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

[1995] APO 5

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 to the grant of a patent by PASDONNAY PTY LTD;  request to amend the statement of grounds and particulars

Decision:    Issued            .

Abstract:    Request refused.  The issue of undue prejudice and the relevance of the public interest considered.  The amendment would add an inadequate particular to the statement.

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 by PASDONNAY PTY LTD, and a request to amend the statement of grounds and particulars

background

Patent application number 638571 by S.D.S. Digger Tools Pty Ltd was advertised accepted on 1 July 1993.  On 1 October 1993 a notice of opposition to the grant of a patent was lodged by Pasdonnay Pty Ltd.  The statement of grounds and particulars was served on 31 December 1993.

Evidence in support was due to be served by 31 March 1994.  A series of extensions of time have extended this time till 30 September 1994.  The service of evidence in support was completed on 28 September 1994.

On 30 September 1994 the opponent requested an amendment to the statement of grounds and particulars.  The applicant objected to this request.

A hearing was conducted by telephone on 8 December 1994.  The applicant was represented by Mr H.Schulze of Collison & Co, Adelaide.  The opponent was represented by Mr E.Harwood of Wray & Associates, Perth.

the amendment

The reasons for requesting the amendment of the statement of grounds and particulars were given as:

"As a result of evidence collected in relation to the opposition proceedings, evidence has arisen of prior use and disclosure of a shrouded drill bit in a percussive reverse circulation hammer by the opponent."

The amendment of the statement of grounds and particulars that the opponent is seeking is to insert a single new particular in the following terms:

"7.  The invention as claim in any one of claims 1 to 15 was prior published, is not novel and does not involve an inventive step as a result of prior use by the opponents and use by others of a shrouded bit on a reverse circulation down hole hammer manufactured by the opponents prior to the priority date."

submissions

Mr Harwood made submissions on the following points:

.the new particular relates to information that had come to light incidental to the preparation of the evidence in support

.the amendment was introduced promptly once the information had been verified

.there would be no protraction of the case as evidence in support was complete

.the case to be answered had not been changed as there was already a particular relating to a different instance of prior use

.it would be contrary to the public interest to exclude the evidence, especially as it could be included in an appeal

.the particular is sufficiently precise, especially as the relevant evidence has already been served

Mr Schulze made submissions on the following points:

.the applicant and opponent are competing manufacturers of drill bits, and the applicant is concerned to have the situation with regard to the present invention clarified quickly

.there has been a significant delay between filing the statement of grounds and particulars and seeking the amendment

.the new prior use is by the opponent and its "friends", so the evidence should have been available earlier if the opponent had acted diligently

.the new particular is vague, and does not contain all the material facts relevant to prior use

.the new particular would not be absolutely determinative of the opposition

.the public interest must be balanced against other interests

decision

The allowability of amendments to the statement of grounds and particulars is determined by regulation 5.9, which states:

"Amendment of statement

5.9  (1)  The Commissioner, on the written request of an opponent and subject to such terms as the Commissioner may specify:

(a)if the Commissioner reasonably believes that an amendment of a statement referred to in subregulation 5.4 (1) ("filing of statement") corrects an error or omission by the opponent or by his or her agent‑may amend the grounds of opposition set out in the statement; or

(b)if the Commissioner reasonably believes that an amendment of the grounds set out in a statement referred to in subregulation 5.4 (1) results from an amendment of a patent request or complete specification‑must amend those grounds; or

(c)must amend particulars relating to a ground referred to in subregulation 5.4 (1).

(2)  The Commissioner must not allow an amendment requested under subregulation (1), if:

(a)an application for dismissal of opposition is being considered; or

(b)an application for determination of opposition is being considered; or

(c)in the case of opposition under section 59 of the Act ("opposition to grant of standard patent")‑a specification relating to the opposed application is being re-examined; or

(d)he or she does not reasonably believe that the applicant has been notified of the proposed amendment; or

(e)he or she reasonably believes that a person will be unduly prejudiced by the amendment.

(3)  The Commissioner must give the parties an opportunity to make representations concerning the proposed amendment.

(4)  If the Commissioner allows an amendment, he or she must give the applicant a copy of the statement as amended."

The power of the Commissioner to amend the particulars of a statement is not discretionary provided the requirements of subsection (2) have been satisfied (The Boots Company PLC v Hamilton Laboratories Pty Ltd, Patent Office decision, 21 December 1992, patent application number 614998, unreported).

In the present case the amendment relates only to the particulars and not to the grounds.  There is no pending application for dismissal, an application for determination of the opposition is not being considered, there is no re-examination, the applicant has been notified of the proposed amendment and both parties have had an opportunity to make representations.  The only remaining issue that I must consider is whether I reasonably believe that "a person will be unduly prejudiced by the amendment" (regulation 5.9(2)(e)).

The issue of undue prejudice has been considered in many decisions of the Commissioner.  In Diamond Scientific Company v CSL Limited (1992) AIPC 90-927 the Delegate of the Commissioner concluded that undue prejudice will occur if:

i)the amendment is detrimental or disadvantageous to the patent applicant;  and

ii)the circumstances surrounding the amendment cause the degree of that detriment or disadvantage to be unwarranted, excessive, improper, inappropriate or unjustified.

Detriment or disadvantage

The first matter to consider is whether or not detriment or disadvantage would be caused if the amendment were allowed.

It was accepted by the attorney for the opponent that there was prima facie detriment to the applicant, so I do not need to explore this issue any further.

Degree of detriment

The next matter is whether the detriment is undue.  It is only if the detriment is unwarranted, excessive, improper, inappropriate or unjustified that the amendment will not be allowed.  To answer this question I must take into account and balance all relevant factors.

Mr Harwood explained the background to the request to amend.  The relevant chronology is:

[Note:  ? indicates that the date was not given, but the order in the chronology was as shown]

1.10.93Notice of opposition lodged.

31.12.93Statement of grounds and particulars served.

April 1994Simpson declaration executed (Note:  Mr Simpson is not an employee of the opponent company).  Mr Simpson indicates to Mr Harwood that he believes there was an extra prior use by Mr Rear (Managing Director of the opponent company).  Mr Rear does not think that the use was prior to the priority date.

June 1994Mr Harwood meets with Mr Rear to finalise his declaration.  Mr Ritchie, a consultant to the opponent company, is present to assist Mr Rear with his declaration.  Mr Harwood again raised the matter of Mr Simpson's recollection of an extra prior use.  Mr Ritchie indicates that the use was prior to the priority date.  Rear declaration finalised, including reference to extra prior use.

?Declaration by Mr Ritchie prepared, including reference to the extra prior use.

28.7.94Rear declaration filed.

18.8.94Ritchie declaration finalised (unavailable to complete declaration earlier).  Declaration incorporates evidence relating to extra prior use.

?Opponent attempts to obtain evidence to substantiate claim of extra prior use.

?Bennett and Redmond say they can support the claim of extra prior use.
(The Bennett declaration is dated 16.9.94, and the Redmond declaration is dated 27.9.94)

30.8.94Request to amend the statement of grounds and particulars.

28.9.94Evidence in support completed.

a)  Factors that indicate that the detriment is excessive

An issue raised by these facts is the delay between the filing of the statement of grounds and particulars and requesting amendment to the statement - a period of 8 months.  Delay is always a relevant consideration in these matters (see Diamond Scientific v CSL, supra).  It was argued that this delay is particularly significant when it is noted that the information in question was within the knowledge of the opponent.

The requirement of diligence under the procedures of the new Regulations was noted by the Delegate of the Commissioner in Boots v Hamilton, supra, at page 7:

"The new Patents Regulations have changed the procedures that apply to oppositions to the grant of a patent.  For instance, the timeframe laid down in the Regulations imposes a responsibility of diligence upon parties coming before the Commissioner.  Additionally, a statement of grounds and particulars must be provided at an early point in the opposition, but this statement is capable of amendment in limited circumstances."

I consider that a delay of 8 months due to the failure of the opponent to identify a particular that they could have found with reasonable diligence is particularly relevant.

A further issue is whether the particular that it is sought to introduce would be inadequate for its purpose (a matter considered relevant in Boots v Hamilton, supra, and E.I. DuPont de Nemours and Company v DowElanco (1994) AIPC 91-067). The particular does not specify the name of the other users, and the date and place of any use. This information was considered to be material to a particular relating to prior use in DuPont v DowElanco, supra, at page 38,310:

"I understand the "material facts" of Mobay (supra) to mean the facts needed for the opponent to establish a prima facie case, but without legal argument, argument based on the facts, corroborative evidence, or references to legal precedent.  In my view, an opponent needs to provide more than just a mere allegation of the case to be answered.  For example, a reference to "prior knowledge, use and sale" or "mere mixture of known ingredients", without the facts to establish a prima facie case, does not provide an applicant with reasonable details of the case to be answered and so defend itself.

For example, for the applicant to understand the case it has to defend in the present circumstances, without placing an undue burden on the opponent, the particulars should briefly and generally include:

...

.for matters such as prior knowledge, sale, prior use, a brief description of their relevance to the ground together with a brief details of the material facts to support a prima facie case, for example, (a) the date and place of any use, (b) the person or persons to whom the invention was allegedly disclosed or sold;"

It was argued that this information is not necessary since the evidence relating to this use had already been served on the applicant.

The function of the statement of grounds and particulars was discussed by the Delegate of the Commissioner in Kent-Moore Corporation v Environmental Products Amalgamated Pty Ltd (1992) AIPC 90-915 at page 38,625 in the following terms:

"The statement sets out the basis of the opposition, and it follows that the opponent's evidence is circumscribed by that statement.  (It also enables the applicant to start preparing their defence upon receipt of that statement, as they are then aware of the basis of the opposition.)"

The function of informing and circumscribing is not avoided merely because evidence has been served.  One reason for this is obvious:  the material facts of the case may not need to be the subject of evidence, or the evidence may be incomplete - where does the applicant stand in such a case?  Consequently, I believe that the statement of grounds and particulars must still be suitable for their purpose even if evidence in support has been served.  This view is consistent with the decision of a Delegate of the Commissioner to direct further and better particulars after evidence in support had been served (see DuPont v DowElanco, supra).

The final issue is that the particular would not be absolutely determinative of the opposition.  This issue was not argued at length, however I need to say a few words on the subject.  There are two situations where the importance of the particular would be relevant to the issue of undue prejudice.  The first is if the information in the particular could never lead to a successful opposition (i.e. it could be the subject of a dismissal).  This would indicate that any prejudice is excessive as the particular should never be filed.  This is not suggested in the present case.

The second situation is if the information in the particular would be absolutely determinative of the opposition.  This would indicate that the detriment is not excessive (as it would not be in the interests of the applicant to defer a critical matter to the bar to sealing stage).  When the facts fall between these extremes, as in the present case, I do not think that it is a factor for or against excessive detriment.

b)  Factors that indicate that the detriment is not excessive

In previous decisions of Delegates of the Commissioner it has been accepted that it is an indicator that detriment is not excessive if extra particulars arise incidental to the preparation of the case, do not result in any protraction of the case, are included by way of amendment at the earliest reasonable opportunity, and do not substantially change the case (as against the specific facts) to be answered (see Diamond Scientific v CSL, supra, and Abundant Lawn Grass v Crancove (1993) AIPC 90-973).

The chronology of events related by Mr Harwood shows that the opponent became aware of a specific event alleged to constitute prior use incidentally to the finalisation of the Simpson and Rear declarations.  The new particular will not result in any protraction of the case (as evidence in support is complete) only if the applicant does not request a direction for further and better particulars.  Given the inadequacy of the new particular, there is a strong possibility that the applicant would request further and better particulars, and the amendment would produce a protraction of the case.  Consequently, I consider that the chronology does not indicate that the detriment is not excessive in the manner suggested in the Diamond Scientific and Abundant Lawn Grass decisions.

I consider that it is relevant that the new particular was included promptly after the facts were ascertained, and can be regarded as merely adding another instance of prior use (a matter already raised in the grounds of opposition).

c)  Balance of factors

I am concerned that the opponent required 10 months from the lodging of its notice of opposition to identify information that was known within the company.  The period is even more significant when it is noted that the matter was raised by Mr Simpson as early as April 1994 and the opponent did not investigate the claim (there was reliance on Mr Rear's memory).  However, once the information was identified the opponent acted promptly and properly.

The fact that the particular is inadequate for its purpose means that the applicant would immediately be put to the additional inconvenience of having to seek further and better particulars (assuming that the particular is even capable of rectification).

In my view the failure to investigate Mr Simpson's claim and the inadequate nature of the particular, make the prejudice to the applicant an undue prejudice.

Public interest

It was argued that the public interest was in favour of the opposition considering all available evidence, which would not be possible if the particulars are not amended.  I must now consider the relevance of the public interest to my decision making.

Regulation 5.9 requires me to answer the question whether I am reasonably satisfied that a person will be unduly prejudiced.  There is a difference between this consideration and that in, for instance, regulation 5.10(5)(c)(ii), where the question is whether the Commissioner "is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances" [emphasis added].  Regulation 5.10 was considered by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243, who confirmed the relevance of public interest considerations to the broad discretion of that regulation (see pages 247 to 248).

However, regulation 5.9 is not a broad discretion.  I can only refuse an amendment if I am satisfied of a single fact (i.e. the undue prejudice of a person), and to take into account matters not relevant to determining that fact would be improper.  I cannot see that the public interest is a consideration over and above the issue of undue prejudice.  This seems to me to be the unavoidable meaning of the words of regulation 5.9.

conclusion

I consider that the applicant would be unduly prejudiced by the amendment.  Consequently I refuse the request to amend the statement of grounds and particulars.

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 (see American National Can Company v W.R. Grace & Co.-Conn (1994) AIPC 91-063).

I have decided the request to amend in favour of the patent applicant, taking into account information from the opponent only presented at the hearing.  In this situation I consider it appropriate to award costs against the opponent.

I award costs against Pasdonnay Pty Ltd.

S.D.Barker

Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Collison & Co, Adelaide

Patent attorneys for the opponent   :  Wray & Associates, Perth