Lost in the dark: the utility of patent office guidelines once again called into question

A recent decision of the High Court has once again cast doubt on the applicability of the Intellectual Property Office's published Guidelines for seeking extensions of time for taking steps in patent proceedings.

Bomac Research Limited v Merial Limited

In Bomac Research Limited v Merial Limited (14/4/10, Miller J, HC Wellington CIV 2009-485-2141) Merial had sought an extension of the deadline for filing its Statement of Case in a patent revocation action. There were two published Guidelines which might apply:

• The first (published in August 1999 and dealing with extensions of time generally) stated that in making a request for an extension the party applying must give full and detailed reasons for the request. 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 within the required time (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 patent revocation proceedings) provided that an applicant for extension should give full and detailed reasons why the extension is required and must convince the Commissioner that the extension is justified.

These Guidelines notwithstanding, Merial's extension application simply stated that "more time is needed". The Intellectual Property Office granted the extension after hearing from both parties and Bomac appealed to the High Court. Bomac's primary contention was 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 not sat on its hands in respect of the initial deadline (ie it 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 the submission that it was incumbent upon the applicant for an extension to prove both the need for the extension and diligence in attempting to meet the current deadline 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 from the Intellectual Property Office, and therefore leave parties in a position of uncertainty, 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."

Amadeus Global Travel Distribution SA v Sabre Inc

The Bomac 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 opposed Sabre's patent application in proceedings before the Commissioner. Both parties were slow in filing their Statement of Case and Counterstatement respectively. Amadeus sought an initial extension of time in which to file evidence in support of the opposition, and this was granted. A subsequent extension requested by Amadeus was refused. Amadeus sought a hearing before the Commissioner in relation to the refusal, but was unsuccessful, and appealed to the High Court.

IPONZ's August 1999 Guidelines for granting extensions of time 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. The Court went on to note that the timeframes laid out in the Patents Act and Regulations were created 50 years ago and, with the complexity of modern litigation, were woefully inadequate.

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. This includes ensuring an expeditious hearing, and the proper exchange of information. However, most importantly, the parties should be afforded every opportunity to put their best case forward. The Court also commented that if there was any delay on the part of one or both of the parties, this could be taken into account when the issue of costs is addressed at the conclusion of proceedings.

Taking all the factors into account, the Court determined that the Commissioner was wrong to have refused Amadeus an extension of time in which to complete its evidence in relation to the proceedings and granted Amadeus its extension.

The Guidelines - Of Questionable Value?

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 given in both Bomac and Amadeus to the interests of justice (which would always seem to favour the granting of 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 the Intellectual Property Office. Like Ronald Young J in Amadeus, Justice Miller in Bomac 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/or determining whether the exercise of that discretion is justified and calls into question their utility to users of the patent system. This is particularly so now that the Commissioner seems to have dispensed with issuing "practice notes" in favour of Guidelines which have no official status.

The Outlook - Proceed With Caution

It is hoped that the situation will be remedied under the new Patents Bill (which, once enacted, will come into force in late 2012 following the drafting of Regulations), either by providing more guidance to affected parties in the Regulations themselves, or affording some official status to the Guidelines. In the meantime it appears that the Commissioner and the Courts will be guided by the merits of the application on a case by case basis, although there may be some scope to persuade the grant or refusal of an application based on precedent. Either way it would be prudent to retain the services of a practitioner with experience in patent opposition matters before embarking down this increasingly difficult path.

By Ian Finch, Partner