Geron Corporation v ES Cell International PTE - [2005] APO 11

OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 2001263199 in the name of GERON CORPORATION

Title: Neural Progenitor Cell Populations

Action: Application under section 223 of the Patents Act by ES CELL INTERNATIONAL PTE LTD for an extension of time in which to file a notice of opposition

Decision: Issued 18 March 2005.
Abstract

The evidence established that the person responsible for monitoring the patenting activities of the prospective opponent’s competitors had an established procedure in place that included ascertaining the existence of applications of interest to give him the opportunity to institute opposition proceedings should the core business of the prospective opponent so require. The evidence additionally shows that the acceptance of the present application was first revealed in a search report commissioned by the responsible person that, had it not been for a relevant error or omission on his part, would have resulted in filing of the notice of opposition by the due date. The circumstances surrounding the error or omission were sufficiently explained.
The prospective opponent acted promptly upon recognition that the error or omission had occurred. A serious opposition is foreshadowed with the interests of the public and the prospective opponent outweighing the interests of the patent applicant.
In the circumstances an extension of time to 16 January 2005 to file the notice of opposition was granted under the provisions of section 223(2).
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No.2001263199 in the name of Geron Corporation, and an application under section 223 by ES Cell International Pte Ltd in which to file a notice of opposition

BACKGROUND

Patent application 2001263199 (the present application) was filed on 16 May 2001 by Geron Corporation (Geron) under the provisions of the Patent Cooperation Treaty. The present application was advertised accepted on 16 September 2004, and thus the period prescribed by regulation 5.3(1) for filing a notice of opposition to the grant of a patent expired on 16 December 2004.
On 23 December 2004 ES Cell International Pte Ltd (ESI) filed a notice of opposition together with an application under section 223 for an extension of time (the extension application) of one month in which to file the notice. On 13 January 2005 ESI filed a statutory declaration made on the previous day by Michael Vovos in support of the extension application.
The extension application did not fall within section 223(4) and, consequently, was not advertised for opposition purposes. Nevertheless, Geron was given the opportunity to be heard pursuant to regulation 22.22 and, after it had filed an objection to the grant of the extension sought, the matter was set for hearing in Melbourne on 22 February 2005.
Geron was represented by Mr Bruce Caine of counsel instructed by Dr Jenny Petering and Dr Marcus Caufield of the patent attorney firm F B Rice & Co. ESI was represented by Mr Ben Fitzpatrick of counsel instructed by Dr Debra Yin Foo of the patent attorney firm Phillips Ormonde & Fitzpatrick. During the course of the hearing Mr Fitzpatrick tendered a statutory declaration made by Dr Yin Foo on 22 February 2005 together with a draft copy of a statement of grounds and particulars exhibited as DYF-1. I was also provided with useful written submissions by both parties.
APPLICATION FOR EXTENSION OF TIME
The extension application alleges that the notice of opposition was not filed within the prescribed period because of “an error or omission”.
In his supporting declaration Mr Vovos states that as the IP and Licensing Manager of ESI he is the person responsible for monitoring the activities of competitors. Geron is apparently one such competitor. Mr Vovos says that in undertaking these duties:
“I look for patent applications filed by the competitors that may be of interest to ESI. As part of my usual practice, I regularly conduct searches in the name of the competitor to ascertain recent activities and newly filed applications. It is my usual practice to place applications of interest on a watch service to monitor their progress, and, if appropriate to look for opportunities to oppose the grant of a patent if the grant of the patent may adversely affect the core business of ESI. This practice is particularly relevant for Australia given the deadlines for filing for pre-grant opposition.
As part of my procedure, I would conduct patent family equivalent searches to determine related applications in the family as well as to identify the equivalent Australian applications. Where an Australian application is identified, my usual practice is to place the application on a watch service for an opportunity to oppose the grant of the application.”
The watch services are conducted on behalf of ESI by IP Organisers Pty Ltd (IPO), a patent watch service provider in Australia. Mr Vovos says he has instructed IPO to set up watches on a number of applications “all with the intention to consider opposition when appropriate.”
On 6 October 2004 Mr Vovos requested ESI’s patent attorneys, Phillips Ormonde & Fitzpatrick (POF), to commission IPO to search for family members and Australian equivalents of US patent 6800480 in the name of Geron (the first Geron patent). He also took steps to obtain the US file wrapper of the first Geron patent. Mr Vovos received the results of the search one week later which identified a number of family members, including the present application (see exhibit MV-1). However, according to Mr Vovos, he “failed to notice the application and the advertised acceptance date” and:
“It wasn’t until 22 December 2004 that I noticed the error when I became aware of the grant of another US patent 6833269. I immediately requested [POF] to conduct an equivalent search to identify Australian patents or applications equivalent to this granted US patent. The equivalent to this US patent was the [present application]. I was advised that the [present application] was advertised as accepted on 16 September 2004 and that the period to oppose expired on 16 December 2004. I took all immediate steps and instructed our patent attorneys to file the Notice of Opposition along with an application for an Extension of Time.”
As noted earlier, the notice of opposition and the extension application were filed the next day.
In conclusion Mr Vovos states that:
“At all material times, it was my intention and I verily believe the intention of ESI to oppose the grant of [the present application] because the application related to subject matter that was relevant to the core business of ESI. Due to an error or omission to notice that this application had advertised [sic] on 16 September 2004 that was reported to us in an equivalent search conducted before the due date for filing a Notice of Opposition, that this resulted in a breakdown of our procedures and lead [sic] to the failure to file a Notice of Opposition.”
NOTICE TO PRODUCE DOCUMENTS
On 9 February 2005 at the request of Geron the Commissioner issued a notice under section 210(c) requiring ESI to produce documents said to be relevant to the issues raised in Mr Vovos’ declaration in support of the extension application.
By letter dated 17 February 2005 ESI objected to the notice to produce for a number of reasons including that it was in respect of documents that were not sufficiently identified or were subject to privilege. Nevertheless, at the commencement of the hearing, ESI produced verified copies of the following list of documents:
“1. Request for Singapore and Australian equivalents of US 6,800,460 (subject of
     the Family equivalent search referred to in Vovos Declaration) – dated 6
     October 2004
2. Request for File Wrapper of US 6,800,480 – dated 6 October 2004
3. Computer Status of AU 2001263199 printed on 7 October 2004
4. Reporting Family Equivalent Search of US 6,800,480 – dated 13 October 2004
5. Email identifying that oppositions should have been filed. Alerted by grant of
    US 6,833,269 – dated 22 December 2004
6. Family search of US 6,833, 269 to establish Australian equivalents. This
    alerted us of the opposed application – dated 22 December 2004”
After reviewing the contents of these documents, the representatives for Geron indicated their satisfaction that ESI had complied with the notice to produce. I therefore proceeded to hear the parties in respect of the extension application only.
THE LAW
Section 223(2) provides as follows:
“Where, because of:
(a)an error or omission by the person concerned or by his or her agent or attorney; or
(b)circumstances beyond the control of the person concerned;
a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.”
It is well settled that in the context of section 223(2) “relevant act” includes the filing of a notice of opposition (see eg. ICI Australia Operations Pty Ltd v Dowelanco (1992) AIPC 90-884 at 38,365-38,366 and Vrubel v Upham 36 IPR 220 at 222).
The question of what constitutes an error or omission requires careful consideration. In Kimberly-Clark vCommissioner of Patents (No 3) 13 IPR 569 at 579-580 Jenkinson J discussed the phrase “error or omission” as it applied in section 160 of the Patents Act 1952, the predecessor of section 223, in the following terms:
“It is in my opinion difficult to suppose that only the inadvertence 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 errors of judgement by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips.”
His Honour accepted that:
“… the failure to do the act or to take the step postulated in respect of an application for exercise of the power conferred by s 160(2)(a) cannot itself be the ‘error or omission’ by reason whereof the failure occurred”
but rejected the proposition that section 160 excluded errors or omissions that were the products of deliberation. Consequently, the phrase “error or omission” should be interpreted broadly as including breakdowns in procedure, or flawed mental functions such as an error of judgement (Total Peripherals Pty Ltd v IBM and Commissioner of Patents (1998) AATA 784 and Oz Technology v Boral Energy (1999) APO 18). However, as noted by Jenkinson J in Kimberly-Clark at 580:
“By no means every judgement by the ‘person concerned’ or by ‘his agent or attorney’ which can be shown to have been mistaken will answer the description ‘error or omission’ in the ordinary meaning of those words, which in their context carry, in my opinion, a connotation of obviousness in error.”
Thus taking a calculated risk would be beyond the meaning of “error or omission” (International Business Machines Corporation v Total Peripherals Pty Ltd [1998] APO 14).
An applicant for an extension of time has an obligation to put before the Commissioner the circumstances which it claims justify the grant of the extension sought, but this does not amount to a burden of proof (SanyoElectricCo Ltd v Commissioner of Patents 36 IPR 470 at 479). Nevertheless, as further noted by Jenkinson J (at 583), in order to make out a proper case justifying an extension:
“… an applicant would in my opinion have to go beyond a disclosure of the processes by which an agent’s errors came to be committed, and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct.”
DECISION
Section 223 confers a discretionary power and operates in circumstances where the failure to do a relevant act is the result of an “error or omission”. That is, the error or omission must be causally related to the failure to act. This is to be contrasted with the situation where there has been a deliberate decision not to do the relevant act (Weir Pumps Ltd v Commissionerof Patents and Stork Pompen BV 13 IPR 163 at 166-167).
I must therefore decide whether an error or omission can be identified which establishes a chain of causation to the failure to file the notice of opposition within the prescribed period. If this is the case, I then need to decide whether, as a matter of discretion, an extension of time should be granted.
Error or omission
Geron has contended that the evidence does not demonstrate that ESI had formed an intention to file the notice of opposition before the expiry of the prescribed period, and that this requisite intention was somehow “thwarted or frustrated by an error or omission” (per Crown & Andrews PtyLtd v All American Fremantle International Inc 38 IPR 595 at 603-604).
The importance of the intention of the person making an application for an extension of time was discussed in Stork Pompen BV v Weir Pumps Ltd 11 IPR 542 at 546:
A review of recent sub-s 160(2)(a) extension decisions … indicates that an error or omission has been considered to have occurred where there has been a breakdown in procedure in effecting a party’s intention in respect of an invention or application … Such cases indicate that having decided a course of action in respect of an act or step the performance of which is required within a certain time under the Act, that intention has been frustrated by either an error (eg the act has been done incorrectly, or mistakenly done outside the time allowed) or due to an omission (eg the act has not been done due to neglect or inadvertence). Therefore in my view, it is appropriate to consider in relation to the person seeking the extension, that person’s intention with respect to doing the act or taking the step, and to determine whether any error or omission arose to frustrate that intention.”
This is consistent with the need for a “sufficient causal connection” between the error or omission and the failure to file the notice of opposition (Kimberly-Clark at 582).
Mr Caine presented Geron’s attack in two ways. First, he submitted there was no evidence of a corporate intention on the part of ESI, the person making the extension application, to file a notice of opposition within the prescribed period. He said this shortcoming was illustrated by the fact that Mr Vovos could go no further than expressing the belief that ESI had “at all material times” intended to oppose the present application.
I am not persuaded by Mr Caine’s line of argument. The evidence, while brief, clearly establishes that Mr Vovos is the person within ESI who has been charged with the responsibility for monitoring the patenting activities of competitors such as Geron, and that as part of his usual practice he places a watch on applications of interest to give him the opportunity to institute opposition proceedings should the core business of ESI so require. The evidence additionally shows that Mr Vovos was authorised by ESI to provide instructions to IPO through the agency of POF with this objective in mind. Given these circumstances, I consider it is most likely that any decision by ESI on whether or not to oppose was left to Mr Vovos’ professional judgement as how best to proceed, and I note here in particular the statement in paragraph 11 of his supporting declaration that:
“It is my general practice to fully consider the relevancy of any application that is advertised as accepted to determine if ESI should oppose the grant of the patent.” [My emphasis]
I have no grounds to doubt the veracity of this statement. Further support for the principal role in the decision making process entrusted to Mr Vovos can, in my opinion, be found in the email sent to him on 22 December 2004 by Robert Klupacs of ESI (the Klupacs email). A copy of the Klupacs email was filed in response to the notice to produce, in which Mr Klupacs queries:
“Are we lodging opposition to [the present application] …? I hope so!”
I am therefore inclined to the view that for present purposes Mr Vovos’ intentions were effectively those of ESI.
This brings me to the second avenue of attack presented by Mr Caine where he submitted that the strategies adopted by Mr Vovos were not indicative of a continuing intention to oppose the present application.
Mr Vovos states that he monitors the activities of competitors “in areas of interest and relevancy to the core business areas of ESI.” This involves conducting competitor name searches “to ascertain recent activities and newly filed applications”, followed by patent family member searches “to determine related applications in the family as well as to identify the equivalent Australian applications.” I must say that on the face of this evidence it is difficult to understand why Mr Vovos was not made aware of Geron’s international application WO 01/88104 on which the present application is directly based. According to exhibit MV-1, the search databases consulted by IPO provide comprehensive coverage of PCT documents. Moreover, Geron’s international application was published in 2001 which would have afforded Mr Vovos ample time in which to monitor the progress of the present application and other family members and, from paragraph 6 of Mr Vovos’ declaration, is clearly directed to subject matter in a “core business area of interest to ESI”.
However, a further reading of Mr Vovos’ evidence reveals is that he does not commission a patent family member search until the competitor under watch is granted a US patent. This practice is exemplified by his request on 6 October 2004 for an equivalent search to identify Australian patent family members of the first Geron patent. In Mr Caine’s submission, any strategy that relies first on identifying granted US patents and then checking for Australian equivalents is fundamentally flawed since there is a significant risk that an Australian application will proceed to acceptance or grant before issuance of the corresponding US patent.
Although superficially appealing, this submission does not demonstrate that Mr Vovos took a calculated risk in underpinning the decisions he made on knowledge of granted US patents. As discussed earlier, the purpose of the search reports commissioned from IPO by Mr Vovos was to identify applications of interest, and thereby ultimately provide him with the opportunity of instituting opposition proceedings as considered necessary. Thus what the strategies normally implemented by Mr Vovos relevantly establish is an intention “to get in a position to be able to decide whether to oppose” which is to be distinguished from a deliberate policy of not making appropriate enquiries (Stork Pompen v Weir Pumps at 546-547).
In taking the matter further, Mr Caine contended that in view of the “ad hoc” nature of Mr Vovos’ normal practice, it was not possible to identify a causal connection between the failure to file the notice of opposition in time and an error or omission that could be attributed to him.
Again I do not find this argument convincing. The existence of the present application was first revealed in the search report prepared by IPO after completing an equivalent search for patent family members of the first Geron patent under instruction from Mr Vovos. Unlike the situation in HenkelKommanditgesellschaft Auf Aktien v Fina Research SA 27 IPR 289, Mr Vovos both requested and received the results of this search before the prescribed period for filing the notice of opposition had expired. Details of the present application are set out on page 7 of the search report, including the date on which it was advertised accepted. These details were, however, overlooked by Mr Vovos when reviewing the search report. Mr Vovos does not say when he reviewed the report, but given his professional responsibility to make decisions on behalf of ESI based on the results of searches he commissions from IPO, and his knowledge of “the deadlines for filing pre-grant opposition” in Australia (see paragraph 3 of his declaration), it would be surprising if he was less than expeditious in performing the review. It is also not clear how Mr Vovos “failed to notice” the present application. Nevertheless, in recognising that some errors “may be as bizarre and as little to be anticipated as lapses of memory and accidental slips” to use the words of Jenkinson J, I accept Mr Fitzpatrick’s submission that the oversight by Mr Vovos cannot be readily explained in hindsight.

Whatever the circumstances, I am satisfied that there has been a failure on the part of Mr Vovos to exercise due diligence when reviewing the search report in respect of the first Geron patent, and that this constitutes an error or omission within the meaning of section 223(2).
The causal relationship between this error or omission and the failure to file the notice of opposition by the due date becomes apparent when it is recalled that Mr Vovos’ normal practice is to institute opposition proceedings where he considers the grant of a patent may prove adverse to the core business of ESI. He identifies neural progenitor cell populations derived from embryonic stem cells as a core business area of interest to ESI, and in paragraph 12 of his declaration states:
“Because [the present application] related to neural progenitor cell populations, I would have considered this relevant. It would have been my normal practice to oppose the grant of any application having subject matter to the interests [sic] of ESI.”
In my view this establishes a prima facie case that if alerted by the search report to the acceptance of the present application, Mr Vovos would have made a conscious decision to oppose at that time, ie. within the prescribed period. The evidence shows this intention was not effected due to his failure to notice the present application and that it had been accepted and advertised for opposition.
Mr Vovos eventually became aware of the status of the present application on 22 December 2004 after being directed to a press release appended to the Klupacs email regarding the very recent grant of US patent 6833269 to Geron (the second Geron patent) in the field of human neural cell production. The press release notes that “the Australian patent corresponding to the new US case has already been accepted.” Mr Klupacs expressed an expectation that this “patent” would be opposed which catalysed an immediate search request by Mr Vovos for Australian equivalents of the second Geron patent. Upon discovering the existence of the present application, and that the period for opposition had expired, Mr Vovos immediately instructed POF to file a notice of opposition together with an application for an extension of time under section 223 which it did on 23 December 2004.
Mr Caine submitted that these actions were consistent with Mr Vovos having formed a definite intention to oppose the present application only after its acceptance came to his attention following the grant of the second Geron patent. I do not agree. In my assessment, the promptness of the extension application once Mr Vovos was notified of the status of the present application reinforces his evidence that had it not been for the error on his part a notice of opposition would have been filed within the prescribed period. I therefore consider that the failure to oppose in time was not associated with any deliberate decision which subsequently changed.
Based on the foregoing considerations, I find that there was a relevant error or omission by Mr Vovos which is causally related to the failure to file the notice of opposition by the due date. It now remains for me to determine whether the discretionary power conferred by section 223(2) should be exercised in favour of ESI.
Exercise of discretion
The considerations involved with the exercise of the discretion to extend time were discussed by Bowen CJ in Vangedal-Nielsen v Smith (Commissioner of Patents) (1980) ALR 144 at 150 as follows:
“Clearly, the Commissioner will have to consider the interests of the prospective opponent who, for some good reason, has not been able to mount his opposition within the initial period of three months. The Commissioner will further have to have in mind, where a serious opposition is foreshadowed, the public interest [in ensuring worthless patents are not granted], but he will have to require to be satisfied by an applicant for an extension that a proper case has been made out justifying an extension. It would be wrong if he granted an extension simply because no one had raised rather exceptional circumstances why it should not be granted. Reasons why this is so include the desirability of operating the system efficiently and without unreasonable delays and also the interests of the applicant for a patent which are also clearly involved.”
In the present case the evidence of Mr Vovos, although brief, sufficiently attests to his conduct and state of mind for me to be satisfied about the existence and nature of the causative error.
On the other factors relevant to the exercise of the discretion, I find that the weight is heavily in favour of allowing the extension application. ESI filed the notice of opposition within a week of the expiry of the prescribed period and immediately that the error was detected. It has also commenced preparation of its statement of grounds and particulars in anticipation of a favourable decision. Thus ESI has acted promptly and Geron will face little delay or inconvenience. On balance the public interest favours allowing ESI to pursue its opposition which from the draft statement of grounds and particulars is potentially serious.
CONCLUSION
I have found that there was an error or omission by Mr Vovos which prevented the filing of a notice of opposition in time. Other considerations particularly the prompt action by Mr Vovos on recognising the error and the short period of extension required strongly favour allowing the extension application.
Consequently, I grant an extension of time under section 223(2) to 16 January 2005 for ESI to file its notice of opposition.
In accordance with regulation 5.4, an opponent must serve a statement of grounds and particulars within three months of filing the notice of opposition. This applies even where there is a pending request to extend the opposition period (G & J Koutsoukos Holdings Pty Ltd vCapral Aluminium Limited [2003] APO 28 at [27]). ESI filed the notice of opposition on 23 December 2004, with the result that it must serve a statement of grounds and particulars by 23 March 2005.
I note for completeness Mr Fitzpatrick’s submission that the extension application also meets the requirements of section 223(2A). I have already determined that an extension of time should be granted to ESI under section 223(2). However, if it were necessary, I would for the same reasons extend the time under section 223(2A).
COSTS
Having considered all the circumstances in this case I see no reason to depart from the normal practice that costs follow the event. I therefore award costs in accordance with schedule 8 against Geron.
O L Haggar
Delegate of the Commissioner of Patents
Patent attorneys for the applicant: Phillips Ormonde & Fitzpatrick, Melbourne
Patent attorneys for the prospective opponent: F B Rice & Co, Melbourne