Osmose New Zealand v Zelam Limited
[2014] APO 49
•7 July 2014
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Osmose New Zealand v Zelam Limited [2014] APO 49
Patent Application: 2010237067
Title:Insecticidal composition and method
Patent Applicant: Zelam Limited
Opponent: Osmose New Zealand
Delegate: Dr S.D. Barker
Decision Date: 7 July 2014
Hearing Date: Written submissions completed on 20 June 2014
Catchwords: PATENTS – extension of time to file evidence in answer – regulation 5.9 – prompt and diligent – extension of one month is appropriate – extension granted
Representation: Patent applicant: Pipers Patent Attorneys
Opponent:AJ Park
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010237067
Title:Insecticidal composition and method
Patent Applicant: Zelam Limited
Date of Decision: 7 July 2014
DECISION
I grant an extension of time to file evidence in answer until 10 June 2014.
Evidence in reply is due within two (2) months of the date of this decision.
I award costs according to Schedule 8 against Zelam Limited.
REASONS FOR DECISION
This matter relates to patent application 2010237067 in the name of Zelam Limited (Zelam). The application was advertised as accepted on 2 May 2013 and a notice of opposition to the grant of a patent was filed by Osmose New Zealand (Osmose) on 2 August 2013.
Osmose filed a statement of grounds and particulars on 4 November 2013. Evidence in support was completed on 3 February 2014. Evidence in answer is due to be filed by 10 May 2014. Zelam has requested an extension of the time for filing evidence in answer until 10 June 2014.
The Commissioner advised on 22 May 2014 that she was satisfied with the reasons in support of the application, and Osmose has asked for a hearing. The hearing was conducted by means of written submissions. Both parties filed submissions in chief and in response.
The law
On 15 April 2013, the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) (the Amendment Regulation) commenced. This Regulation significantly amended the Patents Regulations (the Regulations) as they apply to patent oppositions. The present opposition was commenced after 15 April 2013, so the opposition (including the extension of time to file evidence) is governed by regulation 5.9 of the Regulations as in force on 15 April 2013. Subregulation 5.9(2) states:
The Commissioner may extend the period only if the Commissioner is satisfied that:
(a) the party who intended to file evidence in the period:
(i)has made all reasonable efforts to comply with all relevant filing requirements under this Chapter; and
(ii)despite acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period, is unable to do so, or
(b) there are exceptional circumstances that warrant the extension.
Exceptional circumstances are defined in subregulation (5):
In this regulation:
exceptional circumstances includes the following:
(a) a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Chapter;
(b) an error or omission by the Commissioner that prevents a party from complying with a filing requirement under this Chapter;
(c) an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act.
These provisions have been considered by the Commissioner in a number of decisions (for instance, TRED Design Pty Ltd v Julie-Anne McCarthy and Bradley McCarthy [2013] APO 57 and Merial Limited v Novartis AG [2013] APO 65). The principles applied in those decisions, which I accept as correct, are that I must ask myself the following questions:
1. Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
2. Was the failure to file the evidence in time despite the party (and their attorney or agent) acting promptly and diligently at all times to ensure the evidence is filed in time?
3. Were there exceptional circumstances that warrant the extension?
I can extend the time for filing evidence only if I am satisfied that the answer to questions 1 and 2 is YES, or if I am satisfied that the answer to question 3 is YES. If I am so satisfied, then I must consider whether there are any discretionary reasons why the extension should not be granted.”
Clearly this is a serious test. This is confirmed by the Explanatory Statement accompanying the Amendment Regulation which states:
"The Commissioner will not be able to extend time periods unless one of these conditions was made out. The party seeking the extension will bear the onus of convincing the Commissioner of this. Once the conditions in subregulation 5.9(2) are met, the Commissioner still has the discretion to consider whether or not it is appropriate that an extension of time be granted. In applying the test, the Commissioner will not be required to give a direction to extend a period solely because of delays caused by a legal representative failing to act promptly or diligently, by difficulties in obtaining expert evidence that could have been anticipated and acted on or by attempts to settle the proceedings.
Where a party cannot satisfy the Commissioner that an extension is justified under the test, the Commissioner will not have the power to give a short extension to allow the filing of evidence immediately available or to validate evidence filed out of time."
If the Commissioner is satisfied that an extension is appropriate, the Commissioner must then determine the length of the extension (subregulation (3)):
The Commissioner must determine the length of the extended period having regard to what is reasonable in the circumstances.
The application for extension of time
The application for extension of time states:
"We have completed evidence in the form of Affidavits from Dr Chris Molloy, Andre Siraa and from George Mason and in the form of a Statutory Declaration filed by Craig Kay. That evidence was filed in time respectively on 7th and 9th May 2014 as Part Evidence in Reply [sic]. …
We now need to provide further expert evidence. On review of the Opponent's Evidence in Support and in preparing our Evidence in Reply [sic], it has come to light that we need a commentary and opinion on termites and their feeding habits and in relation to wood protection against insects.
We have sought an expert in Australia and have identified 2 possible candidates at CSIRO in Darwin but, on further consideration, have found that they are not suitable.
We have identified a yet further expert. This expert is our preferred expert and is based in the US. We have attempted to contact him by telephone voice messages and email messages but, so far, we have been unsuccessful. We believe that it is likely that he has been away from his home/office while attending a conference in California of the American Wood Protection Association. Our efforts to contact him are continuing and we have now been able to contact him to ascertain his availability. As of today's date (9 May 2014) it appears that our attempts have been successful. …
In the meantime, to identify alternative or added witnesses, our Australian marketing team is contacting and interviewing our Australian clients to see if one or more of them are suitable and able to act for us as an expert.
Thus we need an extension of time of 2 [sic] months to enable us to finalise the selection of our expert and to settle his evidence in the form of a suitable Statutory Declaration or Affidavit."
A Delegate of the Commissioner was not satisfied that an extension was justified, and allowed seven days for Zelam to provide any further comments. Zelam provided comments and a detailed Schedule of Events, that I can summarise as follows:
5 February Evidence in support received 17 February Meeting to discuss the evidence in support 17 February – 25 March Investigated 15 potential declarants for expertise and conflicts of interest. 13 Australian candidates were unsuitable. February / March / April Evidence in support continually evaluated February / March / April Evaluation of declarants continued February / March / April Noel Coxhead is delegated the role of "chasing up customers" to see if one of them can provide evidence 27 March Professor Grace in Hawaii approached; not available March / April / May Evidence of Molloy, Siraa and Mason filed March / April / May Found that needed to prepare evidence on use of termiticides and wood preservatives April / May Continued search for suitable expert 10 April Dr Freeman in US approached; not available 16 April Mr Humphrey in Australia approached; not suitable 16 April Dr Freeman provided suggestions for declarants 17 April Dr Shupe in US approached 17 April Dr Amburgey in US approached 22 April Reminders sent to Shupe and Amburgey 24 April Amburgey indicated willingness to provide evidence 25 April Preparation of Amburgey evidence begins 25 April Lost contact with Amburgey 4 May Two possible declarants in CSIRO identified 5 May Applicant advises CSIRO staff are not suitable 7 May Amburgey agrees to provide evidence 7 – 9 May Evidence of Molloy, Siraa and Mason filed 7 – 9 May Evidence of Kay filed 9 May Request extension of time 16 May Draft Amburgey declaration provided Has the party made all reasonable efforts to comply with all relevant filing requirements?
In this case, I consider that the reasonableness of Zelam's behaviour is best understood by analysing whether they acted promptly and diligently (in the following paragraphs).
Was the failure to file the evidence despite acting promptly and diligently?
In the Merial decision, the Deputy Commissioner noted:
"in my view when considering whether a party has acted promptly and diligently at all times I need to consider all the actions of the party in relation to compliance with the evidentiary period and not just its failure to comply within the period of the extension already granted."
In dealing with this issue recently (in Fugro Airborne Surveys Corp v Geotech Airborne Limited [2014] APO 23) I said at [20]:
"A party seeking an extension of time will assist the Commissioner (and advance their own cause) if they provide information about what they did, when they did it, and how long those actions took. When considering such information, it is relevant to consider whether there have been any significant unexplained delays. The presence of significant delays without a reasonable explanation is the antithesis of acting promptly and diligently. "
Zelam initially provided only a brief explanation, but supplemented that with a detailed chronology when the delegate asked for further information. It would have been simpler to provide all relevant information at the time of applying for an extension of time.
Osmose raised several points in relation to the chronology that I will deal with in turn.
First, Osmose submitted that it is not possible to determine whether the applicant's actions throughout the period were prompt and diligent due to the way that dates were provided as a range for some activities. It is true that some activities are spread across several months. If all activities were described in this way I would have little understanding of what had been done. But that is not the case in this matter. The question is whether overall I am satisfied that Zelam have acted promptly and diligently.
The fact that some activities took place over several months does not automatically mean that Zelam have not been prompt and diligent. The nature of the activities that occurred over an extended period appear to be actions that would reasonably involve an extended time. Also, the time taken to complete those tasks did not prevent other actions happening at the same time.
Second, Osmose submitted that Zelam have mis-spent their time obtaining evidence from non-independent declarants that do not live in Australia. The implication is that this evidence will be of little weight due to their lack of independence, and time spent preparing such evidence is not diligent. The weight that will be given to evidence depends on many considerations, including the independence of the declarant. In many cases it is both reasonable and appropriate to utilise declarants who are associated with a party to a matter.
Third, Osmose also said that Zelam should have started to identify suitable declarants at an earlier time (referring to the decision in Shelford Services Pty Limited v Baylor Research Institute [2014] APO 20). There is no evidence that the identification of declarants began prior to the review of evidence in support. It appears that the process began shortly after the evidence was received and was completed in late March 2014. The potential declarants were then approached.
This is the most significant period in the chronology. Some further information was provided to the Commissioner in correspondence filed on 20 June 2014. This further information states:
21 February Chris Molloy requested potential declarants not be contacted as he needed to conduct investigations 21 February Paul Lobb provided four further potential declarants 17 February – 25 March Spent investigating expertise and potential conflicts of declarants
I do not see any periods of significant unexplained delay in identifying suitable declarants. I consider that the strategy of considering the evidence in support then preparing a list of possible declarants was reasonable. The shortlisting of declarants to avoid those who might have a conflict was also reasonable. While it might have been possible to carry out some activities faster, the time taken is not outside the range of prompt and diligent given the work that was involved.
Finally, Osmose also said that the case is not complex, so this cannot justify delay. I agree that there is no obvious basis to conclude that the present opposition is any more complex than average.
Looking at the actions of Zelam as a whole, there was a period at the start when there was activity in identifying the declarants. Later the declarations of most of the declarants were completed. I cannot see any periods of significant unexplained delay. I am satisfied that they have been prompt and diligent, and also made all reasonable efforts to comply.
The correspondence from Zelam dated 20 June 2014 also referred to an amendment of the statement of grounds and particulars filed on 10 February 2014. While this certainly altered some details of the case that Zelam had to answer, it is not necessary to consider this in detail given the conclusion that I have reached.
Were there exceptional circumstances?
In the TRED decision I stated that exceptional circumstances were:
"matters outside the normal evidentiary process, and outside the control of the party, where it would be unreasonable to insist on a party filing their evidence"
I am not aware of any exceptional circumstances that apply to this case.
Conclusion
I am satisfied that an extension of time is appropriate. Consequently I need to consider what length of extension is reasonable in the circumstances. Zelam has requested an extension of one month. I am satisfied that is an appropriate extension.
Evidence was filed during the period of the extension, and that evidence has been given to Osmose. Evidence in answer is now complete. According to regulation 5.8(4) the time for filing evidence in reply is two months from the day that the Commissioner notifies the opponent that all evidence in answer has been filed. This decision represents such notice.
Costs
It is normal for costs to follow the event. However, in this case further information was provided by Zelam in the correspondence filed on 20 June 2014. I found this information to be relevant to my decision. In this situation the award of costs should be reversed.
Dr S.D. Barker
Delegate of the Commissioner of Patents
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