WMC Resources Limited v Minara Resources Limited
[2007] APO 3
•16 January 2007
ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 782112 in the name of WMC Resources Limited
Title: Solvent Extraction of Impurity Metals form a Valuable Metal Sulphate Solution
Action: Opposition by Minara Resources Limited under section 59 (Patents Act 1990). Objection to an application for an extension of time in which to serve Evidence-in-Support (regulation 5.10(2)).
Decision: Issued 16 January 2007 .
Abstract
The opponent has provided a satisfactory explanation of the delays incurred in their preparation of evidence.
Because of the dominance of a small number of large companies within the mining field, it was difficult to find independent expert witnesses who were not related to one of the parties. This is particularly true given that the applicant is a subsidiary company of the market leader in Australia (BHP Billiton).
In addition, an expert had withdrawn at a late stage in proceedings and the opponent was obliged to find a replacement witness. There were therefore real difficulties encountered in procuring a witness which the opponent has been endeavouring to overcome. The opponent had therefore provided a satisfactory explanation of the delay.
Based on this and the public interest in having all relevant material before the Commissioner in the opposition, the extension was found to be appropriate in all the circumstances and allowed.
Costs were found against the opponent, however, because they failed to provide relevant information in their application for extension which might have obviated the need for the hearing if it had been raised earlier.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 782112 by WMC Resources Limited and Opposition thereto by Minara Resources Limited under Section 59 of the Patents Act 1990. Objection to an application for an extension of time in which to serve Evidence-in-Support (regulation 5.10(2)).
BACKGROUND
Patent application 782112 (the application) was filed under the provisions of the PCT as PCT/AU00/01557 on 19 December 2000 by WMC Resources Limited (“the applicant”). The application entered the national phase in Australia as 23288/01 on 18 June 2002. Examination was requested on 4 December 2002 and the application was advertised accepted on 7 September 2005.
Minara Resources Limited (“the opponent”) filed a Notice of Opposition on 7 October 2005, followed by a Statement of Grounds and Particulars on 6 January 2006.
The opponent filed three applications for an Extension of Time in which to file Evidence-in-Support.
The first, filed on 6 April 2006 and granted on 19 May 2006, extended the time from 6 April 2006 to 6 July 2006.
The second Application for Extension of Time, filed on 5 July 2006 and granted on 24 July 2006 extended the time until 6 October 2006.
The third Application for Extension of Time, filed on 6 October 2006 and granted on 26 October 2006 was to extend the time to file Evidence-in-Support to 6 January 2007. The applicant objected to the grant of this extension on 20 October 2006 and requested a hearing on the matter.
On 10 November 2006, the applicant filed a Statutory Declaration by Peter M Caporn and annexures PMC 1 to 22, being part of the Evidence-in-Support.
The matter was heard in Canberra on 21 November 2006. Minara Resources Limited was represented by Peter Caporn, Partner of Wray and Associates, Perth. WMC Resources Limited was represented by Greg Munt of Griffith Hack, Melbourne.
RELEVANT LAW
Chapter 5 of the Patents Regulations sets out the procedure and time limits governing opposition proceedings. According to regulation 5.8, the time for serving Evidence-in-Support of an opposition is three months from the date of serving the statement of grounds and particulars. A party to an opposition may apply to the Commissioner to extend this time limit pursuant to regulation 5.10(2):
"The Commissioner may 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 5.3AA, paragraph 5.4(a) or subparagraph 5.8(1)(a)(i)):
(a) on the application of a party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies; and
(c) after the party has served a copy of the application on the other party."
Regulation 5.10(5) relevantly provides that before granting an extension of time I must be reasonably satisfied that the extension is appropriate in all the circumstances, and in this I am guided by the well established principles set out in Ferocem Pty Ltd v Commissioner of Patents 28 IPR 243 and A Goninan & Co Ltd v Commissioner of Patents 38 IPR 213.
These principles do not demand an imperative compliance with particular requirements, but rather, as stated by Burchett J in Ferocem, involve:
"a balancing exercise, in which competing considerations must be taken into account. There are the interests of the persons directly concerned in the application and opposition in question. There are also public interests, which are not necessarily all ranged on the same side. They include the expeditious disposal of matters in the Patents Office, and questions of costs, of efficiency, and of insistence upon the professional standards being maintained by those who deal with the office. But they also include, as Kitto J pointed out in Kaiser Aluminium & Chemical Company v Reynolds Metal Co (1969) 120 CLR 136 at 143, 'the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be.'"
In Goninan Sackville J said that in order to give proper consideration to the public interest in opposition proceedings being determined on their merits, it is necessary to consider the nature of the evidence for which the extension of time is sought and the significance of that evidence for the opposition. The principles applicable to the broad discretion conferred by regulation 5.10 to grant extensions of time were more recently considered in National Starch & Chemical Company v Commissioner of Patents 50 IPR 398 where Goldberg J went further in saying that, in the absence of direct material on the point, the significance of the evidence sought to be adduced might be determined from:
· the technical nature of the invention apparent on the face of the specification;
· the technical nature of the documents referred to in the statement of grounds and particulars;
· the statement of grounds of opposition and the particulars relating to each ground;
· the role and importance of experts in an opposition proceeding; and
· statements in submissions by the party seeking the extension on the nature of the evidence to be relied upon.
10. Finally, regard must also be had to the comments of the Administrative Appeals Tribunal in Sanyo v Commissioner of Patents 36 IPR 470 at 479:
"The decisions of the courts concerning the approach to be taken to the exercise of a discretion to extend time are now well established and include:
· in the absence of nominated factors against which the discretion is to be exercised, regard should be had to the 'subject matter, scope and purpose of the Act': per Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd(1986) 162 CLR 24 at 39-40; 66 ALR 299. A further exposition of this is provided by the comments of Davies J in Chalk v Commissioner for Superannuation (1994) 50 FCR 150 at 154 where he said '……the discretion should be exercised by reference to the words of the statute and the context within which the discretion is conferred';
· while the applicant has the burden of placing before the tribunal the circumstances which it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it should be so described: McDonald v Director-General of Social Security (1984) 1 FCR 354 per Woodward J at 357 and Jenkinson J at 368-9: Australian Broadcasting Tribunal V Bond Corp Holdings Ltd (1989) 86 ALR 424 at 432 per Burchett J;
· it is 'more important to consider the consequences of extending or refusing to extend time than debate the reasons why the act was not done in time': per Davies J in Chalk's case, at 156, with whom Black CJ and Cooper J agreed. Similar comments are to be found in Comcare v A'Hearn (1993) 119 ALR 85, particularly at 88;
· actions of the agent of a principal should not necessarily be regarded as being the actions of the principal: A'Hearn's case;
· a legislative provision providing for the exercise of a discretion to extend time is beneficial in nature and should be applied beneficially: Davies J in Chalk's case at 155."
11. I will take these principles into account when deciding whether the presently sought extension of time is appropriate in all the circumstances.
REASONS FOR THE EXTENSION OF TIME
12. In the third application, dated 6 October 2006, Minara stated that:
“Further time is required for the Opponent to finalise its evidence-in-support in this matter.
As indicated in our Application for Extension of Time dated 5 July 2006, at least one expert witness has been identified to provide evidence in this matter and discussions are underway in an effort to identify additional experts. As a result of extensive work and travel commitments on behalf of the experts, in addition to some effort required to finalise the contract details relating to their involvement as expert witnesses, the formal briefings have been delayed.
Additional time is required to finalise the remaining briefing for preparation of draft statutory declarations, amendment by the declarants, the settling of draft declarations by counsel, and finally execution and service.
The Opponent continues to work assiduously towards finalisation and service of evidence-in-support.”
13. The Second Application for Extension of Time, dated 5 July 2006, contained the same 1st, 3rd and 4th paragraphs as above, while the 2nd paragraph read:
“A number of potentially relevant expert witnesses have now been identified, and discussions have been undertaken in an effort to determine whether those experts are free to contribute to the proceedings. As a result of these interviews at least one potential expert has been identified to provide evidence.”
.
14. The First Application for Extension of Time, dated 4 April 2006, also used the same 1st and last paragraph, however the 2nd paragraph read :
“A number of potentially relevant expert witnesses have now been identified, and the process of contacting these experts has commenced. Further time is required to arrange the briefing of these experts and to subsequently prepare draft declarations. Still further time will then be required for review of these drafts, amendment by the declarants and subsequent settling by Counsel. Of course, the finalised declarations will then need to be executed, served and filed.”
SUBMISSIONS
15. The opponent argued that Application for Extension of Time dated 6 October 2006 provides sufficient justification for the allowance of the extension because it “outlines the difficulty in maintaining contact with the experts as a direct result of their work and travel commitments, and the issue of finalising the contracts that outline the conditions of their involvement”.
16. Notwithstanding the above submission, the opponent added in its submissions further detailed explanation for the delays as follows:
· the identification of appropriate independent experts was based on qualifications, experience and a willingness to take on the role. It is the latter point that gave particular difficulty. Both of the parties involved in the present matter are large multi-national mining companies and many of the potential experts in the field of the invention have either current or prior association with one or other of the parties and so could not be considered independent. This situation has been exacerbated in the current resources boom by the options available to and demands placed upon experts in the mining and related technologies.
· The opponent also argued that the experts consulted in preparing the Statement of Grounds and Particulars were not and would not be expected to be the same as those relied upon for declarations forming part of the Evidence-in-Support because of the need for independence in the evidence provided by the latter.
· a number of suitable independent experts who had no past affiliation with either party proved unwilling to provide evidence that might adversely affect their future potential for employment by the applicant or its parent company, BHP Billiton.
· the applicant had experienced difficulty in retaining and contacting experts once identified due to their extensive travel commitments and frequent geographical isolation. It referred to one such expert in particular who, having been largely unavailable for the last year, on 31 October 2006 withdrew from proceedings altogether.
· a four month delay had arisen with respect to the expert whom the opponent has engaged due to their employment by a University and the resulting confusion as to whether contractual agreements should be executed by the expert, the University or the Universities consulting arm.
· the opponent intended to have all Evidence-in-Support settled by counsel but such activity is dependant on counsel’s caseload and other commitments.
17. The opponent noted that whilst it considered that the reasoning provided in the applications were adequate justification for the grant of the extensions, the provision of such explanation is not a mandatory requirement as set out in Ferocem (supra) and cited Cadbury Schweppes Pty Ltd v Wm Wrigley Jr. Company [2006] APO 35 as an instance where this principle had been applied.
18. On the various interests involved, the opponent acknowledged that the applicant has a legitimate interest in the expeditious disposal of the proceedings and also acknowledged that it is generally in the public interest that opposition proceedings be settled expeditiously. In addition, Minara Resources submitted that its own interests are not served by prolonging the proceedings but through “certainty and clarity”, which they were seeking diligently through persual of the opposition. However, the opponent noted the findings in authoritative cases such as Ferocem (supra) and Goninan (supra) that a balance is to be sought between this requirement and the requirement that a serious opposition be dealt with on its merits. It asserted that the evidence filed so far combined with its conscientious attempts to identify and gain comment from suitable experts established that a serious opposition is in train.
19. The opponent also argued that comments in the recent Federal Court decision in Minnesota Mining and Manufacturing Co. v Tyco Electronics Pty Ltd (2002) 56 IPR 248 at 45 regarding the preparation of evidence in relation to inventive step has “hindered the swift resolution of oppositions in which inventive step arguments will play a significant part.”
20. Finally, the opponent contended that a consideration in this matter is that the subject matter of the present application is very technical and complex, and requires a substantial quantity of evidence to address all of the issues. It cited Wellcome Foundation v Peptide Technology Ltd 14 IPR 567 as a precedent for the complexity of the technology being an issue justifying an extension time to allow an extension of time.
21. The applicant noted that the submissions provided by the opponent at the hearing included considerably more detail as to the reasons for the delay than present in the applications for extension of time and therefore its comments would relate to the case as reflected on the written record.
22. It also noted that the current case is one of three related cases in which Minara Resources Limited has applied for several Extensions of Time in which to serve Evidence-in-Support. In its submissions, the applicant asserted that the opponent’s conduct in each case had been the same i.e. in each case Minara had :
· cited a large number of prior art documents
· sought multiple extensions of time for filing evidence; and
· still not filed any substantive expert evidence.
23. The applicant argued that the Statement of Grounds and Particulars is not a fair presentation of a serious opposition because it is “inconceivable” that all of the 19 documents identified under the ground of novelty are in fact relevant and Mr Munt suggested that examination of the cited documents supported this conclusion. The applicant referred to the fact that in one of the other related oppositions 42 documents were cited in the Statement of Grounds and Particulars in Australia, but in the corresponding European action only 2 were considered relevant for novelty.
24. The applicant also commented that, on the basis of the current (i.e. third) Application for Extension of Time, which was filed a year after the commencement of the opposition process, the opponent had not progressed beyond the stage of identifying and engaging expert witnesses and it appeared that no witnesses had been retained or briefed. It argued that if Minara had been a serious opponent, it would have been well advanced with the preparation of evidence from its declarants, rather than merely still at the stage of identifying and engaging expert witnesses. Furthermore it noted that the only Evidence-in-Support so far filed, consisted of a Statutory Declaration by Peter Caporn accompanied by 19 prior art documents cited in the Statement of Grounds and Particulars.
25. In addition, the applicant commented that none of the Application for Extension of Time provide any evidence of unusual circumstances explaining the lack of progress in preparing Evidence-in-Support, nor is there anything in the current application that suggests that Minara’s Evidence-in-Support will be completed within the three month period of the extension, if granted.
26. The applicant argued that
the lack of clear evidence establishing the reason for the delay,
the apparent citing of irrelevant documents in relation to novelty – a key ground of the opposition,
the evident lack of progress in identifying and briefing expert witnesses,
and the fact that “Minara is prolonging the opposition process in all three oppositions whilst making little or no progress in the preparation of its substantive evidence in each case”,
combined to establish a pattern of behaviour that indicates a lack of serious intent to progress the opposition process.
27. In respect of the interests of the various parties, the applicant affirmed that its interest lay in the economic, efficient and expedient progression of the opposition. In respect of Minara’s interests the applicant questioned the seriousness of the opponent’s intentions and argued that if Minara is refused the grant of the third extension it would still be open for it to pursue revocation under Section 138 of the Act.
28. Referring to F Hoffman-La Roche AG v New England Biolabs Inc (2001) 50 IPR 305, the applicant further argued strongly that “the public interest in swift and economical dispute resolution” is not served by allowing an opponent to prolong the opposition process indefinitely by seeking repeated extensions of time whilst continually failing to make discernable progress in preparation of evidence. Moreover, it is especially important that oppositions relating to the mining industry be progressed expeditiously because of the critical nature of this industry to the economy of Australia.
DECISION
The explanation of the delay
29. The applicant’s main premise in objecting to the opponent’s extension of time request is that the opposition is not a serious one. They asserted that raising a large number of citations indicates that no serious analysis identifying whether there were “real” citations for novelty and inventive step. In that regard, the applicant noted that there was a related European opposition where only 2 documents were relied on (in contrast to the 42 documents cited in Australia). Although I accept that these circumstances may be an indicator of intent in some cases, I do not consider it is determinative. The relevant issue is whether, based on the evidence before me, there is reason to doubt the relevance of the documents cited. In this case, the Statement of Grounds and Particulars (SGP) contains specific and detailed discussion of the prior art which prima facie suggests that a serious opposition has been mounted. Furthermore, from a cursory examination of the documents filed as Evidence in Support, at least some appear to be relevant to the determination of novelty and inventive step in the current matter. In addition, from my experience it is not uncommon for an opponent to raise a large number of documents in the SGP and refine this list at a later date once evidence has been concluded. I am therefore not persuaded by this argument.
30. The applicant also argued that there has been no real progress in the preparation of evidence since the SGP had been filed. In particular, based on the application for the extension of time, the opponent still had not engaged expert witnesses and there appeared to have been no unusual circumstances which prevented them from doing so. At the hearing, the opponent provided a much more detailed explanation of the difficulties of procuring witnesses. As noted above, the opponent submitted that it was always difficult to find independent expert witnesses who were not related to one of the parties where a small number of large companies dominated the field in Australia. This is particularly true in this case given that the filed is mining engineering and the applicant is a subsidiary company of the market leader in Australia ‑ BHP Billiton. Even if potential witnesses were found, they are not often willing to provide evidence against a major company because this might jeopardize their future employment prospects.
31. Despite the difficulties in locating an expert, the opponent had secured a witness but this expert had withdrawn at a late stage in proceedings and the opponent was obliged to find a replacement witness. Given this, I accept that there had been real difficulties encountered in procuring a witness which the opponent has now overcome. I am therefore satisfied that the opponent has been diligently pursuing their opposition and has provided a satisfactory explanation of the delay.
32. I am, however, in agreement with the view, expressed by Mr Munt at the hearing, that the presence of more comprehensive information in the Application for Extension of Time may well have expedited the resolution of this matter. The opponent would do well to bear in mind in the preparation of future applications that a thorough disclosure of the facts leading to the necessity for the extension should be provided in the application rather than relying upon the submissions prepared in relation to an objection to the extension.
The public interest
33. Public interest considerations were addressed by Burchett J in Ferocem (supra). The Kaiser Aluminium decision which Burchett J cited in Ferocem states that one should deal with a serious opposition on its merits rather than shut it out because of a failure in procedure.
34. The actions by Minara so far suggest a serious opposition is on foot. Although not as well reflected in the facts recited in the application(s) for extension of time as would be preferable, Minara generally seem to have proceeded with reasonable haste given the prevailing circumstances. Moreover I accept as real, the difficulty that Minara has encountered in engaging and communicating with experts in a technology so heavily dominated by a small number of large companies and in which these experts, being restricted in number, are already heavily committed.
35. The problems experienced by the opponent appear now largely overcome and my assumption is that the new expert will now be able to concentrate on their evidence and complete it within a reasonable time frame. In this regard, I note that opponent has foreshadowed that there may be future problems with communication difficulties because of travel overseas and to remote locations. Such difficulties are unlikely to be viewed favourably in later applications for extensions of time, given the ready availability of portable electronic communication devices which permit communication even in isolated localities.
36. Overall my view is that there is a serious opposition in train and I believe it is in the public interest to allow evidence to be finalised to allow a more just determination of the opposition. However, I note that this balance may change if there is prolonged protraction of proceedings.
The interests of the parties
37. Minara’s interests would clearly be disadvantaged by it not being able to serve its Evidence-in-Support. As noted in the written submissions from WMC Resources, Minara has commenced research activities based upon the technology which is the subject of the patent. It is therefore clearly in the applicant’s interests to have the opposition determined as expeditiously as possible, given Minara’s commercial intentions.
38. However, while I accept that the applicant could be disadvantaged by a protraction of proceedings if I grant the extension now sought, there is nothing before me to suggest that such protraction would have the same undue effect on WMC Resources as the effect on Minara if it was denied the opportunity to fully argue its case. Furthermore, while the concerns of WMC Resources regarding the expeditious prosecution of the opposition are fully understandable, totalling as they do nine months including the current extension, such delay is not excessive or even necessarily out of the ordinary in the prosecution of oppositions in complex technological areas where legitimate difficulties have been encountered.
39. I also believe that certain advantages accrue to WMC Resources in having all the issues canvassed in opposition proceedings rather than have them flow over to another forum.
CONCLUSION
40. In my view the opponent has provided a satisfactory explanation of the delays incurred in their preparation of evidence. However, this is based on the submissions provided at the hearing rather than the application itself. Further, the public interest is best served by having all relevant material before the Commissioner in hearing the opposition and neither parties interests outweigh the other or the public interest.
41. As a consequence, I am satisfied that the current extension is appropriate in all the circumstances and I grant an extension until 6 January 2007 to serve Evidence-in-Support.
COSTS
42. Although it is normal practice for costs to follow the event, I am aware that in this case the lack of information provided by the opponent in the Applications for Extension of Time filed so far, has led to greater complication in the settlement of this matter and expense for all the parties concerned.
43. As this is clearly the result of decisions taken by the Minara Resources Limited in the preparation of its applications, I award costs against the opponent.
Leigh Tristram
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Griffith Hack Patent Attorneys, Melbourne
Patent attorneys for the opponent : Wray and Associates, Perth