05 October 2014

Patent Oppositions and Amendments: Law Reform Fixes Flaws

Garford Pty Ltd v Dywidag-Systems International Pty Ltd [2014] FCA 1039 (18 September 2014)

HandymanAs many readers will be aware, Australia’s patent laws include a pre-grant opposition system – once an application has been evaluated by an examiner, and approved for grant, an opportunity exists for third parties to step in and challenge that decision.

The purpose of such opposition proceedings (from a policy perspective, at least) is to reduce the probability of invalid patent claims being granted.  Even if prior art searching and examination were perfect, participants in the specific technology area to which an invention relates will always have access to additional information, not readily accessible to a patent examiner, that may be pertinent to the patentability of the invention.

The system thus recognises that the examination process is necessarily imperfect in practice, particularly given that examination resources are finite.

Furthermore, if either party to an opposition (i.e. the applicant or the opponent) is dissatisfied with a Patent Office decision in an opposition, there is an avenue for appeal to the Federal Court of Australia.  Prior to commencement of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 on 15 April 2013, however, there was a problem with the available procedure for appealing a decision in a partially-successful opposition.

Specifically, the Federal Court on appeal was confined to considering the very same subject matter that had been reviewed by the Patent Office in the original opposition proceedings.  Thus, if the opposition had been partially successful, in the sense that the opponent had established that at least some of the accepted claims were invalid, but the patent applicant was given the opportunity to propose amendments to address the successful grounds of opposition, the court could not take into account those proposed amendments.

This was unhelpful to both the patent applicant and the opponent.  From the applicant’s point of view, it would be best that the proceedings before the court be based upon a set of claims that it considers to be defensible.  From the opponent’s perspective, an appeal that may simply have the same outcome as the Patent Office decision, with the applicant still having an opportunity to amend, is potentially a complete waste of time and money.

A judge of the Federal Court has now confirmed that a ‘fix’ for this problem, implemented in the Raising the Bar Act, has been effective.

The Fix

The Raising the Bar reforms introduced subsection (1A) to section 105 of the Patents Act, which provides that:

If an appeal is made to the Federal Court against a decision or direction of the Commissioner in relation to a patent application, the Federal Court may, on the application of the applicant for the patent, by order direct the amendment of the patent request or the complete specification in the manner specified in the order.

Consideration By the Federal Court

In Garford Pty Ltd v Dywidag-Systems International Pty Ltd [2014] APO 37, a delegate of the Commissioner of Patents found that Garford was partially successful in its opposition to a patent application by Dywidag-Systems, in that certain claims lacked fair basis, but that the problems could be rectified by relatively simple amendments.  Garford had also argued in the opposition that the claimed invention was obvious (i.e. lacked an inventive step), and appealed the Patent Office decision, in part on the basis that the delegate had been wrong to reject this ground of opposition.

Dywidag-Systems proposes to amend its patent for two distinct reasons.  Firstly, the specification and claims contain a number of apparent errors that it wishes to correct.  Secondly, it wishes to address the delegate’s findings of lack of fair basis.

In its recent decision, the court has considered only the first group of amendments.  The correction of ‘a clerical error or an obvious mistake’ has a special status under section 102 of the Patents Act (which specifies the types of amendments that are not allowable), in that such corrections are not subject to the usual restrictions that otherwise apply to amendments.  In this case, neither Garford nor the Commissioner of Patents had any objections to Dywidag-Systems’ contention that the amendments in question would correct clerical errors and/or obvious mistakes, and the court agreed.

By agreement between the parties, the remaining amendments to address the fair basis issues will be considered by the court during the substantive appeal.

Advertisement of Application to Amend?

An interesting aspect of the court’s decision is the way in which it has treated advertisement of the amendments.

When an amendment is made before the Patent Office, under section 104, in most cases it must be advertised in the Official Journal.  The primary purpose of advertisement is to notify the public of the amendment, so that there is an opportunity for third parties to oppose under s 104(4).

Under s 105(2), the court has a discretion to attach terms to an order for amendment of a patent or application under s 105(1) and (1A), including as regards advertising.

However, where amendments are ordered by the court, it seems to me that advertisement generally serves a substantially reduced purpose, because there is no mechanism to oppose such an amendment.  It might be argued that, as a matter of good form, amendments should be advertised so that the Official Journal provides a record of actions taken in relation to patents and applications.

If so, then the actual terms applied to the court’s orders in this case are somewhat baffling.  With regard to the corrections, which will now actually be made, the court has determined that it would serve ‘no practical purpose’ to advertise the amendments.  However, with regard to the amendments to address the fair basis issues, which may or may not be made, depending upon the outcome of the substantive appeal, the court has ordered that the application for amendment be advertised. 

Overall, then, the Official Journal will be neither a complete nor accurate record of actions taken in relation to the Dywidag-Systems’ application.  With no provision in the Act for third party intervention, it is not clear what other purpose might be served by the advertisement of a proposal to amend in the course of a substantive appeal from the Patent Office decision.  This is perhaps an area in which the court’s practice will become clearer over time.

Some Background – How the Problem Arose

The problem of amendments in appeals from patent oppositions was largely of the Federal Court’s own making.  The court could no doubt have interpreted the word ‘appeal’, as used in numerous provisions of the Patents Act 1990, in a number of different ways.  However, in New England Biolabs Inc v F Hoffmann-La Roche AG [2004] FCAFC 213 the Full Court decided that it was Parliament’s intention ‘to put before the Court the same subject matter for decision that had been before the Commissioner, but to deploy the executive and judicial powers respectively in the making of decisions on that subject matter’ (at [43], emphasis added).

The facts in New England Biolabs were themselves quite particular.  The appeal in that case was against a decision of the Patent Office to allow an amendment requested under section 104 of the Act.  New England Biolabs wanted the court to exercise a discretion to refuse the amendment, based upon the applicant’s earlier conduct during examination of the Australian application, and its US counterpart.  The court would have had such a discretion had the amendment been requested directly, after grant of a patent, under section 105.  However, section 104 does not afford the Commissioner of Patents any discretion.

So the actual issue in the New England Biolabs case was whether, when an application to amend had originally been made under section 104, could the court exercise a discretion on appeal that was not available to the Commissioner when making the original decision?  The Full Court could perhaps have arrived at the answer ‘no’ without propounding a far-reaching interpretation of the word ‘appeal’ throughout the Act, and depriving single judges of any flexibility in dealing with issues that might arise in other types of appeals, but it did not.  Perhaps it had intended the term ‘subject matter’ to be more nuanced than subsequently understood?  In any event, the eventual fix has finally been made through legislation.

Conclusion – Problem Solved!

The good news from the Garford decision is that the court has confirmed that s 105(1A) works as intended – it is now possible for a patent applicant to propose amendments to a patent specification that can then be considered by the court on appeal from a decision of the Commissioner of Patents.

This resolves the highly unsatisfactory situation whereby parties in such appeals were required to conduct proceedings on the basis of exactly the same documents that had been before the Patent Office, even when this may not have reflected the issues that either party wanted the court to resolve.


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