Section 34 – Where an Opposition is dropped and the Adjudicator rules invalidity based on submissions

diamond

Section 34 of the Israel Patent Law enables the Adjudicator of a patent Opposition to step into the shoes of the Opposer and rule on the validity of the Opposed patent, even if the opposition is withdrawn.

IL 156034 relates to a system for detecting and mapping flaws in diamonds. The opposer Sarine Technologies submitted a user manual and an affidavit that showed that their competing system was prior art.

The Opposition was dropped, but Ms Bracha ruled that on the evidence, the patent was shown to have been invalid as lacking novelty, inventive step and adequate disclosure.

The Applicants, Serguei Borisovish Sivovolenko and Diamcad N.V and their attorneys, Pearl Cohen-Zedek Latzer Baratz creatively argued that since the Opposer’s expert witness testimony had gone unchallenged it could not be relied upon, and Section 36 should only be used in the most extreme circumstances. They also noted that a Russian court had ruled that a key publication was not being prior art.

Ms Bracha rejected this position as untenable and noted that since Applicant could have challenged the evidence, and failed to do so, it had effectively accepted its validity. The assertion that a Russian court had rejected a piece of evidence as being prior art was not supported by any documentation and anyway was hardly binding on the patent office.

Background 

This application is the national phase of a PCT application filed on 3 December 2001, which claims priority from a European application filed on 4 December 2000. The Application was allowed and published for opposition purposes in the March 2008 journal which published in June 2008 (things have improved since then).

In September 2008, Sarine Technologies LTD filed an opposition, however, on 9 December 2013 the parties announced that they were terminating the opposition without costs. This announcement followed the filing of claims and counter claims and evidence, and after a date for a hearing was set.

On 27 January 2014, the Deputy Commissioner Jacqueline Bracha used her authority under Section 34 to rule that on the submitted evidence, that the claimed invention lacked Novelty and Inventive Step and refused to allow the patent to issue.

On 26 March 2014, the parties challenged her ruling and requested a hearing. They claim to have dropped the affidavit and need to cross-examine the key witness for reasons of costs.

Applicant’s claims 

Applicant claimed that Section 34 which allows the commissioner to act as adversary, instead of merely umpiring an opposition was only to be used in exceptional cases. It only allows the Applicant an opportunity to review newly submitted evidence and not to review the examiner’s work and does not allow the commissioner to rule as if the opposition is not withdrawn. Relying on the user guide of the opposer’s system and on the affidavit of their witness is incompatible with the intention of the legislators intention behind Section 34. The Applicant claimed that wholesale reliance on section 34 would adversely affect the chances of parties coming to an amicable settlement and waste judicial resources.

The applicant claimed that the opposer’s system and user guide had not published and was not in the public domain, and thus the Regulation 74a ruling relying on these was invalid. To strengthen this argument, evidence was brought that in the corresponding Russian proceedings the court had ruled that the opposer’s system was not prior art.

The Applicants considered that there was no evidence that the competing system had been available to the public and, since the opposition was withdrawn, the applicant could not cross-examine Mr Caspi and consequently one could not rely on the User Guide as evidence of the competing system being prior art.

Since Ms Caspi was not cross examined on his statement as the opposition was dropped, it could not be relied upon as evidence. Furthermore, the evidence when submitted was to support the claims of his employer who were then opposing the patent and thus was hardly objective.

Furthermore, even were the competing system to be fairly considered prior art, the claimed invention was novel and inventive thereover due to it mapping flaws in diamonds and taking into account reflection and viewing angles. The opposing system modeled diamonds in three dimensions to measure them and not to locate flaws as claimed in the present system.

The opposition related to eight pieces of prior art and the Applicants claimed that only the refraction angle of the immersion media was measured and not that of the diamond itself.

Claim 4 provides a means of mapping flaws which is novel and inventive over the prior art.

Applicant claims that lacuna in the specification and in whether or not it is enabled as required by Section 12, are not grounds for opposition, and once allowed by the Examiner, cannot be addressed in Section 34 rulings. Finally, Applicant alleges that persons of the art would be able to implement the claimed invention having read the specification, and thus it was sufficiently enabled.

The Ruling

The patent application relates to a method and system for locating flaws in a diamond held in a holder

Claims 1 to 3 relate to a method for localizing inclusions in a diamond wherein

  • said diamond is fixed on a holder
  • A scan is taken of the outer surface of the diamond at an arbitrary initial position
  • The inclusion in the diamond is observed in at least a first and a second direction of observation
  • Wherein the translation and rotation for every direction of observation is registered with reference to the initial position
  • Wherein the registered translations and rotations, the scan of the outer surface and knowledge of the refractive index of the diamond are fed in a computer to calculate 3d image including the inclusion with respect to outer surface in order to localize the inclusion with respect to the outer surface of said diamond.

Claim 4 recites a holder, light source, rotation system for manipulating the holder, a scanner for scanning the face of the diamond, a camera or microscope, a computer and a system for applying the method of claims 1 to 3.

Section 34 grants the Commissioner authority to not grant a patent where an opposition if withdrawn if during the opposition grounds for not having allowed the patent were uncovered. There is little discussion of Section 34 in the case law as it is a relatively rare phenomenon.

The opposition process is considered as a continuation of the examination and is designed to prevent unjustified patents issuing. Merely having survived the formal examination does not, in and of itself entitle an applicant to a patent. The patent office uses the tools at its disposal to uncover prior art and the opposition provides interested parties the opportunity to bring additional art to the attention of the commissioner. Allowance is no guarantee that a patent will be granted.

The Deputy Commissioner considers the Opposition as a kind of judicial review and the Commissioner (or deputy Commissioner / adjudicator standing in his shoes) can review the examiner’s work and over rule it. He has the authority to consider all materials of record and the narrow interpretation proposed by Applicant is rejected.

As to the evidence, the user manual dated fro 1995 and shows that DiaExpert’s  competing system was available years before the application was filed.  When Opposer alleged that the system was on sale from 1996, this was not challenged by Applicant. Now that the opposition has been dropped, there is still no evidence that challenged the availability of the system from 1996. In such cases, the Applicant has to provide evidence rebutting the assumption of availability. The purpose of the Patent Law is to prevent ideas already in the public domain from being patented. Without evidence to the contrary, Ms Bracha saw no reason to reverse her decision that the manual was in the public domain and was prior art. Furthermore, Applicant had had an opportunity to challenge the Opposer’s submission that the system and its user manual was prior art and had not done so.

The assertion that a Russian Court had accepted that the opposer’s system was not prior art was not backed up with any evidence, so Ms Bracha saw no reason to relate to it. Indeed, a ruling by a different court is not binding in Israel.

Mr Caspi’s affidavit went unchallenged. That does not mean that since the Applicant chose not to challenge it, the affidavit is not admissible. Rather, it appears to have been accepted as unchallenged. Both the Applicant and Ms Bracha could have cross-examined Mr Caspi, but decided to accept his testimony. True, he was a witness for the opposition and an employee of theirs, but that is of interest only when deciding how much weight to place on a testimony when challenged. No substantive grounds to challenge this testimony were submitted. The court needs to be wary of accepting evidence at face value submitted by those with invested interest, but the Applicant could have cross-examined the witness and chose not to.

When combining the user manual and the other pieces of prior art, claims 1 to 3 and 4 all lack novelty and inventive step. Ms Bracha went on to argue that Section 12 was also fair grounds to reject a patent during oppositions, since Section 34 allows the adjudicator at the patent office to refuse to grant a patent on any grounds under which it never should have been allowed.

Section 34 ruling concerning IL 156034 to Serguei Borisovish Sivovolenko and Diamcad N.V. Ruling by Ms Bracha 25 January 2015.

COMMENTS

The Deputy Commissioner is correct on all counts. The Opposer is really serving the public interest in challenging the validity of allowed patents. In addition to personal commercial considerations, the opposer represents the public. Section 34 is designed to prevent the bribing or buying out of an opposer from resulting in an opposition being dropped and the patent issuing automatically.

The Patent Office is authorized to continue an opposition by stepping into the public’s shoes and has to consider the public interest, and must refrain from granting patent.

The arguments submitted in this case by Pearl Cohen Zedek Latzer Baratz are untenable. They seem to think that if their client comes to an arrangement with an opposer so that the opposer drops the opposition, the patent office should rubber stamp this state of affairs rather than to review the case on the evidence, contrary to Section 34.

Maybe PCZL may be congratulated on their creativity. Possibly as advocates for their client, they can be forgiven for filing spurious arguments without a chance of success. After all, when one goes out to do battle, one can only fight with the weapons available. In this case it seems that the applicant should have come to a settlement with the opposer before the evidence was submitted. Once the cat was out of the bag it was too late.

I am reminded that at a recent meeting between trademark examiners and the profession Ms Dor Cohen-Zedek, the head of the trademark department at PCZL argued that in competing marks cases and oppositions there should be a presumption of validity for her clients.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: