Woodside Energy Limited v Richard John Moore
[2016] APO 85
•1 December 2016
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Woodside Energy Limited v Richard John Moore [2016] APO 85
Patent Application: 2012253232
Title:Subsea cooling system
Patent Applicant: Richard John Moore
Opponent: Woodside Energy Limited
Delegate: Xavier Gisz
Decision Date: 1 December 2016
Hearing Date: Written submissions filed on 15 November 2016 and 22 November 2016
Catchwords: PATENTS - section 223(2)(a) - extension of time to file a notice of opposition to grant of a patent - error or omission established – extension of time allowed.
Representation: Patent attorney for the applicant: FB Rice
Patent attorney for the opponent: Corrs Chambers Westgarth Lawyers
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2012253232
Title:Subsea cooling system
Patent Applicant: Richard John Moore
Date of Decision: 1 December 2016
DECISION
The Opponent’s failure to file the Notice of Opposition within the prescribed period is the result of an error or omission that enlivens s 223(2)(a). The requested extension of time is allowed.
Costs are awarded against the applicant.
The Statement of Grounds and Particulars is due on 2 December 2016.
REASONS FOR DECISION
Background
Patent application 2012253232 in the name of Richard John Moore was filed on 11 May 2012 under the provisions of the PCT and published as WO 2012/151635 on 15 November 2012. The application entered national phase in Australia on 6 November 2013. Examination was requested on 22 October 2015 and acceptance advertised on 26 May 2016. Under regulation 5.4 the time for filing a notice of opposition to grant of a patent expired 3 months later on 26 August 2016.
On 2 September 2016, Woodside Energy Limited (‘WEL’) filed a Notice of Opposition to grant of a standard patent for the Application under section 59 of the Patents Act, together with a request under section 223(2)(a) for an extension of time in which to do so. WEL filed a declaration in the name of Neil Kavanagh dated 9 September 2016 and accompanying exhibits NK-1 to NK-3 supporting its extension request on 12 September 2016.
The Delegate advised on 20 September 2016 that they were not satisfied that an error had been made and requested WEL to provide further material in the form of another declaration.
On 18 October 2016, WEL provided a second statutory declaration in the name of Neil Kavanagh dated 12 October 2016 to support its application for an extension of time.
The Delegate advised on 25 October 2016 that the Commissioner had considered the request and intended to grant the application. On 31 October 2016 the Applicant requested a hearing on the intention to grant the extension of time. The hearing was on the basis of written submissions filed on 15 November 2016 and 22 November 2016.
The law
Section 223 of the Patents Act 1990 relevantly provides:
“(2) Where, because of:
(a) an error or omission by the person concerned or by his or her agent or attorney:
(b) …
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.”The meaning of the term “relevant act” is defined by section 223(11) and regulation 22.11(4)(a), and encompasses the act of filing a notice of opposition to grant of a patent under regulation 5.4.
In applying the provision of section 223 the following principles are derived from decided cases:
(i) The statutory provision to extend time is beneficial in nature and should be applied beneficially (Re Sanyo Electric Co Ltd and Commissioner of Patents [1996] AATA 832 at [16]; (1996) 36 IPR
(ii) 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 (Re Sanyo [1996] AATA 832 at [16]; 36 IPR at 479).
(iii) For s223(2)(a) to be enlivened, it must be shown that an error or omission had contributed to cause the failure to perform the relevant act (Kimberly-Clark Ltd v Commissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 at 570), i.e. there must be a causal connection between the error or omission and the relevant act that is required to be done within the stipulated time (Lazer Safe Pty Ltd v Commissioner of Patents [2001] AATA 967 at [11]).
(iv) The applicants for an extension of time must demonstrate that they had an intention to do the relevant act within the time prescribed, and that an error or omission on their, or their agent’s behalf, reasonably could be said to have frustrated that intention (Kimberly-Clark (No. 3) 13 IPR at 570; Lazer Safe [2001] AATA 967 at [11]). Alternatively, the relevant error can preclude the formation of a specific intention. In such cases the required causal connection is satisfied if the error contributed to the failure to form the intention to perform the relevant act (Apotex Pty Limited and Commissioner of Patents [2008] AATA 226 at [21]).
(v) “In order to make out a proper case justifying an extension an applicant would have to go beyond a mere disclosure of the processes by which an agent’s errors or omissions came to be committed and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the applicant … 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.” (Kimberly-Clark (No 3) 13 IPR at 571).
(vi) There is a distinction between errors or omissions affecting the carrying out of the party's intentions and the consequences of a deliberate decision (Total Peripherals Pty Ltd v IBM & Commissioner of Patents [1998] AATA 784).
Failure to form an intention
In Kimberly-Clark v Commissioner of Patents (No 3) 13 IPR 569 at 579-580, Jenkinson J discussed the phrase "error or omission" as it applied in section 160 of the Patents Act 1952, the predecessor of section 223, in the following terms:
"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."
10. Consequently, the phrase "error or omission" should be interpreted broadly as including breakdowns in procedure, or flawed mental functions such as an error of judgement (Total Peripherals Pty Ltd v IBM and Commissioner of Patents (1998) AATA 784 and Oz Technology v Boral Energy (1999) APO 18).
Application for an extension of time
11. WEL applied for an extension of one month from 26 August 2016 to 26 September 2016 to lodge a notice of opposition to the grant of a patent for application 2012253232. The ground relied upon was an error or omission by the person concerned or their agent or attorney.
The evidence
12. In applying for the extension of time the Opponent filed two declarations by Neil Kavanagh:
- A first declaration by Neil Kavanagh dated 9 September 2016 and accompanying exhibits NK-1 to NK-3.
- A second statutory declaration in the name of Neil Kavanagh dated 12 October 2016
13. The first Kavanagh declaration is as follows:
“1. I am the Chief Science & Technology Manager of WEL and am responsible for managing intellectual property matters for WEL. All the statements contained in this Declaration are personally known to me or are in WEL’s records to which I have access.
2. Richard John Moore (“Moore”) wrote to me on 27 June 2011 advising that he wanted to talk under a condition of confidentiality about a new invention that he had made. A copy of this letter is attached as Exhibit NK-1”.
3. From the Moore letter of 27 June 2011 it was apparent to me that the invention in question related to a new concept for Offshore Oil and Gas Production including subsea processing.
4. I wrote back to Moore by email 27 June 2011 declining to have a meeting under a condition of confidentiality. A copy of the email is attached as Exhibit NK-2.
5. Later, when Australian patent applications 2012253232 (“232 Application”) and 201225321 (“231 Application”) (together, the “Moore Applications”) had been published, and Moore had made several public briefings on the subject of his inventions, I briefly discussed the general subsea cooling concept with WEL’s engineers who were actively involved in technology programs within WEL also relating to subsea cooling. The engineers were of the view that subsea cooling was an obvious thing to do, and this particular form of cooling was not novel.
6. In view of the opinion of WEL’s engineers regarding the apparent obvious nature of subsea cooling, and in view of subsea cooling and processing being widely featured in technical publications, I formed the view at that time that the Moore Applications were unlikely to be granted.
7. For the reason stated in Statement 6, I did not seek any professional advice regarding the likelihood of the Moore Applications proceeding to grant, the likely claim scope in the event that the Moore Applications did proceed to grant, nor instigate a watch on the progress of the Moore Applications.
8. On 25 August 2016 I became aware of international application number WO 2016/054695 in the name of Subcool Technologies Pty Ltd (“Subcool”) listing Moore as the inventor. It was brought to WEL’s attention by the inventor Richard Moore. The breadth of this patent’s claims, relating to subsea processing, prompted me to conduct an online search for other patent applications by Moore leading me to note the existence of international application numbers PCT/AU2012/000509 and PCT/AU2012/000510.
9. On 30 August 2016 I instructed our researcher Gregory McKenzie to conduct a search of Australian patent records in relation to active subsea cooling and in particular international application numbers PCT/AU2012/000509 and PCT/AU2012/000510. A copy of my email to Gregory McKenzie requesting the search is attached as Exhibit NK-3. I now understand that the 232 Application is the Australian National phase of international application number PCT/AU2012/000510 and that the 231 Application is the Australian National phase of international application number PCT/AU2012/000509.
10. Gregory McKenzie informed me on the same day that the 232 Application was accepted on 26 May 2015 and that the opposition deadline expired on 26 August 2016. A copy of Gregory McKenzie’s email advising of the opposition deadline is attached as Exhibit NK-4.
11. On reflection I believe I erred in not arranging for a watch on the progress of the Moore Applications to flag their publication and progress through the Australian patents office or obtaining profession advice regarding the likelihood of the Moore Applications proceeding to grant with a claim scope that might impinge on WEL’s day to day business.”
14. The second Kavanagh declaration is as follows:
“1. I refer to my first declaration in this matter dated 9 September 2016 (my First
Declaration).2. I have been shown a copy of the correspondence received from the Assistant Hearing Office, Mr Isaac Tan in this matter dated 20 September 2016 in which he states:
“..... it appears that WEL made a conscious decision not to oppose the
(232) application."
3. The impression that Mr Tan has formed is not correct.
4. In my role as the Chief Science & Technology Manager of WEL, it was my responsibility to determine whether or not any opposition should be lodged against the 232 Application. In fact I made no decision of any nature before 30 August 2016 as to whether the 232 Application should be opposed.
5. Some time in or about 2014 (and well before 2016), I considered two patent applications by Richard Moore (“Moore”) (including the 232 Application) after they were open to public inspection. I formed the view both from my own review of the applications and from the advice provided to me by WEL engineers that the two applications would not be accepted by the Patents Office, due to their being an obvious formulation of existing refrigeration know-how.
6. In other words, we concluded that the two applications (including the 232 Application) would be rejected by the Patents Office (which in hindsight was incorrect). Thus I did not at any time prior to Tuesday 30 August 2016 (as described below) turn my mind to whether or not oppositions would be necessary. Had I believed that the applications might be accepted, I would certainly have put in place the necessary steps to ensure that the progress of the applications would be monitored and that, in the event that either was accepted, an opposition should be launched. However, that possibility did not occur me (sic) or the engineers who talked with me about the subject matter.
7. I have also seen that Assistant Hearing Officer Mr Tan has noted in the first paragraph on page 2 of his letter, that my First Declaration does not elaborate as to exactly how patent application number WO 2016/054695 was brought to WEL's attention.
8. On the afternoon of 25 August 2016, which I subsequently learned was the day before the opposition deadline for the 232 Application, Moore sent an email to Andrew McCormack and Paul Pickering of WEL and which was copied to Sean Salter (to whom I report), in which Moore was endeavouring to interest WEL in entering into a relationship with his business.
9. On the afternoon of Thursday 25 August 2016, in the course of a discussion about the approach by Moore to WEL, I was informed by one of Andrew McCormack, Paul Pickering or Sean Salter that Moore had referred to international patent application PCT/AU2015/050613, which deals with the same field of technology as the 232 Application. This in turn led me to arrange, as described below, for patent searches to be carried out.
10. When I referred to paragraph 8 of my First Declaration to conducting an online search for other patent applications by Moore, I need to clarify several matters:
a. Paragraph 8 of my First Declaration did not explain how I carry out patent searches, which is by using a professional searcher. Thus the searches for other patent applications by Moore that were carried out and as described in paragraph 8 were not carried out by me (even though I acknowledge that that is the impressions that might have been given by my First Declaration). I never carry out patent searches personally but always instruct a professional patent searcher to do that work for me. Indeed, I instruct my team never to carry out their own patent searches personally given their complexity.
b. Secondly, I gave instructions to Gregory McKenzie on Tuesday 30 August 2016 by email to carry out a search of the 3 patent applications that WEL then know of as lodged by Moore (including the 232 Application). These instructions are contained in exhibit NK-3 to my First Declaration.
c. In fact Gregory McKenzie carried out the search the same day, 30 August 2016 as is described in paragraph 9 of my First Declaration. It was only after I received the search results from Gregory McKenzie that I instructed WEL’s patent attorneys to urgently lodge an oppositions against the 232 Application and an application for an extension of time in which to lodge the opposition.
11. I was and am not familiar with the details of the patent opposition process let alone with the deadlines for the various steps in patent oppositions (such as the deadline for filing an opposition within a certain period after the advertisement of the acceptance of the application.”
Was there a relevant error or omission?
15. I must first establish whether there was an error or omission under the meaning of the Act and if so, whether WEL failed to file a notice of opposition within the prescribed period because of the error. If a causal connection is present, I must then determine whether the Commissioner’s discretion should be exercised to allow WEL the extension of time.
16. The Opponent states in the letter of 14 October 2016:
“As the Second Kavanagh Declaration shows, there were at least two errors made by WEL.
(a) The first error was that a judgment call was made that the subject matter of Australian Patent Application number 2012253232 (the Moore Patent Application) would be rejected by the Australian Patents Office. That error is described in paragraph 5 of the Second Kavanagh Declaration. WEL did not call in external lawyers for advice.
(b) The second error was that as a result of having formed that erroneous view described above, WEL did not put a watch on the progress of the Moore Patent Application.
The error in paragraph (a) above resulted in WEL making a second error as described in paragraph (b) and omitting to watch the progress of the Moore Patent Application.”
17. The circumstances surrounding the first error are given in paragraphs 5 to 7 of Mr Kavanagh’s first declaration:
“5. Later, when Australian patent applications 2012253232 (“232 Application”) and 201225321 (“231 Application”) (together, the “Moore Applications”) had been published, and Moore had made several public briefings on the subject of his inventions, I briefly discussed the general subsea cooling concept with WEL’s engineers who were actively involved in technology programs within WEL also relating to subsea cooling. The engineers were of the view that subsea cooling was an obvious thing to do, and this particular form of cooling was not novel.
6. In view of the opinion of WEL’s engineers regarding the apparent obvious nature of subsea cooling, and in view of subsea cooling and processing being widely featured in technical publications, I formed the view at that time that the Moore Applications were unlikely to be granted.
7. For the reason stated in Statement 6, I did not seek any professional advice regarding the likelihood of the Moore Applications proceeding to grant, the likely claim scope in the event that the Moore Applications did proceed to grant, nor instigate a watch on the progress of the Moore Applications.”
Was Mr Kavanagh’s decision to not put a watch on the Moore Patent Application an error or omission?
18. Mr Kavanagh states at paragraph 1 of his first declaration:
“I am the Chief Science & Technology Manager of WEL and am responsible for managing intellectual property matters for WEL.”
19. Mr Kavanagh states at paragraph 4 of his second declaration:
“In my role as the Chief Science & Technology Manager of WEL, it was my responsibility to determine whether or not any opposition should be lodged against the 232 Application.”
20. It was Mr Kavanagh’s responsibility to make decisions on the opposition of patent applications. Mr Kavanagh made a decision to not monitor the progress of patent application 2012253232.
21. Mr Kavanagh adopted an unreliable strategy – relying on IP Australia to reject the application. A more reliable approach for someone who believed a competitor had applied for a patent that appeared to be clearly invalid (or likely invalid) would be to monitor that application and, if ultimately accepted, oppose it.
22. According to his evidence, Mr Kavanagh’s decision to not monitor the patent application was based on a two considerations. Firstly, the advice from his engineers that the patent application was not novel and obvious; the engineers advised. Secondly, an assessment that the patent would not be granted.
23. Having determined that Mr Kavanagh adopted an unreliable strategy, I must now determine if the adoption of this approach was the result of an error. The evidence suggests two possible scenarios that could be considered an error:
a) the decision was as a result of an incorrect information, or
b) the decision was a result of a faulty mental process.
Was the decision as a result of incorrect information?
24. Mr Kavanagh consulted with his engineers who “were of the view that subsea cooling was an obvious thing to do, and this particular form of cooling was not novel”. The obviousness or novelty of the claims cannot be determined at this stage. There is no evidence that this advice is incorrect, and thus I do not consider that Mr Kavanagh was given incorrect information.
Was the decision the result of a faulty mental process?
25. Mr Kavanagh states in his first declaration (with my emphasis in underline):
“...I formed the view at that time that the Moore Applications were unlikely to be granted.”
26. Mr Kavanagh states in his second declaration (with my emphasis in underline):
“I formed the view both from my own review of the applications and from the advice provided to me by WEL engineers that the two applications would not be accepted by the Patents Office, due to their being an obvious formulation of existing refrigeration know-how.”
“Had I believed that the applications might be accepted, I would certainly have put in place the necessary steps to ensure that the progress of the applications would be monitored and that, in the event that either was accepted, an opposition should be launched. However, that possibility did not occur me (sic) or the engineers who talked with me about the subject matter.”
27. Mr Kavanagh’s assessment, clarified in his second declaration, that the application “would not be accepted” and that the possibility of the application being accepted “did not occur [to him]” is surprising. Given the complexities and uncertainties of the patent application process, I would expect that a person with knowledge of the patent system would only make such an assessment in the most extreme circumstances of clearly invalid patent applications.
28. The patent application was first published as WO 2012/151635 on 15 November 2012 with an international search report which found that the invention defined in the claims lacked novelty and/or inventive step in light of one prior art document: WO 2002/101277. Although this prior art document relates to the same technology, it does not appear prima facie that this prior art would cause the application to fall into the category of being clearly and irreconcilably invalid.
The International Preliminary Report on Patentability Chapter II (IPRPII) of the application was completed on 18 July 2013 and published on the WIPO website on 12 November 2013 (though it was only added to the Australian application casefile on 18 March 2016). The IPRPII included amendments to the claims which overcame the previously noted lack of novel and inventive step. I note that Mr Kavanagh does not mention the IPRPII and it is quite plausible that he and the WEL engineers were unaware of it.
30. In light of the above, Mr Kavanagh’s assessment that the application would not be accepted, even without the benefit of hindsight, was clearly incorrect. I consider this to be a faulty mental process of the kind contemplated in Kimberley Clarke v Commissioner.
Summary on error or omission
31. I am satisfied that Mr Kavanagh’s assessment that the patent application would not be accepted was an error or omission which was directly causative of the failure to file the Notice of Opposition.
Discretion
32. I have found that a relevant error occurred that prevented WEL filing a notice of opposition within the prescribed period. Section 223(2) provides that “the Commissioner may ... extend the time for doing the act”. It remains to be considered whether the balance of relevant factors justifies the exercise of the Commissioner’s discretion in favour of WEL. The factors considered in Vangedal-Nielsen v Smith (Commissioner of Patents) [1980] FCA 163; (1980) 33 ALR 144 at 150 are relevant in the present consideration:
(i) whether the Commissioner is satisfied that a proper case has been made out justifying an extension;
(ii) whether a serious opposition has been foreshadowed;
(iii) whether there has been undue delay in seeking an extension of time;
(iii) the interests of the parties in refusing or granting an extension;
(iv) the public interest.
33. In balancing these factors, it is “more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time” (ReSanyo [1996] AATA 832 at [16]; 36 IPR at 479).
Has a proper case been made out?
34. I am satisfied that Mr Kavanagh has provided a sufficient disclosure of the relevant circumstances in which the error occurred and thus a proper case justifying the extension has been made.
Is a serious opposition foreshadowed?
35. Mr Kavanagh’s declarations establish that he and WEL’s engineers were of the view that the technology of the application was not novel or inventive; this suggests that WEL is in possession of evidence supporting this view. Consequently I am satisfied that a serious opposition has been foreshadowed.
Has there been undue delay in seeking the extension of time?
I consider that Mr Kavanagh and WEL acted promptly once the error became apparent. The Notice of Opposition was filed three days after Mr Kavanagh was informed that the period for filing a Notice of Opposition had passed, which was only seven days after expiry of the prescribed period. This weighs in favour of granting the extension.
The interests of the parties
37. WEL’s interests lie in the opposition being allowed to proceed. Richard Moore’s interests lie in its application proceeding to grant, rather than it being held in opposition for a prolonged period. The interests of the parties are largely offsetting.
The public interest
38. The public interest lies in the efficient and orderly processing of matters before the Patent Office, and in ensuring invalid patents are not granted because insufficient opportunity has been afforded to oppose the grant.
Conclusion on the exercise of the discretion
39. The balance of these factors favours granting the extension. The consequence of refusing to grant the extension is that WEL would be denied the opportunity to mount a substantive opposition to the grant of the patent. Granting the extension will mean that the opposition will proceed, protecting the public interest that invalid patents are not granted. Consequently, it is appropriate to exercise the discretion in this case.
Conclusion
40. I am satisfied that the WEL’s failure to file the Notice of Opposition within the prescribed period is the result of an error or omission that would enliven s 223(2)(a). Consequently the requested extension of time to file the Notice of Opposition is allowed.
41. Pursuant to Reg 5.5(1) the Statement of Grounds and Particulars is due on 2 December 2016.
Costs
42. The Commissioner has a discretionary power to award costs under section 210 and regulation 22.8.
43. I see no reason to depart from the normal practice that costs follow the event. Woodside Energy Limited’s request for an extension of time has been allowed, and the applicant has been unsuccessful in opposing this extension of time. Consequently I award costs according to Schedule 8 against the Applicant, Richard John Moore.
Xavier Gisz
Delegate of the Commissioner of Patents
2
0