FEDERAL COURT OF AUSTRALIA

Commissioner of Patents v Sherman [2008] FCAFC 182

PATENTS – appeal under s 60(4) of the Patents Act 1990 (Cth) against the Commissioner’s decision on an opposition to a grant of patent – whether tender of evidence as to the  Commissioner’s decision, including the material on which it was based, inadmissible in the trial in this Court – whether Evidence Act 1995 (Cth) applies to such evidence – nature of opposition proceeding before the Commissioner – nature of appeal under s 60(4) of the Patents Act – effect of s 160(a) of the Patents Act – effect of O 58 r 8 of the Federal Court Rules – admissibility of evidence at the trial governed by Evidence Act 1995 (Cth)

EVIDENCE – admissibility of evidence as to the Commissioner’s decision and the material on which it was based – whether evidence as to the Commissioner’s decision irrelevant – whether evidence as to the material on which the Commissioner’s decision was based inadmissible as hearsay – evidence about the Commissioner’s decision relevant as jurisdictional fact and as the opinion of a person with technical expertise – this evidence and material on which the Commissioner’s decision was based is admissible under the Evidence Act 1995 (Cth)

PRACTICE AND PROCEDURE – whether leave to appeal against evidentiary ruling ought to be granted – case raises a matter of public importance – leave granted

Patents Act 1990 (Cth) ss 60(4), 160

Evidence Act 1995 (Cth) ss 4(1), 8(1), 9(1), 48(1)(b), 56(2), 59, 60, 76, 77, 79, 140, 190(3)(b)

Federal Court of Australia Act 1976 (Cth) ss 24, 24(1A), 38(1)

Federal Court Rules (Cth) O 58 r 8   

Epeabaka v Minister for Immigration and Multicultural Affairs (1997) 150 ALR 397 referred to
Jafferjee v Scarlett (1937) 57 CLR 115 cited
Kaiser Aluminum & Chemical Corporation v Reynolds Metal Company (1969) 120 CLR 136 referred to
Commissioner of Patents v Microcell Limited (1959) 102 CLR 232 cited
Denison Manufacturing Company v Monarch Marking Systems Incorporated (1983) 76 FLR 200 cited
F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 referred to
Caroma Sales Pty Ltd v Philmac Pty Ltd [1972-73] ALR 427 referred to
Brickwood Holdings Pty Ltd v ACI Operations Pty Ltd [1983] 2 VR 587 referred to
European Community v Commissioner of Patents (2006) 68 IPR 539 referred to
Cadbury Schweppes Plc v Effem Foods Pty Ltd (2006) 69 IPR 584 cited
Commissioner of Patents v Emperor Sports Pty Ltd (2006) 149 FCR 386 referred to
E I Du Pont de Nemours and Company v ICI Chemicals & Polymers Ltd (2003) 128 FCR 392 referred to
E I Du Pont de Nemours and Company v ICI Chemical Industries Plc (2002) 54 IPR 304 referred to
Neumann v Sons of the Desert SL [2008] FCA 1183 cited
Titan Mining & Engineering Pty Ltd v Arnall’s Engineering Pty Ltd (1988) 12 NSWLR 73 referred to
R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 cited
Merck & Co Inc v Sankyo Co Ltd (1992) 23 IPR 415 referred to
Genetics Institute Inc v Kirin-Amgen Inc (1999) 92 FCR 10 cited
Soncini v Registrar of Trade Marks (2001) 109 FCR 548 cited
Fina Research SA v Halliburton Energy Services Inc [2002] FCA 1505 cited
Commissioner of Taxation v Finn (1960) 103 CLR 165 cited
Federal Commissioner of Taxation v Lewis Berger & Sons (Australia) Ltd (1927) 39 CLR 468 cited
Federal Commissioner of Taxation v Sagar (1946) 71 CLR 421 cited
Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618 referred to

THE COMMISSIONER OF PATENTS v BERNARD CHARLES SHERMAN

VID 554 of 2008

HEEREY, KENNY AND MIDDLETON JJ

20 november 2008

MELBOURNE

THE COURT ORDERS THAT:

1.                  Leave to appeal be granted.

2.                  The appeal be allowed.

3.                  The ruling by the primary judge – that all but the first sentence of par 6, and pars 7 and 8 of the affidavit of Dr Steven Barker sworn on 14 February 2008 not be allowed to be read and that the tender of exhibits SB-2 and SB-3 to Dr Barker’s affidavit be rejected – be set aside; and in lieu thereof, order that the whole of the affidavit of Dr Barker including exhibits be admitted into evidence.

4.                  The parties file and serve any submissions on costs they wish to make within 14 days of the date hereof.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

the court:

1                     This is an application by the Commissioner of Patents for leave to appeal from a ruling of the primary judge on the admissibility of part of an affidavit and two exhibits thereto made at the commencement of the trial on 20 June 2008. Only the Commissioner appeared on the hearing before us.

2                     For the reasons stated below, we would grant leave to appeal and allow the appeal.

Factual and Procedural Background

3                     The relevant factual and procedural background is as follows. 

4                     On 1 March 2007, a delegate of the Commissioner of Patents gave a decision upholding the opposition by Merck & Co Inc to the grant of a patent arising from Patent Application No 697696 on the grounds of lack of novelty, inventive step and entitlement.  On 22 March 2007, Bernard Charles Sherman filed a notice of an appeal under s 60(4) of the Patents Act 1990 (Cth).  Merck filed a notice of contention and a statement of grounds of opposition and particulars of objection, both of which Merck subsequently withdrew with leave.  The Commissioner was added as a party to the appeal on the application of Mr Sherman.  The Court subsequently made orders that the Commissioner file and serve the “evidence to which she proposes to draw the Court’s attention” and a “memorandum setting out the respects in which it will be submitted that that evidence should be of assistance to the Court”.  In conformity with these orders, the Commissioner filed a memorandum dated 15 February 2008 and an affidavit of the delegate, Dr Steven Barker, sworn on 14 February 2008.  The Barker affidavit is set out in full in the reasons for judgment of the primary judge: see Sherman v Commissioner of Patents [2008] FCA 1026 at [4]. 

5                     In the 15 February 2008 memorandum, the Commissioner stated that she drew the Court’s attention to:

(a)        the decision of the delegate dated 1 March 2007;

(b)        the prior art citation WO 94/01093 (“the Rork citation”); and

(c)        the declaratory material filed by Merck in the opposition proceeding relating to the         novelty and inventiveness of the claims in light of the Rork citation.

Exhibited to the Barker affidavit were the delegate’s decision (“SB-1”), the Rork citation (“SB-2”) and what the delegate described as “copies of the declaratory evidence filed in the opposition proceeding by [Merck] and relied on by [him] in finding that the opposed application lacks novelty and inventive step in light of the Rork citation” and “a table [he had] prepared which identifies the relevant paragraphs within the declarations”.  The declaratory material and the table were “SB-3”.

6                     By a notice of motion dated 3 April 2008, Mr Sherman sought, amongst other things, an order that the Barker affidavit and its exhibits not be admitted into evidence.  Mr Sherman subsequently confined his challenge to paragraphs 6, 7 and 8 of the Barker affidavit and exhibits “SB-2” and “SB-3”, stating that he did not object to the decision of the delegate (“SB-1”) being admitted (along with the application in suit, the entry in the Official Journal of Patents dated 15 October 1998 advertising acceptance of the application in suit, and the notice of opposition dated 14 January 1999).

7                     As indicated above, the motion was heard when the proceeding came on for trial on 20 June 2008.  Also on this day, the Commissioner applied pursuant to O 58 r 8 of the Federal Court Rules (Cth) seeking to have the Barker affidavit and its exhibits admitted into evidence.  The primary judge heard arguments and reserved his judgment, ultimately ruling that all but the first sentence of paragraph 6, and paragraphs 7 and 8 of the Barker affidavit should not be read and the tender of exhibits “SB-2” and “SB-3” should be rejected: Sherman at [26].  The Commissioner seeks leave to appeal against this ruling and requests that, if leave is granted, then the Court also determine the appeal.  We have proceeded on this basis. 

The Primary Judge’s Decision

8                     The primary judge held that the Evidence Act 1995 (Cth) applied in a proceeding by way of an appeal under s 60(4) of the Patents Act.  His Honour rejected the proposition advanced by the Commissioner that the combined operation of s 8(1) of the Evidence Act and s 160(a) of the Patents Act meant that “all material that was before the delegate would be received into evidence in the court without further formality or requirement”: see Sherman at [13].  His Honour considered that there was “no reason to read [s 160] as implicitly travelling beyond its express terms, particularly where to do so would give rise to a conflict with other legislation expressly applicable to proceedings in the court”: see Sherman at [13].

9                     The primary judge was also unpersuaded by the Commissioner’s argument that s 38(1) of the Federal Court of Australia Act 1976 (Cth) and O 58 r 8(1) of the Rules evinced an intention that material admitted in opposition proceedings should be admissible on an appeal under s 60(4) of the Patents Act, without the need to comply with the Evidence Act.  His Honour held that, even if O 58 r 8(1) of the Rules “permit[ted] the reception into evidence of all material that had been before the delegate in opposition proceedings under the Patents Act, it could not have that effect as a matter of law”; and, in any case, O 58 r 8(1) did not purport to have such an effect: see Sherman at [15]. 

10                  The primary judge ruled that, save for the first sentence of paragraph 6 of the Barker affidavit, the balance of that paragraph was inadmissible under s 56(2) of the Evidence Act.  This was because the delegate’s opinion on novelty and lack of inventive step was irrelevant, these being matters for the Court to decide: see Sherman at [20].  His Honour also held that the Rork citation was inadmissible as a previous representation within the meaning of s 59(1) of the Evidence Act: see Sherman at [21].  In this context, his Honour rejected the Commissioner’s submission, made in reliance on s 190(3)(b) of the Evidence Act, that the application of s 59(1) would cause or involve unnecessary expense or delay.  His Honour held that there was no evidence before the Court to support this submission.   His Honour accepted that the Rork citation (“SB-2”) would be admissible as evidence of the prior art base for the purposes of novelty and inventive step, and that the Commissioner had satisfied the requirements of s 48(1)(b) of the Evidence Act.  His Honour held, however, that the Commissioner had not established that the Rork citation was publicly available before the priority date.  If the Commissioner proved publication (or the matter were admitted), then the Rork citation would, in his Honour’s view, become admissible.

11                  Finally, the primary judge held that the declarations exhibited to the Barker affidavit (“SB-3”) were inadmissible as previous representations within s 59(1) of the Evidence Act and, since “the declarations are sought to be tendered for proof of the substance of the contents of them, s 60 does not overcome this problem”: see Sherman at [23].  Furthermore, there was no evidentiary basis, so his Honour held, for an application of s 190(3)(b) of the Evidence Act in relation to the declarations.

12                  Accordingly, the primary judge ruled that “all but the first sentence of par 6, and pars 7-8” of the Barker affidavit and exhibits “SB-2” and “SB-3” were inadmissible.

Whether leave to appeal should be given

13                  The ruling under challenge cannot be appealed unless leave to appeal is given: see Federal Court of Australia Act 1976 (Cth), s 24(1A).  In the ordinary case, leave to appeal against an evidentiary ruling made at trial would not be given.  This case is exceptional, however, because it relates to a matter of fundamental importance in the conduct of appeals under s 60(4) of the Patents Act and, if it stands, the ruling of the primary judge will have a significant effect on the manner in which the Commissioner discharges her role both before the primary judge and in other proceedings of this kind.  This raises a matter of public importance, especially as the party who successfully opposed the grant of patent has withdrawn from the proceeding, leaving the Commissioner to act, having regard both to her position as the decision-maker making the primary decision and to the public interest: cf  Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 169 FCR 435 at [30].

The Commissioner’s submissions

14                  Before us as before the primary judge, the Commissioner made essentially two submissions.  First, the Commissioner argued that, in an appeal to the Federal Court against a decision of the Commissioner under s 60(4) of the Patents Act, s 160(a) of the Patents Act and O 58 r 8 of the Rules, read with ss 8(1) and 9(1) of the Evidence Act, made the evidence relied on by the Commissioner in making the contested decision admissible on the appeal, notwithstanding that such evidence would be inadmissible under other provisions of the Evidence Act (including s 59).

15                  Secondly, the Commissioner submitted that, in any event, exhibits “SB-2” and “SB-3” and paragraphs 6 (in its entirety), 7 and 8 of the Barker affidavit were admissible under the Evidence Act.

Consideration

16                  Section 8(1) of the Evidence Act is one of a number of provisions in Pt 1.2 of the Evidence Act that concern the application of that Act.   Section 8(1)  relevantly provides that the Evidence Act “does not affect the operation of the provisions of any other Act”.  Thus, where a provision of the Evidence Act is expressly and directly inconsistent with the provision of some other enactment, the provision of the other enactment will prevail.    Having regard to their statutory context, we agree with Finkelstein J in Epeabaka v Minister for Immigration and Multicultural Affairs (1997) 150 ALR 397 at 409, that s 8(1) (and s 9(1)) disclose a legislative intention that, where a relevant court is not required to observe the rules of evidence, the Evidence Act will not operate so as to impose that obligation.   As we explain below, we do not consider that s 160(a) operates to take evidence led on an appeal under s 60(4) of the Patents Act outside the ordinary rules of evidence and, in particular, the Evidence Act.  Accordingly, s 8(1) of the Evidence Act is inapplicable.

17                  In considering whether s 160(a) of the Patents Act discloses a legislative intention that the Court is not required to observe the rules of evidence in an appeal under s 60(4) of that Act, we first take account of the nature of a proceeding of this kind. 

18                  The fundamental principles governing an appeal against the Commissioner’s decision on an opposition to a grant of a patent are well settled.  First, an appeal under s 60(4) of the Patents Act in not an appeal in the strict sense.  Rather, it is a proceeding in the original jurisdiction of the Court and is conducted as a rehearing (sometimes referred to as a hearing de novo):  see Jafferjee v Scarlett (1937) 57 CLR 115 at 119 per Latham CJ; and Kaiser Aluminum & Chemical Corporation v Reynolds Metal Company (1969) 120 CLR 136 at 142 per Kitto J.  The Court upholds the opposition only if clearly satisfied that the patent, if granted, would be invalid: see Commissioner of Patents v Microcell Limited (1959) 102 CLR 232 at 251 per Dixon CJ, McTiernan, Fullagar, Taylor and Windeyer JJ; and Denison Manufacturing Company v Monarch Marking Systems Incorporated (1983) 76 FLR 200 at 201 per Smithers J and 215 per Franki J.  An appeal under s 60(4) of the Patents Act is different from some other “appeals” (as referred to in some other enactments) against administrative decisions that may be brought to this Court, where the Court decides whether the decision was correct in law, having regard to the evidence that was before the decision-maker at the time of making the decision.  In an appeal under s 60(4) of the Patents Act, the Court does not ask this question.

19                   Secondly, on an appeal under s 60(4) of the Patents Act, subject to the Court’s direction, the parties may lead evidence-in-chief.  The position of the opponent is relatively clear.  As Emmett J said in F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 at [30], “[i]t would … be open to an opponent simply to tender the material that was before the Commissioner” and the “Court could, subject to all proper objections, admit that evidence”, although the opponent is not bound to this course. 

20                  Thirdly, the only evidence to be taken into account at the hearing of an appeal under s 60(4) will be the evidence tendered or admitted at the hearing: see Caroma Sales Pty Ltd v Philmac Pty Ltd [1972-73] ALR 427 at 428; Brickwood Holdings Pty Ltd v ACI Operations Pty Ltd [1983] 2 VR 587 at 588-89 per King J; European Community v Commissioner of Patents (2006) 68 IPR 539 at 543 per Young J; and Cadbury Schweppes Plc v Effem Foods Pty Ltd (2006) 69 IPR 584 at 586 per Lindgren J.  This is the evidence on which the Court acts.  As Kitto J said in Kaiser Aluminum at 142-43, in relation to the same kind of proceeding under the former Patents Act 1952 (Cth), the outcome of a proceeding such as this “must be decided upon the evidence adduced before [the] Court”, even if a different case than that made before the Commissioner.  We return to this proposition below, which is virtually decisive of the outcome of this appeal.

21                  Fourthly, whilst the Court will make its own decision on the basis of the evidence before it, in deciding whether the applicant (here, Mr Sherman) has made out his case on the balance of probabilities, the Court will take into account the nature of the proceeding and the fact that the proceeding concerns the decision of an expert administrative decision-maker: see Commissioner of Patents v Emperor Sports Pty Ltd (2006) 149 FCR 386 at [24]; E I Du Pont de Nemours and Company v ICI Chemicals & Polymers Ltd (2003) 128 FCR 392at [28] per Emmett J; E I Du Pont de Nemours and Company v ICI Chemical Industries Plc (2002) 54 IPR 304 at [17] per Branson J; Neumann v Sons of the Desert SL [2008] FCA 1183 at [2] per Ryan J; and s 140 of the Evidence Act.  The Full Court in Emperor Sports (149 FCR at [24]) explained that:

The Commissioner is an administrative decision-maker equipped with technical expertise.  Subject to the rules of natural justice both common law and statutory … he or she is entitled to make use of that expertise, and draw inferences that may be rationally drawn from technical knowledge, including how skilled persons of various descriptions may act in their respective occupations … On an appeal by way of hearing de novo the judge would not be a person credited with technical expertise of his or her own.  In such an event the judge may be able to take into account conclusions of the Commissioner based on his or her expertise, subject of course to the rights of other parties to call rebutting or supporting evidence.

Also in Emperor Sports (149 FCR at [33]), the Full Court noted that, when the identification of the relevant prior art is in dispute, “it is necessary to have either evidence or, which amounts to the same thing, reliance by an administrative decision-maker of expertise appropriate to the office”.  Naturally enough, the weight given by the Court to the Commissioner’s findings will be affected by the extent to which the Court permits evidence to be adduced before it that was not before the Commissioner: see Du Pont 128 FCR at [28] and Du Pont 54 IPR at [17].  We return to these matters on the question of the admissibility of the evidence in question under the Evidence Act.

22                  Fifthly, where a ground of opposition depends on proof of a fact, the onus of proof lies on the party seeking to make out the ground.  Usually the party bearing this onus will be the opponent, but sometimes, as in the present case, it will be the Commissioner: see Titan Mining & Engineering Pty Ltd v Arnall’s Engineering Pty Ltd (1988) 12 NSWLR 73 at 75 per McLelland J. 

23                  Sixthly, as a general rule, the Commissioner has a limited part to play in a proceeding such as this: see Merck & Co Inc v Sankyo Co Ltd (1992) 23 IPR 415 at 417-18 per Lockhart J, citing R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 36.  We accept, however, that, as the Commissioner submitted, there is an important public interest in ensuring that the monopoly conferred by registration is not extended to patents that are clearly invalid: compare Kaiser Aluminum at 143.  We accept too that, in order to protect this public interest, the Commissioner may properly assume a more active role in a proceeding where the opponent withdraws than where the opponent remains an active participant.  If the case were otherwise, then, as Lockhart J noted in Merck (23 IPR 415 at 418), “there will be no-one to present a view contrary to that of the applicant in the court”:  see also Brickwood at 589. 

24                  Seventhly, we consider that the Commissioner mistook certain of Emmett J’s observations in Hoffman-La Roche.  In that case, Emmett J noted that there is no appeal as of right from the judgment of a single judge in contrast to the appeal as of right that ordinarily lies from a final order of a judge of the Court under s 24 of the Federal Court of Australia Act 1976 (Cth).  This led Emmett J to say (99 FCR at [39]) that “the legislature has expressly likened a determination made on an appeal under [s 60(4)] to a determination in an interlocutory proceeding”.  It is to be borne in mind, however, that his Honour was concerned with the absence of a right of appeal and not with the nature of the evidence that might be led.  We agree with the primary judge that this observation does not support the Commissioner’s argument that the Evidence Act is inapplicable, or that an appeal under s 60(4) is to be treated as an interlocutory hearing for the purposes of the rules of evidence.  Our rejection of the Commissioner’s argument in this regard is borne out by Emmett J’s conclusion in Hoffman-La Roche (99 FCR at [68]) that evidence from a certain witness ought not to be excluded, “subject of course to the evidence being otherwise in admissible form”.

25                  Viewed in this context, we do not consider that s 160(a) discloses a legislative intention that the Court is not required to observe the rules of evidence in an appeal under s 60(4) of the Patents Act.  We turn to the terms of s 160(a).  Section 160(a) states that “[o]n hearing an appeal against a decision … of the Commissioner, the Federal Court may … (a) admit further evidence orally, or on affidavit or otherwise” (emphasis added).  Much of this appeal concerned the significance of the word “further” in s 160(a).

26                  In order to understand the point at issue, it is to be borne in mind that the opposition proceeding before the Commissioner is an administrative, as opposed to a curial, proceeding: compare Emperor Sports 149 FCR at [68].  In making the decision the subject of the appeal under s 60(4), the Commissioner is not bound by the Evidence Act.  The Commissioner is bound by other rules, including rules of procedural fairness and the like: see Emperor Sports 149 FCR at [24].  The result is that information that qualifies as evidence before the Commissioner may not amount to admissible evidence in this Court.

27                  The Commissioner argued that the use of the word “further” showed that s 160(a) contemplated evidence filed before the Commissioner “being brought before the Court and relied on in the determination of the appeal”, irrespective of whether it is capable of being characterized as admissible evidence under the Evidence Act.  We reject this submission, which in our view involves a misreading of s 160(a).

28                  As noted above, an appeal under s 60(4) involves a rehearing, in the sense that it is an appeal in the original jurisdiction of the Court.  Section 160 confers powers commensurate with an appeal of this kind, especially by providing in s 160(a) that the Court may admit and consider evidence that was not before the Commissioner.  At the same time, s 160 gives the Court considerable control as to the evidence that can be adduced – in determining the “further” evidence it will admit (s 160(a)) and the extent to which it will permit examination and cross-examination of witnesses (s 160(b)). Moreover, the powers that s 160 confers on the Court with respect to the conduct of the appeal reflect the purpose of the opposition procedure – to provide a relatively quick and inexpensive procedure for preventing a grant of patent that clearly ought not be granted:  see Genetics Institute Inc v Kirin-Amgen Inc (1999) 92 FCR 106 at 112 per Black CJ, Merkel and Goldberg JJ; Du Pont 128 FCR at [25] per Emmett J; and Du Pont 54 IPR at [15] per Branson J.   

29                  Section 160(a) is, therefore, an essentially facultative provision: compare Soncini v Registrar of Trade Marks (2001) 109 FCR 548 at [14] per Sackville J, discussing s 197(a) of the Trade Marks Act 1995 (Cth), and Fina Research SA v Halliburton Energy Services Inc [2002] FCA 1505 at [5] per Moore J applying Sackville J’s comments to s 160 of the Patents Act.  Whilst s 160(a) may contemplate that the evidence before the Commissioner is “the starting point for the evidence on the appeal” (Du Pont 128 FCR at [26]), s 160(a) is not concerned with questions of admissibility, considered from the perspective of the rules of evidence.  Generally, these questions are governed in this Court by the Evidence Act: see Evidence Act, s 4(1).  Section 160(a) does not, therefore, disclose any legislative intention with respect to the rules of evidence.  In particular, s 160(a) does not disclose a legislative intention that the evidence on an appeal under s 60(4) of the Patents Act is not required to comply with the Evidence Act.  

30                  Although dealing with the former Patents Act, various well-accepted authorities fortify the conclusion we have reached.  We refer to Commissioner of Taxation v Finn (1960) 103 CLR 165 at 167-68 per Fullagar J, Kaiser Aluminum at 142-43 per Kitto J, Caroma at 428 per Walsh J, and Merck at 418 per Lockhart J.

31                     The position with respect to appeals from the former taxation boards of review is instructive.  In Finn at 167-68, Fullagar J cited the comments of Starke J in Federal Commissioner of Taxation v Lewis Berger & Sons (Australia) Ltd (1927) 39 CLR 468 at 469 and Williams J in Federal Commissioner of Taxation v Sagar (1946) 71 CLR 421 at 423-24 when explaining the jurisdiction of the High Court in relation to an appeal against a decision of the Taxation Board of Review under former taxation legislation, being, as in this case, also an appeal by way of rehearing.  In particular, Fullagar J adopted Williams J’s statement (in Sagar at 424) that “unless the parties agree that the evidence before the Board shall be used on the appeal, the evidence must be tendered again, and, as the appeal is a rehearing, further evidence can be called”.  Applying this here, it would follow that, failing agreement, the evidence before the Commissioner must be tendered again and, subject to the Court’s direction, further evidence may be called if the parties so wish. 

32                  Even more significantly, in Caroma, Walsh J held that, on an appeal to the High Court under s 60(5) of the Patents Act 1952 (Cth) against the decision of an examiner refusing the grant of a patent, which had been opposed by the respondent pursuant to s 59(1) of that Act, the Court, sitting as the Appeal Tribunal specified in s 60(5), would consider only that evidence that was tendered at the hearing and admitted by the Court.  Referring to Kaiser Aluminum, Finn and Sagar, Walsh J said (at 428):

It was said that the only evidence to be taken into consideration in deciding the appeal is that tendered at that hearing and admitted by me.  In my opinion that submission is correct …[T]he enactment that the Tribunal may admit further evidence ought not to be taken, in my opinion, as implying that the Tribunal must treat all evidence which has been given at a hearing before the Commissioner or his officer as being evidence in the proceeding before the Tribunal. 

…

In the present case the supervising examiner … who heard the matter, had before him two statutory declarations in support of the opposition.  These have not been tendered before me … There has been no proof before me of any facts alleged in the statutory declarations supporting the opposition, except to the extent that the affidavit or oral evidence tendered on behalf of the appellant refers to those facts.

33                  In summary, having regard to the nature of an appeal under s 60(4) of the Patents Act, the terms of s 160, and the authorities, we conclude that the outcome of the appeal being heard by the primary judge will depend on the admissible evidence that is adduced or tendered before him: see also [21] above, especially Kaiser Aluminum at 142-43 per Kitto J; and Merck at 418 per Lockhart J.

34                  Order 58, rule 8 of the Rules does not alter this fundamental position.  This rule provides that the material that was before the Commissioner is, with the leave of the Court and saving all just exceptions, admissible on the appeal.  The rule does not in terms make admissible as evidence that which would be otherwise inadmissible.  On the contrary, no evidence is admissible otherwise than “with the leave of the Court and saving all just exceptions” – language that is apt to incorporate the operation of the Evidence Act.

35                  The second question raised by this appeal is whether, contrary to the primary judge’s ruling, paragraphs 6, 7 and 8 of the Barker affidavit and exhibits “SB-2” and “SB-3” were admissible under the Evidence Act. In paragraphs 6, 7 and 8, the delegate identified the materials that were the bases for his decision on lack of novelty and lack of inventive step as the Rork citation and the declaratory material in “SB-3”.

36                  The Commissioner submitted that the primary judge erred in finding that the delegate’s decision regarding the novelty and inventiveness of the claims was inadmissible under s 56(2) of the Evidence Act because it was irrelevant. The Commissioner further submitted that the primary judge erred in rejecting the tender of the Rork citation (“SB-2”) and the declarations (“SB-3”).

37                  Evidence as to the decision of the delegate is relevant on two bases.  First, the fact that it was made is a fact on which the jurisdiction of the Court depends: see Titan Mining at 75 and European Community at 539.  Secondly, the substance of the decision on novelty and inventiveness (considered as a statement of the delegate’s opinion) is a matter that the Court may take into account: see [21] above. This is because the delegate (in contrast to the Court) is credited with having some technical expertise.  Depending on the extent to which the evidence before the Commissioner and the Court overlaps, the decision-maker’s opinion on these matters carries some weight in the Court’s assessment.  Viewed in this way, the decision of the delegate is plainly not inadmissible on the ground that it is irrelevant.  The opinion rule in s 76 of the Evidence Act does not apply, either because of s 77 (since the decision is relevant as a jurisdictional fact) or because of s 79 (the decision is the opinion of person with relevant specialised knowledge and is substantially based on that knowledge). 

38                  Since the substance of the delegate’s decision is relevant and admissible, then so too is the material on which it is based (here, the Rork citation in “SB-2” and the declarations in “SB-3”).  This is because, in order to understand the delegate’s decision, it is necessary to have regard to the material that the delegate thought pertinent to his decision on novelty and inventiveness.  This conclusion accords with what has in fact happened in the courts in proceedings of this kind, where courts have frequently had regard to the decision of the delegate and the material on which it was based: see, e.g., Emperor Sports 149 FCR at [24] per Heerey, Kiefel and Bennett JJ; Du Pont 128 FCR at [28] per Emmett J; Du Pont 54 IPRat [17] per Branson J; and Merck at 421 per Lockhart J.

39                  We do not consider s 59(1) of the Evidence Act, which is a statutory statement of the hearsay rule, renders the Rork citation and the relevant declarations inadmissible.  This is on account of s 60 of the Evidence Act, which provides that “the hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of the fact intended to be asserted by the representation”. 

40                  In Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618 at [761]-[772], Lindgren J considered the interaction of ss 59 and 60 of the Evidence Act, in the context of expert opinions.  In Alphapharm, Lindgren J held that the representations made by the authors of the articles cited by an expert, Professor Montgomery, were “‘previous representations’ as to the carrying out of the clinical studies and the results of them”: see Alphapharm 76 IPR at [769].  His Honour also held, however, that the intent and effect of ss 59 and 60 of the Evidence Act was that “statements of the bases for expert opinions like those made by Professor Montgomery were to be characterised as being relevant for a purpose other than proof of the facts intended to be asserted by the representations by the authors of the articles”: Alphapharm 76 IPRat [770].  We agree with Lindgren J’s explication of the interaction of ss 59 and 60 in the context of expert opinions. 

41                  In the Barker affidavit, the delegate stated that his decision on lack of novelty and lack of inventive step was based on the Rork citation “together with the evidence filed in relation to that prior art document”.  In this affidavit, the delegate identified the Rork citation as “SB-2” and “the declaratory evidence … relied on by [him] in finding that the opposed application lacks novelty and inventive step in light of the Rork citation” as “SB-3”.  Accordingly, we would regard “SB-2” and “SB-3” as admissible pursuant to s 60 of the Evidence Act on the ground that they are statements of the bases for the delegate’s opinion.

42                  In our view, the primary judge erred in so far as his Honour ruled that paragraphs 6, 7 and 8 of the Barker affidavit and “SB-2” and “SB-3” were inadmissible on the appeal under s 60(4) of the Patents Act.  We would, therefore, allow the appeal.  We would allow the parties fourteen days to make short written submissions on costs.

Associate:

Dated:         20 November 2008