Commonwealth Scientific and Industrial Research Organisation and Novartis AG v Vistakon - [2009] APO 24

ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 2002300702 in the name of COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION and NOVARTIS AG.

Title : Extended wear ophthalmic lens.
Action: Opposition under Section 59 of the Patents Act by VISTAKON, and an application under Sub-regulation 5.10(4) by COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION and NOVARTIS AG to serve further evidence.

Decision : Issued 18 December 2009 .
Abstract
The applicants’ application to serve further evidence arose from assertions by the applicants that the opponent’s evidence-in-reply was not properly in reply.
It was found there were elements of the evidence-in-reply favouring the allowance of an opportunity for the applicants to serve further evidence. The public interest, the parties’ interests and the extent of delay caused by the application to serve further evidence balanced towards allowing the application to serve further evidence.
The application to serve further evidence was allowed.
Subsequent to the further evidence being served by the applicants, the opponent would be allowed the opportunity to serve evidence-in-response.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent application 2002300702 by COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION and NOVARTIS AG, and opposition thereto, under Section 59, by VISTAKON, and an application by COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION and NOVARTIS AG under Sub-regulation 5.10(4) to serve further evidence.

BACKGROUND

Commonwealth Scientific and Industrial Research Organisation (“CSIRO”) and Novartis AG (“Novartis”) filed patent application 2002300702 on 21 August 2002. The application is a divisional application based on application 35828/99 (747782) which in turn is also a divisional application based on application 51478/96 (704749).
The latter application claims priority from an EP application filed 4 April 1995, a Swiss application filed 19 May 1995 and a US application filed 8 December 1995. Consequently, application 2002300702 claims an earliest priority date of 4 April 1995.
Patent application 2002300702 was advertised accepted on 15 December 2005.
Vistakon filed a notice of opposition on 15 March 2006 to the grant of a patent on the application. A statement of grounds and particulars in support of the opposition followed on 15 June 2006.
The parties gained numerous extensions of time to serve evidence-in-support, evidence-in-answer and evidence-in-reply. At one stage Vistakon also made an application to serve further evidence on the applicants. By a direction issued on 6 May 2008, Vistakon’s evidence-in-support filed on 15 October 2007 was combined with further evidence filed on 12 March 2008 so as to represent Vistakon’s evidence-in-support.
The above evidentiary stages were completed on 10 August 2009.
On 30 September 2009 CSIRO and Novartis made an application to serve further evidence on Vistakon. On 23 October 2009 Vistakon objected to the request to serve further evidence and requested a hearing.
The hearing was held in Canberra on 13 November 2009. Ms Katrina Howard, of counsel, represented CSIRO and Novartis, the applicants. Ms Howard was instructed by Mr Andrew Lee, patent attorney of Pizzeys. Mr David Catterns, of counsel, represented Vistakon. Mr Catterns was instructed by Mr Paul Savage, patent attorney of Freehills. Ms Karen Harding from Vistakon and Mr Timothy J Barron from Jenner & Block LLP were observers via the phone from the USA.
SPECIFICATION
The specification of application 2002300702 describes the invention as relating to lenses and polymeric materials useful in optic and ophthalmic arts. More specifically, the invention relates to polymeric materials and treatment processes useful in the manufacture of contact lenses, more specifically extended-wear contact lenses.
There are some compatibility requirements for contact lenses for users. The lens must allow oxygen to reach the cornea sufficiently to prevent corneal swelling and the undesirable growth of blood vessels in the cornea. The lens must allow oxygen from the surrounding air to reach the cornea because the cornea does not receive oxygen from the blood supply like other tissue. The lens must also allow ion permeation to enable the lens to sufficiently move on the eye to encourage tear flow between the lens and the eye.
The claimed invention provides a lens of oxyperm polymerisable material and ionoperm polymerisable material having oxygen transmissibility and ion permeability characteristics to achieve the above objectives and to enable users to wear the lens continuously for extended periods of time (several days) without compromising corneal health and wearer comfort.
The specification describes various methods of measuring ion permeability and oxygen permeability. Ion (and water) permeability may be measured by the applicants’ described and named “Ionoflux” technique, “Ionoton” technique or “Hydrodell” water permeability technique. Oxygen permeability may be determined by the described coulometric method.
THE FURTHER EVIDENCE
CSIRO’s and Novartis’ application to serve further evidence is based on an assertion that parts of Vistakon’s evidence-in-reply is not properly in reply. In their request to serve further evidence, the applicants referred to numerous specific paragraphs from the declarations of Professor William Joseph Benjamin Jr, Professor Glenn Harold Fredrickson and Professor Benny Freeman in Vistakon’s evidence-in-reply. The applicants propose to file further evidence consisting of statutory declarations from their experts Dr William G Pitt and Professor David Solomon to address those paragraphs.
The applicants’ declarants propose to address the views expressed by Vistakon’s declarants in the evidence-in-reply that the applicants’ declarants have insufficient experience and qualifications in respect to oxygen transmissibility and ion permeability in materials, the coulometric method, and polymer systems with bi- or co-continuous morphology, amongst other things. Furthermore the applicants’ declarants propose to address statements in the evidence-in-reply in respect to invalid or incorrect assumptions being made in the applicants’ evidence-in-answer. Also, the declarants propose to address new evidence or issues raised for the first time in the evidence-in-reply such as mathematical proofs to support the views of Vistakon’s declarants and the explanations of the relationships between Fick’s law of diffusion and the “Ionoflux” and “Ionoton” equations.
CSIRO and Novartis also propose to file further evidence from an Australian expert in response to the Benjamin declaration on the point of what was known in Australia at the priority date of the application in respect to the coulometric method.
APPLICABLE LAW
Regulation 5.10 of the Patents Regulations is the pertinent regulation. Sub-regulation 5.10(4) provides the statutory basis to allow further evidence to be served. The sub-regulation states:
(4)       The Commissioner may:
(a)    on the application of a party; and
(b)   on such reasonable terms (if any) as the Commissioner specifies;
permit the party to serve further evidence on the other party.
This provision must be read in conjunction with sub-regulation 5.10(5):
(5)The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:
(a) …
(b) …
(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.
The criteria for allowing an application to serve further evidence under Regulation 5.10 are well-established. In Emory University v Biochem Pharma Inc., [1999] APO 50, in assessing an application to serve further evidence amongst other things, the delegate adopted the principles from Ferocem Pty Limited v Commissioner of Patents, (1994) 28 IPR 243, and A Goninan and Co Ltd v Commissioner of Patents and Another, (1997) 38 IPR 213, with respect to extensions of time. Relevant considerations are the discretionary nature of regulation 5.10, the explanation of the delay in serving the further evidence although a satisfactory explanation is not mandatory, the interests of the parties taking part in the opposition, and the public interest. In assessing the latter, the delegate indicated with reference to the Goninan case, that a view needs to be formed as to the nature of the evidence sought to be adduced and the significance of that evidence for the opposition. With reference to significance, the delegate formed the view that the further evidence needs to be not just merely relevant. If it did not add substantially to the case compared with previous evidence already served then the further evidence could be refused.
The Nalco Chemical Company v W R Grace and Co.-Conn decision, [1998] APO 65, indicated it was relevant to consider the importance of the evidence, sought to be adduced, in influencing the outcome of the case.
The Federal Court decision, IGT v Commissioner of Patents, [2008] FCA 15, though warns against elevating the significance of the evidence to a determinative factor effectively excluding consideration of other matters.
On the point of whether evidence-in-reply is properly in reply, the Nippon Steel Corporation v BHP Steel (JLA) Pty Ltd decision, [1999] APO 44, suggests it would only be in the clearest of cases that it would be possible to conclusively determine outside the hearing of the substantive opposition that the evidence-in-reply was or was not properly in reply.
In any case, regulation 5.10 confers a broad discretion which cannot be reduced to imperative compliance with particular requirements. It is necessary to give genuine and proper consideration to all relevant considerations (Goninan (supra)).
DISCUSSION
Mr Catterns submitted Vistakon’s evidence-in-reply is properly in reply to the applicants’ evidence-in-answer. He suggested that no new legal issues were introduced by the evidence-in-reply and any new objections or additional points raised in the evidence-in-reply were confined to issues raised in the evidence-in-answer and were properly in reply. In support, Mr Catterns’ submissions included tables of those paragraphs in the evidence-in-reply complained of by the applicants. The tables contain the statements made in the evidence-in-reply, compared against the evidence-in-answer and also indicate in the evidence-in-reply where in the evidence-in-support the pertinent issues originate, where appropriate.
Ms Howard submitted the present case is similar to both the Nippon (supra) decision and another Emory University v Biochem Pharma Inc decision, 39 IPR 603, in that much of the evidence-in-reply is not properly in reply. She cited particularly several paragraphs of the Freeman declaration and, to a lesser extent, paragraphs of the Fredrickson and Benjamin declarations. Ms Howard also suggested the links to the evidence-in-answer in Mr Catterns’ submissions do not apply completely. For example, the link in paragraph 7 of Professor Freeman’s evidence-in-reply to Dr Pitt’s evidence-in-answer does not justify the degree of analysis in the subsequent paragraphs 8-14 and associated Annexure A.
There is a substantial volume of evidence-in-reply challenged by the applicants as not being properly in reply. Much of the challenge is to the in-depth analysis and mathematical proofs to support Vistakon’s contentions, contrary to the contentions of the applicants’ declarants, that the present specification insufficiently or inaccurately describes the measuring techniques and measurement values for determining oxygen and ion permeability. Additionally there is Vistakon’s contention that the applicants’ declarants are insufficiently qualified and experienced in the field of the invention. It thus appears that I should be strongly guided by the Nippon (supra) decision which suggests that only in the clearest of cases would it be possible to conclusively determine outside the main hearing whether evidence-in-reply is properly in reply. To determine how clear the case may be with the present application, I will go through some examples. In doing so, I am also guided by Snap-On Technologies Inc v Beissbarth GmbH, [2000] APO 52. In that case the opponent made an application to serve further evidence, that had originally been filed as evidence-in-reply, as a precaution in case that evidence was found to be not strictly in reply. In that decision, the delegate considered the key question was the relevance of the material rather than whether it was strictly in reply.
In paragraph 7 of Professor Freeman’s declaration, he indicates that Dr Pitt’s evidence-in-answer does not specify the “Ionoton” equation on which his views are based. The subsequent paragraphs 8-14 of the Freeman declaration together with Annexure A then introduce a mathematical argument aimed at showing that the two equations on pages 17 and 18 of the present specification are not mathematically equivalent. While the Freeman declaration could be said to address Dr Pitt’s discussion of the “Ionoton” equation, the Freeman evidence at paragraphs 8-14 and Annexure A introduces a seemingly in-depth new analysis to support Professor Freeman’s view of the two equations of the patent specification.
On the other hand, Mr Catterns submitted it is plain to see that one of the fractions in one of the equations, in the Freeman declaration when solved for the permeability coefficient, is upside down compared with the corresponding fraction in the other equation. He stressed the Freeman declaration is not new mathematics and that it merely explains why the first equation is presumed to be the correct one.
If it is so plain, it is difficult to see why such a substantial discussion is then required in the evidence-in-reply. It appears that evidence, with its in-depth analysis, has gone beyond addressing the evidence-in-answer on this point and seemingly raises for the first time an issue about the inconsistency in the two equations.
Professor Freeman at paragraph 15 iterates that an “Ionoton” ion permeability coefficient value of 0.25x10^-3 cm²/s is impossibly high. A lengthy discussion follows through paragraphs 16-25, including references to corresponding US and UK litigation where, in the corresponding applications, the claimed “Ionoton” ion permeability coefficient threshold is three orders of magnitude lower than in claim 1 of the present application. These paragraphs also refer to an Annexure B in the evidence-in-reply which is said to be a narrative of an article in the evidence-in-support (the Yasuda article) on measuring ion permeability.
While this is all well and good, it appears the situation could have been put more simply. The present specification itself obviously has an inconsistency in the values of the “Ionoton” ion permeability coefficient. Page 18 of the description describes a preference for the coefficient being greater than 0.2x10^-6cm²/s whereas claim 1 of the application claims a coefficient no less than 0.25x10^-3cm²/s. This is a difference of three orders of magnitude. One or the other value is seemingly wrong. It seems difficult, on the face of it, to see why the substantial discussion in the evidence-in-reply is then required to establish which is correct.
Paragraphs 67-92 of Professor Freeman’s evidence-in-reply introduce a discussion on the relationship between Fick’s law and the “Ionoflux” and the “Ionoton” equations. Annexures C-F associate with these paragraphs and are said to explain how the “Ionoton” equation appears in the Yasuda article, how the “Ionoflux” equation is derived from Fick’s law and the correspondence between the “Ionoton” and “Ionoflux” equations. Again seemingly, this material contains an in-depth discussion and mathematical analysis to support Professor Freeman’s discussion and appears beyond what is required to reply to the evidence-in-answer.
On the whole, the Freeman declaration seems to broadly relate to the issues in both the evidence-in-support and evidence-in-answer which also discuss the measurement techniques and equations for determining oxygen and ion permeability. The declaration though seemingly introduces a degree of discussion and analysis of the measurement techniques and the accuracy thereof that goes beyond that in evidence-in-answer. In these respects, in considering the Nippon (supra) decision, I think the position is not so clear to conclusively determine at this stage that the Freeman evidence-in-reply is or is not properly in reply. Additionally, while the significance of such in-depth discussion and analysis in the Freeman declaration is questionable in this opposition, I am not prepared to conclude at this stage that the Freeman evidence-in-reply in these parts is insignificant. It appears appropriate to allow the applicants an opportunity to serve further evidence in respect to the Freeman declaration.
Ms Howard submitted the Fredrickson declaration in the evidence-in-reply introduces a number of new documents and issues. These include the alleged lack of teaching in the specification on the production of co-continuous phases in a lens (paragraphs 27 and 28 and new Exhibit E of the Fredrickson declaration), and the correctness of the “Ionoton” ion permeability values (paragraph 47, with references to citations in footnotes but not exhibited), amongst other things. Ms Howard also indicated that Professor Fredrickson makes several statements criticising Professor Solomon’s and Dr Pitt’s arguments, views and their qualifications and experience.
The Fredrickson declaration may well include a new exhibit on co-continuous phases. On the other hand this evidence appears to directly reply to Professor Solomon’s evidence without indulging in excessive in-depth analysis. Likewise, Professor Fredrickson’s discussion of the “Ionoton” ion permeability values covers the same issue of orders of magnitude raised by Professor Freeman but in a much more succinct form. Professor Fredrickson also relies on citations by way of footnotes and not as exhibits attached to his declaration. In this respect it could be argued the absence of the citations in the evidence-in-reply does not require a response from the applicants. On the point of alleged criticisms of Professor Solomon and Dr Pitt, Professor Fredrickson simply addresses the alleged correctness of the statements of both the applicants’ declarants. Furthermore, it appears that only paragraph 10 of the Fredrickson declaration briefly discusses their qualifications and experience. On the whole, I find the Fredrickson declaration of lesser concern for the applicants than the Freeman declaration. On the other hand, I am not prepared to exclude at this stage the possibility that elements of the Fredrickson declaration, as discussed above, may cause some concern requiring a response from the applicants.
Ms Howard referred to the Benjamin declaration in the evidence-in-reply to highlight the alleged lack of teaching in the specification of achieving accurate measurement of oxygen permeability by the coulometric method (paragraphs 27-36) and the alleged lack of discussion in Dr Pitt’s evidence-in-answer about that. The Benjamin declaration is also critical of the qualifications and experience of Dr Pitt. Furthermore, paragraph 34 of the Benjamin declaration refers to the work of a Dr Arthur Ho in Australia, a co-inventor of the alleged present invention.
Professor Benjamin has raised the alleged problems of the coulometric method in his evidence-in-support (paragraphs 34-52 and 80 onwards). He further asserts in his evidence-in-reply that Dr Pitt’s evidence-in-answer is dismissive of Professor Benjamin’s evidence in respect to the coulometric method. Consequently Professor Benjamin appears to have validly expanded on that method in his evidence-in-reply. However, in that evidence, Professor Benjamin also appears to be extensively critical (paragraphs 2, 3 and 8) of Dr Pitt’s qualifications and experience. This would appear to suggest a response from Dr Pitt would be appropriate. Furthermore Professor Benjamin refers to the work of Dr Ho in respect to the coulometric method in 1994. It thus also appears appropriate to allow Dr Ho an opportunity to serve evidence, as requested by the applicants, of what was known or done in respect to such method in Australia at the priority date of the application.
PUBLIC INTEREST

Mr Catterns broadly contended that, despite the additional discussions, exhibits and annexures in the evidence-in-reply, that evidence was properly in reply as indicated by the tables provided with his submissions. He further suggested that, on seeing the evidence-in-reply, the applicants realised the shortcomings of their evidence-in-answer and consequently now seek to address that by an inappropriate application to serve further evidence.
The public interest calls for a balance between the requirements that oppositions be dealt with expeditiously and economically, and that a serious opposition be dealt with on its merits (Ferocem (supra) and Goninan (supra)).
The present application is a divisional application based on another divisional application. As mentioned earlier, this application has a priority date back to 1995. That would appear to be a long period of uncertainty for the public in respect to the patentability of the alleged invention. I think the public interest resides now in achieving a relatively quick resolution of the opposition.
On the other hand, while I appreciate Mr Catterns’ concerns, the merit in allowing further evidence from the applicants, as discussed above, appears to be strong. Vistakon’s evidence-in-reply appears to add a degree of discussion and analysis of the measurement techniques that goes beyond the applicants’ evidence-in-answer and appears to have significance in its own right. Consequently further evidence in this respect from the applicants if allowed would also be likely to be significant. It appears to be in the public interest to allow the applicants the opportunity to serve further evidence.
INTERESTS OF THE PARTIES INVOLVED IN THE OPPOSITION
Mr Catterns submitted Vistakon would be seriously prejudiced by the admission of further evidence. The reasons offered for this included the prolonged uncertainty regarding the fate of the application with no indication as to when the opposition may conclude, and significantly increased costs.
Ms Howard submitted the applicants would suffer an injustice if the filing of further evidence was denied because the applicants would be shut out from addressing the new matter raised in the evidence-in-reply or otherwise addressing significant and important matters for resolving the dispute.
As noted earlier, the priority date of this application is in 1995. That would appear to be a long time for uncertainty to remain for a third party as to the patentability of the alleged invention. Additionally this opposition began almost four years ago. It would appear that Vistakon may have a strong interest in the expeditious resolution of this opposition.
On the other hand, Vistakon has been instrumental with delays of its own in the proceedings. For example it took Vistakon almost two years to serve evidence-in-support from the time of filing the statement of grounds and particulars.
Given the 1995 priority date of the application I would expect the applicants would also be keen on a relatively quick resolution of the opposition. I also though understand the applicants’ concerns that evidence be allowed that deals with any new issues raised by Vistakon’s evidence-in-reply.
From the hearing, the applicants appeared to have strong views that Vistakon’s evidence-in-reply requires a response, contrary to the normal course under Regulation 5.12 where this opposition would otherwise have now been set for a substantive hearing. The Freeman declaration from Vistakon appears to be substantial in the degree of evidence adduced that covers material additional to the evidence-in-support and beyond a reply to evidence-in-answer. The Fredrickson and Benjamin declarations also seem to have elements of some significance additional to responsiveness to the applicants’ evidence-in-answer. I accept the applicants’ contentions that Vistakon’s evidence-in-reply requires a response by way of further evidence.
I conclude that considerations of the interests of the parties in this opposition favours allowing the applicants to serve further evidence.
In addition, if the applicants’ application to serve further evidence were allowed, I would make it a term that Vistakon then has one month in which to serve evidence-in-response.
DELAY IN SERVING FURTHER EVIDENCE
Mr Catterns submitted the history of this opposition exposes that there would be a real risk that any further evidence would not be filed expeditiously. This appears to be making presumptions of likely future actions by the applicants based on past actions. I think each application should be treated on its own merits.
Vistakon finalised its evidence-in-reply on 10 August 2009. On 30 September 2009, CSIRO and Novartis made the application to serve further evidence in response to the evidence-in-reply. The day before the hearing, Mr Lee served a statutory declaration indicating the progress already made in engaging the applicants’ declarants and preparing statutory declarations from them. Additionally, at the hearing, Ms Howard indicated the applicants would serve the further evidence by 31 January 2010. Such a delay in applying for and serving further evidence, and an additional short period for Vistakon to serve evidence-in-response, does not appear to be undue, especially in the context of the opposition having commenced nearly four years ago.
I conclude the application by CSIRO and Novartis to serve further evidence would not cause undue delay.
DECISION
I have found there are elements of Vistakon’s evidence-in-reply favouring the allowance of an opportunity for the applicants to serve further evidence. I have concluded the Freeman declaration is the most significant one favouring the allowance of further evidence. I have also concluded that the Benjamin and Fredrickson declarations are such that an allowance to serve further evidence would be appropriate.
Taking all the relevant circumstances into account, as discussed throughout above, I allow the application to serve further evidence.
In view of the above discussion, I expect CSIRO and Novartis to be measured in their response to the evidence-in-reply and confine their further evidence consistent with the points made in this decision.
As mentioned earlier, CSIRO and Novartis intend to serve further evidence by 31 January 2010. I allow CSIRO and Novartis until 31 January 2010 to serve this further evidence.
Subsequent to the further evidence being served by the applicants I then would allow Vistakon one month to serve evidence-in-response.
I also note, again with reference to comments made in the Snap-On Technologies (supra) decision, that I would be concerned if long debates occurred at the substantive hearing about whether evidence-in-reply or subsequent further evidence or evidence-in-response were admissible and thereby detracted from the substantive issues. I think it would be more efficient and beneficial if all parties come to the substantive opposition with all relevant material and be prepared to deal, in the main, with the substantive issues.
COSTS
Mr Catterns submitted that, regardless of the outcome, costs should go against the applicants on the grounds of the delay caused by the application for further evidence, the inadequate justification provided and the indefinite extent of evidence sought to be admitted.
Ms Howard submitted that costs should follow the event.
The applicant’s letter of 30 September 2009 has to my mind clearly set out the parts of the evidence-in-reply to be addressed, and indicated the nature of the further evidence sought to be adduced. I think the scope of the further evidence anticipated by the applicants in that letter was reasonably clear. Also, as mentioned above, the serving of further evidence would not cause undue delay. I find I cannot support Mr Cattern’s contentions.
I award costs against Vistakon.
M. G. Kraefft
Delegate of the Commissioner of Patents
18 December 2009
Patent attorneys for the applicants : Pizzeys, Brisbane
Patent attorneys for the opponent : Freehills, Sydney