Pfizer Corp v Commissioner of Patents [2006] FCAFC 190 (20 December 2006)

INTELLECTUAL PROPERTY – patents – whether extension of time for patent valid – whether Commissioner misconstrued s 70 of the Patents Act in extending the term of the patent – registration and listing of goods under the Therapeutic Goods Act – whether the first regulatory approval date is the date on which substance was entered into the part of the Therapeutic Register relating to registered goods or the date on which the substance was entered into the Therapeutic Register relating to listed goods

PRACTICE AND PROCEDURE – appeals – leave to appeal required for an appeal under s 158 of the Patents Act – whether clear prima facie error required in the reasons of the primary judge

Acts Interpretation Act 1901 (Cth) s 15AA
Federal Court of Australia Act 1976 (Cth) s 24
Patents Act 1990 (Cth) ss 13, 58, 61, 65, 67, 70, 71, 75, 77, 104, 105, 106, 107, 154, 156, 186, 191, 192, 228
Patents Regulations 1991 (Cth) r 6.8, 6.9, 6.10,10.7
Therapeutic Goods Act 1989 (Cth) ss 9A, 18, 18A, 19, 19A, 19B, 23, 24, 25, 26, 27, 29, 31, 36
Therapeutic Goods Regulations 1990 (Cth) r 10

Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; (1999) 92 FCR 106 cited
H Lundbeck A/S v Commissioner of Patents [2006] FCA 163 cited
Imperial Chemical Industries plc v EI Dupont De Nemours & Co [2002] FCAFC 264 cited
Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; (2002) 122 FCR 494 cited
Lomas v Winton Shire Council [2002] FCAFC 413 cited
Newcastle City Council v GIO General Ltd [1997] HCA 53; (1997) 191 CLR 85 cited
Renaud Cointreau & Cie v Cordon Bleu International Ltee [2001] FCA 1170; (2001) 52 IPR 382 cited
Shanahan v Scott [1957] HCA 4; (1957) 96 CLR 245 cited
Woolworths Ltd v BP plc [2006] FCAFC 52; (2006) 150 FCR 134 referred to

Industry Commission Report on the Pharmaceutical Industry, No 51, AGPS, Melbourne 1996

PFIZER CORP & ORS v COMMISSIONER OF PATENTS & ANOR)

NSD1795 OF 2006

EMMETT, ALLSOP & GREENWOOD JJ
20 DECEMBER 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD1795 OF 2006

BETWEEN:	PFIZER CORP First Appellant PFIZER LIMITED Second Appellant PFIZER RESEARCH & DEVELOPMENT COMPANY N.V./SA Third Appellant
AND:	COMMISSIONER OF PATENTS First Respondent SPIRIT PHARMACEUTICALS PTY LIMITED (ACN 109 225 747) Second Respondent

JUDGES:	EMMETT, ALLSOP & GREENWOOD JJ
DATE OF ORDER:	20 DECEMBER 2006
WHERE MADE:	SYDNEY

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD1795 OF 2006

BETWEEN:	PFIZER CORP First Appellant PFIZER LIMITED Second Appellant PFIZER RESEARCH & DEVELOPMENT COMPANY N.V./SA Third Appellant
AND:	COMMISSIONER OF PATENTS First Respondent SPIRIT PHARMACEUTICALS PTY LIMITED (ACN 109 225 747) Second Respondent

JUDGES:	EMMETT, ALLSOP & GREENWOOD JJ
DATE:	20 DECEMBER 2006
PLACE:	SYDNEY

1 Four patents relating to pharmaceutical substances (‘the Patents’) have been granted to one or other of Pfizer Corp, Pfizer Limited and Pfizer Research & Development Company N.V./SA (together ‘the Patentees’). Two of the Patents relate to a pharmaceutical substance used to treat hypertension and the other two relate to a pharmaceutical substance used for the treatment of migraine headaches. Extensions of the terms of the Patents were granted by the Commissioner of Patents (‘the Commissioner’) under ss 70 and 77 of the Patents Act 1990 (Cth) (‘the Patents Act’). However, on 23 September 2005, the Commissioner directed amendments to the Register of Patents (‘the Patent Register’), which had the effect of shortening the extensions of the terms of the Patents.

2 A judge of the Court dismissed an appeal by the Patentees from those decisions. The Patentees now seek leave to appeal from the orders dismissing the appeal. They say that the Commissioner misconstrued s 70 of the Patents Act in directing the amendments and that, in any event, the provision that authorised the amendment is invalid.

3 The Patents Regulations 1991 (Cth) (‘the Patent Regulations’) were made under the Patents Act. Regulation 10.7(7) requires that, in certain circumstances, the Commissioner must amend the relevant entry in the Patent Register to insert the correct extension of the term of a patent. The amendments to the Patent Register in question were made pursuant to r 10.7(7). Regulation 10.7(9) provides that an appeal lies to the Federal Court against a decision of the Commissioner to amend the Patent Register under r 10.7(7).

4 Section 154 of the Patents Act provides that the Federal Court has jurisdiction with respect to matters arising under that Act and that 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 s 75 of the Constitution. Under s 156 of the Patents Act, the jurisdiction of the Court is to be exercised by a single judge.

5 However, s 58(2) of the Patents Act provides that, except with the leave of the Federal Court, an appeal does not lie to the Full Court of the Federal Court against a judgment or order of a single judge of the Federal Court in the exercise of its jurisdiction to hear and determine appeals from decisions or directions of the Commissioner. Thus, leave to appeal from the orders of the primary judge is required.

6 The decision of the Commissioner and the orders of the primary judge operate to conclude the question of the length of the extensions of the terms of the Patents. No other venue or forum, administrative or curial, is available for the agitation of the questions dealt with by the Commissioner and the primary judge. To that extent, the circumstances are not unlike those that obtain when an opposition to the grant of a patent is dismissed. Those being the circumstances before us, it is necessary to say something about leave to appeal under s 158(2) and the proper test for the grant of such leave.

7 The submission was put to us that there is a rule or principle governing leave to appeal under s 158(2) of the Patents Act (and its equivalent in s 195(2) of the Trade Marks Act 1995 (Cth)) to the effect that it is necessary to show in all cases (and in the case here) clear prima facie error in the reasons of the primary judge. Particular reliance was placed on observations made by the Full Court in Woolworths Ltd v BP plc [2006] FCAFC 52; (2006) 150 FCR 134 at [53]- [56]. However, the majority in Woolworths v BP did not state that as a general proposition and there is no such rule or principle. Having regard to the Patentees’ submissions, it is appropriate to say something about the grant of leave in such cases.

8 All matters originating from a decision or order of the Commissioner, and not just those involving a pre-grant opposition proceeding commenced under s 60(4) of the Patents Act, will involve the discretion in s 158(2). In a pre-grant opposition proceeding, where there have been two hearings before a skilled specialist administrator in the Patents Office and before a judge of the Court, with the latter, if not both the former and the latter, dismissing the opposition, the Full Federal Court should exercise its discretion to grant leave to appeal under s 158(2) with care. Leaving aside applications for leave on a question of pure law, in the context of essentially undisputed facts, and subject always to considerations of fairness and the interests of justice raised by a particular case, leave to appeal against a decision rejecting a pre-grant opposition will often be granted only where the applicant has demonstrated a clear prima facie case of error in the decision appealed from, such that the likely effect of that decision would be to allow an invalid patent to proceed to grant (see Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; (1999) 92 FCR 106 at [23] and Renaud Cointreau & Cie v Cordon Bleu International Ltee [2001] FCA 1170; (2001) 52 IPR 382 at [39]- [45]).

9 On the other hand, the Court should be studious in its examination of the questions likely to arise on appeal, before refusing leave to appeal from an order of a single judge where an opponent has been successful. The Court should be slow to shut out an applicant for a patent or a trade mark who has had only one judicial consideration of entitlement to a grant. Before refusing leave, the Court should be satisfied that it is clear, beyond doubt, that there has been no error and that any patent or trade mark, if granted, should be revoked or expunged (see Lomas v Winton Shire Council [2002] FCAFC 413 at [16]- [19]).

10 However, it is necessary to emphasise the importance of not laying down rigid rules that would restrict the exercise of power in s 158(2) of the Patents Act and s 195(2) of the Trade Marks Act. The principles governing the exercise of the power under s 158(2) of the Patents Act and s 195(2) of the Trade Marks Act are similar to those governing the exercise of power to grant leave to appeal under s 24(1A) of the Federal Court of Australia Act 1976 (Cth): rigid rules should not be formulated and each application should be dealt with in accordance with its own special circumstances. Thus, the discretion to grant leave to appeal must not be constrained by elevating particular approaches to its exercise, in particular classes of case, to rules of general application (see Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; (2002) 122 FCR 494 at [25]; Genetics Institute Inc v Kirin-Amgen Inc at [14], Renaud Cointreau & Cie v Cordon Bleu International Ltee at [39]-[45], Imperial Chemical Industries plc v EI Dupont De Nemours & Co [2002] FCAFC 264 at [10]), Lomas v Winton Shire Council at [15]-[19].)

11 In Woolworths v BP, the Full Court dealt with leave to appeal against orders of a judge of the Court dismissing the opposition to the registration of certain trade marks. The Registrar of Trade Marks had refused to register the trade marks in question. The applicant opponent had thus had two hearings, and each hearing had involved factual questions as to use and distinctiveness. The primary judge had dismissed the opposition and ordered that the applications proceed to registration. Accordingly, the applicant was not shut out.

12 No doubt, where an unsuccessful opponent, after two hearings and where questions of fact, impression and judgment are involved, seeks leave to appeal, it may be appropriate to require the demonstration of a clear prima facie case of error on the part of the primary judge. Indeed, in the kind of case before the Full Court in Woolworths v BP, it may be rare to grant leave to appeal in the absence of a clear prima facie case of error on the part of the primary judge. But their Honours should not be taken to be diluting the proposition stated repeatedly by Full Courts before them (and repeated by them), that the discretion to grant leave to appeal must not be constrained by elevating particular approaches in particular cases to the status of rules of general application. That is what the submissions of the respondents sought, impermissibly, to do here.

13 As we have said, the effect of the Commission’s decisions, and of the orders of the primary judge, is to preclude any further agitation of the question of the length of the extensions of the terms of the Patents. The Patentees say that the Commissioner misconstrued the provisions of ss 70 and 77 of the Patents Act. They also say that r 10.7(7) is invalid as being ultra vires the regulation making power conferred by the Patents Act. Those questions are questions of law concerning the general application of the Patents Act and the validity of the Patent Regulations. They are questions of general importance. The contentions of the Patentees on both questions are at least arguable, in the sense that it is not possible to dismiss the contentions out of hand as having no possible prospect of success.

14 Without deciding whether or not leave would be granted, we heard full argument from all parties on the assumption that leave would be granted. Having regard to the effect of a refusal of leave and since the questions of law that would be raised are of general application and importance, we consider that leave to appeal should be granted in this case to raise the grounds set out in the draft notice of appeal that has been put before the Court.

15 Under s 67 of the Patents Act, the term of a standard patent is 20 years from the date of the patent. Under s 65, unless the Patent Regulations provide otherwise, the date of a patent is the date of filing the relevant complete specification. However, s 70(1) of the Patents Act provides that the patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if certain requirements are satisfied.

The term first regulatory approval date is defined in s 70(5)(a) and 70(5)(b) as follows:

17 Pre TGA marketing approval in relation to a pharmaceutical substance is defined in s 70(6) as an approval, by a Minister or a Secretary to a Department to:

18 Regulations 6.8, 6.9 and 6.10 of the Patent Regulations deal with applications under s 70. Under r 6.8(2), the application must be accompanied by information showing that goods containing, or consisting of, the substance are currently included in the Therapeutic Register. Under r 6.8(3), The application must also be accompanied by information identifying the substance. Regulation 6.9 applies to an application for an extension of the term of a standard patent for which pre-TGA marketing approval has not been given. Regulation 6.10 applies to an application for an extension of the term of a standard patent for which pre-TGA marketing approval has been given. For present purposes, only r 6.9 is relevant.

19 Regulation 6.9(2) relevantly provides that an application for an extension must be accompanied by a certificate stating the date of commencement of the first inclusion in the Therapeutic Register of goods that contain, or consist of, the substance. If the patentee does not have a certificate, the application must be accompanied by information showing the date of commencement of the first inclusion in the Therapeutic Register of goods that contain, or consist of, the substance.

20 Under s 76, the Commissioner must grant an extension of the term of a standard patent if there is no opposition to the grant or, in spite of opposition, the Commissioner’s decision, or the decision on appeal, is that the extension should be granted. Under s 77(1), if the Commissioner grants an extension of the term, the term of the extension is equal to the period beginning on the date of the patent and ending on the earliest first regulatory approval date, reduced (but not below zero) by five years. Under s 77(2), the term of the extension cannot be longer than five years.

21 Regulation 10.7(7) relevantly provides that, if an extension of the term of a standard patent has been granted, and the Commissioner becomes aware that the first regulatory approval date in relation to the pharmaceutical substance is earlier than the date of commencement of the first inclusion in the Therapeutic Register that was supplied under r 6.9(2), the Commissioner must amend the relevant entry in the Patent Register to insert the correct extension of the term of the patent. Regulation 10.7(8) provides that, if the Commissioner proposes to amend an entry in the Patent Register, the Commissioner must give notice to that effect to the patentee and must act in accordance with other specified regulations. Regulation 10.7(9) then provides that an appeal lies to the Federal Court against a decision of the Commissioner to amend the Patent Register under r 10.7(7).

22 The Commissioner relies upon s 228(1) and s 228(2) of the Patents Act as authorising r 10.7. The Patentees say, however, that r 10.7(7) is beyond the regulation-making power conferred by s 228, which, they say, must be construed in the light of Chapters 10 and 19 of the Patents Act. It is therefore necessary to say something about those provisions before dealing with the regulation-making power itself.

23 Chapter 10 of the Patents Act is concerned with amendments. Part 2 of Chapter 10, which includes ss 104 to 109, deals with amendment of patent requests, specifications and other filed documents.

24 Under s 104, an applicant for a patent, or a patentee, may ask the Commissioner for leave to amend, for any purpose, a patent request, a complete specification or any other filed document. The Commissioner must consider and deal with such a request in accordance with the Patent Regulations.

25 Under s 106, where a patent has been granted and the Commissioner is satisfied that the patent is invalid on grounds that could be removed by appropriate amendments of the specification, the Commissioner may direct the patentee to file a statement of proposed amendments for the purposes of removing those grounds. Under s 107, where a complete application for a standard patent has been made, the Commissioner is satisfied that there are lawful grounds of objection to the patent request or complete specification and that those grounds could be removed by appropriate amendments, the Commissioner may direct the applicant to file a statement of proposed amendments for the purposes of removing those grounds. The Commissioner must not give such a direction without first giving the patentee or the applicant, as the case may be, a reasonable opportunity to be heard.

26 Under s 104(7), an appeal lies to the Federal Court against the decision of the Commissioner allowing, or refusing to allow, an amendment requested under s 104. Under s 109, an appeal lies to the Federal Court against a direction of the Commissioner under s 106 or s 107.

27 Under s 105, in any relevant proceedings in relation to a patent, the Court may, on the application of the patentee, direct the amendment of the patent, the patent request or the complete specification. The patentee must give notice of such an application to the Commissioner, who is entitled to appear and be heard before an order is made directing the amendment.

28 Chapter 19 of the Patents Act, which includes ss 186 to 197, deals with the Patent Register. Under s 186, the Patent Register is to be kept by the Patent Office under s 187, and particulars of patents in force must be registered in the Patent Register. Under s 191, a person must not make a false entry in or cause a false entry to be made in the Patent Register.

29 Section 192 provides that a person aggrieved by an entry wrongly existing in the Patent Register, or an error or defect in an entry in the Patent Register, may apply to a prescribed Court for an order to rectify the Register. On hearing such an application, the Court may decide any question that it is necessary or expedient to decide and make any order it thinks fit for the rectification of the Patent Register. The Commissioner must be given notice of an application and may appear and be heard in the proceeding.

30 Under s 228(1) of the Patents Act, the Governor-General is authorised to make regulations not inconsistent with the Patents Act, prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Patents Act, and for prescribing matters necessary or convenient to be prescribed for the conduct of any business relating to the Patent Office. Under s 228(2), that power includes the power to make regulations making provision for and in relation to:

31 The first of those specific powers relate to the provisions of Part 2 of Chapter 10, and specifically ss 104, 106 and 107. The second specific power appears to be additional to the power of the Court conferred by s 192. While s 192 refers to rectification of the Patent Register and the regulation making power refers to amendment of the Patent Register, there is an overlap between rectification of the Patent Register to remove an entry wrongly existing or an error or defect in an entry, on the one hand, and the correction of a clerical error or an obvious mistake, on the other hand.

32 Under s 61, if the relevant prerequisites are satisfied, the Commissioner is to grant a standard patent by sealing a standard patent in the approved form. A standard patent is defined, perhaps somewhat circuitously, as letters patent for an invention under s 61. There is no definition of letters patent.

33 The Patents Act confers no power to amend letters patent and the amending power to be provided for in the regulations is limited to amendment to correct a clerical error or an obvious mistake. In contrast, the regulation making power in relation to amendment of filed documents and amendment of an entry in the Patent Register extends to any other purpose, in addition to the correction of a clerical error or an obvious mistake.

34 The Patentees suggest that the scheme of the Patents Act is that, after the Commissioner has made a decision to grant an extension pursuant to an application under s 70, that decision can only be varied by the Court, on an appeal under s 75(4), or an application under s 192 of the Patents Act for rectification of the Patent Register. They say that the regulation that purports to grant to the Commissioner a right of intermeddling with the process, involving, as it does, a reconsideration of facts that were accurately and responsibly supplied by a patentee, is a usurpation of the Court’s power, such that any other amendment of the Patent Register is invalid. The Commissioner seeks to support the validity of regulation 10.7 by reference to the power to make regulations making provision for and in relation to the amendment of an entry in the Patent Register to correct a clerical error or an obvious mistake or for any other purpose.

35 The expression ‘for any other purpose’ in s 228(2) does not signify that a regulation made literally for any purpose would necessarily be valid. The subject matter, purpose and scope of the Patents Act are obviously important. However, the purpose of regulation 10.7(7) is to ensure the particulars entered in the Patent Register are not false. If an extension were granted that should not have been granted, such that the entry in the Patent Register ought not to have been made, there ought to be a mechanism to correct that entry. Regulation 10.7(7) does no more than do so. The purpose of regulation 10.7(7), therefore, is unexceptionable (see H Lundbeck A/S v Commissioner of Patents [2006] FCA 163 at [46]).

36 Provisions granting power to make regulations expressed in terms of necessity and convenience must not vary or depart from the positive provisions made by the Act itself. Further, such provisions must not enable a regulation making body to extend the scope and general operation of a statute in a way that is otherwise than strictly ancillary. Such a power will authorise the provision of subsidiary means of carrying into effect what is enacted by the statute itself, but will not support an attempt to widen the purposes of the statute, to add new and different means of carrying them out, or to depart from, or vary the plan which the legislature has adopted to attain its ends (Shanahan v Scott [1957] HCA 4; (1957) 96 CLR 245 at 250).

37 If the contentions of the Patentees concerning the construction of s 70(5) are rejected, the position is that the terms of the Patents were extended beyond the times authorised by the Patents Act. That is to say, extensions to dates were granted that should not have been granted. It is unexceptionable that the Commissioner should be authorised to amend the Patent Register to reflect the extensions that were authorised by the Patents Act in lieu of extensions that were not authorised by the Patents Act. Regulation 10.7 is a valid exercise of the power conferred by s 228(2), which is itself a valid exercise of statutory power.

38 Applications were made by the Patentees under s 70 of the Patents Act for extension of the terms of the Patents. The Commissioner accepted the applications pursuant to s 74 of the Patents Act, being satisfied that the requirements of s 70 were fulfilled in relation to each application. Notices of acceptance were duly published and the extensions were granted under s 76 of the Patents Act without any opposition.

39 The extensions were granted on the basis that the first regulatory approval date in relation to each of the Patents was the date on which the relevant pharmaceutical substance was entered in that part of the Therapeutic Register relating to registered goods. However, the relevant pharmaceutical substances had previously been entered in that part of the Therapeutic Register relating to listed goods. The relevant dates were as follows:

40 On 23 September 2005, the Commissioner directed that the Patent Register be amended in respect of each of the Patents by altering the date of expiry of the extended term to be the dates on which the relevant pharmaceutical substances were first included as listed goods, thereby reducing the period of the respective extensions.

41 The Patentees’ contention is that the Commissioner misconstrued s 70 of the Patents Act by treating the date of first inclusion of the respective substances in the part of the Therapeutic Register relating to listed goods as the first regulatory approval date for the substances. In order to deal with that contention, it is necessary to say something about the relevant provisions of the Therapeutic Goods Act 1989 (Cth) (‘the Therapeutic Act’).

42 Under s 9A(1) of the Therapeutic Act, the Secretary of the relevant Department is to cause the Therapeutic Register to be maintained, for the purpose of compiling information in relation to, and providing for evaluation of, therapeutic goods for use in humans. The Therapeutic Register is to contain three parts, including a part for goods to be known as registered goods and a part for goods to be known as listed goods. There is also a third part for medical devices, which is not presently relevant.

43 Section 9A(4) of the Therapeutic Act provides that regulations may prescribe the therapeutic goods, or the classes of therapeutic goods, that are required to be included in each part of the Therapeutic Register. The Therapeutic Goods Regulations 1990 (Cth) (‘the Therapeutic Regulations’) contain such prescriptions. Regulation 10 of the Therapeutic Regulations provides that therapeutic goods of a kind mentioned in Schedule 3 are to be included in the part of the Therapeutic Register for registered goods and therapeutic goods, of a kind mentioned in Part 1 of Schedule 4 are to be included in the part of the Therapeutic Register for listed goods.

44 Each of Schedule 3 and Schedule 4 to the Therapeutic Regulations contains a series of items. Some of the items in each schedule describe goods by reference to items in the other schedule. Item 1 in Schedule 4 consists of therapeutic goods manufactured in Australia for export only, subject to exceptions not presently relevant. In addition, there are seventeen other items, none of which is presently relevant. Item 1 in Schedule 3 consists of medicines that are not mentioned in Item 1 of Schedule 4.

45 Part 3-2 of Chapter 3 of the Therapeutic Act regulates certain dealings with therapeutic goods. Division 1 of Part 3-2, which contains ss 15A to 22B, relates to the importing of therapeutic goods into, and the exporting of therapeutic goods from, Australia and to the manufacturing and supplying of therapeutic goods in Australia for use in humans. Certain prohibitions are contained in ss 19B and 21. Thus, under s 19B, it is, in general terms, an offence to do any of those things unless:

Further, under s 21, there is a prohibition on supplying therapeutic goods in Australia for use in humans by way of wholesale unless:

46 Registered goods and listed goods are dealt with in Division 2 of Part 3-2 of the Therapeutic Act, which is concerned with the registration and listing of goods in the Therapeutic Register. Exempt goods and approval of goods by the Secretary are dealt with in ss 18, 18A, 19 and 19A of the Therapeutic Act.

47 Section 18 provides for the Therapeutic Regulations to exempt therapeutic goods from the operation of Part 3-2. In addition, s 18A authorises the Minister to exempt from the operation of Division 2 specified therapeutic goods or therapeutic goods in a specified class. The Minister may exempt goods under that provision only if the Minister is satisfied that, in the national interest:

48 Section 19 authorises the Secretary to grant an approval for the importation into, or the exportation from, Australia or the supply in Australia of specified therapeutic goods that are not registered goods, listed goods or exempt goods if they are:

49 Section 19A authorises the Secretary to grant an approval to a person for the importation into Australia, or the supply in Australia, of specified therapeutic goods if the Secretary is satisfied as to certain matters including registered goods that could act as a substitute for the goods are unavailable or are in short supply and that the approval is necessary in the interests of public health.

50 Division 2 of Part 3-2 of the Therapeutic Act then deals with registration and listing of therapeutic goods. Under s 23(1), an application for registration or listing of therapeutic goods must be made in accordance with a form approved by the Secretary or in such other manner as is approved by the Secretary. The application must be in writing and it will not be effective unless the prescribed application fee has been paid and the applicant has delivered such information as will allow the determination of the application.

51 Under s 31, the Secretary may, by notice given to a person who is an applicant for the registration or listing of therapeutic goods, require the person to give to the Secretary information or documents relating to certain matters. The matters are identical in relation to both registered goods and listed goods, except that the Secretary may require information relating to the quality of registered goods, whereas there is no requirement to provide information relating to the quality of listed goods. The other matters in relation to which information may be required include the formulation, composition, design specification and presentation of the goods and their safety and efficacy for the purposes for which they are to be used.

52 Section 27 requires the Secretary to assign a unique registration number or listing number to therapeutic goods included in the Therapeutic Register. Section 29 provides that, where goods are included in the Therapeutic Register, the goods remain so included until their registration or listing is cancelled. Section 30 provides that the Secretary may, by notice given to a person in relation to whom therapeutic goods are included in the Therapeutic Register, cancel the registration or listing of the goods in the circumstances specified in that provision.

53 Under s 24, where an application is made for the registration of therapeutic goods in accordance with s 23, and the goods are goods that are required to be registered, a fee is payable in respect of the evaluation of the goods for registration. Section 25 then provides for the goods to be evaluated for registration, having regard to a number of factors (‘the Relevant Factors’). Under s 25(4), if the evaluation of the goods for registration has been completed, the Secretary must notify the applicant of the Secretary’s decision on the evaluation. If the decision is to register the goods, the Secretary must notify the applicant in writing that the goods will be included in the Therapeutic Register and must include the goods in the Therapeutic Register and give the applicant a certificate of registration. Under s 25(5), the registration of therapeutic goods commences on the day specified for the purpose in the certificate of registration.

54 Section 26 deals with the listing of therapeutic goods. Under s 26(1), where an application is made for the listing of therapeutic goods and certain prerequisites have been satisfied, then the Secretary is not to refuse to list the goods except where the Secretary is satisfied as to certain matters. Those prerequisites correspond in large part to the Relevant Factors.

55 Thus, in a sense, the distinction between the prerequisites for the registration of therapeutic goods and the prerequisites for the listing of therapeutic goods is that, for the former, the goods must be evaluated to determine whether the Relevant Factors are present whereas, for listed goods, the listing is to occur unless the Secretary is satisfied that Relevant Factors are not present. The distinction is, in one sense, a difference in onus.

56 The question is whether, in the present circumstances, since no pre-TGA marketing approval was given in relation to the relevant goods, the date of commencement of the first inclusion in the Therapeutic Register of the goods was the date on which they were entered in the part relating to listed goods, rather than the date on which they were entered in the part relating to registered goods.

57 As a matter of ordinary English, ‘first inclusion in’ the Therapeutic Register means the first time when goods are included in the Therapeutic Register pursuant to Division 2 of Part 3-2, irrespective of the part of the Therapeutic Register in which they are included. In the present case, the relevant goods were first included in that part of the Therapeutic Register relating to listed goods. That was when they were first included in the Therapeutic Register.

58 The Patentees contend, however, that the clear and unequivocal language of s 70(5)(a) should be read as though some additional words appeared in it, as follows:

They say that pre-TGA marketing approval is concerned only with the marketing of goods in Australia and that the emphasised words should be implied, in order to ensure conformity between s 70(5)(a) and s 70(5)(b). The Patentees argue that there would be disconformity between ss 70(5)(a) and 70(5)(b) if one provision applied to goods that were not to be marketed in Australia, whereas the other provision was limited to goods that were to be marketed in Australia.

59 The Patentees contend that the expression ‘pre-TGA’ is shorthand for ‘pre Therapeutic Goods Act’. Therefore, they say, the phrase ‘pre-TGA marketing approval’ refers to an approval given before the enactment of the Therapeutic Act under which the Therapeutic Register was established. Section 70(6) of the Patents Act provides that an approval will be a pre TGA marketing approval if it is one of the type evidenced by a certificate from the Secretary of the Department of Community Services and Health under the old Part 2 of Chapter 6 of the Therapeutic Act, before its repeal in 1994. Thus, the Patentees contend, if such a marketing approval were given before the enactment of the Therapeutic Act, the first such approval would be the first regulatory approval date for the purposes of ss 70 and 77. Where there has been no such marketing approval, then the first regulatory approval date would be the date of the commencement of the first inclusion in the Therapeutic Register of a relevant substance that enabled the substance to be marketed in Australia. Thus, say the Patentees, the expression will conform with the purpose of the Act and is supported by the nature of the other approval referred to in s 70(5). They say that the formula in s 77, which gives a 15 year effective minimum term to be calculated from the regulatory approval date, embodies an assumption, consistent with the purpose of the Act, that both types of regulatory approval are approvals for marketing in Australia.

60 The Patentees point to what they say is a higher degree of scrutiny required for registered goods than is required for listed goods as supporting their contention that the Patent Act is concerned with marketing in Australia. Thus, before inclusion of registered goods, it is necessary to provide efficacy data, such as information derived from clinical trials, animal and clinical studies, biochemical data, toxicological data and other scientific information. There is no such requirement for inclusion of listed goods. The regulatory history of the goods in other countries must be provided in relation to registered goods, but not listed goods.

61 More specifically, registered goods must be the subject of evaluation by the Australian Drug Evaluation Committee established under r 36 of the Therapeutic Regulations. The Committee’s functions are provided for in the Therapeutic Regulations. The evaluation process is set out in s 25(1). There is no necessary requirement for such an evaluation in relation to listed goods. Further, the application fee in respect of registered goods, reflecting the cost of evaluation, is $178,000, whereas, in the case of listed goods, the application fee is $520. Finally, a time frame of 255 working days is fixed for evaluation on respective registered goods. There is no such time frame in relation to listed goods.

62 However, those distinctions do not necessarily lead to a conclusion that s 70(5) of the Patents Act, when referring to first inclusion in the Therapeutic Register, should be understood as referring to inclusion for marketing in Australia. There is nothing in s 70(5) to indicate that there should be any qualification of the clear and unequivocal words that are to be found in that provision. Whether or not it is more difficult to have goods included in the part related to registered goods than in the part relating to listed goods, if goods are included in one or other of the parts, they are included in the Therapeutic Register.

63 Section 15AA of the Acts Interpretation Act 1901 (Cth) requires that a purposive approach be adopted where questions of statutory construction arise. Further, the construing of a provision such as s 70(5) requires a consideration of its context, which includes, but is not limited to, the language of the whole of the statute in which it appears. A court is permitted to have regard to the words used by the legislature in their legal and historical context and, in appropriate cases, to give them a meaning that would give effect to any purpose of the legislation that can be deduced from that context. The context can include the legislative history of the provision and reports of law reform bodies that identify a perceived evil requiring reform (Newcastle City Council v GIO General Ltd [1997] HCA 53; (1997) 191 CLR 85 at 112).

64 The Patentees point to extrinsic materials that they say support what they say is a purposive construction. First, they cite the Industry Commission Report on the Pharmaceutical Industry (No 51 AGPS Melbourne 1996) to demonstrate that the intention of Part 3 of Chapter 6 of the Patents Act was to introduce a 15 year effective patent life for pharmaceutical patents. The Report refers to proposals to extend the patent term, in order to ‘restore’ time lost in gaining marketing approval and the period during which a patentee can exploit the statutory monopoly arising from the grant of a patent. The then Government’s preferred approach was said to be extension of the term of a patent for up to 25 years. The Report referred to the effective patent life as running from the date of ‘Australian marketing approval’. The Government’s response of 22 April 1997 to that report, indicated that the proposed extension of term was a recognition of the long development times and regulatory requirements that significantly erode the time available for exploitation of a patent. While the Government’s response accepted an extension of up to five years, it made no reference to marketing approval.

65 The revised explanatory memorandum promulgated in relation to the Bill for the Amending Act that introduced the current regime for extension of patents for pharmaceutical substances refers both to the Industry Commission Report and the Government’s response to it. It states that an extension of up to five years will be available for a standard patent relating to a pharmaceutical substance that is the subject of first inclusion on the Therapeutic Register, thereby simply using the language of the Bill, which was ultimately included in s 70. The Minister’s speech on the second reading of the Bill for the Amending Act refers to the time taken to register and market a new product. The Minister observed that the development of a new drug is a long process and that the objective of the relevant part of the Bill was to provide an effective patent life. However, no mention was made of marketing in Australia.

66 It is tolerably clear that the policy that underlay the introduction of the new regime for extension of the term of a patent was to provide an additional effective term for the exploitation of a patent. The substance of the Patentees’ contentions is that inclusion in that part of the Therapeutic Register relating to listed goods does not permit exploitation. That is a misconception.

67 Manufacture in Australia of goods, pursuant to a patent, is part of the monopoly granted by the patent. Under s 13 of the Patents 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. Exploiting an invention that is a product includes making, selling or otherwise disposing of the product and keeping it for the purpose of doing such things. Clearly, manufacture in Australia of therapeutic goods for export, if the goods are the subject of a patent, involves the exploitation of the invention of the patent.

68 The purpose of the relevant provisions of the Patents Act, in providing for extension of the term of a patent relating to pharmaceutical substances, is to ensure that the term during which the patent can be exploited is not eroded by a delay in the administrative process that will permit exploitation. Until goods are included in the Therapeutic Register, they cannot be supplied or marketed in Australia or exported and, therefore, cannot be exploited commercially. However, export of goods is clearly commercial exploitation. The fact that the prerequisites for export may be less stringent than the prerequisites for supply, or marketing, in Australia, is known to a patentee. Even if a patent can be exploited earlier, by export of listed goods, than by the supply, or marketing, in Australia of registered goods, there will nevertheless be exploitation.

69 For example, there may be goods for which there is no real market in Australia but a very substantial market elsewhere in the world. It may be in the commercial interest of a patentee, therefore, to ensure that it can exploit its patent by exporting goods as soon as possible. On the other hand, if a patentee wishes to ensure a longer period of exploitation by supply in Australia, it is within the power of the patentee to seek inclusion of goods in the Therapeutic Register relating to registered goods before seeking inclusion in that part of the Therapeutic Register relating to listed goods.

70 In some circumstances, of course, even under the present regime, it is possible for marketing approval to be given prior to inclusion of goods in the Therapeutic Register. A pre-TGA marketing approval is an approval, however described, by a Minister or a Secretary to a Department to market the substance or import the substance into Australia for general marketing. An exemption under s 18A or approval under s 19A will permit the marketing, or supply, in Australia, of goods where that conduct would otherwise be prohibited by Part 3-2 of the Therapeutic Act. Either would be a pre-TGA approval, in the sense that it would be an approval given before the regime of the Therapeutics Act is complied with in respect of the goods in question.

71 The goods in question were first included in the Therapeutic Register, within the meaning of s 70(5)(a), when they were included in that part relating to listed goods. There was no error on the part of the Commissioner in treating the first inclusion of the relevant goods in the part of the Therapeutic Register relating to listed goods, as the first regulatory approval date of those goods. There was no error on the part of the primary judge.

72 Leave to appeal should be granted. However, the appeal should be dismissed with costs.

I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Emmett, Allsop & Greenwood.

Counsel for the Appellants::	Mr JM Ireland QC with Ms KJ Howard SC

Solicitor for the Appellants::	Spruson & Ferguson

Counsel for the First Respondent:	Mr S Lloyd

Solicitor for the First Respondent:	Australian Government Solicitor

Counsel for the Second Respondent:	Mr SCG Burley and Mr C Dimitriadis

Solicitors for the Second Respondent:	Blake Dawson Waldron

Date of Hearing:	21 November 2006

Date of Judgment:	20 December 2006

Federal Court of Australia - Full Court Decisions

Pfizer Corp v Commissioner of Patents [2006] FCAFC 190 (20 December 2006)