Kimberly-Clark Corporation v the Procter & Gamble Company
[1993] APO 34
•13 May 1993
official notice
decision of a delegate of the commissioner of patents
Application : Number 612742 in the name of KIMBERLY-CLARK CORPORATION
Title: A Disposable Incontinence Garment or Training Pant
Action: Objection to an application under regulation 5.10(2) of the Patents Regulations 1991 for an extension of time to serve evidence in reply in an opposition by THE PROCTER & GAMBLE COMPANY
Decision : Issued . Extension of time to serve evidence in reply allowed.
patents act 1990
decision of a delegate of the commissioner of patents
Re:Patent Application Number 612742 by KIMBERLY-CLARK CORPORATION, Opposition by THE PROCTER & GAMBLE COMPANY, and Objection to an Extension of Time to file Evidence in Reply.
background
Patent application number 612742 in the name of Kimberly-Clark Corporation was advertised accepted on 18 July 1991. The Procter & Gamble Company filed a notice of opposition on 18 October 1991, and filed a statement of grounds and particulars on 18 November 1991.
Evidence in support was due to be served by 18 February 1992. Proctor & Gamble made an application for an extension of time until 18 May 1992 in which to serve its evidence in support. Kimberly-Clark objected to the extension.
On 29 April 1992 the opponent applied for a further three month extension of time until 18 August 1992 in which to serve evidence in support. Kimberly-Clark also objected to this extension. A hearing ('the previous hearing') was held in Canberra on 9 June 1992. The delegate allowed both extensions of time.
The evidence in support was served on the applicant on 11 August 1992.
On 11 November 1992, the applicant served on the opponent three declarations from Rodney Butler, Peter Davies and Gregory Michael Turner as evidence in answer. However, it would appear that an exhibit, PD-1, which constituted part of the evidence in answer and was meant to accompany the statutory declaration by Peter Davies was not served at this time.
On 29 January 1993 the opponent sought a direction from the Commissioner pursuant to Regulation 5.10(1) that certain parts of the applicant's evidence in answer be excluded from the opposition. In a letter dated 25 February 1993, the delegate stated that it would not be appropriate to consider such a direction, as it would involve raising substantive issues concerning the merits of each case. The raising of substantive issues would not be appropriate in a directions determination.
Evidence in reply was due to be served by 11 February 1993. (The opponent has since filed part evidence in reply on 25 March 1993, 16 April 1993, and 26 April 1993.) An application for an extension of time until 11 May 1993 in which to serve evidence in reply was made by Procter & Gamble. Kimberly-Clark objected to the extension and the matter was set down for a hearing in Canberra on 31 March 1993. Mr G Turner, patent attorney of Spruson & Ferguson, Sydney represented the applicant, and Mr G Pryor, patent attorney of Davies Collison Cave, Melbourne represented the opponent.
THE APPLICATION FOR EXTENSION
The grounds that the opponent gave for its application for extension of time were:
'1. The evidence in answer served by the applicant herein raises many issues some of which are complex and some of which we believe relate to matters which are not relevant to issues raised in the Statement of Grounds and Particulars. This has necessitated a detailed analysis of all the evidence with a view to determining which matters require us to prepare and serve evidence in reply. Further, we have sought directions from the Commissioner of Patents to exclude part of the applicant's evidence in answer from the opposition but as yet we have not received a determination from the Commissioner pursuant to that request.
2. The initial period for serving the evidence in reply included the Christmas-New Year Holiday period and staff involved in preparing the case at Messrs. Davies Collison Cave and at Procter and Gamble have been on leave during this period and this has caused some delay.
3. One of the exhibits in the evidence in answer comprises a sample of a product. On 11 December 1992 our attorneys wrote to the Commissioner of Patents requesting that the exhibit be forwarded to the Melbourne sub-office for inspection. Approximately six weeks elapsed before we were advised that the exhibit had been forwarded to the Melbourne sub-office for inspection so that our attorneys were not able to attend the sub-office to photograph the exhibit until the week commencing 25 January 1991 (sic). Thus we were not properly in possession of all the evidence in answer until about half the initial period for serving evidence in reply had lapsed.
4. Notwithstanding the matters raised in paragraphs 1 to 3 above, substantial progress has been made towards preparation of evidence in reply. A detailed analysis of the evidence in answer has been made and instructions have been received from our principals in the United States to obtain evidence in reply from Ms Reilly, who gave the principal declaration in the evidence in support, and also from a technical staff member at Procter and Gamble Australia. Pursuant to the above, a lengthy report has been received from Ms. Reilly which will form the basis of her declaration. We are presently awaiting receipt of a report from technical staff at Procter and Gamble Australia. We envisage that we should be in a position to finalise the evidence in reply by 11 May 1993.
5. Accordingly more time is required to finalise and serve the evidence in reply.'
At the hearing, Mr Pryor submitted that if an extension of time was not justified by one of these grounds taken alone, then a consideration of all of these factors, taken together, would justify an extension of time.
SUBMISSIONS
On 24 March 1993, one week before the hearing, Mr Pryor filed a statutory declaration on behalf of the opponent. This declaration stated in part:
'2. The evidence in answer which has been served raises many issues and a considerable amount of time was required in order to analyse them, determine whether the issues are relevant or not and to decide if evidence in reply would be required. This analysis is now complete and appropriate action has been taken to prepare the necessary evidence.
3. When analysing the evidence in answer, I identified a number of matters which in my opinion were not relevant to the issues raised in the Statement of Grounds and Particulars. Accordingly, a direction was sought from the Commissioner seeking to exclude the relevant parts of the evidence. Now produced and shown to me marked GCP-1 is a copy of a letter dated 29 January, 1993 to the Patent Office. In an official letter dated 25 February, 1993 the Assistant Commissioner refused to give the directions sought. The official letter was not received by my firm until 3 March, 1993. Now produced and shown to me marked GCP-2 is a copy of the official letter of 25 February, 1993. During the period in which the request for directions was pending, there was uncertainty as to whether parts of the evidence in answer would be excluded and therefore there was uncertainty as to what material would be required in evidence in reply. This uncertainty lead to some delay in preparing the evidence in reply.
4. The initial period for serving evidence in reply included the Christmas/New Year holiday period and in addition to the public holidays I took some annual leave early in the New Year. I am also aware that my instructing principal from the opponent company has a new position within the company and this necessitated him moving his office to a different plant. Accordingly he experienced disruptions to his work patterns. Both of these factors contributed delay to the preparation of evidence in reply.
5. The statutory declaration by Peter Davies which constitutes part of the evidence in answer includes an exhibit of a garment. That exhibit was not served upon us and I accordingly arranged for a copy of it to be forwarded to the Melbourne Sub-Office so that it could be inspected and photographed. Now produced and shown to me marked GCP-3 is a copy of a letter dated 11 December, 1992 requesting that the exhibit be forwarded to the Melbourne Sub-Office. The exhibit was not forwarded to the Melbourne Sub-Office until about 25 January, 1993. To my knowledge there is no letter or document from the Patent Office which confirms the exact date that it was made available. Thus, for approximately half of the initial term for serving evidence in reply we were not in possession of all of the evidence in answer. Naturally this delay also adversely affected our ability to prepare and serve the evidence in reply during the initial period.
6. Substantial progress has been made towards preparation of evidence in reply. At this stage, I envisage that the evidence in reply will comprise statutory declarations by three witnesses. Drafts of the declarations have been prepared but not yet finalised. I am scheduled to travel to the United States in mid-April and I will be meeting with my instructing principal from the opponent company to finalise the evidence. I fully expect that the evidence will be finalised and served by 11 May, 1993.'
Mr Pryor's submissions at the hearing included the following points:
A serious opposition is in train, as evidenced by the filing of our statement of grounds and particulars and evidence in support, and by the steps being presently undertaken to collect evidence in reply.
It is a time consuming process to analyse in total the specification, the evidence in support and the evidence in answer before preparing the evidence in reply.
Considerable time has had to be expended in construing the specification. Whilst the technology is simple, complexity arises because the specification is very badly drafted, unnecessarily long, and uses terms and expressions which are imprecise.
There was a delay whilst Davies Collison Cave awaited the outcome of their request to the commissioner that certain parts of the applicant's evidence in answer be excluded from the opposition.
There was some delay in the office of Davies Collison Cave caused by the Christmas/New Year holiday period.
Our instructing principal has had insufficient time to instruct us due to the disruptions caused by his promotion and subsequent change of office.
Exhibit PD-1 was not served upon us until 27 January 1993. This must be the date regarded as the effective date for service of the evidence in answer, not 11 November 1992. This reason alone is sufficient for justifying an extension of time.
It was not possible for us to obtain the exhibit from any other source beside the applicant. It was not clear that the exhibit was the same as that readily obtainable from the United States. In any case, the onus should not be on the opponent to obtain exhibits submitted by the applicant as part of its evidence in answer.
The opponent has been unable to serve its evidence because of circumstances largely beyond its control.
10.The circumstances of the present case meet the criteria set out in Kent-Moore Corporation v Environmental Products Amalgamated Pty Ltd (1992) AIPC 90-915, and thus the commissioner is bound to grant us an extension of time.
11.It is in the interest of the opponent to be granted sufficient time to properly prepare its case. As the extension is only of three months it would be very prejudicial if the opponent could not file all it's evidence in reply.
12.The interests of the parties lies in favour of allowing the extensions. The opponent would suffer a commercial prejudice if an invalid patent were granted; the public interest is against sealing invalid patents; and there is no evidence that the applicant would be prejudiced by the delay.
13.We are proceeding expeditiously. For example, two of the draft declarations which constitute part of the evidence in reply have been finalised. Another declaration has been drafted but not yet finalised.
14.Grant of the extension would not result in an unreasonable delay in proceedings since all the evidence in reply should be served by 11 May 1993.
Mr Turner's submissions in response included the following points:
The opponent has had since 11 November 1992 to collect its evidence. The opponent has done little to demonstrate progress since the evidence in answer was filed, and it cannot be said that there has been a legitimate effort to bring the matter to a conclusion.
The directions sought by the opponent are clearly a time wasting tactic, since the matter objected to by the opponent was clearly addressing issues raised by the opponent. The opponent has relied on this request to delay the case by waiting until nearly the end of the three month period for filing evidence in reply before lodging the request.
The statutory declaration lodged by Mr Pryor on 25 March 1993 containing a list of patent specifications should not be regarded as evidence of the opponent's diligence and expediency. The declaration supposedly constitutes part of the opponent's evidence in reply. It is merely a list of documents intended to give the illusion of activity. The specifications mentioned are not mentioned in the evidence in support or the evidence in answer. They cannot be considered as part of the evidence in reply. They were not listed in the statement of grounds and particulars. There is no detailed analysis of these documents.
The opponent is being purposely obstructive by seeking another extension of time. Similarly, their request to amend the statement of grounds and particulars is proof of their obstructive behaviour. They are attempting to introduce new evidence without seeking leave to adduce that evidence. It is clear that they are attempting to frustrate the progress of the opposition.
Even though the request seeking directions from the commissioner was refused, it should not form a basis for delaying this opposition. It should be kept in mind that the request only related to a very minor number of points in the evidence in answer. These points related to commercial success, not consideration of the prior art or the technical issues. Clarification in respect of those points should not have delayed preparation of the remaining evidence. Any attempt by the opponent to base their request for extension of time on this event must be regarded as an undue delay.
An application for an extension of time should contain a concise statement of the material facts. When required (such as by the other party objecting to the application), relevant material ought to be filed to substantiate the material facts, and to put the other party into a position whereby those facts can be tested or verified.
The opponent has failed to provide a full and frank disclosure of the facts. The request for an extension of time is merely a list of unsubstantiated assertions and submissions. There has been no disclosure of such details as the date of meetings, date of reports or date of sending evidence to the client.
There were only three or four public holidays during the Christmas/New Year holiday period. This cannot justify the granting of a three month extension.
The opponent has been exceedingly dilatory in obtaining their evidence. With regard to paragraph 3 of the request for an extension of time, it should be noted that the attorney wrote to the office on 11 December 1992. The opponent delayed a full month after receiving the evidence in answer before writing to the patent office. There is therefore undue delay. This is a significant portion of their 3 month period. One would have thought the most expeditious way of obtaining the exhibit was to phone the office and arrange for the exhibit to be delivered to the Melbourne sub-office. The opponent further exacerbated the problem by not being diligent in following up their letter. A delay of 6 weeks on their behalf does not warrant an extension of time of 3 months.
10.The circumstances of the present case do not satisfy the criteria set out in Kent-Moore Corporation v Environmental Products Amalgamated Pty Ltd (1992) AIPC 90-915. Neither do they satisfy the view in an unreported patent office decision (Application Number 621535 by Genetics Institute Inc of 26 March 1993) which states that opposition proceedings should not be unduly delayed.
11.The opposition can still proceed even if the request for an extension of time is refused. The evidence would still be before the commissioner, to be considered in a possible 'bar to sealing' action. The opponent would not be disadvantaged by being denied the opportunity to file their evidence in reply.
12.The onus is on the party seeking the extension to justify the extension.
13.In The Wellcome Foundation Ltd v Peptide Technology Ltd 14 IPR 567 an extension was allowed because the technology involved was complex, and the evidence voluminous. In the present case the technology is straight forward, and there is no proof that the evidence is voluminous.
14.The public interest is favoured by the sealing of a valid patent without undue delay. The applicant would be seriously disadvantaged by the extension because they would be hindered in progressing with promotion of their product.
15.Any delays suffered by the opponent are routine. Such matters as drafting declarations, forwarding these to overseas instructing principals and awaiting their reply is very common. There is nothing exceptional about these circumstances which warrants grant of an extension.
DECISION
Applicable law
Subregulation 5.10(2) enables the Commissioner to grant an extension of time to (inter alia) file evidence in support of an opposition. This subregulation provides:
(2)The Commissioner may:
(a)on the application of a party in the approved form; and
(b)on such reasonable terms (if any) as the Commissioner specifies;
extend the time within which the party may take a step prescribed in this Chapter, not being a step that is taken under regulation 5.3 ('filing of opposition').
Subregulation 5.10(5) sets out the conditions precedent for the Commissioner to grant an extension of time under regulation 5.10(2) (inter alia). This subregulation provides:
(5) The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:
(a)if he or she proposes to grant an application by a party-is reasonably satisfied that the other party has been notified of the application; and
(b)if he or she proposes to act on his or her own motion-ensures that the parties are notified of the proposed action; and
(c)in either case:
(i)gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and
(ii) is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances.
From this, it is clear that before I can grant an extension of time in this matter, the opponent must show that the extension of time is appropriate in all the circumstances.
Kent-Moore (supra) considers in detail the application of regulation 5.10(2) in the context of an application for an extension of time to file evidence in support. It decides that an extension of time should only be granted if the answer to each of the following questions is negative:
_is the justification based on matters not referred to (either directly or by clear implication) in that statement of grounds and particulars?
_is the extension sought to find evidence to support speculative or non-specific particulars?
_is the extension sought because the opponent requires more time to determine whether a particularised document is relevant? and
_has there been unreasonable delay in putting the evidence together?
Furthermore, that decision emphasises that the applicant for an extension of time bears the onus of justifying the extension sought, and refers to the relevant law in the following terms:
'This law can be stated simply as follows:
(i)The Commissioner, before allowing the extension, must be satisfied that the person seeking the extension has made out a proper case justifying the extension;
(ii)The Commissioner must consider not only the private interests of applicants for patents, and opponents, but also the public interest, by ensuring that invalid patents are not granted, and that proceedings are not unreasonably protracted.
However, whatever the justification might ultimately be, it seems to me that it is imperative that the person seeking the exercise of the Commissioner's discretion must provide the Commissioner with a full and frank disclosure of the facts which give rise to the need for the extension. That much is apparent from the words of Jenkinson J in Kimberly-Clark v Commissioner of Patents (1988) 13 IPR 569, when he was considering an extension of time under s 160 of the Patents Act 1952. At page 583 he says:
'The considerations that were identified by Bowen CJ in Vangedal-Nielsen v Commissioner of Patents (1980) 33 ALR 144 at 150 as relevant to the exercise of the power of extension conferred by s 59(1) will in my opinion be relevant also to the exercise of the power conferred by s 160(2)(a) in relation to the time prescribed by the former subsection for lodging notice of opposition, although the relative weight of each consideration may well be different in the two different discretionary judgements. In order to make out the 'proper case ... justifying an extension' to which Bowen CJ referred in that case, 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 of the applicant (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.'
Grounds for extension - complexity of issues
I agree with Mr Turner's submissions that the delays suffered by the opponent under this heading were 'routine'. In this case, I believe that the analysis of the particular evidence in answer which had been filed, consulting with expert witnesses, the drafting of declarations, forwarding these to overseas principals and waiting for replies, do not of themselves justify an extension of time.
Grounds for extension - the application for directions
A significant part of the justification for the extension of time relates to the waiting for a response to the directions sought by the opponent. This delay could not possibly be considered as unexpected. It was also a result of the opponent's own actions.
The opponent's contention that it could not prepare evidence until it had received a determination regarding its request for directions seems to be unusual, and was not fully explained. At the hearing, Mr Pryor said that:
'Having identified parts of the evidence in answer which did not meet that requirement, we then sought directions from the commissioner excluding that material from the opposition. Had that been done, it would have speeded up the progress of this opposition, because there would have been less material to analyse. We did not appeal that decision because we did not wish to unnecessarily protract these proceedings.'
In his declaration of 24 March 1993, Mr Pryor said:
' ... there was uncertainty as to whether parts of the evidence in answer would be excluded and therefore there was uncertainty as to what material would be required in evidence in reply.'
It may appear understandable that the opponent did not want to continue the preparation of evidence until it knew the outcome of the application for directions. It does however seem imprudent on the part of the opponent not to have prepared evidence as quickly as possible rather than taking a chance of being shut out by its failure to be granted an extension of time to serve evidence. The opponent's expectation that the directions sought would be granted seems unduly optimistic in the light of analogous situations before other tribunals. In general, the admissibility of evidence is an issue to be decided at the trial or other hearing. The practice in this office has been to decide the admissibility of evidence in the written decision on the substantive issues. The opponent deliberately chose the novel course of seeking directions excluding evidence. In these circumstances, it would be prudent for an opponent which believed that it had a serious opposition to proceed with the preparation of its evidence. If the opponent was confident that this evidence was not admissible, it could have chosen not to address it at all in its evidence in reply. Alternatively, it could have addressed this evidence in its evidence in reply. Neither of these courses of action would have precluded it from putting submissions on admissibility at the hearing.
Grounds for extension - the missing exhibit
The opponent has not given any reason why it waited one month before informing the Patent Office that a copy of exhibit PD-1 had not been served along with the other evidence in answer. No evidence was produced indicating that further attempts beyond that of sending a letter to the patent office were made to procure the exhibit. There is, however, an issue of whether or not paragraphs 5.8(2)(a) and (b) of the regulations require the applicant to serve copies of exhibits on the opponent. The wording of those paragraphs is
'(a) serve on the opponent a copy of any evidence in answer to the evidence in support ... within 3 months ... ; and
(b) file the evidence in answer as soon as practicable after the copy of the evidence has been served on the opponent.'
Regulation 22.12 requires that
' ... evidence must be in the form of a declaration.'
The requirement that evidence 'must be in the form of a declaration' does not preclude there being exhibits to the declarations. If there is an exhibit to a declaration, regulation 5.8 would require that a 'copy' of that exhibit be served on the opponent. It may be difficult to serve a 'copy' of an exhibit which is a large piece of unique apparatus. However that is not the case here. Exhibit PD-1 is an instance of a mass-produced disposable garment. I believe that the failure to serve a copy of it on the opponent is a failure to comply with regulation 5.8. I also accept that, to some extent, this failure contributed to the opponent's need to request the present extension of time.
Grounds for extension - Christmas/new year holiday period, annual leave and promotion of instructing principal
Whilst not challenging the veracity of the opponent's officers and attorneys, I am not satisfied that the various submissions and assertions of the opponent constitute a full and frank disclosure of all the conduct, knowledge, beliefs and mental processes which has lead to their need to request further time to file evidence in reply. By way of example:
_there is generally no indication of when the opponent undertook action in respect of the activities which have not been completed and for which an extension of time is sought to enable completion;
_there is nothing presented to support the opponent's assertion of the limited availability, or unavailability, for meetings or discussions of draft declarations with the 'instructing principal' nor of the disruption to his work patterns.
The respective interests of the parties and of the public
The law on this class of action, as referred to earlier in this decision, requires me to also consider the respective interests of the parties, and of the public interest.
As has often been stated, the interests of the opponent are best served by granting the extension; the interests of the applicant by refusing the extension. With respect to the public interest, there is a balance between ensuring invalid patents are not granted, and in ensuring that the proceedings are not unreasonably protracted.
I believe that the balance of the interests in the present case is in favour of granting the extension of time. I have found that the applicant's failure to timely serve a copy of exhibit PD-1 on the opponent was contrary to the regulations. I accept that this failure to comply with the regulations did cause some delay in the opponent's preparation of its evidence in reply. It is in the opponent's interest that it be given a remedy which compensates for this failure in procedure on the part of the applicant.
This failure in procedure meant that the opponent did not get to see exhibit PD-1 until some time in the week beginning 25 January 1993. The record does not show which day in that week the opponent inspected the exhibit at the Melbourne sub-office. However, it is likely that this was on or about Friday 29 January. The period from and including 12 November 1992 (when the normal three months for serving evidence started to run) until 29 January 1992 is 79 days. I will accordingly grant an extension of time to 1 May 1993. This is 79 days from 11 February 1992, which would otherwise have been the last day for serving the evidence in reply.
conclusion
In the present case the opponent has the responsibility to establish that the extension of time sought is appropriate in all the circumstances. It has established that a part extension of time is justified, due to the failure of the applicant to timely serve a copy of exhibit PD-1.
I also find that the opponent has not made a full and frank disclosure of the facts which give rise to the need for the full extension of time.
The balance of the interests of the parties, and of the public, are in favour of granting an extension of part of the time requested.
I therefore refuse to grant the full period of the extension of time sought. I grant an extension of time to 1 May 1993 to file evidence in reply.
COSTS
I award costs against the applicant, Kimberly-Clark Corporation.
Allen Evans
Delegate of the Commissioner of Patents
Patent attorneys for the applicant :Spruson & Ferguson, Sydney
Patent attorneys for the opponent :Davies Collison Cave, Melbourne
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