Consideration - Costs of the amendment application
26 The ordinary rule in proceedings for an amendment to a patent is that the patentee pay the costs of the other parties to the proceedings and any opponent seeking to oppose the making of the amendment, regardless of the outcome. The justification for that rule of practice is not far to seek. The occasion for the amendment is brought about by an error that the patentee seeks to correct in respect of its earlier choice in framing the wording of its patent, that identified its claimed monopoly.
27 The question whether such a correction ought be made and its precise terms are matters of public interest, having regard to the monopoly rights conferred by a patent. Others who are, or potentially may be, affected by a proposed amendment, including the Commissioner of Patents, will be able to make any appropriate submissions and give appropriate assistance to the Court in its consideration of the disposition of the amendment application. That is particularly so, as I pointed out in the amendment reasons, that amendment applications can only be decided by the Court in proceedings in which the validity or enforcement of the patent is in issue ([2015] FCA 104 at [133]-[136]). Ordinarily, amendments are sought before, rather than after, the trial but, as I explained in those reasons, Servier's departure from the ordinary course in the present circumstance should not affect the result ([2015] FCA 104 at [171]-[179]).
28 Actavis argued that, in effect, there was an encrusted, and almost unbreakable, rule of law that whatever arguments an opponent to an amendment application might put up, it was entitled to do so at the cost of the patentee. Such an argument must be rejected. Costs are in the discretion of the Court, and they must always remain so under s 43 of the Federal Court of Australia Act. Moreover, if the position were as Actavis argued, great injustice could be done to a patentee by having to meet a barrage of unmeritorious, time wasting, or substantively unsuccessful arguments that need never have been run, simply because an opponent chose to exercise the supposed right of opposition knowing that whatever it said, its costs would be paid by the patentee.
29 It would be productive of injustice to fetter the discretion under s 43 to make orders for costs in the way for which Actavis contended. The discretion exists to enable the Court to make orders that are appropriate in all the circumstances, to do justice between the parties.
30 The ordinary rule for the patentee to pay the other parties' costs on an amendment application has a principled foundation to it, but in this case the opponents substantively lost on a large range of issues that they ran. I decided the amendment application substantively on the evidence that Servier initially filed in support of its application. That evidence met what I found to be its duty of full and frank disclosure of its reasons for seeking the amendment. However, as I explained in the amendment reasons, that duty was far more limited than the boundless duty advocated by the opponents during the course of the interlocutory stages and final hearing of the amendment application. The stance taken by the opponents on that issue, namely, the width of Servier's obligation of disclosure, caused the proceedings on the amendment application to be far more protracted than they ought to have been.
31 Throughout the course of the amendment application, from March 2014 when it was filed, Servier consistently argued, correctly, that its duty of disclosure consisted in having to explain fully and frankly why it was seeking the amendment and did not extend further, contrary to the opponents argument. The opponents argued, also from an early stage in the amendment application proceedings, that Servier had to disclose everything it knew about the best method at the time the complete specification was filed, including what it knew about methods other than 1986 and 1991 methods: see Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2014] FCA 751 at [2], [7], [9] and [10]. I delivered those reasons immediately after the argument on 26 May 2014.
32 Ultimately, the correctness of the opponents' contention as to the extent of Servier's obligation of disclosure needed to be determined on the amendment application. Accordingly, I partially granted the opponents' applications for notices to produce to be issued to Servier, so that each of the parties could lead such evidence at the hearing of the amendment application as they wished, to make good their respective contentions: see Apotex Pty Ltd v Les Laboratoires Servier (No 3) [2014] FCA 1029 at [3], [7], [9] and [11]-[15].
33 I have taken into account, in assessing the overall burden that any costs order might impose, the fact that, until the dying stages of the argument on 26 May 2014, Servier resisted adding to the declarations that it asked to be made, the last sentence in each identifying the fact that the 1986 and 1991 methods produced a white crystalline product.
34 A large amount of time was taken up during the course of the amendment application by the opponents' unsuccessful arguments that, first, the construction of s 105 of the Patents Act had a meaning other than the natural and ordinary meaning reflected in its clear words and that there was no power to grant the amendment sought to add the descriptions of the 1986 and 1991 methods and, secondly, that French and Lindgren JJ had contradicted themselves within 11 paragraphs in their careful reasons in Pfizer Overseas Pharmaceuticals v Eli Liley & Co (2005) 68 IPR 1 at 78 [379] and 80 [390]-[391]. Neither argument had any substance: see amendment reasons [2015] FCA 104 at [137], [143]-[145].
35 Moreover, a large amount of the time and effort was taken up in the amendment application with the opponents' assertions that the 2002 method was, and was known by Servier to be, better than the 1986 and 1991 methods, even though there was no evidence at all that Servier knew at any time that the 2002 method was better (see amendment reasons: [2015] FCA 104 at [57]-[59], [69]-[72], [109]-[116]). The opponents also consumed time with another issue about their assertion of similarity between the 2002 method and the method in the alpha crystalline patent that required further expert evidence to be led.
36 Had I not allowed the notices to produce to be issued which, having regard to my ultimate finding as to Servier's obligation to give full and frank disclosure, I should not have, that material would not have been available to the opponents and the proceedings would have been very significantly shorter (cf: amendment reasons [2015] FCA 104 at [59]).
37 In effect, the opponents were seeking to use what I found was the wrongly asserted wide obligation of a patentee to make full and frank disclosure to force Servier to disclose anything that the opponents might then seize upon to suggest that it knew more than it had disclosed on the patent amendment application. In my opinion, the onus was on the opponents to propound and prove such a case, and before pleading it, they ought to have had a basis to do so. I was unable to see that basis, absent the material that was deployed, although that was not an issue before me, and I make no finding about it. However, it is necessary to refer to those matters in order to demonstrate that the opponents' erroneous reliance on an unduly wide extent of the patentee's disclosure obligation consumed a substantial amount of time and effort, not to say costs, in the conduct of the interlocutory and hearing stages of the amendment application.
38 During the course of argument today, the opponents persuaded me that I may have overstated the time that that hearing should have taken. I observed that it ought to have taken one day to hear (amendment reasons [2015] FCA 104 104 at [185]). However, I did not fully allow for the facts that Servier had initially deployed Mr Caine's evidence in support of its case for an amendment and that, when Dr Jaguelin had to give evidence, she did so through an interpreter which would have added somewhat to the time involved. Taking these matters into account, the hearing may have taken about one and half days, had it been confined to the real but limited issues.
39 Actavis argued in relation to its obligation to pay costs that Servier had somehow brought upon itself a liability to pay costs because, on 8 October 2014, it had added to the amendment application a claim that the 2002 method should be inserted into the complete specification.
40 I reject that argument. In the amendment reasons, I found that Servier made that application as a result of a contention in both opponents' amended grounds of opposition filed on 26 and 29 September 2014 ([2015] FCA 104 at [6]). That occurred after I had granted the opponents' application to serve limited notices to produce. The opponents' amended grounds of opposition raised the argument that the 2002 method was a better method known to Servier at the time that the complete specification was filed.
41 I also found in the amendment reasons that the parties did not raise any serious challenge to Dr Jaguelin's credibility and that she was generally honest and reliable. In making my finding ([2015] FCA 104 at [6]), I had in mind what Dr Jaguelin had said in her affidavit affirmed on 7 October 2014, namely that Servier was applying to add the 2002 method to its application to amend so as to avoid any doubt or substantive dispute that its proposed amendments did not include the best method of performing the invention known to Servier at the filing date. And, she said in the same paragraph of that affidavit, that the method used to produce the batch of perindopril arginine was the same as the description of the 2002 method the subject of the proposed further amendment. She said that the testing of that batch had not been completed or documented before the filing date. I accepted that evidence.
42 My findings in the amendment reasons reflected the fact that Dr Jaguelin's explanation demonstrated why Servier could not have known, whatever its state of belief was, that the 2002 method was better than either the 1986 or 1991 method.
43 Doing the best I can in all of the circumstances, and subject to what I have to say about the offers of compromise, I consider that justice would be done by ordering the opponents pay 60% of Servier's costs of the amendment application.