Mount Sinai School of Medicine

[2013] APO 52

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Mount Sinai School of Medicine [2013] APO 52

Patent:691795

Title:Cloning and expression of biologically active alpha-galactosidase

Patentee:  Mount Sinai School of Medicine

Hearing Officer:  P M Spann – Deputy Commissioner of Patents

Decision Date:  12 September 2013

Hearing Date:  1 August 2013

Catchwords:  PATENTS - section 223 – request for extension of time of 9 years and 11 months to file an application under section 70 (extension of term for a pharmaceutical substance) – error or omission – insufficient evidence  – discretionary factors considered – failure to provide a full and frank disclosure of all relevant circumstances  – unreasonable delay  –  extension refused.

Representation:  Patentee:         A Muratore, Jones Day, Sydney

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent No.:691795

Title:Cloning and expression of biologically active alpha-galactosidase

Patentee:  Mount Sinai School of Medicine

Date of Decision:  12 September 2013

DECISION

I refuse the application for an extension of time under subsection 223(2)(a).

REASONS FOR DECISION

1. This matter concerns an application for an extension of time under subsection 223(2)(a). It is for the purpose of extending the period for filing an application for an extension of term provided for in subsection 71(2) and the period of extension sought is 9 years and 11 months. The question to be answered is whether, pursuant to subsection 223(6A), I should refuse the application. If I decide that the application should not be refused, the consequence is that the application will be advertised pursuant to subsection 223(4) and any subsequent decision to refuse or allow the extension will be made in light of any opposition filed under subsection 223(6).

Background

1. Patent application 56817/94 was filed Mount Sinai School of Medicine (MSSM) as an international application under the Patent Cooperation Treaty on 30 November 1993. It claimed a method for producing human alpha-galactosidase  by cloning and the products of that method. The application was accepted and the present patent subsequently granted by the Commissioner on 5 November 1998. It is in force and will expire on 30 November 2013 unless an extension of term is granted.

1. Part 3 of Chapter 6 of the Patents Act 1990 provides for an extension of term of certain pharmaceutical patents for which exploitation of the patent is delayed because of the requirements for regulatory approval.  Aside from pharmaceutical substances per se extensions of term are also available where what is described and claimed is a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology. The duration of the available term extension is provided by section 77 and is determined based on the “earliest first regulatory approval date”. This, in turn, is defined by section 70 and in most cases is the date of commencement of the first inclusion in the ARTG of goods that contain or consist of the pharmaceutical substance.

1. On the evidence it appears that the patent is licensed exclusively to Genzyme Corporation who produces a product according to the patent known as FABRAZYME (agalsidase beta). Listing of FABRAZYME in the Australian Register of Therapeutic Goods (ARTG) was first obtained by Genzyme Australasia Pty Ltd on 30 May 2002.

1. However another product, REPLAGAL agalsidase alpha ghu, is said to fall within the scope of the present patent and was included in the ARTG before FABRAZYME on 17 May 2002 (having been sponsored by Shire Australia Pty Ltd). It therefore appears that the listing of REPLAGAL rather than FABRAZYME is relevant to a potential extension of term of the patent.

1. If the present patent meets the requirements of the scheme, the potential term extension based on the date of the patent, here 30 November 1993, and the first ARTG commencement date for REPLAGAL of 17 May 2002, is the maximum period of 5 years. Accordingly, the expiry date for the patent would become 30 November 2018. However, one of the conditions for the grant of an extension of term is that the extension be applied for during the period provided for in section 71(2). That period expired for the present patent on 17 November 2002, that is, six months after the first inclusion for REPLAGAL in the ARTG, but no application was filed.

1. Rather on 28 September 2012 MSSM filed an application for an extension of term of the patent together with the present application for an extension of time under section 223. As indicated above, the extension of time sought is 9 years and 11 month being the period from 17 November 2002 to 17 October 2012.

1. Evidence supporting the application was first filed on 4 December 2012. This was considered by a delegate of the Commissioner (Dr Akhurst) on 4 January 2013 finding that a full and frank disclosure of the factors involved in the decision making process had not been provided such that she could not be satisfied that a relevant error or omission had occurred. Despite further submissions and evidence being filed the delegate maintained her view and MSSM requested a hearing. Further evidence and a summary of submissions were filed on the day before the hearing.  I will refer to the evidence and the patentee’s submissions as appropriate in the following reasons.

The evidence

1. The evidence before me comprises two declarations made by Dr Patrick McGrath (3 December 2012 and 25 June 2013), a declaration made by Dr Debra Yin Foo (27 June 2013) and a declaration made by Dr Laura Coruzzi (30 July 2013). Dr McGrath’s first declaration indicates that he is the Executive Director of the Office of Technology and Business development for MSSM and was so in 2002. He states that he was responsible for making decisions about whether to pursue intellectual property rights including whether to extend the term of a patent.

1. Significantly Dr McGrath says that while as a general rule MSSM would seek a patent term extension where a patent is licensed to a third party it relies (and relied in 2002) on the licensee to inform it of the status of regulatory approval of any products covered by the patent. When notification of marketing authorisation of the product in a particular country was received this would “initiate the decision making process for whether or not to extend the patent”.

1. The declaration further provides evidence that the patent was licenced exclusively to Genzyme Corporation including extracts from the licence agreement. I note in passing that these do not indicate any obligation on behalf of Genzyme to inform MSSM about the status of regulatory approval in relation to the patent. In any event Dr McGrath states that he cannot find any record of MSSM being informed that recombinant galactosidase A had been registered on the ARTG and was not aware of a decision being made about whether to extend the patent or of being informed that the patent may be entitled to a term extension.

10.Consequently Dr McGrath suggests that the failure of Genzyme to inform MSSM about the status of regulatory approval was an error or omission leading to a decision about whether to extend the patent not being made. He refers to the extension of the equivalent US patent being indicative of MSSM’s likely intention to extend the patent.

11.In his second declaration Dr McGrath contradicts his earlier evidence. He states contrary to the first declaration that MSSM did not have a general practice in relation to patent term extension in November 2002 and that this was developed subsequently. Rather he says that MSSM did not have a system for ascertaining whether its patents were candidates for extension and that he relied on patent counsel in each jurisdiction to advise MSSM of the laws and procedures that affected it patents. Through its US attorney MSSM engaged the firm of Phillips Ormonde Fitzpatrick (POF)  in Australia but Dr McGrath states that he cannot recall being advised that the patent may be eligible for a term extension in Australia.

12.Dr McGrath says that as of November 2002 he was generally aware that in some jurisdictions patents for therapeutic substances could be extended and that the trigger for a term extension was that the pharmaceutical substance claimed had been given marketing approval in the relevant jurisdiction. He says that he was advised by counsel of the opportunity to extend the US patent although this appears to conflict with the statement in the first declaration that he was advised by Genzyme of the marketing approval for Fabrazyme and contacted MSSM’s patent attorneys to file for an extension of time. In any event he suggests the analysis he would apply in deciding whether to seek extension of the patent and that following the same analysis he decided to extend the US patent. He indicates that he only became aware that MSSM had not made an application to extend the Australian patent during discussions in April 2012 concerning certain related patents in Europe. He says that before this he did not have cause to consider whether the Australian patent was a candidate for term extension and indicates he was surprised that he omitted to consider the possibility when the application was made to extend the US patent in June 2003.  

13.Dr Yin Foo’s declaration indicates that she is a partner in POF and was responsible for the prosecution of the present patent. She states that she did not in any correspondence prior to April 2012 state that the patent may qualify for an extension of term. She also outlines her involvement in discussions from April 2012 concerning the possibility of obtaining an extension of term and the filing of the current extension of time application.

14.Dr Coruzzi is a US patent attorney who as a partner in the practice of Pennie & Edmonds LLP was responsible for the prosecution of the family of patents of which the present patent is a member. Pennie & Edmonds instructed POF in relation to the national phase in Australia. It also advised MSSM concerning the extension of the US patent in 2003. She indicates that Pennie & Edmonds was informed of the approval of Fabrazyme in the US and that it advised MSSM that it was possible to extend the US patent.

15.Dr Coruzzi and the relevant files transferred to Jones Day although she states that she was not directly involved with the prosecution of any national phase entries in the period July 2000 to September 2006. From her review of the files she states that prior to May 2012 POF did not advise her that the Australian patent may be entitled to a term extension. She also states that at no time prior to April 2012 was she or her colleagues made aware that Fabrazyme or other product containing α-galactosidase A was approved for sale in Australia. If advised she says that POF would have been asked whether a patent term extension was available and have advised MSSM accordingly.

16.Instead Dr Coruzzi indicates that in April 2012 when reviewing the patent family for the purposes of an assignment her associate Dr Martinek made enquiries with POF about the status of the Australian patent and subsequently about whether an extension of term was possible. Consequently Dr Coruzzi states that on 17 May she learned that the relevant date to apply for a term extension was 17 November 2002. She then inquired with MSSM about whether relevant circumstances existed for the patentee to request an extension of time. Inquiries continued with MSSM and POF over a number of months leading to the request being filed in September 2012. This Dr Coruzzi indicates was complicated by Dr McGrath’s transition to retirement and a shift of responsibilities at MSSM as well as communication difficulties with POF because of time zone differences.

17.Dr Coruzzi refers to Dr McGrath instructing her firm in 2010 to apply for Supplementary Protection Certificates in a number of European countries for related patents. She does not however provide any indication of the circumstances in which those instructions arose and significantly Dr McGrath does not refer to those circumstances either. 

Law

18.Section 223(2) provides:

“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.”

19.A "relevant act" for the purposes of section 223 is defined in section 223(11) and means:

“an action (other than a prescribed action) in relation to a patent or patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications.”

20.Regulation 22.11(4) then prescribes the following actions as being excluded for the purposes of section 223(11):

(4) For the definition of relevant act in subsection 223 (11) of the Act, each of the following actions is prescribed:
(a) an action or step prescribed in Chapter 5, other than an action or step taken under regulation 5.3 or 5.3AA, paragraph 5.4 (a), subparagraph 5.8 (1) (a) (i) or regulation 5.9A;
(b) filing, during the term of a standard patent as required by subsection 71 (2) of the Act, an application under subsection 70 (1) of the Act for an extension of the term of the patent;
(c) an action or step prescribed in Chapter 20.

21.The meaning of subregulation (4)(b) has been considered by the Commissioner previously and recently by the Administrative Appeals Tribunal in Aspen  Pharma Pty Ltd and Ors and Commissioner of Patents and H Lundbeck (Joined Party) [2012] AATA 851. The Tribunal agreed that subregulation 22.11(4)(b) does not exclude section 70 applications from section 223 provided these are filed within the term of the patent as required by section 71(2).

22.Jenkinson J in Kimberly-Clark Ltd v Commissioner of Patents (No 3) 13 IPR 569-584 considered the scope of an “error or omission” in the context of the equivalent provisions of section 160 of the Patents Act 1952. He stated:

"It is in my opinion difficult to suppose that only the inadvertences 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."

23.Jenkinson J rejected the argument that section 160(2)(a) excluded errors or omissions that were the products of deliberation. Consequently, the concept of what constitutes an error should be interpreted broadly and includes an error of judgement. But Jenkinson J also made the following comments at page 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."

24.At page 583 Jenkinson J further found that, 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."

25.Justice Spender in G S Technology Pty Limited v Commissioner of  Patents [2004] FCA 1017 at [62] considered that the Administralitve Appeals Tribunal in Sanyo Electric Co Ltd v Commissioner of  Patents (1996) AIPC 91-283 at 37,844 had usefully summarised the principles to be adopted concerning the exercise of the discretion to extend time. That is at paragraph 16 of that decision:

“The decisions of the courts concerning the approach to be taken to the exercise of a discretion to extend time are now well-established and include:

·in the absence of nominated factors against which the discretion is to be exercised, regard should be had to the “subject-matter, scope and purpose of the Act” - per Mr Justice Mason (as he then was) in Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others [1986] HCA 40; (1986) 162 CLR 24 at 39-40. A further exposition of this is provided by the comments of Mr Justice Davies in Chalk v Commissioner for Superannuation [1994] FCA 1063; (1994) 50 FCR 150 at 154 where he said “. . . the discretion should be exercised by reference to the words of the statute and the context within which the discretion is conferred”;

·while the applicant has the burden of placing before the Tribunal the circumstances which it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it should be so described (McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354 per Mr Justice Woodward at 357 and Jenkinson J at 368-369, Australian Broadcasting Tribunal v Bond Corporation Holdings Ltd and Others (1989) 86 ALR 424 per Mr Justice Burchett at 432;

·it is “more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time” (per Davies J in Chalk’s case, at 156, with whom Chief Justice Black and Mr Justice Cooper agreed. Similar comments are to be found in Comcare v A’Hearn [1993] FCA 498; (1993) 119 ALR 85, particularly at 88);

·actions of the agent of a principal should not necessarily be regarded as being the actions of the principal (A’Hearn’s case);

·a legislative provision providing for the exercise of a discretion to extend time is beneficial in nature and should be applied beneficially (Davies J in Chalk’s case at 155).”

26.The AAT further outlined a number of issues relevant to the exercising of the discretion provided by section 223(2) in Aristocrat Australia Pty Ltd and Commissioner of Patents and IGT [2009] AATA 873 [35]-[56]. From this it is evident that while understanding principles applied in other cases may be useful they should not be seen as hard and fast rules and, ultimately, the question is whether, in the particular circumstances, the extension of time is appropriate. This fundamentally requires a consideration of the interests that would be affected by allowing or refusing the extension.

Is there a causative error to enliven section 223?

27.Ultimately I do not consider that MSSM has provided sufficient evidence for me to be satisfied that a causative error or omission has occurred. While the evidence may suggest a number of possible errors or omissions in Dr McGrath’s management of MSSM’s patent portfolio or in the advice of its patent attorneys, the circumstances that existed at the relevant time have not in my view been addressed fully and frankly even after extensive opportunities were provided to respond to the Commissioner’s concerns . Consequently there remains in my mind a significant possibility that MSSM have only more recently determined that an extension of term is desirable and no real intention to extend the patent existed before the relevant date.

28.There are a number of aspects of the evidence that are of concern. Initially there was an attempt to construct a case laying responsibility with MSSM’s licensee Genzyme who it is said failed to inform it of the ARTG inclusion for FABRAZYME. The difficulty with this is that the evidence does not indicate that Genzyme had any such obligation and, in any event, the trigger in Australia was the listing of REPLAGAL not FABRAZYME. Recognising this, MSSM then suggested a failure by POF to provide advice about a possible extension was the cause of it not considering whether an extension should be applied for.  While the POF correspondence from 1998 that is in evidence does not include information about extensions of term, the fact is that until the listing of REPLAGAL in 2002, an extension of time could not have been applied for. If a failure by POF to provide advice in 1998 is relevant, that would only be significant if otherwise the advice would have prompted MSSM, or had the potential to induce it, to put in place processes for monitoring the ARTG for the inclusion of goods including alpha-galactosidase  A. However there is insufficient evidence to conclude that that such advice was required by its instructions, that it was omitted in this case in error or, more importantly, that if provided, would have made any difference.

29. As a result, ultimately, the patentee’s case is that the evidence infers an intention to extend the patent and that an error or omission lies in “Dr McGrath’s failure to act according to the responsibilities of his own office … to secure patent rights including patent term extension for the ‘795 Patent”.  In this it relies on the decision in G S Technology, supra, where Spender J stated at [65] that:

“Most errors and omissions which lead to a failure to do an act or take a step are the result of negligence or incompetence. Where such errors and omissions are made against a clearly demonstrated desire to maintain the application (and thus not have it lapse), and where attempts are made to remedy the error or omission as soon as its consequences are discovered and the existence of the error or omission learnt, as is the case here, the considerations in favour of an extension seem to me to be quite persuasive.”

30. However unlike in that case I do not think the evidence provided here is sufficient in two aspects. First, the evidence and surrounding circumstances do not show a “demonstrated desire” to obtain an extension of term in Australia. The obtaining of equivalent rights elsewhere may be suggestive that a decision to seek extension might have been made but there may also have been reasons why the decision would have been different, such as the different commercial value of FABRAZYME in Australia. While the obtaining of extensions in the US and Europe may possibly be an indicator of a general intention, the ability of MSSM to act in those jurisdictions but not in the case of Australia may also suggest a decision was made not to proceed here or at least there was an indifference that by default amounted to the same thing. I note in this regard that evidence on the specific importance of obtaining a term extension in Australia has not been provided.

31.Secondly, I consider that the apparent lack of competence attributed to Dr McGrath approaches the incredible and consequently I would have expected that between MSSM and its attorneys stronger evidence should and could have been provided to support the case that that is being made. This would have included more substantial evidence of the practices and knowledge of MSSM and Dr McGrath in the relevant period as well as the instructions provided to their US attorneys and the advice actually provided.  

32.For example, such evidence would have explained the process by which MSSM became aware of the opportunity to seek extension of time in Europe and the US, what instructions were given to Pennie & Edmonds or others to ensure those opportunities were raised and who else other than Dr McGrath had knowledge of or responsibility for such matters.   

33.I do not consider that in this I am imposing on MSSM a burden of proof. However I am left with significant unanswered doubt that MSSM in the relevant period intended to obtain a term extension in Australia and failed to do so due to an error or omission on behalf of Dr McGrath or its attorneys.

Should the extension be refused on discretionary grounds?

34.If I am wrong in concluding that sufficient evidence of a relevant error or omission has not been provided, I consider that there are other grounds on which the request should be refused.

35.MSSM seek an extension of time of almost 10 years in which to file a request for an extension of term. I discussed the significant public and third party interests that are opposed to the granting of such extensions in the context of the pharmaceutical extension of term scheme in Merck  Sharp & Dohme Corp. [2012] APO 25. Those interests are somewhat different to the considerations that might apply in the case of the payment of a maintenance fee during the normal term of a patent (as in G S Technology) and include that no protection or compensation provisions of the type provided in subsection 223(9) apply to exploitation permitted under section 119A that may have commenced with the expectation that the patent will not be extended. While of course these factors are to be balanced against the interests of the patentee in benefitting from the scheme, I consider that the passage of such an extensive period of time, and as a result the extension being sought close to the end of the normal term of the patent, warrants a very clear case in support of the extension being granted. This is not to say that the period of delay is by itself relevant but rather that the competing interests including uncertainty as to the term of the patent and potential effect on third party decisions to launch competing products becomes much more significant. 

36.Dr McGrath indicates he only became aware of the failure to apply for an extension of term in 2012 and nothing to his knowledge was done or communicated to MSSM before that date that suggested some action should be taken. I find it highly improbable that this was the case in an organisation such as MSSM over such a long period of time and consequently I would have again expected evidence of a far more substantial nature to have been presented such that I could be satisfied that the patentee has indeed acted promptly and appropriately in bringing the current extension of time application. Rather I find the evidence to be as inadequate in this regard as it is to support the existence of an error or omission in the first place. This includes the absence of evidence concerning relevant instructions, the seeking of extensions in other jurisdictions and why, despite those circumstances, consideration of the situation in Australia did not arise, if indeed that is the case.

37. Furthermore, the extension of time request was only filed on 28 September 2012 with evidence following on 4 December. Deficiencies in the evidence were then raised in considerable detail on 4 January 2013 and were repeated subsequently when further opportunity was provided to allow the patentee to provide additional evidence. This was done on 27 June 2013 but still not to the satisfaction of the delegate. Further evidence was then filed on 31 July the day before the hearing.  Noting that, on the evidence, the failure to seek an extension of term and the beginning of steps to file the extension of term and extension of time requests began in April 2012, I consider the patentee’s conduct aside from the other considerations mentioned above is clearly not consistent with an expectation that it act promptly and with a full and frank disclosure of all the relevant circumstances.  

38.While reasons have been given for the delay between April and September 2012 including availability of Dr McGrath, difficulties in communications between the Australian and US attorneys and misdirected inquiries I find these unsatisfactory given the length of the period involved, particularly when evidence supporting the extension was only filed in December 2012. As to what followed, the delay in responding to the delegate’s concerns has not been adequately explained other than that a change in representation occurred in June 2013 which resulted in a different approach to the evidence.

39.The normal expiry date for the current patent is in November 2013. The effect of the current extension of time application has been to put in doubt that date and will have potentially affected parties that have an interest in the marketing of pharmaceutical goods falling within the ambit of the patent and may have delayed seeking ARTG listing for this reason. It may also have affected MSSM’s licensee.  I consider that the patentee and its agents have unreasonably protracted the uncertainty concerning the term of the patent close to the end of its term and for that reason at least I consider the extension of time should not be granted. In this regard as I noted in Merck ([33]-[34]) the timing provisions of the extension of term scheme are intended to provide certainty surrounding the maximum term of a pharmaceutical patent, not the least so that generic manufacturers have the ability to prepare for the marketing of generic drugs at the time the rights in the patent expire.

40.While the extension of time scheme under section 223 also applies and those provisions, according to the authorities, are to be applied beneficially particularly so that rights provided to a party under the Act are not lost inadvertently, the frustration of the intent of the legislation caused by delay and a failure to provide a full and frank disclosure of the relevant circumstances in a timely manner are not factors that weigh in favour of granting an extension of time. 

41. Sub-section 223(6A) requires that if the Commissioner is satisfied that an application under sub-section 223(2) would not be granted, even in the absence of opposition, the Commissioner must refuse to grant the application. As I am satisfied that the Commissioner’s discretion should not be exercised in favour of the patentee, it follows that I am also satisfied that the application would not be granted. Consequently I must refuse the application.

P M Spann
Deputy Commissioner of Patents