Robert Kenneth Prudhoe v Ici Australia Operations Pty Ltd

[1993] APO 26

official notice

decision of a delegate of the commissioner of patents

Application        :    No. 587395 in the name of ROBERT KENNETH PRUDHOE

Title:    Improvements in or relating to buildings

Action: Award of costs in a withdrawn opposition under section 59 of the Patents Act 1952 by ICI AUSTRALIA OPERATIONS PTY LTD.

Decision:    Issued            .  Costs awarded against the opponent.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Application no.587395 by ROBERT KENNETH PRUDHOE and costs in an opposition under subsection 59(1) of the Patents Act 1952 by ICI AUSTRALIA OPERATIONS PTY LTD

background

Application no.587395 by ROBERT KENNETH PRUDHOE was advertised accepted on 17 August 1989. A notice of opposition under subsection 59(1) of the Patents Act 1952 was filed by ICI AUSTRALIA OPERATIONS PTY LTD (ICI) on 16 November 1989.

ICI served evidence-in-support and Mr Prudhoe served evidence-in-answer.  ICI then withdrew its opposition before it served evidence-in reply and a patent was subsequently granted on the application.

Mr Prudhoe's attorney filed a claim for an award of costs before a patent was granted on the application.  And the Office told ICI about Mr Prudhoe's claim for an award of costs after a patent was granted on the application.

Both parties filed written submissions on the issue of costs on 22 December 1992.

CLAIM FOR COSTS

The claim for an award of costs is as follows:

1. Receiving and perusing notice of opposition     $80

2. Receiving and perusing evidence-in support     $185

3. Preparing and lodging evidence-in answer       $430

4. Extension of time fees  $50

SUBMISSIONS

Mr Michael Angliss of the Industrial Property Division of ICI filed submissions on behalf of ICI.  These submissions include letters he sent to Mr Prudhoe's patent attorneys.  Mr P H Huntsman (patent attorney of Davies Collison Cave, Melbourne) filed submissions on behalf of Mr Prudhoe which includes a letter written by Mr Prudhoe.  I will discuss these submissions at appropriate places in this decision.

DECISION

I consider ICI's opposition is a proceeding under the Patents Act 1990 even though Part V of the 1952 Act applies to the opposition (subsection 234(3)). Consequently I have to consider Mr Prudhoe's claim for an award of costs under section 210 and regulation 22.8 of the Patents Act 1990 .

ICI wrote to Mr Prudhoe's attorneys and offered to withdraw the opposition approximately 2 months before it withdrew its opposition.  The basis of this withdrawal was that the parties bear their own costs.   The letter to the Office which withdrew the opposition mentioned this and states as follows:

"To date no response has been received from the applicant and the opponent has determined that the present opposition is to be withdrawn in light of that fact and that the time for lodging evidence-in-response(sic) is about to expire."

ICI also wrote to Mr Prudhoe's attorneys at the same time as it withdrew the opposition and stated it presumed the parties would bear their own costs.  Subsequently Mr Prudhoe's attorneys wrote to both the Office and ICI and stated as follows:

"We have received no instructions from our client that he agrees with your proposal that each party bears its own costs..."

Mr Prudhoe has now filed a claim for an award of costs.  ICI considers it has been inconvenienced by Mr Prudhoe's failure to inform it he did not consent to the withdrawal of the opposition on the basis proposed.  In my view ICI should have taken this failure into account before it withdrew its opposition.  I think this is particularly so since ICI's submissions explain it withdrew its opposition for commercial reasons.  Therefore I will proceed on the basis that there was no agreement about costs between the parties.

The next matter I have to consider is whether I can award costs when an opposition has been withdrawn and a patent has been granted on the application.

ICI's submissions state as follows:

"..the sealing of the patent in favour of the Applicant necessarily requires that any opposition proceedings have concluded..."

It seems to me the grant of a patent on Mr Prudhoe's application merely means the Commissioner is satisfied there is no bar to the grant of a patent on the application (compare the bar to sealing action discussed in Applications by Gould Inc 13 IPR 644). Therefore I consider the grant of a patent on the application does not necessarily mean the opposition proceedings have concluded.

ICI's submissions also state as follows:

"By its withdrawal of its opposition, the former Opponent concluded the opposition proceedings to which it was a party."

ICI brought the opposition proceedings before the Commissioner by filing a notice of opposition under subsection 59(1) of the Patents Act 1952. Mr Prudhoe has filed a claim for an award of costs and I think it is of little importance that the Office did not tell ICI about this until after the patent was granted.

In ICI's opinion the proceedings concluded when it withdrew its opposition.  This means ICI will avoid costs being awarded against it if Mr Prudhoe is entitled to an award of costs.  In this situation I think Mr Prudhoe will be denied natural justice if I do not consider his claim for an award of costs.  Therefore I consider neither party on its own can conclude inter partes proceedings before the Commissioner.  Consequently I am satisfied ICI's opposition proceedings are still before the Commissioner.

ICI argues it has prosecuted a serious opposition and there has been no consideration of the merits of this opposition.  Therefore ICI submits the award of costs should be dismissed in the light of the decision in Continental White Cap Inc v W R Grace & Co((1992) AIPC 90-882).

The situation in this decision is the applicant for the patent intended to withdraw its application.  But the attorney for the opponent came to Canberra to attend the hearing which was set for the opposition.  In the present situation the opposition was withdrawn before it was set down for hearing.  Therefore I consider the present situation is different to that in the Continental White Cap Inc v W R Grace & Co decision(supra).

In its submissions ICI quotes in part from the decision in Continental White Cap Inc v W R Grace & Co (supra).  This quotation refers to the public interest considerations which suggest a party to proceedings should be able to withdraw without incurring a mandatory award of costs against it.  I do not intend to make a mandatory award of costs.

The part of the above decision quoted by ICI also states costs should not be a disincentive to withdrawal.  I note ICI's submissions state as follows:

"The former Opponent withdrew the opposition in light of the transfer of an exclusive distribution agreement and subsequent cessation of its commercial interest in the field of heat storage media.

...the withdrawal on commercial grounds..."

ICI withdrew its opposition on the presumption that each party would bear its own costs.  Despite this presumption I think one factor ICI had to consider before withdrawing its opposition on commercial grounds is the possibility it may have to pay Mr Prudhoe's costs.  I think ICI had to consider this factor because it had no agreement with Mr Prudhoe that each party would bear its own costs.  I consider the fact that ICI proceeded to withdraw its opposition in the light of this factor demonstrates an award of costs against it was not a disincentive to withdrawal.

ICI's submissions do not refer to another part of the decision Continental White Cap Inc v W R Grace & Co (supra) which reads as follows:

"On the other hand, a party whose actions clearly put the other party to unnecessary expense should have costs awarded against them in respect of those expenses."

Thus I will consider whether the "successful" party has been put to unnecessary expense by the other party. But I note the onus in opposition proceedings under subsection 59(1) is on the opponent to prove its case (McGlashan v Rabett 9 CLR 223). Thus I consider ICI may have caused unnecessary expense if its opposition did not alert Mr Prudhoe (and the Commissioner) to an application on which an invalid patent may be granted.

The evidence filed by ICI was considered by the Commissioner to see if there was a bar to the grant of a patent on the application (Applications by Gould Inc, supra).  The Commissioner did not require Mr Prudhoe to amend the specification before a patent was granted on the application.  Thus Mr Prudhoe is the "successful" party in the present opposition and I consider ICI's opposition put Mr Prudhoe to unnecessary expense.   For example the expense of considering and answering the evidence-in-support.  Consequently I am satisfied costs, if any, should be awarded to Mr Prudhoe.

I consider Mr Prudhoe could have taken less time than he did to tell ICI he did not agree with its proposal that each party would bear its own costs.  But I think ICI has not been inconvenienced to such an extent that I should not award costs to Mr Prudhoe (Jones v North Australian Aboriginal Legal Aid Service Inc 82 FLR 264 at page 265).

Mr Prudhoe in a letter dated 17 December 1992 describes ICI's involvement with the present invention.  In his opinion the inappropriate objection by ICI has cost him money in time, effort and expense to pursue his invention and the present patent.  And he states he wishes to recover the "maximum possible compensation".  The submissions made by Mr Prudhoe's attorneys state the evidence-in-answer gives a clear understanding of the history of the dispute between their client and ICI.  After perusing Mr Prudhoe's letter as well as the evidence filed in the opposition I consider there is no reason to award costs other than those specified in schedule 8 of the Patent Regulations.

Items 1 to 3 on the claim for an award of costs involve the opposition proceedings which I have found are before the Commissioner.  Therefore I consider these proceedings meet the requirements of section 210.  Consequently I am satisfied Mr Prudhoe is entitled to an award of costs for these items on the claim for an award of costs.

Item 4 on the claim for an award of costs is described as "extension of time fees".  A person who pays a fee prescribed in the regulations in respect of a matter relating to proceedings before the Commissioner may be paid the amount of the fee (paragraph 1 of division 1 of part 2 in schedule 8).  The fees Mr Prudhoe paid are for filing the notice of opposition and for filing an application for an extension of time to serve evidence-in-answer.  I note the amount claimed in item 4 on the claim for an award of costs corresponds to the fee paid for the latter.

I do not think it follows from paragraph 1 of division 1 of part 2 in schedule 8 that all the fees listed in schedule 7 are relevant to an award of costs.  I consider a party should be awarded a fee from schedule 7 as costs if the fee gives the party its right to start the proceedings.  For example it was necessary for Mr Prudhoe to pay the fee for filing the notice of opposition to give him the right to start opposition proceedings.

I consider a party should not be awarded a fee from schedule 7 as costs if the fee is to request an indulgence from the Commissioner.  But I think such a fee may be awarded to a party as costs if the actions of the other party directly caused it to need the Commissioner's indulgence.  For example if an action of ICI directly caused Mr Prudhoe to need more time to serve the evidence-in-answer.  I consider the reason Mr Prudhoe needed more time did not result from any action of ICI.  Therefore I consider the fee Mr Prudhoe paid for filing the application for an extension of time should not be awarded as costs against ICI.

But I think the award of costs for the fee Mr Prudhoe paid for filing the application for an extension of time also involves another consideration. Regulation 23.3(1) means Mr Prudhoe's application for an extension of time was made under regulation 57(3) of the Patents Act 1952. I consider these extension of time proceedings are "interlocutory" to the opposition proceedings under subsection 59(1). And I think these proceedings are separate to the opposition proceedings. For example the question of costs in relation to the extension of time proceedings may have been considered in a decision if ICI had opposed the application for an extension of time.

It seems to me an award of costs for the fee for filing the application for an extension of time is part of the extension of time proceedings.  In my view the extension of time proceedings are not before the Commissioner because they concluded when the extension was granted.  And the proceedings have to be before the Commissioner for an award of costs under section 210(d).

Consequently I am satisfied Mr Prudhoe is not entitled to an award of costs for item 4 on the claim for an award of costs.

CONCLUSION

I award costs in the withdrawn opposition to application no.587395 to Mr Prudhoe.

M.Kendall
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Davies Collison Cave, Melbourne