The Sunnyfield Association v Paul Andrew Cronk
[2005] APO 51
•16 November 2005
ABSTRACTS OF DECISIONS
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Application : No. 716550 in the name of Paul Andrew Cronk
Titles : Adjustable Reflector Device
Action: Opposition by The Sunnyfield Association to proposed amendments under section 104.
Decision: Issued 16 November 2005.
Abstract
Opposition to an amendment of a patent request which, if allowed, would have the effect of the application claiming divisional status from patent application 679737 relevant to s 79B of the Act. The opponent submitted that an amendment to this effect was not allowable on a number of grounds, including non-compliance with s 79B, and that the application had, or would on the allowance of the amendment, lapse. If allowable it was submitted that allowance of the amendment should be subject to conditions.
Found that:
· it had not been shown that the proposed amendment to the patent request was not allowable under s 102 or reg 10.3 or that the amendment would not otherwise be allowable under the Act or regulations;
· s 79B does not require that a claim of divisional status be made at the time of filing a further application;
· the effect of s 142(2) and reg 13.3(3) is not that the application would lapse on allowance of the amendment since it is the situation at the date of the payment of the relevant anniversary fee that is relevant. However the effect of the amendment would be that the 11th anniversary fee was due by 20 June 2005 and the application would be subject to the “grace” provisions of reg 13.3; and
· s 104(3) was not applicable having being revoked by the US Free Trade Agreement Implementation Act 2004 but in any event the circumstances of this case were not such to invoke those provisions had they been available.
The amendment was allowed but, in light of the nature and timing of the amendment, costs were awarded against the patent applicant.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 716550 in the name of Paul Andrew Cronk, and opposition by The Sunnyfield Association to proposed amendments under s 104 of the Patents Act 1990.
BACKGROUND
An opposition by The Sunnyfield Association (Sunnyfield) to this application under s 59 of the Act was considered by a delegate of the Commissioner of Patents in Paul Andrew Cronk v The Sunnyfield Association [2003] APO 27 (1 August 2003). The opposition was upheld on the grounds of lack of novelty as well as non-compliance with s 40 and the applicant, Paul Andrew Cronk, was given an opportunity to propose amendments overcoming these grounds.
The applicant on 3 September 2003 filed a first statement of proposed amendments including amendments proposed to the description claims and drawings as well as to the request. The latter, if allowed, would have the effect of the request including the following details:
Divisional Application Details
Parent Application Number
679,737 (64800/94)
Thus the request would include a claim of divisional status from patent application 679737 relevant to s 79B of the Act and, as such, may result in the claims of the application obtaining an earlier priority date under s 43 and reg 3.12 than would otherwise be the case. This potentially may mean that one or more of the s 59 grounds of opposition to the present application, and also to patent application 759725 (a divisional of the present application), are overcome. For further background to the oppositions and the potential effect of the amendment reference should be made to the delegate’s decision on 759725 (The Sunnyfield Association v Paul Andrew Cronk [2004] APO 14 (5 July 2004)) where directions have been made suspending the evidentiary stages pending a decision on the allowability of the proposed amendments in this case.
On 12 September 2003 the opponent was invited to provide comments on the proposed amendments and did so on 12 November, including submissions against the allowability of the amendments. The examiner however was of the view that no lawful grounds of objection applied and leave to amend was granted in accordance with reg 10.5 and advertised in the Official Journal on 8 January 2004. Sunnyfield’s notice of opposition under s 104(4) was filed on 8 April 2004 followed in due course by the statement of grounds and particulars and completion of the evidentiary stages. The matter came to hearing in Canberra on 22 September 2005. Mr Cronk was represented by Mr F P Old, patent attorney of Fraser Old & Sohn, Sydney and Sunnyfield by Mr G Davidson, patent attorney of Halford & Co, Sydney.
STATEMENT OF GROUNDS AND PARTICULARS
It is clear that Sunnyfield’s opposition is limited to the amendment proposed to substitute a new patent request for the request on file including a claim for divisional status and not to other of the proposed amendments. The statement is in the following terms:
“Ground 1
1. The amendment of the Patent Request should not be allowed as it would cause the Patent Request to wrongly state divisional status from Patent No. 679737 (64800194).
Particulars Relating to Ground 1
1A.The claims of Patent Application No. 716550 extend beyond the scope of the claims of Patent No. 679737 as accepted.
1B.As of a date three months after publication of acceptance of Patent No. 679737, no further complete patent application invoking divisional status under Section 79B had been made.
1C. If allowed, amendment of the Patent Request would be taken to be made on allowance of the amendment, which does not change the fact stated in particular 1B.
Ground 2
2. Section 104(3) - the Commissioner should impose conditions on allowance of the amendment.
Particulars Relating to Ground 2
2A. Publication of Patent Application No. 716550 occurred on 29 November 1996, and publication of acceptance on 2 March 2000, both stating an earliest priority date of 24 May 1995.
2B. Claims 1-5, and 11-15 of Patent Application No. 71 6550 were found to be invalid as at the priority date claimed on the public record.
2C. Amendment of the Patent Request was requested on 3 September 2003, over eight years from filing of the application, seeking to backdate the priority date.
Ground 3
3. Amendment of the Patent Request and of the complete specification is not allowable as the patent application has lapsed.
Particulars Relating to Ground 3
3A. If amendment of the Patent Request is allowed and Application No. 716550 is taken to have been a divisional application filed on 24 May 1995, the application has lapsed by failure to pay continuation fees due on 18 November 1996 and 18 November 1997, and underpayment of the subsequent continuation fees due.
Ground 4
4.Amendment of the Patent Request is not allowable as it does not comply with Paragraph 92 of the Opposition Decision dated 1 August 2003.
Particulars Relating to Ground 4
4A. The Opposition decision found claims 1-5 and 11-15 invalid and allowed the Applicant sixty days to amend the specification to claim patentable subject matter present in the specification.”
LEGISLATION
Amendment of a patent request is permitted under the Act by virtue of s 104 which reads:
104Amendments by applicants and patentees
(1)An applicant for a patent or a patentee, may, subject to this Act, and subject to and in accordance with the regulations, ask the Commissioner for leave to amend the relevant patent request or complete specification, or any other filed document, for any purpose including either or both of the following:
(a)removing a lawful ground of objection to the request or specification, whether that objection is raised in the course of an examination or re‑examination or otherwise;
(b)correcting a clerical error or an obvious mistake.
(2)Where an applicant or patentee asks for leave to amend a patent request or complete specification, or any other filed document, the Commissioner must consider and deal with the request in accordance with the regulations.
(4)The Minister or any other person may, subject to and in accordance with the regulations, oppose allowing an amendment.
(5)The Commissioner must not allow an amendment that is not allowable under section 102.
(6)On the allowance of an amendment, the amendment is to be taken to have been made.
(7)An appeal lies to the Federal Court, against a decision of the Commissioner allowing, or refusing to allow, a requested amendment, other than a prescribed decision.
S 102 specifies amendments that are not allowable, particularly in relation to patent specifications, but does not address any amendment proposed to a standard patent request. However, reg 10.3 also deals with amendments that are not allowable and the following provisions are relevant:
10.3Amendments not allowable
…
(3)A proposed amendment of a patent request is not allowable if:
(a)the patent request has been accepted under section 49 or 52 of the Act; and
(b)it would convert the patent application from:
(i)an application for a standard patent to an application for an innovation patent; or
(ii)an application for an innovation patent to an application for a standard patent.
…
(5)Subregulation (6) applies if a request for leave to amend the patent request for a standard patent is filed within 3 weeks before the date on which a notice is due to be published in the Official Journal under section 54 of the Act in respect of the specification, and the amendment would:
(a)convert the patent application from an application for a standard patent to an application for an innovation patent; or
(b)change the priority date of the application to a date that is later than the priority date that is currently recorded for the application.
(6)The proposed amendment is not allowable until after the date on which the notice is published.
…
(9)A proposed amendment of a patent request is not allowable after the patent has been granted.
Regulations 10.5 and 10.6 relate to the granting of leave to amend and allowance of amendment. Aside from the circumstances in paragraphs (b) and (c) which do not apply here, reg 10.5(1)(a) provides that:
(1)The Commissioner must grant leave to amend a patent request, complete specification or other filed document:
(a)if the report on the proposed amendments under subregulation 10.2 (1) is not an adverse report; …
Reg 10.2(1) in turn sets out what the Commissioner must report on when considering a request for leave to amend and for current purposes only paragraphs (a), (b) and (c) are relevant:
(1)For the purposes of subsection 104 (2) of the Act, the Commissioner must report on whether:
(a)the request for leave to amend and the statement of proposed amendments do not comply with regulation 10.1 and Schedule 3; and
(b)any proposed amendment of a complete specification is not allowable under section 102 or 103 of the Act; and
(c)the proposed amendments are not allowable under regulation 10.3 or, if made, would not otherwise be allowable under the Act or these Regulations; …
Once leave is granted reg 10.6 provides for the Commissioner to allow the proposed amendments as set out in sub-regulations (1), (2) and (3):
(1)If:
(a)the Commissioner grants leave to amend a patent request, complete specification or other filed document; and
(b)subregulation 10.5 (2) does not apply to the amendment;
the Commissioner must allow the proposed amendment immediately.
(2)If:
(a)subregulation 10.5 (2) applies to a proposed amendment of a patent request, complete specification or other filed document; and
(b)no person opposes the allowance of the proposed amendment; and
(c)the Commissioner is satisfied that no relevant proceedings are pending;
the Commissioner must allow the proposed amendment at the end of the time for bringing opposition proceedings.
(3)If:
(a)subregulation 10.5 (2) applies to a proposed amendment of a patent request, complete specification or other filed document; and
(b)a person opposes the allowance of the proposed amendment; and
(c)the opposition is decided against the opponent; and
(d)the Commissioner is satisfied that no relevant proceedings are pending;
the Commissioner must allow the proposed amendment immediately after the opposition is fully determined.
Chapter 5 of the Patent Regulations also applies to the present opposition however aside from providing the time in which a notice of opposition is to be filed, only reg 5.3(4) is particularly relevant to the grounds of opposition to allowance of an amendment. It provides:
(4)A person must not oppose the allowance of a proposed amendment of a complete specification, except on the grounds that the amendment is not allowable under section 102 of the Act.
There is no equivalent provision relating to a request for leave to amend a patent request.
DECISION
The substance of the present opposition is that, contrary to the practice of the Patent Office reflected at paragraphs 9.3.4, 9.4.1 and 9.10 of the Manual of Practice and Procedure Volume 2, an amendment of the patent request to in effect make the current application a divisional application of 679737 is not allowable. Alternatively it is submitted that if the amendment is allowable the effect would be that the application has lapsed for failure to pay a continuation fee and that otherwise the amendment should only be allowed subject to conditions.
The nature of the Commissioner’s role in considering a request for leave to amend and in allowing amendments has been considered by Justice Emmett in New England Biolabs, Inc v Commissioner of Patents [2001] FCA 787. Essentially the only grounds under which the Commissioner can refuse to allow an amendment are that the amendments are not allowable under s 102 or reg 10.3 or that the amendments would not otherwise be allowable under the Act or regulations. It can be seen above that s 102 and reg 10.3 are not relevant to the present circumstances and hence the question appears to be whether the amendment proposed to the patent request in this case would not otherwise be allowable under the Act or regulations. In this regard Justice Emmett indicated that the regulations do not enumerate the considerations that must be taken into account but annexed to his decision is a list provided by counsel for the Commissioner indicating provisions that might result in an amendment not being allowable. This list would, for example, suggest that an amendment would not be allowable which altered the name of the applicant contrary to s 15, or altered a patent request in relation to a convention application contrary to s 95, even though an express prohibition of that amendment had not been provided.
As a result it would seem that if amending the request as currently proposed was contrary to a requirement of the Act or regulation it may not be allowable. To this end Sunnyfield argue that a divisional, or more correctly a “further” application under s 79B, cannot be created by amendment but must be filed under s 29 as a “further complete application”. It says that allowance of the amendment would be ultra vires and that otherwise the applicant would be allowed to:
“(a)circumvent the publication provisions of the Act – a fundmental consideration of the whole patent system
(b)avoid renewal fees by making an application without reference to divisional status, and later seeking to convert the application to a divisional;
(c)leave the public in uncertainty as to the priority date.”
S 79B is relevant to the filing of divisional applications for standard patents:
79BDivisional applications prior to grant of patent
(1)If a complete patent application for a patent is made (but has not lapsed or been refused or withdrawn), the applicant may, in accordance with the regulations, make a further complete application for a patent for an invention:
(a)disclosed in the specification filed in respect of the first‑mentioned application; and
(b)where the first‑mentioned application is for a standard patent and at least 3 months have elapsed since the publication of a notice of acceptance of the relevant patent request and specification in the Official Journal—falling within the scope of the claims of the accepted specification.
(1A)The reference to a complete patent application first‑mentioned in subsection (1) does not include a reference to a divisional application for an innovation patent provided for in section 79C.
(2)In this section:
applicant has the same meaning as in section 38.
The regulations further provide in relation to s 79B that:
6A.1Divisional applications: standard patents
For section 79B of the Act, a divisional application must be made:
(a)under section 29 of the Act; and
(b)before the date of the grant of a patent on the first‑mentioned application in section 79B of the Act.
It will therefore be apparent that the normal requirements for filing patent application provided by s 29 apply also to divisional applications.
The present application was filed on 24 May 1995 as an international application under the Patent Cooperation Treaty and as such, by virtue of Chapter 8, Part 1 of the Act, is taken to be a complete application for a standard application filed under s 29 on the international filing date. Patent application 64800/94 (now 679737) was filed on 20 June 1994 and a notice of acceptance for that application was published on 10 July 1997 followed by sealing on 30 October 1997. It also appears clear that an invention claimed in the present application at its filing date was disclosed in 679737 and hence it is evident that, at the relevant filing date, the requirements of s 79B(1)A and reg 6A.1 were met and that the post acceptance “within the scope of the claims” requirement of s 79B(1)(b) does not apply. Consequently I do not see that these provisions could possibly be a prohibition against the amendment now sought. More specifically I do not see anything that requires an application to which s 79B applies to invoke that provision at filing and indeed the reference to s 29 in reg 6.1A suggests otherwise.
However, it is the case that under s 29 a patent request must be in the approved form and that the approved form published by IP Australia provides for applicant to give divisional application details or more particularly details of the parent or original application from which divisional status is claimed. The complication of course in this case is, being a PCT application, that requirement could not have been met at the international filing date even if that had been the applicant’s intention since the PCT does not provide for divisional applications. Rather the accepted practice has been that the request be amended to claim divisional status once the application has entered the national phase. In any event it would seem odd to suggest that the mere provision for such details on the approved form means that divisional status can be claimed only at the time of filing, nor is it apparent what such a limitation would achieve in the overall scheme of the legislation.
Within limits, the Act and regulations and particularly s 104 provide quite broad scope for an applicant to change or correct their request, complete specification or other documents prior to grant. This includes changes to the scope of claims, details of inventors and applicants, addition of priority claims and so forth. Hence the Act does not seek to give absolute certainty to third parties as to the nature and scope of potential patent protection as of the filing date, publication date or even acceptance but allows time, as I have said, for refinement of the application both in response to examination but also on the applicant’s own volition (see s 104(1)(a) & (b)). The substantive effect of s 79 B is to provide an earlier priority date derived from the parent application (reg 3.12) with a commensurate reduction in the term of the patent (reg 6.3(7)). It consequently has similar effect to an amendment to include a claim of priority under the Paris Convention and while this may have some impact on the question of validity in some future determination, it is no more significant in terms of the position of third parties than the scope of the claims or the identity of the person said to be entitled to the grant of the patent. I would add that at least reg 6.3(7)(c)(iii) anticipates that an application may be amended to be a divisional application and provides in those circumstances for the date of a patent granted on a further divisional application. The present matter may be unusual in that s 79B details have sought to be added quite late in the piece but the amendment in my view is clearly not prohibited by the Act.
To the extent that it is suggested that the publication provisions of the Act would be defeated, I note that in any event these operate differently for PCT applications, whether or not they are also divisional applications. See for example s 54 and reg 8.3. However most significantly, whether for PCT or other applications, they are not requirements of the Act that would not be met if the amendment were allowed. Rather they provide that a PCT application is open to public inspection, or require the Commissioner to publish a notice that an application or complete specification is open to public inspection, in certain circumstances. Where those circumstances change by effect of an amendment it can only mean that an application may become open to public inspection at a different time than would otherwise be the case. If this were in effect to defeat some policy objective it would be expected that an explicit prohibition to the amendment would have been provided as it is for converting standard to innovation patent applications under reg 10.3. However it is not and in my view cannot be inferred on this basis. Similarly I do not see anything in the fee requirements of the Act or anything else that would make the proposed amendment not allowable.
I include within this the issue of whether the amendment complies with the direction of the Delegate in his decision of 1 August 2003. That is, “… I believe there is patentable subject matter present in the opposed specification and as such I allow the applicant sixty days to amend the present specification”. While I do not believe failure to meet such a direction would be grounds for not allowing an amendment, it would seem to be the case that the direction has been complied with in that amendments have been proposed to the specification as well as the request. I would also read the direction more broadly in the sense of providing an opportunity for the opponent to overcome the successful grounds of opposition rather than a specifying a particular amendment as the Commissioner could have done under s 107. It is however not my role to determine whether those grounds have in fact been addressed but is a matter for the Delegate in his final determination of the s 59 opposition.
In finding that the amendment is allowable, I note that I have reached a position opposite to that of the UK Comptroller General in P’s Application [1983] R.P.C 269 in which the Superintending Examiner found that an amendment with the effect of converting a substantive application to a divisional application should not be entertained. What can be said of this is firstly that the UK Act provides a fundamentally different approach to the allowance of amendments in retaining a discretionary element (see Rule 100) and secondly that the requirement for a new application to include a request for divisional status (Rule 24(1)) as well the prohibition against extending the time for certain actions based on the filing date of a divisional application means that the effect of the UK legislation is quite different. As such the Comptroller’s decision provides no assistance to me in determining the present matter.
An amendment is taken to be made on allowance (s 104(6)). Sunnyfield argues that on allowance of the amendment the application will lapse for non-payment of fees and, more particularly in this case, continuation fees. Under s142(2)(d) an application will lapse if the applicant does not pay a continuation fee for the application within the period prescribed. Reg 13.3 then prescribes that a continuation fee is payable for a relevant anniversary at the last moment of the anniversary and the period in which the fee must be paid is the period ending at the last moment of the anniversary. Reg 13.3(3) provides that a relevant anniversary means an anniversary of the date of the patent if a patent had been granted and that is mentioned in Item 211 of schedule 7. The later sets for the purpose of s 142(2)(d) fee amounts for each anniversary starting from the fifth.
The relevant date for the calculation of continuation fees on the present application is currently 24 May 1995 and the fee for the tenth anniversary was paid on 19 May 2005. Consequently the next payment is due by 24 May 2006. The date of a patent granted on a divisional application is set by reg 6.3(7) and for the purposes of the present case would be, on the allowance of the amendment, the date of patent number 679,737, that is, 20 June 1994. Based on this date the eleventh anniversary fee would have been due by 20 June 2005 although the six month period of grace under reg 13.3(1A) would allow payment of the fee up until 20 December without lapsing of the application.
Otherwise the opponent’s case appears to be that, as a result of the amendment, all previous fees have been paid out of time and consequently the application has lapsed. I however do not believe this is the effect of s 142 and reg 13.3. The “relevant anniversaries” are those listed in fee Item 211 and the applicant has paid the required fee up to the tenth anniversary according to the applicable date and hence reg 13.3(1) has been satisfied. In this regard it is the situation at the date the fee is paid that is relevant and a subsequent change to the date of the patent will not change matters. It also cannot be said that the amendment would allow the applicant to avoid continuation or, if a patent is granted, renewal fees
Sunnyfield further say that if I allow the amendments I should only do so on conditions. In this it cites s 104(3) of the Act (now repealed) and the considerable delay associated with the amendment in the context of these and related proceedings. I think this to misunderstand the purpose both of the repealed legislation and principles against retrospective operation of legislation. S 104(3) is a discretionary provision and clearly did not bring into existence particular rights or liabilities for the parties prior to the commencement of the US Free Trade Agreement Implementation Act 2004 and hence cannot by its repeal impair those rights. In any event the discretion conferred under s 104(3) was one that had a historical basis and very limited application with amendments in Australia, and under similar provisions in UK legislation before the 1977 Act, rarely if ever allowed subject to conditions with the remedy for infringers generally left to the Courts in applying the restriction on damages currently provided in s 115 of the Act. (See Terrell on the Law of Patents Vol 13 at 8.31).
It is the case that the current amendment has been sought more than eight years from the filing date of the application and indeed more than three years from the filing of the notice of opposition under section 59. This appears from Mr Old’s statement at the hearing to have been a deliberate strategy which, in creating uncertainty as to the relevant priority date and validity of the claims, has undoubtedly caused significant inconvenience to the opponent. It also perhaps is an example of where the generous divisional application provisions under Australian law can be legitimately used in a way that, while serving the interests of patent applicants, frustrates the establishment of certainty in the process of granting patents to the detriment of third parties. However, while these circumstances are very unfortunate from the opponent’s perspective and relevant to the awarding of costs, they fall far short of the character that would have enlivened s 104(3), were that still available to me.
CONCLUSION
The opponent has failed to demonstrate that the amendment proposed to the patent request is not allowable. Consequently I allow the amendments set out in the statement of proposed amendments filed on 3 September 2003.
COSTS
As will be clear from my decision, the present matter involves rather unusual circumstances and it is apparent that the strategic use of s 79B by the applicant has resulted in costs thrown away by the opponent in its s 59 opposition and possibly also in relation to that on application 759725. Cost have already been dealt with in relation to the main opposition but in this matter I believe I am entitled to consider the broader circumstances of the dispute between the parties and consequently my view is that despite my finding on the allowability of the amendment, costs should be awarded against the applicant. I therefore award costs against Paul Andrew Cronk.
Philip Spann
Deputy Commissioner of Patents
16 November 2005
Patent attorneys for the Applicant: Fraser Old & Sohn, Sydney
Patent attorneys for the Opponent: Halford & Co, Sydney
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