Aker Biomarine ASA v Neptune Technologies & Bioressources Inc
[2011] APO 100
•25 November 2011
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Aker Biomarine ASA v Neptune Technologies & Bioressources Inc. [2011] APO 100
Patent Application: 2002322233
Title:Natural marine source phospholipids comprising flavonoids, polyunsaturated fatty acids and their applications
Patent Applicant: Neptune Technologies & Bioressources Inc.
Opponent: Aker Biomarine ASA
Delegate: Dr S.D. Barker
Decision Date: 25 November 2011
Hearing Date: Written submissions filed on 14 October 2011 and 21 October 2011
Catchwords: PATENTS – extension of time to serve evidence in answer – parties involved in negotiations – preparation of evidence accelerated on conclusion of negotiations – public interest favours extension – extension allowed
Representation: Patent applicant: Blake Dawson
Opponent:Pizzeys
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2002322233
Title:Natural marine source phospholipids comprising flavonoids, polyunsaturated fatty acids and their applications
Patent Applicant: Neptune Technologies & Bioressources Inc.
Date of Decision: 25 November 2011
DECISION
Extension of time to serve evidence in answer until 17 December 2011 allowed.
Costs according to Schedule 8 awarded against Aker Biomarine ASA
REASONS FOR DECISION
A notice of opposition to the grant of patent application 2002322233 (the patent application) was filed by Aker Biomarine ASA (the opponent) on 23 January 2009, and a statement of grounds and particulars was served on 22 April 2009. Evidence in support of the opposition was completed on 17 May 2010. Consequently, evidence in answer was due to be served by 17 August 2010. Neptune Technologies & Bioressources Inc. (the applicant) has previously sought five extensions of time for serving evidence in answer, and prior to the present application, evidence in answer was due by 17 September 2011. The applicant sought a sixth extension of time for serving evidence in answer until 17 December 2011. The opponent objected to the extension, and a hearing was conducted by way of written submissions.
Some background
The parties were involved in litigation and negotiations in the US in relation to US 6800299. The Delegate who granted the previous (fifth) extension of time request found that there was some relationship between US 6800299 and the present patent application, although they do not share a priority claim. The Delegate also commented in a letter to the parties dated 29 July 2011 on the basis of the opponent’s evidence that “settlement negotiations have been completed in the US”.
An application corresponding to the present patent application is before the European Patent Office Board of Appeals (EP 1417211).
Reasons for the extension of time
The circumstances and reason for the extension of time were given as:
“The Applicant applied for an extension of time from 17 June 2011 to 17 September 2011 in which to file its evidence in answer. This was on the basis that:
(a) the parties were engaged in settlement negotiations which if successful may result in the opposition being withdrawn; and
(b) to allow an expert to consider the evidence in support.The Opponent filed comments in relation to this application. The extension was ultimately granted to 17 September 2011 on the basis that the applicant "has been proceeding under the assumption that [other] litigation would resolve the current opposition".
The Patent Opposition officer stated that if further extensions are requested, they would expect the Applicant to establish that essentially there has been significant progress in the preparation of the evidence. The following reasons and supporting attached declaration are proffered to provide a context and reasons for the further extension to complete evidence in answer:
(a) the history of the recent settlement negotiations are set out in detail in a declaration of Mr Christian Cawthorn of Norton Rose (copy attached) in Canada who is responsible for managing the prosecution of the Opposed Application. Mr Cawthorn states that the negotiations were concluded with an email from the Opponent on 1 September 2011 that the Opponent believed the mediation (which could have favourably affected the Opposed Application) to be unsuccessful;
(b) since the email message on 1 September 2011 , the Applicant has accelerated the search for experts in the field of lipids to prepare evidence in answer;
(c) the Applicant has located two (2) expert witnesses and is concluding retaining them as independent expert witnesses;
(d) the additional time will enable their evidence to be completed and filed. At this stage it is not anticipated that further extensions of time will be necessary beyond 17 December 2011;
(e) the Applicant has acting [sic] quickly since it became clear the negotiations were at an end and in our respectful submission, this application should be granted to enable the Applicant to continue to swiftly prepare its evidence in answer now that those negotiations are at an end.”
The relevant law
The law applying to extensions of time under subregulation 5.10(2) of the Patents Regulation 1991 has been considered in many decisions of the Commissioner, and several decisions of the Federal Court (Ferocem Pty Ltd v Commissioner of Patents [1994] FCA 981; (1994) AIPC 91-057; 28 IPR 243, A Goninan & Co Ltd v Commissioner of Patents [1997] FCA 424; (1997) AIPC 91-330; 38 IPR 213 and National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33; (2001) AIPC 91-697, 50 IPR 398). In summary, the power to extend time is discretionary, so it is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at AIPC 38, 208; IPR 247-8, Goninan at AIPC 39, 434; IPR 220). Relevant considerations include:
- the reason why the evidence was not served earlier (Ferocem at AIPC 38, 207-8; IPR 247);
- the public interest in determining a serious opposition on its merits (Goninan at AIPC 39, 435-6; IPR 222); and
- the interests of the parties (Ferocem at AIPC 38, 208; IPR 247).
Explanation of the delay
The applicant has provided a detailed history of their understanding of the negotiations between themselves and the opponent in the Statutory Declaration of Grant William Fisher (Fisher declaration) and the Affidavit of Christian Cawthorn dated 16 September 2011 (Cawthorn declaration). The Cawthorn declaration states that the applicant was in negotiations with the opponent in relation to “a different matter”. This declaration also states that the negotiations were confidential, and it is not absolutely clear that these negotiations are the same as the negotiations referred to by the previous Delegate. However, in their submissions the applicant asserts that these negotiations were in fact relevant and related to the subject matter of the present patent application. The declarations state that negotiations concluded with an email from the opponent on 1 September 2011 informing the applicant that they believed the mediation to be unsuccessful. The applicant asserts that they believed up until this date that the negotiations could have favourably affected the outcome of the present opposition, and this is supported by the Cawthorn declaration. I am satisfied that the applicant believed they were engaged in relevant negotiations up until 1 September 2011.
The application further states that since 1 September 2011, the applicant has accelerated the search for experts in the field and has in fact located two experts which it intends to retain as expert independent witnesses. The applicant’s submissions of 14 October 2011 confirm that the two experts have indeed been retained and their names are given.
The applicant’s submissions rely on paragraph 3.8.5.3 of the Australian Patent Office Manual of Practice and Procedure which states that “parties undergoing negotiations” is a relevant factor to consider in extension of time requests. The applicant also cites several cases in support of their request.
In particular, the applicant relies on Eli Lilly & Co v Amgen Inc [2000] APO 16; (2000) 48 IPR 363 wherein the Delegate was satisfied that the applicant delayed their submission of evidence due to their reasonable belief that their negotiations with the opponent would effectively resolve the opposition, even though the opponent did not hold this expectation. Consequently, even though the Delegate suggested that the applicant in that case did not act in a most prudent manner, the explanation of the delay was accepted and the extension granted.
The opponent comments that in Eli Lilly (supra) both parties had established that they were “engaged in relevant settlement talks”. However in that case, as in the present case, there was clearly a difference of opinion between the parties as to whether the opposed application would be a part of any agreement reached pursuant to the negotiations, yet this difference of opinion did not prevent the Delegate granting the extension. I do note that the applicant has not explained why they did not accept the opponent’s statement in the Statutory Declaration of Hallvard Peter Bogh Muri dated 30 June 2011 (the Muri declaration), submitted by the opponent with their comments on the previous request for extension of time, which stated that settlement discussions with the applicant have been concluded. This represents a deficiency in their explanation. However, I accept the Fisher and Cawthorn declarations in their statements that the applicant’s belief for whatever reason was that there was still a possibility of negotiation up until 1 September 2011.
The opponent also notes in relation to Eli Lilly (supra) that the opposed request was only the second request for further time compared with the present sixth request. This is acknowledged, however I note that each request should be considered on its merits.
The applicant also refers to Cryovac, Inc. v American National Can Company [2006] APO 34 for the proposition that settlement negotiations may be the basis of a satisfactory explanation for a delay in the preparation of evidence. The opponent disputes the applicability of that case. I note the following paragraph [11] from that case.
“Settlement negotiations have been recognised in previous decisions as a proper explanation of delay (see for example Race Lotto Pty Ltd v AWA Ltd [1998] APO 72; Eli Lilly & Co v Amgen Inc (2000) 48 IPR 363; DYWIDAG-Systems International Pty Ltd v Jennmar Australia Pty Ltd [2003] APO 36; Boral Resources (NSW) Pty Ltd v BST Holdings Pty Ltd [2003] APO 46). These cases broadly involved opposition matters in which settlement negotiations had commenced relatively early in the evidentiary process, but delays in the preparation of evidence had resulted from one party labouring under the misapprehension that negotiations were underway when the other party did not consider any settlement to be in train. The present situation is similar to that in Race Lotto Pty Ltd v AWA Ltd [supra], but in contrast here settlement negotiations have only recently commenced and could not have resulted in the previous extensive delays in the preparation of evidence.” (emphasis added)
The opponent points to the fact that in the Cryovac case (supra), the extension was refused. However in that case the Delegate identifies a difference in the timing of the negotiations compared to the previous cases, and in that context makes the statement quoted by the opponent that “mere speculation of a settlement is not sufficient reason for the grant of an extension”. In the present case, however, both parties agree that all negotiations have ceased, and there is no future “speculation” of settlement on the part of the applicant. I therefore consider that it is appropriate to give weight to the applicant’s belief that the past negotiations were significant, even if this belief was misguided.
The cases cited by the opponent do not convince me otherwise. In the case of EWT Trade and Business Consultants NZ Limited v ACP Publishing Pty Limited, and News Limited [2006] APO 17, the lack of communications between the parties over a three month period suggested at best indifference to settlement negotiations. In the present case, in contrast, there is evidence that negotiations were underway from January to September 2011 (Fisher and Cawthorn declarations). The opponent also cites Magimix SAS v Breville Pty Limited [2010] APO 32, a case in which the extension was refused, wherein the Delegate stated that there was no indication of progress in the preparation of evidence. Again in contrast in the present case, a Statutory Declaration by Paul John Nestel has now been filed in support of the applicant’s case.
I note that the Delegate, in granting the previous extension of time, stated that if further extensions were requested that the applicant would be required to clearly explain in detail what caused the delay. The applicant has provided a detailed explanation and evidence as to the correspondence between the parties which show that the applicant believed that negotiations were in train from 20 January 2011 (Fisher declaration) until 1 September 2011 (Cawthorn declaration). Although the opponent refers to a “unilateral assertion of negotiations” in their latest submission, they do not provide any evidence disputing the applicant’s belief regarding the negotiations. The applicant has also given the names of their experts and has filed a first expert declaration. They have additionally stated that the negotiations were also in part delayed by the summer vacation in the US and Europe. I therefore consider that despite the deficiency referred to earlier, a satisfactory explanation of the delay has been provided.
Public interest
When considering the public interest, it is necessary to form a view as to the nature and significance of the evidence that is being prepared (Goninan at AIPC 39, 438; IPR 225-6). The statement of grounds and particulars indicates that the grounds of opposition include novelty and inventive step, and that numerous documents are cited. The applicant states in their submission that they have retained two expert witnesses who are intended to answer the matters raised by the opponent in its evidence in support. They say that the issues to be addressed by the proposed evidence are responses to each of the statutory declarations submitted by the opponent in its evidence in support, and that the nature of the evidence is of high significance, without which there will be no serious defence of the opposition. The applicant has also now filed a first Statutory Declaration by Paul John Nestel which deals with the meaning of certain terms, and the common general knowledge in the art. The applicant also states that “it is not anticipated that further extensions of time will be necessary beyond 17 December 2011”.
I am satisfied that the type of evidence that is being prepared is likely to be of significance in this opposition. Consequently I am satisfied that the public interest favours allowing the extension.
Interests of the parties
The opponent’s interests clearly lie in the opposition being dealt with expeditiously. They are frustrated by the number of extensions to serve evidence in answer which have been granted, and because they allege that only the applicant believed negotiations to be relevant to this case. Also, I am mindful that the Manual of Practice and Procedure at section 3.8.5.8 states in relation to negotiations that the Commissioner will not grant indefinite extensions.
It is in the applicant’s interests to ensure that all material relevant to the opposition is before the decision maker. Currently, the evidence on file is limited to a declaration which deals with the meaning of certain terms and a statement as to the common general knowledge in the art. It is therefore clearly in the applicant’s interests to obtain the extension. Thus, although the inconvenience to the opponent is noted, the interests of the parties are considered to be opposed and largely offsetting.
Overall
Having regard to the relevant matters, I am satisfied that there is a satisfactory explanation of the delay, and the public interest favours allowing the extension. The interests of the parties is neutral in this regard. It follows that the extension should be allowed. I am heartened to note that the applicant has stated that further extensions are not anticipated. I expect the applicant to take all reasonable measures to ensure that the evidence is completed within the period of this extension.
Costs
The applicant is successful, and I can see no reason to depart from the normal practice that costs should follow the event. I will award costs according to Schedule 8 against the opponent, Aker Biomarine ASA.
Dr S.D.Barker
Delegate of the Commissioner of Patents
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