FEDERAL COURT OF AUSTRALIA

Bradken Resources Pty Ltd (ACN 098 300 988) v Lynx Engineering Consultants Pty Ltd (ACN 059 949 469) [2010] FCA 662

ON APPEAL AND CROSS-APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS

THE COURT ORDERS THAT:

1.                  The answer to Question 1 in the Notice of Motion filed by the applicant is (c). 

2.                  The answer to Question 2 is no.

3.                  The answer to Question 3 is:

The matter be re-listed for a directions hearing on 1 July 2010 at 9.45 am. 

4.                  There be liberty to either party to apply in relation to these orders within 7 days. 

5.                  Costs of the Notice of Motion and of the Objection to Competency be reserved to be determined in the Appeal and Cross-Appeal.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

ON APPEAL AND CROSS-APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS

REASONS FOR JUDGMENT

INTRODUCTION

1                     In this long running intellectual property dispute, the parties seek clarification of the issues that are to be determined at a forthcoming patent appeal.  The vehicle for that clarification is a Notice of Motion filed by the applicant (Bradken) in the following terms:

Question 1:

On the assumption that the Second Appeal filed by the Applicant on 20 November 2009 is competent, is the subject of each of the First Appeal filed on 21 March 2007 and the Second Appeal:

(a)        The form of the claims that were the subject of the decision of the Delegate of the Commissioner of Patents dated 13 March 2007 (First Decision); or

(b)        The form of the claims that were the subject of the decision of the Delegate (sic-of the) Commissioner of Patents dated 13 November 2009 (Third Decision); or

(c)        Both?

Question 2:

Is either of the matters raised in the Respondent’s Notice of Objection to Competency of Appeal filed on 23 December 2009 valid grounds upon which the Second Appeal should be struck out under Section 31A(2) of the Federal Court of Australia Act 1976 (Cth) as being incompetent?  If not, should the Respondent’s Notice of Objection to Competency be dismissed?  If so, which parts of the Second Appeal should be struck out?

Question 3:

Following the determination of Questions 1 and 2, what further or other orders should be made in relation to the future conduct of the proceedings?

2                     For the purposes of understanding Question 2, the respondent’s (Lynx) Notice of Objection to Competency of Appeal filed on 23 December 2009 is in the following terms:

1.         The purported appeal is not an appeal from a decision of the Commissioner within section 60(4) of the Patents Act 1990 (Cth).

Particulars

The purported appeal is from a Final Determination of the Commissioner that a patent should proceed to grant, and is not an appeal from a decision of the Commissioner within section 60(4) of the Patents Act, 1990.  The Applicant has not appealed from the decision of the Delegate of the Commissioner of 18 August 2009.

2.         So far as the Appeal relies on grounds and issues in respect of those grounds which were the subject of decision in the Opposition Decision of 13 March 2007 and relied upon in the Notice of Appeal of the First Opposition Appeal, the Second Opposition Appeal is incompetent and should be struck out. 

Particulars

Grounds 3.1, 3.2, 3.3 so far as they are supported by the following particulars and the following particulars should be struck out of the Notice of Appeal in the Appeal:  particulars 4.3.2, 4.4, 4.5, 4.6, 4.6 (sic), 4.8, 4.9, 4.10, 4.11 and 4.13.

STATUTORY FRAMEWORK

3                     Relevant only to this motion, ss 18, 40, 59, 60, 102 and 104 of the Patents Act 1990 (Cth) (the Patents Act) respectively provide as follows:

18        Patentable inventions

Patentable inventions for the purposes of a standard patent

(1)        Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:

(a)        is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and

(b)        when compared with the prior art base as it existed before the priority date of that claim:

(i)         is novel; and

(ii)        involves an inventive step; and

(c)        is useful; and

(d)        was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor in title to the invention.

Patentable inventions for the purposes of an innovation patent

(1A)     Subject to subsections (2) and (3), an invention is a patentable invention for the purposes of an innovation patent if the invention, so far as claimed in any claim:

(a)        is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and

(b)        when compared with the prior art base as it existed before the priority date of that claim:

(i)         is novel; and

(ii)        involves an innovative step; and

(c)        is useful; and

(d)        was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor in title to the invention.

(2)        Human beings, and the biological processes for their generation, are not patentable inventions.

Certain inventions not patentable inventions for the purposes of an innovation patent

(3)        For the purposes of an innovation patent, plants and animals, and the biological processes for the generation of plants and animals, are not patentable inventions.

(4)        Subsection (3) does not apply if the invention is a microbiological process or a product of such a process.

40        Specifications

(1)        A provisional specification must describe the invention.

(2)        A complete specification must:

(a)        describe the invention fully, including the best method known to the applicant of performing the invention; and

(b)        where it relates to an application for a standard patent—end with a claim or claims defining the invention; and

(c)        where it relates to an application for an innovation patent—end with at least one and no more than 5 claims defining the invention.

(3)        The claim or claims must be clear and succinct and fairly based on the matter described in the specification.

(4)        The claim or claims must relate to one invention only.

59        Opposition to grant of standard patent

The Minister or any other person may, in accordance with the regulations, oppose the grant of a standard patent on one or more of the following grounds, but on no other ground:

(a)        that the nominated person is either:

(i)         not entitled to a grant of a patent for the invention; or

(ii)        entitled to a grant of a patent for the invention but only in conjunction with some other person;

(b)        that the invention is not a patentable invention;

(c)        that the specification filed in respect of the complete application does not comply with subsection 40(2) or (3).

60        Hearing and decision by Commissioner

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

(2)        The Commissioner must give the applicant and the opponent a reasonable opportunity to be heard before deciding a case.

(3)        The Commissioner may, in deciding a case, take into account any ground on which the grant of a standard patent may be opposed, whether relied upon by the opponent or not.

(4)        The applicant, and any opponent, may appeal to the Federal Court against a decision of the Commissioner under this section.

102      What amendments are not allowable?

Amendment of complete specification not allowable if amended specification would claim matter not in substance disclosed in the filed specification

(1)        An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim matter not in substance disclosed in the specification as filed.

Certain amendments of complete specification are not allowable after relevant time

(2)        An amendment of a complete specification is not allowable after the relevant time if, as a result of the amendment:

(a)        a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment; or

(b)        the specification would not comply with subsection 40(2) or (3).

Meaning of relevant time

(2A)     For the purposes of subsection (2), relevant time means:

(a)        in relation to an amendment proposed to a complete specification relating to a standard patent—after the specification has been accepted; or

(b)        in relation to an amendment proposed to a complete specification relating to an innovation patent—after the Commissioner has made decisions under paragraphs 101E(a) and (aa) in respect of the patent.

Amendment of innovation patent request not allowable in certain circumstances

(2B)     An amendment to a patent request relating to an innovation patent application is not allowable if:

(a)        the patent application was provided for in section 79C; and

(b)        the effect of the proposed amendment would be to convert the application from an application for an innovation patent to an application for a standard patent.

Amendments not allowable if information not provided

(2C)     An amendment of a complete specification relating to a patent is not allowable if:

(a)        the patentee or the patentee’s predecessor in title failed to ensure the provision to the Commissioner of the information required by subsection 45(3) or section 101D in relation to the patent; and

(b)        the effect of the proposed amendment would be to remove a lawful ground of objection under paragraph 18(1)(b) or 18(1A)(b) to the specification arising from the existence of some or all of the information not provided.

(3)        This section does not apply to an amendment for the purpose of correcting a clerical error or an obvious mistake made in, or in relation to, a complete specification.

104      Amendments by applicants and patentees

(1)        An applicant for a patent or a patentee, may, subject to this Act, and subject to and in accordance with the regulations, ask the Commissioner for leave to amend the relevant patent request or complete specification, or any other filed document, for any purpose including either or both of the following:

(a)        removing a lawful ground of objection to the request or specification, whether that objection is raised in the course of an examination or re examination or otherwise;

(b)        correcting a clerical error or an obvious mistake.

(2)        Where an applicant or patentee asks for leave to amend a patent request or complete specification, or any other filed document, the Commissioner must consider and deal with the request in accordance with the regulations.

(4)        The Minister or any other person may, subject to and in accordance with the regulations, oppose allowing an amendment.

(5)        The Commissioner must not allow an amendment that is not allowable under section 102.

(6)        On the allowance of an amendment, the amendment is to be taken to have been made.

(7)        An appeal lies to the Federal Court, against a decision of the Commissioner allowing, or refusing to allow, a requested amendment, other than a prescribed decision.

BACKGROUND

4                     For completeness, the history of litigation to date concerning this invention is recorded in the following sets of reasons and judgments:

Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited [2007] FCA 578;

Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited (No 2) (2007) 163 FCR 372;

Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited trading as ANI Bradken Rail Transportation Group [2008] FCA 555;

Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd (2008) 78 IPR 586;

Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited trading as ANI Bradken Rail Transportation Group (No 2) [2009] FCA 363; and

Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited trading as ANI Bradken Rail Transportation Group (No 3) [2010] FCA 32.

5                     The starting point of for these events was an application by Lynx for an Australian patent.  This application was lodged on 30 March 1999 (application 749848) and claims priority from a provisional application PP2677 which was filed on 30 March 1998 (the First Application). 

6                     On 4 October 2002, Bradken filed an opposition to the grant of the First Application pursued by Lynx (the First Opposition).  Four years later, on 10 August 2006, the First Opposition was heard and considered.  In the following year, 13 March 2007, the decision of a delegate was issued.  The First Opposition was upheld in respect of claims 1, 6, 9, 14 and 30 (the First Decision).  Bradken, however, appealed the First Decision in the New South Wales Registry of this Court in NSD 439 of 2007 (Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd (2008) 78 IPR 586).  That appeal was lodged on 21 March 2007 (the First Appeal). 

7                     Following the lodgement of the First Appeal, Lynx, on 11 May 2007, sought to make amendments to the First Application.  This process was repeated on 27 August 2007 pursuant to s 104 of the Patents Act (the Amendment Applications).  

8                     On 1 November 2007, the amendments which were lodged in May and August 2007 were accepted and the acceptance was published, advertised and became open to opposition under the Patents Act.  The amendments affected involved considerable changes. 

9                     On 31 January 2008, Bradken filed a notice of opposition under s 104(4) of the Patents Act in relation to the amended claims based on grounds established under s 102 of the Patents Act (the Second Opposition). 

10                  On 24 June 2009, the Second Opposition to the amended claims was heard by the delegate of the Commissioner of Patents. 

11                  On 18 August 2009, the delegate issued a decision dismissing the Second Opposition (the Second Decision). 

12                  On 13 November 2009, the delegate of the Commissioner of Patents issued a Final Determination (the Final Determination) in relation to the patent confirming that the amendments overcame the successful grounds of opposition which had been upheld in the First Decision.  It followed that none of the grounds of opposition raised by Bradken was established in respect of the amended patent application. 

13                  On 20 November 2009, Bradken appealed the Final Determination of the delegate (the Second Appeal) to this Court by commencement of these proceedings (WAD 212 of 2009). 

14                  On 26 November 2009, orders by consent were made that the Second Appealbe heard concurrently with the First Appeal.

15                  Consequently, on 11 December 2009, Bradken filed consolidated points of claim. 

16                  Some correspondence was exchanged between the parties in relation to the terms of Bradken’s points of claim.  Differences which are discussed in these reasons were unable to be resolved and in consequence, on 23 December 2009, Lynx filed a Notice of Objection to Competency of the Second Appeal pursuant to O 52 r 22(1) and O 58 r 5A of the Federal Court Rules (FCR) and s 60(4) of the Patents Act. 

17                  Essentially the ground of objection, as indicated above, was that the appeal is not an appeal from a decision of the Commissioner within s 60(4) of the Patents Act.  The purported appeal, rather, is from a final determination of the Commissioner that a patent should proceed to grant.  The point raised in the Notice of Objection was that Bradken had not appealed the Second Decision, therefore, various grounds agitated in the Second Opposition and addressed in the Second Decision should be struck out. 

18                  That skeletal overview can now be fleshed out a little.  In the original 29 November 2005 Statement of Grounds and Particulars of Opposition, Bradken recorded as ground 1 under s 59(a) that the nominated person was not entitled to a grant of a patent for the invention.  Under ground 2 pursuant to s 59(b) – para 18(1), the ground of opposition was that the invention so far as claimed in each of claims 1-31 did not satisfy the threshold requirement of an ‘invention’ as required by subs 18(1), and ground 3 pursuant to s 59(b) and in relation to para 18(1)(a), the invention so far as claimed in each of claims 1-31 was said to be not a manner of manufacture within the meaning of s 6 of the Statute of Monopolies.  Under ground 4 and s 59(b) the invention so far as claimed in each of claims 1-31 when compared with the prior art base as it existed before the priority date of the claim is not novel.  Under ground 5 and s 59(b) and para 18(1)(b)(ii), it was asserted that the invention so far as claimed in each of the claims 1-31 when compared with the prior art base as it existed before the priority date of the claim did not involve an inventive step and in ground 6 under s 59(c), it was claimed that the specification filed in respect of the complete application did not comply with subs 40(2) or s 40(3) of the Patents Act. 

19                  In the Final Determination, the delegate noted the First Decision in which the delegate had found that the First Opposition succeeded only for the reasons that claim 1 and certain of its dependent claims lacked novelty.  The delegate noted that that decision was subject to appeal and cross-appeal.  The delegate gave Lynx 60 days from that decision to propose amendments.  The amendments were proposed and subsequently advertised on 1 November 2007.  They were opposed by Bradken on 31 January 2008.  The Second Opposition (to the amendments) was dismissed by a delegate of the Commissioner in the Second Decision (Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2009] APO 15) on 18 August 2009. 

20                  The delegate noted that the amendments had now been incorporated into the specification.  It was noted that the present matter was the Final Determination (of the Opposition to the grant of a patent).  Both parties advised they did not wish to be heard. 

21                  The delegate explained that the Final Determination was an opportunity to examine whether the amendments to the specification overcame the deficiencies identified in the First Decision and whether the amendments introduced any new deficiencies, that is, grounds of opposition arising solely from the amendments as opposed to pre-existing deficiencies. 

22                  The delegate noted that matters that had been decided in the First Decision had been decided once and for all subject to appeal and cross-appeal.  Those matters were not open to further challenge. 

23                  In the Final Determination, the delegate recorded that all deficiencies identified in the First Decision has been overcome by the amendments to the specification.  The main effect of the amendments was to exclude claim 1 and replace it with a new claim based on an independent claim 2 as it stood at acceptance which the delegate had found to be novel with additional limitations.  It followed that the novelty of the claims was no longer an issue.  Further, the delegate who had heard the Opposition to the amendments found that they did not introduce any s 40 deficiencies.  The delegate recorded no reason to conclude otherwise.  It was recorded that the application was in order to proceed to sealing but in view of the pending Appeal and Cross-Appeal it was not possible for the delegate to direct that the application proceed to sealing at that time.  The delegate recorded that subject to the outcome of the Appeal and Cross-Appeal, Lynx could apply to the Commissioner for a direction that the application proceed to sealing.

24                  Under the First Appeal lodged with this Court on 21 March 2007, many of the grounds were repeated including the topics of entitlement, manner of manufacture and priority date; novelty; inventive step; fair basis; and s 40(3) issues.  In a cross-appeal and Notice of Contention filed by the respondent on 13 April 2009 (the First Cross-Appeal), the respondent cross-appealed against the finding that the filing date of the provisional application would not be set as the priority date of the claims, and also against the finding that the invention as disclosed in claim 1 and claims 6, 9, 14 and 30 of the First Application was not entitled to proceed to grant.  There was also a cross-appeal to the awarding of the costs of the Opposition against Lynx.  Insofar as novelty was concerned, issue was taken in relation to a waste bin known as the Dial-A-Dump waste bin.  Lynx argued that the delegate erred in finding that, contrary to the evidence, the public use of the Dial-A-Dump waste bin since 1986 disclosed all the essential features of claims 1, 6, 9, 14 and 30.  Lynx also complained that the delegate erred in finding, contrary to the evidence, that the Lynxrail wagon’ was publicly available through sale of the wagon in Australia before 30 March 1999 and to the extent, which was not conceded, that the Lynxrail wagon had been available within 12 months of the priority date found by the delegate, that it was as a result of the working in public of the invention for the purposes of reasonable trial and/or because of the nature of the invention it was reasonably necessary for the said working of the same to be in public.  Further grounds of contention were advanced to support the conclusion reached by the delegate to the extent that it had been decided in favour of Lynx in the First Decision. 

25                  Lynx makes the point that Bradken did not file any appeal from the Second Decision but only filed an appeal from the Final Determination (the Appeal).  On 11 December 2009, it relied on consolidated points of claim in respect of both appeals. 

26                  The difficulty to which Lynx points is that the Appeal and the consolidated points of claim raise additional items of prior art which, it says, had not been before the Commissioner nor the subject of any of the Commissioner’s decisions nor the subject of the First Appeal and the First Cross-Appeal.

27                  Lynx argues that the issues to be determined on appeal are those raised by the First Appeal and the First Cross-Appeal.  The Notice of Objection to Competency, the Second Appeal and the Second Cross-Appeal should be considered separately.  The Second Cross-Appeal is the Cross-Appeal from the Final Determination and Notice of Contention filed by Lynx on 23 December 2009 together with its Notice of Objection to Competency to the Appeal. 

28                  Lynx contends that its substantive rights will be prejudiced if the issues on the First Appeal and First Cross-Appeal are not determined separately from those (if any) arising on the Second Appeal. 

29                  One important issue raised on the First Cross-Appeal, was the relevant priority date of the patent.  If the First Cross-Appeal is upheld, the claims of the patent, relevantly, claims 1 and 2 of the unamended claims before the delegate on the First Opposition and the subject of the First Decision or, should it be relevant when all matters in all appeals are decided, claim 1 of the amended claims before the delegate on the Second Opposition will have a priority date of 30 March 1998.  Lynx points to the fact that this will predate the alleged disclosure depriving the patent application of novelty by the sale and delivery of Lynxrail wagons to BHP Iron Ore Pty Ltd between December 1998 and January 1999 referred to in particular 3.5.1(a) in the Notice of Appeal in the First Appeal.  However, in light of the entirely replicated Second Cross-Appeal and the Second Appeal, this ground will not be affected by the outcome of this Motion. 

30                  Lynx contends that as no appeal was pursued by Bradken from the Second Decision, matters it resolved have been completely finalised:  Perkin-Elmer Corporation v Varian Techtron Pty Ltd (1985) 5 IPR 321 (at 322-323).  This was an ‘interim decision’ from which an appeal was required if it was sought to be challenged.  The matters decided by the Second Decision (relating only to objections under s 102 and s 40 of the Patents Act) ceased to be open to challenge after that time in the Opposition and only on appeal.  Lynx contends that no appeal has been brought and any appeal would be long out of time.  Such matters were not the subject of the Final Determinationin the sense that those matters were not re-decided.  The decision of the delegate in the Second Decision was therefore conclusive as to the issues raised in the Second Opposition to amendments of the claims and the Final Determinationalso determined that, accepting what was decided in the First Decision and in the Second Decision, the amendments overcame all deficiencies identified in the First Decision and concluded that the FirstApplication could proceed to grant.  The novelty of the claims as amended was therefore no longer in issue as noted by the Commissioner in the Final Determination.  It followed that that Final Determination did not involve any reconsideration or re-decision of the matters already decided in the First Decision or in the Second Decision.  Insofar as the Notice of Appeal in the Second Appeal raises matters decided in the First Decision or in the Second Decision, Lynx argues that it is not competent. 

31                  First, Lynx contends that although the hearing before the Court on the First Appeal, Second Appeal and each of the Cross-Appeals are hearings de novo and permit fresh evidence, they do not permit an extension on appeal of the ‘subject matter’ which was before the Commissioner and the subject matter of the Commissioner’s Decisions (New England Biolabs Inc v F Hoffmann-La Roche AG (2004) 141 FCR 1 (at [44]-[46] and [49]).  Lynx argues that an appeal to the Court evinces a Parliamentary intention that the same subject matter be dealt with by the Court as was dealt with by the Commissioner but this time by the deployment of judicial power:  see also Airsense Technology Ltd v Vision Systems Ltd (2007) 73 IPR 65 per Jessup J (at [13]-[16]). 

32                  This translates in practical terms to a complaint that the additional items of prior art upon which Bradken seeks to rely in its consolidated points for the Appeal and which were not before the Commissioner or in the Oppositions leading to the First Decision, the Second Decision and the Final Determination, did not form part of the ‘subject matter’ before the Commissioner and cannot be the subject of appeal to this Court in either the First Appeal or the Second Appeal (see Bradken’s additional particulars of invalidity, para 4.10 of the Notice of Appeal in the Appeal and paras 25(g) – (p) inclusive of the consolidated points).  Lynx complains that Bradken also seeks to raise additional issues under s 40(3) of the Patents Act in para 4.9 of the Notice of Appeal and in para 36(a)-(d) inclusive of the consolidated points. 

33                  Lynx contends that Bradken in failing to appeal from the Second Decision was precluded from raising the same matters in the current appeals.  In Iluka Midwest Ltd v Technological Resources Pty Ltd (2002) 116 FCR 218 (at [45]) Merkel J said:

In my view it is at least implicit, if not explicit, in the authorities to which I have referred that, to the extent that those issues have been determined by an interim decision in a manner that it is unfavourable to the interests of either party, it is incumbent upon that party, if it so desires, to appeal the decision. If it fails to do so then it is not open to that party to appeal, whether directly or indirectly, against the interim decision of the Commissioner out of time without leave of the Court. Accordingly, an appeal out of time against the interim decision without leave would be incompetent. Further, a failure to appeal against the matters decided adversely to a party in an interim decision can preclude that party from seeking to re-agitate those matters as grounds of appeal against a final decision unless those matters were also dealt with in, and were also decided by, the final decision. It must follow, for the purposes of O 20, r 2, that it is an abuse of process and vexatious for a party to rely, in an appeal against a final decision, on grounds of appeal that only relate to matters decided in the interim decision if no appeal has been brought in respect of the interim decision. Put simply, a party cannot achieve indirectly what it is not permitted to achieve directly. Of course, leave can always be sought to appeal out of time, but that raises separate issues under O 58, r 4(3)(b).  (emphasis added)

34                  For those reasons, Lynx contends that the answers to the Questions in the Notice of Motion should be answered as follows:

1(a)      As to the First Appeal, the claims that were the subject of the decision of the delegate of the Commissioner of Patents dated 13 March 2007;

as to the Second Appeal, so far as it is a valid appeal from the Final Determination, the form of the claims that were the subject of the decision of the delegate of the Commissioner of Patents dated 18 August 2009;

1(b)      See 1(a) above;

1(c)      See 1(a) above;

2.         Yes.  Each of the matters is a valid ground;

3(a)      The Notice and Grounds of Appeal and consolidated points of claim for the Second Appeal should be struck out in accordance with the submissions of Lynx and the Notice of Objection to Competency, and leave given to Bradken to file amended consolidated points of claim and to Lynx to file an amended defence to those consolidated points of claim;

3(b)      Orders and directions for the filing of further evidence on the First Appeal and First Cross-Appeal and on the Second Appeal (to the extent remaining) and Second Cross-Appeal; and

3(c)      Such further or other orders and directions as may be necessary. 

CONSIDERATION

35                  The source of jurisdiction for the Federal Court to entertain appeals of decisions or directions of a Commissioner is found in s 154(1) of the Patents Act which provides as follows:

(1)        The Federal Court has jurisdiction with respect to matters arising under this Act.

(2)        The jurisdiction of the Federal Court to hear and determine appeals against decisions or directions of the Commissioner is exclusive of the jurisdiction of any other court except the jurisdiction of the High Court under section 75 of the Constitution.

(3)        A prosecution for an offence against this Act must not be started in the Federal Court.

36                  The Court has broad powers in exercising its jurisdiction on appeal.  It may admit further evidence, permit examination and cross-examination of witnesses including those giving evidence before the Commissioner.  It may affirm, reverse or vary any decision or direction of the Commissioner and give any judgement or make any order in the circumstances that it considers to be fit including orders as to costs.

37                  In Kaiser Aluminum & Chemical Corp v The Reynolds Metal Co (1969) 120 CLR 136 (at 142-143) Kitto J said (footnotes omitted):

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. The right of appeal is given to an opponent who, in the opinion of the Appeal Tribunal, "is entitled to be heard in opposition to the grant", and a person who proves before the Tribunal, as the appellant has proved in this case, that he had an interest which entitled him to oppose the grant of the patent and still has that interest answers that description. The appeal is therefore competent. 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. This appears to me to follow from the nature of the jurisdiction under s. 76 (ii.) of the Constitution as to which see Federal Commissioner of Taxation v. Lewis Berger & Sons (Australia) Ltd,; Commissioner of Taxation v. Finn, at pp. 167, 168; and indeed it appears from the general provision in s. 149 that 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: cf. Jafferjee v. Scarlett,. For the reasons above stated I am satisfied that the appellant has a locus standi to oppose the grant of a patent.

The respondent contended that the power to admit further evidence implies a discretion, and that I should exercise the discretion by refusing to allow the appellant to depart from the notice of opposition and to make here a case which it did not choose to make before the Deputy Commissioner. In my opinion, however, it is in the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be. (emphasis added)

38                  In Jafferjee v Scarlett (1937) 57 CLR 115 (at 119), Latham CJ noted that it was the duty of a court to decide an appeal such as that presently under consideration as if on an original application and not merely to decide whether the decision of the registrar could or could not be supported.

39                  In Re Smith; Ex p Mole Engineering Pty Ltd (1981) 147 CLR 340(at 348-349) Mason J noted that:

It is a natural consequence of the procedures under Pt V and Pt VIII that an officer who upholds objections to the grant of an application under Pt V will refrain from refusing the application where it appears that the objections may be cured by amendment. Then it is a practical and sensible course to allow the applicant time within which to lodge a request to amend the specification, as Mr Kildea did in this instance. But his decision was nonetheless a final decision on the original unamended application — there was nothing provisional or tentative about the finding on the grounds of objection. It dealt with all the issues arising on the notice of opposition so far as they were capable of final determination.

This view is supported by the judgment of Fullagar J in Broken Hill Proprietary Co. Ltd. v American Can Co.. There two companies lodged notice of opposition to a patent application by the respondent. The grounds of opposition included obviousness, want of novelty and failure to comply with s 40. The opposition was heard by an Assistant Commissioner of Patents. The commissioner delivered an ``Interim Decision'’ holding that the complete specification did not comply with s 40 in that the claims failed to sufficiently define the invention. However, he held that this defect could be overcome by relatively simple amendments which he identified with some particularity. He stated that the amendments, if applied for and allowed, would overcome all the grounds of objection. Fullagar J held that, despite the description ``Interim Decision'’ the Commissioner had actually decided as much of the opposition proceedings as was susceptible of decision at the time and had decided it once and for all. The effect of the decision was that the Commissioner had decided that the application would be refused unless the amendments were applied for and ultimately accepted.  (emphasis added)

40                  In Iluka Merkel J observed:

[30]      An appeal against a decision of the Commissioner under s 60 of the Act is an original proceeding in the Court which is to be decided as the Court thinks fit in all the circumstances upon the evidence before the Court, notwithstanding that the evidence may present a case that is completely different from the case before the Commissioner: see Kaiser Aluminum & Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136 at 142-143.

[31]      There may be much to be said for the view that appeals to the Court from an interim decision made in the course of a pre-grant opposition will fragment the opposition and may be antithetical to a "swift and economical" disposition of the opposition. However, it is now well established that an interim decision of the Commissioner that upholds one or more grounds of opposition, but which allows the applicant to amend its application to overcome those successful grounds of opposition is an appellable decision for the purpose of s 60: see Broken Hill Pty Co Ltd v American Can Co [1980] VR 143 at 147-148; Mole Engineering at 348-350 per Mason J and 355-356 per Wilson J and Acushnet Co v Spalding Australia Pty Ltd (1990) 18 IPR 364 at 372-375.

[32]      The statutory scheme providing for appeals against an interim decision of the Commissioner does not have the consequence that, if a party appeals against the final, but not an interim, decision the Court is bound by all findings of fact and conclusions of law made and applied by the Commissioner in the interim decision: see Acushnet at 376. It is well established that the Court's jurisdiction and powers on an appeal under s 60 are wide, and are not inhibited or fettered by findings of fact and conclusions of law made by the Commissioner or his delegate.

[33]      The cases, however, do not appear to deal directly with the issue arising on the present motions namely, whether Iluka in its appeal against the final decision is entitled, without seeking leave to appeal out of time against the interim decision, to appeal against the interim decision and to rely upon grounds dealt with and decided by the interim decision. Put another way, the issue is whether Iluka is only entitled to appeal against the final decision to grant the patent applied for by Technological Resources as of right on grounds that are consequential upon or related to its opposition to the amendments made by Technological Resources to correct the deficiencies identified by the Delegate in the interim decision, and not on grounds that were only applicable to the interim decision.

[34]      The answer to those questions depends on the proper construction of s 60 of the Act and, in particular, the consequences that attend a failure to appeal an interim decision.  (emphasis added)

…

[50]      In my view, in the context of the statutory scheme in respect of an opposition, the interim decision is to be taken as dealing with and generally deciding the grounds of novelty and fair basis under ss 18 and 40 which were stated to be Iluka's grounds of opposition, rather than only with the specific grounds of novelty and fair basis particularised, argued or pressed by Iluka at the hearing before the Delegate. In that regard it is relevant that the opposition is a proceeding between the applicant and the opponent in which the Commissioner is to adjudicate on whether the patent application should be granted (see s 61(1)). A patent is not to be granted if the invention is not novel or the claims are not fairly based on the specification (ss 18 and 40). In that context it is appropriate to view the interim and final decisions as relating to the grounds of opposition of novelty and fair basis generally, and as not restricted to novelty and fair basis as particularised, argued or pressed at the hearing. A narrow approach to the decisions (that is, deciding only the matters particularised, argued or pressed) is not consistent with their content, would tend to undermine the statutory objective of finality and expedition, is inconsistent with the approach to opposition proceedings taken in the English and Australian cases (and, in particular, with the view taken by Fullagar J (at 147-148) in BHP v American Can) about matters decided by an interim decision and is not mandated by the Act. Thus, prima facie, it does not appear to be open to Iluka, without leave, to rely upon the grounds of novelty or fair basis not pursued at the first hearing, the grounds of novelty or fair basis pursued at the first hearing, or any new novelty or fair basis grounds that were only applicable to the unamended application, as such grounds must be taken as having been decided by the interim decision.

[51]      I have indicated above that "prima facie" Iluka cannot as of right rely upon grounds that must be taken to have been decided by the interim decision. I have used that expression as it may be arguable that some grounds now sought to be relied upon arise out of, or directly relate to, the amended specification and, as such, are not to be taken to have only been dealt with and decided by the interim decision. It should be noted, however, that senior counsel for Iluka conceded that the amendments narrowed the scope of the claims. Accordingly, subject to the issue of leave to appeal out of time, it is appropriate to afford the parties an opportunity to consider these reasons and, in particular, whether any of the grounds that I regard as prima facie not open to Iluka ought to be permitted as grounds of appeal against the final decision.  (emphasis added)

41                  In New England Biolabs Inc a Full Court of this Court held:

[43]      It seems to us that far more important than looking for a statutory intention to remove a discretion that had existed under the Patents Act 1952, and before that, under the Patents Act 1903, is the recognition of the clear statutory intention, able to be seen in a number of provisions of the Patents Act 1903, but made manifest in the Patents Act 1952 and the Act, to put before the Court the same subject matter for decision that had been before the Commissioner, but to deploy the executive and judicial powers respectively in the making of decisions on that subject matter.

[44]      The use of the word "appeal" by Parliament does not confer appellate jurisdiction. There is no doubt that the nature of the appeal provided for in s 104(7) of the Act is one such as to confer original jurisdiction upon the Court. The Court approaches the matter for the first time exercising the judicial power of the Commonwealth, not in order to decide whether the executive decision maker was right or wrong, or otherwise to correct error in the executive decision, but to deal with a subject matter, a controversy, for the first time: Jafferjee v Scarlett (1937) 57 CLR 115 at 119-120, 126; the Bayer case; and Kaiser Aluminum & Chemical Corporation v Reynolds Metal Co (1969) 120 CLR 136 at 142.

[45]      Implicit, however, within the use of the word "appeal" and the phrase "appeal against the decision of the Commissioner", and without any other description of the controversy to be quelled by the exercise of judicial power, is the identification of the matter or controversy -- the subject matter of the deployment of the respective powers -- being the same in each case. The simplicity of the enunciation of what the Court is doing: hearing an appeal against a decision of an administrator by exercising for the first time the judicial power of the Commonwealth in the original jurisdiction leads one to conclude that the Court is dealing with the same subject matter as was dealt with by the Commissioner.

[46]      To the extent that the Act and Regulations delimit the boundary of the subject matter for decision by the Commissioner by restricting the decision to certain criteria or grounds, or by limiting what is permitted to be raised by an opponent in the application, or by eliminating any element of discretion in the making of the decision, they plainly confine the controversy before the Commissioner. We are of the view that the notion of an appeal to the Court in this context evinces a Parliamentary intention that the same subject matter be dealt with by the Court as was dealt with by the Commissioner (but this time by the deployment of judicial power). Thus, in order to conclude that the Court has a wider task by reference to different or wider criteria than that undertaken by the Commissioner one would need to identify some factor either from the nature of the judicial power or from some statutory provision upon which to base such a conclusion.

[47]      It was not said by the appellant that the exercise of the judicial power, of itself, gave the Court a discretion to refuse to grant leave to amend under s 104(7) of the Act in circumstances where the Commissioner had no such discretion under s 104(3). The different nature of the power (judicial rather than administrative) being exercised may lead to certain differences of procedure and approach, and will lead to a different character of decision with different attendant incidents. A discretion of the kind asserted by the appellant to reside in the Court in hearing an appeal under s 104(7) is not a necessary incident of judicial power; rather, if it exists, it is an incident of the task given to the Court (necessarily by statute) to be undertaken. That the judicial power is exercised to quell a controversy does not of itself introduce a general discretion affecting the question as to whether the controversy should be quelled one way or another. Rather, if a discretion resides in the Court to take into account certain matters in deciding whether to take one course or another, that is so because of the delimitation of the boundaries of the subject matter for decision by the Court -- that is, the delimitation of the task of the Court. These limits are to be found in the Act or some other relevant statute.

[48]      Turning to the Act, the appellant first relies upon s 160. That section, however, is not directed to the limits or boundaries of the subject matter for decision. It clarifies and amplifies the power of the Court, but it is not directed to the widening of the subject matter of the appeal against a decision of the Commissioner. The same can be said in this context of ss 19, 22 and 23 of the Federal Court of Australia Act 1976 (Cth).

[49]      The subject matter of any appeal against a decision of the Commissioner is limited by the Act and Regulations as is also the decision or function that was previously before the Commissioner (the "decision" against which the appeal is sought). This is not to give any restricted or restrictive interpretation to otherwise ample powers in s 106 of the Act or ss 19, 22 and 23 of the Federal Court of Australia Act: cf the numerous High Court decisions referred to in Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd (2003) 135 FCR 206 at [187]. Rather, it is to recognise that the provision for an appeal to the Court against a decision of an administrator in this statutory context is to confer judicial power on the Court to hear and decide the same subject matter as was before the administrator, such subject matter having the same boundaries and limits as existed under the statute before the administrator. One boundary of the subject matter for decision was that the opponent (the appellant) was restricted to opposing amendments sought under s 104(1) to grounds found in s 102; another boundary was the statutory and regulatory regime which precluded the Commissioner looking beyond a group of factors which did not include a general discretion which could be informed by the asserted misconduct of the respondent (as applicant). These boundaries are not a limit or fetter on the exercise of the executive power by the Commissioner; nor are they a limit or fetter on the exercise of the judicial power of the Commonwealth by the Court. They are part of the identification of the controversy over rights, privileges and entitlements that are entirely creatures of statute. One incident of the right to ask for leave to amend and of the right of opposition thereto is that allowance of any amendment is to be decided by reference to limited criteria: cf R v Quinn.

[50]      The appellant referred to a number of decisions of this Court in illustration of the asserted effect and significance of s 160: F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 dealing with the nature of evidence before the Court; Frederikshavn Vaerft A/S v Stena Rederi Aktiebolag (2002) 124 FCR 243 dealing with the substitution of the opponent; EI du Pont de Nemours & Co v ICI Chemicals & Polymers Ltd (2003) 128 FCR 392 dealing with fresh grounds and particulars of opposition; Genetics Institute Inc v Kirin-Amgen Inc (1996) 67 FCR 527; and Merck & Co Inc v Sankyo Co Ltd (1992) 23 IPR 415 dealing with the power to order amendments. None of these cases assists the appellant. That the Court relies on evidence different from the material before the Commissioner is only to be expected as a consequence of the judicial power being exercised. The substitution of an opponent is a procedural matter within the boundaries of the dispute, permitted before the Commissioner and within the scope of an ample power such as s 160(e). The raising of fresh grounds (within the statutory limits of the subject matter of the decision) merely reflects the original nature of the jurisdiction in the Court and the fact that the subject matter is being litigated for the first time in the exercise of judicial power. The direction by the Court that a patent be granted conditional on amendments which appear appropriate as was done by Heerey J in Genetics Institute occurred in an appeal under s 60(4) of the Act being an appeal (as his Honour said at 529) from a decision which could include a direction that amendments be made. In Merck & Co Inc v Sankyo Co Ltd Lockhart J was dealing with s 60(5) of the Patents Act 1952.  (emphasis added)

42                  The observation that the evidence presented on the question may give rise to a case completely different from the case which was suggested before the Deputy Commissioner has been observed and repeated in a number of subsequent decisions: see Iluka.  It is the original jurisdiction of the Court which is being exercised. 

43                  The present Appeal which is an appeal against the decision of the Commissioner in an Opposition to the grant of a standard patent under s 60(4) of the Patents Act enables the Court to consider any ground on which the grant of a patent may be imposed with a fair potential to establish that the prospective patent would be invalid (EI du Pont de Nemours & Company v ICI Chemicals & Polymers Ltd (2003) 128 FCR 392 (at [25])).  The du Pont case makes it clear that the Court is not limited to the grounds of invalidity pursued before the Commissioner. 

44                  In argument before me, much attention has been focussed on the decision of New England Biolabs Inc.  In that case a patent opponent appealed a decision to amend pursuant to s 104(7) of the Patents Act.  It argued in favour of the Court exercising its discretion to refuse leave to amend on the hearing of the s 104(7) appeal against the decision to amend.  In refusing the appeal, the Full Federal Court determined that the structure of the legislation was intended to give the Court the same task as is given to the Commissioner.  In the case of an appeal against an amendment, it was clear that the Court was dealing with the same subject matter as was dealt with by the Commissioner.  The Court concluded that, to the extent that the Patents Act and Regulations limited the boundary of the subject matter by restricting the Commissioner’s decision to certain criteria or grounds, or by eliminating any discretion, they confined the controversy before the Commissioner.  It distinguished, however, subject matter from evidence. 

45                  Bradken has accepted that although a ‘completely different’ case may be presented on the hearing de novo appeal, this does not mean that Bradken in its Appeal can go beyond the subject matter that was the subject matter of the Final Determination.  However, the evidence which may be adduced in support of it may be quite different.  I accept this submission.  There is a public interest in all material properly available at the time of the Appeal, rather than simply the material that was relied upon in the course of the opposition process before the Commissioner being considered by Court hearing the Appeal. 

46                  I also accept the submission from Bradken that the effect of the Lynx amendment was that the First Application and the First Decision were replaced by the Second Decision (Mole Engineering). 

47                  The logical effect of this is that all aspects of the First Decision fall away.  As the First Decision was substituted by the Second Decision, from which there can be no appeal, there is no longer a First Decision to be the subject of appeal or cross-appeal.  As Bradken has pointed out, if the Second Decision had been unsuccessful, for Lynx the position would be different and the parties would proceed to appeal and to cross-appeal from the First Decision.  That is not the case.  Equally, it is not apparent to me that Lynx will suffer any prejudice in any material sense because in the Second Cross-Appeal, the grounds of appeal replicate in their entirety the grounds of the First Cross-Appeal advanced by Lynx.  Therefore, just as Bradken may put a different case but on the same subject matter in the Appeal from the Final Determination, Lynx can do precisely the same. 

48                  Lynx advanced certain arguments said to be relevant to prejudice it would suffer if Bradken were permitted to put its different case on the same subject matter.  In particular, the concern expressed by Lynx was the new material going to prior art.  I cannot accept that prejudice would be occasioned in circumstances where all possible material in support of the Second Appeal were, on the one hand, advanced by Bradken and, in response, Lynx would advance everything it had originally sought to advance in the First Cross-Appeal. 

49                  One of the grounds of prejudice advanced appears to be that Lynx would lose its entitlement to have the Appeal granted on the original claims.  It may be that, as Bradken has argued, that was the choice of Lynx in moving on from the original claims and proceeding by way of amendment which had the effect of substituting the original claims, in other words, by pursuing the Second Decision rather than pressing its own Appeal from the First Decision (for example, the First Cross-Appeal).

50                  But that does not have to be decided at present.  It may be the subject of legal argument on the Second Cross-Appeal but it will not preclude Lynx from framing its Cross-Appeal in a manner that advances the claims in its (original) First Application. 

51                  If the legal argument for Lynx is correct then it will remain correct on the hearing of the Second Appeal.  In the meantime, the present structure preserves an entitlement for Bradken to present new evidence but on the same subject matter (although Lynx says Bradken cannot, at law, do this) and at the same time, through the Second Cross-Appeal, permit Lynx to advance its First Cross-Appeal in its entirety.  (Although Bradken appears to submit that this is not open as a matter of law). 

52                  My view is that neither of the legal arguments is sufficiently certain to warrant, in effect, a striking out of any part of the Second Appeal or Cross-Appeal. 

53                  A complaint was made as to a substantial waste of costs but, again, I found it difficult to identify how this could not be remedied, if appropriate.  Lynx would not be precluded from the benefit of the broadest judicial discretion in relation to costs if the circumstance requires. 

CONCLUSION

54                  It appears to me that it was open to either of the parties to pursue the First Appeal or First Cross-Appeal.  Neither did.  Lynx chose to pursue the amendment course.  Bradken opposed the amendment but failed and did not appeal from that decision. 

55                  There are competing arguments as to whether, for the purposes of this Appeal, the pursuit of the amendment completely displaced the First Decision or whether the ongoing existence of the First Cross-Appeal, while the amendment was being ensued, effects a departure from the usual position.  There is also an argument that the introduction of new prior art by Lynx in the proposed Appeal is impermissible because it constitutes new subject matter.  As against that, there are arguments that the new prior art is not new subject matter but simply new evidence.  As complex and intriguing as the argument has been, it is not necessary or optimal that the arguments be determined in advance of the Second Appeal and Second Cross-Appeal.  It does not seem to me that this is an appropriate instance where it can be said with distinct clarity that either of them should be shut out from framing the terms of the Appeal or the Cross-Appeal in the way that each of them sees fit.  The Appeal is a hearing de novo and there is a public interest in whatever evidence and case is properly relevant to the subject matter of the Appeal and Cross-Appeal being available and determined.  That public interest, it seems to me, also coincides with the proper interests of both Lynx and Bradken in the arguments they wish to advance. 

56                  It follows, in my view, that it cannot be said at this stage without further materials and consideration that the position advanced by either party is so inarguable or so unlikely to succeed as to, in effect, give rise to a striking out or dismissal of parts or the whole of either the Second Appeal or Second Cross-Appeal. 

57                  The orders I propose making will be designed to permit each party to advance the primary argument that it wishes to advance.  Whether it does so in a framework of running both the First Appeal and First Cross-Appeal and the Second Appeal and Second Cross-Appeal is a matter to be determined, although that seems unwieldy.  The better course would be for all the matters Bradken wishes to raise by way of appeal to be advanced in one consolidated appeal and all the matters which Lynx wishes to raise by each of its cross‑appeals to be advanced in one consolidated cross-appeal.  In making provision for those orders, I would expressly reserve the entitlement of either party to re-ventilate the legal arguments advanced in the context of this Motion but as against a substantially more detailed background which will inevitably develop through the course of the Second Appeal and
Second Cross-Appeal. 

58                  It follows that as each of the Notices of Objection and the Motion were properly raised, that costs of the argument should be reserved to the substantive appeal and cross‑appeal. 

59                  The orders that I propose making are intended to reflect the objectives outlined in the paragraph above.  I will add provision for liberty to apply if either party considers that the orders I propose do not achieve the intended objectives:

1.                  The answer to Question 1 in the Notice of Motion filed by the applicant is (c). 

2.                  The answer to Question 2 is no.

3.                  The answer to Question 3 is:

The matter be re-listed for a directions hearing on 1 July 2010 at 9.45 am. 

4.                  There be liberty to either party to apply in relation to these orders within 7 days. 

5.                  Costs of the Notice of Motion and of the Objection to Competency be reserved to be determined in the Appeal and Cross-Appeal. 

Associate: 

Dated:         24 June 2010