CATCHWORDS

INTELLECTUAL PROPERTY - patent application - appeal from decision of delegate of Commissioner of Patents - whether Court has power to direct patent application to proceed to grant subject to amendments directed by Court. 

Patents Act 1990 (Cth) ss 60, 104, 107, 160

Federal Court Rules: O 29

Jafferjee v Scarlett (1937) 57 CLR 115

Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Co (1969) 120 CLR 136

Merck & Co Inc v Sankyo Co Ltd (1992) 23 IPR 415

Genetics Institute Inc v Kirin-Amgen Inc

(No. VG 868 of 1995)

Judge:    Heerey J

Date:     4 July 1996

Place:    Melbourne (heard in Canberra)

IN THE FEDERAL COURT OF AUSTRALIA)

                                  )

VICTORIA DISTRICT REGISTRY        )         No.VG 868 of 1995

                                  )

GENERAL DIVISION                 )

B E T W E N:

                   GENETICS INSTITUTE INC.

                                                   Applicant

                           - and -

                      KIRIN-AMGEN INC.

                                                  Respondent

JUDGE:    Heerey J

DATE:     4 July 1996

PLACE:    Melbourne (heard in Canberra)

                      MINUTES OF ORDER

The Court orders that:

1.   Answer the question:

          Whether, if the Court is of the view that any of the claims are bad but can be cured by amendment, the Court has the power to direct that the patent application proceed to grant, together with any amendment? 

          Yes. 

2.   Order that the applicant pay the respondent's costs of the hearing on 21 June 1996 but that otherwise the costs of the notice of motion dated 31 May 1996 be reserved.

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

IN THE FEDERAL COURT OF AUSTRALIA)

                                  )

VICTORIA DISTRICT REGISTRY        )         No.VG 868 of 1995

                                  )

GENERAL DIVISION                  )

B E T W E N:

                   GENETICS INSTITUTE INC.

                                                   Applicant

                           - and -

                      KIRIN-AMGEN INC.

                                                  Respondent

JUDGE:    Heerey J

DATE:     4 July 1996

PLACE:    Melbourne (heard in Canberra)

                    REASONS FOR JUDGMENT

The applicant Genetics Institute Inc (Genetics) has appealed to this Court under s 60(4) of the Patents Act 1990 (Cth) (the Act) against the decision of a delegate of the Commissioner of Patents given on 19 October 1995 to grant a patent for a pharmaceutical product to the respondent Kirin-Amgen Inc (Kirin-Amgen).  The delegate decided that Genetics' opposition to the grant of a patent on Kirin-Amgen's application failed so far as most of the claims were concerned.  He decided that the opposition to the remaining claims succeeded but only on grounds that, in respect of some, they did not comply with s 40 and involved "some minor lack of clarity", and that, in respect of the others, they were not fairly based.  In respect of the claims on which the opposition succeeded the delegate held that the defects could be "readily overcome" and allowed Kirin-Amgen 60 days "to propose appropriate amendments". 

Kirin-Amgen has cross-appealed against the delegate's decision insofar as it upheld objections to claims and seeks a declaration that each of such claims is valid.

Following an order made on 3 June 1996, on the application of Kirin-Amgen, I now have to consider separately before trial pursuant to O 29 of the Federal Court Rules the following question:

      Whether, if the Court is of the view that any of the claims are bad but can be cured by amendment, the Court has the power to direct that the patent application proceed to grant, together with any amendment?

The order of 3 June reserved the right of the Commissioner to appear and be heard.  The Australian Government Solicitor filed written submissions on behalf of the Commissioner.

The decision of the delegate was made under s 60(1) of the Act which provides: 

      Where the grant of a standard patent is opposed, the Commissioner must decide the case in accordance with the regulations.

By s 60(4) Genetics as opponent and Kirin-Amgen as applicant had rights of appeal to the Federal Court against the decision of the Commissioner.

Chapter 10 of the Act confers powers on the Commissioner to grant leave to amend the patent request or complete specification on the application of the applicant for a patent or a patentee (s 104) or to direct the applicant to file proposed amendments of
the patent request or complete specification (s 107).  The Act contemplates amendments to a complete specification both prior to and after acceptance:  s 102(2).

The powers of the Federal Court on an appeal from the Commissioner are contained in s 160 which provides:

      On hearing an appeal against a decision of the Commissioner, the Federal Court may do any one or more of the following:

      (a)   admit further evidence orally, or on affidavit or otherwise;

      (b)   permit the examination and cross-examination of witnesses, including witnesses who gave evidence before the Commissioner;

      (c)   order an issue of fact to be tried as it directs;

      (d)   affirm, reverse or vary the Commissioner's decision or direction;

      (e)   give any judgment, or make any order, that, in all the circumstances, it thinks fit;

      (f)   order a party to pay costs to another party.

The right of appeal is thus by way of rehearing.  The parties accepted that the well-known statement of Kitto J in Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Co (1969) 120 CLR 136 at 142 was applicable to the present Act.  His Honour said:

      The appeal is, of course, only an appeal in name.  In truth it is an original proceeding, being the first judicial proceeding in the matter of the opposition.  ...  It must be decided upon the evidence adduced before this Court, even though that evidence presents on the question of interest a case completely different from the case which was suggested before the Deputy Commissioner.  ...  Upon the hearing of an appeal the Appeal Tribunal may (inter alia) admit further evidence and give such judgment or make such order as it thinks fit in all the circumstances.

Similarly in Jafferjee v Scarlett (1937) 57 CLR 115 at 119 Latham CJ said:

      ... it is the duty of the court to decide the matter as upon an original application and not merely to decide whether the decision of the registrar can or cannot be supported.

On the face of s 160, an order that the Commissioner proceed to grant a patent subject to amendments considered appropriate by the Court would come within the expression "any order" in para (e).  I think that conclusion follows as a matter of ordinary language.  Subject only to having some connection with the subject matter of the appeal, "any order" means any order.  This is the more so in a context when the appeal is from a decision which could (as it did in the present case) include a direction that amendments be made.

In any case, an order directing amendments to claims differing from those directed by the Commissioner would amount to a variation of the Commissioner's decision within the meaning of s 160(d). 

Since the establishment of the modern appellate court by the English reforms of 1875 and their Australian counterparts, statutes have usually (indeed invariably as far as my experience extends) conferred on the appellate court a right to vary the decision under appeal.  The inherent unpredictability of litigation would make absurdly restrictive any provision that confined an appellate court to upholding or reversing in toto the decision below.  In the particular context of patent litigation there is all the more reason to think that the legislature intended the appellate court to have wide powers, and at the very least the power to do everything that the Commissioner could have done in making the decision under appeal.  Patents are often
complex documents and can deal with technology at the very edge of human understanding.  An appeal under s 60(4) can involve evidence quite different to that which was before the Commissioner.  New arguments may be advanced and new insights obtained.  There may be totally new grounds for concluding that, speaking hypothetically of course, a decision to proceed to grant a patent was correct but that amendments not considered by the Commissioner (perhaps because they arise from new arguments or new evidence) should be directed by the Court.

In arguing against this construction senior counsel for Genetics contended that the jurisdiction of the Court is limited to a decision of "the case" referred to in s 60(1), that is to say whether the patent should proceed to grant.  However, "the case" is not limited, as counsel argued, to a jurisdiction to deal with a patent application as accepted; one need only point to the power conferred on the Commissioner himself to direct amendments.  I do not think s 60 can be read independently of the rest of the Act and in particular s 160. "The case" in s 60(1) in my opinion comprehends all issues relating to the grant of the patent, including amendments.  These are matters which were before the Commissioner and are also before the Court. 

The fact that s 104(7) confers an independent right of appeal against a discrete decision of amendment does not lead logically to the conclusion that the jurisdiction under s 60(4), amplified by s 160, excludes questions of amendment being dealt with by the Court.

Finally, reference should be made to Merck & Co Inc v Sankyo Co Ltd (1992) 23 IPR 415 at 433.  In that case Lockhart J, sitting on appeal under the Patents Act 1952, made orders allowing the appeal and setting aside the finding of the delegate that the opposition to the grant failed.  His Honour said (at 433):

      I would order that the application not be granted unless amended as follows (this is the form of order agreed in by counsel for the applicant and counsel for the commissioner):

      "1.   In relation to the specification by:

            (a)   inserting the words `produced in accordance with Example 1 or Example 2' after the words `Compound B-41D' where it appears in each of:

                  Example 3 on p 27, line 11

                  ..."

There then follow further details of amendments.

The question now in issue was not argued before his Honour.  However the form of order is consistent with the exercise of the jurisdiction which, I find, is conferred on the Court by the Act.  Of course, the Court itself does not grant patents.  But the Court can make a direction that a patent be granted conditional on amendments which appear appropriate in the light of the evidence and argument before the Court. 

I therefore answer the question raised for separate determination:  Yes.

Since the issue was a discrete and final issue, I think it is appropriate that Genetics pay the cost of the hearing before me.  But the notice of motion was also concerned with some directions
so in other respects the costs will be reserved.

                                  I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment of his Honour Justice Heerey.

                                  Dated:

                                      Associate

Appearances

Counsel for the applicant:        Mr R Macaw QC with Mr B Caine

Solicitor for the applicant:      Davies Ryan De Boos

Counsel for the respondent:       Mrs A Bennett QC with Mrs K Howard

Solicitor for the respondent:     Sprusons

Date of hearing:                  21 June 1996