FEDERAL COURT OF AUSTRALIA

H. Lundbeck A/S v Commissioner of Patents [2017] FCA 56

ORDERS

OTHER MATTERS:

Upon the applicant undertaking to the Court that in the event that:

(a)    the judgment at first instance in this proceeding is to dismiss the originating application and/or to make a declaration adverse to that sought by the applicant in this proceeding; and

(b)    the Court makes an order extending the time within which the applicant is permitted to appeal until 21 days after the earlier of the events referred to in paragraphs (i) or (ii) below;

the applicant will not commence an appeal from that judgment until the earlier of:

(i)    the commencement by the applicant of any proceeding seeking judicial review of a final decision of the Commissioner of Patents determining the applications for licences to exploit an invention filed by the second to fifth respondents; or

(ii)    the commencement by the applicant of any proceeding for judicial review, or appeal under s 44 of the Administrative Appeals Tribunal 1975 (Cth), of a decision of the Administrative Appeals Tribunal relating to the final decision of the Commissioner of Patents in relation to the applications for licences to exploit an invention filed by the second to fifth respondents.

THE COURT DECLARES THAT:

1.    The prescribed provisions referred to in s 223(9) of the Patents Act 1990 (Cth) (regs 22.21(2) to 22.21(5) of the Patents Regulations 1991 (Cth)) have effect in relation to:

(a)    Australian Patent No. 623144 (the Patent); and

(b)    the applications for licences to exploit an invention filed by the second to fifth respondents in relation to the Patent,

for the period of 13 June 2009 to 9 December 2012.

2.    A declaration that each of the applications for licences to exploit an invention filed by the second to fifth respondents in relation to the Patent are valid.

AND THE COURT ORDERS THAT:

3.    The applicant’s originating application be otherwise dismissed.

4.    The applicant pay the second to fifth respondents’ costs of and incidental to this proceeding.

5.    The time within which the applicant is to file and serve any notice of appeal from these orders be extended to and for a period of 21 days after the earlier of the events referred to in paragraphs (i) or (ii) in the applicant’s undertaking set out above.

6.    Subject to further order, there be a stay on order 4 until the time for the filing and service of any notice of appeal (as extended by order 5) has expired.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BEACH J:

1    The applicant, H. Lundbeck A/S (Lundbeck), is the proprietor of Australian Patent No 623144 in respect of two novel (+)-enantiomers of citalopram, an anti-depressant drug, and a process for the preparation thereof (the Patent); citalopram is 1-(3-dimethylaminopropyl)-1-(4’-fluorophenyl)-1,3-dihydroisobenzofuran-5-carbonitrile. The invention includes pharmaceutically acceptable salts of the relevant enantiomers and is also concerned with a method to resolve the racemate of the carbonitrile compound into the individual isomers. The racemate of citalopram is marketed as CIPRAMIL by Lundbeck Australia Pty Ltd (Lundbeck Australia), a wholly-owned subsidiary of Lundbeck. CIPRAMIL became registered on the Australian Register of Therapeutic Goods (ARTG) on 9 December 1997. The (+)-enantiomer of citalopram is marketed as LEXAPRO by Lundbeck Australia. LEXAPRO was registered on the ARTG on 16 September 2003.

2    The original term of the Patent expired on 13 June 2009 pursuant to s 67 of the Patents Act 1990 (Cth) (the Act). On 25 June 2014, a delegate of the first respondent (the Commissioner) granted an application to extend the term of the Patent to 9 December 2012.

3    The second to fifth respondents (the Generics) have each applied for a licence to exploit an invention in relation to the Patent pursuant to s 223(9) of the Act and reg 22.21 of the Patent Regulations 1991 (Cth) (the Regulations) (the licence applications). Lundbeck has opposed the grant of these licences.

4    On 23 November 2015, Lundbeck sought to have the licence applications dismissed by the Commissioner on the basis that the licence applications did not meet the threshold requirements of 223(9) of the Act. From March 2014 to March 2016, the licence applications were stayed until other related proceedings had been determined. On 8 July 2016, the Deputy Commissioner of Patents rejected Lundbeck’s request for a separate determination of the threshold issues and directed that the licence applications should proceed to a hearing on all issues. Lundbeck has sought to review that decision (or conduct relating thereto) in relation to the threshold issues under s 39B of the Judiciary Act 1903 (Cth) and the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). Lundbeck has also sought declaratory and injunctive relief restraining the Commissioner from further hearing or determining the licence applications. The Generics oppose the relief sought. They contend that no reviewable error has been made. The Commissioner has filed a submitting appearance and accordingly not participated in the proceedings before me.

5    The foundation of Lundbeck’s application before me involves questions of statutory construction. Essentially, the case concerns whether s 223(9) of the Act applies, and therefore the regulations made pursuant to s 223(9) have any effect, in relation to acts done by a third party during the period after the expiry of the original term of a patent, where a patentee has obtained:

(a)    an extension of term of a patent pursuant to the extension of term scheme after the expiry of the term of the patent; and

(b)    an extension of time under s 223(2) in which to make the application for doing so.

6    In summary, I have determined that no reviewable error has been made. Nevertheless in the exceptional circumstances of the present case, I have determined to make declarations resolving some of the legal questions that have been raised. A relevant dispute has been crystallised in respect of such matters. And it is advantageous and efficient to make relevant declarations so that the parties and the relevant decision maker can proceed with the substantive hearing of the licence applications with the benefit of my ruling.

BACKGROUND

7    It is convenient to set out a short background to the various related proceedings that the parties have been engaged in concerning the Patent so that the present dispute can be understood in its context.

Lundbeck’s first application for an extension

8    On 9 December 2003, Lundbeck made an application to extend the term of the Patent based on the date of inclusion of LEXAPRO in the ARTG (Lundbeck’s first extension of term application). On 27 May 2004, Lundbeck’s first extension of term application was granted by the Commissioner, and on 17 June 2004 notice of that grant was published in the Official Journal of Patents (Official Journal) which recorded that the extended term of the Patent would end on 13 June 2014. The Register of Patents was amended to record the extension of term to 13 June 2014 (the first extension of term).

9    On 6 July 2005, the second respondent (Alphapharm) commenced proceedings in the Federal Court of Australia against Lundbeck seeking to revoke the Patent and to remove the entry recording the first extension of term from the Register of Patents (the Alphapharm recovation proceeding). In that proceeding, Lundbeck and Lundbeck Australia cross-claimed against Alphapharm alleging infringement of the Patent.

10    On 7 July 2005, Alphapharm notified the Commissioner that it considered that the first extension of term of the Patent was wrongly granted and should be removed as that extension was based on the ARTG registration of LEXAPRO instead of CIPRAMIL, which was the first product registered on the ARTG containing the pharmaceutical substance (S)-citalopram. On 13 July 2005, the Commissioner determined that any extension of term of the Patent should have been based on the ARTG registration of CIPRAMIL and not LEXAPRO, and proposed to reduce the extended term of the Patent to 9 December 2012 pursuant to reg 10.7(7) of the Regulations.

11    On 15 September 2005, Lundbeck commenced proceedings in the Federal Court against the Commissioner, seeking to restrain the Commissioner from amending the Register of Patents in relation to the first extension of term. Lundbeck contended that reg 10.7(7) of the Regulations was invalid as it was ultra vires vis-à-vis s 228 of the Act. On 1 March 2006, the Federal Court dismissed Lundbeck’s challenge to the validity of reg 10.7(7) (H Lundbeck A/S v Commissioner of Patents (2006) 150 FCR 269).

12    On 13 April 2006, the fifth respondent (Sandoz) commenced proceedings against Lundbeck seeking to revoke the Patent and remove the entry recording the first extension of term from the Register of Patents. On 16 February 2007, Sandoz and Lundbeck reached a confidential settlement and the proceeding was discontinued.

13    On 17 May 2006, Arrow Pharmaceutical Pty Ltd commenced proceedings in the Federal Court against Lundbeck seeking to revoke the Patent and remove the entry recording the first extension of term from the Register of Patents (the Arrow revocation proceeding).

14    On 19 May 2006, a delegate of the Commissioner, Dr Steven Barker, directed that the Register be amended to insert the correct extended term of the Patent (ie 9 December 2012) (Alphapharm Pty Ltd v H Lundbeck A/S (2006) 69 IPR 629; [2006] APO 18) (the Barker Decision).

15    On 6 June 2006, Lundbeck appealed the Barker Decision to the Federal Court. The appeal was heard together with the Alphapharm revocation proceeding and the Arrow revocation proceeding. On 24 April 2008, the Federal Court dismissed Lundbeck’s appeal and held that the first extension of term was invalid and that the Register of Patents should be rectified by the omission from it of any reference to an extension of term of the Patent (Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618; [2008] FCA 559). The Court subsequently ordered on 19 June 2008 that the first extension of term based on the registration of LEXAPRO be removed from the Register of Patents.

16    On 11 June 2009, the Full Court of the Federal Court dismissed Lundbeck’s appeal against the primary judge’s decision. The Full Court upheld the primary judge’s finding that the extension of term based on the ARTG registration of LEXAPRO was invalid and that the Register should be rectified by removing the first extension of term (H Lundbeck A/S & Anor v Alphapharm Pty Ltd & Anor (2009) 177 FCR 151) (the 2009 Full Court Decision).

17    On 9 July 2009, Lundbeck applied for special leave to appeal the 2009 Full Court Decision. Alphapharm and Arrow also applied for special leave to appeal other orders of the Full Court. On 11 December 2009, the applications for special leave were heard by the High Court, which refused special leave in relation to all matters raised by the parties.

18    On 9 February 2010, the Register of Patents was amended to reflect the removal of the first extension of term.

Lundbeck’s second application for an extension

19    On 12 June 2009, after the 2009 Full Court Decision, Lundbeck made an application to the Commissioner for an extension of term based on the ARTG registration of CIPRAMIL (Lundbeck’s second extension of term application), together with an application for an extension of time under s 223(2)(a) of the Act to do so (Lundbeck’s extension of time application). On that date, the Generics were notified by Lundbeck of these two applications.

Lundbeck’s extension of time application

20    Lundbeck’s extension of time application sought an extension of time from 26 July 1999 to 12 June 2009 to extend the term of the Patent. 26 June 1999 was the final day when Lundbeck could have made an application to extend the term of the Patent based on the ARTG registration of CIPRAMIL. On 23 July 2009, Lundbeck’s extension of time application was advertised in the Official Journal.

21    The Generics each filed notices of opposition to Lundbeck’s extension of time application pursuant to s 223(6) of the Act. On 1 June 2011, a delegate of the Commissioner, Ms Karen Ayers, granted Lundbeck’s extension of time application over the oppositions filed by each of the Generics (Alphapharm Pty Ltd & Ors v H Lundbeck A/S (2011) 92 IPR 628; [2011] APO 36) (the Ayers Decision).

22    On 4 December 2012, the Administrative Appeals Tribunal affirmed the Ayers Decision (Re Aspen Pharma Pty Ltd and Commissioner of Patents and Anor (2012) 132 ALD 648) (the AAT Decision).

23    On 18 November 2013, the Full Court dismissed an appeal by the Generics against the AAT Decision (Aspen Pharma Pty Ltd & Ors v H Lundbeck A/S & Anor (2013) 216 FCR 508) (the 2013 Full Court Decision).

24    On 11 April 2014, the High Court granted special leave to Alphapharm to appeal the 2013 Full Court Decision. The High Court heard Alphapharm’s appeal on 8 August 2014 and on 5 November 2014, the High Court dismissed Alphapharm’s appeal (Alphapharm Pty Ltd v H Lundbeck A/S (2014) 254 CLR 247) (Alphapharm).

Lundbeck’s second extension of term application

25    On 30 May 2013, following the AAT Decision, notice of acceptance of Lundbeck’s second extension of term application was published in the Official Journal.

26    The Generics each filed notices of opposition to Lundbeck’s second extension of term application. On 25 June 2014, a delegate of the Commissioner, Dr Barker, granted Lundbeck’s second extension of term application over the oppositions filed by each of the Generics (Alphapharm Pty Ltd, Apotex Pty Ltd, Aspen Pharma Pty Ltd, Sandoz Pty Ltd v H Lundbeck A/S (2014) 109 IPR 323; [2014] APO 41) (the Second Barker Decision). The delegate extended the standard term of the Patent from 13 June 2009 to 9 December 2012.

27    On 6 November 2014, the Federal Court dismissed an appeal by the Generics against the Second Barker Decision (Alphapharm Pty Ltd & Ors v H Lundbeck A/S (2014) 110 IPR 59).

28    On 22 September 2015, the Full Court dismissed an appeal by the Generics against the primary judge’s decision (Alphapharm Pty Ltd & Ors v H Lundbeck A/S (2015) 234 FCR 306) (the 2015 Full Court Decision).

29    On 11 March 2016, the High Court refused the Generics’ application for special leave to appeal the 2015 Full Court Decision.

The section 223(9) licence applications

30    Between 22 May 2008 and 23 October 2008, the Generics obtained ARTG registrations for pharmaceutical products containing, as their active ingredient, escitalopram oxalate. Each of the Generics then launched a pharmaceutical product containing escitalopram oxalate in Australia in the period between 13 June 2009 (ie the expiry of the Patent) and 23 July 2009 (ie the date when Lundbeck’s extension of time application was advertised in the Official Journal). Between 18 December 2013 and 20 December 2013, the Generics filed with IP Australia the licence applications, seeking a licence in respect of the aforementioned and ongoing conduct during the remainder of the extension of term of the Patent.

31    On 28 January 2014, Lundbeck filed notices of opposition to the licence applications.

32    On 5 March 2014, the Commissioner stayed the determination of the licence applications and Lundbeck’s opposition thereof until the appeal in relation to Lundbeck’s extension of time application and Lundbeck’s second extension of term application had been resolved. On 7 November 2014, Lundbeck sought to have the Commissioner’s stay lifted and the licence applications determined. On 26 November 2014, the Commissioner decided not to lift the stay.

33    On 23 November 2015, Lundbeck requested that the Commissioner dispose of the licence applications “on the basis that they do not (on their face) fulfil the threshold requirements” of s 223(9) of the Act. On 2 December 2015, the Commissioner informed Lundbeck that she would not lift the stay and noted that the issue of Lundbeck’s second extension of term application had not been resolved.

34    On 29 March 2016, the Commissioner notified Lundbeck and the Generics that the stay on the licence applications had expired because the issue regarding Lundbeck’s second extension of term application had been resolved by the refusal of the High Court to grant special leave in relation to that matter. On 8 April 2016, the Generics requested that the Commissioner not lift the stay or make any directions concerning the licence applications, pending the determination of related proceedings in which Lundbeck and Lundbeck Australia alleged that the Generics had infringed the Patent.

35    On 12 April 2016, Lundbeck wrote to the Commissioner requesting that the licence applications should progress to determination and that directions should be made to allow the determination of the threshold issues. On 9 and 16 May 2016, Lundbeck and the Generics made written submissions in relation to whether the licence applications should progress. On 8 July 2016, the Deputy Commissioner of Patents, Mr Philip Spann, refused to make directions concerning Lundbeck’s request for the determination of the threshold issues and directed that the licence applications and relevant oppositions proceed to a hearing on all issues (H Lundbeck A/S v Alphapharm Pty Ltd & Ors [2016] APO 45). In essence, the application before me seeks a judicial review of that decision.

36    Before discussing the proceeding before me in more detail, it is appropriate to first refer to other proceedings that are currently on foot between the parties.

The infringement proceedings

37    On 26 June 2014, Lundbeck and Lundbeck Australia commenced proceedings in the Federal Court against the Generics alleging that the Generics had infringed one or more claims of the Patent (the infringement proceedings). Specifically, Lundbeck and Lundbeck Australia alleged that each of the Generics had infringed claim 1 of the Patent by importing, offering to sell, selling and supplying products that contained the oxalate salt of (+)-1-(3-dimethylaminopropyl)-1-(4’-fluorophenyl)-1,3-dihydroisobenzofuran-5-carbonitrile as the active ingredient during the extended term of the Patent.

38    Each of the Generics has denied infringement during the extended term of the Patent. Relevantly, the Generics have each pleaded in their defences that they have sought a licence under s 223(9) of the Act.

39    The infringement proceedings, which were filed in the New South Wales registry, remain on foot.

40    Further, on 31 May 2016, CNS Pharma Pty Ltd, a wholly owned subsidiary of Lundbeck Australia, commenced a separate proceeding against the Generics alleging misleading or deceptive conduct in respect of the Generics’ dealings with their generic escitalopram products. This proceeding is also before the same docket judge dealing with the infringement proceedings.

The present proceeding

41    The originating process in the proceeding before me was filed by Lundbeck on 5 August 2016 in the Victorian registry.

42    An encapsulation of the essence of Lundbeck’s case is conveniently set out in [18] to [24] of the statement of claim in the following terms:

18.    It is not open to the Commissioner to grant a licence to exploit the invention the subject of the 144 Patent under reg 22.21 of the Patents Regulations to each of the 223(9) Applicants, because:

(a)     reg 22.21(2)-(5) of the Patents Regulations are “the prescribed provisions” within the meaning of s 223(9) of the Patents Act;

(b)     on the proper construction of s 223(9), the prescribed provisions can have effect for the protection and compensation of a 223(9) Applicant if and only if:

(i)     the 223(9) Applicant exploited, or took definite steps to exploit, the invention the subject of the 144 Patent application after that application lapsed; or

(ii)     the 223(9) Applicant exploited, or took definite steps to exploit, the invention the subject of the 144 Patent after that patent ceased.

19.     In the circumstances referred to in paragraphs 6 and 7 above:

(a)     the application for the 144 Patent did not at any relevant time lapse; and

(b)     the 144 Patent did not at any relevant time cease.

20.     For the reasons alleged in paragraphs 18 and 19 above, Lundbeck is entitled to a declaration that the prescribed provisions referred to in s 223(9) of the Patents Act have no effect in relation to the 144 Patent and the 223(9) Applicants, for the period of 13 June 2009 to 9 December 2012.

21.     Further to paragraphs 18 to 20 above, by reason that sub-regulation 22.21(2) of the Patents Regulations does not have effect in relation to the 144 Patent and the 223(9) Applicants, the 223(9) Applicants are not, and were not at any material time, persons who may apply to the Commissioner for the grant of licences to exploit the invention the subject of the 144 Patent.

22.     In the circumstances, the 223(9) Applications are invalid and of no effect.

23.     Unless restrained by this Honourable Court, the Commissioner will proceed to a hearing on all issues and a determination of the 223(9) Applications.

24.     For the reasons alleged in paragraphs 18 to 23 above, Lundbeck is entitled to:

(a)     a declaration that the 223(9) Applications are invalid and of no effect;

(b)     a writ of prohibition or an injunction restraining the Commissioner from further hearing and determining the 223(9) Applications.

43    Relevant to [19] of the statement of claim, [6] and [7] of the statement of claim allege that:

6.     The original term of the 144 Patent expired on 12 June 2009.

7.    The term of the 144 Patent was extended to 9 December 2012.

44    On 22 August 2016, the Generics filed an interlocutory application seeking to have the present proceeding transferred to the New South Wales registry on the basis that all previous litigation between the parties in respect of the Patent had been heard in New South Wales, and that the infringement proceedings were being case managed in Sydney.

45    On 26 August 2016, the Generics’ interlocutory application was heard by me. As well as arguing that New South Wales was the more natural forum to hear the present proceeding, the Generics argued that the primary issue in dispute in this proceeding, ie the construction of s 223(9), would overlap with the issues in the infringement proceedings. It was said that as the Generics pleaded the s 223(9) defence in the infringement proceedings and also the s 223(10) defence which raised a similar construction issue on the word “cease”, it was more appropriate to have the threshold issues heard and determined by the docket judge dealing with the infringement proceedings.

46    I decided that there was no good reason to have the proceeding transferred to the New South Wales registry and gave an ex tempore ruling accordingly. First, the issues raised in this proceeding are legal questions, and not factual questions; the question of the location of witnesses and associated forum questions was irrelevant. Second, I was initially concerned that the construction issues in respect of the defences in the infringement proceedings that relied on ss 223(9) and 223(10) would be raised by Lundbeck in an anticipated interlocutory pleading dispute in the infringement proceedings. However, counsel for Lundbeck provided an undertaking to the Court that alleviated my concern. Generally, I was satisfied that I could deal with the discrete legal issues, particularly as any determination would be of benefit to the parties. Moreover, if there was any overlap with any issue to be dealt with in the infringement proceedings, any potential problem would be eliminable if and to the extent that any issue estoppel arose. As such, I dismissed the Generics’ interlocutory application.

47    The originating process was heard by me on 29 November 2016. At that hearing, I granted leave for the parties to file further written submissions on the construction of s 223(9) of the Act. Lundbeck and the Generics filed those submissions on 2 December 2016 and 6 December 2016 respectively.

jurisdiction and discretion

48    Before dealing with the substantive legal questions concerning the construction and application of s 223 of the Act, it is necessary to deal first with some administrative law questions on jurisdiction and discretion.

(a) Has the Deputy Commissioner made any reviewable error?

49    The decision under challenge is the decision of the Deputy Commissioner of 8 July 2016 to hear and determine at the same time all substantive issues in dispute, including the threshold issues. Contrastingly, Lundbeck had asked the Deputy Commissioner to determine the threshold issues in advance of all other substantive issues in the case. But the Deputy Commissioner declined that request. Lundbeck now asks me to determine those threshold issues. The Generics contend that Lundbeck’s application must fail on the basis that no reviewable error has been made.

50    The Generics contend that given the nature of the Deputy Commissioner’s decision, Lundbeck has not established error which would enliven the Court’s jurisdiction to grant relief, whether pursuant to s 39B of the Judiciary Act 1903, s 21 of the Federal Court of Australia Act 1976 (Cth) or the ADJR Act. The Generics have made reference to Lundbeck’s pleading at [23] of its Statement of Claim that “[u]nless restrained by this Honourable Court, the Commissioner will proceed to a hearing on all issues and a determination of the s 223(9) [licence] Applications”. It is said that there is no error in the decision-maker simply declining an application for separate and prior determination of some of the substantive issues in dispute and deciding instead to proceed to hear all issues arising on the licence applications together. It is said that this is all that the decision under review entailed. It is contended that for the Deputy Commissioner to decide upon that course and now to proceed in line with that course is not:

(a)    to act or commit to acting in excess of jurisdiction (a necessary prerequisite for the Court to grant a constitutional writ pursuant to s 39B(1) of the Judiciary Act);

(b)    to infringe or threaten to infringe a legal right of Lundbeck (a necessary prerequisite for the Court to grant an injunction for administrative error pursuant to ss 39B(1) or 39B(1A)(c) of the Judiciary Act);

(c)    to commit administrative error about which the Court could make a declaration pursuant to ss 39B(1) or 39B(1A)(c) of the Judiciary Act or s 21 of the Federal Court of Australia Act; or

(d)    to make a final or operative “decision” within the meaning of s 5 of the ADJR Act, or to engage in “conduct” within the meaning of s 6 of the ADJR Act.

51    Further, the Generics contend that the threshold issues Lundbeck raised before the Deputy Commissioner are “facts or a fact to be adjudicated upon in the course of the inquiry”. That phrase is drawn from Colonial Bank of Australasia v Willan (1874) LR 5 PC 417 at 443. That is, they are matters that form part of the inquiry that the decision maker is required to adjudicate upon in the course of determining an application for a s 223(9) licence as prescribed by reg 22.21. It is said that if the decision maker decides those threshold issues wrongly, then that decision may give rise to jurisdictional error, but that it is no error for the decision maker to attempt to determine those issues.

52    The Generics contend that in the absence of contending for or establishing error on the part of the decision maker in deciding not to determine these issues separately and in advance of the other matters raised by the licence applications, Lundbeck’s application must fail. It is said that Lundbeck has not established a necessary basis under any of s 39B of the Judiciary Act, s 21 of the Federal Court of Australia Act, or the ADJR Act for judicial review of the decision and conduct not to determine particular issues in dispute separately from the balance of the proceedings. It is said that the decision to proceed to determine issues as to whether jurisdiction is enlivened under s 223(9) of the Act is an orthodox approach to the determination of the licence applications pursuant to s 223(9) of the Act. Accordingly, it is said that there has been no administrative error, and no threatened excess of jurisdiction or infringement of legal rights which could warrant the grant of the remedies of prohibition, injunction, relief pursuant to the ADJR Act or a declaration that there has been administrative error on the part of the Deputy Commissioner.

53    Finally, the Generics contend that insofar as Lundbeck relies on the Court’s jurisdiction pursuant to s 39B(1A)(c) of the Judiciary Act with respect to “any matter … arising under any laws made by the Parliament” as the source of jurisdiction for the Court to make declarations as to the proper construction of s 223(9), the Generics do not dispute the existence of the jurisdiction, exercisable in an appropriate case (see Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421). But it is said that in the present case, Lundbeck seeks a declaration about potential rights arising under s 223(9) that are yet to be considered by the decision maker. It is said that there are multiple ways that the Generics can pass the statutory hurdles and multiple interrelated questions of statutory construction, and that even if those questions passed the test of raising a “matter” that was within the s 39B(1A)(c) jurisdiction, on no view was that matter now “ripe” for determination by the Court.

54    I largely agree with the Generics’ contentions save for their submissions concerning the inappropriateness of exercising jurisdiction under s 39B(1A)(c) of the Judiciary Act.

55    In my view, it has not been established that the Deputy Commissioner has made any reviewable error or threatened to make a reviewable error. Accordingly, the jurisdiction to grant relief under the ADJR Act has not been enlivened. For completeness though, I would reject the Generics’ notice of objection to competency to the extent that it proceeds on the mistaken foundation that Lundbeck was making a challenge invoking s 5(1) of the ADJR Act rather than a challenge invoking s 6(1) of the ADJR Act. But in any event, the grounds for challenge under s 6(1) of the ADJR Act have not been made out.

56    Moreover, in my view the Deputy Commissioner has not been shown to have made or threatened to make any jurisdictional error such as to enliven s 39B(1) of the Judiciary Act.

57    But in relation to the jurisdiction arising under s 39B(1A)(c) of the Judiciary Act, in my view there is an extant dispute between the parties concerning the legal issues that have been articulated concerning the construction and application of s 223(9) of the Act. There is a “matter” for the purposes of s 39B(1A)(c). Accordingly, jurisdiction has been enlivened to grant any appropriate declaratory relief (see also s 21 of the Federal Court of Australia Act). The real question is whether I should exercise my discretion to grant declaratory relief.

(b) Should any declaration be made?

58    The Generics contend that the Court should, in the exercise of its discretion, refuse the relief Lundbeck seeks even if Lundbeck could overcome the various jurisdictional barriers. It is said that discretionary reasons militate against the Court using its jurisdiction pursuant to s 39B(1A)(c) of the Judiciary Act and s 21 of the Federal Court of Australia Act to grant declaratory relief other than for administrative error.

59    First, it is said that the preliminary nature of the decision provides a compelling reason weighing against the grant of such relief. I have taken this into account, but the point is not definitive in the present context given that I am being asked to rule upon essentially legal questions and there is some utility in ruling upon them now.

60    Second, it is said that the Act provides that applications for a s 223(9) licence be made to the Commissioner. The Commissioner is the appropriate and specialist first instance decision-maker as to, first, whether the jurisdiction to grant a s 223(9) licence has been established by the licence applicants, and second, whether in all the circumstances the Commissioner should exercise discretion to grant the s 223(9) licence sought, and if so, on what terms. The Commissioner has “broad and flexible powers to determine the practices and procedures to be followed”. It is said that the Court should not grant relief preventing the Commissioner from exercising the statutory jurisdiction and obligation to determine the licence applications which have been made pursuant to the statutorily mandated process. As the Generics point out, the Deputy Commissioner has indicated that he proposes to, but has not yet had the opportunity to, determine the substantive issues in dispute that have arisen in respect of the licence applications, including the threshold issues, and has indicated to the parties the procedure proposed to be adopted. The Generics contend that the procedure that the Deputy Commissioner has adopted or proposes to adopt is an “entirely orthodox” one. The Generics contend that Lundbeck’s application to this Court seeks to “leapfrog” the statutorily prescribed process for the determination of the licence applications in circumstances where no error has been shown in the Deputy Commissioner’s proposed approach to resolving the licence applications.

61    Now these points have considerable force. But in the context where I am being asked to determine essentially legal questions, they are not overwhelming. Indeed the parties and the Deputy Commissioner are likely to be advantaged by any ruling I make now on any legal question.

62    Third, it is said that an adequate review mechanism to the Administrative Appeals Tribunal from any final decision on the licence applications (including any final decision on the threshold issues) is provided for by s 224(1)(a) of the Act. It is said that even if, once made, the ultimate decision as to the threshold issues or any other substantive issue in dispute is open to challenge, the availability of a review mechanism at that point is a powerful discretionary factor against the Court intervening at this juncture in the determination of the licence applications. The Generics also note that pursuant to s 10(2)(b)(ii) of the ADJR Act, the Court may in its discretion refuse to grant relief for the reason that “adequate provision is made by any law other than this Act under which the applicant is entitled to seek a review by the court, by another court, or by another tribunal, authority or person, of that decision, conduct or failure”. In the present case, s 224(1)(a) of the Act provides for a review of a decision of the Commissioner under s 223 to be made to the AAT. The Generics contend that there is no basis upon which the Court, in the absence of error being shown in the decision to refuse Lundbeck’s request for a separate determination of some of the threshold issues, should interfere with the usual and orderly conduct of the licence applications and the availability of any application for review to the AAT.

63    Now I accept that the availability of adequate and indeed preferable (in the usual case) avenues of review from decisions of the Commissioner is a powerful reason against the Court preventing the orderly conduct and determination of the licence applications by the Deputy Commissioner in the present case. But it is not definitive if there is now utility in granting the appropriate declarations on what are essentially legal questions.

64    Fourth, the Generics contend that the relief Lundbeck seeks pursuant to s 39B of the Judiciary Act should also be refused on discretionary grounds, and for similar reasons. It is said that there is an alternative and more convenient remedy. Moreover, the decision maker has not refused to exercise a public duty. Now all of that may be true, but such matters are not a bar to now granting appropriate declaratory relief.

65    Fifth, it is said that the question whether the Court should make a declaration having the effect of deciding a question in issue in pending proceedings “may often be of some difficulty” (Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 438 per Gibbs J), and that that is so in the present case. Relatedly, it is also said that there are difficulties in framing declarations in the present case. I do not consider that such difficulties are insurmountable in the present context.

66    Sixth, the Generics contend that fragmentation of the substantive issues in dispute in pharmaceutical patent litigation of the size and complexity presented by the present proceedings runs the substantial risk of not ameliorating the possibility of delay in the resolution of the substantive issues in the case, but rather increasing it. This is the only point that has really troubled me. I did have concerns that to proceed to grant declarations may have undesirable consequences in terms of fragmentation, including appeals and consequential delays. I raised this matter with counsel and discussed with Lundbeck the provision of a relevant undertaking to avoid such potential fragmentation. The Generics, as one might expect, refused to give any undertaking.

67    Lundbeck has now proffered an undertaking in the following form, which I consider adequately addresses my fragmentation concerns and notwithstanding the absence of any mirror image undertaking from the Generics:

The applicant, H Lundbeck A/S, undertakes to the Court that, in the event that:

(a) the judgment at first instance in this proceeding is to dismiss the originating application or to make a declaration adverse to that sought by the applicant in this proceeding; and

(b) the Court makes an order extending the time in which H Lundbeck A/S is permitted to appeal until 21 days after the earlier of the events referred to in paragraphs (c) or (d) below;

H Lundbeck A/S will not commence an appeal from that judgment until the earlier of:

(c) the commencement by H Lundbeck A/S of any proceeding seeking judicial review of a final decision of the Commissioner of Patents determining the Applications for Licences to Exploit an Invention filed by the Second to Fifth Respondents; or

(d) the commencement by H Lundbeck A/S of any proceeding for judicial review, or appeal under s 44 of the Administrative Appeals Tribunal 1975 (Cth), of a decision of the Administrative Appeals Tribunal relating to the final decision of the Commissioner of Patents in relation to the Applications for Licences to Exploit an Invention filed by the Second to Fifth Respondents.

68    Seventh, the Generics contend that Lundbeck should be denied relief on the grounds of delay. I disagree. Lundbeck’s conduct does not involve any relevant delay. First, Lundbeck raised the construction points it contends for in this proceeding at the earliest opportunity before the Commissioner. It did so when it filed its Statement of Grounds and Particulars (SOGP). Second, about one week after the filing of the SOGP, the Commissioner stayed the licence applications. The stay remained in place until March 2016. Third, both during the term of the stay and after it was lifted, Lundbeck has sought to agitate the construction issues it has raised in this proceeding before the Commissioner. Fourth, on 8 July 2016, the Deputy Commissioner decided to conduct a hearing of the licence applications on all issues and made directions to facilitate that course. Lundbeck commenced this proceeding on 5 August 2016, within the time limit set in the ADJR Act. There has been no relevant delay that would disentitle Lundbeck obtaining the declaratory relief that it seeks.

69    Finally, there is one other preliminary matter that it is convenient to dispose of at this point. It concerns a submission that the Generics have raised to the effect that Lundbeck is by its conduct now precluded from advancing its construction case. The Generics contend that Lundbeck is precluded from advancing its construction of s 223(9) by reason of the so-called doctrine of approbation and reprobation. In support of their contention, the Generics rely upon comments made by Lundbeck’s senior counsel in addressing the High Court on 8 August 2014 (at the hearing which led to Alphapharm). I reject the Generics’ contention for the following reasons. First, senior counsel’s submissions were little more than the usual opportunistic and optimistic advocacy. Second, that doctrine could not operate against an attempt to hold the Commissioner within the statutory limits of her function under the Act. Third, the comments relied upon by the Generics did not constitute the making of a choice between two inconsistent courses of conduct and, consequently, could not give rise to an act of approbation and reprobation. When the comments relied upon by the Generics were made, Lundbeck had already filed its notices of opposition to the licence applications and its SOGP in support of those oppositions. The SOGP advanced the construction of s 223(9) contended for by Lundbeck in this proceeding. Finally, when senior counsel for Alphapharm made submissions in reply, he noted the contention made by Lundbeck in the SOGP to the effect that s 223(9) was not applicable to the circumstances of this case. The Generics were aware of Lundbeck’s position as to the scope and operation of s 223(9). Further, the majority in Alphapharm did not refer to that submission of Lundbeck’s senior counsel. Generally, this point has no substance and in any event could not affect the proper construction of the Act, how the Deputy Commissioner should construe the relevant provisions or dictate the exercise of discretion as to whether to make declarations and the content thereof.

legislative provisions

70    The principal provision relevant to the construction arguments is s 223 of the Act which relevantly provided as at the time of the filing of the licence applications the following:

223 Extensions of time

(1) The Commissioner must extend the time for doing a relevant act that is required to be done within a certain time if the act is not, or cannot be, done within that time because of an error or omission by:

(a) the Commissioner or a Deputy Commissioner; or

(b) an employee; or

(c) a person providing, or proposing to provide, services for the benefit of the Patent Office; or

(d) the receiving Office; or

(e) the International Bureau of the World Intellectual Property Organization.

(2) Where, because of:

(a) an error or omission by the person concerned or by his or her agent or attorney; or

(b) circumstances beyond the control of the person concerned;

a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.

(2A) If:

(a) a relevant act that is required to be done within a certain time is not done within that time; and

(b) the Commissioner is satisfied, on the balance of probabilities, that the person concerned took due care, as required in the circumstances, to ensure the doing of the act within that time;

the Commissioner must, on application made by the person concerned in accordance with the regulations and within the prescribed period, extend the time for doing the act.

(2B) An extension of time under subsection (2A) cannot exceed the period prescribed for the purposes of this subsection.

(3) The time allowed for doing a relevant act may be extended, whether before or after that time has expired.

(3A) Despite subsection (3), the time allowed for doing a relevant act may be extended under subsection (2A) only after that time has expired.

(4) The Commissioner must advertise in the Official Journal:

(a) an application made for an extension of time for more than 3 months; or

(b) an application made for an extension of time for doing a prescribed relevant act in prescribed circumstances.

(6) Subject to subsection (6A), a person may, as prescribed, oppose the granting under subsection (2) or (2A) of the application.

(6A) If the Commissioner is satisfied, on the balance of probabilities, that an application under subsection (2) or (2A) would not be granted even in the absence of opposition under subsection (6):

(a) the Commissioner need not advertise the application in accordance with subsection (4); and

(b) the application cannot be opposed, despite subsection (6); and

(c) the Commissioner must refuse to grant the application.

(7) Where:

(a) a patent application lapses, or a patent ceases, because of a failure to do one or more relevant acts within the time allowed; and

(b) the time for doing that act or those acts is extended; the application or patent must be treated as having been restored.

(8) Where:

(a) a provisional patent application lapses under subsection 142(1) at the end of the period prescribed for the purposes of section 38; and

(b) that period is extended;

the application must be treated as if it had not lapsed.

(9) Where the Commissioner grants:

(a) an extension of more than 3 months for doing a relevant act; or

(b) an extension of time for doing a prescribed relevant act in prescribed circumstances;

the prescribed provisions have effect for the protection or compensation of persons who, before the day on which the application for extension of time is advertised under subsection (4), exploited (or took definite steps by way of contract or otherwise to exploit) the invention concerned because of the failure to do the relevant act within the time allowed, the lapsing of the patent application or the ceasing of the patent, as the case may be.

(10) Infringement proceedings cannot be brought in respect of an infringement committed:

(a) between the day on which the patent application lapses and the day on which it is restored; or

(b) between the day on which the patent ceases and the day on which it is restored.

(11) In this section:

relevant act means an action (other than a prescribed action) in relation to a patent, a patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications.

71    Section 223 refers to “prescribed provisions”, which relevantly to the present case are regs 22.11 and 22.21 of the Regulations (as at the time of the filing of the licence applications).

72    Regulation 22.11 provided at the relevant time:

22.11 Extension of time

(1) For the purposes of subsection 223(2) or (2A) of the Act, an application for an extension of time must be in the approved form and have with it a declaration setting out the grounds on which the application is made.

(1A) Subregulation (1B) applies if:

(a) an application for an extension of time for doing a relevant act is made under subsection 223(2) of the Act; and

(b) the relevant act has not been done; and

(c) a notice of opposition to the grant of the application is filed.

(1B) If the Commissioner grants the application, the Commissioner must extend the time to include the period from the day on which the notice of opposition is filed to the end of:

(a) if an application is made to the AAT for a review of a decision of the Commissioner—the day when the application is withdrawn or finally dealt with or determined; or

(b) in any other case—21 days after the end of the day on which the Commissioner decides the application.

(1C) For paragraph 223(2A)(b) of the Act the prescribed period is 2 months after the circumstance that prevented the person from doing the relevant act within the time required ceases to exist.

(1D) For subsection 223(2B) of the Act the prescribed period is 12 months after the end of the time within which the act is required to be done.

(2) Notice of the grant of an extension of time must be published in the Official Journal.

(3) For subsection 223(4) and paragraph 223(9)(b) of the Act:

(a) the payment of a continuation fee or a renewal fee within the 6 month period mentioned in subregulation 13.3(1A) or 13.6(2) is a prescribed relevant act; and

(b) the prescribed circumstances are that the fee is not paid within that 6 month period mentioned in subregulation 13.3(1A) or 13.6(2).

(4) For the definition of relevant act in subsection 223(11) of the Act, the following are prescribed:

(a) an action mentioned in Chapter 5, other than an action or step taken under regulation 5.4, 5.5, 5.10 or 5.11;

(b) filing, during the term of a standard patent under subsection 71(2) of the Act, an application under subsection 70(1) of the Act for an extension of the term of the patent;

(c) an action mentioned in Chapter 20.

73    Regulation 22.21 provided at the relevant time:

22.21 Protection or compensation of certain persons

(1) The following provisions of this regulation are prescribed for subsections 41(4), 150(4) and 223(9) of the Act.

(2) Persons who availed themselves of or exploited, or took definite steps by contract or otherwise to avail themselves of or exploit, inventions:

(a) in the case of inventions to which subsection 41(4) of the Act applies—in the period mentioned in paragraph 41(4)(c) of the Act; and

(b) in the case of inventions to which subsection 150(4) of the Act applies—after the lapse of the applications and before the day on which their restoration was notified in the Official Journal; and

(c) in the case of inventions to which subsection 223(9) of the Act applies—within the period of time extended under that subsection; may apply, in the approved form, to the Commissioner for the grant of licences to exploit the inventions.

(3) The Commissioner must give a copy of the application to:

(a) a person whose application was restored under section 150 of the Act; or

(b) a patent applicant or patentee of the application or patent for which an extension of time was granted under section 223 of the Act; or

(c) the patent applicant or patentee of the application or patent to which subsection 41(4) of the Act applies;

and to any other person the Commissioner believes to have an interest in the application.

(4) A person mentioned in subregulation (3) may oppose the grant of the licence to which the application relates.

(5) The Commissioner, if reasonably satisfied that the application should be granted, must grant a licence to the applicant on such terms as the Commissioner thinks reasonable.

74    In addition to s 223 of the Act, there are other provisions of relevance to the construction questions.

75    Section 13 provides:

13 Exclusive rights given by patent

(1) Subject to this Act, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention.

(2) The exclusive rights are personal property and are capable of assignment and of devolution by law.

(3) A patent has effect throughout the patent area.

76    Section 67 provides that the term of a standard patent is 20 years from the date of the patent. Sections 70 to 79A (Chapter 6, Part 3) is the extension of term scheme relating to standard patents for pharmaceutical substances.

77    Section 70(1) provides:

70 Applications for extension of patent

(1) The patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subsections (2), (3) and (4) are satisfied.

78    Section 71 provides:

71 Form and timing of an application

Form of application

(1) An application for an extension of the term of a standard patent must:

(a) be in the approved form; and

(b) be accompanied by such documents (if any) as are ascertained in accordance with the regulations; and

(c) be accompanied by such information (if any) as is ascertained in accordance with the regulations.

For this purpose, document includes a copy of a document.

Timing of application

(2) An application for an extension of the term of a standard patent must be made during the term of the patent and within 6 months after the latest of the following dates:

(a) the date the patent was granted;

(b) the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, any of the pharmaceutical substances referred to in subsection 70(3);

(c) the date of commencement of this section.

79    Section 72 provides:

72 Notification and public inspection of application

If a patentee makes an application for an extension of the term of a standard patent, the Commissioner must publish in the Official Journal a notice that the application has been made and is open to public inspection.

80    Section 74 provides:

74 Acceptance or refusal of application

Acceptance

(1) If a patentee of a standard patent makes an application for an extension of the term of the patent, the Commissioner must accept the application if the Commissioner is satisfied, on the balance of probabilities, that the requirements of sections 70 and 71 are satisfied in relation to the application.

(2) If the Commissioner accepts the application, the Commissioner must:

(a) notify the applicant in writing of the acceptance; and

(b) publish a notice of the acceptance in the Official Journal.

Refusal

(3) The Commissioner must refuse to accept the application if the Commissioner is not satisfied, on the balance of probabilities, that the requirements of sections 70 and 71 are satisfied in relation to the application.

(4) If the Commissioner refuses to accept the application, the Commissioner must:

(a) notify the applicant in writing of the reasons for the refusal; and

(b) publish a notice of the refusal in the Official Journal.

81    Section 78 provides:

78 Exclusive rights of patentee are limited if extension granted

If the Commissioner grants an extension of the term of a standard patent, the exclusive rights of the patentee during the term of the extension are not infringed:

(a) by a person exploiting:

(i) a pharmaceutical substance per se that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; or

(ii) a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology, that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification;

for a purpose other than therapeutic use; or

(b) by a person exploiting any form of the invention other than:

(i) a pharmaceutical substance per se that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; or

(ii) a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology, that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification.

82    Section 79 provides:

79 Rights of patentee if extension granted after patent expires

If:

(a) a patentee applies for an extension of the term of a standard patent; and

(b) the term of the patent expires before the application is determined; and

(c) the extension is granted;

the patentee has, after the extension is granted, the same rights to start proceedings in respect of the doing of an act during the period:

(d) commencing on the expiration of the term of the patent; and

(e) ending on the day on which the extension was granted;

as if the extension had been granted at the time when the act was done.

83    As to the applicable principles of construction, the question of construction must begin and end with the statutory text. But the text must be considered in context, which context may be illuminated not just by other relevant legislative provisions in the Act in question, but also by the legislative history and other extrinsic materials. Context has utility if and to the extent that it assists to ascertain the meaning of the text by, for example, illuminating the mischief that the statute was intended to remedy. Further, integral to the task of contextual construction is the objective discernment of statutory purpose.

84    The parties have referred to a plethora of extrinsic material. But such material cannot displace the clear meaning of the text, assuming that the latter can be discerned. Moreover, it is desirable to exhaust the application of the ordinary rules of statutory construction as applied to the text, before one has recourse to the extrinsic material.

85    Further, it should also be noted that Alphapharm at [42] per Crennan, Bell and Gageler JJ stated that:

The pre-existing law and the legislative history should not deflect the Court from its duty to resolve an issue of statutory construction, which is a text-based activity.

86    Further, and relevantly to the issues with which I need to deal, a harmonious construction which accords to each statutory provision a function that can be reconciled with any apparently inconsistent statutory provision is a necessary objective of the task of statutory construction to the extent that it is feasible. This may entail adjusting the meaning of competing provisions to “reveal” a statutory meaning that differs from the grammatical meaning. It may entail considering the hierarchy of statutory provisions within the one instrument so as to ascertain the leading provision and the provision which must give way. Questions of harmony and how it may be achieved may be illuminated by considerations of context.

87    Finally, a subordinate instrument, such as the Regulations in the present case, cannot inform or dictate the proper construction of the Act. But having said that, if regulations together with the principal legislation are propounded together or form part of a legislative scheme, it may be useful to refer to the regulations to ascertain or identify the scheme (Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101 at [19]). But that does not justify using the regulations to expand upon, read down or rewrite the principal statutory provisions being construed, absent clear stipulation in the principal legislation elevating the status of the subordinate instrument.

SOME construction QUESTIONS

88    There are two principal questions of construction that have been raised. The first question concerns the trigger at the end of s 223(9) and whether it deals with two or three disjunctive possibilities. The second question concerns what is meant by “the ceasing of the patent” in s 223(9).

(a) The first question

89    The first question concerns what is meant by the concluding words of s 223(9), “… the invention concerned because of the failure to do the relevant act within the time allowed, the lapsing of the patent application or the ceasing of the patent, as the case may be”.

90    Lundbeck contends that these concluding words should be read as requiring:

(a)    a failure to do the relevant act within the time allowed; and

(b)    the lapsing of the patent application or the ceasing of the patent.

91    In other words, one must have limb (a) together with one of the options, viz, the lapsing of the patent application or the ceasing of the patent. Alternatively expressed, Lundbeck contends that the concluding words of s 223(9) deal with two possible scenarios, viz:

(a)    the failure to do the relevant act within the time allowed and the lapsing of the patent application; or

(b)    the failure to do the relevant act within the time allowed and the ceasing of the patent.

92    Contrastingly, the Generics contend that the concluding words of s 223(9) give rise to three possibilities, viz:

(a)    the failure to do the relevant act within the time allowed;

(b)    the lapsing of the patent application; or

(c)    the ceasing of the patent.

93    In other words, the “failure to do the relevant act within the time allowed” does not need to be linked to the subsequent phrases being “the lapsing of the patent application” or “the ceasing of the patent”.

94    It is appropriate to note the following concerning the context for this debate, if it is not already apparent. Put to one side the scenario of “the lapsing of the patent application”. That is not applicable on the facts of the present case. Consider the scenario “ceasing of the patent”. Lundbeck contends that there has been no “ceasing of the patent”. That is the second question that I will discuss later. But assume for the sake of argument for the purposes of this first construction question only that there has been no “ceasing of the patent”. If Lundbeck’s construction on the first question is correct, there can be no triggering of the concluding words of s 223(9) in the context of the facts of the present case. The composite of “the failure to do the relevant act within the time allowed” and the “ceasing of the patent” could not be satisfied. Contrastingly, on the Generics’ construction, one does not need the conjunction with the “ceasing of the patent”. On their construction, the concluding words of s 223(9) could be satisfied by showing “because of the failure to do the relevant act within the time allowed” with nothing further to be shown.

95    Before resolving this first construction question, I would make two other points. First, whatever the resolution of this question, I am not deciding any factual questions concerning the satisfaction of the “because…” trigger in the concluding words of s 223(9). That is a matter for the Deputy Commissioner in dealing with the licence applications. Second, if the answer given to the first question is that for which the Generics contend, it may be unnecessary for me to deal with the second question as to the meaning of the phrase “ceasing of the patent”. Nevertheless, I will deal with the second question irrespective of the answer to the first question.

96    In my view, the Generics’ construction should be accepted. The concluding words of s 223(9) deal with three possibilities. I say this for a number of reasons.

97    First, the Generics’ construction is supported by the natural and ordinary grammatical meaning and construction of the provision. In this regard, Lundbeck’s construction would require a textual reconstruction. It would require the comma in the phrase “…within the time allowed, the lapsing of the patent application” to be removed or ignored and the word “and” added in its place.

98    Second, it is apparent by reference to the meaning of “relevant act” that circumstances might arise not involving a patent or a patent application. Section 223(11) defines “relevant act” to mean “an action … in relation to … any proceedings under this Act … and includes the making of a Convention application within the time allowed for making such applications”. The breadth of “relevant act” supports the Generics’ construction. Section 223(9) is broader than requiring the “because…” trigger to be tied into the lapsing of the patent application or the ceasing of the patent. So, s 223(9) can embrace for example a failure to file a Convention application or a divisional application within time and generally scenarios dealt with by, say, s 223(2) not involving the lapsing of a patent application or the ceasing of a patent.

99    Third, a question that arises on Lundbeck’s construction is that if it was correct, it might be said that the words “failure to do the relevant act within the time allowed” would have little work to do. But Lundbeck’s answer is that the words do have an ancillary role, being “a role of potential relevance in the inquiry as to the subjective motivation of the third party”. I accept that this is theoretically so, although its answer is hardly compelling.

100    Fourth, s 223(9) when read in the context of s 223 as a whole supports the Generics’ construction. For this purpose, I do not strictly need to apply the tenet of construction that beneficial and remedial legislation should be given a liberal construction, subject to that construction not being unreasonable or unnatural (see IW v The City of Perth (1997) 191 CLR 1 at 12 per Brennan CJ and McHugh J). But if necessary, that tenet can be applied to s 223(9) (cf Alphapharm at [64] per Crennan, Bell and Gageler JJ) and if it was so applied would only fortify the position of the Generics. If one considers the context, it may readily be appreciated that s 223(9) is designed to compensate persons adversely affected by an extension of time. The provisions of inter alia ss 223(2), (4), (9) and (11) should be considered together. Neither their text nor context justifies the narrow construction given by Lundbeck to s 223(9). Section 223 has a harmonious balance to its operation. On the one hand, in the circumstances described in s 223(1) (involving error on the part of the Commissioner, an employee, the receiving Office or a similar kind of third person), s 223(2) (involving error on the part of the relevant person, his or her agent or error beyond their control) or s 223(2A) (involving the failure of an act to be done within a certain time despite the person concerned taking due care to ensure its doing within the required time), s 223 provides for the Commissioner to grant an extension of time. On the other hand, s 223(9) provides for the correlative possibility of the Commissioner granting relief to third parties adversely affected by the grant of the extension of time. If an indulgence is granted to a patentee for an error that is sufficient to enliven the Commissioner’s discretion to grant an extension of time, s 223(9) provides the remedy to adversely affected third parties.

101    Further, let me say something about the legislative history. Prior to 1960 there were relatively more limited provisions under which an extension of time could be granted and dealing with third party consequences; see for example s 64 of the Patents Act 1903 (Cth), ss 2 and 3 of the Patents Act 1906 (Cth), s 11 of the Patents Act 1909 (Cth) inserting a new s 85A into the Patents Act 1903-1909 (Cth), regs 38 and 39 of the Patents Regulations 1912 (Cth), s 9 of the Patents, Trade Marks, Designs and Copyright (War Powers) Act 1939 (Cth), regs 5 and 6 of the Patents, Trade Marks, Designs and Copyright Regulations 1953 (Cth), ss 97, 98 and 160 of the Patents Act 1952 (Cth).

102    In 1960, by s 28 of the Patents Act 1960 (Cth) (amending the Patents Act 1952-1955 (Cth)), s 160 of the principal Act was replaced with a more expanded version which read as follows:

160. – (1.) Where, by reason of an error or omission on the part of an officer or person employed in the Patent Office, an act or step in relation to an application for a patent or in proceedings under this Act (not being proceedings in a court) required to be done or taken within a certain time has not been so done or taken, the Commissioner shall extend the time for doing the act or taking the step.

(2.) Where, by reason of –

(a) an error or omission on the part of the person concerned or of his agent or attorney; or

(b) circumstances beyond the control of the person concerned,

an act or step in relation to an application for a patent or in proceedings under this Act (not being proceedings in a court) required to be done or taken within a certain time has not been so done or taken, the Commissioner may, upon application by the person concerned, but subject to this section, extend the time for doing the act or taking the step.

(3.) The time for the doing of an act or the taking of a step may be extended under either of the last two preceding subsections although that time has expired.

(4.) Where an application for extension of time under sub-section (2.) of this section is made more than three months after the expiration of the time allowed for the doing of the act or the taking of the step, the Commissioner shall advertise the application in the Official Journal.

(5.) A person may, as prescribed, oppose the granting of the application.

(6.) Where an extension of time is granted under this section, such provisions as are prescribed have effect for the protection or compensation of persons who availed themselves, or took definite steps by way of contract or otherwise to avail themselves, of the invention the subject of the application for the patent concerned by reason of the act or step in relation to which the extension was granted not having been done or taken within the time allowed.

(7.) An appeal lies to the Appeal Tribunal from a decision of the Commissioner under this section.

103    Relevantly, Sir Garfield Barwick said in the Second Reading Speech for the Patents Bill 1960 (Cth) (Official Hansard, House of Representatives, 2 June 1960, p 2214):

I now pass to the power of the Commissioner to extend the time set down for the doing of an act. Under section 160 of the act, he can extend the time where the act has not been done by reason of circumstances beyond the control of the person concerned. The committee considered representations that through pressure of business in offices of patent attorneys, errors do occur that result in acts that ought to be done not being done. It recommended that an error or omission on the part of an applicant, or of his agent or attorney be made an additional ground for extending the time for the doing of an act. Clause 29 restates section 160 to give effect to this recommendation. Provision is also made by the amendment to protect persons who are adversely affected by an extension of time under the section.

104    Section 160 now finds expression to a large extent in s 223. Regulation 43D was also introduced into the Patents Regulations 1954 (Cth) in May 1961. This now finds expression (to a large extent) in reg 22.21.

105    The legislative history shows that from 1960 there had been an expansion to the circumstances in which the Commissioner might grant an extension of time to a patentee in return for the expanded protection of third parties.

106    What is also apparent from s 160(6) as amended in 1960 is that in one sense its form supports the Generics’ construction. It refers to “by reason of the act or step in relation to which the extension was granted not having been done or taken within the time allowed”. This is similar to the first disjunctive option in the three options expressed in the text of s 223(9). What was later added were the second and third options. But there is no basis for asserting that the later additions in any way were intended to diminish or eliminate the force or effect of the independent first option.

107    Lundbeck has made reference to s 223(9) as first introduced into the Act and the explanatory memorandum at [310] and [311] in relation to the Patents Bill 1990 (Cth), but it is clear that these are incomplete statements and, moreover, that [310] was referring to additional aspects and not a substitution.

108    Let me now address another argument. Lundbeck submits that s 223(9) should not be read as applying to the extension of term scheme and s 79 in particular. It says that Chapter 6, Part 3 is a specific and detailed regime addressing extensions of term, particularly the rights associated with the Patent during any extended term. Contrastingly, it says that s 223 is a more general provision and that it does not have primacy. Relatedly, Lundbeck says that the extent to which s 79 is limited is as set out in s 78, rather than s 223(9). In summary, it says that s 79 has primacy over and operates to the exclusion of s 223(9). I reject these arguments.

109    First, in my view Lundbeck confuses the two different regimes. Sections 70 to 79A are dealing with the extension of term. Contrastingly, s 223 is dealing with extensions of time. And section 223(9) is dealing with the consequences of an extension of time.

110    Second, the regimes can work harmoniously together. For example, as the High Court discussed in Alphapharm, the second time requirement in s 71(2) is not excluded from s 223(2)(a) by reg 22.11(4)(b). Accordingly, s 223(2) applied to extend the time requirement calculated by reference to ss 71(2)(a), 71(2)(b) and 71(2)(c).

111    Third, the regimes also work harmoniously together by reason of the fact that the extension of time regime is anterior to the extension of term regime. In other words, until the extension of time has been validly made or given, there is no extension of term validly made or given. In other words, the regime in s 223 for the extension of time is anterior in one sense to the extension of term. Sections 223(2), 223(4), 223(7) and 223(9) have independent work to do. The present case does not concern the context of a general regime being inconsistent with a specific regime.

112    Fourth, Lundbeck says that s 79 is inconsistent with s 223(9). But they are dealing with different matters as I have said above. But in any event, I would make the following points. Section 79 refers to “start proceedings”, ie commencing infringement proceedings. It does not define the exclusive rights of the patentee or when infringement occurs; nor does it deal with or exclude any defences to infringement. Moreover, any exclusive right under s 13(1) would be modified by any licence granted under s 223(9). Moreover it is incorrect to say that ss 78, 79 and Chapter 11 operate as a code (including provisions such as ss 119A or 123) such as to impliedly oust the operation of s 223(9). Reference was also made by Lundbeck to s 223(10) also being in conflict with s 79. I do not propose to dwell on s 223(10) given its relevance to the infringement proceedings, save to say that there is substance to the contention that I discussed with Mr Dimitriadis SC that to the extent of inconsistency, s 223(10) would override.

113    Fifth, Lundbeck has said that the only relevant limitation on s 79 is s 78 and that accordingly s 223(9) is implied ousted. But s 223(9) and s 223 generally are dealing with the anterior question of an extension of time and the consequences flowing from that. The patentee does not get the benefit of s 79 (as “modified” by s 78) without going through the gateway of s 223.

114    Generally, Lundbeck also contends that the relevant legislative history demonstrates that since inception, s 223(9) had no intended operation in relation to the expiry of the term of a patent; see its written submissions at [75] to [104]. Generally, it will be apparent that I reject its analysis. But there is one matter I should specifically address at this point. On the proper construction of s 223(9), Lundbeck sought to finesse support for its position by reference to the terms of reg 22.11(4)(b). Now there are difficulties with doing so. First, the terms of a subordinate instrument cannot drive the construction of the principal instrument. Second, the predecessor to reg 22.11(4)(b) was not introduced until 27 January 1999, some nine years after s 223(9) was introduced. Undaunted by such difficulties, Lundbeck contended that one could refer to the regulation to identify the relevant legislative scheme. But the relevant scheme was an extension of term scheme introduced by s 3 of Schedule 1 to the Intellectual Property Laws Amendment Act 1998 (Cth) which introduced a new extension of term scheme for standard patents relating to pharmaceutical substances into the Act (ie ss 70 to 79A). I do not consider that a regulation introduced nine years after s 223(9) can assist the proper construction of s 223(9). Moreover, Lundbeck has sought to deploy it beyond seeking to identify the extension of term scheme introduced by the Intellectual Property Laws Amendment Act 1998. More generally, I have difficulty in Lundbeck delving into the legislative history concerning extension of term when the issue before me principally concerns extension of time.

115    Further and generally, Lundbeck appears to contend that s 223(9) and reg 22.21 only apply where an applicant for a s 223(9) licence has exploited (or taken definite steps to exploit) the invention the subject of the patent after it had ceased. I reject that construction. Section 223(9) is concerned with protecting persons who exploited the invention concerned because of the failure to do the relevant act within the time allowed (or the lapsing of a patent application or ceasing of a patent). But it is also protective of persons who took definite steps by way of contract or otherwise to exploit the invention concerned because of the failure to do the relevant act within the time allowed (or the lapsing of a patent application or ceasing of a patent). There is a difference between those two circumstances. A person cannot ordinarily exploit an invention before the lapsing of a patent application or the ceasing of a patent without exposing themselves to infringement proceedings; this is subject to some statutory exceptions. But a person may take substantial steps by way of contract or otherwise before the lapsing of a patent application or the ceasing of a patent so as to put themselves in a position to exploit the invention as soon as the patent application lapses, or the patent ceases to be in force. This is a reason why the Act requires that applications for an extension of term be made within a specified time. The Act acknowledges that persons may take legitimate steps by way of contract or otherwise towards exploiting an invention the subject of a patent that will cease to be in force because there has not been an application to extend the term of that patent.

116    Finally, reference was made to Law v Razer Industries Pty Ltd (2010) 190 FCR 166, but I do not consider that this assists. Bennett J was dealing with an applicant for a s 223(9) licence who by chance had taken steps to exploit the invention after the patent had ceased. In that context her Honour observed that “the protection [under s 223(9)] would only be afforded to a person who becomes aware that the Patent had ceased and takes actions based upon that status of the Patent” (at [26]). But her Honour was dealing with a different factual scenario to the present. The construction argument raised before me did not arise.

117    In summary, the correct construction of s 223(9) and reg 22.21 is that a person may be granted a s 223(9) licence where at any time before the extension of time was advertised they exploited (or took definite steps to exploit) the invention concerned and those steps have the relevant nexus to one or more of the s 223(9) criteria, namely, the failure to do the relevant act within the time allowed or the lapsing of a patent application or the ceasing of a patent.

(b) The second question

118    The second issue raised by the parties concerns what is meant by “ceasing” in the phrase “ceasing of the patent” in s 223(9). The Generics contend that the Patent had “ceased” consistently with the meaning of the s 223(9) related verbial form. Contrastingly, Lundbeck says that the Patent did not “cease” but “expired”.

119    Lundbeck says that the words “lapse”, “cease” and “expire” (and cognate words) have distinct and specific meanings under the Act. Accordingly, the references to lapsing and ceasing in s 223(9) do not encompass expiry. Lundbeck says that the Act uses:

(a)    the word “lapses” and cognate words (“lapsed” and “lapsing”) to refer to a patent application no longer being on foot; and

(b)    the word “ceases” and cognate words (“ceased”, “cessation” and “ceasing”) to refer to the registration of a patent coming to an end early (ie before the conclusion of its term) because of the failure to pay a renewal fee or file a prescribed document.

120    It contends that in contradistinction to the word “ceases”, the Act uses the word “expires” and cognate words to refer to the term of a patent running its full course and ending.

121    Reference was made to Chapter 13 (ss 141 to 143B) of the Act, which is titled “Withdrawal and lapsing of applications and ceasing of patents”.

122    Section 142 is titled “Lapsing of applications”. It provided at the relevant time:

(1) A provisional application for a patent lapses at the end of the period prescribed for the purpose of section 38 or, if that period is extended, at the end of the period as so extended.

(2) A complete application for a standard patent lapses if:

(a) the applicant does not ask for an examination of the patent request and complete specification within the relevant period prescribed for the purposes of subsection 44(1), (2) or (3), as the case requires; or

(d) the applicant does not pay a continuation fee for the application within the period prescribed for the purposes of this paragraph; or

(e) the patent request and complete specification are not accepted within the period prescribed for the purposes of this paragraph; or

(f) if the application is a PCT application – prescribed circumstances apply to the application.

(3) A complete application for a standard patent lapses if the applicant does not comply with a direction of the Commissioner under section 107 within the time allowed by the Commissioner under that section.

123    Lundbeck contends that the term “lapses” and cognate terms (“lapsed” and “lapsing”) are used throughout the Act consistently with s 142. I accept that this is so in relation to ss 29A (note), 32(2), 36(2), 49A (note), 54(3), 79B(3), 147(3), 148, 149, 150(1), 223(7) to 223(10), 227(4)(c), 228(2)(ha)(iii), 228(2)(ha)(iv), 228(2)(i)(iii) and 228(2)(j).

124    Further, Lundbeck refers to section 143, which is titled “Ceasing of patents”. It stated (at the relevant time):

A standard patent ceases if the patentee:

(a) does not pay a renewal fee for the patent within the prescribed period; or

(b) does not file the prescribed documents (if any) within the prescribed period.

125    Further, Lundbeck says that the term “ceases” and cognate terms (“ceased”, “cessation” and “ceasing”) are used throughout the Act consistently with s 143. I also accept that this is so in relation to ss 55(2)(b), 79C(2)(b)(iii), 101E(1)(b), 101F(1)(c), 143A, 223(7), 223(9) and 223(10).

126    Further, it says that, also relevantly to both “ceases” and “lapses”, the words “restore” and cognate words (“restored” and “restoration”) are used to refer to the reinstatement of a lapsed patent application or a ceased patent. The Act does not contain a provision defining the word “restore” or any cognate word in general terms. Such words are used sparingly in the Act. I further accept that this is so in relation to ss 150, 223(7), 223(10), 228(2)(ha)(iv) and 228(2)(j)(ii).

127    Contrastingly, Lundbeck contends that in the Act, the word “expires” and cognate words (“expired” and “expiration”) are used to refer to the full term of a patent coming to an end.

128    It points out that the Act does not contain a provision defining the word “expires” or any cognate word or (in contrast with lapsing and ceasing) setting out a list of events which will constitute expiry. Such words are used sparingly in the Act. See ss 55(2)(b), 79, 83(4), 85(2), 223(3) and 223(3A). However, Lundbeck contends that s 55(2)(b) is of particular significance in demonstrating that the words “cease” and “expire” have different meanings under the Act. That section uses the words “ceases” and “expires” in the same clause to identify alternative possible means by which the life of a patent may come to an end. Similarly, in s 79C (albeit relating to innovation patents), the Act identifies as alternatives the term of a patent ending or a patent ceasing. It is said that these are strong textual indicators that the term “ceases” has a narrow meaning controlled by s 143 and the word “expires” is intended to convey a different meaning.

129    I would reject Lundbeck’s contentions.

130    First, the word “ceasing” is an ordinary English word. Its natural meaning encompasses “expiry”. Now “ceasing” may have a narrower operation in some parts of the Act (such as s 55(2)(b)), but it is capable in other provisions of the Act of having a broader operation. Such an operation is apparent from s 145(1), which reads “the patent, or all the patents … have ceased to be in force”. This has been interpreted to include expiry of the term of a patent (Regency Media Pty Ltd v MPEG LA, LLC (2014) 231 FCR 588 at [13] and [35] per Bennett and Pagone JJ); see also Alphapharm at [68] where it was noted that one could have a lapse of a patent due to the expiration of the term.

131    Second, if s 223(9) is to be construed so that a licence applicant must show that there was either a lapsing or ceasing of a patent to enliven the Commissioner’s power to grant a licence (Lundbeck’s construction), then the context and purpose of the provision support “ceasing” being given a wide operation, and not being necessarily confined to the meaning of “ceases” in s 143 of the Act. In the context of s 223(9) and reg 22.21, “ceasing” refers to a patent ceasing to be in force, a concept which includes both “ceasing” in a narrow sense and expiry of the term of a patent.

132    Finally, if “ceasing” has a more confined operation in s 223(9), even on Lundbeck’s case it includes a patent which “ceased” within the meaning of s 143. As the Generics have contended, it would seem to be arguable that the present circumstances satisfy the definition of “ceasing” in s 143 subject to the difficulty that I raised with counsel. Section 143(b) provides that a standard patent ceases if the patentee “does not file the prescribed documents (if any) within the prescribed period”. There is no definition for “prescribed documents” or “prescribed period”. But s 2B of the Acts Interpretation Act 1901 (Cth) deems that “in any Act”, “prescribed” means prescribed by the Act or by regulations under the Act. When an application for an extension of the term of a patent is made under s 70, s 71(1) prescribes that the application must be in the approved form and be accompanied by such documents and information (if any) ascertained in accordance with the Regulations. Further, s 71(2) prescribes that the application must be made during or within certain periods of time. The terms of ss 71(1) and 71(2) appear to be a prescription. They state the documents that an applicant must submit and the period in which such action must be taken. “Prescribe” ordinarily means to lay down or direct or dictate a rule or a course to be followed. It is arguable that Lundbeck did not file the prescribed documents (being the documents and information required to be filed for an application for an extension of term based on the ARTG registration of CIPRAMIL under s 71(1)), within the prescribed period (being the time allowed by s 71(2)). That failure was arguably a failure to file the prescribed documents (for an extension of term) within the prescribed period (as contemplated by s 143(b)) and inevitably resulted in the Patent ceasing to be in force from 13 June 2009 unless and until an extension of time was granted pursuant to s 223, and an extension of term granted thereafter (as it ultimately was).

133    But I do not need to rule on this argument or elaborate further on the difficulties that I raised with counsel. For present purposes, my determination is that “ceasing” can include “expiry”.

CONCLUSION

134    I will make declarations to accord with the above reasons and otherwise dismiss Lundbeck’s originating application. Subject to hearing further from counsel, the orders that I propose to make are as set out at the outset of these reasons.

Associate:

Dated: 3 February 2017