Shelford Services Pty Limited v Baylor Research Institute - [2014] APO 20

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Shelford Services Pty Limited v Baylor Research Institute [2014] APO 20
Patent Application: 2010214641

Title:Compositions and Methods for the Systemic Treatment of Arthritis

Patent Applicant:  Baylor Research Institute
Opponent:  Shelford Services Pty Limited
Delegate:  Matt Kraefft
Decision Date:  3 April 2014
Hearing Date:  Written Submissions, completed on 19 March 2014
Catchwords:  PATENTS – extension of time to file evidence in answer – Patent Regulation 5.9 – whether applicant has made all reasonable efforts to comply with all relevant filing requirements - whether applicant has been prompt and diligent at all times to ensure its evidence in answer was filed in the relevant period - exceptional circumstances not established – first two questions satisfied – extension of time allowed.

Representation: Patent applicant: Pizzeys, Canberra.
Opponent:Shelston IP, Sydney.

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010214641

Title:Compositions and Methods for the Systemic Treatment of Arthritis

Patent Applicant: Baylor Research Institute
Date of Decision: 3 April 2014
DECISION
Extension of time allowed.
REASONS FOR DECISION
Background

Baylor Research Institute (“the applicant”) filed patent application 2010214641 on 25 August 2010. The application was advertised accepted on 5 July 2012. Shelford Services Pty Limited (“the opponent”) subsequently filed a notice of opposition followed later by a statement of grounds and particulars in support of the opposition.
The opponent has completed the serving of evidence in support. The applicant was due to file evidence in answer by 4 January 2014. The applicant filed an application on 3 January 2014 for an extension of time until 4 April 2014 in which to file evidence in answer.
After a request for further information for the applicant to support the extension of time, to which the applicant responded on 17 January, a delegate of the Commissioner of Patents issued a letter to both parties indicating an intention to grant the extension. The opponent requested to be heard.
The hearing was conducted by means of written submissions. Both parties filed written submissions.
Applicable law
On 15 April 2013, the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No.1) commenced (“the RTB Regulation”). This regulation significantly amended the Patent Regulations 1991 as they apply to patent oppositions. The law governing extensions of time to file evidence in a patent opposition depends on the date on which the relevant evidentiary period commenced. Where the evidentiary period commenced on or after 15 April 2013 in any opposition commenced before 15 April 2013, or in a substantive opposition commenced after 15 April 2013, the extension is governed by regulation 5.9 of the Patent Regulations as in force on 15 April 2013. This follows from regulation 23.36(2), item 2, of the RTB Regulation. Where the evidentiary period commenced before 15 April 2013, the extension is governed by regulation 5.10 of the Patent Regulations as in force immediately prior to 15 April 2013.
The present evidentiary period, for filing evidence in answer, commenced on 4 October 2013, that is, after 15 April 2013. Consequently the present application for an extension of time is governed by regulation 5.9 of the Patent Regulations as in force on 15 April 2013.
Sub-regulation 5.9(2) states:
The Commissioner may extend the period only if the Commissioner is satisfied that:
(a) the party who intended to file evidence in the period:
(i)has made all reasonable efforts to comply with all relevant filing requirements under this Chapter; and
(ii)despite acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period, is unable to do so, or
(b) there are exceptional circumstances that warrant the extension.
Exceptional circumstances are defined in sub-regulation (5):
In this regulation:
“exceptional circumstances” includes the following:
(a)    a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Chapter;
(b)   an error or omission by the Commissioner that prevents a party from complying with a filing requirement under this Chapter;
(c)    an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act.
These provisions have been considered by the Commissioner in TRED Design Pty Ltd v Julie‑Anne McCarthy and Bradley McCarthy [2013] APO 57 and Merial Limited v Novartis AG [2013] APO 65. The principles applied in those decisions are that I must ask myself the following questions:
1.Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
2.Was the failure to file the evidence in time despite the party (and their attorney or agent) acting promptly and diligently at all times to ensure the evidence is filed in time?
3.Were there exceptional circumstances that warrant the extension?
I can extend the time for filing evidence only if I am satisfied that the answer to questions 1 and 2 is YES, or if I am satisfied that the answer to question 3 is YES. If I am so satisfied, then I must consider whether there are any discretionary reasons why the extension should not be granted.
Clearly this is a serious test. This is confirmed by the Explanatory Statement accompanying the RTB Regulation which states:
"The Commissioner will not be able to extend time periods unless one of these conditions was made out. The party seeking the extension will bear the onus of convincing the Commissioner of this. Once the conditions in subregulation 5.9(2) are met, the Commissioner still has the discretion to consider whether or not it is appropriate that an extension of time be granted. In applying the test, the Commissioner will not be required to give a direction to extend a period solely because of delays caused by a legal representative failing to act promptly or diligently, by difficulties in obtaining expert evidence that could have been anticipated and acted on or by attempts to settle the proceedings.
Where a party cannot satisfy the Commissioner that an extension is justified under the test, the Commissioner will not have the power to give a short extension to allow the filing of evidence immediately available or to validate evidence filed out of time."
If the Commissioner is satisfied that an extension is appropriate, the Commissioner must then determine the length of the extension (sub-regulation (3)):
The Commissioner must determine the length of the extended period having regard to what is reasonable in the circumstances.
Application for Extension of Time
The applicant’s application for the extension of time cites eleven points to support the extension. Essentially the points amount to extensive searches for relevant Australian expert witnesses, the difficulty in securing the services of some witnesses leading to further searches for further witnesses, the time taken to conduct interviews and prepare declarations from the retained experts, and the Christmas/New Year holiday period and other work commitments intervening for the experts.
A delegate of the Commissioner of Patents initially indicated there was insufficient detail in the application to support the extension. The applicant filed further information on 17 January 2014. The further information essentially indicated what transpired in particular months and on particular dates in terms of contacts with potential witnesses, when they were secured, or alternatively when they declined to assist, and in the latter case when they were contacted again. The difficulties in coordinating mutually suitable times to discuss and prepare the evidence, due to the Christmas/New Year holiday period and the busy schedules of Australian and US attorneys and of the expert witnesses, were also cited.
Whether the party has made all reasonable efforts to comply with all relevant filing requirements
The Innovia Security Pty Ltd v Visual Physics LLC decision, [2014] APO 15, makes the point at [18] that it is clear that the requirement in paragraph 5.9(2)(a)(i) is intended to import a consideration of the reasonableness of the relevant party’s conduct over the totality of the opposition proceedings rather than its compliance with the particular evidentiary period in question – here the period for filing evidence in answer – which is addressed by the more specific requirement of paragraph 5.9(2)(a)(ii).
Both parties have provided relatively voluminous submissions. The applicant has also provided a detailed chronology of events and its actions to justify the extension of time. On the other hand, the matter to be decided appears to come down to only a handful of points.
The opponent filed a first application for an extension of time on 4 April 2013. The Patent Office granted the opponent’s requested extension of time on 26 April 2013. From this point on, I expect it would have been clear to the applicant’s attorneys that the new sub-regulation 5.9(2) applied to the applicant.
The opponent filed its notice of opposition on 5 October 2012. A statement of grounds and particulars followed on 4 January 2013. Evidence-in-support from the opponent was initially due on 4 April 2013. The applicant has stated that it began (my emphasis) searching for an Australian expert on 10 April 2013. If the opponent had not filed an application for an extension of time on or before that date, this means the applicant’s evidence-in-answer period would have begun before it started searching for an expert.
In many cases it may be reasonable for an applicant not to start work on defending an application until the evidence in support is filed. This could include the applicant waiting until the evidence in support is filed to then determine appropriate experts to seek in defending the application. The deferral of costs of this type of firm action by the applicant until the evidence in support is filed would be quite reasonable. A reasonable expectation also is that an applicant, seeking an extension of time to file evidence in answer, should nonetheless demonstrate that it had started considering or thinking about how it would defend its case at an early stage.
Any significant gaps or delays in a chronology, where relevant action would generally be expected, should be explained. The nature of the delay and what was done to attempt to mitigate the delay would be a relevant consideration for an extension of time. An explanation of the unforeseen and what was done to mitigate that would generally be considered favourably. A failure to file evidence due to foreseen or foreseeable circumstances would generally not be considered favourably, and effort to address such circumstances in an application or submissions for an extension of time would generally be counter-productive.
In the present case the applicant has noted the opponent’s difficulties in identifying and retaining experts in this field and the extensions of time the opponent was granted in this respect. The applicant has stated it has encountered similar difficulty in engaging and retaining experts. That is evident from the applicant’s chronology. The applicant noted that, in this complex field of paediatric rheumatology, experts have responsibilities other than acting as declarants for this opposition. I can appreciate that it may be entirely reasonable for personnel in this particular area of the health profession to devote clear priority to their work rather than this opposition. On the face of it then, it seems the search for an expert in this area, who could be retained on notice once the evidence in support was filed, should be considered reasonably early in the process. Support for this proposition also comes from the applicant itself. In this case the applicant placed a fair degree of importance on the statement of grounds and particulars. In its submissions the applicant made much of the statement of grounds and particulars being amended by the opponent at a later date. One could thus conclude the applicant was aware of the importance of early preparation of its case. The applicant began searching for an expert in April 2013. One might conclude that if it were not for the opponent gaining extensions of time to file its evidence then the applicant might have been in some trouble getting its evidence from its experts together in a timely fashion. On the other hand, if it is reasonable in this case that firm action by the applicant be deferred until the evidence in support was filed then one would conclude the applicant has done more than expected. Despite some difficulties, the applicant was able to secure an appropriate expert by late August 2013. This was more than a month before the opponent filed its evidence in support, which was on 4 October 2013. The applicant has successfully employed a strategy for finding and engaging an expert before the evidence in support was filed. I would thus conclude the applicant acted reasonably in securing an expert.
The applicant’s chronology indicates that review of the evidence in support took place throughout October and into November. The applicant stated this took unexpectedly longer than anticipated due to seven additional prior art references not mentioned in either statement of grounds and particulars. This review appeared to occur in-house between the attorneys for the applicant. It appears the applicant’s engaged expert though was first contacted in mid-November in respect to the evidence in support. The opponent has particularly noted this as a significant unexplained gap. On the face of it, one may question whether this was a reasonable strategy by the applicant.
There seem to be two opposing ways for applicants to deal with evidence in support. On the one hand, one could send the evidence in support, once filed, immediately to the expert witnesses and get them working on responding to that. This would presumably then be with minimal, if any, instructions from attorneys. One may question then whether the experts would be spending their time wisely and focused on the issues. On the other hand, attorneys could spend their time initially reviewing the evidence alone, formulating questions or issues that they particularly want their experts to focus on and address, and instructing their experts accordingly.
In the present case, the applicant has not stated what was done while the attorneys were reviewing the evidence in support. Nonetheless it seems the applicant’s attorneys followed the latter of the above approaches and I will have to presume their review of the evidence was for the purpose of formulating questions or issues that they particularly wanted their expert to focus on and address.
The applicants’ attorneys have spent over one month reviewing the evidence on their own. The evidence in support was somewhat voluminous. The applicant indicated that evidence amounted to some 340 pages with the seven additional prior art documents not particularised in the statement of grounds and particulars. It may be that 340 pages of evidence in support is a substantial amount to have to work through. I would note that volume of material in this case does not appear to be as onerous as just considering the number of pages alone. The opponent has provided evidence from two declarants whose declarations together amount to about 30 pages. The remainder comprises accompanying exhibits. One exhibit of about 10 pages from one declarant is duplicated by the second declarant. Also one declarant has exhibited a curriculum vitae of about 20 pages. Nonetheless, taking out these factors and perhaps a few further areas where time may have been saved, it seems the applicant was still faced with some 300 pages of material to review.
The evidence in support is reasonably substantial. I consider the applicant’s approach where the attorneys initially reviewed the evidence in support alone was a reasonable strategy in this case. Furthermore I consider the time taken for this review was reasonable under the present circumstances.
The applicant’s engaged expert had some issues regarding availability once contacted about the evidence in support. Nonetheless the expert gave feedback by mid-December. In this context it appears that reasonable efforts were undertaken and outcomes achieved by the attorneys and the expert in a reasonable time frame. At this time that engaged expert indicated that another expert was required in respect to the seven additional prior art references. The engaged expert also identified such an additional person. The applicant secured and interviewed the additional person before Christmas. Thus, this was achieved within two weeks.
Overall I am satisfied that the applicant has made all reasonable efforts to comply with all relevant filing requirements.
Whether there was a failure to file the evidence despite acting promptly and diligently
As mentioned above, I consider the applicant has made all reasonable efforts to comply with all relevant filing requirements. In this case the requirement to file evidence in answer within the prescribed period is the first requirement under Chapter 5 for the applicant to comply with. Consequently, in this case, I would also conclude the applicant has acted promptly and diligently at all times to ensure the evidence was filed in time. A similar overlap of the tests was also found to apply in Merial (supra) at [17].
Whether there were exceptional circumstances
The applicant has satisfied both of the first two questions above. Consequently an extension of time is appropriate. The question of whether exceptional circumstances applied in this case is thus moot. Nonetheless I will address some points.
The applicant submitted there were exceptional circumstances as the opponent filed documents in its evidence-in-support that were not particularised in either of its statements of grounds and particulars.
It is not unusual for parties to find more evidence during the evidence-gathering stages than what may have been particularised in the statement of grounds and particulars. On its own this can hardly be deemed an exceptional circumstance. The applicant nonetheless appeared to press the point that an absence of documents from the statement of grounds and particulars that are filed in evidence is to the opponent’s detriment. The applicant stated, citing the Examiners’ Manual at 3.4.2, the opponent is bound by the statement of grounds and particulars and its case is confined to the issues raised in that statement unless amended under regulation 5.16. Taking this point to its logical conclusion in the present case, it would mean the applicant need not have spent any time on the opponent’s extra evidence not particularised since that extra evidence forms no part of the opposition at present. An exceptional circumstance could thus not be said to have occurred on this point. On the other hand, it would be quite reasonable in this case for the applicant to nonetheless have considered those documents, especially if they are particularly relevant, on the basis that the opponent would likely seek to formally bring those documents into the opposition by amending the statement of grounds and particulars under regulation 5.16. Such action by the applicant in this case would thus be entirely reasonable to take. In this circumstance though, a failure to file the evidence in answer because of the extra time taken to consider the opponent’s non-particularised evidence would be more appropriately assessed as above under whether the applicant acted promptly and diligently at all times rather than as an exceptional circumstance.

In its submissions the applicant also made a case of procedural fairness. The opponent was able to secure three extensions of time to serve evidence in support under the more relaxed provisions available to the opponent prior to the RTB Regulation. The applicant indicated it is evident the opponent had difficulty securing expert witnesses due to the highly specialised field of technology covered by the opposed application. The applicant also indicated it had experienced the same difficulty.
One may have some sympathy for the applicant’s point. On the other hand sub-regulation 5.9(5) details what “exceptional circumstances” includes. The inclusions principally relate to circumstances, errors or omissions that prevented the party from filing the evidence, or a court order or direction by the Commissioner to stay the proceedings. I think a change in the regulations could not fairly be said to prevent a party from filing the evidence, and a court order or direction by the Commissioner does not apply in this case. In dealing with a similar submission in Merial (supra), the deputy commissioner stated amongst other things at [23] that the advantage the opponent may have obtained is simply not a relevant consideration.
I am not convinced that exceptional circumstances apply in this case.
Conclusion
I have concluded that I am satisfied that the applicant has made all reasonable efforts to comply with all relevant filing requirements. I am also satisfied that the applicant has been prompt and diligent at all times to ensure its evidence in answer was filed in the relevant period. On the other hand, I am not convinced that exceptional circumstances apply in this case. Nonetheless, the applicant has satisfied both of the first two questions. An extension of time is thus appropriate.
Under sub-regulation 5.9(3) it is open as to what the appropriate length of the extended period should be having regard to what is reasonable in the circumstances. I have deemed the progress made by the applicant up until Christmas as reasonable, prompt and diligent. It is clear though that much work still needed to be done beyond that point. For example, the initially engaged expert had only given feedback on the evidence in support up to that point. The provision of a declaration by that person would appear to have still been some time away. Furthermore the additional expert was only secured and interviewed just prior to Christmas. In these circumstances I think it reasonable to allow the full requested period of extension.
I allow the applicant an extension of time until 4 April 2014 in which to file evidence in answer.
Costs
Both parties submitted that costs should follow the event. I see no reason to depart from this practice. I award costs in accordance with Schedule 8 against the opponent, Shelford Services Pty Limited.
M G Kraefft
Delegate of the Commissioner of Patents