March 26, 2015

Opposition withdrawn but patent application refused: Lessons for Out-of-Court Agreements

Yair Yahalom, Partner
Yair Yahalom


Gilat, Bareket & Co.
Eran Bareket, Partner, Head of Legal Practice
Eran Bareket

Partner, Head of Legal Practice

Gilat, Bareket & Co.

Managing Partner

Reinhold Cohn Group

An Israeli patent application was opposed in the Israeli pre-grant opposition procedure and the opposition was withdrawn by consent of the parties. Exercising the authority provided by law to the Registrar to re-examine patentability in light of material submitted in an opposition where the opposition is withdrawn, the Deputy Patent Registrar refused to grant the patent, for reasons of lack of novelty, lack of inventive step and lack of enabling disclosure1 (“the Decision”). The Decision, jointly with others that followed a similar course, represent a growing trend of stricter scrutiny in cases of withdrawn oppositions. 

This was an opposition against Israeli patent application No. 156,034 in the name of Diamcad NV, relating to a method and apparatus for localizing inclusions in a diamond. The opposition was withdrawn as per an out-of-court agreement between the parties. Nonetheless, the patent application that was already accepted prior to the opposition was refused.

The application refused because under Section 34 of the Israeli Patents Law2 the Registrar has the power to re-examine a patent application following withdrawal of an opposition in light of materials submitted during pendency of the opposition. The Deputy Patent Registrar exercised this power and re-examined patentability and the Decision was the outcome of such re-examination. The material before the Deputy on which the Decision was based included affidavits of a senior employee of the opponent that were submitted as evidence, notwithstanding the fact that the affiant was not cross-examined3 due to the withdrawal of the opposition.

Following the withdrawal of the opposition, the Deputy Registrar issued a thorough decision explaining that she considers the invention to be prima facie non-patentable. The patent applicants were granted an opportunity to respond, and they did. The Deputy Registrar subsequently decided to hold a hearing to allow the applicants to either cross-examine the opponent’s affiant or alternatively submit an expert opinion or another affidavit in response. The applicants elected not to pursue any of these options. The final decision of the Deputy Registrar to refuse the application then followed.
Rejecting the arguments raised by the applicants the Deputy Registrar held that:

  1. Opposition proceedings are considered as a continuation of patent examination, in which patentability of the invention is re-examined. Accordingly, there is no difference between the purpose of the Article 34 proceedings and the purpose of the examination and opposition proceedings, allowing the Patent Registrar to examine the entire case in light of the new material disclosed during the opposition proceedings and, where relevant, reverse the Examiner’s patentability decision. All grounds that may be applied by an examiner in refusing an application, such as the lack of enabling disclosure, may be grounds for consideration in Article 34 proceedings. 
  2. In exercising its powers pursuant to Section 34 of the Patent Law, the Registrar is entitled to rely on information disclosed during the opposition, even if the patent applicant disputes the availability to the public of such information and even if such dispute was not resolved in the opposition. The term “new material” is wide enough to include any evidence of any kind, including documents and testimonies. 
  3. The fact that an affiant was not cross-examined does not render the affidavit itself to be inadmissible. When exercising the authority under Article 34, the Patent Registrar should weigh the evidentiary value of an affidavit in light of the fact that there was no cross-examination, but the lack of cross examination is not a bar to admissibility. This is particularly so in the case at hand where the applicants waived their right to cross-examination (this being a factor adding weight to the affidavits). 
  4. The fact that an affiant was an employee of the opponent does not render his affidavits a priori inadmissible or unreliable.

This Decision follows the line of several similar decisions in which the authority under Article 34 was exercised4. These decisions seem to signal a growing trend of more strict scrutiny applied in Section 34 review processes.

To our knowledge, the correct interpretation of Article 34 of the Patents Law was not yet adjudicated before the court. All the same, whether these recent decisions indicate a new trend or not, parties (especially applicants) who wish to reach a settlement agreement during opposition proceedings whereby the opponent will withdraw its opposition should be aware of this trend and calculate their actions accordingly. Several practical tips follow.

      • An applicant wishing to settle an opposition whereby the opponent will withdraw its opposition should try to do so before the opponent submits its evidence and preferably even before the opponent submits its statement of case. 
      • If the opponent has already submitted its evidence, the applicant should consider signing the settlement agreement after submitting its own evidence (and before the submissions of evidence in response by the opponent). 
      • If the settlement agreement was eventually signed after the opponent’s submission of evidence, the applicant should insist that the opponent’s affiants be obligated, if needed, to be cross-examined within the framework of proceedings according to Article 34 of the Patent Law. 
      • Applicants should be careful not to waive their right to cross examine the opponent’s affiants or their right to adduce counter evidence.


1 Decision dated January 25, 2015.

2 Article 34 of the Israeli Patents Law:

“If opposition was duly submitted under section 30 and was subsequently cancelled, then Registrar may refuse to grant the patent applied for, if, in the course of the opposition, he discovered material according to which the application should not have been accepted in the first place.”
(unofficial translation)

3 In opposition procedures the opposite party is given the opportunity to cross-examine the affiants of the other party.

4 For example, see the Deputy Registrar’s decision of 23.6.2014 relating to Patent Application No. 204070 and the Deputy Registrar’s decision of 30.3.2011 relating to Patent Application No. 147642; 

This article is provided for general information only. It is not intended as legal advice or opinion and cannot be relied upon as such. Advice on specific matters may be provided by our group’s attorneys.

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