Analysis
60 It is important to start with s 49 of the Act: see [17] above. Certain matters should be noted at the outset. First, the express words of the section relevantly provide:
(1) Subject to section 50, the Commissioner must accept a patent request and complete specification relating to an application for a standard patent, if:
(a) the Commissioner is satisfied that the invention, so far as claimed, satisfies the criteria mentioned in paragraph 18(1)(b); and
(b) the Commissioner considers that:
(i) there is no lawful ground of objection (other than a ground in respect of paragraph 18(1)(b)) to the request and specification; or
(ii) any such ground of objection has been removed.
(2) If subsection (1) does not apply, the Commissioner may refuse to accept the request and specification.
…
(7) Where the Commissioner refuses to accept a patent request and complete specification relating to an application for a standard patent, the Commissioner must notify the applicant in writing of the reasons for the refusal and publish a notice of the refusal in the Official Journal.
(Emphasis in bold added, italics in original.)
The power in s 49(2) is discretionary. There is nothing to suggest that the exercise of the power in s 49(2) is subject to a precondition or requirement that the Commissioner must first consider whether to give a direction under s 107. Indeed, not only is there no express reference to s 107 in s 49, but the drafters turned their mind to what were the preconditions to the exercise of the power in s 49 and referred to s 50, not s 107.
61 Does s 107 in its terms alter that conclusion? The answer is no. The Applicant submitted that the Act prescribes two methods by which amendments may be made to overcome objections raised by the Commissioner. First, at the initiative of the patent applicant (s 104) and secondly, at the initiative of the Commissioner (s 107). The Applicant submitted that if the patent applicant does not propose amendments, then they can only be made by consideration by the Commissioner of the exercise of the power under s 107. The Applicant contended that this was consistent with the regulatory nature of the Commissioner's role under the Act. This submission needs unpacking.
62 The Applicant relied principally on s 107(1) of the Act: see [20] above. It relevantly provides:
(1) Where:
…
(b) the Commissioner is satisfied that there are lawful grounds of objection to the patent request or complete specification, but that those grounds of objection could be removed by appropriate amendments of the request or specification; and
(c) the applicant has not taken action to amend the request or specification so as to remove those grounds of objection;
the Commissioner may, in accordance with the regulations, direct the applicant to file, within such time as the Commissioner allows, a statement of proposed amendments of the request or specification for the purpose of removing those grounds of objection.
(Emphasis added.)
63 The fact that s 107 provides the Commissioner with a power to direct an applicant to file a statement of proposed amendments in certain circumstances does not the support the contention that that power is to be imposed, or grafted, on to the exercise of another power (s 49(2)). Nor does the fact that the Commissioner has a regulatory role support that contention. First, the express words of s 107 are contrary to that contention. Section 107 itself is a discretionary power. Secondly, if exercised, it requires the applicant, not the Commissioner, to file a statement of proposed amendments to the request or specification. Thirdly, s 107 addresses a different state of affairs to that being addressed in s 49(2).
64 If the express words of the Act do not support the construction contended for by the Applicant, what then is left? As these reasons will demonstrate, there is no foundation, let alone a sufficient foundation, to impose an obligation on the Commissioner that the exercise of the power in s 49(2) is subject to a precondition or requirement that the Commissioner must first consider whether to exercise the power to direct under s 107.
65 The Applicant referred to a series of cases and texts which considered different legislation and scenarios where discretions were treated as being coupled with a duty to exercise the so-called "discretionary" power: see Julius v Bishop of Oxford (1880) 5 App Cas 214 at 221; Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 at 134-135; Microcell and Pearce DC and Geddes RS, Statutory Interpretation in Australia (7th ed, LexisNexis Butterworths, 2011) at [11.6]-[11.7].
66 It is important to understand that, unlike the cases referred to by the Applicant, the position here is different. The Applicant does not focus on the discretionary power in s 49(2). His focus is a different section (s 107) which he contends is substantively different in operation. It is different because the Applicant does not contend that the Commissioner was obliged to issue a direction under s 107 but that he was under a duty to consider doing so. There are at least three complete answers to this submission.
67 At the outset, it is worth repeating that the Commissioner was not under a duty to consider issuing a direction under s 107. Neither s 49 nor s 107 was in those terms. Moreover, none of the other provisions of the Act support the contention. Indeed, the Act suggests otherwise. It provides a mechanism for an applicant on its own motion to lodge amendments with the Commissioner under s 104 of the Act: see [18] above. It is therefore unnecessary for an applicant to call for the exercise of the Commissioner's power under s 107. The express terms of s 104 also stand in stark contrast with s 107. Unlike s 104, there is no provision for an applicant to request or require the Commissioner to make a direction to that applicant of the kind contained in s 107. Put another way, if there is a defect in a patent application which could be cured by amendment, then it is open to an applicant to seek leave, under s 104, to amend the application. The existence of, and the contents of, s 104 militates against the implication of the duty contended for by the Applicant: see, for example, Bishop of Oxford at 225.
68 Contrary to the further submission of the Applicant, the decision of the High Court in Finance Facilities does not assist. The provision in issue in Finance Facilities was s 46(3)(a) of the Income Tax Assessment Act 1936 (Cth) which provided that the Commissioner "may allow" a private company a rebate of taxation if satisfied that the shareholder would not pay a dividend to another private company during a specified period. It was argued by the Commissioner that the provision as to allowing a rebate was entirely discretionary. The Court rejected that contention and held that the word "may" conferred a power to be exercised, not a discretion to be weighed. As the High Court said in Samad v District Court of New South Wales (2002) 209 CLR 140 at [67], "[t]he key to the decision, that the Commissioner was bound to allow a further rebate if satisfied of the conditions spelled out in s 46(3)" was found in the following statement by Windeyer J in Finance Facilities at 133-134:
The right of a taxpayer to a discount or rebate arising from facts objectively determinable is quite properly called an entitlement. A claim to a discount or rebate dependent upon the Commissioner being satisfied of certain fact is equally properly called an allowance, something to be allowed. In some contexts the word "allow" in the phrase "may allow" might enhance a discretion said to be embodied by the word "may". But not, I think, in this context. The Act is filled with provisions about allowable deductions which are mandatory.
…
This [question] does not depend on the abstract meaning of the word "may" but of whether the particular context of words and circumstances make it not only an empowering word but indicate circumstances in which the power is to be exercised - so that in those events the "may" becomes a "must".
Unlike Finance Facilities, this is not a case where the Commissioner was satisfied of the fulfilment of criteria on which the exercise of discretion conferring an entitlement turned and, no less importantly, it cannot be said that there was no other valid course open to her. No proposed amendments had been placed before the Commissioner and she was not required to formulate amendments.
69 Next, the Applicant referred to Microcell in support of a contention that ss 49(2) and 107 exist to balance the public interest in finalising administrative proceedings with the private interest of patent applicants in not having their patent applications refused in situations where there is some defect in the patent application which could be cured by amendment. The passages in Microcell relied upon by the Applicant were as follows (at 244-245):
... it is well settled that the Commissioner ought not to refuse acceptance of an application and specification unless it appears practically certain that letters patent granted on the specification would be held invalid. As Menzies J has pointed out, he will not normally have before him the material necessary for the formation of a concluded opinion. Moreover, whereas refusal of acceptance is final, acceptance is not: the application may be opposed after acceptance on any of the grounds mentioned in s 56, and, if a patent is granted, its validity is open to attack in proceedings for infringement or for revocation. So, in McDonald v Commissioner of Patents (a case in which the validity of a patent granted on the specification may be thought to have been very doubtful) this Court allowed an appeal from the Commissioner, Griffith CJ saying: "I think that it is only in a clear case, where it is obvious that a patent cannot be granted, that the Commissioner should reject an application altogether".
On the other hand, it is not to be overlooked that the Commissioner has a duty to the public as well as to the applicant for a patent, and, if it appears manifest that a valid patent could not be granted, the Commissioner not merely has power, but is under a duty to reject the application under s 46. So, in Sir W G Armstrong Whitworth & Co (Engineers) Ltd v Commissioner of Patents [1936] ALR 131 at 131-2, Latham CJ (Starke, Dixon, Evatt and McTiernan JJ concurring) said: "Generally an application would not be stopped at this stage, unless it were a clear case as far as the subject matter is concerned; but where the Court is of opinion that, on the face of it, it is clear that no valid patent could result from the grant, … I think the Commissioner may properly be supported in refusing to give the grant. In my opinion, it is much more proper that the Commissioner should do that than that it should be left to the chance of some member of the public being prepared to undertake the not inexpensive task of challenging a patent".
(Footnotes omitted.)
Microcell does not support the Applicant's contention. None of the passages identified by the Applicant support the contention that the Commissioner must consider directing amendment.
70 Next, the Applicant submitted that the legislative history of the power to direct amendments, and the power to refuse to accept a patent application, supported his contention that the Commissioner does not have the power to refuse to accept a patent application under s 49(2) of the Act without first considering whether or not to direct the patent applicant to file a statement of amendments under s 107 of the Act. The Applicant referred to ss 52 and 52D of the Patents Act 1952 (Cth) (the 1952 Act), the predecessor of the Act. At the time of the repeal of the 1952 Act, s 52 was entitled "Acceptance of application for a standard patent" and was relevantly in the following terms:
(1) If the Commissioner is satisfied that there is no lawful ground of objection to an application for a standard patent and complete specification, or that the grounds of objection to an application for a standard patent and complete specification have been removed, the Commissioner shall, subject to sub-section (3), accept the application and complete specification.
(2) If the Commissioner is not so satisfied, he may refuse to accept the application and complete specification.
71 Section 52D of the 1952 Act was entitled "Action on Examiner's report on modified examination" and sub-ss 52D(7) and (8) were as follows:
(7) If the Commissioner is satisfied that there is no lawful ground of objection to the application and complete specification under section 52C, or that the grounds of objection to the application and complete specification under that section have been removed, the Commissioner shall accept the application and complete specification.
(8) If the Commissioner is not so satisfied, he may-
(a) refuse to accept the application and complete specification; or
(b) direct the applicant to lodge a statement of proposed amendments of the application and complete specification, or, if such a statement has been lodged under sub-section 52A(3) or under paragraph (2)(b) of this section, amend the statement, to the satisfaction of the Commissioner within such time as the Commissioner allows.
72 The Applicant submitted that it was significant that there was no power in the section relating to examination (s 52) to direct an applicant to propose amendments (cf s 52D). Under the current legislation, the power to refuse to accept applications for a standard patent consequent on both examination and modified examination of those applications is found in s 49 of the Act. It does not set out the Commissioner's power to direct an applicant to propose amendments. That power appears in s 107 of the Act.
73 The Applicant submitted that a consideration of the provisions of the 1952 Act established that:
1. The removal of the power to direct amendments from the section dealing with modified examination to s 107 does not imply that:
1.1 the Commissioner has been relieved of the obligation to consider whether or not to direct the applicant to propose amendments; before
1.2 the Commissioner decides whether or not to refuse to accept an application and complete specification following modified examination.
2. The amalgamation of two separate sets of provisions relating to "examination" and to "modified examination" was to remedy the "mischief" of the Commissioner not having power (under the 1952 Act) to direct a patent applicant, during the course of "examination", to propose amendments to the application and complete specification.
74 Those contentions are rejected. Reference to precursor statutory provisions cannot be made where to do so creates an uncertainty that is not apparent on the face of the later provision under consideration: Walsh v Permanent Trustee Australia Ltd (1996) 21 ACSR 213 at 215. That is the position here.
75 There is at least one other reason why the Applicant's contention about the interaction between ss 49(2) and 107 should be rejected - the result contended for by the Applicant is uncertain and inconvenient: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [96]-[99]. If, as the Applicant contends, the Commissioner is required to consider appropriate amendments to a patent application before refusing a patent application, the Commissioner would need to have in her mind, or at least to have formulated, appropriate amendments. A number of questions immediately spring to mind. How would the Commissioner undertake such a task? Where would the line be drawn in determining if the Commissioner had done enough to satisfy this so-called obligation to consider whether to exercise the power? None of these questions arise under the current scheme of the Act because that scheme imposes on an applicant, not the Commissioner, the obligation to file and pursue a patent application.
76 The Applicant's response to these difficulties was to submit that the nature of the Commissioner's obligation was to consider whether or not to exercise the power. That submission does no more than restate the problem. Put another way, the uncertainty and inconvenience caused by adopting the Applicant's construction of ss 49(2) and 107 would tend against the construction contended for by the Applicant: Project Blue Sky at [96]-[97].
77 In any event, even if, contrary to the view formed, the Applicant's contention about this so-called discretionary power is correct, then the application fails on the facts. It fails on the facts because the delegate's reasons for decisions record that the delegate turned his mind to the possibility of a direction under s 107 at the time of the making of the Second Decision and concluded that a direction under s 107 would be futile. That report stated:
I have reviewed the examiner's report, and I agree that there are appropriately raised objections. The applicant has chosen not to defend the application. They have provided no submissions disputing the objections, and have not proposed any amendment to attempt to overcome the objections. In these circumstances there are no reasonable prospects of the applicant overcoming the objections. The application should be refused.
(Emphasis added.)
78 The Applicant submitted that the phrase "I have reviewed the examiner's report, and I agree that there are appropriately raised objections" does not record that the Commissioner or her delegate had considered whether lawful objections were taken and that view is further supported by the fact that the Policy (Annexure B) introduced short timelines for assessment of divisional applications. The passage must be read in context and fairly: see [49] above. The objection was set out. The fact that the Applicant had been given an opportunity to respond to the objection was stated. The failure of the Applicant to respond to the objection was set out. The Commissioner's delegate then reviewed the examiner's report and considered the objections were "appropriately raised". The Commissioner's delegate then concluded that in those circumstances there were "no reasonable prospects of the applicant overcoming the objections".
79 Do the timelines set out in the Policy alter that conclusion? The answer is no. The fact that there were timelines imposed by the Commissioner and that they were in fact imposed is not in dispute. What was not explained by the Applicant was how those timelines support the conclusion that the Commissioner or her delegate did not consider whether lawful objections were taken. If the Applicant's submission is no more than the timelines were too short a period for the Commissioner to undertake that review, then that submission fails at the first hurdle. There is no factual basis for that assertion. Indeed, as has been stated, the record in fact establishes that the objections were reviewed and were reviewed within the timelines imposed by the Commissioner.
80 For those reasons, this ground of review is dismissed.