Practical approach taken to “exceptional circumstances” under Patents Act 2013

The High Court of New Zealand has clarified the meaning of the phrase “exceptional circumstances” in the context of the Patents Regulations 2014, which accompany the Patents Act 2013. “Exceptional circumstances” has been given a meaning consistent with “unusual, out of the common run”, which is likely to be considered the more lenient end of the spectrum of interpretation.

The case concerned whether or not Intervet International B.V. was entitled to an extension of time to file a counterstatement against an application for revocation brought by Merial Inc. Merial filed an application for revocation and statement of case on 22 September 2015. Intervet was then given a due date of 23 November 2015 in order to file a counterstatement to the application for revocation. Due to a number of circumstances this deadline was missed, with the consequence that Intervet eventually applied for an extension of time under regulation 103 of the Patents Regulations 2014 in order to file the counterstatement. The following factors were relied on by Intervet to establish the “exceptional circumstances” required to justify the extension:

  • the failure of Intervet’s agent to open a file relating to the revocation and the absence of flags due to the file not being opened;
  • different docketing practices between offices of Intervet’s agent;
  • the failure of the client to give instructions in time despite being advised of the deadline;
  • that settlement discussions were ongoing;
  • time differences; and
  • a mistake by Intervet’s attorney in terms of the applicable regulation, believing that the old regulation applied with a more lenient test.

The decision of the Intellectual Property Office of New Zealand (IPONZ) to grant the extension was then opposed by Merial on the basis that these were not exceptional circumstances.

The Assistant Commissioner’s decision was in favour of Intervet, allowing the extension of time, and Merial subsequently appealed to the High Court.

In the High Court Simon France J dismissed the appeal, ruling in favour of Intervet and determining that the Assistant Commissioner was correct in both law and fact. His honour determined that in the context of the Patents Act 2013 and Patents Regulations 2014 “exceptional circumstances” has a meaning consistent with “unusual, out of the common run” (at [30]). This construction of the phrase is consistent with that taken by the Supreme Court in the employment context in Creedy v Commissioner of Police [2008] NZSC 31, placing reliance on the ordinary meaning of the word “exceptional”.

In making this decision, Simon France J analysed the purposes of the Patents Act 2013, as well as considering submissions on behalf of the Appellant that “exceptional circumstances” is a higher threshold than mere “unusual or out of the ordinary”. This submission was based on the interpretation of “exceptional circumstances” taken under the Trade Marks Act 2002 by the High Court in Muir Electrical Co Pty Ltd v The Good Guys Group Ltd [2009] NZHC 2400 requiring circumstances “quite out of the ordinary”, a notably higher threshold.

While there were fears that a stringent approach consistent with the approach from Muir Electrical could have been taken to the construction of “exceptional circumstances” by the Courts, the decision provides a practical outcome for participants in the New Zealand patent system to allow for such “exceptional circumstances”.

The list of regulations in the Patents Regulations 2014 which use the phrase “exceptional circumstances” include:

  • regulation 16 regarding alternative document delivery;
  • regulation 78(3) relating to the deadline for responding to an examination report;
  • regulation 103(3) relating to the extension of time for filing a counter-statement to an application for revocation;
  • regulation 147 which provides for general extensions of time;
  • regulation 149 which provides for waiver of certain regulations in exceptional circumstances;
  • regulation 161 which provides extensions for filing a document or taking a step in a proceeding and;
  • regulation 165 for filing evidence out of time.

With situations involving “exceptional circumstances” relatively rare by their nature, we look forward to seeing how IPONZ applies the decision in Merial Inc v Intervet International B.V. [2017] NZHC 2918. If you have any comments or questions on this, or any other intellectual property matter, please contact us.

Jesse Strafford - December 2017

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