Peter John Ward v Embrey Attachments and the Stanley Works
[2008] APO 17
•12 June 2008
ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Patent: 770238 in the name of Peter John Ward
Title : Cutting or Crushing Apparatus
Action: Oppositions by Embrey Attachments Pty Ltd and The Stanley Works to the patentee’s application under section 223 for an extension of time to file search results under section 45(3) and to a request for leave to amend under section 104.
Decision : Issued 12 June 2008
Abstract
Section 223 extension of time granted.
The patentee has provided a full and frank disclosure to establish a causative error to enliven section 223. Their agent’s failure to implement a system for monitoring foreign applications with corresponding Australian applications meant that there was no warning to alert practitioners to forward foreign search results to the Australian patent office to comply with section 45(3). The patentee only became aware of this failure with the Commissioner’s letter of 4 May 2006 and took steps shortly after to apply under section 223 for an extension of time.
Section 45(3) contemplates that foreign search results can be provided after grant and therefore there is a real purpose to the extension. While it is a lengthy extension, the public always had access to the material and could have challenged the patent at any stage. The public interest is therefore not as disadvantaged as Embrey has alleged. In contrast the patentee would be severely disadvantaged because the provisions of section 102(2C) preclude amendments to avoid prior art which was not disclosed under section 45(3).
Section 45(3) was an important change to the Patents Act and the NZ agent should have instigated a system to ensure compliance. However his failure to do this was contrary to his client’s intentions who was unaware of the oversight. In such circumstances, the client should not bear the consequences of the agent’s error and the balance of interests is therefore in granting the extension.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent No. 770238 in the name of Peter John Ward and oppositions by Embrey Attachments Pty Ltd and The Stanley Works to the patentee’s application for an extension of time under section 223 to file search results under section 45(3) and to a request for leave to amend under section 104.
BACKGROUND
Patent Application 770238 was filed in the name of Peter John Ward (“Ward”) on 18 August 2000 under the provisions of the PCT claiming priority from two NZ provisional applications (NZ 335930 and 505442 filed on 19 August 1999 and 29 June 2000 respectively). The Australian application entered the national phase on 18 March 2002 and on 3 October 2002, the applicant requested examination. At that time, the applicant also provided some search results to comply with the provisions of section 45(3). These results consisted of an international search report and an international-type search report conducted by the Australian Patent Office as well as an independent search by the applicant through commercial patent databases.
On 5 September 2002 and 7 March 2003 respectively, the European and US patent offices issued new search reports on family members of the current Australian application (EP 0955197 and US10/049 772) which under section 45(3), the applicant was also obliged to provide. The applicant failed to do this within the statutory deadlines prescribed under then regulation 3.17A(2)(c) (for the EP search report) and 3.17A(4) (for the US search report). The application was then sealed on 3 June 2004 without the Commissioner ever being made aware of these additional foreign search results.
On 11 October 2005, a third party (Watermark Patent & Trade Mark Attorneys) filed a request for re-examination under section 97(2) relying on a number of prior art documents which had been raised in EP and US search reports. The Australian re-examination report found that claims 1-5 and 7 were not novel and claims 6, 8-11 lacked an inventive step based on a number of these documents.
In response to the re-examination report, the patentee proposed a number of amendments noting (in paragraph 2 of page 1 of their letter of 17 March 2008) that these were for the purpose of overcoming the examiner’s objections regarding lack of novelty and inventive step. The examiner granted leave to amend on 10 April 2006 without recognising that the amendments might not be allowable under section 102(2C) because the US and EP search reports had not been provided to the Commissioner under section 45(3).
Belinda Wadeson from Watermark brought this matter to my attention in a telephone conversation on 2 May 2006. At that time (my letter dated 4 May 2006), I advised both parties that having already granted leave to amend, I believed the Commissioner to be functus officio and unable to review or reverse this decision to consider the implications of section 102(2C) in her examination. There was also no statutory power for the Commissioner to raise section 102(2C) of her own volition after having granted leave to amend. Under regulation 10.5(2), the Commissioner has no discretion in publishing the decision to grant leave to amend. Under regulation 10.6(2), she must then allow an amendment where leave has been published unless there is an opposition filed. This meant that the amendments would necessarily proceed through to acceptance unless a third party opposed them.
I also pointed out in my letter that the patentee may not be aware of the problem as he had not been sent a copy of Watermark’s letter of 13 February 2006 which first raised the issue. Both parties were advised that there may be a potential remedy under section 223 to apply for an extension of time to file search results but noted that any such extension would be more than 3 months and therefore could also be opposed by third parties.
The section 104 amendments were advertised for opposition purposes on 8 June 2006 and two parties filed notices of opposition. Embrey Attachments Pty Ltd, (“Embrey”) filed its notice on 4 September 2006 (opponent 1) and The Stanley Works (“Stanley”) filed its on 7 September 2006 (opponent 2).
In the meantime (on 29 August 2006), the patentee filed an application under section 223(2) for an extension of time from 3 April 2003 [when the EP search results were first due] to provide search results pursuant to section 45(3). I note that this start date coincides with the deadline set by regulation 3.17A(2) as it existed at that time the EP search report was issued [see SR [2002] No. 59]. However there were a number of amendments to that regulation which occurred before the original deadlines for the EP search report had expired and had the effect of extending the statutory deadline first to 1 June 2003 [see SR (2002) No. 263] and then again to 1 February 2004 [see SR (2003) No. 71] – Annex A summarises these amendments.
By my reckoning, the series of amendments to regulation 3.17A meant that the search reports were not finally due until 1 February 2004 and the extension required is 10 months less than that requested. However, since the requested extension is longer than (and encompasses) the required period, the issue was never raised by the opponents and the difference in start dates is not a critical factor in the determination, I will treat the current section 223 request as if it were for the correct statutory period.
10. The section 223 application was advertised for opposition purposes on 9 November 2006 and both opponents to the section 104 amendments also opposed the section 223 request, filing their notices of opposition on 8 December 2006.
11. Opponent 2 (Stanley) did not serve any evidence advising that it would rely on the evidence served by opponent 1 (Embrey). Embrey completed its evidence on 27 February 2007 in the section 104 opposition and on 5 June 2007 in the section 223 opposition. The patentee (Ward) did not file any evidence in answer in any of the oppositions and the Commissioner set all matters for hearing in Canberra on 13 February 2008.
12. Stanley did not appear nor did it file any written submissions in relation to either of its oppositions. Embrey was represented by Helen Rofe of counsel instructed by Roger Green and Belinda Wadeson Patent Attorneys from Watermark, Melbourne. Ward was represented by Robert Wulff and Samantha Keirs, Patent Attorneys from Griffith Hack, Sydney, who both appeared via video link.
Section 104 opposition
13. The main ground of the section 104 opposition was based on section 102(2C) which reads as follows:
An amendment to a complete specification relating to a patent is not allowable if:
(a)the patentee or the patentee’s predecessor in title failed to ensure the provision to the Commissioner of the information required by section 45(3) or 101D in relation to the patent; and
(b)the effect of the proposed amendment would be to remove a lawful ground of objection under section 18(1)(b) or section 18(1A)(b) to the specification arising from the existence of some or all of the information not provided
14. The provision was introduced in the Patents Amendment Act 2001 as a penalty for non-compliance with section 45(3) and means that a patentee cannot amend a complete specification relating to a patent (innovation or standard) to remove a novelty, inventive step or innovative step objection if the objection arises as a result of information that should have been provided to the Commissioner under subsection 45(3) or section 101D of the Patents Act and was not (see the Explanatory Memorandum to the Patents Amendment Act 2001).
15. At the hearing, Embrey also raised oral arguments that there was also a problem with section 40 compliance in contravention of section 102(2)(b). The patentee acknowledged that there might be a potential problem with the form of the current amendments and had filed further amendments prior to the hearing (on 31 January 2008) to rectify this.
16. Unfortunately, the second set of amendments were a separate section 104 request and could not be considered until the current amendments had been finalised. Given the obvious efficiencies in having the two requests combined, and the patentee’s concession that there could be a problem with the current amendments, the patentee agreed to withdraw both sets of amendments undertaking to file a third set of amendments which incorporated both the first and second section 104 requests. This third set of amendments could be dealt with later date once the fate of the section 223 request had been determined.
17. Given the withdrawal of the section 104 amendments, there was no basis for the current section 104 oppositions and the hearing therefore proceeded solely in relation to the section 223 request.
CHRONOLOGY
18. The relevant chronology can be summarised as follows:
| Date | Event |
| 18 August 2000 | Australian application 770238 is filed under the provisions of the PCT |
| 1 October 2001 | Date of Assent of Patents Amendments Bill 2001 introducing section 45(3) provisions |
| 18 March 2002 | The NZ PCT application enters national phase in Australia |
| 2 April 2002 | Date of commencement of Section 45(3) provisions |
| 15 July 2002 | NZ agent [James & Wells (“JAW”)] receives a direction to request examination of the Australian patent application from his Australian agent who also advises him of the new section 45(3) requirements |
| 6 August 2002 | NZ agent instructs Australian agent to request examination and advises them of prior art available to the applicant as of 6 August 2002 |
| 5 September 2002 | European Search Report is completed |
| 3 October 2002 | Applicant requests examination and provides certain search reports to comply with section 45(3) – these reports do not include the European or US reports. |
| October 2002 | NZ agent transfers Ward files from Auckland to Hamilton office and responsibility for the files passed to two other practitioners in the Auckland office. |
| 7 March 2003 | US Search Report is completed |
| 22 December 2003 | Australian Application accepted |
| 1 February 2004 | EP and US search results due for Australian application |
| 3 June 2004 | Patent Sealed |
| 11 October 2005 | Third party [Watermark Patent and Trade Mark attorneys, Melbourne (“Watermark”)] files re-examination request |
| 16 November 2005 and 17 January 2006 | Examiner's re-examination reports issue and re-issue |
| 17 March 2006 | Response to re-examination report and s104 amendments filed |
| 10 April 2006 | Examiner grants leave to amend |
| 4 May 2006 | Commissioner's letter to Watermark and Ward indicating that leave to amend the specification had been granted by the Examiner and that the leave is not able to be reversed. The Commissioner indicates that an opposition to the granted amendments could be filed and also any request by the Applicant to extend the time to file 45(3) might also be opposed. |
| 8 June 2006 | section 104 amendments advertised |
| 29 August 2006 | patentee files section 223 request to file section results under section 45(3) check date. |
| 4 September 2006 | Embrey files a notice of opposition in relation to the section 104 amendments |
| 7 September 2006 | Stanley files a notice of opposition in relation to the section 104 amendments |
| 9 November 2006 | patentee’s section 223 request advertised for opposition purposes |
| 8 December 2006 | Stanley and Embrey both file notices of opposition to the patentee’s section 223 request |
| 31 January 2008 | new section 104 request filed by the patentee |
| 13 February 2008 | hearing in relation to section 104 and section 223 requests |
| 15 February 2008 | withdrawal of both section 104 requests |
RELEVANT LAW
Section 45(3)
19. Section 45(3) provides that:
The applicant must inform the Commissioner in accordance with the regulations, of the results of the following searches carried out for the purpose of assessing patentability of an invention disclosed in the complete specification or a corresponding application filed outside Australia:
(a)any documentary searches by, or on behalf of a foreign patent office other than searches prescribed by the regulations;
(b)the documentary searches prescribed by the regulations
20. Section 45(4) notes that sub-section (3) only applies to searches completed before the grant of a patent.
21. Section 45(3) was a relatively new provision at the time when the current error was alleged to have occurred. The provision was introduced by the Patents Amendment Act 2001 which was assented to on 1 October 2001 and came into effect on 2 April 2002 around 6 months before examination was requested on the current application.
22. As noted above (see also Annex A), the deadline for both search reports are governed by current 3.17A(4) which states that:
The applicant must inform the Commissioner of the results of a documentary search by the latest of:
a)the day 6 months after the search is completed; and
b)the day 6 months after the applicant asks for an examination under section 44 of the Act; and
c)1 February 2004.
23. The explanatory memorandum to the Patents Amendments Bill 2001 suggested that the main purpose of the amendments was to strengthen Australian patents and make them more certain by changing the novelty and inventive step requirements of the Patents Act to more closely align these tests with international standards. Under Section 45(3), an applicant was obliged to provide results from searches conducted by foreign patent offices on overseas family equivalents. Such information assisted the Australian Patent Office with identifying the most relevant prior art documents.
24. I note that most foreign search results are now readily available on line and hence recent amendment to the Patents Regulations (October 2007) have now removed the obligation to provide them. However this only applies for applications where the previous statutory deadlines for providing them had not already expired by 22 October 2007 or where examination had not been requested by that date [see regulations 3.17B(2) and (3)]. In the current case, the statutory deadlines for section 45(3) had already expired and the provisions of regulation 3.17A(4) mean that the current patentee still has an obligation to meet section 45(3) requirements.
Section 223(2)
25. Section 223(2) reads as follows:
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.
26. Section 223(11) defines a "relevant act" for the purposes of section 223 as:
an action (other than a prescribed action) in relation to a patent, a 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.
27. Section 223 is a discretionary provision and both parties could be adversely affected by the decision to grant an extension of time to file a notice of opposition. Therefore sub-regulation 22.22(1) gives both parties the opportunity to be heard in respect of the grant of a section 223 extension of time.
28. The definition of an error or omission was expressed by Jenkinson J in Kimberly-Clark Ltd v Commissioner of Patents(No 3) 13 IPR 569-584 where the Federal Court upheld a decision by the Commissioner's delegate to refuse an extension of time to lodge a notice of opposition. Jenkinson J defined an error or omission in the following terms in the context of section 160 of the Patents Act 1952. Section 223 is the equivalent of the previous section 160.
"It is in my opinion difficult to suppose that only the inadvertence and accidental steps, and not errors resulting from faulty reflection, of the former class of persons were intended by the draftsman to be within s 160(1). Further, the word 'error' is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgement by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips."
29. Jenkinson J rejected the argument that section 160(2)(a) excluded errors or omissions that were the products of deliberation. Consequently, the concept of what constitutes an error should be interpreted broadly and includes an error of judgement. But Jenkinson J also made the following comments at page 580:
"By no means every judgement by the person concerned or by his agent or attorney which can be shown to have been mistaken will answer the description error or omission in the ordinary meaning of those words, which in their context carry, in my opinion, a connotation of obviousness in error."
30. In addition it was found that the applicant for the extension of time had not provided a prompt, frank, comprehensive and clear disclosure of all the circumstances relevant to the weighing of the discretionary consideration upon which grant or refusal of an extension of time will depend.
31. At page 583 Jenkinson J found that, in order to make out a proper case justifying an extension:
"………an applicant would in my opinion 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 (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."
DECISION
32. Both parties also acknowledged that there were two distinct issues in the current section 223(2)(a) dispute:
a) Whether there was an error on the part of the agent to enliven section 223; and
b) If there were an error, whether the Commissioner should still exercise her discretion to grant the extension.
Was there an error to enliven section 223?
33. The patentee initially provided a statutory declaration by Simon John Murphy dated 30 June 2006 in support of his section 223 request. In his declaration, Mr Murphy stated that he was a registered New Zealand patent attorney and currently employed by the firm James & Wells (JAWs). He initially filed the New Zealand provisional applications and the PCT application on which the current Australian application is based. On 15 July 2002, he received a direction to request examination of the Australian application and was advised at that time by his Australian agent of the (then) relatively new section 45(3) provisions which had commenced 3 months earlier (on 2 April 2002).
34. Mr Murphy then sought instructions from his client and advised the Australian agent of the prior art he was aware of as of 6 August 2002. Those results were included in a letter to the Australian patent office on 3 October 2002. The US and EP search results had not been completed by 6 August 2002 and so were not included in Mr Murphy’s initial advice to the Australian agent. Shortly after this (some time in October 2002), the Ward files were transferred to two new (then unnamed) practitioners in the Auckland office. According to Mr Murphy (in paragraph 13), these practitioners were unfamiliar with the applications and were not aware of the earlier advice from the Australian agent. He concluded that this caused the applicant’s duty to disclose search results under section 45(3) to be overlooked.
35. Embrey argued that paragraph 13 of Mr Murphy’s declaration suggested that the new practitioners were responsible for the error and yet neither was named nor did they provide evidence in support of the section 223 request. According to Embrey, this meant that no one with direct knowledge of the circumstances of the error had provided evidence and that therefore the patentee had failed to provide a “full and frank disclosure” of the relevant circumstances leading to the error.
36. I disagree with their argument. Reading Mr Murphy’s declaration as a whole [see in particular paragraphs 11 and 12], the critical causative error occurred with the failure in JAW’s Auckland office to have a formal system in place to ensure compliance with the new section 45(3) provisions. As Mr Murphy notes, his firm had a system for US applications where “duty to disclose” provisions similar to section 45(3) exist. This system involved having a warning sticker on the cover page of all files containing a corresponding US application highlighting an applicant’s “duty to disclose” any search results to the US office.
37. JAW made an error in failing to put a similar system in place for Australian applications. The consequence of this error was that when a search result was received on an overseas patent application (with an Australian family equivalent), there was no flag on the file to alert a practitioner that the search result also needed to be forwarded to the Australian Patent Office. The subsequent transfer (and splitting) of the files to two new practitioners who were unfamiliar with the file made it less likely that someone would notice (and correct) the original defect but the transfer by itself was not the causative error.
38. However although Mr Murphy’s explanation of the circumstances of the error is entirely plausible given the (then) newness of the section 45(3) provisions, I note that that Mr Murphy devolved responsibility of the file in October 2002. As a consequence, there was a long period (around 16 months) when Mr Murphy had no knowledge of the file. My concern was that he was not in a position to comment about the patent applicant’s actions and beliefs in this intervening period and in particular whether the new persons responsible for the file had learned of the problem prior to the Commissioner’s letter of 4 May 2006.
39. The opponent argued in their submissions of 15 May 2008 (see paragraph 57) that this issue had already been identified in the Statement of Grounds and Particulars and that the patentee should not be given an opportunity to rectify the deficiencies of their original application. In my view, the issue was not raised in evidence in support and it was reasonable for the patentee to assume that it was not being pursued by the opponent at the hearing. As a consequence, I don’t believe the patentee had been given adequate notice of the problem and that he should be allowed the opportunity to provide further evidence.
40. I also note that an administrative agency, in contrast to a court, is "under a duty to arrive at the correct or preferable decision in the case before it according to the material before it. If the material is inadequate [the administrative decision-maker] may request or itself compel the production of further material": Bushell v Repatriation Commission (1992) 175 CLR 408 at
41. Given this role, the Commissioner has invoked regulation 5.11 in past decisions in order for the decision maker to properly or more fully determine the matter (see, for example, Bausch & Lomb Inc v. Allergan Inc (1997) APO 45 and Flexible Steel Lacing Company v Beltreco Ltd 2000 APO 24). Further, in a recent case Ashmont Holding Ltd v American Home Products Corporation and Nature Vet Pty Ltd 2002 APO 24, the delegate of the Commissioner found that late filed evidence should still be considered in her determination of the section 223 application:
"I agree with Ms Howard that it is most unfortunate that these declarations were filed late. Ashmont were given 60 days from the date of the decision on the extension of term of petty patent 711820 in which to file the section223 application which should have been ample time to obtain the necessary supporting declarations. Nevertheless, I believe that I should be considering all relevant material in coming to my decision and that the matter should be decided on its merits, rather than excluding information on the basis of a failure in procedure on the part of Ashmont. "
42. I believe the principles of Ashmont apply here. Allowing the patentee to provide further evidence will enable a more correct determination of a matter. Procedural fairness is preserved by letting all parties make representations on the proposed new material. However, as also noted in Ashmont, delay would be a factor in determining whether to exercise my discretion to grant the application for extension and in the determination of costs.
43. As a consequence, I allowed the patentee some time after the hearing to provide further evidence. I noted that such evidence should preferably be from the “new practitioners” mentioned in Mr Murphy’s declaration but if not, someone who could directly comment about the processes in the Auckland offices at the relevant date.
44. The patentee advised that the two new practitioners (Mr Allen and Mr Johnson) had since resigned from JAW and were not available to provide evidence. Instead, the patentee provided further statutory declarations by Simon John Murphy (dated 4 March 2008), Ian Finch (dated 17 April 2008), Simon Ward (dated 5 March 2008) and Robert Wulff (dated 29 April 2008).
45. Mr Finch (a partner of the firm JAW) stated that his firm did not have any formal procedures for ensuring section 45 compliance at the relevant time and that a system was only implemented when the error in the current case had become apparent. Mr Murphy’s declaration of 4 March 2008 confirms this providing a copy of an internal memorandum dated 8 August 2006 to all staff from Ian Finch. This memorandum advises all staff to implement an IDS (information disclosure sticker) system for files with an Australian patent family member. I note that the date of the memorandum (8 August 2006) was very close to the date which the current section 223 request was filed (29 August 2006) consistent with both Mr Murphy’s and Mr Finch’s explanation of events.
46. Mr Finch also reviewed the case files and noted that there was no apparent communication between the practitioners and the patentee about the Australian IDS requirements. Mr Ward (the patentee) confirms in his declaration of 5 March 2008 that any error was made without his knowledge. In addition, Mr Wulff (patent attorney from Griffith Hack, Sydney handling the patent prosecution in Australia) declared that his firm did not send any reminders of the Australian section 45(3) requirements after 27 September 2002 which might have alerted the new practitioners to review their files to ensure section 45(3) compliance.
47. Mr Wulff also confirmed that his firm only became aware of the potential problem as a result of the Commissioner’s letter of 4 May 2006. In my view, all this further evidence is consistent with the patentee’s agent in New Zealand making a genuine error in failing to set up a formal system to alert practitioners of the need to provide search results under section 45(3). This error was not realised until 4 May 2006 at which stage he took steps soon after to rectify the problem.
48. The opponent in their submissions of 15 May 2008 questioned why the NZ practitioners would have omitted to disclose the European and US search results. In their view, given the relative newness of the provisions, these requirements should have been at the forefront of their mind. However, as noted in Kimberly-Clark Ltd v Commissioner of Patents (1988) 84 ALR 685 at 694-5:
‘... the word "error" is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgment by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips.’
49. Against this background, the opponent’s hindsight analysis of what should have happened is not all that relevant to what the evidence clearly indicates did happen. Similarly, while the opponent tried to identify gaps in the patentee’s evidence, these were very minor and did not suggest any inconsistency in the patentee’s explanation nor cause me to question or doubt the patentee’s explanation.
50. Ms Rofe argued at the hearing that there were other technical deficiencies with Mr Murphy’s original declaration. In particular she suggested that it:
a) does not articulate the nature of the precise error or omission which occurred and how that error or omission caused the patentee’s failure to disclose the search results;
b) fails to explain the nine month delay from receiving notification of the absence of section 45(3) disclosure in the Commissioner’s letter of 5 November 2005 (sic) to making the application for an extension of time (I take this to mean the Commissioner’s re-examination report of 16 November 2005);
c) fails to explain why it took a further two months from the date of his declaration for the patentee to make its application for an extension of time;
d) fails to mention the role of the patentee’s Australian agents Griffith Hack in the failure to disclose the foreign search results;
e) does not disclose whether there are any Canadian or other international search results which should have also been disclosed; and
f) fails to comply with many matters of form.
51. I believe that some of Embrey’s concerns might have been addressed by the further evidence provided by the patentee after the hearing but in any event, I did not find any of their arguments persuasive.
52. The circumstances of the error were clear from the material provided and I had no difficulty inferring how the error would have led to the patentee’s failure to file search results. In addition, I do not accept that the patentee necessarily would have realised from the Commissioner’s re-examination report of 16 November 2005 that there was a problem with section 45(3) compliance. The only reference to section 45(3) in the re-examination report was in the first paragraph where the examiner noted that:
“I have received the letter filed by the third party of 11 October 2005 disclosing known search results in accordance with section 45(3) or section 101D.”
As the patentee argued at the hearing, this paragraph highlights the source of the new documents but does not suggest that the patentee had failed to comply with section 45(3). Although Watermark had referred to the problem in a letter dated 13 February 2006, this letter was not forwarded to the patentee. The patentee was therefore not directly advised of the problem until my letter of 4 May 2006.
53. This letter acknowledged (see paragraph 4) that it seemed unlikely that the patentee would have been previously aware of the problem. Mr Wulff’s declaration of 29 April 2008 (see paragraph 7) confirms that the letter of 4 May 2006 was the first time the patentee became aware of a problem with section 45(3) compliance. I therefore do not accept that there was a nine month delay in filing a section 223 application as alleged by Embrey.
54. Mr Wulff’s declaration of 29 April 2008 also outlines a number of steps taken by the patentee between May 2006 and August that year (when the section 223 application was filed) and also explains the role played by the Australian agent in the failure to file search result. I believe his declaration adequately obviates the concerns raised by Embrey in paragraphs (c) and (d) above.
55. With regard to paragraph (e), I note that at the relevant date the patentee had already provided search results from 3 sources including results from an independent search through commercial data bases which the Commissioner could not have sourced from any other provider in a letter to the Australian Patent Office dated 27 September 2002. The patentee had therefore already demonstrated a willingness to comply with their section 45(3) obligations at the relevant time. The EP and US results were only not included in that letter because these were established after the NZ agent had provided instructions to the Australian attorney. There is therefore no evidence that there was a deliberate strategy by the patentee to conceal foreign search results and no reason to suspect that there are other search results as alleged by Embrey. I would expect that most foreign search results (including those Canada) would be publicly available and if there were to be the problem alleged by Embrey, they could provide some evidence of it. In absence of this material, I do not accept Embrey’s argument.
56. With regard to paragraph (f), the opponent outlined their alleged deficiencies with regard to “matters of form” in their submissions dated 15 May 2008. However, none of the these “matters of form” affect the substance of the patentee’s case. It is also a well established principle from Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Co [1969] HCA 7; (1969) 120 CLR 136 at 143, that matters of form are not fatal:
“the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than it should be shut out in consequence of a failure of procedure, lamentable though the failure may be."
57. As a consequence, I do not agree with Embrey’s argument in paragraph (f).
58. Having found all the Embrey’s arguments unpersuasive, I am satisfied that there has been a causative error to enliven section 223. The patentee’s NZ agent failed to implement a system for monitoring foreign applications with corresponding Australian applications which meant that there was no warning to alert practitioners to forward foreign search results to the Australian patent office. The patentee only became aware of this failure with the Commissioner’s letter of 4 May 2006 and took steps shortly after this to rectify the problem.
Should the Commissioner exercise her discretion to grant the extension?
59. The granting of an extension under section 223 is discretionary and having found that the patentee has established a causative error to enliven section 223, the key question then becomes whether the Commissioner will use her discretion to grant the extension. There were a number of discretionary issues raised by the Embrey which it submitted weighed heavily against such a grant:
a) There was not a full and frank disclosure (Kimberly-Clark [supra] at p 583-4)
b) There was no real utility to the extension (re Application by Viskase Corporation (2001) 51 IPR 416 (at 418)
c) The public interest [Scaniainventor v Commissioner of Patents (1981) 36 ALR 101 (at p 105)]
60. I will deal with each of these issues separately below.
Full and frank disclosure
61. I have dealt with this argument in some depth above and do not propose to revisit the same issue here. A “full and frank disclosure” requires a party to place before the decision maker all material facts relevant to the determination (see for example Hayden & Ors v Teplitzky & Ors [1997] FCA 230 (9 April 1997). As noted above, my view is that the patentee has clearly established that there was a causative error to enliven section 223. The key error occurred when Mr Murphy was responsible for the files with his Office’s failure to provide a monitoring system for foreign applications with corresponding Australian applications. Mr Murphy has direct knowledge of the circumstances of this error and has provided an entirely plausible explanation for the error and how it led to the failure to file search results under section 45(3). The patentee also provided a number of declarations to explain why the error was not realised until 4 May 2006 and what steps he took to rectify the error once he became aware of it. The evidence is all consistent with the facts as explained by the patentee and there is no suggestion that there are further facts material to her determination which have been concealed from the Commissioner. I therefore consider that the patentee has provided a full and frank disclosure of the circumstances of the error which led to the failure to file search results.
No real utility to the extension
62. Embrey noted that section 45(3) was introduced by the Patent Amendment Act 2001 (Clth) as part of a suite of amendments whose stated purpose was to increase the “threshold” for obtaining a patent so as to increase the likelihood that granted patents are valid (see the Explanatory Memorandum to the Patents Amendment Act 2001). The opponent argued that this “threshold” test had to be satisfied at grant and as this had already occurred, the failure of file search results could not be remedied by section 223.
63. I note that section 223 extends the time for doing a relevant act but it does not change the day that the relevant act is done. Therefore it is possible for a relevant act to be done after a key “cut off” event has already occurred and the relevant act can have no effective purpose. This occurred in the case of Re Application byViskase Corporation 51 IPR 416; [2001]APO 2(5 January 2001) where a third party had requested an extension of time under section223 to file notice of documents under section 27(1) for the examiner to consider in examination after the application had already been accepted.
The Deputy Commissioner found that he had no power to deem the application as not having been accepted, or to otherwise withdraw acceptance of the application. Accordingly, as the purpose of the section 223 request would require an action on the part of the Commissioner that is contrary to law in order for it to be given effect, discretion should operate to refuse the extension because there was no purpose (or utility) in the extension.
65. In the current case, Embrey argued that the section 45(3) provisions cut out at acceptance. According to the Embrey, by reason of section 49(1), the Commissioner cannot revisit the considerations leading up to acceptance and sealing of the Patent. It argued that the Commissioner lacks the power to review the examination and acceptance of the Patent in light of new material arising after grant. The purpose of the extension of time request would therefore require an action of the part of the Commissioner that is contrary to law in order to give it effect.
66. However Embrey’s argument is clearly inconsistent with both Section 45(4) of the Patents Act and regulations 3.17A(4) and (5) of the Patent Regulations. Section 45(4) states that section 45(3) applies to all foreign searches completed before the grant of a patent – clearly contemplating that there would be searches provided to the Commissioner after acceptance of a patent application.
67. The time periods to provide search results prescribed in regulation 3.17A(4) also envisage search results to be provided after both acceptance and grant. Inter alia, they allow an applicant to inform the Commissioner of the results of a documentary search by the day 6 months after the search is completed. If a search was completed post acceptance or even shortly before acceptance, the prescribed time limit would fall after both acceptance and grant of the application and allow a patent applicant to provide search results at those stages.
68. Regulation 3.17A(5) is even more explicit specifically providing a no-fault extension of time mechanism for an applicant to provide search results on or before 3 months after the date a notice of acceptance is published on a patent application.
69. If search results were received after either acceptance or grant of an application, the Commissioner has power under section 97(1) to re-examine the patent and deal with any new citations. Such a scheme suggests that the increased “threshold” of patentability is a standard to be applied at any stage in the life of a patent and not just at grant. This is in contrast to the Viskase situation where the material was provided under section 27(1) [as it was then] and could only be dealt with by the Commissioner before acceptance.
70. My view is that the Commissioner has a statutory power to deal with a foreign search report after acceptance or grant and the Patents Act and Regulations clearly contemplate search reports being filed after these stages. I find therefore that there is a real purpose to the current extension request and that this is not a discretionary factor which would lead to refusal of the request.
Public Interest
71. Embrey noted that the purpose of section 45(3) was to increase the “threshold” for obtaining a patent so as to increase the likelihood that granted patents are valid. Embrey argued that the consequences of a failure to disclose under section 45(3) were consistent with this stated objective. I accept that it is not in the public interest for a patentee to obtain a broader patent protection than that to which he is entitled only to seek to narrow the patent under section 104 in light of retrospective 45(3) compliance. However this still has to be balanced against other public interest considerations. The purpose of the Patent System is to encourage innovation by rewarding inventors with an exclusive monopoly to their claimed invention. A single inventor or small company is unlikely to file many patent applications and cannot be expected to have an in depth knowledge of the patent system. Having a complex administration scheme where patentees could lose all their IP rights as a result of a technical problem [such as paying a fee or not being aware of the provisions of section 45(3)] would make the system unworkable for that group of key stakeholders.
72. In recognition of this, Australia has a generous extension of time scheme under section 223 which allow patentees to preserve their IP rights when there has been a genuine error in failing to meet a statutory deadline. As noted by the Federal Court in GS Technology Pty Ltd v the Commissioner of Patents [2004] FCA 1017 (9 August 2004) at paragraph 50:
“Section 223 of the Act is a remedial section designed to advance the purposes of the Act and, to that end, permitting the forgiving of error or mistake where it is appropriate to do so.”
73. Section 223 [see regulation 22.11(4)] allows an extension of time to do any relevant act under the Patents Act and Regulations other than:
(a)an action or step prescribed in Chapter 5, other than an action or step taken under regulation 5.3 or 5.3AA, paragraph 5.4 (a), subparagraph 5.8 (1) (a) (i) or regulation 5.9A;[1]
(b)filing, during the term of a standard patent as required by subsection 71 (2) of the Act, an application under subsection 70 (1) of the Act for an extension of the term of the patent.[2]
[1] These are excluded because they have their own (more generous) extension of time provisions [prescribed in chapter 5]
[2] These are excluded because it prevents the restoration of a patent that the public had already been advised had expired after 20 years
74. The ability to extend a time limit prescribed under section 45(3) where there has been a genuine error has not been excluded under these provisions and is consistent with the principle of protecting patentee’s rights when there has been a genuine error. In the current case, the patentee was represented by an experienced patent agent who was aware of the new section 45(3) provisions in Australia but for some reason did not instigate a system for monitoring foreign search results.
75. The failure to instigate a system to ensure section 45(3) was a major oversight for the NZ agents. It was an important change to the Australian Patents Act and it is difficult to understand how the NZ agents (who regularly deal with Australian patent applications) would not have thought to implement a system for ensuring compliance (especially given that they had a system for US applications where similar provisions existed).
76. Burchett J discussed discretionary factor for determining an extension of time in Ferocem v Commissioner ofPatents 28 IPR 243 at page 247 where he noted:
"The determination of an application for an extension of time under reg 5.10(2) involves a balancing exercise, in which competing considerations must be taken into account. ... They include the expeditious disposal of matters in the Patent Office, and the questions of cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office."
77. It could be argued that the NZ agents’ failure to implement a monitoring system for Australian applications is a lapse in proper professional standards. However even if this were true, I do not think that this is sufficient to refuse an extension. The evidence (in particular Simon Ward’s declaration of 5 March 2008) suggests that the patentee always intended to obtain a valid patent in Australia (see paragraph 3). In such circumstances, the principles of GS Technology v the Commissioner of Patents [supra] at paragraph 65 would apply:
“Most errors and omissions which lead to a failure to do an act or take a step are the result of negligence or incompetence. Where such errors and omissions are made against a clearly demonstrated desire to maintain the application (and thus not have it lapse), and where attempts are made to remedy the error or omission as soon as its consequences are discovered and the existence of the error or omission learnt, as is the case here, the considerations in favour of an extension seem to me to be quite persuasive.”
78. Even if this were not the case, it would still not be appropriate to visit the consequences of the actions of the attorney on his client because the client would not have been aware of the situation (as per New Clear Water Pty Ltd v Atlantis Corporation Pty Ltd 2001 APO 48).
79. The opponent then argued that granting of a broad patent would restrict third parties operating in the technology area due to grant of a broad patent and would be counter to the public interest. I am also not convinced that the third parties would be as disadvantaged as Embrey has alleged. The validity of a patent is not guaranteed under the Patents Act [as per section 20(1)] and a patent is always open to challenge either through revocation proceedings (section 138) in the courts or re-examination (section 97) before the Commissioner (as occurred in this case).
80. In making a business decision about potential infringement, third parties have an obligation to assess the likely validity of the patent and would conduct their own research to determine this. The opponent conceded as much in their submissions of 15 May 2008 (see paragraph 32) when they admitted that third parties made an assessment about the validity of patent based on non-disclosed art. In their research, the opponent would no doubt conduct their own searches (based on their own thorough of the art) and consider prior art searches by overseas patent offices of related applications (noting that there will be some prior art searches that the patentee is not obliged to file[3]). All this material is necessary for third party to make an informed decision about the possible risks involved in any potential infringement and suggests that they should not be solely reliant on the provisions of section 45(3) to determine the validity of a claim.
[3] .An applicant does not need to provide foreign search results if they undergo modified examination under section 48 or if the foreign search results are completed after the grant of a patent had to be filed [see section 45(4)].
81. In addition, while foreign search results filed under section 45(3) are useful to a third party in locating prior art, such information is generally publicly available elsewhere and there is no need for them to access the Australian file to obtain this information.[4] While there might have been a long period between the completion of the search results and their filing in Australia, they have been available since their completion in 2002-2003 and there was nothing which prevented Embrey (or any other third party) from drawing it to the Commissioner’s attention earlier. Any delay therefore might have been within a third parties’ control and it is therefore difficult to see any real disadvantage suffered by them as Embrey have claimed.
[4] In fact, third parties cannot access this information from the Australian file prior to publication of acceptance [see sections 55(1) and regulation 4.3(1)(d)]. Even after acceptance, it can often be easier for a third party to obtain a foreign search result directly from the relevant office where the information is available on-line as Embrey itself did in this case prior to requesting re-examination
82. Embrey further argued that the absence of the search results had a material effect on the patent being granted in this case because the Commissioner found all but two of the claims of the granted patent to be invalid based on the documents cited in those reports. They suggested that the patentee’s failure to disclose international search results which were known to them was in effect a misrepresentation which resulted in an invalid patent being granted. According to the opponent, allowing a section 223 extension to enable retrospective compliance with section 45(3) would validate a patent that was invalidly granted and this would be contrary to the public interest.
83. However in my view there is no evidence that the patentee had a deliberate strategy to conceal search results from the Commissioner or that he intended to deliberately mislead her. All the evidence suggests a genuine error and in such circumstances, I do not believe there has been a misrepresentation by the patentee as argued by the opponent.
CONCLUSION
84. The patentee has provided a full and frank disclosure to establish a causative error to enliven section 223. He has demonstrated a clear intention to comply with section 45(3) by providing search results he had to hand on 6 August 2002 when he was reminded of the obligation. His failure to provide further search results was caused by his NZ agent’s failure to implement a monitoring system to alert practitioners of the need to forward search results to the Australian Patent Office. The patentee attempted to remedy the problem as soon as he became aware of it from the Commissioner’s letter of 4 May 2006. In my view, this suggests a genuine error rather than a deliberate decision to conceal search results as argued by the opponent.
85. In such circumstances, the principles of GS Technology Pty Ltd v the Commissioner of Patents [supra] at paragraphs 51-52 would apply:
“Section 223 of the Act operates in circumstances where the failure to do an act or take a step is the result of an "error or omission". This is to be contrasted with the situation where there has been a deliberate decision not to do the act or take the step.”
86. The balance of discretionary factors is weighted towards granting the extension. Section 45(3) contemplates that foreign search results can be provided after grant and therefore there is a real purpose to the extension. While it is a lengthy extension, the public always had access to the material and could have challenged the patent at any stage. The public interest is therefore not as disadvantaged as Embrey has alleged. In contrast the patentee would be severely disadvantaged because the provisions of section 102(2C) preclude amendments to avoid prior art which was not disclosed under section 45(3).
87. Section 45(3) was an important change to the Patents Act and the NZ agent should have instigated a system to ensure compliance. However his failure to do this was contrary to his client’s intentions who was unaware of the oversight. In such circumstances, the client should not bear the consequences of the agent’s error and the balance of interests is in favour of granting the extension.
88. I therefore grant the patentee an extension of time under section 223 until 29 August 2006 to file search results under section 45(3).
COSTS
89. In matters before the Commissioner, costs generally follow the event. In this case, the patentee successfully argued that the section 223 should be granted but had withdrew the section 104 amendments conceding the section 104 oppositions to the opponents. In such circumstances, the hearing costs cancel each out and I make no award of cost.
90. The opponent in their letter of 15 May has requested a variation of costs because of the extra work involved in the patentee’s late withdrawal of the opposition. However, aside from their section 102(2C) argument [which was already covered by the section 223 submissions], the opponent’s case in the section 104 opposition was trivial and they provided no evidence or submissions in support of their section 102 arguments nor did they outline any specific concerns in their Statement of Grounds and Particulars. In these circumstances, there is no case for a variation of costs.
Karen Ayers
Delegate of the Commissioner of Patents
12 June 2008
Patent attorneys for the patentee: Griffith Hack, Sydney
Patent attorneys for opponent 1 (Embrey): Watermark, Melbourne
Patent attorneys for opponent 2 (Stanley): AJ Park, Canberra
Annex A
Relevant Changes to regulation 3.17A which affecting the section 45(3) deadlines
EP search results (issued on 5 September 2002)
| Governing regulation | Relevant Amendment to Patents Regulations | Commencement date | Original Deadline | New deadline |
| reg 3.17A(2) | SR [2002] No. 59 | 1 April 2002 | 3 April 2003 | |
| reg 3.17A(2) | SR [2002] No.263 | 6 November 2002 | 3 April 2003 | 1 June 2003 |
| reg .3.17A(2) | SR [2003] No. 71 | 28 April 2003 | 1 June 2003 | 1 Feb 2004 |
| reg 3.17(4) | SR [2003] No 213 | 26 August 2003 | 1 Feb 2004 | no change |
US Search Results (issued on 7 March 2003)
| Governing regulation | Relevant Amendment to Patents Regulations | Commencement date | Original Deadline | New deadline |
| reg 3.17A(2) | SR [2002] No.263 | 6 November 2002 | 7 Sept 2003 | |
| reg 3.17A(2) | SR [2003] No. 71 | 28 April 2003 | 7 Sept 2003 | 1 Feb 2004 |
| reg .3.17A(4) | SR [2003] No. 213 | 26 August 2003 | 1 Feb 2004 | no change |
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