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[2006] FCA 163
Federal Court of Australia
2006-03-01
Lindgren J
Original judgment source is linked above.
INTRODUCTION 1 This proceeding is one of three related 'Lundbeck' proceedings before the Court. 2 The first proceeding to be commenced was NSD 1120 of 2005 ('the revocation proceeding'), between Alphapharm Pty Ltd ('Alphapharm') as applicant and the present applicant, H Lundbeck A/S ('Lundbeck'), as respondent. In that proceeding, Alphapharm seeks a declaration that claims 1 - 6 of Lundbeck's Australian Patent No 623144 ('the Patent') are invalid and an order that they be revoked, or, in the alternative, an order that the Register of Patents ('the Register') be rectified pursuant to s 192 of the Patents Act 1990 (Cth) ('the Act') to remove an extension of the term of the Patent from the Register. Alphapharm seeks another supportive declaration related to the extension of the term of the Patent, of which I need say no more. Lundbeck and its Australian subsidiary, Lundbeck Australia Pty Ltd ('Lundbeck Australia'), the exclusive licensee of the Patent in Australia, cross-claim against Alphapharm for infringement of the Patent. 3 The second proceeding to be commenced is this present proceeding, between Lundbeck and the Commissioner of Patents ('the Commissioner'). Lundbeck seeks relief designed to prevent the Commissioner from amending the entry in the Register in relation to the extension of the term of the Patent. The Commissioner wishes to consider and decide whether reg 10.7(7) of the Patents Regulations 1991 (Cth) ('the Regulations') requires her to amend it, but Lundbeck contends that reg 10.7(7) is invalid. (Regulation 10.7(7) is set out at [17] below.) 4 Alphapharm contends that Lundbeck obtained the extension by making a misrepresentation to the Commissioner as to what was the 'first regulatory approval date' for the purposes of s 70 of the Act (s 70 is, so far as relevant, set out at [21]) and of reg 10.7(7). It was Alphapharm which drew to the attention of the Commissioner the alleged error as to what was the true 'first regulatory approval date'. The Commissioner takes the position that if Alphapharm is correct in its contention that that date is earlier than the one on which she acted when she entered particulars of the extension in the Register, reg 10.7(7) requires her to amend the entry. Alphapharm contends that the consequence of the alleged error is that the extension was invalidly granted and that all reference to it should be removed from the Register, whereas the Commissioner contends that the consequence is only that the entry reflects an excessively long extension, and that the Register should be amended only so as to refer to a shorter period. 5 The third proceeding is NSD 1870 of 2005 ('the TGA proceeding') between Lundbeck Australia as applicant and the Secretary of the Department of Health & Ageing of the Commonwealth of Australia as respondent. In that proceeding, Lundbeck Australia applies for orders restraining the respondent ('the Secretary') from using what it contends is 'protected information' within the meaning of s 25A of the Therapeutic Goods Act 1989 (Cth) ('the TGA') in considering any application made by any third party for registration of therapeutic goods containing (+)-citalopram. On 15 June 2005, Alphapharm had applied to the Secretary for the registration of such therapeutic goods under the TGA. 6 By orders made on 28 November 2005, I ordered that Alphapharm be joined as second respondent in the TGA proceeding. On 23 December 2005, I ordered that the revocation proceeding and the TGA proceeding be heard together. They have been fixed for a 15 day hearing from Monday, 27 November until Friday, December 15 2006.
THE PRESENT PROCEEDING 7 Having been given, by Alphapharm, reason to think that her entry on the Australian Register of Therapeutic Goods ('ARTG') of the extension of the term of the Patent is incorrect, the Commissioner proposes to give Lundbeck an opportunity to be heard on 22 March 2006 on the question whether Alphapharm is correct, and whether she should amend the entry under reg 10.7(7). (The Commissioner is required to give Lundbeck an opportunity to be heard by reg 10.7(8) - see [17] below.) 8 Contending that reg 10.7(7) is invalid, Lundbeck, by its application filed on 15 September 2005 in this proceeding, claims: prohibition, alternatively, an injunction, prohibiting the Commissioner from making any decision or doing any act, including the conduct of any hearing, in relation to the extension of the term of the Patent in purported reliance on reg 10.7(7); a declaration that reg 10.7(7) is not authorised by s 228 of the Act, is invalid and is of no force or effect; and a declaration that the Commissioner is functus officio in relation to her decision made to extend the term of the Patent.
facts 9 The date of the Patent is 13 June 1989 (so its twenty-year term expires on 13 June 2009) and its title is '(+)-Enantiomer of Citalopram and Process for the Preparation Thereof'. An Agreed Statement of Facts in this proceeding states, relevantly, as follows: 'The Patent and listing on the ARTG
13 Subsection 71(2) of the Act provides that an application for an extension of term must be made during the term of the patent and within six months of the latest of the following dates: '(a) the date the patent was granted; (b) the date of commencement of the first inclusion in the [ARTG] of goods that contain, or consist of, any of the pharmaceutical substances referred to in subs 70(3); (c) the date of commencement of [s 71].' In this case, on either of the competing views the latest of those three dates is that referred to in para (b). If the date referred to in para (b) was, as Lundbeck contends, 16 September 2003, Lundbeck had until 16 March 2004 in which to apply for the extension, and therefore its application made on 22 December 2003 was within time. If, on the other hand, the date referred to in para (b) was, as Alphapharm contends, 9 December 1997, Lundbeck had only until 9 June 1998 in which to apply for an extension, and, therefore, its application on 22 December 2003 was made out of time. Accordingly, in the revocation proceeding Alphapharm seeks rectification of the Register by removal from it of any reference to the extension (see [2] above). 14 The term of an extended patent is defined by s 77 of the Act which provides: '(1) If the Commissioner grants an extension of the term of a standard patent, the term of the extension is equal to: (a) the period beginning on the date of the patent and ending on the earliest first regulatory approval date (as defined by section 70) in relation to any of the pharmaceutical substances referred to in subsection 70(2); reduced (but not below zero) by: (b) 5 years. (2) However, the term of the extension cannot be longer than 5 years.' 15 If the correct first regulatory approval date is 9 December 1997, the s 77(1) formula yields a calculation of eight years, five months and twenty-six days minus five years, which is three years five months and twenty-six days. This period, added on to the twenty-year term of the Patent expiring on 13 June 2009, would extend the term of the Patent to 9 December 2012. This is the period which the Commissioner says, subject to her hearing Lundbeck on 22 March 2006, the Register should reflect if Alphapharm's contention as to the first regulatory approval date is correct. 16 If, on the other hand, the correct first regulatory approval date is 16 September 2003, the s 77(1) formula would give a period of fourteen years, six months and three days minus five years, which is nine years, six months and three days. But s 77(2) provides that the term of an extension cannot be longer than five years. This extension of five years, added on to the twenty-year term of the Patent expiring on 13 June 2009, would extend that term to 13 June 2014. This was the extension which the Commissioner entered in the ARTG, and which Lundbeck continues to support. 17 Sub-regulations 10.7(7), (8) and (9) provide: '(7) If: (a) an extension of the term of a standard patent for a pharmaceutical substance has been granted under section 76 of the Act; and (b) the Commissioner becomes aware that the first regulatory approval date in relation to the pharmaceutical substance is earlier than: (i) the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods that was supplied, under subregulation 6.9(2), with the application for the extension of the term; or (ii) the date of the first approval that was supplied, under subregulation 6.10(2), with the application for the extension of the term; the Commissioner must amend the relevant entry in the Register to insert the correct extension of the term of the patent. (8) If the Commissioner proposes to amend an entry in the Register under subregulation (7), the Commissioner must: (a) give notice to that effect to the patentee; and (b) act in accordance with regulations 22.22 to 22.24 as if those regulations applied to a decision to amend an entry. (9) An appeal lies to the Federal Court against a decision of the Commissioner to amend the Register under subregulation (7).' (my emphasis) Regulations 22.22 to 22.24, referred to in subreg (8)(b), provide for the giving of notice and of an opportunity to be heard before the Commissioner exercises a discretionary power adversely to a person. 18 Sub-regulations (7), (8) and (9) of reg 10.7 were introduced by the Patents Amendment Regulations 2005 (No 1) (SLI 51 of 2005). If subreg (7) is invalid, subregs (8) and (9) will fall with it. For obvious reasons, Lundbeck does not submit that if subreg (7) is valid, nonetheless subregs (8) and (9) are invalid, and I will say nothing further about them. 19 In her letter dated 13 July 2005 to Watermark, Lundbeck's Patent Attorneys, the Commissioner stated: 'The term of this patent (as factually determined under s 77 on the basis of the registration of Cipramil) expires on 9 December 2012, and not 13 June 2014 (the date currently included in the Register). Accordingly the Register does not reflect the correct term of this patent.' The Commissioner pointed out that in these circumstances, under reg 10.7(7) she must amend the relevant entry in the Register to insert the correct term of the Patent, but not without first giving the patentee an opportunity to be heard: see reg 10.7(8).
LEGISLATION 20 Section 228 of the Act provides, relevantly: '(1) The Governor‑General may make regulations, not inconsistent with this Act: (a) ... ; (b) prescribing matters necessary or convenient to be prescribed for carrying out or giving effect to this Act; and (c) prescribing matters necessary or convenient to be prescribed for the conduct of any business relating to the Patent Office; ... (2) Without limiting subsection (1), that subsection includes the power to make regulations: (a) ... ; (b) ... ; (c) ... ; (e) making provision for and in relation to the amendment of an entry in the Register to correct a clerical error or an obvious mistake, or for any other purpose; ...' It is common ground that reg 10.7(7) is not supportable as a regulation making provision for correction of a clerical error or an obvious mistake, but the Commissioner relies on the words 'or for any other purpose' in para (e) of s 228(2). 21 Section 70 provides for the making of applications for an extension of the term of a patent by the patentee of a standard patent. The section provides, relevantly: '(1) The patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subsections (2), (3) and (4) are satisfied. (2) Either or both of the following conditions must be satisfied: (a) one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification; (b) one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification. (3) Both of the following conditions must be satisfied in relation to at least one of those pharmaceutical substances: (a) goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods; (b) the period beginning on the date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years. (4) The term of the patent must not have been previously extended under this Division. (5) For the purposes of this section, the first regulatory approval date,in relation to a pharmaceutical substance, is: (a) if no pre‑TGA marketing approval was given in relation to the substance - the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, the substance; or (b) ... (6) ...' It is not disputed that subsections (2), (3) and (4) were satisfied in the present case. Accordingly, Lundbeck was entitled to apply for an extension of the term of the Patent. Whether the first regulatory approval date is 9 December 1997 (as Alphapharm contends) or 16 September 2003 (as Lundbeck contends) will arise for determination in the revocation proceeding. 22 Subsections (2), (3) and (4) prescribe conditions of a patentee's being entitled to 'apply' for an extension. The conditions are stated in objective terms: either they are satisfied and a patentee is entitled to apply, or they are not satisfied and the patentee is not entitled to apply. 23 Section 71 provides for the form and timing of an application. Subsection (2) of s 71 was referred to at [13] above. Paragraph (b) of subs (2), like the definition of 'first regulatory approval date' in para (a) of subs 70(5), refers to an objective state of affairs. 24 Section 72 provides that if a patentee applies for an extension, the Commissioner must publish in the Official Journal a notice that the application has been made and is open to public inspection. 25 Section 73 permits a patentee to withdraw the application for an extension, and requires the Commissioner to publish in the Official Journal a notice of the withdrawal. 26 Section 74 deals with acceptance or refusal of an application for an extension. It provides: 'Acceptance (1) If a patentee of a standard patent makes an application for an extension of the term of the patent, the Commissioner must accept the application if the Commissioner is satisfied that the requirements of sections 70 and 71 are satisfied in relation to the application. (2) If the Commissioner accepts the application, the Commissioner must: (a) notify the applicant in writing of the acceptance; and (b) publish a notice of the acceptance in the Official Journal. Refusal (3) The Commissioner must refuse to accept the application if the Commissioner is not satisfied that the requirements of sections 70 and 71 are satisfied in relation to the application. (4) If the Commissioner refuses to accept the application, the Commissioner must: (a) notify the applicant in writing of the reasons for the refusal; and (b) publish a notice of the refusal in the Official Journal.'
27 Two aspects of this provision may be noted. First, it is the first provision regulating the Commissioner's response to an application. The Commissioner must 'accept' or 'refuse to accept' the application. The acceptance/refusal to accept stage precedes the grant/refusal to grant stage, to be discussed next.
28 Secondly, although s 74 does not expressly indicate the steps the Commissioner must take in order to be satisfied that the requirements of ss 70 and 71 are satisfied, the fact that opposition is provided for in the next stage, coupled with the use of the word 'satisfied', seem to suggest that what is contemplated is a 'formal' checking by the Commissioner that on the information supplied by the patentee, the requirements of those two sections are satisfied.
29 If the Commissioner is satisfied that these requirements are satisfied, she must accept the application to be dealt with further, notify the patentee of the acceptance, and publish notice of the acceptance in the Official Journal: s 74(1), (2). If the Commissioner is not so satisfied, she must refuse to accept the application, notify the patentee of the reasons for the refusal, and publish notice of the refusal in the Official Journal: s 74(3), (4).
30 There is no provision for a right of appeal against a refusal to accept, which could, however, be made the subject of an application for relief under s 39B of the Judiciary Act 1903 (Cth).
31 Sections 75 and 76 deal with the next stage. Section 75 provides that the Minister or any other person may, in accordance with the regulations, oppose the grant of the extension on the ground that one or more of the requirements of ss 70 and 71 are not satisfied, but not on any other ground: subs (1). If the grant of an extension is opposed, the Commissioner must decide the case in accordance with the regulations, having first given the patentee and the opponent a reasonable opportunity to be heard: subss 75(2) and (3).
32 If there is no opposition, or, in spite of opposition, the Commissioner decides that the extension should be granted, the Commissioner must grant an extension: s 76(1). If the Commissioner grants an extension, the Commissioner must notify the patentee of the grant and publish notice of the grant in the Official Journal: s 76(2).
33 The applicant and any opponent may appeal to this Court against the Commissioner's decision: s 75(4).
34 It follows that, provided an application for an extension, and, in particular, the associated information supplied by the patentee, satisfy the requirements of ss 70 and 71, the Commissioner must grant 'an extension of the term of a patent' if there is no opposition to the grant.
35 Section 76 does not specify the period of the extension that must be granted, but s 77, which was set out at [14] above, does so.
36 While the Commissioner must grant an extension, she is not required to specify the period of the extension granted. It is not necessarily the period that was applied for. The period is defined in s 77. The 'trigger' for which is the granting of 'an extension of the term of a standard patent' by the Commissioner.
37 Section 187 provides that particulars of standard patents in force, and other prescribed particulars relating to standard patents (if any) must be registered in that part of the Register dealing with standard patents. Regulation 19.1 of the Regulationsprescribes in para (c) particulars of 'an extension of the term of a patent'. It follows that the Commissioner must enter in the Register particulars of the true period of extension referred to in s 77.
38 Section 191 provides that a person must not make a false entry in the Register, or cause a false entry to be made in it. The stated penalty is imprisonment for two years.
39 Subsection 192(1) provides that a person aggrieved by the omission of an entry from the Register, or an entry made in the Register without sufficient cause, or an entry wrongly existing in the Register or an error or defect in an entry in the Register, may apply to a prescribed court for an order to rectify the Register. Subsection 192(3) provides that the Commissioner must be given notice of the application, may appear and be heard in the proceeding, and must appear if directed to do so by the court.
40 Clearly, ss 191 and 192 show a general intention that the Register be correct and reliable. A particular reason underlying this policy is that subs 195(1) provides that the Register is prima facie evidence of any particulars registered in it.
41 Section 228 of the Act provides, relevantly, as follows: '(1) The Governor-General may make regulations, not inconsistent with this Act: (a) ...; and (b) prescribing matters necessary or convenient to be prescribed for carrying out or giving effect to this Act; and (c) prescribing matters necessary or convenient to be prescribed for the conduct of any business relating to the Patent Office; ... (2) Without limiting subsection (1), that subsection includes the power to make regulations: ... (e) making provision for and in relation to the amendment of an entry in the Register to correct a clerical error or an obvious mistake or for any other purpose; ...' (my emphasis) Lundbeck contends that reg. 10.7(7) is invalid as being ultra vires with regard to s 228, retrospective in its operation, and injurious to substantive rights of the patentee.
(1) Ultra vires 42 The Commissioner does not seek to support reg 10.7(7) as a provision for and in relation to the amendment of an entry in the Register to correct a 'clerical error' or an 'obvious mistake'. The Commissioner's proposition is quite simple: subs 228(1), when read with subs 228(2)(e), empowers the Governor-General to make regulations making provision for and in relation to the amendment of an entry in the Register for any purpose, and reg 10.7(7) meets that description. 43 Lundbeck did not submit that the words 'for any other purpose' are to be read ejusdem generis with the expressions 'to correct a clerical error' and 'to correct ... an obvious mistake'. Lundbeck did, however, refer to the words 'not inconsistent with this Act' in the chapeau to subs 228(1), and to the opening provision of subs 228(2) that subs (1) of s 228 'includes' the various powers listed in subs (2). 44 Lundbeck referred to the following authorities for the proposition that, generally speaking, a power to make regulations is not construed so as to authorise the making of regulations which widen, vary or depart from positive provisions of the enabling Act, extend the scope and general operation of that Act, or operate in a way that is otherwise than strictly ancillary: Shanahan v Scott (1957) 96 CLR 245 at 250, 254; Utah Construction and Engineering Pty Ltd v Pataky [1966] AC 629 at 640; Willocks v Anderson (1970) 124 CLR 293 at 298-9; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 380; Carbines v Powell (1925) 36 CLR 88 at 92; Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 410. However, the starting point in each case is the empowering section. In the present case, s 228(1)(b) does not stand alone: there is s 228(2)(e) to be considered. 45 Subsections (1) and (2) of s 228, so far as presently relevant, can be paraphrased as follows: the Governor-General may make regulations, not inconsistent with the Act, prescribing matters convenient to be prescribed for carrying out or giving effect to the Act or for the conduct of any business relating to the Patent Office, including regulations making provision for and in relation to the amending of an entry in the Register for any purpose. 46 I do not think that the expression 'for any other purpose' in s 228(2)(e) signifies that a regulation made for literally 'any' purpose would necessarily be valid. One need only think of a regulation made for a purpose which demonstrated bad faith, or, I suggest, for a purpose totally foreign, even antithetical to, the concerns and objects of the Act. However, I can think of no purposive limitation to be read into subs 228(2)(e) which would have the effect that reg 10.7(7) is ultra vires. The purpose of reg 10.7(7) is, after all, the unexceptionable one of ensuring that particulars entered in the Register are not false. 47 On the narrowest construction of s 228, reg 10.7 is intra vires. That narrowest construction requires that: (1) the regulation make provision for and in relation to the amendment of any entry in the Register for some purpose, not being the correction of a clerical error or of an obvious mistake; (2) the regulation not be inconsistent with the Act; and (3) the regulation prescribe matters convenient to be prescribed for carrying out or giving effect to the Act. 48 The first of these requirements is met. As to the second, I do not think that reg 10.7(7) is inconsistent with the Act. Lundbeck points to the right of appeal given by s 75(4) and the right given to an aggrieved party to apply to a prescribed court for an order for rectification of the Register given by s 192. It is not, however, inconsistent with these provisions that a regulation should require the Commissioner to amend an entry in the Register which does not reflect the true extension of the term of a patent, where the Commissioner has become aware that the entry in the Register fails to do so. 49 Regulation 10.7(7) provides for circumstances not covered by ss 75 and 192. Assume that: · a patentee obtained an extension upon a misrepresentation to the Commissioner as to the first regulatory approval date;
· that there was no opposition to the application for the extension;
· that no aggrieved party applied for rectification of the Register under s 192; and
· that the Commissioner became aware of the misrepresentation.
According to Lundbeck's argument, nothing could be done. I do not think the Act evinces an intention that nothing should be able to be done in these circumstances or that ss 45 and 192 are intended to be a code in the present respect. The Act does, however, in ss 187, 191 and 195(1) referred to earlier, reveal a legislative intention that the Register should not contain false entries. 50 As to the third requirement mentioned, I think it was open to the Governor-General to consider that reg 10.7(7) prescribed a matter 'convenient to be prescribed for carrying out or giving effect to [the] Act'. This was so for the reasons mentioned in the immediately preceding paragraph. Similarly, para (3) of the Explanatory Statement which accompanied the Patent Amendment Regulations 2005 (No 1) stated: 'Recently, the Commissioner has become aware that the extensions of term granted in respect of several patents are longer than the patentees are entitled to under the Act. This appears to be due to the Commissioner having been supplied with incorrect information by the patentees when these extensions of term were requested.' Why is a regulation providing for mandatory amendment of the entry in the Register in these circumstances not a matter convenient to be prescribed for carrying out or giving effect to the Act? 51 Underlying Lundbeck's submissions, in particular those to be dealt with at (2) and (3) below, is the notion that, by reason of the entry in the Register, the patentee has the benefit of the extension as so entered. It does not. By reason of s 77, the term of the extension is as fixed in that section. To amend the Register to show a shorter extension than that entered on it, would do no more than to remove a false entry and to ensure that the Register reflected the true extension fixed in s 77. 52 Lundbeck also submits that, to amend the Register so as to show an extension down to zero is inconsistent with s 76(1), which provides that the Commissioner must grant an extension if there is no opposition to the grant of it. However, the notion that the extension might be zero is expressly contemplated by s 77. The effect of ss 76 and 77 is that in the absence of opposition, the Commissioner must grant an extension yet its term can be zero. It would be zero (but no less than zero) where the period beginning on the date of the patent and ending on the earliest first regulatory approval date in relation to any of the pharmaceutical substances referred to in subs 70(2), is less than five years.
(2) Retrospectivity of operation and (3) Injurious effect on substantive rights of the patentee 53 As noted in the immediately preceding two paragraphs, Lundbeck's submissions in these respects proceed on the assumption that the patentee is entitled to the benefit of the extension as entered in the Register. This is not so. The true extension is that brought about by the operation of s 77. The Register does not give an indefeasible title and is only prima facie evidence of any particulars registered in it: s 195(1). A patentee has no right to insist that the Register continue to record an extension greater than it truly is.
conclusion 54 For the above reasons, the application should be dismissed with costs.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.
Associate: Dated: 1 March 2006 Counsel for the Applicant: Mr D Shavin QC and Ms K J Howard
Solicitor for the Applicant: Corrs Chambers Westgarth
Solicitor for the Respondent: Australian Government Solicitor
H Lundbeck A/S
Commissioner of Patents
(1925) 36 CLR 88
(1951) 83 CLR 402
(1998) 194 CLR 355
(1957) 96 CLR 245
(1970) 124 CLR 293