Minara Resources Limited v BHP Minerals International, Inc

[2007] APO 1

ABSTRACTS OF DECISIONS

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 779844 in the name of BHP MINERALS INTERNATIONAL, INC.

Title:          Method for leaching Nickeliferous Laterite Ores

Action:          Opposition under Section 59 by MINARA RESOURCES LIMITED, and objection to an application under Regulation 5.10(2) for an extension of time in which to serve evidence in support

Decision:          Issued  02 January 2007.

Abstract

This was an opposition to a request for an extension of time of three months to file evidence in support.  Four previous extensions of three months each had already been granted.  At the time the applicant indicated its objection to the extension some evidence in support had already been served, but nothing in the way of expert evidence.  The request for the extension stated it was for the purpose of filing expert evidence.  The opponent stated at the hearing that statutory declarations from two of the three experts are ready for execution and that of the third expert is nearing completion.  The opponent attributed the delay in obtaining the declarations in question to other priorities of the experts and communication difficulties peculiar to the field in which the experts were involved, namely the mining industry

The extension was allowed.  The public interest and the interest of the opponent, which were in favour of the extension, were considered to outweigh the interest of the applicant, which was against the extension.  The factors bearing upon whether an adequate justification for the delay had been provided seemed also to favour the extension being granted.

Costs were awarded against the applicant.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 779844 by BHP Minerals International, Inc., opposition under section 59 by Minara Resources Limited, and objection to an application under regulation 5.10(2) for an extension of time in which to serve evidence in support.

BACKGROUND

1.   Patent application 779844 was filed on 25 October 2000 by BHP Minerals International, Inc. (BHP) as International Application PCT/US2000/041511.  It claims priority from US patent application 09/433110 filed on 3 November 1999.  Application 779844 was advertised accepted on 17 February 2005.

2.   Minara Resources Limited (Minara) filed a notice of opposition to the grant of a patent on 17 May 2005. On 16 August 2005 Minara served its statement of grounds and particulars and so far has obtained four extensions of time totalling twelve months to file its evidence in support.  Some part evidence in support comprising an attorney statutory declaration was filed during that period.  On 16 November 2006 Minara filed librarian statutory declarations as further part evidence in support. On the same day Minara requested a further three month extension of time to 16 February 2007 in which to serve the remainder of its evidence in support. This fifth extension of time was objected to by BHP.

3.   The matter was heard in Canberra on 15 December 2006.  The party objecting to the extension of time (that is, BHP) opted not to appear, and instead relied on written submissions by Greg Munt, patent attorney of the firm Griffith Hack, Melbourne.  Minara was represented at the hearing by Peter Caporn, patent attorney of the firm Wray & Associates, Perth who appeared by telephone.  Mr Caporn also provided written submissions.  Both sets of written submissions were of considerable assistance in determining this matter.

REASONS FOR THE EXTENSION OF TIME

4.   The circumstances and grounds for requiring the fifth extension of time are as follows:

“Further time is required for the Opponent to finalise its evidence-in-support in this matter.

Since the filing of the extension application dated 16 August 2006 the patent attorneys for the Opponent have met with counsel. As a result of this meeting, and on the recommendation of counsel, further requests for comment have been forwarded to the expert witnesses.

We have since received feedback from two of the expert witnesses and are waiting on comment from the third. The third expert witness has had extensive work and travel commitments recently and has been unable to attend to the requests for further comment. However, recent correspondence indicated that we would have his comment within the next week or two.

We have today served and filed a number of librarian statutory declarations,

Additional time is required for finalisation of two of the expert witness statutory declarations and for consideration of comment from the third expert and then finalisation of that expert's statutory declaration. Further time will of course then be required to arrange execution, service and filing of each statutory declaration.

The Opponent continues to work assiduously towards finalisation and service of evidence-in-support.”

5.   The previous (that is, fourth) application for an extension of time filed on 16 August 2006 read as follows:

“Further time is required for the Opponent to finalise its evidence-in-support in this matter.

Since the filing of the extension application dated 16 May 2006 initial Statutory Declaration drafts have been provided to each of the three retained experts. Comment from two of the three experts was received by our attorneys in late July 2006 and they are expecting comment from the third within a week.

We have today served and filed the Statutory Declaration of Peter M Caporn, having annexed thereto the various documents to be relied upon in the Opposition. Consequent application to amend the Statement of Grounds and Particulars has also today been filed and served.

Additional time is required for the preparation of final drafts of the three expert's Statutory Declarations, the settling of those draft declarations by Counsel, and finally execution and service. A date in mid-September has been booked with Counsel for the purpose of settling the three expert witness Statutory Declarations. The Counsel previously retained in this matter was unavailable prior to the mid-September date.

The Opponent continues to work assiduously towards finalisation and service of evidence-in-support. As should be noted from the above detail, we expect that evidence-in-support will be finalised in the period now sought.”

6.   The third application for an extension of time filed on 16 May 2006 read as follows:

“Further time is required for the Opponent to finalise its evidence-in-support in this matter.

The preparation of draft statutory declarations for each of the three previously briefed experts have begun. Further time is required to finalise these drafts and have them reviewed by the respective experts. It is unfortunately expected that, due to the extensive travel commitments of the experts, review of the draft declarations may be delayed.

Additional time is required for the review and amendment of the drafts by the declarants, the settling of the draft declarations by Counsel, and finally execution and service.

The Opponent continues to work assiduously towards finalisation and service of evidence-in-support.”

7.   The first and second applications for an extension gave the reasons for the extension as delays in identifying and retaining expert witnesses in the field of the invention.

THE LAW

8.   Extensions to the time limits to file evidence in oppositions is at the discretion of the Commissioner, and is governed by subregulation 5.10(2).  The Federal Court has considered the requirements of regulation 5.10 in 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, and National Starch & Chemical Company v Commissioner of Patents (2001) 50 IPR 398. The relevant considerations arising from these decisions have been set out and followed in numerous patent office decisions relating to regulation 5.10, and may be summarised 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;

(e)  The interests of the opponent, the applicant and any other parties are a relevant consideration.

In summary, it is clear from these decisions that the Commissioner, having given both parties the opportunity to make representations, may grant an extension only if reasonably satisfied that it is appropriate in all of the circumstances

RELEVANT CONSIDERATIONS

Explanation of the delay

9.   In his written submissions for BHP, Mr Munt drew attention to two other current oppositions which involve basically the same parties as in the present matter, and in which he alleged that Minara’s conduct had been the same as in the present matter. In each of these three oppositions, Minara has cited a large number of documents, sought multiple extensions of time for filing evidence and still not filed any substantive expert evidence prior to the most recent extension applications.

10.  Mr Munt went on to criticise the lack of detailed information given in the circumstances and grounds for requesting the extensions, even to the extent of not having revealed the names of the experts whose evidence is the cause of the delay.  He also criticised the lack of progress in finalising the evidence even though Minara has had 16 months at the date of the hearing to serve evidence in support and said that this indicates that Minara is not progressing preparation of evidence with the diligence expected of a serious opponent.

11.  Mr Munt also drew attention to innovation patent application 2006100870 filed by the applicant, which is divided from the opposed application. The claims of this innovation patent are similar to the claims of the opposed application, although not the same. In an examination report which has just issued on this innovation patent, the examiner did not consider any of the prior art cited in the statement of grounds and particulars as relevant to the novelty of the invention defined in the innovation patent. Mr Munt therefore questioned the relevance of the 33 documents cited by the opponent in the statement of grounds and particulars.

12.  Mr Munt then stated that the reasons provided by Minara for the delay in preparing the evidence in support relate to the availability of experts, rather than the complexity or volume of evidence being prepared.  He submitted that the fact that an expert is overseas is not an impediment to preparing a statutory declaration in view of modern communications, and cited Coflex v Stolt Comex Seaway A/S [1995] APO 58 and as applied in Eleven Lighting Pty Limited v Interium Pty Ltd [2002]APO 25 in support of this.

13.  In his submissions for Minara, Mr Caporn cited Ferocem [supra] on the principle that sufficient detail regarding the circumstances and reasons for needing the extension was not a mandatory requirement, and that the Commissioner need only be “reasonably satisfied that an extension of time is appropriate”.  He cited Cadbury Schweppes Pty Ltd v Wm Wrigley Jr. Company [2006] APO 35 as an instance where this principle had been applied.

14.  In any case he submitted that the reasons given in the requests for extensions clearly outlines the difficulty in maintaining contact with the experts as a result of their work and travel commitments and that this provides clear justification for the allowance of the extension. He argued that consultants in mining and related industries are by their very nature often unavailable and also geographically isolated and further, in such locations telephone and internet facilities can often be unreliable.

15.  At the hearing, Mr Caporn explained that the mineral processing industry was going through a very busy period and that BHP is one of the largest companies in this field. The opponents have found it difficult to locate and retain experts in this industry as many experts are concerned that giving evidence against BHP may be prejudicial to their employment opportunities in the mining industry. This has also been a contributing factor for the delays in serving the evidence in support.

16.  Whilst the reluctance of experts in this field to give evidence against BHP may be true, I note that the second request for extension filed indicates that the experts have been identified and retained around February 2006 and the opponent has had around nine months since then to get the evidence from these experts.  Although I generally agree with Mr Munt when he states that an expert being overseas is not an impediment to preparing a statutory declaration in view of modern communications, I find Mr Caporn’s submissions regarding the difficulty in communicating with experts in geographically isolated areas persuasive.

17.  At the hearing Mr Caporn provided additional information over that given in the latest request for the extension of time.  The declaration from the first expert has been finalised and forwarded to the expert for final execution and they expect to serve the evidence in early January. In relation to the declaration of the second expert, some final amendments are currently being made and a final execution copy will be forwarded to him shortly. Final comments have just been received from the third declarant and this will be incorporated into the final draft which they expect to forward to the expert in January. Whilst Mr Caporn was very confident that the declarations of the first and second experts would be finalised and served within the extension sought, he was not so confident about the declaration of the third expert, but he nevertheless said that it would at least be very close to completion.

18.  He further argued that recent decisions of the Federal Court have made it particularly difficult to undertake the gathering of such expert evidence in anything other than a careful and well-considered manner.  This involves a two stage process, where in the first stage evidence on common general knowledge in the art is received from the expert and then in the second stage the specification and citations are given to the expert for novelty and inventive step considerations. This was apparently a reference to comments made by the Federal Court in Minnesota Mining and Manufacturing Co. v Tyco Electronics Pty Ltd (2002) 56 IPR 248 at 45. This two stage process has made it inevitable that evidence gathering will take longer.

19.  He also submitted that in the examination report of the divisional application 2006100870 mentioned by Mr Munt, although there was no novelty objection, the examiner had raised a lack of innovative step objection based on a number of documents cited in the statement of grounds and particulars. He argued that this was a clear indication that the documents cited in the statement of grounds and particulars raise serious doubts about the validity of the claimed invention. I agree.

20.  When I take all of the above in consideration, even though Minara has had extensions totalling 12 months, it appears that Minara has been making steady progress in the preparation of evidence from its expert witnesses and that these are now close to completion. I am satisfied that the opponent has provided a reasonable explanation for the delay in filing the evidence.

The public interest

21.  The public interest calls for a balance between the requirements that oppositions be dealt with expeditiously and economically, and that a serious opposition be dealt with on its merits (Ferocem (supra) and Goninan (supra)). 

22.  Mr Munt submitted that the public interest is not served by enabling an opponent to prolong the opposition process indefinitely whilst making little or no progress to seriously pursue its opposition case during the extensions of time granted.  He put BHP’s interest as being in the economic, efficient and expedient progression of the opposition, noting that Minara’s lack of progress in the preparation of evidence in support in all three opposition indicates behaviour calculated to delay BHP obtaining a patent grant.

23.  Mr Caporn acknowledged that BHP has a legitimate interest in the expeditious disposal of the proceedings.  He also acknowledged that it is generally in the public interest that opposition proceedings be settled expeditiously, but in the present instance he asserted that the opponent had established that a serious opposition is in train and that this should be taken into account.

24.  I agree. Although it is doubtful that all 33 documents listed in the statement of grounds and particulars will be relied upon in the opposition, the examination report of the divisional innovation patent lends support to Minara’s submission that a serious opposition is on foot.

25.  Although I share BHP’s concern that the current extension will bring the time the opponent has had to serve its evidence in support to 18 months, overall I consider the public interest strongly favours providing Minara with a further opportunity to bring forward relevant evidence especially when evidence from two of the three experts is ready for execution and that of the third is nearing completion. This would allow a more just determination of the opposition, despite the resultant delay in the opposition proceedings.

The interests of the parties

26.  Minara has a legitimate interest in opposing the grant of the patent as the field of technology is highly relevant to Minara’s activities. Mr Caporn submitted that they had established that a serious opposition is on foot and therefore Minara’s interests would clearly be disadvantaged if it were not able to serve its evidence in support and is therefore shut out of the opposition.

27.  It is clearly in BHP’s interests to have the opposition determined as expeditiously as possible.  I accept that BHP could be disadvantaged by a protraction of proceedings if I grant the extension now sought.  Nevertheless, given that a serious opposition is in train and that the evidence from the three witnesses is nearly complete, it is my view that the balance in relation to the interests of the parties is currently in favour of the opponent.

CONCLUSION

28.  Although the current request for extension of time is the fifth such request, I have found that Minara has provided a reasonable explanation for the delay in filing the evidence in support. I have also found that the considerations behind the private interests of the parties and the public interest support the extension.

29.  I am therefore satisfied that an extension of time is appropriate in all the circumstances.  Therefore I grant Minara Resources Limited an extension until 16 February 2007 in which to serve its evidence in support.

COSTS

30.  In the present case, the explanation supplied was found to justify an extension.  In such circumstances costs follow the event.  I see no reason to depart from the usual practice of the Commissioner in these matters. I therefore award costs against BHP International, Inc.

R Subbarayan
Delegate of the Commissioner of Patents

02 January 2007

Patent attorneys for the applicant  :  Griffith Hack, Melbourne

Patent attorneys for the opponent   : Wray & Associates, Perth