RxPrism Health System Pvt Ltd v Canva Pty Ltd
[2023] APO 23
•1 May 2023
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
RxPrism Health System Pvt Ltd v Canva Pty Ltd [2023] APO 23
Patent Application: 2020202729
Title:Systems and methods of generating a website
Patent Applicant: Canva Pty Ltd
Opponent: RxPrism Health System Pvt Ltd
Delegate: Leslie F. McCaffery
Decision Date: 1 May 2023
Hearing Date: 9 March 2023 by videoconference and written submissions.
Catchwords: PATENTS – section 223 – opposition to the grant of an extension of time to rely on the grace period prescribed in regulation 2.2C(3) –whether the failure to file within the grace period was an inevitable consequence of the deliberate use of an inadequate system – relevance of previous request for an extension on another application – full and frank disclosure – opposition unsuccessful – costs awarded.
Representation: Counsel for the applicant: Cynthia Cochrane SC
Patent attorney for the applicant: FPA Patent Attorneys Pty Ltd
Patent attorney for the opponent: IP Guardian
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2020202729
Title:Systems and methods of generating a website
Patent Applicant: Canva Pty Ltd
Date of Decision: 1 May 2023
DECISION
The opposition is unsuccessful.
I grant the extension of time of 12 months to file a complete application within the period set out by regulation 2.2C(3).
Costs according to Schedule 8 against the Opponent, RxPrism Health System Pvt Ltd.
REASONS FOR DECISION
The present matter is an opposition to the grant of an extension of time under section 223(2)(a) to file a complete application within the grace period prescribed under section 24(1) and regulation 2.2C(3). The original request was the subject of a decision by a Delegate of the Commissioner in Canva Pty Ltd [2021] APO 35 (Canva). In short, the Delegate, taking all the relevant considerations into account, considered it appropriate to exercise the discretion in the favour of Canva Pty Ltd (the Applicant). They directed that the application for an extension be advertised for opposition purposes. This occurred on 30 September 2021.
A Notice of Opposition was filed by RxPrism Health System Pvt Ltd (the Opponent) on 19 November 2021. A Statement of Grounds and Particulars was filed on 1 December 2021, setting out grounds under sections 223(2)(a), 223(2)(b), 223(2A)(a) and 223(2A)(b). The grounds of opposition under sections 223(2)(b), 223(2A)(a) and 223(2A)(b) were dismissed following a request by the Applicant, but an oppositions delegate considered that a prima facie case had been set out by the Opponent in relation to the ground of opposition under section 223(2)(a).
Both parties filed evidence in the opposition. Evidence in Support (EIS) consisted of a declaration by Dr Maruthi Viswanathan (Viswanathan 1), together with Annexures I to VII. Evidence in Answer (EIA) consisted of a declaration by Mr Kirk Simmons (Simmons 2), together with Annexure B.[1] Evidence in Reply (EIR) consisted of a second declaration by Dr Viswanathan (Viswanathan 2) together with Annexures VIII to XI.
[1] Mr Simmons had previously filed a declaration in support of the request for an extension. Annex A was attached to that declaration. For the avoidance of doubt, the declaration filed as EIA in the present matter is referred to herein as Simmons 2.
The Opponent requested a hearing, and the matter was set down for hearing on 9 March 2023. The Applicant appeared by teleconference. The Opponent filed written submissions dated 22 February 2023 (OS1) and 7 March 2023 (OS2).
Summary of the previous decision (Canva)
The Applicant provided a summary of key findings by the Delegate in Canva. I consider this a reasonable summary of the decision:
During the period from prior to 3 September 2018 to 31 May 2019 Canva instructed a US attorney, Toler[2], in relation to filing patent applications for the invention the subject of the Application.[3]
[2] Toler Law Group, PC, hereinafter Toler.
[3] Canva at [13], first sentence.
On 3 September 2018 Mr Gonczi, Canva, sent an email to Mr Parekh, Toler, which stated:
“Wanted to flag a possible functional patent that we are looking to make an application for. The functionality is already in market for Canva but is going to become more ubiquitous as more and more of our users switch over to E2, so there will be benefit to moving quickly to get a filing in the US and Aus before the grace period expires”[4] (emphasis added)
[4] Canva at [14].
By the above words, Mr Gonczi, Canva, intended to convey to Mr Parekh, Toler, that Toler attend to a patent filing strategy of filing patent applications in both the United States and Australia, within their respective grace periods.[5]
Canva intended to file an Australian patent application in time to claim the benefit of the grace period.[6]
Pursuant to the process that Canva had in place:
a. Canva relied on communications from Toler; Canva would act on any communications from the US patent attorney, such as reminders, to enable the application to be filed.[7]
b. at least at the time by which an application needed to be filed to rely on the Australian grace period, Canva did not maintain its own systems for monitoring patent deadlines.[8]
On 24 April 2019, the US application was timely filed by the US patent attorney, however no corresponding Australian application was filed. There is no evidence of a change in instructions or that there was a deliberate decision by the US patent attorney not to file an Australian application within time to rely on the grace period for any reason.[9]
There is no evidence to suggest that there was a failure to have a properly maintained docketing system such that the failure to file the application would be an inevitable outcome of the use of an inadequate system.[10]
On balance, it is a reasonable inference from the evidence that there was an error or omission by the US attorney which led to a breakdown in the procedure in place for filing of the Australian application.[11]
It is not apparent that any action on the part of Canva, for example, the failure to follow up on the Australian application, should be characterised as an error, given the process set out above wherein Canva relied on communications from the US attorney.[12]
[5] Canva at [16].
[6] Canva at [21], first and second sentences; see also [17], [30].
[7] Canva at [26], final sentence; see also [22], (3) and (4).
[8] Canva at [29], first sentence.
[9] Canva at [28].
[10] Ibid, third sentence.
[11] Canva at [28], [30].
[12] Canva at [26].
The Applicant also provided a convenient timeline of events, which is substantially reproduced in Attachment A. The Opponent referred in their submissions to events associated with another Canva application, AU 2019222919. These are indicated in the timeline by grey shading. I note that the timeline includes an entry dated 15 November 2021 relating to infringement proceedings by the Opponent against Canva in the Delhi High Court. While this entry is included in Attachment A, I consider it has little relevance in the present matter and have not considered it further.
The submissions
The gist of the Opponent’s case is that the Applicant did not provide a full and frank disclosure of the circumstances that led to the failure to file the application by the due date, including a disclosure of a previous request for an extension of time on another Australian application by Canva. A full and frank disclosure of this additional information, in their submissions, would have shown that the failure was consistent with those in KGK Synergize Inc.,[13] where the Delegate found there was no relevant error or omission as the failure to file an application by the due date was “the inevitable outcome of a deliberate decision to use an inadequate system”.[14]
[13] [2013] APO 72.
[14] SGP at [7].
In support of that case, they submitted that:
“…the applicant chose not to share any information about their previous applications filed at IP Australia neither did they mention their established working relationship with Australian law firms along with FPA well before March 2020. This indicates that the Applicant deliberately opted for and had a history of using an inadequate deadline monitoring systems by way of their US Attorney. The applicant had access to adequate legal advice including their Australian Attorneys.
The applicant did not submit at the time of filing request for extension of time in the instant application that they had already submitted a similar request in relation to a previous application i.e. Australian Patent Application No. 2019222919 on 11 October 2019. We submit this is relevant as it shows a history of using extensions of time to file applications where such deadlines should have been adequately monitored. It also shows the applicant had previously know about the inadequacies of their deadline monitoring system for some time but made not practical steps to change that system which led to at least 2 deadlines being missed being the filing deadline for application 2019222919 and the deadline for the present application 2020202729.
…this pattern of using extensions of time requests to file applications instead of providing adequate monitoring systems is not an error or omission, but it rather a conscious decision not to properly monitor the relevant deadlines. Missing deadlines are a predictable consequence of an inadequate monitoring system.”[15]
[15] OS1 at [2] to [4].
The Applicant submitted that in order to succeed in its opposition, the Opponent must establish that the evidence provides a proper basis for disturbing the following findings of the Delegate in Canva:
That there is no evidence to suggest there was a failure to have a properly maintained docketing system such that the failure to file the application would be an inevitable outcome of the use of an inadequate system.
On balance it is reasonable to infer there was an error or omission by the US attorney which led to a breakdown in the procedure in place for filing an Australian application and this error or omission is causal of the failure to file an Australian application in time to rely on the grace period.
That Canva has provided a full and frank disclosure of its own actions and understanding based on the information within its control.[16]
[16] Applicant’s written submissions (AS) at [5].
10. The Applicant submitted that the third finding above is necessarily tied to the first two findings because the Applicant’s duty to provide a full and frank disclosure is not at large. They argued that this is necessarily tied to relevance, and unless the Opponent can show that the evidence identified in their submissions is material to the decision, the Opponent’s challenge to the third finding must be rejected.[17]
[17] AS at [6].
11. The Applicant submitted that the Opponent’s basis for challenging the first finding was based on a false premise that Canva had instructed the same US attorney for the present application and Australian application 2019222919. However, the US patent attorney firm instructed in relation to the present was Toler, while the US patent attorney firm instructed for 2019222919 was Karish & Bjorgum PC (Karish). Once this was appreciated the Opponent’s other challenges fall away since any defects in Karish’s docketing system are not relevant to the Delegate’s finding in Canva on causation and full and frank disclosure as there was no evidence to suggest that Toler’s docketing system was not properly maintained.[18]
[18] AS at [7].
Determination
12. A useful summary of the relevant law was provided by the Delegate in Canva,[19] and I do not intend to repeat it here. The provisions of S223 have also recently been considered in Nufarm Australia Limited v Advanta Seeds Pty Ltd.[20] Perhaps of some relevance to the present situation is the argument that was put to the Court that unless the party had a system in place for the payment of renewal fees at the relevant time, “there could be no error or omission in such a procedure or system that led to the failure to do the relevant act” and that, as a consequence, “the jurisdictional fact of a relevant error or omission” was not established.[21] Downes J did not find these submissions persuasive, stating that:
“The legal proposition sought to be advanced by Nufarm is, in any event, wrong as it seeks to limit the circumstances in which an error can arise within the meaning of s 223(2), in a manner which is not found in or supported by the terms of the legislation. In Aspen Pharma, Yates J (with whom Jessup and Jagot JJ agreed) implicitly rejected an approach of the kind posited by Nufarm, stating at [71]:
In Kimberly Clark, Jenkinson J considered the scope to be given to the word “error” in the context of s 160(2) of the Patents Act 1952 (Cth), which was in closely similar terms to s 223(2) of the Act. His Honour observed (at 694) in that context, that:
… 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. …
Similarly, in G S Technology at [69], Spender J regarded the “reference to a failure to have a reminder system, or a failure to place an incorrect date in the reminder system is truly a red herring on the question of the existence of an error or omission”. I agree with this observation: that is, the proposition that an applicant for an extension of time under s 223(2) must have a system in place before an error or omission can be shown to have occurred is an irrelevant distraction, without any proper justification having regard to the subject matter, scope and purpose of the legislation: cf Australian Broadcasting Tribunal v Bond Corporation Holdings Ltd (1989) 86 ALR 424 at 432 (Burchett J, with whom Sheppard and Beaumont JJ agreed).”[22]
[19] Canva at [3] to [9].
[20] [2023] FCA 109.
[21] Ibid at [99].
[22] Ibid at [105] to [106].
13. Turning to the present case, the key issue relates to whether the failure to file the application within the grace period was an inevitable outcome of the use of an inadequate system rather than an error. The Opponent argued that the previous request on 2019222919 showed that despite being aware of the inadequacies of their system and practices, the Applicant had made a deliberate decision to continue to use them.[23] The Opponent’s submissions are largely predicated on the “access” that the Applicant had to Australian Attorneys, and an assertion that Canva’s practice of relying on US associates to monitor and advise them of deadlines represented an “inadequate” system of monitoring deadlines. However, this kind of hindsight analysis of the circumstances to identify alternative systems and processes that could have been employed seems to me to be one of the “red herrings” referred to by Spender J in G S Technology. Consistent with the guidance provided by Downes J, the key consideration here is not whether the system or practices could have been better, or that alternatives existed that may have circumvented the issues, but rather whether there was a relevant error that enlivens the provisions of section 223.
[23] OS1 at [3] to [5].
14. In this regard a distinction is made between an error or omission that leads to the failure to perform the act and where the failure is a consequence of a deliberate decision.[24] My understanding is that there may be circumstances where the deliberate implementation and use of inadequate systems or processes will inevitably result in a failure to perform a relevant act. Such circumstances may not enliven the provisions of section 223 as they are the result of a deliberate decision rather than an error. For example, in KGK Synergize Inc.,[25] the Delegate considered that the failure to put in place a docketing system that was capable of monitoring important dates was not an error, and the failure to be aware of such dates was an inevitable consequence of a deliberate decision to use such an inadequate system.[26] Similarly, in Re Weir Pumps Ltd and Commissioner of Patents and Stork Pompen BV,[27] Deputy President Bannon found that there was no relevant error or omission as it was “a deliberate policy of Weir that it did not maintain a watch for pending patent applications or for their acceptance”.
[24] Total Peripherals Pty Ltd v IBM & Commissioner of Patents [1998] AATA 784.
[25] [2013] APO 72 at [19].
[26] Ibid at [19].
[27] [1988] AATA 331, 13 IPR 163.
15. The Delegate in Canva distinguished the present circumstances from those in KGK on the basis that it was an error on the part of the US patent attorney that led to the failure to file an Australian application within the grace period, rather than being an inevitable consequence of an inadequate system. This consideration admittedly did not include any information about the previous extension of time for 2019222919, but I do not consider that the evidence provided by the Opponent leads me to a different conclusion.
16. As an initial point, it is unfortunate that Canva has required extensions of time on two separate occasions, but this does not necessarily preclude the grant of an extension. The consideration will depend on the facts of the case. In this respect I consider the circumstances of the two cases to be fundamentally different. The present case relates to the Australian grace period provisions and the need to file a complete Australian application within 12 months of the relevant disclosure. The situation in 2019222919 related to filing a “full” application within 12 months of the filing of a provisional application in the US (presumably a PCT application based on the filing strategy used for other Canva applications at the time[28]).
[28] Simmons 2, Attachment B.
17. Moreover, between 1 August 2017[29] and 31 May 2019,[30] Toler was the only the US attorney firm Canva instructed on patent matters, including the US provisional application from which the present application claims priority.[31] Prior to this time, they instructed Karish on patent matters, including the US provisional application associated with 2019222919.[32] It was clearly not the same docketing system involved in both cases, but rather docketing systems at two different attorney firms. Contrary to the Opponent’s submissions that the Applicant was aware of deficiencies in their monitoring system and took no practical steps to address the deficiencies, the Applicant transferred responsibilities for their applications from Karish to Toler shortly after discovering that the deadline to file an application had been missed for the provisional application related to 2019222919.[33] The specific circumstances, the patent firms, the personnel and the systems involved in each case were different. On balance, the evidence does not support the Opponent’s submissions that the Applicant made a deliberate decision to continue to rely on an allegedly deficient monitoring system.
[29] Simmons 2 at [9].
[30] Canva at [13].
[31] Gonczi 1 at [3].
[32] Simmons 2 at [9].
[33] AS at [24].
18. In any case, I do not consider that the Opponent’s submissions in relation to Canva using an “inadequate” strategy of relying on US patent attorneys, rather than Australian patent attorneys, to monitor deadlines and file applications in Australia based on US applications carry much weight in the consideration. It seems to me that the strategy used by Canva is no different than any other Australian application claiming priority from a US basic application, or for that matter any other foreign basic application. This is a widely used strategy, and the systems used by foreign attorney firms appear to be well-established. Indeed, the Applicant had successfully prosecuted other applications through the US patent attorneys, which I consider provides further support for the conclusion that the failure to file an Australian application within the grace period was the result of a case-specific error rather than a systemic deficiency. The evidence provided by the Opponent provides no basis for concluding that the strategy used by the Applicant was fundamentally inadequate and the failure to file the application in a timely manner was the inevitable consequence of a deliberate decision to use such an inadequate system.
19. As noted by the Applicant, the issue raised by the Opponent as to whether they had provided a full and frank disclosure of the circumstances is tied to the relevance of the evidence provided in support of that argument. As I consider that the Opponent’s submissions in relation to 2019222919 have little material relevance to the present determination it follows that there is no reason for me to depart from the conclusion of the Delegate in Canva that the Applicant had provided a full and frank account of its own actions and understanding based on the information within its control.[34]
[34] Canva at [36].
20. Finally, as noted by the Delegate in Canva, the Applicant relied on their US associates to monitor deadlines and advise them of due dates. The Opponent has provided no evidence that it was a deliberate decision, including the deliberate use of inadequate processes and systems, that led to the failure to file the Australian application within the required time. The evidence clearly shows that there had been an intention to utilise the grace period in Australia and the US,[35] but due to an error on the part of the US attorney an Australian application was not filed within the required time. I agree with the previous determination that this is a relevant error or omission that enlivens the provisions of section 223.
[35] Lao 1 at [5].
Conclusion
21. The opposition is unsuccessful.
22. I grant the extension of time of 12 months to file a complete application within the period set out by regulation 2.2C(3).
Costs
23. Costs generally the event. I see no reason to depart from that approach. I therefore award costs according to Schedule 8 against the Opponent, RxPrism Health System Pvt Ltd.
Dr Leslie F. McCaffery
Delegate of the Commissioner of Patents
Attachment A
| Date | Action | Evidence reference |
| 14 September 2015 | First patent application on record filed in Australia by Canva | Viswanathan 1, Annexure II Simmons 2, paragraph 5 |
| 23 February 2016 | US application number 62/298900 filed (priority application to Australian patent application 2019222919) – “the Vector Watermarking patent application”. Email from Mr Van Treeck to Mr Obrecht and Mr Torrens of Canva advising that Canva would have 12 months from this date to file a provisional patent application. | Simmons 2, paragraph 9, Viswanathan 2, Annexure VIII, |
| 24 February 2016 | Mr Obrecht emailed Mr Van Treeck indicating that work on the Vector Watermarking patent application should continue. | Viswanathan 2, Annexure VIII, paragraph 7 |
| 23 May 2016 | Mr Van Treeck emailed Mr Obrecht and Mr Torrens on the Vector Watermarking patent application stating “I just wanted to make sure this application did not fall through the cracks”. | Viswanathan 2, Annexure VIII, paragraph 8 |
| June 2017 | Kirk Simmons employed at Canva. | Simmons 1, paragraph 2 |
| 29 July 2017 | Mr Torrens emailed Mr Van Treeck Watermarking patent application. | Viswanathan 2, Annexure VIII, paragraph 10 |
| 30 July 2017 | Mr Torrens advised Mr. Simmons and Mr Van Treeck that the Vector Watermarking application had expired. Mr. Simmons emailed back Mr Van Treeck asking when the Provisional expired and what options were available for protecting the invention covered by the provisional application. | Viswanathan 2, Annexure VIII, paragraph 11 |
| 31 July 2017 | Correspondence regarding the expiry of | Viswanathan 2, Annexure VIII, paragraph 12, Viswanathan 2, annexure X, paragraph 6b- e |
| 1 August 2017 | Mr Simmons instructed Mr Van Treeck to transfer Canva’s files for the Vector Watermarking patent application to Mr Parekh from Toler IP. | Viswanathan 2, Annexure VIII, paragraph 13 Simmons 2, paragraph 9 |
| 22 September 2017 | Mr Simmons discussed with Mr Parekh from Toler IP as to the possibilities for the Vector Watermarking patent application, with a view given that nothing could be done. | Viswanathan 2, Annexure VIII, paragraph 13 |
| March 2018 | Simon Lao employed at Canva. | Lao 1, paragraph 2 |
| May 2018 | Canva places the Showsquad functionality in market. | Lao 1, paragraph 6 Simmons 1, paragraph 7 |
| From at least September 2018 | James Gonczi had responsibility, as part of Kirk Simmons’ team, for seeking patent protection for the Showsquad functionality. | Gonzci 1 (all) Simmons 1, paragraphs 4 to 6 |
| From prior to 3 | Canva has a policy of filing its patent applications in both the United States and Australia. Canva had an approach of filing in Australia (and the US) utilising the grace period where required. | Lao 1, paragraph 5 Gonczi 1, paragraph 4 |
| 3 September 2018 | James Gonczi sends an email to Canva’s US Patent Attorney requesting a “functional patent”, “in the US and Aus before the grace period expires”. (The individual US Patent Attorney that was instructed is no longer with the relevant patent attorney firm). | Lao 1, paragraph 4 and Annexure A Harrap 1, paragraphs 2 and 4 Gonczi 1, paragraphs 2, 3 and 5 (Harrap 2, paragraph 2) |
| From 3 September | Canva relied on its external patent attorney to manage and comply with all relevant deadlines in relation to the Showsquad matter and other matters. | Gonczi 1, paragraph 3 Gonczi 2, paragraph 3 |
| From 3 September 2018 | The decision to file in Australia before the grace period expires was maintained. | Simmons 1, paragraph 11 Harrap 2, paragraph 5 |
| From 3 Sept | Communications between Canva and the US Patent attorney relating to the US patent application for Showsquad, but not the Australian patent application. | Lao 1, paragraph 7 Harrap 2, paragraph 4 |
| November 2018 to April 2019 | Canva’s legal team has introductory communications with Stuart Irvine from FPA Patent Attorneys Pty Ltd. | Simmons 2, paragraph 10 |
| 24 April 2019 | Canva files a US patent application. | Lao 1, paragraph 3 Simmons 1, paragraph 9 |
| 6 May 2019 | Canva enters a general engagement for patent matters with FPA Patent Attorneys Pty Ltd. | Simmons 2 paragraph 10 |
| May 2019 | 12 months from the functionality being placed in market – Australian application not filed. See rows above for practice of AU filing and instructions. | Gonczi 1, paragraph 8 Gonczi 2, paragraphs 4 and 5 |
| June 2019 | James Gonczi leaves Canva, with Simon Lao assuming responsibility for the patent matter. | Lao 1, paragraph 3 |
| 13 June 2019 | Meeting between Canva and Stuart Irvine from FPA Patent Attorneys Pty Ltd. Possibility to file the Vector Watermarking patent application in Australia was raised. | Simmons 2, paragraph 10 Viswanathan 2, Annexure VIII, paragraph 14 |
| 27 August 2019 | Mr Kirk Simmons instructed Mr Irvine to file the Vector Watermarking patent application in Australia with a request for an extension of time. | Viswanathan 2, Annexure VIII, paragraph 19 |
| 30 August 2019 | The Vector Watermarking patent application was filed in Australia. The application was allocated application number 2019222919. | Viswanathan 1, Annexure IV Simmons 2, paragraph 5 |
| March 2020 | Canva first directly engages an Australian Patent attorney specific to this patent matter (and other matters). | Harrap 1, paragraph 4 Simmons 2, paragraph 10 |
| 31 March 2020 | Canva advises its AU Patent Attorney of Canva’s intention to file in Australia. | Lao 1, paragraph 8 |
| 9 April 2020 | Canva aware of the expired grace period. | Lao 1, paragraph 8 |
| 20 April 2020 | Canva instructs the filing of the Australian patent application together with a request for an extension of time in relation to the grace period. | Lao 1, paragraph 9 |
| 23 April 2020 | Australian patent application 2020202729 filed. | |
| 15 November | Order issued by the Delhi High Court in respect of a Patent Infringement suit initiated by RX Prism Health System against Canva for alleged infringement of Indian Patent No. 360726. | Viswanathan 1, Annexure I |
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