I’ve blogged before about how a good thing became less good when it was codified in the statute, specifically §17(c) of the Israel Patent statute, enacted in 1995, which codified what had until then been an Israel PTO practice: you get a corresponding patent allowed in certain other jurisdictions, and if you amend the claims in Israel to correspond to the allowed foreign claims, you can piggy-back on that allowance to gain allowance in Israel. The policy was put in place at a time when the ILPTO was overloaded with work. And while the ILPTO has in past 10 years significantly decreased its examination backlog, §17(c) remains on the books (at least for now), and for many applicants presents a way lowering their world-wide patent prosecution costs, by allowing them to leverage prosecution in larger, more important jurisdictions, such as the USA, Europe and Japan, to obtain a low-cost allowance in tiny Israel.
As an ILPTO policy, the office had some flexibility in its implementation of this practice. But now that it’s a statutory provision, the office, at least for the past 15 years or so, feels it no longer has such flexibility. Hence, since the statute says you can piggy-back on a granted patent, but not an allowance, the ILPTO now makes applicants wait for the grant of the foreign patent. Similarly, because of poor statutory drafting, the ILPTO won’t let applicants springboard from a corresponding patent that constitutes a corresponding national phase PCT filing if the PCT application doesn’t claim priority from an earlier application. And whereas in the past you could convert US method-of-treatment claims to Swiss-type or purpose-directed-product claims and still get those claims allowed on basis of the granted US method-of-treatment claims, in the early 2000’s the ILPTO decided it was precluded by the language of §17(c) from doing so.
Now the ILPTO wants to restrict §17(c) even more, but in a way that I don’t think the statute authorizes it to do. But first some background.
In Israel, when prosecution on the merits concludes, there are two important dates to keep in mind: the date of acceptance of the application, and the date of grant of the patent. “Acceptance” occurs after the acceptance fee is paid, when notice that the application has been allowed is published in the Patents Journal under §26. This begins a three-month period to oppose the grant of the patent. If an opposition is filed, pre-grant opposition proceedings ensue. If no opposition is filed (or if the opposition is rejected and no appeal of the decision filed with the district court), the patent automatically grants (§35). So if the acceptance occurs upon publication per §26 on December 31, and no opposition is filed by the end of the day on the following March 31, on April 1 the patent automatically grants.
When §17(c) was enacted, the statute was also amended to include §17(e), which says that up until the time of the grant of the patent, the applicant must inform the ILPTO if opposition or cancellation proceedings were instituted against the foreign patent which served as the basis for the §17(c) request. §17(e) does not state that the ILPTO may take any steps as a result of being so informed. Recently, though – viz., November 2020 – someone at the ILPTO decided that if opposition or cancellation proceedings are instituted against the foreign patent prior to the acceptance of the application, that’s sufficient reason to withdraw the allowance, and it wrote this into Commissioner’s Circular notice no. 035/2017. Curiously, when this Circular was first published in early 2017, it didn’t say anything about returning §17(c)-allowed applications to examination.
I’m not sure of the ILPTO’s legal justification for this practice – I don’t recall seeing reasons for the change to this language when it was proposed just two months ago, and no reasons seems to be given on the ILPTO’s web site. I suspect, however, that that justification (and I use the term loosely) resides in §17(d), which says that the Commissioner, his deputy or the chief examiner may refuse to accept an application for which a §17(c) request was made if the application doesn’t meet the requirements of §17(c), or if there is “another special reason not to accept the application”. The former condition seems obvious: if an application doesn’t meet the requirements of §17(c), then it’s not allowable under §17(c) (duh!), and if an examiner mistakenly concluded that the application met the requirements of §17(c) and so informed the applicant, but it was later discovered (prior to acceptance) that the requirements of §17(c) weren’t fulfilled, the Commissioner has the authority under §17(d) to revoke the allowance per §17(c), and to return the application to regular examination.
If that was the ILPTO’s rationale or amended Circular 035/2017 in November, then it was flawed reasoning: the filing of an opposition to the foreign patent is irrelevant to the question of whether or not the dictates of §17(c) were fulfilled.
Alternatively, maybe the Office thinks that the filing of an opposition against the foreign patent constitutes “another special reason not to accept the application”. To the best of my knowledge that phrase has never been clearly defined, and maybe the Office feels it’s free to shoehorn this situation into that rubric.
Whatever the ILPTO’s rationale for the November revision of the Circular, I don’t think anyone would contest that up until the actual publication under §26, viz. until the “acceptance” of the application, the Commissioner has the authority to rescind the notice of allowance (whether allowed under §17(c) or under regular examination) if there is justified cause to do so, even though the statute doesn’t explicitly provide for this. If it becomes clear, for example, that the claims in fact recite something that defies the laws of physics, that might constitute justified cause to rescind the allowance and return the application to ex parte examination. During the re-opened prosecution of the application, the applicant will be able to present its case and, if necessary, freely amend the claims.
Having said that, I’m not convinced that the fact per se of the filing of an opposition to a corresponding patent upon which a §17(c) request was based constitutes justified cause to withdraw an allowance. The opposition might be frivolous. More importantly, if there are third parties that wish to oppose the grant of the patent in Israel, they have a three month window in which to do so following “acceptance” of the application. And they can file for cancellation of the patent after grant, and of course can avail themselves of an invalidity defense in infringement proceedings. If the Commissioner were to examine the prior art cited in the foreign opposition, and on that basis determine that there’s a genuine question of the allowability of one or more claims, that might justify withdrawing the allowance and reverting to examination. But not the mere filing per se of the opposition.
If that’s the case for withdrawal of an allowance before §26 publication and “acceptance”, it’s all the more so with regard to the period of time after that: the statute simply does not authorize the Commissioner to take any steps against a patent application once that publication occurs, unless a third party files an opposition.
[The fact that the period after “acceptance” is different than the period before “acceptance” is reflected in the in fact that, prior to “acceptance”, the applicant can amend its application pretty much as it sees fit, even introducing new matter (albeit usually being required to post-date that new matter, per §23), whereas after “acceptance”, amendment to the application is quite circumscribed, permitted on per §29 and §65.]
And yet, on January 19 – less than two months after aforesaid amendment of Circular 035/2017, the Commissioner published yet another proposed change to that very same newly-introduced sentence of that same Circular, according to which applications which are allowed under §17(c) will be returned to regular examination if after “acceptance” but prior to the grant of the patent, notice is filed with the ILPTO that opposition or cancellation proceedings have commenced against the foreign patent on which the §17(c) is based.
It seems a little odd that this proposed change is coming so soon on the heels of the previous change. Be that as it may, I can think of reasons why the ILPTO might want to institute such practice, but the statute simply doesn’t allow it: as explained above, once the application is “accepted”, the patent grants automatically after three months if no opposition is filed. Nothing in §17(e) abrogates that, or gives the Commissioner the power to withdraw the “acceptance”.
If the ILPTO wants to change the policy concerning §17(c) practice, then it needs seek that change via amendment of the statute, not by asserting it has powers that it doesn’t have.
Comments on the draft change to the Circular are due at that ILPTO by February 2 ([email protected]).