v Hatch Associates Pty Ltd
[2011] APO 64
•17 August 2011
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
WorleyParsons Services Pty Limited v Hatch Associates Pty Ltd [2011] APO 64
Patent Application: 2005250509
Title:Thick slurry heating system
Patent Applicant: Hatch Associates Pty Ltd
Opponent: WorleyParsons Services Pty Limited
Delegate: Firoozeh Rabbani
Decision Date: 17 August 2011
Hearing Date: 19 July 2011, in Canberra
Catchwords: PATENTS – request for extension of time under reg 5.10(2) to serve evidence in support – request for extension contained inadequate explanation of delay – instructing on legal matters relevant to proceedings may be difficult – ability to forecast deficiencies in the declaration of the first witness considered unreasonable - supplementary evidence on specified technical points viewed relevant to determination of the problem - interests of public & parties support an extension – extension allowed – no costs awarded
Representation: Patent applicant: Peter Caporn
Opponent:Roger Henning
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2005250509
Title:Thick slurry heating system
Patent Applicant: Hatch Associates Pty Ltd
Date of Decision: 17 August 2011
DECISION
Extension of time until 17 August 2011 allowed. No award of costs.
REASONS FOR DECISION
Background
Acceptance of patent application 2005250509, titled “Thick Slurry Heating system” in the name of Hatch Associates Pty Ltd was advertised on 17 June 2010. An opposition was made to the application by WorleyParsons Services Pty Limited on 17 September 2010, and the statement of grounds and particulars was served on 17 December 2010.
Evidence in support of the opposition was due on 17 March 2011, however, a first extension of time was requested to 17 June 2011 because technical staff were on leave during the Christmas break and/or on work-related travel. This first extension was granted with a proviso from the applicant that it would consider opposing future extensions.
A second extension of time was requested on 17 June 2011 till the 17 August 2011, a period of two months, which the applicant has opposed. This decision is therefore in relation to this second extension of time to serve evidence in support.
The opponent chose to provide written submissions in relation to their request for an extension of time. The applicant provided written submissions and appeared by telephone.
The Application for an Extension of Time
The reasons provided for the extension of time were:
“The opponent has made substantial progress in the preparation of evidence in support
The progress made to date includes retaining two potential expert witnesses. Extensive interviews have been conducted with one expert witness.
Both expert witnesses are located in different parts of the country from the attorneys acting for the opponent, which has caused some delays in preparing evidence.
The opponent expects that the evidence in support will be complete or substantially complete
by the end of the currently requested period of time.
The opponent believes that the evidence it has collated to date is highly relevant to the
grounds of opposition and will when served and filed, provide valuable information to the
Commissioner on the validity of the claims.
It is in the public interest that the Commissioner consider evidence on validity of the patent application before deciding whether to grant a patent on the application.”In the written submissions, opponent provided further reasons, in particular that during the course of preparing the evidence in support based on a single declaration it was realised that a supplementary declaration would be appropriate to enable the opposition to be determined on its merits.
Relevant Law
The time for serving Evidence in Support expires 3 months from the date of serving the Statement of Grounds and Particulars (regulation 5.8). This time can be extended under regulation 5.10(2):
(2)The Commissioner may:
(a)on the application of a party in the approved form; and
(b)on such reasonable terms (if any) as the Commissioner specifies:
extend the time within which the party may take a step prescribed in this Chapter, not being a step that is taken under regulation 5.3 or paragraph 5.4(1)(a).
This provision must be read in conjunction with regulation 5.10(5):
(5)The Commissioner must not give a direction under sub-regulation (1) or grant an application under sub-regulation (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 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, and extension of time or the serving of evidence is appropriate in all the circumstances.
Consequently, it is a prerequisite to any decision that the Commissioner must ensure that the other party has been notified, and that both parties have had the opportunity to make representations. In the present case all parties have been notified and given the opportunity to make representations.
An extension can only be granted if the Commissioner is reasonably satisfied that it is appropriate in all the circumstances. In exercising this discretion I am guided by the decisions of Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) AIPC 91-057; 28 IPR 243, Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) AIPC 91-330; 38 IPR 213 and Goldberg J in National Starch & Chemical Co v Commissioner of Patents (2001) AIPC 91-697, 50 IPR 398. The general principles that flow from these decisions are:
a)The power is discretionary: Regulation 5.10 confers a broad discretion, which cannot be reduced to imperative compliance with particular requirements. It is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at AIPC 38, 208; IPR 247-8, Goninan at AIPC 39,434; IPR 220)
b)Explanation of delay: The reasons why the evidence was not served earlier are a relevant consideration, but a satisfactory explanation is not a mandatory requirement (Ferocem at AIPC 38, 207-8; IPR 247). It is relevant to consider the disadvantage to the other party of delays in determining the opposition, and the effect of delays on the efficient and orderly administration of the Patents Office. (Ferocem at AIPC 38, 208; IPR 247, Goninan at AIPC 39, 436; IPR 222)
c)The public interest: The public interest in determining a serious opposition on its merits is a relevant consideration. (Goninan at AIPC 39, 435-6; IPR 222)
* In order to do this, it is necessary for the Commissioner to form a view as to the nature of the evidence that it is sought to adduce, and the significance of that evidence for the opposition proceedings. (Goninan at AIPC 39, 438; IPR 225-6)
* The significance of the evidence is assessed having regard to any relevant material available, not just the evidence itself. (National Starch at [33])
* The public interest is not protected merely because some evidence has already been served. (Goninan at AIPC 39, 438; IPR 225)
d)The interests of the party seeking the exercise of discretion: The interests of the party seeking the exercise of discretion are a relevant consideration. (Ferocem at AIPC 38, 208; IPR 247)
DISCUSSION
Explanation of the delay
As noted in the opponent’s application for an extension of time, the primary factor leading to the delay is the logistic separation of the attorneys and the expert witnesses. In their written submissions opponent further elaborated that the delay can be attributed in part to their realisation during the course of evidence preparation, that a supplementary declaration would be appropriate. It was not until they started interviewing the first witness and reviewing his declaration that they realised that specific technical points had not been addressed in relation to “computational aspects of slurry flows within a heat exchanger”.
The applicant contends that the explanation of the delay is inadequate and wanted full disclosure of details such as dates of meetings, draft of evidence to date, and dates of future meetings.
The applicant further argues that if the opponent was serious in their efforts that they would have started the process of procuring evidence directly after filing the notice of opposition some nine (9) months ago.
One may accept that the opponent was tardy in starting the evidentiary process, however, they were not in a position to predict the nature of the evidence provided by the first witness. Forecasting deficiencies in the declaration of the first witness would not be reasonable in this scenario. The primary expert has qualifications at the postgraduate level in metallurgy and thirty (30) years of experience in the alumina industry. His expertise is relevant to the issue of bauxite processing and fouling in heat exchangers in the Bayer process. Presumably, he was not able to predict slurry flows within a heat exchanger using computational means. It may be that the opponent believes that the specification under dispute is directed to a team of skilled people from related fields and is therefore now procuring evidence in a related area. Therefore this delay appears unavoidable.
Is it reasonable to consider that the lack of proximity of the witnesses to the attorneys can be a real obstacle to communication? To put this question into context, it is useful to refer to the requirements of expert evidence in general.
The expert evidence that is provided in the course of an opposition proceeding before a tribunal such as a hearing at the Patent Office, is not subject to the same rules of evidence as that required by the courts. Therefore, the principles as set out by Heydon JA in Makita(Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 85, and described as the “counsel of perfection” by Branson J in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 at 7, can only be used to provide useful guidance on the care with which expert evidence needs to be obtained.
The judgement of Minnesota Mining & Manufacturing Co v Tyco Electronics Pty Ltd, [2002] FCAFC 315 at 44-45, goes into some detail about evidentiary issues and the weight that certain evidence was to be given in view of the way in which the evidence came into existence.
From the aforementioned cases I conclude that courts place a high value on the way expert testimony is obtained, and even though the same rules do not apply to tribunals, they provide a constructive framework in which to consider the issues associated with instructing experts.
I believe in view of the complexity involved in instructing expert witnesses in relation to patent matters that it is reasonable to expect that at least initial meetings are conducted in person. To ask for an opinion in relation to the common general knowledge or obviousness would necessarily require that the expert be instructed as to these legal concepts in the context of patent law.
Furthermore, even if the attorney firm was in possession of state of the art communication devices allowing for virtual communication, the other parties would also have to be in possession of the same to enable its use. Therefore, while electronic communication has broken down some tyrannies of distance, it is not presumed that everyone is equipped with the same means to facilitate its use.
However, the delay that would ensue from a geographical separation would not be expected to protract the proceedings indefinitely. Once initial meetings have been conducted to effectively instruct the experts (and it is assumed that these meetings have already taken place), it would be less significant to argue a geographical separation as the reason for the delay. In particular this reason loses significance as the opponent has already had one extension of time.
Therefore, it is only in view of the disclosure by the opponent that they need to procure further evidence of significance to the opposition that I can appreciate that a reasonable explanation of the delay has been provided. I note that this explanation was only provided in the submissions and not included in the original request for an extension of time.
The public interest
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 served. Opponent has explained that the evidence it seeks to adduce describes the common general knowledge in regard to heating systems for dense slurries.
A first witness has been extensively interviewed and his declaration is nearly complete. His evidence will address the role of heat exchangers in the Bayer process, the types and configurations of heat exchangers that are used in such processes and the problems that need to be addressed when designing slurry heating systems. The opponent claims that the significance of these points is to establish the obviousness of the claimed invention.
Opponent further asserts that in the course of interviews and further review of the first expert’s declaration, that it has concluded that supplementary evidence would be appropriate. The supplementary evidence will address specific technical points including computational aspects of slurry flows within a heat exchanger.
The significance of the supplementary evidence can be assessed having regard to any relevant material available, not just the evidence itself. (National Starch at [33] supra) I therefore, make reference to the specification.
The specification is directed to the behaviour of thick bauxite slurry in fluid elements and the associated problems of plug flow along the tube wall. The specification identifies a number of important problems associated with conventional shell and tube heaters, and provides for an alternative heating system for indirect heating of thick slurries. In view of the problem to be solved, I consider that supplementary evidence addressing computational aspects of slurry flow in heat exchangers could be relevant and significant to matters in issue.
Moreover, as an opposition without evidence-in-support is one which, in practical terms, is rendered almost untenable (Kimberly-Clark Worldwide Inc v Carter Holt Harvey Tissue Australia Pty Ltd [1999] APO 83), it becomes more relevant for this evidence to be considered rather than to be excluded, if the opposition is to be dealt with on its merits.
Interests of the parties
The opponent has the onus of proof and clearly can not make its case without evidence in support. So their interest in allowing the extension of time is self evident.
The applicant has argued that the protraction of the opposition proceeding by this second request for an extension of time is disadvantageous to their interests. The interest of the applicant lies in an expeditious and efficient resolution of the opposition proceedings so as to determine the monopoly of the patent. Prima facie I agree with this view, however, I also note that post-grant litigation in the courts is still an option where the applicant can be faced with the very evidence that they would exclude at this stage by opposing the extension of time. Such a scenario would clearly be disadvantageous.
Therefore, at this stage in the opposition proceedings, the interests of the parties favour the grant of the extension.
CONCLUSION
The request for an extension of time to file evidence in support did not include relevant details necessary to prevent the current opposition. However, in their written submissions, opponent was able to indicate the nature and significance of the evidence. The public interest and the interest of the opponent are clearly in favour of granting the extension as the opposition can not proceed without evidence in support.
I note that the opponent has indicated that they expect that the declarations from the primary expert will be finalised in the near future, and that the supplementary evidence will be complete and ready for filing within the requested extension period. I urge them to adhere to this timetable.
Taking all relevant considerations into account I am reasonably satisfied that the extension of time is appropriate in all the circumstances. I therefore grant the extension of time to serve evidence in support until 17 August 2011.
COSTS
Only the applicant provided submissions in regards to costs and claimed an award of costs based on the lack of detail provided in the explanation for the delay. In proceedings such as these it is usually the case that costs follow the event. As the applicant has been unsuccessful this would normally mean that costs should be awarded against them.
However, I agree that the explanation of the delay provided in the request for an extension of time was not adequate and based on this the applicant was motivated to object to what they perceived was another frustration in the opposition proceedings. The opponent succeeded on the basis of information provide in their submissions. The original explanation for an extension was inadequate therefore, it is appropriate to depart from the normal award of costs. In view of the afore-mentioned reasons I think it is appropriate that each party bear it owns costs.
Therefore, I make no award of costs.
Firoozeh Rabbani
Delegate of the Commissioner of Patents
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