Novozymes A/S v DSM IP Assets B.V - [2018] APO 2

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Novozymes A/S v DSM IP Assets B.V. [2018] APO 2

Patent Application: 2010270301

Title:Fermentative production of ethanol from glucose, galactose and arabinose employing a recombinant yeast strain

Patent Applicant:                   DSM IP Assets B.V.
Opponent:  Novozymes A/S
Hearing Officer:  Dr S.D. Barker – Deputy Commissioner of Patents
Decision Date:  5 January 2018
Hearing Date:  29 November 2017, in Canberra

Catchwords: PATENTS – opposition to the grant of a patent – where an opposition is decided in stages, findings of fact in the original decision must be applied in the final determination – original decision found lack of inventive step – this ground has been overcome consistent with the original decision – application proceed to grant

Representation: Counsel for the applicant: Mr B Fitzpatrick
Patent attorney for the applicant: Mr D Longmuir of Phillips Ormonde Fitzpatrick
Counsel for the opponent: Ms K Crooks
Patent attorney for the opponent: Dr J Flattery-O'Brien of Shelston IP Pty Ltd

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010270301

Title:Fermentative production of ethanol from glucose, galactose and arabinose employing a recombinant yeast strain

Patent Applicant: DSM IP Assets B.V.
Date of Decision: 5 January 2018
DECISION
I direct that the application proceed to grant.
I allow the parties an opportunity to provide written submissions in relation to costs according to the following schedule:
DSM IP Assets B.V. is to provide submissions within three (3) weeks from the date of this decision;
Novozymes A/S is to provide submissions in response within five (5) weeks of the date of this decision;
DSM IP Assets B.V. is to provide a reply (if any) within six (6) weeks of the date of this decision.

REASONS FOR DECISION

Patent application number 2010270301 (the present application) was filed on 6 July 2010 under the provisions of the Patent Cooperation Treaty. The applicant is DSM IP Assets B.V. (DSM). An opposition to the grant of a patent was filed by Novozymes A/S (Novozymes). A decision issued on 17 January 2017 (the original decision). [1] The applicant was given an opportunity to amend, and the amendments have been allowed. The opponent asked to be heard in the final determination of the opposition, and a hearing was held on 29 November 2017 in Canberra.
[1] Novozymes A/S v DSM IP Assets B.V. [2017] APO 4.
The original decision
The original decision found that claims 1 – 11, 13, 14 and 16 lack inventive step in the light of a document referred to as YJ-9. It is to be noted that there was no finding that claim 12 lacked inventive step. Rather, there was an explicit finding that it had not been shown that claim 12 lacked inventive step:
"Claim 12 is appended to claim 11. The claim specifies that the cell is an inhibitor resistant cell. YJ-9 makes no reference to the cell being inhibitor resistant. There is no evidence that this would have been a matter of routine. It follows that it has not been shown that claim 12 lacks inventive step."
Regulation 5.23
Shortly before the hearing, Novozymes filed new evidence and asked that it be considered under the provisions of regulation 5.23. I will deal with this matter before considering the final determination. In Reflex Instruments Asia Pacific Pty Ltd v Minnovare Limited[2] a delegate stated that the considerations that are relevant to the operation of regulation 5.23 are:
[2] [2017] APO 8 at [52].
1. The circumstances leading up to the evidence not being filed earlier;
1. What does the evidence show;
1. Is the information likely to be crucial to the delegate’s decision;
1. The public interest in having the information considered; and
1. The balance of convenience of the parties if the information is considered.
At the hearing Novzymes confirmed that the purpose of this new evidence is to show that it would have been a matter of routine to use an inhibitor resistant cell. In light of my view, explained later in this decision, that it is not permitted to revisit the finding in the original decision that it would not have been a matter of routine to use an inhibitor resistant cell, the evidence provided by Novozymes cannot be considered as part of this decision. It follows that the information is not critical, and in fact is not relevant to my decision. There is no justification to invoke regulation 5.23.
The specification
The nature of the invention is described fully in the original decision. For the purposes of this decision it is sufficient to note simply that the specification relates to the fermentation of sugar compositions of glucose, galactose and arabinose using a yeast belonging to the genera Saccharomyces, Kluyveromyces, Candida, Pichia, Schizosaccharomyces, Hansenula, Kloeckera, Schwanniomyces or Yarrowia, where the yeast contains the genes araA, araB and araD. The genes araA, araB and araD encode the enzymes necessary for arabinose catabolism.
The amendment
Claim 1 has been amended by the inclusion of a feature from claim 12. Claim 1 as amended appears here, with the new text shown underlined:
Process for the production of one or more fermentation product from a sugar composition, comprising the following steps:
a) fermentation of the sugar composition in the presence of a yeast belonging to the genera Saccharomyces, Kluyveromyces, Candida, Pichia, Schizosaccharomyces, Hansenula, Kloeckera, Schwanniomyces or Yarrowia, and
b) recovery of the fermentation product,
wherein the yeast comprises the genes araA, araB and araD and the sugar composition comprises glucose, galactose and arabinose, and wherein the yeast is inhibitor resistant.
A new claim 2 has also been inserted, which is the same as the amended claim 1 except that it defines the fermentation as anaerobic:
Process for the production of one or more fermentation product from a sugar composition, comprising the following steps:
a) anaerobic fermentation of the sugar composition in the presence of a yeast belonging to the genera Saccharomvces, Kluvveromvces, Candida, Pichia, Schizosaccharomvces, Hansenula, Kloeckera, Schwanniomvces or Yarrowia, and
b) recovery of the fermentation product,
wherein the yeast comprises the genes araA, araB and araD and the sugar composition comprises glucose, galactose and arabinose, and wherein the yeast is inhibitor resistant.
For reference, these are claims 11 and 12 at the time of the original decision:
11. Process according to any one of claims 1-10 wherein the genes have been introduced in the mixed sugar cell by introduction into a host cell:
a) a cluster consisting of PPP-genes TAL1, TKL1, RPE1 and RKI1, under control of strong promoters,
b) a cluster consisting of a xylA-gene and the XKS1-gene both under control of constitutive promoters,
c) a cluster consisting of the genes araA, araB and araD and/or a cluster of xylA-gene and the XKS1-gene;
and
d) deletion of an aldose reductase gene;
and adaptive evolution of the mixed sugar construct to produce the mixed sugar cell.
12. Process according to claim 11, wherein the host cell is an inhibitor resistant cell.
Claim 11 was found to lack inventive step, whereas claim 12 did not lack inventive step.
The law
It is well established that an opposition can be decided in stages. Normally a first decision decides the opposition in relation to the specification as it stands at that time, but allows the applicant an opportunity to amend the specification rather than refuse the application outright. This is made clear in R v Smith; Ex parte Mole Engineering Pty Ltd (ex parte Mole).[3]
"It is a natural consequence of the procedures under Pt V and Pt VIII that an officer who upholds objections to the grant of an application under Pt V will refrain from refusing the application where it appears that the objections may be cured by amendment. Then it is a practical and sensible course to allow the applicant time within which to lodge a request to amend the specification, as [the original delegate] did in this instance. But his decision was nonetheless a final decision on the original unamended application – there was nothing provisional or tentative about the finding on the grounds of objection. It dealt with all the issues arising on the notice of opposition so far as they were capable of final determination."
[3] R v Smith; Ex parte Mole Engineering Pty Ltd [1981] HCA 25; (1981) 147 CLR 340 (ex parte Mole) at 348-9.
After the applicant has amended the specification a second decision is made, which is generally referred to as a final determination. The range of matters that can be considered at the final determination is limited to whether the amendments to the specification overcome the deficiencies identified in the original decision, and whether the amendments introduce any new deficiencies. Novozymes submitted that ex parte Mole is authority for a more limited proposition – the validity of the unamended claims cannot be reconsidered once an opposition decision has been made. In the present case, the original decision did not consider any claim having the same scope as claim 1 as amended. It follows, according to Novozymes submission, that the inventiveness of the subject matter of claim 1 as amended has not been considered previously, so it can and must be considered now. However, Novozymes go further and suggest that in deciding this question I am not bound to accept factual issues that were decided in the original decision:
"the ex parte Mole principle only prevents the Delegate from re-considering the case (i.e. the validity or otherwise of the claims), as opposed to factual issues leading to a decision on such matters."[4]
[4] Opponent's written summary of submissions at [40](e).
At the hearing Novozymes nuanced this point, submitting that a final determination can revisit matters in certain circumstances: where the findings in relation to grounds in the original decision is not challenged, where the issue arises as a result of amendment, where the challenge is to the underlying facts and not the conclusion in relation to a ground, and where the form of the amended claim was not considered in the earlier decision. This position was supported by making heavy reliance on the specific facts of the ex parte Mole, Iluka[5] and Merck[6] decisions. While each of these decisions was made in the context of the facts of the particular case, the principles that were laid down as the basis of each decision are of application beyond their individual circumstances. I will briefly explain my view in relation to this point.
[5] The Iluka case is a reference to the decisions of the Federal Court in Iluka Midwest Ltd v Technological Resources Pty Limited [2002] FCA 49; [2002] AIPC 91-782 (Iluka 1) and Iluka Midwest Ltd v Technological Resources Pty Limited [2002] FCA1233; 58 IPR 467 (Iluka 2).
[6] Merck Sharpe & Dohme (Australia) Pty Ltd v Genentech Inc [2016] FCA 324; 118 IPR 498 (Merck).
ex parte Mole
The ex parte Mole case arose in the context of an intention to hold a second hearing reconsidering all matters already decided in the original decision. The High Court found that course of action was not appropriate, and explained the basis of that decision in general terms going to the finality of all matters decided in the original decision. Mason J stated:
"his decision was nonetheless a final decision on the original unamended application – there was nothing provisional or tentative about the finding on the grounds of objection. It dealt with all the issues arising on the notice of opposition so far as they were capable of final determination."[7]
[7] ex parte Mole at 349.
Wilson J said:
"the Commissioner has no authority, in the exercise of his powers under s. 10(2), to order a re-hearing of an opposition to the grant of a patent following an interim decision … specific words would be required to found a power to order a re-hearing … The exercise of such a power would also be inexpedient in denying finality and causing added complexity in the administration of the Act … the inherent finality of the decision ensures that, subject to appeal, it provides a firm base on which another officer can proceed in the exercise of the powers and functions of the Commissioner."[8]
[8] ex parte Mole at 358.
It is clear that the High Court based its decision on a lack of jurisdiction to make a second decision, and also on a general principle of finality.
Iluka
In the Iluka case the court considered a new claim 23 that was added by amendment. Initially the respondent claimed that the appellant was not entitled to oppose that claim in a final determination, but withdrew that claim and instead argued that the opposition to that claim was without substance.[9] The Court was not called upon to decide whether it was open to the appellant to challenge claim 23 on the basis that it was a new claim arising as a result of amendment.
[9] Iluka 2 at [26].
The Iluka case also refers to "grounds" that were decided the original decision, which might be seen as suggesting that the prohibition in ex parte Mole only goes to those matters and not the facts that underpinned those grounds. In the analysis relating to claim 23, the Court referred to the facts as determined by the delegate in the original decision,[10] and did not revisit the correctness of those determinations.
[10] Iluka 2 at [27] – [34].
The language used in Iluka 1 is one of a "statutory objective of finality and expedition",[11] not a provisional determination in relation to the facts:
"to the extent that those issues have been determined by an interim decision in a manner that it is unfavourable to the interests of either party, it is encumbent upon that party, if it so desires, to appeal the decision. If it fails to do so then it is not open to that party to appeal, whether directly or indirectly, against the interim decision of the Commissioner out of time without leave of the Court."[12]
[11] Iluka 1 at [50].
[12] Iluka 1 at [45].
The thrust of the Iluka case is not consistent with permitting a party to revisit the facts underpinning the original decision provided the ultimate decision is left alone.
Merck
In the Merck case the original decision had found that claim 1 lacked novelty. After the amendment of claim 1, the opponent could not argue that there should have been a finding of lack of novelty on a broader basis and also a lack of inventive step. This was because:
"Merck's challenge to the second decision asserting lack of novelty and inventive step was in reality an attack on the first decision … The attack in the notice of appeal had to be made against the first decision. It could not be made against the second decision by reason of the principle in Mole Engineering".[13]
[13] Merck at [70].
Conclusion
The matters to be decided in this final determination are whether the amendments to the specification overcome the deficiencies identified in the original decision, and whether the amendments introduce any new deficiencies. In deciding these matters I cannot revisit any findings that were part of the original decision, but issues that were not considered in the original decision can be decided (for the first time) in a final determination. However, the decision in the final determination should be consistent with any relevant findings in the original decision.
Does the amendment overcome the deficiencies identified in the original decision?
Novozymes contend that the amendments to the specification do not overcome the deficiencies identified in the original decision. Specifically, they contend that claims 1 – 13 and 24 as amended lack inventive step. In the original decision I found that the opposition succeeded on the ground of lack of inventive step. This ground was not successful in relation to claim 12 because I found that the evidence did not establish that the use of a cell that is inhibitor resistant would have been a matter of routine. Claim 1 has been amended to insert the feature that the yeast is inhibitor resistant. In view of my finding that it would not have been a matter of routine to use an inhibitor resistant cell, it follows that it has not been established that claim 1 lacks inventive step.
Claim 2 is similar to claim 1, and also includes the feature that the cell is inhibitor resistant. For the same reasons, it has not been established that claim 2 lacks inventive step.
Claims 3 – 13 are appended to claims 1 or 2. It follows that the same conclusion must apply to these claims, and that it has not been established that they lack inventive step.
Claim 24 reads:
Fermentation product produced by the process of any one of claims 1 – 23.
I consider that this claim is directed to the product when produced by the process of any of claims 1 – 23. It follows that the same conclusion applies to this claim.
New deficiencies
Novozymes argument is that claim 1 has been amended to include the feature that the yeast is inhibitor resistant, so issues that relate to this feature of the claim are a new deficiency (at least so far as they arise in relation to claim 1). Consequently it is legitimate to ask whether that feature solves the lack of inventive step. During the hearing the argument was framed in slightly different terms, but the issue remains the same.
The precise scope of claim 1 is clearly the result of the amendment made following the original decision. However, the subject matter of claim 1 as amended was within the scope of claim 1 as it stood before the amendment, and any lack of inventive step (assuming there is a lack of inventive step) does not arise as a result of the amendment. The real question is whether the original finding of lack of inventive step has been overcome, which has already been considered.
Conclusion
I conclude that the amendment has overcome the deficiencies consistent with the original decision. I also conclude that the amendment has not introduced any new deficiencies.
Costs
DSM asked that they be allowed to make submissions on costs once the decision had issued, and I agreed to that request. I understand that DSM may be proposing to ask for a variation of the normal award of costs in the event that they are successful. Consequently it is appropriate to invite DSM to make their submissions on costs first, and to allow Novozymes an opportunity to respond.
Dr S.D. Barker
Deputy Commissioner of Patents