Kelvindale Products Pty Ltd v TFH Temporary Fence Hire Pty Ltd

[2009] APO 25

ABSTRACTS OF DECISIONS

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Patent Application                 :          No. 2006203138 in the name of Kelvindale Products Pty Ltd

Title:          Fence Support Shell

Action: Request under section 223 of the Patents Act 1990 for an extension of time to file a notice of opposition to the grant of a patent by TFH Temporary Fence Hire Pty Ltd and an objection thereto by Kelvindale Products Pty Ltd

Decision:          Issued    22 December 2009             

Abstract

TFH has shown the existence of an error or omission that prevented forming an intention to oppose the patent application and subsequent filing of a notice of opposition by the due date. An extension of time under section 223(2)(a) is appropriate.

It has not been established that there were circumstances beyond the control of TFH. Consequently, an extension of time under section 223(2)(b) is not appropriate.

The system used in attorney’s office for meeting a deadline to file a notice of opposition is considered to be falling short of taking due care. Therefore, section 223(2A) does not apply.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent application No. 2006203138 in the name of Kelvindale Products Pty Ltd and a request under section 223 for an extension of time to file a notice of opposition to the grant of a patent by TFH Temporary Fence Hire Pty Ltd and an objection thereto by Kelvindale Products Pty Ltd.

BACKGROUND

1. Patent application 2006203138 (hereinafter referred to “the patent application”) directed to a Fence Support Shell was filed on 24 July 2006 by Kelvindale Products Pty Ltd (hereinafter referred to “Kelvindale”) as a divisional of Patent Application No. 2005201543. The patent application proceeded to acceptance and was advertised accepted on 16 July 2009. The time to oppose the grant of a patent in respect of the patent application under section 59 of the Patents Act 1990 expired on 16 October 2009.

2. TFH Temporary Fence Hire Pty Ltd (hereinafter referred to “TFH”) filed a notice of opposition to the patent application on 22 October 2009 along with an application for an extension of time from 16 October 2009 to 16 November 2009 in which to file a notice of opposition to the grant of a patent in respect of the patent application.

3. Kelvindale filed an objection to the extension of time sought by TFH on 30 October 2009.

4. On 23 November 2009, TFH filed a statement of grounds and particulars in respect of their opposition to the patent application under section 59 of the Patents Act 1990.

5. The matter was heard in Canberra on 24 November 2009. TFH filed written submissions via their patent attorney, Ahearn Fox, Brisbane, prior to the hearing but chose not to appear at the hearing. Kelvindale was represented by Mr Peter Dummer, patent attorney, of Wallington-Dummer, Sydney, who attended the hearing by telephone. Mr John van Leeuwen, patent attorney, of Wallington-Dummer, Sydney also attended the hearing on phone as an observer. 

APPLICATION FOR EXTENSION OF TIME

1. The application for extension of time requests an extension of time of one month from 16 October 2009 to 16 November 2009 in which to file a notice of opposition to the grant of a patent in respect of the patent application. The circumstances in which, and the grounds upon which, the application for extension of time is made are stated to be as follows:

“An error or omission by the applicant or their agent and/or circumstances beyond the control of the applicant or their agent, and/or, that in spite of the applicant or their agent having taken due care regarding the filing of a Notice of Opposition within the relevant period, the circumstances prevented the applicant and his agent from so doing.”

1. The request was supplemented with a statutory declaration from Mr Ian Robert Tannahill (hereinafter referred to “first Tannahill declaration”). The first Tannahill declaration relies on the following exhibit in support of TFH’s case:

IRT-1Copy of letter dated 15 September 2006 addressed to TFH

1. Mr Tannahill is the patent attorney for TFH. The relevant parts of the first Tannahill declaration read as follows:

“2. Since 15 September 2006 I have been maintaining a watch on the status of application No. 2006203138 on behalf of my firm’s client TFH Temporary Fence Hire Pty Ltd, (hereinafter referred to as “TFH”). Attached hereto and marked Exhibit IRT-1 is a copy of a letter dated 15 September 2006 addressed to TFH.

3.  On or about 12 October 2009 my file relating to watches that I had been conducting in respect of application No. 2006203138 was removed from my desk and placed on the desk of my firm’s office manager who was conducting a review of all files containing unbilled “wip” for the months of October and November 2008.

4.  The file relating to application No. 2006203138 was one of several files that I had placed in a pile on my desk which I intended to work on during the early part of the week beginning 12 October 2009.

5.  Because I did not notice that my file relating to application No. 2006203138 was missing, I did not discuss the filing of a Notice of Opposition with my client during the early part of the week beginning 12 October 2009 as originally planned.

6.  On 21 October 2009 the file relating to application No. 2006203138 was returned to my desk together with a note from Dan Fox instructing me to bill the unbilled “wip” relating to the watches I had conducted over the past twelve months.

7.  It was immediately apparent to me when I picked up my file late on 21 October 2009 that I had omitted to discuss last week with TFH the filing of a Notice of Opposition in respect of application No. 2006203138.

8.  On the morning of 22 October 2009 I was able to speak to Brett Thomas of TFH Temporary Fence Hire Pty Ltd.

9.  During the course of our conversation, Brett Thomas confirmed that TFH had not signed a Deed of Settlement prepared on behalf of Kelvindale Products Pty Ltd concerning the manufacture by TFH of anchor blocks and that it was still their intention to oppose application No. 2006203138.

10. As a consequence of the circumstances outlined above, a Notice of Opposition was not filed in respect of application No. 2006203138 by 16 October 2009.”

1. A second declaration by Mr Tannahill was filed on 12 November 2009 (hereinafter referred to “second Tannahill declaration”). The second Tannahill declaration puts into evidence the following exhibits in support of TFH’s case:

IRT-1Twenty-eight status reports obtained by Mr Tannahill in respect of patent application No. 2006203138

IRT-2Copy of the note referred to in paragraph 6 of first Tannahill declaration

10. On 23 November 2009, Kelvindale filed a statutory declaration by Mr Brial Dehlsen along with their written submissions for the hearing.

11. Mr Dehlsen is the managing director of Kelvindale. The Dehlsen declaration provides information about Kelvindale’s negotiations with TFH regarding a related patent application.

12. A third declaration by Mr Tannahill was filed on 23 November 2009 (hereinafter referred to “third Tannahill declaration”) along with THF’s written submissions for the hearing. The third Tannahill declaration concerns a related patent application.

DECISION

Law relating to extension of time under section 223

13. Section 223 of the Patents Act 1990 provides that:

(2)Where, because of:

(a) an error or omission by the person concerned or by his or her agent or attorney; or

(b)circumstances beyond the control of the person concerned;

a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.

(2A)If:

(a)a relevant act that is required to be done within a certain time is not done within that time; and

(b)the Commissioner is satisfied that the person concerned took due care, as required in the circumstances, to ensure the doing of the act within that time;

the Commissioner must, on application made by the person concerned in accordance with the regulations and within the prescribed period, extend the time for doing the act.

(2B)An extension of time under subsection (2A) cannot exceed the period prescribed for the purpose of this subsection.

14. I will now consider whether there was an error or omission, or circumstances beyond control. If either of these were present, I will then decide whether there was an intention to file a notice of opposition and whether the failure to file the notice of opposition was because of an error or omission, or circumstances beyond control. Considering that section 223(2) confers a discretionary power, finally I will decide whether, as a matter of discretion, an extension of time should be granted. I will then separately consider whether the ground of due care is appropriate.

Was there an error or omission?

15. The question of what constitutes an error or omission requires careful consideration.  In Kimberly-Clark v Commissioner of Patents (No 3) 13 IPR 569 at 579-580, Jenkinson J discussed the phrase "error or omission" as it applied in section 160 of the Patents Act 1952, the predecessor of section 223, in the following terms:

"It is in my opinion difficult to suppose that only the inadvertence and accidental steps, and not errors resulting from faulty reflection, of the former class of persons were intended by the draftsman to be within s 160(1). Further, the word ‘error' is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgement by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips."

16. Consequently, the phrase "error or omission" should be interpreted broadly as including breakdowns in procedure, or flawed mental functions such as an error of judgement (Total Peripherals Pty Ltd v IBM and Commissioner of Patents (1998) AATA 784 and Oz Technology v Boral Energy (1999) APO 18).

17. The first Tannahill declaration states that Mr Tannahill placed the file relating to the patent application on his desk with an intention of working on it during the early part of the week beginning 12 October 2009, a few days before the due date of 16 October 2009 for filing a notice of opposition. The declaration further states that the file was removed from his desk on or about 12 October 2009 and placed on the desk of his firm’s office manager and was not returned until 21 October 2009, and therefore Mr Tannahill omitted to discuss the file with TFH by the due date of filing a notice of opposition.

18. There is no information in the first Tannahill declaration as to who removed the file from Mr Tannahill’s desk and whether that person was aware of the due date for filing a notice of opposition in respect of the patent application. Nevertheless, I am satisfied that Mr Tannahill not noticing that the file was missing from his desk was an error within the terms of section 223(2)(a).

Were circumstances beyond control?

19. Circumstances beyond control were considered in the context of the Trade Marks Act in Re Atomic Skifabrik Alois Rohrmoser v Registrar of Trade Marks [1987] FCA 22 at [18], (1987) 7 IPR 551 at 558, where Jenkinson J concluded:

"In the context in which it is found, the expression `circumstances beyond the control of the person concerned' does in my opinion designate - and designates only - occurrences which neither the person concerned nor any person acting on his behalf to do the act or take the step could prevent.  The operations of nature and the activities of strangers may result in such occurrences.  So, too, may the acts and omissions of certain independent contractors engaged by the person concerned or by his agent, as for example the carrier of mail or the office cleaner, either of whom causes the loss or destruction of a document to be filed.  But the acts or omissions of the agent who on behalf of the person concerned is to do the act or take the step are not occurrences of the description specified in paragraph 131(1)(a), in my opinion.  Nor, in my opinion, are the acts or omissions of that agent's servants.  The section is, I think, correctly described as a force majeure provision."

20. TFH did not provide any submissions in support of their application for extension of time in respect of circumstances beyond control under section 223(2)(b).

21. However, Mr Dummer, the attorney for Kelvindale, submitted that the provisions of section 223(2)(b) were not available to TFH. He argued that the person concerned, Mr Tannahill in this instance, could have made provisions for the retention of the file which was to remind him of the need for filing a notice of opposition, or of providing a diary entry or initiating an electronic reminder to ensure that the deadline was met. He further submitted that the removal of the file by someone within the attorney’s office offers no remedy under section 223(2)(b) which, as considered by Jenkinson J, can only become effective in a force majeure situation.

22. I concur with Mr Dummer in that the facts of the case do not support a force majeure situation. Consequently, circumstances beyond control have not been established. 

Was there an intention to file a notice of opposition?

23. Mr Dummer submitted that there is no evidence that Mr Tannahill had sought or obtained definite instructions to file a notice of opposition just before the file went missing from his desk which happened around 12 October 2009. He argued that Mr Tannahill was only intending to discuss the filing of a notice of opposition and there existed no standing prior instruction by TFH for such a filing prior to 12 October 2009. He drew my attention to the fact that the application for an extension of time only occurred on 22 October 2009 after Mr Tannahill’s discussions with TFH. Mr Dummer further submitted that TFH had not clearly demonstrated an intention to file a notice of opposition by 16 October 2009.

24. Mr Tannahill submitted that he had been maintaining a watch on the status of the patent application since 15 September 2006, and the twenty eight status reports he obtained in respect of the patent application over a period of nearly three years clearly demonstrate that TFH always had an intention to oppose the patent application if the claims of the patent application embraced their business activities. He further submitted that his only reason for wanting to speak to Mr Brett Thomas of TFH on 22 October 2009 was to check that TFH had not reached a settlement with Kelvindale in which case the filing of a notice of opposition might have placed TFH in an awkward position.

25. TFH were aware of the claims of the patent application on 16 July 2009 when the application was advertised accepted. It appears from Mr Tannahill’s submissions that TFH were negotiating a settlement with Kelvindale during the opposition period. However, there is no evidence on file in declaratory form to support the view that TFH had a clear intention to oppose the patent application by the due date of 16 October 2009. In my view, TFH failed to demonstrate a clear intention to oppose the patent application by the due date by not providing instructions to file a notice of opposition to their attorney, Mr Tannahill.

Was the failure to file a notice of opposition by the due date because of the error?

26. Section 223(2)(a) operates in circumstances where the failure to do a relevant act is the result of an "error or omission". That is, the error or omission must be causally related to the failure to act. This is to be contrasted with the situation where there has been a deliberate decision not to do the relevant act (Weir Pumps Ltd v Commissioner of Patents and Stork Pompen BV 13 IPR 163 at 166-167).

27. The importance of the intention of the person making an application for an extension of time was discussed in Stork Pompen BV v Weir Pumps Ltd 11 IPR 542 at 546:

“A review of recent sub-s 160(2)(a) extension decisions indicates that an error or omission has been considered to have occurred where there has been a breakdown in procedure in effecting a party's intention in respect of an invention or application   Such cases indicate that having decided a course of action in respect of an act or step the performance of which is required within a certain time under the Act, that intention has been frustrated by either an error (eg the act has been done incorrectly, or mistakenly done outside the time allowed) or due to an omission (eg the act has not been done due to neglect or inadvertence).  Therefore in my view, it is appropriate to consider in relation to the person seeking the extension, that person's intention with respect to doing the act or taking the step, and to determine whether any error or omission arose to frustrate that intention."

28. Thus, the relationship between the error or omission and the failure to do an act is of cause and effect, and the error will be seen as thwarting an intention to do the act. This is consistent with the need for a "sufficient causal connection" between the error or omission and the failure to do the relevant act as noted by Jenkinson J in Kimberly-Clark (supra) at 582.

29. It is clear from the first Tannahill declaration that had the file not been removed from Mr Tannahill’s desk, he would have discussed the filing of a notice of opposition with TFH by the due date of 16 October 2009. Mr Dummer’s submission that it must have been clear to TFH well before the 12 October 2009 that a Deed of Settlement with Kelvindale was out of question suggests that any negotiations between TFH and Kelvindale had ceased prior to 12 October 2009. Therefore, it appears to me that had Mr Tannahill contacted TFH between 12 October 2009 to 16 October 2009 regarding filing a notice of opposition, TFH would have formed the intention to oppose the patent application as they did on 22 October 2009, and a notice of opposition would have been filed by the due date.

30. Normally, the error will be seen as thwarting an intention to do the act. However, the present case is different in that the error prevented forming of an intention to oppose the patent application and subsequent filing of a notice of opposition by the due date.

31. For guidance in the present matter, I will turn to Apotex Pty Limited v Commissioner of Patents and Les Laboratories Servier [2008] AATA 226 at [21], where the Administrative Appeals Tribunal stated:

“I consider that, while the majority of cases will disclose a specific intention to oppose, with that intention being thwarted by the relevant error, there will be, as in this case and in Kimberly-Clarke, exceptional circumstances where no specific intention to oppose has been formed. In this case, as in Kimberly-Clarke, the relevant error precluded the forming of the specific intention. In this way, the error contributed to the failure to place the patent application on watch and to form the intention to file the notice of opposition. That, in my view, is sufficient to satisfy the required causal connection described by Jenkinson J in Kimberly-Clarke.”

32. The above observation of the tribunal is relevant to the present case and I cannot see any reasons for taking a contrary view. Therefore I conclude that in the present case, the error contributed to the failure to form an intention to oppose the patent application and subsequent filing of a notice of opposition by the due date, and the required causal relationship to satisfy the provisions of section 223(2)(a) has been established.

Should the discretion be exercised?

33. The considerations involved with the exercise of the discretion to extend time were discussed by Bowen CJ in Vangedal-Nielsen v Smith (Commissioner of Patents) (1980) ALR 144 at 150 as follows:

"Clearly, the Commissioner will have to consider the interests of the prospective opponent who, for some good reason, has not been able to mount his opposition within the initial period of three months.  The Commissioner will further have to have in mind, where a serious opposition is foreshadowed, the public interest [in ensuring worthless patents are not granted], but he will have to require to be satisfied by an applicant for an extension that a proper case has been made out justifying an extension.  It would be wrong if he granted an extension simply because no one had raised rather exceptional circumstances why it should not be granted.  Reasons why this is so include the desirability of operating the system efficiently and without unreasonable delays and also the interests of the applicant for a patent which are also clearly involved."

34. An applicant for an extension of time has an obligation to put before the Commissioner the circumstances which it claims justify the grant of the extension sought, but this does not amount to a burden of proof (Sanyo Electric Co Ltd v Commissioner of Patents 36 IPR 470 at 479). As noted by Jenkinson J in Kimberly-Clark (supra) at 583-584, in order to make out a proper case justifying an extension:

".. an applicant would in my opinion have to go beyond a disclosure of the processes by which an agent's errors came to be committed, and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct."

35. Therefore in the exercise of discretion, I will need to consider the interest of the parties in refusing and granting the extension, the public interest including the question of undue delay, the interest of the patent office and whether there has been a full and frank disclosure of all relevant circumstances.

36. It is clearly in the interest of Kelvindale if the extension of time is refused. On the contrary, TFH’s interest lies in obtaining the extension of time so that they can oppose the patent application. I note that TFH have already filed a statement of grounds and particulars in a timely manner.

37. The public interest lies in a serious opposition being dealt with on its own merits. The consequence of refusing to grant the extension is that the opposition cannot proceed. On the other hand, granting the extension will mean that the opposition to the grant of patent will proceed, protecting the public interest that invalid patents are not granted.

38. In regard to above, while Mr Dummer argued that TFH’s action must be seen as a spoiling action to involve Kelvindale in additional expenses and delay, Mr Tannahill submitted that TFH are serious about their opposition to the grant of a patent on the patent application and that the inventiveness of the claimed invention is questionable. Based on the evidence on file, I am satisfied that TFH shows a clear intent in progressing the opposition and that a serious opposition is in the offing. I note that the delay in requesting the extension, once the error was apparent was very short. Therefore, I consider that the public interest lies in granting the extension of time.

39. The interest of the patents office, although of no major significance, is in having the opposition matter resolved in a timely manner without undue delay. Considering that the notice of opposition has been delayed by six days only, the interest of the patents office will not be adversely affected.

40. On balance of considerations, I am of the view that that the interest of Kelvindale appear to be far outweighed by the public interest and the interest of TFH.

41. The first Tannahill declaration is candid in the admission of an error and I am satisfied that there has been a full and frank disclosure of the events.

42. In my view, the system used in Mr Tannahill’s office for meeting a deadline for filing a notice of opposition was far from being reliable and I am not surprised that it failed. The question before me is whether an extension of time is justified in view of the attorney’s actions. A similar issue was considered in New Clear Water Pty Ltd v Atlantis Corporation Pty Ltd 2001 APO 48, where the Deputy Commissioner concluded that it was not appropriate in all the circumstances to visit the consequences of the actions of the attorney on his client because the client would not have been aware of the situation. I consider that the same principle applies here. 

43. Overall, I consider that it is appropriate to exercise the discretion in the present case.

Did the person concerned took due care?

44. I am not aware of any Australian case law in which the standard of due care required under section 223(2A) was considered. For guidance on the matter, I will turn to IP Australia’s Manual of Practice and Procedure, which states:

"Extensions of time under subsection 223(2A) would only arise where the person concerned had appropriate systems in place and did everything that could reasonably be expected to ensure the relevant act was done and despite that, a relevant act was not done in time. A reasonable enquiry is whether the systems or mechanisms put in place were appropriate to ensure the relevant act was performed in time. If the person concerned did not have adequate systems in place or had not done everything reasonably possible to ensure the relevant act was done in time, an extension under section 223(2A) would not be appropriate." [3.24.6]

45. TFH did not provide any submissions in support of their application for extension of time in respect of due care under section 223(2A).

46. However, Mr Dummer stated that the concept of “due care as required in the circumstances” is well known in the law and directed my attention to Vaughn v Menlove (1837) 3 Bing. N.C. 467, 1323 E.R. 490 (C.P.), where it was described whether the individual “proceed[ed] with such reasonable caution as a prudent person would have exercised under such circumstances.”

47. Mr Dummer submitted that a file lying in a pile of files on an attorney’s desk is not a reliable mechanism for meeting a deadline to file a notice of opposition. He argued that ascertaining from a client just two before the deadline if a notice of opposition should be filed is not a course of action which would be followed by a prudent person. He further submitted that the fact that Mr Tannahill cannot attest to any other manner, such as a diary entry or electronic data entry, by which the approaching deadline could have been brought to Mr Tannahill’s attention demonstrates a lack of due care.

48. Considering the facts of the case, my view is that the system used in Mr Tannahill’s office for meeting the deadline for filing a notice of opposition falls short of taking due care.

CONCLUSION

49. TFH has shown the existence of an error or omission that prevented forming an intention to oppose the patent application and subsequent filing of a notice of opposition by the due date. I am satisfied that an extension of time under section 223(2)(a) is appropriate.

50. I am not satisfied that circumstances beyond control or taking due care have been demonstrated. Consequently, an extension of time under section 223(2)(b) or 223(2A) would not be appropriate.

51. I grant the extension under section 223(2)(a).

COSTS

52. Ordinarily in proceedings such as these, costs follow the event. In the present case, TFH have been successful in obtaining extension of time under section 223(2)(a), but unsuccessful in relation to sections 223(2)(b) and 223(2A). TFH have taken a shot gun approach to the grounds for the extension, and there was no case in relation to unsuccessful grounds. In this situation, TFH should not be rewarded by an award of costs. Furthermore, I consider that Kelvindale also should not be rewarded by an award of costs.

53. Therefore, I make no award of costs.

Dr S. K. Aggarwal
Delegate of the Commissioner of Patents
22 December 2009   

Patent attorneys for Kelvindale   : Wallington-Dummer, Sydney

Patent attorneys for TFH              : Ahearn Fox, Brisbane