Mason & Porter Limited v Coonara Heaters Pty Ltd

[1989] APO 9

In the Matter of the Patents Act 1952

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In the Matter of Patent Application No. 578430 by MASON & PORTER LIMITED

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In the Matter of an Application by COONARA HEATERS PTY. LTD. for an Extension of Time under Section 59(1) to Lodge Notice of Opposition.

DECISION OF A SUPERVISING EXAMINER OF PATENTS:
Background
         Application No. 34858/84 was lodged on 31 October 1984 by Mason & Porter Limited for a patent for an invention relating to space heating stoves.  The application was advertised as accepted on 27 October 1988 and was given the Serial No. 578430.  On 20 January 1989 Coonara Heaters Pty. Ltd. applied for an extension of time of 3 months, from 27 January 1989 to 27 April 1989, in which to lodge notice of opposition.  Coonara, an Australian company, gave the following grounds for the extension:

"We have only recently become aware of the acceptance of the above‑identified application.  We believe the granting of this application may adversely affect our business interests, and further time is required to more fully determine the exact nature and scope of the claims of the application."

On 3 February 1989 Mason & Porter objected to the extension of time and requested a hearing on the matter.  On 22 February 1989 Coonara lodged notice of opposition, and in the accompanying letter further comments were made on the matter of the extension of time:

"In connection with the objection to the application for extension of time for lodging Notice of Opposition, we advise that Opponent only became aware of the existence of the application just prior to Christmas and the Summer Vacation on the 21st December last and further time was required to enable an accurate assessment of the scope of the claims to be made."

The matter came to hearing in Canberra on 2 March 1989; Mr. J. Hinde, patent attorney, appeared for the patent applicant.  The prospective opponent was not represented at the hearing but lodged written submissions instead.
The criteria to be considered in an application for an extension of time under section 59(1) are derived from the following parts of the judgement of Bowen C.J. of the Federal Court in Vangedal‑Nielsen v. Commissioner of Patents & Gelphen Nominees (1981) 33 ALR 144:

"... an applicant before the Commissioner seeking the allowance of an extension carries the burden of establishing an appropriate case to justify that allowance.  It does not appear to me that the form of [section 59(1)] requires the conclusion that the applicant for extension of time before the Commissioner is entitled to the extension unless some cases showing perhaps "rather exceptional circumstances" is raised against him ...

The right to lodge a notice of opposition within three months is clearly given mainly in the interests of the person wishing to oppose a patent on any one or more of the grounds stated in s.59(1).  No doubt, there is also a public interest involved in ensuring that worthless patents are not granted because insufficient opportunity has been afforded of raising those grounds ...

Clearly, the Commissioner will have to consider the interests of the prospective opponent who, for some good reason, has not been able to mount his opposition within the initial period of three months.  The Commissioner will further have to have in mind, where a serious opposition is foreshadowed, the public interest which has been mentioned, but he will have to require to be satisfied by an applicant for an extension that a proper case has been made out justifying an extension.  It would be wrong if he granted an extension simply because no‑one had raised rather exceptional circumstances why it should not be granted.  Reasons why this is so include the desirability of operating the system efficiently and without unreasonable delays and also the interests of the applicant for a patent which are also clearly involved."

Submissions
         The written submissions made for the prospective opponent by its patent attorney Mr. L.J. Dyson state that:

"The extension was sought on the basis that extra time was required to familiarise themselves with the contents of the specification as accepted.  They became aware of the existence of the patent application upon receipt of a letter of advice from this firm, dated 19th December, 1988, which was received and date stamped by Coonara on the 9th January, 1989.

The Managing Director (Mr. Peter White) of Coonara Heaters Pty. Ltd. was on vacation over the Christmas period until the start of business on Monday 16th January, 1989.  He ordered a full copy of the specification of Application No. 578430 on the 18th January, 1989 and this was forwarded to him on that day.  Mr. White immediately consulted a partner of this firm to advise them [sic] that there was a possibility of an opposition against the patent application but that he required more time to consult with us as to the actual scope of the patent application."

The submissions discuss the features of claim 1 as accepted in application No. 578430, a comparison is made with an Australian specification cited during examination, and it is then stated that "further investigation has revealed the existence of" a US patent available to the public in Australia before the priority date of the applicant's claims.  A copy of the US patent is attached to the submissions.  The features of the stove described in the US patent are compared with claim 1 of the applicant's specification, two differences are discussed, and on this basis it is submitted that "the opponent is in possession of serious ground for opposition ...".  One of the grounds in the notice of opposition is that of lack of novelty, so there is a clear implication in Mr. Dyson's submissions that claim 1 of the applicant's specification may not be novel in the light of the US patent.
         Mr. Hinde submitted that the circumstances of the application for the extension did not satisfy the criteria derived from the Vangedal‑Nielsen judgement.  In particular he suggested that the inaction of the prospective opponent and its attorneys over the December and January holiday period was inexcusable and dilatory.  He indicated that there was no explanation of why, after the advertisement of acceptance on 27 October 1988, the opponent's attorneys took until 19 December 1988 to notify the opponent of acceptance.  He also suggested that the "further investigation" which discovered the US patent was done too late, either near the end of the 3 month period provided by section 59(1) or possibly even after that period had elapsed; he stated:

"You don't have a serious opposition because months after the section 59 date is expired you've found a citation which looks close; and even if you did have a serious opposition at that time you would be way outside the bounds laid down by the Vangedal‑Nielsen decision for the grant of an extension of time."

Mr. Hinde also criticised the prospective opponent's application for extension and its attorney's submissions for not discussing the questions of inventive step or contribution to the working of the invention relating to the differences in features of the patent applicant's claim 1 and the US patent.
Mr. Hinde referred to several other earlier decisions in his submissions. Firstly he suggested that the decision of the High Court in Kaiser Aluminium & Chemical Corp. v. The Reynolds Metal Co. (1969) 120 CLR 136 has often been referred to in these matters in deciding to allow an extension of time in the public interest; the comments of Kitto J. at page 143 have often been cited, viz:

"In my opinion, however, it is in the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be."

Mr. Hinde pointed out that this dictum should be considered in context.  In the Kaiser Aluminium case the opposition had been instigated, the evidence had been served and thus it was clearly apparent that a serious opposition had been established.  The contentious issue was that of locus standi; the opponent failed to indicate locus standi in the notice of opposition, and this was the "failure in procedure" referred to by Kitto J.  Mr. Hinde distinguished the present circumstances where he suggested that there has not been enough evidence presented to clearly establish that a serious opposition is foreshadowed.
         "The other side of public interest" according to Mr. Hinde is that there should be a rapid determination of the opposition matters and that the Commissioner's discretion should be exercised against a dilatory opponent.  Such decisions were made in the following cases:

(i)Weir Pumps Limited v. Commissioner of Patents & Anor. (1989) AIPC 90‑537. At p.38744 Bannon C.J. of the AAT stated "Loss of opportunity to oppose is not disastrous."

(ii)Minnesota Mining & Manufacturing Co. v. Kimberly‑Clark Ltd. 22 October 1987 (unreported).  The Supervising Examiner's decision not to allow the extension was subsequently reversed by the AAT when more evidence was adduced.  (AAT Case No. V722 of 1987).

(iii)Shell International Research Maatschappij N.V.'s Application (1980) 50 AOJP 968.

(iv)Viscount Plastic Products Pty. Ltd.'s Application (1980) 50 AOJP 2073.

Finally Mr. Hinde submitted that there is an adequate procedure available to the Patent Office to deal with a pertinent citation which has come to light after acceptance; namely that "the Commissioner has the power to withdraw acceptance" based on the decision of the High Court in Tate v. Haskins 53 CLR 594. He stated:

"It is the appropriate procedure in the current case, rather than allowing this opponent to clog up the system with another opposition which on the face of everything we've seen to date would seem to have little chance of success, and moreover because the conduct of the prospective opponent and his attorneys point blank disqualifies him from the beneficial exercise of the Commissioner's discretion."

Decision
         Firstly, on the matter of whether there was a good reason why the prospective opponent did not lodge a notice of opposition within the initial 3‑month period, I generally agree with Mr. Hinde's submissions.  The fact that Mr. White was on holidays is hardly a good reason, he should have delegated his work if he considered it important.  More significantly though, there has been no reason offered for the delay by the prospective opponent's attorneys in notifying Coonara of acceptance of the Mason & Porter application.  Thus I consider that the opponent has not proved that there was a good reason why it could not mount the opposition in time.
         Secondly, on the matter of serious opposition, I am satisfied from Mr. Dyson's submissions that a serious opposition is foreshadowed.  The US patent cited prima facie appears to be pertinent.  It was not referred to in the prior art cited by the examiner which therefore indicates that some investigation has been carried out by the prospective opponent.  I have no proof as to whether the US patent was found within the initial 3‑month period or later, as suggested by Mr. Hinde, but I am prepared to resolve this matter in the prospective opponent's favour.  I do not consider that the prospective opponent needs to discuss novelty and inventive step in depth in its submissions; to do so would be to pre‑empt the opposition proceedings per se.
         Thirdly, I comment on some of the decisions referred to as follows.  Re the Kaiser Aluminium case : I agree that the dictum therein needs to be generally applied with some care, there being no doubt in that case that a serious opposition had been firmly established.  In this case I believe that the seriousness of the opposition is not as firmly established as in the Kaiser Aluminium case, but it is sufficient to establish grounds for consideration of the interests of the opponent.  Re Minesota Mining v. Kimberly Clark : in that case it was established that a serious opposition was not foreshadowed; the hearing officer commented on the prospective opponent's related art:

"The evidence suggests only that Kimberly is active in the art and has a keen interest in the present application, and in this respect is more evidence of Kimberly's locus standi ... than of anything else."

Similarly, in the Shell Internationale case it was established that there was no serious opposition.  In the Viscount Plastics case the extension was not allowed because of a delay of 10 months which was considered to be undue delay.  Re the Weir Pumps and Tate v. Haskins decisions: I agree that loss of opportunity to oppose under section 59 is not an end of the matter for a prospective opponent, however court proceedings can be expensive and protracted and it may often be preferable to settle the matter if at all possible via opposition proceedings.  Also, it would seem to be more practicable to allow the opponent to argue his case rather than to refer the matter back to the examiner as suggested by Mr. Hinde.  Further, I think that Mr. Hinde's comments on the consideration of the US patent cited by the opponent seem to imply that the matter should be given serious consideration.
         Thus I am confronted with a problem where prima facie not all of the criteria for an extension, derived from the Vangedal‑
Nielsen decision have been met. I dealt with a similar problem in W.R. Grace & Co. v. Betz International Inc. (1989) AIPC 90‑359, in which I concluded:

"However, I doubt that Bowen C.J. implies in his decision that all the criteria are essential and must be met in order to allow the extension.  Furthermore, in order to resolve the problem I will now consider the more basic criteria of the respective interests of the prospective opponent, the patent applicant and the public."

In this case I consider that there would be a substantial disadvantage to the public and to the prospective opponent if the extension is not allowed; a serious opposition is foreshadowed and the importance of this is emphasised in the Kaiser Aluminium case.  Insofar as the patent applicant is concerned, the prospective opponent's lack of a good reason why the opposition was not mounted in the initial 3‑month period has no adverse effect per se, and even though there has been some minimal delay there is no other disadvantage to the patent applicant or to the public in allowing the extension of time.
         I conclude that Coonara Heaters have established an appropriate case to justify allowance of the extension of time, and accordingly I allow the extension of time to validate the notice of opposition lodged on 22 February 1989.
         Regarding costs, I take the following matters into consideration.  The statement of circumstances on the application for extension is insufficient proof of a serious opposition being foreshadowed; such matters only came to light in Mr. Dyson's written submissions which were served on the applicant only the day before the hearing, thus the patent applicant had some justification in its objection based on the application for extension per se.  The patent applicant's objection was also justified somewhat by the nature of the opponent's reasons for not mounting the opposition in the initial 3‑month period.  On the other hand though, Mason & Porter was aware that, even though Coonara had applied for 3 months extension from 27 January 1989 to 27 April 1989, the notice of opposition was in fact lodged on 22 February 1989, making the extension in effect for only about one month.  Also the patent applicant offered no reason why it would be disadvantaged because of the extension of time.  Thus I conclude that even though my decision on the extension of time is in Coonara's favour, I make no award of costs because Mason & Porter had some justification for its objection as discussed above.

(J.I. WELSH)

Patent attorneys for the applicant: Spruson & Ferguson, Sydney