Nufarm Australia Limited v Advanta Seeds Pty Ltd - [2020] APO 51

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Nufarm Australia Limited v Advanta Seeds Pty Ltd [2020] APO 51
Patent:2009304572

Title:Hybrid plant cell

Patentee:Advanta Seeds Pty Ltd

Opponent:Nufarm Australia Limited

Delegate:Keith Wagg

Decision Date: 24 November 2020

Hearing Date: Written submissions completed on 28 August 2020

Catchwords: PATENTS – extension of time to pay renewal fees – having no system in place to forward email or mail from departed employees is not an error – it has not been established that the error of entering the patent into the electronic system caused the failure to pay the renewal fees – opposition successful – costs awarded against the applicant.

Representation: Counsel for the Opponent: Benjamin J Fitzpatrick
Patent Attorneys for the Opponent: Phillips Ormonde Fitzpatrick
Counsel for the Applicant: JM Hennessy SC and Ben Gardiner
Lawyers for the Applicant: Clifford Gouldson Lawyers

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE

Patent:2009304572

Title:Hybrid plant cell

Patentee:Advanta Seeds Pty Ltd
Date of Decision: 24 November 2020

DECISION
I refuse the extension of time.
I award costs according to Schedule 8 against the Applicant.

REASONS FOR DECISION

This matter arises under the Patents Act (the Act) and the Patents Regulations (the Regulations).
Patent application 2009304572 was filed on 06 October 2009 by Pacific Seeds Pty Ltd, now Advanta Seeds Pty Ltd (the Applicant). The application was accepted by a delegate of the Commissioner on 16 March 2015. Michael Houlihan filed a notice of opposition to grant, and Nuseed Pty Ltd also filed a late notice. A delegate of the Commissioner granted an application under s 223 for Nuseed's to file the late notice.[1] These oppositions were then dismissed after neither Opponent filed Statements of Grounds and Particulars. The patent application proceeded to grant on 07 January 2016.
[1] Nuseed Pty Ltd v Pacific Seeds Pty Ltd [2015] APO 79.
On 20 April 2018 IP Australia wrote to the Applicant's patent attorney firm, Spruson & Ferguson, informing them that Patent 2009304572 had ceased because renewal fees were not paid by the due date of 6 October 2017. An application for an extension of time under s 223(2)(a) and s 223(2A) to pay the renewal fees was lodged on 8 April 2019 along with a statutory declaration in support of the application filed on 15 April 2019. The application for an extension of time under s 223(2)(a) to pay the renewal fees was advertised pursuant to s223(4) in the Australian Official Journal of Patents dated 4 July 2019. On 4 September 2019, Nufarm Australia Limited (the Opponent) filed a notice of opposition to the application for an extension of time to pay the renewal fees. This decision relates to opposition to the extension of time to pay renewal fees for 18 months.
The law
This matter is governed by section 223(2) which states:
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 gave a convenient summary of the principles in Knauf Plasterboard Pty Ltd v CSR Building Products Limited:[2]
[2] Knauf Plasterboard Pty Ltd v CSR Building Products Limited [2018] APO 64 at [6] – [8].
"The following principles for applying the provisions of section 223 are derived from decided cases:
(i) The statutory provision to extend time is beneficial in nature and should be applied beneficially.[3]
(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.[4]
(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.[5]
(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.[6] 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.[7]
(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."[8]
The term' error or omission' in section 223 encompasses accidental slips, inadvertences and errors caused by faulty reflection;[9] an unexpected failure to exercise due diligence and/or a flaw in mental function in carrying out an intention;[10] and a breakdown in procedure in effecting an intention.[11] Accordingly, the phrase 'error or omission' has a broad scope.
In contrast, the failure to perform the relevant act cannot itself be the 'error or omission' by which the failure occurred[12] and a deliberate policy or decision that leads to the failure to perform the relevant act does not constitute an 'error or omission'.[13]"
[3] ReSanyo Electric Co Ltd and Commissioner of Patents [1996] AATA 832, (1996) 36 IPR 470 at 479 [16].
[4] Ibid.
[5] Kimberly-Clark Ltd vCommissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 at 579 [9], 582 [15]; Re Lazer Safe Pty Ltd and Commissioner of Patents [2001] AATA 967 at [11].
[6] Ibid.
[7] Re Apotex Pty Limited and Commissioner of Patents [2008] AATA 226 at [21].
[8] Kimberly-Clark Ltd v Commissioner of Patents (No 3), supra at 583-584 [17].
[9] Ibid at 579 [9].
[10] Total Peripherals Pty Ltd v Commissioner of Patents [1998] AATA 784 at [14].
[11] Oz Technology, Inc v Boral Energy Ltd [1999] APO 8.
[12] Kimberly-Clark Ltd v Commissioner of Patents (No 3), ibid at 580 [11].
[13] Re Weir Pumps Ltd and Commissioner of Patents and Stork Pompen BV [1988] AATA 331; (1988) 13 IPR 163 at 166-167 [9].
To this list could be added the observation that an error or omission does not include changes of mind with the benefit of hindsight,[14] and misapprehension or ignorance of the law does not constitute an error by itself.[15]
[14] Amicus Therapeutics, Inc. [2019] APO 4 at [34] and Magnum Magnetics Corporation [2019] APO 3 at [33].
[15] Kmart Australia Limited [2011] ADO 2.
The application for an extension of time
On 8 April 2019, the Applicant applied for an extension of time under both s 223(2)(a) and s223(2A). These proceedings relate to the request made under s 223(2)(a).[16] The period was for 20 months from 6 October 2017. I note this should be 18 months. The application stated that a declaration was to follow.
[16] The advertisement under s 223(4) was in relation to the s 223(2)(a) request and the applicant stated in their submissions at 7 that they no longer relied on s 223(2A).
The evidence and the circumstances
The s223 request was followed by a declaration by Barry James Croker (Croker #1), dated 11 April 2019 and received on 15 April 2019 with 12 annexes (of correspondence). In his declaration, Mr Croker stated his belief that failures within UPL/Avanta to manage post and emails of former staff and a failure to enter the patent into their Anaqua system (a system that manages renewal fees) led to the fees not being paid and speculated that it was due to change in staff members.[17]
[17] Croker #1 at 27.
No evidence in support was filed. The Applicant filed a further declaration of Barry James Croker (Croker #2) signed 3 April 2020 along with a declaration by Nicholas David Gardner (Gardner) signed 17 October 2019 as evidence in answer. The Opponent filed a declaration by Andrew Loorham in reply dated 6 May 2020.
Croker explains[18] the following circumstances relevant to Advanta's failure to pay the renewal fee on time:
[18] Applicant’s submissions at 20.
(a) Advanta is part of a larger corporate group.
(b) the application for the patent was managed jointly by the R&D Global Manager at the relevant time, Dr Albert Leon, and the Canola R&D Manager in Australia, Mr Andrew Easton, with assistance from Global Technology Lead, Dr David Stalker;
(c) Dr Stalker was based overseas but correspondence to him in relation to the patent was sent care of Advanta's head office in Toowoomba;
(d) Dr Leon, Mr Easton and Dr Stalker kept the Australian managing director apprised of the application process;
(e) all three of these employees are no longer with the company;
(f) a series of structural changes were made within the broader Advanta corporate group in 2016 which resulted in internal responsibility for payment of the patent's renewal fees moving to another entity called UPL Limited. These changes became effective on 20 July 2016;
(g) once the patent had been granted, steps were taken to commercialise the invention claimed in the patent;
(h) a licence to exploit the subject matter of the patent was granted to Nuseed Pty Ltd by an agreement dated 9 September 2016 (having an effective date of 1 January 2016). The Licence Agreement is annexed to Croker # 2 as Confidential Annexure BJC-2. It was incorrectly described as "exclusive" at Croker #1 but it has, in fact, been operationally exclusive since it commenced;
(i) despite the changes to the corporate structure described above, decisions relating to patent renewals and maintenance were still undertaken by Advanta's legal team until a formal handover took place in 2017 or 2018; and
(j) Advanta did not become aware that the patent had lapsed until 1 April 2019.
The Applicant provided the following summary[19] of the records of the Applicant, its attorney, CPA Global and the public records of IP Australia about the events that took place:
[19] Applicant’s submissions at 21.
(a) Spruson and Ferguson (Spruson) was the patent attorney on the record;
(b) it was CPA Global's responsibility to "manage and liaise with Advanta/UPL regarding the renewal fees";
(c) CPA Global paid one renewal fee on Advanta's behalf on 25 January 2017;
(d)The next renewal fee was due on 6 October 2017 and was not paid;
(e)IP Australia sent a notice of cessation of the Patent to Spruson and Ferguson on 20 April 2018;
(f) Spruson's records show that several emails were sent to Advanta staff members in relation to the grant and renewal of the patent. These were sent to Dr Stalker, Mr Easton and [email protected].
(g) CPA's records show that it sent several letters by post to Dr Stalker at Advanta's head office in Toowoomba requesting payment of the renewal fees.
(h) After the 2016 amalgamation of Advanta and UPL, and during the formal handover between 2017-2018, the responsibility for maintaining the patent portfolio was being managed by the Advanta Legal Manager and the patent department of UPL. In order to manage the large combined patent portfolio, new software was acquired which required each patent to be manually uploaded to it. During this time, the Advanta Legal Manager left the company. In the course of merging the Advanta and UPL patent portfolios, the Patent "was not identified or recorded into the portfolio management system."
(i) There is no evidence of any decision being taken not to renew the patent or allow it to lapse.
The Applicant submitted[20] that Mr Croker's evidence is that:
(i) Advanta has no record of receipt of these emails from Spruson and Ferguson in relation to the grant of the patent and renewal fees; and
(ii) in any event, they were sent just before or sometime after the relevant staff members had left the company;
[20] Ibid.
(iii) Advanta has no record of the letters from CPA sent to Dr Stalker at Advanta's head office as ever having been received;
Was there a relevant error or omission?
A prerequisite to enliven consideration of whether or not discretion to extend time should be granted is the existence of a/an error(s) or omission(s). The Applicant identified[21] three errors or omissions that occurred that they claim resulted in the failure to pay the renewal fees:
(i)not ensuring that emails sent to former Advanta employees were forwarded to current employees or to a general Advanta email address;
(ii)not ensuring that physical letters sent to Advanta's head office in Toowoomba, and addressed to Dr Stalker, were forwarded to another member of staff; and
(iii)failing to enter the details of the patent into the new portfolio management software.
[21] Applicant’s submissions at 22.
The Opponent made several submissions on these errors that relate to the detail provided in Mr Croker's evidence. Mr Croker had made enquiries within Advanta about what had occurred on points (i) and (ii) and the Opponent submits that Mr Croker cannot say whether or not the communications were forwarded to someone else or whether they were ignored. The Opponent's case is primarily concerned with the lack of sufficient information to permit a proper evaluation of the application to extend time. In support of this position, the Opponent cited the following passages from Croker #1 and added their emphasis:
'From my correspondence with and my enquiries of Spruson &
Ferguson, correspondence regarding the grant of and renewal of the
patent was sent to the email addresses of staff just before, or sometime
after they left the company. This correspondence included IP Australia
correspondence. As those staff members have left Advanta, I am unable
to ask them whether and to whom the correspondence was forwarded.'[22]
…
'I have undertaken enquiries within our office and we have no record of
receipt of these letters and do not know why they were not referred to
another member of staff for action or what was done with them.'[23]
…
'Further, there is no set policy in Advanta's office in Australia for dealing
with email on the departure of an employee. From my enquiries I have
determined that an auto reply may be engaged, they may be forwarded
to another staff member or email address, or the emails remain unread.
However, I have not been able to identify what occurred with Andrew
Easton's email to date.'[24]
…
'With respect to the global employees involved, Dr Leon and Dr Stalker,
we do not have access to their emails here in Australia and to date. I
have not been able to ascertain through enquiry what happened with
their email box.'[25]
[22] Croker #1 at 12.
[23] Croker #1 at 17.
[24] Croker #1 at 24.
[25] Croker #1 at 25.
Indeed, the emphasis does highlight the difficulty of pinpointing a single error. It does, however, point to the systemic error the Applicant identified where staff had left and either nothing had been done to forward or direct enquires from those staff or no one knows what had been done.
The Opponent submitted that the departure of Dr Leon occurred on 12 September 2018, well after the renewal fee due date, so his departure is irrelevant. The Opponent also submitted that Dr Stalker and Mr Easton's departures could not be of relevance because a payment was made by CPA for the first renewal fees after they had left. Dr Stalker left Advanta on 30 April 2016 Mr Easton left Advanta on 22 July 2016, and there was still a payment made on 25 January 2017. In my view, this does raise some questions about whether or not some instructions were sent to CPA before their departures to make the payments of 25 January 2017. However, it is still clear to me that Spruson and Ferguson and CPA were sending correspondence to people who were no longer at Advanta. It is clear that CPA Global sent the first letter requesting instructions to pay the renewal fees to Dr Stalker on 27 June 2017 at the Applicant's current address in Toowoomba.[26] CPA Global sent a further three further letters to the same address.[27]
[26] BJC 8.
[27] BJC 9-11.
The Applicant stated in their submissions that “there is no evidence of any decision being taken not to renew the patent or allow it to lapse”[28] and cited Mr Croker’s second declaration, where he stated that:
“Advanta at all times maintained an intention to keep the Patent valid and to pay all renewal fees as they fell due, given the Patent is of considerable importance and of significant commercial value to Advanta. Advanta did not at any stage intend to abandon the Patent. Its intention was always to ensure that the Patent remained valid until its expiry on 6 October 2019.”[29]
[28] Applicant’s submissions at 21.
[29] Croker #2 at 5.
I note that Mr Croker became the Managing Director of Advanta Seeds on 01 May 2018 and in 2017 was the Global Supply Director.[30] Mr Croker provided points which he believed demonstrated that there was an intend to maintain the patent which included trying to pay the fees once they became aware (18 months after fees were due).[31] Further evidence was supplied included licensing of the patent.
[30] Croker #1 at 1.
[31] Croker #2 at 6.
As I noted above the term 'error or omission' in section 223 encompasses accidental slips, inadvertences and errors caused by faulty reflection;[32] an unexpected failure to exercise due diligence and/or a flaw in mental function in carrying out an intention;[33] and a breakdown in procedure in effecting an intention.[34] Accordingly, the phrase 'error or omission' has a broad scope. The Applicant is claiming that having "no set policy in Advanta's office in Australia for dealing with email [or postal mail] on the departure of an employee"[35] should fall within one of these categories. I note the consideration in KGK Synergize Inc.[36] in which a failure to be aware of essential dates arising from a failure to maintain a docketing system for monitoring those dates was not considered to be an error, but rather an inevitable outcome of the use of an inadequate system. In that case, the Delegate, now Deputy Commissioner, cited the AAT Deputy President in Re Weir Pumps Ltd and Commissioner of Patents and Stork Pompen BV[37] (Weir Pumps) where "a deliberate policy of Weir that it did not maintain a watch for pending patent applications or for their acceptance" was not an error or omission. To not have a policy of forwarding mail and email of former employees would inevitably lead to outcomes such as a failure to pay renewal fees on time. I cannot see how the current circumstances falls within the scope of the broadly defined error or omission given Weir Pumps Ltd. For example, it cannot be a breakdown in a procedure when there was no procedure or system in place. This is not an error or an omission.
[32] Kimberly-Clark Ltd v Commissioner of Patents (No 3), supra at 583-584 at 579 [9].
[33] Total Peripherals Pty Ltd v Commissioner of Patents [1998] AATA 784 at [14].
[34] Oz Technology, Inc v Boral Energy Ltd [1999] APO 8.
[35] Croker #1 at 24.
[36] [2013] APO 72.
[37] [1988] AATA 331, 13 IPR 163.
The Opponent also submitted that the failure to add the patent in suit to the new management software was too vague with no dates given as to when the purchase of this software occurred or who did it. The paragraph the Opponent took issue with here is recited below.
"I have been advised why renewal may not have appeared in our back up processes and also was informed that Advanta's systems and processes in place to ensure IP Rights are renewed on time. Initially, and sometime around 2017-18, i.e. after amalgamation, the responsibility for maintaining the patent portfolio was being managed by the Advanta Legal Manager and the patent department of UPL Ltd. These two teams worked in collaboration with each other to ensure proper maintenance of the patent portfolio. Therefore, merging the patent portfolio of these two entities and maintaining the merged portfolio turned out to be a large and complex task for the team. To be able to manage the portfolio, the two teams sought approval for, and purchased, a portfolio management software "Anaqua". Still, the bibliographic details of each patent family member in each country needed to be manually uploaded to the Anaqua. To give perspective as to the size of the project, the bibliographic details of about 2382 pending and granted patents/patent manually entered and uploaded into the Anaqua system. During this period, the Legal Manager of Advanta, Mr Sandeep Chowdhury, who was incidentally also the decision-maker for the maintenance of the Advanta portfolio, left the organisation and it is not been possible to trace the email chain from either the attorneys Spruson & Ferguson or CPA Global to the Legal Manager, Advanta, regarding the renewal of this patent. I believe that somewhere during the merging of Advanta and UPL portfolios to the combined management of the merged portfolio between Advanta and UPL professions, the departure of the Legal Manager Advanta along with other key personnel responsible for maintaining the Advanta patent portfolio and finally till the manual upload was completed into the Anaqua system, this patent was not identified or recorded into the portfolio management system. I believe it was an inadvertent human error that led to this mismanagement, which was compounded by a complex chain of events occurring around the same time which resulted in this oversight i.e. (a) merger of Advanta and UPL portfolio; (b) combined management of the merged portfolio between Legal Manager Advanta and UPL patent department; (c) the departure of the Legal Manager, Advanta and other key personnel; and (d) manual upload of the bibliographies of the entire 2300+ portfolio into the Anaqua system, which led to this unfortunate event.[38]
[38] Croker #1 at 23.

The Opponent compares this situation with that in Re Sanyo.[39] The Opponent submits that that the AAT had the benefit of statements from Mr Sato, a director of the Japanese patent agents NGB Corporation, Mr Leslie from the Applicant's Australian firm Davies Collison Cave, Mr Yamada, the Applicant's Japanese patent attorney, Mr Walker, a partner in the patent renewal firm Computer Patent Annuities and Mr Sugiyama, the in-house intellectual property manager of the Applicant. With the assistance of this comprehensive suite of evidence, the Tribunal was able to set out with clarity the train of events that lead to the failure to pay the renewal fee. I note that in that case the Respondent, i.e. the Commissioner, did concede that a number of errors had occurred, but argued that discretion should not be exercised. However, the issue, from the Commissioner’s perspective, was that Sanyo had not provided sufficient information as to the surrounding circumstances to permit a proper evaluation of its application.[40] Furthermore, the Commissioner’s case was that no employee responsible was identified, no evidence of how the system operated had been given, that the loss of files during a move was speculative and that correspondence was lacking.[41] I note that the Tribunal then stated:
"It is more important to consider the consequences of extending or refusing to extend time than to debate reasons why the act was not done in time".[42]
[39] Re Sanyo Electric Co Ltd and Commissioner of Patents [1996] AATA 832; (1996) 36 IPR 470
[40] Re Sanyo at [12].
[41] Re Sanyo at [13].
[42] Re Sanyo at [16].
The evidence provided by Mr Croker is of low weight. This paragraph begins with him, stating that he was advised and informed. He then concludes with "I believe it was an inadvertent human error that led to this mismanagement." This evidence appears to be hearsay and vague in nature with him being advised or informed and then forming a belief about what happened based on the advice/information.[43] There is no evidence of who informed or advised him or what his enquiries were. However, considering the AAT's findings in Re Sanyo, I do accept his statement that the "Patent was not identified or recorded into the portfolio management system". I have no reason to believe that this is incorrect, and it highlights an error that occurred within the broad definition of an error.
[43] Croker #1 at 23 first sentence.
Did the error or omission cause the failure to pay the renewal fees?
It has been established that the patent was not entered into this system, and this satisfies the requirements of an error. Mr Croker states that sometime around 2017-2018, i.e. after amalgamation, the two teams start working together. They seek approval for and purchase a system. Then they were faced with an immense task of manually entering all the Patent family members into that system. I consider that if the patent had been correctly entered into this system before the due date, then the renewal fees would have been paid. However, there are questions as to whether this process of entering the portfolio into the system occurred or even began to occur before the due date of 6 October 2017. If the error occurred after the due date, then it cannot have caused the failure to pay the renewal fees.
The Applicant does not have a burden of proof to make their case; however, they must set out the circumstances enough for the tribunal to be able to make a decision. In this case, the full events have not been provided. It would be known to the Applicant when this system was purchased, and it would be known when the task of entering the patent portfolio into it began, however, those dates have not been provided. I cannot determine if the error caused the failure to pay the renewal fees.
I refuse the application.
Costs
The opposition has been successful. I award costs against the Applicant according to Schedule 8 of the Regulations.
Keith Wagg
Delegate of the Commissioner of Patents