Mistakes by staff of Israel’s largest patent firm considered unavoidable

Centocor Ortho Biotech Inc. received regulatory approval for a pharmaceutical preparation described in 154325.  The patent, titled “ANTI-IL-12 ANTIBODIES, COMPOSITIONS, METHODS AND USES”, is the national phase entry of PCT/US2001/024720.

The wonder drug treatment described promises to be of benefit for treating psoriasis and multiple sclerosis amongst other things. The claimset of the PCT application is somewhat reminiscent of claims made in Matthew 11:5.

Like other developed countries, Israel allows patent term extensions for basic pharmaceutical patents.  The rationale is that regulatory approval delays commercialization of new drugs.  The relevant law is the amendment to Section 64 of the Israel Law Patent Law 1967.  Under Section 64, if a drug does not enjoy patent protection for at least 14 years after obtaining regulatory approval in at least one country offering patent term extensions, the period of protection in Israel may be extended for up to five additional years to ensure 14 years of protection. Under Section 64O of the Law, the request for patent term extension must be filed within 2 months of regulatory approval. Until a patent issues, its term cannot be extended of course. The previous commissioner ruled that a request for Patent Term Extension must, in such circumstances, be filed within 3 months of allowance.

The law is clear. To be entitled to benefit from this extension which discriminates not just against the generic industries but also against the health funds, basket of drugs and the public who will have to pay more for treatments, it is necessary to submit paperwork in a timely manner and intention is not enough. The Law states categorically that the only exception is circumstances beyond the control of the applicant or his representatives. This is not the case here. the representatives made a mistake. 

Now section 164 A1 of the patent law states that:

164.(a) The Registrar may, if he sees reasonable cause for doing so, extend any time prescribed by this Law or by regulations under it for the performance of anything at the Office or before the Registrar, except for…section 64… unless he is satisfied that the application in Israel was not submitted on time because of circumstances over which the applicant and his representative had no control and which could not be prevented;

The standard for obtaining an extension is thus neither ‘unintentional’ nor ‘due care’. The standard required by the law is whether the circumstances were unavoidable. What this means, is that the period for filing a request for patent term extension is to be strictly enforced unless there are circumstances beyond the control of the applicant or his representative.

Indeed, where the standard required is Due Care, as it is for extending the 30 month national phase entry deadline for PCT applications, the term ‘due care’ is understood to mean Force Majeure, see here .

From the affidavits submitted by employees of the agents for applicant (Reinhold Cohen Patent Attorneys) it is clear that, despite the firm being organized and having procedures in place to cover patent term extensions, there was human error. The deadline was missed and this was discovered seven months later. 

Whether this is or is not fairly described as ‘unintentional’ or as the agent for applicant exhibiting ‘due care’ is immaterial. Such circumstances cannot fairly be described as being ‘circumstances over which the applicant and his representative had no control and which could not be prevented‘ unless one rules that human error is unavoidable.  There was no earthquake or natural disaster; there was no war. Nor was there a postal strike. A paralegal and her supervisor both messed up. It happens.

The deputy commissioner was correct that the ramifications of the decision will only be relevant in nine years from now. She was also correct in accepting the validity of the applicant’s submission that the damage may cause the applicant irreparable harm. However, as I see it, these considerations are not relevant and cannot ‘tip the balance in favor of the applicant’ the law seems to be unequivocal. Under the law the registrar does not have the discretion to provide a patent term extension in cases that are preventable. RCIP like other Israel firms is engaged in what is termed ‘risk management’. They could have thrown more resources at ensuring tha the deadline wasn’t missed. They could have had two independent docketing systems to guarantee full redundancy. They could have a partner of the firm personally review all docket dates.  There are a number of possibilities. The standard is not what is reasonable, but what is avoidable.

Particularly worrying is the reliance by the Deputy Commissioner on the internal procedures in RCIP to indicate that the mistake was unavoidable since I have no doubt that RCIP will have changed their internal procedures to make sure that whatever human error caused the mistake it won’t be repeated.  

Smaller IP firms (which is everyone else in Israel except for Teva and the patent office) probably don’t handle enough patent term extension requests to have specific procedures for so doing. They can, nevertheless, handle such requests competently. For example, in the past, my previous firm (JMB, Factor & Co) successfully handled such requests on occasion.

Should patent term extensions be a monopoly of the largest firm simply because they are big enough to have procedures for such items, and also big enough to lose track of such cases for over seven months?  

Arguably rulings on this type of case are too important to be delegated to a deputy commissioner who is only recently appointed. On the other hand, Commissioner Asa Kling is a former RCIP employee so obviously could not rule on this himself.

Even were the standard to be ‘Due care’ we note that the Israel Patent Office understands this term for late entry into the national phase in a very strict manner indeed. See due-care. Indeed, a case I handled for a Korean applicant whose Korean attorney thought there were 31 months and not 30 months was not allowed. So this decision wrongly understands “unavoidable” as being synonymous with “due care” and then considers local agents of record missing something by seven months despite them having procedures in place, as being consistent with due care.   

There is a lot of international pressure exerted on Israel by the United States which alleges that the Israeli law is biased in favour of the generic industries. It is therefore worthwhile to note that in the famous Angiomax case in the US, where the 60 day period was missed by a single day, the successive courts of appeal upheld the decision by the USPTO not to grant a patent term extension.  

The moral of the story should be that mistakes happen, and there is a cost for it.

In her ruling, which was a response to the request for extension by the party concerned, the balance was tipped in favour of the applicant. There was no note made of the fact that it is generally accepted that the public interest encourages competition and abhors monopolies. Patents are themselves an exception to this public interest where limited monopolistic protection is provided to patent applicants to encourage innovation and in return for teaching something new and significant.  Where the inventor has published or otherwise disclosed his invention before filing, he is not entitled to a patent at all. The publication may proceed filing of the priority application by only a day or so, but it is still novelty destroying prior art. 

Patent term extensions are designed to ensure that drug development can generate a profit to compensate for the enormous investment in R&D, clinical trials, etc. They are thus an exception to an exception.  The cost of human error to the patentee may well be enormous, but the exact same cost will now be borne by the diseased, the crippled and the ill, or by the Israeli tax payer via the public purse or the health funds paying monopolistic prices for up to five years more than would otherwise have to. It will also effect Teva and Unipharm who provide jobs in Israel and pay taxes locally.  

We note that a former deputy commissioner (Israel Axelrod – now a District Court Judge in Beer Sheva) creatively interpreted the previous patent term extension amendment in favour of drug developers who were also represented by Reinhold Cohen Patent Attorneys. That amendment was poorly drafted and his interpretation thereof was feasible. Nevertheless, the Knesset responded by amending the amendment and tightening the loophole to make his interpretation untenable. It is clear from this that the Israeli Parliament sees the correct balance between the various interests as providing the possibility for patent term extensions for the minimal period granted abroad, if all the paperwork is correctly submitted in a timely fashion. Indeed, were the 60 day deadline to be missed somewhere abroad rather than in Israel, resulting in no extension to be granted in another jurisdiction, the Israel Law would not allow an extension to be granted locally, so as not to discriminate against local generic players.

It seems that the present creative interpretation, which is wider than linguistically possible, discriminates against local manufacturers. We therefore suspect that Teva or Unipharm will appeal the decision to the courts and that it will be overturned.

Patent Term Extension for 154325 submitted by Reinhold Cohen Patent Attorneys and Gilat Bareket Lawyers on behalf of Centocor Ortho Biotech Inc. Jaqueline Bracha, Deputy Commissioner March 22, 2012.

4 Responses to Mistakes by staff of Israel’s largest patent firm considered unavoidable

  1. Joe Wyse says:

    Michael, surely you’re not insinuating that this decision was anything but beyond reproach. I’m shocked, shocked!

    • Hi Joe,

      I try to fairly and accurately report decisions and place in context of other decisions and the black letter law.

      I don’t think reproach is the correct word here. I do think that the decision is out of line with the approach taken by the Israel patent Office in the past. I also think the ruling is difficult to square with the standard of ‘unavoidable’, required by the law, which is generally taken to mean ‘force majeure’ and not misdocketing.

  2. […] preparation and the deadline was missed, not for the first time by the agents of applicant, see here. The time frame is extendible by the commissioner, but the standard should be despite the applicant […]

  3. A patent guy says:

    You can be sure that the validity of the patent term extension will be challenged on grounds that the office improperly allowed the late filing. And in the meantime you can use this decision to your clients’ benefits in other, less egregious cases where deadlines were missed.

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