The Israel Patent Office has ruled that an inadequate payment occurring in a manual docketing system is unreasonable because IP firms should have computerized systems. Despite the client wanting to renew a patent, the attorney of record taking steps to renew, but making a mistake, and attempting to rectify on discovering the error which the Israel Patent Office could have (and in my opinion should have) brought to attorney’s attention, the patent cannot be reinstated!
Asterias Biotherapeutics Inc. owned Israel Patent Number 159324 “A method of differentiating PPS cells into a population of neural cells using TGF-8 super family antagonists”. The patent was filed on 20 June 2002 and issued on 31 July 2o12, so the Applicant’s representative, Colb, should have paid the first, second and third renewals for years 1-6, 6-10 and 10-14. They inadvertently only paid the first and second renewal and the IPO sent a certificate for the second renewal but failed to note that the third renewal should also have been paid. The patent lapsed and this fact published in the August 2013 journal.
Asterias Biotherapeutics, represented by Colb, attempted to reinstate the patent by arguing that there was a mistake by an office worker of the Agent of Record, and only the first and second renewals were paid. The worker docketed the next renewal for 20 June 2016. This date was calculated manually and was docketed in a diary by hand as is clear from an appendix to the submission to reinstate the patent. As the June deadline approached, the status of the patent was checked and it was discovered to have inadvertently lapsed. The Patent Office confirms receipt of the first two renewals and issued a renewal certificate for years 7-10.
The Deputy Commissioner ruled that there is no doubt that the Applicant wanted to renew the patent and that close to realizing that it had lapsed they took steps to revive the patent. However, under Section 60 of the Israel Patent Law 1967, there is a further consideration, namely whether the circumstances leading to the renewal not being paid can be considered reasonable. The Deputy Commissioner, Ms Bracha was not convinced that the Agent of Record had behaved reasonably. She was unclear as to whether the renewal dates were calculated and recorded manually or whether they used a computerized system as is generally the case. Therefore the request for reinstatement is denied.
I strongly object to this ruling. Any computer system ultimately will require a person to enter data and to correctly act upon it. The Israel Patent Office has successfully computerized itself over recent years but still makes mistakes. I’ve seen papers from other attorneys relating to other applications misfiled by the Israel Patent Office in applications that I am responsible for. Other patent offices around the world still use manual ledgers.Before setting up my own practice, I worked at Seligsohn & Gabrieli which was then run by the late Arnan Gabrieli. He was old-fashioned and didn’t believe in computerization and saw computers as electronic typewriters. Everything was docketed by hand in ledgers by a receptionist. She was diligent as she knew that any mistakes would cost her her job. The system, though primitive, worked.
The Law does not require computerized docketing. Nor do the regulations. Computerization enables streamlining and staff reductions which may result in lower operating costs that may be passed onto the clients as lower service charges. It is more efficient. It is not, however, more reliable. Ultimately it relies on humans entering data into a computer and a wrong keystroke can result in an error. Mistakes happen in both manual and automated systems.
I really do not know how many IP firms use manual diaries, how many use spreadsheets and how many have expensive software. I do know that some software has proven unreliable. Some vendors have gone out of business and some firms have not got around to selecting renewal or docketing software. The difference is one of setup costs and operating costs. I am not sure that any one is more reliable. Ultimately a person has to look at the record and typed instructions into the IPO website to pay the renewal on line.
In the USPTO website, one has to enter a patent number and the corresponding application number so that the two numbers have to correspond. This safety feature prevents mistyping causing an error in identifying a particular patent. The USPTO renewal interface not only informs the user that a payment is or is not due, but calculates the amount and whether extension fees are required. In contrast, the IPO system is not, or at least was not automated. Typing the patent number, the fee is not calculated automatically. A person still had to type in that he was paying the first, second (and third) renewal, possibly with extension fees. This stage is prone to mistakes. Even if handled by a patent attorney and not a
paramedic paralegal mistakes can and do happen.
Until recently, once one had paid online, one had to print out and forward the ruling to the patent office. Sometimes the system crashes and one has to start again. One pays by credit card on the Israel Patent Office website but at least until recently, one then had to print out the payment slip, send it physically to the patent office and they had to correctly enter the details and then print out a certificate. I had a case that went abandoned and was revived where I could prove that the payment was made and was received by the Israel Patent Office because I paid renewal fees for two separate cases on the same A4 receipt, and only one was docketed by the Israel Patent Office. Since I had paid and sent them the proof of payment, clearly the data was entered wrongly their end. It happens. It happens at the patent attorney end as well and will happen with both computerized systems or manual ones.
Now, Colb has a large and profitable, established practice. The docketing solution appropriate for him may be beyond the reach of smaller practices. But smaller practices grow. When does a firm need to graduate to a dedicated software practice and when can they rely on a spreadsheet or on a manual solution? If Colb successfully managed for decades with a manual system and built up the practice before computerized systems became available, should the firm be forced to change? The Israel Patent Office is justifiably proud of their ISO certification. Some patent firms have such certification, others do not. ISO requires procedures. It does not require these to be computerized.
As Colb has been found unacceptably negligent in not having a reasonable solution, Asterias Biotherapeutics can sue them for negligence and pharmaceutical patents that are worth renewing 12 years after filing and 13 years from priority may be extremely valuable. I do not believe that any IP firm can afford to insure themselves for claims of tens of millions of Shekels. I predict that Colb appeals this ruling to the courts. I hope that and appeal to the IPAA, the AIPPI, the IPR forum and other representative bodies to file amicus briefs supporting such an appeal.
In a recent posting, I argued that Einav Zilber wasa more appropriate chairperson of the Israel Patent Attorneys Association (IPAA) than her predecessor, the venerable Dr Meir Noam since he was previously the Commissioner of Patents and is thus conflicted if the Association has to challenge a Patent Office ruling or procedure. I think that this type of case amply demonstrates what I mean.
One more comment. Section 60 allows reinstatement if a mistake is reasonable. In one of her first rulings, Ms Bracha allowed a human error by Reinhold Cohen that resulted in a deadline being missed, to be extended. In that case, relating to patent term extensions, the Law (Section 64) requires the mistake to be unavoidable. It does not allow due care or unintentional mistakes to be rectified. Nevertheless she ruled that human errors are unavoidable. That ruling was in 2012, not long before this mistake occurred. Why didn’t she rule that RCIP should have had a computerized docketing system?