Nufarm Australia Limited v Advanta Seeds Pty Ltd
[2023] APO 51
•5 October 2023
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Nufarm Australia Limited v Advanta Seeds Pty Ltd [2023] APO 51
Patent:2009304572
Title:Hybrid plant cell
Patentee:Advanta Seeds Pty Ltd
Opponent:Nufarm Australia Limited
Delegate:Neil Miller
Decision Date: 5 October 2023
Hearing Date: 8 August 2023, by Videoconference
Catchwords: PATENTS - section 223(2) – extension of time to pay renewal fees – nature of the error – full and frank disclosure – discretionary considerations – whether there was an error by IP Australia – extension of time allowed – costs awarded
Representation: Counsel for the Patentee: Ben Gardiner KC
Solicitor for the Patentee: Baker McKenzie
Counsel for the opponent: Ben Fitzpatrick
Patent attorney for the opponent: Phillips Ormonde Fitzpatrick
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent:2009304572
Title:Hybrid plant cell
Patentee:Advanta Seeds Pty Ltd
Date of Decision: 5 October 2023
DECISION
Extension of time allowed under section 223(2)(a).
I award costs according to Schedule 8 against Nufarm Australia Limited.
REASONS FOR DECISION
Background
Patent application 2009304572 was filed on 06 October 2009 by Pacific Seeds Pty Ltd, now Advanta Seeds Pty Ltd (‘Advanta’). The application was granted on 7 January 2016. On 20 April 2018 IP Australia advised the patent attorney firm, Spruson & Ferguson, that Patent 2009304572 had ceased as the renewal fees were not paid by the due date of 6 October 2017. An application for an extension of time under s223 to pay the renewal fees was lodged on 8 April 2019, the extension was advertised for opposition purposes on in the Australian Official Journal of Patents dated 4 July 2019.
A notice of opposition was then filed by Nufarm Australia Limited (‘Nufarm’) on 4 September 2019. Written submissions for the opposition were completed on 28 August 2020. A decision of the Commissioner (‘the initial decision’) refusing the extension of time issued on 24 November 2020. A request for review of the decision was filed by Advanta on 23 December 2020 with the Administrative Appeals Tribunal (‘the AAT’).
The AAT rendered its decision on 6 May 2022, the AAT set aside the initial decision of the Commissioner. On 26 May 2022 the AAT issued orders extending the time for payment of the fee in respect of the Patent to 9 April 2019 by which time it is understood that the fee had been paid, or by 26 June 2022 if payment of the fee had not been finalised or any further action is required in respect of payment. Advanta was alerted by Nufarm’s attorney by way of an email on 19 May 2022 that there was an issue with the ninth annuity fee and notably the AAT’s orders did not cover the payment of the ninth annuity.
On 1 June 2022 Advanta filed a request for an extension of time to pay renewal fees to attend to the payment of the ninth annuity, which was due by 6 October 2018. On 9 September 2022 a Delegate of the Commissioner wrote to Advanta regarding the 1 June request. The Delegate clarified that the decision of the AAT provided an extension of time to pay the eighth anniversary and that no extension had been granted with respect to the ninth anniversary. The Delegate noted that the factual circumstances surrounding the requested extension suggested that Advanta was seeking an extension of time to pay the ninth anniversary fees within the grace period (i.e. by 8 April 2019) which would require an extension of some 38 months and not 44 months as stated in the request form. Consequently, as there were inconsistencies in the extension form, the Delegate sought clarification as to Advanta’s position regarding the required extension of time.
Advanta subsequently confirmed that the extension of time sought is from the last day of the grace period in relation to payment of the 9th anniversary renewal fee, being 8 April 2019. Moreover, given the uncertainty as to the length of extension required Advanta nevertheless paid sufficient fees to cover an extension from the last day required to pay the fee prior to the grace period commencing. Following Advanta’s response, the extension was advertised for opposition purposes. A notice of opposition was filed by Nufarm on 28 November 2022.
Prior to the lodgement of the notice of opposition Nufarm appealed the decision of the AAT to the Federal Court. On 20 February 2023 the decision in Nufarm Australia Limited v Advanta Seeds Pty Ltd [2023] FCA 109 (“the FCA decision”) issued affirming the ruling of AAT to set aside the initial decision of the Commissioner and grant an extension of time for payment of the 8th anniversary renewal fee.
The Law
This matter is governed by Section 223 of the Patents Act 1990 (“the Act”). More specifically Section 223(2) provides:
“(2) Where, because of:
(a) an error or omission by the person concerned or by his or her agent or attorney; or
(b) circumstances beyond the control of the person concerned;
a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.”
A "relevant act" for the purposes of section 223 is defined in section 223(11) and means:
“an action (other than a prescribed action) in relation to a patent or patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications.”
Section 223 has been considered in detail in many decisions. The Delegate in Knauf Plasterboard Pty Ltd v CSR Building Products Limited [2018] APO 64 (“Knauf”) gave a convenient summary of the principles at [6] as follows:
(i)The statutory provision to extend time is beneficial in nature and should be applied beneficially. (Re Sanyo Electric Co Ltd and Commissioner of Patents [1996] AATA 832; (1996) 36 IPR 470 (“Sanyo”) at 479 [16]);
(ii)While the Applicant has the burden of placing before the tribunal the circumstances it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it be so described. As per Sanyo at 479 [16].
(iii)For section 223(2)(a) to be enlivened, it must be shown that an error or omission had contributed to cause the failure to perform the relevant act, i.e. there must be a causal connection between the error or omission and the relevant act that is required to be done within the stipulated time. (Kimberly-Clark Ltd v Commissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 (“Kimberly Clark”) at 579 [9], 582 [15]; Re Lazer Safe Pty Ltd and Commissioner of Patents [2001] AATA 967 (“Lazer Safe”) at [11])
(iv)The applicants for an extension of time must demonstrate that they had an intention to do the relevant act within the time prescribed, and that an error or omission on their, or their agent's, behalf reasonably could be said to have frustrated that intention, as per Kimberly Clark at 583-584 [17] and at 579 [9]; Lazer Safe at [11]. However, there will be exceptional circumstances where the relevant error precluded the formation of a specific intention. In such cases the required causal connection is satisfied if the error contributed to the failure to form the intention to perform the relevant act (Re Apotex Pty Limited and Commissioner of Patents [2008] AATA 226 at [21]).
(v)"In order to make out the 'proper case ... justifying an extension'... an applicant would ... have to go beyond a disclosure of the processes by which an agent's errors came to be committed and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the Applicant... relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct." Kimberly Clark at 583-584 [17] and at 579 [9].
10. The Delegate in Knauf at [7] also noted that the term 'error or omission' in section 223 has a broad scope and encompasses:
· accidental slips, inadvertences and errors caused by faulty reflection per Kimberly Clark at 579 [9];
· an unexpected failure to exercise due diligence and/or a flaw in mental function in carrying out an intention (Total Peripherals Pty Ltd v Commissioner of Patents [1998] AATA 784 at [14]); and
· a breakdown in procedure in effecting an intention (Oz Technology, Inc v Boral Energy Ltd [1999] APO 8 (“Oz Technology”).
11. The Delegate in Knauf at [8] also remarked that the above criteria are in contrast to:
· a failure to perform the relevant act cannot itself be the 'error or omission' by which the failure occurred per Kimberly Clark at 580 [11]; and
· a deliberate policy or decision that leads to the failure to perform the relevant act does not constitute an 'error or omission' Re Weir Pumps Ltd and Commissioner of Patents and Stork Pompen BV [1988] AATA 331; (1988) 13 IPR 163 (“Weir Pumps”) at 166-167 [9].
The application for an extension of time
12. The present proceedings concern the request for the extension of time lodged 1 June 2022. The length of the extension required being 38 months to attend to payment of the ninth annuity fees with the grace period. The grounds relied upon by Advanta are an error or omission by the person concerned, or their agent or attorney pursuant to s223(2)(a) and an error or omission on the part of IP Australia pursuant to s223(1).
13. During oral submissions Nufarm noted that their written submissions were primarily focused on the question of s223(2)(a) and did not directly address the proposition advanced by Advanta concerning the exercise of the Commissioner’s powers to grant and extension under s223(1). This was owing to fact that there is no formal mechanism to oppose the grant of an extension under the provision of s223(1). Only applications made under s223(2) or (2A) may be opposed pursuant to the provisions of s223(6). I note however that that a decision made by Commissioner under s223(1) is reviewable either to the Administrative Appeals Tribunal or under the Administrative Decisions (Judicial Review) Act 1977.
14. In the present case Nufarm was of the understanding that they would have been advised of any intention to grant an extension under the provisions of s223(1). It was also Nufarm’s understanding that it was the practice of the Commissioner to allow Nufarm the opportunity to comment on the grant of an extension on this basis. Counsel for Nufarm then pointed to the decision of the Delegate in R Thomas & A Garnham v. Jiejing pty ltd [1994] (“R Thomas & another”) 29 IPR 441 at 445:
“Consequently, even though s.223 does not provide for advertisement for opposition purposes of a request under s.223(1), the practice of the Commissioner is that he will not proceed to grant such extensions if he has good reason to believe that there is a person whose interests may be adversely affected by granting the extension - until he has ascertained whether that person objects to the Commissioner granting the extension sought. (This situation arises most commonly during opposition proceedings, where there is clearly an interested third party.)”
15. Advanta at [27] of their written submissions noted that it had not been formally advised of any decision on its application insofar as it relies on s223(1). During oral submissions Advanta advanced that the evidence supports the conclusion that Advanta’s failure to pay the correct amount of outstanding renewal fees was caused, at least in part, by incorrect information provided by an officer of IP Australia. Advanta also noted with reference to paragraph [32] of their written submissions that there is no statutory provision to oppose the granting of an extension under s223(1). Consequently, Nufarm’s reliance on R Thomas & another is, in Advanta’s submission, misplaced. Thus, in the present circumstances the Delegate is entitled to proceed on the basis of the uncontradicted evidence of Ms Davidson and her various interactions with IP Australia, to conclude that the requested extension of time should be granted pursuant to the provisions of s223(1).
16. Following this opening salvo in relation to the request made under s223(1), I advised the parties that I would firstly hear submission on the extension being requested under s223(2)(a). Following the primary submissions of the parties in relation to this matter I would then consider the s223(1) request.
The evidence and the circumstances
17. The s223 request was accompanied by the following declarations:
· a declaration by Barry James Croker dated 31 May 2022 (“The Croker declaration”)
· a declaration by Lesleigh Trinder dated 1 June 2022 (“The Trinder declaration”)
· a declaration by Samantha Davidson dated 1 June 2022 (“The Davidson declaration”)
· a declaration by Nicola Hayden dated 1 June 2022 (“The Hayden declaration”) and
· a declaration by Helen Macpherson dated 1 June 2022 (“The Macpherson declaration”)
18. Barry Croker and Lesleigh Trinder are employees of Advanta. Ms Trinder personal assistant to the Managing Director of Advanta. Ms Trinder states that she has held the position of personal assistant to the Managing Director at Advanta for the last 15 or 16 years. Prior to this, she has held a variety of administrative roles within Advanta since commencement of her employment at Advanta in March 1998. Mr Croker is Managing Director of Advanta Seeds Pty Ltd, a position he has held since 1 May 2018. Prior to becoming managing director Mr Croker has held various roles within the Advanta group of companies. Mr Croker also states that he is responsible for approving all payments made by Ms Trinder on behalf of Advanta using company-issued credit cards.
19. Samantha Davidson co-owner of the Centre for Indigenous Policy, a role which she has held since April 2020. Prior to this Ms Davidson was employed as a Senior Lawyer at Clifford Gouldson Lawyers from February 2013 to 2 May 2019. During her time at Clifford Gouldson Lawyers she held the role of "Head of Section" for the intellectual property group. Ms Davidson states that intellectual property work that she undertook in her role at CGL focused on providing advice to clients on a wide range of intellectual property matters including identifying IP assets, protection of trade marks and commercialisation.
20. Nicola Hayden is a Senior Law Clerk and Trade Marks Attorney at Clifford Gouldson Lawyers. Since September 2018, Ms Hayden has predominantly worked as part of Clifford Gouldson's IP group largely worked under the supervision of Ben Gouldson a Director of Clifford Gouldson and Samantha Davidson.
21. Helen Macpherson is partner at the law firm Baker McKenzie and has represented Advanta in respect of the opposition proceeding in respect of the initial s223 request and subsequent proceedings before the AAT and Federal court.
22. The circumstance leading to the present extension of time request was an underpayment of the necessary fees to affect the restoration of the patent. In support of the initial extension of time request, Advanta paid a sum of $2600. This sum however was insufficient, the total fees payable for the restoration of the patent was in fact $3000. The $400 shortfall in the fees seemingly arose due to a failure to properly account for late payment fees associated with the 2018 renewal payment.
Nufarm’s submissions
23. In their written and oral submissions, Nufarm noted that the evidence provided in support of the requested extension does not identify the causative error or omission that prevented the relevant act from being performed. Consequently, s223(2)(a) has not been enlivened, moreover Advanta has not provided the necessary full and frank disclosure to warrant the extension.
24. During the hearing Nufarm submitted that the case advanced by Advanta is that they were reliant on advice from IP Australia and acting on this advice Advanta then erroneously calculated the total fees payable. In Nufarm’s view the position advanced by Advanta is seemingly an amalgam between considerations relevant to s223(1) and s223(2)(a). If s223(2)(a) is relied upon then Advanta must provide evidence to attest to the error or omission on the part of a representative of Advanta or the agent.
25. Nufarm then advanced that Advanta had not filed any cogent or probative evidence that enlivens s223(2)(a). All that the evidence provided by Advanta shows is that there was an initial calculation of fees in the amount $2900, this figure seemingly being arrived at based on Advanta’s discussion with IP Australia. Despite this initial calculation of fees payable, a payment in the amount of $2600 was made. Given this it was apparent that Advanta did not rely upon the advice from IP Australia as Advanta failed to pay the amount of fees it says were calculated on the basis of discussion with IP Australia. The evidence provided in support of the requested extension of time fails to identify how the amount of $2600 was arrived at nor does attest to who made the error.
26. Counsel for Nurfarm then submitted that given Advanta’s written submission and the way the evidence is presented, it seems to be suggested that it was someone within Advanta that calculated the sum $2600. None of the declarations provided by Advanta’s agents identifies the person responsible for the miscalculation. Likewise, the evidence provided by Advanta’s representatives also fails to identify the individual who made the error. Nufarm then made reference to the evidence provided by Advanta’s representatives namely the declaration of Mr Croker and Ms Trinder and noted the fact that neither seeks to take responsibility for the error.
27. Nufarm also noted that the evidence of Ms Trinder sets out that she assumes that she acted upon instructions from her agents as to what amount to pay. There is nothing in Ms Trinder’s evidence that establishes how the figure of $2600 was arrived at by Advanta’s representative. Moreover, when one looks to the evidence provided by Advanta’s agents there is nothing that details how the figure of $2600 was derived. The evidence provided by Advanta’s agents clearly details the calculation of a sum of $2900 following discussions with IPAustralia. There is no evidence as to who calculated the amount of $2600 let alone the basis upon which the calculation was made. Consequently, there is an evidentiary gap with no proper explanation being given as to why no one associated with Advanta has been able to explain the circumstances that led them to calculate the sum of $2600. Such an evidentiary gap is a fundamental flaw in Advanta’s case for the grant of the extension pursuant to s223(2)(a).
28. It was noted by Nufarm that Advanta seemingly relies upon the fact that the failure to pay the correct amount was the causative error. The failure to pay the correct amount, in Nufarm’s view is the relevant act, and that error or omission must be something that is antecedent to the relevant act. Simply identifying the failure to pay the correct amount should not be viewed as an error or omission that would enliven s223(2)(a), if it were, then any failure to pay the correct amount of fees would automatically obtain the benefit of s223(2)(a). This would effectively eviscerate the operation of s223(2)(a) as it would remove the threshold requirement of the section. The relevant error in Nufarm’s view concerns who calculated the incorrect figure, how and why the calculation was performed, evidence as to this act needs to be provided so that the relevant error or omission can be identified. It is a fundamental requirement of the section that the applicant for an extension of time must provide evidence attesting to the error and it is an onus that cannot be avoided.
29. Counsel for Nufarm pointed out that the discretion under s223(2)(a) is not a general discretion. The discretionary power is only enlivened once it has been established that an error or omission occurred. In the present circumstance Advanta has failed to properly identify the relevant error or omission to enliven the s223(2)(a) and thus the Commissioner is not able to exercise the discretionary power provided for under the section.
30. In summary Nufarm’s position is that without evidence as to who calculated or how the figure of $2600 was arrived at, then Advanta has failed to establish that there was a relevant error or omission. Furthermore, even if the Delegate were minded that Advanta’s evidence establishes that there was an error or omission, then given the evidentiary gap Advanta has not provided the necessary full and frank disclosure required by the section. For these reasons Nurfarm submits that the extension should not be allowed.
Advanta’s submissions
31. Counsel for Advanta noted that the relevant authorities have affirmed that the operation of s223 is beneficial in nature and should be applied beneficially in favour of Advanta, this being most recently affirmed by Downes J in the FCA decision. More specifically Advanta noted the comments of Downes J at [78]-[83] of the FCA decision which was summarised by Advanta as follows “The beneficial nature of the provision applies not only in the exercise of the discretion but also to the question of whether the discretion is enlivened in the first place”.
32. Advanta advanced that under the provision of the section it is necessary to show a causative error or omission, the causal relationship however need not be a direct one but could in fact be an indirect one. Advanta then referred to the decision in G S Technology Pty Limited v Commissioner of Patents [2004] FCA 1017 (“GS Technology”) concerning this point. Following this Advanta then sought to list the various kind of acts that fall within the general ambit of what may be considered to be an error or omission which is in keeping with the various authorities referenced above. Advanta then referred to the comments of Spender J in GS Technology at [50] where his Honour noted that s223 is a remedial section permitting the forgiving of error or mistake where it is appropriate to do so.
33. Counsel for Advanta then proceeded to discuss the nature of the error, this being the incorrect calculation of the total fees payable on lodgement of the initial extension of time request and the circumstances leading to the discovery of the error. Firstly, the error in Advanta’s view was due in part to the fault of an employee of IP Australia, and in part, the fault of an employee of Advanta and its lawyers. Advanta had in fact attempted to pay the outstanding fees in full, and at time of making the payment was of the belief that it had in fact paid the necessary amount to ensure reinstatement of the patent. Advanta continued to hold this belief for a further three years, the evidence also suggests that IP Australia throughout this three-year period also considered that the outstanding fees had been paid in full. It was only after the conclusion of the relevant appeals that the error was discovered and following this Advanta took immediate action to rectify the error.
34. During the hearing Advanta sought to focus on the evidence set out in the Trinder, Hayden and Davidson declarations. My considerations concerning the evidence is set out in more detail below. Advanta firstly directed me to paragraph [9] of the Davidson declaration and to the file note of Ms Davidson exhibited in Annexure SD-2 which details how an initial calculation of the fees owning was arrived at following consultation with a representative of IP Australia. The calculation coming to a total of $2900, however on reflection the calculation fails to take into account the late fees payable on the 2018 annuity being $600. Advanta then went to Annexure SD-4 of the Davidson declaration, this being an email from Ms Davidson communicating to Advanta the amount of fees that would be payable for the necessary extension of time. Counsel for Advanta then submitted that this email was clearly in error as it quoted the incorrect amount of fees payable. In view of this it clear that Advanta at this time was labouring under the misapprehension that the total amount payable was $2900.
35. During oral submissions Advanta noted that it was not in dispute that on lodgement of the extension of time request that Advanta paid the incorrect sum of $2600. Advanta acknowledged that it was not clear why a payment of $2600 was made and not $2900 as advised by Ms Davidson. Advanta then went to the Davidson declaration at [19] where Ms Davidson states that she does not now recall who made the decision to pay $2,600 rather than $2,900 in respect of the renewal fees and nor has she been provided with any documentary records that refer to that decision. Similar statements in relation to the incorrect payment are also made by Ms Hayden and Ms Trinder. More specifically Ms Hayden at paragraph [24] of her declaration states that she does not remember who determined that the amount of $2600 was payable rather than the $2900 that been previously communicated to Advanta. Likewise, Ms Trinder does not recall who advised her of the amount to be paid; see Trinder declaration at [10]. However, as she was assisted by Ms Hayden she expects that she took the advice of Ms Hayden in relation to the amount of fees payable: Trinder declaration at [7], [8] and [10].
36. Advanta submitted, that based on the information available it seems likely that someone either within Clifford Gouldson lawyers or Advanta or both had realised that only 2 years of renewals were owing and not 3 years. This is reflected in the statement made at paragraph [23] of the Hayden declaration. Advanta then again referred to paragraph [24] of the Hayden declaration where Ms Hayden acknowledges that she would have informed Ms Trinder of the amount of the fees to be paid. When all the evidence is considered, Advanta has provided an explanation as to how the figure of $2600 was arrived at and how the erroneous payment was then affected. Consequently, the error is plainly evident and is readily identifiable given the evidence. Moreover, each of the declarants has provided the necessary full and frank disclosure of the circumstance surrounding the causative error.
37. In relation to the proposition advanced by Nufarm that there is an evidentiary gap, Counsel for Advanta remarked that the fact that neither Ms Davidson, Ms Hayden nor Ms Trinder was able to recall as to how or who arrived at the figure of $2600 was not surprising as at the time of making the declarations more than 3 years had passed. In cases involving errors or omissions that occurred some time ago, the memories of witnesses may have faded. The applicant then noted the decision of the Delegate in Knauf at [26] with regard to the imperfect recollection of the witnesses. Advanta submitted that the detailed explanation provided by each of Ms Davidson, Ms Hayden and Ms Trinder clearly sets out the nature of the error and the factors that give rise to the error. Counsel for Advanta then remarked that it is difficult to imagine what better evidence could be provided in circumstances where the witnesses are attesting to events which occurred more than 3 years ago.
38. Counsel for Advanta then went through the evidence concerning the conduct of Advanta in relation to their actions on discovery of the error and their continued payment of the annuities from 2019 through to the present. It was submitted that Advanta’s conduct is relevant to the consideration of the exercise of the discretion under s223(2)(a). More particularly Advanta sought to pay all annuities from 2019 to present as they fell due to ensure reinstatement of the patent. Advanta maintained the belief that all fees were up to date, additional the evidence also shows that this view was also supported by IP Australia’s conduct in relation to its repeated advice given on subsequent renewal payments. The actions relating to the payment of the renewal fees over the relevant period are best outlined in the Hayden declaration at paragraphs [25]-[39].
39. Counsel then stated that what the evidence shows is that Advanta has been extremely diligent from the time of first discovering the error back in April 2019 to ensure that all of its renewal payments were up to date. On making the payments Advanta have repeatedly followed up with IP Australia to ensure that the correct payments had been made and assigned against the patent. Consequently, there was a clear intent on the part of Advanta to maintain the patent in good standing. This in Advanta’s view favours the exercise of the Commissioner’s discretion noting the comments of Spender J in GS Technology at [65].
40. In summation Advanta again emphasised that the evidence clearly documents that there was a causative error this being error in calculating the outstanding fees payable. Thus, Nufarm’s submission that the evidence goes no further than an identification of the fact that the relevant act was not carried out is without merit. It also follows that Nufarm’s submission that a full and frank disclosure has not been provided is without merit given the evidence provided by Advanta in relation to this matter. More specially Advanta has put on evidence from five different witness explaining in detail the error in the calculation of fees and there are no evidentiary gaps. Consequently s223(2)(a) is enlivened and that the factors favour the exercising of the discretion provided by s223(2)(a).
Was there a relevant error or omission?
41. A prerequisite to enliven consideration of whether or not discretion to extend time should be granted is the existence of an error(s) or omission(s). In order to make out a proper case for justifying the extension the applicant must also provide a full and frank disclosure of the facts leading to the error or omission.
42. On a review of the Croker and MacPherson declarations the evidence shows the intent of Advanta to maintain the patent in good standing. They also establish that Advanta undertook the necessary remedial action on realisation of the error or omission without undue delay. This is also supported by statement made in the Hayden declaration at paragraphs [25]-[39] which attest to the fact that Advanta sought to pay all outstanding annuities over the period in which the initial extension of time was in dispute. I note that the Croker and MacPherson declarations do not directly engage with the alleged error or omission or the circumstances leading to the error. At most Mr Croker simply acknowledges that he approved the expenditure of Ms Trinder in relation to the payments she made to IP Australia Croker at [16]. I also note that Mr Croker states that since early April 2019, Clifford Gouldson has had standing instructions from Advanta to manage all IP Australia fees due and payable in respect of the Patent. It is also Mr Croker understanding that Clifford Gouldson has been attending to the payment of all renewal fees for the Patent on a yearly basis as if the Patent was in force, per Croker at [17].
43. The majority of the Davidson declaration speaks more to the case being pressed by Advanta under s223(1). It is clear from the Davidson declaration that Ms Davidson was of the view that a total $2900 was owing in fees, Davidson at [14]. This figure was communicated to Advanta by Ms Davidson, per Davidson at [17]. Ms Davidson also states, “I do not now recall who made the decision to pay $2600 rather than $2900 in respect of the renewal fees and have not been provided with any documentary records that refer to that decision”, Davison at [19]. I note that Ms Davidson at paragraph [20] of her declaration also attests to Advanta’s intent to maintain the patent in good standing.
44. Of the evidence provided only the Hayden and Trinder declarations engage with circumstances leading to, or concerning, the causative error or omission.
45. On a review of the Trinder declaration the relevant information concerning the error is set out at paragraphs [5]-[10]. At paragraphs [5]-[7], Ms Trinder details the actions taken in respect of the lodgement of the request for the extension of time and Ms Trinder attests to the fact that she made the payment of $2600. At paragraph [8] she states that she was in a teleconference with Ms Hayden while in processing the lodgement of the extension of time via IP Australia's online systems. This is also corroborated by the email from Ms Hayden to Ms Trinder attached as annexure LT-4 where Ms Hayden states that she will phone Ms Trinder to assist her through the online filing process.
46. Ms Trinder also states that it is her recollection that at the relevant time Clifford Gouldson were handling the extension of time application for Advanta, including advising Advanta as to the documents to be filed and payments that were required to be made: Trinder declaration at [9]. Ms Trinder at paragraph [10] of her declaration acknowledges that she does not have any records as to who advised her of the amount of the renewal fee to be paid in connection with the extension of time application but expects that it was likely Ms Hayden that would have advised her as to the required fees.
47. Paragraphs [16]-[18] of the Hayden declaration detail the interaction between Ms Hayden and Ms Trinder during the lodgement of the request for the extension of time. Most notably Ms Hayden in her declaration states that she had a telephone conversation with Ms Trinder on 8 April 2019 where she guided her through the lodgement process through the use of Advanta's eServices account. It is also Ms Hayden’s recollection that during the telephone call, Ms Trinder lodged the forms online and attended to the payment of the relevant fees for the extension: Hayden at [17].
48. Further details concerning the payment of the fees is then provided at paragraphs [23] and [24] of the Hayden declaration. At [23] Ms Hayden explains how the figure of $2600 could have been derived as follows:
“23. It is my understanding now that the $2,600 paid by Advanta on 8 April 2019 represented $600 for renewal fees due in October 2017 and October 2018 (of $300 each), and $2,000 in late fees for the October 2017 renewal fee (being $100 for each month of the 20 month requested extension). It makes sense to me now that only two amounts of $300, rather than three, were paid because the October2019 renewal fee was not yet due as at April 2019.”
49. At [24] Ms Hayden states that she does not remember who determined that Advanta should pay $2600 as opposed to the $2900 that had been previously communicated. Given that she was guiding Ms Trinder through the lodgement process Ms Hayden acknowledges that it is likely that she advised Ms Trinder of the amount of the renewal fees to be paid.
50. Additionally, I note that both Ms Trinder and Ms Hayden state that they did not seek to verify whether the amount paid was the correct amount. Ms Trinder states at [9] of her declaration that she did not conduct any investigations or calculations in respect of the amount of fees payable. Ms Trinder’s statements at [9] also intimate that she was reliant on the advice Clifford Gouldson concerning the amount payable. Likewise, Ms Hayden states at [24] of her declaration that that she does not recall researching or performing any calculations concerning the amount of fees payable for the requested extension of time.
51. When I consider the evidence as a whole it is apparent that the figure of $2600 was erroneously obtained. While the specific details surrounding the manner in which the figure was arrived at are not entirely clear, it does not negate the fact that the figure was erroneously obtained. Moreover, the evidence suggests that the figure was arrived at or settled upon by a representative of Advanta or their agent.
52. Here it is necessary to address a number of comments made by Nufarm during oral submissions, concerning Advanta’s reliance on the effluxion of time and the recollection of the witness. In considering the issue of the effluxion of time Nufarm went to the declaration of Ms Hayden at paragraphs [17], [11] and [8]. These paragraphs in Nufarm’s view exemplify that Ms Hayden does in fact have good recollection concerning conversations she had various individuals at the relevant time. Consequently, Nurfarm stated that it can hardly be said that the lack of any proper explanation concerning the figure of $2600 is due to the effluxion of time given the circumstances.
53. Nufarm also submitted that what is notable about paragraph [24] of the Hayden declaration is that Ms Hayden does not say, nor does anyone else from Advanta or their lawyers, that she conducted any enquires either of the file notes or records within her firm or Advanta nor did she make consult with any of her colleagues or make any other enquiries as to how or who determined that the amount of fees owing was $2600. This in Nufarm’s view is a notable omission and paragraph [24] of the Hayden declaration is as high as it gets in terms of any explanation of the error, such explanation is manifestly insufficient for the purposes of s223(2)(a).
54. When I look to the evidence of Ms Hayden at paragraphs [17], [11] and [8] I do not come to the same view as Nufarm. I note that the identified passages include or are bookended by references to various file notes, emails and other contemporaneous material exhibited with the declaration. For example, paragraph [11] reproduced below concerns recording a change in the address for service from Spruson and Ferguson to Advanta:
“11. In the course of the communications I had with Sam Davidson on 4 April 2019 regarding the EOT Application, I recall that we discussed that Advanta would lodge a request to become the agent on record for the Patent, in place of Spruson & Ferguson. To the best of my recollection, the reason for this was so that Advanta would receive future renewal notices directly from IP Australia.”
The emails concerning Ms Hayden’s discussion with Ms Davidson are exhibited in Annexure NH-5 which is introduced at paragraph [10] of the Hayden declaration. Likewise, with paragraph [17] the relevant file note concerning the referenced conversation is introduce as annexure NH-11 at paragraph [18] of the Hayden declaration. Paragraph [8] of Ms Hayden’s declaration makes direct references a file note contained in Annexure NH-3. Contrary to Nurfarm’s submission these paragraphs to my mind do not show that Ms Hayden recollection of events is unaffected by the effluxion of time. It is apparent that the statements made in paragraphs [17], [11] and [8] simply speak to the events detailed in the attached file notes and emails.
55. Nufarm’s position concerning the level of disclosure provided by Ms Hayden at [24] (reproduced below) does not necessarily assist their case.
“24. I do not now remember who determined that Advanta should pay $2,600, rather than the $2,900 recorded in the 3 April Davidson File Note and 3 April Davidson Email. I do not recall conducting any research or calculations in relation to the renewal fees that were payable in connection with the EOT Application. I do not recall Ms Trinder informing me that she thought the fees payable were $2,600 rather than $2,900. As I had provided Ms Trinder with the documents to be lodged (as per my email dated 8 April 2019 attached as Annexure NH-10) and was providing her with guidance on the process for filing those forms with IP Australia, I consider that I would have informed Ms Trinder of the amount of the renewal fees that needed to be paid.”
The statement of Ms Hayden at [24] clearly show that she was guiding Ms Trinder through the lodgement process and that she is of the belief that she informed Ms Trinder of the amount payable.
56. In my view, when the evidence of Ms Hayden and Ms Trinder concerning the lodgement of the extension of time is considered it shows that during the course of submitting the extension an erroneous amount was entered with there being a failing on the part of both Ms Trinder and Ms Hayden to verify the amount payable. The failure to verify the amount payable by Ms Hayden or Ms Trinder could be said to be a breakdown in procedure or a failure to exercise due diligence when giving directions. Such actions falling with in the general ambit of error or omission for the enlivenment of s223(2)(a) see for example Total Peripherals Pty Ltd and Commissioner of Patents and International Business Machine Corporation [1998] AATA 784 and Oz Technology.
57. Nufarm in their consideration of evidence has sought to focus on the lack of any substantive explanation as to how the figure of $2600 was calculated or who calculated the figure. In the present circumstance I do not believe that how or who settled upon this figure is material to the determination of the causative error. What is clear from the evidence is that an erroneous amount was entered during the course of lodgement of the request with IP Australia. Then there was a failing on the part of Advanta or their agent to exercise due diligence to verify that the amount of fees entered was in fact correct. Notwithstanding this I note that at [23] of the Hayden declaration, a plausible explanation is provided as to how the figure of $2600 may well have been derived.
58. I am satisfied that the evidence establishes that there was an error or omission on the part of Advanta or their agent. I note Nufarm’s submissions that the failure to do the relevant act cannot itself be the error or omission by which the failure occurred, but this is not the case in this instance. The failure in my view was ensuring that the amount fees entered during the lodgement of the extension of time request was correct and sufficient to restore the patent, neither Ms Hayden nor Ms Trinder being the parties concerned with the lodgement of the request sought to verify that the amount of fees entered was sufficient. It is this failure to exercise proper due diligence that is the relevant error or omission.
Did the error or omission cause the failure to pay the correct fees?
59. Given the evidence before me there is no doubt that the incorrect amount was paid. I am also satisfied based on the evidence that the failure to pay the correct amount is sufficiently linked to the actions of either Ms Trinder and Ms Hayden and their failure to verify that the amount of fees payable was correct at the time of lodgement of the initial request for an extension of time.
Should the discretion be exercised?
60. The power provided by section 223(2) is discretionary – “the Commissioner may ... extend the time for doing the act” – and it remains to be considered whether the balance of relevant factors justifies the exercise of the Commissioner’s discretion in favour of Advanta. The relevant factors to be considered were summarised in Vangedal-Nielsen v Smith (Commissioner of Patents) [1980] FCA 163; 1A IPR 731 at 736 as follows:
(i) whether the Commissioner is satisfied that a proper case has been made out justifying an extension;
(ii) whether a serious opposition has been foreshadowed;
(iii) whether there has been undue delay in seeking an extension of time;
(iv) the interests of the parties in refusing or granting an extension;
(v) the public interest.
61. In balancing these factors, it is “more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time” Sanyo at 479 [16].
Has a proper case been made out?
62. Nufarm has submitted that Advanta has failed to provide a full and frank disclosure of all the surrounding circumstances that led to the error or omission. Nufarm noted that not one of the declarants was able to identify the individual who made the calculation or how that figure was derived. Nurfarm questioned how is it that Advanta was able to adduce detailed evidence in relation to the conversations with IP Australia at the relevant time but unable to provide any evidence in relation to the miscalculation in question. There is an evidentiary gap, and as a consequence Advanta have not provided the required full and frank disclosure. In support of this, Nurfam referenced the words of Jenkinson J in Kimberly Clarke at 583 namely that the necessary disclosure to support an extension application must go beyond the disclosure of the processes by which an agent’s errors came to be committed. Advanta’s declaratory evidence goes no further than this.
63. Advanta submitted that all that was required was a full and frank disclosure of the relevant circumstances. There is no basis for any contention that Advanta’s disclosure of the relevant circumstances is less than full and frank. Advanta has investigated every circumstance relating to the incorrect calculation of the renewal fee this is reflected in the evidence.
64. I note that Nufarm has been somewhat selective in the citation of the referenced passage of the Kimberly Clarke decision. Notably Jenkinson J went on to state as follows:
“… and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the applicant (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct.”
65. As to Nurfarm’s point concerning the evidentiary gaps, to my mind such gaps further emphasise the fact that there was a breakdown in process. The evidentiary gaps are not indicative of a failing or unwillingness of Advanta to provide a full and frank disclosure. The evidence provided by Advanta in my view discloses the relevant circumstances surrounding the error so as to provide an understanding of how the failure to do the relevant act occurred. Advanta has in my view provided, in line with the statement of Jenkinson J above and other relevant authorities reference above, the necessary full and frank disclosure. I am satisfied that a proper case has been made out justifying an extension.
Has there been undue delay in seeking the extension of time?
66. On a review of the evidence, it is apparent that Advanta on discovery of the relevant error properly sought to rectify the error. There has been no undue delay that would weigh against granting the extension.
The interests of the parties
67. Advanta’s interests lie in the extension being granted and the patent restored to thereby enforce the terms of the licensing agreement in place with Nuseed Pty Ltd. which is a wholly owned subsidiary of Nufarm. Nufarm’s interests lie in in the extension being refused thereby releasing Nuseed from the licensing agreement and any fees associated with the agreement. The interests of the parties are largely offsetting.
The public interest
68. In the present circumstances the status of the patent is uncertain. Granting the extension would restore the patent to the register providing the public with certainty as to the rights afforded to Advanta under the patent. Similarly refusing the extension would also provide the public with certainty as to the status of the patent. Consequently, I consider the public interest to be a neutral consideration.
69. Having regard to the factors set out above, on balance I am satisfied that it is appropriate to exercise the discretion in this case.
The s223(1) request
70. As previously noted, these proceeding do not primarily concern the request for the extension of time made under the provisions of s223(1). In the interest of completeness, I will however address this issue.
71. The case for the extension of time under s223(1) advance by Advanta is predicated on the calculations made by Ms Davidson based on advice she received from IP Australia. In the present circumstances the evidence makes it clear that the calculations made by Ms Davidson did not factor into the erroneous payment made by Ms Tinder as guided by Ms Hayden. The evidence shows no causal link between the fees said to be payable by Ms Davidson and the payment effected by Ms Trinder under the guidance of Ms Hayden. The calculation of the fess owing made by Ms Davidson based on her conversation with an employee of IPAustralia are in my view outside the chain of causation.
72. In light of the forgoing, I am unable to find any causal error or omission on the part of IP Australia that would enliven s223(1).
Conclusion
73. I am satisfied that the failure to attend to the correct fee payment was the result of an error or omission enlivening the provisions of s223(2)(a) and that it is appropriate to exercise the discretion to grant an extension under that provision. I allow the extension of time.
Costs
74. It is usual in matters before the Commissioner that costs follow the event. Nufarm has been unsuccessful and request for an extension of time has been allowed. I therefore award cost against Nufarm Australia Limited in accordance with Schedule 8 of the Patents Regulations 1991.
Neil Miller
Delegate of the Commissioner of Patents
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