Snap-On Technologies Inc v Beissbarth GmbH

[2000] APO 52

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 677139 in the name of SNAP-ON TECHNOLOGIES, INC.

Title:          Eight Sensor Wheel Aligner

Action:          An application by BEISSBARTH GmbH under reg. 5.10(4) to serve further evidence and objection thereto by SNAP-ON TECHNOLOGIES, INC.

Decision:          Issued  .

AbstractThe opponent sought to adduce further evidence that had originally been filed as evidence in reply.  This action was described by the opponent as a precautionary measure, even though they believed the evidence to be strictly in reply.

It was found that it was not appropriate in the present proceedings to conclude whether the evidence initially tendered as evidence in reply should properly be considered as evidence in reply, and that this should be determined as part of the substantive opposition.  In light of that, and having regard to the criteria set out in Imperial Chemical Industries PLC v Mitsubishi Gas Chemical Co (1994) 29 IPR 285 for allowing further evidence to be adduced, it was held that the application to file further evidence should be granted.

The applicant was allowed one month from the date of issue of this decision to file evidence in response to the further evidence.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 677139 bySNAP-ON TECHNOLOGIES, INC. and an application by BEISSBARTH GmbH under reg. 5.10(4) to serve further evidence and objection thereto by SNAP-ON TECHNOLOGIES, INC.

BACKGROUND

Patent application 11482/95 in the name of Snap-on Technologies, Inc. (hereinafter referred to as "Snap-On") was filed on 31 January 1995. The application was advertised accepted on 10 April 1997 as 677139.

Beissbarth GmbH (hereinafter referred to as "Beissbarth") filed a notice of opposition to the grant of the patent on 10 July 1997, and a statement of grounds and particulars was served on 10 October 1997.

Beissbarth completed Service of evidence-in-support on 18 September 1998 following the granting of 3 extensions, all of which were unopposed.  Service of evidence-in-answer was completed by Snap-On on 5 July 1999 following the granting of 3 extensions that were all unopposed.

A statement of proposed amendments to the specification of 677139 filed by Snap-On on 5 July 1999 was withdrawn on 21 October 1999.

Beissbarth made an application seeking an extension of time to serve evidence in reply from 6 October 1999 to 6 January 2000.  The extension of time was granted, and part of the evidence in reply was served on 5 January 2000. On 20 January 2000 the applicant notified the Commissioner by correspondence that it objected to certain parts of the opponent’s evidence in reply as not being strictly in reply, and requested that the Commissioner issue a direction that the evidence which was not strictly in reply should be disregarded at the substantive hearing.  In a letter dated 27 January 2000, the delegate informed Snap-On they did not believe it was appropriate to make a determination on this issue outside of the substantive hearing, and that they were unable to issue a direction that certain evidence should be disregarded on this basis.

Applications by Beissbarth for further extensions of time to 6 February 2000 and subsequently to 6 March 2000 were not opposed, and the serving of evidence in reply was completed on 28 February 2000.  In a letter to the Patent Office dated 2 March 2000, Snap-On advised that the withdrawal of their objection to the request by the opponent for an extension to 6 March 2000 was not to be taken as an admission that the evidence filed by Beissbarth strictly constituted evidence-in-reply to the evidence-in-answer.

On 3 March 2000, the opponent filed an application to serve further evidence.  The Commissioner advised both parties that if the request was granted, he would make it a term of that granting that the opponent would have one month in which to serve the evidence and the applicant would have one month in which to serve evidence in response.  The applicant was invited to make representations regarding the Commissioner’s terms, and indicate whether or not it wished to be heard in relation to the application to serve further evidence.  The applicant advised on 19 April 2000 that it objected to the application for leave to serve further evidence and that it wished to be heard.

The matter came to a hearing in Canberra on 5 July 2000.  Snap-On was represented by Mr J Roger Green of Freehills, Carter, Smith & Beadle, Melbourne.  Beissbarth was represented by Mr Steven Krouzecky of Wray & Associates, Perth.  Both parties appeared by telephone.

THE APPLICATION FOR LEAVE TO SERVE FURTHER EVIDENCE

The reasons given in the application for making the application are as follows:

“We, BEISSBARTH GMBH, OF HANAUER STRASSE 101, D-80993, MUNICH, GERMANY, ask the Commissioner to allow the filing of further evidence in the opposition proceedings in respect of application 677139.

The nature of the further evidence and the grounds for making this application will be set forth in a declaration by Stephen George Krouzecky that will be filed shortly.”

The Krouzecky declaration was filed on 22 March 2000.  Paragraph two states that:

“2.     The Application for Further Evidence was filed:

·     partly in response to the objection made by the applicant in their correspondence to the Commissioner of Patents dated 20 January 2000 in respect of certain parts of the opponent's evidence in reply filed at that time;

·     partly in response to the letter to the Commissioner of Patents dated 2 March 2000; and

·     primarily as a precaution, in the event that certain parts of the opponent's evidence in reply are found not to constitute evidence in reply, but new evidence, where the delineation between the two at this time is moot.”

The further evidence comprises:

a)a statutory declaration by Georg Hopfenmuller dated 3 January 2000;

b)a further statutory declaration by Werner Alt dated 3 January 2000;

c)a further statutory declaration by Douglas Graham Myers dated 5 January 2000; and

d)a statutory declaration by Zoran Klimevski dated 25 February 2000.

APPLICABLE LAW

The Commissioner deals with applications for leave to serve further evidence under subregulations 5.10(4) and (5) of the Patent Regulations 1991 which state:

“(4)     The Commissioner may:

(a)       on the application of a party; and

(b)       on such reasonable terms (if any) as the Commissioner specifies;

permit the party to serve further evidence on the other party.

(5)The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:

(a)if he or she proposes to grant an application by a party – is reasonably satisfied that the other party has been notified of the application; and

(b)if he or she proposes to act on his or her own motion – ensures that the parties are notified of the proposed action; and

(c)in either case:

(i)gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and

(ii)is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances.”

I note that before granting a request to serve further evidence, I must be reasonably satisfied that the serving of further evidence is appropriate in all the circumstances.  Both parties directed my attention to Imperial Chemical Industries PLC v Mitsubishi Gas Chemical Co (1994) 29 IPR 285, which details several criteria to be considered in the exercise of the Commissioner’s discretion under subregulation 5.10(4). I agree with the position advocated by both parties that the following criteria provide a sound basis for determining whether allowing the application to serve further evidence is appropriate in all the circumstances:

1. Has the party seeking to serve further evidence shown that the evidence could not have been obtained with reasonable diligence at an earlier stage?

1. Is the evidence such that, if given, it would probably have an important influence on the result of the case?

1. Is the evidence such as is presumably to be believed, i.e. is it apparently credible, though not necessarily incontrovertible?

1. Would allowance of the application to serve further evidence cause unnecessary protraction of the opposition?

1. Would there be an injustice done to either party?

SUBMISSIONS

Both parties at the hearing provided written submissions.

I will refer to relevant submissions where appropriate in the body of my decision.

DECISION

The request for leave to serve further evidence is rather unusual in that it relates to evidence originally filed as evidence in reply, and not to evidence actually filed after completion of the usual evidentiary stages of an opposition.  Mr Krouzecky explained that this action was taken as a “precautionary measure”, even though the opponent believed the evidence to be strictly in reply. Accordingly, by virtue of their application to serve further evidence, Beissbarth have indicated that they wish this evidence to be considered as “further” evidence.

Mr Green argued that the statutory declarations initially served as evidence in reply should be treated as such, and for this reason alone the request for leave to serve further evidence should be refused.  Furthermore, it was asserted that the application should not be granted because the evidence is not “new” or “additional”.  I am not convinced by either argument,  and I note that the applicant’s position is diametrically opposed to their initial view that Beissbarth’s evidence was not strictly in reply (as per the letter of 20 January 2000 to the Commissioner, implying that the applicant considered this evidence to be “new”).

In my view, the applicant is having an “each-way bet”.  If I accept that the evidence is evidence in reply, then I am unlikely to grant leave to serve further evidence (ie. it is not further evidence).  However, the applicant has indicated that they may argue at the substantive hearing that the evidence is not strictly evidence in reply, and therefore should not be admitted into the proceedings (ie. it is further evidence).

I do not believe it is appropriate for the Commissioner to decide at this stage whether the evidence is properly considered as evidence in reply or otherwise.  In this situation I am guided by the views expressed in Emory University v Biochem Pharma Inc (1997) 39 IPR 603 and Nippon Steel Corporation v BHP Steel (JLA) Pty Ltd [1999] APO 44 (16 July 1999), which observed that generally it is impractical and inappropriate to come to a concluded view on the question of whether evidence in reply is in fact properly in reply outside the substantive hearing. Similarly, I do not consider that a debate about whether the evidence which was initially tendered as evidence in reply should properly be considered as evidence in reply is useful in determining whether I should grant leave to serve further evidence.

Moreover, I am concerned that long debates at the substantive hearing about whether evidence is admissible could detract from the substantive issues, and I believe it would be more administratively efficient if both parties come to the substantive opposition with all material.  From the decision in RGC v Wimmera [1999] APO 79 (16 December 1999) I note that the Commissioner has an inquisitorial role in an opposition. While she must allow the parties natural justice to reply to evidence, she is not bound by the rules of evidence. Reflective of this, the Commissioner even has the power under regulation 5.11 to consider documents in an opposition that are not part of the evidence. In my view, the key question to consider is “how relevant is this material?” rather than “is it strictly in reply?”.

In assessing the admissibility of further evidence, the first point I will consider relates to the significance of the evidence.  Mr Krouzecky submitted that the further evidence would assist with the question of whether the invention claimed is anticipated.  In A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213, in which the evidence in question had already been filed, Sackville, J at p.225-6 explained what he envisaged in his reference to the nature of the evidence and its significance:

"I do not mean to suggest that the evidence has to be scrutinised in the same way as would occur at a hearing on the merits.  But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on their merits."

A similar approach was by the Federal Court in GS Technology v The Commissioner of Patents, (1998) AIPC 91-387) which found that it was inappropriate to apply a test of substantive relevance and that what was required was that the documents sought were "on reasonable grounds, arguably relevant to the issues in the litigation.".

In the decision of a delegate of the Commissioner in ICI v Mitsubishi (supra), which was concerned with a request to serve further evidence where the evidence had already been filed, it was stated at 292 that: "The present action is not the substantive opposition hearing. To attempt to determine in any absolute sense the importance of the applicant's further evidence would be to pre-empt, without the benefit of full argument, the decision in the substantive opposition hearing."

As the evidence is before me I have also considered it directly although not in depth.  The statutory declarations by Klimevski, Myers and Alt concern material which prima facie is pertinent to the question of whether the claimed invention is novel and inventive.  I do accept the position put forward by Mr Krouzecky that the Klimevski declaration is particularly relevant, as it constitutes the only evidence in the opposition proceedings to date from a person at “arms-length” to either of the parties and who has worked in the industry in Australia.

In my view the state of the common general knowledge in Australia is clearly relevant to a balanced consideration of inventiveness and is therefore potentially critical to a hearing of the opposition on its merits.  Establishing the common general knowledge in opposition proceedings was discussed in Nalco Chemical Company v W.R. Grace and Co. -Conn. [1998] APO 65 (23 November 1998). I find the delegate's comments at page 10 particularly apposite:

"These statement are made in the context of arguments about inventive step which depend on evidence of what is the common general knowledge of an ordinary worker in the art in Australia.  Statements about common general knowledge made by one individual are very liable to a criticism that they are unrepresentative.  In this context statements from other independent declarants, ie. statements which corroborate those of another witness, as argued by the applicant, are likely to have an important bearing on the outcome of the case.  I do not believe it is necessary for me to go beyond this and to consider directly the applicant's other evidence.  Stephenson's statements go to the important issue of inventive step and are likely to have an important bearing on the outcome of the case whether they stand alone or whether they provide corroboration of the evidence on common general knowledge of another witness."

I believe that a similar argument applies in this instance, and that evidence as to the common general knowledge will have a significant impact on this case.
The declaration by Georg Hopfenmuller is primarily directed to confirming the publication of an operating manual identified by Werner Alt in his statutory declaration of 2 July 1998.  Even though the evidence from this declarant does not appear to be as significant as that of Klimevski, Myers and Alt, I consider the declaration lodged to provide proof of publication of the operating manual exhibited to the Alt declaration (WA-4) to also have significance.  I am aware that its publication in Australia might assist in establishing some fact or belief as common general knowledge but no argument has been put forward on this count.  More significant is the consideration that the Alt declaration and associated exhibits appear to be of major importance to the opposition.  I can certainly see merit in taking measures to avoid arguments on whether supporting documents are published and so the significance of the evidence of proof of publication is tied to the significance of the Alt declaration.  On balance, I am satisfied that the evidence of proof of publication is not superfluous and is significant.

Overall, I am satisfied that the further evidence is particularly pertinent to the issue of whether the invention claimed is anticipated.  I therefore consider it both significant and relevant.

The second criterion I will consider relates to the diligence of the party seeking to adduce the evidence.  As a preliminary point I note that it is not a prerequisite of a request for leave to serve further evidence that the evidence has already been served.  However in the present case the evidence has already been served.  Mr Krouzecky argued that, as this evidence was intended to be evidence in reply, by its very nature it could not have been served until after Snap-On had served its evidence in answer.  Mr Green submitted that the opponent’s lack of diligence in obtaining the statutory declarations from Hopfenmuller and Klimevski was a significant factor which should be taken into account in refusing the application to serve further evidence.

Mr Green relied on several paragraphs from the Krouzecky declaration to support his assertion that the opponent had not acted in the most expeditious fashion.  I was specifically referred to paragraphs 3, 4 and 8, the relevant parts of which are as follows:

“3.c) (i)   In light of the German patent attorney's experience referred to at 3. a) and my experience referred to at 3. b) both the German patent attorney and I concluded that we could not rely upon getting any evidence from BMW Germany or BMW Australia in time to make evidence in support.

(ii)   Consequently, neither the German patent attorney nor I pursued the matter further with these organisations during the evidence in support and evidence in answer stages.

4.a)   During the time that the opponent was collating evidence in reply, the German patent attorney for the opponent prompted the opponent to make contact with BMW Germany one more time.

b)During this attempt, the opponent was able to contact Mr Hopfenmuller who was happy to co-operate.

8.g)   In briefing Mr Klimevski in the matter in late December 1999, I was able to determine that he could actually adduce further critical evidence concerning the novelty and inventiveness of the Snap-On Invention as a result of certain repairs he undertook of a BMW-KDS system in October 1993.

h)This was the first time that any such evidence had come to light in Australia for the opponent.”

I do think that it is fair to say that the evidence could not have been obtained earlier.  It is apparent from the Krouzecky declaration that a considerable amount of effort has gone into identifying suitable witnesses and obtaining their evidence at an early stage.  Even after potential witnesses were identified, it did not necessarily follow that they would be willing to assist.  Clearly, the difficulty of securing the services of these individuals is a relevant consideration in the present matter, and in my opinion the very fact that Beissbarth is seeking to retain several witnesses from overseas could imply some difficulty in obtaining expert evidence.

I note from paragraph 4(a) of the Krouzecky declaration that Georg Hopfenmuller was identified as a potential declarant at some point after July 1999.  His statutory declaration was executed on 3 January 2000 and served on 6 January 2000.  If Mr Hopfenmuller was contacted in early July 1999, it would mean that at most, a period of six months had elapsed between this contact and the signing of his declaration.  I do not consider this period excessive, particularly when dealing with witnesses who are based overseas.  Similarly, the gathering of evidence from Mr Klimevski appears to have been prosecuted in a timely manner.  Mr Klimevski, who was identified as a possible declarant in “the later part of 1999” (paragraph 8(f) of the Krouzecky declaration), was briefed by Mr Krouzecky in late December 1999, and his declaration served on 28 February 2000.

The applicant also criticised the further evidence because, it asserted, Mr Krouzecky had conceded in his statutory declaration that the declarations of Hopfenmuller and Klimevski (neither of whom made declarations by way of evidence in support of the opposition) were more in the nature of evidence in support than evidence in reply.  I believe that it can be said of any evidence in reply that it “could” have been included in the evidence in support, and ultimately, it is for the opponent to decide the manner in which they wish to prosecute their case.  So long as the evidence in reply is confined to rebutting the evidence in answer, and is not merely evidence to strengthen the opponent’s own case, then the evidence will be properly in reply.

I also note that the opponent has filed its regulation 5.10(4) application about one week after service of the evidence in reply, and that this has occurred before any substantive hearing.  Overall, I am satisfied that Beissbarth have acted diligently and that there is no strong basis on which to question their diligence.

The third criterion concerns the credibility of the evidence, and I note that neither party made representations on this issue at the hearing.  On the basis of the nature of the evidence alone, I am inclined towards finding this criterion satisfied.

Criterion four relates to unnecessary protraction of the opposition.  I believe that there invariably must be a protraction of the opposition if the application was allowed.  I would be bound to provide the applicant with an opportunity to respond to this further evidence whereas, if the amendment was not allowed, the opposition could be set down for hearing in the near future.  The applicant has indicated that they are particular concerned about delay in the proceedings, but I note from their submissions that they have requested three months (instead of the usual one month) to respond to the further evidence, if the application was granted.  Such a request suggests to me that, at least at this time, the applicant is not particularly concerned with delay. 

I appreciate the opponent’s submission that there is merit in allowing the request and having all available evidence considered in the opposition.  I observe that further delay may arise in allowing time for Snap-On to serve evidence in response if I admit Beissbarth’s further material.  However, the applicant has been in possession of the evidence since 28 February 2000, and I believe by now they should have at least broadly considered how they might respond thereto.  The volume of material is not excessive, and I therefore consider the period of one month to file evidence in response as adequate.  In the time frame of an opposition, the period of one month does not seem to be all that lengthy especially if the delegate is able to reach a more appropriate decision because of the extra material before her or him.  Such a protraction would therefore seem not to be unnecessary.

I find that in the overall time frame of the case, there will be no unnecessary protraction of the case.

I now consider the fifth criterion of injustice to either party.  The interests of the applicant are clearly in not having the opposition proceedings unduly delay the hearing of the substantive opposition.  I am not aware of any other special circumstances that would specifically disadvantage Snap-On if the present application were granted.  Clearly the interests of Beissbarth are in obtaining leave in order that they may serve further evidence.  Irrespective of the potential protraction of proceedings I think that the interest of both parties and the public would lie in granting the application.  Having all the available evidence considered in the opposition will lead to a better outcome and reduce the likelihood of appeal proceedings being necessary.

On balance, I think the interests of the opponent and the public in having the opportunity to present relevant evidence that would allow the opposition to be decided on its merits outweigh the interests of the applicant in these circumstances.

Overall, my assessment of the relative weightings attributable to the above factors is in favour of granting the application under regulation 5.10(4) to serve further evidence.

CONCLUSION

I have found that, having regard to all of the circumstances of this matter, it is appropriate to grant the request by the opponent, Beissbarth GmbH, to file further evidence, and I grant this request.  Bearing in mind that the opponent has already served its further evidence and that the applicant has had an opportunity to acquaint themselves with the details of the further evidence, I allow the applicant, Snap-On Technologies, Inc. a period of one month from the date of issue of this decision in which to serve its evidence in response to that further evidence.

COSTS

Both parties, irrespective of whether the application was granted or denied, argued that costs should be awarded in their favour.  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.

In actions before the Commissioner, costs usually follow the event.  In this case I have found in favour of the opponent on all the issues raised.  Considering all the circumstances I award costs against the applicant.

R. W. J. Finzi

Delegate of the Commissioner of Patents

Patent attorneys for the applicant:                 Freehills Carter Smith & Beadle, Melbourne

Patent attorneys for the opponent:                 Wray & Associates, Perth