Statens Serum Institut v Octapharma AG
[2004] APO 23
•26 August 2004
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 753468 in the name of Statens Serum Institut
Title: Process for producing immunoglobulins for intravenous administration and other immunoglobulin products
Action: Request for an extension of time to serve evidence in support of an opposition by Octapharma AG
Decision: Issued 26 August 2004 .
Abstract
Extension of time allowed.
The parties disagreed as to whether negotiations for settlement were still taking place. The opponent had a reasonable belief that negotiations were still continuing, so an explanation of the delay had been provided.
In deciding the award of costs, it was noted that the opponent had not confirmed that negotiations were continuing before making the application, and that the applicant had not directly communicated that it had terminated negotiations. No award of costs.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 753468 by Statens Serum Institut, and an extension of time to serve evidence in support of an opposition by Octapharma AG
BACKGROUND
Patent application number 753468 in the name of Statens Serum Institut (hereafter referred to as SSI) was advertised accepted on 17 October 2002. A notice of opposition was filed by Octapharma AG (hereafter referred to as Octapharma), and a statement of grounds and particulars was served within time. Several extensions of time to serve evidence in support have been allowed. On 16 July 2004 Octapharma requested a further extension of time from 17 July 2004 to 17 October 2004. SSI objected to the extension, and the matter was heard by telephone on 17 August 2004. Octapharma was represented by Mark Roberts, patent attorney from Davies Collison Cave. SSI did not appear, and filed written submissions.
The application for extension of time
The application gives the reason for the extension of time as:
“Further time is required in which to finalise and serve the balance of evidence-in-support of this opposition in view of ongoing settlement discussions between the parties. The settlement discussions offer a prospect of enabling this opposition to be withdrawn without the need for the balance of the evidence-in-support to be served.”
In a letter dated 3 August 2004, the patent attorney for Octapharma informed the Commissioner that settlement discussions between the parties had now broken down.
Submissions by the parties
Both parties provided lengthy submissions prior to the hearing. Copies of numerous letters and emails were attached as exhibits. The essence of the disagreement is whether negotiations had come to an end by the time that the extension of time was made. SSI accept that negotiations commenced in January 2004, but contend that the negotiations finished in May 2004. Octapharma argued that they reasonably believed negotiations were still underway, and it was not until August 2004 that they were aware that negotiations had terminated. Details of the reasons for these beliefs will be discussed below.
DECISION
The chronology of events in this case is easily summarised from the material on the file.
16.4.03 Statement of grounds and particulars served by Octapharma. Two extensions of time for serving evidence in support were allowed on the basis of obtaining evidence from experts. No objection was raised by SSI. Evidence in support due by 17.1.04 17.10.03 First declaration in support filed by Octapharma. 18.11.03 Second declaration in support filed by Octapharma. 8.1.04 SSI contacted Octapharma by email, suggesting that “Octapharma obtains rights or a license to our patent”. Two further extensions of time were allowed (without objection) based on negotiations. Evidence in support due by 17 July. 16.3.04 Octapharma contacted SSI suggesting “a contract by which you declare not to sue Octapharma AG or its affiliates for patent infringement”. 23.3.04 SSI emailed Octapharma proposing to amend some of the claims. 1.4.04 Octapharma emailed SSI saying they were reviewing the proposal. 17.6.04 Octapharma contacted SSI with a draft agreement. 21.6.04 SSI’s Australian attorneys wrote to Octapharma’s Australian attorneys and the Commissioner. The letter chiefly related to a document in the particulars of the opposition (called D10), but also stated “we note that settlement negotiations between the parties were terminated in May 2004”. 1.7.04 Octapharma emailed SSI requesting a response to the letter of 17 June. 5.7.04 SSI emailed Octapharma as follows:
“Thanks for your letters of June 17th and July 1st. I regret to inform you that the agreement sent on June 17th is not acceptable to SSI. Our suggestion was to enter an agreement for Australia.
Best regards”
5.7.04 SSI’s Australian attorneys wrote to the Commissioner regarding D10. The letter included the comment “negotiations did occur between the parties but these negotiations were terminated in May 2004”. 9.7.04 Telephone conversion between officers of SSI and Octapharma. No record of the content of this conversation was provided in evidence. 16.7.04 Octapharma requested an extension of time for serving evidence in support until 17 October.
The covering letter from the Australian attorney stated “we are informed that these settlement negotiations are in fact ongoing”.26.7.04 Octapharma emailed SSI asking for confirmation that negotiations were proceeding. 2.8.04 SSI wrote to Octapharma that negotiations were ended. 3.8.04 Octapharma’s attorneys wrote to the Commissioner that negotiations were concluded. 4.8.04 SSI objected to the extension of time. 12.8.04 SSI wrote to the Commissioner that negotiations were not ongoing. When did negotiations terminate?
The critical fact in the view of the parties is when did the negotiations terminate. SSI submitted that negotiations concluded in May 2004 because they had not received a response from Octapharma. This is supported by the letter of 21 June 2004. When were Octopharma notified that negotiations had terminated? I would have expected negotiations to be concluded in a manner similar to how they were started - in this case, a communication from SSI to Octapharma. The letter of 21 June 2004 seems a poor substitute for a direct notification. The email of 5 July 2004 complicates things, in that it is cordial, and to my mind leaves open the possibility of finding an acceptable settlement. It seems implicit in the 5 July 2004 email that if the document was reworded to relate only to Australia, then there would be an agreement. The 5 July 2004 letter from SSI’s attorneys to the Commissioner reiterated the view that negotiations had ended. It seems that communication direct from SSI suggested negotiations were still in progress, whereas communications from SSI’s Australian attorneys suggested otherwise. There is no evidence that there was ever a clear and direct communication from SSI to Octapharma stating that the negotiations were terminated (prior to August 2004). I conclude that it was reasonable for SSI to form the view in May that negotiations had ended, and it was also reasonable for Octapharma to believe that negotiations were still continuing on 5 July 2004.
The law on extensions of time
The time for serving evidence in support of an opposition is 3 months from the date of serving the statement of grounds and particulars (regulation 5.8). This time can be extended under regulation 5.10(2):
(2) The Commissioner may:
(a) on the application of a party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies:extend the time within which the party may take a step prescribed in this Chapter, not being a step that is taken under regulation 5.3 or paragraph 5.4(1)(a).
This provision must be read in conjunction with regulation 5.10(5):
(5) The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:
(a)if he or she proposes to grant an application by a party - is reasonably satisfied that the other party has been notified of the application; and
(b)if he or she proposes to act on his own motion - ensures that the parties are notified of the proposed action; and
(c) in either case:
(i)gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and
(ii)is reasonably satisfied that a direction, and extension of time or the serving of evidence is appropriate in all the circumstances.
Consequently, it is a prerequisite to any decision that the Commissioner must ensure that the other party has been notified, and that both parties have had the opportunity to make representations. In the present case the other party has been notified, and the parties have been given the opportunity to make representations.
An extension can only be granted if the Commissioner is reasonably satisfied that it is appropriate. In exercising this discretion I am guided by the decisions of Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) AIPC 91-057; 28 IPR 243, Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) AIPC 91-330; 38 IPR 213 and Goldberg J in National Starch & Chemical Co v Commissioner of Patents (2001) AIPC 91-697, 50 IPR 398. The general principles that flow from these decisions are:
a)The power is discretionary: Regulation 5.10 confers a broad discretion, which cannot be reduced to imperative compliance with particular requirements. It is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at AIPC 38,208; IPR 247-8, Goninan at AIPC 39,434; IPR 220)
b)Explanation of delay: The reasons why the evidence was not served earlier are a relevant consideration, but a satisfactory explanation is not a mandatory requirement. (Ferocem at AIPC 38,207-8; IPR 247)
c)The public interest: The public interest in determining a serious opposition on its merits is a relevant consideration. (Goninan at AIPC 39,435-6; IPR 222)
* In order to do this, it is necessary for the Commissioner to form a view as to the nature of the evidence that it is sought to adduce, and the significance of that evidence for the opposition proceedings. (Goninan at AIPC 39,438; IPR 225-6)
* The significance of the evidence is assessed having regard to any relevant material available, not just the evidence itself. (National Starch at [33])
* The public interest is not protected merely because some evidence has already been served. (Goninan at AIPC 39,438; IPR 225)
d)The interests of the party seeking the exercise of discretion: The interests of the party seeking the exercise of discretion are a relevant consideration. (Ferocem at AIPC 38,208; IPR 247)
e)The interests of other parties: It is relevant to consider the disadvantage to the other party of delays in determining the opposition, and the effect of delays on the efficient and orderly administration of the Patents Office. (Ferocem at AIPC 38,208; IPR 247, Goninan at AIPC 39,436; IPR 222)
Explanation of the delay
Octapharma has specified that the delay is due to settlement negotiations. The presence of negotiations has been recognised as a proper explanation of delay in several decisions of the Commissioner (for instance, the parties referred to Race Lotto Pty Ltd v AWA Ltd [1998] APO 72; Eli Lilly & Co v Amgen Inc (2000) 48 IPR 363; DYWIDAG-Systems International Pty Ltd v Jennmar Australia Pty Ltd [2003] APO 36; Boral Resources (NSW) Pty Ltd v BST Holdings Pty Ltd [2003] APO 46). There is no debate that negotiations were taking place, and that they have now come to an end. Octapharma reasonably believed that negotiations were continuing during July 2004. There is clearly a satisfactory explanation of the delay. However, even if negotiations had ended earlier, I doubt it would have made any difference. Once negotiations come to an end, the preparation of evidence should recommence, but it is unrealistic to expect evidence to be served immediately, and a short delay in finalising evidence is to be expected. If negotiations came to an end sometime in May 2004, it would not have been easy for evidence in support to have been completed by 17 July 2004. Consequently a satisfactory explanation of the delay would probably still have been established.
The public interest
The public interest in determining a serious opposition on its merits requires me to form a view of the nature and significance of the evidence that the opponent will serve. The grounds of opposition include manner of manufacture, novelty and inventive step. The particulars of these grounds refer to a large number of documents. Octapharma have already served two declarations. One of these declarations (by Mr Roberts) serves to introduce into evidence copies of 11 documents. The other declaration (by Mr Goss) is said to be a preliminary declaration, setting out background information. Mr Roberts stated that the further material that will be served consists of two declarations relating to the technical issues of novelty, inventive step, clarity and fair basis. I conclude that the evidence that is likely to be filed is of high significance for the opposition.
The interests of Octapharma
The interests of Octapharma clearly favour the allowance of further time so that all relevant evidence can be considered at the opposition. The interests of Octapharma lie heavily in favour of an extension of time.
The interests of SSI and the Patent Office
The interests of SSI favour the opposition being resolved expeditiously. Consequently, their interests lie against allowing an extension of time. The effect of the delay on the efficient and orderly administration of the Patent Office lies against allowing the extension, but this is not a significant consideration.
The balance of considerations
I have been given an adequate explanation for the delay, and the nature of the evidence that will be served suggests it would be of high significance. The interests of Octapharma and SSI appear to be opposed, and largely offsetting. The interests of the Patent Office are a minor consideration. I am satisfied that a proper case for an extension of time has been made out.
Conclusion
I allow an extension of time until 17 October 2004 in order for Octapharma to serve evidence in support.
Other matters
Mr Roberts stated that there is no evidence immediately to hand that can be filed. However, Mr Roberts specified that he expected the remaining evidence in support to be finalised within the period of the extension sought. I expect Octapharma to take all steps necessary to ensure that evidence in support is finalised by 17 October.
Mr Roberts suggested that SSI had brought this objection in order to frustrate Octapharma. The letter of 23 June indicates that SSI came to the view that negotiations concluded in May 2004 well before the present action commenced. In this regard they have not changed their interpretation of the facts to suit their cause. However, it is apparent that SSI did not take immediate steps to clearly inform either Octapharma or the Commissioner of the end of negotiations. This is regrettable.
Mr Roberts raised a number of other points relating to inaccuracies and irrelevancies in letters sent by SSI and the submissions made by SSI. Clearly there is some bad feeling surrounding the failed negotiations, and I will not add to this by deciding matters that are not relevant to the extension of time. Both parties should now focus on the preparation of evidence in support and answer.
Octapharma do not appear to have confirmed (with SSI) that negotiations were continuing before making the present application for extension of time. The procedure laid down in para 8.5.8 of Volume 3 of the Manual of Practice and Procedure should have been followed: the application for extension of time should have included confirmation from SSI that negotiations were occurring, and there should have been an indication of why negotiations had not yet concluded. If this had happened, then the present dispute might have been avoided.
Costs
Octapharma has been successful in their request for an extension of time. Other relevant matters are that Octapharma did not confirm with SSI that negotiations were continuing, and SSI did not directly communicate that negotiations had been terminated. In these circumstances, Octapharma should not be awarded costs, but neither does SSI deserve an award of costs. I make no award of costs.
Dr S.D.Barker
Delegate of the Commissioner of PatentsPatent attorneys for the applicant : F.B.Rice & Co
Patent attorneys for the opponent : Davies Collison Cave
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