Suntory Holdings Ltd v Commissioner of Patents

Relevant legislation 13 Section 104 of the Act governs requests for amendments to applications for a patent. The applicant or patentee may ask the Commissioner for leave to amend the complete specification "for any purpose", which may include removing a lawful ground of objection to the request or the specification: the Act, s 104(1)(a). Where an applicant or patentee asks for leave to amend a complete specification, the Commissioner must "consider and deal with the request in accordance with the regulations": the Act, s 104(2). 14 Regulation 10.2 of the Regulations prescribes how the Commissioner must "consider and deal with the request". Relevantly, reg 10.2(1) requires the Commissioner, "for the purposes of s 104(2) of the Act", to report to the patentee on certain matters, namely whether: (a) the request for leave to amend and the statement of proposed amendments do not comply with reg 10.1 and Schedule 3 of the Regulations; (b) any proposed amendment of a complete specification is not allowable under ss 102 or 103 of the Act; and (c) the proposed amendments are not allowable under reg 10.3 or, if made, would not otherwise be allowable under the Act or the Regulations. Where the grant of a standard patent or innovation patent is opposed (as it was here), reg 10.2(6A) also requires the Commissioner to give a copy of the request for leave to amend and a statement of the proposed amendments to the opponent and to invite the opponent to comment on the request and statement (as was done in this case by the Commissioner on 17 January 2013). 15 Section 104(5) of the Act provides that the Commissioner "must not allow an amendment" that is not allowable under s 102 of the Act (s 102 of the Act sets out various requirements that must be met). Proposed amendments within the terms of reg 10.3 are also not allowable. 16 By reg 10.4, the Commissioner must refuse a request for leave to amend in certain circumstances and reg 10.5 sets out circumstances when the Commissioner must grant leave to amend. The effect of reg 10.5 is that the Commissioner must grant leave to amend unless the proposed amendments are not allowable under the Act or Regulations. The Commissioner does not have any discretion to refuse the amendment for other reasons: New England Biolabs Inc v F Hoffman-La Roche AG [2004] FCAFC 213; 141 FCR 1. 17 Regulation 10.6 prescribes the timeframe in which the Commissioner must allow the proposed amendments, if leave to amend is granted. Regulation 10.6 needs to be considered in conjunction with s 104(6) of the Act which provides that on allowance of an amendment, the amendment is taken to have been made. 18 By s 104(7) of the Act, an appeal lies to the Federal Court against a decision of the Commissioner allowing, or refusing to allow, a requested amendment (other than a prescribed decision). The decision appealed from in the present case is not prescribed decision. 19 The Commissioner cannot exercise her power to amend under s 104 if "relevant proceedings" are on foot. Section 112 prohibits the amendment of a complete specification except by order of the Court made under s 105 of the Act while "relevant proceedings" in relation to the patent are pending. "Relevant proceedings" are defined in the Dictionary in Schedule 1 to the Act to mean court proceedings concerning the infringement, revocation or validity of a patent. If "relevant proceedings" are on foot, the patentee can apply to the Court for an order in those proceedings directing the amendment: s 105 of the Act. The power of the Court under s 105 has been described as a statutory incident of the exercise of judicial power in the examination of the scope and validity of the patent: New England Biolabs Inc v F Hoffman-La Roche AG at [51]. The power is discretionary and the Court may refuse an amendment even though allowable: Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (No 3) [1997] FCA 1063; Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd [2012] FCA 1510; 99 IPR 59 at [160] - [162]. 20 Following the legislative changes effected by the Amendment Act, the Commissioner is now unable to exercise her power to amend under s 104 where there is a pending appeal to the Court from a decision or direction of the Commissioner. The patentee must now apply to the Court instead for an order directing the amendment: the Act, ss 112A, 105(1A). Sections 112A and s 105(1A) were introduced with effect from 15 April 2013. 21 Section 112A provides: 112A Decisions on appeal A complete specification relating to a patent application must not be amended, except under s 105, if: a) an appeal against a decision or direction of the Commissioner has been made to the Federal Court in relation to the specification; and b) the appeal, and any proceedings resulting from it, have not been finally determined, withdrawn or otherwise disposed of. 22 Section 105(1A) provides: Order for amendment during an appeal (1A) If an appeal is made to the Federal Court against a decision or direction of the Commissioner in relation to a patent application, the Federal Court may, on the application of the applicant for the patent, by order direct the amendment of the patent request or the complete specification in the manner specified in the order. 23 A correlative amendment was made to the reg 10.2 of the Regulations to include the provision that an amendment of a complete specification is not allowable if making an amendment would be contrary to s 112 or s 112A of the Act: reg 10.2C(6).

Transitional Provisions 24 Transitional provisions govern s 112A and s 105(1A) of the Act. The relevant transitional provisions are contained in Item 32 of Part 2 to Schedule 3 of the Amendment Act. 25 Section 112A applies in relation to: • requests for amendments made on or after 15 April 2013; and • requests for amendments made before 15 April 2013 if the Commissioner had not dealt with the request on or before that day: the Amendment Act, Sch 3, Part 2, Item 32(1) (emphasis added). 26 Section 105(1A) applies in relation to appeals to the Federal Court: • made on or after 15 April 2013; and • made before 15 April 2013, if the appeal had not been finally determined, withdrawn or otherwise disposed of: the Amendment Act, Sch 3, Part 2, Item 32(5). 27 In issue is whether the Commissioner had "dealt with" Suntory's amendment request before 15 April 2013.

Issue 1: Meaning of "dealt with" in Item 32(1) 28 Suntory contends that s 112A of the Act is not operative in relation to its amendment request because the Commissioner had dealt with its amendment request before 15 April 2013. The basis for the contention was the step that the Commissioner had taken as required by reg 10.2(6A) to give a copy of Suntory's application request to DSM and to invite comments from DSM. The Commissioner, on the other hand, contended that she had not "dealt with" the request by 15 April 2013 because the request was not "dealt with" until it was refused, which was later. 29 On Suntory's construction, s 112A of the Act will only apply to extant applications made prior to 15 April 2013 if the Commissioner had not commenced to deal with the request in accordance with the Regulations by 15 April 2013 by taking one or more of the steps that she is required to take under the Regulations. Suntory argued that Item 32(1)(b) of Part 2 to Sch 3 should be read together with s 104(2) of the Act. It was put that s 104(2) draws a distinction between "considering" and "dealing with" a request and that the dichotomy supports the words "deal with" in s 104(2) as meaning to "take action with respect to". It was submitted that the actions required to be taken by s 104(2) are the steps mandated in the Regulations as part of the process by which the Commissioner ultimately considers whether to grant or to refuse the amendment request, and that where the Commissioner has commenced to deal with the request in accordance with the Regulations by completing one or more of the steps required of the Commissioner, it was no longer possible to say that the Commissioner has not dealt with the request in accordance with the Regulations. Suntory reasoned that reading s 104(2) and Item 32(1)(b) consistently, s 112A will only apply to extant applications where the Commissioner has not taken a step required by her under the Regulations. Suntory supported its construction by a claim that the transition provision gives effect to the principle lying behind s 8 of the Acts Interpretation Act 1901 (Cth) (now repealed) that statutory amendments should not take away existing rights without an express or clear contrary intention. 30 I accept the submission that the meaning to be assigned to the phrase "dealt with" in Item 32(1)(b) should be considered in the context of, and in conjunction with, s 104(2) of the Act. In my opinion however, the Commissioner has not "dealt with the request" within the meaning of that phrase as it appears in Item 32(1)(b) until the Commissioner either grants leave to amend, or refuses the request for leave to amend. 31 First, Suntory's construction does not give due regard to the statutory language. Section 104(2) of the Act and Item 32(1)(b) of Part 2 to Sch 3 of the Amendment Act have a textual difference. The language of s 104(2) requires the Commissioner to consider and "deal with" with the amendment request but the expression which appears in Item (1)(b) is the past tense of "deal with" - the words that appear are "dealt with", not "is dealing with". The use of the past tense in Item 32(1)(b) conveys, as a matter of ordinary meaning, something which has been done whereas the language of s 104(2) is the present tense. The Commissioner "deals with" the amendment request by taking the steps directed by the Regulations. The use of the past tense in Item 32(1)(b) is in contrast to the language of s 104(2). 32 In this context, the use of the past tense in Item 32(1)(b) can, and in my view should, be understood in the sense of a past act. The phrase "dealt with" in Item 32(1)(b) is used in juxtaposition to the language of s 104(2) of the Act which requires the Commissioner to consider and "deal with" the request "in accordance with the regulations". The Commissioner deals with a request "in accordance with the regulations" by following the process directed by the Regulations and either allowing or refusing the amendment. It is consistent with s 104(2) that "dealt with" in Item 32(1)(b) should be understood as the past tense of that which the Commissioner must do "in accordance with the regulations". The Regulations set out when the Commissioner must allow, and when the Commissioner must refuse to allow, an amendment. "Dealing with" the request involves, as a step, allowing the amendment or refusing to allow the amendment. 33 Thus, a request has not been "dealt with" by the Commissioner until the Commissioner has followed the process prescribed by the Regulations and has allowed, or refused to allow, the amendment. This construction does not involve imputing the word "finally" into the text, as Suntory contended would be necessary. In Euroceltique S.A. [2013] APO 30 Deputy Commissioner Spann succinctly reasoned as follows: 16. Consequently it can be seen that Chapter 10 of the Patents Regulations sets out as a whole how the Commissioner is to "deal" with a request to amend and dealing with the request includes, as appropriate, examination of the request (10.2), refusing requests to amend (10.4), granting of leave to amend and advertisement (10.5) and allowing the amendments (10.6). 17. In its submissions (including its earlier submissions of 27 March 2013) Euroceltique argues that Item 32(1) of Schedule 3 should not be read to apply where the Commissioner had not "finally" dealt with the amendment (suggesting that the delegate had impermissibly read in the word "finally") and that, as the amendments had "been dealt with (albeit not finally) by the commencement date", then the provisions of section 112A did not apply. It follows that it is the applicant's submission that "dealt with" includes any dealing with the amendments, including any consideration of the amendment by the delegate that occurred before 15 April. 18. In my view it is not necessary to read any additional words into Item 32(1) nor are the words unclear in the context of the Act. I consider that the words "dealt with" in Item 32(1) of Schedule 3 have a clear connection with the requirement for the Commissioner to "deal with" the request under subsection 104(2). As I have found above, Chapter 10 of the Regulations sets out how the Commissioner is to "deal" with requests to amend. "dealt" is simply the past tense of "deal" (Macquarie dictionary) so, accordingly, I consider that on the plain meaning the Commissioner has not dealt with an amendment if the Commissioner has started but not completed the processing of the amendments as required by all relevant provisions of Chapter 10 of the Regulations. In this case, she is still "dealing" with the amendment as required by the Regulations.I agree with those reasons. There is both textual and contextual warrant for giving the words the ordinary signification they have, when considered in juxtaposition with s 104(2) of the Act. I agree with, and adopt, the reasoning in this passage. 34 Secondly, I do not accept Suntory's argument that an "evident purpose" of Item 32(1)(b) was to preserve the Commissioner's power to amend under s 104 in respect of extant applications as at 15 April 2013 which the Commissioner had commenced to deal with, so as to avoid wastage of costs and resources. There are two short answers to this argument. First, that "evident purpose" is not apparent from the text nor does it emerge from the extrinsic materials and secondly, the purpose of the provision is elucidated by the clear meaning of the text considered in the context of s 104(2): Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at [47]; Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 293 ALR 257 at [39]. 35 Thirdly, I do not accept Suntory's argument that Item 32(1)(b) has no work to do on the Commissioner's construction because s 112A would have no application, in any case, to amendment requests which the Commissioner had allowed or refused prior to 15 April 2013. In my view, the work of Item 32(1)(b) is evident from its terms, which is to apply s 112A to requests for amendment made under the earlier legislation which the Commissioner was still "dealing with" when the new provisions were enacted. This construction both reflects the evident purpose for which s 112A and 105(1A) were enacted - that is, to streamline the amendment process - and gives full effect to the statutory language of Item 32(1)(b).

Issue 2: had the commissioner "dealt with" Suntory's request before 15 april 2013? 36 Suntory alternatively contended that the Commissioner had "dealt with" Suntory's request for amendment prior to 15 April 2013 by her conduct in refusing to take any further steps in relation to request. It was argued that the effect of the decision not to take any further steps before the law was changed was to refuse the amendment because the Commissioner had no authority under the Act or Regulations to refuse to take any further steps and the refusal constituted a constructive failure to exercise jurisdiction. I find this argument both illogical and contrary to the fact that the Commissioner did refuse the request on 23 April 2013. 37 It was not the case that the Commissioner had refused to make any decision. If there was a constructive failure to exercise jurisdiction as asserted, such failure lay in any delay in making the decision to refuse or allow the amendment until after 15 April 2013 when the change in law meant that the Commissioner had to refuse the amendment. It may be that the amendment request could have been allowed or refused by 15 April 2013 had the Commissioner continued to process the request, but the Commissioner did not so act and only refused the request after the change in law. In consequence, s 112A applies to that request and it is now not competent for the Commissioner to make the amendment exercising her power under s 104.

ISSUE 3: Was the decision to refuse the request for leave to amend an appealable decision under s 104(7)? 38 Section 104(7) of the Act provides that an appeal lies to the Federal Court against the decision of the Commissioner "allowing, or refusing to allow, a requested amendment". Suntory relied on this provision to challenge the Commissioner's decision to refuse the request for amendment but DSM argued that the appeal is not competent because s 104(7) does not confer rights of appeal against a decision of the Commissioner to refuse a request for leave to amend. DSM relied on a textual difference in expression between s 104(7) of the Act and reg 10.4 of the Regulations. It was contended that a decision made under reg 10.4 to refuse the request for leave to amend was not the same as a decision "refusing to allow a requested amendment", and that the language of s 104(7) applies only to an amendment where leave is granted under reg 10.5 but is then refused under reg 10.6 after a successful opposition proceeding. The rationale for restricting the right of appeal was said to be the de novo nature of an appeal under s 104(7) where the Court "stands in the shoes of the Commissioner" and deals with the matter as if for the first time. The argument, as best as I understood it, was that the Court, standing in the shoes of the Commissioner, could not allow an amendment where the process under regs 10.5 and 10.6 had not been completed, which is the case where the request was refused by the Commissioner under reg 10.4. The scheme of the legislation was thus said to confer rights of appeal only where the process under regs 10.5 and 10.6 had occurred and that a challenge to an amendment refused under reg 10.4 was confined to judicial review. 39 The argument is rejected. It is uncontroversial that the appeal under s 104(7) is conducted as a hearing de novo: New England Biolabs Inc v F Hoffmann-La Roche AG at [44] but I can see no reason why the de novo nature of the appeal precludes the Court from hearing and determining whether an amendment should be allowed where the Commissioner has refused to grant leave to amend made under reg 10.4. The appeal as a hearing de novo means that the Court exercises original jurisdiction to determine the subject matter of the appeal afresh and in determining the appeal, the Court makes a decision based on the law as it exists at the time of the appeal and on the evidence presented in the appeal. The Court is not confined to the material that was before that decision maker. Nor are the powers of the Court exercisable only if the Court finds some legal, factual or discretionary error in the decision appealed from. The Court "stands in the shoes of the Commissioner" but exercises judicial power and may overturn the decision of the Commissioner regardless of whether there was error in that decision: New England Biolabs Inc v F Hoffmann-La Roche AG at [44]. The fact that the Court re-exercises the Commissioner's powers and reaches its own decision based on the material before it reflects the original nature of the jurisdiction in the Court and the fact that the subject matter is being litigated for the first time in the exercise of judicial power. Consistently with the nature of the appeal, the Court is given extensive powers under s 160 of the Act on the hearing of an appeal from the Commissioner. As the Full Court noted in New England Biolabs Inc v F Hoffmann-La Roche AG at [47], the judicial nature of the power exercised by the Court in the appeal may lead to certain differences of procedure and approach and will lead to a different character of decision with different attendant incidents. The Court's powers include the power to make any order that the Court, in all the circumstances, thinks fit: the Act, s 160(e). That power enables the Court to remit a matter back to the Commissioner, if need be, because the Court has reversed the Commissioner's decision but processes still need to be undertaken if the amendment is to be allowed. Contrary to DSM's submission, there is no "impediment" to the Court hearing an appeal from a reg 10.4 decision. 40 I also rejected the textual difference argument. A refusal of a request for leave to amend is the refusal of an amendment and so appeal rights are invoked within the language of s 104(7). This does not involve any strained reading of s 104(7).

ISSUE 4: THE NATURE OF THE APPEAL 41 DSM contended that the Court, in hearing the appeal, must apply the law as it exists at the date of hearing and must therefore ask itself whether the amendment is allowable under s 104 of the Act, having regard to s 112A. It was put that s 112A clearly provides that when an appeal is pending a complete specification may only be amended pursuant to s 105. It was also submitted that, as the appeal is de novo, the transitional provision therefore does not assist Suntory because the amendment request cannot have been "dealt with" within the meaning of Item 32(1)(b) since the very subject matter of Suntory's appeal under s 104(7) is whether that amendment should be allowed. This argument is misconceived. 42 The issue in the appeal is whether the amendment is allowable under s 104 of the Act. The determination of that issue turns on whether s 112A applies. Section 112A applies if the Commissioner "had not dealt with" the amendment request before 15 April 2015. That issue has been resolved against Suntory as matter of construction and factually on the evidence. The evidence before the Court in the appeal was that the amendment request was refused on 23 April 2013. Thus the law as it exists at the date of hearing requires the appeal from the decision of the Commissioner to be dismissed because the transitional provision applies section 112A, not because the appeal was heard and determined after the change in law.

CONCLUSION 43 Accordingly, the appeal is dismissed.

THE INTERVENER 44 On 21 June 2013 the Court granted DSM leave to intervene, with the scope of that intervention to be determined at the final hearing. The grant of leave was made with the consent of Suntory and the Commissioner. At the hearing, DSM sought an order pursuant to r 9.12 of the Federal Court Rules 2011 (Cth) that it be given the rights, privileges and liabilities of the parties to the proceeding. Such an order is unnecessary to resolve the matters before the Court in this appeal and the appropriate order, in my view, is to confine the scope of DSM's intervention to submissions. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.