CATCHWORDS
COURTS AND JUDICIAL SYSTEM - Cross-vesting - application for leave to appeal to Federal Court from interlocutory order of State Supreme Court in third party proceedings where principal proceedings are for infringement of patent - third party proceedings raising questions of contract including choice of law and choice of jurisdiction - whether only matters for determination in application for leave to appeal were matters other than matters arising under Patents Act
PATENT - exclusive appellate jurisdiction of Federal Court over infringement proceedings - whether extends to matter of application for leave to appeal from interlocutory order in third party proceedings - whether matter arising under Patents Act
Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) ss 7(3), 7(5), 7(7), 7(8)
Patents Act 1990 (Cth) ss 120(1), 158(1)
NEC Information Systems Australia Pty Ltd v Lockhart (1992) 108 ALR 561
G D Searle & Co v Drug Houses of Australia Pty Ltd (1984) 53 ALR 637
Decor Corporation Pty Ltd v Dart Industries Inc (1991) 104 ALR 621
Felton v Mulligan (1971) 124 CLR 367
ROMMELAG AG
v
DELTA WEST PTY LTD
VG 459 of 1994
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 19 MAY 1995
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIAN DISTRICT REGISTRY ) VG 459 of 1994
)
GENERAL DIVISION )
ON APPEAL FROM THE SUPREME COURT OF VICTORIA
BETWEEN: ROMMELAG AG
Appellant
AND: DELTA WEST PTY LTD
Respondent
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 19 MAY 1995
MINUTE OF ORDERS
THE COURT ORDERS:
1. IT IS DECLARED that the Federal Court of Australia has no jurisdiction to entertain the notice of appeal filed herein on 19 December 1994 or the application for leave to appeal filed herein on 22 March 1995.
2. IT IS ORDERED that the abovenamed appellant pay the respondent's costs of and incidental to the motion on notice herein dated 30 March 1995.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIAN DISTRICT REGISTRY ) VG 459 of 1994
)
GENERAL DIVISION )
ON APPEAL FROM THE SUPREME COURT OF VICTORIA
BETWEEN: ROMMELAG AG
Appellant
AND: DELTA WEST PTY LTD
Respondent
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 19 MAY 1995
REASONS FOR JUDGMENT
RYAN J: On 19 December 1994 the applicant, Rommelag AG, ("Rommelag") filed a notice of appeal against an interlocutory order made by Ashley J in the Supreme Court of Victoria. The principal proceedings in that Court involved an action for patent infringement by Astra AB and Astra Pharmaceuticals Pty Ltd (hereafter collectively called "Astra") against the present respondent Delta West Pty Ltd ("Delta West"). Rommelag was joined as a third party in those proceedings. Delta West's statement of claim against Rommelag as third party alleged that Rommelag had agreed to sell to Delta West a "bottle pack" type 3012M, 10-Fold version aseptic plant for producing blow-moulded containers for pharmaceutical preparations ("the Plant").
It was alleged to be a term of the agreement for sale ("the purchase agreement") that the Plant could be used by Delta West to manufacture unit dose containers adapted to fit co-acting Luer-lock syringes ("the Luer-lock Containers"). As well, it was alleged that Rommelag had warranted that the manufacture, use and sale of the Luer-lock Containers would not infringe the patent rights of Astra, and that Rommelag was entitled to license Delta West to manufacture, use and sell them provided that they were not used with, or sold for use with, local anaesthetics.
The third party statement of claim went on to allege that Rommelag had licensed Delta West to manufacture, use and sell the Luer-lock Containers provided that they were not used with or sold for use with local anaesthetics. Further or alternatively it was alleged that Rommelag had represented that the manufacture, use and sale of the Luer-lock Containers subject to the proviso would not infringe Astra's patent rights and that Rommelag was entitled to license Delta West to manufacture, use and sell them subject to the proviso. It was then pleaded that, acting in reliance on those representations, Delta West had manufactured the Luer-lock Containers and used them with, and sold them for use with, pharmaceuticals other than local anaesthetics.
The third party statement of claim then asserted that, if Astra's claims of patent infringement were well-founded, Rommelag had been in breach of the purchase agreement and the licence, had made negligent misrepresentations and had contravened s 52 of the Trade Practices Act whereby Delta West had suffered loss and damage.
Rommelag moved to strike out the third party statement of claim invoking what Ashley J called "choice of law and choice of jurisdiction clauses" which were contained in the purchase agreement in the following terms:
"XIV. Place of fulfilment, legal venue and applicable law.
Place of fulfilment and legal venue in the event of litigation shall be in Aarau.
The legal relationship in its entirety shall be subject to Swiss law."
...
"15. Place of fulfilment, venue, applicable law.
Place of fulfilment is CH-5000 Aarau. Venue is Aarau. Possible litigations have to be judged by the commercial court in first instance of the canton of Aarau, Switzerland. The contractual stipulations as well as all litigations which might result from the contractual situation are subject to the Swiss law."
It was also contended in support of Rommelag's motion that the Supreme Court of Victoria was a "clearly inappropriate forum" for resolution of claims founded on a contract separate from but related to the purchase agreement. However, on 5 December 1994, Ashley J in the exercise of his discretion dismissed Rommelag's motion and refused leave to appeal from that interlocutory order.
Rommelag's notice of appeal in this Court refers to that order. As well, Rommelag on 22 March 1995 filed in this Court an application for leave to appeal which contained, amongst others, the following paragraphs:
"1. So far as it is
necessary for it to do so, the applicant applies for leave to appeal from the
Judgment of the Honourable
Mr Justice Ashley in the Supreme Court of Victoria delivered on 5 December 1994
at Melbourne.
2. Leave to appeal is or may be required by the Federal Court of Australia Act 1976 Sections 24(1) and 24(1A)."
Delta West which has entered a conditional appearance in this Court now moves to set aside Rommelag's notice of appeal on the grounds that:
"(a) the judgment appealed from is not a judgment of the kind referred to in section 158 of the Patents Act 1990;
(b) alternatively, the judgment appealed from is an interlocutory judgment from which no leave to appeal has been given under section 24(1A) of the Federal Court of Australia Act 1976."
Section 158(1) of the Patents Act 1990 confers an appellate jurisdiction on this Court by stipulating:
"(1) An appeal lies to the Federal Court against a judgment or order of:
(a) another prescribed court exercising jurisdiction under this Act."
The Supreme Court of Victoria is a "prescribed court" for purposes of the Patents Act and by virtue of s 155(1) of the Patents Act has jurisdiction "with respect to matters arising under this Act in respect of which proceedings may, under this Act, be started in a prescribed court". Among the proceedings which may be started in a prescribed court are "infringement proceedings" [s 120(1)].
Accordingly,
although Delta West concedes that an appeal lies to this Court from a judgment
or order of a prescribed court exercising its jurisdiction with respect to
patent infringement, it contends that the order of Ashley J was made
in exercise of the Supreme Court's jurisdiction over claims in tort and
contract and under the Trade Practices
Act. As such, it was not made with
respect to infringement proceedings.
Mr Norman O'Bryan of Counsel for Rommelag referred to the discussion by a Full Court of this Court in NEC Information Systems Australia Pty Ltd v Lockhart (1992) 108 ALR 561 where it was observed, at 566:
"(c) Once federal jurisdiction is attracted in a proceeding in a State court, the jurisdiction which is exercised by that court throughout the case will be federal (save as to a completely disparate claim constituting in substance a separate proceeding) and there will remain no State jurisdiction capable of concurrent exercise with the federal jurisdiction which, as regards the whole of the matter, is invested in the State court: Felton v Mulligan (1971) 124 CLR 367 at 373. Thus, in the present case, it was not disputed that, upon the filing on 1 June 1990 of the cross-claim in the Commercial Division proceeding seeking a declaration of contravention of s 52 of the Trade Practices Act 1974 (Cth) (the Trade Practices Act), thereafter the Supreme Court, both at the trial level and in the Court of Appeal, was exercising federal jurisdiction. This case turns not upon that question, but upon the complication introduced by the additional allegation of contravention of s 47 of the Trade Practices Act, this being a matter arising under Pt IV of that Act and therefore a "special federal matter."
The Full Court then elaborated six further propositions relevant to the application of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) ("the Act") including the following, at 567:
"Thirdly, there is the class of matters in which original jurisdiction is conferred by particular statutes on this court or the Family Court of Australia, and concurrently there is an investment of jurisdiction in State and Territorial courts, but subject to a conferral of appellate jurisdiction upon this court or the Family Court (as the case may be) which jurisdiction is exclusive, save that in some instances (eg Copyright Act 1968 (Cth) s 131B, Patents Act 1990 (Cth) s 158, Trade Marks Act 1955 (Cth) s 114, Designs Act 1906 (Cth) s 401) an appeal, by special leave, may be brought directly to the High Court of Australia. In other matters in this category (eg Commonwealth Electoral Act 1918 (Cth) s 383) original jurisdiction is conferred only upon the Supreme Court of the States and Territories, but an appeal lies to this court. It is this appellate federal jurisdiction which is specially treated in s 7(3) of the Act."
The fourth proposition distilled by the Full Court in this examination was that the existing exclusive appellate jurisdiction of the Federal Court is undiminished and, indeed, enhanced by ss 7(5) and (7) of the Act. Those sub-sections provide:
"(5) Subject to sub-sections (7) and (8), where it appears that a matter for determination in a proceeding by way of an appeal from a decision of a single judge of the Supreme Court of a State or Territory (not being a proceeding to which sub-section (6) applies) is a matter arising under an Act specified in the Schedule, that proceeding shall be instituted only in, and shall be determined only by -
(a) the Full Court of the Federal Court or of the Family Court, as the case requires; or
(b) with special leave of the High Court, the High Court."
...
"(7) Where -
(a) the Full Court of the Supreme Court of a State or Territory commences to hear a proceeding by way of an appeal; and
(b) before the Court determines the proceeding, it appears to the Court that the proceeding is a proceeding to which sub-section (5) applies,
the Court shall, unless the interests of justice require that the Court proceed to determine the proceeding, transfer the proceeding to the Full Court of the Federal Court or of the Family Court, as the case requires."
Of them the Full Court went on, at 568 to observe:
"Thus, where the full court of a State Supreme Court has commenced to hear, but has not determined, an appeal which, by virtue of the provisions we have described, should be before the full court of this court, it shall transfer it to this court unless "the interests of justice" require the full court of the State to proceed to determine the matter. This is the effect of s 7(7) of the Act.
Again then, there is apparent the manifest object that in some classes of matter the exclusive jurisdiction of this court should continue because, in the view of the Parliament, there is particular utility in maintaining that position."
The Full
Court's fifth proposition was that there are matters under Federal law in
respect of which original and concurrent
jurisdiction has been conferred upon, or invested in, this court and in State
and Territory courts and appeals in which stay within the respective court
structures, so that this court has no appellate jurisdiction in respect of the
judgments of State courts. It is
implicit in the contentions of Counsel for Delta West that its claim against
Rommelag under the Trade Practices Act
is in this category.
In my view, the resolution of the present issue is determined by s 7(3) of the Act which provides:
"Where it appears that the only matters for determination in a proceeding by way of an appeal from a decision of a single judge of the Supreme Court of a State or Territory are matters other than matters arising under an Act specified in the Schedule, that proceeding shall be instituted only in, and shall be determined only by, the Full Court of the Supreme Court of that State or Territory."
An application for leave to appeal is comprehended by the phrase "a proceeding by way of appeal" in that sub-section; see NEC Information Systems Australia Pty Ltd v Lockhart (supra) at 574.
The Patents Act is one of the Acts specified in the Schedule to the Act so the question has to be asked whether the only matters for determination in the application for leave to appeal are matters other than matters arising under the Patents Act. "Matter" in this context is used in the sense imported by s 76(ii) of the Constitution of the questions involved in an adjudication upon the opposing contentions by the adversaries in the third party proceedings. (See eg Felton v Mulligan (1971) 124 CLR 367 per Walsh J at 406). In that sense the only matter raised by the application for leave to appeal is whether the third party notice in the Supreme Court of Victoria should have been struck out or stayed in the exercise of that Court's discretion in the light of the choice of law and choice of jurisdiction clauses. I do not regard that as a matter arising under the Patents Act.
By contrast the application for leave to file a caveat discussed in G D Searle & Co v Drug Houses of Australia Pty Ltd (1984) 53 ALR 637, to which I was referred by Counsel for Rommelag, was expressly connected with or incidental to the petition by virtue of ss 91 and 92 of the Patents Act 1952 itself. Thus, Northrop J was able to conclude, at 640-641:
"In my opinion, in determining an application for leave to file a caveat out of time, the Supreme Court is exercising jurisdiction under the Patents Act.
The petition is a proceeding under the Patents Act within the meaning of s 146(1) of that Act and the application for leave to file a caveat against the granting of the prayer in that petition is a matter connected with or incidental to that petition. In ss 146(1) the word "under" in the phrase "under this Act" connotes "in pursuance of" or "under the authority of": compare the reasoning of Bowen CJ and Lockhart J in Australian National University v Burns (1982) 43 ALR 25 at 31-2.
...
The same principles should be applied to applied to the resolution of the motion by Drug Houses. To say that the order appealed from was made under the Supreme Court (Industrial Property) Rules does not deny the proposition that the order was made by the Supreme Court "exercising jurisdiction under" the Patents Act. Accordingly, in my opinion, the Federal Court has jurisdiction to hear and determine the appeal: see s 24(1)(c) of the Federal Court of Australia Act 1976."
See also per Sheppard and Neaves JJ at 652.
The present case is similarly distinguishable from Decor Corporation Pty Ltd v Dart Industries Inc (1991) 104 ALR 621 to which I was also referred by Counsel for Rommelag. In that case the interlocutory orders, the subject of an application for leave to appeal to this Court, were made for an account of profits for a patent infringement.
In my view, Ashley J, in entertaining the third party proceedings was not exercising jurisdiction under the Patents Act. He was exercising jurisdiction at common law or under the Trade Practices Act, at best, concurrently with the jurisdiction which the Supreme Court has over the controversy between Astra and Delta West under the Patents Act.
On the view which I have taken, s 7(3) of the Act read as a whole provides the answer to Mr O'Bryan's submission that to refer to the Supreme Court the present application for leave to appeal would be futile because that Court would have to refer to the proceeding back to this Court. The Supreme Court is obliged to determine the proceeding because the only matter for determination in it is not a matter arising under an Act specified in the Schedule to the Act.
A second difficulty invoked by Mr O'Bryan was that to separate the third party proceedings in a case like the present from the principal proceedings for patent infringement would be productive of unnecessary complexity and possibly inconsistent results. That difficulty can be overcome by resort to the scheme of s 7 of the Act read as a whole. Where the matters for determination in a proceeding by way of appeal include a matter arising under eg the Patents Act, this Court has exclusive jurisdiction over the whole proceeding unless the Supreme Court inadvertently commences to hear it and determines it as contemplated by s 7(7) and s 7(8) of the Act. As noted by the Full Court in NEC Information Systems Australia Pty Ltd v Lockhart (supra) at 565 "the existing exclusive appellate jurisdiction of this court ... is undiminished and, indeed, it is enhanced by s 7(5) and (7) of the Act."
I consider that it is within the inherent power of this court to make a declaration defining its jurisdiction where a party to proceedings commenced here has asserted contrary to the true legal position that this court has jurisdiction over a particular controversy. Accordingly, I propose to declare that this court has no jurisdiction to entertain the notice of appeal filed on 19 December 1994 on the application for leave to appeal filed on 22 March 1995. Rommelag must pay Delta West's costs of and incidental to the motion on notice dated 30 March 1995.
I certify that this and the preceding nine (9) pages are a true copy of the reasons for judgment of his Honour Justice Ryan
Associate:
Date:
Counsel for the applicant: Mr N O'Bryan
Solicitor for the applicant: Davies Ryan de Boos
Counsel for the respondent: Mr A Ryan
Solicitors for the respondent: Phillips Fox
Hearing date: 30 March 1995
