Instant Foundations (Aust) Pty Ltd v Steel Foundations Limited

[1996] APO 18

official notice

decision of a delegate of the commissioner of patents

Application  :          No. 658252 in the name of INSTANT FOUNDATIONS (AUST.) PTY. LTD.

Title:          GROUND ANCHORS

Action:          Application under Regulation 5.5 by INSTANT FOUNDATIONS (AUST.) PTY. LTD. for dismissal of an opposition under Section 59 by STEEL FOUNDATIONS LIMITED.

Decision:          Issued  .

Abstract:          The applicant has a deed of assignment from the inventor.  At some stage the inventor also had a working relationship with the opponent.  This does not preclude the opponent from opposing the patent application.

The statement of grounds and particulars is inadequate because it does not fully particularise each of the grounds of opposition.  Opposition ground in respect to manner of manufacture is dismissed for lack of material facts to support the ground.  Opponent given the opportunity to provide further and better particulars for grounds in respect to lack of novelty and inventive step.

There is insufficient basis for dismissing the opposition in total but a failure to provide further and better particulars in respect to the above grounds will result in the opponent being unable to rely on the relevant current particulars in the substantive opposition. 

Each party to bear its own costs.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 658252 by INSTANT FOUNDATIONS (AUST.) PTY. LTD., and an application under Regulation 5.5, by INSTANT FOUNDATIONS (AUST.) PTY. LTD., for dismissal of an opposition by STEEL FOUNDATIONS LIMITED.

background

Patent application 658252 was advertised accepted on 6 April 1995.  Steel Foundations Limited (hereafter Steel Foundations) filed a notice of opposition on 4 July 1995.  They subsequently filed a statement of grounds and particulars on 5 October.  Instant Foundations (Aust.) Pty. Ltd. (hereafter Instant Foundations) filed an application for dismissal of the opposition on 6 November 1995 and the matter was set for hearing on 1 February 1996.  Mr M. Hall, solicitor employed by Cullen & Co., represented Instant Foundations.  Mr J.G. Adams, patent attorney of Grant Adams & Company, filed written submissions prior to the hearing on behalf of Steel Foundations (on 24 January 1996).

DECISION

The reasons for dismissing an opposition must satisfy a stringent test.  General Steel Industries Inc. v Commissioner of Railways (N.S.W.) and others ((1964) 112 CLR 125) is recognised authority for dismissal actions. That decision variously describes a test for summary dismissal as “so obviously untenable that it cannot possibly succeed”; “manifestly groundless”; “so manifestly faulty that it does not admit of argument”. On this basis an opposition will be dismissed only if it is clear that the opposition could not possibly succeed. Additionally the onus resides with the person or company seeking dismissal to show that the opposition meets this test.

At the hearing Mr Hall submitted that Instant Foundations has two primary reasons for seeking dismissal of the opposition.  The first is that the opponent is estopped from contesting the opposition because of a prior direct relationship allegedly existing between the opponent company and the inventor of the invention associated with application 658252, a Mr Paul Camilleri.  The second is that the statement of grounds and particulars does not fully particularise each of the grounds of opposition meaning that Instant Foundations cannot establish all of the material facts in order to answer the case against it.  Mr Hall also noted that the statement included grounds beyond those available under Section 59 of the Patents Act.

Standing of the Opponent:

On the first point Mr Hall noted that Mr Camilleri assigned to Instant Foundations the invention associated with application 658252 and any letters patent derived therefrom.  Instant Foundations filed a copy of the deed of assignment with their application for dismissal.  However there is no indication as to when the assignment took place as the deed of assignment is not dated. 

The written submissions from Mr Adams on behalf of Steel Foundations acknowledge that Mr Camilleri is the inventor and has assigned the rights to Instant Foundations.  The submissions also acknowledge that Mr Camilleri himself is estopped from bringing action against the validity of application 658252.  However Mr Adams claims that Steel Foundations is not estopped as Mr Camilleri is not and never has been a director or a personal shareholder of Steel Foundations.

To support the claim Mr Adams filed a copy of an Australian Securities Commission company extract in respect of Steel Foundations and a statutory declaration by a Mr W.P. Brockwell, company secretary for Steel Foundations, accompanied by the First Annual Return of the company.  The company extract is dated 4 July 1995.  It shows that Steel Foundations was registered on 5 July 1994 and shows lists of current and previous directors of Steel Foundations since that time.  Mr Camilleri’s name does not appear in either list.  This suggests that Mr Camilleri had not been a director of Steel Foundations at any time between the registration date of the company and the date of the extract.  The First Annual Return dated 28 November 1995 lists directors, the company secretary and shareholders of the company as at that date.  While this document does not establish Mr Camilleri’s history of association with Steel Foundations it does show that he was not a director, shareholder or other principal officer of the company on 28 November 1995.

Mr Hall submitted that the company extract and annual return only show that Mr Camilleri was not a director at the relevant dates of these documents.  He asserted there is no evidence that Mr Camilleri was never a director of the opponent company.  Mr Hall put forward the proposition that prior to the opposition being filed Mr Camilleri was a director of the opponent but that by the date of filing of the notice of opposition (4th July 1995) he was no longer a director. 

I disagree with Mr Hall concerning the argument that the documents only show that Mr Camilleri was not a director at the relevant dates.  The company extract covers a one year period between 5 July 1994 and 4 July 1995.  It omits Mr Camilleri from the list of current and previous directors for that period.  On the other hand Mr Hall further supported his proposition by referring to two statements in support of applications for registered designs (numbers 123575 and 123789).  Both of these statements are made and signed by Mr Camilleri.  In the statements (dated 20 April and 1 June 1995, respectively) Mr Camilleri represents himself as being a director of Steel Foundations.  This is clearly in conflict with statements from the company extract.

The written submissions from Mr Adams acknowledge these representations by Mr Camilleri.  The submissions also mention that the statements were prepared on the basis of a misunderstanding of Mr Camilleri’s relationship with Steel Foundations.  They claim that Mr Camilleri was acting as a consultant for the company at the time of making the designs and was not a director or other official of the company.  The submissions also state that the error was not appreciated until after the design applications had proceeded to registration.

I find it a little difficult to see how this alleged error could have occurred.  I could more easily understand it if another representative of Steel Foundations had made the statements.  However they were made by Mr Camilleri himself.  I would think that he would have been in the best position of knowing his association with Steel Foundations, particularly if it was for such a principal position as director of the company.

The material before me for the period prior to filing of the notice of opposition (prior to 4 July 1995) is in conflict.  In such a situation I can only form a view of Mr Camilleri’s relationship with Steel Foundations on the balance of probabilities.  The making of erroneous statements to support applications for registered designs could result in the designs registrations being invalidated.  This is far less serious than the penalties and consequences of presenting the Australian Securities Commission with erroneous information.  Any company mindful of this would take particular care to ensure the accuracy of information given to the commission.  For this reason I give more weight to the information in the company extract.  On the balance of probabilities I conclude that Mr Camilleri was not a director of Steel Foundations for the period covered by the company extract, that is between 5 July 1994 and 4 July 1995. 

In any case there is no material before me to suggest that Mr Camilleri was a director at the time that Steel Foundations filed the notice of opposition, also 4 July 1995.  I agree with Mr Adams that, irrespective of what transpired prior to that date, the fact that Mr Camilleri was not a director at that time allows Steel Foundations to proceed with the opposition.

Even if Mr Camilleri was a director this does not necessarily mean that he was totally responsible for the decisions and actions of the company.  There is no material before me to suggest that Mr Camilleri alone made the decisions concerning the direction of Steel Foundations.  On this basis I must also accept that Steel Foundations is entitled to oppose the application.

Mr Hall submitted that even if Mr Camilleri is not, and never has been, a director of the opponent company, the opponent is still estopped from contesting the application.  This submission is based on the statements by Steel Foundations of Mr Camilleri’s role as a consultant for the company.  Mr Hall stated that while the opponent does not provide any evidence as to the role and duties of Mr Camilleri as a consultant he clearly authored the designs and presumably provided services in respect of matters relating to the technology the subject of the designs registrations.  Mr Hall noted that the designs registrations related to flights for ground screws and to screw piers.  These are technologies similar to the ground anchors of the present invention.  Mr Hall also asserted that, as the opponent acknowledges that Mr Camilleri is estopped from bringing an action against the applicant, it would be contrary to equity and conscience to then allow the opponent to contest the application when the opponent is acting as a corporate shield, or with the involvement, of the inventor.

I find it difficult to accept that a company is estopped from contesting an application on the grounds that the inventor of the invention the subject of the application may have been associated with the company through employment, consultancy work or otherwise.  In business, employees consultants and other officers frequently transfer their services amongst many companies in the course of their lifetimes.  This is particularly likely between companies manufacturing similar products and competing in the same market.  To preclude companies from contesting applications on the basis of prior associations of their employees or other officers with other companies would lock out many companies from instigating opposition proceedings.

The paramount consideration is whether the company’s business is such that it has an interest in the progress of particular patent applications.  As Steel Foundations are manufacturers of ground anchors for the building and construction industries I am prepared to accept that Steel Foundations are competitors in the market with Instant Foundations and have, at this stage of proceedings, an appropriate level of interest.

I find that Steel Foundations are not estopped, because of their relationship with Mr Camilleri, from contesting the validity of patent application 658252.

Adequacy of the Statement of Grounds and Particulars.

Section 18(1)(a)

In paragraph 1 of the statement Steel Foundations assert that the invention is not a manner of manufacture.  The corresponding particulars state that the invention as claimed is directed to a mere collocation of known integers.  Instant Foundations argue in their application for dismissal that the claims do not define separate integers without any working inter-relationship but a novel combination of features.  Mr Hall further submitted at the hearing that the opponent’s particulars were inadequate.  He said that the opponent has not provided any description of what integers were known nor details of prior art or common general knowledge to support the assertion. 

The E I Du Pont De Nemours and Company v DowElanco decision ((1994) AIPC 91-067) sets out the basic requirements for statements of grounds and particulars. For manner of manufacture it requires a brief description of the particular type of manner of manufacture, e.g. a mere collocation of known integers, together with brief details of material facts to establish a prima facie case. 

Mr Hall noted the absence of material facts and that this meant that the applicant could not establish the case it had to answer.  He also suggested the lack of material facts meant that the statement could not be cured by further and better particulars.  He relied on the Mobay Corporation v The Dow Chemical Co. decision ((1992) 24 IPR 379) to support this contention. Accordingly Mr Hall submitted that this ground of opposition should be dismissed.

Mr Adams’ written submissions refer to the inadequacy of the applicant’s further argument that the lack of objections by the patent examiner regarding manner of manufacture means this ground of opposition is invalid.  The submissions state that this argument would suggest that patent examiners are “totally infallible and can never make mistakes”.  The submissions further suggest that this argument also means that any matter already considered by the examiner would be automatically excluded from consideration during opposition proceedings.  The opponent asserts that such an argument is clearly untenable and the opponent should be given the opportunity to support its allegation that the claims do not define a manner of manufacture.

I agree with Mr Hall that the particulars to support this ground do not present the necessary material facts for Instant Foundations to know the case it has to answer.  The particulars simply amount to an ambit statement of the type of manner of manufacture that is allegedly lacking.  There are no details to support the assertion that the invention is a mere collocation of known integers and no details to establish a prima facie case. 

The Mobay case (cited above) states that a failure to provide material facts to support a ground of opposition cannot be cured by further and better particulars.  This means the particulars in respect to manner of manufacture would have to stand even though they are totally inadequate, or the ground would have to be dismissed.  In my view if Instant Foundations do not provide material facts to support a ground of opposition then they are not entitled to oppose on that ground.  I dismiss the ground of opposition in respect to lack of manner of manufacture.

Section 18(1)(b)

In the first instance both parties made submissions regarding the allowability of a ground of opposition concerning the application’s entitlement to an early priority date.  Steel Foundations’ grounds of opposition include the statement that it contests the claimed priority date of 12 December 1991 and contends that the applicant is not entitled to a priority date earlier than 14 December 1992.  Mr Hall submitted that this ground should be dismissed as Section 59 does not include it as a valid ground of opposition.  On the other hand Mr Adams submitted that the priority date of any claim is important in determining the prior art that may be applied to the claim.

I acknowledge the importance of establishing the priority dates of claims for determining the prior art that may be considered.  It is so important that it is not necessary to challenge the priority date in a statement of grounds and particulars at all.  Steel Foundations’ statement merely expresses a right that any opponent has without question.  Mr Hall is correct in saying that the statement is not a listed ground of opposition under Section 59.  This is because the challenge is not a material fact.  It is merely a fact which may be relevant to an ultimate fact of anticipation under Section 18(1)(b).  Accordingly Steel Foundations’ statement is unnecessary in a statement of grounds and particulars.

Turning to the particulars alleging publication by a number of patent documents (paragraphs 2.1.1 to 2.1.8) Instant Foundations’ application for dismissal asserts that several of these particulars are not well taken.  The assertion states that the patent documents have already been considered by the patent examiner during prosecution of the case and the applicant’s invention has been found to be novel and patentable thereover.  Mr Adams argues that such an argument is untenable as the examiner does not have the benefit of third party observations on the relevance of prior art nor the benefit of knowing the level of common general knowledge in the art and how a skilled person in the art would apply the teachings of any prior art.

I accept the views put forward by Mr Adams.  There is a substantial difference between the search material, which patent examiners can access when considering prior art, and the products, documentation, understanding and other evidence available to people skilled in the art.  It is clear that opponents to patent grants are able to draw on far greater resources than examiners in determining the relevance of prior art.  Additionally the Borden, Inc. v Elkem A/S decision ((1992) AIPC 90-893) states that the fact that documents have already been considered by the examiner during the examination procedure carries no weight whatsoever in an action for dismissal. I accept particulars 2.1.1 to 2.1.8 as valid documents for consideration.

Mr Hall also referred to the further documents in paragraphs 2.3.1 to 2.3.18 of the statement.  These together with the eight patent documents mean there are twenty-six documents that are particularised for the one ground of opposition.  Mr Hall referred to the ICI v Irenco Inc & Ors decision ((1993) 26 IPR 154). He submitted that where more than seven to ten documents are particularised for any one ground then the statement should provide full particulars of the documents and identify what information in each document is relied upon for that ground of opposition.

The E I Du Pont de Nemours and Company v DowElanco decision (cited earlier) further outlines the detail needed.  The particulars should include brief details of the relevance of the documents to the ground together with page and line references to direct the reader to the specific parts of the documents that are to be relied upon.  While the present particulars themselves do not provide this level of detail for the patent documents (paragraphs 2.1.1 to 2.1.8) such detail does appear in the international search report (ISR) published with the specification for application 658252.  Seven of the eight patent documents mentioned in the statement of grounds and particulars are cited in the ISR.  It may not be clear whether Steel Foundations intends to rely on the same passages of text or drawings as mentioned in the ISR for each patent document.  Nevertheless the ISR does give Instant Foundations a basis for determining the case they have to answer for the patent documents without undue expense.

In my view the detail required by the E I Du Pont decision is not necessary for small brochures or other small technical documents, such as those mentioned in paragraphs 2.3.1 to 2.3.18.  On the other hand I think those brochures and other articles require further particularisation of their availability, such as when and in what fashion they became publicly available.

Given the details provided in the ISR for documents 2.1.1 to 2.1.8 and the nature of documents 2.3.1 to 2.3.18, I do not think that further particularisation of relevant passages of documents is necessary.  I think Instant Foundations is reasonably able to understand the case against it despite the high total number of documents.

A further deficiency pointed out by Mr Hall is that the ground claims there is both lack of novelty and lack of inventive step. Mr Hall submitted that these were separate grounds of opposition and hence the opponent should provide separate particulars for each of these grounds. He again cited the Mobay decision (cited earlier) to support this contention. The difference between that case and the present case is that the Mobay case was for the conduct of an opposition under the old Patents Act 1952 which categorically distinguished the grounds of novelty and obviousness. Novelty, inventive step and also manner of manufacture are all grouped under the ground of patentability in the Patents Act 1990 (see Section 59(b)). Hence I must accept the grouping of Steel Foundations’ novelty and inventive step grounds as they stand. However I also accept that the particulars should clearly state the case against inventive step rather than rely on the lack of novelty statements and the cited documents alone. The extra information I would expect to see in the particulars are brief material facts regarding the relevance of the common general knowledge and the supporting documents to the case against inventive step. In line with the E I Du Pont decision (cited earlier) an elaboration of the common general knowledge requires the particulars to include a brief description of the alleged common general knowledge and identification of the person skilled in the art (that is, the particular field of technology relevant to the subject matter - not the actual person).

Mr Hall again cited the Mobay decision to submit that the lack of material facts to support the assertion of lack of inventive step meant that the statement could not be cured by further and better particulars.  However the particulars in this case are not lacking in material facts.  They merely fail to adequately outline the relevance of the cited documents and the common general knowledge to the case against inventive step.  I think that Steel Foundations should be given the opportunity to present further and better particulars to elaborate the case against inventive step.

Section 40(2) and 40(3).

Both parties made elaborate submissions prior to the hearing concerning the clarity of the claims.  I am prepared to allow those issues to be pursued at the substantive opposition.  The main item of contention for this hearing is the assertion by Steel Foundations in their notice of opposition that the claims may define more than one invention.  Steel Foundations claim this is dependent on the way the description and claims are interpreted in respect to essential and optional features (paragraph 3.1.1).

Mr Hall is right in pointing out that the challenge of there being more than one invention is not an available ground of opposition under Section 59.  From Steel Foundations’ statement however this issue indirectly arises from some difficulty in determining the essential and optional features of the invention.  This difficulty takes issue with the clarity and fair basis of the claims and sufficiency of the description which are valid grounds of opposition, namely non-compliance with subsections 40(2) and (3).  Accordingly I accept paragraph 3.1.1 of the statement of grounds and particulars as it stands.

CONCLUSION

On the issue of the standing of Steel Foundations I find that Steel Foundations are not estopped from contesting patent application 658252.  Concerning the statement of grounds and particulars I find the ground of opposition in respect to manner of manufacture is not supported by any material facts.  Consequently I dismiss this ground of opposition.  I also find that the particulars are inadequate in supporting the assertions of lack of novelty and inventive step.  Despite these inadequacies I have found sufficient merit in the particulars against this ground to allow Steel Foundations the opportunity to provide further and better particulars.  It follows that I think there is nothing before me to suggest the opposition is so obviously untenable that it could not possibly succeed.  Additionally Instant Foundations have not sufficiently discharged the onus on them to show otherwise. 

Under Regulation 5.10(1) I allow Steel Foundations the opportunity to provide further and better particulars to elaborate the case against inventive step.  This should include a brief description of the alleged common general knowledge and identification of the person skilled in the art.  It should also include brief material facts regarding the relevance of the common general knowledge and the cited documents to the case against inventive step.  I also allow Steel Foundations the opportunity to provide further and better particulars to better particularise the non-patent documents in respect to their availability.  This should include details of when and in what fashion these documents became publicly available.

I allow Steel Foundations 21 days from the date of this decision to provide further and better particulars.  If Steel Foundations do not avail themselves of this opportunity then they will not be able to rely on the relevant current particulars in the substantive opposition. 

COSTS

Mr Adams submitted for Steel Foundations that the application for dismissal should be rejected totally and that Steel Foundations be awarded costs.  Mr Hall for Instant Foundations submitted that if the opposition is dismissed in total or in part then Instant Foundations should be awarded costs.  He further submitted that if Instant Foundations are not successful in having any part of the opposition dismissed then the question of costs should not be determined until the substantive opposition is determined.  To support this proposition Mr Hall cited Re Application by Guertler (4 IPR 208). As I have dismissed a part of the opposition I need not consider the Guertler case any further. I am satisfied that I should decide the question of costs concurrently with this decision.

Costs normally follow the event.  Instant Foundations have not been successful with their application for dismissal of the opposition.  I have not entertained their argument that Steel Foundations are estopped from contesting application 658252.  Apart from dismissing the ground in respect to manner of manufacture I have also not entertained several of their submissions concerning the statement of grounds and particulars.  On the other hand Steel Foundations’ statement of grounds and particulars has serious flaws which need to be rectified for a proper opposition case to be made out.  I think that Instant Foundations were justified in objecting in some way to the opposition given the nature of the statement of grounds and particulars provided by Steel Foundations.  Given the overall situation I think that each party should bear its own costs.

M.G. Kraefft
Delegate of the Commissioner of Patents

Patent attorneys for the applicant   :  Cullen & Co.

Patent attorneys for the opponent   :  Grant Adams & Company