Virbac S.A. v American Home Products Corporation and Merial Australia Pty Limited

[2003] APO 6

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 691990 in the name of Virbac S.A.

Title:          Equine anthelmintic formulations

Action:          Award of costs in two oppositions to the grant of a patent by American Home Products Corporation and Merial Australia Pty Limited

Decision:          Issued            .

Abstract

Costs awarded against the patent applicant, Virbac S.A., in both oppositions.

The oppositions were successful on a substantial ground.  Although all documents mentioned in the Statements of Grounds and Particulars were not argued at the hearing, the Statements were not misleading as to the case to be answered, and there was no evidence that this placed an undue burden on Virbac.

The issue of entitlement was essentially an ex parte matter, and costs in relation to further evidence relating to that matter were not appropriate.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 691990 by Virbac S.A., and the award of costs in two oppositions to the grant of a patent by American Home Products Corporation and Merial Australia Pty Limited

BACKGROUND

1. The grant of patent application number 691990 in the name of Virbac S.A. (hereafter referred to as Virbac) was separately opposed by both American Home Products Corporation (hereafter referred to as AHPC) and Merial Australia Pty Limited (hereafter referred to as Merial). A decision upholding the oppositions was issued on 12 December 2002 (see [2002] APO 48). The oppositions succeeded on the basis that all claims lacked inventive step, claim 1 was not fairly based and there was a lack of entitlement with respect to some of the claims. The parties were allowed 30 days to file written submissions in relation to costs.

   SUBMISSIONS OF THE PARTIES

2. AHPC’s submissions were as follows:

   “It is the submission of this opponent that the cost award in relation to this opposition matter should follow the event.  Since the opponent has been wholly successful in invalidating all of the claims accepted in respect of the opposed application, we submit that the opponent should be awarded its costs.

   At the opposition hearing Counsel for the applicant suggested that the Delegate should take into consideration when awarding costs the fact that the number of references relied upon for novelty by the opponent was reduced between filing the Statement of Grounds and Particulars and making submissions at the hearing.

   In response to this submission by Counsel for the applicant we submit that the manner in which the opponent presented its Statement of Grounds and Particulars, its evidence and its submissions at the hearing did not unduly burden the applicant, or require the applicant to consider in detail references which were not ultimately relied upon.  …

   We also wish to make submission in relation to costs incurred in addressing the entitlement and fair basis issues raised by declarations by Mr Forster and Mr Harvey.  These were issues not raised by the opponent, but which due to a serious omission by the applicant in failing to name all inventors, the opponent was required to address.  Consideration of these serious issues resulted in further costs to the opponent.  Since the Delegate found that Colin Manson Harvey should have been named as an inventor in respect of the subject matter of claims 1, 2, 3, 6 and 8 we submit that the opponent should be entitled to indemnity costs (i.e. all costs not unreasonably incurred) in respect of its consideration of these issues.”

3. Merial’s submissions were as follows:

   “We respectfully submit that the general rule in relation to costs should apply in the circumstances of this opposition -  that is, costs follow the event.  Given Merial has been successful on the substantial grounds of lack of inventive step and non-compliance with section 40, costs should be awarded against the applicant without qualification.

   We submit that the fact that there was one other opponent in this opposition should not alter the general rule that costs are to be awarded between the applicant and each opponent according to the success or failure of each opposition.  …  Merial did adopt many of the submissions of the other opponent in order to avoid unnecessary repetition.  This was done in the spirit of reducing the length of the hearing (and therefore the costs to our respective clients) and, in our submission, should not be used as a basis for qualifying an award of costs that is favourable to Merial.”

4. I have not received any written submissions from Virbac.

   DECISION

5. The power of the Commissioner to award costs is based on section 210 and regulation 22.8.  The power is discretionary, so I must take into account all relevant considerations.  Relevant considerations include who was successful in the action, but are not limited to this matter alone.  The facts relevant to the award of costs in the present cases are:

   a)  The oppositions were successful;
   b)  The oppositions were successful on the substantial ground of lack of inventive step;
   c)  The finding of lack of inventive step was in relation to all claims;
   d)  Lack of inventive step was the major issue at the hearing;
   e)  The case of both opponents was largely the same;
   f)  Both oppositions were heard together.  The second opponent adopted many of the submissions of the first opponent in the interests of efficiency.  The applicant responded to the combined submissions of both opponents in a single presentation;
   g)  Not all of the documents identified in the Statements of Grounds and Particulars were argued at the hearing;  and
   h)  The opposition also succeeded on the ground of entitlement, which was raised by me at the hearing, and not by either of the parties.

6. Both AHPC and Merial have been successful (on a substantial issue going to all of the claims), and each should be awarded costs.  It is true that not all of the documents identified in the Statements of Grounds and Particulars were argued at the hearing, but this does not count against the opponents in this case.  The function of the Statement and Grounds and Particulars is to foreshadow the case of the opponent, but it does not have to define it with absolute precision.  The Statements were not misleading as to the case that Virbac had to answer.  Additionally, there is no evidence that the inclusion of documents that were not argued placed an undue burden on Virbac.  I conclude that there are no reasons for reducing the award.  Due to hearing both oppositions together, considerable efficiencies were achieved.  I consider that the hearing of one opponent individually would have taken substantially the same time as that to actually hear both oppositions.  The award in each instance shall include the total time for attendance at the hearing.

7. At the hearing I raised the issue of entitlement, and allowed Virbac to serve further evidence on the point.  I also allowed the opponents to serve responding evidence, if any.  There are no items in Schedule 8 dealing with further evidence (see Young v Arthur Yates & Co Ltd [2002] APO 7). AHPC have asked me to vary the scale of costs to include the further evidence. The issue of entitlement was not raised by the opponents, and neither opponent filed any further evidence. I do not consider that entitlement was a part of the case of either opponent. Rather, it was essentially an ex parte matter on which the opponents provided comments for my assistance.  Consequently it would not be appropriate to award costs in relation to this issue (including the preparation of written submissions).

8. I award costs in accordance with Schedule 8 against Virbac S.A. in both oppositions.

   Dr S.D.Barker
   Delegate of the Commissioner of Patents

   Patent attorneys for the applicant  :  Barker Blenkinship & Associates

   Patent attorneys for AHPC  :  Davies Collison Cave

   Patent attorneys for Merial  :  F.B.Rice & Co