Kimberly-Clark Corporation v the Procter & Gamble Company

[1990] APO 43

PATENTS ACT 1952

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Application No. 586633 by KIMBERLY‑CLARK CORPORATION, opposition by THE PROCTER & GAMBLE COMPANY and objection to extension of time to lodge evidence‑in‑support.

Background

Patent application No. 586633 for an invention entitled "Diapers with elasticized side pockets" was advertised as accepted on 20 July 1989.  On 12 October 1989 The Procter & Gamble Company (Procter) lodged notice of opposition under section 59 to the grant of a patent on the application and has been granted three unopposed extensions of time in which to serve its evidence‑in‑support.
         On 31 August 1990 a fourth application for extension of time was lodged seeking to extend the period for lodging evidence for a further period of 2 months until 12 November 1990.  Kimberly‑
Clark Corporation (Kimberly‑Clark) through its patent attorneys gave notice of its objection to the application for extension being granted, and in accordance with practice the matter was set down for hearing.
         The hearing was held in Canberra on 5 October 1990.  Mr Greg M. Turner, patent attorney of Spruson & Ferguson, Sydney represented the applicant for the patent, and Mr David Shavin of Counsel, instructed by Mr D.J. Ryan, patent attorney of Davies & Collison, Melbourne represented the opponent.

The Application for Extension
          The circumstances and grounds given in the present application for extension of time are as follows:

"Further time is required for the reason that the attorney handling the matter has been required to visit the United States for the purpose of discussing the collection of the evidence and to consider certain further evidence which has recently become available.

Further time is required to enable us to complete these discussions and investigations and to prepare and serve the evidence."

Submissions
         Mr Shavin lodged a statutory declaration made by Mr Ryan at the hearing which further explains the circumstances concerning the extension of time.
         This declaration includes the following points in support of the application for extension of time:

(1)A number of prior art documents have been considered in relation to the opposition and have been filed with 2 declarations lodged on 11 April 1990 and 4 June 1990.

(2)It was difficult to find a suitable expert witness to determine the state of the art in Australia at the priority date of the application.  An expert witness was engaged as a consultant on 11 July 1990 and reports were prepared during July and August.

(3)In late August Mr Ryan became aware of information disclosed in proceedings in the United States which may be relevant to the present opposition.  Mr Ryan attended a conference in New York on 4 September 1990 where documents were made available to him which suggested that the invention had been obtained and which also went to the grounds of fair basis and sufficiency.  Mr Ryan is considering this new material and is awaiting further material from the United States relating to these grounds.  Before filing evidence Procter would like the new evidence and the reports of the expert witness to be considered by Counsel.

(4)The attorneys for Kimberly‑Clark were advised by phone and letter on 31 August 1990 that it was necessary to seek a further extension of time for the filing of evidence‑in‑support.

(5)An application to amend the Notice of Opposition to add the ground of obtaining was filed on 13 September 1990.

Mr Shavin submitted that a lot of work had already been done by the opponent involving considerable expense and this fact together with the new material which goes to the grounds of opposition demonstrated this was a serious opposition. He also argued the opposition procedure itself contemplates delay and the fact of the delay was not a sufficient basis of itself to counterbalance the public interest aspect in having a serious opposition properly considered by the Commissioner (Kimberly Clark Ltd v Commissioner of Patents and Another (No. 2) 13 IPR 551).
         Mr Turner's submissions on behalf of the patent applicant included the following points:

(1)Application No 586633 was advertised accepted on 20 July 1989 so Procter has had at least 15 months to prepare its case.  During this time Procter has put nothing before the Commissioner to establish that an invalid patent will issue.

(2)In contrast to the situation in The Wellcome Foundation Limited v Peptide Technology Limited (13 IPR 567) the invention is relatively straightforward, the technology is simple and Procter has not demonstrated the evidence is voluminous.

(3)Procter has been importing and selling a diaper which appears to lie within the scope of the claims of the applicant's application.  Kimberly‑Clark was therefore severely disadvantaged because it could not take action on the alleged infringing product.  Although the applicant could claim damages for infringement prior to sealing, a dollar value cannot be attributed to these circumstances and so the applicant would not recoup the loss.

(4)The request under sub‑regulation 76(3) to add a new ground to the notice of opposition has not been allowed and it is therefore irrelevant to the present extension of time.  In addition the further evidence from the US in relation to the new ground of obtaining would not relate to the present grounds of opposition.  The consideration of fair basis is an internal matter with respect to a specification and does not depend on other evidence.

(5)There was insufficient time for the applicant's attorneys to submit Mr Ryan's declaration dated 4 October 1990 to Kimberly‑Clark for comment or investigation before the hearing and this should be taken into consideration in awarding costs.

Decision
         In deciding whether an extension of time should be allowed, the Commissioner:

(i)must be satisfied that an applicant who seeks such an extension has made out a proper case justifying the extension; and

(ii)must consider not only the respective interests of applicants and opponents, but also those of the public by ensuring that worthless patents are not granted and that there are no unreasonable delays in the proceedings.

Furthermore in matters such as this, the onus rests on the applicant for the extension of time to establish its case.
         As to the first consideration, Procter's case relies heavily on the facts given in the declaration lodged at the hearing.  Much of this relates to a proposed new ground of opposition.  I consider this new ground is irrelevant to the application for extension of time since obtaining is not a ground of opposition at present.
         Procter has located and filed a number of prior art documents in relation to current grounds of opposition, namely novelty and obviousness.  In addition it is apparent the opponent had some difficulty in locating an expert witness since there were only two or three companies in Australia at the priority date which manufactured disposable diapers.  This situation was exacerbated by the fact that Procter's operations in this area were relatively new and its senior management was not in a position to readily identify experts.  These circumstances indicate to me that Procter is engaged in a serious opposition.
         I agree to some extent with Mr Turner's submission that the facts in this case can be distinguished from the situation in Wellcome v Peptide referred to above, because the technology is not complex and the amount of evidence presently lodged is not voluminous.  Nevertheless Procter had difficulties locating an expert witness, that witness has prepared reports and advice of Counsel in relation to those reports is being sought.  The evidence will then need to be assembled prior to putting it into statutory declaration form.  For these reasons I believe Procter has made out a proper case to justify the extension of time.
         In determining whether the extension of time ought to be allowed I must also consider the interests of the respective parties and the public interest.  Mr Turner argued the patent applicant is being severely disadvantaged by the importation and sale by Procter of diapers which may infringe the granted patent.  He did admit that Kimberly‑Clark could claim damages for infringement which occurs prior to sealing but he said such damages would be inadequate.  I do not think it is possible to anticipate what remedy may be granted in a possible case of infringement.  But I do not believe that, in the case of a serious opposition, the opponent should be denied sufficient time to lodge evidence‑in‑support merely because the applicant, in a subsequent infringement action, may be unable to recoup sufficient damages.
         There is a public interest aspect to consider in ensuring that a worthless patent is not granted simply because insufficient time has been available to prepare and serve evidence‑in‑support.  It is also in the public interest that unreasonable delays do not occur in the proceedings.  Mr Turner considered Procter had put nothing before the Commissioner to establish an invalid patent would issue.  However I note the exhibits to the declarations lodged on 11 April 1990 and 4 June 1990 are patent specifications which prima facie appear relevant to the grounds of novelty and/or obviousness, which grounds clearly go to validity.  In Mr Shavin's opinion the documents which recently became available in the US relate to issues of fair basis and sufficiency, both of which affect validity.  I agree with Mr Turner that the issue of fair basis may be an internal matter concerning the specification.  However Mr Shavin submitted that the new evidence was of a technical nature.  He also referred me to paragraph 13 of Mr Ryan's declaration where the issue of fair basis is mentioned in relation to the basic application from which priority is claimed.  In the absence of the evidence I cannot assess its relevance to the question of fair basis.  However I believe the existing evidence which may affect validity and the new technical evidence which may also be directed to matters affecting validity should if possible be considered by the Commissioner before a patent is granted on application No 586633.
         Turning to the question of delay, Mr Turner said Procter had already had sufficient time to serve the evidence‑in‑support, and was attempting to postpone sealing of a patent on the application to its own substantial advantage.  In response Mr Shavin referred me to the decision in Kimberly‑Clark v Commissioner (supra) which states that the opposition procedure itself contemplates delay.  I agree the fact of delay is not sufficient of itself to deny an opponent the opportunity to present all its evidence.
         I must however consider whether the delay by the opponent in this case is unreasonable.  Procter has already been granted extensions totalling 8 months and now seeks a further 2 months extension.  Procter has indicated the extensions have been required for the collection and preparation of evidence and the seeking of advice from an expert witness.  Mr Ryan's declaration indicates that it will probably take at least between one and two months for the opponent to assemble, consider and put the evidence into statutory declaration form.  Mr Shavin indicated at the hearing that a further extension of 30 days may be required for serving the evidence.  Procter has demonstrated to me that it has been and is actively engaged in collecting evidence‑in‑support both from an expert witness and from material available in the US.  It appears this evidence will be finalised soon.  This along with my previous finding that Procter is engaged in a serious opposition, convinces me the delay in serving the evidence‑in‑support is not unreasonable.  Thus I believe the public interest will be best served if Procter is allowed an opportunity to put all relevant evidence before the Commissioner during the opposition proceedings.
         Therefore I am satisfied the extension of time sought is justified.  Accordingly I allow the extension of time to 12 November 1990.
Costs
         Mr Turner submitted that, since he had only received a copy of the declaration lodged on 5 October 1990 the day prior to the hearing, he did not have sufficient time to submit it to Kimberly‑
Clark for comment or investigation before the hearing.  He said the detailed reasons for the extension which are described in the declaration were not set out in the application for extension of time.  In reply Mr Shavin said there had been a number of phone calls and letters which had informed the applicant's attorneys of the proceedings in the US.  I agree with Mr Turner that the application for extension of time did not indicate in any detail the reasons set out in Mr Ryan's declaration lodged on 5 October 1990.  Procter did not send Kimberly‑Clark's attorneys a copy of the declaration earlier than 4 October 1990 because Mr Ryan was away and did not return to Melbourne until 1 October 1990.  It seems some of the information in this declaration was given to the applicant's attorneys by phone and letter before 4 October 1990 but I have no evidence to show the extent of those communications.
         In reaching my decision I took into account the difficulty in locating an expert witness, the circumstance that the existing evidence and the new technical evidence may affect validity, and the need to assemble the evidence before putting it into statutory declaration form.  Some of these circumstances were not referred to in the application for extension of time.  In my view Procter should have also relied on the circumstances described in Mr Ryan's declaration in the present application for extension of time.  I therefore believe Kimberly‑Clark's objection to the application for extension of time was justified to some extent because of the insufficient grounds specified in that application.  However I note Mr Turner did not admit that Kimberly‑Clark may not have objected to the application if it had provided a fuller explanation of the circumstances.  I also note Mr Turner did not deny that Kimberly‑Clark's attorneys were informed on 31 August 1990 of the necessity for Procter to seek a further extension of time to file evidence‑in‑support and were given some information by phone and letter about the proceedings in the US.  Thus before Kimberly‑Clark decided to attend the hearing it should have taken account of this information as well as the other circumstances of the case, such as the time to locate an expert witness.  Consequently I think that in this situation I should make no award of costs.

(JANET WERNER)