PhotoCure ASA v Queen's University at Kingston

REASONS FOR JUDGMENT 1 The applicant ("PhotoCure") has commenced a proceeding in the Court against the respondent ("Queens") for a declaration that Australian Patent No 624985 ("the patent") granted to Queens is invalid and for an order that the patent be revoked. Since the commencement of the proceeding Queens has assigned all its right, title and interest in the patent to DUSA Pharmaceuticals Inc ("DUSA"). DUSA has applied for an order that it be joined as a respondent in the proceeding and that Queens be removed as a respondent in the proceeding. 2 PhotoCure does not oppose DUSA's joinder as a respondent but opposes the removal of Queens as a respondent. Queens, which has not entered an appearance, has not been served with DUSA's application. 3 Under O 6 r 9(b) of the Rules of the Federal Court of Australia the Court may order that a party who has "ceased to be a proper or necessary party" cease to be a party to the proceeding. Order 6 r 10(2), relevantly, provides that "where the interest…of a party passes by assignment…to another person, the Court may make orders for the addition, removal or re-arrangement of parties and may make orders for the further conduct of the proceeding". Order 6 r 10(3) provides that the Court may act under sub-rule 2 on the application by a party or by a person to whom the interest passes or of its own motion. 4 PhotoCure contends that, notwithstanding the assignment, both Queens and DUSA are proper parties to the proceeding. It relies upon an observation by Lindgren J in Emory University v Biocham Pharma Inc (1998) 86 FCR 1 ("Emory") at 9 where his Honour stated that as a revocation proceeding is concerned with extinguishing the right to do the acts of exploitation, to the exclusion of others in the patent area, the owners of such rights are proper parties to the proceeding. His Honour added: "Accordingly, the original grantee and any assignee is a proper party." 5 In my view his Honour was not addressing the issue in the present case, namely whether after an assignment the original grantee ceases to be a proper party. Rather, his Honour was making the point that to the extent an original grantee and an assignee are owners of the rights that the applicant for revocation is seeking to extinguish, they are proper parties. 6 I need not pursue the question of the applicability of O 6 r 9(b) further as I am satisfied that the present case falls within O 6 r 10(2) which applies, inter alia, when a party's "interest" in the proceeding passes to another person: see Frederikshavn Vaerft A/S v Stena Rederi Aktiebolag [2002] FCA 1024 at [23] per Sundberg J. Order 6 r 10(2) is drawn in very wide terms and I see no reason to give it the narrow interpretation for which PhotoCure contends, which is that the sub-rule only applies to an assignment of the cause of action. 7 Accordingly, I am satisfied that the Court has a discretion to substitute DUSA for Queens as a respondent. However, a number of factors have led me to decline to exercise that discretion in favour of the removal of Queens as a respondent at this stage. 8 First, Queens has not been served with notice of this application and has had no opportunity to present any view in favour of, or against, its removal. While Queens has not appeared to date it does not follow that it has no interest in the question of revocation. For example, it may, or may not, have some liability to DUSA if the patent is revoked. The deed of assignment is unclear on that question. 9 Second, I am not satisfied that the fact of assignment has the consequence that Queens has ceased to be a proper party. It was the grantee of the patent and there may be good reason for the applicant to wish to ensure that Queens is bound by the result of the present proceeding. Further, while a party ought not to be joined as a party solely for the purpose of discovery, it may equally be said that it is not for a respondent to be able to act unilaterally, whether by assignment or otherwise, and thereby cease to be liable to provide discovery: cf Emory at 9. Discovery is a real issue in the present proceeding in the sense that, as Queens is a foreign respondent, the rights of the applicant to discovery against it as a non-party may differ from the rights of the applicant to discovery against it as a party. Accordingly, I am not satisfied that Queens has ceased to be a "proper" party to the proceeding at this stage. 10 Third, it also follows that I am not satisfied that the removal of Queens cannot cause any prejudice to the applicant or to the conduct of its case. On the other hand, no prejudice of any kind has been demonstrated by DUSA if Queens is not removed as a party. 11 Accordingly, I am not satisfied that an appropriate case has been made out for me to exercise my discretion, whether under O 6 r 10(2) or otherwise, to order Queens' removal as a party. It follows that DUSA is to be joined as a respondent but that, otherwise, DUSA's motion dated 16 August 2002 for the removal of Queens as a party in the proceeding is to be dismissed. DUSA should pay PhotoCure's costs of the motion and of its earlier motion dated 5 June 2002 which DUSA has not proceeded with through no fault of PhotoCure. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.