22 Jan Australian Patent Update: Can a Court direct amendments to overcome its own ruling on patent validity?
Australian Patent Decision confirms that a Court can direct amendments to overcome the Court’s own ruling on the question of the validity of the patent.
Branhaven LLC (Branhaven) and Cargill, Inc. (Cargill) were co-applicants of an Australian patent application (Application No. 2010202253) that related to using gene-association analyses such as correlating single nucleotide polymorphisms (SNPs) with traits of bovine species to improve selective breeding techniques for cattle. Meat and Livestock Australia Limited (MLA) opposed the grant of this patent application at the Australian Patent Office. The delegate of the Commissioner of Patents decided that the opposition failed on all grounds except one on lack of clarity and an aspect of manner of manufacture with respect to one claim (claim 13) (Meat & Livestock Australia Limited and Dairy Australia Limited v Cargill, Inc. and Branhaven LLC  APO 26). MLA appealed to the Federal Court of Australia (FCA) against the delegate’s decision. Since the patent application was filed after 1 April 2002 and examination requested before 15 April 2013, the amendments introduced under the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) did not apply to this decision.
The Federal Court provided two rulings. In the first ruling, the FCA rejected all of MLA’s principal grounds of opposition and its corresponding grounds of appeal (Meat & Livestock Australia Limited v Cargill, Inc  FCA 51). The FCA ordered both parties to file submissions detailing steps required to deal with the application including proposing amendments to the claims. Branhaven proposed to amend various claims under s 105(1A) of the Patents Act 1990 (Cth) (the Act) to overcome the issues raised in the principal reasons provided in the first decision by the judge, Beach J. MLA opposed the proposed amendments stating various grounds of opposition including:
1. The power and jurisdiction of Beach J were exhausted when he decided that the unamended claims of the patent application were invalid, and that s 105(1A) cannot confer power and jurisdiction where it does not exist.
2. The observations provided by Beach J in the first decision in his principal reasons regarding appropriate amendments did not answer the question of whether he had the jurisdiction to deal with any amendments.
3. The Commissioner of Patents’ practice does not clarify whether the FCA’s exercise of federal judicial power rather than administrative power has jurisdiction to allow patent application amendments or to exercise analogous power.
4. The proposed amendments are not allowable under s 102(1) of the Act.
5. The proposed amendments are not allowable under s 102(2)(b) of the Act because the specification would not comply with s 40(3) and s 40 (2)(b) of the Act.
In considering the submissions by both parties in the second ruling, the FCA allowed the proposed amendments to the patent application and rejected all of MLA’s principal arguments except the s 105(1A) discretionary power argument, wherein the FCA provided an explanation for the relevant factors considered if a discretionary decision were to be made (Meat & Livestock Australia Limited v Cargill, Inc (No 2)  FCA 33). In July 2018, Cargill assigned all interest in the patent application to SelecTraits Genomics LLC (SelecTraits).
MLA decided to submit an application for leave to appeal the second ruling of the primary judge, Beach J, which was considered in the most recent decision of Meat and Livestock Australia Limited v Branhaven LLC  FCAFC 171 on 08 October 2020. Branhaven and SelecTraits were both respondents in this appeal application. MLA put forth two grounds in its application for leave to appeal the FCA’s decision. First, MLA asserted that s 105(1A) of the Act was not properly construed with respect to deciding whether the primary judge, Beach J, had the jurisdiction to make the order to amend the claims as proposed by Branhaven. Second, it stated that the primary judge had made a clear error in their analysis of the complete specification and the scope of the disclosure, and applied an incorrect legal test in determining whether the proposed amendments to the patent application satisfied the requirements of ss 102(1)-(2) of the Act.
s 102 What amendments are not allowable?
Amendment of complete specification not allowable if amended specification claims or discloses matter extending beyond that disclosed in the filed specification
(1) An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim matter not in substance disclosed in the specification as filed.
Certain amendments of complete specification are not allowable after relevant time
(2) An amendment of a complete specification is not allowable after the relevant time if, as a result of the amendment:
(a) a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment; or
(b) the specification would not comply with subsection 40(2) or (3).
s 105 Amendments directed by court
Order for amendment during relevant proceedings
(1) In any relevant proceedings in relation to a patent, the court may, on the application of the patentee, by order direct the amendment of the patent request or the complete specification in the manner specified in the order.
Order for amendment during an appeal
(1A) 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.
Orders for amendment generally
(2) An order under subsection (1) or (1A) may be made subject to such terms (if any) as to costs, advertisements or otherwise, as the court thinks fit.
(3) The applicant for an order under subsection (1) or (1A) must give notice of an application for an order to the Commissioner, who is entitled to appear and be heard, and must appear if the court directs.
(4) A court is not to direct an amendment that is not allowable under section 102.
(5) The applicant must file a copy of an order within the prescribed period.
(6) On the filing of a copy of an order, the patent request or complete specification is to be taken to have been amended in the manner specified in the order.
s 112A Decisions on appeal
A complete specification relating to a patent application must not be amended, except under section 105, if:
(a) an appeal against a decision or direction of the Commissioner has been made to the Federal Court in relation to the specification; and
(b) the appeal, and any proceedings resulting from it, have not been finally determined, withdrawn or otherwise disposed of.
As mentioned earlier, s 105(1A) and s 112A were introduced into the Act by the Raising of the Bar Act. Prior to introducing s 105(1A), the FCA had no power to direct amendments of a patent application in an appeal brought in respect of a decision by the Commissioner under s 60(4) of the Act.
Among other amendments, the focus of the judgement was on an amendment to claim 1 wherein the words “and is in linkage disequilibrium with the SNP at position 300 with an r2 value of ≥0.7” were introduced. The amended claim covered a method of identifying a bovine trait using its nucleic acid sample and identifying at least three SNPs, each significantly associated with the said trait and one of the SNPs located at position 300 on one of the relevant contigs or within the range of 500000 nucleotides on either side of position 300 on any relevant contigs, and which is in linkage disequilibrium with the SNP at that position 300 and has an r2 value of 0.7 or greater.
In regards to MLA’s first ground in their application for leave to appeal, the Full Court considered s 105(1A) of the Raising the Bar Act which expanded the Court’s power to deal with amendments of patent applications under appeal. The Full Court decided that Beach J had jurisdiction over the amended patent application and that the publication of Beach J’s first set of primary reasons did not bring the proceeding to an end, as argued by MLA. Therefore, this did not dispose of the appeal as no order was made to that effect. The Full Court held that his Honour Beach J had clearly stated in his first set of reasons that he has refrained from making an order until any amendment that might be proposed has been dealt with.
MLA’s second substantive argument was that Beach J had erred in allowing the proposed amendments. The main issue was that unamended claim 1 had neither explicitly stated a ‘Linkage Disequilibrium’ requirement for the relevant SNPs nor the degree of Linkage Disequilibrium required. However, irrespective of these facts, Beach J had allowed the amendments on the grounds that they were limiting and had in substance been disclosed in the specification. Although the Full Court asserted that if a claim was amended to be narrower than the disclosure in the specification, then it would be fairly based on the disclosure, it did state that in some situations this may not be true. In this case, however, the Full Court accepted MLA’s assertion that the unamended specification did not mention r2 values. However, the Full Court agreed with Beach J’s decision to accept that the r2 values were broadly equivalent to the Linkage Disequilibrium values, which was based on expert evidence.
Thus, the application for leave to appeal was dismissed and MLA ordered to pay the respondent costs for the application. The patent application has been granted in its proposed amended form.
This decision clarifies that the Full Court can direct amendments at any stage where validity is in play. According to the Full Court, section 105(1A) was designed to give the Court power to consider amendments “while an appeal is on foot.” Therefore, any potential patent litigants should incorporate this possibility into their strategies.