CSL Limited and the University of New South Wales v Cortecs Limited

[2000] APO 21

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 679542 in the name of CSL Limited and The University of New South Wales

Title:          Treatment of H. Pylori associated gastroduodenal disease

Action:          An application by Cortecs Limited for an extension of time to serve evidence in reply and objection thereto by the applicants.  Hearing.

Decision:          Issued            

Abstract

The opponent applied for an extension of time after the time for serving evidence in reply had expired.  The opponent had incorrectly recorded the due date.

The opponent provided limited details of efforts taken to ensure that timely consideration of material for evidence in reply purposes was occurring in the evidence in reply period.

The opponent, who did not appear at the hearing, filed a statutory declaration by Cripps intended as evidence in reply subsequent to, but on the day of, the hearing.  There was no information before the Commissioner at the time of the hearing that this material was in existence.  A further statutory declaration by Smith intended as evidence in reply was filed several days later and beyond the period sought by the extension request.

Held that the opponent had not made out a proper case justifying the extension of time.  The circumstances and reasons presented by the opponent did not justify the extension of time sought.  The opponent's submissions provided no compelling reason under public interest considerations to conclude that an extension of time was warranted.  However the availability of the Cripps statutory declaration weighed the public interest considerations marginally in favour of allowing a limited extension of time to bring this evidence into the proceedings.

In weighing up the various factors in this case the public interest factor was considered to marginally outweigh the other factors.  An extension of time was allowed for the purpose of serving the Cripps statutory declaration.

Costs were awarded against the opponent.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent application No. 679542 in the name of CSL Limited and The University of New South Wales and an application by Cortecs Limited for an extension of time to serve evidence-in-reply, and objection thereto by the patent applicants.

BACKGROUND

Patent application 679542 in the name of CSL Limited and The University of New South Wales (hereinafter referred to as "the patent applicants") was filed on 25 July 1994.  The application was advertised accepted on 3 July 1997.

Cortecs Limited (hereinafter referred to as "Cortecs" or "opponent") filed a notice of opposition to the grant of the patent on 3 October 1997.  A statement of grounds and particulars was served on 2 January 1998 and service of evidence in support was completed on 3 August 1998.  Service of evidence in answer was apparently completed by the patent applicants on 31 August 1999 although Cortecs to date have not formally confirmed to the Patent Office the date of service on them of this evidence.

Cortecs served a notice of intention to serve evidence in reply on 30 September 1999.  By letter dated 8 December 1999, the Patent Office advised the parties that as service of evidence in reply had apparently not been effected by 1 December 1999, the provisions of regulation 5.12 applied.

On 16 December 1999 Cortecs filed an application for extension of time from 1 December 1999 to 1 March 2000 in which to serve evidence in reply.  By letter of 24 December 1999, the patent applicants lodged an objection to the grant of the extension of time.

A hearing was set in Canberra for 28 February 2000 at 10am.  The patent applicants were represented by Mr J Slattery, patent attorney of Davies Collison Cave, who appeared by telephone.  Cortecs did not appear but written submissions were provided by their patent attorneys Baldwin Shelston Waters on 25 February 2000.

THE APPLICATION FOR AN EXTENSION OF TIME

The application states the circumstances in which and the grounds upon which the application is made as follows:

"Following the completion of the applicant's Evidence-in-Answer on 31 August 1999, copies of the declarations and exhibits constituting the applicant's evidence were dispatched to our technical experts for review and comment.  As all three experts have academic commitments which at this time of the year are particularly intensive, we have not as yet received their commentary on the evidence which would enable us to prepare Statutory Declarations as part of our Evidence-in-Reply. We also understand that one of the experts may not be available for some time because of illness.

Further, after the filing of the Notice of Intention to file Evidence-in-Reply on 30 September 1999 we instructed our Australian attorneys to prepare a draft letter of settlement, with a view to entering negotiations for resolving the opposition. We were advised by our Australian attorneys that the deadline for filing Evidence-in-Reply was 31 December 1999 and hence assumed that there was sufficient time to forward the proposed letter of settlement to the applicants' attorneys to initiate negotiations. At the same time we also intended to file a request for further extension of time in which to file our Evidence-in-Reply, to allow both the Evidence-in-Answer to be thoroughly reviewed as well as to allow sufficient time to pursue the relevant negotiations for settlement of the opposition. As soon as it became clear that the deadline of 1 December 1999 for filing Evidence-in-Reply was missed, we instructed our Australian attorneys to forward the letter of settlement to the applicants' attorneys and to lodge a request for a further extension of time in which to file our Evidence-in-Reply."

DECISION

Applicable law in relation to extension of time under Regulation 5.10

The present application for extension of time is made under the provisions of regulation 5.10.  Given paragraph 5.10 (5)(c), the Commissioner must not grant an extension of time unless:

·    the parties have had an opportunity to make representations on the matter, and

·    the Commissioner "is reasonably satisfied" that an extension of time "is appropriate in all the circumstances".

In their submissions the parties agree on the matters the Commissioner needs to consider in applications of this kind.  These derive from the judgements by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 and that by Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213. These cases provide a thorough consideration and summary of the law, as it stands, on the extension of time provisions. It is clear from these judgements that regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements. On the contrary it is necessary to give proper, genuine and realistic consideration to all relevant aspects of the case. Relevant aspects include:

(a)The provision of an explanation or justification for the delay in completing the evidence stage and why more time is required.

(b)       The public interest.

(c)       The interests of the parties involved in the opposition.

Application of the law to the facts

(a)The provision of an explanation or justification for the delay in completing the evidence stage and why more time is required

The application for extension of time includes a statement of the circumstances and grounds for the extension.  The written submissions dated 25 February 2000 and filed on behalf of the opponent supplement the statement in the following paragraphs which I have numbered for ease of reference:

1.  "We submit that following the completion of the Applicant's Evidence-in-Answer on 31 August 1999, copies of the declarations and exhibits constituting the Applicant's evidence were despatched to technical experts for review and comment.  As all three experts had academic commitments which at that time of year were particularly intensive, or were otherwise indisposed, we had not received their commentary on the evidence which would enable us to prepare Statutory Declarations as part of our Evidence-in-Reply.  Comments from one of the experts have only been received recently."

2.  "In the period between September and November 1999, the Opponent was also considering approaches for negotiating settlement of the opposition and the preparation of appropriate correspondence was underway.  Unfortunately, due to a clerical error the Opponent was advised that the deadline for filing Evidence-in-Reply was 31 December 1999 rather than 1 December 1999 and hence assumed that there was sufficient time to forward a proposed letter of settlement to the Applicant's attorneys to initiate negotiations, and still be in the position to file at least part of Evidence-in-Reply by the perceived deadline of 31 December 1999."

3.  "The Opponent had intended to file a request for further extension of time in which to file Evidence-in-Reply, to allow both the Evidence-in-Answer to be thoroughly reviewed as well as to allow sufficient time to pursue the relevant negotiations for settlement of the opposition.  As soon as it became clear that the deadline of 1 December 1999 for filing Evidence-in-Reply was missed, the letter of settlement was forwarded to the Applicant's attorneys and a request for further extension of time in which to serve Evidence-in-Reply was filed."

4.  "Recently it has come to our attention that two of the original three experts who received copies of Evidence-in-Answer for review will in fact not be available to make comments.  This has necessitated approaching another expert to provide comments.  We anticipate having comments from this expert in the very near future."

Mr Slattery submitted that the onus rests with the opponent to provide a clear picture of the circumstances in which the extension of time is requested.  He further submitted that the Commissioner must be reasonably satisfied that an extension of time is appropriate given all the circumstances before granting the extension.  The circumstances and grounds advanced by the opponent are therefore crucial to deciding whether an extension is appropriate.

Concerning the opponent's statement and submissions, Mr Slattery made the following submissions:

1. There is no explanation of the circumstances surrounding the "clerical error" regarding the due date for serving evidence.  The opponent's attorneys, if not the opponent itself, seem to have recognised 31 August 1999 as the date for service of evidence in answer and there is no explanation why that date was not used to establish the due date for evidence in reply.
   
   

2. With regard to the opponent's submissions in paragraph 1, no details are given of when copies of the declarations were given to the experts.  There is mention of comments being "received recently" from one expert which, as no explanation is given, presumably was "recent" relative to the date of the submissions (25 February 2000).  There is no indication as to efforts taken to ensure comments from experts by an earlier date.
   
   

3. With regard to the submissions in paragraphs 2 and 3, it is not apparent how active the opponent was in seeking negotiations of settlement.  The letter of settlement was only sent on 15 December 1999 - if settlement action was relevant, the question arises as to why the letter was not sent earlier than December 1999.  There is also no explanation to suggest that the opponent could have been in a position to file some evidence in reply by the perceived due date of 31 December 1999 as is stated in paragraph 2.
   
   

4. From the submissions in paragraph 4 and the use of "Recently", the implication appears that any evidence in reply could not have been filed by December 1 or 31.
   
   

5. The circumstances as presented by the opponent leave open what was happening over the relevant period and do not lead to a conclusion and being reasonably satisfied that an extension is justified in the circumstances.

In my view the points raised by Mr Slattery are all relevant.  Generally speaking, the opponent's statement and submissions are lacking sufficient details of activities over the period from at least 31 August to 15 December 1999 for me to clearly understand the efforts made by, or on behalf of, the opponent to consider, and if thought necessary, serve evidence by the due date (irrespective of whether that date be December 1 or 31).  I see the issue surrounding the error of the due date being of less significance compared to other factors going to why the time period had proved inadequate.  The same can be said of the settlement issue however it appears the opponent was intending to advance the start of settlement negotiations as a basis for an extension of time "to allow both the Evidence-in-Answer to be thoroughly reviewed as well as to allow sufficient time to pursue the relevant negotiations for settlement of the opposition" (see the application for extension).  If such negotiations were really important to the opponent it seems that efforts should have been made sooner rather than later to get a document to the patent applicants, not wait to within the last month of the perceived period for serving evidence.  Of course I have no details of how active the opponent or its attorneys were in addressing the settlement issue over the evidence period other than that a relevant letter was sent to the patent applicants on 15 December 1999.

As to the opponent's efforts to serve evidence in reply, the statement in the application for extension of time and its submissions indicate to me no more than that copies of the evidence in answer had been forwarded to its technical experts and that by 15 December 1999 no commentaries had been received from them.  No details have been given from which I can assess the efforts taken to ensure that timely consideration of material for evidence in reply purposes was occurring, whether by the technical experts, the opponent or its patent attorneys.  For example, no details are given of the "academic commitments" or the indisposed condition of the technical experts (paragraph 1 of the opponent's submissions) to know how this may have impacted on the evidence stage, or whether the opponent or its attorneys was aware of these matters before 15 December 1999 and took any alternative actions to endeavour to meet the evidence deadline.  The submissions, without specific details of activities pertinent to this evidence stage, leave unknown exactly the efforts taken to ensure timely attention to considering and preparing evidence in reply.

In my view the circumstances and reasons presented by the opponent do not justify the extension of time sought.  I am not reasonably satisfied on the basis of the circumstances which have been presented before me that an extension of time is appropriate in all those circumstances.

(b)       The public interest

Both parties advanced submissions under this heading.  The public interest in determining a serious opposition on its merits is a relevant consideration.  There is also the efficient and orderly administration of matters before the Patent Office to consider.

The opponent submits that it should have the opportunity to serve evidence in reply so that the opposition can proceed on its merits.  It also suggests that the nature of the evidence sought to be adduced and its significance should be considered as part of the public interest enquiry in granting the extension.

Mr Slattery made the point, and I agree, that even if the extension of time is refused the opponent is not shut out of the opposition.  It has filed evidence in support and thus can argue its case using that evidence.  To refuse the extension of time merely deprives the opponent a chance to reply to matters in the evidence in answer.  In my view in refusing to grant the requested extension of time the consequences to the opponent and the public interest would be less significant as compared to the situation where an opponent is deprived an opportunity to serve evidence in support.

Whilst the opponent advances consideration of the nature of the evidence sought to be adduced in this matter, the fact is that the opponent has not given in its submissions of 25 February 2000 filed in support of the extension any indication of what evidence is being contemplated.  Without any such indication or the evidence itself this cannot be a relevant consideration.

In my view, given the statement in the application for extension of time and the opponent's submissions of 25 February 2000, there is no compelling reason under public interest considerations to conclude that an extension of time is warranted.

(c)       The interests of the parties involved in the opposition

For the opponent the grant of the extension of time will allow it to further consider the evidence in answer and provide an opportunity to serve evidence in reply.  However whether the extension of time sought would prove sufficient is doubtful given the comments in paragraph 4 of the opponent's submissions quoted earlier in this decision.  Regardless of whether the opponent is able to serve evidence in reply, it has filed evidence in support and is in a position to argue its opposition.  There is nothing contained in the opponent's submissions which suggests to me that any serious prejudice would arise to it if unable to serve evidence in reply.  Even if there is any prejudice to the opponent, it seems to arise from its own actions and degree of diligence in prosecuting the evidence stage.

The interests of the patent applicants are affected by the delay in finalising the evidence stages.  Had not the application for extension of time been filed, a hearing for the opposition would have been scheduled.  Any delay is therefore delaying the ultimate determination of the opposition and standing of the patent application.  However determining the present application for extension of time and objection thereto has necessarily led to delay in finalising the opposition process.

In my view the interests of the parties are balanced in this case.  As such these interests would not incline me to refuse the extension of time if justified on other considerations.

Events subsequent to the hearing

As already mentioned, the opponent provided written submissions prior to the hearing and did not appear at the hearing held in the morning of 28 February 2000.  Some three hours after the hearing had concluded the patent attorneys for the opponent transmitted to the Patent Office by facsimile

·    a covering letter dated that day and a copy of a statutory declaration by A W Cripps dated 25 February 2000, and

·    an application for an extension of time of one month from 1 March to 1 April 2000.

The letter indicated that a copy of the declaration had been served on the patent applicants that day.  Furthermore on 2 March 2000 the attorneys for the opponent filed at the Patent Office (by way of the Sydney State Office of IP Australia) another statutory declaration dated 1 March 2000, this one by C J Smith.  The patent applicants' attorneys have indicated receipt of this declaration on 3 March 2000, which is beyond the period sought by the present extension request.

At the time of the hearing there was no information before me that any statutory declarations which were intended as part evidence in reply had been contemplated, prepared or executed.  To the best of my knowledge no information to that effect had been given to the Patent Office.  There is no mention in the opponent's submissions dated 25 February 2000 and transmitted to the Patent Office that afternoon that a declaration intended to be evidence in reply had been prepared or had been executed that day.  Nothing in Mr Slattery's submissions indicated he was aware of the preparation of any declarations to be filed by the opponent as evidence.

After receipt of the material from the opponent's attorneys on 28 February 2000, the patent applicants' attorneys were invited to provide any submissions in respect of this material, particularly the Cripps statutory declaration, and insofar as this material may affect the relevant considerations by the Commissioner concerning the extension of time.  The submissions in response draw attention to the fact that the hearing concerned an extension of time requested on 15 December for the period 1 December 1999 to 1 March 2000, and continues:

"Accordingly, it is submitted that the matter which needs to be decided pursuant to Regulation 5.10(5) is the question of whether the Commissioner can be "reasonably satisfied" that that particular extension of time was "appropriate in all the circumstances", i.e. the circumstances relating to that particular extension of time as set out in the application for extension of time itself and the opponent's submissions in that regard made during the hearing.  The applicants submit that the services of copies of Statutory Declarations and the making of an application for a further extension of time at this stage in the opposition proceedings are not circumstances which should be considered relevant to the determination of the question as to whether the Commissioner should be reasonably satisfied that the extension of time from 1 December 1999 to 1 March 2000 was appropriate in all the circumstances at the time it was requested."

In my view the existence and filing of the statutory declarations by Cripps, even though filed and first known of after the hearing, is a circumstance that I need to consider.  I think it is clear from the comments of Sackville J in Goninan (supra) that the Commissioner needs to consider all relevant material placed before him in order to give proper, genuine and realistic consideration to the merits of the application.  The Cripps declaration is, I believe, material which is relevant to the application, notwithstanding the circumstances in which it has been brought into the proceedings.  However the judgements in Ferocem (supra) and Goninan also make it clear that in determining an extension of time matter there are various factors to consider and that these will need to be weighed against each other.  For instance, Burchett J in Ferocem said (at 28 IPR 247):

"The determination of an application for an extension of time under reg. 5.10(2) involves a balancing exercise, in which competing considerations must be taken into account.  There are the interests of the persons directly concerned in the application and opposition in question.  There are also public interests, which are not necessarily all ranged on the same side.  They include the expeditious disposal of matters in the Patent Office, and questions of cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office.  But they also include, as Kitto J. pointed out in Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136 at 143, “the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be.” This proposition was cited, by Bowen CJ in Vangedal-Nielsen [33 ALR 144 at 150], where he also set out some of the considerations involved upon the application for an extension of time."

In Goninan, Sackville J said this in the context of the evidence in support stage (at 38 IPR 225):

"The decision-maker still has to consider whether an extension to allow further evidence is appropriate, having regard to the public interest in having a serious opposition determined on the merits.  Of course, that aspect of the public interest must be weighed with and against other relevant considerations, including the absence of any satisfactory explanations for the failure (or failures) to comply with the time limits specified in the regulations."

In Goninan, Sackville J also refers to two other issues regarding the decision-maker. The first is that the Commissioner is not under a duty to grant an extension of time where evidence is available for use in the opposition proceedings regardless of the other circumstances of the case (at 38 IPR 221-3). The second is that "in general it is for the decision-maker and not the court to determine the appropriate weight to be given to the various matters which are to be taken into account in the exercise of a statutory power" (at 38 IPR 224).

The declaration of Cripps to hand after the hearing is a matter relevant to the considerations under aspects (b) and (c) discussed earlier.  It has no effect on the considerations under aspect (a).  With respect to aspect (c), the interests of the parties, the main change from the position discussed earlier would be that the opponent's interests would be enhanced if the extension of time were granted thus permitting into evidence the Cripps declaration.  However against that needs to be weighed the effect on the patent applicants of needing to consider more evidence in preparing for the substantive opposition hearing.  Overall I believe that any change in the interests does not of itself change my conclusions under this aspect as stated earlier.

Aspect (b) concerns the public interest.  There is an element of the public interest which requires the Commissioner to take into account the proposition that opposition proceedings be determined on their merits. The existence of the Cripps declaration is relevant to this consideration.  Cripps, who is a technical expert, in his declaration comments on and replies to statements in the evidence in answer.  In my view this evidence is relevant to the issues arising in the opposition.  Whether it is likely to be important in the opposition proceedings is not something which can be easily assessed without having regard to all the evidence filed in the proceedings, and in this case there is considerable evidence both in support and in answer.  I do not believe it is appropriate for the Commissioner in deciding an application for extension of time to scrutinise all the evidence to assess the degree of importance of particular evidence, in this case the Cripps declaration.  In my view the nature of the evidence in the Cripps declaration may result in some enhancement of the determination of the opposition issues, and in that sense is likely to be important.  The public interest is therefore likely to be best served by permitting the Cripps declaration into evidence in order to enhance the determination of the opposition on its merits.  That course of action would also mean that the opponent would not be "shut out" from the evidence in reply stage despite any "failure in procedure, lamentable though the failure may be" on the part of the opponent as may be evident from my considerations and conclusion under aspect (a).  From the Ferocem case it is clear that although an application for an extension of time may be "regarded as unjustified", in exercising a discretion under regulation 5.10 the Commissioner "should consider whether some short period ought to be allowed, so that an applicant who may have assumed some extension would be granted will not be shut out entirely from presenting evidence that may be immediately available."  If that discretion is applied favourably to the opponent in this case, the extension would amount to nearly three months, hardly a "short period" in the context of normal evidence periods specified in regulation 5.8.

However the Ferocem case makes reference to other public interests matters.  Burchett J referred to "the expeditious disposal of matters in the Patent Office, and questions of cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office."  Of relevance in this case is the matter of "professional standards" by those who deal with the Patent Office.  The sequence of events and circumstances mentioned immediately under the current heading brings into question the diligence and standards employed by the opponent and/or its agents in prosecuting the application for extension of time and placing relevant material before the Commissioner to determine the matter.  On the afternoon of the very day Cripps executed his declaration, the patent attorneys for the opponent provided submissions to the Commissioner, but no mention was made in those submissions about the declaration.  It is inconceivable to believe that the attorneys were not aware of the proposed declaration when preparing the submissions.  No explanation or submissions accompanied the Cripps declaration to shed light on the circumstances of its origin and presentation at that time.  As I have said, the existence of the declaration must be taken into account.  It is of concern that the Commissioner and the patent applicants' patent attorney were not aware of the declaration at the time of the hearing.  In order for the Commissioner to exercise a discretionary power he or she needs to be in possession of all relevant material and there is an onus on the parties, particularly one seeking the indulgence of the Commissioner, to inform the Commissioner of such material.  It also does not assist the other party in its assessment of the case at the time of making submissions if unaware of relevant material available at that time but which is subsequently provided to the Commissioner by the requesting party.

In weighing the two elements of the public interest discussed, I am inclined to the view that the former marginally outweighs the latter.  That is, it would be in the public interest to permit the Cripps declaration into evidence in order to enhance the determination of the opposition on its merits, notwithstanding that the manner by which the opponent brought this material into the proceedings when it did, in the words of Burchett J in Ferocem, hardly "deserves any praise".  Thus my earlier view as to the public interest aspect is modified to the extent that an extension of time may be warranted to permit the Cripps declaration into evidence as evidence in reply.

CONCLUSION

The opponent has not made out a proper case justifying the extension of time.  The circumstances and reasons presented by the opponent do not justify the extension of time sought.  The statement in the application for extension of time and the opponent's submissions of 25 February 2000 provide no compelling reason under public interest considerations to conclude that an extension of time is warranted.  However, the availability of a statutory declaration on 28 February 2000 and after the hearing, weighs the public interest considerations marginally in favour of allowing a limited extension of time to bring this evidence into the proceedings.

In considering whether the extension of time sought is appropriate in all the circumstances, I need to weigh up the following factors in this case:

• The opponent has not made out a proper case justifying the extension of time.

• The public interest in allowing an extension of time to bring the Cripps evidence into the proceedings.

In balancing these factors in the circumstances of this case I consider that the public interest factor marginally outweighs the other factor.  Thus whilst the opponent has not justified the extension of time sought, I have decided to allow an extension of time to 28 February 2000 for the purpose of serving the statutory declaration by A W Cripps dated 25 February 2000.

It is not appropriate for this decision to consider the further application for extension of time filed by the opponent.  That will need to be considered separately on its merits.

COSTS

The power to award costs is based on section 210 and regulation 22.8.  The normal practice is that costs should follow the event.  Although I have allowed an extension of time I do not consider the opponent is entitled to any costs.  On the other hand the patent applicants raised valid objections to the application for extension of time.  Actions by the opponent after the hearing at which the patent applicants appeared have led to the allowance of an extension of time.  In the circumstances I believe the patent applicants are entitled to their full costs and so I award costs against the opponent Cortecs Limited.

Trevor Bruhn
Delegate of the Commissioner of Patents

Patent attorneys for the patent applicants  :  Davies Collison Cave,  Melbourne

Patent attorneys for the opponent            :  Baldwin Shelston Waters,  Sydney