SNF (Australia) Pty Ltd v BASF Australia Ltd
[2017] APO 2
•12 January 2017
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
SNF (Australia) Pty Ltd v BASF Australia Ltd [2017] APO 2
Patent Application: 2012216282
Title:Treatment of aqueous suspensions
Patent Applicant: BASF Australia Ltd
Opponent: SNF (Australia) Pty Ltd
Delegate: Ed Knock
Decision Date: 12 January 2017
Hearing Date: Written submissions filed on 5 and 12 December 2016
Catchwords: PATENTS – section 104 amendments – opposition thereto – request for dismissal of opposition – grounds for opposition held to be not available under the Patents Act 1990 – opposition dismissed.
Representation: Counsel for the applicant: Mr David Shavin QC with
Mr Peter Creighton-Selvay
Solicitor for the applicant: Gilbert + Tobin
Patent attorney for the opponent: K&L Gates
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2012216282
Title:Treatment of aqueous suspensions
Patent Applicant: BASF Australia Ltd
Date of Decision: 12 January 2017
DECISION
I dismiss the opposition to the section 104 amendments at issue.
I award costs against the opponent SNF (Australia) Pty Ltd.
REASONS FOR DECISION
Patent Application 2012216282 by BASF Australia Ltd (BASF) is a member of a family of divisional applications for patents originating from Patent Application 2004203785. The application 2012216282 is the great-great-grandchild of 2004203785. All of this family of applications were originally in the name of Ciba Specialty Chemicals Water Treatments Limited (Ciba), but were assigned to BASF on 20 December 2016. For a full elucidation of the inter-relationships within this family, see the decision on the opposition to application 2004203785, SNF (Australia) Pty Ltd v Ciba Specialty Chemicals Water Treatments Limited 2016 APO 8 at [14] to [24].
Practically every member of the present family of applications has been the subject of litigation between Ciba and SNF (Australia) Pty Ltd (SNF). The most extensively litigated so far are the five now-expired innovation patents belonging to the family. These certified innovation patents have been found by both the Federal Court (Kenny J) and the Full Court of the Federal Court to be valid and infringed by SNF. A subsequent request for Special Leave to appeal to the High Court was refused. However, in the SNF v Ciba decision on the opposition to 2004203785 the delegate of the Commissioner stated that SNF had applied to set aside the declarations and orders of Kenny J on the basis of fresh evidence, and that on 3 August 2015 Davies J had dismissed that application. The delegate went on to say that he was informed that SNF have filed an appeal against that decision. To the best of my knowledge, that situation remains unresolved, but in any case does not impact on the matter at hand.
The opposition to patent application 2004203875 was upheld on one ground only, in particular, that some claims lacked an inventive step in light of International Publication WO 01/92167, which is referred to as the “Gallagher patent” in the opposition decision.
On 29 March 2016 Ciba filed a request to amend the present application to being an application for a patent of addition to Australian Patent 2001269025, which is the national phase entry for WO 01/92167. Leave to amend was advertised on 4 August 2016 and a notice of opposition to the amendment was filed by SNF on 26 September 2016. On 4 November 2016 Ciba requested the opposition to the amendment be dismissed.
The request for dismissal was set for hearing on 12 December 2016 on the basis of written submissions. Each party was given seven days to file submissions, and then a further seven days to file submissions in response to the other party’s submissions. Ciba filed submissions and submissions in response, and SNF filed submissions but no submissions in response.
The section 104 request to amend relevantly reads as follows:
Pursuant to s 104(1) of the Patents Act 1990 (Cth), the patentee hereby makes an application to convert Patent Application number 2012216262 [sic] to a Patent of Addition.
Please find enclosed:
1. Request to amend a Patent Request or any other filed document; and
2. Replacement Patent Request.
The opponent’s Statement of Grounds and Particulars was given to the applicant on 26 October 2016, and relied on the following grounds:
“Ground 1 – Section 81 – Lack of power
The commissioner does not have power under the Patents Act 1990 (Act) to convert an existing filed application to a patent of addition. Accordingly, the application to amend the patent request was not in accordance with the Act.Ground 2 – Section 81 – Not an improvement or modification
If the Commissioner does have power, the Application does not satisfy the requirements of Section 81 of the Act as the 282 Patent is not an improvement or modification of the invention.Ground 3 - Section 81 - Discretion
If the Commissioner does have power under the Act, and the Application satisfies the requirements of Section 81 of the Act, the Commissioner does have a discretion under the Act and should exercise her discretion to refuse the Application on the basis of:
(a)
the entirely inconsistent evidence and submissions advanced by Ciba in previous proceedings before the Federal Court of Australia, the Federal Court of Canada and the Australian Patent Office;
(b)Ciba maintaining these inconsistent contentions in the current appeal proceedings in the Australian Federal Court SNF (Australia) Pty Ltd v Ciba Specialty Chemicals Water Treatments Limited [VID 211 of 2016];
(c)the evidence given by Ciba's witnesses and the findings of fact made by Justice Phelan in the Canadian Federal Court proceeding after having the benefit of hearing evidence from Ciba's in house patent attorney, Mr Peatfield and one of the named inventors; and
(d)the timing of the Application.”
Dismissal of oppositions is provided for in regulation 5.17 of the Patents Regulations 1991. An applicant must make a request within one month of the Commissioner giving them a copy of the statement of grounds and particulars. As the applicant in this case was given its copy on 26 October 2016 and the dismissal was requested on 4 November 2016, this requirement has been met.
The circumstances in which the Commissioner will dismiss an opposition are well established: “whether there are prospects of success that are real and not fanciful or merely arguable” (Re Preference Manufacturing (Aust) Pty Ltd and Commissioner of Patents [2012] AATA 393 at [14]).
The Commissioner may dismiss a particular ground of opposition (see for example L'Air Liquide, SA pour L'Etude et L'Exploitation des Procede Georges Claude v The Commonwealth Industrial Gases Ltd [1992] APO 1; 24 IPR 27). However, the Commissioner should not dismiss a ground of opposition merely because it is not supported by some of the particulars (Norwood Industries Pty Ltd v Macbird Floraprint Pty Ltd [1992] APO 39; 24 IPR 368). The Commissioner may also direct further and better particulars “where a material fact is pleaded, but not with sufficient particularity” (B.C. Cairns Australian Civil Procedure; Mobay Corporation v The Dow Chemical Company [1992] APO 25).
The present request for dismissal is in regard to an opposition to a request under section 104 of the Patents Act 1990 to amend a patent request for a standard patent to a patent request for a patent of addition and in consequence convert the present application to one for a patent of addition. Patents of addition are a rarely availed of option under the Patents Act 1990. A patent of addition is shielded from any requirement to involve an inventive step over its parent patent, notwithstanding that the parent may have been published prior to the priority date of the patent of addition. The rationale for patents of addition is that they provide applicants with their only opportunity, apart from secrecy, to protect non-inventive modifications or improvements to a main invention, and to do so cheaply - no renewal fees are required for a patent of addition. The down-side is that a patent of addition can remain in force only for so long as the parent remains in force - in the present case, for example, the parent will expire in 2021, and thus so will any patent of addition to it.
Turning now to the three grounds upon which SNF opposes the allowance of the section 104 request, the first is that the Commissioner does not have the power to convert the present application to one for a patent of addition. This is said to be on the basis of the plain wording of section 81 of the Patents Act 1990. However, section 81 is not about conversion, which would be enough, I believe, to reject this ground.
Conversion is effected under section 104. Under section 104, an applicant has the right to amend its patent request in any way it sees fit, provided it is compliant with the Patents Act 1990 and Patent Regulations 1991 as a result of the amendment. The opponent endeavoured to read into the wording of subsection 81(1) that unless an application starts out its life at filing as an application for a patent of addition, it is prevented from ever becoming a patent of addition. Subsection 81(1) reads as follows:
“(1) Where:
(a) a patent for an invention (in this Chapter called the main invention) has been applied for or granted; and
(b) the applicant or patentee (or a person authorised by the applicant or patentee) applies for a further patent for an improvement in, or modification of, the main invention; and
(c) the application for that further patent is made in accordance with the regulations;
the Commissioner may, subject to this Act and the regulations, grant a patent of addition for the improvement or modification.”
In my view it is clear that the phrase “applies for a further patent” must reflect the state of the patent request at the particular point at which the Commissioner is about to take the action of granting the patent. This is clear from the wording itself, but also avoids the iniquity of an applicant being shut out from securing any hitherto unrecognised rights subsisting in a disclosure made in a complete specification at filing. It follows that the first ground is unsustainable.
The second ground is that the present application does not fulfil the requirement of being an improvement or modification of the main invention. This requirement, which is in section 81, is not a requirement which the present amendment has to meet in order to be allowable as an amendment. It is stipulated in regulation 5.21 of the Patent Regulations 1991 that:
5.21 Opposition to amendment—grounds
For subsection 104(4) of the Act, an opposition to an amendment may be made only on the ground that the amendment is not allowable under:
(a) section 102 of the Act; or
(b) regulation 10.3.
Neither of these provisions comes into play in the present circumstances. As explained by the applicant in its submissions:
“(a)Regulation 10.3 is concerned with the amendment of a provisional specification. The 282 Patent is not a provisional specification. It follows that regulation 10.3 is irrelevant.
(b)Section 102(1) provides that an amendment is not allowable if, as a result of the amendment, the specification would claim or disclose matter that extends beyond that disclosed in the complete specification and other prescribed documents. No such allegation is made by SNF in its Statement of Grounds and Particulars, nor could it be.
(c)Section 102(2) provides that an amendment is not allowable if, as a result of the amendment, a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment or the specification would not comply with sections 40(2) and 40(3) of the Act. No such allegation is made by SNF in its Statement of Grounds and Particulars, nor could it be.
(d)Section 102(2B) is concerned with amendments to innovation patents. The 282 Patent is not an innovation patent. It follows that section 102(2B) is irrelevant.
(e)Section 102(2D) provides that an amendment is not allowable “if it is of a kind prescribed by regulations made for the purposes of this section”. Regulation 10.2B of the Regulations then provides that “This regulation is made for subsection 102(2D) of the Act” and enumerates those amendments which are “not allowable for patent requests”. SNF does not contend that the Amendment Request is not allowable by reason of any of the matters enumerated in regulation 10.2B, nor could it be.”
I concur with this analysis. It follows that the second ground is unsustainable.
The third ground appears to be asking the Commissioner of Patents to exercise a discretion she is perceived by the opponent to have, and disallow the section 104 amendments. In earlier times the Patents Act took a more restrictive approach to amendments, and there appears to have been a school of thought that the Commissioner may have such a discretion in the case of, say, inequitable conduct or abuse of process by the applicant or patentee. However the contemporary approach of the courts (see, for example, New England Biolabs Inc v Commissioner of Patents [2001] FCA 787) at [58] - [67] is that no such discretion on the part of the Commissioner exists. Provided the proposed amendments are allowable under the Patents Act 1990 and the Patents Regulations 1991, the Commissioner must allow the amendments. But even so, the situation as it stands is that a delegate of the Commissioner has already granted leave to amend, and there would appear to be no basis upon which that action can, or should be, reversed. It would appear that the various issues raised by the opponent in respect to third ground are, if at all, best aired in the forum of the substantive opposition. The third ground is unsustainable.
It is clear from the opponent’s submissions that its principal grievance lies in the way in which, after leave to amend was granted, the amendment has been advertised, ostensibly “for opposition purposes” (as per formal notifications to each of the applicant and the opponent that leave to amend had been granted) under regulation 10.5(2)(b), only for it to emerge that there were no relevant grounds available upon which to oppose the particular amendment. The opponent has stated:
“If Ciba’s submission is accepted, then SNF will find itself in the position where it is entitled to oppose the Amendment Application, but has no available ground upon which that opposition can be based. This simply cannot have been the intention of the legislature – advertising the Amendment Application for opposition, in circumstances where no grounds of opposition are available, would be pointless.”
In fact, there are grounds available for opposing a request to amend a request for a standard patent, and these are set out in regulation 10.2B. It is just that these are fairly limited, and do not involve any section 81 considerations. There therefore seem to be some basis for the opponent’s observation that advertising an amendment which converts a request for a standard patent to a request for a patent of addition is “pointless”. However the awareness behind that observation is one which ought to be readily achievable by reference to the Patents Act 1990 and Patents Regulations 1991. Furthermore, the Act and Regulations provisions around amendments are already quite complex, and it is probably well not to introduce specific exceptions, such as for conversion to patents of addition, to the type of amendments to the patent request which would “materially alter the meaning or scope of the request” and which need to be advertised. In any case, subregulation 10.5(2) makes no reference to the publication of which it speaks as being for opposition purposes: simply informing the public at large of the conversion might be a point in itself.
It is also apparent from the opponent’s submissions in this matter that it is concerned that it may be being deprived of an opportunity to challenge the patent-of-addition status of the present application. This is not correct. It is a well-established principle underlying the patent system that a patent’s validity is never determined once and for all, and mechanisms exist for a patent to be challenged at any stage of its existence. In the case of converting a standard application to an application for a patent of addition it has obviously been thought unnecessary to allow third parties the opportunity to oppose the amendment effecting that conversion. This may have something to do with the fact that less than 0.5% of applications are for patents of addition, and only in a very small proportion of those does the additional status become an issue. In the present case, though, there is clearly a high potential for it to become an issue, due to the would-be parent application being found in the opposition to the ancestor patent application 2004203785 to be the sole anticipatory prior art, and to be so on the basis of not involving an inventive step. Accordingly, as I have already commented at [16], above, the most expedient forum in which to challenge the additional status of the present application, which already has a substantive opposition in train, would be as part of those substantive opposition proceedings, where inventive step will likely be a principal consideration. In this regard, see, for instance, the comments made by the delegate of the Commissioner in Baracuda (Pty) Ltd v Chauvier [1987] APO 3 to the effect that:
“However, insufficient status as a patent of addition is not in itself a ground of opposition, although in view of the provisions of section 76 [equivalent to section 25 of the current Patents Act], the validity of the application in suit could be affected if patent of addition status were not applicable.”
Conclusion
I find that the opposition as a whole has no prospects of success, and should be dismissed.
Costs
In proceedings such as these it is customary that costs follow the event. The opponent has submitted that if the opposition is dismissed, it would be appropriate for no costs to be awarded. They justified this as follows:
“As noted above, the Amendment Application was properly advertised for opposition in accordance with the Regulations, and SNF proceeded to exercise its right to file the Opposition. SNF should not be penalised by an award of costs against it, should the Commissioner accept Ciba's submissions and conclude there are no available grounds for the Opposition (notwithstanding the absurdity of such a result, as noted above).”
The patent applicant, on the other hand, submitted:
“SNF submits in the OS that if its opposition to the Amendment Request is dismissed, there should be no order as to costs, given that it proceeded to exercise its right to file the opposition in the advertised opposition period.
SNF’s opposition to the Amendment Request raises not a single available ground of opposition under the Act or Regulations. SNF’s behaviour in pursuing its opposition, in circumstances where the opposition was fundamentally misconceived and should never have been pursued at the outset, warrants an award of costs against SNF should the Commissioner dismiss the opposition to the Amendment Request. Ciba has been forced to incur costs in applying for the dismissal of the opposition to the amendment application, because SNF failed to consider, either properly or at all, what grounds of opposition were available to it before filing its notice of opposition. The Commissioner should not encourage such conduct by forcing Ciba to bear its costs of applying to dismiss what was always a manifestly hopeless opposition.” [Emphasis in the original text.]
In my view, the applicant has the high ground on this. The opponent SNF should have recognized that there was no statutory basis upon which to oppose the amendment, thus rendering the opposition futile. I therefore award costs against SNF (Australia) Pty Ltd.
Ed Knock
Delegate of the Commissioner of Patents
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