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High Court of Australia |
SANOFI v. PARKE DAVIS PTY. LTD. (No. 2) [1983] HCA 32; (1983) 152 CLR 1
Patents
High Court of Australia
Mason A.C.J.(1), Murphy(2), Wilson(1), Brennan(3) and Dawson(1) JJ.
CATCHWORDS
Patents - Extension of term - Inadequate remuneration of patentee - Powers of court - Extension of time for presentation of petition - Application after expiration of patent - Patents Act 1952 (Cth), ss. 6 "patentee", 90(1), 93, 94, 95.
HEARING
1982, October 12-14; 1983, October 6. 6:10:1983DECISION
1983, October 6.
2. On 10 June 1980 the Supreme Court of Victoria, a "prescribed court" within
the meaning of that term in the Patents Act 1952 (Cth),
as amended ("the
Act"), constituted by Murray J., ordered that the time within which Sanofi
might petition for an extension of the
term of the patent on the ground of
inadequate remuneration be extended to 29 August 1980. The order was made on
the application
of Sanofi after notice to the Commissioner of Patents ("the
Commissioner") and after counsel for the applicant and a solicitor for
the
Commissioner had been heard. His Honour purported to act pursuant to s. 90(1)
of the Act. The petition was filed on 29 August
1980 and in due course was
heard by Fullagar J. On 24 June 1981 his Honour ordered that, subject to the
insertion therein of certain
limitations to the specification and claims and
of a condition, new letters patent be granted to and in the name of Sanofi for
a
term of ten years from 16 October 1979 (1983) VR 25 . The condition was that
-
"no action or other proceedings shall be commenced or prosecuted, and no
damages shall be recovered, either in respect of any
infringement of the
patent which has taken place after the date of expiration of the original
term thereof and before the date of
this Order or in respect of the sale,
use or employment at any time hereafter of any article actually made in the
Commonwealth of
Australia in that period in accordance with the claims of
the patent" (1983) VR, at p 38 . (at p5)
3. The only parties represented on the hearing of the petition before
Fullagar J. were Sanofi and the Commissioner, although the
intention of Sanofi
to present it was duly advertised on 12 June 1980 pursuant to s. 90 of the Act
and reg. 37 of the Patents Regulations
and again on 9 October 1980 pursuant to
an order of Fullagar J. No caveats were entered by any person against the
grant of the petition.
(at p5)
4. The failure of the respondent Parke Davis Pty. Ltd. ("Parke Davis") to enter a caveat and thereafter to participate in the hearing of the petition by Fullagar J., was surprising because the company had spent substantial sums of money both before and after 16 October 1979 in developing and preparing to market a product which could only be marketed if its belief and expectation that the patent would expire on 16 October 1979 was borne out by events. In July 1981 it sought orders from Fullagar J. to prevent the passing and entry of the orders made on 24 June 1981, but its efforts were unsuccessful. It was subsequently granted special leave to appeal to the Full Court of the Federal Court from the decision of Fullagar J. on Sanofi's petition [1981] FCA 190; (1981) 54 FLR 122 . The grant of leave was limited in substance to the question whether a prescribed court has jurisdiction to allow a further period in which to present a petition for the extension of the term of the patent in a case where the application for further time is not made until after the patent has expired. That question was exhaustively argued on the appeal by counsel for both Parke Davis and Sanofi and by majority (Bowen C.J. and Ellicott J., Deane J. dissenting) the Court resolved it in favour of Parke Davis (1982) 43 ALR 487 . The appeal was allowed, the orders of Fullagar J. were set aside and the petition by Sanofi for an extension of the term of the patent dismissed. (at p5)
5. Sanofi now appeals to this Court. We have had the benefit of a lengthy and detailed presentation by senior counsel for the two companies of the same arguments which were presented to the Federal Court and which are canvassed in considerable detail in both the majority and dissenting judgments in that Court. The question is obviously one of difficulty upon which minds may differ. In presenting the reasons for the conclusion to which we have come we do not find it necessary to repeat in detail the background material consisting of the legislative and judicial history both in England and in Australia which is relevant to the problem and which is described so adequately in the Federal Court judgments. (at p6)
6. The determination of the question involved in the appeal depends
essentially upon the proper construction of s. 90(1) of the
Act. That
sub-section reads as follows:
"A patentee of a standard patent who considers that he has been
inadequately remunerated by his patent may, after advertising,
as
prescribed, his intention to do so, present to a prescribed court, at
least 6 months before the expiration of the term
of the patent, or within
such further period as a prescribed court allows, a petition praying that
his patent be extended for
a further term."
The construction which found favour with a majority of the members of the
Federal Court was to read the phrase "or within such further
period as a
prescribed court allows" as subject to an unexpressed but implied limitation
confining the "further period" to a period
prior to the expiry of the patent.
Their Honours found limited support for that conclusion in arguments advanced
by counsel for Parke
Davis based on the presence in s. 90(1) of the words
"patentee" and "extended". They nevertheless found it necessary to turn to
broader
considerations, which were summarized by their Honours in this
sentence (1982) 43 ALR, at p 498 :
"The construction which we would place on s. 90(1) gains support not only
from the words of the sub-section the discernible object
and purpose of the
section and a review of its statutory origins but also from other provisions
in the Act."
It will be necessary to consider these different considerations in the course
of dealing with the submissions of counsel. (at p6)
7. Mr. Handley, counsel for Parke Davis, argues that s. 90(1) is not ambiguous and that the plain meaning of the words contained in the sub-section supports the conclusion of the majority in the Full Court. He submits that the reference to "patentee" in the sub-section carries its prima facie meaning of "the person for the time being entered on the register as the grantee or proprietor of a patent" (s. 6). When regard is had to s. 20(1)(a) which requires that a Register of Patents be kept in which shall be entered, inter alia, particulars of "patents in force", it follows, so the argument runs, that the patent must still be in force at the time when a petition for an extension is presented. Reliance is placed also on the use of the word "extended", it being said that the word implies the continued existence of the subject-matter, namely, an unexpired patent. However, in our opinion, the argument encounters substantial difficulties. (at p7)
8. First, the definition of "patentee" in s. 6, when read with s. 20(1)(a) does not necessarily identify the proprietor of a patent in force. Section 20 does not require that a patent be removed from the register immediately upon expiry. Paragraph (1)(a) is not expressed to be exhaustive of the patents which are to be entered or remain entered on the register. The operation of s. 20(1)(b) is such as to allow the register, by prescription, to record information relating to the history of a patent such as its expiry and extension or its cessation and restoration. (at p7)
9. Secondly, the meaning of the word "patentee" contained in s. 6 applies only "unless the contrary intention appears". Even if, by association with s. 20, the word be given the limited meaning contended for by Mr. Handley, there are a number of provisions in Pt IX, dealing with the extension of patents which provide strong evidence that the word "patentee" in this Part is not limited to such a meaning but includes the proprietor of an expired patent. In saying this, we do not rely on s. 96 which expressly extends a reference to a patentee in Pt IX to include a reference to an exclusive licensee; we accept Mr. Handley's submission that s. 96 in no way loosens the link between a "patentee" and a patent in force. Again, it is common ground that in s. 93 the word "patentee" includes persons who derived profits from the patent earlier in its term and who do not fall within the statutory definition. However, it seems to us that the word "patentee" as it appears in s. 94(1), (2) and (3) and s. 95(1), (2), (9), (10) and (13) is clearly intended to apply to the proprietor of an expired patent. We shall explain our reason for this conclusion when we have commented on the word "extended". Reference may also be made to a closely analogous situation which is covered by Pt X of the Act, dealing with the restoration of patents which have ceased by reason of failure to pay a prescribed fee within the prescribed time; in that Part the word "patentee" obviously refers to the holder of a patent which is no longer in force: cf. In re Robinson's Patent [1918] HCA 35; (1918) 25 CLR 116, at p 138 , per Isaacs J. (at p7)
10. Thirdly, the words "extended" or "extension" are not defined in the Act. Their meaning may well vary with the nature of the subject matter, as Deane J. observed in his judgment. The Shorter Oxford English Dictionary includes among the meanings of "extension" the phrase "enlargement in length, duration, area or scope". It is not an abuse of language to speak of the retrospective enlargement of the term of a monopoly as an extension of such a monopoly. In any event, in our opinion, Pt IX supplies its own dictionary of both "patentee" and "extended", as we explain in our next two points. (at p8)
11. Fourthly, it is conceded, as we understand the argument for Parke Davis, that s. 90(1) would authorize a prescribed court to allow a petition for the extension of the term of a patent to be presented at any time before the expiry of the patent. It follows that the succeeding sections contemplate that at the time when the court pursues the procedures outlined in those sections that the patent may already have expired. Indeed, we understand it ordinarily to be the case that the court makes its decision in accordance with s. 94 at a time when the patent has already expired. Yet that section continues to use the words "patentee" and "extension" to refer to the expired patent. (at p8)
12. Finally, s. 95 is instructive in this regard. The section deals with the extension of the term of a patent on the ground of war loss. It is acknowledged, and has always been acknowledged both in Australia and England since the first World War, that at least in some circumstances an application for an extension may be made notwithstanding that the patent has expired. Having regard to the exigencies of war any other approach could operate with undue harshness to the patentee. Yet, notwithstanding that the application may be made after the expiry of the patent, it is nevertheless an application by "the patentee" for "the extension" of the term of the patent (s. 95(1)). (at p8)
13. In the Full Court their Honours who formed the majority found support for
their conclusion in the use of the words "further
period" in s. 90(1). They
reasoned that these words appeared to be a reference to a period of the type
earlier referred to, namely,
a period before the expiration of the term of the
patent. With all respect, the only period referred to earlier in the
sub-section
is one which itself occupies the whole of the six months preceding
the expiry of the term of the patent. Ordinarily the petition
for an extension
of the term must be lodged prior to the commencement of that period. In such a
context, it seems to be inappropriate
to speak of a "further period" within
which such an extension may be sought. Clearly the section intends to refer to
such "later
period" or such "later time" as a prescribed court allows. What
the sub-section significantly does not say is within such further
or later
period "before the expiry of the patent". The incongruity of the wording of s.
90(1) in this regard is analogous to the
situation which confronted Sargant J.
in In the Matter of Brown's Patent (1920) 37 RPC 52 when he had to construe
the proviso, added
in 1919, to s. 18(1) of the Patents and Designs Act 1907
(U.K.). His Lordship said (1920) 37 RPC, at p 54 :
"I must look at the language of the two Sections. Section 18, sub-sec.
(1) of the Act of 1907 is in these terms: - 'A patentee
may, after
advertising in manner provided by Rules of the Supreme Court his intention
to do so, present a petition to the
Court praying that his patent may be
extended for a further term, but such petition must be presented at least
six months
before the time limited for the expiration of the patent.'
There is a punctum temporis, six months before the expiration of
the
patent, before which the petition has to be presented, and there is a
period of six months from that punctum temporis
down to the expiration of
the patent. The language of Section 7, subsec. (1) of the Act of 1919 is
curiously inappropriate
to that state of things. The words to be inserted
are: - 'Provided that the Court may in its discretion extend such period
within
which such a petition may be presented.' There is no period which
was to be extended. There was a period of time prior to
which a petition
had to be presented. But I think looking at the language the true meaning
of 'extend such period' is 'enlarge
the time,' and that the words must be
read 'Provided that the Court may in its discretion enlarge the time
within which such
a petition may be presented.' That is to say, it may
allow the petition to be presented after the punctum temporis, six months
before the expiration of the patent."
So much for his Lordship's treatment of the problem presented by the reference
in the proviso to a period of time. However, it is
relevant to continue with a
further citation from the judgment. Continuing, Sargant J. said:
"If that is so, is there any sufficient reason for putting a limit on
the discretion of the Court, and saying that the
Court is debarred in its
discretion from enlarging that time beyond the date of the expiration of the
patent? The only suggestion,
when once that construction has been put upon
the language, is that the patentee is no longer a patentee. I do not think
that that
is sufficient. He was a patentee, his rights are in respect of
that which was a patent, and, in my opinion, having regard to the
object of
Section 7, which obviously is to protect patentees who lost, or omitted to
exercise, their rights owing to the state of
war that had been existing, and
looking to the fact that the whole matter is within the discretion of the
Court, I see no sufficient
reason for limiting that power to enlarge the
time, to a power to enlarge it merely up to the date of the expiration of
the patent.
In my judgment it is left to the discretion of the Court to
enlarge the time to any extent that the Court in its discretion may think
fit."
It is clear from this passage that his Lordship was influenced, in his
construction of s.7 of the 1919 Act, by the effect on patents
of the war which
had then only recently concluded. Nevertheless, his construction was followed
consistently thereafter in the United
Kingdom, in some cases long after the
effects of the war had receded: see, e.g., In the Matter of Petersen's Patent
(1921) 38 RPC
267, at p 275 ; In the Matter of Horstmann, Horstmann & Edgar's
Patent (1928) 46 RPC 1 ; In the Matter of the Patents of Neufeldt
and Kuhnke
G.m.b.H. (1930) 47 RPC 553, at p 563 ; In the Matter of Ruths' Patent (1931)
48 RPC 553, at p 554 ; In the Matter of Meldahl's
Patents (1950) 67 RPC 81 .
It would seem that the United Kingdom legislature acknowledged the force of
this line of authority when
in the Patents Act 1949 (U.K.), it included in the
form of a parenthesis an express limitation in the phrase "at such later time
(not being later than the expiration of the said term) as the court may allow"
(s. 23(2)). By way of contrast, s. 24(3) of the same
Act dealing with
extension of the term of a patent on the ground of war loss makes it plain
that the same phrase without the parenthesis
would allow the application to be
made after the expiry of the term of the patent. Similarly, we would think
there are strong reasons
for attributing the same meaning to the phrase "such
later time" which appears in s.95(5) of the Australian Act in connexion with
applications for extension due to war loss. (at p10)
13. Mr. Handley relies upon the distinction that Pt IX consistently draws
between the power of the court to extend the term of a
patent and its power to
grant a new patent, suggesting that the choice between the two alternatives
depends upon whether or not at
the time when the court exercises its
discretion in relation to a petition under s. 90(1) the term of the patent has
expired. If
the term has not expired, then the appropriate order is one
extending the term; on the other hand, if as in many if not most cases
will be
the norm the term has expired the court would properly order the grant of a
new patent. On the basis of these considerations,
Mr. Handley argues that it
is significant that the court is not empowered to extend the time within which
a petition praying for
the grant of a new patent may be presented. The only
petition which in these circumstances the Act recognizes is one praying that
the patent be extended for a further term, thereby giving rise to the
implication that the original term of the patent must still
be current at the
time of the presentation of that petition. If viewed in isolation as a matter
of language, the argument is logically
persuasive. Yet it falters when viewed
in the context of established principles of patent law. In In re Robinson's
Patent (1918)
25 CLR, at pp 135-138 , Isaacs J. made a detailed review of the
legislative history and practice in the United Kingdom from which
he concluded
that notwithstanding that the term of a patent had expired the subsequent
action, even though in the form of a new grant,
was uniformly described as a
prolongation or extension of the original term. He cited from the decision of
Bovill v. Finch (1870)
LR 5 CP 523, at p 532 , the sentence: "Every new grant,
therefore, is a graft only on the original grant, and has no existence apart
from the parent grant", (a sentence which was also referred to by Dixon J. in
Ex parte Celotex Corporation; In re Shaw's Patents
[1937] HCA 31; (1937) 57 CLR 19, at p 25
). Isaacs J. then turned to s. 84 of the Patents Act 1903-1909 (Cth), and
found the same
principle embodied
therein. He said (1918) 25 CLR at p 137 :
"The whole section is headed 'Extensions of Patents.' The first paragraph
is based on a petition for the extension of the
original patent for a
further term, and the last paragraph enables the Court to order the grant
of a new patent. It is not,
and could not be, disputed that the Court's
order, like the English recommendation and grant, may be made after the
expiration
of the original term, that is, notwithstanding a gap has
occurred. If so, there is nothing in sec. 84, any more than there
is or
ever was in the long line of patent legislation interpreted by
authoritative decisions, to insist on an uninterrupted
period for the
whole term comprised within the original and extending grants."
The statutory context in which his Honour spoke was privided by s. 84 of that
Act and reg. 8 of the Patents (Temporary) Regulations
1914, made under the
Patents, Trade Marks and Designs Acts (Nos 15 and 16 of 1914) (Cth). Section
84 required that the petition for
an extension of the term of a patent be
presented at least six months before expiry. Regulation 8 authorized the
extension of the
time prescribed by the Patents Act for doing any act or
filing any document. In the result, Isaacs J. held that the Solicitor-General
had acted within power in authorizing the presentation of a petition up to
three months after the original term had expired. Regulation
8 ceased to
operate in 1920, but in 1921 sub-s. (7) was added to s. 84 providing that the
court, in its discretion, may "either before
or after the expiration of the
term of a patent extend the period within which proceedings may be taken for
the extension of the
term of the patent . . .". (at p12)
14. Starke J.'s judgments in In re Dunlop's Patent [1922] HCA 43; (1922) 31 CLR 579 and Re Radiation Ltd.'s Patent (1946) 16 AOJP 2169 show that the sub-section was understood as authorizing after the expiration of the patent an application for an extension of time within which a petition for an extension of the patent might be presented. (at p12)
15. It may also be noted that in In re Usines de Melle's Patent [1954] HCA 32; (1954) 91 CLR
42, at pp 50-51 , Fullagar J. discussed
the provision
in s. 84(5) of the
Patents Act 1903-1950 (Cth) which permitted
the court to order either the
extension of the term
of the patent
or the grant of a new patent. He
acknowledged that it had been
the invariable practice, both in England and in
Australia,
to order
a new grant in cases where the patent had expired, and
then continued:
"But it is clearly a legitimate reading of s. 84(5) to treat it as merely
authorizing two alternative forms of order, either
of which may be made
whether the patent has expired or not. And I think that two good reasons
exist for so reading it. The first
is to be found in sub-s. (7) of s. 84.
This sub-section clearly contemplates cases where not merely the order but
the application
for extension is made after the expiration of a patent, and
yet it refers only to applications 'for the extension of the term of
the
patent'. The other form of order is not mentioned. The second reason is
found in the history of the English legislation . . ."
His Honour then traversed ground similar to that discussed by Isaacs J. in In
re Robinson's Patent (1918) 25 CLR at p 137 . Mr. Handley
sought to distance
his submission from these decisions by stressing the different form adopted in
Pt IX of the Act, but in our opinion
it is indistinguishable in relevant
respect from the earlier Act. (at p12)
16. Parke Davis also relies on the marked change in wording between s. 84(7) of the 1903-1950 Act and s. 90(1) of the Act. The former provision removes any doubt by expressly declaring the power of the court "either before or after the expiration of the term of a patent" to extend the period within which proceedings may be taken for the extension of the term of the patent. The latter provision deals in the one sub-section with both the presentation of a petition praying that the patent be extended for a further term and the power of the court to extend the time within which that petition may be presented. The two provisions are structurally different. Assuming that no change of legislative intention was sought to be expressed there would have been some difficulty in incorporating in s. 90(1) the same phrase as appeared in s. 84(7). It would have required a further set of words in the form of a parenthesis or a separate sub-section. The change of structure may well have diverted the attention of the draftsman from the precise wording of s. 84(7). In evaluating the submission, the present provision is also to be contrasted with the change in practice which was effected in England by s. 23(2) of the 1949 Act. As we have already observed, the practice had been established by the decision of Sargant J. in In the Matter of Brown's Patent (1920) 37 RPC 52 and followed consistently thereafter. However, s. 23(2) provides for an application for the extension of the term of a patent to be made "not more than twelve nor less than six months before the expiration of the term of the patent or at such later time (not being later than the expiration of the said term) as the court may allow." Presented, therefore, with two clear but contrasting expressions of legislative intent, the draftsman of s. 90(1) chose to follow neither. Mr. Lyons, counsel for Sanofi, seeks to argue that no change of legislative intention should be read into s. 90(1) because the Act was enacted following the preparation of a report by a committee chaired by Mr. Justice Dean of the Supreme Court of Victoria and that the report made no mention of a change in direction in this regard. In our opinion, the Court should not seek to obtain from that report any direct assistance in the construction of s. 90(1) of the Act. The central principle governing the resort by the Court to materials such as these is well established. They may be relied upon to show the mischief to which the statute was directed as distinct from the remedy which was intended: Black-Clawson Ltd. v. Papierwerke A.G. [1975] UKHL 2; [1975] UKHL 2; (1975) AC 591 ; Wacal Developments Pty. Ltd. v. Realty Developments Pty. Ltd. [1978] HCA 30; (1978) 140 CLR 503, at pp 509, 520-521 . In any event, as we understand his submission, all that Mr. Lyons seeks to establish from the Dean Committee Report is the negative proposition that no "mischief" arising from the operation of s. 84(7) of the 1903-1950 Act for which a remedy should be devised was reported by the committee. So much may be acknowledged. If follows from what we have said that we are unable to discern the existence of a change in direction on the part of the legislature merely from the fact of the different wording of the two provisions. (at p13)
17. It was next contended by Mr. Handley for Parke Davis that if it was intended that proceedings for the extension of the term of a patent could be instituted after the expiry of the patent the legislature would have been more explicit in the protection to be afforded to members of the public in the event of a retrospective extension of the term of the patent. Reference was made to other provisions of the Act which evidenced such a concern: ss. 160(6), 98(4). This is a somewhat speculative submission. Certainly, ss. 160 and 98 allow for protection to be furnished by way of prescribed provisions. Section 94 places the responsibility for such protection in the discretion of the court; it is a wide discretion, namely, "such restrictions, conditions and provisions (if any) as the court thinks fit". Similar provision for protection of the public is to be found in s. 95(9) associated with the power of the Court to extend the term of a patent on the ground of war loss. One would have thought that a discretion conferred in such wide terms would allow the Court to tailor the protection required by the public interest to the particular circumstances of each case and thereby offer an assurance of a protection which might be more suitable than the more rigid prescription contemplated by the other sections to which we have referred. Be that as it may, both forms of provision are directed to the same end and the choice between them is a matter of legislative policy. It cannot be said that there is such an absence of protection as may properly lead the Court to favour a construction of s. 90(1) which would require the proceedings for extension to be instituted before the term of the patent expires. Finally, it may be observed that no greater protection was provided by the 1903-1950 Act notwithstanding that s. 84(7) expressly recognized the possibility of proceedings for extension being instituted after the expiry of the term of the patent. (at p14)
18. It remains to consider what is perhaps the major thrust of Mr. Handley's submissions, a thrust which reflects the consideration which weighed heavily with the majority in the Federal Court. We refer to the broad consideration derived from a view of the purpose and object underlying the Act. Their Honours expressed that purpose in terms of the encouragement of inventors by granting a monopoly for an invention which on the expiry of the monopoly was to be fully available to the public unless for reasons of inadequate remuneration a court extended its term. Speaking of the right to petition for an extension of the term of a patent, their Honours considered that if it were left unrestricted it would seriously encroach upon the interests of the public which the Act otherwise sought to secure. They thought it would also mean an undetermined de facto extension of the monopoly, since no commercial concern would consider the expenditure of capital moneys in connexion with exploitation of the invention while the patent remained under threat of extension. With all respect to their Honours, we think that such a conclusion is inconsistent with the history of the legislation. It is to be remembered that Australian practice since the introduction of reg. 8 in 1914 would appear to have been uniform and to have allowed a petition praying for the extension of the term of a patent to be presented after the term had expired. That construction of reg. 8 was adopted by Isaacs J. in In re Robinson's Patent [1918] HCA 35; (1918) 25 CLR 116 . There followed in 1921 the addition of sub-s. (7) to s. 84 of the 1903 Act. There is no suggestion that when the 1952 Act came into operation there was any change in the practice. There are several unreported decisions of single justices of this Court during the currency of the present Act which have confirmed the existence of that practice: In re General Tire & Rubber Co.'s Patent, per Windeyer J., 19 October 1966; In re Hanson-Van Winkle-Munning Co.'s Patent, per Barwick C.J., 25 February 1970; In re Stamicarbon N.V.'s Patent, per Walsh J., 22 March 1971 (1971) 45 ALJR 175 ). The transcripts relating to each of these decisions were tendered in the course of argument and serve to indicate that the question of the proper construction of s. 90(1) was raised on each occasion. Counsel for Sanofi were given leave to file submissions by way of reply and in the course of those submissions reference is made to a further four occasions during 1954 and 1955 when justices of this Court after the expiry of the term of a patent extended the time within which a petition praying for the extension of that patent could be presented. Fullagar J. notes in the present case that the decision of Walsh J. in Stamicarbon has been followed by several judges of the Supreme Court of Victoria. He adds that the construction for which Sanofi contends was supported by counsel for the Commissioner. In the light of this practice implemented consistently in Australia for nearly eighty years, we can only assume that it is not inimical to the true purpose or object underlying patent legislation. (at p15)
19. However, we would want to say this. The existence of a wide discretion in the Court does not mean that it should, or would, ever be exercised lightly in favour of a petitioner and never in the absence of circumstances which persuade the Court that notwithstanding the delay in seeking the extension of the term of a patent that delay is sufficiently explained and ought to be excused. Furthermore, in the event of a decision to exercise its discretion in favour of the petitioner, the court is fully armed with the power to impose such restrictions, conditions and provisions as may be appropriate to protect the interests of those members of the public who might otherwise be prejudiced by the extension of the term of the patent. It may have been thought that the form of condition imposed in Celotex represents the most that a court can do to protect the public. In our opinion, that is not so. The discretion conferred by s. 94(1) is expressed in wide terms and ought not be construed restrictively. If in its exercise the Court is sensitive to the particular circumstances then we can see no reason to feel that the public interest is threatened by a construction of s. 90(1) which gives effect to its natural and ordinary meaning. In our opinion, there is no warrant for implying a limitation on the words "or within such further period as a prescribed court allows". (at p16)
20. Mr. Handley sought the indulgence of the Court, in the event that the appeal was to be allowed, to have the matter remitted to the Supreme Court of Victoria in order that Parke Davis might seek revision of the conditions which Fullagar J. attached to his order of 24 June 1980. We have given careful consideration to this request and would have been prepared to acquiesce in it if we thought that a just resolution of the matter required it. However, we have come to the conclusion that the proper order is simply that the appeal should be allowed, dismissing the appeal to the Federal Court and restoring the declaration and orders of Fullagar J. The fact is that the petition to extend the term of the patent was advertised on two occasions and no explanation is forthcoming as to why Parke Davis failed to enter a caveat or appear at the hearing of the petition by Fullagar J. The delay in seeking an extension of the patent was not such as to excuse a failure to maintain a search of the Official Journal, particularly having regard to the long-standing practice to which we have referred. (at p16)
21. We would allow the appeal and order that Parke Davis pay the costs of Sanofi and the Commissioner in the Federal Court and in this Court. (at p16)
MURPHY J. The issue is whether, once a patent has expired, a patentee may be allowed further time to present a petition for extension of the term of the patent. (at p16)
2. The Patents Act 1952 has two main objects. One is to encourage investors by granting a monopoly over the exploitation of their discoveries but only for a limited duration and upon full disclosure of the invention's specifications. The other is to ensure that the public will be able to reap the full benefits of the invention after the expiration of that limited monopoly. Provisions for extension qualify the public access and should be read strictly in order to promote the main objects. (at p16)
3. Section 90(1) of the Act provides:
"A patentee of a standard patent who considers that he has been
inadequately remunerated by his patent may, after advertising,
as
prescribed, his intention to do so, present to a prescribed court, at least
6 months before the expiration of the term of the
patent, or within such
further period as a prescribed court allows, a petition praying that his
patent be extended for a further
term."
I agree with the majority in the Federal Court (Bowen C.J. and Ellicott J.)
that s. 90 should be read as conferring jurisdiction
to allow further time to
present a petition up to but not beyond the date of expiration of a patent.
The division of opinion in the
courts below on whether s. 90 authorizes a
court to allow presentation after the patent has expired, shows that the
section is ambiguous.
As I said in Australian Paper Manufacturers Ltd v.
C.I.L. Inc. [1981] HCA 64; (1981) 148 CLR 551, at p 559 :
"It is a reasonable principle of interpretation that where an Act which
grants monopoly rights is ambiguous, the ambiguity (whether
relating to
substance or procedure) should be resolved in favour of the public and
against the extension of monopoly." (at p17)
4. The ordinary meaning of "extend" is to "stretch out" (Shorter Oxford
English Dictionary (3rd ed.)). For something to be "extended"
it must be in
existence (see Brooke v. Clarke (1818) 1 B & Ald 396, at p 403 (106 ER, 146,
at p 148) ; State v. Graves (1944)
182
SW 2d 46, at p 51 ; Fowler's Modern
English Usage, 2nd ed. (1972) describes the equating of "extend" with "give",
"accord" or
"bestow"
as a "septic influence in journalism"). (at p17)
5. Under s. 6 of the Act, "unless the contrary intention appears", "patentee" means "the person for the time being entered on the register as the grantee or proprietor of a patent". When s. 6 is read in the light of s. 20(1)(a) which provides that the Register of Patents is a register of patents which are in force, then, prima facie, "patentee" in the Act means a person registered as the proprietor of a patent then in force. No contrary intention appears in s. 90(1). (at p17)
6. Further the phrase "within such further period" in s. 90(1) refers to an earlier period. This must be the period from the commencement of the patent until six months before expiration of its term, which is a period wholly within the term of the patent. It is natural to read "such further period", as a period also within the term of the patent, that is one ending on or before the patent's expiration, so that both the period and the further period are periods within the term of the patent. If what was intended was a power to allow presentation at any time whether before or after the expiration of the patent, the use of the expression "period" is unnecessary and inappropriate. The Act makes a clear distinction between an "extension" and "regrant" (which is necessary when the original patent has expired), and the absence of any reference to regrant in s. 90(1) supports this interpretation. (at p17)
7. Bowen C.J. and Ellicott J. observed (1982) 43 ALR, at p 492 that "the legislative background to s. 90 both in the United Kingdom and Australia illustrates the significance which the legislatures in each country placed on the requirement that the petition for extension be lodged prior to the expiration of the original letters patent. Where the legislature wished to depart from this, clear words were used or a clear legislative intent was discernible". By an amendment in 1921 s. 84(7) of the Patents Act 1903-1950 provided that the "Court may, in its discretion, either before or after the expiration of the term of a patent extend the period within which proceedings may be taken for the extension of the term of the patent, whether such proceedings are by petition or by originating summons" (my emphasis). In 1949 s. 23(2) of the United Kingdom Patent Act was amended to authorize an application "at such later time (not being later than the expiration of the said term) as the court may allow" (my emphasis). The enactment of s. 90(1) in 1952 should be viewed in this legislative context. The new Australian legislation was brought into line with the new United Kingdom legislation by omitting the words of the former s. 84(7) "either before or after the expiration of the term of a patent". Those excluded words should not now be implied. (at p18)
8. If an extension can be granted based on a petition presented after the expiration of the patent, then acts done in good faith by members of the public after the patent had expired, in the knowledge that extension proceedings had not been commenced and without knowledge that extension proceedings were contemplated, would be unlawful. If the Parliament had intended that the power to extend time should be open ended, one would expect to find safeguards such as protection from legal action or compensation for members of the public who rely on the expiration of the patent. Such safeguards are expressly provided for elsewhere in the Act where time can be extended although that time has expired (s. 160) or a patent is restored after having ceased because of failure to pay a fee within time (s. 98). (at p18)
9. The appeal should be dismissed. (at p18)
BRENNAN J. Having had the opportunity of reading the reasons for judgment of my brothers Mason, Wilson and Dawson, I respectfully agree with and adopt their Honour's reasons for holding that the Supreme Court of Victoria had jurisdiction to allow Sanofi a period after the expiry of the term of the original patent in which to present a petition praying that the patent be extended for a further term. I agree also with their Honours' reasons for holding that the Supreme Court had jurisdiction to extend that term by the grant of a new patent although the term had expired when the petition was presented, but I would regard that jurisdiction as limited to the making of an order for a grant of a patent containing certain conditions. I would state my reasons for this conclusion and for the order which, in my opinion, should be made on this appeal. (at p19)
2. In Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. [1982] HCA 44; (1982) 149
CLR 191, at p 220 , I referred to the
passing of an
invention into the public
domain upon the expiration of the term
of the patent. During the term, the
patentee enjoys
a legal monopoly,
a "right to exclude others from
manufacturing in a particular
way, and using a particular invention" (per Lord
Herschell L.C. in
Steers v. Rogers (1893) AC 232, at p235 ). But when the
patent
expires, all the world may make and use the article
the subject of
the
patent (Cellular Clothing Co. v. Maxton & Murray (1899)
AC 326, at p 344 ).
Parke Davis was entitled to make
and market the pharmaceutical
substance to
which Sanofi's patent related once
the term of the original patent expired.
The Federal
Court of Australia, when it
gave Parke Davis limited leave to
appeal against
the order to grant Sanofi a new patent, found [1981] FCA 190; (1981)
54 FLR
122, at pp 123-124 :
"In the belief that the patent was about to expire and, after 16 October,
1979, that it had expired," (Parke Davis) "had spent
substantial sums of
money in developing and preparing to market a product which could not be
marketed if there were an extension
or regrant of the patent." (at p19)
3. Here are the seeds of the present controversy. On the one hand, Sanofi had
the right or privilege to apply for an extension of
the term of the original
patent; on the other hand, Parke Davis had a substantial commercial interest
in the making and marketing
of the pharmaceutical substance to which the
patent related. The resolution of the controversy turns upon the extent to
which the
right or freedom of Parke Davis, or of any other member of the
public, to make use and sell the subject matter of the patent after
it had
passed into the public domain can be overridden or affected adversely by a
subsequent grant of a new patent extending the
term of the original patent.
Accepting that Sanofi's petition to the Supreme Court of Victoria for an
extension of the original term
of the patent was presented within "such
further period" as the Court allowed pursuant to s. 90(1) of the Patents Act
1952 (Cth),
Sanofi exercised its right or privilege to seek from the Court an
order under s. 94(1)(b) of the Act for the grant of a new patent.
The question
whether Parke Davis' interests can be overridden depends upon the effect of a
grant of a new patent ordered by the Court
in purported exercise of the power
conferred by s. 94(1)(b). (at p20)
4. The grant of a new patent is a graft upon the original grant and has no existence apart from the parent grant; the grant of a new patent is considered necessary when the term of the patent is to be extended after it has expired: Ex parte Celotex Corporation; In re Shaw's Patents [1937] HCA 31; (1937) 57 CLR 19, at p 25 . Once granted, the new patent confers upon the patentee according to its tenor the rights of a patentee as from the time of the expiry of the original term: Re N.V. Phillips Gloeilampenfabrieken's Patent (No. 2) [1967] HCA 53; (1967) 121 CLR 83, at p 87 ; In re Bendix Application [1961] HCA 76; (1961) 107 CLR 349, at p350 ; In re Brearley's Patent (1933) VLR 5 . The grant of a new patent without conditions might thus expose a member of the public, lawfully making using or selling an invention after the original patent had expired, to liability for infringement of the new patent. If s. 94 authorizes an extension of the original term (whether by extension or by regrant) to the prejudice of an innocent infringer, it confers a truly retrospective power upon the Court - that is, a power to make unlawful a past action that was lawful when it was done (Staska v. General Motors-Holden's Pty. Ltd. [1972] UKPCHCA 1; (1972) 123 CLR 673, at p675 ). (at p20)
5. The general terms of a statute are not construed as affecting retrospectively a person's freedom to act in a way which was lawful at the time (Phillips v. Eyre (1870) LR 6 QB1, at pp 25 et seq ) for "it manifestly shocks one's sense of justice that an act legal at the time of doing it should be made unlawful by some new enactment" (Young v. Adams (1898) AC 469, at p 476 citing Midland Railway Co. v. Pye [1861] EngR 560; (1861) 10 CB (NS) 179, at p191 [1861] EngR 560; (142 ER 419, at p 424) ). By parity of reasoning, if a statute confers a power to affect another person's freedom to act, the statute is not construed as conferring a power to impose a liability retrospectively for doing what was lawful at the time unless the terms of the statute clearly require that construction. It follows that, if the grant of a new patent without conditions in extension of a term which has expired would confer rights upon the patentee against a person who had made used or sold the subject matter of the patent when it was in the public domain, such a grant would exceed the power conferred by s. 94(1)(b). There is a strong general presumption that a legislature does not intend to impose a new liability in respect of something that has already happened (Sunshine Porcelain Potteries Pty. Ltd. v. Nash (1961) AC 927, at p 938 ). There is no indication that the Act intends a retrospective alteration of the rights of the patentee so as to permit him to treat as an infringer a person who lawfully made used or sold the subject matter of the patent when it was in the public domain (cf. In re Hale's Patent (1920) 2 Ch 377, at pp 386-387 ). However, if such an innocent infringer can be protected and is protected by appropriate restrictions, conditions and provisions contained in the new patent exempting him from liability for acts done while the invention was in the public domain, an order for the grant of such a new patent is within the power conferred by s. 94(1)(b). A new patent containing such conditions does not retrospectively destroy the legal immunity of an innocent infringer for acts done prior to the grant of the new patent. (at p21)
6. In my opinion, the power to grant a new patent under s. 94(1)(b) when the original term is expired may be exercised only where the new patent will create no liability for infringement arising from the lawful making using or selling of the invention while it was in the public domain. In practice the courts have imposed conditions to effect this result: In re Schlumberger (1853) 9 Moo PC1, at p 17 [1853] EngR 1042; (14 ER 197, at p 203) is an early example, although the Judicial Committee were not there reporting upon an application to extend the original term of a patent. In this country, the standard form of conditions upon the grant of a new patent in extension of the original term was settled in the Celotex Case (1937) 57 CLR, at p 25 , and they were imposed in the present case in substantially the same form. The Celotex conditions provide, inter alia, "that no action or other proceedings shall be commenced or prosecuted and no damage shall be recovered either in respect of any infringement of any of the patents which has taken place after the date of the expiration of the original term and before the date of this order; or in respect of the sale, use or employment at any time hereafter of any article actually made in that period in accordance with the invention covered by each respective patent". (at p21)
7. A new patent containing that condition qualifies the monopoly rights of the patentee. Sanofi's rights were so qualified in the present case, and the grant of the new patent exposed Parke Davis to no liability in respect of what it had done while the subject matter of the patent was in the public domain. It follows that the Supreme Court was empowered by s. 94(1)(b) to make the order which it made. (at p21)
8. But a Celotex order leaves without adequate protection the commercial interests of a person who has installed machinery or plant for the making or treating of articles in reliance upon the subject matter of the patent being in the public domain. Although the patent legislation is designed to ensure that the public may enjoy the benefit of an invention when the term of a patent expires, a Celotex order disappoints the reasonable commercial expectations of an intending manufacturer and sterilizes his expenditure on machinery or plant. The courts of the United Kingdom, albeit under legislation that is not identical with the Patents Act 1952 (Cth), refined the conditions to be contained in a new patent granted after the original term had expired. Those conditions protected the commercial interests of persons who installed machinery or plant for the manufacture or treating of articles while the subject matter of the patent was in the public domain as well as preserving their immunity in respect of the making using or selling of such articles during that time. The various stages in the development of the forms of conditions may be traced in the orders made in In re British Thomson-Houston Co., Ltd's Patent (1929) 46 RPC 367, at pp 376-377 ; Re Evans' Patent (1946) 63 RPC 147 ; In re Cline's Patent (1946) 63 RPC 148 ; In re Thompson's Patents assigned to Gillette Industries Ltd. (1946) 63 RPC 150 ; In re Barrs' Patent (1948) 65 RPC 327 ; and In re Siemens Brs & Coy. Ltd.'s Patent (1950) 68 RPC 61 . (at p22)
9. In my opinion when an order for the grant of a new patent is sought pursuant to s. 94(1)(b) after the expiry of the term of the original patent, prima facie the new patent should contain conditions similar to those developed under the English practice. The Celotex conditions are or may frequently be insufficient properly to protect the commercial interests of those who expend money on plant or machinery or otherwise act in reliance upon the subject matter of the patent being in the public domain. (at p22)
10. Parke Davis submits that the Celotex conditions specified by the Supreme Court in the present case are insufficient properly to protect its commercial interests. In applying for leave to the Federal Court to appeal against the order for the grant of the new patent Parke Davis sought to raise the insufficiency of those conditions as a ground of appeal. The Federal Court refused Parke Davis leave to raise that ground. That ground was not considered upon the appeal to the Federal Court but, as Parke Davis there succeeded on wider grounds, the refusal of leave to appeal against the conditions became immaterial. But counsel for Parke Davis submits that, in the event of Sanofi's appeal succeeding in this Court, the matter should be remitted to the Supreme Court of Victoria in order that that Court might frame anew the conditions to be contained in the grant. The submission is attractive, for no court has yet heard and decided upon the submissions of Parke Davis as to the conditions to be contained in the new patent which are necessary properly to protect Parke Davis' interests. Although Parke Davis, had it known of the presentation of Sanofi's petition, might have filed a caveat and become a respondent to the petition in the Supreme Court, I would not shut it out from arguing the question of conditions merely because it learnt of Sanofi's petition too late. A person who, before the advertisement of a petition appears, expends money on plant or machinery or otherwise acts in reliance upon the subject-matter of a patent being in the public domain, is prima facie entitled to protection of his commercial interests. He is not guilty of conduct disentitling him from seeking protection by the imposition of conditions in a new grant merely because he fails to discover that a petition for extension of the original term is to be presented or has been presented in one of the nine prescribed courts. (at p23)
11. However, the question of appropriate protective conditions was not the
issue fought on the appeal. Nor was it the issue fought
before the Federal
Court. The Federal Court, by its interlocutory order, refused Parke Davis
special leave to appeal against the
conditions. But counsel submits that the
order refusing it leave to appeal against the conditions is no bar to its
seeking relief
at this stage. Reliance is placed upon O. 70, r. 26 of the
Rules of this Court:
"An interlocutory order or rule from which there has been no appeal does
not operate so as to bar or prejudice the Court in
its appellate
jurisdiction from giving such decision upon an appeal as is just."
Jessel M.R., in reference to a similar English rule, expressed the opinion
that it was "only intended to prevent the right of appeal
from being
interfered with by the existence of an interlocutory order which incidentally
involved a decision of the point" (White
v. Witt (1877) 5 Ch D 589, at p 590
). The rule has no application here, for the point argued on the appeals to
both the Federal
Court and to this Court was the point of power to make an
order extending the term of a patent. There is no interlocutory order which
involved a decision on that point. The question of conditions is a separate
one, having to do with the manner in which the power
is exercised rather than
with the existence of the power. Neither appeal related to the conditions upon
which the power should be
exercised. However, the difficulty which Parke Davis
faces is not merely procedural. The procedural difficulty could be cured with
this Court's consent by filing out of time a notice of appeal against the
Federal Court's refusal of leave to appeal against the
conditions imposed by
the Supreme Court. The substantial difficulty Parke Davis faces is that there
was no material canvassed before
this Court to show that the Federal Court's
refusal to entertain an appeal against the conditions which the Supreme Court
imposed
was in error. For reasons which I have given, there may be some
support for the view that the Celotex conditions were insufficient
properly to
protect Parke Davis' interests, but there may well have been other
considerations which led the Federal Court to refuse
leave to appeal on this
ground. As I cannot be satisfied that, having regard to the course of the
litigation, the justice of the
case requires a further judicial consideration
of the question of conditions to be contained in the new grant, I would simply
allow
the appeal and restore the order of Fullagar J. and order that Parke
Davis pay the costs of Sanofi and the Commissioner in the Federal
Court and in
this Court. (at p24)
ORDER
Appeal allowed.Order of the Full Court of the Federal Court of Australia made on 21 July 1982 set aside and in lieu thereof order that the appeal to that Court be dismissed.
Restore declaration and orders of Fullagar J.
Order that the first respondent pay the costs of the appellant and of the second respondent in the Full Court of the Federal Court of Australia and in this Court.
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