official notice

decision of a delegate of the commissioner of patents

Application	:	No. 635438 in the name of AUSTOFT INDUSTRIES LTD

Title	:	BASECUTTER GEARBOX FOR SUGAR CANE HARVESTER

Action	:	An objection by CAMECO INDUSTRIES INC to an application for an extension of time within which to serve evidence-in-answer.

Decision	:	Issued             .  Extension of time for serving evidence-in-answer granted.  

patents act 1990

decision of a delegate of the commissioner of patents

Re:	Patent Application No. 635438 by AUSTOFT INDUSTRIES LTD and objection to an application for an extension of time within which to serve evidence-in-answer.
background
Patent application 635438 by Austoft Industries Ltd (Austoft) was filed on 5 August 1991.  The application was advertised accepted on 18 March 1993.  On 18 June 1993 Cameco Industries, Inc (Cameco) filed a Notice of Opposition and on 19 July 1993 they filed a statement setting out the grounds and particulars of the opposition.  A request for this statement to be amended was filed on 9 September 1993.  The applicant did not object to the amendment and it was allowed on 10 October 1993.  Evidence-in-support was served on 18 October 1993.  The evidence filed at the Patents Office comprised declarations with colour photographs as exhibits.  In the evidence served on the applicant black and white photocopies of the photographs were supplied.

The Patents Office received a letter dated 18 November 1993 from the attorney acting for the applicant concerning the quality of the photocopies of the exhibits served on the applicant and requesting that the time for the filing of the evidence-in-answer should not commence until such time as clear copies of the exhibits were served on the applicant.  In a letter dated 23 November 1993 the opponent objected to any such extension of time for filing evidence-in-answer.  On 29 November 1993 a letter was sent to the opponent stating that the Commissioner could see no reason why the opponent should not have served colour copies of the exhibits and requesting that they serve them as soon as possible.  These colour photocopies were served on 10 December 1993.  On 24 January a delegate of the Commissioner made a direction that the time for serving certain of the evidence-in-answer would expire on 19 February 1994.  

On 17 January 1994 Austoft filed an application for an extension of time for three months from 18 January 1994 to 18 April 1994 for the serving of evidence-in-answer.  On 4 March 1994 Cameco filed an objection to the application for extension of time and on 5 April 1994 they served declarations on which they intended to rely at the hearing.  

A hearing to determine the matter took place in Canberra on 12 April 1994.  Austoft was represented by Mr Crispin Marsh, patent attorney with F B Rice and Co, who was heard by telephone.  Cameco was represented by Mr J G Hinde, patent attorney with Spruson and Ferguson.  

the application
The circumstances in which, and the grounds upon which, the application was made are as follows:

"After receiving the evidence lodged by the Opponents, copies of the evidence were forwarded to the client for comment.  Our clients found that the copies of the evidence provided to them was so poor that much of the evidence was incomprehensible.  For this reason, we requested fresh copies of parts of the evidence and after some protracted correspondence this was finally received on 10 December 1993.  As it was impossible to determine the true relevance of much of the evidence without these replacement photographs, the preparation of the evidence-in-answer has been delayed for this reason.

It is envisaged that amendments may be necessary to the claims of the application in the light of the evidence, in particular the Evidence of the Greaves machine referred to in the Hodgett Declaration.  Amended claims have been prepared, however these needed to be considered by Mr Malcolm Baker, Engineering Director of the Applicant Company who was on holidays from the Christmas (sic) until the 31st January 1994.  These holidays overlapped with those of Crispin Marsh, Partner of F.B. Rice & Co., responsible for this matter who only returned from holidays on the 14th February 1994.  The matter of the amended claims has been pursued with Mr Baker at the present time.  

It is also intended to obtain a leading Declaration to answer some of the other allegations contained in the evidence-in-answer from Mr Baker and Mr Baker's Evidence has been delayed, firstly by the unavailability of the comprehensible photographs forming part of the evidence, and by the overlap of holidays referred to above.

Extensive information has been obtained already from Mr Baker as to the circumstances surrounding the trialling of the Austoft 7000 Cane Harvester referred to in a number of the Declarations forming part of the Evidence-in-answer.  Materials related to this matter are in our hands.  The completion of the leading Declaration requires some additional information from Mr Baker and his more extensive comments in connection with the differences between the present invention and certain prior art drawn to our attention in the Evidence-in-Answer.  Once Mr Baker's leading Declaration has been completed, it may be necessary to obtain additional evidence from other employees of Austoft Industries Ltd attesting to particular aspects of the trialling of the Austoft 7000 machine.  It may also be necessary to obtain some additional Evidence in respect of the alleged prior use of the Greaves machine.
Austoft Industries Limited has recently been floated on the Australian Stock Exchange and is now a substantially wholly Australian owned company.  The process of this public floatation of the company has occupied a considerable amount of executive time of Austoft Industries Limited which has also made it more difficult to obtain full instructions in connection with answering the opposition.  Austoft Industries Limited is the World's largest sugar cane harvester manufacturer and has a very real and substantial interest in maintaining its patent portfolio in the face of plagirists (sic) who are copying its products substantially and identically.  These plagirists are damaging Australia's export earnings by selling "copy cat" machinery around the World without having had the expense of conducting original research and development which is both time consuming and expensive.  Austoft Industries therefore has a ral (sic) and substantial interest in progressing the present application." 
submissions
The main points made by Mr Marsh for the applicant are summarised as follows

1.   There are special considerations where the applicant for the extension of time is the patent applicant.  A patent is in effect a contract between the applicant and the public in which the applicant discloses the invention and in return is granted a patent.  In Australia (as distinct from, for example, the United States of America) the application is published whether the application is successful or not and for this reason the applicant should not be shut out unless the delay is manifestly unreasonable.
     
2.   In deciding what is "reasonable" I should take into account practical realities including pressures of work.  It could not be reasonably expected that a party could "drop everything" to file evidence.

3.   Mr Marsh also referred me to anecdotal examples of the length of time that it had taken for various opposition proceedings to be dealt with by the Patent Office and attempted to use this information, the provision of deferred examination and the fact that an applicant was allowed 21 months to place an application in order for acceptance to show that the Patent Office did not treat the processes leading to the grant of a patent with any urgency.

4.   As the opponent had taken the full seven months allowed between acceptance and the serving of evidence-in-support although they were aware of the subject matter of the invention, it was unreasonable for them to now object.

5.   The relevant time at which the assessment of the criterion that the extension should be appropriate in all circumstances should be made was at the completion of filing of the evidence in support and that events occurring before that were irrelevant.

6.   The extension of one month given by the Direction of 24 January 1994 was not significant as it was not in respect of all of the particulars relating to the photographs and furthermore there was no basis to assume that the reasons for the direction was the quality of the photocopies.

7.   There was no way of knowing whether the photographs were merely corroborative.  As the photographs themselves were part of the evidence filed at the Patent Office, it was the photographs and not the actual machines that would be considered by the delegate hearing the opposition.  For this reason the evidence-in-answer should address the photographs and viewing the machines could not be seen as a substitute for colour photocopies.  Mr Marsh submitted that the viewing of the machines which took place in March 1994 was actually necessitated by substantial issues of fact raised by the evidence and that this viewing was not related to the lack of provision of colour photocopies.

8.   In conclusion Mr Marsh submitted that the application for the extension reasonably set out the proper case justifying the extension.   
 
For the opponent Mr Hinde made the following main points:

1.   The applicant had not established an appropriate case to justify the extension.  The object of the application could not be described as "laudable".  

2.   Although no extension was appropriate in the present circumstance, a short extension had already been given by the Direction of 24 January 1994.

3.   Mr Hinde made reference to a letter (Exhibit JGH-4) from himself to Mr Marsh dated 27 November 1992 in which he alleged that the patent applicant had marketed a machine as depicted and described in the specification of the patent application before the priority date of the application.  

4.   The applicant had taken one month from the date the evidence was served to complain about the quality of the exhibits.  He submitted that in any event the colour photographs were corroborative evidence and not necessary for the preparation of evidence-in-answer (one of the photographs being of Austoft's own machine) and further that it would have been a simple matter for the applicant to have arranged a viewing of the other machinery.  According to a declaration of Mervyn George Greaves the inventor and the patent attorney acting for Austoft inspected the machine in March 1994.
 
5.   He referred to an article from the Financial Review, dated 12 August 1993 entitled "Austoft float to be next month" (Exhibit JGH-7).  Thus it would seem that the float took place in September 1993 which was at about the time that the opponent was preparing evidence and the float could not be used as a reason for an extension of time.  
decision
Regulation 5.10(2) enables the Commissioner to grant an extension of time in opposition proceedings:

    "(2)  The Commissioner may:
(a)  on the application of the party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies;
extend the time within which the party may take a step prescribed in this Chapter, not being a step that is taken under regulation 5.3 or paragraph 5.4(1)(a)."   

The serving of evidence-in-answer is such a "a step prescribed".  

Regulation 5.10(5) sets out the conditions that apply:

    "(5)  The Commissioner must not give a direction under
subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:
(a)  if he or she proposes to grant an application by a party - is reasonably satisfied that the other party has been notified of the application; and
(b)  if he or she proposes to act on his or her own motion - ensures that the parties are notified of the proposed action;
     and
(c)  in either case:
(i)  gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and
(ii) is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances."

From this I note in particular that before I can grant an extension of time I must be reasonably satisfied that the extension of time is appropriate in all the circumstances.

In determining what factors must be considered I am guided by the recent decision of the Federal Court, Ferocem Pty Ltd v Commissioner of Patents, (1994) AIPC 91-057.  In this decision Burchett J said: 

"The determination of an application for an extension of time under reg.5.10(2) involves 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 cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office.  But they also include, as Kitto J. pointed out in Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Company (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."  This proposition was cited by Bowen CJ in Vangedal-Nielsen [33 ALR 144] (at 150), where he also set out some of the considerations involved upon an application for an extension of time." 

Vangedal-Nielsen concerned an extension of time for filing of opposition to the grant of patent and was decided according to the Patents Act 1952.  Following his reference to the Kaiser Aluminium case Bowen CJ said:

"Three months has been considered by Parliament to be an appropriate period to allow for [the lodgement of a notice of opposition].  But it has been recognised that cases may occur where, for one reason or another, three months may prove insufficient.  Accordingly, it has been provided that further time may be allowed not exceeding a further three months.  The Commissioner is interposed as the arbiter whether such an extension should be allowed and how long it should be.  Clearly, the Commissioner will have to consider the interests of the prospective opponent who, for some good reason, has not been able to mount his opposition within the initial period of three months.  The Commissioner will further have to have in mind, where a serious opposition is foreshadowed, the public interest which has been mentioned, but he will have to require to be satisfied by an applicant for an extension that a proper case has been made out justifying an extension.  It would be wrong if he granted an extension simply because no one had raised rather exceptional circumstances why it should not be granted.  Reasons why this is so include the desirability of operating the system efficiently and without unreasonable delays and also the interests of the applicant for a patent which are also clearly involved."   

Although regulation 5.10(2) does not cover extensions of time to file an opposition I view Burchett J's remarks in the Ferocem case as support for considering factors such as those stated in the Vangedal-Nielsen case in relation to an extension of time under regulation 5.10(2).

From these judgements the considerations relevant to an extension of time can be thus stated generally as follows:

a)   The Commissioner, before allowing an extension, must be satisfied that the person seeking the extension has made out a proper case justifying the extension;  and

b)   The Commissioner must consider not only the private interests of applicants for patents and opponents, but also the public interest, by ensuring that invalid patents are not granted, and that proceedings are not unduly protracted.

Turning now to the grounds upon which the application has been made:

1.   The poor quality of the photocopies appears to be the primary reason for the extension of time.  I agree with the proposition that if an exhibit filed with the Patents Office is in the form of a colour photograph then it must be assumed that the colour in the photograph imparts additional information by colour, contrast or texture over that contained in a monochrome photocopy.  As colour photocopying facilities are inexpensive and readily accessible it is reasonable that a colour reproduction should also be served on the applicant.  Furthermore, it is not reasonable to expect the applicant to ascertain the relevance of the exhibit and the case which must be answered until the colour version is served, nor is it reasonable to expect the applicant to arrange a viewing of the machinery as a substitute for the colour photocopy.

2.   Mr Baker, the Engineering Director of the applicant company, was on holiday from Christmas to 31 January 1994 and Mr Marsh the attorney responsible for this matter returned from holidays on 14 February 1994.  I note firstly that neither of these periods of absence were described as unforeseen.  I must assume therefore that the applicant and attorney knew of the possible consequences of these absences and did not make other provisions for the preparation of evidence.  Concerning Mr Baker, I accept that his personal availability could have been crucial not only for the preparation of his own declaration, but also that his declaration might necessitate obtaining additional evidence from other employees.  

     In this regard I note that the serving of the evidence-in-support was completed on 18 October with the exception of the colour photographs which were served on 10 December 1993.  Without making any assessment of the importance of the photographs I think it is reasonable to expect that some preliminary preparation of evidence would have commenced prior to the serving of the colour copies.  Upon receipt of the colour copies, and knowing Mr Baker's unavailability after Christmas I would have expected the colour copies to have been given to Mr Baker immediately for the completion of his declaration.  There were two working weeks between 10 December and Christmas in which this could have been done but I accept Mr Marsh's submission that as Engineering Director Mr Baker would have had many other claims on his time at what was probably a very busy time prior to his departure.  I conclude on this point that although I do not agree that Mr Baker's absence on holidays is in itself a valid reason for an extension of time I accept that in combination with the uncertainty surrounding the photographs and the lateness of their availability to him, his leave compounded the delays.

3.   I find it difficult to believe that Mr Marsh's personal presence was crucial for the preparation of evidence.  I would have thought that it would be standard practice in a firm of Patent Attorneys for an Attorney who knows that he or she will be absent on leave to hand over the responsibility for the case to an associate.  Furthermore, it appears that Mr Marsh's leave occurred after the original time for the filing of evidence-in-support had already expired.  I find that I cannot take this factor into consideration in my decision.

4.   It was submitted that the public floatation of Austoft had occupied considerable amount of executive time making it more difficult to obtain full instructions in connection with answering the opposition.  As the information given does not establish any direct causal connection between the floating of Austoft and a delay in the preparation of evidence I do not consider this factor to be a relevant consideration.

Given the above considerations, in my view some case has been made out justifying an extension.  I must now consider the interest of the parties.

I accept the applicant's proposition that they have a real and substantial interest in progressing the patent application.  I do not accept, however, their submission that special considerations apply where the applicant for the extension of time is the patent applicant.  A potential applicant has a choice of whether to try to protect an alleged invention by secrecy or whether to avail themselves of protection using the patent system.  I accept that for mechanical inventions secrecy is difficult but when choosing to apply for a patent an applicant is fully aware of the consequences of that choice including publication of the disclosure of the alleged invention.  I cannot agree that this publication should result in the applicant being given any particular advantage in that they should be dealt with more leniently.  Furthermore, the fact that the opponent took the full time allowed by the Patents Act to serve evidence does not in any way relieve the applicant of the requirement that the evidence-in-answer be served within the required time.

Clearly it would not be in the opponent's interest for an extension of time to be given.  If no extension were to be granted in this case the applicant would be prevented from presenting any evidence on which to base their case.  

There are two main factors that have to be balanced when assessing the public interest.  The first is that an invalid patent should not be granted.  This is best achieved by ensuring that all parties have the necessary time in which to serve relevant evidence so that the delegate of the Commissioner has all relevant material available when determining the opposition.  In the present case it seems that the evidence for which the extra time is sought will be relevant to the determination of the opposition.  

The other consideration is that proceedings should not be unreasonably protracted.  The assessment of this factor depends very much on the circumstances surrounding the individual case and may be considered to affect the length of the extension as much as whether an extension is actually given.  I note in this regard that part of the applicant's evidence-in-answer was served on 18 April 1994 on which date a further application for an extension of time to 18 May 1994 was made.  The balance of the evidence was served on 21 April 1994.     

After consideration of the various interests in this matter I believe that the circumstances tend to support an extension of time.

I conclude that I am reasonably satisfied that the applicant had made out a proper case justifying some extension of time in which to serve evidence-in-answer but I am not convinced that, based only on the reasons given, they are entitled to the full period of three months for which they have applied.

I must now consider what length of extension is appropriate in the present circumstances.  The requested extension period will have already elapsed prior to my decision being issued and some evidence has already been filed and served in that period.  I believe that an extension of time that will allow this evidence to be considered but will not result in any further delays in the opposition proceedings would be appropriate in all the circumstances.  I will therefore grant an extension of time to 18 April 1994.

It should be noted that this extension does not concern the further extension application made on 18 April 1994.  
costs
As a general rule costs follow the event.  At the hearing 
Mr Hinde submitted for the opponent that regardless of the outcome the opponent should be entitled to costs.  I do not agree noting that the opponent was in part responsible for events that necessitated this application.  I have found that the reasons given by the applicant justify to some extent the extension granted.   I therefore award costs against Cameco Industries Inc. 

Vivienne Thom
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  F B Rice & Co
Patent attorneys for the opponent   :  Spruson & Ferguson