Emory University v Biochem Pharma Inc

[1996] APO 9

official notice

decision of a delegate of the commissioner of patents

Application  :          No. 658136 in the name of Emory University

Title:          Method and compositions for the synthesis of BCH-189 and related compounds.

Action:          Opposition to grant of patent by Biochem Pharma Inc;  Requests to amend the statement of grounds and particulars objected to by Emory University.

Decision:          Issued             .

Abstract:          

Biochem requested an amendment to include the grounds of opposition that the invention as claimed in claims 16 to 23 and 33 to 47 was not a patentable invention within the meaning of section 18(1) of the Patents Act 1990 as the claims were not a manner of manufacture within the meaning of section 6 of the Statute of Monopolies and did not pass the threshold requirement of “an invention”.

The law on manner of manufacture at the time the original statement was filed was uncertain due to conflicting decisions of the Federal Court.  The law was made clearer by a High Court decision issued after the statement had been filed.

The patent attorney responsible for drafting the statement of grounds and particulars had a mistaken understanding of the law on manner of manufacture and consequently did not anticipate the High Court finding in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd, issued on 9 November 1995.  There was an error in judgement in not opposing the patent application on the ground of manner of manufacture.

All amendments to the statement of grounds and particulars allowed.

Direction issued that the time for filing evidence in answer run from the date of this decision.

Costs awarded against Biochem despite being successful in this case.  Evidence important to the resolution of the issues was only made available at the hearing.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 658136 by Emory University and opposition thereto by Biochem Pharma Inc; two requests by Biochem Pharma Inc to amend the statement of grounds and particulars objected to by Emory University.

background

Patent Application No 658136 by Emory University (Emory) was advertised accepted on 6 April 1995.  Biochem Pharma Inc (Biochem) opposed the application and filed a statement of grounds and particulars on 21 August 1995.  Biochem filed a request to amend the statement on 15 September 1995 which was allowed on 20 October 1995.  Biochem filed further requests to amend the statement of grounds and particulars on 1 November 1995 and 15 November 1995.  Emory objected to both of these requests.

A hearing was held in Canberra on 1 December 1995 relating to both requests to amend the statement.  Biochem filed a further amendment to the grounds and particulars at the hearing.  Emory also objected to this amendment.

Emory were represented at the hearing by Mr David Catterns of Counsel, assisted by Mr Paul Whenman and Ms Gwen Bentley of F.B. Rice & Co.  Biochem were represented by Dr Annabelle Bennett of Counsel, assisted by Mr Ron Haliday of Cullen & Co.

Amendments TO statement

The amended statement filed on 1 November 1995 seeks to add the new ground that the invention, so far as claimed in each of claims 16 to 23 and 33 to 47 is not a manner of manufacture within the meaning of section 6 of the Statute of Monopolies.  It also seeks to amend the ground relating to novelty to include claims 16 to 23 and 47.  Previously only claims 33 to 46 were opposed on the ground of lack of novelty.

The amended statement also introduces particulars relating to manner of manufacture, particulars relating to novelty of claims 16 to 23 and 47 and two new particulars in relation to section 40.  It also includes a number of new references in relation to inventive step and novelty.  In addition, the new statement introduces a brief summary of the relevance of each document cited in the particulars.

The amended statement filed on 15 November 1995 includes all the changes which were introduced in the 1 November statement, plus one additional reference which is cited in the particulars against both novelty and inventive step.

At the hearing Biochem filed a further amended statement of grounds and particulars.  This included a further ground relating to manner of new manufacture.  The grounds relating to manner of new manufacture are as follows:

II.       Section 59(1)(f)

The invention, so far as claimed in each of claims 16 to 23 and 33 to 47 is not a manner of manufacture within the meaning of section 6 of the Statute of Monopolies.

II(A)The invention, so far as claimed in each of claims 16 to 23 and 33 to 47 is not a patentable invention within the meaning of Section 18(1) of the Patents Act 1990 and it does not pass the threshold requirement of “an invention”.

Ground II was first introduced into the statement in the amendments filed on 1 November 1995.  Ground II(A) was introduced in the statement filed at the hearing on 1 December 1995. No new particulars were included in the statement filed on 1 December 1995. The particulars relating to grounds II and II(A) are as follows:

Section 59(1)(d)
There is no manner of manufacture in compounds which are mere analogues of BCH-189 apparently having the same properties as BCH-189 and differing only in the nature of the pyrimidine base and substituents on the hydroxymethyl group on the oxathiolane ring of BCH-189.  There is, furthermore, no manner of manufacture in mixtures which are enriched in one of the enantiomers of BCH-189.  There is also no manner of manufacture in selecting an isomer of BCH-189 in the absence of supporting data to show that the selected isomer has any different properties from BCH-189.

decision

Regulation 5.9 sets out the requirements for amendment of the statement.  The parts of Reg 5.9 relevant to the present circumstances are:

5.9(1)   Subject to Sub-regulation (2), the Commissioner, on the written request of an opponent and subject to such terms as the Commissioner may specify:

(a)if the Commissioner reasonably believes that an amendment of a statement referred to in subregulation 5.4 (1) (“filing of statement”) corrects an error or omission by the opponent or by his or her agent - may amend the grounds of opposition set out in the statement; ........

(c)must amend particulars relating to a ground set out in a statement that is served and filed under subregulation 5.4(1).

(2)       The Commissioner must not allow an amendment requested under subregulation (1), if; ........

(e)he or she reasonably  believes that a person will be unduly prejudiced by the amendment.

I may allow an amendment to the grounds if the amendment corrects an error or omission.  The power to amend is discretionary, so “the opponent must demonstrate both the facts that enliven the power to amend, as well as circumstances that justify the exercise of that power” (Biosys v Ecogen Australia Pty Ltd (1993) AIPC 91-001). There is a further condition that I must not allow the amendment if I reasonably believe that a person will be unduly prejudiced by the amendment.

The definition of an “error or omission” in the context of sec 160 of the Patents Act 1952 was expressed by Jenkinson J in Kimberly-Clark Ltd v Commissioner of Patents and Another (No 3) 13 IPR 569 at pages 579 to 580 in the following terms:

“It is in my opinion difficult to suppose that only the inadvertences and accidental steps, and not errors resulting from faulty reflection, of the former class of persons were intended by the draftsman to be within s 160(1). Further, the word "error" is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some fine errors of judgement by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips.”

While Kimberly-Clark Ltd v Commissioner of Patents dealt with a different section of the former Act, these comments seem equally applicable to Regulation 5.9.  The words “error or omission” in Reg 5.9 were considered in Biosys v Ecogen (above):

“The term "error or omission" has been considered many times in decisions concerning section 223 (and its equivalent, section 160 of the Patents Act 1952). I consider that it would be inappropriate to give a different meaning to the term "error or omission" when used in regulation 5.9(1)(a) (see D.C.Pearce and R.S.Geddes "Statutory Interpretation in Australia" 3rd edition, pages 65 to 67). Thus, it is apt to apply the following formulation: "an error or omission has been considered to have occurred where there has been a breakdown in procedure in effecting a party's intention" (Stork Pompen v Weir Pumps 11 IPR 542 at 546; this point was not overturned in the decision of the AAT reported at 13 IPR 163). As a consequence, the intention of the party with respect to doing some act is an essential preliminary to the demonstration of an error or omission.”

It is clear from Biosys that the meaning given to “error or omission” in decisions concerning section 223 of the 1990 Act and section 160 of the 1952 Act is relevant to regulation 5.9. It is also clear from Kimberly-Clark that the words “error or omission” should be given a broad meaning.

At the hearing, Biochem served a statutory declaration by Ronald A. Haliday setting out why the grounds relating to manner of manufacture had not been originally included.  The statutory declaration included additional unsworn handwritten comments.  At the hearing Mr Haliday also gave an unsworn oral statement relating to the amendment of the ground concerning novelty.  Following Mr Haliday’s statement, Emory stated that they would only be pursuing objection to the addition of the grounds relating to manner of manufacture.

The parts of Mr Haliday’s declaration relevant to the omission of the ground of manner of manufacture are as follows (with unsworn additions in italics):

“8. That the new ground was not included in the originally lodged Statement of Grounds and Particulars due to an error or omission on my part. There was an omission on my part that I had not read the full Federal Court decision of NV Philips Gloeilampenfabrieken and Another v. Mirabella International Pty. Ltd. 26 IPR 513, 1993 (hereafter “the first Mirabella decision”) in which new law concerning what constitutes a manner of new manufacture was decided. If I had have read this decision, I would have recommended its inclusion to Biochem Pharma Inc in the originally lodged Statement of Grounds and Particulars as it is apposite to the lack of patentability of the opposed application.  It was always my intention to include any available ground of opposition in the Statement of Grounds and Particulars.

9.        There was an error on my part in not firstly having Counsel peruse the originally lodged Statement of Grounds and Particulars before it was lodged in the Patent Office.  Counsel perused the Statement some time following its lodgement and immediately advised that such a ground be included.

10. That on 9 November 1995, the High Court of Australia handed down its decision in re NV Philips Gloeilampenfabrieken v. Mirabella International Pty. Ltd in which it was held that there is no patentable invention within the meaning of Section 18(1)(a) of the Patents Act 1990 if the invention does not pass the threshold requirement of what constitutes “an invention”. It was consequently an error in my judgement that I did not anticipate that the High Court would make this finding in a 3:2 majority.”

I note that at paragraph 1 of his declaration, Mr Haliday stated that he “personally took responsibility for drafting the Statement of Grounds and Particulars and did draft them”.  Therefore the error referred to in paragraph 9 is not a relevant error under reg 5.9.  There is no evidence of any intention to have Counsel peruse the originally lodged Statement before it was lodged.  In fact the evidence, and much of Biochem’s case at the hearing, suggests Mr Haliday took complete responsibility for drafting and filing the statement.  Biochem did not press this point at the hearing but directed its case to the errors referred to in paragraphs 8 and 10.

At the hearing Biochem argued that the relevant grounds were left out or omitted by reason of a mistake on the part of Mr Haliday. Mr Haliday held a mistaken opinion as to the state of the law and the availability in Australia under the Patents Act 1990 of the threshold patentability test and of the approach taken by the Federal Court in Philips v Mirabella[1], and that this approach, as varied by the High Court, would prevail over the joint judgement of the Federal Court in CCOM[2].  Biochem also argued that the test of “threshold patentability” and the other aspects of the High Court decisions could not have been ascertained prior to 9 November 1995.

[1] NV Philips Gloeilampenfabrieken & Anor v Mirabella International Pty Ltd, 26 IPR 513

[2] CCOM Pty Ltd & Anor v Jeijing Pty Ltd & Ors (1994) AIPC 91-079

Biochem supplied evidence that it was always the intention of Mr Haliday to include any available ground of opposition in the statement of grounds and particulars.  Emory, on the other hand, argued that the right intention would have been to intend to oppose the application on the specific ground of manner of manufacture at the time of filing the statement.  Mr Catterns referred me to Biosys (above), where the hearing officer found that the intention of the opponent to include the ground of manner of manufacture at the time of filing the statement had not been established.  However the situation in Biosys was different.  In that case, no evidence was filed and the hearing officer decided that a statement in a letter was not, on its own, sufficient evidence of intention.  In the present case Biochem has filed evidence in the form of a declaration stating that it was always the intention of the opponent to include any available ground of opposition.  Mr Haliday stated that if he had read the Federal Court decision of Philips v Mirabella, he would have recommended inclusion of the ground of manner of manufacture in the originally filed statement.  Mr Catterns also referred me to Stork Pompen v Weir Pumps 11 IPR 542, and the subsequent decision on appeal[3], where intention was discussed. But in that case there was a deliberate decision to follow a particular course of action.  That is not the case here.  I am satisfied that Mr Haliday had formed the right intention at the right time.  I must now decide if a relevant error or omission occurred which prevented Mr Haliday from putting this intention into effect.

[3] Weir Pumps Limited v Commissioner of Patents & Anor, (1989) AIPC 90-537

Mr Catterns submitted that while the High Court decision of Philips v Mirabella broke new ground in its use of the words “Patentable Invention” to hook the Microcell[4] argument on as distinct from manner of manufacture, it was really only an application of Microcell.  He argued that a lack of awareness of Philips v Mirabella at either the Federal Court or High Court level was irrelevant, as Microcell had been around for ages.  Mr Catterns summarised his argument by saying that an error in failing to read a particular judgement of the Federal Court which invalidates a particular patent on the ground of manner of manufacture is not the same as not being aware that the ground was available.

[4] Microcell Ltd’s Application, 102 CLR 232

I can see considerable merit in the points raised by Mr Catterns.  But in the present case the situation is more complex.  Dr Bennett relied on CCOM and the dissenting judgements in the High Court in Philips v Mirabella to show that it was not as easy as relying on Microcell.  She stated that before the High Court decision on Philips v Mirabella, CCOM was the last word on manner of manufacture.  Dr Bennett pointed out that CCOM went on the basis of NRDC[5] and did not even mention Microcell.  While it was easy in hindsight to say that Microcell was there, the full bench of the Federal Court in CCOM and two judges of the High Court in Philips v Mirabella did not appreciate that Microcell was applicable under the Patents Act 1990. Dr Bennett also submitted that there were aspects of the High Court decision that were not available before the decision was handed down. She argued that it would be absurd in the extreme to fail to permit the High Court decision to be applied. Dr Bennett said that if there needs to be a relevant error, it is failing to divine a 3:2 decision of the High Court judges.

[5] National Research Development Corporation’s Application, (1959) 102 CLR 252

As noted by the hearing officer in Biosys v Ecogen (above), the opponent must not only demonstrate the facts that enliven the power to amend, but must also justify the exercise of that power.  Mr Catterns referred me to Kimberly-Clark Ltd v Commissioner of Patents and Another (No 3) 13 IPR 569 and other decisions that required a full and frank disclosure of all the surrounding circumstances that led to the error or omission. Jenkinson J in Kimberly-Clark at 584 stated:

“Section 160(2)(a) confers a power so conditioned that in my opinion its exercise is not lightly to be granted, and a power to be invoked only upon a prompt, frank, comprehensive and clear disclosure of all the circumstances relevant to the weighing of the discretionary considerations upon which grant or refusal of an extension of time will depend.”

Mr Catterns submitted that Mr Haliday’s declaration did not satisfy these requirements as there were gaps in the declaration.  There was no mention, for example, of Mr Haliday’s knowledge or understanding of the law from cases such as Grace v Asahi[6] and CCOM.

[6] W R Grace & Co v Asahi Kasei Kogyo Kabushiki Kaisha, 25 IPR 481

In Ferocem Pty Ltd v Commissioner of Patents 28 IPR 243, Burchett J warned against an insistence upon “imperative” compliance with particular requirements in an attempt to fetter by a guideline a general statutory discretion. Burchett J pointed out that Jenkinson J was construing s 160 as a special provision in Kimberly-Clark.  Both parties at the hearing agreed that there was a significant difference between reg 5.9 and the decisions relating to extension of time.  This relates to the causal relationship signified by the words “by reason of” (s 160 of the 1952 Act) and “because of” (s 223 of the 1990 Act) referred to in Kimberly-Clark and other decisions.  Reg 5.9 does not have such a requirement, but requires that the Commissioner reasonably believes that an amendment “corrects” an error or omission by the opponent or by his or her agent.

Reg 5.9(1)(a) is, however, concerned with an error or omission and Kimberly-Clark also dealt with an error or omission.  Therefore I think it could normally be expected that a request to amend under this subregulation should include a full and frank disclosure of all the relevant circumstances.  However such a requirement could not be said to be imperative and if other factors are involved, these should also be taken into account.

Mr Haliday’s declaration was certainly frank concerning his omission of keeping abreast of the law, but it does lack some of the detail referred to by Mr Catterns.  While the declaration did not detail Mr Haliday’s knowledge of other Court decisions relevant to manner of manufacture, I acknowledge that there were divergent views in the Federal Court decisions that had issued under the 1990 Act.  It was only after the High Court decision of Philips v Mirabella issued that the conflict in the Federal Court could be resolved.  There also appears to be aspects of the High Court decision which may not have been available beforehand, such as the threshold patentability test.  I agree with Dr Bennett that where, subsequent to filing the statement of grounds and particulars, the High Court has brought down new law or clarified a conflict in the existing law, it would be unfair not to allow the High Court decision to be applied.  This, of course, is subject to the other requirements of reg 5.9.

Other considerations to be taken into account when exercising the discretion of the Commissioner were set out in Vangedal-Nielsen v Commissioner of Patents (1980) 33 ALR 144. The Commissioner must consider not only the private interests of applicants for patents and opponents, but also the public interest. The interest of the opponent would be met by allowing the amendment. The interest of the applicant involves the applicant having certainty in knowing the case they have to answer. In this regard Mr Catterns pointed out that the amended Statement filed at the hearing was the fifth form of the document. Dr Bennett pointed out that many of the amendments were minor changes to the particulars, which were not being objected to. The amendment to bring in the new ground II was filed on 1 November 1995. New ground II(A) was introduced after the decision of the High Court in Philips v Mirabella was issued.  Dr Bennett submitted that there had not been a string of amendments to the grounds and that all amendments were up front.

The public interest is a balance of ensuring that invalid patents are not granted, and that proceedings are not unduly protracted.  Not surprisingly, the opponent emphasised the former, while the applicant emphasised the latter.  In the present case the amendment to introduce new ground II was filed on 1 November 1995.  This was before the evidence was served on Emory on 20 November 1995.  The amendment to add new ground II(A) was filed on 1 December 1995, within two weeks of the evidence being served.  While this will introduce some delay, I do not think this delay will be great enough to significantly disrupt the efficient working of the system.  Burchett J in Ferocem Pty Ltd v Commissioner of Patents 28 IPR 243, when referring to the public interest, stated at 247:

“But they also include, as Kitto J pointed out in Kaiser Aluminum & Chemical Corporation v The Reynolds Metal Co (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”.”

In the present case I consider that the public interest consideration that the opposition being dealt with on its merits outweighs the other factors.  In my opinion, the discretionary requirements of subregulation 5.9(1) have been met.

I am satisfied that Mr Haliday had a mistaken understanding of the law on manner of manufacture and consequently did not anticipate the High Court finding in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd, issued on 9 November 1995.  I am not convinced that, in general, an error of understanding of the law resulting solely from an attorney not reading an available decision is a relevant error.  Deliberate ignorance of the law should probably not be regarded as an error justifying amendment.  But in the present case the error arises due to the special circumstances of a decision by the High Court on a directly relevant matter.  There was therefore an error in judgement in not opposing the patent application on the ground of manner of manufacture.  I also reasonably believe that the amendments that Biochem have requested will correct the errors or omissions that have occurred.

There is a further requirement introduced by subregulation 5.9(2)(e) that I must not allow an amendment if I reasonably believe that a person will be unduly prejudiced by the amendment. My comments above when considering the timing of the amendments apply equally here.  Biochem seeks to amend almost concurrently with the evidence in support.  Emory has not suggested that it will be unduly prejudiced in any other way.  I do not think that the applicant will be unduly prejudiced if I allow the amendments.

As I have found that subregulation 5.9(2) provides no bar to me allowing the amendments in the present circumstances, I will allow the amendments to include the new grounds.  I also allow the particulars relating to grounds II and II(A).  As Emory has not objected to the other amendments to the grounds and particulars, I will also allow these amendments.

Finally, Emory requested that I give a direction that the time for serving evidence in answer should run from the date of this decision.  I will give this direction.

costs

Mr Catterns argued that costs should go to Emory in any event.  He said that Emory had only received a draft copy of Mr Haliday’s statutory declaration the day before the hearing, despite requesting evidence on several occasions earlier. (There is on file a copy of a letter sent from Emory’s attorney to Biochem’s attorney inviting Biochem to provide evidence supporting the proposed amendments dated 16 November 1995.  The copy was received via facsimile by the Patent Office on the same day.  Further letters with the same invitation, dated 17 November 1995 and 24 November 1995 are also on file).  Emory received a copy of the final form of the declaration, including handwritten alterations involving important issues, on the day of the hearing.  Oral evidence relating to the amended grounds of novelty was given at the hearing itself.  In addition, a further amended form of the Statement of Grounds and Particulars was filed at the hearing.  Mr Catterns also argued that as Biochem was seeking an indulgence of the Commissioner, costs should go to Emory.  Dr Bennett opposed the suggestion that the applicant get costs in any event.  She stated that after seeing the statutory declaration, Emory still opposed the amendments and opposed vigorously. Dr Bennett suggested that if Emory had withdrawn the objection and asked for an order of costs, it may have been different.

I award costs against Biochem for the reasons submitted by Mr Catterns.  Evidence important to the resolution of the issues was only made available at the hearing.  In addition, a further amendment to the statement was filed at the hearing.  In these circumstances I do not think that it was unreasonable for Emory to contest the amendments.

conclusion

I allow all of the amendments made to the Statement of Grounds and Particulars, up to and including the Statement filed on 1 December 1995.

I direct that the time for serving evidence in answer will run from the date of this decision.

I award costs against the opponent, Biochem Pharma Inc.

Brendan Bourke
Delegate of the Commissioner of Patents

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

Patent attorneys for the opponent  : Cullen & Co, Brisbane