ImaRx Pharmaceutical CORP. v Mallinkrodt Medical Incorporated

[2001] APO 10

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 698209 in the name of IMARX PHARMACEUTICAL CORP.

Title:          LOW DENSITY MICROSPHERES

Action:          An application for an extension of time by MALLINKRODT MEDICAL INCORPORATED to serve evidence in support under regulation 5.10(2) and an objection thereto by IMARX PHARMACEUTICAL CORP.

Decision:          Issued            .

Abstract

The opponent has not made a proper case justifying the requested extension of time.  Based

both on the current and earlier requests as well as the submissions made at the hearing the

opponent has not provided any material, which shows that there were any unusual

or extraordinary circumstances that prevented them from preparing and filing evidence in

support of their opposition.

The delay in filing of evidence in support by the opponent found to be unduly long.

Found that the public interest, lying in the need for the Commissioner to ensure that invalid

patents are not granted, does carry a substantial weight.

After due consideration, the granting of an extension of time to the opponent till 24

February 2001 to file evidence in support found to be appropriate in all the circumstances.

Opponent granted 7 days from the date of this decision to file any evidence in support that

they may have immediately to hand.

In the matter of costs, the opponent has not made out a proper case justifying the extension

sought.Costs awarded against the opponent Mallinkrodt and in favour of the

applicant ImaRx.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent application No. 698209 by IMARX PHARMACEUTICAL CORP. and an opposition under Section 59 of the Patents Act 1990 by MALLINKRODT MEDICAL INCORPORATED. An application for an extension of time by MALLINKRODT MEDICAL INCORPORATED to serve evidence in support under Regulation 5.10(2) and an objection thereto by IMARX PHARMACEUTICAL CORP.

BACKGROUND

Patent application 33103/95 entitled "Low Density Microspheres" was filed on 6 October 1995 by ImaRx Pharmaceutical Corp (ImaRx).  The application was advertised accepted on 29 October 1998 and assigned the number 698209.  Mallinkrodt Medical Incorporated (Mallinkrodt) filed a notice of opposition on 29 January 1999 and its statement of grounds and particulars on 28 April 1999.  The time for filing evidence in support would have expired on 28 July 1999 but on 28 May 1999 ImaRx made a request to the Commissioner for dismissal of the opposition.  The delegate's decision indicated that the opposition was not dismissed and that in accordance with regulation 5.8(1)(a)(iii), evidence in support was due to be served within 3 months from the date of the decision (the final date being 24 November 1999).

Mallinkrodt sought four extensions of time (each of three months duration) to file evidence in support, which were granted unopposed until 24 November 2000.  On 23 November 2000, Mallinkrodt sought a further extension of time from 24 November 2000 to 24 February 2001 to file evidence in support of their opposition.  This was opposed by ImaRx, resulting in this hearing.

The matter was heard in Canberra on 15 February 2001.  Both parties appeared by telephone.  Dr John McCann, patent attorney of Spruson & Ferguson, Sydney represented the applicant.  Maurice Valla of Woodcock & Washburn, Philadelphia, USA, attended via telephone as an observer on behalf of the applicant.  David McBeth, patent attorney, Phillips Ormonde & Fitzpatrick represented the opponent.

THE APPLICATION FOR EXTENSION

The application for extension of time stated that "The circumstances in which, and the grounds upon which, this application is made are as follows:

Preparation of the opponent's Evidence-in-Support is continuing.  The principal witness has completed his initial review of the draft statutory declaration that has been prepared to assist the Hearings Officer in the determination of the present opposition proceedings.  As a result of comments received from the principal witness upon reviewing of his Statutory Declaration, further revision of the Statutory Declaration is required and the principal witness has been provided with further reference materials for his consideration.  Once this has been completed then the draft Statutory Declaration will be forwarded to the opponent who is based in the United States for their comment.

The further time is required for the Statutory Declaration of the principal witness to be finalised.  It is envisaged that the opponent will be able to complete service of its Evidence-in-Support within the period of this requested extension."

SUBMISSIONS

The applicant provided a copy of their submissions (via facsimile) at the hearing.  The applicant's position (in brief) was stated as follows:

"…the application for an extension of time for serving evidence in support by Mallinkrodt should not be granted, on the ground that Mallinkrodt has not discharged the onus of demonstrating to the Commissioner that the extension applied for is 'appropriate in all the circumstances' for the following reasons:

(i)        Mallinkrodt has not provided a satisfactory explanation of the delay surrounding the application for extension and as a consequence has not provided sufficient reasons which justify the granting of an extension;

(ii)       There has been undue delay in the preparation of evidence by Mallinkrodt providing yet another reason why an extension should not be granted;

(iii)      Given (i) and (ii) it is questionable whether Mallinkrodt is conducting a serious opposition;

(iv)      The balance of interests of the parties, and the interest of the public, favours not granting the application for extension.

The opponent made their submissions in course of the hearing.  I shall refer to submissions from both parties, wherever relevant, in my decision.

DECISION

The requirements for granting an extension of time to serve evidence are set out in Regulation 5.10 of the Patents Regulations in force under the Patents Act 1990. In particular, subregulation 5 requires:

"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."

From this I conclude that before I can grant an extension of time I must be reasonably satisfied that the extension of time is appropriate in all the circumstances.

Regarding the factors that must be considered some guidance is provided in the Federal Court decision of Ferocem Pty. Ltd. v Commissioner of Patents 28 IPR 243. In this decision Burchett J said:

“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.”

Considerations arising from this judgement, which are relevant to an extension of time, are:

a)The Commissioner, before allowing an extension, must consider whether the

person seeking the extension has made a proper case justifying the extension
(though lack of a proper case does not necessarily mean that an extension will be
refused); and

b)        The Commissioner must consider not only the private interests of applicants for
           patents and opponents, but also the public interest, by ensuring that invalid patents
           are not granted, and that proceedings are not unduly protracted.

These considerations were also raised in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213 (and more recently in National Starch & Chemical Company vCommissioner of Patents [2001] FCA 33). In that judgement, with regard to the public interest, Sackville J stated:

“The decision-maker still has to consider whether an extension to allow further evidence is appropriate, having regard to the public interest in having a serious opposition determined on the merits.  Of course, that aspect of the public interest must be weighed with and against other relevant considerations, including the absence of any satisfactory explanation for the failure (or failures) to comply with the time limits specified in the Regulations.

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.”

All relevant matters must be taken into consideration.  The absence of a satisfactory explanation of the delay does not preclude an extension of time being granted if an extension is appropriate in the circumstances (Ferocem (supra)).

A Proper Case Justifying The Extension

Both parties were in general agreement regarding the law applicable to the consideration of the application for an extension of time to file further evidence.  The opponent was of the opinion that only its current application for extension of time should be considered to the exclusion of previous applications.  The applicant referred to the teaching of Sackville J in A Goninan & Co Ltd v Commissioner of Patents (supra):

"Nor do I think 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."

I shall have regard to this teaching while determining whether the opponent has made out a proper case justifying the extension it seeks.

There was a dispute between the parties regarding the total length of extensions sought and the total time available till the current request for extension of time.  Mallinkrodt had filed a statement of grounds and particulars on 28 April 1999.  On 28 May 1999 ImaRx made a request for dismissal of the opposition.  On 24 August 1999 the Commissioner issued a decision to the effect that certain particulars were not available to be argued at the substantive hearing and further and better particulars were to be provided for certain grounds.  The commissioner set the date for service of evidence in support (that is 24 November 1999) at three months from the date of the decision.

I consider that Mallinkrodt's efforts to file evidence in support should have commenced from 24 August 1999.  I shall now consider the various extensions sought by Mallinkrodt to determine if they have made a proper case justifying the extension sought.

I have listed below the main reasons for the various extensions sought:

• first extension (24 November 1999 to 24 February 2000), indicates that they have identified two suitable witnesses and are seeking further time for the witnesses to consider the relevant material and attend to the preparation of statutory declarations.

• second extension (24 February 2000 to 24 May 2000) states that further time was required to complete drafting of statutory declarations and for the witnesses to review the draft statutory declarations and for any necessary amendments to be attended to prior to execution and service.

• third extension (24 May 2000 to 24 August 2000) indicates that one of the witnesses has been absent overseas for a period exceeding eight weeks and that the patent attorney handling the matter is presently overseas and will not return until the end of June.  It states that the further time is required to finalise the statutory declarations and for the witnesses to review the draft statutory declarations and for any necessary amendments to be attended to prior to execution and service.  It further stated that "It is anticipated that the opponent will be able to complete service of its evidence-in-support within the period of this requested extension."

• fourth extension (24 August 2000 to 24 November 2000) mentions a principal witness who is presently attending a scientific conference and that "the further time is required for the witness to complete review of the draft statutory declaration and for any necessary amendments to be attended to prior to execution and service".  It further stated that "It is envisaged that the opponent will be able to complete service of its evidence-in-support within the period of this requested extension."

• fifth extension (24 November 2000 to 24 February 2001) states "As a result of comments received from the principal witness upon reviewing of his statutory declaration, further revision of the statutory declaration is required and the principal witness has been provided with further reference materials for his consideration.  Once this has been completed then the draft statutory declaration will be forwarded to the opponent who is based in the United States for their comment. The further time is required for the statutory declaration of the principal witness to be finalised.  It is envisaged that the opponent will be able to complete service of its evidence-in-support within the period of this requested extension."

After reviewing the reasons set out by Mallinkrodt for seeking these extensions I am of the opinion that none of these reasons constitute any unusual or extraordinary circumstances that would show that the opponent has made out a proper case justifying the extension it seeks.

Issues such as identification of witnesses, drafting and revision of statutory declarations, overseas business/technical trips by witnesses/attorneys are all factors which arise as a matter of routine in the preparation of evidence both for the applicant as well as the opponent.  I see no unusual or extraordinary events which would justify the extension being sought by Mallinkrodt.  There were some other issues also raised by Mallinkrodt and I shall now proceed to consider those.

Mallinkrodt stated that both parties were overseas companies and of necessity would face difficulty in identifying suitable witnesses and establishing common general knowledge in the art.  ImaRx stated that Mallinkrodt should have no difficulty in this regard as they have a large pool of experts and that they would be fully aware of the overseas experts in the relevant field.  I agree with ImaRx that identification of witnesses should not have taken so long.  Further the relevant witnesses in Australia would have a good idea of what constituted common general knowledge in Australia.  I am also aware that neither of the parties has indicated that the technology of the opposed application is so rare or complex that as a result, there are very few/no practitioners in the art in Australia.  I note that there are many opposition actions before the patent office where both parties are overseas applicants and that this is not an unusual circumstance.

Mallinkrodt's submissions at the hearing have not provided me with any material which shows that there were any unusual or extraordinary circumstances that prevented them from preparing and filing evidence in support of their opposition.

Based on the material before me I consider that Mallinkrodt has not made out a proper case justifying the extension it seeks.  However I also need to consider the private interests of the parties in this matter as well as the public interests before deciding whether or not an extension of time is appropriate in all the circumstances.

The Private Interests Of Applicants For Patents and Opponents

The private interests of the applicant in this matter will best be served when it is able to defend its patent application.  A proper determination of the opposition (either a grant/refusal/suggested amendments to the specification) will help it with determining future actions in respect of its patent application.  At this juncture the applicant has only the notice of opposition and the amended statement of grounds and particulars available to it.  In the absence of detailed submissions from skilled witnesses of the opposition, the applicant is disadvantaged in that it does not have the full case before it that it has to answer.  Also any unnecessary protraction of the opposition proceedings is to ImaRx's disadvantage, as it cannot proceed to a full commercial exploitation of its patent application.  I conclude that a delay in the proceedings is clearly against the interests of ImaRx.

Mallinkrodt's case would be seriously prejudiced if I were to refuse the extension and thus preclude it from serving any evidence in support of the opposition.  The stages of the serving of evidence in answer and evidence in reply would be seriously undermined in the absence of any proper evidence in support of the opposition.  The opponent's interests clearly lies in a proper determination of the validity or otherwise of the patent application and a clear indication of the monopoly ground if any that they cannot encroach upon.  I conclude that the opponent's interests lie in obtaining an extension of time to enable it to file evidence in support of its opposition.

While Mallinkrodt have not made out a case justifying the extension, I still have to consider the public interest if the opponent is shut out from serving evidence in support of its opposition.

The Public Interest

The first issue in this matter is for the Commissioner to ensure that invalid patents are not granted.  This can best be done when both parties have had the opportunity to provide evidence supporting their case.  The opponent has filed its statement of grounds and particulars but has not filed any evidence in support.  Consequently the stages of service relating to evidence in answer and evidence in reply cannot proceed.  The applicant submitted that in the circumstance where an extension to file evidence in support was refused, "The Commissioner may inform himself of a fact by reference to a document available in the Patent Office (per regulation 5.11(1))".  The applicant was referring to the 17 references relied on in the statement of grounds and particulars, contending that of those 17 documents, 6 of which were patents and 1 of which was a patent application would be available to the Commissioner.  However in this case the Commissioner does not have the benefit of expert evidence which may be relevant to a proper determination against all the grounds raised in the opposition.  Thus a refusal of the extension would work against a proper determination of the opposition and thus go against the public interest.  The public interest relating to this first issue would clearly favour a grant of an extension of time to enable the opponent to file evidence in support.

Against this, the other factor I must consider deals with ensuring that proceedings are not unduly protracted.  The opponent has previously had extensions of time totalling 12 months.  They are seeking a further three months, but up until 9 days before the (proposed extension) deadline they had not filed any evidence.  The opponent’s submissions in this matter indicate that they have made some progress in the preparation of evidence but there seems to be some delay in the submission of the same.  I consider that this delay in filing the evidence will protract the proceedings, as the applicant has to wait till the filing of evidence in support is completed.  Further the applicant has to prepare and serve their evidence in answer and then wait for the opponent to prepare and serve evidence in reply which will consequently delay the final determination of the opposition.  In view of the fact that there has been a delay of 12 months with no filing of evidence in support I consider that this protraction will be undue.  Therefore I consider that the resulting protraction in proceedings is clearly is against the public interest and favours a refusal of the request for an extension of time.

Another aspect of the public interest I have to cover (arising from the teaching of A Goninan & Co Ltd v Commissioner of Patents (supra)) lies in a consideration of the nature of the evidence the opponent seeks to adduce and the significance of that evidence for opposition proceedings.  The opponent has only filed a statement of grounds and particulars in this matter.  In support of the grounds of novelty and inventive step 17 documents have been cited together with a brief description of their disclosures.  Detailed submissions have also been provided relating to section 40(2) considerations.  Clearly a serious opposition is in train even though the opponent has not yet filed their evidence in support.  I consider that the filing of evidence in support consistent with the statement of grounds and particulars, is clearly of significance for a proper determination of the opposition and therefore definitely in the public interest.

Is The Extension Of Time Appropriate In All The Circumstances?

I shall now consider the various factors and how they impact on a final decision in this matter.  I had found that the opponent has not made a proper case justifying an extension to file evidence in support.  In the matter of the private interests of the parties, the opponent’s interests were best served by the grant of an extension, whereas the applicant’s interests were best served by a refusal of the extension.

Regarding the public interest three different aspects had been considered.  In the matter of the need for the Commissioner to ensure that invalid patents are not granted, the public interest would clearly favour a grant of an extension of time.  Against this, the need to ensure that proceedings are not unduly protracted would require that the request for an extension be refused and as the protraction has been shown to be undue, a refusal of the extension would be justified.  Finally in the consideration of the nature of the evidence the applicant seeks to adduce and the significance of that evidence for opposition proceedings, I found that from a consideration of the statement of grounds and particulars, an extension of time would clearly be in the public interest.

Having looked at the above, I find that three factors favour grant of an extension whereas another three factors favour a refusal of the extension.  However not all factors may be considered to be evenly weighted in this regard.  I consider that the public interest lying in the need for the Commissioner to ensure that invalid patents are not granted does carry a substantial weight.  It affects the public, the applicant and the opponent as the grant of invalid patents can lead to revocation actions.  These actions adversely affect (time and expense involved) all parties including the public via the Courts.  The filing of evidence in support by the opponent at this stage has been delayed by at least a year, which (in the circumstances) is unduly long.  However, after due consideration of all the circumstances, I consider that the granting of an extension of time to 24 February 2001 to file evidence in support would be justified in all the circumstances.  At the time of issuing this decision, I am not aware that the opponent has as yet filed any evidence.  Consequently I grant the opponent 7 days from the date of this decision to file any evidence in support that they may have immediately to hand.

COSTS

Usually in actions such as this costs follow the event.  However in this instance the opponent has not made out a proper case justifying the extension sought.  The extension sought has been granted on consideration of the public interest and on the basis that the service of evidence in support will be completed within the time allowed by the current extension.  In these circumstances I believe it is appropriate to award costs against the opponent Mallinkrodt and in favour of the applicant ImaRx.

Jacob P.Elijah
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Spruson & Ferguson, Sydney

Patent attorneys for the opponent   :  Phillips Ormonde & Fitzpatrick, Melbourne