Oligoscience Biotechnology GmbH v Commissioner of Patents
[2025] NZHC 3255
•30 October 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2025-485-13
[2025] NZHC 3255
BETWEEN OLIGOSCIENCE BIOTECHNOLOGY GMBH
Appellant
AND
THE COMMISSIONER OF PATENTS
Respondent
Hearing: 13 October 2025 Appearances:
I Finch for Appellants
V Argyle and H McKercher Counsel Assisting
Judgment:
30 October 2025
JUDGMENT OF CHURCHMAN J
Introduction
The appellant appeals a decision of the Assistant Commissioner of Patents (Assistant Commissioner) dated 28 November 2024 (the Decision) pursuant to s 214 of the Patents Act 2013 (the Act).1 The decision under appeal concerns the appellant’s proposed method to genetically modify bacteria to optimise the commercial yield of human milk oligosaccharides (HMOs).2
The appellant asks the Court to make the following orders to:
1 Re Patent Application No. 761328 [2024] NZIPOPAT 14.
2Oxford English Dictionary < Oligosaccharide is defined as “A sugar composed of a relatively small number of monosaccharide residues.”
OLIGOSCIENCE BIOTECHNOLOGY GMBH v THE COMMISSIONER OF PATENTS [2025] NZHC 3255
[30 October 2025]
(a)Extend the stay of execution of the Assistant Commissioner’s order that the application is void from the date of hearing to the date of this Court’s judgment (or such further date as the Court deems necessary to give effect to its judgment).
(b)Reverse the Decision dated 28 November 2024.
(c)Direct that New Zealand Patent Application No. 761328 (Application) is in order for acceptance.
Dr Argyle has been appointed as counsel assisting, to act as a contradictor in the appeal.3
Background
The benefit of human milk oligosaccharides (HMOs) is to protect people against harmful pathogens. While HMOs may be extracted from human breast milk or cow milk, it is difficult to obtain large amounts of a satisfactory purity.
The commercialisation of HMOs involves retrieving and purifying HMOs excreted from the cell wall of the bacterium Escherichia Coli. HMOs not excreted from the bacterium cell wall cannot be purified and used for commercial products unless they are liberated from the cell in other ways, through a process called lysis.4
Application claims
On 31 January 2020, the appellant filed an Application relating to an invention to improve the efficient production of HMOs (proposed invention). The amended proposed claims related to:
1.A genetically modified bacterium, wherein the bacterium is Escherichia coli (E.coli), wherein the bacterium produces 2’-Fucosyllactose, and wherein the bacterium comprises:
(a) an exogenous gene encoding an α-1,2-fucosyltransferase, wherein the gene encoding the α-1,2-fucosyltransferase is a heterologous gene encoding futC from Helicobacter pylori, wherein the heterologous gene encoding futC from Helicobacter pylori is codon-optimized for expression in E.coli;
Oligoscience Biotechnology GMBH v The Commissioner of Patents CIV-2025-485-13, 21 May 2025 at [7].
Oxford English Dictionary < Lysis is defined as “the disintegration or dissolution of cells”.
(b) an auto-inducible lysis system, wherein the auto-inducible lysis system is a Mg2+-regulated auto-inducible lysis system; and
(c) a lysis gene from a bacteriophage and a Mg2+-regulated promoter, wherein expression of the lysis gene is controlled by the Mg2+-regulated promoter.
2.The genetically modified E.coli bacterium according to claim 1, wherein a Iac
operon is inactivated by deletion.
3.The genetically modified bacterium according to claim 1, wherein the bacterium further comprises an additional Mg2+-regulated element.
4.The genetically modified bacterium according to claim 3, wherein the additional Mg2+- regulated element is the 5’UTR of the mgtA gene of Escherichia coli.
5.The genetically modified bacterium according to claim 1, wherein expression of the lysis gene is controlled by the Mg2+-regulated promoter and by an additional Mg2+- regulated element.
6.The genetically modified bacterium according to any one of claims 1 to 5, wherein the bacterium is unable to cleave lactose into glucose and galactose, or wherein the Iac operon is inactivated, or wherein a Iac operon is inactivated by deletion.
7.The genetically modified bacterium according to any one of claims 1 to 6, wherein the bacterium comprises an exogenous gene encoding a lactose permease.
8.The genetically modified bacterium according to claim 7, wherein the lactose permease is the E.coli LacY protein.
9.The genetically modified bacterium according to any one of claims 1 to 8, wherein the bacterium comprises a heterologous gene encoding a chaperone, or comprises a heterologous gene encoding a chaperone wherein the chaperone is human Hsp70.
10.The genetically modified bacterium according to any one of claims 1 to 8, wherein the rcsA gene is overexpressed; or a gene encoding a Lon protease family protein is inactivated, or a gene encoding a Lon protease family protein is inactivated by deletion; or the wcaJ gene is inactivated, or the wcaJ gene is inactivated by deletion; or the zwf gene and the two pntAB genes are overexpressed; or the gsk gene is overexpressed; or the trxA gene is overexpressed; or the trxB gene is inactivated, or the trxB gene is inactivated by deletion.
11.The genetically modified bacterium according to claim 10, wherein the rcsA gene, and the gene encoding a Lon protease family protein, and the zwf gene and the two pntAB genes, and the gsk gene, and the trxA gene, are derived from E.coli.
12.A method for producing 2’-Fucosyllactose, which comprises:
(a) culturing the genetically modified bacterium according to any one of claims 1 to 11 in a medium; and
(b) purifying the 2’-Fucosyllactose from the culture medium after lysis has been induced via the auto-inducible lysis system, or when the concentration of free Mg2+ in the medium is 10 μΜ or less.
13.The method for producing 2’-Fucosyllactose according to claim 12, wherein the medium comprises lactose or free Mg2+.
The proposed invention modifies E.coli bacteria that produces a protein required to create a specific HMO called 2’-fucosyllactose (2’-FL). When magnesium ions fall below a certain threshold inside the E.coli bacterium, the cell membrane ruptures and a process called auto-inducible lysis or autolysis occurs.5 The proposed invention has been described as a “magnesium time bomb” in which lysis occurs without the external application of force or human intervention. After the bacterium breaks down, the remaining HMOs can then be retrieved and purified for commercial use.
Relevant law
Section 14 of the Act states that an invention will be patentable if it meets the following requirements:
An invention is a patentable invention if the invention, so far as claimed in a claim,—
(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and
(b)when compared with the prior art base—
(i) is novel; and
(ii)involves an inventive step; and
(c)is useful; and
(d)is not excluded from being a patentable invention under section 15 or 16.
The sole issue on appeal is s 14(b)(ii), namely whether the invention when compared to the prior art base involves an inventive step. An inventive step is something that is not
Oxford English Dictionary < Ion is defined as “any individual atom, molecule, or group having a net electric charge (either positive or negative) through the loss or gain of an electron.” Autolysis is defined as “The destruction of cells or tissues by enzymes present within them, occurring after death or as part of a pathological process.”
obvious to a person skilled in the art (PSA), having regard to any matter which forms part of the prior art base.6
Section 8 of the Act defines “prior art base” as meaning all matter (whether a product, a process, information about a product or process, or anything else) that has at any time before the priority date of that claim been made available to the public (whether in New Zealand or elsewhere).
The inventive step is considered against what is known as a “prior art base”. The prior art base is material available to the public at any time before the priority date of the claim.
In the present case, this means matter available to the public before 1 August 2017. There are nine prior art documents in issue in this case from D1 through to D9.
The test in Windsurfing International Inc v Tabur Marine, as modified by Pozzoli SpA v BDMO SA (Windsurfing/Pozzoli test) provides guidance on whether an invention involves an inventive step:7
(1)(a) Identify the notional ‘‘person skilled in the art’’;
(b) Identify the relevant common general knowledge of that person;
(2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;
(3) Identify what, if any, differences exist between the matter cited as forming part of the ‘‘state of the art’’ and the inventive concept of the claim or the claim as construed;
(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?
A PSA may be a singular person or a team of skilled persons possessing different or overlapping qualifications and experience who would ordinarily work together in the subject matter in question.
Patents Act 2013, s 8.
Windsurfing International Inc v Tabur Marine [1985] RPC 59, per Oliver LJ, at 73–74; and Pozzoli SpA v BDMO SA [2007] FSR 37 at [23], per Jacob LJ.
The knowledge that a PSA has is called the “common general knowledge” (CGK). That is the knowledge that they have gained from experience working in the relevant field, and as a result of their qualifications and training. A piece of knowledge in a scientific paper does not become CGK until it is generally known and accepted without question by the majority of those who are engaged in the particular art.8 CGK is ascertained by way of evidence given by persons knowledgeable in the art.9
The Supreme Court in Lucas v Peterson Portable Sawing Systems Ltd is the leading authority on whether an invention lacks an inventive step.10 The Court stated that prior documents may be looked at together if that were what a PSA would do.11 The test of whether the inventive step would be obvious and would be recognised is a question of fact.12 Claims under a patent application are to be “read as a whole and given a purposive construction.”13 Each claim is to be interpreted by reference to the object and description in the body of the application.14
Decision of examiner
On 11 April 2024, a third patent examination report was issued. The examiner concluded that all 21 claims in the Application lacked an inventive step under s 14 of the Act. The examiner assessed the inventive step against nine prior art publications which were labelled and referred to as D1 through to D9 (attached as Appendix A). The examiner found the inclusion of an autolysis system to optimise yield of the HMOs was not inventive. The examiner concluded that the invention was, therefore, not patentable.
The appellant was out of time to issue a response against the inventive step objections and as a result, requested a hearing before the Assistant Commissioner.
Merck & Co Inc v Arrow Pharmaceuticals (NZ) Ltd HC Wellington CIV-2006-485-817, 29 September 2006 at [33]; General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 482-483; and British Acoustic Films Ltd v Nettlefold Productions Ltd [1936] 53 RPC 221 at 250.
ResMed Ltd v Fisher & Paykel Healthcare Ltd [2017] NZHC 2954 at [24] citing Amarillo Cell Culture Co Inc v Fernz Corp Ltd HC Auckland CL52/93, 3 October 1994 at 15.
10 Lucas v Peterson Portable Sawing Systems Ltd [2006] NZSC 20, [2006] 3 NZLR 721.
11 Ancare New Zealand Ltd v Novartis New Zealand & Cyanamid of NZ Ltd [2000] 3 NZLR 299 at [43].
At [26].
At [26].
14 Sawing Systems Ltd (in liq) v Lucas, above n 10, at [27].
Decision under appeal
On 28 November 2024, the Assistant Commissioner upheld the examiner’s conclusion that the Application lacked an inventive step by applying the Windsurfing/Pozzoli test.
The Assistant Commissioner accepted that it was more likely than not that a PSA will be acquainted with lysis systems generally, including autolysis systems, and their usefulness for extracting HMOs. The Assistant Commissioner adopted the examiner’s identification of the PSA as:
… a biochemist or molecular engineer working in the field of human milk oligosaccharide production, particularly in industrial scale production or synthesis of products from engineered bacteria, such as industrial fermentation.
The Assistant Commissioner accepted that the inventive concept of the claim encompassed two features: a gene encoding which produced the HMO, 2’-FL, and an autolysis system in the host cell.
The Assistant Commissioner found that there were differences between the matter cited as forming part of the ‘‘state of the art’’ and the inventive concept of the claim as construed. The Assistant Commissioner identified the key difference between D2 and claim 1 as D2 not disclosing that the autolysis system is regulated by magnesium ions. The use of the autolysis system is based on the insight that a significant amount of HMO remains in the cell at harvest. However, that method is taught in D2. D3 also teaches the same autolysis system as claimed and is “exactly what is missing from D2”.
The Assistant Commissioner found that it would be obvious to a PSA to combine the teaching of D2 and D3. D2’s teaching is that 50 per cent of HMOs remained in the bacterium cell and therefore, the obvious thing for the PSA to do would be to lyse the cell. D2 does not teach this because it focuses on production and not harvesting. D7 represents common general knowledge of lysing systems. Through a process of elimination, the PSA would arrive at D3 as the “best way of lysing” taught by D7. Therefore, the combination of D2 and D3 is one which the PSA would naturally arrive at. The Assistant Commissioner found that D2 and D3 teaches the claimed inventive concept of claim 1.
The Assistant Commissioner also concluded that the other claims in the Application were not inventive in light of the documents identified as the prior art base.
Overall, the Assistant Commissioner disagreed that the use of the “magnesium time bomb” within the E.coli bacteria was inventive and held instead that it was known in the art via a combination of previously disclosed methods.
The Assistant Commissioner concluded that the appellant did not place the Application for acceptance within the time available under s 71 of the Act and reg 80 of the Patents Regulations 2014. Therefore, the Application was not in order for acceptance and was void.
Approach to appeal
Section 214 of the Act provides that a person who is aggrieved by a decision of the Commissioner may appeal to the Court.
The appeal is decided on the basis of the written evidence provided in accordance with s 209 of the Act, whether by affidavit or statutory declaration. A party may also apply to adduce additional evidence with leave of the Court.15
The Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar provides guidance in respect of the rights of appeal, namely:16
Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion (Footnotes omitted).
In Sealed Air New Zealand Ltd v Machinery Developments Ltd, this Court outlined the principles that guide the Court on appeal from specialist bodies.17 In relation to appeals in patent matters, the appeals are heard by way of rehearing and the Court shall have and may
High Court Rules 2016, r 20.16.
Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16].
Sealed Air New Zealand Ltd v Machinery Developments Ltd HC Wellington CIV-2003-485-2274, 25 August 2004
exercise the same discretionary powers as are conferred upon the Commissioner.18 In addition, the Court noted:19
a)The Court is not bound to accept the Tribunal's finding of fact.
b)Although it must exercise its own judgment, the Court ought to give proper weight to the expressions of opinion by experienced professionals.
c)The usual onus lies on the appellant to satisfy the Court that the decision was wrong.
Therefore, the appellant must identify error on part of the Assistant Commissioner or persuade the Court to reach a different conclusion from him.20
Whether there was an inventive step
The question for this Court on appeal is governed by s 14(b)(ii) of the Act. Namely, when compared with the prior art base, whether the appellant has satisfied the Court, on the balance of probabilities, that the use of an autolysis system to optimise harvest of HMOs from E.coli cells involves an inventive step.
The parties agree that the Windsurfing/Pozzoli test is applicable to the current circumstances. The parties do not dispute the characterisation of the PSA or the inventive concept of the claim. The issues in dispute in this case are summarised as being:21
…
(b) Identify the relevant common general knowledge of that person;
…
(3) Identify what, if any, differences exist between the matter cited as forming part of the ‘‘state of the art’’ and the inventive concept of the claim or the claim as construed;
(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?
At [8]–[9].
At [7] citing Jessica Gorman and others (ed) McGechan on Procedure (online looseleaf ed, Thomson Reuters).
Pharmalink International Ltd v Pharmazen Ltd [2025] NZHC 2657 at [2].
Windsurfing International Inc v Tabur Marine, above n 7; and Pozzoli SpA v BDMO SA, above n 7.
Admissibility of document titled “Annex-1”
The appellant refers to (in [19 (t)]) and [116] of its submissions) and appears to rely on a document called Annex-1. Annex-1 is a five-page document titled “The induction of genetically introduced lysis genes SRRz after the cultivation of an HMO producing microorganism to release intracellular HMOs”.
Counsel Assisting submits that the Court should not have regard to this document noting that it does not comply with the Evidence Act 2006 and is therefore inadmissible.
Section 209 of the Act outlines how a party gives evidence to the Commissioner in proceedings:
209 How to give evidence to Commissioner in proceedings
(1)Evidence must be given by affidavit or statutory declaration (unless the Commissioner directs otherwise under subsection (2)) in proceedings before the Commissioner under this Act.
(2)However, the Commissioner may—
(a)take oral evidence instead of, or as well as, the affidavit or declaration; and
(b)allow a witness to be cross-examined on the witness’s affidavit, declaration, or oral evidence.
Annex-1 is not set out in the form of an affidavit or statutory declaration. The document summarises the methodology and findings of the proposed invention. It also includes various figures, including a figure that shows that auto-inducible lysis increased the release of 2’-FL by 480 per cent.
As the Assistant Commissioner correctly pointed out, the document had not been signed or dated, nor had it been affirmed or sworn.22 It does not comply with s 209 of the Act. The Assistant Commissioner was correct to exclude it. It is therefore not something that this Court should have regard to on appeal.
See High Court Rules 2016, r 9.76; Oaths and Declarations Act 1957, ss 7–9.
Analysis of D2
The appellant submits that the Assistant Commissioner was wrong to conclude that the PSA would ignore the teaching of D2 to focus on strain optimisation. The appellant also contends that the Assistant Commissioner was wrong to disregard the teaching in D2 of boiling the cell as a method of lysing the cell. The appellant argues that there is no reason that the PSA would look for methods for lysing the cell, aside from using industry-accepted and conventional methods, such as boiling the cell.
Counsel assisting submits that the PSA would understand that cell lysis is required to optimise the total amount of 2’-FL. The PSA would know that an active step of cell disruption is required to release intracellular HMOs. If the aim is to ensure the greatest amount of product is obtained, a PSA would choose another method of lysing cells other than the boiling method in D2.
The appellant submits that the Assistant Commissioner concluded that a PSA would ignore the teachings of D2. However, that is not what the Assistant Commissioner concluded. A more accurate description would be that the conclusion in D2 encourages further research that maximises the yield and harvest of HMOs. D2 indicates that a significant level of HMOs remain inside the cells and that the cell may be lysed by boiling. The Assistant Commissioner correctly noted that a PSA would understand how to maximise the yield of HMOs by recognising that the intracellular content should also be accessed. At [100] of his decision the Assistant Commissioner said: “I am satisfied that the inventive concept of current claim is taught by the combination of D2 and D3.”
The Assistant Commissioner’s description of the PSA also supports his analysis of D2. The parties agreed that the PSA was a biochemist working in the field of HMO production in industrial scale production or synthesis of products from engineered bacteria. Therefore, if the aim of the PSA was to maximise the yield of HMOs for industrial scale production, merely following the method of boiling the cell would be insufficient.
At [118]–[119] the Assistant Commissioner held:
D3 provides an obvious way to modify the engineered E.coli of D2 to optimise harvest of 2-FL the engineered E.coli produces. This is not to say that constructing the resulting strain of modified E.coli will be simple. But that is not the question here.
The step required to add the teaching of D3 to the teaching of D2 is not inventive. Rather, it is obvious. That is, combining the teaching of D2 and D3 will be obvious to the person skilled in the art.
A PSA would recognise the limitations of boiling the cell in that the method only yields half of the HMOs in the cell while the other half remains in the cell. The purpose for which a PSA would view D2 is for maximising the production of 2’-FL. In order to maximise HMO harvest, I agree that D2 encourages a PSA working in the industrial scale production or synthesis of HMOs to include a lysis system in a genetically modified E.coli cell.
I, therefore, conclude that the Assistant Commissioner did not err in his analysis of D2.
Assessment of common general knowledge
The appellant submits that the Assistant Commissioner incorrectly assessed the requirement of CGK. In particular, the appellant alleges the Assistant Commissioner erred by finding that D7 would constitute a part of the CGK in the absence of expert evidence.
The position of counsel assisting was that while it was not usually appropriate to consider a review article such as D7 as a part of CGK, the appellant, at the examination hearing, had specifically acknowledged that D7 was representative CGK. Counsel Assisting submits that it was, therefore, appropriate for the Assistant Commissioner to consider the information in D7 as forming part of the CGK.
In the third examination report, the examiner identified D3, D4, D7, D8 and D9 as representing the skilled person’s CGK. The Assistant Commissioner noted, that at the examination hearing, the appellant had submitted: “D7 was a review article and could be considered to represent CGK.” The finding by the Assistant Commissioner is clearly correct.
In oral argument, Mr Finch attempted to resile from that concession by focusing on the words “to represent CGK” claiming that was different to saying that they were part of CGK. I do not accept that distinction. I note that, in the written submissions of the appellant to the Assistant Commissioner, immediately after the paragraph where the appellant acknowledge that D7 may be considered to represent CGK, the submissions said:
On the other hand, D3, D4, D8 and D9 cannot be considered as CGK per the description provided in Raychem… because they are not in the same field that the purported PSA above will be working in.
The appellant clearly accepted, before the Assistant Commissioner, that D7 was representative of the CGK. That was an appropriate concession. I note that the appellant had not tendered any independent expert evidence as to what constituted the CGK as at the relevant date.
D7 also discusses lysis systems derived from bacteriophages.23 Bacteriophages produce cell death when certain conditions prevail, leading to release of cellular contents. Many lysis genes are sourced from bacteriophages. Claim 1(c) outlined at [6] of this decision mentions that the proposed invention contains a lysis gene from a bacteriophage.
It is unsurprising that the Assistant Commissioner accepted that D7 could be part of the CGK of the PSA. The Assistant Commissioner’s conclusion was:
If D7 is representative of common general knowledge, — being knowledge the PSA will know where to find, if it is not front on mind — then the PSA, looking for a suitable lysis system to incorporate into an engineered E.coli cell, will either know of or soon find D3. D7 points directly to it.
On the facts of this case, that is a conclusion that the Assistant Commissioner was entitled to reach. I therefore accept the submission of Counsel Assisting that, given the appellant’s assertion before the Assistant Commissioner that D7 was representative of CGK and, in the absence of the appellant having called any independent expert evidence to the contrary, it was appropriate for the Assistant Commissioner to have reached the conclusion that the information in D7 formed part of the CGK.
In reaching this conclusion I have not overlooked the contents of the declaration of Dr Wemhoff. I accept the point made by Counsel Assisting that Dr Wemhoff, as an employee of the applicant, is not independent and that is a matter which goes to the weight that should be attached to her declaration.
Oxford English Dictionary < Bacteriophages are defined as “A minute organism or agent which destroys bacteria.”
The closest that the declaration comes to addressing the concept of inventiveness is the comment in [7] relating to the magnesium regulated lysis system when Dr Wemhoff says: “It was entirely surprising to see that a not insignificant amount of HMO remains in the cells, a finding which was not expected by the one [sic] of ordinary skill in the art.”
Counsel Assisting challenges the validity of this observation. By referring to Fig. 2A of D2, counsel points out D2 shows that when conditions and the bacterium are enhanced to produce large amounts of the HMOs 2’-FL and 3’-FL, comparatively equal amounts are inside the cell and outside the cell and that the language of D2 does not suggest any elements of surprise that this is so.
I accept that Counsel’s analysis is correct. In D2, the cell is lysed to release HMO from inside the cell using the boiling method. Given the D2 is part of the CGK it should not have been a surprise to a PSA that, unless lysed, a significant amount of HMO remained in the cell.
Mosaicking of D2 and D3
The appellant submits that the Assistant Commissioner impermissibly engaged in “mosaicking” D2 and D3 to determine that there was no inventive step in the appellant’s claims. The appellant argues that the Assistant Commissioner attempted to fill the gaps of D2 by using D3. The appellant claims that to provide a link between D2 and D3, the Assistant Commissioner constructed an ex post facto and hypothetical chain of reasoning that includes D7. The appellant asserts that the Assistant Commissioner ought to have considered whether the teachings of D2 or D3 in isolation led to the claims. Under that analysis, the appellant submits that the claims would have been found to embody an inventive step.
Through the discovery of D7, Counsel Assisting notes that a PSA would apply the methods of D3 to harvest HMOs. Counsel Assisting highlights that the difference between D2 and D3 is that D3 uses a magnesium-induced auto-inducible lysis system to liberate a protein from a cell. However, the fact that D3 focuses on harvesting a protein does not prevent a PSA from applying the method in D3 to harvest HMOs.
It is impermissible to consider more than one document together to find lack of novelty.24 However, where a combination of more than one document would disclose the claimed invention, then the invention may be deemed to lack inventive step.25 Prior documents may only be looked at together only if that is what a PSA would do.26
I agree with the Assistant Commissioner’s conclusion that the combination of the teaching of D2 and D3 would be obvious to a PSA. The Assistant Commissioner correctly concluded that the step required to add the teaching of D3 to the teaching of D2 is not inventive. It would be obvious to a PSA that in order to optimise the harvest of 2’-FL, a PSA would need to modify the engineered E.coli of D2. Given that D2 indicated to the PSA that approximately half of HMOs remain in the cell, D3 would be readily found by the PSA and considered together.
I consider that reading D2 and D3 together would disclose the proposed invention. As held by the Assistant Commissioner, the method in D3 “discloses exactly what is missing from D2” to optimise HMO harvest and yield. D3 provides a PSA with an obvious solution on how to optimise harvest of 2-FL from modified E.coli in D2.
Therefore, I do not find the Assistant Commissioner erred in reviewing D2 and D3 in combination.
Hindsight reasoning
The appellant submits that the Assistant Commissioner engaged in impermissible hindsight reasoning, and that the Assistant Commissioner wrongly held that a PSA, through D7, would find D3. The appellant also alleges it was not obvious for a PSA to read D2’s references and use D3 to liberate intracellular HMOs and that without knowledge of the claimed invention, there was nothing to lead the PSA from D2 to D3. Hence, there would be no motivation to combine the teachings of the prior art base. The appellant suggests another alternative:
24 British Ore Concentration Syndicate v Mineral Separation Ltd (1909) 26 RPC 124 (CA) at 147; and
Re Lowndes’ Patent (1928) 45 RPC 48 (Ch) at 57.
25 Ian Finch (ed) James and Wells Intellectual Property Law in New Zealand (online looseleaf ed, Thomson Reuters) at [2.4.2].
26 Ancare New Zealand Ltd v Novartis New Zealand & Cyanamid of New Zealand Ltd [2000] 3 NZLR 299, [2001] RPC 20 (CA) at [43], approved by the Supreme Court in Lucas v Peterson Portable Sawing Systems Limited [2006] 3 NZLR 721 (SC) at [54].
An equally viable alternative would be to use exporter/transporter protein which transports the molecule of interest to the extracellular part. In view of the strain optimisation approach by the authors of D2 that would very likely be the most attractive solution since this would keep the cells/strain alive.
Counsel Assisting agrees that hindsight analysis would be impermissible. However, Counsel notes that the statement above was a form of evidence that was not previously before the Assistant Commissioner. The Assistant Commissioner did not engage in hindsight reasoning as a PSA would understand that cell lysis is required to gain access to the total 2’-FL amount.
There are various cases both in New Zealand and in overseas jurisdictions in which the Courts have warned against applying hindsight to the assessment of whether the inventive step would be obvious to a PSA.27 Whether an inventive step is obvious to a PSA must be determined at the time of the date of the application (also known as the priority date).28
I do not accept the appellant’s submissions that the Assistant Commissioner engaged in hindsight reasoning. The test which the Assistant Commissioner applied was whether the inventive step was obvious to the PSA. The connection between D3 and D7 is not through hindsight, rather, D7 makes several references to D3, particularly to an autolysis system. While D3 focused on the harvest of a particular polymer, D3 informs a PSA that an autolysis system may be developed in genetically modified E.coli, influenced by the amount of magnesium ions.
It would, therefore, be obvious to a PSA to apply that same method to increasing the harvest of remaining intracellular HMOs inside an E.coli cell.
In terms of the Assistant Commissioner’s analysis as to whether a PSA would be lead from D2 to D3, I do not agree with the appellant’s submissions that there is nothing to lead the PSA from D2 to D3. D2 addresses the increase in production of 2’-FL and another HMO, 3’-FL by way of genetically modified E.coli. D3 addresses an auto-inducible lysis system to genetically modified E.coli that is regulated by magnesium ions.
27Smale v North Sails (NZ) Ltd [1991] 3 NZLR 19 (HC) at 43; Hammar Maskin AB v Steelbro New Zealand Ltd HC Christchurch CIV-2006-409-977, 8 October 2008; Haberman v Jackel International Ltd [1999] FSR 683 (Ch); and Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59, (2002) 212 CLR 411 at [78].
28 Actavis UK Ltd v Merck & Co Inc [2008] EWCA Civ 444, [2008] RPC 26 at [119].
The Assistant Commissioner clearly articulated that the step required to add the teaching of D3 to the teaching of D2 is not inventive. It would be obvious to a PSA that if they were to incorporate an auto-inducible lysis system to the genetically modified E.coli, that the production of HMOs would increase.
Overall, I do not find the Assistant Commissioner impermissibly engaged in hindsight reasoning to reach to his findings.
Application of D3
The appellant submits that the Assistant Commissioner incorrectly applied D3. The PSA would not be motivated to introduce the teachings of D3 to E.coli disclosed in D2. The research in D3 represented the early and experimental status of autolysis systems. The appellant refers to “Appendix Three” attached to its submissions which outlines three recent studies in 2021 and two in 2024 relating to the harvest of HMOs.
Counsel Assisting rejects the appellant’s submission that D3 was preliminary research and submits that the appellant has not demonstrated how a PSA would read and apply D3 in an alternative manner. Counsel Assisting also submits that the appellant has attempted to tender evidence out of time and states that the documents in question were not previously before the Assistant Commissioner.
As addressed above, I do not accept the appellant’s submissions that the PSA would not be motivated to introduce the teachings of D3 to D2. In relation to whether D3 represented preliminary research, I acknowledge that D3 is comparatively dated compared to the other prior art bases, aside from D9. The appellant argues that the studies in Appendix Three do not refer to autolysis to support the proposition that D3 is preliminary research.
Aside from the lack of discussion regarding autolysis in those studies, the appellant has not cited anything else that would support a conclusion that D3 is preliminary research. The appellant has not referred to any recent cases which have refuted the claims, methodologies and findings of D3. The fact that the methods of D3 are not commonplace in the field of the invention does not mean that a PSA cannot rely on the evidence. Even if D3 was preliminary research, I do not consider that would prevent a PSA from applying the teachings of D3 to D2.
In any event, as discussed above, I consider that it would be inappropriate for the Court to consider Appendix Three given that the Assistant Commissioner did not take it into account in determining his decision.
Overall, I do not consider the Assistant Commissioner erred in applying D3.
Assessment at inventive step
The appellant submits that the Assistant Commissioner made the wrong assessment as to the inventive step. The appellant says it was the first to apply D3 to the production of HMOs and to understand that the presence of magnesium ions would lead to an improvement of HMO synthesis, due to enhanced enzyme activity.
The appellant argues that the Assistant Commissioner was also wrong to disregard the declaration from Dr Wemhoff dated 3 September 2024. While the Assistant Commissioner referred to the declaration in his decision, the appellant claims that he ignored the findings in determining the inventive step. Dr Wemhoff is a micro biologist and co-inventor of the proposed invention employed by the appellant.
Counsel Assisting submits that the appellant’s claim that it was the first to apply D3 to the “production of HMOs” is wrongly categorised. Counsel submits that the alleged inventive concept is not connected to the production of 2’-FL. Rather, it is the optimisation of harvest of 2’-FL from E.coli cells using a magnesium ion-related auto-inducible lysis system. Counsel Assisting makes a distinction between harvest and production or synthesis. On one hand, the definition of “harvest” is the taking or collecting of a substance that has already been produced. On the other hand, “production” or “synthesis” refers to the production of a substance from simpler materials after a chemical reaction. As noted above, counsel also suggests the Court ought to exercise caution in attributing weight to the declaration from Dr Wemhoff. Due to her close relationship with the appellant, her evidence cannot be regarded as independent.
The appellant’s ground of appeal relies on the evidence from Annex-1 that enhanced enzyme activity would increase the synthesis of 2’-FL. As discussed at [36] above, it is not appropriate for the Court to consider this ground of appeal where there is evidence that was not before the Assistant Commissioner.
I agree with Counsel Assisting that Dr Wemhoff’s evidence is admissible but that she is not an independent expert due to her affiliation with the appellant. Her evidence therefore needs to be approached cautiously. During the hearing, Mr Finch submitted that Dr Wemhoff’s evidence should have led to the conclusion that there was an inventive step because Dr Wemhoff concluded that there was an increase in HMO production.
The focus, in this case is not about the results of the claimed invention, rather, the methodology in the claimed invention. Dr Wemhoff’s views may be relevant as to the consequences of the claimed invention. However, the increase in the production of HMOs does not provide assistance as to whether the differences between the prior art bases and the methodology in the claimed invention constitute steps which would have been obvious to the PSA. This is the issue that is relevant to the important question of whether there is an inventive step.
Also, I do not accept the appellant’s submissions that Dr Wemhoff’s views were disregarded. The Assistant Commissioner clearly took into account Dr Wemhoff’s views in his decision. At [70], in examining how D2 boosted production of HMOs by engineered E.coli, the Assistant Commissioner noted that Dr Wemhoff’s findings appeared to corroborate those reported in D2.
The appellant has not established that the Assistant Commissioner misunderstood the evidence of Dr Wemhoff or that he ignored it.
Application of D7
The appellant submits that the Assistant Commissioner incorrectly applied D7. The appellant argues that while a PSA may have known about inducible cell lysis systems, they were not common place in the production of HMOs. The appellant also submits that D7 does not provide sufficient motivation to arrive at the proposed invention without the benefit of hindsight, and a PSA would be more likely to employ traditional methods of cell lysis, such as through mechanical, physical, enzymatic or chemical means. It submits D7 does not mention HMOs and that the “bio-based chemicals” disclosed in D7 are not equivalent to the HMOs of the Application.
In circumstances where D7 is accepted as representative of the CGK, Counsel Assisting submits that the Assistant Commissioner was justified in combining D2 with the disclosure of D7.
The critical question is not whether inducible cell lysis systems were commonplace in the production of HMOs at the time. The appellant admits that they may have been known at the time but that they were not a PSA’s most obvious choice in lysing cells. The test to determine whether there is an inventive step is not about what method the PSA would most likely choose to undertake the task. Rather, the test concerns the CGK of the PSA and whether the proposed invention constitutes steps which would have been obvious to a PSA.
A PSA would not be required to use hindsight to arrive at the proposed invention in light of D7. A PSA who is reading the prior art bases with the purpose of harvesting HMOs for industrial production would be aware that traditional methods do not effectively maximise yield. D7’s findings would inform a PSA that conditionally inducible cell lysis systems are more efficient than traditional methods to extract intracellular content that fails to release from cells when the traditional methods of lysing are used.
While D7 does not explicitly mention HMOs, it would have been obvious to the PSA to employ the method in D7 on engineered E.coli bacteria to increase the industrial yield of products from host-cells, namely HMOs. I consider that it was open to the Assistant Commissioner to apply D7 to reach the proposed invention where it was representative of the CGK.
I find that the Assistant Commissioner did not err in his application of the Windsurfing/ Pollozi test to D7.
Conclusion
In light of the findings above, I conclude that:
(a)There was no inventive step in the proposed invention under s 14 of the Act. It is clear that the steps to achieve a higher yield of HMOs through autolysis would have been obvious to the PSA based on the prior art bases.
(b)The Assistant Commissioner correctly applied the Windsurfing/Polozzi test in determining that there was no inventive step in the appellant’s proposed invention under s 14 of the Act. The Assistant Commissioner correctly decided that the Application was void.
Having found that there was no inventive step in the Application, it is not appropriate to grant the orders sought by the appellant.
Result
The appeal is dismissed.
Costs
I invite the parties to settle costs but if that is not possible, Counsel Assisting is to file and serve a memorandum of no greater than three pages in length within 14 days of the date of this decision. The appellant will have 14 days of receipt of that memorandum to file and serve a reply, also to be no more than three pages in length. I will then deal with costs on the papers.
Churchman J
Solicitors:
James & Wells, Tauranga for Appellant
A.J. Park, Auckland for Counsel Assisting
Appendix A
| Citation | Document | Publication date |
| D1 | WO 2016/040531 A1 (GLYCOSYN LLC ) | 17 March 2016 |
| D2 | Di Huang and others “Metabolic engineering of Escherichia coli for the production of 2′- fucosyllactose and 3-fucosyllactose through modular pathway enhancement” (2017) 41 Metabolic engineering 23 | 9 March 2017 |
| D3 | Xiaoming Zhang and others “An auto-inducible Escherichia coli lysis system controlled by magnesium” (2009) 79 Journal of microbiological methods 199 | 1 November 2009 |
| D4 | Stephen Tamekou Lacmata and others “A novel autolysis system controlled by magnesium and its application to poly (3-hydroxypropionate) production in engineered Escherichia coli” (2017) 8(5) Bioengineered 594 | 26 February 2017 |
| D5 | A Reum Lee and others “Soluble Expression of the Fucosyltransferase Gene from Helicobacter pylori in Escherichia coli by Co-expression of Molecular Chaperones” 43(3) Microbiology and Biotechnology Letters 212 | 28 September 2015 |
| D6 | Young-Wook Chin and others “Improved production of 2-fucosyllactose in engineered Escherichia coli by expressing putative α-1,2-fucosyltransferase, WcfB from Bacteroides fragilis” (2016) 257 Journal of Biotechnology 192 | 2 December 2016 |
| D7 | Yongqiang Gao and others “Inducible cell lysis systems in microbial production of bio-based chemicals” (2013) Applied microbiology and biotechnology, vol.97, pages 7121–7129 | 20 July 2013 |
| D8 | Ivan Hajnal and others “A novel cell autolysis system for cost-competitive downstream processing” (2016) 100 Applied microbiology and biotechnology 9103 | 15 June 2016 |
| D9 | Xinyao Liu and others “Nickel-inducible lysis system in Synechocystis sp. PCC 6803” (2009) 106(51) PNAS 21550 | 22 December 2009 |
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