Viskase Corporation v W.R. Grace & Co.-Conn

[1995] APO 29

official notice

decision of a deputy commissioner of patents

Application        :    No. 639718 in the name of VISKASE CORPORATION

Title:    Thermoplastic Film incorporating High Melt Index Resins

Action:    Opposition thereto by W.R. GRACE & CO.-CONN. and Objection to the grant of a Request for Directions under Regulation 5.10(1)(a).

Decision:    Issued            .

Abstract:    Directions not appropriate.  Production of documents request to establish previous extension of time unjustified.  No order for production.

patents act 1990

decision of a deputy commissioner of patents

Re:Patent Application No. 639718 by VISKASE CORPORATION, Opposition thereto by W.R. GRACE & CO.-CONN., and Objection to the Grant of a Request for Directions under Regulation 5.10(1)(a).

background

Application No. 639718 by Viskase Corporation (Viskase) was advertised accepted on 5 August 1993.  On 5 November 1993 W.R. Grace & Co.-Conn. (Grace) filed a notice of opposition to the grant of a patent.  A statement of grounds and particulars was filed, and a copy served on Viskase, on 7 February 1994.  This statement was subsequently amended under Regulation 5.9, the amendments being allowed on 24 January 1995.

The serving of evidence-in-support was completed on 7 December 1994 following the granting of three unopposed extensions of time.  On 3 January 1995 Viskase filed a request for directions under Regulation 5.10(1)(a).  On 20 January 1995 Grace gave notice that they objected to the grant of the request, and advised that they wished to be heard if the Commissioner intended to make the directions sought.  Viskase filed written representations to the Commissioner on the matter on 23 January 1995, and confirmed that they wished to be heard in respect of their direction request.

The matter was heard in Melbourne on 21 April 1995.  At the hearing Viskase was represented by Ms Lynn Stafford, patent attorney of Watermark Patent & Trademark Attorneys, and Grace was represented by Ms Elizabeth Eadie, patent attorney of Davies Collison Cave.

the request

Viskase requested the Commissioner to direct the Opponent, under regulation 5.10(1)(a) to:

"(i)supply details of the comparative tests that according to the extension of time application made on 8th August, 1994 were to be included in the evidence-in-support and in relation to which we assume the extension of time was granted; and

(ii)provide an explanation as to why the results were not included in the evidence-in support bearing in mind the further time requested in the 8th August, 1994 request was to conduct this step."

At the hearing the attorney for Viskase sought an additional direction that certain evidence-in-support (that is, the declaration by M.R. Havens, the second Elizabeth Eadie declaration, the David George Hewitt declaration and the declaration by Larry Eugene Freyer and their respective exhibits) should be disregarded in the Opposition procedure on the basis that it had been served out of time.

The attorney for Viskase also indicated at the hearing that they were seeking to rely on section 210 in relation to the exercise of the Commissioner's powers to require the production of documents.

extension of time application

On 8 August 1994 Grace filed an application for extension of time for serving evidence-in-support.  This application was unopposed and on 12 September 1994 Grace was advised that the extension of time from 7 August 1994 to 7 November 1994 had been granted.

The circumstances in which and the grounds upon which the application for extension were made were stated in the application as follows:

"Initial opinions have been received from the opponent's two United States experts and the opponent's Australian expert.  The opinions have been reviewed and preparation of declarations which are to form evidence-in-support has been commenced.  However upon review of the evidence collected to date and discussions with the United States experts, it has been found necessary to conduct some comparative tests.

Accordingly, one of the United States experts is currently conducting comparative tests on prior art materials described in some of the patents and publications which have been served in the evidence-in-support.  Many of the tests have been completed however, not all the tests have been completed.  It has not yet been possible to evaluate the results and provide analysis for inclusion in the evidence-in-support.

Therefore, an extension of time is necessary to complete and evaluate the comparative tests, provide analysis for inclusion in the evidence-in-support, complete the US experts' declarations, to allow the opponent's Australian expert to review the test results and complete the Australian expert's declaration."

submissions

At the commencement of the hearing the attorney for Grace tendered a copy of a statutory declaration executed by L. George Legg, a patent attorney employed by Grace and who is responsible for the conduct of the opposition on their behalf.  Ms Eadie indicated that the original of this declaration would be filed as soon as it has been received from the USA.  She also indicated that she would be relying on matter contained in this declaration in her submissions.  Consequently I allowed time at the start of the hearing for the attorney for Viskase to consider this declaration.  Ms Stafford indicated that, while the declaration in some ways addressed the request for directions, it did not provide all the reasons requested by Viskase.

Ms Stafford's submissions on behalf of Viskase may be summarised as follows:

.The sole reason for requiring the extension of time within which to serve evidence-in-support was for Grace to conduct comparative tests, evaluate the results and provide analysis for inclusion in the evidence.

.The evidence-in-support does not include or make reference to the comparative tests.

.The direction as requested clearly falls within the scope of the term "direction" as discussed in Mobay Corporation v The Dow Chemical Company 24 IPR 379, (1992) AIPC 90-895.

.The request is consistent with the Patents Act and Regulations, in particular sub-section 210(c) and regulation 22.14.

.In the absence of test results in the evidence-in-support, prima facie the extra time granted by the Commissioner was not used for the reasons set out in the application for extension of time and furthermore for the reasons upon which that extension was granted.  Therefore the direction request clearly relates to the conduct of the proceedings, and in particular to the apparent lack of a full and frank disclosure of all the facts of the situation at the time the application for the extension of time was lodged.

.Concerning the production of documents, Viskase are requesting the production of the comparative tests conducted by Grace as specified in their extension of time application of 8 August 1994.  This request clearly states with reasonable particularity, as required in Paracel Holdings Pty. Ltd. v McIlwraith McEachern Operation Ltd. (1992) AIPC 90-870,the specific documents to be produced.

.The exercise of the Commissioner's power to grant the request is appropriate in all the circumstances.

.In the absence of the comparative results in the evidence served in the extended period, this evidence has been served out of time.  Therefore the Commissioner should give the additional direction that this evidence be disregarded in the opposition procedure.

In response Ms Eadie made submissions on behalf of Grace, which I summarise as follows:

.The Legg declaration deposes to the fact that comparative tests were conducted during the extension period.  It also outlines that the tests were inconclusive and not completed due to test equipment failure.

.The issue of whether the extension was justified is an issue between the Commissioner and Grace.  The Commissioner could have sought further disclosure of the reasons for the extension if the Commissioner was not satisfied the extension was justified.  Furthermore the Commissioner could have imposed terms on the extension of time but did not do so.

.If Viskase were concerned that the reasons for the extension were unjustified, they had the opportunity to oppose the grant of the extension.

.The extension of time sought was to conduct comparative tests.  The Legg declaration establishes that the reasons for the extension were bona fide.  What tests were conducted is not relevant.

.The role of directions, as set down in E I DuPont de Nemours and Co v Commissioner of Patents and Others (1987) 12 IPR 536, is to find out what the issues between the parties are, what the extent of the evidence will be and what steps may be taken to confine or compress evidence in a way best calculated to bring litigation to an end at the earliest possible moment. The role of directions is not, as in the present case, to seek retrospectively that an extension is justified.

.Following the decision in Mobay v Dow (supra), the power of the Commissioner to make directions relates purely to managing and directing the cases before the Office.  The directions requested by Viskase are therefore inappropriate.

.The directions sought are inconsistent with the Patents Act or Regulations since there is no mechanism to declare an extension of time null and void or that evidence has not been properly lodged.

.The Legg declaration indicates that the comparative tests were conducted for the sole purpose of use in the opposition proceedings and for the purpose of obtaining legal advice from Davies Collison Cave in relation to opposition proceedings.  Any documents relating to the test results were not brought into existence for any other reason.  Therefore the sole purpose test set out in Grant v Downs (1976) CLR 674 is fulfilled and any documents evidencing the test results are privileged.

decision

The Commissioner's power to give directions is provided by regulation 5.10(1), the relevant portion of which reads:

"The Commissioner may, on his or her own motion or on application of a party:

(a) give a direction that is not inconsistent with     the Act or these Regulations for the conduct of           proceedings to which this chapter applies;..."

This power is qualified in regulation 5.10(5) so that the Commissioner must not give a direction unless the Commissioner "is reasonably satisfied that a direction.....is appropriate in all the circumstances."

Viskase requests the Commissioner to exercise this power to direct Grace to supply details of comparative tests referred to in an extension of time application, and to explain why details of the test results were not included in the evidence-in-support.  Furthermore they seek to rely on sub-section 210(c) to require the production of documents relating to those tests.

It seems to me that the sole purpose for Viskase's request for directions is to try to establish whether the request for extension of time to serve evidence-in-support was justified.  I do not believe that directions are appropriate in these circumstances.  If the extension was found subsequently to be unjustified, there is no mechanism in the legislation to retrospectively declare the extension null and void.  I believe that if an extension of time is subsequently found to be unjustified, this is an issue for consideration at the substantive opposition stage and would be determined by the weight accorded to the evidence served in the extended period and by the nature of any discretion exercised by the Commissioner.  Therefore I do not believe that a direction to supply details of the comparative tests is appropriate.  It follows that I do not consider that I should make any order for the production of documents relating to those tests.

In the present case the Legg declaration clearly indicates in paragraphs 3 and 5 that tests were conducted and Mr Legg deposes at the end of paragraph 4:

"The three month extension which was granted was used for the purposes set out in the extension request."

Furthermore, in paragraphs 6 and 7, Mr Legg indicates he has been advised the tests "were inconclusive and not completed due to test equipment failure" and it was decided not to include the tests in the evidence-in-support.  Therefore it seems prima facie that the application for extension of time was justified and that the Legg declaration provides the required explanation as requested by Viskase.  It follows that the additional direction that the evidence-in-support served during the extended period be disregarded is not appropriate.

costs

Both parties agreed that costs should follow the event.  However Ms Stafford submitted that in considering costs I should take into account the fact that the Legg declaration was presented at a late stage in the proceedings.  I have found that the directions requested are not appropriate.  I considered the Legg declaration only in relation to the additional direction concerning the disregarding of the evidence.  As Ms Eadie pointed out, notice of the request for this direction was given only at the hearing.  Therefore I believe costs should follow the event and so I award costs against Viskase.

conclusion

I have found that the directions requested are not appropriate in all the circumstances.  Therefore I refuse to issue the directions requested by Viskase.  I also refuse to order the production of the documents requested by Viskase.

Janet Werner
Acting Deputy Commissioner of Patents

Patent attorneys for the applicant  :  Watermark Patent & Trade Mark Attorneys, Melbourne

Patent attorneys for the opponent   :  Davies Collison Cave, Melbourne