Commonwealth Scientific and Industrial Research Organisation v BASF Plant Science GmbH
[2014] APO 74
•12 November 2014
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Commonwealth Scientific and Industrial Research Organisation v BASF Plant Science GmbH
[2014] APO 74
Patent Application: 2005217079
Title:Method for producing polyunsaturated fatty acids in transgenic plants
Patent Applicant: BASF Plant Science GmbH
Opponent: Commonwealth Scientific and Industrial Research Organisation
Delegate: Dr S.D. Barker
Decision Date: 12 November 2014
Hearing Date: Written submissions completed on 21 October 2014
Catchwords: PATENTS – extension of time to file evidence in answer –evidence of declarant prepared in two stages – prompt and diligent – discretionary factors considered – extension of time allowed
Representation: Patent applicant: Watermark
Opponent:FB Rice
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2005217079
Title:Method for producing polyunsaturated fatty acids in transgenic plants
Patent Applicant: BASF Plant Science GmbH
Date of Decision: 12 November 2014
DECISION
I allow an extension of the time for filing evidence in answer until 12 September 2014.
For the purposes of regulation 5.8(4), this decision represents notice that all of the evidence in answer has been filed. The time for filing evidence in reply is 2 months from the date of this decision.
I award costs according to Schedule 8 against BASF Plant Science GmbH.
REASONS FOR DECISION
This matter concerns a request for an extension of time to file evidence in answer and is determined under regulation 5.9 of the Patents Regulations as amended on 15 April 2013 by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1).
Background
This matter relates to patent application 2005217079 in the name of BASF Plant Science GmbH (BASF). The application was advertised as accepted on 2 February 2012 and a notice of opposition to the grant of a patent was filed by Commonwealth Scientific and Industrial Research Organisation (CSIRO) on 2 May 2012.
CSIRO filed a statement of grounds and particulars on 2 August 2012. Evidence in support was completed on 2 January 2014. Evidence in answer was due to be filed by 2 September 2014 (as a result of two extensions of time that have previously been allowed). BASF requested a further extension of the time for filing evidence in answer until 2 October 2014.
The Commissioner advised on 17 September 2014 that she was satisfied with the reasons in support of the application, and CSIRO asked for a hearing. The hearing was conducted by means of written submissions. Submissions in chief were filed by both parties on 14 October 2014. Submissions in response by both parties were filed on 21 October 2014. BASF filed a declaration by Amanda Lee Jones (patent attorney on behalf of BASF) on 14 October 2014.
The law
On 15 April 2013, the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) (the Amendment Regulation) commenced. The Amendment Regulation significantly amended the Patents Regulations (the Regulations) as they apply to patent oppositions. The law governing extensions of time to file evidence in a patent opposition depends upon the date on which the opposition commenced. Where the evidentiary period commenced on or after 15 April 2013 (as in the present case), the extension is governed by regulation 5.9 of the Regulations as in force on 15 April 2013. This follows from regulation 23.36(2), item 2, of the Regulations. Consequently, this matter is determined under the Regulations as amended on 15 April 2013.
Subregulation 5.9(2) states:
The Commissioner may extend the period only if the Commissioner is satisfied that:
(a) the party who intended to file evidence in the period:
(i)has made all reasonable efforts to comply with all relevant filing requirements under this Chapter; and
(ii)despite acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period, is unable to do so, or
(b) there are exceptional circumstances that warrant the extension.
Exceptional circumstances are defined in subregulation (5):
In this regulation:
exceptional circumstances includes the following:
(a) a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Chapter;
(b) an error or omission by the Commissioner that prevents a party from complying with a filing requirement under this Chapter;
(c) an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act.
These provisions have been considered by the Commissioner in TRED Design Pty Ltd v Julie-Anne McCarthy and Bradley McCarthy [2013] APO 57 (the TRED decision) and Merial Limited v Novartis AG [2013] APO 65 (the Merial decision). The principles applied in those decisions, which I accept as correct, are that I must ask myself the following questions:
1. Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
2. Was the failure to file the evidence in time despite the party (and their attorney or agent) acting promptly and diligently at all times to ensure the evidence is filed in time?
3. Were there exceptional circumstances that warrant the extension?
I can extend the time for filing evidence only if I am satisfied that the answer to questions 1 and 2 is YES, or if I am satisfied that the answer to question 3 is YES. If I am so satisfied, then I must consider whether there are any discretionary reasons why the extension should not be granted.”
As noted in the Explanatory Statement accompanying the Amendment Regulation:
"The Commissioner will not be able to extend time periods unless one of these conditions was made out. The party seeking the extension will bear the onus of convincing the Commissioner of this. Once the conditions in subregulation 5.9(2) are met, the Commissioner still has the discretion to consider whether or not it is appropriate that an extension of time be granted. In applying the test, the Commissioner will not be required to give a direction to extend a period solely because of delays caused by a legal representative failing to act promptly or diligently, by difficulties in obtaining expert evidence that could have been anticipated and acted on or by attempts to settle the proceedings.
Where a party cannot satisfy the Commissioner that an extension is justified under the test, the Commissioner will not have the power to give a short extension to allow the filing of evidence immediately available or to validate evidence filed out of time."
If the Commissioner is satisfied that an extension is appropriate, the Commissioner must then determine the length of the extension (subregulation (3)):
The Commissioner must determine the length of the extended period having regard to what is reasonable in the circumstances.
The facts
It is necessary to understand the actions undertaken by BASF to prepare their evidence, not just their actions since the grant of the last extension. In my consideration, I will focus on the evidence of Professor Napier.
Date Action 26 August 2013 A brief provided to Professor Napier 2 September 2013 Professor Napier meets with the patent attorney for BASF to discuss the common general knowledge 2 January 2014 Evidence in support completed 10 January 2014 Specification and other material sent to Professor Napier 11 February 2014 – 3 April 2014 Liasing with Professor Napier 16 June 2014 Draft declaration sent to Professor Napier 23 June 2014 – 24 July 2014 Exchanges with Professor Napier regarding declaration 28 July 2014 Napier declaration signed
Drafting of second Napier declaration begins29 August 2014 Napier declaration filed 29 August 2014 Application for extension of time to file evidence in answer 12 September 2014 Second Napier declaration filed
It is significant to note that the first mention of a second declaration by Professor Napier appears to be in the request for extension of time filed on 29 August 2014. Up until that time it was reasonable for the Commissioner to proceed on the assumption that the actions outlined were directed to the production of a single Napier declaration.
The current extension of time
The application for extension of time says:
"The opponent has continued to act diligently to meet the 2 September 2014 deadline and the following documents constituting part evidence in answer have been completed and filed at IP Australia on 29 August 2014:
1. Declaration of Professor Johnathan Napier dated 28 July 2014;
2. Declaration of Dr Toralf Senger dated 28 August 2014.
A limited extension of one month is sought to complete the evidence. A second declaration of Professor Napier has been drafted. Further time is required to finalise and settle this document.
It is expected that the opponents evidence in answer will be completed in full within the limited extended period."
On 10 September 2014 a delegate advised that he was not satisfied with these reasons. On 15 September 2014 the following additional information was provided:
"Fourthly, with regards to the diligence in preparing the evidence we highlight the following:
· The first Napier declaration details his views of the state of the art and the common general knowledge at the priority date, and reflects his opinion prior to seeing the opposed patent application and any prior art. The second Napier declaration reflects his opinion following his review of the opposed application and the prior art and draws upon his comments made in the first declaration on common general knowledge to provide opinion on inventive step. This strategy requires preparation of evidence in stages. The first Napier declaration was signed on 28 July 2014. There was discussion and planning about the content of the second declaration but the substantive drafting of the second Napier declaration did not commence until after 28 July.
· Watermark met with our barrister on 16 July 2014. At this meeting, the strategy for completion of the evidence was further discussed including the finalisation of the Senger declaration and the focus of the second Napier declaration. The focus of the second Napier declaration was also dependent on the final Senger declaration to ensure consistency and to avoid unnecessary duplication and costs for the client.
· At the time of making the application for extension of time (for the extension from 2 July to 2 September) it was anticipated that Dr Senger's declaration would have been completed in late July/early August. The completion of this document was delayed because Dr Senger was not available to complete his review of the document because of the arrival of his son. Further, it was also anticipated that the first Napier document would have been signed earlier however due to the travel and workload commitments of Professor Napier there was some delay and the document was not signed until 28 July. These delays lead to the substantive drafting of the second Napier declaration commencing after 28 July."
Conclusion
The evidence of Professor Napier had been in preparation since before the evidence in support was filed. The evidence was prepared in a two stage process. The first stage is contained in a declaration dated 28 July 2014. The extension of time is required in respect of the second stage of evidence.
Has the party made all reasonable efforts to comply with all relevant filing requirements?
In the Merial decision, the Deputy Commissioner noted:
"that the requirement in paragraph 5.9(2)(a)(i) is intended to import a consideration of the reasonableness of the relevant party’s conduct over the totality of the opposition proceedings rather than its compliance with the particular evidentiary period in question"
BASF adopted a two stage approach to the evidence of Professor Napier. In the first stage he prepared a declaration in relation to the common general knowledge before seeing the specification and in the second stage a second declaration after seeing the specification. Such an approach is in line with the procedures used in the Federal Court (Minnesota Mining & Manufacturing Company v Tyco Electronics Pty Ltd [2002] FCAFC 315), but is not a strict requirement before the Commissioner. Where the use of a two stage process leads to the need for an extension of time, a party will need to show that it was reasonable to use such a process, and that they were prompt and diligent in the way they carried it out.
The reason why a two stage approach was adopted is only briefly mentioned in the submissions dated 21 October 2014:
"given Prof Napier's status in the field, the strategy of obtaining his opinion on common general knowledge prior to providing him with copies of the opposed application, Green declaration and exhibits was adopted"
I think this is implying that Professor Napier has appropriate experience and standing such that his views on what is common general knowledge is likely to be given weight. As a consequence, his evidence was prepared in a way that would not risk attack on the basis that it was coloured by knowledge of the invention. This leads to a conclusion that the two stage approach was reasonable. However, it would have been preferable for BASF to have explained its strategy for preparing evidence as part of each application for extension of time (i.e. provide a narrative, as well as a chronology of events), and not rely on an inference drawn from its submissions filed for the hearing.
The chronology above suggests that the two stage approach was not carried out properly. Professor Napier was providing information for his second declaration long before the first declaration had been completed. This would seem to contaminate his first stage evidence. However, the situation is clarified in the submissions dated 21 October 2014, where BASF stated:
"Prof Napier's first declaration was based on transcripts obtained from the interviews held between Prof Napier and Carolyn Harris in September 2013. Therefore, Prof Napier's first declaration is not impacted upon by his review of the Opposed application, Green declaration and prior art."
In other words, Professor Napier's comments for stage one were collected, but not reduced to a declaration at that time. Instead, his comments for stage two were assembled before converting his stage one comments to declaratory form. Since this did not result in any delay in the overall preparation of evidence, this seems a reasonable approach. However, this information was not provided in any of the applications for extension of time.
Was the failure to file the evidence despite acting promptly and diligently?
In Mineral Technologies Pty Ltd v Orekinetics Investments Pty Ltd [2014] APO 63 I summarised the principles that have been applied in a number of previous extension of time decisions. Of significance for the present case are the following:
- The presence of significant delays without a reasonable explanation is the antithesis of acting promptly and diligently (Fugro Airborne Surveys Corp v Geotech Airborne Limited [2014] APO 23 at [20])
- It is necessary to understand why actions were undertaken (Sportingbet Australia v Tabcorp International Pty Ltd [2014] APO 21, Clarus Therapeutics, Inc. v Lipocine, Inc [2014] APO 50 at [21])
- It must be remembered that "promptly and diligently" is not setting a standard of perfection (Osmose New Zealand v Zelam Limited [2014] APO 49 at [22])
Based on the facts outlined above, it is apparent that BASF began evidence preparation before evidence in support was completed, which is commendable. CSIRO allege that a lack of diligence can be seen in several of the steps after that time. I will consider each of those allegations.
a) Delay in commencing drafting of the second declaration
While the drafting of the second declaration did not commence until after completion of first declaration, the information required for that declaration was assembled much earlier. CSIRO have stated that there is no explanation of why the drafting did not commence earlier. It seems from the information available to me that the information for the declaration was collected, and then the first declaration was prepared before the second declaration. I consider that there are no significant unexplained delays in this process, and that it was carried out promptly and diligently.
b) Delay in finalising the second declaration once drafting commenced
Drafting commenced on 28 July 2014. The declaration was signed on 11 September 2014 and filed on 12 September 2014. CSIRO have pointed out that BASF have not itemised all the steps that were undertaken in that period. This is true, however it is clear that the declaration was drafted and completed in this time. While some extra detail might be nice, the time taken is not outside the range of "prompt and diligent", in my opinion.
c) Delay in drafting the first declaration
It is apparent that the first Napier declaration could have been prepared earlier, as the necessary information was collected in September 2013. However, BASF did not stop collecting evidence. They proceeded to collect evidence for the stage two declaration. It was only the drafting of the stage one declaration that was deferred. Overall, I do not consider that there was any delay in finalising the evidence as a whole as a result of this approach.
d) Delay in preparing the evidence in parts
I accept that a party who adopts a two stage preparation of evidence must show that course was reasonable, and that it was done diligently and promptly. I am satisfied that was the case in this instance.
e) Delay associated with the Senger declaration
In correspondence dated 15 September 2014 BASF said that the second declaration was dependent on a declaration by Dr Senger "to ensure consistency and to avoid unnecessary duplication and costs for the client". The Senger declaration was filed on 29 August 2014.
Overall
There are no significant unexplained delays in the chronology. I am satisfied that BASF acted promptly and diligently.
Were there exceptional circumstances?
In the TRED decision I stated that exceptional circumstances were:
"matters outside the normal evidentiary process, and outside the control of the party, where it would be unreasonable to insist on a party filing their evidence"
BASF asserted there were exceptional circumstances in relation to some matters within the offices of BASF's Australian patent attorneys. Given my conclusion that paragraph 5.9(2)(a) is satisfied, it is not necessary to consider these arguments.
Discretionary matters
Once the mandatory requirements of paragraphs 5.9(2)(a) or 5.9(2)(b) have been met, an extension is not automatic. The Commissioner "may" extend the period for filing evidence. The matters that are relevant to this discretion have not been considered in previous decisions. In the present case BASF were always intending to prepare two declarations by Professor Napier, but did not disclose this to the Commissioner until the third application for an extension of time. I am sure that the Commissioner would have been proceeding on the understanding that only one declaration of Professor Napier was in preparation, and would have viewed the information provided in that way. This is a piece of information that should have been provided in order to allow the Commissioner to properly understand the extensions.
I do not believe that BASF have been deliberately deceptive. It is more likely that they assumed the Commissioner would expect that a two stage approach would be followed. Further, a two stage approach can be seen as reasonable, and carried out promptly and diligently. The omission to disclose this fact should not prevent an extension in this case. However, where a party deliberately misleads the Commissioner in order to obtain an extension, either by explicit statement or omission, I consider that the Commissioner would be entitled to take that into account in exercising her discretion.
Conclusion
I am satisfied that an extension of time is appropriate.
Finally, I need to consider what length of extension is reasonable in the circumstances. The final Napier declaration was filed on 12 September 2014. I consider it is reasonable to extend the time until that date.
Costs
It is normal for costs to follow the event. In this case important information was only disclosed in the responding submissions. Consequently it is appropriate to award costs against the successful party.
Dr S.D. Barker
Delegate of the Commissioner of Patents
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