G.J. Consultants Pty Ltd v Novogen Research Pty Ltd - [2007] APO 40

ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 777324 in the name of G.J CONSULTANTS PTY LTD

Title: Isoflavone Metabolites

Action: Request for an extension of time to serve evidence in reply by NOVOGEN RESEARCH PTY LTD and an objection thereto by G.J CONSULTANTS PTY LTD

Decision: Issued 24 December 2007
Abstract

On balance, the explanation justifies an extension of time.
Furthermore, on balance the interest of the parties supports granting the extension. While it cannot be said that that there is a zero risk of prejudice to G.J Consultants Pty Ltd (GJC), there seems to be no specific disadvantage to them. The effect of not allowing the extension, thereby denying Novogen Research Pty Ltd (Novogen) the opportunity to put evidence before the Commissioner to decide who the correct owner of the patent is, would seem to outweigh any delay.
In addition, the public interest supports an extension of time. Extending the time to allow the filing of evidence that addresses the inconsistencies in evidence should lead to a more correct and just decision. In further support are Dr Heisey’s repeated assertions (on behalf of Novogen) during the hearing that he fully expected the evidence in reply to be completed within the extension requested, and that Novogen appears to have taken into account the effects of the December holiday period when requesting the present extension.
Taking all relevant considerations into account, I allow the requested extension of time to file evidence in reply until 31 December 2007.
I award costs against GJC.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 777324 by G.J CONSULTANTS PTY LTD and a request for an extension of time to serve evidence in reply by Novogen Research Pty Ltd and an objection thereto by G.J Consultants Pty Ltd

BACKGROUND

Patent application 777324 in the name of G.J. Consultants Pty Ltd (GJC) was filed on 1 May 2000 as PCT/AU00/00392, for an invention titled "Isoflavone Metabolites". The application was advertised as accepted on 14 October 2004. On 14 January 2005, Novogen Research Pty Ltd (Novogen) filed a Notice of Opposition. A Statement of Grounds and Particulars followed on 14 April 2005 and partial Evidence in Support was served on 18 October 2005 following 2 extensions of time and a Notice of Production issued by Novogen on 29 July 2005 on GJC. On 18 October 2005 Novogen also filed a request pursuant to section 32 asking the Commissioner to determine the person who may proceed with the application. On the same day Novogen also filed a request for certification of a Notice of Production to be served upon themselves (i.e. Novogen) for certain agreements between GJC and Novogen. This request was accompanied by a request that the agreements be not open to public inspection pursuant to Regulation 4.3(2)(b). These agreements were produced on 31 October 2005 and were not made open to public inspection. The remaining Evidence in Support was completed on 1 February 2006 following 2 additional extensions of time. On 1 February 2006, the documents produced by GJC in response to the Notice of Production filed on 25 July 2005 were held to be available under section 55 of the Act and taken as evidence in the proceedings under section 59 and 32.
GJC requested and was granted 3 extensions of time until 1 February 2007 to serve Evidence in Answer. Evidence in Answer was served on 31 January 2007.
A notice to serve Evidence in Reply was served by Novogen on 16 February 2007 and a request for an extension of time was filed by the opponent on 30 April 2007 and was granted until 31 July 2007. GJC did not oppose the grant of the extension but filed comments. A further extension of time was requested by Novogen and was not formally opposed.
On the 31 October 2007 Novogen requested another application for a two-month extension of time to 31 December 2007 and GJC objected to this extension.
The third request for the extension to file Evidence in Reply was heard in Canberra on 23 November 2007. GJC filed written submissions in support of its objection. Novogen filed written submissions and were also represented by Dr Ross Heisey, patent attorney of Davies Collison and Cave, Sydney.
THE APPLICATION FOR AN EXTENSION OF TIME
The reasons given for the third application for extension of time to prepare Evidence in Reply includes the unforeseen unavailability of an expert witness Mr Ben Miller during the best part of the previous 3 month extension to file evidence due to his involvement with an action before the Federal Court of Australia. The reasons also indicated that expert evidence would be filed by Novogen’s Chief Chemist, Dr Andrew Heaton, but there was an unavoidable delay in the preparation of the evidence due to the complexity of the chemistry in general and the volume and nature of the Evidence in Answer served by the applicant.
Novogen reasoned that, unlike most oppositions which pertain to matters of validity and where the evidence usually relates to prior art that is publicly available, “the present opposition concerns the issue of entitlement and obtaining and therefore much of the information to be relied upon is in someway secret, confidential and/or not publicly available”.
Novogen also indicated that the evidence in reply “goes to the matter of apparent mischaracterization of numerous chemical compounds from chemical reaction mixtures” and a necessary analysis of complex chemical spectra much of which was seen for the first time in Evidence in Answer served on 31 January 2007. In this manner Novogen reiterated the notion that this present opposition is distinguished from the usual oppositional situation that relies on material that is publicly available and published well before the priority date of the invention.
RELEVANT LAW
The time for serving Evidence in Reply is 3 months from the date of serving the Evidence in Answer (regulation 5.8). This time can be extended under regulation 5.10(2):
(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).
This provision must be read in conjunction with regulation 5.10(5):
(5)The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:
(a)if he or she proposes to grant an application by a party - is reasonably satisfied that the other party has been notified of the application; and
(b)if he or she proposes to act on his own motion - ensures that the parties are notified of the proposed action; and
(c)in either case:
(i)gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and
(ii)is reasonably satisfied that a direction, and extension of time or the serving of evidence is appropriate in all the circumstances.
Consequently, it is a prerequisite to any decision that the Commissioner must ensure that the other party has been notified, and that both parties have had the opportunity to make representations. In the present case the opponent has been notified, and both parties have been given the opportunity to make representations.
An extension can only be granted if the Commissioner is reasonably satisfied that it is appropriate in all the circumstances. In exercising this discretion I am guided by the decisions of Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) AIPC 91-057; 28 IPR 243, Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) AIPC 91-330; 38 IPR 213 and Goldberg J in National Starch & Chemical Co v Commissioner of Patents (2001) AIPC 91-697, 50 IPR 398. The general principles that flow from these decisions are:
a)The power is discretionary:    Regulation 5.10 confers a broad discretion, which cannot be reduced to imperative compliance with particular requirements. It is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at AIPC 38,208; IPR 247-8, Goninan at AIPC 39,434; IPR 220)
b)Explanation of delay: The reasons why the evidence was not served earlier are a relevant consideration, but a satisfactory explanation is not a mandatory requirement. (Ferocem at AIPC 38,207-8; IPR 247). It is relevant to consider the disadvantage to the other party of delays in determining the opposition, and the effect of delays on the efficient and orderly administration of the Patents Office. (Ferocem at AIPC 38,208; IPR 247, Goninan at AIPC 39,436; IPR 222)
c)The public interest:     The public interest in determining a serious opposition on its merits is a relevant consideration. (Goninan at AIPC 39,435-6; IPR 222)
*         In order to do this, it is necessary for the Commissioner to form a view as to the nature of the evidence that it is sought to adduce, and the significance of that evidence for the opposition proceedings. (Goninan at AIPC 39,438; IPR 225-6)
*         The significance of the evidence is assessed having regard to any relevant material available, not just the evidence itself. (National Starch at [33])
*         The public interest is not protected merely because some evidence has already been served. (Goninan at AIPC 39,438; IPR 225)
d)The interests of the party seeking the exercise of discretion: The interests of the party seeking the exercise of discretion are a relevant consideration. (Ferocem at AIPC 38,208; IPR 247)
DECISION
Explanation of the delay
GJC submitted that there had been no adequate explanation. GJC reasoned that as neither Mr Miller nor Dr Heaton was independent it would be unlikely that there would be an issue with their availability that would necessitate a delay in the filing of evidence. In particular GJC proposed that Mr Miller's unavailability due to his involvement in a matter in the Federal Court should have been foreseen given that hearings in the Federal Court are set down in advance. GJC also submitted that the scientific matters for review should not have required extensive time to review because they related to technical material familiar to one as experienced as Dr Heaton.
Dr Heisey remarked that he understood that because the opposition is based on the issue of entitlement and obtaining as distinct from matters of validity, it might seem that sufficient time has already been granted for filing of evidence. However, he pointed out that the nature of the evidence was complex and much of the evidence relied on laboratory notebook and spectral and GCMS data. This material was not initially known or available to the opponent and it was only seen for the first time.
Dr Heisey argued that the Evidence in Answer was voluminous and complex. He exemplified several examples of inconsistencies and apparent mischaracterization of the chemical data, in particular the NMR spectra presented in the patent application and the declarations of the Evidence in Answer. These errors and inconsistencies had complicated the task of clarifying the problems raised in Evidence in Answer and much effort was necessarily required to correlate the biological data with laboratory notebook entries, NMR spectra and GCMS data.
Notwithstanding the complexity and apparent inconsistency of the data presented in the patent and Evidence in Answer, I noted during the hearing that if the opponent's request was successful, Novogen would be afforded 11 months to file their evidence and I asked why was it taking Dr Heaton so long to complete.
Dr Heisey reiterated that the unravelling of the inconsistencies was an onerous task and although it was perhaps a simple matter to identify inconsistencies it was altogether a more complicated matter to address them in detail.
During the hearing I sought further information about the delay of Mr Miller’s evidence. I noted that contracts are factual documents requiring little further evidence and two extensions had already been granted for completion for what appeared to be “easy” evidence. While Dr Heisey said that Mr Miller was going to complete the evidence by 14 December, I put to Dr Heisey that the deadline meant that there would be only one week available after completion of the matter in the Federal Court, for Mr Miller to complete evidence that he had not been able to complete within the previous 9 months.
Dr Heisey noted my concerns, but pointed out that Mr Miller had competing work interests and the opponent has no control over the availability of a witness. Mr Miller was unable to complete his evidence within the last extension due to his appearance in the Federal Court and that contrary to GJC’s position that this appearance should have been foreseen, Dr Heisey remarked that it was in fact the case that Mr Miller's unavailability was not readily predictable.
I also raised concerns as to whether the December holiday period would have an adverse impact on the ability of Mr Miller and Dr Heaton to complete the evidence. It would appear to me that this factor had been ignored by Novogen and could cause further delays to the filing of evidence and I put this to Novogen. Dr Heisey repeated several times during the hearing that he was confident that the evidence would be completed within the requested extension. I can only assume from this that Dr Heisey had factored in the effects of this holiday period when deciding to request a further two months.
Superficially, it would appear that it should not have taken Novogen this long to provide their evidence in reply. Turning to the evidence expected of Dr Heaton, it would seem to be nothing more than a matter of comparing chemical formulae. In the normal course of events, this should not take up to 11 months to do, particularly, as GJC submitted, given the experience of Dr Heaton.
Nevertheless, I do take on board Dr Heisey’s submissions and examples going to the inconsistencies and mischaracterisation of chemical data that occurs between the specification and the Evidence in Answer and within the Evidence in Answer itself and can see how that could have slowed Dr Heaton’s evidence preparation in this case.
With regard to the delay associated with Mr Miller’s evidence, I do take note of GJC’s submission that Federal Court hearings are set down well in advance of their commencement. However, taking note of Dr Heisey’s submissions, it is also possible for such dates to be set well in advance but for participants not to know what involvement this requires until much closer to that date.
I am of the opinion that, on balance, the explanation justifies an extension of time.
Interests of the parties
GJC contended that its interests are not served in granting the extension as its costs of prosecuting the patent were increasing as the delay in hearing the opposition increased.
Dr Heisey argued that Novogen were not responsible for GJC’s costs and the costs incurred by GJC were likely to have occurred before the filing of the opposition and relate to general patent filings and prosecution costs.
GJC also objected on the basis that Novogen could apply for revocation under section 138 of the Act if they had concerns about the validity of the patent resulting from any determination made by the Commissioner. As such, GJC believed that Novogen’s interests were not prejudiced by refusal to grant the extension.
Dr Heisey submitted that Novogen had some entitlement to all or some of the compounds that were subject of the patent. Furthermore, Dr Heisey submitted that if the patent were to be granted to GJC and under section 138 it was found that the subject matter belonged to Novogen then Novogen had no avenue to have the patent transferred into their name. They could not amend the patent request after grant to insert Novogen as the relevant owner. They also could not have the patent which was (wrongly) in the name of GJC assigned to the “correct” owner (i.e. Novogen) since the patent would have been revoked.
On balance the interest of the parties supports granting the extension. While it cannot be said that there is a zero risk of prejudice to GJC, there seems to be no specific disadvantage to them. The effect of not allowing the extension, thereby denying Novogen the opportunity to put evidence before the Commissioner to decide who the correct owner of the patent is, would seem to outweigh any delay. As pointed out by Novogen, if the patent is granted to the “wrong” person the patent request cannot be amended after grant to correct this (see regulation 10.3(9)) and the situation could not be corrected by assigning the granted patent to the “right” person (see, for example, Stack v Brisbane City Council 47 IPR 525).
Public Interest
The public interest in determining a serious opposition on its merits is a relevant consideration. In order to do this, it is necessary for the Commissioner to form a view as to the nature of the evidence that it is sought to adduce, and the significance of that evidence for the opposition proceedings [A Goninan & Co Ltd v Commissioner of Patents (supra)]. The other arm of the public interest is the expeditious disposal of matters before the Patent Office. Considerations under this heading involve a balancing act. To put it bluntly, the question that could be asked in making a decision is “Is the delay worth it?” Will the evidence be of such relevance that the delay is excusable because the outcome of the substantive opposition will be that much better for its presence?
GJC contended that Novogen's request related to Evidence in Reply and as such was likely to be of lesser relevance to the outcome of the opposition compared with earlier evidence and was also not as relevant as the earlier evidence to ensuring that the public interest was served. GJC also reasoned that the delay is unjustified because Mr Miller's contribution which related merely to the drafting of the contracts and agreements was already in evidence. They also submitted that scientific evidence provided by Dr Heaton was likely to be irrelevant because the scientific issues raised in Novogen's Evidence in Support by Dr Williams had been adequately addressed by the Evidence in Answer of 31 January 2007.
Dr Heisey confirmed that the extension is sought for matter that was in strict reply and addressed the declarations by Drs Joannou and Reeder submitted as Evidence in Answer on 31 January 2007. Dr Heisey noted that, in any event, GJC could exercise their option to object to the evidence if they considered it was not in reply. When I enquired as to the nature of the evidence that was to supplied by Dr Heaton, Dr Heisey reiterated the examples of inconsistencies and apparent mischaracterization of the chemical data, in particular the NMR spectra presented in the patent application and the declarations of the Evidence in Answer and indicated that Dr Heaton's evidence would be highly relevant to the determination of the opposition.
Notwithstanding the detail set out in the explanation, I also enquired as to what was the nature of the evidence yet to be provided by Mr Miller. Dr Heisey indicated that the evidence of Mr Miller went to the meetings between the parties before the contracts were agreed and Mr Miller intended to correct some statements made in Dr Joannou's declaration. I pointed out that contracts were factual documents and that evidence as to what went on “behind the scenes” did not seem relevant. Dr Heisey submitted that Mr Miller’s evidence would be important. He stated that there were numerous meeting and many things said and done around the signing of agreements between GJC and Novogen (which Mr Miller was party to) and GJC’s evidence went towards what was happening around that time. Dr Heisey indicated that while Mr Miller’s evidence would go to what is written in the contracts, he said that Mr Miller wanted a chance to add to the evidence from what he saw around that time and which were not present in GJC’s evidence.

In my opinion, the public interest supports an extension of time. I agree with Novogen that Dr Heaton’s evidence will be important to the determination of the opposition. It would appear that there are inconsistencies between the patent specification and the evidence. At the same time, I still have some doubts as to the relevance of Mr Miller’s evidence but I am prepared to give Novogen the benefit of the doubt at this time. In summary, I am of the opinion that extending the time to allow the filing of evidence that addresses the inconsistencies in evidence should lead to a more correct and just decision.
In support of this, I am also heartened by Dr Heisey’s repeated assertions during the hearing that he fully expected the evidence in reply to be completed within the extension requested. He indicated that Novogen had got on top of the inconsistencies within the evidence and that he was confident Dr Heaton could file his evidence within time. Dr Heisey also assured me that Mr Miller's submissions had been very near completion in September 2007 (presumably implying that there was only a little left to do) and, furthermore, Mr Miller was motivated to complete his evidence by the 14 December 2007 as he would be unavailable after 15 December. In addition, Dr Heisey’s assertions that he was confident that the evidence would be completed within the period requested when I noted concerns regarding the December holiday period lead me to believe that Dr Heisey has taken the effects of this period into account when deciding how long to request an extension for.
CONCLUSION
Taking all relevant considerations into account, I allow the requested extension of time until 31 December 2007.
The explanation justifies an extension as does the interest of the parties. The evidence sought to be filed should result in a more correct and just decision and Novogen was confident of filing it within the extension requested even taking into account the December holiday period.
COSTS
In proceedings such as these it is usually the case that costs follow the event. I see no reason to vary that approach on this occasion. I award costs against GJC.
GREG POWELL
Delegate of the Commissioner of Patents
24 December 2007
Patent attorneys for the applicant : None
Patent attorneys for the opponent : Davies Collison Cave, Sydney