F. Hoffman-La Roche AG v New England Biolabs, Inc
[2001] APO 60
•31 October 2001
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 632857 in the name of F. HOFFMAN-LA ROCHE AG
Title: Purified Thermostable Enzyme
Action: Request for leave to amend the complete specification (section 104(1), Patents Act 1990), opposition to the request by NEW ENGLAND BIOLABS, INC (section 104(4), and application for an extension of time in which to serve the evidence in support (regulation 5.10(2)).
Decision: Issued .
Abstract
A proper case justifying the extension is not made out, partly as there is not a satisfactory explanation for the delay and the nature of the case is that the opposition could proceed absent the evidence, though at some disadvantage. As a serious opposition is indicated and the evidence is at least in draft form, a short extension is appropriate.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Proposed amendment of patent application No. 632857 by F. HOFFMAN LA-ROCHE AG and opposition thereto by NEW ENGLAND BIOLABS, INC
BACKGROUND
Patent application 632857 (the application) was filed in Australia on 8 October 1990 by Cetus Corp (with rights subsequently assigned to F. Hoffman-la Roche AG (Roche)), as a divisional of applications 77298/87 and 30629/89, both now lapsed. The earliest priority date is 22 August 1986. The application is governed by the transitional provisions of the Patents Act 1990, and Chapter 5 of the Patent Regulations 1991 apply in respect of the present action.
Acceptance of the application was advertised on 14 January 1993, and notices of opposition were filed by New England Biolabs, Inc (NEB) and another. In due course the Commissioner's decision issued. That decision was appealed on merits, and it appears to be largely in response to that decision and the results of the appeal that on 19 June 2000 Roche filed with the Commissioner a request under section 104 to amend the complete specification of 632857, together with proposed amendments.
In the course of considering the request the Commissioner's delegate invited NEB to comment, as provided for by regulation 10.2. NEB's comments included an assertion of "inequitable conduct" by Roche, however the delegate advised that this was outside the scope of the allowability of amendments as set out in section 102, and in his view the amendments were allowable. Accordingly the amendments were advertised on 9 November 2000.
On 22 November 2000 NEB applied to the Federal Court for judicial review of the delegate's decision to grant leave to amend, under the AD(JR) Act. Judgement issued on 27 June 2001, and the application was dismissed.
Also, on 15 December 2000 NEB applied to the Court for a stay in the section 104 action. This was refused, but the application was adjourned sine die with liberty to apply on reasonable notice.
In the meantime, on 9 February 2001, NEB had filed a notice of opposition to the request to amend, followed by a statement of grounds and particulars on 9 May 2001, which establishes 9 August 2001 as the due date for evidence in support.
On 9 August 2001 NEB filed an application for an extension of time of three months to 9 November 2001 in which to file this evidence. Roche has objected to this extension, and that is the issue for decision here.
The matter was set for hearing in Canberra on 10 October 2001. Roche was represented at the hearing by Mr Stephen Burley of Counsel, instructed by Drs Andrew Blattman and Martin O'Brien, patent attorneys of Spruson & Ferguson, who all appeared by telephone. NEB was represented by Ms Pamela Tate of Counsel, instructed by Ms Virginia Beniac-Brooks, patent attorney of Callinan Lawrie, who appeared in person.
The application for extension of time
In its application NEB makes the following statement in support:
"As the Commissioner of patents and Roche are aware on 22 November 2000 we lodged with the Federal Court of Australia an application for an order to review the decision made under Section 104 of the Patents Act 1990 (Cth) and regulation 10.5(1) of the Patent Regulations 1991 (Cth) of your delegate, David Hennessy, dated 20 October 2000 in respect of Roche's request to amend the Patent Application. The first directions hearing before Justice Merkel was held on 15 December 2000 in Melbourne where his Honour formed the view that as this proceeding was broadly related to the current adjourned appeal before Justice Emmett, the matter should be returned to Justice Emmett's docket. The trial proceeding before Justice Emmett was held on the 8th and 10th of May 2001 and a decision issued on 27 June 2001. As a consequence of not knowing the outcome of our application for review until at least 27 June 2001 and thus whether the Delegate's decision would be overturned and the need for eventual re-advertisement of the amendment request for opposition purposes or if the current timetable would stand, we were uncertain whether the current period for serving our Evidence-in-Support was still applicable. Accordingly, the available time of three (3) months from the time of filing our Statement of Grounds and Particulars on 9 May 2001 has been lost.
Notwithstanding the above our Australian Attorneys have located an expert witness to review the amendment proposed by Roche to provide his comments. Material has been forwarded to this expert and his initial comments have been received. Further time is required for our Australian Attorney to review those comments; for all those comments to be incorporated into a Statutory Declaration and for that declaration to be reviewed by the expert. Further time is also required for us to consider the Statutory Declaration, for our Australian Attorneys to settle the Declaration in conjunction with counsel and the expert and for the Declaration to be executed and served on Roche.
It is in the public interest that the Commissioner's delegate has all the relevant material before him/her when deciding the opposition."
The relevant law
Regulation 5.10(2) reads as follows:
"(2) The Commissioner may:
(a) on the application of a party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies;
extend the time within which the party may take a step prescribed in this Chapter, not being a step that is taken under regulation 5.3 or paragraph 5.4(1)(a)."
The time for service of evidence falls under regulation 5.8 and therefore the above regulation applies. However the application of this regulation is governed by regulation 5.10(5), which (so far as is relevant in this case) reads as follows:
"(5) The Commissioner must not….grant an application under subregulation (2)….unless the Commissioner:
(ii) is reasonably satisfied that….an extension of time….is appropriate in all the circumstances."
These regulations have been judicially considered, the principal cases being Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243, Kent-Moore Corp v Environmental Products Amalgamated Pty Ltd (1992) AIPC 90-915, A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213, and National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33. The judgements show that this regulation confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements. It requires proper, genuine and realistic consideration of all the relevant factors. Relevant factors will include the provision of an explanation for the delay, and the interests of the parties and the public.
Expressed generally, in exercising the discretion the Commissioner must:
(i) before allowing an extension, be satisfied that the person seeking the extension has made out a proper case justifying the extension; and in deciding this:
(ii) take into account, not only the private interests of applicants for patents and their opponents, but also the interest the public has in the granting of valid patents and the timeliness of proceedings before the Commissioner.
EVIDENCE
· From Roche - a statutory declaration by Kate Johnston, solicitor for Roche in the AD(JR) proceedings, with annexures A-D, primarily concerning those proceedings and a related application for a stay in this opposition.
· From NEB - a statutory declaration by Virginia Beniac-Brooks, a patent attorney for NEB, which sets out the history of this action and reasons in support of the extension.
SUBMISSIONS
The main submissions made by the parties are as follows.
From NEB
· This is the first request for an extension of time made by NEB in the totality of the opposition proceedings. Even with concurrent AD(JR) proceedings NEB complied with the time limits for filing the present notice of opposition and statement of grounds and particulars.
· Ferocem identifies the discretion (regulation 5.10(5)) as a very general discretion, and not one which is conditioned on specific requirements, such as for example in the case of section 223
· In particular, while the explanation for the delay is a relevant consideration, a satisfactory explanation for the delay is not an imperative to the grant of the extension.
· In any case there is a proper explanation for the delay. After NEB's failure to convince the delegate that the proposed amendments were not allowable, and they were consequently advertised, NEB applied to the Federal Court for a stay in the section 104 proceedings. This application was unsuccessful, Merkel J stating that as they had been advertised, he could not see sufficient disadvantage to NEB to justify interfering in the statutory process thus started.
· Consequently there were concurrent AD(JR) proceedings in the Federal Court and section 104 proceedings before the Commissioner.
· In the former two brand new issues were raised by Emmett J, namely a question regarding the validity of regulation 10, and the nature of the 'report' relied on by the Commissioner under this regulation. It was only on 27 June 2001, when judgement in this matter issued, that it became clear to NEB that the opposition could proceed. At this time only about one month was left for the preparation of evidence in support.
· The exercise of the discretion involves a balance of private and public interests. NEB will suffer severe prejudice if the, or at least some, extension is not granted. The evidence is from an expert in what is a very technical field, and it will go to the effect of the amendments on the scope of the claims of the specification, and consequently whether they are allowable.
· Roche on the other would suffer no real prejudice, on the grant of what is now a short extension, particularly since the detail contained in the statement of grounds and particulars should have enabled Roche to proceed with the preparation of its evidence in answer.
· The statement of grounds and particulars clearly show that a serious opposition is in train. The public interest, including that aspect concerning the efficacy of proceedings before the Commissioner, favour the grant of the extension. The evidence sought to be filed will assist in the eventual decision of the section 104 opposition.
· In any case at least a short extension should be granted so as to allow evidence in the final stage of preparation to be filed.
· As stated in the Goninan judgement, in reaching a decision, the delegate must give a proper, genuine and realistic consideration of the merits of the case, and this requires an assessment of the nature and significance of the evidence.
· In response to Roche's submission that NEB's decision to engage a new expert in Dr Morona caused an unjustified delay, in view of the existence of a number of previously engaged experts with a detailed knowledge of the case, this was deliberately done to obtain a view specifically on the effect of the amendments, not the matters of novelty etc considered in the merits appeal which these other experts addressed.
· Given that Roche appears to concede that a short extension is appropriate in the circumstances, and given also the present timing, Roche has no sound basis to object to the extension sought, and no order of costs should be made against NEB.
· In response to prompting by Counsel for Roche, Counsel's understanding is that, as presently instructed, the Morona declaration is the whole of the evidence, and there is considerable confidence that this will be completed by 9 November 2001. However a formal undertaking cannot be given at this time. As to the suggestion that the delegate should make a direction to that effect, it is submitted that there is not the power to do this.
From Roche
· While there is no general disagreement with opposing Counsel's recitation of the appropriate authorities and the principles they teach, it should be noted that those cases related to section 59 oppositions, which involve broader issues than section 104 opposition.
· The onus is on NEB to justify the extension sought.
· The only explanation for the delay is the AD(JR) action, but NEB is not entitled to assume that this justifies a failure to proceed with the preparation of its evidence in accordance with the requirements of the regulations. The AD(JR) application was not well founded anyway.
· NEB's application for a stay in this opposition was refused on the grounds that it was premature, but the application was adjourned sine die with liberty to apply on reasonable notice. Later application for a stay could have been made, most particularly during the AD(JR) hearing, but was not.
· Instead NEB simply chose to wait for the judgement in the AD(JR) action to issue, and in the interim ignore the prescribed regulatory timetable for the preparation of the evidence.
· This patent application is now very old and there is no explanation of why a new expert is needed, as a number of experts were involved in the merits appeal.
· Roche is prejudiced by delay on delay; it is now almost eight years since the application was accepted. If (as put by NEB) it should be easy for Roche to prepare its evidence in answer based on the statement of grounds and particulars, then so too for NEB and its evidence.
· NEB has been in possession of the proposed amendments since June 2000, and there is no reason why preparation of evidence could not have been considered from then.
· The public interest does not favour an extension as this is now very old matter, and it still has not been resolved.
· It should also be remembered that a delegate of the Commissioner has reported that the amendments are allowable.
· In any case the extension sought is excessive. If a case is properly made out the appropriate extension would be seven days from the date of the hearing.
· Undertaking sought from opposing Counsel that the only evidence at issue is the declaration of Morona, and/or that in his decision the present delegate make a direction to the same effect - regulation 5.10(2)(b).
· Costs should be in Roche's favour in any event.
DECISION
I note that at the time of making this decision no evidence in support has been filed.
Has the delay in preparing the evidence been explained?
The Ferocem judgement shows that, while the reasons for requiring the extension are a relevant consideration in reaching a decision, nevertheless a satisfactory explanation is not a mandatory precondition for the extension to be granted.
The explanation for the delay has been set out above, and essentially relates to the concurrent AD(JR) action in the Federal Court and section 104 action before the Commissioner. In their application for the extension NEB states:
"As a consequence of not knowing the outcome of our application for review until at least 27 June 2001 and thus whether the Delegate's decision would be overturned and the need for eventual re-advertisement of the amendment request….we were uncertain whether the current period for serving our Evidence-in-Support was still applicable."
Implicit in this statement is that in the time between filing the statement of grounds and particulars on 9 May 2001 and the issuance of the judgement in the AD(JR) matter on 27 June 2001, ie about seven weeks, NEB basically made no attempt to progress with the preparation of their evidence, rather acting as though the proceedings before the Commissioner had somehow been stayed. They had not of course, though as Roche pointed out, the previously adjourned stay application could have been enlivened.
It is possible to feel some sympathy for NEB in this. No doubt an AD(JR) outcome was expected which would have made this opposition unnecessary, and I have no reason to think that they were not acting in good faith. Additionally, major issues were raised in Court, which were not contemplated by either party, which had the potential to seriously affect the outcome of the section 104 action. As a consequence the hearing was adjourned for a while and the parties were given the opportunity to make further submissions.
However none of this changes the fact that NEB knew, or should have known, that at least absent any Court order, the Court proceedings had no bearing on the progress of the matter before the Commissioner, which is determined by the legislation.
In my opinion this apparently deliberately chosen course of action (or inaction) was imprudent and unjustified. The regulations set out a clear timetable for these matters, and NEB had no valid basis for acting as though they did not apply in the circumstances of this case.
I consider that the explanation for the delay is unsatisfactory, but I must also consider other issues.
The interests of the parties
In this case I am not persuaded that either of the parties will be seriously disadvantaged, irrespective of what I decide.
It is common in cases such as this to consider the interest the patent applicant presumably has in the expeditious grant of a patent for the invention. But as I said earlier, this application was accepted almost eight years ago, so I do not consider that undue emphasis should be placed on 'expeditious' handling here. In any case, since the hearing was held barely a month before the end of the extension sought, and it will take some time for the decision to issue, there cannot be real prejudice to Roche whatever the outcome.
There was a suggestion from Roche at the hearing that it may be appropriate to allow a short extension of seven days from the date of the hearing, however I explained that as it would likely take several weeks for the decision to issue, that was not really a practical option in this case.
In my opinion there is no real prejudice to Roche should I grant even the full extension, and I did not understand it to be strongly argued otherwise, rather there was some exasperation at the duration of the total process.
On the other hand NEB submitted that they would be seriously prejudiced in the conduct of the opposition if they were unable to file the declaration by their expert. I have looked at the statement of grounds and particulars, which are extensive. There are about four pages of particulars relating to section 102(1) (not in substance disclosed as filed), six pages relating to section 102(a) (not within scope of claims before amendment), and fifteen pages relating to section 102(b) (section 40 matters).
The format of the particulars is quite descriptive, and notwithstanding the number of items raised, in my opinion the opposition could proceed reasonably effectively without the expert's declaration. NEB could still appear and make submissions at the substantive hearing, and it should be remembered that this not a section 59 opposition; the grounds are much more limited.
I consider that NEB would likely suffer some prejudice should I refuse to grant any extension at all, but it would not be sufficient to render the opposition untenable.
The interests of the public
The public interest has two components. First, that a serious opposition should be dealt with on its merits, as opposed to being shut down because of a procedural failure. See Kaiser Aluminium & Chemical v The Reynolds Metal Co (1969) 120 CLR 126. This of course goes to the issue of public confidence in the validity of granted patents. Second, that proceedings before the Commissioner should be conducted in a timely and expeditious manner.
In the manner this case has proceeded I do not consider 'timeliness' to be a real issue. But is it a serious opposition?
As I have said, the grounds and particulars cited are extensive and detailed. The proposed amendments are also extensive, and consist of 65 replacement pages of text and two of figures, including replacement claims 1-104. It was indicated at the hearing that the evidence in question would be a declaration by an independent expert, one Dr Morona, which would address the effect of the amendments on the scope of the claims, and consequently whether they are allowable. As at the 1 October 2001 the declaration was said to be in draft form, and ready for review by Dr Morona.
While a delegate of the Commissioner has previously reported that they are allowable, it is my understanding that the comments received from NEB in response to the proposed amendments did not really address the issue of allowability as provided by section 102. I also note that the invention relates to DNA technology and is very specialised. Although I have said that I thought the opposition could proceed without this (or any) evidence, in my opinion such a declaration could be of some importance in the opposition (Goninan), particularly in helping to ensure that the eventual decision is the correct one.
The material before me indicates that this is a serious opposition, and I did not understand Roche to be pressing otherwise. I consider the balance of interests weighs in favour of public confidence, and to that effect it is preferable for NEB's evidence to be on file. I also anticipate that the evidence will be filed shortly.
CONCLUSION
Taking into consideration all of the factors mentioned, most particularly NEB's inadequate explanation for the delay and that the opposition could proceed without the evidence, I am not satisfied that NEB has made out a proper case justifying the extension. Nonetheless, as the evidence was in draft form at the beginning of October, should by now be further advanced, could be of some importance in the opposition, and there is no real prejudice to Roche, I consider it would be appropriate to grant a short extension so the evidence could be filed in whatever form it now or then is, as suggested in Ferocem. An appropriate extension would be seven days from the date of issuing this decision.
The reality of the matter is however, having regard to the likely date of issue, that such an extension would not be significantly different from the extension actually sought. Accordingly I grant an extension of time in which to serve evidence in support to 9 November 2001.
Further, as the only evidence canvassed in the submissions is a declaration by Dr Morona, it is my expectation that this will be the only evidence filed. It is also unlikely that the Commissioner would look favourably on any further request for time to serve this evidence.
I would mention that at the hearing Counsel for Roche submitted that I should include in my decision directions to the above effect, but I am not satisfied that I can do so.
COSTS
In proceedings before the Commissioner costs normally follow the event, and I can see no reason why that should not be the case here. As I have concluded that a proper case justifying the extension has not been made out, I award costs against New England Biolabs, Inc.
RG Tolhurst
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Spruson&Ferguson
Patent attorneys for the opponent : Callinan Lawrie
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