Kokusan Kinzoku Kogyo Kabushiki Kaisha

[1995] APO 25

official notice

decision of a delegate of the commissioner of patents

Application        :  No. 86670/82 in the name of Kokusan Kinzoku Kogyo Kabushiki Kaisha

Title:  Steering lock for automobiles

Action:  Application for an extension of time under section 223 to extend the time in which to pay a continuation fee; hearing.

Decision:  Issued            .

Abstract:  No error or omission relevant to the failure to pay the continuation fee was established; the application for an extension of time is refused.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 86670/82 by Kokusan Kinzoku Kogyo Kabushiki Kaisha and an application for an extension of time under section 223.

background

Patent application No. 86670/82 was filed on 2 August 1982 by Kokusan Kinzoku Kogyo Kabushiki Kaisha (hereinafter referred to as "Kokusan").  The application claims priority from a Japanese application filed on 26 December 1981.  Application 86676/82 became open to public inspection in Australia on 30 June 1983.

Application 86670/82 lapsed on 2 August 1987 when the continuation fee payable in respect of the fifth year for the application was not paid either by the anniversary date, 2 August 1987, or within the grace period of 6 months after that date.  The application was advertised lapsed in the Official Journal of 31 March 1988.  An examiner's first adverse examination report issued on the application on 25 August 1986 and at the time of lapsing had not been answered.

On 31 December 1993 Kokusan, through its Australian patent attorneys Davies Collison Cave, filed an application for an extension of time under section 223(2) seeking to extend the time in which to pay the continuation fee for the application which fell due on 2 August 1987.  Relevant fees including all unpaid continuation fees were remitted with the extension application.  Statutory declarations to support the extension application were filed on 27 January 1994.   On 24 February 1994 an amended application for extension of time was provided, the amendments correcting the dates of the period of extension sought.  The extension of time sought is for a period of 6 years and 5 months.

By letter dated 22 March 1994, the applicant was informed that the Commissioner was not satisfied that the extension of time sought was justified by the material supplied in support.  In brief, the letter indicated that it was not clear that the failure to pay the continuation fee by the due date was necessarily because of an error or omission, as provided for under s.223(2), and the applicant was invited to provide further supporting evidence of the error or omission and the circumstances in which it arose.  The letter also drew attention to the period of extension sought and indicated "it is highly likely that the delegate will consider that the granting of an extension of time for that duration to be contrary to the public interest".

On 21 July 1994, as no response had been received to the letter of 22 March, the applicant was informed that the Deputy Commissioner intended to refuse the s.223 request unless within 14 days further material in support was filed or a hearing was sought.  By a letter of 4 August 1994, the attorneys advised that instructions were being sought from Japanese associates.  After this advice the Deputy Commissioner directed the matter be set for a hearing and a hearing notice issued on 11 August 1994.

On 26 September 1994 the applicant filed a further declaration in support and also advised its representation at the scheduled hearing.

The hearing took place in Sydney on 28 October 1994. 
Dr P Stearne, patent attorney of Davies Collison Cave, along with Mr M Roberts of that firm appeared for Kokusan.

THE LEGISLATION

The present matter concerns an application for an extension of time under s.223.  The relevant provisions are as follows:

"(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.

(3)The time allowed for doing a relevant act may be extended, whether before or after that time has expired.

(4) Where an application is made for an extension of time for more than 3 months, the Commissioner must advertise the application in the Official Journal.

....

(11) In this section:

"relevant act" means an action (other than a prescribed action) in relation to a patent, a patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications."

Whilst reg 22.11(3) identifies certain prescribed actions to which s.223 is not applicable, a period covered by reg 13.3(1) is not one of them, so that s.223 has application to extend the time to pay a continuation fee.

THE APPLICATION FOR EXTENSION OF TIME

The application

The application for extension of time gives the circumstances and grounds for the application thus:

"The patent Applicant failed to pay the fifth year renewal (sic) fee due 7 August 1987 due to an error, or omission, made by their Japanese patent attorney.  Reminders concerning the payment of renewal fees was sent by Davies Collison Cave to the Japanese Patent Attorneys, Intapatent Bureau, which were apparently received, but through error or omission, were not communicated to the Applicant and consequently no action was taken to pay the renewal fees.  The Japanese Patent Attorneys, Intapatent Bureau, failed to notify the Applicant of the lapsing of the patent application, and indeed the Applicant remained ignorant of this until very recently. It was always the Applicant's intention to maintain the application in force and to prosecute the application through to allowance as a patent.  Evidence in statutory declaration form will shortly be filed at the Patent Office with regard to the circumstances which led to the lapsing of the application."

The evidence in support of the application

1.  Declaration by Satoru Kobayashi dated 20 January 1994
Mr Kobayashi is the Section Manager of the Patent Section of Alpha Corporation, formerly called Kokusan.  He declares as follows:

"2.Mr Takeshi Akiyama, President of Intapatent Bureau, a Japanese firm of Patent Attorneys, was responsible for handling Japanese domestic and foreign patent matters for Alpha Corporation from the early 1980's. Because Alpha Corporation was not familiar with overseas patent matters we relied heavily on Mr Akiyama for advice in all overseas patent matters, including the payment of renewal fees, responding to Examiners' actions and the like. Around 1991 we began to feel that we had not been receiving sufficient information and documentation from Mr Akiyama in connection with Alpha's overseas patent cases. Hence, from 1991 until a transfer of our overseas patent files to new attorneys in May 1993, Alpha Corporation repeatedly asked Mr Akiyama to provide status reports on our patent cases in order to complete our records, but no such information was forthcoming. 

3.In respect of granted patents and pending overseas applications where annuities were due, no information or any reminders regarding due dates for renewal were received from Mr Akiyama. Since our corporation did not own a large number of foreign patents, and as patent regulations vary from country to country, we were uncertain in what countries renewal were payable and we thus relied heavily on Mr Akiyama in this regard.

4.From time to time Alpha Corporation received invoices from Mr Akiyama in connection with renewal fees for patents and these were always settled promptly. In view of this, we believe that Mr Akiyama was aware of Alpha's desire to keep its patents in force, and furthermore that payment of necessary annuities had been attended to.

5.Nevertheless, Alpha Corporation was concerned at the lack of information (lack of information concerning renewal dates) from Mr Akiyama and his lack of response to our request for the same, and in May 1993 we decided to transfer supervision of all of our patent cases to ISP Corporation, a Japanese corporation handling Japanese and overseas patent matters. We asked ISP to review all of our own files as well as the patent files of Mr Akiyama to ascertain the status of our foreign patents, including the '866 application.

6.On July 1993 we were informed by ISP that the current status of Alpha's overseas patents/patent applications could not be determined from the files. We therefore instructed ISP to write directly to the respective overseas attorneys on our various patent cases, including the '866 application to ascertain their current status. As a consequence, it was only in September 1993, when ISP received a reply from their Australian agents, Davies Collison Cave, that we realised that renewal fees for the '866 application, due 2 August 1987, had not been paid, and that the extended period for payment had passed. We immediately instructed ISP to seek advice from our Australian attorneys whether the '866 application could be restored, and if so take the necessary steps for restoration."

2.  Declaration by Yuzuru Yotsuya dated 20 January 1994
Mr Yotsuya is a member of ISP Corporation, a Japanese corporation which handles foreign patent matters for Japanese clients.  He declares:

"2.ISP has since May 1993 acted on behalf of Kokusan Kinzoku Kogyo Kabushiki Kaisha the Applicant of Australian Patent Application No. 86670/82 (hereafter the "'866 application"). Kokusan Kinzoku Kogyo Kabushiki changed its name to Alpha Corporation on 24 September 1993. For convenience I will refer both to Kokusan Kinzoku Kogyo Kabushiki and Alpha Corporation as "Alpha".

3.Alpha's Japanese Patent Attorney prior to May 1983 was Mr Takeshi Akiyama of Akiyama International Patent Office, doing business as Intapatent Bureau in Tokyo. All of Alpha's foreign patent matters including the '866 application were handled by Mr Akiyama, and because of Alpha's unfamiliarity with overseas patent practice, heavy reliance was placed on Mr Akiyama's full professional advice in record keeping in connection with overseas patent matters, payment of overseas renewals, responding to Examiner's reports, etc.

4.When we had completed our review of the files transferred to us by Mr Akiyama at the end of July 1993, we found that Mr Akiyama had never given Alpha any reminders or information regarding renewal of overseas patent cases.

5.Alpha, on the other hand, up until end July 1993, believed that their patents and patent applications, including the '866 application had been maintained in good order, since the necessary fees for renewal were paid to Mr Akiyama who had debited therefore in advance. However, we found that Mr Akiyama failed to timely send instructions for payment of renewal fees and remittance therefore to foreign attorneys, including the Australian attorneys, Davies Collison Cave, acting in respect of the '866 application. We wrote to Davies Collison Cave on 4 August 1993 enquiring as to the status of the '866 application. Now produced and shown marked Exhibit "YY1" is a copy of a letter dated 4 August 1993 to Davies Collison Cave. We were advised by Davies Collison Cave on 11 August 1993 that the '866 application had lapsed on 2 February 1987 through failure to pay the necessary annuity fee. Now produced and shown marked Exhibit "YY2" is a copy of Davies Collison Cave's letter of 11 August 1993 advising of lapse of the '866 application.

6.When we met with Mr Akiyama to discuss Alpha's overseas patent matters, it was apparent that he, at 84 years old, was incapable of responding to Alpha's needs. The situation was exacerbated by the fact that he works alone, without any secretary or clerical staff. Thus he has not fully managed various patent matters, including management of renewal due dates. Reminders received from Davies Collison Cave as to the impending lapse of the '866 application were never forwarded to Alpha.

7.It has always been Alpha's intention to pay the annuity fees on this case and to maintain the '866 application. Consequently, as soon as Alpha became aware of lapse of the '866 application we were instructed to seek restoration of the application and, in this regard, we wrote to Davies Collison Cave on 12 November 1993 advising that Alpha strongly wished to restore the '866 application. Davies Collison Cave then advised us of the procedure for seeking restoration of the '866 application.

8.From our review of Mr Akiyama's foreign patent files, I believe it is clear that failure to pay the renewal fee due 2 August 1987 was due to an error or omission by Mr Takeshi Akiyama, the Japanese Patent Attorney acting for Alpha at that time."

3.  Declaration by Satoru Kobayashi dated 12 September 1994
Mr Kobayashi provides additional evidence over his first declaration as follows:

"3.I confirm that as Section Manager of the Patent Section, Electronic Technical Department, Operation Division for Automobile Parts, of Alpha Corporation (formerly Kokusan Kinzoku Kogyo Kabushiki Kaisha) (hereafter referred to as "my company"), I was responsible for instructing Mr Takeshi Akiyama of Intapatent Bureau to handle all patent matters of my company, that is, drafting of patent applications, filing of patent applications in Japan and overseas, payment of renewal fees and the like.

4.My company did not have in place a backup patent annuities reminder system of its own. Rather, we totally relied on Mr Akiyama's professional services to attend to overseas patent annuity payments and any other formal patent matters. It was our standing instruction to Mr Akiyama that all of my company's patents/applications were to be kept in force unless we specifically instructed abandonment.

5.Notwithstanding my company's instructions that overseas patents/applications were to be kept in force, Mr Akiyama failed to pay the appropriate renewal fees and did not advise my company that he had not paid these renewal fees.

6.Now produced and shown to me marked Exhibit "SK-l" is an affidavit sworn by Mr Akiyama in connection with the corresponding, United Kingdom Patent Application No 2,138,067.

7.At paragraph 3 of that affidavit, Mr Akiyama states that he did not provide information to offer Alpha Corporation regarding due dates for renewal of the various foreign patents, nor did he issue specific reminders on an annual basis. Mr Akiyama further states that he was aware of the desire of Alpha Corporation to keep their patents in force. The British patents and patent applications lapsed by Mr Akiyama's errors and omissions have now been restored.

8.Mr Akiyama is no longer willing to cooperate with regard to restoration of patents and patent applications around the world and as a consequence my company is unable to obtain a declaration from him in connection with Australian Patent Application No 86670/82."

The statements by Mr Kobayashi in the first two sentences of para 7 correctly reflect the statements of Mr Akiyama in his affidavit sworn 15 March 1994 copied as Exhibit SK-1.  I also note that Mr Akiyama says that "in respect of the renewal fees due in 1992 and 1993 in relation to these twelve UK patents I failed to make arrangements for payment".

Other supporting material

At the hearing I asked Dr Stearne whether some additional material was available and could be filed to support the extension of time request, in particular

.any invoices sent to Kokusan by its Japanese agent around the lapsing date (2/8/87) specifically regarding AU 86670/82 or generally regarding annuities then due, and of any payments made thereon,

.any other lapsings of Kokusan's patents or applications arising around the time of the lapsing of AU 86670/82 (1987-88), and

.any reminder issued by the Australian patent attorneys to Kokusan's Japanese agent regarding the fee due on 2/8/87.

By letters dated 10 and 16 February 1995, Davies Collison Cave provided copies of various documents obtained from its Japanese associates mainly concerning the lapsing and restoration of certain British and European patents of Alpha Corporation.  The actual lapsing dates of those patents is not evident from the documents.  In a covering letter Mr Yotsuya says:

"Please note, however, that our client, regrettably, cannot provide you with any further documents to show that they paid an invoice or invoices pertaining to annuities for [application 86670/82], because our client has not received any information regarding annuity payment from Mr Akiyama ....." .

These letters include no information about any other lapsings of Kokusan's applications or patents around 1987-88. 

SUBMISSIONS

I summarise Dr Stearne's main submissions as follows.

1.  Kokusan relied on its Japanese patent attorney, Mr Akiyama, for advice regarding actions and renewal payments, but were not kept relevantly informed by him.  Kokusan received no information or any reminders about due dates for renewals, although from time to time invoices were received from Mr Akiyama and these were promptly paid.

2.  The evidence shows that an error or omission arose in Mr Akiyama's office.  Relevant fees were not paid by Mr Akiyama or instructions sent to associates regarding payments even though he charged his clients.  This is a clear situation which shows dramatically the failure to do an act or take a step by virtue of an error or omission by an agent or attorney.  The error or omission by Mr Akiyama, applicant's Japanese patent attorney, clearly satisfies s.223.

3.  S.223 is a remedial provision providing for extensions of time and which makes no reference to time frame - he referred to the Lehtovaara case (1981) 39 ALR 103 and the Scaniainventor case (1981) 36 ALR 101 in support of this view. Any discretion exercised by the Commissioner with regard to s.223 must be done within the framework of the legislation.

4.  In exercising discretion under s.223, delay may be a factor, but a minor one - undue delay is not part of the provision.  Further the interests of the applicant and the public need to be considered.  For the applicant's part, failure to gain an extension of time will mean they are totally prejudiced due to a loss of their rights "due to no fault of their own".  Regarding the public interest, the applicant is not aware of any interest by manufacturers in the invention and no general public interest in the application.  Also it would be contrary to the public interest if foreign patent applicants did not receive equitable treatment if there was no blameworthy conduct on their part.

5.  There are provisions within s.223 protecting the public interest - see subsections (4), (6), (9) and (10).

At the hearing I asked Dr Stearne for any submissions on the requirement in s.223(4) regarding advertisement of the extension application.  The normal practice of the Commissioner is to direct advertisement when satisfied that an extension application meets the requirements of s.223(2) and, in the absence of opposition, could be granted.  However the compensation provisions of subsection (9) link to the advertisement date.  Dr Stearne expressed no firm view other than to suggest the normal practice could apply.

DECISION

Advertisement under s.223(4)

Soon after the hearing I considered the question of advertisement of the extension application.  Whilst I had not determined whether the extension was justified or whether discretion could be favourably exercised, as the applicant had presented at that stage an arguable case to justify the extension and reasons why discretion could be favourably exercised, it seemed reasonable to me that advertisement of the application could occur.  Accordingly I directed advertisement of the extension of time application.  The advertisement appeared in the Official Journal dated 1 December 1994.  No person has filed opposition under s.223(6) to the grant of the extension application.

Error or omission

The provisions of s.223(2) are such that before the Commissioner can proceed to exercise discretionary power under the subsection, the existence of a relevant error or omission must be established.  I have said relevant error or omission since the subsection requires a causal link between the error or omission and the fact that the "relevant act" was not done within a "certain time".  The provisions of s.223(2) correspond closely to the provisions of s.160(2) of the repealed Patents Act 1952 and I believe that precedent under the former act is equally relevant to the current provisions.  Decided cases involving the former s.160 provisions such as Kimberly-Clark Ltd v. Commissioner of Patents 13 IPR 569 and Danby Pty Ltd v. Commissioner of Patents 12 IPR 151 discuss the causal link aspect.

The evidence provided in support of the extension application shows that Kokusan entrusted its Japanese patent attorney, Mr Akiyama, with responsibilities regarding its overseas patent matters, including the payment of renewal or continuation fees and advice thereon.  Mr Kobayashi says that Kokusan's standing instruction to Mr Akiyama was to maintain all the company's patents/applications in force unless instructed otherwise.  It is I think evident from the evidence that Kokusan received no specific reminders from Mr Akiyama regarding due dates for renewals, and no status information reports from Mr Akiyama when these were specifically sought between 1991 and 1993.  However Mr Kobayashi states that from time to time Mr Akiyama invoiced Kokusan in connection with renewal fees and Kokusan always settled these promptly, but no documents have been exhibited as evidence of those actions.  It is not clear whether these invoices specified those patent applications or patents on which fees were due, or were generally directed to services provided.  There is no evidence before me to suggest that Kokusan may have believed it had paid an invoice which included the 1987 continuation fee for AU application 86670/82. 

The evidence is somewhat vague as to the relationship and contacts between Kokusan and Mr Akiyama.  Although Mr Akiyama was apparently engaged in "the early 1980's", Mr Kobayashi only says that "around 1991 we began to feel that we had not been receiving sufficient information and documentation from Mr Akiyama in connection with [Kokusan's] overseas patent cases."  It is not evident what the relationship was before 1991, however I note that in Exhibit SK-1 Mr Akiyama, in an affidavit concerning restoration of certain UK patents, says:

"I was aware of the desire of Alpha Corporation to keep their patents in force, and up to 1991 I arranged for most of the renewal fees to be paid at the appropriate time.  Regrettably, in respect of the renewal fees due in 1992 and 1993 in relation to these twelve UK patents I failed to make arrangements for payment."

Dr Stearne submitted that the evidence showed that an error or omission arose in Mr Akiyama's office.  Viewed generally, that appears to be a reasonable conclusion to make.  However what is of relevance to the present matter is whether there was an error or omission by the applicant or Mr Akiyama which resulted in the continuation fee due on 2 August 1987 not being paid.  Whilst it appears that errors or omissions by Mr Akiyama in 1992 and 1993 caused a number of foreign patents of Kokusan to cease, this was at a time some 4-5 years after fees were payable in Australia for application 86670/82.  I have not been provided with any material to indicate that applications or patents of Kokusan other than AU 86670/82 lapsed around 1987-88 due to a failure to pay fees.

Given the evidence, I do not doubt that Kokusan has encountered difficulties in determining the circumstances surrounding the lapsing or ceasing of some of its patent matters especially if the fault lay with Mr Akiyama.  However I believe the legislation places an onus on an applicant seeking the indulgence of the Commissioner under s.223(2) to establish and identify "an error or omission" linked to the failure to do the relevant act, in this case pay the fee due in August 1987.  I believe that if, in respect of a specific case, an applicant places reliance on some general error or omission in seeking to enliven the operation of s.223(2), then it needs to be established as highly probable that the general error or omission applied to the specific case.  In my view it is not reasonable to conclude from the evidence before me that failings (errors or omissions) by Mr Akiyama in 1992 or 1993 regarding failures to pay renewals for some foreign patents represented a continuation of similar failings by him at any point before that time, and moreover that such failings applied in respect of AU 86670/82 in 1987 and resulted in the continuation fee not being paid.  The statement by Mr Akiyama in Exhibit SK-1 that "up to 1991 I arranged for most of the renewal fees to be paid at the appropriate time", given its generality, is of little weight to enable me to conclude otherwise.

It seems to me that any difficulties encountered by Kokusan in determining the circumstances surrounding the lapsing of AU 86670/82 may not be entirely beyond its own making.  Whilst it is perfectly reasonable for a company to entrust certain responsibilities regarding its patent matters to attorneys, it would seem that the company should be clear of the services to be provided and ought to maintain or initiate some regular review of its patent matters to know what is happening and whether services are being provided, especially if some regular review service is not forthcoming from its attorneys.  Mr Kobayashi admits that for some 2 years from 1991 information requested by Kokusan from its attorney was not forthcoming yet it seems that Kokusan waited that period of time before enlisting the assistance of another attorney: this alone suggests an unconcerned attitude by the company in relation to its potentially valuable patent property.  What the relationship between Kokusan and Mr Akiyama was before 1991 is not apparent nor is it known whether Kokusan itself monitored or reviewed its patent matters to any degree before 1991.  It seems to suggest extreme ignorance by Kokusan of its patent matters if, like in the case of application 86670/82, it first becomes aware of a lapsed status some 6 years after the event.  Whilst I have made these observations in the context of the applicant being in a position to disclose all the circumstances relevant to the lapsing, the adequacy of the overall system adopted by the applicant in relation to its patent matters would, I believe, be a relevant consideration by the Commissioner regarding the exercise of discretion under s.223.

In my view it is open to speculation what happened concerning the failure to pay the continuation fee due in August 1987.  For example, it may have arisen because:

.the Australian attorneys failed to issue a reminder to its Japanese associates,

.the Japanese associate/attorney failed to remind, or request the relevant fee from, the applicant,

.the applicant failed to instruct its attorney, or pay the relevant fee, or pay a relevant invoice including the fee,

.the applicant decided not to pursue the application (an adverse examiner's report had issued some 11 months prior to the lapsing date and was unanswered), or

.the Japanese attorney, if having received the fee, may have failed to transmit payment to the Australian attorneys.

From the evidence before me none of these possibilities can be clearly disregarded.

In summary, I cannot identify an error or omission by the applicant or its attorney which resulted in the failure to pay the continuation fee due in August 1987.  As such the basis to enliven the exercise of the Commissioner's discretionary power under s.223(2) has not been established.  Considerations pertaining to the exercise of the Commissioner's discretion in this case are thus not required.  In my view the applicant has had ample opportunity to provide evidence to support its extension application and has been heard on its application.  Accordingly I believe it is appropriate that I should formally refuse the application for an extension of time.

CONCLUSION

I have decided that no error or omission by the applicant or its attorney has been established relevant to the failure to pay the continuation fee on application 86670/82 due on 2 August 1987.  I formally refuse the application for an extension of time under s.223.

Trevor Bruhn
Delegate of the Commissioner of Patents

Patent attorneys for the applicant : Davies Collison Cave, Sydney