Facts:

This was an appeal by NXT Building Systems Pty Limited (‘NXT’) against the decision of the Commissioner of Patents refusing to correct an error in NXT’s request to postpone acceptance of its patent application.

NXT filed a patent application for six inventions, always intending to divide these into six separate divisional applications before the parent application was accepted.  Due to errors by its attorneys, NXT failed to file the divisional applications before the parent application was accepted.  This resulted in a loss of protection for five of NXT’s inventions.  Section 34(2) Patents Act 2013 provides that a divisional application may only be made before acceptance of the patent application.

Sections 75 allows an applicant to request postponement of acceptance to ensure that the patent application is not accepted before the specified postponement date.  This is to allow an application to file divisional applications.  Reg 83(1) Patents Regulations 2014 requires that such a postponement request must be filed before the complete specification is accepted.

When completing the electronic patent application form on filing, NXT’s then attorneys did not set the postponement acceptance date as 12 months.  They left the default setting of “0” and did not change this to “12”.  A second attorney that took over conduct of the application did not notice this failure.

The patent application was accepted on 15 March 2022.  NXT then filed the five intended divisional applications on 30 March 2022 with an extension of time application to claim divisional status.  This was declined on 1 April 2022.

On 5 April 2022 NXT requested a correction of error under s 202 to set the postponement acceptance date at “12” months in order to correct the date of acceptance of the parent and obtain patent protection for the five inventions via divisional applications.

The Commissioner accepted that there was an error or omission in the patent application i.e. the mistaken failure of the attorneys to request postponement of acceptance of the application.  However, the Commissioner held that the error correction request was tantamount to filing a notice requesting the Commissioner to postpone acceptance after the complete specification had been accepted.  This was contrary to Reg 83(1) which requires that such a request be notified to the Commissioner before the application is accepted.

NXT appealed.

In an interlocutory decision before the appeal, Cull J directed that the Commissioner be named as a respondent and that the Commissioner could participate in the appeal to defend his decision. This was because there was no other party to the proceedings to act as a contradictor and the Court would benefit from hearing the commissioner defend his decision   [12].

Where an appeal is against the exercise of a discretion a more limited appellate approach applies i.e. showing that there have been errors of law or principle or that the decision-maker took into account irrelevant considerations or was plainly wrong: May v May (1982) 1 NZFLR 165 (CA).  The more generous appellate approach in Austin Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103; (2007) 74 IPR 452 requires only that there has been an error on the part of the Commissioner.

Held,  allowing the appeal.

(1)             As the parties had not fully addressed the correct appeal test in their written submissions, the Court would consider the appeal on the May v May approach.  If NXT were successful on that basis, there was no need to consider the Austin Nichols’ test or to require further submissions [15].

(2)             The appeal would be allowed applying the May v May approach [16].

(3)             It was common ground that the Commissioner was correct to find that there was a mistake correctable under s 202 and that these were not errors of judgment or the result of poor strategy or misguided advice [31] and [33].

(4)             In each case the granting of an application under s 202 would result in correction of non–compliance with Reg 83(1).  As a matter of logic, correction of a failure to comply with the legislative requirement should not be refused on the basis that the correction would 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 [37].

(5)             The Commissioner’s reasoning revealed an error of law or principle or the taking into account of an irrelevant consideration (namely making non–compliance with the legal 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 [39] [44].

(6)             The purpose of the Patents Act expressed in s 3 and the open–textured wording of s 202 supported the broad approach that there are likely to be a wide range of factors that could be relevant to the exercise of the power to correct under that section.  At a high level, these factors included the effect on the interests of the patent holder, and the impact on the interests of third parties, and the potential effect on maintaining an efficient and effective patent system [42].

Primapak LLC [2019] NZIPOPAT 1; Magic Leap, Inc [2019] NZIPOPAT 8; Re Watership Pty Limited (1991) 4 TCLR 317 referred to. 

(7)             The balance of competing interests in this appeal favoured correction of the error [43]. Correction was appropriate having regard to the Act’s purpose, the impact of the error on NXT’s ability to protect its valuable inventions, and the absence of prejudice to third parties.  Any potential undermining of the statutory purpose of maintaining an efficient and effective patent system due to the attorneys’ conduct was insufficient to prevent correction in this case [43] and [45]. 

Editorial note:  

This decision does not finally decide the standard of appellate review where there is an appeal from a decision refusing correction of an error under s 202 Patents Act 2013.  For procedural reasons arising from the way counsel argued the case, La Hood J was able to decide the case on the more arduous May v May test but was not called on to consider whether the Austin Nichols’ approach to appellate review should properly apply.