New Clear Water Pty Ltd v Atlantis Corporation Pty Ltd
[2001] APO 48
•21 September 2001
OFFICIAL NOTICE
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Application : No. 728958 in the name of New Clear Water Pty Ltd
Title: Apparatus for use as a disposal field
Action: Request under s.223 by the opponent Atlantis Corporation Pty Ltd for an extension of time to serve the Statement of Grounds and Particulars
Decision: Issued 21 September 2001
Abstract
Statement of grounds and particulars was not timely served. Service occurred almost three weeks after the attorney was advised that the statement was late. The evidence in support of the request largely related to illness within the family of the attorney. It was not apparent that the attorney’s client was aware of what was happening.
The requested extension had not been justified. However, in all the circumstances it was not appropriate to visit the consequences of the actions of the attorney on his client. Also, there were assertions that the evidence in support of the opposition would be ready to be served by 24 October 2001
Despite the lack of justification, the discretion under s.223 was exercised in the following manner:
If the evidence in support of the opposition – in its entirety – is served on the applicant by the otherwise due date of 26 October 2001, the requested extension of time under s.223 to serve the statement of Grounds and Particulars will be granted.
If the evidence is not served by that date – the requested extension of time under s.223 will be refused. The only excuse for non-service by that date which would be entertained is a force majeur that is unrelated to the attorney, his family, or his business concerns.
PATENTS ACT 1990
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Re:Patent Application No. 728958 by New Clear Water Pty Ltd, opposition thereto by Atlantis Corporation Pty Ltd, and a request under s.223 for an extension of time to serve the Statement of Grounds and Particulars.
BACKGROUND
The notice of opposition to this application was filed on 26 April 2001. The statement of Grounds and Particulars (the Statement) was therefore due to be served by 26 July 2001, but it was not served until 21 August 2001. The opponent requested an extension of time to serve that statement, under the provisions of s.223. The applicant objected to that extension. A hearing was held on 18 September 2001. Mr P Taylor of Paul R Taylor and Associates represented the Atlantis Corporation (Atlantis), and provided written submissions. Mr P Caporn of Wray & Associates represented the applicant (New Clear Water) and appeared by phone.
File History
The notes on the file evince the following history in relation to the service of the statement.
1 August. Opposition officer rang Mr Taylor as she had not yet received the Statement. The file note states:
"he said that he had missed the date for filing SG&P & that he would file a s223 & SG&P in the next couple of days."
Also, later that day the attorney for the applicant faxed advice to the Commissioner that they had not been served with the statement, and enquired as to the status of the opposition.
8 August. Opposition officer sent an Email to Mr Taylor requesting that he contact her in relation to the statement. On the copy of the Email, the opposition officer noted:
"I was unable to contact Paul Taylor on (phn no). I rang Telstra to check if the number was still active. Simon from corporate faults told me that the number was OK, but that an STD bar was on place on that number. As I am not able to telephone Paul Taylor, I sent the above message to the email address on folio 13."
9 August. A file note records:
"Paul Taylor rang in response to the email sent yesterday. He apologised for not getting the SG&P in and advised that he will fax in a copy of the SG&P and a s223 application tomorrow."
17 August. Commissioner receives by fax a covering letter, together with a Statement, a request under s.223 to extend the time for serving the statement, and a supporting declaration. All four documents are dated 15 August.
21 August. The applicant was served with the statement, by mail.
17 September. A file note records:
"I rang Mr Taylor to check if he was appearing at tomorrows hearing (18.9.01). Mr Taylor advised that he would be sending in written submissions and a further stat dec. …. I asked Mr Taylor to send a copy of written submission & stat dec to other side"
[I note here that, as at the commencement of the hearing, the applicant had not received a copy of those documents.]
Evidence, and submissions, to support the extension
The request for the extension of time was accompanied by a statutory declaration, the text of which I give here in full.
I, Paul Robert Taylor… do solemnly and sincerely declare as follows:
I am the patent attorney responsible for the above application.
I had been instructed by my client to lodge the Statement of Grounds of Opposition, prior to the due date of 25th July 2001.
The instructions were noted and we assembled our material on which to base our opposition. We docketed the file for action, unfortunately for 25th August 2001, and not 25th July 2001.
It was only, when I was contacted by the opposition clerk, that I found our error. However just prior to this contact, my son suffered a "pneumothorax" (a hole in the lung) which required an emergency operation in the casualty ward" (sic) of the Royal North Shore Hospital, in which 800ml of air were removed from the chest cavity. However the problem returned and major surgery was required, which he undertook on the 9th August 2001. The various "running around" associated with my son's visits to specialists and subsequent stay in hospital greatly interfered with my work and a further delay arose in lodging the application for extension.
The client at all times required the statement to be lodged and it was only due to an error on my part that the statement was not lodged within the required time.
The declaration faxed on 17 September is somewhat longer, but it is appropriate to also cite it in full.
I am the Paul Taylor who made the previous declaration dated 15th August 2001.
At all times the client required the Statement of Grounds of opposition to be lodged and we had assembled our "printed publication evidence" and was also preparing statutory declarations evidence to serve on the applicants. This evidence will be finalised before 24th October 2001.
I must state that it was only though an error on my behalf that the Statement of Grounds of opposition was not lodged before the due date.
As stated previously, it was only, when I was contacted by the opposition clerk, which I believe was the 1st August 2001, that I found our error. However just prior to this contact, my son has suffered a "pneumothorax" (a hole in the lung) which required an emergency operation in the casualty ward" (sic) of the Royal North Shore Hospital, in which 800ml of air were removed from the chest cavity.
However the problem returned and after several x-rays and consultations with our doctor and a specialist which occurred from the 31st July to the 7th August 200 (sic), we were advised that our son's condition was serious and could result in a collapsed lung with resultant long term health problems. Therefore major surgery was required, which he undertook on the 9th August 2001. The various "running around" associated with my son's visits to specialists and preparation for the operation greatly interfered with my work and I completely overlooked the lodgement of the extension.
I was, again, reminded by the opposition clerk early morning on the 9th August that I had not lodged the extension. However we were just leaving to admitted (sic) my son to the North Shore Private Hospital, and I was rather preoccupied at the time. My son was operated on, several hours, after telephone conversation with the opposition clerk.
The operation took a considerable toll on my son, not to mention my wife and myself, as we were advised after the operation that it was one of the most painful operations to have and his condition after the operation was very poor. We visited him three times a day during his five days stay in the hospital; this greatly effected (sic) my concentration on work matters. It was only after he was brought home that I reviewed my files and found that I had not lodged the Statement of Grounds of Opposition and request for an extension in which to do so.
I immediately requested the extension and served the Statement of Grounds of Opposition on the applicant.
There are no exhibits accompanying either declaration. Both declarations are declared before "Wendy Taylor, School Teacher". It is not clear to me whether there is a familial relationship between Wendy Taylor and Paul Taylor. But I do note that this Wendy Taylor has witnessed all the declarations made by Paul Taylor on this patent matter, and on another patent matter. I also note that under the Statutory Declarations Act this is not per se a relevant issue.
There are some difficulties in interpreting these declarations, arising from the various references to ‘we’ and ‘our’. In para 3 of the first declaration, the first ‘we’ would normally be taken as a joint reference to the client and Mr Taylor (as the agent), whereas the second ‘we’ would usually not be associated with the client. In para 4, reference is made to ‘our error’ – which again would not normally be associated with the client. In para 2 of the second declaration reference is made to ‘our’ evidence – which would seem to be associated with the client. Thereafter, there is consistent reference to ‘our’ and ‘we’, which clearly are references to his wife. The significance to be attached to the use of the varied references to ‘our’ and ‘we’ is not readily apparent. One interpretation is that Mr Taylor is effectively a joint opponent with Atlantis. Another interpretation is that Mr Taylor’s wife was associated with the error (such as might be expected had she been providing clerical support to Mr Taylor) – in which event I would normally have expected her to provide a supporting declaration. More seriously, if the Wendy Taylor that witnessed the declarations is in fact Mr Taylor’s wife, it does raise the question of whether she could witness the second declaration, as that declaration would appear to be effectively making statements on her behalf (ie. she was properly a joint declarant.) However, I do not believe that I need to resolve these questions. For the purpose of the present matter I am satisfied that it is appropriate to proceed on the basis of taking these declarations at face value.
Finally, Mr Taylor's written submissions for the hearing are quite brief. They are (in full):
The client at all times required the opposition to proceed.
The opposition is not a frivolous matter, but if the patent is granted with the claims presently on file, could affect my client's business.
The patent literature had been searched, and relevant patents had been found and reviewed.
The error was beyond the control of the opponent, and was due to an oversight of the attorney handling this matter, which was compounded by my personal problems due to my son's serious illness.
The Patent Office has a duty to ensure that valid patents are granted, which do not have claims, which are broader than should be granted.
The applicant has not lost any time if this extension is granted, as we will have all our evidence served by the 24th October 2001, and all we are doing is requesting a return to the status quo.
To deny our request for extension would be to deny to our client his rights of natural justice, as the delay was through no fault of his own.
Applicant’s submissions
The applicant provided the following written criticisms of the first declaration from Mr Taylor (they not having the 2nd declaration at that time of providing those written submissions).
Para 2. There is no evidence of the instructions from the opponent, nor any indication of when that instruction was received.
Para 3. There is no indication as to how or why the error was made. No evidence of the actual error is provided. And to the extent that material had been assembled, there is no indication of why this was not served immediately.
Para 4. With regard to the medical emergency, there is no indication of exactly when the medical emergency occurred, no supporting evidence of it having occurred at all, and no supporting evidence for the delay in lodging the extension application and for service of the Statement.
The applicant submits that there should be some evidence that the opponent was actively pursuing the opposition, and that there has not been a full and frank disclosure of all the surrounding circumstances. They also submit that the loss of opportunity to oppose is 'not disastrous' as there remains the availability of revocation proceedings. And they argue that there has been undue delay involved.
At the hearing the applicant reiterated these points. They noted that the second declaration added little of substance. They sought to draw a parallel with the office decision in Henkel v Fina Research SA (1993) 27 IPR 289 - where an extension was refused.
Discussion
The material to support the requested extension of time is, to say the least, scant. Two issues are involved.
The first issue is the explanation for why the statement served by the due date of July 26 (noting that Mr Taylor incorrectly refers to July 25). In support of this is the bald statement in his first declaration:
"We docketed the file for action, unfortunately for the 25th August, and not 25th July".
There is nothing else. There is no corroboration; no independent evidence; no support whatsoever. The credibility of the statement is based entirely on the fact that he makes the assertion in a statutory declaration. What Mr Taylor is asking of the Commissioner, and of the patent applicant, is tantamount to "I made a mistake. Don't ask me for evidence – just believe me."
In looking at this issue, I am mindful of the Comments of Jenkinson J in Kimberly-Clark v Commr of Patents 13 IPR 569 where he stated:
'Further, the word "error" is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgement by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory or accidental slips.'
And in this regard the asserted error on the part of Mr Taylor may fall into this category. However, I am also mindful of Jenkinson J's observation later in that decision (at pp 583/4):
'In order to make out the "proper case… justifying the extension" to which Bowen CJ referred in that case, an applicant would in my opinion have to go beyond a disclosure of the processes by which an agents errors came to be committed, and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the applicant (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to a reasonableness of that conduct. Whether or not the error or omission of the agent which enlivened the power occurred without moral fault on his part, the applicant's claim to the exercise of the power cannot be judged without the means of evaluating the applicant's moral claim to an indulgence which will, to some extent at least, work a prejudice to the efficient operation of what Bowen CJ in that case called "the system", even if no prejudice to the applicant for a patent. …. Section 160(2)(a) confers a power so conditioned that in my opinion its exercise is not lightly to be granted, and a power to be invoked only upon a prompt, frank, comprehensive and clear disclosure of all the circumstances relevant to the weighing of the discretionary considerations upon which grant or refusal of an extension of time will depend.'
In this regard, while Mr Taylor has asserted the existence of a relevant causative error that enlivens s.223, I am anything but satisfied that Mr Taylor has provided a full and frank disclosure of the circumstances surrounding the entry of the incorrect date into his docketing system. And I have no evidence from the actual opponent (Atlantis) concerning their claim to the exercise of the discretion.
The second issue concerns the events following the telephone call from the Opposition officer to Mr Taylor on August 1, at which time Mr Taylor was made aware that the statement had not been timely served. Service did not occur until 21 August, almost 3 weeks later. Most of the substance of the two declarations provided by Mr Taylor apparently relates to the reasons for this delay. The explanation, in brief, is that his son became ill with a perforated lung and this led to his normal routines being disrupted (with consequential impact on his work.)
I think that it is generally accepted by society that a serious illness in a family would be the cause of some distress to immediate family members. And appropriate regard should be had to this. However, I have no reason to believe that the illness of Mr Taylor's son was such as might lead to a debilitating effect on Mr Taylor. Further, Mr Taylor is a Registered Patent Attorney, and as such has professional obligations to run his practice in a proper manner. As was said by Burchett J in Ferocem v Commissioner of Patents 28 IPR 243 at page 247:
The determination of an application for an extension of time under reg 5.10(2) involves a balancing exercise, in which competing considerations must be taken into account. … They include the expeditious disposal of matters in the Patent Office, and the questions of cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office."
The declarations provided by Mr Taylor, together with the delay in serving the statement, admit of no reasonable interpretation other than that Mr Taylor had little regard to the interests of his client for the period of several weeks following August 1. In the exercise of my discretion in this matter, this conduct can hardly qualify as "proper professional standards". The real question is whether the consequences of this should be visited on his client.
In this regard, I am also aware of a similar situation involving Mr Taylor, in Humberto Urriola v Australian Drainage Module Ltd 2000 APOR 30. That matter concerned an extension of time for serving evidence in answer, where the service was late because of the illness of Mr Taylor's mother. It is perhaps noteworthy that Mr Taylor represented Humberto Urriola in that matter, and (on my understanding) Humberto Urriola is the managing director of the present opponent, Atlantis Corporation. [See, for example, the decision of the full Federal Court in Atlantis v Schindler 39 IPR 29 at page 37.]
Decision
By any measure, the present situation is far from satisfactory. The applicant clearly has an interest in having their application proceed to grant. Against that, there are the comments of Kitto J in Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136 at 143:
"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."
I am also mindful of the comments of the Administrative Appeals Tribunal in Sanyo v Commissioner of Patents 36 IPR 470 @ 479:
The decisions of the courts concerning the approach to be taken to the exercise of a discretion to extend time are now well established and include:
…..
It is "more important to consider the consequences of extending or refusing to extend time than debate the reasons why the act was not done in time": per Davies J in Chalk's case, at 156, with whom Black CJ and Cooper J agreed. Similar comments are to be found in Comcare v A'Hearn (1993) 119 ALR 85, particularly at 88
Actions of the agent of a principal should not necessarily be regarded as being the actions of the principal: A'Hearn's case:
A legislative provision providing for the exercise of a discretion to extend time is beneficial in nature and should be applied beneficially: Davies J in Chalk's case at 155.
Mr Taylor has not given a proper justification for the extension sought. But the difficulty I have is that I am not convinced that Mr Taylor's client – Atlantis Corporation – is aware of the situation. If the present opponent was aware of my decision in Humberto Urriola v Australian Drainage Module Ltd, and was aware of the current situation, I think it would be appropriate to treat the actions of Mr Taylor as being the actions of Atlantis Corporation. In that event I would unhesitatingly refuse to grant the extension on the material currently before me. However, it seems to me that I cannot, in all the circumstances, conclude that Atlantis Corporation is so aware. Indeed, assuming Atlantis is a serious opponent, the most cogent explanation for the total absence of anything from them to support the request, is ignorance of the existence of these proceedings. If Atlantis Corporation is indeed ignorant of these proceedings, they may be shut out of the opposition through no fault of their own. In the exercise of discretion, this would be inappropriate.
Against this, I do not think that in the current circumstances Atlantis is entitled to be completely free of the consequences that arise from the actions of their agent. Their rights need to be balanced as against the rights of the patent applicant, who is entitled to have the opposition proceed with due diligence.
In exercising my discretion in this matter, while the material before me can be subject to great criticism, no single issue can give rise to an imperative to either grant or refuse the extension. I need to have regard to all the relevant circumstances. In my mind, the most significant elements in this case are:
A plausible causative error or omission has been asserted;
The extension has not been justified;
I am not satisfied that the opponent is aware of what has happened;
If the opponent is so unaware, the consequence of them being excluded from the opposition is relatively severe (although they could seek revocation, that would be far more expensive than opposition proceedings before the Commissioner);
On the evidence, the opponent’s attorney has had little regard to the interests of his client;
That if the opposition proceeds, the applicant may be faced with interminable delays caused by the conduct of the opponent;
A serious opposition should be dealt with on its merits;
Assuming the credibility of Mr Taylor's second declaration, the evidence in support of the opposition will be ready to be served by 24th October 2001 – and such service would be suggestive of there being a serious opposition; and
If I were to grant the extension now, I cannot dictate the future exercise of the Commissioner’s discretion to grant or refuse extensions of time under Regulation 5.10.
Accordingly, I exercise my discretion with respect to the request under s.223 in the following manner:
If the evidence in support of the opposition – in its entirety – is served on the applicant by the otherwise due date of 26 October 2001, I shall grant the requested extension of time under s.223 to serve the statement of Grounds and Particulars.
If the evidence is not served by that date – I shall refuse the requested s.223 extension of time. The only excuse for non-service by that date that I am prepared to entertain is a force majeur that is unrelated to Mr Taylor, his family, or his business concerns.
In the event of refusal of the s.223 request, the Commissioner will proceed to dismiss the opposition under regulation 5.5(4)(b).
Noting that the Statement was served on the applicant by mail, I emphasise that placing something in the mail does not constitute service; the applicant must have the evidence in its (or its attorney’s) possession by 26th October 2001.
It is also appropriate that I emphasise that a major consideration is that I am not satisfied that Atlantis Corporation is aware of what has happened. Accordingly, a copy of this decision, and of the decision in Humberto Urriola v Australian Drainage Module Ltd, will be forwarded directly to Atlantis Corporation – so that the Commissioner can in future be satisfied that the opponent is fully aware of the circumstances of these two matters.
Appeal rights
The parties may apply to the Administrative Appeals Tribunal for a review of this decision. The period for seeking review is 28 days from the date of the decision.
This decision is somewhat unusual in that it has a conditional conclusion. Following the decisions in BHP v American Can Company 29 ALR 424, and ex parte Mole Engineering (1981) 35 ALR 119, I would expect the 28-day period for seeking review will be computed as follows:
On the specific, limited issue of whether or not there has been compliance with the specified conditions – 28 days from the decision to actually grant or refuse the extension.
For all other issues – 28 days from the date of this decision.
Costs
At the hearing the applicant argued that, in the event that I granted the extension, they should still be awarded costs. While in general costs follow the event, this is not always appropriate. In the present case the applicant had every right to object to the extension. The extension lacks justification. My decision to possibly grant the extension is based on factors associated with the opponent which it would not be reasonable to expect the applicant to anticipate. I think the applicant should have their costs.
In circumstances where the proceedings have come about because of the actions of the attorney representing a party, there may be circumstances where it would seem appropriate that the award of costs should be made against the attorney. In my view, the present case is indeed such a case. However the power under s.210(c) for the Commissioner to award costs is limited to an award against a party to proceedings. Mr Taylor is not a party to the proceedings, and so I am unable to award costs against him. Accordingly I award costs against the opponent, Atlantis Corporation Pty Ltd.
D Herald
Deputy Commissioner of Patents
Patent attorneys for the applicant : Wray & Associates, Perth
Patent attorneys for the opponent : Paul R Taylor & Associates, Sydney
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