RTI Pty Ltd v Scantech International Pty Ltd - [2014] APO 4

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
RTI Pty Ltd v Scantech International Pty Ltd [2014] APO 4

Patent Application: 2006220232

Title:On-belt analyser system

Patent Applicant:  Scantech International Pty Ltd
Opponent:  RTI Pty Ltd
Hearing Officer:  Karen Ayers
Decision Date:  28 January 2014
Hearing:  Written submissions filed by 2 January 2014
Catchwords:  PATENTS – extension of time to file evidence in answer – reg 5.10 – reasonable explanation provided - nature and significance of some of the evidence justifies extension – extension granted

Representation: Patent applicant: Davies Collison Cave, Melbourne
Opponent:Fisher Adams Kelly, Brisbane

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2006220232

Title:On-belt analyser system

Patent Applicant:  Scantech International Pty Ltd
Opponent:  RTI Pty Ltd
Date of Decision:  28 January 2014
DECISION
The applicant is granted an extension of time to 12 February 2014 to file evidence in answer.
REASONS FOR DECISION
Background

Patent application 2006220232 was filed by Scantech International Pty Ltd under the provisions of the PCT on 1 March 2006 claiming priority from both an Australian provisional application (2005900951) and a US basic application (60/658195) filed on 1 and 2 March 2005 respectively. The standard application was published accepted on 21 June 2012 and a notice of opposition was filed on 19 September 2012 by RTI Pty Ltd. The opponent served their Statement of Grounds and Particulars on 1 February 2013 and completed their evidence in support on 12 February 2013.
Evidence in answer was initially due on 12 May 2013. Since then, the applicant has been granted 2 extensions to complete their evidence covering the period up to 12 November 2013. The current extension is for a further 3 months up to 12 February 2014. The opponent has objected to this extension with Commissioner advising both parties that this objection would be based on written submissions rather than an oral hearing.
The relevant law
As a consequence of the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 there are substantial changes to Chapter 5 of the Patents Regulations 1991. In the case of the present application, as already noted, evidence in support was completed on 12 February 2013. This means that the period for evidence in answer commenced on that date. As this was prior to 15 April 2013 when the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 commenced, it follows that the current extension of time request is governed by regulation 5.10 of the Patents Regulations as in force immediately before 15 April 2013. Another consequence of the amendments to Chapter 5 is that evidence that is required to be served on or after 15 April 2013 is to be filed with the Commissioner rather than served. Consequently in this decision I will make reference to the filing of evidence where that is to happen on or after 15 April 2013.
Regulation 5.10(2) of the Patents Regulations gives the Commissioner the power to extend the time for filing evidence in answer. The Commissioner must not grant an extension unless satisfied that the parties have been notified of the application for extension (reg. 5.10(5) (b)), has given the parties a reasonable opportunity to be heard (reg. 5.10(5)(c)(i)), and is reasonably satisfied the extension is appropriate (reg. 5.10(5)(c)(ii)). In the present case the parties have been notified and have had an opportunity to be heard. The only remaining question is whether it is appropriate to extend the time.
The considerations relevant to this question have been considered several times by the Federal Court (Ferocem Pty Ltd v Commissioner of Patents [1994] FCA 981; 28 IPR 243, A Goninan & Co Ltd v Commissioner of Patents [1997] FCA 424; 38 IPR 213 and National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33; 50 IPR 398). In summary, the power to extend time is discretionary, so it is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at 247-8, Goninan at 220). Relevant considerations include:
Extension of time requests
First extension request
With their first extension of time request (12 May 2013 to 12 August 2013), the applicant filed partial evidence from their expert witness (Andrew Harris) but noted that this did not address all the issues raised in the opposition. They were experiencing difficulties in obtaining expert evidence to address the remaining issues due to the small scale of the relevant industry in Australia, it was difficult to find such witnesses.
Second extension request
In their second extension of time request (12 August 2013 to 12 November 2013), the applicant had identified a second witness (Mr Silvére Compos) and provided a second (partial) declaration which also only partially addresses the opponent’s evidence. They required further time to provide the remaining material. The opponent did not formally object to this request but provided informal comments for the delegate to consider. The delegate considered these comments but granted the extension. He outlined his expectation that evidence in answer would be filed within the extended time period.
Third (current) extension request
In the reasons provided in their third (and current) extension of time request (12 November 2013 to 12 February 2013), the applicant advised that they had expected to complete their evidence within the extended time but Mr Compos had become increasingly (and unexpectedly) unavailable. When they realised that this problem was on-going and preventing their evidence being completed in a timely fashion, they identified 2 other potential expert witnesses and had started preliminary discussions with one of these to determine his suitability and availability.
Objection to the extension of time request
In their objection, the opponent reiterated the concerns they made in relation to the applicant’s second extension of time application. In the opponent’s view, the applicant would have been aware of the need of an expert from the time of filing of the opposition to the innovation patent which had occurred 19 months earlier (on 12 December 2011). According to the opponent, the applicant already had ample time to prepare their evidence and could easily have found an expert in Australia from either the many recipients of the applicant’s products, their related companies in Australia or from CSIRO.
Given their perception of a lack of diligence on the part of the applicant, the opponent was also concerned that the current extension request would not be the last. Their view was that the previous extension was granted on the condition that the evidence would be completed within the extended time but that the applicant failed to meet this condition and therefore was not entitled to any further extensions.
Explanation of delay
The specification as accepted relates to a conveyor-based bulk material analyser for analysing material such as coal, minerals, cement raw materials etc. The analyser utilises a thermal neutron capture and gamma ray production technique known as PGNAA (Prompt Gamma Neutron Activation Analysis). These analysers are widely used in mining industries and hence the opponent believed that the applicant should have had no difficulty in finding an expert from their end users.
Based on this assumption, the opponent considered that the on-going extensions were nothing more than a “deliberate delaying tactic”. They noted that the applicant had previously requested to stay the current proceedings based on co-pending opposition proceedings on their divisional (innovation) patent (2011100234)[1]. This request had been refused by the Commissioner[2] and the opponent believed that the applicant was simply using the extension of time process as a de-facto way of achieving the same result.
[1] I note that this decision was recently issued (on16 December 2013) – see RTI Pty Ltd v. Scantech International Pty Ltd [2013] APO 67
[2] Delegate’s letter of 24 October 2013
However I don’t believe that the opponent’s initial assumption is well-founded. As the applicant noted, the performance of a PGNAA analyser can only be determined/optimised by computer-based simulations. This would require a specialised knowledge of the instrument which an end user is unlikely to have. I therefore agree with the applicant that the most appropriate skilled worker is likely to be a scientist or a nuclear engineer experienced in the design or manufacture of PGNAA analysers. I also accept that there would only be a few experts in such a specialised field in Australia. While the opponent suggested that CSIRO was an obvious potential source for these, I accept the applicant’s explanation that CSIRO is generally extremely reluctant to allow its employees to be involved in contentious commercial matters such as oppositions.
The applicant’s requests for extensions of time all reflect the inherent difficulties in obtaining experts in a narrow and highly specialised field. Their first extension mentions interviewing a number of potential experts before engaging one (Andrew Harris). When they found that Mr Harris wasn’t able to fully address the opponent’s evidence, they located a second witness (Mr Compos). The applicant’s second extension request was hopeful that Mr Compos could complete his evidence within the extended time. However there were unforeseen difficulties with Mr Compos’s availability and the applicant has now requested a third extension to brief another witness.
In their submissions for the hearing, the applicant has advised that a third expert witness (Mr Ken Smith) has been engaged and has commenced his review of the EIS. In my view, this is consistent with the applicant making a concerted effort to find experts in the relevant technology and pursuing alternative witnesses when unforeseen problems arise. I am therefore satisfied that applicant has acted diligently and in good faith.
The opponent observed that their Statement of Grounds and Particulars and evidence in support in the current opposition is the same as in the co-pending opposition on the divisional innovation patent which was completed in December 2011. The opponent questioned why the applicant has taken so long to respond to evidence which they have been aware of for 2 years. The claims of the innovation patent and standard application are very similar and the Statement of Grounds and Particulars of both oppositions are the same (despite the ground of innovative step not being available to the opposition under section 59).
Having themselves relied on their previous evidence, I can understand why the opponent might have expected that the applicant would do likewise. However innovation and standard patents are subject to different legal tests of invalidity (innovative step versus inventive step) and hence the issues in the two oppositions are necessarily different. It would therefore be reasonable for an applicant to prepare separate evidence for the standard opposition. The applicant has already filed fresh evidence and has been diligent in their search for expert witnesses. I accept that they are seriously defending their patent application.
The opponent also argued that the Commissioner had granted the previous extension based on the condition that evidence in answer would be completed by the end of the (previous) extension period. In their view, the applicant’s failure to fulfil this condition meant that the current extension should now be refused.
I note that the Commissioner’s letter of 26 August 2013 advised that:
“The delegate has considered the opponent’s comments of 19 August 2013 and finds it
appropriate to grant an extension of time of three months to file the evidence in answer being a further declaration of Mr Silvére Compos. Given the expert has already provided evidence and is therefore aware of the aspects of the opposition, the delegate expects the evidence in answer to be filed within the time allowed by the present extension.”
Rather than a condition of allowance, the letter simply set out the Commissioner’s expectation that evidence would be completed by the end of the previous extension. The applicant had also expected that they could meet the previous deadline noting (in their previous request) that:
“Now that a witness has been identified, and is in the process of providing evidence, we do not anticipate there to be any substantial further delays in the finalisation of evidence.”
Of course, these expectations were based on the facts as they were known at the time of the previous extension request. Such expectations can always be readjusted if circumstances change. In the current case, there have been unforeseen difficulties with an expert’s availability which were outside the applicant’s control. Neither the delegate nor the applicant could have predicted the difficulties with the expert’s availability which clearly impeded the preparation of evidence. I accept that this adequately explains why the applicant was unable to meet their previous deadline.
The opponent suggested that the current extension is unlikely to be the last and that there is significant doubt that the applicant would provide any further relevant evidence in any event. However the opponent’s argument appears to be based on the assumption that the applicant is deliberately protracting the opposition process and (as I noted above), I do not believe this to be the case. The applicant has identified 3 potential witnesses and has already provided partial evidence from two of these. It is clear that the applicant intends to file evidence in answer and is seriously defending their application. Where the applicant has had problems with the availability of their experts, they have also taken prompt action to obtain another expert. This is much more consistent with a diligent applicant trying to complete their evidence as soon as possible.
The applicant has now engaged a third expert (Mr Smith) who has already started his review. This is likely to result in additional evidence (contrary to the opponent’s assertion). In addition, with a new expert involved, it seems likely that the previous problems have now been resolved and the applicant should now be able to finalise their evidence relatively quickly.
In my view, there is no evidence of the applicant deliberately using the extension of time process to protract the current opposition proceedings. The history of the extension of time requests is consistent with a diligent applicant making a concerted effort to prepare evidence in a narrow and highly specialised field where the availability of expert witnesses is a problem. I am therefore satisfied with the applicant’s explanation of the delay.
Public interest
The public interest calls for a balance between the requirements that oppositions be dealt with expeditiously and economically, and that a serious opposition be dealt with on its merits (Ferocem (supra) and Goninan (supra)).

The public interest in determining a serious opposition on its merits is assessed by considering the nature and significance of the evidence that will be filed. (Goninan at [225]-[226]).
I am satisfied that the evidence in answer is likely to be relevant to the proper determination of these opposition proceedings. Therefore at this stage of the proceedings I am of the view that there is clearly greater public interest in having the opposition determined on its merits.
Interests of the parties
As is normal in such matters, the parties have differing interests. I recognise that each party has valid reasons to support their differing interests. I can see no logical basis to weigh one interest more than the other. I believe that the interests of the parties are largely offsetting, although not identical.
Conclusion
I have found that the applicant has provided an adequate explanation for the delay in filing their Evidence in Answer. I have also found that the considerations behind the private interests of the parties and the public interest support the extension.

I am therefore satisfied that an extension of time is appropriate in all the circumstances. Therefore I grant the applicant an extension until 12 February 2014 in which to file its Evidence in answer.
Costs
In the present case, the explanation supplied was found to justify an extension. In such circumstances costs follow the event. I see no reason to depart from the usual practice of the Commissioner in these matters. I therefore award costs against the opponent RTI Pty Ltd according to Schedule 8.
Karen Ayers
Delegate of the Commissioner of Patents