Mundipharma Medical GmbH v F H Faulding and Co Limited
[2000] APO 60
•29 September 2000
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : Nos. 693134
Title: Opioid Formulations For Treating Pain
Action: An application by Mundipharma Medical GmbH for an extension of time under Regulation 5.10(2) to serve evidence-in-answer and opposition thereto by F H Faulding and Co Limited.
Decision: Issued .
Abstract
The requested three month extension of time to serve evidence-in-answer was granted.
The applicant did not provide a satisfactory explanation for the delay in serving evidence. The reliance by the applicant and its Australian agent, on an overseas agent to prepare evidence, and the subsequent failure to provide this evidence within the prescribed time period because the overseas agent was unaware of such a deadline, is in itself not a justifiable explanation.
The applicant's interests were clearly for the extension to be allowed as it would otherwise be shut out entirely, resulting in the opposition not being decided on its merits. Similarly, it weighs heavily in the public interest that a substantive opposition be decided on its merits. There was no evidence provided to suggest the minimal delay caused by the allowance of an extension would be of any great detriment to the opponent.
As a result of the applicant not providing a satisfactory explanation for the delay in its application, costs were awarded against the applicant.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No.693134 by Mundipharma Medical GmBH., and opposition under Section 59 of the Patents Act 1990 by F H Faulding & Co Ltd for an extension of time under Regulation 5.10(2) in which to serve evidence-in-answer.
BACKGROUND
Patent application 693134 in the name of Mundipharma Medical Gmbh (hereinafter referred to as Mundipharma ) was filed on 22 November 1994 as PCT/US94/13606 in the name of Euro-Celtique S.A.. The application was advertised accepted on 25 June 1998. A notice of opposition to the grant of a patent was filed by F H Faulding & Co Ltd. (hereinafter referred to as Fauldings) on 25 September 1998. Subsequent to this, a statement of grounds and particulars was filed on 24 December 1998. After three extensions of time, evidence-in-support was served on 1 March 2000.
During this time, Mundipharma requested a consideration for a transfer of interest in entitlement to the patent application on 8 March 2000 upon completing a Deed of Assignment with Euro-Celtique S.A. This was approved on 14 April 2000, with the patent application consequently to proceed in the name of Mundipharma.
An application for an extension of time to serve evidence-in-answer was filed by Euro-Celtic S.A. on 1 June 2000, requesting an extension until 1 September 2000, with Fauldings subsequently objecting to this extension on 20 June 2000.
On the 18 July 2000 notice was given to the Commissioner and the agents for the opponent, that there has been a change of practitioner acting on behalf of the applicant.
The matter came to a hearing in Canberra on 29 August 2000. Mundipharma was represented by Mr Bruce Caine, of Counsel, whilst Fauldings was represented by Mr Greg Bartlett, patent attorney of Phillips Ormonde & Fitzpatrick, Melbourne, assisted by Ms Jennifer Potter, Intellectual Property Manager of Fauldings, Adelaide.
THE APPLICATION FOR EXTENSION OF TIME
The application states the circumstances in which and the grounds upon which the application is made as follows:
"We Euro-Celtique S.A., of 122 Boulevard De La Petrusse, Luxembourg, hereby apply for an extension of time for a period of 3 months from 1 June 2000 until 1 September 2000, within which to serve on the Opponent, F H Fauldings and Co Limited, Evidence-in-answer to the Opposition to the grant of a Patent on Patent application No. 693134.
The circumstances in which, and the grounds upon which, this application is made are as follows:
More time is required in which to arrange for evidence to be prepared for us in response to the Opponent's evidence in answer. As can be ascertained from Opponent's evidence, the subject matter of his opposition was heavily litigated in the U.S. Accordingly, our Australian attorneys were relying upon the U.S. colleagues to take the lead in the preparation of the evidence in answer.
Unfortunately, while our U.S. attorneys received three folders of the Opponent's evidence in March 2000 from our Australian attorneys, our U.S. attorneys were not aware until recently of the return date for serving evidence. The letter accompanying the folders of evidence received from our Australian attorneys, setting out the date by which the evidence in answer was due to be served, appears never to have been received by our U.S. attorneys. Moreover, our U.S. attorneys only became aware of the deadline of 1 June 2000 by virtue of our Australian attorneys, reminder letter which was sent and received on 19 May 2000. This led to a situation where time did not permit the preparation of adequate evidence in answer and retaining of experts, particularly in view of the Memorial Day Holiday weekend in the U.S. Since becoming aware of the deadline, however, our U.S. attorneys have contacted in-house patent counsel for our U.S. associated company and trial counsel in the afore-mentioned U.S. litigation in order to address the Opponent's evidence and prepare evidence in answer promptly. Our U.S. attorneys have advised that until they were made aware of this 1 June 2000 deadline, they had no basis to suspect that a deadline had ever been set, given the differences between Australian and U.S. rules.
Further, both our US associate company and our U.S. attorneys have of late been involved in matters concerning the U.S. patent corresponding to this application, which has been the subject of litigation in the U.S. We have both been extremely busy in preparing of an Oral Hearing in the U.S. Court of Appeal for the Federal Circuit which as conducted on 3 May in relation to this patent.
In any event now that we have been made aware by our Australian attorneys of the requirement in Australia to serve evidence promptly, we are reviewing the Opponent's evidence and (subject to the need to coordinate our approach in Australia with that in the U.S. related proceedings) we will be proceeding without delay in finalising our approach to the Opposition an appointing experts to provide evidence in answer for the Australian proceedings."
At the commencement of the hearing, Mr Caine filed a request to amend the Application for the Extension of Time, in order to correct a clerical error or obvious mistake as set out in sub-section 104(1)(b) of the Act. The request was accompanied by a fresh Application for Extension of Time in which the opening paragraph now reads as follows, (with the remainder of the document being identical to that set out above):
"We, Mundipharma Medical GmbH,
of Obstgartenstrasse 19, CH-8035 Zurich, Switzerland, hereby apply for an extension of time for a period of 3 months from 1 June 2000 until 1 September 2000, within which to serve on the Opponent, F H Faulding and Co Limited, Evidence-in-answer to the Opposition to the grant of a Patent on Patent Application No. 693134."
DECISION
Before deciding on the allowance or otherwise, of an extension of time to serve evidence-in-answer, I will first turn to the request to amend the application for an extension made by the applicant at the commencement of the hearing.
Mr Caine submitted that the original agent for the applicant had erroneously recorded the name of Euro-Celtique S.A., rather than Mundipharma in the application for an extension of time filed. It was readily apparent from the case chronology that the transfer of entitlement had been completed several months prior to the application being made. Thus, it was plain on the face of the application that either or both, a clerical error or obvious mistake had been made in the preparation of the document.
Mr Bartlett made no submission on this matter except to state it was a matter between the applicant and the Patent Office.
Without reviewing the well established principles of what is considered to be a clerical error or obvious mistake, I note the recording of the incorrect applicant's name and address on the application for an extension is plainly evident as an error given the background of this case. Furthermore, the steps needed to correct this are readily apparent, and have been made by the applicant and the mistake overcome. I am loathed to have this application delayed in some additional way due to some procedural obstruction, when it is readily apparent that the administrative oversight made by the applicant's original agent can, and has been readily rectified. As such, I allow the proposed amendment in order to provide the correct applicant's name and address on the application.
I will now address the determination of the allowance or otherwise of the application for an extension of time.
Applicable law in relation to extension of time under Regulation 5.10
The present application for extension of time is made under the provisions of regulation 5.10. Given paragraph 5.10 (5)(c), the Commissioner must not grant an extension of time unless:
· the parties have had an opportunity to make representations on the matter, and
· the Commissioner "is reasonably satisfied" that an extension of time "is appropriate in all the circumstances".
In their submissions the parties agree on the matters the Commissioner needs to consider in applications of this kind. These derive from the judgements by Burchett J in Ferocem Pty Ltd v Commissioner of Patents ( 1994) 28 IPR 243 and that by Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213. These cases provide a thorough consideration and summary of the law, as it stands, on the extension of time provisions. It is clear from these judgements that regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements. On the contrary it is necessary to give proper, genuine and realistic consideration to all relevant aspects of the case.
Relevant aspects include:
(a) The provision of an explanation or justification for the delay in completing the evidence stage and why more time is required.
(b) The public interest.
(c) The interests of the parties involved in the opposition.
If I am to be reasonably satisfied that an extension of time is appropriate in all the circumstances, then I must take into account all matters relating to the above aspects when deciding the issue.
Application of the law to the facts
(a) The provision of an explanation or justification for the delay in completing the evidence stage and why more time is required;
The person seeking the extension of time, in this instance the applicant, must discharge the onus of satisfying the Commissioner that the extension is appropriate in all the circumstances. Accordingly, the extension request should provide sufficient details of the grounds and circumstances necessitating the extension sought to allow a determination as to whether an extension is appropriate in all the circumstances.
Mr Caine for Mundipharma, made the following submissions in respect of the explanation for the delay:
"The important things for your consideration of this particular factor, that is only one factor to be weighed in the balance, is, is there an explanation and is it frank? The answer to both those questions is yes. Moreover it's a failure which arises in what only can be described in unexpected circumstances, it's not a failure that's been brought about by a lamentable, or culpable or even negligible or reckless disregard for office practice or procedure. It was plainly not to be expected that the Americans would not receive a letter advising them of the due date and that they would not find out until two months later."
In respect to the need for more time to complete the preparation of further evidence Mr Caine added:
"The Opposition is a serious one, and it requires a detailed ventilation of the merits of the invention. The fact that U.S litigation is waging overseas, whilst it might be thought that that assists, in many respects experience tells us that complicates things because the witnesses that will be used in the litigation around the world will not necessarily be the same, because there will be issues peculiar to the juris prudence in the various places.
The most important thing that emerges from these circumstances is that there is a clear statement to the effect in the last paragraph, that preparation will be proceeding without delay so as to finalise the material necessary by engaging the relevant experts".
Mr Bartlett, critically reviewed each paragraph of the application for the extension of time filed, and forwarded the following submissions:
Throughout the application there is nothing whatsoever to indicate what the applicant themselves, or what their Australian attorneys were doing to ensure a timely deliverance of the evidence in question would occur.
In respect of the phrase "Our U.S. attorneys have advised that until they were made aware of this 1 June 2000 deadline, they had no basis to suspect that a deadline had even been set, given the differences between Australian and U.S. rule" (emphasis added) Mr Bartlett questioned how reasonable would it be, to suspect there exists a U.S attorney who believes that Australian opposition proceedings are without deadlines. Particularly, given that after inquiring with a U.S. patent attorney, as far as the opponent is aware, there are no actions before the USPTO (or any other Patent Office) that do not have some type of deadline associated therewith.
In respect of the phrase "…we are reviewing the Opponent's evidence and (subject to the need to coordinate our approach in Australia with that in the U.S related proceedings) we will be proceeding without delay in finalising our approach to the Opposition and appointing experts to provide evidence…" (emphasis added) it was submitted there is no suggestion that the applicant would proceed without delay to prepare evidence, as any further action would always be subject to a "coordinated approach". In any case, if the extension were granted it would merely lead to the appointment of experts by the applicant, and not the completion of the evidence as a whole.
The net effect of reviewing the application shows it is readily apparent that whilst a full and frank disclosure is not required, sufficient details or justification have not been provided. In addition, the applicant is not committing itself to doing anything, in any time frame, unless it suits them (with the U.S proceedings in mind). As such the applicant is making a calculated delay, in order to coordinate its approach between the two countries. Accordingly, it runs the risk of foregoing its right to present its case properly if it is not serious in the manner in which it follows proceedings in Australia.
In reviewing the circumstances and grounds upon which the application is based, I believe the application can be reduced to the following key reasons as to why an extension is required:
The applicant's then Australian attorneys were relying on their U.S. colleagues to lead in the preparation of the evidence-in-answer, as litigation proceedings were occurring in the U.S., and;
The applicant's U.S. attorneys were not made aware of a deadline for serving this evidence before 19 May 2000, as a letter setting out the deadline appears never to have been received. Moreover the U.S attorneys advised they had no basis to suspect a deadline had even been set thus leaving insufficient time to complete and review the evidence to be submitted.
The applicant and its U.S. attorneys have been busy in preparing for an Oral Hearing in the U.S. Court of Appeals.
In determining whether the above reasons provide suitable explanation and justification for the delay, I make the following observations:
Whilst it is the applicant's prerogative in how they best prepare their evidence, merely stating that its U.S. attorneys are to lead the preparation of evidence-in-answer, does not relieve the applicant of its obligation to ensure that evidence is provided in a timely manner. It remains the applicant's responsibility throughout the entire proceedings to manage its resources appropriately such that its evidence is diligently prepared in a timely manner. In this instance, it appears the applicant falls palpably short in satisfying these obligations.
The fact that the applicant left the preparation of evidence in answer to its U.S. attorneys, coupled with the facts that the U.S. attorneys were seemingly unaware of the time limit restrictions, and that they had other commitments, I do not believe are proper grounds, nor provide sufficient justification for a delay. Like Mr Bartlett, I am not entirely convinced that a U.S attorney would have no basis at all to suspect that some type of deadline is imminent for the filing of evidence. However, this being a first extension request I am prepared to give the benefit of doubt to the applicant. I would also point out that I have strong concerns in respect of the U.S litigation delaying any Australian action. I note that the opposition process is meant to be carried out expediently, and delays due to overseas action are not acceptable.
At present, no evidence at all has been served by Mundipharma, nor is there any indication of what the evidence contains or its relevance. Furthermore, I note there is no indication of the progress made with the preparation of evidence in the period up to 19 May 2000 (ie the time from which the U.S attorney's were first informed of a deadline). Nor is there any indication of the progress made from the 19 May 2000 notification of deadline and 1 June 2000 due date, or the likelihood of the evidence being completed, should an extension be granted. I agree with the submissions made by Fauldings in respect of the applicant proceeding without delay "subject to the need to coordinate" its approach with that in the U.S. related proceedings. As such I am somewhat concerned about the applicant's ability and willingness to file its evidence at the end of the extension requested.
Consequently I am of the view that Mundipharma have not provided a satisfactory explanation for the delay in serving their evidence. However it still remains for me to consider whether an extension of time is appropriate in all of the circumstances.
(b) The public interest;
The question public interest in the granting of extensions of time by the Commissioner has been considered in a number of Federal Court decisions. From these decisions it is apparent that the public interest is ascertained by weighing up often conflicting concerns. For example, the public has an interest in both the need for efficient, expeditious disposal of matters in the Patent Office, and the concern expressed by Kitto J in Kaiser Aluminium & Chemical v. The Reynolds Metal Company (1969) 120 CLR 136 at 143, viz a serious opposition should be dealt with on its merits rather than be shut out as a consequence of a failure of procedure." It is also the case that the public has an interest in encouraging innovation and so it follows that the applicant should have the opportunity to defend its patent application on its merits and not have its defence shut out as a consequence of a failure in procedure.
Mundipharma submits the impact of this extension on the efficient and timely disposition of this matter as a whole, is negligible as this is the first request for an extension, and a legitimate explanation of the unexpected circumstances has been provided.
In weighing up the public interest, I find that Mundipharma has not unduly affected the efficient and expeditious disposal of matters other than to make use of the Patent Regulations afforded to it, as it believed it had legitimate reasons to do so. The delay caused by the granting of this extension would be negligible, since the hearing was held three days prior to the requested extension date.
On the other hand, it is clearly not in the public interest in having a party shut out and not being given the opportunity to defend its patent application on its merits in the first instance.
Consequently I find the public interest in Mundipharma being granted an extension of time in this instance outweighs any short-term delay in proceedings this may cause.
(c) The interests of the parties involved in the opposition
In addressing this issue, the applicant submitted that it is inescapable that the refusal of this extension of time would deny it the right of a hearing on the merits of the case, as no evidence on behalf of Mundipharma at all would be before the patent office. Mundipharma furthermore submits it wishes to prosecute this opposition to grant with all due haste, as any undue delay would disadvantage its ability to instigate infringement proceedings at the earliest possible opportunity as set out in Goninan (supra at page 222).
Mundipharma recognised in its submissions that Fauldings have a legitimate concern that this matter proceeds expeditiously. It however submitted there is no evidence Fauldings were to be commercially harmed by this extension in the light of Faulding's own three extensions totalling eight additional months in which to serve its evidence-in-support.
Fauldings in its submissions, referred to British American Tobacco Co Ltd v Phillip Morris Ltd 2000 APO 32 and highlighted the point made by the hearing officer that natural justice varies with the whole circumstances, and is primarily about fair and not identical treatment. Fauldings then submitted that merely because it was afforded three extensions totalling eight months in which to file its evidence, this does not imply that the applicant should automatically be given the same time period, or in fact any extension of time.
I agree with this submission, and the sentiments expressed in the above decision, and as such it is still for me to decide what is considered to be a fair treatment under the circumstances at hand.
I believe, the interests of the opponent, Fauldings, are clearly in not having the opposition proceedings unduly delay the hearing of the substantive opposition. However, I am not aware of any other special reasons that would specifically disadvantage the opponent if the present extension were granted. Nor did Fauldings provide any evidence to suggest the contrary. Given that the opponent themselves have caused some delay with their own extensions, and given this is only the first extension request made by the applicant, it appears there are no immediate circumstances that would be detrimental to the opponent.
Clearly the interests of the applicant, Mundipharma, are in obtaining this extension in order to serve its evidence-in-answer as part of the opposition process. The facts of the case clearly suggest that the applicant's case would be seriously prejudiced if I were to refuse the extension and effectively shut out the applicant from adducing evidence to address the matters raised in the evidence-in-support.
In respect of the applicant being shut out, Fauldings in their submission directed my attention to Ferochem (supra at page 248) and the following comments by Burchett J:
"Indeed, even where an application …is regarded as unjustified, it seems to me a decision maker, having a discretion of the kind conferred by reg 5.10, should always consider whether some short period should be allowed, so that an applicant who may have assumed some extension would be granted will not be shut out entirely from presenting evidence that may be immediately available."
In particular Mr Bartlett emphasised there was a qualifier to the phrase "shut out entirely" and that is the need for evidence to be "immediately available" in order for the discretion to be invoked and a short period to be granted. He then submitted as the application on the face of it provides no adequate explanation, and as there has been no advice as to the immediate availability of evidence, a short period of time should not be granted in order for the applicant to avoid being shut out entirely.
I do not believe this submission is one that is relevant until it has been determined whether or not, in all of the circumstances, an extension of time should be granted. In particular, exercising of the discretionary power as to whether allow a short period of time or otherwise, is predicated on the fact that the application for the extension has been refused. Consequently it is not for me to decide whether a short period of time is appropriate or not, until I have determined if the application for the extension is successful or not.
In weighing up the interests of both parties, I believe the interests of Mundipharma in having the opportunity to present its evidence, (thus allowing the substantive opposition to be decided on its merits), outweighs the interests of the opponent Fauldings in this instance. I am however mindful that I should give due consideration to the undue delay of the opposition proceedings. This is just one consideration and is not in my opinion the overriding one in the present circumstance.
CONCLUSION
I believe the proposed amendment to correct the applicant's name and address is one that should be allowed in order to avoid any future procedural delay that may occur as a result of the original application containing either, or both, a clerical error or obvious mistake.
I find that the applicant has not made out a proper case in its application for an extension of time. The applicant may suggest that its U.S. attorneys not receiving a letter confirming a deadline is an unexpected event, however there was nothing in the application to suggest that progress had been made prior to, or subsequent to this fact being realised. Whilst it is the applicant's prerogative in allowing its U.S. agents to take the lead in the preparation of evidence for this opposition, it does however remains the applicant's responsibility to ensure that evidence is provided in a timely manner. However, in this instance I believe an extension of time is warranted, as the applicant would be unjustly shut out entirely, and the opposition not decided on its merits, if the extension were not allowed. I do not believe this to be in the public's interest, nor the applicant's, given the delay caused by the allowance of the extension is minimal. Furthermore, there is no evidence to suggest the opponent's interests would be unduly disadvantaged by the extension being granted.
Hence I find that in balancing the interests and potential detriment to both parties, it is appropriate in all of the circumstances, that I allow the extension of time sought by Mundipharma.
Consequently I am reasonably satisfied that an extension of time is appropriate in all of the circumstances. I therefore allow the extension of time for the period requested, that is, from 1 June 2000 to 1 September 2000. Furthermore, I expect the applicant to proceed expeditiously with the preparation of its evidence-in-answer.
COSTS
The power to award costs is based on section 210 and regulation 22.8. The normal practice is that costs should follow the event.
In this instance however even though I have awarded the extension of time sought, I find that, based on the explanation and justification for delay provided in the application, Fauldings were justified in their opposition to the extension.
Consequently I award costs against the applicant, Mundipharma.
Lars Koch
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Wray & Associates, Perth
Patent attorneys for the opponent : Phillips Ormonde Fitzpatrick, Melbourne
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