15 October 2012

Timeframes Slashed in Second Stage of Proposed Regulations

White rabbit checking watchThe primary objective of Schedule 3 of the Raising the Bar reforms to Australia’s intellectual property laws is to improve efficiency in procedures relating to approving and challenging patent and trade mark applications, so as to reduce delays in the system (see, e.g., Major Australian Patent Reform Passes in Senate).  It therefore comes as no surprise that in the second (and final) stage of draft amendments to the Patents Regulations 1991, released by IP Australia on Thursday, 11 October 2012, a number of allowed time periods for completing various actions in relation to patents and applications have been substantially cut.  These changes were clearly foreshadowed in the original consultation process, prior to release of the proposed legislation.

The second stage of proposals also includes regulations implementing Schedule 6 of the Raising the Bar reforms, which are directed towards simplifying and streamline various processes.

In a nutshell, the major time-related proposals are:
  1. significant reductions in the time available for examination of a patent application, and for the applicant to overcome all objections and achieve acceptance (or ‘allowance’, as it is more-commonly called in some other jurisdictions) of the application;
  2. reductions in some of the periods allowed for completing steps in opposition proceedings – particularly ‘procedural’ oppositions, such as opposing an amendment or the grant of an extension of time; and
  3. major reform to the test applied to determine whether an extension of time to file evidence in an opposition is justified – under the current Regulations it has become difficult for the Patent Office to refuse an extension request, while the proposed Regulations will place the onus of establishing the case for an extension firmly on the requestor.
We have updated our ‘redlined’ copy of the present Regulations, showing the changes that would be made by the proposed amending regulations, which can still be found at the following links:
  1. Volume 1 (Chapters 1 to 23 and Schedules 1, 1A and 2) [PDF 1.6 MB]; and
  2. Volume 2 (Schedules 2A to 8 and the Notes) [PDF 422 kB].
The due date for written submissions on the draft regulations is unchanged by the release of this additional tranche.  Any submissions must still be filed by the unextendable deadline of 5.00pm, on 21 November 2012. Submissions may be emailed (Word or RTF format preferred) to reform@ipaustralia.gov.au.

EXAMINATION OF APPLICATIONS

Currently, examination of Australian patent applications can become protracted.  An applicant is not required to request examination until five years from filing unless (as is usually the case) the Commissioner of Patents directs the applicant to do so at an ealier date.  Once a direction has been issued, the applicant has six months to file a request for examination.

At some later date (typically abound a year after the examination request has been filed) a first examination report is issued.  The applicant then has up to 21 months to overcome any objections, and achieve acceptance of the application.

The proposed regulations aim to restrict both of these periods, in order to resolve patent applications more quickly.  The changes are summarised in the table below.

Required Action
Current Period
New Period
To request examination after a direction to do so is issued by the Commissioner 6 months 2 months [subregulation 3.16(2)]
To gain acceptance of an application after a first examination report issues 21 months (fees payable after 12 months) 12 months (no fees payable) [paragraph 13.4(1)(b)]

OPPOSITIONS

In the draft Regulations, Chapter 5 (which relates to oppositions) has been completely rewritten.  There are a number of changes in terminology and structure of the regulations.

For example, the former Statement of Grounds and Particulars is now called an opposition statement, which is required to set out the grounds of opposition, and ‘the facts and circumstances forming the basis for the grounds’.

Oppositions are divided into substantive oppositions (challenges to the validity of patent claims which have passed a patent office examination and challenges to the grant of an extension of the term of a pharmaceutical patent) and procedural oppositions (challenges to the exercise of administrative powers of the Commissioner of patents, such as allowing amendments, extensions of time, and so forth).  Substantive oppositions encompass both pre-grant opposition to standard patent applications, and post-grant opposition to certified innovation patents.  Where a distinction is relevant, oppositions to innovation patents are termed section 101M oppositions.

Where the Regulations currently require a party to serve filed documents on the other party in the course of opposition proceedings, the proposed Regulations now require only filing at the Patent Office, with the Commissioner being responsible for giving the other party a copy ‘as soon as practicable’. 

Furthermore, where the current Regulations require service of documents within a specified time period, the critical action under the proposed Regulations is filing of the documents at the Patent Office.  For example, the current Regulations require that evidence be served on the other party in an opposition within a prescribed period, and a copy filed at the Patent Office as soon as practicable.  Under the proposed Regulations, the evidence will need to be filed at the Patent Office within the prescribed period, and the Commissioner will then be responsible for providing the other party with a copy.
Substantive Oppositions
For the most part, the time periods allowed for the various steps of a substantive opposition are unchanged.  The relevant period are summarised in the following table.

Required Action
Current Period
New Period
Filing Notice of Opposition in a substantive matter (including opposition to the grant of a standard patent) after publication of decision in the Official Journal 3 months 3 months
Filing opposition statement after filing of a Notice of Opposition in a substantive matter 3 months 3 months
Filing, by the opponent, of evidence in support of an opposition, after filing of the opposition statement 3 months 3 months
Filing, by the applicant, of evidence in answer after filing of the evidence in support 3 months 3 months
Filing, by the opponent, of evidence in reply after filing of the evidence in answer 3 months (assuming notice of intention to rely on evidence in reply is given within 1 month) 2 months

However, while the allowed periods are unchanged in most cases, the big difference for many applicants and opponents will be the tests to be applied when assessing an application for an extension of time in any of the evidence stages.
Extensions of time for filing of evidence
A major cause of protracted opposition proceedings is extensions to the various time periods for providing evidence.  As we have explained in a number of earlier articles (see, e.g., Australian Patent Office Discretion in Opposition Proceedings) the Commissioner of Patents currently has limited discretion to disallow extensions.  Many oppositions are subject to multiple extensions of time and extend over many years.  IP Australia considers this to be contrary to the interest of the public and parties in resolving oppositions faster.


New Regulation 5.9 seeks to address this issue by introducing a new test for determining whether an extension of time for filing evidence is justified:

5.9 Extension of time for filing evidence
(1) The Commissioner may extend an evidentiary period mentioned in regulation 5.8:
(a) if requested in writing by a party; or
(b) on the Commissioner’s own initiative.
(2) The Commissioner may extend the period only if the Commissioner is satisfied that:
(a) the party who intended to file evidence in the period:
(i) has made all reasonable efforts to comply with all relevant filing requirements under this Chapter; and
(ii) despite acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period, is unable to do so; or
(b) there are exceptional circumstances that warrant the extension.
(5) In this regulation:
exceptional circumstances includes the following:
(a) a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Chapter;
(b) an error or omission by the Commissioner that prevents a party from complying with a filing requirement under this Chapter;
(c) an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act.

According to the draft Explanatory Memorandum:

In applying the test, the Commissioner would not give a direction to extend a period solely because of delays caused by an agent or a legal representative failing to act promptly or diligently, by difficulties in obtaining expert evidence that could have been anticipated and acted on or by attempts to settle the proceedings.

Furthermore, while it has become the practice under the current Regulations to allow a party to file any evidence already available, even if a further extension is refused, it appears to be the intention that this will no longer be the case under the new Regulations.  The draft Explanatory Memorandum states that:

Where a party cannot satisfy the Commissioner that an extension is justified under the new test, the Commissioner will not have the power to give a short extension to allow the filing of evidence immediately available or to validate evidence filed out of time.

We would note that this appears to be an fairly harsh regime!  Three months may seem like a long time to the bureaucrats at IP Australia (though perhaps not to the Hearing Officers who often appear to take at least this long to issue a decision once a matter has been heard), but out here in the real world it can be a challenge to meet these deadlines.  Expert witnesses are rarely available on demand – most have full-time jobs elsewhere – even if they can be found relatively quickly.  Applicants and opponents are generally preoccupied with running their businesses, and a patent opposition is not often a priority.  And many patent attorneys are juggling dozens of matters at any one time.

One thing is certain – if the Regulations are passed in their current form, it s likely that significant additional time pressures will be placed upon applicants, opponents, and their representatives involved in opposition proceedings.
Procedural Oppositions
Procedural oppositions under the proposed regulations would have further shortened periods for completing specified actions:

Required Action
Current Period
New Period
Filing Notice of Opposition in a procedural matter after Commissioner’s decision has been published in the Official Journal 3 months (opposing an amendment)
1 month (opposing an extension of time)
2 months
Filing opposition statement after filing of a Notice of Opposition in a procedural matter 3 months 1 month
Evidence stages 3 months, each stage Not specified

The Regulations do not provide specifically for the filing of evidence in procedural oppositions.  In place of regulated evidentiary stages, proposed Regulation 5.12 provides that:

The Commissioner may:
(a) decide the practice and procedure to be followed in a procedural opposition; and
(b) direct the parties accordingly.

With regard to this Regulation, the draft Explanatory Memorandum says that:

…the Commissioner will have the ability to direct, on a case-by-case basis, the appropriate practice and procedures for procedural oppositions – this will include directing evidential timeframes. This regulation will ensure that when a procedural opposition is complex and the parties would benefit from following the standard evidential periods then the Commissioner could make directions that these periods are to apply. However, where the procedural opposition is simple and the process can be contracted, then the Commissioner would be able to make the appropriate directions for the matter.

OTHER PROPOSALS

While the amendments discussed above are most likely to have an impact on stakeholders in the patent system, there are a number of other changes proposed in this stage of draft regulations.  These include:
  1. establishing earlier deadlines for filing of divisional applications;
  2. simplifications to the manner in which ‘convention countries’ are defined for the purposes of the Patents Act 1990 and Patents Regulations 1991;
  3. establishment of a 12-month grace period for ‘secret use’ of an invention, prior to filing of a patent application, to mirror the existing period permitted for a prior publication;
  4. a substantial re-write of the regulations relating to the determination of priority dates and to the identification of prior art which is to be disregarded (including an applicant’s own prior disclosures within the 12-month grace period);
  5. replacement of the requirement for an applicant to file a ‘Notice of Entitlement’, identifying the basis for ownership of the invention and application, prior to acceptance, with a requirement that this information be specified at filing;
  6. restructuring and simplification of regulations relating to the handling of Australian national stages of PCT applications; and
  7. removing from the Regulations copies of international treaties and their regulations that are now easily accessible by other means (i.e. the Internet).

CONCLUSION

Most regular users of the Australian patent system have become accustomed to relatively relaxed timeframes for completing actions and/or filing documents.  And when these timeframes prove inadequate, obtaining extensions of time (particularly at an earlier point in proceedings) has been, for the most part, a formality.

Under the new regime (assuming, as is likely, that it comes into force substantially unchanged) there will be far greater pressure on everyone concerned to act promptly and diligently at every stage of proceedings.

It certainly seems that the future holds new challenges for patent applicants, opponents, and their agents!

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