The Government of the United States of America as represented by the Secretary, Department of Human Services and Health v University of Queensland and CSL Ltd

[2001] APO 51

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 683220 in the name of The Government of the United States of America as represented by the Secretary, Department of Health and Human Services

Title:          Self-Assembling Recombinant Papillomavirus Capsid Proteins

Action: Opposition under s.59 of the Patents Act 1990 by University of Queensland and CSL Limited; objection to a request for leave to serve further evidence; objection to two requests to amend the statement of grounds and particulars; and a request for a direction that certain parts of the evidence in reply are inadmissible.

Decision:          Issued            .

Abstract

The evidence filed in reply is prima facie properly evidence in reply.  The evidence in answer will sometimes bring up new issues that must be addressed in the evidence in reply.  While certain points were not put in evidence in support, the opponent could not have reasonably seen them as relevant until the applicant's defence was put.

Even if the evidence was not in reply, the circumstances do not support a direction that the evidence be inadmissible.  Some of the issues addressed in the evidence appear to be fundamental to the determination of the opposition.  The public interest in considering the opposition on its merits and the interests of the parties in having all significant matter relevant to their respective cases available at the substantive hearing weigh heavily in the circumstances under consideration.

Application to serve further evidence allowed.  Applicant allowed a period of three months for the applicant to file evidence in response, commencing from the day on which evidence in reply is completed

Direction given that the opponent provides further and better particulars in relation to certain particulars.  Where particulars are amended at a late stage in proceedings, an opponent would be expected to state their case with a considerable degree of precision.

Amendment to the statement of grounds and particulars allowed on the condition that the direction for further and better particulars is complied with within one month from the date of the decision.

Costs awarded against the opponent.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 683220 by The Government of the United States of America as represented by the Secretary, Department of Health and Human Services; opposition under s.59 of the Patents Act 1990 by University of Queensland and CSL Limited; objection to a request for leave to serve further evidence; objection to two requests to amend the statement of grounds and particulars; and a request for a direction that certain parts of the evidence in reply are inadmissible.

BACKGROUND

The Government of the United States of America as represented by the Secretary, Department of Health and Human Services, also known as National Institutes of Health, ("NIH", "the applicant") filed patent application 683220 (48475/98) on 3 September 1993 through the provisions of the Patent Co-operation Treaty.  The application claims priority from two US patent applications, the earliest of which was filed on 3 September 1992.  Following examination, the application was advertised accepted on 6 November 1997.

University of Queensland and CSL Limited ("CSL", "the opponent") jointly opposed the application on 5 February 1998. The opponents served their statement under regulation 5.4 of the Patent Regulations on 5 May 1998. The opponent completed service of evidence in support on 13 May 1999. The applicant completed service of evidence in answer on 2 November 2000, following an amendment to the specification under section 104 of the Patents Act 1990. Evidence in reply was due to be served on 2 February 2001. This has subsequently been extended to 2 November 2001.

The opponent served and filed a declaration by Ian Hector Frazer, together with exhibits IHF1 to IHF18 on 2 May 2001 ("the first Frazer declaration").  The opponent stated that this declaration formed part of the evidence in reply.  The applicant subsequently applied under Regulation 5.10(1) for a Direction of the Commissioner directing that certain parts of the statutory declaration of Ian Hector Frazer dated 19 April 2001 and exhibits IHF1 to IHF18, served as part of the opponent's evidence in reply, are inadmissible as evidence in reply, and that the opponents are not entitled to rely on or be heard on those parts of this evidence.

The opponent filed a further declaration by Ian Hector Frazer, together with exhibits IHF1 to IHF24 on 17 July, together with a request to serve the declaration and exhibits as further evidence under the provisions of regulation 5.10(4) ("the second Frazer declaration").  The applicant has objected to this request to serve further evidence.

The opponent filed requests to amend the statement of grounds and particulars on 28 May 2001 and 17 July 2001.  The applicant has objected to both these requests.

The applicant has therefore objected to a request to serve further evidence, two requests to amend the statement of grounds and particulars, and applied for directions regarding the admissibility of evidence in reply that has been filed.  I heard the parties on these matters in Canberra on 9 August 2001.  John Slattery, assisted by Mark Olive, patent attorneys of Davies Collison Cave, represented NIH.  Robin Kelly, patent attorney of Fisher Adams Kelly, represented CSL.  John Cox of CSL accompanied Mr Kelly.

At the hearing I noted that the earlier request to amend the statement of grounds and particulars appeared to be wholly subsumed in the later request.  Mr Fisher orally withdrew the earlier request at the hearing.  This withdrawal was later followed up in writing.  Therefore I now have to deal only with the request filed on 17 July 2001.

I also noted at the hearing that the second Frazer declaration appears to overlap significantly with and possibly subsume the first Frazer declaration.  Mr Fisher indicated that it was the opponent's intention for the second Frazer declaration to also form part of the evidence in reply.  I told Mr Fisher that he would need to notify the Patent Office and the applicant in writing that the second Frazer declaration also formed part of the evidence in reply, as this was not currently clear from the written record.  On this basis, Mr Slattery extended his application for directions to include the second Frazer declaration.

The opponent has filed the Frazer declarations as evidence in reply and as further evidence.  However, Mr Kelly made it clear at the hearing that when the Frazer declarations were being drafted that they were considered to constitute evidence that was strictly in reply to points made in evidence in answer.  In view of the objections made by the applicant, the opponent proceeded with a request under regulation 5.10(4) so as to overcome any possible objections which may be made by the applicant and provide the applicant with a chance to respond to the evidence in reply.  I note here that it is often the practice of the Commissioner to allow the other party a period of time to file responding evidence as a term of granting a request under regulation 5.10(4).

The opponent has subsequently confirmed in a letter dated 10 September 2001 to the Patent Office that the statutory declaration by Ian Hector Frazer executed on 17 July 2001, together with exhibits IHF1 to IHF24, constituted part of the evidence in reply in the opposition to patent application 683220.  As the second declaration appears to subsume the first declaration, for the purposes here I will limit further consideration to the second declaration, i.e. the Frazer declaration made on 17 July 2001.

At the hearing, I also invited submissions from the parties as to whether a direction for further and better particulars would be appropriate to more suitably deal with any alleged deficiencies with the statement of grounds and particulars.

I also heard a matter between University of Rochester and University of Queensland and CSL Limited on 7 August 2001.  That matter was in relation to patent application 688759 and is the subject of a separate decision.  I mention it here because many of the issues arising in that case are similar to the issues considered herein.

SPECIFICATION

The specification is for an invention entitled "Self-Assembling Recombinant Papillomavirus Capsid Proteins".  The described invention relates particularly to recombinant viral proteins that are suitable for use in the diagnosis, prophylaxis and therapy of viral infections.  The specification ends with 28 claims in all, including claims to a genetic construct, a capsomer structure, various methods of making and using capsomer structures, and diagnostic kits.  Apart from omnibus claims 23 to 28, all of the claims are either directly or indirectly appended to claim 1.  Claim 1 reads as follows:

"A genetic construct comprising a papillomavirus L1 conformational coding sequence encoding a papillomavirus L1 capsid protein and a recombinant vector, wherein said construct is capable of directing expression in a host cell of a capsomer structure having conformational epitopes, which are capable of inducing high titre neutralizing antibodies against native papillomaviruses, by self-assembly of said capsomer structure comprising said papillomavirus L1 capsid protein, with the proviso that said recombinant vector is a non-mammalian cell vector and said cell is a non-mammalian host cell."

RELEVANT LAW

Regulations 5.9 and 5.10 are the provisions relevant to amendment of the statement, service of further evidence, and directions by the Commissioner in the case of oppositions under section 59 of the Patents Act 1990.

Amendment of statement
5.9      (1) Subject to subregulation (2), the Commissioner, on the written request of an opponent and subject to such terms as the Commissioner may specify:

(a) if the Commissioner reasonably believes that an amendment of a statement referred to in regulation 5.4 corrects an error or omission by the opponent or by his or her agent — may amend the grounds of opposition set out in the statement; or
(b) …
(c) must amend particulars relating to a ground set out in a statement that is served and filed under regulation 5.4.

(2) The Commissioner must not allow an amendment requested under subregulation (1), if:

…
(d) he or she does not reasonably believe that the applicant has been notified of the proposed amendment.
(e) [repealed]

(3) The Commissioner must give the parties an opportunity to make representations concerning the proposed amendment.
(4) If the Commissioner allows an amendment, he or she must give the applicant a copy of the statement as amended.

Under regulation 5.9(1)(c), on the written request of an opponent, the Commissioner must amend particulars relating to a ground set out in a statement that is served and filed under regulation 5.4. The regulations were amended on 29 November 2000 to remove the requirement in subregulation 5.9(2)(e) that an amendment is not allowable if the Commissioner reasonably believes a person will be unduly prejudiced by the amendment.  Therefore, in relation to the requested amendments, the hearing was limited to whether the Commissioner should specify any terms.

Conduct of proceedings to which this Chapter applies
5.10     (1) The Commissioner may, on his or her own motion or on the application of a party:

(a) give a direction that is not inconsistent with the Act or these regulations for the conduct of proceedings to which this Chapter applies; or
(b) …

(2) …
(3) …
(4) The Commissioner may:

(a) on the application of a party; and
(b) on such reasonable terms (if any) as the Commissioner specifies;

permit the party to serve further evidence on the other party.
(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 or her 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, an extension of time or the serving of further evidence is appropriate in all the circumstances.

Regulation 5.10 lays down the general requirement that, before granting the application or giving a direction, I must be reasonably satisfied that it is appropriate in all the circumstances.

The Federal Court has considered the requirements of regulation 5.10 in Ferocem Pty Limited v. Commissioner of Patents (1994) 28 IPR 243, A Goninan and Co Ltd v Commissioner of Patents and other (1997) 38 IPR 213, and National Starch & Chemical Company v Commissioner of Patents 50 IPR 398. There have also been numerous decisions issued by the Patent Office in relation to regulation 5.10. Although Ferocem, Goninan, and National Starch all related to requests under regulation 5.10(2), which relates to applications for extensions of time, a number of Patent Office decisions have considered the principles set out in these decisions to be generally applicable to regulation 5.10.  For example, see Nalco Chemical Company v W.R. Grace & Co.-Conn [1998] APO 65 (23 November 1998) in relation to regulation 5.10(4), and Alvern Norway A/S v Trans Global Concepts Pty Ltd 38 IPR 158 in relation to regulation 5.10(1).

Burchett J set out some general guidance on the factors to be considered under regulation 5.10(5) in Ferocem at 247-248:

"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.  There are interests of the persons directly concerned in the application and opposition in question.  There are also public interests, which are not necessarily ranged on the same side.  They include the expeditious disposal of matters in the Patents Office, and questions of costs, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office.  But they also include, as Kitto J pointed out in Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Co (1969) 120 CLR 136 at 143, ' 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'. …"

These considerations were referred to in Goninan, where Sackville J adopted the position that the decision-maker was required to give proper, realistic and genuine consideration to the public interest generally and specifically to the opposition proceeding being determined on its merits.  In respect of this point, he stated:

"In order for the Commissioner or his delegate to give proper, genuine and realistic consideration to the aspect of public interest I have identified, it is necessary to consider the nature of the evidence the opponent seeks to adduce and the significance of that evidence for the opposition proceedings. I do not mean to suggest that the evidence has to be scrutinised in the same way as would occur at a hearing on the merits. But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on its merits."

DECISION

Before considering the evidence, I consider it appropriate to address some preliminary points made by Mr Kelly for the opponent.  Mr Kelly argued that the mere fact that the applicant had objected to the evidence shows that the applicant considers the new matters as damaging to their case.  Mr Kelly stated that if the particulars were irrelevant or did not damage the applicant's case then it would be safe to say that they would raise no objection.  I do not agree.  The applicant may have any number of valid reasons for objecting to the evidence.  I will consider the interests of the applicant in more detail later in my decision.  All that I need to say here is that the fact the applicant has objected tells me nothing about the relevance of the evidence.

Mr Kelly also said that any decision of the Commissioner on the substantive matters is appellable to the Federal Court, who will hear the case de novo.  Mr Kelly stated that there are no restrictions applicable to what evidence may be lodged on appeal, and that the hearing officer in a substantive opposition should have access to the same or similar evidence that may be cited in an appeal.  Mr Kelly argued that objections to admissibility of evidence should not be regarded as having any substance if they deal mainly with procedural matters and thus overshadow issues of relevance.  Mr Kelly said that it is only in regard to extreme circumstances such as overwhelming delay by an opponent in relation to giving notice of the new prior art that it may be ignored.

I believe Mr Kelly's argument here is incorrect.  It is clear from F Hoffman-La Roche AG v New England Biolabs Inc 50 IPR 305 that it was within the power of the court to constrain the evidence that may be considered on an appeal. In any case, Goldberg J stated in National Starch that it was not part of the delegate's task to speculate as to the issues which might arise on appeal.  Further, Sackville J rejected an argument in Goninan that the Commissioner has a duty to allow any evidence that is relevant to an opposition.  There, Sackville J said, "the public interest in having an opposition determined on its merits must be weighed with and against other considerations.  It is not the only factor to be considered."

The applicant has asked for a direction to the effect that the evidence in the Frazer declarations is not strictly in reply and is therefore inadmissible.  On the issue of evidence being strictly in reply, a delegate of the Commissioner made the following comments in RGC Mineral Sands v Wimmera Industrial Minerals Pty Ltd [1999] APO 79 (16 December 1999):

"In my view, it is not practical or appropriate for the Commissioner to come to a concluded view on whether the evidence in reply is in fact properly in reply outside the substantive hearing.  I note that other Patent Office decisions have made similar observations (see Emory University v Biochem Pharma (1997) 39 IPR 603 (at 607) and Nippon Steel Corporation v BHP Steel (JLA) Pty Ltd 1999 APO 44). …"

In Sonus Pharmaceuticals, Inc v Alliance Pharmaceutical Corp and Schering Aktiengesellschaft [2001] APO 13 (16 March 2001), a delegate said:

"The only time that a final determination of whether the evidence is actually in reply is made is during the substantive hearing of the opposition.  However, that does not mean that I cannot form a view of the question, and indeed it is essential for me to do so in order to decide the matter before me.  However, it is only possible to form a preliminary view.  If there is a reasonable basis for believing that evidence fits the definition of evidence in reply, then I believe that I should treat that evidence as reply evidence at this time unless Sonus can satisfy me that that conclusion is not appropriate.  It may be that a different conclusion would be reached after detailed analysis of the declarations, such as during the substantive opposition.  It clearly would have been easier to determine these issues as a part of the substantive opposition, but that option is not available.  I am required to make a preliminary assessment, and to base my decision on that assessment."

In  Sonus Pharmaceuticals, the delegate discussed the purpose of evidence in reply, with reference to Ernest Scragg & Sons Ltd's Application [1972] FSR 219 at 223 and to a number of Patent Office decisions. I will not repeat the delegate's discussion here, though I bear in mind the principles set out in the cases discussed therein and the conclusions drawn by the delegate. However, I also note that in MacDonald Engineering Company Pty Ltd v Firebelt Pty Limited [2000]APO 37, a delegate considered the decision in Minister for Immigration and Ethnic Affairs v Pochi 31 ALR 666 and said:

"It is clear from this decision that the Commissioner is not restricted by the rules of evidence or procedure applicable in a court, and thus it is arguable whether the Commissioner is as a matter of law bound to exclude evidence which is not properly in reply."

Another decision of particular relevance here is Snap-On Technologies, Inc, v Beissbarth GMBH [2000] APO 52 (3 August 2000). In that case, the applicant had sought directions that the evidence in reply should not be admitted into proceedings as it was not strictly in reply. The opponent sought leave to serve as further evidence the material previously served as evidence in reply. The opponent indicated this action was taken as a precautionary measure, even though the opponent believed the evidence to be strictly in reply. Therefore the facts considered by the delegate in Snap-On Technologies are very similar to some of the issues before me.

The delegate in Snap-On Technologies did not believe it was appropriate for the Commissioner to decide prior to the hearing on the substantive matter whether the evidence is properly considered as evidence in reply or otherwise.  The delegate did not consider a debate about whether the evidence was strictly in reply to be useful in determining whether he should grant leave to serve further evidence.  The delegate also made the following comments:

"Moreover, I am concerned that long debates at the substantive hearing about whether evidence is admissible could detract from the substantive issues, and I believe it would be more administratively efficient if both parties come to the substantive opposition with all material. From the decision in RGC v Wimmera [1999] APO 79 (16 December 1999) I note that the Commissioner has an inquisitorial role in an opposition. While she must allow the parties natural justice to reply to evidence, she is not bound by the rules of evidence. Reflective of this, the Commissioner even has the power under regulation 5.11 to consider documents in an opposition that are not part of the evidence. In my view, the key question to consider is "how relevant is this material?" rather than "is it strictly in reply?"."

The above decisions suggest that the directions sought by the applicant on the admissibility of the evidence in reply are not appropriate at this stage.  However, each case must be treated on its merits.  There may be some cases where it is clear from even a preliminary view that the evidence is not properly in reply.  However, even if this was clear, I must consider whether the directions sought by the applicant are appropriate in all the circumstances.  As outlined in Ferocem (above), this includes taking into account the competing considerations of the public interests and the interests of the persons directly concerned.  It is clear from the Federal Court decisions of Ferocem, Goninan  and National Starch, discussed above, that the nature of the evidence and the significance of that evidence for the opposition proceedings is an important consideration.  Given the facts of this case, the same considerations are applicable to any exercise of the Commissioner's discretion I may make her under regulation 5.10, such as the request to serve further evidence under regulation 5.10(4) or any directions under regulation 5.10(1).

Mr Slattery referred me to a number of Patent Office decisions, in particular Optech International Ltd v Buxton Hicrarium Ltd 28 IPR 649; Raychem Ltd v Global Lighting Technologies Pty Ltd 36 IPR 572; and DAP Enterprises Pty Ltd v Roberts Designs Pty Ltd 41 IPR 192. These decisions all considered the issue of admissibility of evidence in reply. Each of these decisions involved a consideration of the evidence in reply at the substantive opposition, where a full and detailed consideration of the evidence could be given. However the principles relating to evidence in reply relied on in these decisions are consistent with the principles discussed in Sonus.  I note that even in the decisions where the evidence was found to be not strictly in reply, such as in Optech and Raychem, the delegate still considered the evidence in the determination of the substantive opposition, to the extent the evidence was relevant.

This is consistent with the delegate's finding in Snap-On Technologies that the relevance of the material is the key question to consider, rather than whether the material is "strictly" in reply.  Of course, if the evidence is properly in reply, it will be prima facie relevant, on the assumption that the evidence in answer is relevant.  The Frazer declaration is available for me to consider and the parties have made submissions on whether or not the evidence is properly in reply.  Therefore I find it useful here to form a preliminary view on whether the material is properly in reply, in order to determine the relevance of the material and consider whether the exercise of the discretionary powers of the Commissioner sought by the parties are appropriate in all the circumstances.

Relevance of the evidence

The opponent filed a number of documents in its evidence in support relating to the grounds that the claims lack novelty and inventive step.  Patent application WO93/02184 appears to be particularly relevant for the present circumstances.  Ian Frazer is a co-inventor of the invention described in WO93/02184 (now Australian Patent 651727).  According to the opponent, the applicant has argued in its evidence in answer that the VLPs described in this document and others do not have conformational epitopes, as is required by the claims of the opposed application.  The applicant also appears to have disputed the opponent's definition of conformational epitopes.  In addition, the applicant has argued in evidence in answer that the use of a non-mammalian vector/host cell system is another distinguishing feature.  For example, Lowy at paragraph 15 says that the opponent's documents "lack a reduction to practice of VLPs in a nonmammalian expression system, and any conception that they could substitute a nonmammalian expression system for their mammalian expression system is not enabled …".  The opponent says that its evidence is in reply to these arguments.

Paragraphs 1 to 7 of the Frazer declaration summarise the conclusions drawn from the evidence in answer.  These conclusions include the points made about conformational epitopes and non-mammalian cell vector/host cell.  In paragraphs 8 to 10, Frazer briefly revisits the invention in his application WO93/02184 "to highlight the breakthrough in science that was achieved".  Mr Frazer asserts that "the invention has stood the test of time  … and has been copied by many workers without modification …".  Although the applicant objects to these paragraphs as reiterating evidence in support, in my view they merely provide context for the evidence in reply.

In paragraph 11, Frazer says that because of the close similarity between VLPs described in WO93/02184 and the infectious virion, the VLPs described will possess the same conformational epitopes as the native virion and will inherently generate neutralising antibodies in sera.  Frazer points to "successful clinical trials" (IHF-1) to support his argument.  Frazer then expands on this and other points from the evidence in answer in paragraphs 11 to 27, with reference to exhibits 1 to 11 to support his argument that conformational epitopes are an inherent characteristic of a VLP.  Frazer also refers to the evidence in answer throughout his evidence.  Mr Slattery said that this inherency argument was a new line of argument that had not been raised in the evidence in support and was therefore inadmissible.  I note that the evidence in answer has attacked the opponent's supporting evidence on the basis that it did not disclose conformational epitopes and that correct conformation needs to be verified because VLPs are often produced that do not assume the correct conformation.  For example, see Lowy paragraphs 36 to 38.  Any evidence that conformational epitopes would inherently be formed is in my view rebuttal of this argument.  In my opinion, paragraphs 1 to 27 and exhibits 1 to 11 are prima facie evidence in reply.

Paragraphs 28 to 40 and exhibits IHF12 to IH20 of the Frazer declaration appear to be replying to the allegations in the evidence in answer that the prior art cited in support of the opposition is not enabling in regard to non-mammalian expression systems.  The evidence attempts to establish that Frazer contemplated a range of expression systems in his patent application and that non-mammalian expression systems were known at the priority date, contrary to assertions in the evidence in answer.  Prima facie, this evidence is in reply to the evidence in answer.

Mr Slattery said that none of exhibits IHF-1 to IHF-18 were particularised in the original statement of grounds and particulars and none of these exhibits have been alluded to in any manner in the evidence in answer.  Mr Slattery argued that the exhibits are therefore inadmissible as evidence in reply, consistent with the Optech decision.  However, in the Optech case, the new documents were put forward as anticipations.  Notwithstanding the amendments to the statement of grounds and particulars, which I will come to later, the new documents cited here are not raised as anticipations in their own right, at least as far as I understand the opponent's case.  Rather, the new documents appear to be cited to aid in the interpretation of the cited prior art and the invention defined in the opposed application.  In my view, the fact that a document is new does not, per se, mean that it is not in reply.

Paragraphs 41 to 57, and exhibits IHF-21 to IHF-24, appear to be addressing a number of points that were raised in the evidence in answer.  The applicant has argued that this evidence largely reiterates the evidence in support and is therefore inadmissible.  Mr Slattery argued that the evidence in reply should do no more than to directly and clearly rebut the evidence in answer.  Such action would ordinarily be expected to be a clear contradiction of the evidence in answer, preferably including a cross-reference to particular arguments in the evidence in answer.  While I do not believe the presence or absence of cross-references is determinative, I note that there are limited cross-references in parts of the Frazer declaration.  While I agree that significant portions of the evidence presented in the Frazer declaration appear to reiterate the evidence in support, this appears to generally be for the purpose of providing context to the evidence refuting the evidence in answer.

Paragraph 48 and exhibit IHF-22 of the Frazer declaration deal with what Mr Kelly referred to as "the second ATG point".  The opponent argues that it is clear that failure to initiate translation from the second ATG results in a failure to form VLPs.  According to paragraph 48 of the Frazer declaration, this shows that the methodology used in the priority document of the opposed application was basically the same methodology shown in WO93/02184.  Mr Kelly also argued that this point was also raised in paragraph 17 and exhibits IHF-6 to IHF-8 in rebuttal of paragraph 23 of Lowy.  Mr Slattery, on the other hand, submitted that there is no reference anywhere in the evidence raised to date suggesting that the translation start site of the L1 gene is relevant to these proceedings.  Mr Slattery contended that this was a new line of argument presented in the evidence in reply.

As Mr Kelly pointed out, the evidence in answer will sometimes bring up new issues that must be addressed in the evidence in reply.  For example, see RGC Mineral Sands v Wimmera Industrial Minerals Pty Ltd [1999] APO 79 (16 December 1999). Lowy at paragraph 23, and elsewhere, disputes that the VLPs in WO93/02184 had the same conformation as virions. Other declarants for the applicant have given similar evidence. The "second ATG" point appears to be relevant to the issue of whether or not the prior art particles were conformationally correct. While the point was not put in evidence in support, the opponent could not have reasonably seen it as relevant until the applicant's defence was put. Therefore, from a preliminary viewpoint, the evidence on this point appears to be in reply.

The applicant, in its evidence in answer, appears to have attacked the prior art put forward in the evidence in support on the basis that the alleged anticipations are not enabling as they did not disclose conformationally correct epitopes or the use of non-mammalian expression systems.  It appears that these questions are fundamental to a correct determination of the opposition.  It is well accepted that a disclosure must "for the purposes of practical utility" (Hill v Evans, (1862) 6 LT 90), be the same as the later claim. The applicant has attacked the opponent's evidence in support and the opponent is entitled to address that in its evidence in reply. In my view, the evidence filed by the opponent is prima facie in reply.

Mr Slattery said that many of the documents in the evidence in reply were not applicable as they were published well after the priority date.  I consider that there is a serious question to be answered and anything that would help decide the issue is relevant matter.  I note here that the applicant has also provided post-filing date literature in support of its arguments (for example, see paragraph 27 of the Shah declaration).  In my view, the ultimate relevance and weight to be placed on such evidence is a matter that is best decided in the substantive opposition.

I am therefore of the view that the Frazer declaration and the exhibits thereto are properly in reply.  My view, however, has only been formed on the basis of a limited analysis of the evidence to the extent necessary to form a preliminary view.  It has not been formed on the basis of the type of in-depth analysis of the evidence that would be given at the substantive hearing into the matter.  It is possible that the opponent has overstepped the mark as to what is strictly in reply in relation to some of the issues canvassed, and that the applicant is correct in that the evidence in reply involves some change to the case to be answered.  However, in my view, the evidence in the Frazer declaration is prima facie highly relevant to the issues to be determined in the substantive opposition.  It is therefore in the public interest for the evidence to be before the delegate at the substantive hearing.  My findings on the relevance of the evidence do not support the applicant's request for directions striking out the evidence.  In my view, a more appropriate way of proceeding would be to provide the applicant an opportunity to serve evidence responding to any new matter.  However, before deciding this, I must balance the public interest in considering the opposition on its merits with all other relevant considerations.

Delay

The majority of Patent Office decisions relating to regulation 5.10 have considered any delay to the opposition proceedings that may be caused by the exercise of the Commissioner's discretion to be a relevant consideration when deciding whether to exercise that discretion.  As noted by Sackville J in Goninan, "it is a relevant factor for the commissioner to take into account that delays in determining opposition proceedings may unfairly disadvantage the applicant for a patent and may create difficulties for the efficient and orderly administration of the Patents Office."

Relevant factors include the questions of whether the evidence could have been obtained with reasonable diligence at an earlier stage, and whether the exercise of the discretion under regulation 5.10 would cause unnecessary protraction of the opposition proceedings. These factors have been considered relevant in a number of Patent Office decisions on applications to serve further evidence under the Patents Act 1990 that have adopted certain "criteria" in considering the exercise of the Commissioners discretion. For example, see Sandoz Ltd v Fujisawa Pharmaceutical Co Ltd (No 2) (1993) AIPC 91-013, and ICI v Mitsubishi Gas Chemical 29 IPR 285. In Nalco Chemical Company v W.R. Grace & Co - Conn [1998] APO 65 (23 November 1998), the delegate held that the criteria set out in these cases are in accord with the principles set out in Ferocem and Goninan.

Mr Slattery argued that in the present case the evidence could have been served earlier with reasonable diligence.  Mr Slattery said that many of the new documents were cited in a corresponding US Interference action or were publicly available before the opponents completed service of their evidence in support.  Mr Slattery said that the opponent had not provided any valid reasons why these documents could not have been prepared and served in its evidence in support.  Mr Slattery submitted that the opponent has protracted the opposition by attempting to rely on these documents as primary citations late in proceedings.

I believe that part of the applicant's problems here arise because of the way the new documents are cited in the amended particulars.  The documents are said in the particulars to disclose the invention as claimed in any claim.  I will address the statement of grounds and particulars in more detail below.  The applicant's problem with the new documents may have been exasperated by the opponent's request to serve further evidence.  However, as I have noted above, it became apparent at the hearing that the opponent was citing the new documents to aid in the interpretation of the prior art cited in the evidence in support, rather than as citations in their own right.  The documents appear to have been served to address issues raised by the evidence in answer.  I have found these documents to be at least prima facie relevant and, at least on a preliminary view, to be properly evidence in reply.  By its very nature the evidence could not have been served until after the evidence in answer was completed.  The opponent appears to have acted with reasonable diligence in preparing and serving the evidence from Professor Frazer, once the evidence in answer was completed.

I note that the opponent is waiting upon my ruling on the admissibility of certain evidence before preparing evidence from other experts on that material.  At the hearing Mr Kelly referred me to a letter and comments from Margaret Stanley, who will apparently be preparing a declaration in reply.  It appears from this letter that Margaret Stanley is to file evidence of likely relevance to the opposition.  It is my expectation that the opponent will now complete its evidence in reply promptly.

Interests of the parties

The opponent's interests principally lie in having any material relevant to its case being considered at the substantive hearing into the matter.  I have dealt with the relevance of the material in some detail already.  The opponent did not alert me to any other considerations that are likely to impact on their interests in the matter.

The applicant's interests may be impacted by any delays to the opposition proceedings. I have already considered the issue of any delay above.  Any new material introduced in evidence in reply or further evidence at this stage of the opposition procedure may also impact negatively on the applicant's interests.  It would be a denial of natural justice if any new material was admitted and the applicant was not given an opportunity to respond to that material.

The opponent has indicated that they would be agreeable to the applicant being given a period of time in which to file responsive evidence.  This would protect the applicant's interest in being able to mount a proper defence of its application.  In my view, any other interests of the applicant are outweighed by the public interest in determining the opposition on its merits.

Mr Slattery submitted that, in view of the extensive nature of the evidence, a period of one month to respond would be insufficient.  I agree that a period of three months for the applicant to file evidence in response would be appropriate.  The opponent has indicated that it will be filing further evidence in reply based on the new documents exhibited to the Frazer declaration.  Therefore it would be appropriate for any period for the applicant to file evidence in response to commence from the day on which evidence in reply is completed.

It could be argued that, as I have found the Frazer declaration and attached exhibits to be properly in reply, then this closes the argument rather than opens it to further evidence.  However, the opponent has filed the evidence as further evidence as well as evidence in reply.  The relevance of some of the "new" material only became apparent after service of evidence in answer.  I am also mindful that my findings on the evidence in reply are based only on a preliminary review and not on the type of full evaluation of the evidence that would occur at a substantive hearing.  In view of all these circumstances it would seem to me to be appropriate to allow the applicant an opportunity to address the "new" material in the evidence in reply and further evidence.

This in effect creates a fourth stage of evidence, whereas regulation 5.8 outlines three evidentiary stages.  However, I believe this is consistent with regulation 5.10(4), which allows for the Commissioner to permit a party to serve further evidence on such reasonable terms as the Commissioner specifies.  This course of action will result in protraction of the opposition proceedings.  However, in my view it will allow for the remainder of the evidence to be filed in an orderly and efficient manner and protect the interests of the parties in having all significant matter relevant to their respective cases available for consideration at the substantive hearing.  The resulting protraction could not be considered to be an unnecessary protraction.

Statement of Grounds and Particulars

The amendments to the particulars introduce new particulars 3.1.14 to 3.1.49 and introduce particular 4.2.18.  The applicant has objected to the amendments and asked that I impose as a term of the amendment that the opponent not be allowed to rely on the documents listed at 3.1.14 to 3.1.48 in these proceedings.  The applicant's reasons for this request are the late stage of opposition proceedings at which the amendments were requested and the insufficiency and unsatisfactory nature of the amended particulars.

To my knowledge, there are no decisions to date in which terms have been imposed on amended particulars under regulation 5.9.  There have been a number of decisions where delegates of the Commissioner have given directions under regulation 5.10 in relation to the statement of grounds and particulars.  (For example, Mobay Corporation v Dow Chemical Company (1992) AIPC 90-895; Imperial Chemical Industries v Irenco 26 IPR 154; E I Dupont De Nemours & Co v Dowelanco 29 IPR 131).

Mr Kelly argued that the statement of grounds and particulars must be considered in conjunction with the evidence in reply to provide an explanation as to their relevance.  This argument is clearly contrary to the established practice.  In ICI v Irenco the delegate said:

"…  The purpose of the statement is to expedite the opposition process and to this end, in the words of the Assistant Commissioner in the decision of Diamond Scientific Co. v. CSL Limited (supra), "the applicant has the right to know, at the time the statement of grounds and particulars is filed, the complete case that it has to answer in the opposition".

The suggestion that the relevance of a document needs to be disclosed only when the evidence-in-support is completed is therefore clearly incorrect.  The applicant must be made aware of the case to be answered at the time the statement of particulars is filed not after spending a great deal of effort analysing a large list of documents or when the evidence in support is finally filed.  …  In this regard, it is expected of the applicant that it make a reasonable effort to understanding the case made by the opponent but where the particulars require more than this, then further and better particulars are appropriate."  (My emphasis).

Similarly, in Dupont v Dowelanco, the delegate said:

"…, although evidence in support has already been served, a statement of grounds and particulars must be sufficiently informative, in itself, to enable the applicant to understand the case it has to defend …"

In my view, the statement here is not sufficiently informative.  The statement gives no indication of the relevance of new particulars 3.1.14 to 3.1.49 and does not identify what information in each of these documents is relied upon in relation to the particular ground of opposition.  Further, particular 4.2.18, which states that the claims of the opposed application are not novel and/or lack an inventive step in regards to publications 3.1.1 through 3.1.48, appears to be inconsistent with the way Mr Kelly and the evidence in reply were stating the case.

Given my previous findings on the likely importance of the new particulars to a correct determination of the opposition, I do not believe it is appropriate to specify the terms under regulation 5.9 as requested by the applicant.  In my view, the deficiencies with the particulars can more suitably be dealt with by issuing directions for further and better particulars under regulation 5.10.

Mr Slattery submitted that the particulars were so inadequate that the opponent should not be given another opportunity to amend, particularly at this late stage.  He referred me to Dupont v Dowelanco (above), where the delegate found it was not appropriate to allow a further opportunity to amend.  I agree with the applicant that the particulars are inadequate.  The particulars do not clearly set out the case the applicant has to answer or the material facts on which the opponent lies.  However in Dupont, the delegate was addressing the issue of non-compliance with a previous direction for further and better particulars.  The delegate also appeared to be influenced by the requirement of not unduly prejudicing the applicant.  I have previously noted this subregulation has been repealed.

Mr Slattery argued that the same argument could be made out that it was against the public interest to allow amendment of inadequate particulars at such a late stage of proceedings.  The inadequacy of the particulars is itself, of course, a relevant factor in determining whether to make any directions in relation to the statement or to the evidence in reply, or to the grant of leave to serve further evidence.  However it is an inadequacy that can be readily fixed.  Given this, and my intention to give the applicant an opportunity to file evidence in response, I consider the public interest in determining the opposition on its merits to be the overriding factor in deciding the procedure to be followed for this case, after weighing up all the circumstances.

Mr Kelly offered to replace the phrase "was disclosed in" with "is invalidated by consideration of".  In my view, such an amendment would only serve to further obscure the case.  What is required is further and better particulars that briefly include the relevance of the documents identified in particulars 3.1.14 to 3.1.49 to the ground, together with references to direct the reader to the specific part of the document that is to be relied upon.  In addition, if the opponent intends to retain particular 4.2.18, the further and better particulars should clearly and unambiguously identify which documents refer to which ground, and identify the relevance of those documents to each ground.  The further and better particulars should only contain a summary of the material facts on which the opponent relies, but not the evidence by which those facts are proved.

Given the advanced stage of preparation of their case, I do not think such a direction will unduly burden the opponent.  In fact, in cases such as this where particulars are amended at a late stage in proceedings, I would expect that the opponent would be able to state their case with a considerable degree of precision.  On the other hand, without further and better particulars, the applicant will remain uncertain of the exact case to be answered.

This leaves the amended statement dated 17 July 2001.  Under regulation 5.9 the Commissioner must amend the particulars, despite any inadequacies.  However, the Commissioner may specify terms.  I consider it appropriate to specify as a term of that amendment that my direction for further and better particulars is complied with within a certain time.  I consider that one month would be an appropriate period for the opponent to comply with my direction.

CONCLUSION

I consider that the evidence filed in reply is prima facie properly evidence in reply.  The evidence in answer will sometimes bring up new issues that must be addressed in the evidence in reply.  While certain points were not put in evidence in support, the opponent could not have reasonably seen them as relevant until the applicant's defence was put.  The applicant has attacked the opponent's evidence in support on the basis that the alleged anticipations are not enabling.  The opponent is entitled to address that in its evidence in reply.

Even if the evidence could be shown to be not strictly in reply, the circumstances do not support a direction that the evidence be inadmissible.  Some of the issues addressed in the evidence appear to be fundamental to the determination of the opposition.  The public interest in considering the opposition on its merits and the interests of the parties in having all significant matter relevant to their respective cases available at the substantive hearing weigh heavily in the circumstances under consideration.

I permit the opponent to serve the Frazer declaration dated 17 July 2001 and associated exhibits as further evidence on the applicant.  I allow the applicant a period of three months to file evidence in response.  The period for the applicant to file evidence in response is to commence from the day on which evidence in reply is completed

I direct that the opponent provide further and better particulars in relation to particulars 3.1.14 to 3.1.49 and 4.2.18.  The further and better particulars should contain a summary of the material facts on which the opponent relies, including the relevance of the documents to the stated grounds and references directing the reader to the specific part of the document being relied upon.

I allow the amendment to the statement of grounds and particulars dated 17 July 2001, on the condition that my direction for further and better particulars is complied with within one month of the date of this decision.

COSTS

The applicant has been unsuccessful in obtaining the directions it sought in relation to the evidence in reply.  It has also been unsuccessful in relation to the request to serve further evidence.  However, it has been successful in pointing out the inadequacies of the amended particulars.  I believe that the amendments to the particulars may have created some confusion for the applicant in establishing the case it has to defend.  This was possibly compounded by the opponent's request for certain evidence to be treated as both evidence in reply and as further evidence.  The true relevance of the 24 new documents only became apparent at the hearing.  In light of this, it was not unreasonable for the applicant to raise an objection to the new material.

In light of my findings on the statement of grounds and particulars and my subsequent directions, I consider it appropriate to award costs against the opponent, University of Queensland and CSL Limited.

Mr Slattery requested that the applicant be given costs for both patent attorneys in attendance at the hearing on behalf of the applicant.  He submitted that it would have been reasonable to employ counsel in these proceedings and schedule 8 of the patent regulations allowed costs for a patent attorney instructing counsel.  He argued that, by analogy, it would be reasonable to allow costs for two patent attorneys.

I agree that it would have been reasonable for the parties to employ counsel in this case.  However, the applicant did not do so.  The schedule of fees appears to recognise the different roles provided by counsel and by a registered patent attorney or solicitor instructing counsel.  The schedule also recognises the case where a registered patent attorney assumes both roles, by providing an increased allowance over that for an attorney instructing counsel.  I do not think the analogy provided by Mr Slattery stands up to close scrutiny and therefore do not agree to his request for costs for two patent attorneys.

Brendan Bourke
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Davies Collison Cave, Melbourne

Patent attorneys for the opponent   :  Fisher Adams Kelly, Brisbane