Knauf Plasterboard Pty Ltd v CSR Building Products Limited - [2018] APO 64

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Knauf Plasterboard Pty Ltd v CSR Building Products Limited [2018] APO 64

Patent Application: 2014201979

Title:WALL STRUCTURE AND METHOD

Patent Applicant:                   CSR Building Products Limited
Opponent:  Knauf Plasterboard Pty Ltd
Delegate:  Dr S. J. Smith
Decision Date:  18 September 2018
Hearing Date:  Written submissions filed 14 August 2018 and 21 August 2018

Catchwords: PATENTS – section 223 – extension of time to file notice of opposition – failure to file prepared notice – full and frank disclosure – discretionary considerations – extension of time allowed – costs awarded

Representation: Patent attorney for the applicant: Griffith Hack
Patent attorney for the opponent: Spruson & Ferguson

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2014201979

Title:WALL STRUCTURE AND METHOD

Patent Applicant: CSR Building Products Limited
Date of Decision: 18 September 2018
DECISION
Extension of time allowed under section 223(2)(a) until 12 July 2018 to file a notice of opposition.
The statement of grounds and particulars is due to be filed by 12 October 2018.
I award costs according to Schedule 8 against CSR Building Products Limited.
REASONS FOR DECISION
Background

Patent application 2014201979 in the name of CSR Building Products Limited (CSR) was filed on 8 April 2014 claiming priority from provisional application 2013901190 which was filed on 8 April 2013. Examination was requested on 29 November 2016 and acceptance advertised on 5 April 2018. Pursuant to regulation 5.4(1) the time for filing a notice of opposition to grant of a patent expired 3 months later on 5 July 2018.
On 12 July 2018 Knauf Plasterboard Pty Ltd (Knauf) filed a notice of opposition to grant of a standard patent. The covering letter associated with the notice of opposition indicated that it was a replacement of a notice previously filed on 5 July 2018 with an incorrect application number. An application for an extension of time under section 223(2)(a) in which to file the notice of opposition and a supporting declaration were filed on 13 July 2018. A further declaration in support of the extension was filed on 19 July 2018. The parties were advised of the Commissioner’s intention to grant the extension of time on 19 July 2018, and, pursuant to the requirements of regulation 22.22, CSR was provided with an opportunity to be heard on the extension of time request.
CSR objected to the extension of time being allowed on 26 July 2018 and requested to be heard. The matter was heard by written submissions.
The law
Section 223 of the Patents Act 1990 relevantly provides:
“(2) Where, because of:
(a) an error or omission by the person concerned or by his or her agent or attorney; or
(b) …
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.”

The meaning of the term “relevant act” is defined by section 223(11) and regulation 22.11(4), and encompasses the act of filing of a notice of opposition to the grant of a patent under regulation 5.4.
The following principles for applying the provisions of section 223 are derived from decided cases:
(i) The statutory provision to extend time is beneficial in nature and should be applied beneficially.[1]
(ii) While the applicant has the burden of placing before the tribunal the circumstances it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it be so described.[2]
(iii) For section 223(2)(a) to be enlivened, it must be shown that an error or omission had contributed to cause the failure to perform the relevant act, i.e. there must be a causal connection between the error or omission and the relevant act that is required to be done within the stipulated time.[3]
(iv) The applicants for an extension of time must demonstrate that they had an intention to do the relevant act within the time prescribed, and that an error or omission on their, or their agent’s, behalf reasonably could be said to have frustrated that intention.[4] However, there will be exceptional circumstances where the relevant error precluded the formation of a specific intention. In such cases the required causal connection is satisfied if the error contributed to the failure to form the intention to perform the relevant act.[5]
(v) “In order to make out the ‘proper case … justifying an extension’ … an applicant would … 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 … 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.”[6]
[1] ReSanyo Electric Co Ltd and Commissioner of Patents [1996] AATA 832; (1996) 36 IPR 470 at 479 [16].
[2] Ibid.
[3] Kimberly-Clark Ltd vCommissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 at 579 [9], 582 [15]; Re Lazer Safe Pty Ltd and Commissioner of Patents [2001] AATA 967 at [11].
[4] Kimberly-Clark Ltd vCommissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 at 579 [9]; Re Lazer Safe Pty Ltd and Commissioner of Patents [2001] AATA 967 at [11].
[5] Re Apotex Pty Limited and Commissioner of Patents [2008] AATA 226 at [21].
[6] Kimberly-Clark Ltd vCommissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 at 583-584 [17].
The term “error or omission” in section 223 encompasses accidental slips, inadvertences and errors caused by faulty reflection;[7] an unexpected failure to exercise due diligence and/or a flaw in mental function in carrying out an intention;[8] and a breakdown in procedure in effecting an intention.[9] Accordingly, the phrase “error or omission” has a broad scope.
[7] Ibid at 579 [9].
[8] Total Peripherals Pty Ltd v Commissioner of Patents [1998] AATA 784 at [14].
[9] Oz Technology, Inc v Boral Energy Ltd [1999] APO 8.
In contrast, the failure to perform the relevant act cannot itself be the “error or omission” by which the failure occurred[10] and a deliberate policy or decision that leads to the failure to perform the relevant act does not constitute an “error or omission”.[11]
[10] Kimberly-Clark Ltd vCommissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 at 580 [11].
[11] Re Weir Pumps Ltd and Commissioner of Patents and Stork Pompen BV [1988] AATA 331; (1988) 13 IPR 163 at 166-167 [9].
The application for an extension of time
On 13 July 2018 Knauf applied for an extension of time of one month until 5 August 2018 to file a notice of opposition to the grant of a patent. The ground relied upon was an error or omission by the person concerned, or their agent or attorney.
The evidence
Together with its extension request, Knauf provided a declaration (the first declaration) from the secretary of the attorney handling the opposition that relevantly states:
“That, on the deadline of 5 July 2018 I filed the Notice of Opposition in Appendix A via eServices. I received the confirmation and printed the paperwork. Because our office was packing up and moving location on the day, I put the paperwork into a folder with the intention to file it in our system at a later time, when the move was complete. This folder was then placed into the box that was taken to be moved to the new office location. The paperwork was lost during the move.
Upon request from the attorney to check with the Patent Office that the Notice of Opposition had been received on 12 July 2017 [sic], I noticed that there was an error in the application number on the Notice of Opposition. We then filed a correcting letter with the Patent Office on 12 July 2018 with the request to replace the Notice of Opposition with a Notice including the correct application number.
That, I also called the Office to confirm the correcting although was advised that they could not locate our original Notice of Opposition, with the typo in the application number, that was filed on the deadline.
That, there may have been an error in filing the notice of opposition on the deadline, and if so, that error was mine. As an abundance of caution, we are re-filing the Notice of Opposition with the corrected application number along with an extension of time.”
I note that Appendix A to which the first declaration refers includes a cover letter dated 5 July 2018 which refers to application number 2014201907 and a notice of opposition dated 5 July 2018 which refers to application number 2014201970.
Following a telephone conversation between the responsible attorney and a delegate of the Commissioner in which it was pointed out that there was no record within IP Australia of a notice of opposition being filed on 5 July 2018 on the correct application, or either of the possible incorrect application numbers, a further declaration (the second declaration) was filed on 19 July 2018 by the attorney handling the opposition, which relevantly states:
“That, on the deadline of 5 July 2018 which we were monitoring, I instructed my secretary Isabel Hall to file a notice of opposition in relation to 2014201979 and was informed by Isabel that this had been done.
With reference to the previous declaration by Isabel Hall in relation to this matter, although Isabel believed she had filed the Notice of Opposition, it now appears that this was not done as we understand there is no record of the Notice being filed at the Patent Office.
Accordingly, there was an error or omission on our part resulting from moving office on the deadline whereby the Notice of Opposition was not filed on the deadline, in spite of an attempt to do so and my understanding that this had been done.”
A subsequent declaration (the third declaration) by the responsible attorney dated 3 August 2018 was filed together with Knauf’s written submissions of 14 August 2018, and relevantly states:
“That I sent a letter to the Applicant on 10 May 2018, noting acceptance of its application 2014201979. In the letter, I indicated that in the absence of confirmation of a reasonable request, ‘our client will have no other option than to oppose the granting of the application and will then take definite steps to invalidate the claims.’ ...
That, we received no response to our letter of 10 May 2018 from the Applicant.
That on 1 June 2018, I sent a letter to the Applicant in response to a threatening letter to our client in relation to related innovation patent 2014100051. In my letter, I confirmed that our client would proceed with invalidating the patent application 2014201979 by way of the present opposition. …
That, on 13 June 2018, I confirmed in a letter to my client that we would file the notice of opposition in relation to 2014201979 on the deadline. ...”
A copy of the correspondence dated 10 May 2018 was included with the third declaration and relevantly states:
“We note that application AU2014201979 has now been accepted.
We firmly believe that the claims of that application are invalid. Although the claims allude to the feature of a bulkhead, the claims are not explicitly limited to a bulkhead. All the indicated advantages of the invention stem from the bulkhead and so this may be an oversight.
...
Please confirm by 18 May 2018 that your client is prepared to limit the claims of AU 2014201979 to include the bulkhead features of related innovation patent AU 2014100051.
In the absence of your confirmation, our client will have no other option than to oppose the granting of the application and will then take definite steps to invalidate the claims.”
A copy of correspondence dated 13 June 2018 from the attorney to Knauf was included with the third declaration and contains the following passage:
“The deadline for opposing the registration of their patent application AU 2014201979 is 5 July 2018. We enclose a Notice of Opposition which we will file on that date.”
CSR submits that the third declaration must be disregarded as evidence filed out of time. It is certainly preferable that all relevant evidence in support of an extension of time under section 223 be provided at the earliest opportunity. Indeed, pursuant to regulation 22.11(1), an application for an extension is not made until a declaration is filed. However, the extension has not yet been granted and I cannot see that there is a prescribed time for filing further evidence in support of a requested extension such that the third declaration could be considered out of time. Accordingly, I will have regard to the content of the third declaration to the extent that it is relevant. Principles of procedural fairness require that CSR has an opportunity to comment on any evidence in support of the request, and CSR has commented on the third declaration.
Was there a relevant error or omission?
The crux of CSR’s submission is that no relevant error or omission has been established. CSR submits that the loss of paper work during the office move cannot be a causal error, as it can only have caused loss of the relevant paper work not the failure to do the action, and further submits that the second error identified in the first declaration, the typographical error in the notice of opposition, has no causal link to the failure to file the notice of opposition. With regard to the attribution, in the second declaration, of the error to the office move, CSR submits that there is no causal connection between the office move and the failure to file the notice – that is, as set out in the first declaration, the secretary was able to access eServices despite the move.
With regard to the relevance of the office move, Knauf states in written submissions, in passages which appear to in fact be evidence rather than submission, that the move referred to coincided with a firm merger from Cullens to Spruson and Ferguson, with the “Cullens environment being dismantled around us.”[12] While this adds some context to the circumstances, as noted by CSR this move, in itself, does not seem to be material to the existence or not of an error, and I agree that events occurring after the failure to file the notice are not causal of the failure. I also accept CSR’s submission that it would be expected that there would be some electronic record of the action having been undertaken, if it had in fact been done. However, the presence or absence of records either in paper or electronic form after the relevant date is not, to my mind, relevant to the existence of an error or omission in relation to the action of filing the notice of opposition. In relation to the typographical error I agree with CSR that such an error in a filed notice of opposition may have been addressed by amendment – regulation 5.14 allows for the correction of clerical errors in notices of opposition.
[12] Knauf’s submissions dated 14 August 2018.
However, it is clear that filing of the notice of opposition was not successfully effected, as pointed out by an officer of IP Australia in a telephone call to the relevant attorney on 19 July 2018, following which the second declaration was filed. CSR submits that there are irreconcilable inconsistencies between the first declaration and the second declaration: that is, in the first declaration it is declared that the notice of opposition was filed and in the second it is acknowledged that it was not, and this is attributed to the office move. In light of Knauf’s submissions in relation to the office move, I understand attribution of the error to the move to mean that, in the general upheaval I would expect to be associated with such a move, there was the potential, in this instance realised, for errors to occur. With regard to the inconsistency between the declarations, I note that in the first declaration it is acknowledged that there may have been an error in filing the notice of opposition, and Knauf submits that the first declaration in support of the extension was made before it was clear that the notice of opposition had not been received by IP Australia. CSR’s conclusion is that “[n]one of the evidence or submissions identify an actual error or omission that is causally linked to the non-filing of the Notice of Opposition.”[13]
[13] CSR’s submissions dated at 21 August 2018 at [38].
In my view the evidence establishes that Knauf had an intention to file a notice of opposition in the period leading up to the relevant date. While the specific details surrounding the failure to file a notice by that date are not entirely clear, the uncontradicted declaratory evidence of both the attorney and the secretary is that there was an intention to file a notice of opposition on 5 July 2018 and it is clear that instructions were given to the secretary to file the notice of opposition.[14] There is no inconsistency between the declarations in this regard, and also no inconsistency with the correspondence annexed to the third declaration. Whether the failure to file the notice of opposition arose due to an error in the electronic process of attempting to file the notice, from a mistaken belief that it had already been done – for example, this action may have been confused with some other action which was in fact undertaken, or due to some other error on the part of the secretary, does not alter the fact that there has been a breakdown in the process – described by Knauf as a “secretarial error” – which I understand as a failure by the secretary to act on the intentions of Knauf and the instructions of the attorney. Indeed, I note that CSR seems to accept in its submissions that the secretary made an attempt to file the notice and gave the attorney an understanding that it had been done. It is troubling that the first declaration attests to receipt and printing of confirmation documents which cannot have occurred in relation to this notice of opposition. However, in the circumstances this seems likely to reflect a confusion of this action with some other action – such confusion is understandable in the context of an office move causing some level of disruption. I do not consider that a fair assessment of the evidence as a whole leads to a conclusion that there was a deliberate decision not to file the notice of opposition by the relevant date, or a lack of an intention to do so.
[14] Second declaration at [2].
I am satisfied that the failure of the secretary to act on instructions from the attorney constitutes an error or omission. I note CSR’s submission that the requirement that the failure to do the relevant act cannot itself be the error or omission by which the failure occurred,[15] but this is not such a case. The failure by the secretary to file the notice of opposition occurred in the context of an intention and instruction to do so. It is this failure to act effectively on this instruction that is the relevant error or omission.
Did the error or omission cause the failure to file a notice of opposition within the prescribed time?
[15] Kimberly-Clark Ltd vCommissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 at 580 [11].
Given my conclusion that the relevant error or omission is the failure of the secretary to act on instructions to file a notice of opposition on the relevant date, it is self-evident that the error was causative of the failure of the notice of opposition to be filed. CSR’s submissions regarding the lack of a causal link between the errors described in the declarations and the failure to file the notice are addressed above.
For completeness, I note that it is apparent that there were also other errors with regard to the application numbers recited in the prepared paperwork. However, given that the notice was not filed, the possible consequences of these errors are not material to the extension of time request.
Should the discretion be exercised?

I have found that a relevant error occurred that prevented Knauf from filing a notice of opposition within the prescribed period. However, the power provided by section 223(2) is discretionary – “the Commissioner may … extend the time for doing the act” – and it remains to be considered whether the balance of relevant factors justifies the exercise of the Commissioner’s discretion in favour of Knauf. The relevant factors to be considered were summarised in Vangedal-Nielsen v Smith (Commissioner of Patents)[16] as follows:
(i) whether the Commissioner is satisfied that a proper case has been made out justifying an extension;
(ii) whether a serious opposition has been foreshadowed;
(iii) whether there has been undue delay in seeking an extension of time;
(iv) the interests of the parties in refusing or granting an extension;
(v) the public interest.
[16] [1980] FCA 163; 1A IPR 731 at 736.
In balancing these factors, it is “more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time”.[17]
Has a proper case been made out?
[17] ReSanyo Electric Co Ltd and Commissioner of Patents [1996] AATA 832; (1996) 36 IPR 470 at 479 [16].
Having considered CSR’s submissions that the disclosure of the relevant circumstances and chain of causation is not full and frank and that no relevant error or omission has been identified, for the reasons set out above, I am satisfied that the evidence establishes that there was a relevant error or omission. To the extent that there are inconsistencies in the evidence, these seem more likely to arise from imperfect recollection than from any intention to mislead the Commissioner. I do not think that misremembering can be equated to a failure to be full and frank, and I am mindful both of the beneficial nature of section 223 and of the comments of Spender J (albeit in relation to actions related to the maintenance of an application) in G S Technology Pty Limited v Commissioner of Patents:
“Most errors and omissions which lead to a failure to do an act or take a step are the result of negligence or incompetence. Where such errors and omissions are made against a clearly demonstrated desire to maintain the application (and thus not have it lapse), and where attempts are made to remedy the error or omission as soon at its consequences are discovered and the existence of the error or omission learnt, as is the case here, the considerations in favour of an extension seem to me to be quite persuasive.”[18]
[18] [2004] FCA 1017; (2004) 63 IPR 9 at 24 [65].
I am satisfied that a proper case has been made out.
Is a serious opposition foreshadowed?
An intention to oppose the application (contingent on CSR’s response) is indicated in correspondence of 10 May 2018 and a basis for the opposition is outlined, which indicates that consideration had been given to the nature of the opposition at that early stage. I have no evidence before me that would lead me to doubt that a serious opposition is in train.
I note CSR’s submission that “[i]f a serious case were to be tried, all due effort and care would have been taken by the Opponent in ensuring the timely filing of a Notice of Opposition.”[19] I cannot agree that the presence of an error in and of itself constitutes a basis for concluding that a serious opposition is not foreshadowed, or that reasonable effort and care to file the notice was not taken. Taken to its extreme, CSR’s submission in this regard would seem to render section 223(2)(a) otiose.
Has there been undue delay in seeking the extension of time?
[19] CSR’s submissions dated 14 August 2018 at [45].
CSR submits that the delay of one week in checking with the patent office that the notice of opposition had been filed is unexplained. However, the evidence supports a conclusion that the attorney believed the notice of opposition had been filed on time prior to this.[20] What prompted the investigation with the patent office on 12 July 2018 is not described in the evidence. While information in this regard would have been of interest, in my opinion this is not an inordinately long delay, and whatever the case may be I can see no reason to conclude that the attorney was aware that the notice had not been filed successfully prior to that date. The notice was then filed on 12 July 2018 and the extension requested on 13 July 2018. There has been no undue delay that would weigh against granting the extension.
The interests of the parties
[20] Second declaration at [2].
Knauf’s interests lie in the extension being granted and the opposition being allowed to proceed. CSR’s interests lie in the application proceeding to grant without a potentially lengthy opposition process. The interests of the parties are largely offsetting.
The public interest
The public interest lies in the efficient and orderly processing of matters before the Patent Office, and in ensuring invalid patents are not granted because insufficient opportunity has been afforded to oppose the grant.
The consequence of refusing to grant the extension is the denial of Knauf’s opportunity to mount a substantive opposition to the grant of a patent in respect of application 2014201979, although there are of course, as noted by CSR, other remedies, such as re-examination or seeking revocation of the patent once granted. Granting the extension will mean that the opposition will proceed, protecting the public interest in not granting invalid patents.
Having regard to the factors set out above, on balance I am satisfied that it is appropriate to exercise the discretion in this case.
Conclusion
I am satisfied that Knauf’s failure to file the notice of opposition within the prescribed period was the result of an error or omission enlivening the provisions of section 223(2)(a) and that it is appropriate to exercise the discretion to grant an extension under that provision. I will allow the extension of time.
Pursuant to regulation 5.5 the statement of grounds and particulars is due on 12 October 2018.
Costs
It is usual in matters before the Commissioner that costs follow the event. Knauf’s request for an extension of time has been allowed, and CSR has been unsuccessful in its objection. I will award costs against CSR.
Dr S. J. Smith
Delegate of the Commissioner of Patents