Memcor Australia Pty Ltd v Zenon Environmental Inc. (Corrected Version) - [2008] APO 14

ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 715364 in the name of Zenon Environmental Inc.

Title: Vertical skein of hollow fiber membranes and method of maintaining clean fiber surfaces

Action: Application for dismissal of an opposition under section 104 by Memcor Australia Pty Ltd

Decision: Issued 30 May 2008
Abstract

The practice of all federal courts in relation to summary disposal has been altered by Parliament, and it would be strange indeed if Parliament intended that a different approach should apply in federal tribunals. The practice of the Commissioner should follow the new practice reflected in section 31A of the Federal Court of Australia Act.
Decisions of the Commissioner do not give rise to an issue estoppel. However, the earlier decision of the Commissioner is relevant to the prospects of success in the present opposition. The gap in the logic of the earlier decision makes it uncertain whether the same outcome would be expected in the present opposition. It is clear that it cannot be said that there are no reasonable prospects of success.
The opposition is not dismissed.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 715364 in the name of Zenon Environmental Inc. and an opposition under Section 104 of the Patents Act 1990 by Memcor Australia Pty Ltd

BACKGROUND

Patent application 715364 was filed under the provisions of the PCT on 8 August 1996 by Zenon Environmental Inc (Zenon). The application was advertised accepted on 3 February 2000, and on 2 May 2000 a notice of opposition under section 59 was filed by Memcor Australia Pty Ltd (Memcor). This opposition has not yet been heard.
Zenon filed a first request to amend under section 104 on 8 May 2002. This amendment added around 60 new claims to the 18 claims as accepted. Memcor filed a notice of opposition under section 104(4). The amendment was withdrawn following completion of evidence in support.
On 5 March 2004, Zenon filed a second request to amend under section 104. This request added around 20 claims in addition to the 60 claims that had been proposed in the first request to amend. The amendment was opposed by Memcor, and the amendment was subsequently refused following a hearing (see Memcor Australia Pty Ltd v Zenon Environmental Inc [2006] APO 36).
On 16 January 2007, Zenon filed a third request to amend under section 104. This request is similar to the second request, but is intended to take account of the earlier decision. The amendment was opposed by Memcor, and Zenon requested dismissal of the opposition.
The hearing took place in Canberra on 1 May 2008. Zenon was represented by Mr Matthew Swinn, of Corrs Chambers Westgarth, Melbourne. Memcor was represented by Mr David Yates SC and Mr Peter Heathcote, patent attorney of the firm Shelston IP, Sydney.
THE PRESENT ACTION
The present invention concerns a microfiltration device to remove micron, sub-micron and larger suspended solids such as organic molecules, emulsified organic liquids and colloidal or suspended solids from water for a variety of applications. The proposed amendment increases the claims from 18 to 95.
The grounds of opposition are stated to be section 102, paragraphs 1, 2(a) and 2(b) of the Patents Act. The particulars that supports these grounds is a 12 page document. The request for dismissal sums up the situation as follows:
“The amendments sought in the Currrent Request are identical to those sought in the Previous Request save that the Current Request addresses the matters raised in the delegate’s decision with resulted in the refusal of the Previous Request and that two additional dependent claims are added. …
The primary reason for seeking dismissal is that the opposition, if it proceeded, would involve no more than a reconsideration of a previously decided matter.
Matters decided by the Commissioner or her delegate in an earlier decision are final insofar as those matters were capable of determination at that earlier point (R v Smith; ex parte Mole Engineering Pty Ltd (1981) 147 CLR 340).
Since a rehearing or reconsideration of previously decided matters is not permissible and this opposition, if it proceeded, would involve no more than a reconsideration of previously decided matters … the opposition could not possibly succeed and should be dismissed.”
THE LAW ON DISMISSAL
Dismissal of an opposition is provided for by regulation 5.5 of the Patents Regulations, which states:
5.5 (1) An applicant may:
(a) within 1 month of being served with a copy of a statement by an opponent under paragraph 5.4(a); or
(b) if the complete specification in relation to an opposed application is re-examined under subsection 97(1) of the Act - within 1 month from the day when the re-examination is completed under regulation 9.5;
request the Commissioner in the approved form to dismiss the opposition.
(2) As soon as practicable after a request is made, the Commissioner must inform the opponent of the request having been made.
(3) The Commissioner may dismiss the opposition whether or not the applicant has requested dismissal of the opposition.
The legislation is otherwise silent on the criteria to be applied to determine whether to dismiss an opposition.
The Commissioner developed an approach to dismissal based on the approach that courts apply in determining whether to exercise their powers to summarily determine claims and defences. In this regard, the Commissioner took guidance from the approach laid down in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125. The Federal Court approved this approach in Stack v Commissioner of Patents [1999] FCA 148 at [5 - 6]; (1999) 43 IPR 663 at 664 - 665:
“In resolving the matter, the delegate treated reg 5.5 as establishing a procedure for the summary dismissal of an opposition to applications of the kind referred to in reg 5.1; accordingly, he followed the approach that courts apply in determining whether or not to exercise their powers to summarily determine claims and defences. In this context, he referred to General Steel Industries Inc v Commissioner of Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129. The delegate concluded:
‘... an opposition or a ground of opposition will be dismissed [under reg 5.5] only if it is clear that the opposition could not possibly succeed. In bringing this action the onus falls on [the applicant] to show that the opposition is clearly untenable.’
No complaint is made about, and there is no reason to doubt the correctness of the delegate's approach in this regard.”
It seems manifestly clear that dismissal under regulation 5.5 should be interpreted in the same way as summary judgment by a court.
Recently a delegate found that this approach should reflect changes in the approach used in the Federal Court (see Les Laboratoires Servier v Apotex Pty Ltd [2008] APO 11). I note that the relevant change to section 31A of the Federal Court of Australia Act was introduced in 2005 by the Migration Litigation Reform Act. The Second Reading speech (Commonwealth, Parliamentary Debates, House of Representatives, 10 March 2005, 2 - 4 at 3 (Philip Ruddock, Attorney-General)) relevantly states:
“The bill also strengthens the power of the courts to deal with unmeritorious matters, by broadening the grounds on which federal courts can summarily dispose of unsustainable cases. It is appropriate that this provision is of general application. It will be a useful addition to the court’s powers in dealing with any unsustainable case.”
It appears that the change to the summary disposal rules was in a context far broader than just migration cases. The Explanatory Memorandum, Migration Litigation Reform Bill 2005 (Cth) states
23. Section 31A will allow the Court greater flexibility in giving summary judgement and will therefore be a useful addition to the Court’s powers in dealing with unmeritorious proceedings.
25. An identical amendment is inserted into the Judiciary Act 1903 (item 9, Schedule 1) and the Federal Magistrates Act 1999 (item 8, Schedule 1) to provide a uniform approach to summary judgment in the High Court, Federal Court and FMC.”
As noted in the Servier decision, a similar approach is also applied in England and Queensland. It seems clear that Parliament has decided that the approach to summary judgment in all federal courts should be the same, and that the same approach applies to all matters (not just to migration cases).
The Stack case was explicit in approving the adoption of court practices when considering dismissal. The practice of all federal courts has been altered by Parliament, and it would be strange indeed if Parliament intended that a different approach should apply in federal tribunals. I consider that it is undeniable that the Commissioner should follow the clear shift that applies in all federal courts, and apply the practice in section 31A of the Federal Court of Australia Act.
The effect of section 31A is that the previous test of whether an opposition is obviously or manifestly groundless or untenable has been relaxed slightly, and instead the question is whether there is no reasonable prospect of success (see the cases cited in the Servier decision). This is the approach that I will apply in the present case.
In the present case the request for dismissal was made within one month of being served with a copy of a statement by the opponent. The Commissioner informed Memcor of the request on 21 December 2007. Consequently the procedural prerequisites for dismissal have been satisfied.
RELEVANCE OF THE EARLIER DECISION
The present case is unusual in that there is an earlier decision on the allowability of essentially the same amendment. The decision followed a hearing of the same parties on essentially the same grounds. There is disagreement between the parties as to the relevance of the earlier decision, and the appropriateness of some previous office decisions on dismissal. Consequently I will approach the subject from first principles.
Ex parte Mole Engineering
Many previous decisions in this area have considered the High Court decision in R v Smith; ex parte Mole Engineering Pty Ltd (1981) 147 CLR 340. This was a case relating to an opposition to the grant of a patent under section 59 of the Patents Act 1952. The Deputy Commissioner issued a decision that was called an interim decision, and allowed an opportunity to amend. A Principal Supervising Examiner considered whether the application as amended should proceed to grant. The Court held that those matters that had been decided (in the interim decision) were not open to challenge or reconsideration (other than by an appeal against the interim decision, which had not been done). The principle was stated by Mason J as:
“clearly once a decision has been made under s.60 the Commissioner cannot re-hear the proceeding and arrive at a different conclusion” (page 348)
Wilson J expressed the principle in this way:
“the inherent finality of the decision ensures that, subject to appeal, it provides a firm base on which another officer can proceed in the exercise of the powers and functions of the Commissioner” (page 358)
The doctrine that best summarises the effect of this case is that the Commissioner was functus officio with regards to those matters covered by the original decision.
Where a different opposition is subsequently brought, it cannot be said that the Commissioner is functus officio. The power to deal with the matter arises from the filing of the new notice of opposition. The Commissioner not only has the power to consider the new matter, but has a duty to do so.
Issue estoppel
The doctrine of issue estoppel is conveniently summarised in the classic statement of Dixon J in Blair v Curran (1939) 62 CLR 464 at 532:
"A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies."
The critical question is whether a decision of an administrative tribunal such as the Commissioner of Patents can give rise to an issue estoppel. Dixon J referred to a “judicial determination”, which would normally be regarded as beyond the capacity of any federal administrative tribunal. Support for this view is found in WJ & F Barnes Pty Ltd v Federal Commissioner of Taxation (1957) 96 CLR 294, Commonwealth v Sciacca (1988) 17 FCR 476, Midland Metals Overseas Limited v Comptroller-General of Customs (1991) 30 FCR 87, Comcare v Grimes (1994) 50 FCR 60. I am satisfied that decisions of the Commissioner of Patents do not give rise to an issue estoppel.
Prospects of success
The Commissioner can dismiss an opposition if there are no reasonable prospects of success. In a situation where essentially the same claims have previously been the subject of an opposition, the question immediately arises as to why it is reasonable that there could be a different outcome. Factors that come to mind as to why it could be reasonable to expect a different outcome could be:
(i)different grounds of opposition
(ii)different particulars of opposition
(iii)substantial differences between the claims
(iv)different evidence that will be led
(v)clear deficiencies in the original decision
APPLICATION TO THE FACTS
The present case is to be answered by considering the prospects of success in the opposition. I note that in doing this it is permissible to carry out a detailed analysis of the specification and the particulars of opposition (see the Servier decision).
It is agreed that the opposition is proceeding on essentially the same basis as the previous opposition. On the face of it, this suggests that the same outcome is likely, i.e. the amendment will be refused. Zenon argued that a different outcome could be expected in the present opposition because the earlier decision contained errors. Mr Yates directed my attention to several portions of the earlier decision in support of his contention that there were reasonable prospects of a different outcome. One of those portions is [56] – [58]:
“56. Feature (b) of claim 1 defines:
permeate collection means to collect said permeate, sealingly connected in open fluid communication with a permeate-discharging face of each of said headers
whereas claim 23 defines:
(ii) lumens of the membranes are in fluid communication with at least one permeate collection means – through the permeate discharging face of its associated header. I have added the italicised matter as it is obviously implied.
57. Prima facie it appears and at the hearing it was the opponent’s view that this feature of claim 23 is broader than the scope of claim 1 because at least one header is broader than each of said headers.
58. I disagree with this construction of claim 1 because after defining at line 17 – 19 of the claim that ‘open ends of the fibers extending from a permeate-discharging face of at least one header’ it is inconsistent and incorrect to require permeate collection means to collect said permeate, sealingly connected in open fluid communication with a permeate-discharging face of each of said headers. Therefore ‘at least one header is required’, not ‘each of said headers’.”
The hearing officer construed the expression “each of said headers” in claim 1 as meaning “at least one header”. This particular point of construction is important because it flows directly into the issue of allowability under section 102(2)(a). The construction adopted is quite different to the plain meaning of the words. The construction appears to be based on two considerations - the “inconsistent” and the “incorrect” matters. The “inconsistent” matter is that the previous portion of claim 1 refers to the open ends of the fibers extending from the face of “at least one header”. This is a different feature of the device, so it is not apparent why consistency would be expected. The “incorrect” matter appears to be a view of how the device will operate. It is a well established principle of construction that resort to the description is appropriate to resolve ambiguity, but the ambiguity has not been explained. It is evident that decision does not fully explain the thinking process of the hearing officer.
The gap in the logic of the earlier decision makes it uncertain whether the same outcome would be expected in the present opposition. It is clear that it cannot be said that there are no reasonable prospects of success. Consequently I do not need to go any further, and it is unnecessary to consider whether the earlier decision was correct on the merits. I refuse to dismiss the opposition.
COSTS
Both parties submitted that costs should follow the event. I have found that Memcor succeed in this action, and I agree that it is appropriate for costs to follow the event. I award costs according to Schedule 8 against Zenon Environmental Inc.
Dr S.D.Barker
Delegate of the Commissioner of Patents
30 May 2008
Patent attorneys for the applicant : Corrs Chambers Westgarth, Melbourne
Patent attorneys for the opponent : Shelston IP, Sydney