New York University v Nissin Molecular Biology Institute, Inc

[1994] APO 22

official notice

decision of a delegate of the commissioner of patents

Application        :    No. 82287/91 in the name of NEW YORK UNIVERSITY

Title:    Heterohybridomas Producing Human Monoclonal Antibodies to HIV-1

Action:    Request under Regulation 3.25 by NISSIN MOLECULAR BIOLOGY INSTITUTE, INC.

Decision:    Issued            . 

-the undertaking in respect of experimental use, and of not making the sample available to others, is in respect of actions anywhere in the world;

-experimental purposes, as used in subreg. 3.25, should be interpreted analogously to those experimental uses of an invention that do not give rise to infringement of a patent;

-the request is deficient in that the undertaking fails to identify the microorganism the subject of the undertaking, and the manner of referring to a petty patent, or relevant proceedings, is inadequate;

-the undertaking is not deficient through referring to oppositions, petty patents, or relevant proceedings, even though the application has not yet been accepted;

-the requestor's intended use of the sample falls within the ambit of experimental purposes; and

-there is no basis to conclude that the undertaking was not made in good faith.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 82287/91 by NEW YORK UNIVERSITY, and a request under Regulation 3.25 by NISSIN MOLECULAR BIOLOGY INSTITUTE, INC.

background

Patent application 82287/91 was filed under the Patent Cooperation Treaty as PCT/US91/04304, on 26 December 1991. The application designated Australia, and was published on 7 January 1992.

The application is directed to a method of producing a heterohybridoma cell which makes a human monoclonal antibody against a neutralizing epitope of HIV-1, and cell lines produced by the method. At the end of the specification, there is a reference to 5 deposits, which so far as is relevant to the present matter, is in the following terms:

"The following illustrative cell lines secreting human monoclonal antibodies specific for HIV-1 gp120 neutralizing epitopes were deposited at the ATCC, Rockwell, Maryland.

"5.  447-52D   Human x Human x Mouse Heterohybridoma cell line producing a human IgG3,lambda antibody (ATCC accession # HB 10725)"

Claim 25 is in the following terms:

"A cell line according to claim 22 which is 447-52D (ATCC# HB 10725).

The application has not yet been accepted, and consequently the time for filing copies of the deposit receipt, and a relevant notice of entitlement relating to the deposit, has not expired; no such documents have been filed.

On 1 June 1993, Nissin Molecular Biology Institute, Inc. (hereafter referred to as NMBI) filed a request under regulation 3.25(1) for the Commissioner to grant the certification referred to in Rule 11.3(a) of the Budapest Treaty.

The applicant subsequently objected to the request, and a hearing in the matter was held in Canberra on Feb 16 1994. The applicant was represented by Mr. P Jones (patent attorney of Phillips Ormonde & Fitzpatrick, Melbourne); the requestor appeared by phone and was represented by Mr R Halliday (patent attorney of G.R. Cullen & Co., Brisbane) assisted by Dr. Finney.

The Request

The request is made by Nissin Molecular Biology Institute, Inc, of the U.S.A. It is a two-sheet document. The first sheet contains the request, and states the reasons for the request as:

"We wish to establish the difference between an antibody developed by us and an antibody produced by the hybridoma deposited under accession No. ATCC HB 10725."

The second sheet contains the undertaking, and is as follows:

"We, Nissin Molecular Biology Institute, Inc., of .... undertake to use the micro-organism only for experimental purposes or in relation to:

(1) opposition proceedings under Chapter 5 of the Patents Act 1990, or Part V of the Patents Act 1952, in relation to the grant of a standard patent on this application; or

(2) a notice under section 28 of the Patents Act 1990 in relation to a petty patent; or

(3) relevant proceedings in relation to the patent, as defined in the Act.

I note here, as I did in Merck & Co v Niblack (1992) AIPC 90-866, that where the undertaking is on a different sheet of paper than the request, the undertaking will need to specifically identify the microorganism that is the subject of the undertaking. This has not been done; consequently I am of the view that the undertaking is not in accordance with the requirements of the regulations.

Submissions

The objections of the applicant fall into 4 categories:

1. 'experimental purposes' as used in regulation 3.25(4)(c) - the regulation that sets out the nature of the undertaking required - is a qualification of the subsequent subparagraphs - that is, release cannot be given for experimental purposes alone, but must be in association with opposition proceedings, a section 28 notice, or relevant proceedings in relation to a patent;

1. as the application has not been accepted, and is not a petty patent, there is no basis for allowing the requestor to use the sample for the purpose of opposition, a section 28 notice, or in relevant proceedings in relation to the patent;

1. the reasons for requiring the sample do not constitute experimental purposes; and

1. the requestor has not made the undertaking in good faith.

At the hearing, I also raised the question of whether there was a jurisdictional issue which implied that 'experimental purposes' should be interpreted as 'experimental purposes within Australia'.

Decision

This matter requires a detailed consideration of subregulation 3.25(4), which, so far as is relevant to the present matter, is as follows:

(4)The Commissioner must comply with a request in respect of a patent application or patent:

(a)if the specification relating to that application or patent is open to public inspection; and

(b)unless the Commissioner is reasonably satisfied that the nominated person is not entitled to rely on the deposit for the purposes of the Act; and

(c)if the person making the request or the person nominated as a skilled addressee has undertaken to use that micro-organism only for experimental purposes or in relation to:

(i)opposition proceedings under Chapter 5 of the Act (" opposition") in relation to the grant of a standard patent on that application; or

(ii)a notice under section 28 of the Act ("notice of matters affecting validity of petty patents") in relation to the petty patent; or

(iii)relevant proceedings in relation to the patent;

and not to make that micro-organism, or a culture derived from that micro-organism, available to another person; and

(d)unless the Commissioner is reasonably satisfied that the undertaking given by the person making the request or the person nominated as a skilled addressee was not given in good faith; ...

It was agreed by the parties that Regulation 3.25 applied to the present case, and that subparagraphs 3.25(4)(a) and (b) were satisfied. In particular, no issues arise as a result of the absence of a relevant notice of entitlement, or the copy of the relevant deposit receipt.

Relationship between Experimental Purposes, and Use in Oppositions etc.

Mr Jones argued that in subparagraph (c) the reference to 'experimental purposes' did not stand alone, but qualified subparagraphs (4)(c)(i) to (iii). I do not agree. The phrase 'experimental purposes' is followed by the conjunctive 'OR'. If 'or' was not present, the regulation would have the meaning suggested, but not otherwise.

I also note that the undertaking specified in para (d)(ii) of Form 37 of the regulations under the 1952 Act only referred to experimental purposes. It is my view that the extra references do no more than make clear that a sample can be used in oppositions, section 28 notices, or in relevant proceedings - which use might not fall within the ambit of 'experimental purposes'.

Thus in my view, there are in fact four categories of use permitted by subregulation 3.25(4)(c) - viz.

-    experimental purposes;
-    use in relation to oppositions;
- use in relation to s.28 notices; and
-    use in relation to relevant proceedings,

with the reference to 'experimental purposes' located in the main body of the text of 3.25(4)(c) indicating that this is the primary use envisaged by the provision.

Undertaking referring to oppositions, etc

Mr Jones argued that as the application has not been accepted, there was no basis for permitting use in relation to oppositions. Likewise, the application is not for a petty patent (and so a s.28 notice is inappropriate), and there cannot yet be any relevant proceedings as a patent has not yet been granted on the application.

Mr Jones argued that if the application is accepted in the future, and the applicant wanted to use the sample in relation to an opposition, or to relevant proceedings, the requestor should have to make a new request for release of the sample.

This same issue arose in Merck & Co v Niblack (1992) AIPC 90-866, where I said:

"While there may be some merit in requiring the reasons for requesting a certification of release to be completely consistent with the undertaking, in my view the essential requirement is that the requestor undertakes to restrict his use of the microorganism to the extent specified in regulation 3.25(4)(c). I do not believe that a request is invalidated merely because the statement of reasons for seeking release of the deposit given on the request form is narrower in scope than the undertaking given. In my view, such a difference would only invalidate the request if there was a good reason - such as, perhaps, an inference that the inconsistency is related to some lack of good faith; in the present case there is no allegation of lack of good faith, and no lack of good faith is apparent to me."

I do not agree with Mr Jones' proposition. Further to what I said in Merck (supra) I note that (for example) where:

-a person has obtained a sample before an application is accepted; and

-the requestor subsequently wants to use that sample in an opposition,

it seems to me to be an unnecessary imposition to require the person to seek a further certification for release of the sample. The regulations make abundantly clear that a sample can be used for opposition purposes. The only thing that is achieved by excluding opposition from an undertaking made pre-acceptance, is an imposition on the requestor to make a new reg 3.25 request for a use they are clearly entitled to, if they want to oppose the application. I do not consider this to be an efficient administration of these provisions; and I see no good reason for imposing such a restriction on the undertaking.

Similar considerations apply in respect of the possibility that the application can be amended to be one for a Petty Patent (with s.28 notices being then possible), and in respect of subsequent 'relevant proceedings'.

Consequently, I see no reason for rejecting the undertaking on the basis of the references to oppositions, s.28 notices, and relevant proceedings.

However, while I find that paragraphs (1), (2) and (3) of the undertaking are in principle permissible, they are all inadequate as they fail to refer to the present application. In this respect, and in the absence of a patent having yet been granted on the present application, paragraph (2) of the undertaking should be restricted to 'a petty patent granted on [the present application]', and paragraph (3) should be restricted to 'relevant proceedings in relation to a patent granted on [the present application] ... '.

Experimental Purposes

Mr Jones suggested that relevant precedent for the term 'experimental purposes' is that body of law relating to non-infringement by experimental uses of inventions.

The basis of this submission is that experimental use of an invention does not constitute an infringement; and that experimental use of a deposited microorganism should not be given greater latitude than would be accorded to other inventions. Mr Jones expressed concern that when a party obtained a sample, they obtained the whole invention, and that this is very different to other inventions where an interested person has to expend effort to perform the invention following the instructions in the specification.

I agree with the proposition that 'experimental purposes' should be construed analogously to those experimental uses of an invention that do not give rise to infringement of a patent.

Mr Jones referred me to Monsanto Company v Stauffer Chemical Company (NZ) [1984] FSR 559, and to a passage in Frearson v Loe (1878) 9 Ch.D. 48 cited in that decision. He asserted that the proposed experiments by the requestor in fact would give rise to a commercial advantage to the requestor, and that consequently the use was not an experimental use.

I think it appropriate here to quote the relevant passages from Monsanto (supra):

In Frearson v Loe (1878) 9 Ch.D. 48 the patents related to machinery for the manufacture of screws. The defendant made screw blanks in small quantities using contrivances which infringed the patents. He said he did so merely by way of experiment. The relevant portion of the headnote reads:

"When articles which are the subject of a patent are made without a license from the patentee simply for the purpose of bona fide experiments, those who so make them are not necessarily liable to an action, but when they are made and used for profit, or with the object of obtaining profit even to a limited extent, such making and using constitute an infringement of the patentee's rights, and will be restrained by injunction."

"... no doubt if a man makes things merely by way of bona fide experiment, and not with the intention of selling and making the thing so made for the purpose of which a patent has been granted, but with the view of improving upon the invention the subject of the patent, or with the view of seeing whether an improvement can be made or not, that is not an invasion of the exclusive rights granted by the patent. Patent rights were never granted to prevent persons of ingenuity exercising their talents in a fair way. But if there be neither using nor vending of the invention for profit, the mere making for the purpose of experiment, and not for a fraudulent purpose, ought not to be considered within the meaning of the prohibition, and if it were, it is certainly not the subject for an injunction."

But the learned master of Rolls went on to say that where, as was the case, the defendant made a machine, knowing it to infringe the patent, and used it under a claim of a right to do so, and under that claim made a quantity of goods, albeit small, that could not be regarded as within the exemption.

The decision proceeds to discuss a number of specific situations of where experimental use was, or was not, found.

I consider the above passage, citing Frearson v Loe provides a clear statement of the extent of activities that properly fall within the ambit of experimental purposes. I particularly note the passage:

"... no doubt if a man makes things merely by way of bona fide experiment, and not with the intention of selling and making the thing so made for the purpose of which a patent has been granted ..."

The requestor states that they want to conduct experiments to establish the difference between an antibody they have developed, and an antibody produced by the deposited microorganism. I have no basis to conclude that this stated experiment is not bona fide - and in this respect the fact that a party could (if so minded) use the sample for other purposes does not establish a lack of bona fides. Furthermore there is nothing in the stated purposes that is even remotely suggestive of the requestor making, or preparing to make, commercial gain through exploitation of the hybridoma the subject of the deposit. Indeed, I would have thought it highly desirable for a person who believes they have a similar organism to undertake comparative experiments, to inter alia avoid the possibility of infringing the patent.

Consequently, I am of the view that the proposed use of the deposit by the requestor falls within the ambit of 'experimental purposes', and there is no inconsistency with the undertaking.

Experimental Purposes - the Jurisdictional Question

At the hearing, I raised a jurisdictional issue in relation to experimental purposes - viz. having regard to the Patents Act 1990 applying to Australia (only), and the remedies available for a breach of the undertaking, whether 'in Australia' should be read onto 'experimental purposes'.

As I raised the matter for the first time at the hearing, I gave both parties an opportunity to later provide submissions on the point. Subsequently:

-the requestor submitted that the matters to be considered by the Commissioner are clearly set out in subreg. 3.25(4), and that as the matter was not raised by the patent applicant I ought not be considering the matter;

-the applicant submitted that the Act did restrict the experimental purposes to activities within Australia. They referred me to Appendix A2 of the 1993 revision of the book Biotechnology and the Law by Iver P. Cooper. The Appendix reproduces certain recommendations in the 8 April 1987 WIPO report on the Industrial Property Protection of Biotechnological Inventions - in particular a recommendation that (in effect) there be an undertaking not to export the deposited material, or if the deposit is not held in Australia, not to export the material to a country other than Australia.

They also referred to the purpose and objective of regulation 3.25, and the interests of the parties and the public interest.

Subsection 6(a) of the Act requires a deposit to be deposited with a prescribed depositary institution, which is defined in the dictionary to the Act as:

(a)an international depositary authority, whether in or outside Australia; or

(b)any other depositary institution in Australia that is prescribed for the purposes of this paragraph.

and 'international depositary authority' is further defined has the same meaning as in the Budapest Treaty.

I note that there is no requirement for a deposit to have been made in Australia; indeed, although there is one International Depositary Authority (IDA) in Australia, most IDA's are in other countries.

If the term 'experimental purposes' used in the regulation is read down so as to be restricted to 'in Australia', I perceive a number of difficulties in the operation of the Patents Act.

-Firstly, if it is not possible to import a foreign deposit into Australia (for whatever reason), an interpretation that experimental purposes is restricted to 'in Australia' would necessarily preclude an alleged infringer (for example) from gaining access to the deposited microorganism under regulation 3.25. As a result the alleged infringer would be unable to establish whether or not the deposited microorganism was novel, or to independently assess whether their microorganism was the same as the deposited microorganism.

-Secondly, a deposit is made to satisfy the requirements for a full description of the invention - as provided in section 41 of the Act; again, if experimental purposes is restricted to within Australia, and the microorganism cannot be brought into Australia (for whatever reason) it can hardly be said that the invention (for which a patent is granted, or applied for) has been fully disclosed.

These situations are contrary to the basic premises on which patents are granted; however they do not arise if 'in Australia' is not read down onto 'experimental purposes', for in that event the alleged infringer or other interested person could conduct the necessary experiments in the country in which the deposit was made. Consequently I consider the phrase 'experimental purposes' in regulation 3.25 must refer to experimental purposes anywhere in the world.

I gain further support for this view in considering the requirement of not making the sample available to another person. From the construction of the regulation, any jurisdictional restriction read onto experimental purposes must equally be read onto the requirement of not making the sample available to other persons. To restrict the not making available requirement to persons 'within Australia' would mean that there was no fetter on making the sample available to persons anywhere else in the world. I do not believe that it is the intention of the legislation to provide an access provision which restricts availability in Australia but has no fetter on the person making the sample available to the rest of the world. This clearly requires that the restriction of not making the sample available refers to persons anywhere in the world, and not just Australia.

Finally, I observe that treating the undertaking as applying to activities anywhere in the world is consistent with the recommendations in the WIPO report earlier referred to; an undertaking that excludes making the sample available to another person anywhere in the world excludes exporting the sample to a third party. If the undertaking is restricted to 'in Australia' it seems to me that exporting the sample to third parties would not be in breach of the undertaking - and having exported the sample it could be used in foreign countries without fetter. That is, (and recognising that the WIPO recommendation is not determinative of Australian law) reading 'in Australia' onto the undertaking would be inconsistent with the WIPO recommendations.

Consequently, I conclude that the undertaking required under regulation 3.25(4), in so far as it relates to experimental purposes, and not making the sample available to others, is an undertaking in respect of actions anywhere in the world.

I am therefore satisfied that the intended use of the sample falls within the meaning of 'experimental purposes' as used in regulation 3.25(4)(c).

Good Faith

Mr Jones argued that the request should be refused under reg. 3.25(d) - viz. the request was not made in good faith. The basis for this argument is that the parties had been in settlement negotiation for some time; during the negotiations the applicant advised the requestor that:

"We pointed out that the sequence of the binding region of the antibody in question was public record as it had been published in PCT application WO93/19785. Furthermore we advised you that if this sequence information was not satisfactory for your purposes, we would be willing to provide you with a sample of the antibody for comparison purposes. However our client is firm that it will do whatever is necessary to avoid release of the hybridoma."

The requestor rejected the proposal, stating:

"NMBI is planning to conduct the experiment to analyse (i) a DNA/amino acid sequence and (ii) an immunoreactivity of the antibody produced by the hybridoma cell line ATCC HB-10725 ... for a comparison with the antibody of NMBI ....

"Therefore, for obtaining the reliable data and conducting the precise comparison, it is necessary to obtain the live sample identified as HB-10725 not from New York University but from ATCC. Further please recall that New York University had deposited the Hybridoma cell line (HB-10725) in ATCC on the understanding that the depositor shall furnish the sample for the public use upon receiving the request therefor."

Mr Jones argued that NMBI should be able to satisfy their identified needs by comparing their antibody with the antibody that New York University offered to supply; that their failure to agree to this demonstrates that they actually want to do something else with the sample; and there is thus a lack of good faith on the part of NMBI.

I note that:

-the offer of New York University provides no independent means to establish that the antibody supplied is in fact produced by HB-10725;

-New York University, in arguing that access to the deposit is not required, quote a patent specification published in 1993 (two years after the present application) as a reference for a sequence of the binding region of the antibody in question - but reliance on this document is incongruous with the requirements that a specification be interpreted at its publication date, and be sufficient at it application date;

-the reasons stated by NMBI are consistent through the documentation, and are in my view prima facie plausible;

-the actions of New York University seem tantamount to an effort to dictate the type of experimentation being conducted by NMBI. However, the use for experimental purposes permitted under reg. 3.25 is not restricted to 'experimental purpose of a type agreed to by the applicant', or the like.

For me to not comply with the request on the basis of subregulation 3.25(4)(d), I must be reasonably satisfied that the undertaking given by the person making the request is NOT given in good faith - that is, any benefit of doubt must go to the requestor. The material before me, and the submissions of Mr Jones, do not provide me with any basis for being so reasonably satisfied.

Consequently, I do not find there is any basis under subregulation 3.25(4)(d) for me to not comply with the request.

Conclusion

I have found that:

-the undertaking in respect of experimental use, and of not making the sample available to others, is in respect of actions anywhere in the world;

-experimental purposes, as used in subreg. 3.25, should be interpreted analogously to those experimental uses of an invention that do not give rise to infringement of a patent;

-the request is deficient in that the undertaking fails to identify the microorganism the subject of the undertaking, and the manner of referring to a petty patent, or relevant proceedings, is inadequate;

-the undertaking is not deficient through referring to oppositions, petty patents, or relevant proceedings;

-the requestor's intended use of the sample falls within the meaning of experimental purposes; and

-there is no basis for me to conclude that the undertaking was not made in good faith.

Because the request is deficient, I refuse to make the certification referred to in Rule 11.3(a) of the Budapest Treaty.

If the requestor files a new undertaking consistent with my findings within 60 days of the date of this decision, I will reconsider the request in the context of that undertaking. Alternatively, the requestor is at liberty to make a new request accompanied by an appropriate undertaking.

Costs

The parties submitted that costs should follow the event. However, while I have found deficiencies in the undertaking, those deficiencies do not go to the substance of the patent applicant's objections to the request. Consequently I consider it appropriate to make no award of costs.

D. HERALD
Delegate of the Commissioner of Patents

Patent attorneys for the requestor  :  G.R. Cullen & Co., Brisbane

Patent attorneys for the applicant  :  Phillips Ormonde & Fitzpatrick, Melbourne