FEDERAL COURT OF AUSTRALIA

European Community v Commissioner of Patents [2006] FCA 706

PATENTS – appeal from decision of Patent Commissioner – opposition to patent application – where respondent granted leave to withdraw appearance – where no appearance on behalf of the Commissioner – whether it is appropriate to allow patent to proceed to grant – relevant legal principles – whether necessary to consider merits of patent application – opposition dismissed – patent allowed to proceed to grant

Patents Act 1990 (Cth) s 60

Titan Mining & Engineering Pty Ltd v Arnall’s Engineering Pty Ltd (1988) 12 NSWLR 73 followed

Kaiser Aluminum & Chemical Corporation v Reynolds Metal Company (1969) 120 CLR 136 cited

RD Werner Co Inc v Bailey Aluminium Products Pty Ltd (1987) 8 IPR 339 cited

Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 discussed

Caroma Sales Pty Ltd v Philmac Pty Ltd (1972) 46 ALJR 324 followed

Brickwood Holdings Pty Ltd v ACI Operations Pty Ltd [1983] 2 VR 587 followed

THE EUROPEAN COMMUNITY v COMMISSIONER OF PATENTS

VID 31 of 2003

YOUNG J

16 MAY 2006

MELBOURNE

THE COURT ORDERS THAT:

1.             The appeal be allowed and the decision of the Delegate of the Commissioner of Patents given on 12 December 2002 allowing the opposition, be reversed.

2.             The opposition to Australian patent application number 713629 be dismissed in its entirety and the said patent application proceed to grant.

3.             The costs order in the opposition hearing below be vacated.

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

REASONS FOR JUDGMENT

1                     This is an appeal from a patent opposition within the Patents Office.  The appeal is from a decision of a delegate of the Commissioner of Patents made on 12 December 2002 whereby the delegate allowed part of the opposition and refused to order that the accepted patent application number 713629 proceed to grant.  The patent applicant (‘the appellant’) appealed by notice of appeal dated 21 January 2003, pursuant to s 60(4) of the Patents Act 1990 (Cth).

2                     I have before me the following exhibits to the affidavit of Douglas Charles Carter, sworn 21 April 2006:

(a)           the patent application dated 12 March 1998; 

(b)          the advertising of the acceptance of the application on 9 December 1999; 

(c)           the notice of opposition dated 7 March 2000;  and

(d)          the decision of the delegate of the Commissioner of Patents dated 12 December 2002. 

These are the requisite documents to found the jurisdiction of the Court in an appeal under s 60(4): see Titan Mining & Engineering Pty Ltd v Arnall’s Engineering Pty Ltd (1988) 12 NSWLR 73 (‘Titan’) at 75 per McLelland J.

3                     The patent application in issue is entitled ‘Ruminal Bolus for Electronic Identification of a Ruminant’.  The specification relates to a bolus or large pill which is to be used in identifying ruminant animals.  The device comprises a solid body composed of aluminium oxide which encloses electronic transmitting components.  It is designed to be swallowed by the animal so that electro-magnetic data can be transmitted and then used for tracking and other management purposes.

4                     The original respondent in the appeal, Aleis International Pty Ltd (‘Aleis’), did not appear at the hearing.  By affidavit sworn 13 March 2006, Mr Ian David Hughes, a partner of Deacons, the solicitors for Aleis, deposed that he had been instructed that Aleis wished to withdraw its appearance and take no further part in the appeal.  Aleis instructed Deacons to file a notice seeking leave to do so.  Mr Hughes also deposed that he held instructions to institute revocation proceedings in respect of any patent that might be granted to the appellant as the result of a successful appeal.  Those revocation proceedings, according to Mr Hughes, are likely to raise various grounds of invalidity including fair basing, manner of manufacture and inventive step, prior use, prior publication and such other grounds as may be advised.

5                     At a hearing on 17 March 2006, I granted Aleis leave to withdraw its appearance in the proceedings.  In those circumstances, the Commissioner of Patents was substituted as the respondent in the proceeding.  On 17 March 2006, a representative of the Commissioner of Patents appeared and informed the Court that the Commissioner of Patents did not oppose the orders sought by the appellant in the appeal, and did not wish to appear further in the proceedings. 

6                     There was no appearance on behalf of the Commissioner of Patents at the hearing on 16 May 2006.  I was informed by senior counsel for the appellant, Mr McGowan, that the position adopted by Commissioner of Patents had not changed since 17 March 2006.

7                     The appellant seeks orders as follows:

(a)           the appeal be allowed and the decision of the delegate of the Commissioner of Patents given on 12 December 2002 allowing the opposition be reversed; 

(b)          the opposition to Australian Patent Application No 713629 be dismissed in its entirety and the said patent application proceed to grant;  and

(c)           the costs order made below in the opposition proceedings be vacated. 

8                     After hearing submissions from Mr McGowan and considering the authorities, I have concluded that the orders sought by the appellant should be made without embarking upon a consideration of the merits of the appeal.

discussion

9                     An appeal under s 60(4) of the Patents Act is an original proceeding in this Court and the hearing of an appeal is a hearing de novo: see Kaiser Aluminum & Chemical Corporation v Reynolds Metal Company (1969) 120 CLR 136 at 142; RD Werner Co Inc v Bailey Aluminium Products Pty Ltd (1987) 8 IPR 339 at 340; and F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 at 63 (‘Hoffman-La Roche’).

10                  In an appeal, the issue for decision would be whether, if granted, the patent would be clearly invalid.  The authorities dealing with the issues that arise in an appeal and the onus of proof are canvassed by Emmett J in Hoffman-La Roche, particularly at 66-70 [48]-[66].  Emmett J arrived at the following conclusion at 70 [67]:

‘The language employed in the cases to which I have referred suggest that it should appear clear to the Court that no patent granted in respect of the specification would be valid.  I consider that, before the Court would uphold an opposition to the grant of a patent, the Court should be clearly satisfied that the patent, if granted, would not be valid.’

11                  The appellant submitted that the appeal should be allowed and the patent application should proceed to grant essentially because the onus is on the now-withdrawn opponent to make out the opposition and, in this proceeding, the opponent has neither tendered nor adduced any evidence before this Court capable of discharging its onus.  In those circumstances, the accepted patent application stands unchallenged and it was submitted that it must be allowed to proceed to grant. 

12                  These submissions are made good by a number of authorities to which I was referred: Titan at 75-76; Caroma Sales Pty Ltd v Philmac Pty Ltd (1972) 46 ALJR 324 (‘Caroma’) at 324 per Walsh J; Brickwood Holdings Pty Ltd v ACI Operations Pty Ltd [1983] 2 VR 587 (‘Brickwood’) at 588-589 per King J.  In Titan, McLelland J set out at 75-76 the approach that should be followed by the Court:

‘Proceedings in the court on “appeal” from a decision of the Commissioner pursuant to s 60(5) are original proceedings and not an appeal in any technical sense.  The duty of the Court in such proceedings is to exercise de novo the function of the Commissioner under s 60.  The Court must exercise that function only on the basis of the evidence adduced in the proceedings before it.  The material before the Commissioner or his delegate when he made the decision appealed from is not to be treated as being before the Court unless it is tendered and admitted in the proceedings before the Court (cf the Supreme Court Rules, Pt 81, r 14).  Evidence which was not before the Commissioner may also be admitted before the Court.

The Court, exercising the function of the Commissioner, may take into account a ground of opposition specified in s 59 whether relied on by the opponent or not (see s 60(2)).  This recognises that a decision under s 60 has a public aspect going beyond the mere resolution of a contest between the applicant and the opponent.  This public aspect is further recognised by s 149 of the Act which contemplates active intervention by the Commissioner before the Court, with leave, in such proceedings as this.  The non-appearance, or withdrawal, of the opponent provides an obvious occasion for such intervention where there are matters to which, in the public interest, the Commissioner desires to have the Court direct its attention.

Where a ground of opposition depends on some fact being established, the onus of proof of that fact rests upon the party seeking to establish that ground of opposition, that is, the opponent or the Commissioner, as the case may be…

Subject to its jurisdiction being established, the issue for the Court is, as it was for the Commissioner, whether the patent, if granted, would be clearly invalid on one of the relevant grounds. Unless invalidity on such a ground is clearly shown, the application should be allowed to proceed to a grant and the validity of the patent left to be determined in infringement or revocation proceedings.’

13                  In Caroma, Walsh J was confronted with a situation like that of the present case, in that neither the respondent-opponent nor the Commissioner appeared.  Walsh J found at 324-325:

‘It was said that the only evidence to be taken into consideration in deciding the appeal is that tendered at the 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.  As Kitto J. said in Kaiser Aluminum & Chemical Corporation v Reynolds Metal Co. (1969), 120 CLR 136, at p. 142, an appeal under s.60(5) of the Act is in truth an original proceeding and “it must be decided upon the evidence adduced before this Court”.  His Honour referred to some authorities dealing with the nature of the jurisdiction exercised by this Court in taxation “appeals”.  One of those authorities was Commissioner of Taxation v Finn (1960), 103 CLR 165.  In that case, at pp. 167-168, Fullagar J. cited passages from the judgment of Williams J. in Federal Commission of Taxation v Sagar (1946), 71 CLR 421, at pp. 423-424, including the following passage: “The appeal is a proceeding in the original jurisdiction of the Court so that, unless the parties agree that the evidence given 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”.

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.’

14                  In Brickwood, King J had before him a patent appeal in which the opponent did not appear and had indicated it would withdraw its opposition, and the Commissioner indicated he did not intend to take any active role in the matter.  King J allowed the appeal and ordered that the patent application proceed to grant.  His Honour said at 588-589:

‘[a]s the burden of proving to the Court that no valid patent could issue from the patent application was upon the respondent, the appellant was under no duty before the Court to ventilate the Commissioner’s reasons for his decision, or to put before the court any of the evidence put by the parties before the Commissioner.  Thus, in view of the respondent’s withdrawal and the attitude of the appellant, the Court had before it an opposition unsupported by any evidence or opponent.  This was, I think, a basis for allowing the appeal. 

In the absence of intervention by the Commissioner, there was then no way in which the issues raised in the opposition proceedings could be put before the Court, and the Court had before it an accepted application which it was proper to require the Commissioner to grant.  In my view, the Commissioner’s expressed attitude of passivity justified my making such an order. 

I do not think that this view is inconsistent with the judgment of Walsh, J. in Caroma Sales Pty Ltd v Philmac Pty Ltd (1972), 46 ALJR 324, in which case the appellant adduced affidavit evidence and called oral evidence on a patent appeal hearing at which neither the respondent nor the Commissioner appeared.  It is to be distinguished from the present case in at least two respects.  In the first place, the appellant, which was, as here, the patent applicant, voluntarily proceeded with the hearing… The question whether it would have needed to proceed with the hearing, if it had not wished to seek leave to amend, was not raised.  In the second place, the respondent did not consent, either expressly or by implication, to the appellant’s course of action.  All that it did was abstain from appearing.

I think therefore that in the circumstances, the orders I have made were justified.’

15                  The essence of these authorities is that the only evidence to be taken into consideration in deciding an appeal is that tendered at the hearing and admitted by the Court. 

16                  In this case, there is no evidence capable of supporting the opposition, as none has been tendered.  The opponent has withdrawn and the Commissioner of Patents does not wish to take an active part in the proceeding.  Consequently, in my opinion, there is no basis on which this Court can uphold any ground of opposition.  

17                  Mr McGowan has drawn my attention to the fact that the grounds available to the Court to refuse a patent application are all those available to an opponent, whether relied upon by the opponent or not: see s 60(3) of the Patents Act and Titan at 75.  However, I agree with his submission that the grounds available can only be those which are supported by evidence or which do not require evidence.  The only ground of opposition taken below was that of prior user, and no evidence capable of supporting that ground has been adduced before me.  Nor has any cross-contention been filed that would raise any other issue. 

18                  I have also taken into account that s 20(1) of the Patents Act makes it clear that the grant of a patent is no guarantee of validity.  Here, indeed, Mr Hughes’ affidavit indicates that the original opponent intends to institute revocation proceedings.  In those circumstances, there is, in my opinion, no reason why the Court need examine the merits of the opposition.  That is particularly so where the Commissioner of Patents, who would normally raise public interest factors for the assistance of the Court, has indicated that it does not oppose the orders sought in the appeal. 

19                  Accordingly, I propose to make the orders sought by the appellant.  There is no need, having regard to the authorities, for this Court to embark upon a consideration of the merits of an opposition that has not been pursued. 

Associate:

Dated:              13 June 2006