WA Security Products Pty v Capral Aluminium Limited

OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Patent Application : No. 754829 in the name of WA Security Products Pty Ltd

Title : A Method of and System for Operating Gaming Machines
Action: An application under section 223 for an extension of time to file a notice of opposition by Capal Aluminium Limited

Decision : Issued.
Abstract
On balance, the Commissioner was satisfied that the opponent had provided instructions to their agent to oppose the application but that their agent failed to diary the opposition deadline in either of his usual computer monitoring systems. As a consequence of that error, the agent missed the deadlines and failed to file the notice of opposition by the due date of 28 February 2003.
The opponent's error was not of the type that did not deserve the Commissioner's discretion to grant the indulgence and the public interest lay in allowing the opposition to be filed so that the Commissioner could consider the validity of the application in an inter partes forum. Given this interest, the discretion was weighed in favour of allowing the extension and an extension of time was granted to 12 March 2003.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 754829 in the name of WA Security Products Pty Ltd and application under section 223 for an extension of time to file a notice of opposition by Capral Aluminium Limited.

BACKGROUND

Patent Application 754829 (91328/01) was filed in the name of WA Security Products Pty Ltd (WA Security) on 13 November 2001 as a divisional application of 742820 (37825/00). The parent application was then accepted on 10 January 2002 and a notice of opposition was filed by Capral Aluminium Limited (Capral) on 10 April 2002.
The divisional application was then advertised accepted on 28 November 2002. The prescribed period for filing a notice of opposition to the grant of a patent under regulation 5.3(1) was therefore 28 February 2003. Twelve days outside this period, on 12 March 2003, Capral filed a notice of opposition to the divisional application. The notice of opposition was accompanied by a request under section 223 to extend the time to file a notice of opposition. On 20 March 2003, Capral provide a statutory declaration in support of their section 223 application.
There was no requirement for advertisement of the section 223 request because the period requested under section 223 was less than 3 months and the request did not relate to a prescribed relevant act in circumstances prescribed in sections 223(4). However the patent applicant was given the opportunity to be heard on the section 223 matter in accordance with sub-regulation 22.22(1), because they could be adversely affected by a decision under section 223. The patent applicant advised that they objected to the section 223 extension of time and the matter was set for hearing in Canberra on 23 April 2003.
Mr R.J.L. McCormack of counsel represented WA Security (the patent applicant) instructed by Mr E.J. Harwood, patent attorney and his assistant Mr M.R. Finn both of Wray & Associates, Perth (Bentley Office). The opponent did not appear but Mr Michael Angliss patent attorney of Cullen & Co, Brisbane sent written submissions in support of their section 223 request for an extension of time.
APPLICATION FOR EXTENSION OF TIME
Evidence in support of the extension of time was filed on 20 March 2003. The evidence consisted of a statutory declaration made by Mr Michael Angliss, patent attorney for the opponent's agent Cullen & Co.
In that declaration Mr Angliss stated that he received his instructions from Philip Vanderwoerd and as a result of a number of discussions with him during December 2002 and January 2003, he understood that Capral required a notice of opposition to be filed in respect of the current application. He already had a watching brief on this application (a print out from this watch was provided as evidence) and his normal practice after receiving instructions to file a notice of opposition by the due deadline of 28 February 2003 would have been to enter the deadline on "InProma" and to diary the date in "Outlook Task Manager".
In this case however, it appeared he had failed to diary the deadline in either system. He stated that he did not notice this until 10 March 2003 while he was preparing an application for an extension of time to serve evidence in support in respect of the parent application. On 12 March 2003, he prepared and filed a notice of opposition and an extension of time application under section 223. Mr Angliss further stated that he understood his client, Capral always intended to file a notice of opposition to the divisional application of the already opposed Australian patent application 742820.
NOTICE OF PRODUCTION
On 14 April 2003, WA Security requested the Commissioner issue a notice for the production of certain documents relevant to the section 223 request to Capral pursuant to section 210(c) of the Patents Act [1990]. There were 2 categories of documents requested:
1. The letter(s) and or other document(s) containing or confirming instructions by Capral Aluminium Ltd to file a notice of opposition in respect of patent application 754829.
2. A copy of the entry appearing in your Inproma database and appearing in your Outlook Task Manager, as referred to in Mr Angliss's declaration (paragraph 7), including evidence relating to the date of creation.
Capral responded to that notice on 22 April 2003. For item 1, they provided two "file notes" of discussions between Mr Angliss and Philip Vanderwoerd during December 2002 and January 2003 which Mr Angliss had referred to in his initial declaration. These file notes were redacted to exclude certain subject matter not relevant to the current section 223 request and which Capral argued was legally privileged (relying on Genentech Inc v Human Genome Sciences Inc [2000] APO 22). Capral also advised there were no documents in relation to item 2 because the deadline was not diarised and as a result, no documents of the type identified as item 2 exist.
RELEVANT LAW
Section 223(2) reads as follows:
Where, because of:
an error or omission by the person concerned or by his or her agent or attorney; or
circumstances beyond the control of the person concerned;
a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.
Section 223(11) defines a "relevant act" for the purposes of section 223 as:
an action (other than a prescribed action) in relation to a patent, a patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications.
The definition of an error or omission was expressed by Jenkinson J in Kimberly-Clark Ltd v Commissioner of Patents(No 3) 13 IPR 569-584 where the Federal Court upheld a decision by the Commissioner's Delegate to refuse an extension of time to lodge a notice of opposition. Jenkinson J defined an error or omission in the following terms in the context of section 160 of the Patents Act 1952. Section 223 is the equivalent of the previous section 160.
"It is in my opinion difficult to suppose that only the inadvertence and accidental steps, and not errors resulting from faulty reflection, of the former class of persons were intended by the draftsman to be within s 160(1). Further, the word 'error' is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgement by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips."
Jenkinson J rejected the argument that section 160(2)(a) excluded errors or omissions that were the products of deliberation. Consequently, the concept of what constitutes an error should be interpreted broadly and includes an error of judgement. However, Jenkinson J also made the following comments at page 580:
"By no means every judgement by the "person concerned" or by "his agent or attorney" which can be shown to have been mistaken will answer the description "error or omission" in the ordinary meaning of those words, which in their context carry, in my opinion, a connotation of obviousness in error."
In addition, at page 583 Jenkinson J found that, in order to make out a proper case justifying an extension:
"………an applicant would in my opinion have to go beyond a disclosure of the processes by which an agent's errors came to be committed, and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct."
There are a number of relevant decisions dealing with applications for extension of time to file a notice of opposition.
In Re Weir Pumps Ltd v Commissioner of Patents and Stork Pompen BV (1988) 13 IPR 163, the AAT upheld a decision of the Commissioner to refuse an extension of time to lodge a notice of opposition. This was dealt with under the relevant provisions in the 1952 Patents Act, section 160(2). It was found that the opponent was completely unaware of the patent application in question as it had a "deliberate policy not to maintain a watch for pending patent applications or their acceptance".
In Danby Pty Ltd v Commissioner of Patents and Another (1988) 12 IPR 151, the Federal Court upheld the Delegate's decision to allow an extension of time for lodging a notice of opposition. Despite rather "thin" evidence, the Court was satisfied that instructions to oppose when acceptance took place were firmly given but that they were not carried out due to an error, rather than the opponent having lost interest in opposing.
In Henkel Kommanditgesellschaft Auf Aktien v Fina Research SA (1993) 27 IPR 289 the Commissioner's Delegate refused an extension of time to file a notice of opposition. The applicant for the extension of time was aware of the patent application in question but was not aware that the application had proceeded to acceptance, due to their watch being conducted in an inappropriate database. The Delegate was satisfied that this prima facie constituted an error or omission. However, he found that the evidence provided was inadequate as to the chain of causation and refused an extension of time for filing a notice of opposition.
All of these cases focus on the need for the opponent to establish that they intended to file a notice of opposition and that they failed to do so in time because of an error or omission on their part, or on the part of their agents. They also place the onus on the opponent to provide a prompt, frank, comprehensive and clear disclosure of all of the facts relevant to the case in order to establish their clear intention to oppose the application and to understand why they failed to do so.
DISCUSSION
WA Security had 3 broad objections to the section 223 application, submitting that:
1.Capral did not establish that they had a clear intention to file a notice of opposition within the prescribed time limits.
2.Capral did not provide a full and frank disclosure of the circumstances of the error that led to the failure to file a notice of opposition within the prescribed time limits (as per Kimberly-Clark Ltd v Commissioner of Patents(No 3) 13 IPR 569-584).
3.In any case, Capral's error was not of the type that deserved the Commissioner's discretion to grant the indulgence " (as per the AAT decision in GS Technology Pty Ltd v Commissioner of Patents & Anor issued in respect of Q2001/257 on 17 April 2003).
I will deal with these objections separately.
Capral did not establish that they had a clear intention to file a notice of opposition within the prescribed time limits.
WA Security noted that the only contemporaneous material supporting Capral's intention to file an opposition were the brief and somewhat cryptic file notes dated 21 January 2003 from a telephone discussion between Michael Angliss of Cullen & Co and Philip Vanderwoerd of Capral. These file notes were filed in response to the notice to produce. In their accompanying letter of 22 April 2003, Capral provided an explanation of the file note. They stated that the file note was in Michael Angliss's handwriting and that the "M" referred to in the file note was Michael Angliss. The words "2 Divs" referred to the 2 divisional applications of the parent application in opposition. The words "Accepted. End Feb 03" referred to the current application and its deadline to file a notice of opposition. The "P" on the file note was Philip Vanderwoerd who is recorded as stating "will oppose". Having the benefit of this explanation, the file notes indicate that Philip Vanderwoerd provided instructions to Michael Angliss to file a notice of opposition on the current application by the due date of 28 February 2003.
WA Security suggested that it was not clear that file notes provided by Capral of the relevant telephone discussions contained operative instructions because Capral never established that Philip Vanderwoerd was authorised by Capral to provide instructions to Mr Angliss. Further, even if there were operative instructions provided in the telephone conversations, it was not clear whether this was conditional on anything (eg receiving written instructions).
I am not persuaded by these arguments. Mr Angliss's declaration of 20 March 2003 specifically states in paragraph 5 that he obtains his instructions from Capral from Philip Vanderwoerd. This indicates that Philip Vandervoerd was responsible for Capral's opposition portfolio and there is no reason to question whether he was authorised by his company for that purpose. In any case, the file note, while brief, clearly indicated that Mr Angliss had understood he had specific instructions from the applicant to oppose. If there was a condition on this (for example, to wait on written instructions or to have it confirmed by an "authorised officer") this would have been critical to Mr Angliss's follow up actions from the telephone conversation and I find it difficult to accept that Mr Angliss would have omitted a file note to that effect if such a condition existed. Accordingly I accept that Mr Angliss had operative instructions to file a notice of opposition.
WA Security argued that Capral's response to the notice of production indicated that there may have been other written instructions from the applicant indicating their intention to oppose the application but which the opponent was deliberately withholding despite the notice of production. They referred to Mr Angliss's letter of 22 April 2003 in response to the Commissioner's notice of production, in which Mr Angliss states at paragraph 2:
"With respect to the documents identified under item 1 of the Notice, we submit that there is a lawful excuse not to produce the documents in their entirety.
They argued that the opponent's failure to produce these documents could only mean that they are adverse to the opponent's case and the Commissioner should therefore draw an adverse inference from this lack of disclosure.
I do not believe that there are likely to be any other documents as the applicant has argued. Reading Mr Angliss's comments in context, it is clear that he is referring to redacting parts of the documents provided because of privilege, not that other documents existed. Mr Angliss's statutory declaration refers to his "understanding" from Capral that they required a notice of opposition to be filed. This was based on telephone discussions (see paragraph 5) rather than written instructions and is consistent with there not being documents other than file notes from phone discussions that Mr Angliss produced.
WA Security also argued that even if Capral had provided instructions on 21 January 2003, they could have changed their mind again before 28 February 2003 when the notice of opposition was due. They referred to another file note of 8 December 2002 where the opponent had stated that they would "probably oppose" and suggested that this meant some level of ambivalence by the opponent in regard to whether to oppose the current application.
WA Security also noted that although error was noticed on Monday, 10 March 2003 when the agent was preparing an application for extension of time to file evidence in support for the parent application was being prepared, the agent did not file a notice of opposition until Wednesday 12 March 2003. WA Security noted that this delay was unnecessary given the simplicity of the task and is consistent with Capral having not established a clear intention to file a notice of opposition until 12 March 2003 (which is after the relevant date).
I am not convinced by either argument. There is no dispute that the opponent had a strong interest in the current patent application. At the time a notice of opposition was due on the current application, Capral had a watching brief on the application (and provided evidence of such) and had already filed a notice of opposition on its parent. WA Security argued that the current application had different subject matter than its parent and Capral may not have had the same level of interest in both applications. However, I am not convinced the subject matter is so different that a party having a commercial interest in the parent application would not also have a strong interest in the divisional. In such circumstances, the phrase "probably oppose" in the file note of 8 December 2002 indicates the opponent's likely intention to oppose at the relevant date rather than ambivalence as argued by the applicant.
With regard to the delay of two working days to file a notice of opposition after realising the error, I do not see this as an unusual delay. While the clerical act of filing a notice of opposition is very straight forward as the applicant has argued, it seems to me that an agent might still want to investigate the circumstances of the error or to consult with his client about the error before filing a notice of opposition and that this might involve a short delay. Mr Angliss clearly states in his declaration (paragraph 9) that at no time was there any intention by him or his client not to pursue an opposition to the current patent application. This indicates that the opponent had not changed their mind between the telephone conversation of 21 January 2003 (when they asked Mr Angliss to file a notice of opposition) and 12 March 2003 (when they filed a notice of opposition).
In my view the opponent had established a prima facie case that the opponent had an intention to oppose at the relevant date. Mr Angliss's declaration of 20 March 2003 states at paragraph 5 that he understood from telephone conversations with Philip Vanderwoerd of Capral that Capral required a notice of opposition to be filed in respect of the current application. The file notes provided of those conversations support this statement and I have no reason to doubt its veracity especially given the clear interest that the opponent was able to demonstrate in the current application.
WA Security argued that the burden of proof has to be on the party seeking the indulgence particularly as they have access to all the material available surrounding the error. According to the WA Security, Capral should not be able to claim privilege and expect the Commissioner to draw beneficial inferences from their unsupported statements to grant an extension. In fact, the Commissioner should be able to draw adverse inferences where material is ready to hand and not produced.

I note that the standard of proof to apply in the current case is the civil standard of a "balance of probabilities". In other words, the evidence as a whole has to show whether it was more likely than not that the opponent had a clear intention to oppose the patent application on the relevant date (see Dunlop Holdings Limited's Application [1979] RPC 523 and Aoki's Application [1987] RPC 133).
The weight of evidence that the opponent provided before the hearing supports their contention that they had a clear intention to oppose at the relevant date. I accept that there was probably other material that the opponent could have filed to support their case - such as a statutory declaration from the opponent company confirming that they intended to file a notice of opposition. However, while a declaration from the opponent company itself might have added to the opponent's case, it would be no more than corroborative evidence and of limited value given the material already on file. I am therefore not prepared to draw adverse inferences about its absence.
Capral did not provide a full and frank disclosure of the circumstances of the error that led to the failure to file a notice of opposition within the prescribed time limits.
The opponent did not meet the deadline for filing a notice of opposition because the deadline did not appear on either of the two diary systems used by the agent (InProma and Outlook Task manager). The opponent's agent (Mr Angliss) stated that he could not determine why this had occurred but the most likely explanation was that he failed to enter them after receiving instructions from his client on 21 January 2002. In paragraph 7 of his declaration, Mr Angliss stated that it was standard practice for him to enter deadlines in the two diary systems. His failure to follow the practice for some indeterminable reason was an error on his part which caused the failure to file the opposition on time.
Although there was not a lot of detail provided by the opponent about how the error occurred, I am satisfied that the information is as much as the opponent can reasonably provide. The absence of a standard diary entry is the type of mistake which does not leave an obvious trail. I agree with the opponent that the failure of the deadline to appear in either of the two diary systems suggests an error on the part of the agent in recording the information. His inability to recall how this occurred is consistent with a honest, albeit careless, mistake. There is sufficient information for me to understand the circumstances of the error and I conclude that there was a full and frank disclosure of the circumstances of this error [as per Kimberly-Clark Ltd v Commissioner of Patents (supra)].
WA Security argued that:
1.   The opponent failed to provide key pieces of information to establish their case of a clear intention to file, such as declaratory evidence from the opponent confirming that they intended to oppose and establishing Philip Vandervorerde's authority to provide instructions on behalf of the opponent.
2.   In paragraph 5 of Mr Angliss's declaration dated 20 March 2003, he states that he "understood" Capral required a notice of opposition to be filed. However, there was no explanation of how Mr Angliss came to this understanding.
3.   In paragraph 9 of Mr Angliss's declaration of 20 March 2003, he states that Capral "always intended to file a notice of opposition". However, this is inconsistent with the file notes provided in response to a notice of production where one file note suggests that Capral will only "probably" oppose. The failure to explain this apparent conflict is also evidence of a lack of "full and frank disclosure".
I am not convinced any of these arguments. With respect to point 1, as noted above, this extra evidence would have been mere corroboration and in the absence of a credible challenge to the original evidence, I do not see that this material is required to establish the opponent's case. The evidence is not directly relevant to the error and does not affect the understanding how the error occurred. I find its absence does not indicate a lack of "full and frank disclosure".
With respect to point 2, I do not see the reasons of how Mr Angliss came to understand his instructions to file a notice of opposition as being necessary for a "full and frank disclosure" even assuming Mr Angliss could recall that level of detail from a conversation in January. The information is not relevant to the actual error of his failing to diary the deadline and is not needed to establish that he had instructions to file a notice of opposition.
With respect to point 3, I do not believe there is an inconsistency as the applicant has alleged. As noted above, I view the words "probably oppose" in the file note as meaning "likely to oppose" suggesting that the opponent was always intending to file a notice of opposition as the paragraph states.
As a consequence, I find that the opponent has provided a full and frank disclosure.
Capral's error was not of the type that deserved the Commissioner's discretion to grant the indulgence.
WA Security argued that even if the Commissioner found that there to be an error, it is not the type of error which enlivens section 223. The applicant argued that Mr Angliss's failure to use diary systems twice was "unreasonable, not without moral fault and therefore not deserving of the granting of the indulgence" (as per the AAT decision in GS Technology Pty Ltd v Commissioner of Patents & Anor issued in respect of Q2001/257 on 17 April 2003 by Deputy President Don Muller - paragraph 19). This is particularly so as Capral chose not to attend the hearing to defend a challenge to their section 223 application.
I note that the error to enliven section 223 appears to have been of Mr Angliss's volition and his decision therefore not to defend a challenge to the extension of time application is surprising. However this is, of itself, insufficient basis to refuse the extension of time in absence of any credible challenge to the evidence.
With regard to the original error in failing to enter the opposition date in his monitoring systems, I agree the error is prima facie careless but it is not unreasonable. In contrast to the GS Technology case, Mr Angliss was well aware of deadlines and had processes in place to ensure that these were met. His standard practice was to enter the deadlines into two separate systems which presumably provided him with back up should one or other of the systems failed. Having an elaborate checking system, and then failing to enter the deadlines into either system suggests an aberration compared with what was otherwise an exercise of reasonable care. All this is consistent with an honest, albeit careless, mistake. In my view, the mistake is not such that it was undeserving of the granting of the indulgence.
DECISION
On balance, I am satisfied that there was an error by the opponent's agent which caused the opponent to fail to file the notice of opposition on time. While the opponent's agent might be criticised for not appearing at the hearing, the opponent could not have been added much more to their case at hearing. In my view, the opponent gave a prima facie credible explanation for their error and provided material which supported their position. I am also satisfied that the opponent has made a full and frank disclosure of the error to allow the Commissioner to exercise her discretion. I therefore grant an extension of time to 12 March 2003 for the opponent to file a notice of opposition.
I note that the provisions of regulation 5.4 mean that the opponent must serve on the applicant a copy of the statement that sets out the grounds of opposition and the particulars relating to each ground within three months of filing the notice of opposition. This time limit is dependent on when the notice of opposition was filed and not when the section 223 application was granted. Therefore the statement of grounds and particulars was due on 12 June 2003.
COSTS
The power to award costs is based on section 210 and regulation 22.8. The normal practice is that costs should follow the event. However, in this case, while the opponent was successful, they did not provide documents relevant to the determination of the section 223 application until the day before the hearing . As a consequence, I make no award of costs.
Karen Ayers
Delegate of the Commissioner of Patents
Patent attorneys for the patent applicant : Wray & Associates, Perth
Patent attorneys for the opponent : Cullen & Co, Brisbane

[2003] APO 23

17 June 2003