Nalco Chemical Company v W.R. Grace & Co.-Conn

[1998] APO 65

official notice

decision of a delegate of the commissioner of patents

Application  :          No.624675 in the name of Nalco Chemical Company

Title:          Transition Metals as Treatment Chemical Tracers

Action: Opposition under section 59 of the Patents Act 1990 by W.R. Grace and Co.-Conn.  Hearing on an application by the patent applicant to serve further evidence after the completion of evidence in answer.

Decision:          Issued            .

Abstract

1. The principles that apply to grant of leave to serve further evidence during the progress of an opposition are the same as those that apply to extension of time to serve evidence.  These derive from the decisions in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243) and A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213.

1. Relevant considerations include the likely importance to the outcome of the case of the evidence for which leave is sought, whether serving of the evidence will cause any unnecessary protraction of the proceedings, whether there will be any injustice done to the other party, the extent of any delay in seeking to serve the evidence and the reasons for that delay.

1. The overriding principle with regard to the exercise of a discretion by the Commissioner, such as that to grant leave to serve further evidence, is that genuine and proper consideration be given to all relevant considerations and this involves a balancing exercise in which all competing considerations must be taken into account.

1. In this case the evidence relates to the issue of common general knowledge.  It is likely to be important in resolving the question of inventive step.  There will not be any unnecessary protraction of the opposition, any injustice done to the opponent will be small and although the delay involved in seeking to serve the evidence is very long, only a small part of it has not been adequately explained.  On balance it is appropriate to grant leave to serve the further evidence.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No.624675 by Nalco Chemical Co and opposition under S.59 of the Patents Act 1990 by W.R. Grace and Co.-Conn and an application to serve further evidence.

background

Patent Application 624675 was filed on 6 February 1990 by Nalco Chemical Company (NALCO).  I t was advertised accepted on 18 June 1992, and a notice of opposition was filed by W.R. Grace and Co.-Conn. (GRACE) on 18 September 1992.  This was followed by a statement of grounds and particulars on 19 October 1992.  Evidence in support was completed on19 April 1993 after extensions of time totalling three months.  Evidence in answer was completed on 19 October 1993 after extensions of time totalling three months.  In neither case did the other party object to these extensions of time.

On 18 October 1993 the applicant filed a request to amend under s.104 of the Patents Act 1990. As a result of this the period for serving Notice of Intention to file evidence in reply was deferred until one month after the proposed amendments were either allowed or refused. The s.104 request was opposed by GRACE. On 12 and 16 December 1994, and on 21 December 1995 the opponent applied to amend the s.104 statement of grounds and particulars. These amendments were allowed without objection from the applicant. Following a hearing on 12 February 1998, a decision was issued on 30 July 1998, allowing the s.104 amendments and setting the time for serving Notice of Intention to serve Evidence in Reply as 30 August 1998. Notice was served on 27 August 1998 and the time for serving Evidence in Reply set at 30 October 1998.

On 11 March 1998, the applicant sought leave to adduce further evidence in the section 59 opposition. The application was accompanied by a statutory declaration in the name of Ruth Clarkson "annexing a copy of a Statutory Declaration by Neville Stephenson dated 12 July 1993." On 16 April 1998 the opponent filed written representations objecting to the request. On 6 May 1998 the Commissioner indicated to the applicant the he did not consider that they had made out a prima facie case for leave to adduce the further evidence and invited further submissions.  On 18 May 1998 the applicant filed further representations, supported by a statutory declaration by Ruth Megan Clarkson.  On 7 July 1998, the delegate indicated to the parties that as a prima facie case had now been made out the request would be granted, but invited the opponent to indicate whether it wished to be heard.  The opponent objected and the matter was set down for hearing in Canberra on 19 October 1998.

At the hearing the applicant was represented by Dr Ian Ernst, patent attorney, of Baldwin Shelston Waters, Sydney; and the opponent by Mr Michael Angliss, patent attorney, assisted by Mr Andrew Dark, of Davies Collison Cave, Melbourne.

APPLICATION AND WRITTEN REPRESENTATIONS

In its application to serve further evidence on 11 March 1998, the applicant, NALCO, stated:

"We respectfully submit that leave be granted as the filing of this declaration will not affect the opponents case since they are already aware of the contents of Stephenson's declaration, having already been served a copy in relation to the section 104 opposition to amendments in respect of the abovementioned patent application on 13 June 1995, and in light of the fact that filing of Evidence-in-Reply in respect of this section 59 opposition has been deferred awaiting the decision in relation to the amendments."

The further evidence comprises a statutory declaration by Neville Stephenson annexed to a declaration by Ruth Megan Clarkson, dated 9 March 1998. The latter provides evidence to support the request for leave to adduce the Stephenson declaration but does not itself go to the substantive issues of the s.59 opposition. The relevant facts stated in this Clarkson declaration are:

"2. Annexed as Exhibit RMC-1 is a copy of a declaration made by Neville Stephenson dated 12 July 1993, the original of which was served as Evidence-in-Answer in respect to the opposition in relation to amendments under section 104 in relation to the abovementioned Patent Application 624,675 (49151/90).

"3. Filing and serving of this declaration in relation to the section 59 opposition in respect of the abovementioned Patent Application 624,675 (49151/90) was inadvertently overlooked when Evidence-in-Answer was completed."

On 16 April 1998 the opponent, GRACE, after being informed of the application to serve further evidence, made the following representations:

"As set out by the Delegate of the Commissioner of Patents in ICI v Mitsubishi Gas Chemical 29 IPR 285, and followed subsequently, the criteria to be considered with regards to the exercise of the Commissioner's discretion to grant leave to serve further evidence are as follows:

(a)it must be shown that the evidence could not have been obtained with reasonable diligence at an earlier stage;

(b)the evidence must be such that if given, it would probably have an important influence on the case;

(c)       the evidence is such as is presumably to be believed, that is, it must be apparently credible, though not necessarily incontrovertible;

(d)if the request to serve further evidence were allowed:

would this cause unnecessary protraction of the opposition?

would there be any injustice done to the other party?

"In this case, we submit that there is no need for the Commissioner to go beyond criterium [sic] (a) in deciding that the granting of leave to serve the further evidence must be refused.

"The further evidence accompanying the letter dated 9 March 1998 to the Commissioner was served on us on 13 March 1998.  The further evidence consists of a Statutory Declaration dated 9 March 1998 having exhibited to it a copy of a Statutory Declaration dated 12 July 1993 by Neville Stephenson.  The Clarkson declaration of 9 March 1998 is merely a vehicle to serve the Stephenson declaration of 12 July 1993.  That is, the further evidence for which leave is sought to adduce is really the Stephenson declaration of 12 July 1993.

"The delay between executing the Stephenson declaration of 12 July 1993 and serving it is four years and eight months.  The representation by the attorneys for the applicant that the filing of the declaration with the evidence in answer was inadvertently overlooked does not go any way towards showing that the evidence could not have been obtained with reasonable diligence at an earlier stage.  We assume that the inadvertent oversight was by the applicant's attorneys, yet we note that evidence in answer to the main opposition was served on three different occasions after the execution of the Stephenson declaration, on 16 July 1993, four days after the execution, on 18 October 1993 and on 19 October 1993.  Thus, the Stephenson declaration of 12 July 1993 was inadvertently overlooked on at least three separate occasions.  On each of those occasions, we acknowledged service of those declarations that had been served and it should have been clear to the applicant's attorneys from these acknowledgements that the Stephenson declaration had not been served.

"In the letter of 9 March 1998 seeking leave to adduce the further evidence, the applicant's attorneys submit that the granting of leave to adduce the further evidence 'will not affect the opponent's case since they are already aware of the content of Stephenson's declaration, having already been served a copy in relation to the section 104 opposition to amendments in respect of the above mentioned patent application on 13 June 1995.' It is submitted that the service of the declaration in the amendment opposition is irrelevant to the granting of leave to adduce the declaration in this opposition since it is an entirely different matter. However on the important question of reasonable diligence, it is noted that the Stephenson declaration of 12 July 1993 was served in the amendment opposition with a declaration dated 5 June 1995 by Stephenson, witnessed by Ruth Clarkson of the applicant's attorneys, in which Stephenson declares 'I am the same Neville Stephenson who previously executed a declaration dated 12 July 1993 for use in the above proceedings which I understand was omitted from evidence.' It is clear from this that at the very latest, the Stephenson declaration of 12 July 1993 could have been filed and served in the main opposition on or shortly after 5 June 1995, about two years and nine months before its actual service. This does not reflect reasonable diligence.

"Given the lack of reasonable diligence it is submitted that the Commissioner must have no choice other than to refuse to grant the leave to adduce further evidence, but we understand that the Commissioner is obliged to offer the applicant an opportunity to be heard in the matter before refusing leave.  Should the Commissioner indicate his intention to refuse the leave and the applicant then seeks to be heard, the opponent will also seek to be heard both on the issue of reasonable diligence and on the other criteria mentioned in ICI v Mitsubishi Gas.  On the other hand should the Commissioner conclude that leave should be granted to adduce the further evidence contrary to our submissions, we advise that we will seek the opportunity to be heard in the matter before the leave is granted."

After being notified that the Commissioner did not consider that they had made out a prima facie case for leave to be granted. NALCO made further submissions on 18 May 1998:

"1.       We submit that the evidence which is proposed to be adduced, based on the nature thereof and grounds is relevant to the action and would contribute to a more correct, just or expeditious result.  The Stephenson declaration is by an Australian consultant in water treatment who is independent from both the opponent and the applicant.  His declaration includes comments relating to his understanding of the common general knowledge as it existed before the priority date of the opposed specification and thus are relevant to arguments concerning inventive step.  Without his declaration in Evidence, the Applicant may be at a disadvantage concerning arguments at any hearing in relation to inventive step.

"2.       We submit that the application for special leave, were it to be allowed would not cause unnecessary protraction of the opposition.  As will be further outlined below, the opponent has not yet begun preparation of Evidence-in-Reply in respect of the opposition and accordingly the opposition would not be protracted by including Stephenson declaration [sic].  Moreover the opponent has been in possession of the evidence since 9 June 1995.

"3.       We submit that there would not be any injustice done to the other party if the application were allowed.  As will be further outlined below, the opponent has been aware of this declaration since it was filed as part of the Evidence-in-Answer in respect to the opposition to amendments on the same application.

"4.       We submit that we have been diligent in prosecution [sic] this opposition action.  We enclose a declaration by Ruth Megan Clarkson which outlines the history behind our omission to include the Stephenson declaration in Evidence-in-Answer. We further comment as follows:

"As advised in our letter of 9 March 1998, the opposition in respect of Secton 9 [sic] has been deferred awaiting the decision in relation to the opposition to the amendments. This deferral was issued by the Patent Office on 8 December 1993 and stated that 'time for serving the Notice of Intention to serve Evidence-in-Reply will be one (1) month from the Commissioner notifying the parties of the allowance of the amendments dated 18 October 1993'. This deferral effectively stopped the clock in relation to the prosecution of the section 59 opposition pending the outcome of the opposition into the amendments. The opposition with respect to the amendments was heard on 12 February 1998 and a decision has still not issued. Accordingly the clock in relation to the substantive prosecution of the section 59 opposition is still stopped. Taking the above into account, it is clear that we have been diligent in prosecuting the opposition application. As the clock has stopped and has not yet been restarted, there has been no relevant time in which to be diligent. The opponent has not yet been required to respond to the Evidence-in-Answer and accordingly no injustice can be done to the other party and there would be no unnecessary protraction of the opposition with the allowance of leave to adduce further evidence. The evidence which is proposed to be adduced is relevant to the action and would contribute to a more correct, just and expeditious result.

"Concerning the fact that we were aware of the omission of the Stephenson declaration from the main opposition as early as June 1995, I refer to the enclosed declaration by Ruth Megan Clarkson dated 14 May 1998. Please note that we only became aware of the fact that we had omitted the Stephenson declaration from the main section 59 opposition on or around May/June 1995 when preparing our Evidence-in-Answer in respect of the opposition to the amendments. We did file this declaration diligently as part of our Evidence-in-Answer to the opposition to the amendments on 9 June 1995, which effectively put that declaration on notice to the opponents at that date. As the opposition to the amendments and the Section 59 opposition are in relation to the same application and are consequently interlinked, we were under the impression that the filing of the Stephenson declaration in respect of the opposition to the amendments would enable us to rely on that declaration at any hearing in respect of the Section 59 opposition. In support of this we note that the Statement of Grounds and Particulars served by the opponent in respect of the opposition to the amendments, relies on both the Evidence-in- Support and Evidence-inAnswer filed in respect of the main Section 59 opposition. In discussion with Applicant's Counsel leading up to the hearing in respect to the opposition to the amendments heard in February 1998, our counsel also recommended that we seek leave to adduce this declaration as further evidence in respect of the main section 59 opposition. We accordingly did so, diligently in our request of March 1998. We would also wish to point out that the opponent by letter dated 21 December did put settlement proposal to the applicant and that these discussion were still going over a year later. It was not until the hearing into the amendments that it was clear that the opponent did not wish to settle the opposition and accordingly, it was not appropriate to seek leave to adduce further evidence until after the hearing into the amendments was completed."

These submissions were supported by another declaration, dated 18 May 1998, by Ruth Megan Clarkson seeking to amplify the details relating to their failure to include the Stephenson declaration in the Evidence-in-Answer:

"2. I first became aware that we had omitted to file the Neville Stephenson declaration as part of our Evidence-in-Answer in respect of the above Section 59 opposition sometime around May/June 1995 when I was preparing Evidence-in-Answer in respect to the opposition to the amendments to the opposed application. Up to that time, I verily believed that the Neville Stephenson declaration had been included in the patent Applicants Evidence-in-Answer in the substantive opposition. It was at all relevant times intended to include the Neville Stephenson declaration as part of the Patent Applicants Evidence-in-Answer. At that time I thought it appropriate to serve this declaration as part of Evidence-in-Answer to the opposition to the amendments as I was under the impression that by doing so, I would be able to rely on this declaration at any hearing with respect to the main Section 59 opposition. This was done diligently on 9 June 1995.

"3. On preparation for the hearing in respect of the opposed amendments which was heard on 12 February 1998, I mentioned to Counsel that we had inadvertently not filed the Stephenson declaration in respect of the main Section 59 opposition but had filed it with respect to the opposition to the amendments. Counsel questioned whether it would be admissible in the section 59 proceedings and recommended that we seek leave to include it specifically by way of adducing further evidence to thereby bring it into the Section 59 opposition. This was done diligently on 9 March 1998."

SUBMISSIONS AT THE HEARING

At the hearing Mr Angliss for the opponent, GRACE, made submissions directed to:

·     the relevant law, including the large number of Patent Office decisions on the issue

·     the credibility of the evidence given that the declarant was a professor who would be expected to have more than ordinary skill

·     that the evidence was unlikely to add anything of consequence beyond evidence already served

·     that most of the evidence was directed to novelty issues, not its stated purpose of dealing with inventive step issues

·     that the opponent would suffer injustice in having to deal with new evidence at this stage

·     the length of the delay between obtaining and filing the evidence, ie nearly 5 years and the inadequacy of the reasons given (there was an error of judgment, not merely an omission.)

·     possession of information without it having been identified as relevant to the issue is not the same as having it properly served

·     considering all the issues the balance should favour the opponent.

Mr Ernst for the applicant, GRACE, made submissions directed to:

·     recent case law requires that a "balancing exercise" be carried out in exercising the Commissioner's discretion, that no single requirement, eg diligence, could be considered an imperative (see Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243)

·     decisions under the Patents Act 1952 are not relevant because the leave was there defined as "special leave" implying a narrower discretion than the current regulation requires.

·     mistakes in prosecution of a case need not be punished, for example, when "any fault is that of the party's legal representatives,…the product of unavoidable human error or, possibly, the outcome of the application to the case of fresh legal minds". (see State of Queensland v JL Holdings (1996-97)189 CLR 146 at p.169-170)

·     even if diligence is a relevant factor, it should be assessed against the prosecution of the case as a whole in which the applicant has been diligent - being "mistaken" does not preclude diligence

·     it is not necessary to consider the actual content of the declaration in depth or compare it with the evidence already served to determine its relevance

·     its importance may lie in corroborating the evidence of other declarants

·     the declarant is presumably credible as he is independent of both parties and is from a relevant technical field, he has declared what he knows to be "usual" and in regard to the central issue of tracers as opposed to treating agents he has only "ordinary skill

·     if leave is granted the opponent will be given an opportunity to respond to the evidence and will thus not suffer injustice

· the opponent has had possession of the evidence for nearly 5 years, since it was filed in the section 104 action

·     the case will not be unnecessarily protracted because the declaration is not long, it does not introduce any new documents, evidence-in-reply has not yet been served and it is well before any hearing date

·     taking all the circumstances into account there is no case to shut out the evidence.

DECISION

At the hearing there was lengthy discussion as to what was the law relevant to an application to serve further evidence under regulation 5.10(4) of the Patents Act 1990.  I was referred to numerous decisions on the granting of leave to serve further evidence.  The decisions in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 and A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213 on extension of time to serve evidence were also drawn to my attention.

The law on grant of leave to serve further evidence

The power to grant leave to serve further evidence is discretionary.  Regulation 5.10(4) states:

"(4) The Commissioner may:

(a)on the application of a party; and

(b)on such reasonable terms (if any) as the Commissioner specifies;

permit the party to serve further evidence on the other party."

I note that this regulation, unlike the relevant regulation 59 under the Patents Act 1952, does not refer to the leave sought as being "special leave".  Thus the case law developed under the 1952 Act cannot automatically be applied to matters under the 1990 Act.

Regulation 5.10(5) sets out the conditions necessary for an exercise of the Commissioner's discretion not only in granting an application to serve further evidence [regulation 5.10(4)] but also in giving a direction [regulation 5.10(2)] and in granting an extension of time [regulation 5.10(2)].  The issue in question in the present action is set out in regulation 5.10 (5)(c)(ii):

"(5) The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:

"(c) in either case:

(ii)is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances.

Regulation 5.10(5) also includes, as prerequisites to any decision, that the Commissioner must ensure that the other party has been notified, and that both parties have had an opportunity to make representations.  These matters are not in question in this action.

The wording of regulation 5.10(4) is closely parallel to that of regulation 5.10(2) which states:

"(2) The Commissioner may:

(a) on the application of a party in the approved form; and

(b) on such reasonable terms (if any) as the Commissioner specifies;

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 paragraph 5.4(1)."

In both cases the exercise of the discretion they allow is governed by regulation 5.10(5).  Thus I think that the principles for the exercise of the Commissioner's discretion set out in Ferocem (supra) and Goninan (supra) are relevant to the present case even though they relate to applications for extension of time under regulation 5.10(2).  In fact a number of earlier decisions on further evidence have already taken the decision in Ferocem (supra) into account, including:

• WR Grace and Co.-Conn v Asahi Kasei KK [1996] APO11 (20 February 1996)

• Tasman Engineers Pty Ltd v Ausbelt Splicing Services (International) Pty Ltd [1996] APO 13 (27 February 1996); (1996) AIPC 91-240

• Dominion Mining Limited v Western Mining Corporation Limited [1998] APO 11 (17 March 1998)

• Bac Tech (Australia) Pty Ltd v Technological resources Pty Ltd [1997] APO 8 (19 March 1997)

The delegate in ABB Engineering Construction v Goninan (1997) 38 IPR 213 has, I think, conveniently summarised the principles identified in Ferocem (supra) and Goninan (supra):

"From these decisions it is clear that the principles that govern extensions of time to serve evidence in support are:

a)        The power is discretionary:     Regulation 5.10 confers a broad discretion, which cannot be reduced to imperative compliance with particular requirements.  It is necessary to give genuine and proper consideration to all relevant considerations.  (Ferocem at 247-8, Goninan at 220)

b)        Explanation of delay:             The reasons why the evidence was not served in time are a relevant consideration, but a satisfactory explanation is not a mandatory requirement.  (Ferocem at 247)

c)        The public interest:                 The public interest in determining a serious opposition on its merits is a relevant consideration.  (Goninan at 222)

·In order to do this, it is necessary for the Commissioner to form a view as to the nature of the evidence that it is sought to adduce, and the significance of that evidence for the opposition proceedings.  (Goninan at 225-6)

·The Commissioner must also consider whether an extension should be given to permit the filing of any evidence which is immediately available.  (Goninan at 225) Logically, this is only relevant if the Commissioner determines that the extension sought is not justified.

·The public interest is not protected merely because some evidence in support has already been served.  (Goninan at 225)

d)        The interests of the opponent: The interests of the opponent are a relevant consideration.  (Ferocem at 247)

e)        The interests of other parties:   It is relevant to consider the disadvantage to the other party of delays in determining the opposition, and the effect of delays on the efficient and orderly administration of the Patents Office.  (Ferocem at 247, Goninan at 222) "

• I will now consider whether the criteria which have been identified as relevant in the many decisions on granting leave to serve further evidence issued by the Patent Office and to which I was referred during the course of the hearing are in accord with these principles.  The criteria have been stated ( see ICI v Mitsubishi 29 IPR 285) as:

(i)"It must be shown that the evidence could not have been obtained with reasonable diligence at an earlier stage

(ii)The evidence must be such that if given, it would probably have an important influence on the case

(iii)The evidence is such as is presumably to be believed, that is, it must be apparently credible, though not necessarily incontrovertible

(iv)If the request to serve further evidence were allowed:

would this cause unnecessary protraction of the opposition?

would there be any injustice to the other party?"

The criterion of reasonable diligence (i) falls within principle (b) Explanation of delay.  Ferocem (supra) makes it clear that a satisfactory explanation for delay is not a mandatory requirement, but that the reasons are a relevant consideration.  This is in accord with earlier decisions on further evidence in which a finding of lack of reasonable diligence did not automatically lead to refusal, for example, Dominion Mining v WMC (supra), National Starch and Chemical Investment Corporation v Goodman-Fielder Limited [1998] APO 48 (2 September 1998).

The criteria of the evidence having an important influence on the case and being presumably to be believed, (ii) and (iii), fall within the principle of the public interest.  Some recent decisions where the request was allowed and in which there was a finding that the evidence was relevant to the outcome of the case are: Dominion Mining v WMC (supra) and National Starch v Goodman-Fielder (supra).  In Acushnet Company v Spalding and Evenflo Companies Inc [1997] APO 60 (20 November 1997) and in Domtar Inc v Westvaco Corporation [1997] APO 50 (8 October 1997), 39 IPR 531 the evidence was found, in both cases, to be unlikely to have an important influence on the result of the case and, taking all matters into account, the requests were refused. A notable exception is Tasman Engineers v Ausbelt (supra).  In this case it was found that "while some of the evidence could have a bearing on the outcome of the opposition this likelihood is small" and "is outweighed by the detriment that would be caused to the applicant and the public interest in the maintenance of an expeditious and orderly opposition process."

The criteria of unnecessary protraction of the opposition and of injustice done to the other party fall generally within principle (e), the interests of other parties ie the effect on the efficient and orderly administration of the Patent Office, and on the applicant for the patent.  In general, delay is judged more likely to be of advantage to the opponent but of disadvantage to the applicant: see Goninan (supra) p.222.  A recent case where there was found that there would be an injustice done to another party is SmithKline Beecham PLC v Lek, Tovarna Farmacevtskih [1997] APO 62 (20 November 1997). In this case it was found that there would be an injustice done to the applicant if the further evidence were allowed because the applicant would have to prepare an answer to a case for which no benefit had been identified, and because of the inevitable and unnecessary delay that would entail. In Acushnet v Spalding (supra) it was found:

"where the injustice has occurred is in the fact that the opponent has not adequately provided satisfactory reasons for the need to serve this further evidence.  As I have previously indicated, on the face of it, the evidence does not appear to be such as to have a major bearing on the outcome of the case."

In both these cases the balance of the various considerations led to refusal of the request

I think I have demonstrated above that it is appropriate to apply the principles developed in the context of decisions on the extension of time to serve evidence to the question of grant of leave to serve further evidence.  I note particularly that the overriding principle arising from these decisions with regard to the exercise of a discretion by the Commissioner is that genuine and proper consideration be given to all relevant considerations and this involves a balancing exercise in which all competing considerations must be taken into account.

I will now apply these principles to the facts of the present case.

Importance of evidence

As a preliminary point I note that it is not a prerequisite of a request for leave to serve further evidence that the evidence has already been served.  However in the present case the evidence has already been served.

In Goninan (supra), in which the evidence in question had already been filed, Sackville, J at p.225-6 explained what he envisaged in his reference to the nature of the evidence and its significance:

"I do not mean to suggest that the evidence has to be scrutinised in the same way as would occur at a hearing on the merits.  But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on their merits."

A similar approach was taken by the Federal Court in GS Technology v The Commissioner of Patents, (1998) AIPC 91-387). This case concerned the exercise of the Commissioner's discretion to require production of documents by a third party under section 210 of the Patents Act 1990. Thus the documents were not before the Court. In determining the relevance of the documents sought the Court found that it was inappropriate to apply a test of substantive relevance but that what was required was that the documents sought were "on reasonable grounds, arguably relevant to the issues in the litigation." I note that in this case the documents were not before the Court.

In the decision of a delegate of the Commissioner in ICI v Mitsubishi (supra), which was concerned with a request to serve further evidence where the evidence had already been filed, a similar approach was followed, at p.292:

"The present action is not the substantive opposition hearing.  To attempt to determine in any absolute sense the importance of the applicant's further evidence would be to pre-empt, without the benefit of full argument, the decision in the substantive opposition hearing."

As the evidence is before me I have also considered it directly although not in depth. I note that any such direct consideration would not be possible if the evidence had not already been filed.  In that case I would have to rely on the submissions alone to determine the importance of the evidence.

Prima facie Stephenson's expertise is in a relevant field of technology.  Although he is a professor and may have personal knowledge beyond that of the ordinary worker in the art, I do not think that makes it impossible for him, at least in principle, to distinguish between, for example, what he knows as a researcher, what he expects his students to know when they enter an industry and what he has observed to be the knowledge of workers in the field when he has carried out industrial consultancies.  He has made statements as to what he knows to be usual in controlling corrosion in the operation of cooling towers, and as to what he knows about the use of tracers in water treatment in the industry in Australia.  In my view these statements are "apparently credible, though not necessarily incontrovertible."

These statement are made in the context of arguments about inventive step which depend on evidence of what is the common general knowledge of an ordinary worker in the art in Australia.  Statements about common general knowledge made by one individual are very liable to a criticism that they are unrepresentative.  In this context statements from other independent declarants, ie statements which corroborate those of another witness, as argued by the applicant, are likely to have an important bearing on the outcome of the case.  I do not believe it is necessary for me to go beyond this and to consider directly the applicant's other evidence.  Stephenson's statements go to the important issue of inventive step and are likely to have an important bearing on the outcome of the case whether they stand alone or whether they provide corroboration of the evidence on common general knowledge of another witness.

Injustice

I have not yet dealt with the question of injustice to the opponent if I grant leave to serve the further evidence.  The opponent will be disadvantaged by having to deal with a new piece of evidence not raised at the earliest appropriate time in the action, which would have been during the service of evidence in answer.  However, time will be allowed to the opponent to deal with it.  Further, while apparently relevant the new evidence is not particularly extensive, nor on the face of it, particularly complex.  The opponent has in fact argued that it will contribute little to the result.  Despite the uncertainty as to the need to deal with this piece of evidence facing the opponent while awaiting this decision, I think that any injustice suffered by the opponent because of the late raising of this evidence by the applicant will be small.

However I do not accept the applicant's arguments that there will be no injustice or that the injustice will be reduced significantly by the fact of the evidence already having been considered by the opponent during the resolution of the section 104 action. There is no reason to assume that the issues there were necessarily the same as those to be dealt with under section 59. Nor is there any inherent reason that a party should be required to assume that any individual piece of evidence served in one action should automatically, and without any notice from the other party, be carried forward into a different even if related action.

Delay

In the present case a significant delay in filing the evidence for which leave is sought resulted from the actions of the applicant in failing to file that evidence with its evidence in answer, and later when the omission was discovered in failing to file it then.  Even later, when it was pointed out to the attorneys for the applicant that they were probably in error in their assumption that having filed the evidence in one action was sufficient for it to be carried over into another action, there was a further delay of one month before the evidence was filed with a request for leave to serve it as further evidence.  I will deal later with whether or not these delays amounted to a lack of diligence on the part of the applicant, ie whether a satisfactory explanation has been provided.  For now I will focus on whether or not they have led or will lead to an unnecessary protraction of the opposition.

The evidence was served on 11 March 1998 at the same time as the request for leave to serve it was filed.  On 7 July 1998 the Commissioner found a prima facie case for granting leave had been made out and gave the opponent an opportunity to be heard which resulted in the present action. This was prior to the decision on the section 104 amendments which was issued on 30 July 1998. Following this the opponent served Notice of Intention to File Evidence-in-Reply and the date for serving evidence in reply was set at 30 October 1998. If I grant leave for this evidence to be served, I will also allow the opponent a period from the date of issue of this decision in which to respond to the evidence, which has already been filed. This period would normally be one month.

Although this would take the period for the opponent to respond beyond the time allowed for evidence to be completed in the opposition, it is still likely to be well before any date set for hearing the opposition.  The opponent has, as a result of the present matter, already had cause to consider the further evidence.  Thus I think it unlikely that the time required to respond will be very long, even were it to extend beyond the mooted one month.  And the likelihood of it extending to such an extent as to cause the date of the substantive hearing to be delayed is even more remote.

Thus I conclude that there would be no unnecessary protraction of the matter, nor any negative impact on the efficient and orderly administration of the opposition process, as a result of allowing the further evidence to be served.

Explanation for delay

There has been an unfortunate sequence of events leading up to the applicant's filing this request and the applicant has gone to some lengths to make a "full and frank disclosure" of these events, see Ferocem (supra).  The actual evidence was prepared with diligence early in the process, and failed to be served with the Evidence-in-Answer because of a simple oversight.  However the later events which interfered in it being served immediately after the oversight was discovered cause some problems.

The Macquarie Dictionary, second edition, Macquarie University (1991) defines diligence as "constant and earnest effort to accomplish what is undertaken; persistent exertion of body or mind".  The applicant referred me to Wilcox, J in Dial-An-Angel v Sagitaur 19 IPR 177 at pp 185:

"I am not aware of any authority on the meaning of the words 'with due diligence'.  I think that the words must be given their ordinary English meaning.  It is necessary to ask whether the person………has commenced the action within a reasonable period….., having regard to the whole of the relevant circumstances, and whether the action has been prosecuted in a reasonable manner."

If I take into account the circumstance of the somewhat unaccountable assumption by the applicant's attorney that this declaration could and would be automatically imported into the current action from the section 104 action, then it could be argued that the applicant had acted with diligence except for the month or so's delay, till March 1998. This was after the problem was brought to their attention at least by February 1998. There has been no explanation put forward for this latter period of delay.

The proposal that because the "clock was stopped" with regard to the serving of Evidence-in-Reply does not, in my view, mean that efforts to deal with other aspects of the case could also automatically be stopped.  If this evidence were of major significance then its early serving on the opponent might well have influenced the course of events, even potentially to leading the opponent to withdraw its opposition.  More likely in this case it could have had a positive effect on the course of negotiations for settlement which took place.  Of course because the declaration had not been filed these comments are mere speculation.

Bearing in mind that human error is always a possibility, and despite the nature of the error in the present case, I find that a satisfactory explanation for the delay up to an unspecified date around February 1998 has been provided.  However the delay between this date and filing of the request to serve further evidence on 11 March 1998 has not been explained.

CONCLUSION

I have found that:

• the evidence is likely to have an important influence on the outcome of the case, although I have not determined the precise nature of that influence;

• there will be no unnecessary protraction of the case and no negative impact on the efficient and orderly administration of the opposition process,

• any injustice done to the opponent will be small; and

• most, but not all, of the applicant's lengthy delay has been satisfactorily explained.

I must now weigh all these factors to decide whether or not to exercise my discretion to allow the service of this further evidence.  On balance I find that the small injustice done to the opponent and the failure to satisfactorily explain a part of the delay are outweighed by the likely influence of the evidence and by the fact that in allowing the evidence there will be no unnecessary protraction of the case and no negative impact on the opposition process.

I grant leave to the applicant to serve the further evidence.  As the evidence has already been filed, I grant the opponent one month from the date of this decision to respond.

COSTS

Both parties submitted that costs should follow the event.  In matters before the Commissioner costs usually follow the event.  In this case I find no persuasive reason to vary that practice and I award costs against the opponent, W R Grace and Co.-Conn.

Wanda Gunawardana
Delegate of the Commissioner of Patents

Patent attorneys for the applicant: Baldwin Shelston Waters, Sydney

Patent attorneys for the opponent: Davies Collison Cave, Melbourne