The objection as to competency - consideration
55 The Commissioner's objection as to competency raised a question as to the jurisdiction of the Court to hear Merck's appeal. The question arose because Merck sought to invoke a right to appeal under s 60(4) of the Act in respect of the second decision. The Commissioner contended that the relief that Merck sought could not be given in this appeal because the first decision had been a final determination of the subject matter (i.e. the lack of novelty and an inventive step) on which the notice of appeal was based.
56 The legislative scheme governing opposition to the grant of a standard patent reflected the principal features of the similar scheme in the Patents Act 1952 (Cth) that the High Court considered in Mole Engineering 147 CLR 340.
57 There, a delegate gave an "interim" decision that determined that a patent application did not comply with the analogue of s 40 of the Act. The delegate gave the applicant 60 days to lodge a request to amend the patent. The applicant then lodged amendments designed to eliminate the aspects of a claim the subject of the adverse findings in the interim decision. After the original decision-maker had retired, a second decision-maker decided that the amendments were allowable but, he stated that he and the Commissioner had agreed that the applicant should withdraw its amendments and the Commissioner would direct that the whole application be re-heard, since the original decision-maker was no longer available to finalise the opposition. The opponent sought, and the High Court granted, a writ of prohibition against the proposed re-hearing.
58 Gibbs CJ, Murphy and Aickin JJ agreed with the separate, but similar, reasons of Mason J and Wilson J. They held that there was no power for the Commissioner or a delegate to re-hear an opposition proceeding under the analogue of s 60 (147 CLR at 348, 358). Mason J explained that when a provision in similar terms to s 60(1) of the Act required the Commissioner to "decide the case", any such decision was final. He held that the analogue of s 60(4) gave the applicant and opponent the right to "appeal" against "a decision of the Commissioner under this section". He reasoned that the Commissioner had no power to re-hear the case, because the previous Act did not contemplate that there could be two decisions under the relevant section of the Act. He said that an impossible situation would arise were this not so. That was because no statutory provision indicated which of any conflicting decisions under the section would prevail (147 CLR at 348; see too at 358 per Wilson J).
59 Importantly, Mason J said that the right of appeal from a "decision" created by the analogue of s 60(4) was quite consistent with a decision that upheld grounds of opposition but did not refuse the application because the objections might be overcome by amendment (147 CLR at 348). He also noted that the 1952 Act provided (unlike the preclusive effect of reg 5.3(4) that I noted in [16] above) that amendments made after an initial decision would be considered under the analogue of Ch 10 of the Act (Pt VIII of the 1952 Act) and that an appeal lay from a second decision, under the former Pt VIII (cf the current s 104(7)).
60 The parties did not argue before me the question of how the second decision (which by reason of the operation of s 104(6) would be a third decision) was, in fact, authorised by s 60 or any other provision of the Act. The second decision appears to be the result of a practice that the Commissioner has developed to overcome the odd preclusion effected by reg 5.3(4) of any consideration of whether an amendment actually overcomes the earlier successful objection. While this practice appears to reflect a desire to afford natural justice and a degree of common sense (not exhibited in reg 5.3(4)), it is difficult to see how the Act permits an amendment to be considered twice, once under s 104(2) and then subsequently under s 60 on different grounds of opposition outside those permitted by the operation of s 104(4) and reg 5.3(4). However, because the parties proceeded as I have indicated and because I consider that the appeal is incompetent in any event, it is not necessary to decide whether the only means of the Commissioner considering an amendment is under s 104(2). If the effect of s 104(4) and of reg 5.3(4) is as it appears to be, the only way in which a person could challenge an amendment that is deemed to have been allowed under s 104(6), but would not have overcome the earlier established ground of opposition, would be in proceedings under s 39B(1) of the Judiciary Act 1903 (Cth) or s 75 (v) of the Constitution. That would hardly serve the purpose of the Parliament providing an appeal de novo in respect of an opposed amendment under s 104(7) on the very much more limited issues under reg 5.3(4).
61 In Mole Engineering 147 CLR at 348-349 (see too per Wilson J at 355-356, 358-359) Mason J held:
It is a natural consequence of the procedures under Pt V and Pt VIII that an officer who upholds objections to the grant of an application under Pt V will refrain from refusing the application where it appears that the objections may be cured by amendment. Then it is a practical and sensible course to allow the applicant time within which to lodge a request to amend the specification, as [the original delegate] did in this instance. But his decision was nonetheless a final decision on the original unamended application - there was nothing provisional or tentative about the finding on the grounds of objection. It dealt with all the issues arising on the notice of opposition so far as they were capable of final determination. (emphasis added)
62 Thus, an opposition can be decided in stages under the current legislative scheme that reflects in large part (except perhaps for the effect of reg 5.3(4)) the well-established procedural mechanisms that, as Mole Engineering 147 CLR at 349-350, 354-356 showed, have applied to opposition proceedings both in Australia and the United Kingdom for many years.
63 Merkel J held that the right of an appellant to re-agitate issues on a further hearing by the Commissioner or on an appeal depended upon the issues dealt with and decided by the interim (or first) decision, rather than on whether the decision was in favour of one party or the other: Iluka 116 FCR at 231 [44], 232-233 [49]-[50]. He held that, prima facie, the unsuccessful party could not appeal against the delegate's subsequent decision on an amendment based on new grounds of lack of novelty and fair basis when it had challenged the original application on other grounds of lack of novelty and fair basis. He said that the original decision must be taken to have decided all such grounds (116 FCR at 233 [50]).
64 Subsequently, in Iluka Midwest Ltd (formerly RGC Mineral Sands Ltd) v Technological Resources Pty Ltd (2002) 58 IPR 467 at 477-478 [34] (Iluka No 2)) Merkel J concluded that a finding by the delegate in the interim (or first) decision that the only objections that needed to be overcome by the amendments was a decision adverse to the opponent. He held that the new ground of opposition was one that could have been relied on at the earlier hearing, did not arise as a result of any of the amendments, and could not be raised in an appeal based on the amendments.
65 I am of opinion that in the first decision the delegate determined that claims 1, 4, 5, 15 and 28 lacked novelty only because of the specific matters in the prior art that she found had amounted to anticipations (see the passage from the second decision at [20] that I have quoted in [40] above). Those findings related to only the four particular inflammatory diseases or inflammatory disorders (rheumatoid arthritis (RA), multiple sclerosis (MS), psoriasis and EAE) in the precise factual situations the subject of her consideration of each of claims 1, 4, 5 and 15 and the consequential impact of those findings on the inclusion of each of those four inflammatory diseases or inflammatory disorders in claim 28.
66 The alleged concession simply involved Genentech accepting that, if the delegate found that one of the prior art publications had anticipated an independent claim, a dependent claim such as claim 28 that covered the same subject matter as the established anticipation, would also fail. In making the alleged concession Genentech, as well as Merck, would have been aware of what the four prior art publications disclosed as the alleged anticipations. In particular, both Genentech and Merck would have been aware that each publication related to one or more of the four diseases and the particular way in which Merck relied on the publication as an anticipation of one or more of the original claims. By conceding that were Merck to prove such an anticipation by a prior art publication, Genentech did no more than to accept that if the delegate found anticipation, the opposition would establish that precise anticipation, no more and no less, and the dependant claim that repeated the anticipated subject matter (here, the relevant diseases) necessarily could not be sustained in its then form.
67 However, the delegate found that Genentech could amend claims 1, 4, 5 and 15 to overcome the anticipation. That finding necessarily determined, contrary to Merck's argument, that those claims, and their dependent claims, including claim 28, could be amended in such a way that the prior art would not anticipate them: Mole Engineering 147 CLR at 348-349, 355-356, 358-359.
68 The flaw in Merck's argument is that it assumed that all of the claims that the delegate concluded in the first decision at 105 IPR at 340 [126]-[127] lacked novelty, and therefore, they could not be amended to overcome the lack of novelty. The argument simply ignored the delegate's decision that the claims could be amended to overcome the deficiencies in respect of lack of novelty. That decision was unfavourable to Merck. That determination could, and indeed had to, be challenged by Merck on an appeal under s 60(4) against the first decision.
69 In amended claims 1, 2 and 14 Genentech removed the integers of claims 1, 4, 5, 15 and 28 that the delegate had found lacked novelty. It was not open to Merck to appeal against the allowance of the amendments (probably under s 104(7) or later, if the Act in fact permitted this, under a second exercise of a right to appeal under s 60(4)).
70 Merck's challenge to the second decision asserting lack of novelty and inventive step was in reality an attack on the first decision that allowed Genetech to amend claims 1, 4, 5, 15 and 28 to overcome the delegate's findings that they lacked novelty. The attack in the notice of appeal had to be made against the first decision. It could not be made against the second decision by reason of the principle in Mole Engineering 147 CLR 340 and, accordingly, the appeal is incompetent. The delegate's reasoning in the second decision (assuming she had power to make it) was correct.