Correction of error allowed by Court, right to pursue divisional applications allowed

Background

The New Zealand patent system allows for the filing of one or more divisional applications from an earlier New Zealand application (a ‘parent application’), provided that the divisional application is filed prior to acceptance of the parent application (and within five years of the filing date of the parent, but that’s a story for a different day). The New Zealand system also allows for an applicant to request postponement of acceptance, allowing an applicant to, amongst other things, preserve the right to file a divisional application. Divisional applications are frequently used to pursue the protection of inventions which are disclosed in the parent application but are not unified with the invention claimed in the parent.

In this case the Applicant filed a single New Zealand application which disclosed six distinct inventions, and always intended to divide the inventions into six separate applications. However, the attorneys for the applicant (the attorney changed during prosecution), failed to file a request for postponement of acceptance at any time prior to acceptance, meaning that the parent application proceeded to acceptance without any divisional application being filed.

Section 202 of the Patents Act 2013 allows the Commissioner to correct an error or omission by an applicant in the patent register, any patent, any patent application or any document filed in connection with the patent application. After discovering the error, the Applicant requested the Commissioner correct the omission by the applicant’s attorney in failing to request postponement of acceptance.

Decision of the Commissioner of Patents

The Commissioner of Patents refused to correct the omission, firstly through the examination team, then when a hearing was requested, in the decision of Assistant Commissioner Luiten in NXT Building System Pty Ltd [2023] NZIPOPAT 15.

The Assistant Commissioner was sympathetic to the circumstances surrounding the failure of the attorneys to request postponement of acceptance and considered there was an error or omission to be corrected. However, the Assistant Commissioner held at [33]-[34]:

“33. Nevertheless, the Applicant’s request to correct the error or omission in this case is, in effect, tantamount to filing a notice requesting the Commissioner to postpone acceptance of the complete specification after the complete specification is accepted. This is contrary to the requirement of r83(2) which requires that the Commissioner must be notified of a request to postpone acceptance under s75(1) before the application is accepted. The situation is distinguished from Primapak and Magic Leap where in both instances the Commissioner was notified of the request for postponement before the application was accepted.

34. For this reason I decline to correct the error or omission that I have been asked to correct: to effect the correction would be to bypass or nullify the clear requirement under r83(2) that the Commissioner must be notified of a request to postpone acceptance under s75(1) before the application is accepted.”

The Assistant Commissioner thus refused the correction on the grounds that it would nullify a requirement of the Act or Regulations.

Decision of the Court

The Applicant appealed the Commissioner’s decision to the High Court. Interestingly, the Commissioner wished and was allowed (by way of an interlocutory decision) to defend his decision.

Justice La Hood found that the Commissioner had erred in making non-compliance with the legislative provision determinative of whether a correction should be allowed (at 39):

“[39] However, as it stands, the Commissioner’s expressed reasoning reveals an error of law or principle, or the taking into account of an irrelevant consideration. Namely, making non-compliance with the legislative requirement inherent in the error to be corrected, and considered in isolation from the conduct that caused it, a determinative factor in assessing the s 202 application. Given this error, I need to fully consider the merits of NXT’s application.”

La Hood J then went on to consider the merits of the case having regard to the purpose in section 3 of the Patents Act 2013, and in particular section 3(a):

3 Purpose

The purposes of this Act are to—

(a) provide an efficient and effective patent system that— (i) promotes innovation and economic growth while providing an appropriate balance between the interests of inventors and patent owners and the interests of society as a whole;

Taking this into account the La Hood J found in favour of allowing the correction because (at [43]):

“(a) NXT’s clear intentions were not carried out by its attorneys with the result that, if the error is not corrected, they will lose valuable property rights in five of the six inventions in the parent application.

(b) NXT and its attorney acted quickly when they discovered the error.

(c) … There is no suggestion that the integrity of the register will be undermined by the correction because nobody looking at the register after 2016 could have been misled about the application. There is therefore no prejudice to third parties if the correction is made.

(d) In any event, any potential prejudice to third parties can be cured by requiring publication of the proposed correction pursuant to s 202(3), which is not opposed by the appellant.

(e) Although the error occurred on a number of occasions during the process, the non-compliance with legislative requirements was inherent in the errors that require correction. There has been no other non-compliance.

(f) I accept that the degree of the non-compliance with legislative requirements might be a relevant factor, but for the reasons already explained I do not consider it to be a material factor in this case (let alone a decisive one) when considered in isolation from the conduct that led to the errors.”

Comment

The outcome of the appeal in this case seems logical. As eloquently put by La Hood J at [37]:

“[A]s a matter of logic, correction of a failure to comply with a legislative requirement should not be refused on the basis that correction will remedy the legislative non-compliance. There would be no need for the correction if there had been compliance with the legislative requirement in the first place.”

Instead, a more comprehensive consideration of the circumstances surrounding the case is required. These factors include:

the intention of the applicant;

the speed in which the applicant acted;

the potential prejudice to third parties by the correction;

whether there are other avenues by which any such prejudice can be addressed; and

the degree of non-compliance with legislative requirements.

In somewhat of a warning to attorneys and applicants, La Hood J considered that the degree to which the applicant or its agents were at fault was also a relevant factor (at [43]):

“I consider that too readily correcting errors when attorneys do not have reasonable systems in place, or have otherwise acted incompetently, could undermine the statutory purpose of providing an efficient and effective patent system. Applicants and their attorneys should be incentivised to ensure that they invest in and maintain reasonable systems and instruct and employ competent practitioners. This will be undermined if mistakes are too readily corrected.”

David Nowak - September 2024