James Howden Australia Pty Ltd v D. Richardson & Sons Ltd and Flakt A.B

[1985] APO 14

In the Matter of the Patents Act 1952

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In the Matter of Patent Application No. 540554 by JAMES HOWDEN AUSTRALIA PTY. LTD.

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In the Matter of Oppositions thereto by

1.D. RICHARDSON & SONS LTD. and

2.FLAKT A.B.

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In the Matter of an Objection to Extensions of Time to Serve Evidence‑in‑Support.

DECISION OF A SUPERVISING EXAMINER OF PATENTS:
         Patent Application No. 540554 (78943/81) was advertised accepted on 22 November, 1984.  Notices of opposition to this application were lodged on 21 February, 1985 by D. RICHARDSON & SONS LTD. (RICHARDSON) and on 22 February, 1985 by FLAKT A.B.  Accordingly RICHARDSON and FLAKT A.B. had until 21 and 22 May, 1985 respectively to serve their Evidence‑in‑Support.
         On 20 May, 1985, RICHARDSON and FLAKT A.B. lodged applications for extension of time under the provisions of Regulation 55, requesting 3 month extensions of time to 21 and 22 August, 1985 respectively within which to serve Evidence‑in‑Support.  In view of the provisions of Regulation 85 and in accord‑
ance with Patent Office practice, these extension applications were referred to the applicant, JAMES HOWDEN AUSTRALIA PTY. LTD. (HOWDEN) to enable that party to raise an objection and to be heard if it so wished.  HOWDEN duly lodged an objection to the extensions being granted and accordingly a hearing was set

down in Canberra for 14 June, 1985, to enable the parties to be heard on the matter.  At the hearing HOWDEN was represented by Mr. C. Marsh, patent attorney of F.B. Rice & Co., and FLAKT A.B. was represented by Mr. A.J.F. Ward, patent attorney of Clement Hack & Co.  Mr. R. Puisens of Flakt Australia Ltd. also attended the hearing.  At the hearing Mr. Ward also appeared on behalf of Edwd. Waters & Sons, the attorney representing RICHARDSON.
         At the hearing, Mr. Ward tendered a copy of a statutory declaration made by Norman Henry Haertsch, which had been served on HOWDEN on 7 June, 1985. Although the title of the declaration states that it is in support of the FLAKT AB opposition it was accompanied by a letter which states that it was served on behalf of both opponents.  This declaration was stated to be part only of the Evidence‑in‑Support.
         The circumstances in which and the grounds upon which FLAKT A.B. applied are:

"Patent Application No. 540,554 is concerned with anti‑stall measures for axial fans involving an enlargement of the casing in the vicinity of the impeller.  Work on this concept has been carried out in the USSR and in Germany for several years before the priority date of the application. When a copy of the accepted specification was obtained and studied it became apparent that the alleged invention claimed therein had been employed and tested in this earlier work.  A publication "VGB‑Kraftwerkstechnik, 57, Jahrgang Heft 3 Marz 1977", in the German language, described a construction differing only in non‑essential details from that which is claimed.  This document has been found to be available to the Australian public before the priority date but the opponents have considered it desirable to seek even more pertinent evidence. Investigations have shown that a brochure which illustrated and described fans provided with an anti‑stall measure identical with that claimed in patent application No. 540,554 was printed in Germany in 1977.  Considerable time and effort have been put to seeking evidence of copies of this brochure having been available to the Australian public before 3rd December, 1980.  The opponents have also become aware that tenders were made in Australia well before 3rd December, 1980 for the supply of fans employing such anti‑stall provisions.  Further very diligent efforts have been made to obtain evidence of this, in the belief that it constitutes prior use of what is claimed in the patent specification.  The continuation of these efforts has been delayed because a key witness who has the relevant records has not been available.  He returned to Australia only recently after a vacation abroad, and even now is only available on occasions, being in semi‑retirement.  Due to these circum‑

stances, and due also to the fact that recent strike action in Sweden has made communication between the opponents and their Australian patent attorneys more difficult, it will not be possible to complete the preparation and service of Evidence‑

in‑Support of the opposition within the initially prescribed period.  Accordingly an extension of time is required."

The circumstances in which, and the grounds upon which RICHARDSON applied are:

"The opponents only became aware of patent application 540554 shortly before the expiry of the term for filing Notice of Opposition and in the three months since that time attention has been given to the collection of evidence to support the opposition.

A number of relevant prior patent specifications which are available in Australia and were published prior to the priority date of specification 540554 have been located but further time will be required to enable the opponents to locate appropriate expert witnesses to advise as to the import of these disclosures in the light of the common general knowledge in the art.

The opponents are also aware that a Germany company who is manufacturing and marketing axial flow fans with a stall free arrangement very similar to that claimed in specification 540554 prior to 1980.  The investigations to date have revealed that such fans were offered for sale in Australia prior to 1980, however, further time is required to enable the completion of investigations to determine the existence of complimentary documentary evidence of such offers for sale and also corroborating evidence from persons to whom such offers were made.  In addition, further time is also required to ensure that after the collection of the evidence has been completed, it can be drafted into appropriate declaration form. It is anticipated that the completion of the collection of evidence and its preparation will require at least three months further work."

The provisions of the industrial property legislation material to extensions of time in opposition proceedings have been considered by the Federal Court in Vangedal‑Nielsen v. Smith (1980) 33 ALR 144 and in Lyons v. Registrar of Trade Marks (1983) 50 ALR 496, 1 IPR 416. These decisions show that:

.The applicant seeking the allowance of an extension of time carries the burden of establishing an appropriate case to justify that allowance.  That is, the applicant for extension   of time carries the onus of proof; an extension cannot be granted merely because the other party has been unable to show that an extension should not be granted.

.The applicant for extension of time must make out a "proper case justifying extension".

.In deciding whether the applicant for extension has made out a proper case justifying extension, the Commissioner must take all relevant considerstions (and no others) into account.

These cases also show that in meeting the onus upon it, the applicant for the extension of time is not limited to reliance upon facts proved by formal evidence adduced by it.  It may be able to point to background material or to material publicly available or even to facts proved by the opponent's evidence. Factors to be considered in deciding whether an extension of time should be granted include:

.the public interest in ensuring that worthless patents are not granted because sufficient time has not been allowed to raise an objection or to prepare and serve evidence in support of an objection,

.the applicant's interest in having sufficient time to prepare  an adequate defence of its application, and

.the opponent's interest in expeditiously preventing the grant of a patent which will curtail its activities.

I turn now to the situation before me.
         Mr. Ward commenced by stating that the opponents were going to pool their resources with respect to the collection of evidence.  It was also his understanding that both opponents would act together in the sense that the evidence in support would be the same for both parties and they would terminate their evidence at the same time.
         Mr. Ward presented the commercial background of the opponents.  Research relating to the subject matter of the present invention was undertaken in the Soviet Union some time ago.  FLAKT AB as well as a Germany company, which Mr. Ward designated as KKK, were licenced to manufacture and sell the stall‑free fans which resulted from this research.  In his declaration Mr. Haertsch refers to Aktiengesellschaft Kuhnle Kopp and Kausch, which appears to be the full title of this company.  Mr. Ward pointed out that RICHARDSON has been the Australian representative of KKK since 1982, though prior to this date KKK was represented by another company.  It appears that Mr. Haertsch, who was a principal of KKK's previous representative is in semi‑retirement.
         Mr. Ward conceded that FLAKT AB was watching for the acceptance of application No. 540554 and was considering opposing grant of its overseas equivalents.  However he stated that a lot of the material to be used as evidence in support of the opposition had been obtained from KKK and some of the material was not in the English language.
         Mr. Ward argued that the opponents were involved in a serious opposition because he had already served the Haertsch declaration on HOWDEN.  He also submitted that in a letter lodged by F.B. Rice & Co. the applicant had conceded that there was a reason for a serious opposition.  My attention was directed to a paragraph which reads as follows:

"The present applicants are aware that products are being sold and offered for sale in Australia at the present time which clearly fall within the scope of the claims of this application."

During his reply Mr. Marsh also conceded that the applicant was aware that FLAKT AB was selling fans similar to its own overseas.  He also submitted that the vague nature of the grounds for the extension of time, an analysis of these grounds and the lack of diligence of the opponents indicated that neither opponent was involved in a serious opposition.
         However the fact that FLAKT AB has already served part of its evidence in support, albeit out of time and the fact that RICHARDSON is prepared to co‑
operate with one of its business rivals leads me to conclude that both opponents are mounting a serious opposition.  The patent applicant itself considers that one or both opponents may be infringing application No. 540554.
         I now have to consider whether the opponents' circumstances and grounds amount to a proper case justifying extensions of time.
         Mr. Marsh pointed out that HOWDEN had made it plain to both RICHARD‑
SON and FLAKT AB that it would vigorously oppose any application for extension of time such as the present matter.  Mr. Ward pointed out that this was an irrelevant consideration in the light of Vulcan Australia Ltd.'s case (51 AOJP  1886).  Mr. Marsh also noted that Mr. Ward had admitted that FLAKT AB had been watching for the publication of application No. 540554.  Therefore the opponent had a period of time from the publication date up to the end of the normal period for lodging evidence‑in‑support in which to research, collate and present their evidence, i.e. almost three years.  However, as Mr. Ward pointed out, it was only on acceptance that FLAKT AB or RICHARDSON could have known what there was to oppose, or indeed if there was anything to oppose.  I agree with Mr. Ward on both these points.
         HOWDEN, according to Mr. Marsh, is being damaged by any delay in granting the patent, since fans promoted and presumably sold by FLAKT had the distinctive features of the invention.  Mr. Puissens readily agreed with Mr. Marsh that such fans could cost upwards of $100,000 each.  Thus even one sale could be most damaging to HOWDEN's business, especially since major users of these fans are power utilities, to whom Crown user provisions apply.  However as pointed out by Mr. Ward any damage caused by infringement of a patent can be recovered back to the date of publication.  Therefore granting an extension of time will not be detrimental in this respect to the applicant for the patent if a patent is subsequently granted.
         During the course of his submissions Mr. Ward remarked that he could find no previous decision of this Office in which an extension of time had been refused when the extensions of time totalled less than 12 months.  In any case he argued that the opponent to a patent application was entitled to as much time as he needed to collect evidence.  Mr. Marsh, on the other hand argued that it was incumbent upon the person requiring the extension of time to show good reason for granting the extension irrespective of whether it was the first or a later application.  He added that each application should also be considered on its merits.  I agree with Mr. Marsh that his is the correct approach for dealing with an application for an extension of time.
         Although both applications for an extension of time are somewhat vague, for example neither application refers to the company KKK, I do not consider this to be so serious an omission as to prejudice an application for an extension of time.  I also note that these applications appear to have been made prior to RICHARDSON and FLAKT AB deciding to pool their resources because each application refers to different kinds of documents.  Thus the FLAKT AB application refers to a publication "VGB‑Kraftwerkstechnik" and a brochure whereas the RICHARDSON application refers to relevant prior patent specific‑
ations.  However the FLAKT AB application refers to tenders for the supply of fans and the RICHARDSON application refers to a German company, presumably KKK, offering for sale fans in Australia. In the light of the commercial background outlined by Mr. Ward I can well understand the difficulties the opponents faced in finding documentary evidence of these activities.  In particular I note the facts that Mr. Haertsch was unavailable because of an overseas vacation that he was in semi‑retirement and that he does not have any connection with either opponent.  Thus I am satisfied that the applicants for the extension of time have made out a proper case to justify the extension.  It is also in the public interest that the oppositions to the grant of patent application No. 540554 be considered if there is the possibility that the subsequent patent may be invalid.  I therefore grant an extension of time for RICHARDSON to serve its evidence‑in‑support of the opposition to 21 August, 1985, and a like extension for FLAKT AB to 22 August, 1985.
          With respect to costs, Mr. Ward argued that because of the extensive explanation of the grounds in the applications for extension of time, and because part of the evidence in support had been served, then the opposition to the extension of time was vexatious.  He submitted that in these circumstances it would be proper for full costs to be awarded to his clients rather than costs from the standard scale.
          It seems that at a meeting between Mr. Marsh and Mr. Ward some time before the hearing, Mr. Ward gave an undertaking that both opponents would act together, although he conceded that he had no authority to make such arrange‑
ments at that time.  In reply Mr. Marsh stated that at the meeting HOWDEN had offered to withdraw its opposition to the FLAKT AB application if Mr. Ward would undertake to serve the evidence within this further three month period.  This offer was refused.  Mr. Marsh also stated that prior to the hearing he had no evidence that the opponents would act together other than Mr. Ward's uncertain undertaking, moreover he submitted that I had no authority to award other than standard costs.
         Considering the costs in respect of the objection to RICHARDSON's application, it seems to me that when HOWDEN gave notice of its objection to the applications for extension of time it was considering two applications which contained one similar ground, but which also referred to the collection of different kinds of documents.  In addition HOWDEN would not have been certain that the Haertsch declaration, which was served one week before the hearing, was in support of RICHARDSON's application.  Therefore I think that it was reasonable for HOWDEN to object in the first place and to maintain its objection to the RICHARDSON application after service of the Haertsch declaration.  My conclusion to grant RICHARDSON an extension relied not only on the reasons given in their application, but also on the commercial background which was outlined at the hearing.  Therefore I award the costs in respect of this objection against RICHARDSON.
         After the Haertsch declaration was served HOWDEN made a conditional offer to withdraw its opposition to the FLAKT AB application.  However I consider that this offer was refused so close to the date of the hearing that HOWDEN was left with little choice but to maintain its objection to the FLAKT AB application.  In any case it had a justifiable reason to be represented at the hearing of the RICHARDSON application.  My conclusion to grant an extension to FLAKT AB relied not only on the reasons given in their application, but also on the commercial background which was outlined at the hearing.  Therefore I award the costs in respect of this objection against FLAKT AB.

(M. KENDALL)