Alcon Laboratories, Inc v Bausch & Lomb Incorporated

[1997] APO 67

official notice

decision of a delegate of the commissioner of patents

Application  :          No. 646455 in the name of Alcon Laboratories, Inc.

Title:          Contact Lens Cleaning and Disinfecting with Combinations of Polymeric Quaternary Ammonium Compounds and Enzymes

Action:          Section 104 request to amend withdrawn after opposition by Bausch & Lomb Incorporated; award of costs.

Decision:          Issued            .

Abstract

Request for amendment withdrawn after opponent had completed filing its evidence-in-support but without the applicant filing any evidence-in-answer.  At the same time as the withdrawal, the applicant filed a new section 104 request to amend.

Costs were awarded against the applicant in view of the considerable delays caused by its actions.  The applicant's explanation for withdrawing the request seems unrelated to its apparent expectation of success in the opposition case and it did not explain the delay in amending its claims in accordance with the corresponding European application before acceptance of the first request to amend.

While the applicant was found to be instrumental in causing delays in the proceedings, costs were not awarded on a higher scale merely as a penalty.  Costs were awarded in accordance with schedule 8.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 646455 by Alcon Laboratories, Inc. and opposition by Bausch & Lomb Incorporated to section 104 request to amend the complete specification; award of costs following withdrawal of the request to amend.

background

Patent application No. 646455 by Alcon Laboratories Inc.(Alcon) was advertised accepted on 24 February 1994.  On 24 May 1994 notices of opposition were filed by Allergan Inc.(Allergan) and Bausch & Lomb Incorporated (Bausch & Lomb).

Alcon filed a section 104 request for leave to amend the specification on 14 June 1995.  A further statement of proposed amendments was filed on 11 December 1995.  Subsequently, leave to amend the specification was granted and this was advertised on 26 April 1996.

Bausch & Lomb filed notice of opposition to these section 104 amendments on 26 July 1996.  Alcon, Bausch & Lomb and Allergan all agreed to deferral of the section 59 opposition proceedings pending resolution of the opposition to the section 104 amendments; Allergan did not oppose the section 104 amendments.

A statement of grounds and particulars with regard to the section 104 opposition was filed by Bausch & Lomb on 25 October 1996 and its evidence-in-support on 26 February 1997.

Alcon filed, on 26 May 1997, a letter advising of  withdrawal of the voluntary request to amend of 14 June 1995 which brought to an end the section 104 opposition.  On the same day Alcon filed a new section 104 request to amend.

On 15 August 1997, Bausch & Lomb filed a request for the exercise of the Commissioner's discretionary powers in respect of costs following Alcon's withdrawal of its request to amend.  Bausch & Lomb indicated that it did not want to be heard by the Commissioner in the matter but wished to rely on written submissions contained in its letter dated 28 July 1997.  Alcon similarly filed written submissions dated 16 September 1997.  This decision is made on the basis of these written submissions by both parties.

Decision

Award of costs

In  submissions dated 28 July 1997, Bausch & Lomb sought award of costs incurred.  It further submitted that "in view of the actions of the patent applicant and under all the circumstances the scale of costs should be varied, so as to award the opponent its actual costs in this opposition."

The Commissioner may, under section 210(d), award costs against a party to proceedings before the Commissioner.  Costs are generally awarded against the unsuccessful party in an opposition but all relevant considerations need to be taken into account.  In the present case the request for amendment was withdrawn after the opponent, Bausch & Lomb, had served all its evidence-in-support but Alcon had not filed any evidence-in-answer.  Withdrawal of the request could signify that Alcon was the unsuccessful party and had withdrawn its request because it considered Bausch & Lomb's opposition would succeed but I need to take into consideration the submissions before me before making a decision on the award of costs.

Bausch & Lomb submitted that Alcon had not explained the long delay in withdrawing its request for amendment- a period of seven months from being notified of the case in support of the opposition as set out in the statement of grounds and particulars and three months from service of the evidence-in-support.  Bausch & Lomb also submit that the withdrawal of the request following receipt of the statement of grounds and particulars and evidence-in-support "constitutes an admission by Alcon that their proposed amendments were not allowable under section 102."

In its written submissions Alcon state that its first request filed on 14 June 1995:

"was lodged with the intention of reducing the number of issues required to be addressed in the Applicant's Evidence-in-Answer to the oppositions to grant of a patent on application No. 646455 filed separately by Bausch & Lomb Incorporated and Allergan Inc.  The proposed amendments subject of the First Request represented a substantial narrowing of the claim scope.  The First Request was made with every expectation that it would be accepted and that the proposed amendments would be subsequently allowed."

After due consideration of an examiner's first report and comments by Bausch & Lomb, Alcon filed further amendment items on 11 December 1995, which subsequently led to advertisement of the granting of leave to amend according to the first request.  Alcon submit:

"The arguments included in the comments lodged by the Opponent on 28 August 1995 form the substance of the grounds and particulars set out in the Opponent's Statement served on 25 October 1996.  In view of the Examiner's disagreement with those arguments when presented to him during the examination of the First Request, the applicant had every expectation that the opposition to the First Request would be unsuccessful, in which case costs would have been awarded against the Opponent.  Accordingly, the withdrawal of the first request on 26 May 1997 was not motivated by any expectation that the Opponent would be successful and it does not in any way constitute an admission that the proposed amendments were not allowable under section 102".

Alcon submit that its second request to amend filed on 26 May 1997:

"was filed with the intention of amending the claims to substantially accord with the claims of the corresponding European patent application No. 91304144.1.  It is felt that the claims of the European patent application define the invention more particularly than either the claims accepted by the Patent Office on 21 December 1993 or those proposed under the First Request.  It is also believed that the claims proposed under the second Request, if allowed, should similarly reduce the number of issues required to be addressed in the Applicant's Evidence-in-Answer to the two oppositions to the grant of a patent."

Bausch & Lomb's submissions assert that there has been no attempt by Alcon to resolve its dispute with them. In its view, the filing by Alcon of a second request for amendment will inevitably prolong matters.  Should this second request for amendment eventually be advertised for opposition purposes, Bausch & Lomb may consider the amendments not allowable and oppose the request.  It submits:

"No explanation has been provided by Alcon, however, as to why its request for a further amendment which was filed on 26 May 1997 was not made by way of an amendment to its previous amendment.  That is, no explanation has been provided by Alcon as to why its amendments filed 26 May 1997 was not brought within the present s.104 opposition proceedings.  If it had been filed in such a way, the proposed amendments could have been considered in the present s.104 opposition proceedings, and substantial protraction of the proceedings, as well as unnecessary expense and inconvenience to Bausch & Lomb, could have been avoided."

I agree with Alcon, that once the 14 June 1995 request for amendment had been advertised as accepted, it was not possible for changes to be made to those amendments.  If, as Alcon states, it wished to amend the claims in order that they substantially accord with the claims of the corresponding European patent application, the only course of action open to it was to file a new request to amend. These amendments must be considered quite separately and on their own merits.  However, Alcon must have been aware that this second request may also become subject of further opposition proceedings.

I do not believe that the delay in withdrawing the first request for amendment is reasonable and Alcon have not provided me with any explanation for the delay.  Alcon has not explained why it did not amend the claims in accordance with those of the corresponding European application before acceptance of the first request for amendment.  I do not have any evidence before me to indicate when Alcon became aware of the nature of the claims of the European application or why, if these were felt to define the invention more particularly than earlier claims, such amendment was not proposed much earlier.

In their submissions, Alcon refer me to European application number 91304144.1, which, I discovered from INPADOC, corresponds to EP 457484 and is directed to technology quite unrelated to the present application.  A search on INPADOC for family members related to the present application 646455 revealed European patent application EP 456467 which has an application number 91304114.1 (not 91304144.1) and publication date of 13 November 1991.  This may be the document to which Alcon intended to refer to in its submissions.  I note though that the copy of EP 456467 available to me from the Australian Patent Office records contains claims which are substantially the same as the accepted claims of AU 646455.  Therefore it is not clear to me why the claims proposed with the second request would "define the invention more particularly" than the accepted claims.

Alcon has not provided any explanation of the delay in withdrawing its first request for amendment and subsequently filing the second request despite being fully aware of Bausch and Lomb's case for the opposition.  This long delay by Alcon has resulted in considerable protraction of the section 59 opposition proceedings which have both been deferred pending resolution of the section 104 amendment issue.  Bausch & Lomb has been put to unnecessary expense and inconvenience in preparing evidence for its opposition to the first request amendments which Alcon has now withdrawn.  I note that Alcon withdrew the first request on the day on which its evidence-in-answer was due to be served.  The subsequent filing of the second request for amendment on 26 May 1997 must only further delay the section 59 opposition proceedings.

I have no reason to doubt Alcon's assertion that it made its requests for amendment in good faith and in the belief that it would be successful in the opposition action brought by Bausch & Lomb.  However, I do not agree that granting leave to amend by the examiner for the first request for amendment constitutes any indication of the possible outcome of the opposition hearing.  The examiner does not have the benefit of all the various evidence which is available to the hearing officer.  Furthermore, if Alcon were expecting to succeed in the opposition, it is not clear to me why it would withdraw the first request.  I note that the 11 December 1995 claims are directed to methods only while both the originally accepted claims and those of the 26 May 1997 request for amendment include method claims and claims to compositions.  Therefore Alcon may have withdrawn its first request for amendment so the claims would not be restricted to claims for only methods.  This would accord with its submission that the claims proposed with the second request would "define the invention more particularly" than those proposed in the first request.

Alcon has caused considerable delays by its actions resulting in Bausch & Lomb incurring unnecessary expense and inconvenience in what I believe to be a serious opposition action by Bausch & Lomb.  I have considered the issue of the award of costs taking into account all the circumstances discussed above and conclude that costs should be awarded against Alcon.

I now turn to the request by Bausch & Lomb for the scale of costs to be varied so as to award it actual costs.

Regulation 22.8(1) states:

"The Commissioner must not award costs in proceedings to which this Division applies, other than costs specified in Schedule 8 unless each party to the proceedings has had the reasonable opportunity to make a submission on the matter of the award of those costs."

I am satisfied that each party has had the opportunity to make such submissions on those costs.

Bausch & Lomb submit that:

"Alcon's actions in filing a request for amendment and subsequently withdrawing it after a considerable delay are vexatious and an abuse of procedure and will result in undue delay in the overall proceedings.  There is no evidence in Alcon's actions that its request for amendment filed on 14 June 1995 was a serious one, and we submit that the grounds for opposition in the present s. 104 proceedings have not been overcome by the proposed amendment which Alcon has filed on 26 May 1996.  Under such circumstances, Bausch & Lomb Incorporated has been put to considerable unnecessary time, effort and expense for which costs in accordance with Schedule 8 would be an inadequate compensation.  We submit that although the award of actual costs in a patent opposition matter is unusual, the scale of costs can be varied to allow the recovery of costs reasonably and properly incurred, if the scale provides inadequate recompense, as we submit is clearly the case in the present proceedings: Sterling Drug Inc. v Boots Company (1996) 35 IPR 630."

It further submits that Alcon's actions in causing these delays were strongly contrary to the public interest, when a clear alternative was available to it and that actual costs should be awarded against Alcon as a disincentive for further abuse of procedure.

Alcon, however, make the point that its amendments have been made in good faith and in no way represent an abuse of procedure.  Alcon argue that in the present situation there was no clear alternative for it which would have resulted in the proposed amendments being considered more expeditiously and there was no deliberate delay of the opposition proceedings.  Furthermore, it points out that Bausch & Lomb has not provided any details of specific costs for which it desires the award of actual costs.  Alcon referred me to the following decisions with regard to the issue of actual costs:

Sterling Drug Inc. v Boots Company PLC (1996) 35 IPR 630; Nicholson v Colonial Mutual Insurance Co. (1887) 13 VLR 58;  J. L. Swanson & C. V. Hardy v K. J. Mellett Nominees Pty Ltd (Patent Office decision, 1 August 1997, unreported).

In Sterling Drug Inc. (supra) the hearing officer concluded at 633 that;

"the scale of costs can be varied to allow the recovery of costs reasonably and properly incurred, if the scale provides inadequate recompense" and;

"Costs on a higher scale are to be allowed in cases where there has been 'an extraordinary amount of work and labour' in the preparation and conduct of the case, and should not be imposed as a penalty on the other party for the manner in which they have conducted their case (Nicholson v Colonial Mutual Insurance Co (1887) 13 VLR 58)."

The circumstances in Sterling Drug Inc (supra) are very similar to the circumstances in the present proceedings.  The hearing officer found at 634:

"The evidence presented above, while circumstantial, suggests that Sterling have deliberately delayed the opposition to the first amendment, and may have delayed the substantive opposition.  While such conduct is undesirable, it is not relevant to the quantum of costs.  The only relevant matter is the reasonableness of any unusual expenses incurred by Boots.  There is no evidence that Boots incurred any unusual expense in the course of the opposition, so I will not order a variation of the scale."

Following that decision, although I find that Alcon has been instrumental in causing delays in the present proceedings, this is not relevant to the scale of costs.  The only matters to be taken into consideration in deciding the scale of costs would be any unusual expenses incurred by Bausch & Lomb but it has not provided detail of any specific expenses.  I note that in J. L. Swanson (supra), the hearing officer considered claims for costs in amounts greater than specified in Schedule 8 and for matters other than those provided for in Schedule 8 but the opponent had provided a detailed bill of costs.  I am unable to award costs on a higher scale merely as a penalty to Alcon.

Summary

I award costs against Alcon in accordance with Schedule 8.

Gillian Jenkins
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  F. B. Rice & Co, Sydney

Patent attorneys for the opponent   :  Spruson & Ferguson, Sydney