Novozymes A/S v North Carolina State University and Bioresource International, Inc
[2009] APO 18
•9 September 2009
ABSTRACTS OF DECISIONS
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Application : Patent Application No. 2003298543 in the name of North Carolina State University and Bioresource International, Inc.
Title: Methods and compositions for improving growth of meat-type poultry
Action :Opposition by Novozymes A/S under section 59 of the Patents Act 1990 and a request by the opponent that the Commissioner re-examine the application under 97(1).
Decision: Issued 9 September 2009.
Abstract
The opponent after serving its statement of grounds and particulars requested that the Commissioner consider exercising her discretion to re-examine the patent application. This was objected to by the applicant.
Generally the Commissioner only re-examines an application where she becomes aware of information on which she is satisfied that the patent granted would be clearly invalid (Commissioner of Patents v Emperor Sports Pty Ltd [2005] FCA 996). Normally this occurs in circumstances where, save the re-examination action by the Commissioner, grant of a potentially invalid patent will follow as a matter of course. In this light, re-examination in the context of an existing opposition is clearly a special case and the considerations are not unlike those that apply where the Court has been requested to exercise its discretion to direct re-examination under s97(3) as in VIP plastic Packaging Pty Ltd v B.M.W Plastics Pty Ltd [2009] FCA 593.
On this basis it is apparent that in the circumstances the public interest predominantly lies in the expeditious determination of the opposition on its merits. Re-examination may assist in resolving or reducing the cost of opposition and there is some prospect of this, for example, where the parties agree that re-examination occur. However re-examination in other situations may not promote this objective but rather may delay the resolution of the opposition and add to its cost.
Found, taking all factors into account, that there remains a significant likelihood that re-examination in this case would prolong the opposition without achieving any better result than if the opposition is prosecuted promptly and considered on its merits.
Decided that in the circumstances that it is not appropriate to direct re-examination of the application.
PATENTS ACT 1990
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Re:Patent Application No. 2003298543 in the name of North Carolina State University and Bioresource International, Inc., opposition by Novozymes A/S under section 59 of the Patents Act 1990 and a request by the opponent that the Commissioner re-examine the application under 97(1).
BACKGROUND
The grant of a patent on application no. 2003298543 has been opposed. The opponent Novozymes served its statement of grounds and particulars on 1 May 2009 and obtained an extension of time under section 223 for this purpose. Evidence-in-support has not yet been served. However, on 24 June 2009 the opponent‘s attorney wrote to the Commissioner requesting that the Commissioner consider exercising her discretion to re-examine the application and to postpone the opposition until the outcome of the re-examination is known.
The attorney’s letter includes submissions and a comparative table in relation to five attachments which are:
D1Odetallah et al, Abstract 45, Concurrent meeting of the Southern Poultry Science Society, 23rd Annual Meeting, the southern conference on avian diseases, 43rd annual meeting, January 14&15, 2002.
D2Product sheet: Bio-Feed Pro® (Novo Nordisk)
D3Brenes et al, (1993) Effects of enzyme supplementation on the nutritional value of raw, autoclaved and dehulled lupins (lupinus albus) in chicken diets, Poultry Science 72:2281-2293
D4Amino acid alignment of Bacillus Licheniformis PWD-1 keratinase with Alcanase (the enzyme included in Bio Feed Pro®)
D5Results of peptide sequencing of Bacillus Licheniformis PWD-1 keratinase
D6A statutory declaration said to affirm the publication date of D2.
Of these at least documents D1 – D3 are referred to in the statement of grounds and particulars and the substance of the submissions is that the invention claimed in the present application is not novel and lacks an inventive step over the disclosures of D1 and D2 and lack an inventive step over the disclosure of D3 or D3 in combination with D1 and D2. In this light the attorney further submitted that it is not in the public interest that the application remain in force and that the opponent should not be required to fund an opposition when the claimed invention is so plainly anticipated and lacks inventive step in light of the prior art.
On 2 July a delegate of the Commissioner wrote to the parties indicating that it appeared that the material was sufficiently relevant to warrant re-examination and that it appeared that this would focus the issues to be decided in the opposition. The delegate however also indicated that following office practice this will only be considered where all parties agree. The applicant indicated that it did not agree and in a further letter on 29 July 2009 the delegate informed the parties that looking at the case it was “uncertain (or at best arguable)” that the cited documents disclose all the features claimed and therefore it was not certain that the re-examination will dispose of the opposition. Therefore he indicated that in the absence of agreement the Commissioner will not re-examine the application.
On 4 August 2009 the opponent requested to be heard on the matter. By direction of the delegate the hearing was to be on the basis of written submissions and these were provided by the opponent on 18 August 2009 and by the applicant on 31 August 2009. I will refer to these submissions in my decision as appropriate.
THE RELEVANT LAW
Re-examination of a standard patent application is provided for under s97(1) of the Act which is in the following terms:
97Re‑examination of complete specifications
(1)Subject to this section and the regulations, if:
(a)a request and complete specification relating to an application for a patent has been accepted; and
(b)the patent has not been granted;
the Commissioner may re‑examine the complete specification.
It is clear from this, and it has not been contested, that re-examination in these circumstances is discretionary. This can be compared with the situations under s97(2) and (3) where the Commissioner must re-examine a granted patent where asked to do so by the patentee, or any other person, or where directed by the Court.
By virtue of s 98 re-examination is limited to the questions of whether a claimed invention is not novel or does not involve an inventive step. The prior art for this purpose is taken not to include information made publicly available only through doing an act.
DECISION
The sole issue to be determined in this matter is whether the Commissioner should in these circumstances exercise her discretion under section 97 of the Act to re-examine the application. In this regard it is well established that a broad discretion cannot be reduced to imperative compliance with particular requirements. It is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem Pty Ltd v Commissioner of Patents (1994) AIPC 91-057; 28 IPR 243 and Goninan & Co Ltd v Commissioner of Patents (1997) AIPC 91-330; 38 IPR 213)
A rationale for the introduction of re-examination into the Australian patent system is provided by the report of the Industrial Property Advisory Committee[1] that preceded the introduction of the 1990 Act. It however was proposed as a means of challenging the grant of a patent at the same time as a recommendation for abolition of the pre-grant opposition system. That recommendation was rejected by the Government and originally an application could only be re-examined pre-grant where an opposition had been filed. The current provision was introduced by the Patents Amendment Act 2001. The purpose apparent from the Explanatory Memorandum was that where the Commissioner became aware of information after acceptance of the application that may affect the validity of the patent she would not then be required to grant a patent that she believes is invalid.
[1] Report to the Minister for Science and Technology, 29 August 1984.
Generally the Commissioner only re-examines an application where she becomes aware of information on which she is satisfied that the patent granted would be clearly invalid. This reflects the view articulated by Justice Lindgren in Commissioner of Patents v Emperor Sports Pty Ltd [2005] FCA 996 at [107] that the approach applicable to the Commissioner in pre-grant examination, opposition and post-grant re-examination is the same. Normally pre-grant re-examination occurs in circumstances where, save the re-examination action by the Commissioner, grant of a potentially invalid patent will follow as a matter of course. This can arise in number of circumstances such that new information becomes available to the Commissioner after acceptance of the application, including where evidence has been provided in an opposition but the opposition withdrawn.
In this light re-examination in the context of an existing opposition is clearly a special case and presumably was intended as a means primarily of expediting and facilitating the resolution of the opposition. While there has been no formal consideration of the discretionary factors that might apply in these circumstances it appears that in the case of application number 671545 a similar request was refused on the basis that re-examination was unlikely to curtail the opposition proceedings. A factor in this appeared to be that there were grounds of opposition outside of lack of novelty and inventive step that were open for determination. However it also appears that there was a view that re-examination in the circumstances was weighted heavily against the interests of the applicant and would not dispose of the issues on novelty and inventive step in relation to which relevant evidence could be served in the opposition.
The latter point raises an issue with what the outcome of an adverse re-examination report might be in the context of opposition. It may, for example, lead the applicant to withdraw the application or amend the patent specification which in turn may save the opponent the cost of the opposition. A re-examination report is however not a decision to refuse. It is similar to a normal examination report which is rebuttable and not binding on the Commissioner in the determination of an opposition. Therefore it may equally be that the opponent is not satisfied with the outcome and would wish to proceed with the opposition in any event. As an alternative, and perhaps more likely, the applicant might file a response disputing the report as provided for under s99. In that case it is unlikely that the Commissioner would instigate separate refusal proceedings under s100A since, while they continued, the opposition proceedings would provide the most effective means by which the issues could be determined, particularly in light of appropriate expert evidence. As such, there is significant potential for re-examination to merely prolong the opposition proceedings.
In this regard the considerations seem to be not unlike those that apply where the Court has been requested to exercise its discretion to direct re-examination under s97(3). These have been given judicial consideration including most recently in VIP Plastic Packaging Pty Ltd v B.M.W Plastics Pty Ltd [2009] FCA 593 where Justice Kenny found at [16]:
“I doubt that the provision of a report by the Commissioner after re-examination would reduce the cost of this proceeding and expedite its determination. First, the Commissioner’s report after re-examination is not binding on the Court. In the absence of an undertaking of the kind sought by B.M.W. Plastics from VIP Plastic, the provision of a report under s 100 will not necessarily relieve the Court of the task of deciding the issues of novelty and lack of inventive step by reference to the admissible evidence. If the Commissioner’s report were unfavourable to VIP Plastic, it would desire to put on evidence and dispute the report. There may be additional issues for the Court to determine if it receives such a report. Further, both parties said that, regardless of the lack of novelty and inventive step grounds, there will be a need for evidence, including expert evidence, to be adduced before the Court on various other issues. In the circumstances, I am not persuaded that re-examination by the Commissioner would be most expeditious or reduce costs.”
Where opposition proceedings are underway the public interest in invalid patents not appearing on the Register is clearly met by the opposition process itself. If the opposition were to be withdrawn this would change the nature of the discretionary considerations for instigating re-examination but as it is the public interest predominantly lies in the expeditious determination of the opposition on its merits. If the parties agree that re-examination should occur it seems there is at least some prospect that these interests may be met, for example, through agreement to narrow the issues in contention. Otherwise there is no certainty that the opposition will be more expeditious or less costly. For the applicant there could be significant additional delay in the grant of the patent and increased costs. Of course it is in the opponent’s interest for re-examination to occur since it has little to lose and may benefit from being in a position to withdraw if the re-examination is strongly in its favour. However it cannot have its cake and eat it too. The possibility that it might decide to withdraw its opposition on the basis of an adverse re-examination report will, all other things being equal, be generally insufficient to outweigh the very likely prospect of significant delay to the opposition proceedings. In this the relevance of the prior art on which re-examination may be sought is not the most significant consideration. It will have been raised in the opposition and, if clearly relevant to validity, may in any event have the effect of narrowing the proceedings, for example, by prompting an amendment. However if the applicant chooses not to follow this path, re-examination will not of itself achieve that result. The applicant may well and is perhaps likely to challenge any adverse finding of the Commissioner and the opponent to protect it interests will then need to see the opposition out.
This is not to say that, aside from an agreement for re-examination to occur, there are not other circumstances where re-examination may be appropriate. These could include the situation where an authorative determination has previously been made on the same factual questions, where one party independently undertakes to abide by the finding of the Commissioner, or where prima facie there appears to be clearly no patentable subject matter in the application. In these cases the prospect of the re-examination resolving matters in dispute would be significantly greater. However none of these apply in the present case and particularly I understand there to be issues on which the evidence of persons skilled in the art may be important in determining the opposition including on what is inherently disclosed by the prior art in question. The applicant seems to be strongly of this view. Consequently it appears, taking all factors into account, that there remains a significant likelihood that re-examination would prolong the opposition without achieving any better result than if the opposition is prosecuted promptly and considered on its merits.
Further to this point the opponent submits that the Commissioner is obliged to correct an error that occurred in examination, that is, in not raising objections on the basis of the prior art mentioned above. I have not considered whether or not any error occurred, and to do so would amount to undertaking the re-examination sought, however prima facie the suggestion that the examiner had access to the prior art but did not find grounds for objection tends to reinforce the view that this is not a case where the application on the face of it clearly contains no patentable subject matter. I also reject the suggestion that the Commissioner in these circumstances has an obligation as such to conduct re-examination to correct an error and can find no support for this contention in the legislation. If the Commissioner has an obligation it is to prevent a clearly invalid application proceeding to grant. However, as I have indicated, while the opposition is proceeding the primary consideration is that it is determined expeditiously on its merits. If re-examination occurs it should be to promote this purpose. Of course the opponent retains the option of withdrawing its opposition. If so the discretion to re-examine will be reconsidered in the light of the prior art raised and the submissions already made. If not then the balance of interests lies in the opposition proceeding without re-examination.
Having reached this point it is unnecessary to address in detail the submissions made by the applicant on the validity and nature of the direction given on 29 July 2009. However it is worth pointing out that the discretion to re-examine under the legislation is one that is not exhausted by being decided on one set of circumstances. Where new circumstances arise the discretion can be exercised again. Nevertheless here I believe that the delegate was considering the same circumstances but that, if indeed he made a final determination of the matter (it is unclear), his decision was invalid. In this regard there unfortunately appears to have been some confusion in the letters of 2 and 29 July about the relevant discretionary considerations and in focusing almost exclusively on agreement between the parties the delegate appears to have ignored other relevant matters. More significantly I believe the opponent was clearly a person against whom the discretionary power was being exercised adversely and therefore had the right to be heard provided by regulation 22.22 if not as a matter of natural justice. In this regard the applicant’s reliance on Re Comptroller-General of Customs and Garrick William Hand v Kawasaki Motors Pty Limited [1991] FCA 518 is misconstrued and ignores the statutory and factual context that applies in this case.
CONCLUSION
I find in the circumstances that it is not appropriate to direct re-examination of the application. The period for filing evidence in support of the opposition expires on 1 November 2009.
COSTS
I award cost in favour of the patent applicant. Since hearing was by way of written submissions, this will include only the cost of preparing of the case for hearing, Item 11, Part 1 of Schedule 8 (John Edward Vines v John McDonald [2005] APO 25).
While the applicant submitted that costs should be awarded on an indemnity basis this appears to have been on the incorrect understanding that no award was possible under the schedule. In any event I can see no basis for going beyond that. Given the simple and interlocutory nature of the matter I have heard the parties on the papers for the very reason of reducing the cost and inconvenience to both parties. There are otherwise in my view no special or unusual circumstances that warrant a variation in the award of costs.
P M Spann
Deputy Commissioner of Patents
9 September 2009
Patent attorneys for the applicant: Pizzeys, Canberra
Patent attorneys for the opponent: Shelston IP, Sydney
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