Sherman v Commissioner of Patents

REASONS FOR JUDGMENT 1 By a decision published on 1 March 2007, a delegate of the Commissioner of Patents ("the Commissioner") upheld the opposition of Merck & Co Inc ("Merck") to application No 697696 by the applicant, Bernard Charles Sherman, for a patent under the Patents Act 1990 (Cth) ("the Patents Act"). The delegate held that the applicant was not entitled to the patent, and that the invention was not novel, and did not involve an inventive step. 2 By notice filed on 22 March 2007, the applicant appealed from the decision of the delegate under s 60(4) of the Patents Act. In October 2007, Merck withdrew from the proceeding and, by order made on 26 October 2007, the Commissioner was added as a respondent pursuant to O 6 r 8(b) of the Federal Court Rules. On 14 December 2007, the court ordered that, on or before 15 February 2008, the Commissioner file and serve the evidence to which she proposed to draw the court's attention at the hearing of the proceeding. On 15 February 2008, the Commissioner filed an affidavit sworn by the delegate. On 3 April 2008, the applicant filed a Notice of Motion seeking orders that the delegate's affidavit, and the exhibits thereto, not be admitted into evidence. On the return of that Notice of Motion, I ordered that it be adjourned to the time and date at which the proceeding was listed for trial. 3 The proceeding came on for trial on 20 June 2008. In opening, counsel for the applicant tendered a certificate of an officer in the Patent Office, Ms Teresa Kolodziejczyk, and, under cover of that certificate, a copy of each of the patent application, an extract from the Official Journal advertising acceptance of the application, Merck's notice of opposition and the decision of the delegate dated 1 March 2007. Counsel for the Commissioner then sought to read the affidavit of the delegate to which I have referred, and to tender the exhibits thereto. Counsel for the applicant objected to the reading of certain paragraphs in the affidavit, and to the reception into evidence of some of those exhibits. I heard argument on those objections, and reserved my judgment. These reasons deal with that matter. 4 The delegate's affidavit is not lengthy, and it will be convenient to set out its terms in full hereunder: 1. I am a Supervising Examiner of Patents with the Australian Patent Office, a part of IP Australia and have held this position for 16 years. Prior to my current position, I was an Examiner of Patents from 1985 to 1989 and a Senior Examiner of Patents from 1989 to 1991. 2. My qualifications include a Bachelor Science (Honours), Doctor of Philosophy and Bachelor of Laws. 3. I was the Delegate of the Commissioner of Patents in relation to the opposition to grant of Australian Patent Application No. 697696 in the name of Bernard Charles Sherman which was opposed by Merck & Co Inc. In my role as Delegate, I read all of the evidence filed by both parties in the opposition proceeding and listened to oral arguments from the Applicant's and Opponent's Counsel in Canberra on 4 and 5 December 2006. 4. On 1 March 2007, after having considered the evidence and the parties' submissions, I issued my decision in relation to the opposition. Now produced and shown to me and marked "SB-1" is a copy of my issued decision. 5. The opposition hearing proceeded in relation to three grounds. These grounds were: a) lack of novelty; b) lack of an inventive step; c) lack of entitlement. 6. I found as Delegate that the opposition succeeded on all three grounds. In relation to the grounds based on lack of novelty and lack of inventive step my decision was based on the prior art document described as W094/01093, referred to as the "Rork citation" in my decision, together with the evidence filed in relation to that prior art document. The Rork citation is referred to as 'PAP-22' in the evidence. 7. Now produced and shown to me and marked "SB-2" is a copy of the Rork citation. 8. Now produced and shown to me and marked "SB-3" are copies of the declaratory evidence filed in the opposition proceeding by the opponent and relied on by me in finding that the opposed application lacks novelty and inventive step in light of the Rork citation. Preceding the copied declarations is a table I have prepared which identifies the relevant paragraphs within the declarations marked SB-3. 5 Counsel for the applicant objected to the reading of paragraphs 6, 7 and 8 of the affidavit, and to the reception into evidence of the exhibits referred to therein. Although those objections were based upon several grounds arising under the Evidence Act 1995 (Cth) ("the Evidence Act"), most of them involved the proposition that the Commissioner should not be permitted to prove the contents of the Rork citation referred to in the delegate's affidavit, and of the statutory declarations exhibited to the affidavit, without calling direct evidence of the substantive facts which the Commissioner seeks to establish by the tender of those documents. Counsel for the applicant relied in this respect upon ss 59(1), 135, 56(2) and 48(1) of the Evidence Act, and upon O 14 r 9 of the Federal Court Rules. 6 Counsel for the Commissioner pressed for the reception into evidence of the contents of the delegate's affidavit, and of the exhibits thereto. They submitted that, in an appeal to the Federal Court under s 60(4) of the Patents Act, that Act permitted all of the material which had been before the delegate in the opposition hearing to be tendered as evidence without reference to restrictions that might otherwise have been imposed by the Evidence Act. Alternatively, they sought a direction pursuant to s 190(3) of the Evidence Act that the provisions of that Act relied upon by the applicant not apply, on the ground that the application of those provisions would cause or involve unnecessary expense or delay. They relied also upon ss 60 and 75 of the Evidence Act in response to the applicant's reliance upon s 59. 7 The material which the Commissioner seeks to lead in evidence would be relevant to the questions whether the invention lacks novelty and/or an inventive step. The Rork citation is said to be a document that was publicly available before the priority date: see the definition of "prior art base" in the Dictionary in the Patents Act. To the extent pressed by the Commissioner, the statutory declarations are said to be relevant because they provide a technical understanding of the citation, and deal with the question of obviousness in the context of the inventive step requirement. 8 It is convenient to commence by dealing with the submission made on behalf of the Commissioner that the Evidence Act does not apply to a proceeding of this kind, in relation to material that was admitted in the opposition proceedings. The submission was based upon the terms of s 8(1) of the Evidence Act, which relevantly provides that that Act "does not affect the operation of the provisions of any other Act". Relevantly to this point, the Commissioner relied upon the provisions of two other Acts, namely, s 160(a) of the Patents Act and s 38(1) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"). 9 Section 160 of the Patents Act provides, relevantly: On hearing an appeal against a decision or direction of the Commissioner, the Federal Court may do any one or more of the following: (a) admit further evidence orally, or on affidavit or otherwise; … (c) order an issue of fact to be tried as it directs; …. It was submitted on behalf of the Commissioner that, by empowering the court to admit further evidence, the Patents Act contemplated that the material that had been admitted in the opposition proceedings would be admissible in court by reason of that circumstance, and that the operation of the Patents Act was not, in this respect, affected by the Evidence Act (ie as provided for in s 8(1) of the latter). 10 Section 38(1) of the Federal Court Act provides that the practice and procedure of the court "shall be in accordance" with the Rules of Court. The Commissioner pointed to O 58 r 8(1) of the Federal Court Rules, which provides: Material before the Commissioner for the purpose of the decision appealed from is, with the leave of the Court and saving all just exceptions, admissible in evidence on the hearing of the appeal. As I understand the submission made on behalf of the Commissioner, it is said that O 58 r 8(1) both evinces an intention that material which was admitted in opposition proceedings should, without the need to comply with the Evidence Act, be admissible in the court, and that the rule was also relevant to the exercise of the court's discretion under s 190(3) of the Evidence Act. 11 Counsel for the Commissioner relied upon what Starke J had said in relation to an appeal from the Taxation Board of Review in Federal Commissioner of Taxation v Lewis Berger & Sons (Australia) Limited (1927) 39 CLR 468, 469: The appeal to this court submits the ascertainment of the taxpayer's liability to judicial review and ascertainment, but the so-called appeal is a proceeding in the original, and not within the appellate, jurisdiction of the court. It follows, I think, that the parties on this appeal are not limited to the material that was before the Board of Review, but are entitled to adduce before this court such evidence in support of, or in answer to, the appeal as is relevant to the matter. The material before the Board and its decision and reasons should be brought before this court, and the parties may use this material if they so desire, but further or additional evidence may be adduced, or the appeal may be conducted as an original cause brought in this court. In Kaiser Aluminium & Chemical Corporation v Reynolds Metal Co (1969) 120 CLR 136, 142-143, Kitto J relied upon Lewis Berger as support for the proposition that an appeal from opposition proceedings under the Patents Act 1952 (Cth) invoked the original jurisdiction of the High Court, and that such an appeal - … must be decided upon the evidence adduced before this Court, even though that evidence presents on the question of interest a case completely different from the case which was suggested before the Deputy Commissioner. In further support of that proposition, Kitto J referred to the then equivalent of s 160(a) of the Patents Act. 12 Counsel for the Commissioner referred also to the judgment of Emmett J in F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56. In that proceeding, the respondent to an appeal from the Commissioner in opposition proceedings sought to lead extensive evidence which had not been before the delegate. That was objected to. Emmett J said (at [30]): It is clear, however, that since the proceeding is a hearing de novo, it is for the Court to determine what evidence should be permitted on the hearing. That question must depend upon the nature of the proceeding. It would of course be open to an opponent simply to tender the material that was before the Commissioner or his delegate. The Court could, subject to all proper objections, admit that evidence. His Honour referred to s 160 of the Patents Act, and said (at [37]) that it suggested that it was "within the power of the Court to constrain further evidence and the extent of examination and cross-examination". His Honour continued (at [38]): Section 160 does, however, indicate that the Court may exercise a discretion as to the extent to which further evidence will be admitted, beyond that which was before the Commissioner and the extent to which examination and cross-examination of witnesses might be permitted. Such a constraint is indicative of a proceeding different from one intended to resolve all disputed questions. Counsel for the Commissioner relied also upon E I Du Pont De Nemour & Company v ICI Chemicals and Polymers Limited (2003) 128 FCR 392. There the question was whether an opponent who had succeeded before the Commissioner was entitled to raise new grounds of opposition in the appeal by the applicant under s 60(4) of the Patents Act. In the course of providing reasons why that should be so, Emmett J said (at [26]): While an appeal is to be treated as a hearing de novo, the evidence from the hearing before the Commissioner is, according to O 58 r 8 of the [Federal Court Rules 1979 (Cth)], admissible in evidence on a hearing of the appeal with the leave of the Court, subject to all appropriate exceptions. As I have said, s 160(a) also contemplates that the evidence before the Commissioner is the starting point for the evidence on the appeal. In the present case, counsel for the Commissioner submitted that these passages in the judgments of Emmett J provided support for the proposition that s 160(a) of the Patents Act contemplated that at least everything which had been before the delegate would be, without further requirement, received into evidence in the "appeal" in the Federal Court. 13 By s 8(1) of the Evidence Act, that Act does not "affect the operation" of the Patents Act. The submission made on behalf of the Commissioner was, in effect, that the "operation" of s 160(a) of the Patents Act was that all material that was before the delegate would be received into evidence in the court without further formality or requirement. I do not so read s 160(a). Section 160 gives the Federal Court a series of conventional adjectival powers which would be convenient to have in the disposition of a proceeding of a kind to which that section applies. There is, in my view, no reason to read that section as implicitly travelling beyond its express terms, particularly where to do so would give rise to a conflict with other legislation expressly applicable to proceedings in the court. Because a proceeding under s 60(4) of the Patents Act is an appeal in name only, it might have been considered appropriate, in s 160, to make special provision for powers of the kind to which it refers. In the case of par (a), for example, there might otherwise have been a question whether the court should have the power to admit evidence beyond that led in the proceeding from which the "appeal" was brought. However, since the legislature chose to provide for a proceeding in a Chapter III court, there is no reason to suppose that, by the reference to "further evidence" in s 160(a) it silently intended that the Evidence Act, which would otherwise be binding on that court, would not apply. 14 Turning to the Commissioner's reliance on s 38(1) of the Federal Court Act and O 58 r 8(1) of the Federal Court Rules, the first, and perhaps most obvious, point to make is that none of the provisions of the Evidence Act upon which the applicant relies could "affect the operation" of s 38(1). That is to say, the power of the Judges of the court to make rules as to practice and procedure is in no sense compromised by those provisions of the Evidence Act. Indeed, the rules of court are made against the implicit assumption that that Act will apply to proceedings in the court. In the case of clear inconsistency between the Evidence Act and some other Act, the former yields: see s 8(1). However, the Evidence Act yields to regulations only when the latter were in force at the time of the enactment of s 8, and have since remained unamended: see s 8(2). It is tolerably clear that there was no intention to subordinate the provisions of the Evidence Act to rules of court in any circumstances. 15 Thus, even if O 58 r 8(1) of the Federal Court Rules purported, on a proper construction, to permit the reception into evidence of all material that had been before the delegate in opposition proceedings under the Patents Act, it could not have that effect as a matter of law. As it happens, I do not think the rule purports to have that effect. I consider that the reservation "saving all just exceptions" is a recognition, at least, that some of the material which had been before the delegate might not be admissible in court proceedings as a matter of law. The express requirement that the leave of the court be obtained before the tender of such material likewise recognises that the tender would not be automatic, but would require a conscious decision by the court, against such norms of substantive and procedural law that might be applicable in the circumstances. 16 I was assured by counsel for the applicant that they had been unable to find any reported judgment, or otherwise any instance, when this court had ruled that the Evidence Act, or the rules of evidence, does or do not apply in a proceeding by way of an appeal from the Commissioner, or in an analogous proceeding. The authorities upon which the Commissioner relied in presently relevant respects do not disclose any such ruling. Neither in Hoffman-La Roche nor in Du Pont was Emmett J concerned with a question of the present kind. His Honour's observations to the effect that material which had been before the Commissioner would constitute the evidence in the court on appeal were, in my view, concerned only to provide a general foundation for a discussion of the issues with which his Honour was concerned, namely, (in Hoffman-La Roche) whether the respondent was confined to the evidence which had been before the delegate, and (in Du Pont) whether a previously successful opponent was entitled to advance new grounds on "appeal". I do not read Emmett J as implying (and his Honour certainly did not hold expressly) that material could be put into evidence notwithstanding that it was inadmissible pursuant to the Evidence Act. 17 Perhaps the closest a court has come to dealing with the present question is when McLelland J said in Titan Mining & Engineering Pty Ltd v Arnall's Engineering Pty Ltd (1988) 12 NSWLR 73, 75: Proceedings in the Court on "appeal" from a decision of the Commissioner pursuant to s 60(5) are original proceedings and not an appeal in any technical sense. The duty of the Court in such proceedings is to exercise de novo the function of the Commissioner under s 60. The Court must exercise that function only on the basis of the evidence adduced in the proceedings before it. The material before the Commissioner or his delegate when he made the decision appealed from is not to be treated as being before the Court unless it is tendered and admitted in the proceedings before the Court (cf the Supreme Court Rules, Pt 81, r 14). Evidence which was not before the Commissioner may also be admitted before the Court. The provision in the NSW Supreme Court Rules to which McLelland J parenthetically referred is that corresponding to O 58 r 8(1) of the Federal Court Rules. In making that reference, his Honour was, in my view, noting the potential relevance of the provision, but not by way of derogation from the point made in the body of the passage, namely, that the material before the Commissioner would not be before the court unless tendered and admitted; and so tendered and admitted, I would add, in the normal way. 18 Before leaving the cases, there is another respect in which counsel for the Commissioner relied upon Hoffman-La Roche. In that matter, Emmett J referred to the provision of the Patents Act that permits an appeal to a Full Court from a judgment in an appeal from the Commissioner only by leave. His Honour continued: Thus, the scheme, as contemplated in the … [Patents] Act, is that there is no appeal as of right from any determination that a single Judge may make in relation to an appeal. Ordinarily, of course, where a final order is made by a judge of this Court, there is an appeal as of right to the Full Court under s 24 of the Federal Court of Australia Act 1976 (Cth). However, under s 24(1A), an appeal in respect of an interlocutory judgment may only be brought with leave. Thus, the legislature has expressly likened a determination made on an appeal under s 60(5) to a determination in an interlocutory proceeding. Counsel submitted that, if the present proceeding is, in effect, an interlocutory one, the hearsay rule does not apply: Evidence Act, s 75. I cannot, however, accept the premise upon which this submission is based. The present proceeding is on no view interlocutory. It is a final proceeding in the original jurisdiction of the court, the resolution of which will establish binding rights and obligations. Emmett J said only that, in providing for an appeal by leave, the legislature had "likened" a determination under what is now s 60(4) to a determination in an interlocutory proceeding. On no view of the matter was his Honour intending to say that a proceeding under s 60(4) was an interlocutory one. 19 For the above reasons, I reject the Commissioner's submission that the provisions of the Evidence Act do not apply in relation to material that was before the delegate. I regard the proceeding as a conventional one in the original jurisdiction of the court, in which the questions which were before the delegate are again in controversy, and must be decided on the evidence that is tendered and admitted here. The admission of that evidence is, in my view, regulated by the Evidence Act in the normal way. 20 Turning to the substance of the applicant's objections under the Evidence Act, I shall commence with par 6 of the delegate's affidavit. The applicant objected to the whole of that paragraph, other than the first sentence thereof, as irrelevant (relying on s 56(2) of that Act). The facts in issue are whether the invention lacks novelty, or lacks an inventive step. Those are matters to be decided by the court. What the delegate decided in that regard is not a fact in issue. Accordingly, I would hold that the part of par 6 objected to is not admissible pursuant to s 56(2) of the Evidence Act. 21 I consider next the admissibility of the Rork citation (or, more accurately, of what I take to be a copy of an application for a patent in the name of Rork). To the extent that the contents thereof are sought to be relied on as part of, or as illuminating to some degree, the common general knowledge before the priority date, it would be the substance of the matters asserted therein that is relevant in this proceeding. The citation should then be understood as a previous representation within the meaning of s 59(1) of the Evidence Act, and is prima facie inadmissible. At this level, s 60 would not avail the Commissioner. Although counsel for the Commissioner relied upon s 190(3)(b) of the Evidence Act, and submitted that the application of s 59(1) "would cause or involve unnecessary expense or delay" in relevant respects, there is no evidence now before the court to support such a submission, in which case I could not uphold it. 22 However, there is another sense in which the Commissioner will seek to rely on the Rork citation. In seeking to establish what was the prior art base for the purposes both of novelty and of inventive step, the Commissioner will rely on the citation not as a representation within the meaning of s 59(1) of the Evidence Act, but simply as a document that was publicly available. Clearly the delegate was competent to produce the citation as a document. By exhibiting a copy of it to his affidavit, and by counsel for the Commissioner seeking to tender it, the requirements of s 48(1)(b) of the Evidence Act have, in my view, been satisfied. However, nothing in the delegate's affidavit, or otherwise proved in the proceeding, satisfies me that the Rork citation was publicly available before the priority date, as required by the definition of "prior art base". In the nature of things, it seems most unlikely that the citation would not have been so available, and I pressed counsel for the applicant for an indication as to whether the question was genuinely in dispute within the meaning of s 190(3)(a) of the Evidence Act. This particular question had not been raised in the outline of submissions previously filed on behalf of the Commissioner and, when I raised the matter, counsel for the applicant were not, on the state of their then instructions, in a position to admit that it was not genuinely in dispute. As things stand, therefore, I could not admit the citation into evidence, but, if it is later admitted by the applicant that the publication of the citation before the priority date is not genuinely in dispute, or if the Commissioner proves such publication, the document will be admitted. 23 Finally, there is the matter of par 8 of the delegate's affidavit, to which the statutory declarations relied on in the opposition proceedings are exhibited. Whether for the purpose of better understanding the Rork citation, or for the purpose of dealing with the point of common general knowledge, the reason for the tender of these declarations is to be able to rely on the substantive contents thereof. Those contents are previous representations within the meaning of s 59(1) of the Evidence Act and evidence of them is, prima facie, inadmissible. Because the declarations are sought to be tendered for proof of the substance of the contents of them, s 60 does not overcome this problem. 24 Neither, for reasons previously given, has the Commissioner established the evidentiary basis for reliance upon s 190(3)(b) of the Evidence Act in relation to these declarations. That is to say, there is no evidence about the expense or delay that would be involved in leading the evidence in question in the conventional way. 25 Several detailed objections to the admission of these declarations were also raised by the applicant under s 56(2) of the Evidence Act. However, since the Commissioner has, in my view, insuperable problems under s 59(1), I have no need to consider the matter of relevance. 26 In the circumstances, I will not allow all but the first sentence of par 6, and pars 7-8, of the delegate's affidavit to be read, and I reject the tender of exhibits SB-2 and SB-3 thereto. I shall list the proceeding for directions at an early date for the purpose of fixing dates for the resumption of the trial. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.