Research Affiliates LLC v Commissioner of Patents

THE APPLICATION FOR LEAVE 4 The requirement to obtain leave to appeal to a Full Court is imposed by s 158(2) of the Patents Act. That subsection provides as follows: Except with the leave of the Federal Court, an appeal does not lie to the Full Court of the Federal Court against a judgment or order of a single judge of the Federal Court in the exercise of its jurisdiction to hear and determine appeals from decisions or directions of the Commissioner. 5 "The principles governing the exercise of the power under s 158(2) of the Patents Act and s 195(2) of the Trade Marks Act", it has been said, "are similar to those governing the exercise of power to grant leave to appeal under s 24(1A) of the Federal Court of Australia Act …": Pfizer Corporation v Commissioner of Patents [2006] FCAFC 190 at [10], 155 FCR 578 at 581 per Emmett, Allsop and Greenwood JJ. 6 Although the "principles" were there said to be "similar", there seems to have emerged some tension between the principles which inform the exercise of discretion conferred by s 24(1A) of the Federal Court of Australia Act 1976 (Cth) ("Federal Court of Australia Act") and those that inform the exercise of the discretion conferred by s 158(2) of the Patents Act. 7 Section 24(1A) states that: An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal. This provision confers an "unfettered discretion" in "unqualified terms": Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 399. Sheppard, Burchett and Heery JJ there observed at 399-400: In our opinion, the principles discussed in [Niemann v Electronic Industries Ltd [1978] VR 431] and in the other cases to which we have referred provide general guidance which a court should normally accept. However, there will continue to be cases raising special considerations, and the court should not regard its hands as tied in any case beyond this; that by s 24(1A) the legislature has evinced a policy against the bringing of interlocutory appeals except where the court, acting judicially, finds reason to grant leave. When the court comes to exercise its discretion on a particular application, an important distinction to be observed is that between the common interlocutory decision on a point of practice - concerning which the High Court has given (see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177) a strong warning that 'a tight rein' should be kept on appeals - and an interlocutory decision determining a substantive right - where leave will more readily be granted. …... In the present case, the interlocutory decisions in respect of which leave is sought are certainly attended with difficulty, and their correctness is open to dispute. If they are wrong, significant consequences will be suffered by the applicants. We regard this as a clear case for the grant of leave. 8 The principles that inform the exercise of the discretion conferred by s 24(1A), being the principles discussed in Niemann, are frequently summarised by Judges of this Court as inviting an inquiry as to: (a) whether in all the circumstances the judgment of the primary judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and (b) whether substantial injustice would result if leave were refused supposing the decision would be wrong. See for example: Oswal v Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) [2011] FCA 536 at [17]; Atich v Civil Aviation Authority [2013] FCA 20 at [16]; and Cabcharge Australia Ltd v Australian Competition and Consumer Commission [2010] FCAFC 111 at [20]. 9 That test is "cumulative" and is not satisfied unless each limb is made out: Rawson Finances Pty Limited v Deputy Commissioner of Taxation [2010] FCAFC 139 at [5] per Ryan, Stone and Jagot JJ. But the "two elements of the test are not unrelated": Cabcharge Australia Ltd v Australian Competition and Consumer Commission [2010] FCAFC 111 at [20] per Kenny, Tracey and Middleton JJ. The "sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments": Sharp v Deputy Commissioner of Taxation (1988) 19 ATR 908 at 910, 88 ATC 4184 per Burchett J. 10 The principles that inform the exercise of the discretion conferred by s 158(2) of the Patents Act were summarised, at least in part, by their Honours in Pfizer Corporation as follows: [8] … Leaving aside applications for leave on a question of pure law, in the context of essentially undisputed facts, and subject always to considerations of fairness and the interests of justice raised by a particular case, leave to appeal against a decision rejecting a pre-grant opposition will often be granted only where the applicant has demonstrated a clear prima facie case of error in the decision appealed from, such that the likely effect of that decision would be to allow an invalid patent to proceed to grant: … [9] On the other hand, the Court should be studious in its examination of the questions likely to arise on appeal, before refusing leave to appeal from an order of a single judge where an opponent has been successful. The Court should be slow to shut out an applicant for a patent or a trade mark who has had only one judicial consideration of entitlement to a grant. Before refusing leave, the Court should be satisfied that it is clear, beyond doubt, that there has been no error and that any patent or trade mark, if granted, should be revoked or expunged … Reliance in the application presently before the Court was placed upon the need for the Court to be "studious … before refusing leave to appeal" and the observation that leave should only be refused where the court is "satisfied that it is clear, beyond doubt, that there has been no error…". But those observations have to be considered in the context of the nature of the application for leave being entertained. 11 When entertaining an application for leave to appeal against a decision upholding a decision of the Commissioner of Patents dismissing opposition to the grant of a patent, Black CJ, Merkel and Goldberg JJ in Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742 at [16], 92 FCR 106 at 111 said that where "an opponent to a patent has had the benefit of two hearings and has been unsuccessful in both, we think there should be limited scope for a further appeal, particularly where the matters primarily in issue are essentially questions of fact…". Similarly, Graham J in Sunnyfield Association v Cronk [2010] FCA 143 at [11], 85 IPR 384 at 387 said that only "in exceptional circumstances would it be right to grant an applicant what would effectively amount to a further consideration of factual issues". His Honour went on to say that this "is particularly so given that an unsuccessful opponent of a patent will still be able to institute revocation proceedings under s 138 of the Act, with the result that a refusal to grant leave to appeal under s 158(2) will not be finally determinative of the opponent's rights…". 12 There nevertheless seems to be the potential for tension between the two different inquiries: an inquiry as to whether a decision is attendant with sufficient doubt to warrant the grant of leave in applying s 24(1A) of the Federal Court of Australia Act and an inquiry as to whether a court can be satisfied that there has been "no error" in applying s 158(2) of the Patents Act. The different classes of decision that may attract an application under s 24(1A) of the Federal Court of Australia Act, being decisions that may vary from interlocutory procedural decisions to decisions that determine substantive rights, to the many different classes of decision that may attract a grant of leave pursuant to s 158(2) of the Patents Act, may go some way to explaining the propositions generally expressed (for example) in Décor and Pfizer. In Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742 at [14], 92 FCR 106 at 111, Black CJ, Merkel and Goldberg JJ again referred to the need to avoid "laying down of rigid rules that would restrict" the exercise of discretion and to "the diversity of cases to which s 158(2) will potentially apply…". 13 But whether there is some divergence of approach between the exercise of the discretions conferred by s 24(1A) of the Federal Court of Australia Act and s 158(2) of the Patents Act can be left to one side. 14 Now before the Court is not an application for leave to appeal but rather an application for an order that the question of leave should be referred to a Full Court. It is that application which needs to be presently resolved rather than whether leave to appeal should be granted. Not surprisingly, the two issues nevertheless overlap.