Merial Limited v Norbrook Laboratories Limited
[2015] APO 56
•24 August 2015
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Merial Limited v Norbrook Laboratories Limited [2015] APO 56
Patent Application: 2010227340
Title:A topical parasiticide composition
Patent Applicant: Norbrook Laboratories Limited
Opponent: Merial Limited
Delegate: Dr S.D. Barker
Decision Date: 24 August 2015
Hearing Date: Written submissions completed on 23 July 2015
Catchwords: PATENTS – extension of time to file evidence in answer – extension granted – the question of whether a party has been prompt and diligent at all times is assessed by looking at the behaviour of the party as a whole
Representation: Patent applicant: Baldwins Intellectual Property
Opponent:FB Rice
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010227340
Title:A topical parasiticide composition
Patent Applicant: Norbrook Laboratories Limited
Date of Decision: 24 August 2015
DECISION
I grant an extension of time of two months to file evidence in answer.
REASONS FOR DECISION
This matter relates to patent application 2010227340 in the name of Norbrook Laboratories Limited (Norbrook). The application was advertised as accepted on 19 June 2014 and a notice of opposition to the grant of a patent was filed by Merial Limited (Merial) on 19 September 2014.
Evidence in answer was due to be completed by 23 June 2015, and Norbrook has requested a two month extension of time for filing evidence. The Commissioner advised on 19 June 2015 that she was satisfied with the reasons in support of the application, and Merial asked for a hearing.
The hearing was conducted by means of written submissions. Initial submissions were received on 16 and 17 July 2015. Responding submissions were filed on 23 July 2015.
The law
On 15 April 2013, the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) (the Amendment Regulation) commenced. The Amendment Regulation significantly amended the Patents Regulations (the Regulations) as they apply to patent oppositions. Where the opposition commenced after 15 April 2013, the extension is governed by regulation 5.9 of the Regulations as in force on 15 April 2013. This is the situation in the present case.
Subregulation 5.9(2) states:
The Commissioner may extend the period only if the Commissioner is satisfied that:
(a) the party who intended to file evidence in the period:
(i)has made all reasonable efforts to comply with all relevant filing requirements under this Chapter; and
(ii)despite acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period, is unable to do so, or
(b) there are exceptional circumstances that warrant the extension.
Exceptional circumstances are defined in subregulation (5):
In this regulation:
exceptional circumstances includes the following:
(a) a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Chapter;
(b) an error or omission by the Commissioner that prevents a party from complying with a filing requirement under this Chapter;
(c) an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act.
These provisions have been considered by the Commissioner in TRED Design Pty Ltd v Julie-Anne McCarthy and Bradley McCarthy [2013] APO 57 and Merial Limited v Novartis AG [2013] APO 65. The principles applied in those decisions, which I accept as correct, are that I must ask myself the following questions:
1. Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
2. Was the failure to file the evidence in time despite the party (and their attorney or agent) acting promptly and diligently at all times to ensure the evidence is filed in time?
3. Were there exceptional circumstances that warrant the extension?
I can extend the time for filing evidence only if I am satisfied that the answer to questions 1 and 2 is YES, or if I am satisfied that the answer to question 3 is YES. If I am so satisfied, then I must consider whether there are any discretionary reasons why the extension should not be granted.”
Clearly this is a serious test. This is confirmed by the Explanatory Statement accompanying the Amendment Regulation which states:
"The Commissioner will not be able to extend time periods unless one of these conditions was made out. The party seeking the extension will bear the onus of convincing the Commissioner of this. Once the conditions in subregulation 5.9(2) are met, the Commissioner still has the discretion to consider whether or not it is appropriate that an extension of time be granted. In applying the test, the Commissioner will not be required to give a direction to extend a period solely because of delays caused by a legal representative failing to act promptly or diligently, by difficulties in obtaining expert evidence that could have been anticipated and acted on or by attempts to settle the proceedings.
Where a party cannot satisfy the Commissioner that an extension is justified under the test, the Commissioner will not have the power to give a short extension to allow the filing of evidence immediately available or to validate evidence filed out of time."
If the Commissioner is satisfied that an extension is appropriate, the Commissioner must then determine the length of the extension (subregulation (3)):
The Commissioner must determine the length of the extended period having regard to what is reasonable in the circumstances.
The application for extension of time
The application for extension of time is extremely lengthy. I will quote a few select passages to give a flavour for the issues. In relation to background to the extension, the application says:
"The Opponent filed voluminous Evidence in Support on 19 March 2015 consisting of declarations from five experts along with two declarations from the Opponent's agents. The Evidence in Support included references to 24 additional prior art disclosures, of with the Applicant had received no prior notice.
On 8 April 2015, the Opponent requested to amend the Statement of Grounds and Particulars by introducing the 24 additional prior art disclosures. …
In any event, the Opponent's case was not fully elucidated to the Applicant until 8 April 2015 … some 7 months after the Notice of Opposition was filed and 10 months from the date the application was accepted."
In relation to the causes of delay, the application says:
"The Evidence in Support refers to an unusually large amount of prior art that was given by an unusually high number of experts."
"The first expert … has advised that in fact he has suffered from significant, unanticipated internet access problems during his sabbatical"
"Despite the efforts made to date, the Applicant and the experts it has retained have simply not had time to fully review and respond to the Opponent's lengthy evidence and will not have sufficient time to do so before the current deadline."
A lengthy chronology is provided which is largely unhelpful.
Has the party made all reasonable efforts to comply with all relevant filing requirements?
In the Merial decision, the Deputy Commissioner noted:
"that the requirement in paragraph 5.9(2)(a)(i) is intended to import a consideration of the reasonableness of the relevant party’s conduct over the totality of the opposition proceedings rather than its compliance with the particular evidentiary period in question"
The matters discussed below with regard to prompt and diligent also include matters of reasonableness. It is appropriate to discuss the two matters together.
Was the failure to file the evidence despite acting promptly and diligently?
In the Merial decision, the Deputy Commissioner noted:
"in my view when considering whether a party has acted promptly and diligently at all times I need to consider all the actions of the party in relation to compliance with the evidentiary period and not just its failure to comply within the period of the extension already granted."
Norbrook state that the task of preparing evidence was hampered by a number of matters that I will discuss in turn.
The amendment of the statement
Merial amended the statement of grounds and particulars to introduce new documents. This amendment was filed after the completion of evidence in support - on 8 April 2015, and allowed on 24 April 2015. Merial submitted that Norbrook were aware of these documents since the time that the evidence in support was filed. However, the effect of such a late amendment of the statement of grounds and particulars cannot be so easily discounted. It is self-evident that the amendment would cause inconvenience, and potentially delay, to Norbrook. It is a relevant consideration when dealing with an extension of time, but in this case it is a minor factor.
Engaging experts
The applicant began considering the choice of experts about a month before evidence in support was filed. The applicant had engaged experts within 10 days of the evidence in answer period commencing. Such a short period seems quite reasonable.
Planned expert absences
Norbrook knew that the first expert would be on a research sabbatical during the period that evidence would be prepared. It turned out that this expert had significant, unanticipated internet access problems during his sabbatical. Merial submitted that communication difficulties should have been expected. However, I think that it was reasonable to rely on email communication with the expert. The delays associated with the internet access were unpredictable. The delays were of limited duration, and are not significant in the preparation of the evidence.
Progress of evidence / discussions with experts
Merial stated that the experts were engaged on 2 April 2015, but the first questions regarding common general knowledge were not sent to the first expert until 23 April 2015 (three weeks later). They said "all that took place in the interim was the sending of 4 pages of information concerning the code of conduct for expert witnesses and information on common general knowledge". Consequently, it cannot be said that nothing happened during this three week period. The declarant was provided with important information about their role.
Staged process
Norbrook are using a two stage procedure to prepare their evidence. While that may be a reasonable strategy, it needs to be carried into effect in a manner that is prompt and diligent. Regardless, there is no delay arising from this approach.
Volume of evidence
It is asserted that there is an unusually large volume of evidence in support to be considered. The volume of evidence is clearly a relevant consideration.
Overall
The question of whether a party has been prompt and diligent at all times is assessed by looking at the behaviour of the party as a whole. It seems clear that Norbrook commenced preparation of their evidence promptly, and have been pursuing the preparation of evidence from their experts in a reasonable way. The absence of one expert on sabbatical has not clearly been a problem, except for the problems with email communication. That problem seems to have been of short duration. The volume of evidence to be answered is quite large.
I do not believe that there are any significant unexplained delays. Despite the criticisms that Merial have made, it seems to me that the evidence preparation has been proceeding in an appropriate way. I think it can fairly be said that the failure to file evidence in time is despite Norbrook acting reasonably, and promptly and diligently.
Were there exceptional circumstances?
In the TRED decision I stated that exceptional circumstances were:
"matters outside the normal evidentiary process, and outside the control of the party, where it would be unreasonable to insist on a party filing their evidence"
Norbrook alleges that there were exceptional circumstances in:
- the unusually large volume of evidence in support;
- the unusually high number of experts giving evidence in support; and
- the unusually large volume of new prior art included in the evidence in support.
These are matters that relate directly to the evidentiary process, and do not represent exceptional circumstances. To the extent that there is any unusual complexity in the evidence, this represents the context against which the preparation of evidence is understood (as already discussed).
Conclusion
I am satisfied that an extension of time is appropriate.
Finally, I need to consider what length of extension is reasonable in the circumstances. Norwood have asked for a two month extension. The reason is because need that time to "review, consider and answer questions on the Opponent's Evidence in Support". In the circumstances of this case, I am satisfied that this is an appropriate period.
The time for filing evidence in reply is governed by subregulation 5.9(4): within two months of the day the Commissioner notifies the opponent that all evidence in answer has been filed. At the time of issuing this decision it is not yet apparent whether all evidence in answer has been filed.
Costs
Norbrook filed its intial submissions late (the date set by the Commissioner was 16 July 2015, and the submissions were file early on 17 July 2015). Merial said that they were severely disadvantaged by this, and asked that costs be awarded to them.
Norbrook have been successful in the matter. However, Norbrook's submissions were filed late. While I do not believe Norbrook obtained any advantage from this, I am prepared to accept that it has caused some inconvenience to Merial. I will make no award of costs.
Dr S.D. Barker
Delegate of the Commissioner of Patents