Kureha Kagaku Kogyo Kabushiki Kaisha v Cryovac Inc
[2005] APO 45
•14 October 2005
ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 736684 in the name of Kureha Kagaku Kogyo Kabushiki Kaisha
Title: Multilayer film
Action: Opposition under section 59 by Cryovac Inc. and an application for an extension of time to serve evidence in answer.
Decision: Issued 14 October 2005.
Abstract
I have found that on balance, the applicant should be given a final opportunity to finalise their evidence. In this case, it clear that the evidence that the applicant is seeking to adduce is key to the opposition and that its admission might lead to a more correct (or just) result at the substantive hearing. On the understanding that evidence in answer is likely to be at least close to completion within 2 months, the interests of the applicant and the public in having the hearing determined on its merits outweigh any disadvantages to the opponent in having a short delay. I therefore allow an extension of time to serve evidence in answer within 2 months of the date of this decision. However, this is on the understanding that the applicant can serve their evidence within this period. If further extensions are requested, the applicant will need to establish significant progress with the evidence and be able to estimate a date for completion.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 736684 by Kureha Kagaku Kogyo Kabushiki Kaisha, an Opposition under section 59 by Cryovac Inc. and an application for an extension of time to serve evidence in answer
BACKGROUND
Australian patent application 736684 (16436/99) was filed in the name of Kureha Kagaku Kogyo Kabushiki Kaisha on 12 September 1999 as a divisional application of 698972 (60825/96). The parent application (698972) is a convention application with an earliest priority date of 31 July 1995. This application had been opposed by American National Can Company (ANCC) on 12 February 1999. Evidence in answer in the parent application had been completed on 22 October 2001. The opponent subsequently withdrew their opposition on 15 April 2004 before Evidence in Reply had been finalised.
The divisional application was advertised accepted on 2 August 2001. On 1 November 2001, a notice of opposition was filed by Pechiney Plastic Packaging, Inc (Pechiney). Evidence in support was never filed in this opposition despite the opponent being granted a number of extensions – the last of which was until 4 February 2005. The delegate in granting that extension advised that further extensions would be unlikely to be granted unless the opponent can demonstrate that there was a serious opposition on foot and that they could demonstrate that evidence was being actively prepared.
Pechiney requested another extension until 4 April 2005. In her letter of 15 February 2005, the delegate advised that the reasons provided were insufficient to suggest that a serious opposition is in train. The matter was therefore set for hearing with a view to refuse. Neither party appeared at the hearing or provided any written submissions. In my letter of 1 March 2005, I noted there had been no real progress with the evidence since at least December 2003 because of lack of instructions from the US attorneys and/or the opponent company. Given this, I agreed with the delegate’s initial view that the extension of time to serve evidence in support was not appropriate and I therefore refused the opponent’s request. This meant under the provisions of regulation 5.8(3) that evidence in answer on the Pechiney opposition was due on 1 June 2005. However, no evidence in answer was served before Pechiney withdrew their opposition on 15 April 2005.
There was also a second opposition filed on the divisional application on 1 November 2001 by Cryovac Inc (Cryovac). Evidence in support had been completed after 20 months and evidence in answer was due on 1 January 2004. The applicant requested and was granted a number of extensions. In his letter of 8 April 2005, the delegate considered the applicant’s request for an extension of time until 1 July 2005 but requested further information in support of their request. In particular, the delegate was concerned that evidence in support of the opposition had been completed 18 months previously and it was not readily apparent how the existence of other oppositions could cause a delay of 18 months in preparation of evidence in answer. Further, the delegate noted that there appeared to have been no progress in the preparation of evidence in answer over those 18 months and that it appeared that the applicant was not seriously defending the opposition.
The applicant did not respond to the delegate’s letter and the Commissioner therefore set the matter for hearing with a view to refuse the extension. Neither party attended the hearing but both sides provided submissions for the Commissioner to consider. Because the parties both indicated an interest in the current extension (in contrast to the extension on the Pechiney opposition), I am issuing the following formal office decision based on the submissions received.
RELEVANT LAW
The relevant provisions under the Patents Act 1990 for extending the time in which to serve evidence in support are subregulations 5.10(2) and 5.10(5) as follows:
(2)The Commissioner may 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 or 5.3AA, paragraph 5.4(a) or subparagraph 5.8(1)(a)(i)):
(a) on the application of a party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies; and
(c) after the party has served a copy of the application on the other party.
(5)The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:
(a) …
(b) …
(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.
The law relevant to the determination of the instant matter has been conveniently elaborated as follows:
“(a)The broad discretion afforded by Regulation 5.10 cannot be reduced to insistence on imperative compliance with particular requirements;
(b)The exercise of this discretionary power requires proper, genuine and realistic consideration of all the relevant aspects that pertain to the application;
(c)The provision of a satisfactory explanation of the delay is a relevant consideration, but is not mandatory;
(d)The public interest in determining a serious opposition on its merits is a relevant consideration and must be balanced with the requirement that matters before the patent office should be dealt with in an efficient, orderly manner and not be unduly prolonged; and
(e)The interests of the opponent, the applicant and any other parties are a relevant consideration.”
[Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Co (1969) 120 CLR 136; Ferocem Pty Limited v. Commissioner of Patents (1994) 28 IPR 243; A Goninan and Co Ltd v Commissioner of Patents and Another (1997) 38 IPR 213; National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33].
PREVIOUS EXTENSION REQUESTS
The applicant has requested and been granted a number of extensions. The reasons for each extension are outlined below:
Extension 1: 1 January 2004-1 April 2004
“We are in receipt of the evidence in support of this application which consists of 14 pieces of prior art and a declaration by one expert witness. The volume of material which we and our Australian attorneys together with our expert witness need to address is substantial and further time is therefore required in which to complete this process.”
Extension 2: 1 April 2004-1 July 2004
“We are still considering the evidence in support in this particular opposition. However, this application is also being opposed by another party who has not yet filed any evidence in support. Therefore, even though we have made progress in this opposition, in order to effectively use our expert witness’ time we would hope to be able to see all the evidence in support which will be directed against this application in both oppositions.”
“Regardless of the other opposition, we nevertheless require further time to have our expert witness fully consider the evidence in support and have these opinions drafted in the form of a declaration to be served as our evidence in answer.”
Extension 3: 1 July 2004-1 October 2004
“Since our last application for extension of time to serve evidence in answer in this opposition, we are in the position of still considering the opposition to the parent of this application (namely Australian patent application serial number 698972) and the related opposition to the present application by another opponent. We are therefore considering these three matters together and it is for this reason that we seek the present extension of time to serve evidence in answer in the present opposition.”
Extension 4: 1 October 2004-1 January 2005
“Since last applying for the extension of time to serve evidence in answer, various matters relating to this opposed application and its parent (Australian patent application serial number 698972) are as yet unresolved. Specifically, we are awaiting advice that the opposition to the parent of this application has been withdrawn. Although we were advised of this informally some time ago, we have not yet been officially so advised and therefore the decision of the opponent in that case may have a bearing on how we proceed with this opposition. In addition, we have yet to receive all of the evidence in support from the second opponent to this application. This also may influence how we proceed with evidence in this opposition. An extension of time is therefore requested so that these two issues may be resolved prior to compiling our evidence in answer in this opposition.”
Extension 5: 1 January 2005-1 April 2005
“Again this opposition is linked with and dependent on the fate of two related oppositions, namely the opposition by American National Can Company to the parent of this application (that is, opposition to Australian Patent Application No. 698972); and the opposition to this application by another party (that is by Pechiney Plastic Packaging Inc.). At this stage, we do not have any indication as to the intention of these two opponents namely, the American National Can Company or Pechiney Plastic Packaging Inc, and in fact, we are still awaiting service of evidence by Pechiney Plastic Packaging Inc as co-opponent to this application.
In view of the uncertainty attending the opposition to this application and its parent, further time is needed for us to be acquainted with and apprised of the intensions of those two opponents as to our future course of action.”
Extension 6: 1 April 2005-1 July 2005
“Since the last application for extension of time, there have been two developments which hopefully will bring resolution to the two oppositions (namely to this application no. 736684 and to its parent namely application number 698972). Firstly, an amendment has been proposed to the parent of this application which should be accepted since the claim being objected to in the parent application has been deleted. This should lead to the acceptance of the amendments which were originally proposed on 20 October 2004 which in turn should lead to clarification of the opponent’s intention to that opposition. It will be recalled that the opposition to the parent application no. 698972) has for some time been in a state of uncertainty.
The sound development since our last application for extension of time concerns the co-pending opposition by Pechiney Plastic Packaging Inc. to 736684, namely that the opponent’s application for extension of time to serve evidence in support was not allowed, the result being that no evidence in support has been filed by that opponent.
We are therefore in a position which, it is hoped, will shortly resolve the intention of the other two opponents, namely American National Can Company and Pechiney Plastic Packaging Inc, which should then place us in a position as to the future directions of this opposition by Cryovac.”
DECISION
Has there been a satisfactory explanation of the delay?
The only reason the applicant has given for the delay is that they were waiting until two other oppositions were finalised [the opposition on the parent by the American National Can Company (“ANCC”) and the co-pending opposition on the current divisional application by Pechiney Plastic Packaging Inc (“Pechiney”)]. Both oppositions were finally withdrawn on 15 April 2005 (within the period requested by the current extension). My understanding is that Pechiney and ANCC are related companies. They have the same American business address and use the same Australian agent. Not surprisingly therefore, there is considerable overlap in the statement of grounds and particulars between the oppositions filed by ANCC and Pechiney on the parent and divisional application respectively.
I note that evidence in answer in the parent had already been completed on 22 October 2001 (well before the divisional evidence in answer was due). Many of the citations raised against the divisional application had already been raised against the parent and presumably had been dealt with in the applicant’s evidence in answer in the parent application. The experts would have been fully briefed and would have already provided their opinions in relation to common citations on apparently similar subject matter. In my view, the parent prosecution should have greatly assisted the applicant in preparing their evidence for the divisional application. There was therefore no reason for the opposition on the parent by ANCC to have held up evidence in answer in the current divisional application.
In relation to the co-pending opposition by Pechiney on the current divisional application, I note that where there are multiple oppositions on the one application, it is reasonably common for an applicant to wait for all the evidence in support before preparing their evidence in answer. Although all the oppositions are independent, there are inherent efficiencies in an applicant dealing with common issues together. Given the Commissioner’s long standing practice to hear all oppositions together to consider all issues of validity at the one time, this “common issues approach” can assist at the substantive opposition because it allows the key issues of invalidity to be consolidated before the hearing. Further, as the Commissioner’s practice means that all oppositions have to be completed before the matter is heard, the “common issues approach” does not usually delay the substantive opposition provided the applicant does some background work in engaging expert witnesses prior to commencing their evidence and also that those witnesses diligently prepare their evidence once they have all the relevant material before them.
The opponent argued that it was unnecessary to wait for the Pechiney opposition to be finalised. There was a substantial overlap between the SGPs of the ANCC opposition on the parent and the Pechiney opposition on the divisional. As the applicant had already addressed evidence in support on the ANCC opposition, it was reasonable to assume that the applicant would also understand the key issues of dispute in the Pechiney opposition (in which case, they could commence their evidence in answer on the divisional application).
However, I note that neither the SGP nor the claims of the divisional and parent were the same and so it was possible for different issues to be raised in the two oppositions. Further, Cyovac did not oppose the parent application suggesting that there are likely to be significant differences between the parent and divisional. There is also a possibility that Pechiney might re-draft their evidence in support in the divisional application based on the applicant’s evidence in answer in the parent. In these circumstances, my view is that a cautious applicant would be likely to wait until the Pechiney opposition was finalised before preparing their evidence in answer in both the Cryovac and Pechiney oppositions.
The opponent noted that the applicant was aware as early as October 2004 that the ANCC opposition (and presumably the related Pechiney opposition) was likely to be withdrawn. As a consequence, there was no reason for the Pechiney opposition to be further delaying the Cryovac opposition. However, withdrawal of the opposition had only been confirmed until 15 April 2005 (after the current request for extension) and the applicant could not assume before this that the Pechiney opposition would be withdrawn. Given this, I am prepared to give the applicant the benefit of doubt and find that the applicant’s approach in waiting for resolution of the Pechiney opposition on the divisional to be a sign of cautiousness in dealing with the current opposition rather than a lack of diligence.
interests of the parties
The opponent argued that the applicant had shown a lack of diligence and should not be granted an extension. However although I share the opponent’s concerns about the lack of progress in the current opposition, I am not convinced that the applicant has shown a lack of diligence (for the reasons given above). I further note that Cryovac is involved in a number of oppositions in a similar or a related technology as either an applicant or opponent [some of which were discussed in Cryovac Inc v Pechiney Plastic Packaging, Inc [2003] APO 18 (11 April 2003) and [2002] APO 18 (22 May 2002)]. The table below summarises the current status of the active oppositions:
Application number Applicant Opponent Date of opposition Current status 726277 Cryovac Pechiney 2 February 2001 EIR – EIA due 2 November 2002 and finalised 2 August 2004 697435 ANCC Cryovac 8 January 1999 EIA – EIS completed 23 May 2000 (initially due on 8 July 1999). 730200 Cryovac Pechiney 1 June 2001 EIA – initially due 3 March 2003. 739324 Cryovac Pechiney 11 January 2002 EIA – initially due 2 September 2003. 739685 ANCC Cryovac 21 December 2001 EIA – EIS completed 21 Jan 2004 (initially due 21 June 2002) 747947 Pechiney Cryovac 30 August 2002 EIA – EIS completed 22 September 2005 (initially due 28 February 2003) 761877 Pechiney Emballage Flexible Europe Cryovac 12 June 2003 EIS not completed (initially due on 8 March 2004)
It is not readily apparent how closely related these oppositions are to the current case and there has been no suggestion from either party that the other oppositions are affecting the time periods in the current opposition. However, I would observe that there have been significant delays by Cryovac in all of the oppositions. Cryovac has taken over 2 years to complete their evidence in several of their oppositions. Their longest delay has been 31 months and their shortest 10 months (in addition to the initial 3 month statutory period). In the current opposition, Cryovac had 20 months to complete evidence in support. As noted by the delegate in Cryovac Inc v Pechiney Plastic Packaging, Inc [2003] APO 18 (11 April 2003), Cryovac’s actions do not show any real urgency in bringing each of these oppositions to a conclusion. Given this history in their own delays, it seems disingenuous for Cryovac to now suggest that they are being disadvantaged by the current delays.
In contrast, the applicant would be disadvantaged if they were unable to serve evidence in answer and I believe that the evidence being prepared is clearly relevant to a proper determination of the opposition. The applicant’s interest is best served if they had a second opportunity to defend their application. As noted above, I am prepared to give the applicant the benefit of doubt and conclude that their tardiness up to date was due to cautious case management.
I also note that there are many common citations between the Cryovac and Pechiney/ANCC oppositions. Having already responded to the ANCC evidence in the parent opposition, the applicant should be in a position to prepare their evidence in answer relatively quickly in the Cryovac opposition. My assumption is therefore that the applicant would be close to finalising their evidence within the next 2 months. This is not a long time frame compared to the opposition process restarting should the applicant decide to file a divisional application with identical claims (as has occurred in previous cases I am aware of where the applicant has been refused an extension of time). The divisional approach would have the potential to even more seriously delay the resolution of the current matter and would not be in anyone’s interest. If this occurred, the Commissioner would seriously consider an award of actual costs which were thrown away by the applicant’s actions.
On balance, I believe that in this instance the interests of the applicant in having the opportunity to provide evidence in answer outweigh the interests of the opponent. However, this balance would significantly change if the opposition was significantly protracted much beyond this time frame.
the public interest
The public interest calls for a balance between the requirements that the Commissioner deals with opposition matters expeditiously and economically and that a serious opposition is dealt with on its merits [see Ferocem Pty Ltd v Commissioner of Patents (supra) and in A Goninan & Co Ltd v Commissioner of Patents (supra)].
In the present case, the evidence would appear to be highly relevant and is likely to lead to a more just and correct determination of the opposition. Given my assumption above that evidence in answer will be close to completion within 2 months, I believe that, on balance, the public interest is best served by accepting a short delay in the progression of the opposition in favour of completion of evidence that appears to be highly relevant to the opposition.
CONCLUSION
I have found that on balance, the applicant should be given a final opportunity to provide their evidence. In this case, it clear that the evidence that the applicant is seeking to adduce is key to the opposition and that its admission might lead to a more correct (or just) result at the substantive hearing. On the understanding that evidence in answer is likely to be close to completion within 2 months, the interests of the applicant and the public in having the hearing determined on its merits outweigh any disadvantages to the opponent in having a short delay. This is despite the Commissioner’s initial view (based on the delegate’s letter of 8 April 2005) that the extension should be refused.
I note that reconsidering the Commissioner’s initial position has caused significant delays and uncertainties with evidence in answer which was not within the applicant’s control. In order to put the application back on track, I propose to allow an extension of time under regulation 5.10(1) to serve evidence in answer within 2 months of the date of this decision. If further extensions are requested, the applicant will need to establish significant progress with the evidence and provide an estimated date for completion. If either party objects to this proposed extension, please advise within 7 days of the date of this decision. If no response is received within that time period, the Commissioner will proceed to grant the proposed extension.
COSTS
The power to award costs is based on section 210 and regulation 22.8. The normal practice is that costs should follow the event. In the current circumstances, the opponent did not formally object to the extension and neither party appeared at the hearing. I do not believe an award of costs is appropriate.
Karen Ayers
Delegate of the Commissioner of PatentsPatent attorneys for the applicant : Spruson & Ferguson, Sydney
Patent attorneys for the opponent : Davis Collison Cave, Melbourne
2