Merial Limited v Novartis AG
[2013] APO 65
•5 December 2013
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Merial Limited v Novartis AG [2013] APO 65
Patent Application: 2010206029
Title:Palatable ductile chewable veterinary composition
Patent Applicant: Novartis AG
Opponent: Merial Limited
Hearing Officer: P M Spann, Deputy Commissioner of Patents
Decision Date: 5 December 2013
Hearing Date: 25 November 2013
Catchwords: PATENTS – extension of time to file evidence in answer – reg 5.9 – whether applicant has acted promptly and diligently at all times – whether circumstances beyond control – extension refused.
Representation: Patent applicant: M Caine, Davies Collison Cave
Opponent:M Caulfield, FB Rice
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010206029
Title:Palatable ductile chewable veterinary composition
Patent Applicant: Novartis AG
Opponent: Merial Limited
Date of Decision: 5 December 2013
DECISION
Extension of time refused.
REASONS FOR DECISION
This matter concerns a request for an extension of time to file evidence in answer and is determined under regulation 5.9 of the Patents Regulations as amended on 15 April 2013 by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1).
Background
Patent application 2010206029 was filed by Novartis AG (Novartis) on 29 July 2010 as a divisional of 2008201605. The parent application was itself a divisional application. It was accepted and opposed but was withdrawn on 2 April 2013 after evidence in support of that opposition was filed.
The present application was advertised as accepted on 9 August 2012 and a notice of opposition to the grant of a patent was filed in the name of Merial Limited (Merial) on 29 November 2012. A statement of grounds and particulars was served and filed on 31 January 2013 and the evidence in support completed on 27 April 2013.
Consequently, the period for filing evidence in answer commenced on 27 April 2013 (the Commissioner’s letter in this regard is in error). However due to the operation of subregulation 23.26(2)(Item 4), the end of the period for filing evidence support became 29 July 2013.
On 18 July 2013 the attorney for Novartis filed the first declaration made by its expert Dr James Rowe as part evidence in answer. It then filed on 29 July 2013 a request for an extension of time of three months to 29 October 2013. The reasons provided were essentially that, while significant progress had been made, Dr Rowe had gone on holiday for an extended period before the evidence could be completed.
The extension was not objected to and a delegate of the Commissioner granted the extension on 14 August 2013 for the period requested. On 24 October 2013 Novartis filed Dr Rowe’s 2nd, 3rd and 4th declarations as part evidence in answer. Then on 29 October 2013 Novartis filed the present request for an extension of time for an additional period of two months to 29 December 2013. A delegate on 1 November 2013 informed the parties that, subject to a party requesting to be heard, the Commissioner intended to grant the extension.
Merial notified the Commissioner on 7 November 2013 that it objected to the extension and requested to be heard. Before the hearing in this matter, Novartis filed a 5th declaration by Dr Rowe which was intended to be filed as part evidence in answer if the extension is granted. The matter was heard on 25 November 2013. On 27 November a 6th Rowe declaration was filed and on 28 November Novartis’ attorney wrote to the Commissioner advising that “the evidence in answer is now complete”.
Consequently the extension of time sought by Novartis is effectively the period from 29 October to 27 November 2013.
The law
As the period for filing evidence in answer commenced after 15 April 2013, this request is to be determined under regulation 5.9 as amended on 15 April 2013 by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) – See subregulation 23.26(2)(Item 2). That item also provides that the reference in subregulation 5.9(1) to regulation 5.8 is taken to be reference to regulation 5.8 as in force before 15 April 2013 and paragraph 5.10(1)(b) and subregulation 5.10(2) as in force before 15 April 2013 are taken not to apply.
Consequently while the present opposition was filed before 15 April 2013, and generally is governed by the provisions of Chapter 5 of the regulations that applied before that date, extensions of the time for filing the evidence in answer are governed by the new scheme reflected in regulation 5.9 as in force from 15 April 2013.
Subregulation 5.9(1) gives the Commissioner the power to extend the evidentiary time periods:
The Commissioner may extend an evidentiary period mentioned in regulation 5.8:
(a) if requested in writing by a party; or
(b) on the Commissioner's own initiative.
The power to extend time is discretionary, as evidenced by the use of the word "may". This power is qualified by subregulation 5.9(2), which 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.
Both parties indicated their approval of the delegate’s analysis of the law as stated in TRED Design Pty Ltd v Julie-Anne McCarthy and Bradley McCarthy [2013] APO 57. It is unnecessary to repeat that analysis here but the delegate provided the following useful summary of the requirements of regulation 5.9 which I will adopt for the purpose of this decision:
“30. It follows that I need to 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?
31.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.”
The request
To understand the relevant circumstances it is necessary to consider the totality of Novartis’s efforts to obtain the evidence in answer. This is reasonably apparent from the extension of time applications and information that was only proffered at the hearing. The circumstances can be summarised as follows:
a)Dr Rowe was engaged by Novatis in February 2013 well before the evidence in support was filed. At that time Dr Rowe informed Novartis that he would be absent overseas “from July/August”.
b)Since Merial’s evidence had not yet been filed it was assumed that it would mirror the evidence filed in the opposition to the parent application and by mid-March 2013 Novartis had received from Dr Rowe initial comments in relation to his background and knowledge in the animal health field.
c)The evidence in support was completed on 27 April and made available to Novartis on 29 April 2013. This included lengthy expert evidence from Mr Rob Marov which was then subjected to “detailed review”. In May 2013 Dr Rowe provided an outline of his educational and professional experience and was set two tasks (the first of 9). These were to set out his experience in formulating oral veterinary compositions prior to 30 July 2003 (task 1) and to advise what steps he would have taken before 30 July 2003 to devise a relevant composition (task 2). Dr Rowe considered his response to these tasks in May and June leading to the making of Dr Rowe’s 1st declaration on 9 July 2013.
d)On 8 July 2013 Dr Rowe was asked to devise a search of publicly available documents prior to 30 July 2003 (task 3). During July he also completed a review of the results of the search (task 4) and responded to a request to devise an oral veterinary composition based on his knowledge and experience and the information identified as the results of his search (task 5). This information became the subject of the 3rd Rowe declaration made on 18 October 2013 and filed 24 October 2013.
e)By 29 July 2013 Dr Rowe “left the country on holidays for July and August” and the first request for an extension of time was filed indicating that despite all reasonable effort the evidence was not completed. The request further indicated that Dr Rowe had taken with him a copy of the opposed application to review while on leave and that Novartis’ attorneys expected to be able to maintain email correspondence with him.
f)Dr Rowe informed Novartis that he would not be returning to Australia until 22 September and it is said that while overseas he understandably did not make work a priority and had trouble with the use of his laptop.
g)Dr Rowe while overseas nevertheless provided initial comments on the opposed specification in mid-August and provided comments on the draft 3rd declaration so that it could be finalised on his return.
h)Once Dr Rowe returned he was given the task of reviewing the prior art documents provided by the opponent (6th task) and to compare these documents with the claims of the opposed application (7th task). Initial comments were provided at the end of September and final comments mid-October. It is said that it was not possible to finalise and file the declaration in relation to this evidence by 29 October and that a factor in this was that Dr Rowe was engaged on other work matters in the periods of 9 – 16 and 21-24 October.
i)Rowe declarations 2 (relating to declaration 1), 3 (tasks 3, 4 and 5) and 4 (analysis of the opposed application) were filed on 24 October 2013. It is said that Dr Rowe was also given a further task before the end of the extended period. Likely this was to comment on whether the invention claimed in the specification is obvious over the prior art raised by the opponent (task 8).
j) Following the filing of the present request for an extension of time the 5th Rowe declaration (task 6, 7 and 8) was filed on 19 November 2013 and the 6th Rowe declaration (task 9 – comments on the Marov declaration) on 27 November 2013. It is said that the filing of the last declaration was delayed by Dr Rowe moving house in mid-November.
k)Novartis notified the Commissioner on 28 November 2013 that the evidence in answer had been completed.
Has Novartis made all reasonable efforts to comply with all relevant filing requirements?
It is clear 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 – here the period for filing evidence in answer – which is addressed by the more specific requirement of paragraph 5.9(2)(a)(ii).
With some exceptions, for example the period for requesting dismissal of an opposition, the requirement to file evidence in answer within the prescribed period will normally be the first requirement under Chapter 5 with which the patent applicant needs to comply. That is the situation in this case and consequently it is not necessary to consider separately whether Novartis made reasonable effort to comply with the time limit. If it has acted promptly and diligently in relation to the preparation and filing of the evidence in answer it will necessarily have also made all reasonable efforts to comply.
Was the failure to file the evidence despite acting promptly and diligently at all times?
As a preliminary matter this case concerns a request for an extension of time following the grant of a previous extension of time. This raises the question of whether I am considering the actions of Novartis only in the extended period or more broadly. While I certainly cannot review the previous decision to extend time, it is still the case that I am considering an extension of the period mentioned in regulation 5.8 to file evidence in answer, not an extension of the extended period. Therefore 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.
At the hearing Mr Caine indicated that there was an expectation that the evidence could be completed within the prescribed 3 month period but that difficulties in obtaining evidence meant that this could not be done before Dr Rowe went on leave. I however have not been given any evidence of the plan Mr Caine developed for the obtaining the evidence, the reasons for choosing Dr Rowe and of the difficulties that were actually encountered in the obtaining of the evidence. In the absence of that, and given the scope of the evidence in support and the evidence in answer, I find it difficult to conclude that persevering with Dr Rowe in the knowledge that he would be taking extended leave was consistent with acting promptly and diligently.
Despite what was said at the hearing it seems highly unlikely that all the evidence ultimately filed could have been prepared in the normal evidentiary period even with the most favourable circumstances. Knowing that the expert would not be available from July and likely that an extension of time would be required it would have been reasonable for another expert to be considered or, if Dr Rowe was the only reasonable option and if circumstances allowed, making better use of the expert during his absence from Australia or on his return.
The Explanatory statement accompanying the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) states at page 19 that (my emphasis):
“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”
Ultimately it appears Dr Rowe’s absence for significant periods in July and August was predictable and, were this not the case, it is clear that the evidence could have been prepared and filed within the first extended period. Consequently, in the absence of a clear indication of why it was reasonable for Novartis to persevere with Dr Rowe and sufficient information about the steps taken to accommodate his extended leave, I am not satisfied that Novartis has acted promptly and diligently at all times.
I would add that I understand the submissions made by Novartis about the relative efficiency of the obtaining of evidence in this case as opposed to the norm under the former extension of time provisions, and the advantages that the opponent may have obtained in that regard. These however are simply not relevant considerations for the threshold question of whether the failure to file the evidence occurred despite Novartis acting promptly and diligently.
Were there exceptional circumstances that warrant the extension?
It was suggested that Dr Rowe’s holidays were circumstances beyond the control of the applicant. In general I reject this proposition on the basis that it was known from the beginning that Dr Rowe would be taking extended leave. Therefore Novartis had the opportunity to make arrangements that avoided the consequence of Dr Rowe not being available.
On the other hand there appears to have been a portion of Dr Rowe’s extended leave in September and work commitments in October that were not anticipated and which, having persevered with Dr Rowe to that point, was practically beyond Novartis’ control. In relation to the leave the period appears to have extended from “early September” to 22 September when Dr Rowe returned to Australia. Potentially, if available in that period, at least the evidence filed on 19 November may have been able to have been filed in the extended period ending on 29 October 2013. An exceptional circumstance including circumstances beyond the control of a party that occurs in a period of extension already granted may well justify a further extension.
I must however be satisfied that the further extension is warranted and in this regard, unlike the situation under section 223 of the Act, Novartis must bear the onus in establishing that the extension is justified (see TRED at [30]-[31]). I tend to agree with the submissions by Merial that the extension request does not provide sufficient evidence on which the extension can be said to be warranted. In particular, as I indicated above, there is insufficient evidence of the period of Dr Rowe’s extended leave or subsequent work commitments that could not have been anticipated and the effect on the preparation of evidence. Therefore even if I could find that a further period of extension were justified I would not have sufficient information to determine what the length of the extension should be.
Consequently I am not satisfied that there are exceptional circumstances that warrant a further extension.
Conclusion
I am not satisfied that the evidence in answer was not filed in the extended period despite Novartis acting promptly and diligently at all times. I am also not satisfied that there are exceptional circumstances that warrant the grant of a further extension of time.
As a result the period for filing evidence in answer ended on 29 October 2013 and I direct that the period for filing evidence in reply commences from the date of this decision.
I also direct that the declarations filed on 18 and 27 November are not evidence in answer in relation to the opposition. Being in relation to an opposition filed before 15 April 2013, Novartis may make an application for leave to file the declarations as further evidence under subregulation 5.10(4) as it existed before 15 April 2013. I make no comment on the prospects of success for such an application other than that it will be considered on its merits. Otherwise the declarations may be information that the Commissioner takes into account under regulation 5.11 as it existed before 15 April 2013. Again this will be a decision for the Commissioner to make at the relevant time.
Costs
I award costs in accordance with Schedule 8 of the Patents Regulations against the patent applicant Novartis.
P M Spann
Deputy Commissioner of Patents
30
1
0