Stack v Commissioner of Patents

"… an opposition or a ground of opposition will be dismissed [under reg 5.5] only if it is clear that the opposition could not possibly succeed. In bringing this action the onus falls on [the applicant] to show that the opposition is clearly untenable."

6 No complaint is made about, and there is no reason to doubt the correctness of the delegate's approach in this regard. The delegate proceeded to deal with what he referred to as the "only two issues that may possibly be relevant to the exercise of my discretion under Regulation 5.5" raised by the material before him and gave the following reasons for concluding that the applicants failed to make out a case for dismissal of the opposition:

"… Thus I believe the Notice is prima facie valid and sufficient for its purpose.

As GST [the applicants] have not provided anything to suggest that the Notice of Opposition is clearly deficient or that it is insufficient for its purpose such that the opposition is "so obviously untenable that it cannot possibly succeed" I do not have grounds to dismiss the opposition for this reason.

The second issue is that Mr Abaza [for the applicants] believes the Grounds support the Section 223 application and the occurrence of an "error or omission" on the part of GST or its agent. While it is not appropriate for me to make any detailed assessment of the opponent's case or its potential for success, I agree with Mr Collins that the Grounds and Particulars appear prima facie to relate to issues that the Federal Court in Kimberly-Clark Ltd v Commissioner and Minnesota Mining and Manufacturing Co, 13 IPR 569, considered were relevant to the exercising of the Commissioner's discretion. In this regard the grounds appear to relate generally to whether there has been "a prompt, frank, comprehensive and clear disclosure of all the circumstances relevant to the weighing of the discretionary considerations upon which grant or refusal of an extension of time will depend" (Kimberly-Clark, supra at 584). Furthermore Mr Abaza has not suggested that any one or more of the Grounds are not sufficiently particularised and that being the case I am not in a position to say that the opposition is clearly untenable for this or any other reason that may be inferred from GST's submissions."

7 In seeking review of the delegate's decision, the applicants make no criticism of what the delegate had to say about there being only two issues raised for his determination or about his conclusion on the first of those issues that was adverse to them. 8 The second issue was confined to the assertion made on behalf of the applicants that the matters raised in the second respondent's notice of opposition did nothing more than confirm that the failure of the applicants to pay the continuation fee on time was due to an error or omission within s 223(2)(a), ie, an error or omission sufficient to justify the grant of the extension of time sought. The gravamen of each of grounds of opposition 1 to 4 is that particularised failures by the applicant GST or those acting for it and which were said by the applicant in its extension of time claim to constitute errors or omissions within s 223(2)(a) are not adequately explained in the material relied on by the applicants to justify the extension of time sought. I respectfully agree with the comments of Jenkinson J on the cognate provision in the 1952 Act in Kimberly-Clark Ltd v Commissioner of Patents (No 2) (1988) 13 IPR 569 at 583 - 584 to the effect that the statutory power to extend time can only properly be exercised where the person seeking the extension has made a full disclosure of all the circumstances relevant to the exercise of that discretionary power. As the delegate correctly observed, it was not appropriate, in the context of considering whether to dismiss summarily the second respondent's notice of opposition, to embark on a detailed factual enquiry as to whether there had been a material non-disclosure by the applicant in any of the respects the subject of these first four grounds of opposition. He was, for the reasons given, entitled to treat the respondents' allegations of non-disclosure as raising for investigation matters relevant to the exercise of the discretion conferred by s 223(2)(a) and to reject the limited argument put to him by the applicants on this part of the case. Accordingly, he did not commit any reviewable error in refusing to dismiss summarily the notice of opposition in relation to grounds of opposition 1 to 4. 9 While deliberate conduct of the kind the subject of ground 5 (and perhaps also of ground 6) of the notice of opposition may not necessarily be inconsistent with there being relevant "error or omission" within s 223(2)(a), the applicant did not, either in its brief written submissions to the delegate or in its extensive submissions to this Court, attempt to explain why the matters raised in grounds 5 and 6 compelled the conclusion that the respondents were here relying on errors or omissions within s 223(2)(a), ie, on matters that could only require summary dismissal at least of these two grounds in the notice of opposition. There is thus no justification for any finding that the delegate's decision so far as it covered these two grounds of opposition was infected with error. 10 The applicants, in their application for review, also raise a number of arguments, none of which was ventilated in the proceedings before the delegate (as they could all have been, if only the applicants had chosen to do that). One of these new matters was said to raise only a question of law, viz, whether s 227(4) is applicable, where the fee payable is a continuation fee. Others of these new matters would require this Court to undertake a factual inquiry of its own into matters not the subject of any argument or investigation before the delegate. Submissions were made claiming review on the ground of what I take to be an improper exercise of the dismissal power vested in the delegate, firstly, that, on the state of the fee account between the Commissioner and the applicant, the Commissioner could not properly assert that, as at the due date for payment, anything was outstanding in respect of the continuation fees in question and, secondly, that this Court should determine whether, by reason of information the delegate should be inferred to have with respect to litigation in the past between the applicant and the Commissioner concerning various of the applicants' patents, the delegate should have held that assertions the subject of one of the grounds of opposition relied on by the second respondent were "unverified, untrue, scandalous and could not" be acted upon by the delegate. 11 When the Commissioner has to determine an opposed application for an extension of time made under s 223(2) he is not thereby placed under an obligation to undertake a general investigation to see if there is any factual or legal basis that might justify the grant of the extension: he is entitled, if not required, to confine his consideration of the matter to the issue raised in the applicants' statement of grounds for the application provided in accordance with reg 22.11(1) and the opponent's grounds of opposition provided in accordance with reg 5.4(1)(a). The delegate was under no obligation to make unsolicited inquiry into the two factual matters the applicants have raised for the first time in this Court and his failure to do this cannot make his decision relevantly erroneous. 12 ADJR review is concerned only with whether administrative action is within the limits of the power under which that action is taken and with whether proper processes of decision-making have been followed, not with whether the correct or best decision has been made. See Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35 - 36, cited in Minister for Immigration and Ethnic Affairs v Wu Chan Liang (1996) 185 CLR 259 at 272. I also regard the invitation to embark upon the two factual inquiries I have referred to in order to determine whether the delegate ignored relevant considerations in exercising the power of summary determination as infringing the prohibition against turning a review of the decision provided for by the Administrative Decisions (Judicial Review) Act 1977 (Cth) into a reconsideration of the merits of the decision: the assumption implicit in the applicants' contention that the Court should investigate these two matters is that if facts may exist which would require a different decision from that made, that is sufficient to obtain review by the Court of the decision. 13 Moreover, it is well-established that s 16(1) the ADJR Act confers upon the Court a wide discretion whether or not to grant relief. This discretion extends not only to the form of relief where relief is appropriate but also to whether or not to grant relief, even where a basis for a relief is established: Lamb v Moss (1983) 76 FLR 296 at 312; Seymour v Attorney-General for the Commonwealth (1984) 4 FCR 498 and Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 338. Even if it were properly open to this Court to make the factual inquiries urged on it by the applicants, I would, in the exercise of this discretion, decline to do that here. 14 What is sought to be reviewed is a decision refusing summary dismissal of an opposition. Such a decision, while no doubt a decision to which the ADJR Act applies, is not determinative of the rights of either of the parties to the proceeding before the delegate. Notwithstanding the dismissal, the applicant is free to pursue its claim for the extension of time sought in the final hearing provided for by reg 5.12. The applicants have full opportunity in the final hearing to which they are entitled to pursue all the arguments they wish to raise against the sustainability of the notice of opposition, including those they have raised for the first time in this Court. Even if the continuing pendency before the Commissioner of the applicants' claim for the extension of time does not enliven the special discretion conferred on the Court by s 10(2)(b) the ADJR Act, I consider that the policy considerations underlying that provision and which were referred to in Bragg v Secretary, Department of Employment, Education and Training (1995) 59 FCR 31 at 34 are of relevance in the circumstances of this case to the exercise of the more general discretion conferred on this Court by s 16(1) the ADJR Act. There is no reviewable error in the decision made on the only issues on which the applicants relied to seek summary dismissal by the delegate. There should be no encouragement to an applicant for summary determination in proceedings of the kind provided for by reg 5.5 to treat it merely as a step that has to be taken, without any need for careful thought about the arguments that can be advanced, before presentation of that party's full case in an application to review the delegate's decision refusing summary relief. These considerations are sufficient to justify the exercise of the general discretion to refuse relief without there being an investigation by this Court of the new grounds of challenge to the delegate's decision which would involve factual inquiry and which were raised by the applicant for the first time in this Court. 15 Different considerations might arise if the delegate could be shown to have made a decision infected with an error of law fundamental to the sustainability of the second respondent's opposition: that might well justify the grant of review under the Patents Act even though the delegate had not been required to consider the point and even though the decision in question was only one refusing summary relief. 16 One such point is said to be raised by the applicants in the proceedings before me. They contend that under the Patents Act and Regulations in force at the relevant time, ie, prior to the 1998 amendments, the delegate was bound in law to dismiss the opposition. The submission is that s 227(4) applies where the fee payable is a continuation fee pursuant to s 227(1) and reg 22.2(1); it was said to follow from this that the delegate was bound to dismiss the second respondent's opposition. But a continuation fee is not payable in respect of the doing of any act by any person other than the Commissioner, nor is it a fee payable in respect of the filing of a document: it is merely the fee which a patent applicant must pay from time to time during the pendency of the application to prevent s 142(2)(d) operating to extinguish the application. That s 227(4) did not apply to the payment of continuation fees is confirmed by s 227(5), to which s 227(4) is expressed to be subject, and reg 22.1(3), which govern how the Commissioner is to give a notification that will be sufficient for the purposes of s 227(5): the Commissioner can prevent s 227(4) operating in cases to which it applies by giving a notice of the non-payment of the fee within seven days after the filing of a document or the doing of the act for which the fee is payable. So far as continuation fees are concerned, however, there is no document to be filed nor any act to be done by anyone separate from the act of paying the fee itself. Section 227(4) is confined, so far as fees payable in respect of the filing of documents are concerned, to fees of the kind prescribed by Item 1 in Column 1 of Pt 2 of Sch 7 to the Regulations and, so far as fees payable in respect of the doing of acts by persons other than the Commissioner are concerned, to fees of the kind prescribed in Item 13 in Column 1 of that Schedule. 17 In the course of argument, a question was also raised as to whether there was not apparent, on the face of the decision, an error of law vitiating it in so far as the delegate indicated that he dealt with the case on the basis that the continuation fee which the applicant had failed to pay was due on the anniversary of the filing of the parent application, when instead, reg 13.3(1), s 65(b) and reg 6.3(f) together operate to make the continuation fee payable from what may be a different date, viz, the date of filing of the complete specification in which the invention that is the subject of the divisional application was first disclosed. However, it is unnecessary to express any conclusion on the proper reading of these provisions: even if it is possible for the date of a divisional patent application to be, by force of reg 6.3(f), a date other than the date of filing of the parent patent application (with which, by force of s 29(4), a complete specification must be filed), it is perfectly possible that the invention the subject of divisional patent application 32815/95 was first disclosed when the complete specification accompanying the parent application 85236/91 was filed on 30 August 1991. The delegate's statement therefore may well be factually correct and involve no error of law. If the applicant wished to contend otherwise, it bore at least an evidentiary onus in that regard. It made no attempt either before the delegate or in this Court to discharge that onus. 18 Having refused to dismiss the notice of opposition summarily under reg 5.5, the delegate then made an order for costs in favour of the second respondent in reliance on s 210(d) and reg 22.8. 19 Section 210(d) empowers the Commissioner to award costs against a party to proceedings before the Commissioner. Regulation 22.8 establishes, among other things, a procedure for quantifying, by reference to scheduled items, costs, expenses and allowances and to taxation by an employee of the Commissioner in accordance with those scheduled items. Regulation 22.8(4) provides for the taxation to be subject to a review by the Commissioner. 20 The decision of the delegate to make an award of costs in favour of the second respondent was challenged by the applicant on a number of bases. 21 The proposition that no costs are provided for in respect of a request to dismiss a notice of opposition pursuant to s 5.5(1)(a) for the purposes of s 210(d), so no order for costs can be made, is manifestly untenable: the applicants themselves qualify this proposition by accepting that costs can be awarded in proceedings under reg 5.5(1)(a) in the event that they succeed in persuading the Commissioner to dismiss the second respondent's opposition to their application for extension of time. No rational explanation was proffered for why, this being so, the Commissioner's power to award costs did not extend to dismissal of a request for dismissal of an opposition. Power to dismiss the applicants' request is necessarily implicit in reg 5.5(3) in so far as it confers power not only to dismiss the opposition but also to refuse to do that. 22 Further, the filing of a notice of opposition to an application for extension of time to pay a continuation fee brought under s 223, the making of a request under reg 5.5(1)(a) for summary dismissal of that opposition and the making by the Commissioner of a determination on the request is a proceeding before the Commissioner within the meaning of that term in s 210(d). Section 210(d) confines the Commissioner's power with respect to costs to awarding costs "for the purposes of this Act" and to awarding costs "against a party to proceedings before the Commissioner". This suggests that costs can only be awarded under the section where there is a contest between at least two persons about whether the Commissioner should take action which the Patents Act authorises him to take. 23 The Patents Act and Regulations make provision for the exercise by the Commissioner, at the request of certain persons, of various powers with respect to patents only after hearing persons with an interest in opposing the exercise of those powers. See also s 216(1). I regard the expression "proceedings before the Commissioner" in s 210(d) as a reference to a matter comprising a determination by the Commissioner with respect to the exercise or non-exercise of a power conferred on him by the Patents Act which he is permitted to make only after hearing the persons with opposing interests in the exercise of the power. 24 The contest between the second respondent in opposing the grant of an extension of time under the Patents Act sought by the applicant, which is regulated by Ch 5 of the Patents Regulations and is resolved by the decision of the Commissioner's delegate, in my opinion, comprises "proceedings before the Commissioner" within the meaning of that term in s 210(d). Support for this view is also provided by reg 5.10(1)(a), which applies to "proceedings to which this Chapter applies", ie, the matters in reg 5.1, and which include the determination by the Commissioner in respect of a notice of opposition to an application for extension of time: see reg 5.1(a)(iv). 25 The applicants finally contend that the costs power in s 210(d) is beyond the legislative power of the Commonwealth as an impermissible conferral of judicial power upon the Commissioner. The Commonwealth appeared on the hearing by the Solicitor-General and junior counsel to contest this proposition. 26 I reject the applicants' contention. 27 In Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245, it was said at 267:

"Difficulties arise in attempting to formulate a comprehensive definition of judicial power not so much because it consists of a number of factors as because the combination is not always the same. It is hard to point to any essential or constant characteristic. Moreover, there are functions which, when performed by a court, constitute the exercise of judicial power but, when performed by some other body, do not."

28 However, dicta in R v Quinn; Ex parte Consolidated Food Corporation (1977) 138 CLR 1 at 10 suggest that there may be functions or powers which are exclusively related to judicial power. 29 Courts exercising judicial power have long had wide discretionary powers to award costs. That, however, does not mean that the costs power is necessarily stamped with an exclusively judicial character. There is authority that powers may be committed to a court which are not themselves exclusively judicial, but which are capable of being administrative in character, in a different context, because they are ancillary to or incidental to the exercise of strictly judicial power. See R v Davison (1954) 90 CLR 353 at 368. 30 The power to award costs cannot, in my opinion, be described as an essential element of the exercise of judicial power. It is well-established that the common law courts of general jurisdiction had no authority to order costs in the absence of a statute conferring that power on them - see, eg, Garnett v Bradley (1878) 3 App Cas 944 and Latoudis v Casey (1990) 170 CLR 534 at 557 - even though the Court of Chancery long asserted the right to award costs in proceedings before it and this is sometimes described as an inherent power of that Court. (There is a view, however, that the chancery jurisdiction in costs is also statutory in origin: see Andrews v Barnes (1888) 39 Ch D 133 at 139.) 31 Legislatures have not confined the costs power to courts but have long acted to confer it on administrative bodies charged with determining controversies between persons. Some examples in the Commonwealth area of the conferral by the Parliament of this power on a range of administrative bodies are provided by the Administrative Appeals Tribunal's power to award costs in proceedings brought to it under various Acts: see, eg, s 67 the Safety, Rehabilitation and Compensation Act 1988 (Cth) and s 69B the Administrative Appeal Tribunal Act 1975 (Cth); by s 174 the Copyright Act 1968 (Cth), which empowers the Copyright Tribunal to order that the costs of any proceedings before it incurred by any party be paid by any other party and by s 347 the Workplace Relations Act 1996 (Cth), which authorises the Australian Industrial Relations Commission to make orders for costs in certain circumstances in proceedings before it. 32 In my opinion, the true position is that statutory power to award costs in respect of proceedings before a decision-maker, judicial or administrative, takes its character from the principal power to which the power to award costs must always be ancillary: Cominos v Cominos (1972) 127 CLR 588 at 591 and cf R v Quinn at 10. 33 Whether costs are awarded by a court or some other body, the power to do that will necessarily be ancillary or incidental to some other power exercised by that Court or body. R v Quinn at 10 and Brandy at 267 show that the fact that the power or function to which the awarding of costs is ancillary may involve a determination after a contested hearing inter-parties is not sufficient of itself to stamp the exercise of the principle function as exclusively judicial because that principal power or foundation may be an administrative or even a legislative one. See also Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 414. 34 The principal powers here in question to which the power to order costs under s 210(d) is ancillary are those to which I have referred, ie, those conferred on the Commissioner by the Patents Act which he can only exercise after hearing the persons who have opposing interests in the exercise of the power. They are powers, moreover, which the Commissioner is required to exercise in performing his administrative functions with respect to the grant of patent applications and the maintenance of the Register of Patents containing the matters required by s 187. It is unnecessary, for present purposes, to determine whether each of the many decisional powers conferred on the Commissioner by the Patents Act and Regulations are, in truth, administrative in character. It is sufficient to identify some of these powers which are, in my opinion, plainly of that character. They include the powers of the Commissioner to determine oppositions to the grant of a standard patent (ss 59 and 60); opposed applications to amend patent applications (s 104) and opposed requests to amend entries in the Register (reg 10.7). All involve proceedings in respect of which the Commissioner has power to award costs under s 210(d). 35 In R v Quinn, the High Court held that the legislative grant of power to the Registrar of Trade Marks to remove a mark from the Register on the ground of non-use did not involve the impermissible conferral of federal judicial power on that official. This was so even though the legislative provision in question conferred this power on "the High Court or the Registrar" and, where application was made to the Registrar, rather than to the Court, provided by regs 22 and 53 - 59 for its exercise by that official only after the registered proprietor of the mark was given full notice of the applicant for removal's case and full opportunity to contest the application in a hearing before the Registrar. The leading judgment was given by Jacobs J, who said at 9 - 10:

"I entertain no doubt that the Parliament can set up administrative machinery for registration of trade marks and can determine what should be allowed to be entered on the register. It could do this directly by a simple provision for registration by lodgment of particulars or it can do it indirectly by requiring a Commonwealth officer to determine whether the conditions exist which the Parliament has prescribed for a trade mark to be entered on the register. The determination of the facts, the existence of which Parliament has prescribed as a condition of the exercise of the administrative function of registration, is not necessarily the exercise of judicial power. The nature of the determination is not altered by the circumstance that an opportunity is given to others, who are strangers to the application, to be heard on the determination of those facts."

36 His Honour rejected the argument that, even though a determination that a trade mark should be registered may be an exercise of administrative power, a determination that a trade mark should cease to be registered was necessarily an exercise of judicial power because it affected existing rights and was a determination of those rights. His Honour said, at 10, that, although determination of such a matter could be the subject matter of judicial power if Parliament chose to make it so, it was not necessarily the subject of judicial power for the following reason:

"The rights involved spring from the statute which governs their creation and continuance. The Registrar is given the administration of the statute. It is his administrative duty to keep the Register in the State which the Legislature has prescribed. In so doing he must make decisions not only upon what should or should not be placed but also upon what should remain on the Register in accordance with the statutory prescriptions."

37 The Patents Act prescribes the conditions on which a valid patent may be obtained from the State. The grant of a patent under the Patents Act is an administrative act. Determinations under the Patents Act made by the Commissioner as to whether the conditions prescribed by the legislature for the making of such a grant are satisfied are, on the authority of R v Quinn, exercises of administrative not judicial power. 38 One of the conditions the Patents Act by s 142(2)(d) requires to be complied with for the grant of a patent is timely payment of continuation fees in respect of patent applications. The Patents Act requires these fees to be paid either at the times fixed by the Regulations or at later times determined by the Commissioner under s 223(2). The Commissioner would, in my opinion, plainly act administratively in determining whether a condition as to payment of a fee prescribed by the legislature for the grant of a patent application was satisfied if s 223(2) empowered him to extend time for the payment of the fee upon the applicant satisfying him ex parte that late payment was due to an error or omission of the kind referred to in s 223(2)(a). R v Quinn shows that the administrative nature of such a determination is not changed to judicial because it can only be made after strangers to the patent application have opportunity to be heard on whether facts exist which are essential to the satisfaction of the condition for the grant of a patent application that there be timely payment of continuation fees. 39 The power to extend time for the payment of continuation fees being administrative in character, so also is the power to award costs when exercised in connection with that first-mentioned power. 40 There are other features of the power to award costs conferred by s 210(d) that indicate that it does not have a judicial character. An award of costs under a broad discretionary power such as is found in s 210(d) brings into existence new rights and obligations that did not hitherto exist. It does not involve the determination of existing rights and obligations by the ascertainment of the law as it is and the facts as they are and the application of that law to those facts. It is the latter process that is, as a general but not invariable rule, a hallmark of the exercise of judicial rather than administrative power: Brandy at 268. This suggests that the costs power here in question is other than judicial in character. Further, an award of costs under s 210(d) is not of itself enforceable, but is only recoverable as a debt: see s 211. If a determination is not enforceable as such, that will be an important indication that the proper characterisation of a decision disposing of a controversy between contesting parties (even if it does so by reference to the determination of rights and duties based on existing facts and law) is nevertheless non-judicial: see Brandy at 271. 41 The application for review is dismissed with costs. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond.

Associate: Dated: 24 February 1999 Solicitor for the First and Second Applicants: Andrew P Abaza

Solicitor for the First Respondent: Australian Government Solicitor

Counsel for the Second Respondent: Mr GA Thompson SC

Solicitor for the Second Respondent: Minter Ellison

Counsel for the Intervener: Mr D Bennett QC and Mr R Orr

Solicitor for the Intervener: Australian Government Solicitor

Date of Hearing: 15 February 1999

Date of Judgment: 24 February 1999