S.D.S. Digger Tools Pty Ltd v Pasdonnay Pty Ltd

[1995] APO 57

official notice

decision of a delegate of the commissioner of patents

Application        :    No. 638571 in the name of S.D.S. DIGGER TOOLS PTY LTD

Title:    Transmission Sleeve for a Down Hole Hammer

Action: Opposition under Section 59 of the Patents Act 1952 by PASDONNAY PTY LTD and an objection to an application for an extension of time to serve evidence in answer.

Decision:    Issued            .

Abstract:    Partial extension of time only granted to serve evidence already completed.  No proper case made out.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 638571 by S.D.S DIGGER TOOLS PTY LTD, Opposition thereto by PASDONNAY PTY LTD under section 59 of the Patents Act 1952, and an objection to the application for an extension of time within which to serve evidence in answer.

background

Patent application No. 638571 was filed on 24 April 1991 by D.T.A. Pty Ltd who subsequently changed their name to D.T.A. Digger Tools Pty Ltd and then to S.D.S. Digger Tools Pty Ltd (SDS).  The application was advertised accepted on 1 July 1993.

A notice of opposition was filed by Pasdonnay Pty Ltd (Pasdonnay) on 1 October 1993.

As the application was filed before, but accepted after, the commencement of the Patents Act 1990, Chapter 5 of the Patent Regulations 1991 applies in relation to the opposition proceedings.

The statement of grounds and particulars was served on 31 December 1993.  The serving of evidence in support was due to be completed by 31 March 1994 but, in fact, was completed on 29 September 1994 after a number of unopposed extensions of time were granted.

The opponent filed a request to amend the statement of grounds and particulars on 30 August 1994 and the applicant objected to that request being granted.  In a decision issued on 1 February 1995, a delegate of the Commissioner of Patents refused the request to amend the statement of grounds and particulars.

The serving of evidence in answer was due to be completed by 29 December 1994.   However, SDS was granted two unopposed extensions of time so that the final date for the serving of evidence in answer is now 29 June 1995.

On 29 June 1995, the applicant applied for a further extension of time from 29 June 1995 to 29 September 1995 within which to file evidence in answer.  In a letter dated 17 July 1995, the opponent objected to the granting of such an extension.  The matter was heard in Canberra on 21 August 1995.  At the hearing, the applicant was represented by Mr Howard Schulze, patent attorney of Collison & Co, Adelaide, in person, and the opponent was represented by Mr Errol Harwood, patent attorney of Wray & Associates, Perth, assisted by Mr Mark Suddaby of that firm, by telephone.

APPLICATION FOR EXTENSION

The reasons given in the application for extension of time under consideration are as follows:

"The major declaration by Werner Giehl has been prepared and has been generally settled.

However, due to absence of this main witness overseas, some difficulties has (sic) been experienced and delays in getting the final form of this document concluded.

Due to the complexity of the evidence and the need to co-ordinate the number of experts, it was necessary to get the primary evidence together from which the experts could then consider the position.

A second set of statements have been obtained from an expert engineer who specialises in this field, a Malcolm McInnes, and this is now being finalised.

The further time is therefore necessary simply to gather together the quite complex material in an orderly fashion and the applicant is seeking to do this as quickly as possible."

The reasons supplied with the two earlier unopposed applications for extension of time by SDS are as follows:

"There are two opponents.  One of the opponents has sought to amend its grounds and particulars and the evidence that has thus far been filed will be viewed differently depending upon the results of the hearing.

Expert witnesses are currently reading the various declarations and we are waiting for feedback from these in order to prepare the declarations.

In view of the substantial number of declarations involved, and the diversity of input that is necessary, as well as the yet undecided position regarding the amendments on the grounds and particulars, further time will be necessary and is requested for preparation and lodgement  of Evidence-in-Answer.";

and

"The collection of evidence has involved substantial investigation of the facts and a primary Declaration by Werner Giehl is at the point of completion.  Further expert evidence has been and is being prepared especially by Malcolm McInnes, an Engineer, having experience in this business and continuing investigation into other sets of circumstances is continuing.

In view of the large body of evidence that has been filed further time is still required in order to complete the Declarations already substantially completed, and obtain follow up Declarations supporting these."

SUBMISSIONS

The main points of Mr Schulze's submissions at the hearing can be summarised as follows:

.The evidence provided by the opponent included the issue of prior use where certain individuals claimed to have taken certain actions in the presence of other individuals.  Since the applicant's main declarant was not present when these actions allegedly took place, investigations as to whether or not the actions took place have taken time.

.Although the applicant had been aware of some of the issues since 1993, it was not aware of all the issues it had to answer until the serving of evidence had been completed.  In fact it was only from 2 February 1995, when the decision was issued in relation to the request to amend the statement of grounds and particulars that the applicant knew for certain what issues had to be addressed.

.It was decided to collect evidence serially and therefore to obtain a declaration from the applicant's main witness, a Mr Giehl, first, before seeking further evidence to support the Giehl evidence.  As a consequence the delays experienced in getting the Giehl declaration finalised (because the declarant had been overseas) had consequentially meant a delay in obtaining the supporting evidence.  While in hindsight it may have been better to collect evidence concurrently, this had been a case management decision to use resources as effectively as possible.

.The applicant's business headquarters had shifted from Adelaide to Perth about six months ago causing further difficulties in the gathering of evidence.

.The applicant's chief engineer had left the company and set up in opposition so that the gathering of evidence had been further delayed.

.In all the circumstances, given that:

the applicant was serious about defending the      application;

the evidence in support had been complex including     the ground of obviousness; and

the applicant had been as diligent as possible;

it was not unreasonable for an extension of time to be granted.

At the hearing, Mr Schulze showed me a signed facsimile of a declaration made by Mr Giehl.

The main points raised by Mr Harwood at the hearing can be summarised as follows:

.The applicant has not made a full and frank disclosure about all the circumstances surrounding the request for an extension of time.  While Mr Schulze added further information at the hearing, there is still no full and frank disclosure of when Mr Giehl went to China, how long he stayed there and why he couldn't complete his evidence before he left.

.The applicant had known of all the issues since 1993 because the opponent had raised them in a section 27 notice during the examination stage of the present application.  The same issues were raised in the statement of grounds and particulars served in December 1993.

.In any case, the last evidence which the opponent is able to rely on in relation to the opposition was served in August 1994.

.The evidence in support is not complex at all.  While there may be a fair number of declarations, only three of them relate to the matter of prior use.

.In relation to the proposed amendment to the statement of grounds and particulars, a party would be imprudent not to proceed with the gathering of evidence while awaiting the outcome of a decision on such a matter. (Kimberly-Clark v Procter & Gamble 26 IPR 581)

.The applicant has not shown due diligence in completing the evidence in answer.  This is especially the case because the reasons given are no more than routine delays and because evidence in answer should be directed only to commenting on the evidence in support.

.The applicant's business headquarters had already been located in Perth as SDS, a Perth company, had taken over the original applicant company located in Adelaide.

DECISION

Regulation 5.10(2) of the Patent Regulations 1991 enables the Commissioner to grant an extension of time in opposition proceedings.  From regulation 5.10(5) I note that I must be reasonably satisfied that the extension of time is appropriate in all the circumstances.

The factors to be considered in relation to a request for an extension of time have been set out in numerous decided cases.  A recent example relevant to an application for extension of time is Ferocem Pty Ltd v Commissioner of Patents, (1994) AIPC 91-057. From this, I understand that the factors which the Commissioner should consider before allowing an extension of time are:

a)whether the person seeking the extension has made out a proper case justifying the extension;

b)   whether there is a serious opposition in train;

c)the private interests of the parties to the action; and

d)the public interest in ensuring that the proceedings should not be unduly protracted.

In the present case, SDS has given a number of reasons for the need for an extension of time.  However I must say at the outset that each of them individually does not seem to justify such an extension.

One of the main reasons advanced by Mr Schulze for the delay in collecting evidence and the need for extra time to do so was that the opponent was alleging prior use and had provided a number of declarations to support this ground.  I can appreciate the difficulty in obtaining evidence to counter such an allegation.  However, I note that the Giehl declaration was almost completed as at the 29 March 1995.  There is no indication that any of the remaining evidence which the applicant wishes to collect is going to deal with the question of prior use.  Certainly there is no indication that Mr McInnes is providing evidence on the question of prior use.  I do not think that the need to locate evidence to counter an allegation of prior use is of itself a sufficient reason to justify this further extension of time.

While a request to amend a statement of grounds and particulars can cause some uncertainty as to what case an applicant has to answer, I do not think that is reason enough to justify a further extension of time of three months.  I note that the decision refusing the request to amend was issued on 1 February 1995.  This means that the applicant has already been allowed five months from the date of that decision within which to serve evidence in answer.  In any case, I note Mr Harwood's reference to Kimberly-Clark v Procter (supra).  While the facts of that case differ from the present one, I believe that the general principle applies that it would be imprudent of a party to hold off collecting evidence pending the outcome of such a decision.  In the worst case for the applicant, the request to amend could have been allowed in which case the applicant might have needed to collect more evidence.  If such were the case, it may have provided justification for an extension of time.  However there seems to be no real reason for ceasing the collection of evidence pending the outcome of the request to amend.  In the event, the request was refused.

Another reason given by SDS is that their chief witness has been out of the country.  However, I agree with Mr Harwood that the applicant has not provided a full and frank disclosure of when and for how long Mr Giehl was overseas.  This is particularly relevant because the reasons given in the second application for extension of time indicate that the Giehl declaration is on the point of completion.  This means that as at the end of March 1995, the Giehl declaration was almost completed according to the applicant.  In effect the applicant is using the reason of Mr Giehl being overseas to extend the time for serving evidence in answer from 29 March 1995 to 29 September 1995.  As I have indicated earlier, Mr Schulze showed me a signed facsimile of a statutory declaration by Mr Giehl.  I assume from this that the declaration has only recently been completed.  While I sympathise with Mr Schulze about the difficulty of dealing with witnesses who are out of the country, I do not think that this is sufficient justification of itself to warrant what in effect would be a six months extension given the reasons stated in the previous application for extension.

Mr Schulze also suggested that rightly or wrongly a decision had been made to pursue Mr Giehl's evidence first before seeking supporting evidence from other witnesses. Such a decision was a case management one and had resulted in the collection of other supporting evidence being delayed due to the delay in completing the Giehl evidence. Again I do not think that this reason justifies an extension of time. Each party is free to choose the particular methodology it will use to collect evidence in opposition proceedings. However each party is, or should be, aware of the strict time limits set down in Chapter 5 of the Patent Regulations 1991. If a party chooses a particular methodology which, in the normal course of events, will not allow for the timely completion of evidence, then I do not think that the Commissioner should automatically grant an extension of time to allow for the completion of such evidence. To do so would defeat the whole purpose of Chapter 5 of the regulations which is aimed at achieving expeditious resolution of oppositions.

Mr Schulze also commented on the complex nature of the evidence in support. The evidence is voluminous in nature with at least 14 declarations and many exhibits. I tend to agree with Mr Harwood however that on a quick scan of the evidence it does not appear to be technically complex. However I do not rule out the fact that the issues being dealt with may be legally complex. Chapter 5 of the regulations allows for a period of 3 months within which an applicant should file evidence in answer. It seems to me that were the applicant asking for an extension of time after that initial three months, then the amount of evidence served by the opponent would probably have been sufficient justification for such an extension to be granted. In any case the applicant has already received such an extension. However the applicant is now asking for a further three months extension having already had nine months within which to serve evidence in answer. I do not believe that the amount or complexity of the evidence in support provides sufficient justification for an extension after such a period of time has already expired.

The other reasons supplied by Mr Schulze including the relocating of the applicant's headquarters and the departure of the applicant's chief engineer do not strike me as being circumstances which are out of the ordinary in the normal operation of a business.  They do not, it seems to me, provide sufficient justification for an extension of time to be granted.

Mr Schulze also made passing reference to the fact that another opposition is running in parallel with Pasdonnay's.  That of itself is not sufficient justification for an extension of time.  It is up to the firm for which Mr Schulze works to make available sufficient resources to cope with the defence of two oppositions.

I have considered each of the reasons given by the applicant in support of the extension of time individually and have found that each of them does not justify an extension of time.  However, given the number of reasons provided, it seems to me that I should consider the reasons as a whole to see whether or not collectively they justify an extension of time.

There may be circumstances where individual reasons provide no justification but because particular reasons are exacerbated by other reasons, collectively the reasons provide justification.  However I do not think that this applies in the present case.  This is especially so because the applicant has already had nine months within which to serve its evidence in answer.

I do not believe that the second factor I have listed above in relation to matters that the Commissioner should consider is appropriate in the present circumstances.  Whether or not there is a serious opposition is not something the applicant is accountable for.  It seems to me to be more appropriate in the present case to decide if the applicant is mounting a serious defence to the opposition.  Had I not been shown a facsimile of a statutory declaration by Mr Giehl at the hearing, I would suspect that I would have doubted that SDS was serious in defending its patent application.  This is because after nine months no evidence would have been finalised at all.  However, in the circumstances, I am prepared to accept that the applicant is serious in its defence of its application.  Certainly Mr Schulze argued strongly at the hearing on the importance of the patent application to SDS.

In relation to the interests of both parties, certainly SDS would be disadvantaged if I refused to grant the extension of time.  It would not have served any evidence in answer at all.  On the other hand, of course, if I were to grant the extension of time, Pasdonnay would be disadvantaged in that it would have to deal with any evidence that the applicant was able to serve in this extended period.  Otherwise, Pasdonnay would seem to be only marginally disadvantaged if I were to grant the extension of time in that the proceedings will be delayed to some degree.  I note that Pasdonnay was also responsible in delaying proceedings due to a number of extensions of time it received in preparing its evidence in support.

In relation to the public interest, if I were to grant the extension of time, the proceedings would most probably be protracted as Pasdonnay would be entitled to serve evidence in reply if SDS served its evidence in answer within the allowed time.  At the moment, as there is no evidence in answer, there is no need for any evidence in reply.

However, there is another aspect to the public interest.

Public interest considerations were addressed by Burchett J. in the Ferocem decision (supra) where he said:

"The determination of an application for an extension of time under reg 5.10(2) involves a balancing exercise, in which competing considerations must be taken into account.  There are the interests of the persons directly concerned with application and opposition in question.  There are also the public interests, which are not necessarily all ranged on the same side.  They include the expeditious disposal of matters in the Patents Office, and questions of cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office.  But they also include, as Kitto J. pointed out in Kaiser Aluminium & Chemical Corporation v. The Reynolds Metal Company (1969) 120 CLR 136 at 143, 'the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be'."

In the present case, it seems to me that the public has an interest in the applicant being able to mount a defence of what might be a worthwhile invention rather than that defence be shut out because of a failure in procedure.

I believe that SDS has not made out a proper case justifying an extension.  However I am mindful of some further comments made by Burchett J. in Ferocem (supra):

"... even where an application for a particular period ... is regarded as unjustified, it seems to me a decision maker, having a discretion of the kind conferred by Regulation 5.10, should always consider whether some short period ought to be allowed, so that an applicant who may have assumed some extension would be granted will not be shut out entirely from presenting evidence that may be immediately available.  I am speaking of a case such as the present, where it was clear the applicant might well have a quantity of evidence ready to file, although its desire was to lodge all the evidence at the same time and in conjunction with the presentation of evidence in the Federal Court Proceedings."

In the present circumstances, as I am aware that SDS does have some evidence prepared, I am prepared to allow the applicant a short extension of time to serve whatever evidence it has at hand.

SUMMARY

I grant the applicant an extension of time from 29 June 1995 to five working days from the date of this decision to serve whatever evidence in answer it has on hand. 

COSTS

While the applicant has been granted a partial extension of time, the applicant has not made out a proper case to justify this extension.  In addition, I have granted this extension of time only on the basis of material disclosed to me at the hearing.

Therefore, I award costs against SDS.

R.W. HALLETT

Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Collison & Co, Adelaide

Patent attorneys for the opponent   :  Wray & Associates, Perth