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Lost in the dark: The utility of Patent Office Guidelines once again called into question

5 July 2010. Posted by Ian Finch.

In recent years more and more Australian practitioners have been doing business directly with IPONZ rather than instructing a local agent.  

Understandably, many of those practitioners will look to the Intellectual Property Office’s published Guidelines to determine how procedural aspects of a case should be handled.  
 
While in most cases those Guidelines will be of considerable assistance, there are some traps for the unwary.  For example, a recent decision of the New Zealand High Court has cast doubt on the applicability of the Guidelines for seeking extensions of time in patent proceedings.

In Bomac Research v Merial (14/4/10, Miller J, HC Wellington CIV 2009-485-2141) Merial (represented by an Australian attorney firm) had sought an extension for filing its Statement of Case in a patent revocation action.  There were two published Guidelines:

 

  • The first (published in August 1999 and dealing with extensions of time generally) stated that in making a request for an extension the onus is on the party seeking the extension to justify it and this will require a minimum of: the reasons why it has not been possible to complete the required action (including details which demonstrate there has been no lack of diligence); the present status of the required action; what actions are outstanding and an anticipated timetable; and
  • The second (last updated 16 November 2009 and dealing specifically with extensions in patent opposition and revocation proceedings) provided that an applicant for extension should give full and detailed reasons for the application and must convince the Commissioner that the extension is justified.  

These Guidelines notwithstanding, Merial’s application simply stated that “more time is needed”.  Nonetheless, IPONZ granted the extension. Bomac appealed to the High Court contending that, in accordance with the Guidelines and on principle, Merial should have filed reasons for the application in order to establish both that it was necessary and that Merial had acted diligently.  In the absence of such reasons, Bomac submitted, there was no evidentiary basis on which the Commissioner could exercise his discretion to grant the extension.  

However the High Court rejected Bomac’s arguments holding:            

“The reasons for delay are always a relevant consideration but it is not correct that they must invariably be supplied nor that they must withstand scrutiny.  An applicant fails to explain itself at its peril, but the regulations do not insist that it justify delay.  Where, as in this case, the delay is short and the Statement of Case has been filed in the interim, it need not weigh heavily with the Commissioner even if not adequately explained.”

As to the submission that dealing with extension applications in the absence of reasons would lead to unprincipled and inconsistent decisions the High Court simply added:
 
“It is true that they [extension applications] must be dealt with according to the interests of justice in particular circumstances and to that extent there is inevitably an element of uncertainty.  But the important point is that an applicant who takes an extension for granted does so at its own risk.  It would have been difficult for Merial to show that the Assistant Commissioner erred, had he refused the extension in the case.”

The decision follows an earlier judgment in the patents field which reached a very similar conclusion.   In Amadeus Global Travel Distribution SA v Sabre Inc (14/3/03, Ronald Young J, HC Wellington AP126/02) Amadeus successfully sought an initial extension of time to file evidence in support of the opposition.  A subsequent request was refused. Amadeus sought a hearing before the Commissioner, but was unsuccessful, and appealed to the High Court. IPONZ’s August 1999 Guidelines identified typical periods of extension in patent oppositions. The Guidelines also specifically stated that outside those standard extension periods “exceptional circumstances” would need to exist to justify an extension. The Court expressed doubt whether the Guidelines were appropriate, as neither the 

Act nor the Regulations referred to “exceptional circumstances” or contained pre-ordained extension periods. 

Disregarding the Guidelines, the Court took the view that the decision to grant an extension must depend on the circumstances of each individual case, and that it is vital that justice is done between the parties. Most importantly, the parties should be afforded every opportunity to put their best case forward.  

Taking all the factors into account, the Court deemed the Commissioner wrong to have refused Amadeus an extension of time and granted Amadeus its extension.

The extension application in Bomac simply stated that “more time is needed”.  On the basis of the concluding comments of Justice Miller, practitioners assume some risk in relying on such a brief explanation to justify all but the shortest of extensions.  The position regarding longer extensions however remains uncertain given the primacy in both Bomac and Amadeus to the interests of justice (which would always seem to favour granting an extension in proceedings involving a challenge to a pending or granted patent given the statutory monopoly which it will/does confer).  

Of more concern is the effect of the judgments on the status of the Guidelines issued by IPONZ.  Both judges ruled that the Guidelines, while no doubt useful, cannot be applied prescriptively and cannot be used to modify what is, under reg.168, an unfettered discretion.  This would tend to suggest the Guidelines are of little or no value in setting a framework for the exercise of the Commissioner’s discretion and calls into question their utility to users of the patent system.  

It is hoped that the situation will be remedied under the new Patents Bill either by providing more guidance to affected parties in the Regulations themselves, or affording some official status to the Guidelines.  In the meantime the Commissioner / Courts will be guided by the merits of the application on a case by case basis.
 

This article was written by Ian Finch, Partner, James & Wells. Based in our Hamilton office Ian specialises in the litigation and enforcement of intellectual property rights.  For more information and for expert IP advice contact Ian on Email: ianf@jaws.co.nz or Phone: +64 7 957 5660 or 0800 IINOV8.