(a) The first question
89 The first question concerns what is meant by the concluding words of s 223(9), "… the invention concerned because of the failure to do the relevant act within the time allowed, the lapsing of the patent application or the ceasing of the patent, as the case may be".
90 Lundbeck contends that these concluding words should be read as requiring:
(a) a failure to do the relevant act within the time allowed; and
(b) the lapsing of the patent application or the ceasing of the patent.
91 In other words, one must have limb (a) together with one of the options, viz, the lapsing of the patent application or the ceasing of the patent. Alternatively expressed, Lundbeck contends that the concluding words of s 223(9) deal with two possible scenarios, viz:
(a) the failure to do the relevant act within the time allowed and the lapsing of the patent application; or
(b) the failure to do the relevant act within the time allowed and the ceasing of the patent.
92 Contrastingly, the Generics contend that the concluding words of s 223(9) give rise to three possibilities, viz:
(a) the failure to do the relevant act within the time allowed;
(b) the lapsing of the patent application; or
(c) the ceasing of the patent.
93 In other words, the "failure to do the relevant act within the time allowed" does not need to be linked to the subsequent phrases being "the lapsing of the patent application" or "the ceasing of the patent".
94 It is appropriate to note the following concerning the context for this debate, if it is not already apparent. Put to one side the scenario of "the lapsing of the patent application". That is not applicable on the facts of the present case. Consider the scenario "ceasing of the patent". Lundbeck contends that there has been no "ceasing of the patent". That is the second question that I will discuss later. But assume for the sake of argument for the purposes of this first construction question only that there has been no "ceasing of the patent". If Lundbeck's construction on the first question is correct, there can be no triggering of the concluding words of s 223(9) in the context of the facts of the present case. The composite of "the failure to do the relevant act within the time allowed" and the "ceasing of the patent" could not be satisfied. Contrastingly, on the Generics' construction, one does not need the conjunction with the "ceasing of the patent". On their construction, the concluding words of s 223(9) could be satisfied by showing "because of the failure to do the relevant act within the time allowed" with nothing further to be shown.
95 Before resolving this first construction question, I would make two other points. First, whatever the resolution of this question, I am not deciding any factual questions concerning the satisfaction of the "because…" trigger in the concluding words of s 223(9). That is a matter for the Deputy Commissioner in dealing with the licence applications. Second, if the answer given to the first question is that for which the Generics contend, it may be unnecessary for me to deal with the second question as to the meaning of the phrase "ceasing of the patent". Nevertheless, I will deal with the second question irrespective of the answer to the first question.
96 In my view, the Generics' construction should be accepted. The concluding words of s 223(9) deal with three possibilities. I say this for a number of reasons.
97 First, the Generics' construction is supported by the natural and ordinary grammatical meaning and construction of the provision. In this regard, Lundbeck's construction would require a textual reconstruction. It would require the comma in the phrase "…within the time allowed, the lapsing of the patent application" to be removed or ignored and the word "and" added in its place.
98 Second, it is apparent by reference to the meaning of "relevant act" that circumstances might arise not involving a patent or a patent application. Section 223(11) defines "relevant act" to mean "an action … in relation to … any proceedings under this Act … and includes the making of a Convention application within the time allowed for making such applications". The breadth of "relevant act" supports the Generics' construction. Section 223(9) is broader than requiring the "because…" trigger to be tied into the lapsing of the patent application or the ceasing of the patent. So, s 223(9) can embrace for example a failure to file a Convention application or a divisional application within time and generally scenarios dealt with by, say, s 223(2) not involving the lapsing of a patent application or the ceasing of a patent.
99 Third, a question that arises on Lundbeck's construction is that if it was correct, it might be said that the words "failure to do the relevant act within the time allowed" would have little work to do. But Lundbeck's answer is that the words do have an ancillary role, being "a role of potential relevance in the inquiry as to the subjective motivation of the third party". I accept that this is theoretically so, although its answer is hardly compelling.
100 Fourth, s 223(9) when read in the context of s 223 as a whole supports the Generics' construction. For this purpose, I do not strictly need to apply the tenet of construction that beneficial and remedial legislation should be given a liberal construction, subject to that construction not being unreasonable or unnatural (see IW v The City of Perth (1997) 191 CLR 1 at 12 per Brennan CJ and McHugh J). But if necessary, that tenet can be applied to s 223(9) (cf Alphapharm at [64] per Crennan, Bell and Gageler JJ) and if it was so applied would only fortify the position of the Generics. If one considers the context, it may readily be appreciated that s 223(9) is designed to compensate persons adversely affected by an extension of time. The provisions of inter alia ss 223(2), (4), (9) and (11) should be considered together. Neither their text nor context justifies the narrow construction given by Lundbeck to s 223(9). Section 223 has a harmonious balance to its operation. On the one hand, in the circumstances described in s 223(1) (involving error on the part of the Commissioner, an employee, the receiving Office or a similar kind of third person), s 223(2) (involving error on the part of the relevant person, his or her agent or error beyond their control) or s 223(2A) (involving the failure of an act to be done within a certain time despite the person concerned taking due care to ensure its doing within the required time), s 223 provides for the Commissioner to grant an extension of time. On the other hand, s 223(9) provides for the correlative possibility of the Commissioner granting relief to third parties adversely affected by the grant of the extension of time. If an indulgence is granted to a patentee for an error that is sufficient to enliven the Commissioner's discretion to grant an extension of time, s 223(9) provides the remedy to adversely affected third parties.
101 Further, let me say something about the legislative history. Prior to 1960 there were relatively more limited provisions under which an extension of time could be granted and dealing with third party consequences; see for example s 64 of the Patents Act 1903 (Cth), ss 2 and 3 of the Patents Act 1906 (Cth), s 11 of the Patents Act 1909 (Cth) inserting a new s 85A into the Patents Act 1903-1909 (Cth), regs 38 and 39 of the Patents Regulations 1912 (Cth), s 9 of the Patents, Trade Marks, Designs and Copyright (War Powers) Act 1939 (Cth), regs 5 and 6 of the Patents, Trade Marks, Designs and Copyright Regulations 1953 (Cth), ss 97, 98 and 160 of the Patents Act 1952 (Cth).
102 In 1960, by s 28 of the Patents Act 1960 (Cth) (amending the Patents Act 1952-1955 (Cth)), s 160 of the principal Act was replaced with a more expanded version which read as follows:
160. - (1.) Where, by reason of an error or omission on the part of an officer or person employed in the Patent Office, an act or step in relation to an application for a patent or in proceedings under this Act (not being proceedings in a court) required to be done or taken within a certain time has not been so done or taken, the Commissioner shall extend the time for doing the act or taking the step.
(2.) Where, by reason of -
(a) an error or omission on the part of the person concerned or of his agent or attorney; or
(b) circumstances beyond the control of the person concerned,
an act or step in relation to an application for a patent or in proceedings under this Act (not being proceedings in a court) required to be done or taken within a certain time has not been so done or taken, the Commissioner may, upon application by the person concerned, but subject to this section, extend the time for doing the act or taking the step.
(3.) The time for the doing of an act or the taking of a step may be extended under either of the last two preceding subsections although that time has expired.
(4.) Where an application for extension of time under sub-section (2.) of this section is made more than three months after the expiration of the time allowed for the doing of the act or the taking of the step, the Commissioner shall advertise the application in the Official Journal.
(5.) A person may, as prescribed, oppose the granting of the application.
(6.) Where an extension of time is granted under this section, such provisions as are prescribed have effect for the protection or compensation of persons who availed themselves, or took definite steps by way of contract or otherwise to avail themselves, of the invention the subject of the application for the patent concerned by reason of the act or step in relation to which the extension was granted not having been done or taken within the time allowed.
(7.) An appeal lies to the Appeal Tribunal from a decision of the Commissioner under this section.
103 Relevantly, Sir Garfield Barwick said in the Second Reading Speech for the Patents Bill 1960 (Cth) (Official Hansard, House of Representatives, 2 June 1960, p 2214):
I now pass to the power of the Commissioner to extend the time set down for the doing of an act. Under section 160 of the act, he can extend the time where the act has not been done by reason of circumstances beyond the control of the person concerned. The committee considered representations that through pressure of business in offices of patent attorneys, errors do occur that result in acts that ought to be done not being done. It recommended that an error or omission on the part of an applicant, or of his agent or attorney be made an additional ground for extending the time for the doing of an act. Clause 29 restates section 160 to give effect to this recommendation. Provision is also made by the amendment to protect persons who are adversely affected by an extension of time under the section.
104 Section 160 now finds expression to a large extent in s 223. Regulation 43D was also introduced into the Patents Regulations 1954 (Cth) in May 1961. This now finds expression (to a large extent) in reg 22.21.
105 The legislative history shows that from 1960 there had been an expansion to the circumstances in which the Commissioner might grant an extension of time to a patentee in return for the expanded protection of third parties.
106 What is also apparent from s 160(6) as amended in 1960 is that in one sense its form supports the Generics' construction. It refers to "by reason of the act or step in relation to which the extension was granted not having been done or taken within the time allowed". This is similar to the first disjunctive option in the three options expressed in the text of s 223(9). What was later added were the second and third options. But there is no basis for asserting that the later additions in any way were intended to diminish or eliminate the force or effect of the independent first option.
107 Lundbeck has made reference to s 223(9) as first introduced into the Act and the explanatory memorandum at [310] and [311] in relation to the Patents Bill 1990 (Cth), but it is clear that these are incomplete statements and, moreover, that [310] was referring to additional aspects and not a substitution.
108 Let me now address another argument. Lundbeck submits that s 223(9) should not be read as applying to the extension of term scheme and s 79 in particular. It says that Chapter 6, Part 3 is a specific and detailed regime addressing extensions of term, particularly the rights associated with the Patent during any extended term. Contrastingly, it says that s 223 is a more general provision and that it does not have primacy. Relatedly, Lundbeck says that the extent to which s 79 is limited is as set out in s 78, rather than s 223(9). In summary, it says that s 79 has primacy over and operates to the exclusion of s 223(9). I reject these arguments.
109 First, in my view Lundbeck confuses the two different regimes. Sections 70 to 79A are dealing with the extension of term. Contrastingly, s 223 is dealing with extensions of time. And section 223(9) is dealing with the consequences of an extension of time.
110 Second, the regimes can work harmoniously together. For example, as the High Court discussed in Alphapharm, the second time requirement in s 71(2) is not excluded from s 223(2)(a) by reg 22.11(4)(b). Accordingly, s 223(2) applied to extend the time requirement calculated by reference to ss 71(2)(a), 71(2)(b) and 71(2)(c).
111 Third, the regimes also work harmoniously together by reason of the fact that the extension of time regime is anterior to the extension of term regime. In other words, until the extension of time has been validly made or given, there is no extension of term validly made or given. In other words, the regime in s 223 for the extension of time is anterior in one sense to the extension of term. Sections 223(2), 223(4), 223(7) and 223(9) have independent work to do. The present case does not concern the context of a general regime being inconsistent with a specific regime.
112 Fourth, Lundbeck says that s 79 is inconsistent with s 223(9). But they are dealing with different matters as I have said above. But in any event, I would make the following points. Section 79 refers to "start proceedings", ie commencing infringement proceedings. It does not define the exclusive rights of the patentee or when infringement occurs; nor does it deal with or exclude any defences to infringement. Moreover, any exclusive right under s 13(1) would be modified by any licence granted under s 223(9). Moreover it is incorrect to say that ss 78, 79 and Chapter 11 operate as a code (including provisions such as ss 119A or 123) such as to impliedly oust the operation of s 223(9). Reference was also made by Lundbeck to s 223(10) also being in conflict with s 79. I do not propose to dwell on s 223(10) given its relevance to the infringement proceedings, save to say that there is substance to the contention that I discussed with Mr Dimitriadis SC that to the extent of inconsistency, s 223(10) would override.
113 Fifth, Lundbeck has said that the only relevant limitation on s 79 is s 78 and that accordingly s 223(9) is implied ousted. But s 223(9) and s 223 generally are dealing with the anterior question of an extension of time and the consequences flowing from that. The patentee does not get the benefit of s 79 (as "modified" by s 78) without going through the gateway of s 223.
114 Generally, Lundbeck also contends that the relevant legislative history demonstrates that since inception, s 223(9) had no intended operation in relation to the expiry of the term of a patent; see its written submissions at [75] to [104]. Generally, it will be apparent that I reject its analysis. But there is one matter I should specifically address at this point. On the proper construction of s 223(9), Lundbeck sought to finesse support for its position by reference to the terms of reg 22.11(4)(b). Now there are difficulties with doing so. First, the terms of a subordinate instrument cannot drive the construction of the principal instrument. Second, the predecessor to reg 22.11(4)(b) was not introduced until 27 January 1999, some nine years after s 223(9) was introduced. Undaunted by such difficulties, Lundbeck contended that one could refer to the regulation to identify the relevant legislative scheme. But the relevant scheme was an extension of term scheme introduced by s 3 of Schedule 1 to the Intellectual Property Laws Amendment Act 1998 (Cth) which introduced a new extension of term scheme for standard patents relating to pharmaceutical substances into the Act (ie ss 70 to 79A). I do not consider that a regulation introduced nine years after s 223(9) can assist the proper construction of s 223(9). Moreover, Lundbeck has sought to deploy it beyond seeking to identify the extension of term scheme introduced by the Intellectual Property Laws Amendment Act 1998. More generally, I have difficulty in Lundbeck delving into the legislative history concerning extension of term when the issue before me principally concerns extension of time.
115 Further and generally, Lundbeck appears to contend that s 223(9) and reg 22.21 only apply where an applicant for a s 223(9) licence has exploited (or taken definite steps to exploit) the invention the subject of the patent after it had ceased. I reject that construction. Section 223(9) is concerned with protecting persons who exploited the invention concerned because of the failure to do the relevant act within the time allowed (or the lapsing of a patent application or ceasing of a patent). But it is also protective of persons who took definite steps by way of contract or otherwise to exploit the invention concerned because of the failure to do the relevant act within the time allowed (or the lapsing of a patent application or ceasing of a patent). There is a difference between those two circumstances. A person cannot ordinarily exploit an invention before the lapsing of a patent application or the ceasing of a patent without exposing themselves to infringement proceedings; this is subject to some statutory exceptions. But a person may take substantial steps by way of contract or otherwise before the lapsing of a patent application or the ceasing of a patent so as to put themselves in a position to exploit the invention as soon as the patent application lapses, or the patent ceases to be in force. This is a reason why the Act requires that applications for an extension of term be made within a specified time. The Act acknowledges that persons may take legitimate steps by way of contract or otherwise towards exploiting an invention the subject of a patent that will cease to be in force because there has not been an application to extend the term of that patent.
116 Finally, reference was made to Law v Razer Industries Pty Ltd (2010) 190 FCR 166, but I do not consider that this assists. Bennett J was dealing with an applicant for a s 223(9) licence who by chance had taken steps to exploit the invention after the patent had ceased. In that context her Honour observed that "the protection [under s 223(9)] would only be afforded to a person who becomes aware that the Patent had ceased and takes actions based upon that status of the Patent" (at [26]). But her Honour was dealing with a different factual scenario to the present. The construction argument raised before me did not arise.
117 In summary, the correct construction of s 223(9) and reg 22.21 is that a person may be granted a s 223(9) licence where at any time before the extension of time was advertised they exploited (or took definite steps to exploit) the invention concerned and those steps have the relevant nexus to one or more of the s 223(9) criteria, namely, the failure to do the relevant act within the time allowed or the lapsing of a patent application or the ceasing of a patent.