Bausch and Lomb Incorpoprated v Allergan Inc

[1997] APO 45

official notice

decision of a delegate of the commissioner of patents

Application  :          No.675414 in the name of Bausch & Lomb Incorporated.

Title:          Method and Composition for Cleaning and Disinfecting Contact Lenses.

Action:          Application by Allergan Inc. for an extension of time under subsection 223(2) to file a notice of opposition.

Decision:          Issued            .

Abstract

Allergan’s attorney was watching for acceptance of this divisional application and received

verbal instructions to oppose it before acceptance.  The attorney’s interpretation of regulation 5.3(1) in conjunction with his failure to ensure he was reminded about the deadline for filing a notice of opposition resulted in him not complying with Allergan’s instructions.

The relative interests of the parties and the public interest do not favour either granting or refusing the extension of time.  Allergan considers there is no subject matter in either the parent or divisional application which is not of interest to it.  The decision on the opposition to the grant of a patent on the parent application has not been issued.  It seems more likely than not that Allergan is pursuing a serious opposition against the divisional application.  There was no undue delay.  Discretion exercised in Allergan’s favour and the time to file a notice of opposition extended.  Allergan given notice under regulation 22.14 about serving and filing the statement of grounds and particulars.

The finding that Allergan intended to file a notice of opposition depended on a statement made by attorney at the hearing.  The applicant did not say it would not have attended the hearing if this statement had been made earlier.  No award of costs.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Application no.675414 by Bausch & Lomb Incorporated and an application by Allergan Inc. for an extension of time under subsection 223(2) to file a notice of opposition.

background

Application no.30439/92 by Bausch & Lomb Incorporated (Bausch) is a further application from application no.49989/90 (now no.628926).  The application was advertised as accepted under no.675414 on 6 February 1997 and thus any notice of any opposition was due to be filed by 6 May 1997.  On 6 May 1997 Alcon Laboratories Inc (Alcon) filed a notice of opposition to the grant of a patent on the application.

On 12 May 1997 Allergan Inc (Allergan) filed a notice of opposition to the grant of a patent on the application which was accompanied by an application for an extension of time under section 223(2).  Allergan filed a statutory declaration in support of its extension of time on 16 May 1997.

A copy of the application was sent to Bausch’s attorneys on 26 May 1997 and it objected to the extension of time.  The matter was set for hearing in Canberra on 16 July 1997 and both parties appeared by telephone.  Bausch was represented by Dr C Bodkin, patent attorney, of Spruson & Ferguson and Allergan was represented by Dr P Stearne, patent attorney, of Davies Collison Cave.  Mr J Siely, patent attorney, of Davies Collison Cave assisted Dr Stearne at the hearing.

APPLICATION FOR EXTENSION OF TIME

Allergan’s application requests an extension of time of one month and gives the circumstances and grounds as follows:

“Due to an error/omission in the office of our Australian attorneys a Notice of Opposition was not filed by the due date of 6 May 1997.  This will be particularised in detail in the next few days in a declaration of Dr Peter Stearne, our Australian Patent Attorney.”

EVIDENCE.

The evidence supporting the extension of time consisted of a statutory declaration made by Dr Peter Stearne on 16 May 1997 with exhibits PAS-1 to PAS-8 (the first Stearne declaration).

On 15 July 1997 Dr Stearne faxed me another statutory declaration made by him on 15 July 1997 with exhibit PAS-9 (the second Stearne declaration).  He also faxed me a document signed by Martin Voet on 9 July 1997 (the Voet document).

SUBMISSIONS.

Dr Bodkin faxed me a copy of a summary of his submissions just before the hearing on the morning of 16 July 1997.

At the hearing Dr Bodkin pointed out the second Stearne declaration and the Voet document did not accompany the application for extension of time.  Therefore he argued regulation 22.11(1) meant I should not consider either of these as they were not admissible evidence.

Dr Stearne said Allergan had complied with this regulation when it filed the first Stearne declaration.  He also pointed out regulation 22.11(1) did not prevent the applicant for an extension of time from filing evidence in support of its case after it had complied with this regulation.  I agree with Dr Stearne although I note the delay between complying with the regulation and the filing of such evidence may influence my discretion to extend the time and/or award costs.

Dr Bodkin pointed out the Voet document did not comply with the requirements for a statutory declaration set out in regulation 22.13.  Dr Stearne said he filed the document in the form in which he had received it by fax.  He said he expected the original document to comply with regulation 22.13 and he would file this soon after he received it by post.

I agree with Dr Bodkin but, as pointed out by Dr Stearne, the Commissioner as an administrative tribunal can consider any document which has probative value.  I consider this document has some probative value and I will give it an appropriate weight in my considerations (Minister for Immigration and Ethnic Affairs v Pochi 31 ALR 666). I note Dr Stearne did not file the original of the Voet document.

Consequently in making my decision I have considered the first and second Stearne declarations, the Voet document, Dr Bodkin’s written summary and the oral submissions made by each party at the hearing.  I will refer to these submissions at appropriate places in my decision.

DECiSION.

Dr Bodkin did not dispute that subsection 223(2) may be applied to extend the time to file a notice of opposition under section 59.  I note many judgements and decisions have applied this subsection and the corresponding subsection in the 1952 Act to such a situation ( for example Kimberly-Clarke Ltd v Commissioner of Patents (No. 3) 13 IPR 569 and ICI Operations Australia Pty Ltd v Dowelanco (1992) AIPC 90-884).

Dr Stearne said Allergan’s extension of time is based on the occurrence of an error or omission and not circumstances beyond its control.  The first Stearne declaration points out he became aware of application no.675414 during prosecution of Allergan's opposition to the parent application.  Dr Stearne then wrote to Allergan and advised it the most appropriate course was to watch for acceptance of the application.

Seemingly Allergan agreed to this, as in September 1994 Dr Stearne told it the application was due to be advertised lapsed after the watching service told him this.  Subsequently the watching service told Dr Stearne the application had been restored and he informed Allergan of this in March 1995.
On 13 January 1997 the watching service told Dr Stearne the application had been accepted and this was due to be advertised in the Official Journal dated 6 February 1997.  Dr Stearne then inadvertently sent the file to the general filing system and not to the “policing” division of his firm so that he was not reminded of the deadline to file a notice of opposition.  According to Dr Stearne this is the error which lead to the failure to file the notice of opposition in the time allowed.

Dr Bodkin argued an essential preliminary in the demonstration of an error or omission is for Allergan to show it intended to file a notice of opposition (Biosys v Ecogen Australia Pty Ltd 26 IPR 668 at page 671). I agree as long as Allergan did not form this intention after the period for filing the notice of opposition expired.
The first Stearne declaration points out the purpose of the watch "was to enable an opposition to be filed within the appropriate time frame".  At the hearing Dr Stearne said the only purpose of watching for acceptance of the application was to oppose the application.

Before starting the watch Dr Stearne wrote to Allergan as follows:

"The most appropriate course of action to take in respect of this divisional application, is to watch for acceptance of the application and then analyse the accepted claims and make an informed decision as to whether the application should be proposed(sic)."

I conclude the fact that the attorneys were watching for acceptance of the present application did not mean Allergan intended to oppose the grant of a patent on the application.  I consider it merely means Allergan was considering opposing it under section 59.

Dr Stearne argued the fact that Allergan was involved in a protracted opposition to the parent application meant it intended to oppose the present divisional application.  Both he and Mr Siely directed my attention to the similarity between the claims in the two applications.  Dr Bodkin pointed out the claims of the parent have a much wider scope than those of the divisional.  He said in this situation it did not automatically follow that the divisional would be opposed.

I note, prima facie without deciding the issue, that the scope of the present claims lie within the scope of the accepted claims in the parent.  I think I cannot automatically conclude from this that Allergan intended to oppose the present application.  For example the broader scope of the parent's claims may be relevant to Allergan's activities but the narrower scope of the divisional's claims may not be relevant.

Mr Martin Voet, Allergan's chief patent counsel visited Australia in November/December 1995 in connection with the opposition to the parent application.  The first Stearne declaration states he and Mr Voet discussed the divisional application at that time and these discussions verbally confirmed the watch was to be maintained.

Mr Voet’s statement recalls the discussions in November/December 1995 and states as follows:

“In our discussions, maintenance of the watch on Australian application No.30439/92 to which reference is made in the Stearne declaration with a view to filing a Notice of Opposition in respect of the divisional application if it proceeded to acceptance was confirmed.”
This suggests to me that in November/December 1995 Allergan was still considering opposing the grant of a patent on the present application.  I agree with Dr Bodkin that this statement is not consistent with a firm intention to oppose.

The second Stearne declaration confirms Mr Voet gave instructions “to oppose the grant of a patent on application no.30439/92 if it proceeded to acceptance”.  I note the declaration does not state when or how Mr Voet gave these instructions.  I presume it was prior to acceptance because of the use of the phrase “if it proceeded to acceptance”.  At the hearing Dr Stearne stated Mr Voet had verbally instructed him to oppose the grant of a patent on the present application during his visit in November/December 1995.  He said Mr Voet gave these instructions because there was no subject matter in either the parent or divisional application which was not of interest to Allergan.

Dr Bodkin expressed surprise that Dr Stearne did not clearly state when he received these instruction in either of his declarations.  He said the rest of the evidence did not support Dr Stearne’s allegation that he received such instructions in 1995.  Consequently I will review the evidence to see if there is any which suggests Dr Stearne did not receive instructions to oppose the application in November/December 1995.

On 13 January 1997 the watching service sent Dr Stearne a memorandum which pointed out the application had been accepted.  It also asked if the watching service should “check for opposition to or for divisionals of AU 675414 in six months time".  Dr Stearne duly advised Allergan the application had been accepted.  Dr Bodkin points out Allergan did not file a copy of this advice or any response in its evidence.  I am a little surprised by this as such evidence may have supported Dr Stearne’s statement about any instructions he had received to oppose the application.

On 17 January 1997 the watching service sent Dr Stearne a further memo in confirmation of its memorandum of 13 January 1997.  Dr Stearne wrote a note on this memo as follows:

“6.2.97 acceptance-3 months to oppose from there”.

Dr Stearne argued the phrase “from there” showed he intended to file a notice of opposition in the three month period.  Dr Bodkin said these words did not mean Allergan intended to oppose the application.  I think it is not clear from this note whether or not Dr Stearne received instructions to oppose the application in November/December 1995.

Dr Stearne received the watching service’s memorandum and memo before the date of the Official Journal which advertised the acceptance of the application.  The first Stearne declaration states as follows:

"When informed by our watching service that an application, in respect of which I am to lodge a notice of opposition, has been accepted, it has been my practice to pass the file to a division in our Sydney office, the function of which is to 'police' the deadlines by which actions pertaining to patent applications must be carried out, including the deadlines for lodging notices of opposition, and provide me with a timely reminder.  In this case, through inadvertence for which I have no recollection and hence no explanation, I omitted to do so.  Instead the file was erroneously returned to our general filing system, without a policing date."

At the hearing Dr Stearne said he could not file a notice of opposition when he received the advice from the watching service because the application had not been accepted.  I presume he meant because the application had not been advertised accepted as both the memorandum and the memo clearly state the application was accepted on 5 December 1996.  This means Dr Stearne interprets regulation 5.3(1) to mean a notice of opposition cannot be filed before the date of the Official Journal in which acceptance of the application is advertised.

Regulation 5.3(1) states the notice of opposition must be filed “within 3 months of publication in the Official Journal of the notice of acceptance”.  In my view the word “within” in this regulation permits a potential opponent to file a notice of opposition before publication of the notice of acceptance provided the application has been accepted.  Therefore I consider Dr Stearne may have filed a notice of opposition soon after he received the memorandum or the memo from the watching service.

The fact that Dr Stearne did not file a notice of opposition soon after he received the memorandum or the memo seems to be inconsistent with Dr Stearne receiving instructions to oppose the application in November/December 1995.  But I consider there is no inconsistency if Dr Stearne’s actions are viewed in the light of his interpretation of regulation 5.3(1).

I consider there is no other evidence on file which suggests Dr Stearne did not receive instructions to oppose the application in November/December 1995.  Dr Stearne stated at the hearing he received instructions to oppose the present application from Allergan’s chief patent counsel in November/December 1995.  Therefore I must conclude Allergan intended to oppose the present application in November/December 1995.

Dr Stearne’s interpretation of regulation 5.3(1) in conjunction with his failure to ensure he was reminded about the deadline for filing a notice of opposition resulted in him not complying with Allergan’s instructions.  Therefore I consider there is a causal connection between what Dr Stearne did and the failure to file a notice of opposition within the time allowed (Kimberly-Clarke Ltd v Commissioner of Patents (No. 3,) supra at page 580).

Consequently I may extend the time for Allergan to file a notice of opposition to application no.675414.  But before doing so I have to consider whether to exercise the discretion in subsection 223(2) in Allergan’s favour.

Dr Bodkin argued Allergan had not given a frank, comprehensive and clear disclosure of all the circumstances relevant to weighing of the discretionary considerations as required by the Kimberly-Clarke case (Kimberly-Clarke Ltd v Commissioner of Patents (No. 3,) supra at page 584).  Dr Stearne submitted Allergan had made out a proper case justifying an extension.

The context of the present extension of time is similar to that in the Kimberly-Clarke case.  But the Federal Court has rejected the notion that a broad discretion can be reduced to an insistence on imperative compliance with particular requirements (Ferrocem Pty Ltd v Commissioner of Patents (1994) AIPC 91-057 at page 38,207). Both Dr Bodkin and I expressed surprise at some aspects of Allergan’s evidence but I consider I should not refuse to exercise the discretion in its favour because of this.

Dr Stearne said Allergan would be significantly disadvantaged by refusal of the extension of time.  He argued Bausch, by filing a divisional application, would in effect be able to get a patent for subject matter Allergan had opposed in the parent application.
Dr Bodkin submits Bausch would be significantly disadvantaged by allowing the extension of time.  He said I should consider Allergan’s extension of time on its merits without having regard to Alcon’s opposition.  According to Dr Bodkin the decision in the Outokumpu case was inappropriate because the hearing officer took account of the fact that the application had been opposed by another opponent (Outokumpu Harjavalta Metals Oy v WMC Resources Ltd 37 IPR 55 at page 63).

An important approach adopted by courts in exercising a discretion to extend time is to consider the consequences of extending or refusing to extend the time (Sanyo Electric Co. Ltd v Commissioner of Patents (1996) AIPC 91-283 at page 37,844). I think a consideration of the consequences of extending or refusing to extend the time to file a notice of opposition inevitably means the decision maker has to take account of other oppositions. Therefore I consider it was appropriate for the hearing officer take account of the fact that the application had been opposed by another opponent in the Outokumpu case (Outokumpu Harjavalta Metals Oy v WMC Resources Ltd., supra).  I will take account of Alcon’s opposition in Allergan’s application for extension of time.

Mr Siely argued Allergan would be greatly disadvantaged if I did not allow the extension of time.  He said this would prevent it from protecting its interests in the present subject matter if Bausch withdrew the parent application.  I agree with Dr Bodkin that I should not consider this hypothetical situation in considering the interests of the parties.

It seems to me the interests of both parties are in balance with respect to refusing or granting the extension of time.  I think the public interest in not allowing invalid applications to proceed to grant is already protected by Alcon’s opposition.

Both Dr Stearne and Mr Siely said Allergan had pursued a vigorous opposition against the parent of the present application.  Therefore they argued Allergan must be pursuing a serious opposition against the present application because of the similarity between its claims and those in the parent application.  Dr Bodkin said Allergan was not involved in a serious opposition

Earlier in this decision I noted, without deciding the issue, that the scope of the present claims lie within the scope of the accepted claims in the parent application.  This was the situation during all of the opposition period for application no.675414.  Dr Stearne said Mr Voet considers there is no subject matter in either the parent or divisional application which is not of interest to Allergan.  The Commissioner has not issued a decision about the opposition to the grant of a patent on the parent application.  In this situation it seems to me more likely than not that Allergan is pursuing a serious opposition against the present application.

Dr Bodkin said a factor I should consider in exercising my discretion is whether there had been an undue delay in filing the application for extension of time.  Dr Stearne said the start of the delay should be calculated from the date he discovered the notice had not been filed (Danby Pty Ltd v Ribloc Group Ltd 10 IPR 277 at page 283). He said the application for the extension of time had been filed a few days later. Dr Bodkin argued the end of the delay was the day before the hearing as the application for extension of time was not completed until Allergan filed the second Stearne declaration and the Voet statement.

I agree with Dr Stearne that the period of the delay starts at the date he discovered the notice had not been filed.  But it seems to the period ends when Allergan completed filing the evidence in support of its application (Manual of Practice and Procedure, vol 3, paragraph 26.5.3).  I think it is clear that my decision relies on a statement made by Dr Stearne at the hearing.  Therefore I think the period of the delay ends on the date of the hearing.  This is a period of approximately 2 months and I do not consider this delay is undue.

The Federal Court considers most provisions which authorise an extension of time are instances of beneficial legislation which, accordingly should be applied beneficially (Chalk v Commissioner for Superannuation 33 ALD 420 at page 425). Also the High Court considers it is in the public interest that a serious opposition should be dealt with on its merits rather than shut out through a lamentable failure in procedure (Kaiser Aluminium & Chemical Corp. v The Reynolds Metal Company 120 CLR 136 at page 143). Therefore I will exercise my discretion in favour of Allergan.

Therefore I grant Allergan an extension of time to 12 May 1997 within which to file a notice of opposition to application no.675414.

NOTICE ABOUT THE STATEMENT OF GROUNDS AND PARTICULARS.

Dr Stearne said at the hearing I should give a direction about when the statement of grounds and particulars should be served if I allowed the extension of time.  I said I considered this would be appropriate if I allowed the extension of time.  Dr Bodkin did not say Bausch would object to this course of action if I allowed the extension of time.  Subsequent to the hearing Dr Stearne filed a letter which suggests the statement should be served one or two months from the date this decision is issued.

Regulation 5.4 obliges Allergan to serve a statement of grounds and particulars “within 3 months of filing the notice of opposition”.  In the present case the notice was not valid on filing on 12 May 1997 so Allergan was not obliged to serve or file a statement.

I have retrospectively and legitimately validated the filing of a notice of opposition on 12 May 1997 under subsection 223(2).  This action is futile, if the Allergan’s obligation to serve and file a statement also started on this date, as the 3 month period has already expired.  In the present situation regulation 5.4 does not provide for the period for serving and filing the statement.

Regulation 22.14 reads as follows:

“If the Commissioner reasonably believes that it is necessary for the proper prosecution or completion of the proceedings for a person to perform an act, file a document.....that is not provided for by ...these regulations, the Commissioner may give notice to the person requiring him or her to perform the act, file the document...specified in the notice.

The period for serving evidence-in-support in regulation 5.8(1)(a)(i) starts from the date the statement is served.  Therefore I consider it is necessary for the proper prosecution or completion of the opposition proceedings for Allergan to have an opportunity to serve and file a statement of grounds and particulars.
I consider it is not procedurally fair to Allergan for the 3 month period in regulation 5.4 to start before it knew I had validated the filing of the notice.

It follows from the above I reasonably believe it is necessary for the proper prosecution and completion of these opposition proceedings to give Allergan notice about the period for serving and filing a statement of grounds and particulars under regulation 22.14.

Therefore I give Allergan  notice as follows:

Allergan must serve its statement of grounds and particulars on Bausch and file it with the Commissioner within two (2) months from the date this decision is issued.

I allow Bausch 14 days from the date of this decision to ask to be heard about this notice.  Otherwise the notice will take effect when the period for appealing against this decision has expired.

COSTS

Dr Stearne argued costs should follow the event.  Dr Bodkin said costs should be awarded against Allergan irrespective of whether I allowed an extension of time because Allergan filed some of its evidence close to the date of the hearing.

Dr Stearne suggested Bausch’s objection to the extension of time was frivolous.  My finding that Allergan intended to file a notice of opposition depends on a statement made by Dr Stearne at the hearing.  Thus I consider it was not frivolous of Bausch to maintain its objection to the extension of time and appear at the hearing.  Dr Bodkin did not say his client would not have attended the hearing if Allergan had made this statement earlier.  In this situation I consider I should make no award of costs.

SUMMARY.

I granted Allergan an extension of time to 12 May 1997 within which to file its notice of opposition.  I gave Allergan notice under regulation 22.14 about serving and filing its statement of grounds and particulars.  I made no award of costs.

M Kendall
Delegate of the Commissioner of Patents

Patent attorneys for the applicant   :   Spruson & Ferguson, Sydney

Patent attorneys for the opponent   :   Davies Collison Cave, Sydney