Galagen, Inc v Northfield Laboratories Pty Ltd
[2001] APO 30
•6 July 2001
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 695354 in the name of Galagen, Inc.
Title: Method for Microfiltration of Milk, Milk Serum, Colostrum, or Colostral Whey
Action: Opposition under Section 59 by Northfield Laboratories Pty Ltd. Application for an Extension of Time in which to serve Evidence in Answer (regulation 5.10(2)).
Decision: Issued .
Abstract
The extension of time sought for serving Evidence in Answer is found to be not justified by the reasons given for the delay relating to:
filing of amendments to the specification in the light of comments by the expert witness for the applicant
amending the draft Evidence in Answer to reflect the specification after the incorporation of the amendments when filed
and the requested one month extension is refused.
Following the judgement in Ferocem Pty Ltd v Commissioner of Patents, (1994) AIPC 91-057, however, a limited extension of time of five working days is granted to allow the applicant to serve whatever evidence it has to hand.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 695354 by Galagen, Inc. and opposition under Section 59 by Northfield Laboratories Pty Ltd. Application for an Extension of Time in which to serve Evidence in Answer (regulation 5.10(2)).
BACKGROUND
Patent application 695354 in the name of Galagen, Inc. (Galagen, 'the applicant') was filed on 12 April 1996 under the Patent Cooperation Treaty as PCT/US96/05110 and claimed priority from United States applications 09/422,493 (12 April 1995) and 08/630,452 (11 April 1996 ). The patent application was advertised accepted on 13 August 1998.
Northfield Laboratories Pty Ltd (Northfield, 'the opponent') filed a notice of opposition under section 59 on 12 November 1998 followed by a Statement of Grounds and Particulars on 11 February 1999.
Service of Evidence in Support was completed on 9 December 1999 following four extensions of time totalling seven months.
Following five extensions of time totalling fourteen months, Evidence in Answer was due to be served by 9 May 2001. On that date Galagen filed a sixth request for extension of time of one month to 9 June 2001. Northfield formally objected to this request 25 May 2001.
The matter was heard in Canberra on 7 June 2001 with both parties appearing by telephone. David MacBeth of Phillips Ormonde & Fitzpatrick, Melbourne represented the applicant and Greg Noonan of Freehills Carter Smith and Beadle, Melbourne represented the opponent. Gillian Jenkins of IP Australia also attended the hearing.
To date, the applicant has not served any Evidence in Answer and has not filed the amendments upon which the sixth request for extension of time is based.
RELEVANT LAW
The time for serving evidence in answer is three months from the date of service of the Evidence in Support, according to regulation 5.8. This time may be extended under regulation 5.10(2):
The Commissioner may 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 5.3AA, paragraph 5.4(a) or subparagraph 5.8(1)(a)(i):
(a)on the application of a party in the approved form; and
(b)on such reasonable terms (if any) as the Commissioner specifies; and
(c)after the party has served the application on the other party."
This provision must be read in conjunction with regulation 5.10(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 or her 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, an extension of time or the serving of further evidence is appropriate in all the circumstances."
Thus the Commissioner, having ensured that the other party has been notified, and that both parties have been given the opportunity to make representations, may grant an extension only if reasonably satisfied that it is appropriate in all the circumstances.
Regarding the factors that must be considered in deciding whether or not the Commissioner should be grant an extension of time, Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 states:
"The idea that such a broad discretion can validly be reduced by a decision-maker to an insistence upon 'imperative' compliance with particular requirements has repeatedly been rejected by the courts."
He concludes that:
"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 interests of the persons directly concerned in the application and opposition in question. There are also public interests, which are not necessarily ranged on the same side. They include the expeditious disposal of matters in the Patents Office, and questions of costs, 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 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 it should be shut out in consequence of a failure of procedure, lamentable though the failure may be". This proposition was cited by Bowen CJ in Vangedal-Nielsen v Smith (Commissioner of Patents) (1980) 33 ALR 144 (at 150), where he also set out some of the considerations involved upon an application for an extension of time."
These considerations were also raised in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213 where Sackville J adopted the position that the decision-maker was required to give proper, realistic and genuine consideration to the public interest generally and specifically to the opposition proceeding being determined on its merits. In respect of this point, he stated:
"In order for the Commissioner or his delegate to give proper, genuine and realistic consideration to the aspect of public interest I have identified, it is necessary to consider the nature of the evidence the opponent seeks to adduce and the significance of that evidence for the opposition proceedings. I do not mean to suggest that the evidence has to be scrutinised in the same way as would occur at a hearing on the merits. But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on its merits."
The relevant principles developed in these decisions may be summarised as follows:
· The broad discretion afforded by Regulation 5.10 cannot be reduced to insistence on imperative compliance with particular requirements;
· The exercise of this discretionary power requires proper, genuine and realistic consideration of all the relevant aspects that pertain to the application;
· The provision of a satisfactory explanation of the delay is a relevant consideration, but is not mandatory;
· The public interest in determining a serious opposition on its merits is a relevant consideration and must be balanced with the requirement that matters before the patent office should be dealt with in an efficient, orderly manner and not be unduly prolonged;
· The interests of the opponent, the applicant and any other parties are a relevant consideration.
These principles were echoed in the more recent decision in National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33.
I will apply these general principles from the above cases to the present facts recognising that I must not either grant the extension or refuse it without giving proper consideration to all relevant circumstances.
THE REQUEST
In the present application, the reason given for the need for the extension currently sought, is as follows:
"As a result of discussions with the expert during settlement of his draft that will form the applicant's Evidence-in-Answer with respect to the present opposition proceeding, the applicant has decided to amend the claims of the opposed application to address objections raised by the opponent in its Statement of Grounds and Particulars.
The further time is necessary for the applicant in consultation with the expert witness Dr Mani Iyer to determine the exact form of the amendments that are to be made. The expert's Statutory Declaration will then need to be revised prior to execution to take into account any amendments to the specification and claims."
The applicant further argued at the hearing that the delays that led to this request being made eighteen months after service of the EIS, resulted from a succession of difficulties in identifying the expert witness, Mr Iyer, and in gaining his comments with regard to the EIS.
DECISION
In applying the law to the facts of this case I will consider all the relevant circumstances under two general headings: the explanation or justification for the delay and the interests of the parties involved and the public.
The explanation or justification for the delay
I note that while there are no imperative requirements in relation to deciding this matter, any explanation or justification, provided by the person making the request, should supply sufficient detail as to why the extension is required. (see Dominion Mining Ltd v MIM Holdings Ltd [1997] APO 27 (11 June 1997).
Such justification or explanation should establish that the unforeseen circumstances beyond the control of the applicant necessitated additional time to serve evidence and that the applicant has showed diligence in using his or her best endeavours to serve evidence on time. (see Dominion Mining Ltd v MIM Holdings Ltd supra; Kimberley-Clark Corporation v Proctor & Gamble Co (1993) 26 IPR 581 at 588; Rafaele v Tetley GB Ltd (1996) 36 IPR 481 at 486; Gentia Software plc v Abhor Software Corporation (1998) 42 IPR 169 at 172-3); Kirin-Amgen Inc v Board of Regents of the University of Washington [1994] APO 9 (25 January 1994).
Notwithstanding the foregoing, the absence of a satisfactory explanation of the delay does not preclude the granting of an extension of time if it is appropriate to do so in all the circumstances (Ferocem (supra).
In assessing this issue I will consider whether the applicant has demonstrated diligence in seeking to serve the evidence on time and whether the proposed filing of amendments constitute a suitable justification for the granting of the extension.
DUE DILIGENCE IN PROSECUTION
In determining whether the granting of the request for extension of time is appropriate I am mindful of the teaching of Sackville J in A Goninan & Co Ltd v Commissioner of Patents (supra):
“Nor do I think that there is any substance in the contention that the finding that the first application was not properly based was “wholly irrelevant” to the determination of the second application. One of the factors to be taken into account in determining whether a further extension should be granted was the extent of any delay in filing evidence and whether Goninan had offered a satisfactory explanation for the delay, or any part of it. As Ferocem shows, this consideration cannot be regarded as paramount in the sense that it forecloses proper consideration of other relevant factors. But it was clearly a relevant factor in the delegate’s deliberations and he was entitled to take into account that at no stage had a satisfactory explanation for the delay been forthcoming.”
In this light I shall now consider the various extensions sought and the circumstances surrounding their grant:
First extension (9 March 2000 to 9 June 2000), indicates that the applicant, based in the United States had been unable to identify a suitable witness to assist in the preparation of the Evidence in Answer.
Second extension (8 June 2000 to 9 September 2000), states that the applicant's attorneys have obtained comments from the inventor and "another scientist" and forwarded them to the applicant's Australian attorneys for review. Further time was requested to consider those comments and to draft Evidence in Answer based upon them. Further time was also requested to identify a suitable witness qualified to comment on common general knowledge in Australia at the priority date of the application. Being unsuccessful at identifying this witness, the applicant states that it "has sought assistance in Australia…".
Third extension (9 September 2000 to 9 December 2000), states that an Australian expert has been engaged and has provided comments but further time is required to prepare a statutory declaration for service as Evidence in Answer.
Fourth extension (9 December 2000 to 9 March 2001), indicates that a draft statutory declaration has been completed but further consultation with the witness is necessary before the declaration can be finalised. It explains that the delay has resulted from the limited time available to the witness due to the end of the academic year. It states that it is envisaged that that Evidence in Answer should be served within the term of the extension.
The opponent stated in a letter to the Commissioner dated 19 December 2000 that it would not formally object because of the applicant's expectation that the evidence would be served within the term of the extension, but would object if further extensions were requested and expressed concern with the delays in filing of the Evidence in Answer and suggested the granting of shorter period than the three months requested. The Commissioner decided to grant the extension but stated that the extension "is made on the understanding that the evidence-in-answer will be served within this period and the Commissioner will be unsympathetic to any further extension of time requests."
Fifth extension (9 March 2001 to 9 May 2001), identifies the expert witness as Dr Mani Iyer of the University of Melbourne and states that, having now completed his review of the draft statutory declaration, "further issues have arisen requiring the expert to consider further materials and to conduct further research". It further states that contact with Dr Iyer was restricted from December 2000 to the end of February 2001 due to the Christmas /Academic holiday period and a work related trip to China and Korea during February with little notice. It states that further time is required to finalise the Statutory Declaration and that while "it is hoped that it may be possible to complete lodgement of service of the Evidence-in-Answer before 9 May 2001, a two month extension has been requested as a precaution given the previous difficulties that have been accounted due to the expert's other work commitments".
On 19 March 2001 the opponent formally objected to the grant of the request. The opponent withdrew this objection on 6 April 2001. It asserted that this withdrawal was based upon a personal undertaking by the applicant, that it would serve Evidence in Answer by 9 May 2001.
Sixth (current) extension (9 May 2001 to 9 June 2001), as stated above
Three months is provided under the Patent Regulations in which to provide Evidence in Answer. A period of this order is expected to prove adequate except under unusual circumstances. Under such circumstances the provisions of reg 5.10 (2) permit the time to be extended. In the present case, however, the applicant has filed no evidence or submissions establishing that the circumstances in this case were unusual. The Evidence in Support was not unduly long or complex, comprising only one statutory declaration and associated exhibits. There is no suggestion that the technology involved in the application was unusually difficult or rare.
Furthermore, on specific points raised at the hearing, I comment as follows:
The applicant has not previously suggested that it was contemplating amendment of the specification. Given that it has been in possession of the Evidence in Support since December 1999 and Dr Iyer's comments since 9 September 2000, I find it unlikely that the possibility of amendment has only occurred to the applicant since May 2001. I recognise the desirability of amending the specification to make the issues in the substantive opposition more focussed, however, a diligent applicant would ensure that such amendments are filed expeditiously. In the context of the extended delays already encountered in the present case, I consider that the applicant's tardiness in raising the matter of amendments demonstrates a lack of diligence in progressing the opposition in a timely manner.
The opponent submitted that the applicant first referred to having obtained comments from the inventor in the second request for extension, dated 8 June 2000, but has provided no explanation as to why it apparently took six months to get these comments. I agree with the opponent that there has been no satisfactory explanation for this delay and that, prime facie, this indicates a lack of diligence on the applicant's part.
The applicant stated, in the second request for extension, dated 8 June 2000, that it had obtained comments from the inventor and from "another scientist". In this context it appears that these comments are to be the basis of part of the Evidence in Answer. Despite this statement and the ensuing twelve months that have elapsed since the applicant received them, there has been no further reference to these comments, nor explanation as to why such Evidence in Answer based on this material has not been served.
The applicant submitted that the delay in identifying the expert witness was in part due to it being unable to locate a suitable person in the United States. Given that the expert witness is required to comment on the common general knowledge in Australia at the priority date of the application - a fact admitted in the request for the second extension - I can see no reason why the applicant took until June 2000 to seek assistance in locating the witness in Australia and it has provided no explanation. Moreover, the necessity of expert witnesses in opposition proceedings is well established, as is the fact that their identification may be time consuming and frequently requires approaching persons in other countries. Given that the applicant had been in possession of the Statement of Grounds and Particulars since 11 February 1999, I would expect that a diligent applicant would have begun its search for a suitable witness or a pool of possible witnesses from which to draw, soon after this date. On the evidence before me, however, it appears that the applicant did not begin trying to locate the expert witness until well after the three month period for service of Evidence in Answer, provided in the regulations, had expired.
The applicant submitted that Dr Iyer’s busy academic schedule, conflicting work priorities and difficulties encountered over the Christmas holiday season led to delays in his assessing and providing comment on the Evidence in Answer. Busy schedules and competing priorities are quite normal with expert witnesses, however, particularly those in academia with teaching and research responsibilities. It remains the responsibility of the party employing the witness, in the absence of extraordinary delays or difficulties, to make suitable arrangements to achieve the time frames required by the regulations. In the present case the only extraordinary delay raised by the applicant is Dr Iyer's trip to Korea and China at short notice. By the applicant's own comments however, this delay was only for a period of one month in February 2001. Other than in respect of that one event, there has been no argument or evidence that the demands upon Mr Iyer’s time were any greater than would normally be expected of someone in his position, nor that extraordinary or unforeseen circumstances arose.
At the hearing the applicant made much of its location in the United States and the inherent difficulties in communication associated with prosecuting an opposition action in Australia via instructing attorneys in the United States. I do not find this argument convincing. Such international arrangements are quite normal and both the attorneys in Australia and the instructing attorneys in the United States should be familiar with the processes involved. Furthermore, in this era of electronic communication, I do not consider that geographical separation is an adequate basis for arguing the length or the number of delays that have been associated with the filing of the Evidence in Answer in this case.
The opponent submitted that throughout the whole of the proceedings, the reasons offered by the applicant for the delays have been vague and lacking in detail. I agree with this comment.
On two occasions the applicant has led the Commissioner and the opponent to believe that service of Evidence in Answer was imminent, but has failed to serve it. On the first occasion the applicants statement in the fourth request led to the opponent refraining from objecting to the request. On the second occasion the opponent filed an objection to the fifth request. In a letter dated 6 April 2001, however, the opponent allegedly withdrew this objection on the basis of a personal undertaking that the opponent asserted, both in that letter and at the hearing, the applicant had made, to the effect that it would serve Evidence in Answer by 9 May 2001. While this undertaking is not before the Commissioner, the applicant has neither contested the assertion made by the opponent, nor has it provided any discussion or explanation of the its failure to comply with this undertaking.
Furthermore, I note that, at the date of this decision, neither any Evidence in Answer nor any of the proposed amendments have been filed. In addition, the applicant has provided no firm indication as to when either of these items would be filed. I also note that a request for a further one month extension of time to 9 July 2001 for serving Evidence in Answer has been filed.
In the light of these factors, I consider that the applicant has been tardy in its prosecution of the case and has failed to demonstrate diligence in serving the Evidence in Answer in a timely manner.
The relevance of the proposed amendment(s)
The opponent directed me to Exxon Chemical Patents Inc. v Lubrizol Corporation 41 IPR 126, as providing discussion of the relevance of amendments as a consideration in deciding Reg 5.10 (2) matters. The delegate in that case reviewed prior decisions in Nippon Steel Corporation v BHP Steel (JLA) Pty Ltd [1998] APO 5 (26 February 1998), Steni Rederi Aktibolag v Danyard A/S (1996) 34 IPR 111, Orion-Yhtyma OY v Pickering [1997] APO 15 (24 April 1997) and Dominion Mining v MIM Holdings (supra). He concluded that a request to amend a specification, which is the subject of opposition proceedings, is a relevant consideration in deciding whether or not to grant an extension of time under reg 5.10(2). He also noted that there is a preference for resolving oppositions through amendments to the specification if possible. Nevertheless, the delegate considered that, despite both the amendment and part of the Evidence in Answer having been filed, Exxon had failed to justify their delay in completing the Evidence in Answer.
While the discussions in Exxon Chemical Patents Inc. v Lubrizol Corporation (supra) are relevant, I do not believe that the decision provides clear precedent for deciding the present case. This is because (i) much of the assessment of the amendment in Lubrizol related to a request for the Commissioner to defer the service of Evidence in Answer under Reg 5.10 (1) rather than the granting of a request under Reg 5.10(2), and (ii) both the amendments and part of the Evidence in Answer had already been filed when the matter was decided.
It appears from the discussion in Lubrizol, however, that the basis for consideration of amendments in the granting of an extension to file evidence, is that they provide a preferable method of overcoming part or all of the issues raised in the opposition. Inherent in this is that the amendments go toward the issues raised in the opposition and that the Evidence in Answer relates to the elements of the specification affected by the amendments.
In the present case, however, there have been no amendments filed, details of the proposed amendments have not been provided in evidence or discussed in submission and no Evidence in Answer has been filed nor its relation to the amended specification discussed. Although, at hearing, the applicant indicated that the amendments related generally to the question of novelty, it provided no details establishing how the amendments will affect specific issues raised by the opponent nor how the resulting changes to the specification will affect Dr Iyer's statutory declaration or any other draft Evidence in Answer.
Therefore, on the evidence before me, I consider that the proposal to file amendments provides little weight in support of the granting of the extension as the applicant has not provided sufficient evidence to establish the relationship of such amendments to the matters to which the substantive opposition relates.
Consequently I find that there has not been an adequate justification of the delay.
Interests of the parties involved in the opposition and of the public
Regarding the interests of the opposing parties, the opponent submitted that it is facing an extended period of uncertainty as a result of the delays in proceedings and a further protraction would result in greater disadvantage. On the other hand I understand that the applicant's interests are best served by granting an extension to prepare its case in full. I do not consider that either party has a stronger claim in terms of their private interests.
The issue of the public interest was considered by Burchett J in the Ferocem (supra) decision. He concluded that in reaching a decision on this point, a balance is required between differing public interests. Although it is desirable in the interests of cost, efficiency and the orderly prosecution of matters before the Patent Office, that oppositions progress without delay, it is equally important that decisions be made on merit, rather than parties being completely shut out as a result of a failure in procedure.
In the present case the application has been in a state of uncertainty of some eighteen months at least. Additionally, the possibility of amendment has only been raised after five previous requests for extension of time that failed to refer to it. Both the public and the opponent would thus have reasonably assumed, on the basis of the previous requests, that service of the Evidence in Answer would follow the review of the draft statutory declaration by Dr Iyer. It now appears, however, that, if this extension is granted, service of the Evidence in Answer becomes contingent on the completion of the amendment action.
The applicant has so far failed to file these proposed amendments, to indicate any details of their content, to serve any Evidence in Answer, or to give any firm undertaking when Evidence in Answer will be served or the amendments filed. Furthermore it has filed another request for an extension of time since the hearing took place. It is therefore unclear as to when the Evidence in Answer will be filed and what affect, if any, the proposed amendments will have on the Evidence in Answer.
I recognise, however, that Evidence in Answer is integral to the presentation of the applicant's case and clearly highly relevant to the deciding of the opposition on its merits. In this context I note that the applicant has indicated that some Evidence in Answer has already been prepared in the form of draft statutory declarations. In recognition of this, the opponent suggested that the granting of a short extension would permit the applicant to file the Evidence in Answer it has to hand, consistent with the principles laid down in Ferocem (supra). I agree with this observation. I furthermore note that the applicant is still free to file amendments to the specification after the Evidence in Answer is served.
I believe that, considering all the circumstances, the public interest would not be served by granting a further extension of time given that the applicant has not shown diligence in prosecuting the matter over the last eighteen months nor has given any clear indication as to when the substantive opposition will progress.
CONCLUSION
I find that in all the circumstances the applicant, Galagen Inc., has failed to make out a case that justifies the extension of the time to serve Evidence in Answer by a further one month. I consider that it is in the public interest however, that the applicant should not be completely shut out.
Nevertheless, I am most concerned with the applicant's lack of diligence in service of the Evidence in Answer. I note that despite the last two requests expressing a hope to file the Evidence in Answer within the time sought, and despite apparently having given the opponent an undertaking that led to an objection being withdrawn - the evidence still has not been served. In addition, the applicant has indicated an intention to amend, but as yet no amendments have been filed.
I am not satisfied, from the evidence before me, that the conduct of the applicant in this opposition, is consistent with a serious prosecution of the opposition. I am also aware that a proposal to amend the specification at this time will further delay the opposition proceedings if it is dealt with prior to determining the Section 59 opposition. I do not believe that it is in the public interest for this opposition to be further protracted.
Given the delays to date in serving the Evidence in Answer, and in seeking amendment, it is my opinion that the opposition should proceed to hearing and determination without waiting for the amendments (if any) to be processed, unless the parties agree otherwise.
In addition, the applicant has requested a further extension of time to 9 July 2001. In all the circumstances, I consider it appropriate to set that request for hearing - with a view to possible refusal - at the earliest opportunity. To that end a hearing notice accompanies this decision, setting a date ten working days from the date of this decision.
In consideration of the comments in Ferocem (supra) and Goninan (supra), I grant the period up to the date of the hearing referred to above, in which the applicant may serve any Evidence in Answer that it has to hand.
Costs
In actions before the Commissioner, costs usually follow the event. I see no reason for departing from this in the present case. I award costs against the applicant Galagen, Inc.
Leigh R. Tristram
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Phillip, Ormonde & Fitzpatrick, Melbourne
Patent attorneys for the opponent : Freehills, Carter Smith & Beadle, Melbourne
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