Merial Limited v Novartis AG - [2014] APO 19

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Merial Limited v Novartis AG [2014] APO 19

Patent Application: 2010206029

Title:Palatable ductile chewable veterinary composition

Patent Applicant:  Novartis AG
Opponent:  Merial Limited
Delegate:  Dr S.D.Barker
Decision Date:  1 April 2014
Hearing Date:  Written submissions filed on 4 March 2014
Catchwords:  PATENTS – Further evidence – reg 5.10(4) – nature and significance of evidence supports further evidence – further evidence allowed.

Representation: Patent applicant: Davies Collison Cave
Opponent:FB Rice

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010206029

Title:Palatable ductile chewable veterinary composition

Patent Applicant: Novartis AG
Date of Decision: 1 April 2014
DECISION
I allow the further evidence.
I allow Merial Limited two (2) months from the date of this decision to file any evidence responding to the further evidence.
I award costs against Merial Limited.
REASONS FOR DECISION
Background

Patent application 2010206029 (the application) is a divisional of 2008201605 (the parent). The parent is itself a divisional application which was opposed and then withdrawn on 2 April 2013.
The application was filed by Novartis AG (Novartis) on 29 July 2010. It was advertised as accepted on 9 August 2012. A notice of opposition to the grant of a patent was filed by Merial Limited (Merial) on 9 November 2012. The statement of grounds and particulars was served and filed on 31 January 2013. The evidence in support was completed on 27 April 2013.
The evidentiary period to file evidence in answer therefore started on 27 April 2013 so the evidence in answer was due on 29 July 2013. This period was extended to 29 October 2013.
Evidence in answer, in the form of a first declaration by from Dr Rowe was filed on 22 July 2013 and his 2^nd, 3^rd and 4^th declarations were filed on 24 October 2013.
On 29 October 2013 Novartis filed another request for an extension of time to file more evidence in answer. This extension of time was opposed and a hearing was held on 25 November 2013. On 27 November Dr Rowe’s 5^th and 6^th declarations were filed.
On 5 December 2013 a Deputy Commissioner refused the extension of time, see Merial Limited v Novartis AG [2013] APO 65. The consequence of this decision is that Dr Rowe’s 5^th and 6^th declarations do not make up any part of the evidence in answer.
On 13 January 2014 Novartis sought leave to file Dr Rowe’s 5^th and 6^th declarations as further evidence under regulation 5.10(4). Merial opposed that application. The parties were heard on the basis of written submissions.
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. Pursuant to subregulation 23.36, item 2, an application to file further evidence in this opposition is governed by subregulations 5.10(4) and 5.10(5) as they existed immediately before 15 April 2013. This is because the notice of opposition was filed before 15 April 2013. These subregulations state:
(4) The Commissioner may:
(a) on the application of a party; and
(b) on such reasonable terms (if any) as the Commissioner specifies;
permit the party to serve further evidence on the other party.
(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.
Both parties have filed submissions in relation to the application for further evidence and I am therefore satisfied that they have been notified and have made representations concerning this application.
The discretion under subregulation 5.10(4) should not be limited by imperative compliance with a particular requirement such as a satisfactory explanation of delay. Instead the discretion should be exercised if it is appropriate in all the circumstances and thus even if a satisfactory explanation of delay is not given the nature and significance of the evidence needs to be considered. This follows from the construction of subregulation 5.10(5) by Burchett J in Ferocem Pty Ltd v Commissioner of Patents [1994] FCA 981; 28 IPR 243 at 247 and also by Sackville J in A Goninan & Co Ltd v Commissioner of Patents [1997] FCA 424; 38 IPR 213.
The explanation of delay
The need to file further evidence arises from the failure of Novartis to obtain an extension of time to file evidence in answer. That extension was not allowed because the Deputy Commissioner was not satisfied that Novartis had acted promptly and diligently and there were no exceptional circumstances. However that is not the test that I must apply. Instead I must form a view of whether I have been provided with an adequate explanation of the delay in seeking to file further evidence.
Novartis relied upon the information provided for the previous extension of time, that is that the expert had travel planned which affected his availability to complete his evidence in answer. The Deputy Commissioner said that persevering with Dr Rowe in the knowledge that he would be taking extended leave was not consistent with acting promptly and diligently. Submissions filed for this matter state “[u]nfortunately, in Australia it is very difficult to find experts in the field of veterinary pharmaceuticals”. While this is probably true, there is no evidence that Novartis investigated the possibility of engaging a different expert. I am not satisfied that I have been provided with a satisfactory explanation of the delay.
Nature and significance of the evidence
The nature of the evidence to be included is Dr Rowe’s expert opinion on the documents raised as evidence in support (his 5^th declaration) and his opinion on Mr Marov’s interpretation of them (his 6^th declaration). Mr Marov is the expert on behalf of Merial. Merial submitted that they consider these declarations are submissions rather than evidence. While there are some parts of the evidence that might be regarded as submissions, this is also clearly evidence. In Dr Rowe’s 6^th declaration he discusses Mr Marov’s opinion of the common general knowledge in the art at the priority date and whether in the light of the common general knowledge the person skilled in the art would be led to the current claims. This discussion is relevant to the current case. The fact that the evidence contains relevant and irrelevant material is undesirable, but is not a bar to the evidence being available (as in Apotex v Astrazeneca AB 100 IPR 285 at paragraph 87). Dr Rowe’s 5^th and 6^th declarations contain evidence that is of a kind that is likely to be significant to the case. The nature and significance favours allowing the further evidence.
The interest of both parties
As mentioned above the interests of the party seeking the exercise of discretion are a relevant consideration (Ferocem at 247). It is also relevant to consider the disadvantage to the other party of delays in determining the opposition (Ferocem at 247, Goninan at 222). The parties have legitimate interests that lie on opposite sides of the balance.
Balance of the considerations
The nature and significance favours allowing the further evidence, but the explanation of delay does not. On balance, the nature and significance of Dr Rowe’s 5^th and 6^th declarations outweighs the issues of the delay. Therefore leave to file further evidence should be granted.
In order for Merial to address these declarations, I will allow Merial a period of 2 months to file responding evidence.
Costs
I see no reason to depart from the normal outcome that costs should follow the event.
Dr S.D.Barker
Delegate of the Commissioner of Patents