19 February 2012

Attacking Australian Patents – Re-examination & Revocation

Patent Revoked! As many readers will be aware, Australia has a pre-grant opposition procedure which can be used to challenge a decision of the Australian Patent Office to issue a patent.  Opposition proceedings are conducted before the Patent Office, and are initiated by the opponent filing a Notice of Opposition.

There is, however, only a limited time period within which to oppose an application once it has passed examination.  Specifically, details of the accepted application are published in the Australian Official Journal of Patents, and the official publication date (which is also listed in the AusPat database record for the application) commences a three-month opposition period.

Once the opposition period has expired, it is generally no longer possible to oppose the application.  In exceptional circumstances, an extension of time to lodge a Notice of Opposition may be available, however once the patent has actually issued there is no longer any possibility of opposing, because the grant of a patent is not reversible.

So what can be done about granted patents which are of doubtful validity, and which may be of concern to another party operating within the Australian market?  There are two options available in this situation:
  1. requesting re-examination by the Patent Office; and/or
  2. commencing revocation proceedings in the Federal Court of Australia.
The procedures, pros and cons of each are discussed in this article.

RE-EXAMINATION

Re-examination is initiated by filing a request, along with the required official fee (currently A$800.00).  The request must include copies of the prior art documents relied upon by the requester and, for each document, a statement explaining the relevance of the document to the patent claims, i.e. why each claim is either not novel, or not inventive, in view of the document.

Unlike the current US re-examination procedure, there is no requirement to establish a 'substantial new question of patentability'.  In Australia, all re-examination requests are automatically granted.

An examiner will then reconsider the claims in light of the request and accompanying submissions and, if persuaded that there are possible grounds for revocation of one or more claims, issue a re-examination report to the patentee.

The process is essentially ex parte, i.e. after the initial filing, the requester takes no further part in the proceedings.  However, since anyone is entitled to request re-examination (including a patent attorney), it is possible for the actual interested party to remain anonymous.

There are, however, some significant limitations to the re-examination process (additional to the inability of the requester to intervene after the initial request has been filed):
  1. re-examination can only be based on grounds of lack of novelty or obviousness – no other matters that would have been grounds for refusal during examination or opposition can be raised in re-examination;
  2. the prior art that can be submitted is limited to published documents – for example, a prior public use which is not also covered by an enabling disclosure in a published document cannot form the basis for re-examination; and
  3. for various legal and practical reasons, it is extremely difficult to succeed in a re-examination based on obviousness.
Re-examination is therefore only a truly viable option if the requester has clearly novelty-destroying prior art in the form of published documents.

The cost of re-examination depends largely on the number of documents relied upon, and the number of claims challenged, since these determine the amount of work that must go into the initial submissions.  A typical re-examination submission prepared by a professional agent (i.e. an Australian patent attorney) might cost A$4000.00-A$5000.00, however it is not unknown for a re-examination request to cost well in excess of $10,000.00, with absolutely no guarantee of success.

Re-examination proceedings are generally resolved, one way or another, within a matter of months.

REVOCATION PROCEEDINGS

Revocation proceedings are initiated by filing an application with the Federal Court of Australia.

The Federal Court can consider all grounds of invalidity, and all forms of prior art, including prior public or commercial use, which may be evidenced by witness testimony and documents which may not themselves have been publicly available at the time, but which nonetheless help to establish what was in public use.

An application for revocation can be filed preemptively with the court.  There is no requirement for there to be an existing dispute or controversy, or for the applicant to have any expectation that the patentee may commence infringement proceedings.  However, if there are convincing grounds for revocation of the patent, it may be an effective strategy to contact the patentee before commencing court action in an effort to negotiate a settlement, which could include persuading the patentee to voluntarily amend the patent, or to grant a royalty-free license.

The cost to prepare and file an application with the Federal Court is typically in the range of A$10,000.00-A$20,000.00.  Costs from that point depend upon the nature and complexity of the asserted grounds of revocation.  A case in which a lack of inventive step is asserted (which under Australian law is heavily evidence-based) could easily run to A$150,000.00 or more.

Revocation proceedings, from the time of filing of an application with the court, to the time of a final decision, would typically run for between one and two years.

It is worth bearing in mind that if the revocation application is potentially infringing the patent in Australia, revocation proceedings could be a risky option.  As a practical matter, the true party in interest in court proceedings cannot remain anonymous, and in appropriate circumstances the patentee may use the proceedings to file a cross-claim for infringement of the patent, which may significantly increase the complexity and cost of proceedings.

In Australia, unlike (say) the US, it is usual for the court to make an award of costs against the losing party.  This is a two-edged sword for the revocation applicant.  If successful, it is possible that the court may order the patentee to pay a substantial proportion of the applicant’s costs of the proceedings.  On the other hand, failure means potentially having to pay the patentee’s costs of defence in addition to the costs of the unsuccessful revocation efforts.

SUMMARY

In summary, the pros of re-examination are:
  1. relatively low cost;
  2. anonymity is possible; and
  3. speedy resolution.
The cons of re-examination are:
  1. limited grounds;
  2. limited prior art (documents only); and
  3. poor prospects of success, except in very clear cases of anticipation.
Pros of revocation proceedings in court are:
  1. all grounds available; and
  2. no limitations on prior art or evidence.
The cons of court proceedings are:
  1. cost;
  2. no anonymity;
  3. slow resolution; and
  4. risk of retaliation.
It should be noted, however, that an opposition – which ought to provide a compromise between these two extremes, if filed in time – is not without risks and disadvantages.  An opposition can become expensive, and the standard of proof required of the opponent is, in fact, higher than in revocation court proceedings.

Anybody considering an attack on a patent or application which is causing concern is therefore very strongly encouraged to seek professional advice specific to their circumstances.  Yes – lawyers and patent attorneys always say this about everything.  But that is because it is generally true!

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