Divisional Deadlines Still Between a Rock and a Hard Place
In NXT Building System Pty Ltd 2023 NZIPOPAT 15 the Assistant Commissioner (AC) clarified that it is in principle possible to obtain an extension of time in which to request examination of a divisional patent application in New Zealand, in exceptional circumstances. The threshold for establishing exceptional circumstances is comparatively low because there is no requirement to prove that all parties involved acted with due diligence and prudence.
Background: New Zealand Patent Application No. 726018 entered national phase on 6 November 2016 with an effective filing date of 7 April 2015. Consequently, under regulation 71(a), the five year deadline to request examination of that application, and any related divisional applications, was 7 April 2020.
The introduction of this deadline in New Zealand has been concerning for practitioners for some time, due to the serious implications it can have on applicant’s rights and abilities to obtain patent protection in New Zealand.
In this case, it was always the applicant’s intention to file multiple divisional applications, because the application described at least six separate inventions. The applicant’s strategy was to file five divisional applications at the appropriate time before acceptance of the parent application. It is standard practice for many New Zealand patent attorneys to request postponement of acceptance for a period of 12 months either at the time a patent application is filed, or upon entry into national phase, or at the time of requesting examination. This practice ensures that applicants have an opportunity to file one or more divisional applications if necessary, before an application is officially accepted. Section 75 and Regulation 83 require that postponement of acceptance must be requested before acceptance, and that acceptance cannot be postponed for more than 12 months after the date of the first examination report. In this case, the first examination report issued on 28 May 2021 so the maximum period of postponement available was until 28 May 2022.
However, unfortunately, for various reasons explained in evidence in the proceedings, a request for postponement of acceptance was not made at any stage during the filing and prosecution of the application. The application was accepted on 15 March 2022. It was only then that the error or omission was realised.
Five divisional applications out of application 726018 were subsequently filed and an extension of time was sought under regulation 147 to request examination of the divisional applications. A request to correct an error or omission under Section 202 was also filed on the basis that the failure to request postponed acceptance prior to the application being accepted was an error or omission that should be corrected.
Correctable Error?: Before deciding whether to grant the extension of time under Regulation 147, the AC first had to consider whether the failure to request postponed acceptance could be corrected under section 202. The AC discussed two earlier decisions in which section 202 was successfully used to correct an error relating to postponement of acceptance. In Primapak LLC [2019] NZIPOPAT 1 postponement of acceptance was reinstated after it was found that the removal of the postponement of acceptance by the personal assistant of the applicant’s patent attorney went against the client’s clear instructions. In Magic Leap, Inc [2019] NZIPOPAT 8 postponement of acceptance was reinstated after it was found that the removal of the postponement of acceptance by the applicant’s patent attorney was done with a lack of awareness of a recent change in the client’s instructions. In this case however, the AC refused to allow the correction of error under Section 202, distinguishing the earlier cases on the basis that a postponement of acceptance was filed and its inadvertent removal was an identifiable error. The AC held that granting the correction of error request in this case would be contrary to the clear requirement under Regulation 83 that postponement of acceptance must be requested before acceptance.
As a consequence of this decision, the five divisional applications filed by the applicant could not proceed as divisional applications since they were not filed before acceptance of the parent application.
Exceptional Circumstances?: Although not required to do so, the AC went on to consider if the extension of time under Regulation 147 would have been granted had the application for correction of error been allowed. The AC noted that “exceptional” in the context of Regulation 147 simply means “unusual” or “the exception to the rule”. The evidence submitted on behalf of the applicant in this case was evidence from the applicant’s Australian patent attorney which included evidence relating to the history of representation and the patent filing history, and in particular, outlined the deficiencies in the patent management software used by the attorney (namely that it did not include pre-set date reminders specific to New Zealand and therefore the five year deadline for filing and requesting examination of divisional applications was not monitored) and that, in combination with the attorney being a sole practitioner with no staff, working from home with young children, and the added complications of Covid-19 during March 2020, was what led to the errors in managing this case. The AC found that this particular combination of circumstances was unusual and thus exceptional, and that the extension of time would have been granted in these circumstances. The AC noted that the exercise of discretion under Regulation 147 does not require an assessment of whether any of the parties concerned had in any way failed to act with due diligence and prudence. If that was a requirement, the extension would have been refused based on the evidence submitted.
Another point that was briefly discussed in this case was the timing issues relating to examination. In this case, the deadline to request examination of divisional applications had expired over a year before the parent application was examined, and long before the divisional applications were filed. The AC noted that it is not unusual for the deadline to expire before the parent application is examined, or during examination, and therefore possibly before a need to file a divisional application becomes evident (for example, as a consequence of a unity of invention objection being raised). The AC made the point that such circumstances are not unusual and therefore cannot be relied on as an exceptional circumstance for obtaining an extension of time under Regulation 147. This aspect of the decision is therefore of little comfort for those prosecuting patent applications in New Zealand, and means that practitioners and applicants must continue to be very vigilant and proactive when considering the need to file divisional applications in New Zealand. Currently, there are significant delays in patent examination in New Zealand, with first examination reports taking about 18-months to issue for mechanical and ICT inventions, 29 months for chemical inventions, and 38 months for biotech inventions. If examination is not requested early in New Zealand, it is possible that applicants will not become aware of the need for filing a divisional application (for example, to address a unity of invention objection) until well after the five year deadline for requesting examination of divisional applications has expired, and will therefore be prevented from obtaining additional patent protection in divisional applications, unless other exceptional circumstances can be established that are sufficient to obtain an extension of time. This case is at least helpful in providing practitioners and applicants with some guidance as to what types of circumstances would be considered unusual enough to warrant an extension being granted under Regulation 147.
It is also worth noting that New Zealand legislation relating to the filing and prosecution of divisional applications is out of step with other jurisdictions, in particular Australia, where the five year deadline to request examination for divisional applications starts from the date of filing of the divisional application, not from the date of filing of the parent application, as the case is in New Zealand. Furthermore, in Australia, a divisional application can be filed any time up to three months after publication of acceptance of the application. Therefore, the applicant in this case would not have suffered the same disadvantages in Australia since the five divisional applications could still have been filed after acceptance, and there would have been plenty of time to request examination of those applications.
Authors: Quinn Miller and Sally Paterson and Tom Robertson
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