Nippon Steel Corporation v BHP Steel (JLA) Pty Ltd

[1998] APO 5

official notice

decision of a delegate of the commissioner of patents

Patent:          No. 675388 in the name of NIPPON STEEL CORPORATION

Title:          METHOD OF PRODUCTION OF THIN STRIP SLAB

Action:          Application for an extension of time to serve evidence in support of an opposition by BHP STEEL (JLA) PTY LTD and objection thereto by NIPPON STEEL CORPORATION

Decision:          Issued            .

Abstract

The application was not justified by the reasons provided at the time of the application.  However it is appropriate to consider reasons  for the extension which are provided subsequent to the filing of the application for extension of time.

Application granted.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application 675388 by Nippon Steel Corporation, an application for an extension of time to serve evidence in support of an opposition by BHP Steel (JLA) Pty Ltd and objection thereto by Nippon Steel Corporation.

background

Patent application number 675388 was filed on 24 March 1995 by Nippon Steel Corporation (hereinafter referred to as Nippon).  The application was advertised accepted on 30 January 1997.  A notice of opposition to the grant of a patent was filed by BHP Steel (JLA) Pty Ltd (hereinafter referred to as BHP) on 30 April 1997, and a statement of grounds and particulars was served on 24 July 1997.

Evidence in support was due to be completed by 24 October 1997.  On 24 October 1997, BHP filed an application for an extension of time of three months from 24 October 1997 to 24 January 1998 to serve evidence in support.  Nippon objected to the extension on 10 November 1997.

Part of BHP's evidence in support, in the form of statutory declarations by Iain William Farr and Massoud Assefpour, was served on 8 December 1997.

On 22 January 1998,  BHP filed a further application for an extension of time of two months from 24 January 1998 to 24 March 1998 to serve evidence in support.

The first application for extension of time was heard in Canberra on 5 February 1998.  Nippon was represented by Dr John McCann, patent attorney of Spruson and Ferguson, Sydney.  BHP was represented by Mr Geoff Mansfield, patent attorney of Griffith Hack, Melbourne.

THE APPLICATION FOR EXTENSION OF TIME

The application, which was filed on 24 October 1997, includes the following reasons for the need for further time to serve evidence in support:

“Since service of the Statement of Grounds and Particulars, copies of the prior art documents cited in that statement have been sent to the applicant’s attorneys.  Our attorneys have conferred with witnesses who are to give evidence and preparation of formal declarations is in progress.  Further time is required to have those declarations completed and settled by counsel prior to execution and service.”

EVIDENCE IN SUPPORT OF THE APPLICATION FOR EXTENSION OF TIME

At the hearing, Mr Mansfield provided me with a statutory declaration made out by him in support of the application for extension of time.

The declaration sets out the importance of the opposition to BHP.  It refers to a joint venture involving the building of a plant requiring expenditure of a large amount of money.  Because of the significance of the opposition, the declaration indicates that the comprehensive statement of grounds and particulars was settled by counsel.

Mr Mansfield declares, in his declaration, that one of the main aspects of the opponent’s case in the substantive opposition will be that the opposed specification contains technical flaws.  To this end, the opponent has been required to gather material on the fundamental chemistry of the subject matter of the opposed specification.

The Mansfield declaration indicates that a draft of one of the statutory declarations which was served on 8 December 1997 had been prepared by 24 October 1997, the day on which the present application for extension of time was filed.

The Mansfield declaration states that when the opponent was informed of Nippon’s objection to the application for more time, the opponent made every endeavour to complete the declarations which were served on 8 December 1997.  This entailed the forgoing of any advice on the evidence from counsel which BHP had previously intended to seek.

The declaration also refers to the efforts by BHP to seek further evidence to support one of the two declarations served on 8 December 1997.  According to Mr Mansfield, this further evidence could not have been sought until the completion of the relevant declaration.

SUBMISSIONS

Both parties provided me with written copies of their oral submissions made at the hearing.  I will refer to these submissions where relevant in the body of the 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 (1994) 28 IPR 243 and more recently by Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213.  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)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 Patents Office to consider.

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

Disadvantages to either the applicant or opponent are relevant considerations.

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;

In his submissions, Dr McCann presented a detailed argument on the lack of sufficient explanation to justify the extension of time.  I concur with Dr McCann’s submission on this point as it relates to the application for the extension of time at its time of filing.  However, the Mansfield declaration tabled at the hearing provides a far more detailed explanation for the delay in regard to the nature of the evidence required to support the substantive issues in the opposition.

Dr McCann argued that the application should be justified by the reasons given at the time of its filing.  He submitted that any explanation or evidence filed subsequent to the filing of the application should be ignored by me in determining whether or not the extension is justified.

I have some sympathy for Dr McCann’s argument insofar as he was faced with evidence in relation to the extension of time for the first time during the course of the hearing.  However, while it is regrettable that such an action has occurred, it is almost inevitable that, if either party wishes to serve evidence in procedural disputes of this nature, such evidence will be served close to or on the day of the hearing given the normally short delay between the filing of the application and the hearing date.  I offered to adjourn the hearing to allow Dr McCann time to consider the Mansfield declaration.  In the event, because of the brevity of the declaration, Dr McCann chose not to accept my offer of an adjournment.

I do not agree that I should only consider that material which was provided at the time of the application when deciding whether or not the application is justified.  Any subsequent material which provides an explanation for the delay is a relevant consideration that I should take into account.  The fact that this material was not previously provided may however have a bearing on the award of costs as Dr McCann suggested.

The other piece of information which is before me is the second application for extension of time and the reasons provided in that application.  Both parties referred to these reasons which are as follows:

“Copies of declarations by Iain William Farr and Massoud Assefpour, together with exhibits thereto, have been forwarded to the applicant’s attorneys and lodged at the Patent Office as part of the opponent’s Evidence-in-Support.  The opponent also intends to lodge a further Statutory Declaration by an expert witness.  We have retained the expert witness and provided background documents which have been reviewed by the expert witness. More time is required to consult the expert witness and prepare the declaration.  In addition, more time is required to complete proof of publication of certain documents exhibited to the Farr and Assefpour declarations.”

While these reasons are provided to support the second application for extension of time, Mr Mansfield has relied on them to assist in his establishing a case for the extension of time presently under consideration.  Mr Mansfield indicated that the expert witness could not be retained until the Assefpour declaration was completed because the purpose of retaining this expert witness was to provide corroboration for the material set out in the Assefpour declaration.  The Assefpour declaration was served on 8 December 1997.

Dr McCann queried the need to establish the publication of documents at this late stage of the evidence in support process.  He argued that the establishment of publication dates was a relatively straightforward procedure which could have commenced when the statement of grounds and particulars was served.  I note that there is no indication of which documents still need to have publication dates confirmed or why what seems to be an excessive period of time has been required to establish these dates.  A quick perusal of some of the exhibits shows that some of the publications are journal articles and other non-patent literature.  I would assume that these publications would provide greater difficulty when establishing publication dates than patent literature.  I also note that these articles are referred to for the first time in the declarations which were not completed until 3 December 1997 (and served on 8 December 1997).  They are not referred to in the statement of grounds and particulars.  I can appreciate that there could have been some difficulty in locating suitable witnesses over the Christmas holiday break to establish the publication dates of these documents.  However at the time of the hearing, some 2 months after completion of the declarations, this evidence has still not been completed.

Mr Mansfield indicated that another reason for the initial delay in completing the evidence in support was the identification of suitable and preferably independent witnesses.  Dr McCann suggested that a large company such as BHP should have no difficulty in locating suitable expert witnesses.  I note that the two declarations served in support so far are made by employees of BHP but I understand from Mr Mansfield that the expert witness presently retained to corroborate these declarations is independent of the opponent company.

Taking all these matters into account, I am of the view that the opponent has provided a reasonable explanation for the delay in serving the Farr and Assefpour declarations given the nature and extent of the evidence provided in these declarations i.e. I believe that that the opponent has provided a reasonable explanation of the delay up until 8 December 1997.

However, I have some concerns about the opponent’s explanation of the delay between the 8 December 1997 and 24 January 1998.  While I can understand the desire of the opponent to provide independent supporting evidence and the difficulty in locating an independent expert in the technology of the present invention, I do not believe that any decision to locate an expert witness should have been made after the completion of the Farr and Assefpour declarations.  The Patent Regulations clearly set out the time limit for serving evidence in support.  It is up to the opponent or its professional advisers to plan the nature of the evidence needed and the most effective method of gathering that evidence so that it can be served within the time allowed by the regulations.  There is no evidence before me which suggests that the opponent started its search for an independent expert witness any earlier than the completion of the two declarations which have already been served.  The Mansfield declaration does not indicate when the search for an independent witness commenced.  I note that a first draft of the Assefpour declaration was completed by 24 October 1997.  It seems to me that a decision to locate corroborating evidence should at the very least have been made at this stage.  The reasons provided in the first application for extension of time make no mention of this.  I do not think it is appropriate that decisions of this nature in the gathering of evidence should be made after the first three months period to gather evidence has expired.

Despite my concerns, however, I believe that the opponent has provided a reasonable justification for this delay in that the actual collection of corroboratory evidence could not take place until the completion of the Assefpour declaration.  Any delay in the preparation of the Assefpour declaration would cause a subsequent delay in the preparation of corroborating evidence.

In summary, I believe that the opponent has justified the delay in completing service of the evidence in support.

(b)      The public interest

On the issue of the public interest I am guided by the reasons of Burchett J in the Ferocem case and reiterated by Sackville J in Goninan (supra).  In short, 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 (1969) 120 CLR 136 at 143, viz a serious opposition should be dealt with on its merits rather than be shut out as a consequence of a failure in procedure.

In relation to the expeditious disposal of matters before the Patent Office, the hearing, perhaps unfortunately, has taken place after the expiry of the extension of the time applied for.  In such a circumstance, it seems to me that the case would be at the same stage of processing whether I granted the extension of time or not.  I do not think that this extension of time would cause any protraction of the prosecution of the case.

In relation to the requirement that a serious opposition be dealt with on its merits, Dr McCann argued that the reasons given in the application for extension of time did not provide any support for an assertion that a serious opposition was in train.  Even though the opponent had provided the applicant with copies of the citations referred to in the statement of grounds and particulars, Dr McCann submitted that the opponent could, at the very least, put these documents into evidence via a short statutory declaration before the time for serving evidence in support had expired.  Dr McCann argued that, as the opponent had not done so, this was a clear indication that a serious opposition was not being contemplated by the opponent.  However, in the light of the Mansfield declaration, it is clear to me that a serious opposition is in train.

It is in the public interest for the opposition to be dealt with on its merits.  In considering this aspect, I have taken account of Mr Mansfield’s submissions on the nature of the two declaration served on 8 December 1997.  These declarations are quite extensive and include many exhibits.  They would appear on the face of it to have a significant role to play in the outcome of the substantive opposition.  This is also the only evidence served to date.  Dr McCann suggested that, notwithstanding this, if I refused the extension of time, the public interest would still be served in ensuring that an invalid patent was not granted by the Commissioner taking any appropriate bar to sealing action stemming from the material in these declarations.  However, it seems to me that the public interest would be better served by the inclusion of the evidence in a substantive opposition hearing where both parties are free to provide submissions on the material rather than a bar to sealing action where the Commissioner only has the benefit of the material itself.  I believe that the public interest would be best served if this evidence was allowed to be argued in the substantive opposition.

It is more debatable whether the public interest would be best served by allowing more time to include the corroborating evidence.  I have doubts about this but I am mindful that the second application for extension of time relies on this as one of the reasons for that extension.  I think it is appropriate to say that the public interest would not be unduly prejudiced by extending the time up to 24 January 1998 which is what the present application seeks to do.  It is certainly in the public interest for the publication dates of articles exhibited to the two declarations already served to be established.

On balance it seems to me that the public interest is best served by extending the time to not only allow the service the Assefpour and Farr evidence but also the further time until 24 January 1998 to allow the further application for extension to be considered.  In so doing the likelihood of a correct conclusion to a serious opposition will be enhanced.

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

The interests of Nippon (applicant)

As Dr McCann submitted, while Nippon does not have a granted patent it is at a disadvantage and naturally is hesitant to outlay a large investment in its technology.  I would qualify this by saying that while Nippon does not have a valid granted patent it is at a disadvantage.  For reasons already given I think that any disadvantage to Nippon will be minimal because there will be no protraction of the case as a result of this extension time if it is granted.

The interests of BHP (opponent)

Mr Mansfield has demonstrated that the substantive issues of the opposition are dependant on the evidence of the Assefpour and Farr declarations.  It is clearly in the interests of the opponent if the time to serve evidence in support is extended to the full period sought which would allow the second application for extension to be considered.  In the circumstances of this case and its technology, it seems a valid endeavour to seek corroboration of the substantive evidence which would assist in the timely execution of the opposition.  The interests of the opponent favour extending the time as sought.

Taking all these aspects in account, I find, on balance, the granting of the extension of time is appropriate in all the circumstances.

CONCLUSION

I have found that BHP has provided a satisfactory explanation of the delay.  I have found that the public interests and BHP’s interest favour the grant of the extension to ensure the evidence already served is available and the further application can be dealt with on its merits, and that there is no significant disadvantage to Nippon.  On balance, the extension sought by BHP is appropriate in all the circumstances of this case.  The time for serving evidence in support is extended to 24 January 1998.  As a consequence, the further application for an extension of time should be considered under regulation 5.10 as in any other case.

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.  BHP has succeeded in its application, despite the fact that it did not make out a proper justification for an extension of time when it filed the application.  The significant considerations in my decision arose out of the Mansfield declaration provided at the hearing.  It is not appropriate to award costs against Nippon.  I consider it appropriate to award costs against BHP.

I award costs in accordance with Schedule 8 against BHP Steel (JLA) Pty Ltd.

R. Hallett
Delegate of the Commissioner of Patents

Patent attorneys for the applicant:     Spruson  & Ferguson, Sydney

Patent attorneys for the opponent:     Griffith Hack, Melbourne