Nippon Steel Corporation v BHP Steel (JLA) Pty Ltd

[1998] APO 8

official notice

decision of a delegate of the commissioner of patents

Application  :          No. 674783 in the name of NIPPON STEEL CORPORATION

Title:          Thin Cast Piece and Thin Sheet of Straight Carbon Steel Containing Large Quantity of Copper and Tin and Method of Manufacturing the Same

Action:          Opposition under section 59 (Patents Act 1990) by BHP STEEL (JLA) PTY LTD, and an objection to an application for an extension of time in which to serve evidence in support (regulation 5.10(2)).

Decision:          Issued            .

Abstract

Serving of the evidence in support was completed before the hearing and within the period of extension sought.  Prima facie this is a serious opposition which, in the circumstances, should be allowed to proceed on public interest grounds.  This is despite the fact that the justification given by the party seeking the extension is inadequate.  Extension allowed.  No award of costs.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 674783 by NIPPON STEEL CORPORATION, opposition thereto by BHP STEEL (JLA) PTY LTD, and an objection to an application under Regulation 5.10(2) for an extension of time in which to serve to serve evidence in support

background

Patent application 674783 was filed as 75461/94 in the name of Nippon Steel Corporation (the applicant) and advertised accepted on 9 January 1997.  On 7 April 1997 a notice of opposition was filed by BHP Steel (JLA) Pty Ltd (the opponent), followed by a statement of grounds and particulars on 17 April 1997.  Two applications for an extension of time in which to serve the evidence in support were then made, respectively, for three months and two months and were granted without objection.  On 16 December 1997, one day before the end of the second extension, the opponent filed statutory declarations by Iain William Farr and Lazar Strezov and sought a third extension of one month, to 17 January 1998.  This day being a Saturday, the extension was, in effect, to 19 January 1998.  The circumstances and grounds given in the application for the extension were:

“Copies of declarations by Iain William Farr and Lazar Strezov, together with exhibits thereto, have been forwarded to the applicant’s attorneys by courier.  More time is required to ensure receipt of those documents and to complete proof of publication of certain documents exhibited to the Farr and Strezov declarations.”

On 19 January additional evidence in support was served, consisting of proof of publication of a couple of documents in the Strezov declaration, and a further (fourth) extension of one month was sought to file evidence constituting proof of publication of a third document in the Strezov declaration.  That evidence was served on 12 February 1998.  It is an objection by the applicant to this fourth extension of time that is the subject of this decision.

The matter came to a hearing on 24 February 1998 in Canberra.  The opponent elected not to appear, and in lieu filed written submissions accompanied by a statutory declaration by Geoffrey Miles Mansfield.  The applicant was represented at the hearing by Dr John McCann, patent attorney of Spruson and Ferguson, Sydney.

THE APPLICATION FOR EXTENSION OF TIME

The application for an extension stated the circumstances and grounds as being:

“A copy of a declaration by Jonathan Wood providing proof of publication of two documents exhibited to the Strezov declaration has been forwarded to the applicant’s attorney.  More time is required to ensure receipt of this document and to complete proof of publication of a third document also exhibited to the Strezov declaration.”

EVIDENCE IN SUPPORT OF THE APPLICATION FOR AN EXTENSION OF TIME

The only evidence entered in this matter consists of the Mansfield statutory declaration adverted to above.  It sets out the importance of the opposition to the opponent.  It refers to a joint venture involving the building of a plant requiring considerable capital outlays.  Because of the significance of the opposition the comprehensive statement of grounds and particulars was, according to the declaration, settled by counsel.

Mr Mansfield’s declaration goes on to state that the need to prove publication of certain documents was initially overlooked, and only became apparent when the final form of the declarations was almost settled.  Although Mr Mansfield expected that proof could be obtained within a short time, it took longer than expected because of the intervening Christmas holiday period and consequential absences of Griffith Hack staff and a prospective declarant.

SUBMISSIONS

In essence, the applicant’s case relies on the record of the opponent so far in the opposition as not justifying the extension, while the opponent argues that the broad discretion granted by reg 5.10 to the Commissioner in having regard to all the competing considerations involved in the matter does justify the extension.

Dr McCann made the following points in relation to whether the opponent had discharged its obligation to justify the extension:

·   the opponent has not made a full and frank disclosure of the facts surrounding the application for an extension and as a consequence has not provided sufficient reasons which justify the granting of an extension, in that:

(i)  sufficient disclosure of BHP’s efforts and reasons for failure to complete its evidence by the due date have not been provided

(ii) the opponent’s reasons in its application for the extension of time were deficient and unclear

(iii)the previous extension of time was to prove publication of a document not mentioned in the statement of grounds and particulars

(iv)the relevance of the nature of the evidence which the opponent seeks to adduce is unclear and there is no indication in the extension application of whether it is of any particular importance to the outcome of the case

·   there has been undue delay in the preparation of evidence by the opponent in that:

(i)  the opponent has already had at least 9 months, and probably almost 12 months, to prepare its opposition, and there is nothing in the reasons for the extension application which indicate that the opponent has moved expeditiously

(ii) there is nothing in the reasons for the extension to indicate that the delay has been caused by anything out of the ordinary

(iii)given the size of the opponent organisation, it is hard to believe that the opponent would have experienced any difficulty in locating experts that may have caused an out of the ordinary delay

(iv)the delays by the opponent in preparing its evidence in support have been of a routine nature; in other words, the delay has been an undue delay, as in Kimberly-Clark Corporation v The Proctor and Gamble Co

26 IPR 581 and Lesaffre et Cie. v Burns Philp Research and Development Pty Ltd (1997) AIPC 91-360

On the issue of whether there was a serious opposition in train, Dr McCann submitted that that was questionable, and asserted that the conduct of the opponent in these proceedings has been obstructionist.  As to where the various interests lay, Dr McCann contended that both the public interest and the applicant’s interest lay in the matter proceeding as expeditiously as possible.  The public interest in seeing that invalid patents were not granted would be satisfied since all the cited documents are in the evidence, and the Patent Office can take these documents into account at the opposition hearing and/or in a bar to sealing action.  The opponent, on the other hand, “is not disadvantaged to any significant degree” and “[a]ny submission by BHP that it would be a denial of natural justice for the Patent Office to refuse an extension ........... is unwarranted”.

The submissions from the opponent draw attention to the relevant law in these matters, as set out 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. In particular, it is submitted specific issues such as the completeness of the disclosure by the applicant for an extension of time and the specific reasons given, cannot of themselves be totally determinative in a decision to exercise the wide discretionary power given under reg. 5.10. At most, they could be taken into account in the balancing exercise between the competing considerations referred to by Burchett J in Ferocem.

As regards the case at hand, the opponent maintained that:

·   this is a serious opposition, as reflected by the “very detailed” statement of grounds and particulars, and it would not be in the public interest and would be grossly unfair to the opponent if its evidence should be shut out in consequence of some failure in procedure rather than on its merits: Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136

·   the opponent’s substantive evidence had been served before the present extension was sought, and the evidence which had remained to be served was done so within the extension period; the reasons for the delay in serving this evidence is explained by the facts set out in the Mansfield declaration

·   the significance of the outstanding evidence at the time of the extension application must be considered: A Goninan v the Commissioner (supra), it would be unfair to the opponent if that previously served evidence could become challengeable or inadmissible on the technicality that publication had not been proved

·   there is currently no infringement taking place in Australia, and therefore the applicant’s interests cannot be prejudiced by the grant of the extension as compared with the public interest of having the issues raised and documented in the opposition decided on their merits rather than on a matter of procedure

·   the opponent has truthfully stated reasons for the need for an extension and has made a full and fair disclosure of all the relevant circumstances

·   the opponent’s evidence has been served and the proceedings will not be further protracted if the extension of time is granted; the substance of the opponent’s evidence was fully disclosed in the Strezov and Farr declarations served by 17 December 1997 and the applicant has not been prejudiced in its consideration and preparation of a response.

I will refer to these submissions in more detail where relevant in my following decision.

DECISION

The law on extensions of time under Regulation 5.10

The time for serving evidence in support of an opposition is three months from the date of serving the statement of grounds and particulars under regulation 5.8.  This time may be extended under regulation 5.10:

(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)(a).

Regulation 5.10(5) provides:

(5)       The Commissioner must not ... grant an application under subregulation (2)          ... unless the Commissioner:
           ...
(c)       ...

(i)        gives the parties a reasonable opportunity to make   representations concerning the application...; and

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

A thorough consideration and summary of the law, as it stands, on the extension of time provisions was given by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (supra) and more recently by Sackville J in A Goninan & Co Ltd v Commissioner of Patents (supra).  It is clear from these decisions that regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements.  This would not concur with the relevant regulation.  On the contrary it is necessary to give proper, genuine and realistic consideration to all relevant aspects of the case.  Relevant aspects include:

(a)The provision of an explanation or justification for the delay in completing the evidence in support

The reasons why the evidence was not served in time are a relevant consideration, but a satisfactory explanation is not a mandatory requirement.

(b)       Whether there is a serious opposition in train

(c)The interests of the parties involved in the opposition

Disadvantages to either the applicant or opponent are relevant considerations.

(d)The public interest

The public interest in determining a serious opposition on its merits is a relevant consideration.  There is also the efficient and orderly administration of matters before the Patent Office to consider.

If I am to be reasonably satisfied that an extension of time is appropriate in all the circumstances, then I must take into account all matters relating to the above aspects when deciding the issue.

Application of the law to the facts

(a)       The provision of an explanation or justification for the delay

Dr McCann was critical of a number of aspects of the opponent’s conduct in this regard.  Overall I feel that whilst there is some basis for the viewpoint of the applicant on this, the actual position is nowhere near as marked as the applicant has made out.

The time taken to gather evidence of publication does seem out of proportion with what would, on the face of it, seem to be a very simple task.  The application for an extension of time did not put forward any exceptional circumstances, and even the explanation put forward in Mr Mansfield’s statutory declaration, namely, that a potential declarant was on leave, is less than convincing.  Why could someone else not have provided the declaration?  There are obvious considerations which might lead a party to be reluctant to be too forthcoming about difficulties in establishing publication, but when the party is seeking an extension of time these considerations do not excuse the party from providing sufficient explanation and justification for the extension.  Also, it is not at all clear why proof of publication could not have been sought in parallel with the production of the statutory declaration in which the document was cited, once that had emerged.

However, I must part company with Dr McCann on a number of the specific points he has made on this.  Firstly, I do not see anything significant in the fact that the same or similar wording was used in relation to an extension of time in another opposition in which the parties were involved.  Evidence-gathering procedures usually proceed along such routine lines that it is predestined that such coincidences will occur.  Secondly, I do not think too much significance attaches to the fact that proof of publication was ultimately established by means of the opponent’s own library.  Both people who have provided expert evidence for the opponent are from Sydney, whereas the library is in Melbourne.  Thirdly, I see no relevance in the fact that one of the documents in respect of which proof of publication had already been provided on 19 January 1998 was not particularised in the statement of grounds and particulars.  As Dr McCann himself conceded at the hearing, there are a number of ways in which such documents can legitimately be used in evidence, such as when establishing the common general knowledge in the art.  As for the fact that, whereas that document was referred to in the Strezov declaration as Fundamentals of Solidification, 3rd Edition, 1992 (my emphasis), in the statutory declaration providing proof of publication it is said to have an accession date of 26 July 1990 (again my emphasis), Dr McCann himself referred to this as a clerical error, and it might well cause the opponent at least some minor difficulty down the path, but I hardly see the relevance of this to the issue at hand. Finally, Dr McCann asserted that the evidence of publication was, in any case, superfluous under the Patents Act 1990, as it was no longer required that publication in the patent area be established. This, of course, does not apply where common general knowledge is concerned, and, in any event, in my experience parties in opposition proceedings seem to have no compunction about challenging documentary evidence having no formal evidence of publication.

(b)      Whether a serious opposition is in train

Dr McCann contended that it was questionable whether this is a serious opposition.  He sought to draw that inference from the opponent’s actions so far in this opposition.  I can see no real support for that inference.  The opponent has completed its evidence in support within a little over 10 months of filing its notice of opposition, which by the normal standard of these proceedings cannot be regarded as “dragging the chain”.  At a superficial level, the evidence looks substantial.  Moreover, in his statutory declaration Mr Mansfield has indicated that large amounts of money are tied to the present invention (he referred to a mere pilot plant as costing in excess of  a hundred million dollars).  I have little doubt this is a serious opposition.

(c)       The interests of the parties

The opponent’s interests clearly lay in granting the extension.  While the document in question may be admissible at the hearing of the substantive opposition, it is by no means certain what weight it will be accorded without proof of publication.  A bar to sealing action would not be anywhere near as rigorous as a fully argued opposition action.

I agree with Dr McCann that the applicant’s interests are clearly served by having a patent granted for its invention as expeditiously as possible.  However, whatever way this decision were to go it would not impact on the progress of the opposition, since the evidence in support has been completed, so I see the effect on the interests of the applicant as being neutral.  In looking at the past detriment it should not be forgotten that as the applicant has in effect been in possession of the evidence since mid-December, it will effectively have had the time available to it to serve its evidence in answer extended by about 3 months.

(d)      The public interest

It was pointed out by Burchett J in the Ferocem case (supra) and reiterated by Sackville J in Goninan (supra) that the public interests are not all ranged on the same side.  On the one hand are the expeditious disposal of matters in the Patent Office, and questions of costs, of efficiency, and of insistence of standards being maintained.  On the other hand are the words of Kitto J in Kaiser Aluminium & Chemical v The Reynolds Metal Company (supra), viz a serious opposition should be dealt with on its merits rather than be shut out as a consequence of a failure in procedure.

As I have already noted, the outcome of this decision does not affect the expedition of this matter, and allowing the extension to my mind does not constitute an erosion of standards.  Moreover, there would seem to be a clear imperative, from a public interest perspective, to allow the extension in order to allow the matter to be dealt with on its merits.  As I have also already noted, I reject the proposition that the fact the Patent Office can take into account these documents at the opposition hearing or in a bar to sealing action is an adequate substitute for the full force of opposition proceedings.

Taking all the relevant aspects into account, I am of the view that the public interest considerations in allowing evidence that has already been served to be taken into account in the opposition clearly outweigh the mild infraction on the part of the opponent in not satisfactorily explaining the delay in completing the evidence in support.  I find that the extension of time is appropriate in all the circumstances.

CONCLUSION

I have found that while the opponent has not provided a satisfactory explanation of the delay, public interest considerations favour the grant of the extension to ensure that the evidence already served is available, and on balance the extension sought by the opponent is appropriate in all the circumstances.  I allow an extension of time in which to serve the evidence in support to 12 February 1998, being the actual date of completion of service.  The time for serving evidence in answer should commence on the date of issue of this decision.

COSTS

The power of the Commissioner to award costs is based on section 210 and regulation 22.8.  The power to award costs is discretionary, so I must take into account all relevant considerations.  The opponent has succeeded in its application, despite the fact that it did not make out a proper justification for an extension of time.  I am also cognisant of the fact that it was open to the applicant to withdraw its objection to the extension once the evidence in support had been completed.  In the circumstances, I think it appropriate to make no award of costs.

Accordingly I make no award of costs.

E. J. Knock
Delegate of the Commissioner of Patents

Patent attorneys for the applicant:     Spruson  & Ferguson, Sydney

Patent attorneys for the opponent:     Griffith Hack, Melbourne