Alphapharm Pty Ltd v H Lundbeck A/S & Ors

[2014] HCATrans 160

[2014] HCATrans 160

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S97 of 2014

B e t w e e n -

ALPHAPHARM PTY LTD ACN 002 359 739

Appellant

and

H LUNDBECK A/S

First Respondent

COMMISSIONER OF PATENTS

Second Respondent

ASPEN PHARMA PTY LTD ACN 075 449 594

Third Respondent

SANDOZ PTY LTD ACN 075 449 553

Fourth Respondent

APOTEX PTY LTD ACN 096 916 148

Fifth Respondent

CRENNAN J
KIEFEL J
BELL J
GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 8 AUGUST 2014, AT 10.02 AM

Copyright in the High Court of Australia

____________________

MR S.C.G. BURLEY, SC:   May it please the Court, I appear with my learned friend, MR C. DIMITRIADIS, for the appellant.  (instructed by King & Wood Mallesons)

MR R.M. NIALL, QC:   May it please the Court, I appear with my learned friend, MS K.J. HOWARD, SC, for the first respondent.  (instructed by Corrs Chambers Westgarth Lawyers)

MR D. SHAVIN, QC:   May it please the Court, I appear with my learned friend, MS C.I. CUNLIFFE, for the Institute of Patent and Trade Mark Attorneys, seeking leave to intervene.  (instructed by Davies Collison Cave)

MR A.J. RYAN, SC:   May it please the Court, I appear on behalf of the Generic Medicines Industry Association, seeking leave to intervene.  (instructed by Minter Ellison Lawyers)

CRENNAN J:   Thank you, Mr Ryan.  Mr Burley, do you have anything to say about the applications to intervene.

MR BURLEY:   Yes, your Honour.  In our respectful submission, the application by the Institute of Trade Mark and Patent Attorneys of Australia is one which adds nothing to the submissions made by the first respondent of the appeal.  We have nothing to say in relation to the other intervener’s application.  We do object to the evidence that is apparently sought to be relied upon in the appeal proper by IPTA, that being the affidavit of Dr Davies, and I can elaborate on that if necessary further, your Honour.

CRENNAN J:   Thank you.  Yes, Mr Niall.

MR NIALL:   The first respondent does not have any position in relation to the intervention, if the Court pleases.

CRENNAN J:   The Court is of the opinion that the summons for intervention by the Institute of Patent and Trade Mark Attorneys of Australia should be dismissed on the basis that the matters it seeks to raise in these proceedings are unlikely to add to the submissions made by the parties.  The Court is also of the view that the summons for intervention filed on behalf of the Generic Medicines Industry Association should also be dismissed on the basis that the matters it seeks to raise in these proceedings are unlikely to add to the submissions made by the parties.  Yes, Mr Burley.

MR BURLEY:   Your Honours, this appeal concerns the extent of the power conferred on the Commissioner of Patents to permit an applicant for an extension of term of a patent to file an application out of time.  This is of particular importance because the term of all standard patents is 20 years by section 67 of the Act, and only in the exceptional case of standard patents relating to pharmaceutical substances can an extension of term be permitted and then only on the conditions as set out in section 70.

There is an intrinsic tension of competing public interests that arises in the consideration of extensions of terms for patents.  A patent provides a temporary monopoly granted by the Crown to the patentee in return for the disclosure of the invention to the public in the patent specification.  At the completion of the term – the end of the monopoly – traders are free to use the invention in competition with the patentee – for most patents they know the term of the patent and can prepare to compete with the patentee promptly upon the end of the term.

CRENNAN J:   Well, there is provision for springboarding, is there not?

MR BURLEY:   The springboarding provisions are not in the current version of the Act.

CRENNAN J:   Not in the current version, I see.

MR BURLEY:   This has obvious social economic ‑ ‑ ‑

CRENNAN J:   So any preparations are at the risk of the generic manufacturer?

MR BURLEY:   Indeed, your Honour, yes, and as to timing of the end of the term, anticipatory conduct before that.  As we would submit, that has obvious social and economic advantages, not only for the competitors, but also for the public.

CRENNAN J:   Am I right, the unusual aspect of this case is that racemic compound did not preclude the patent from being acquired on the grounds of lack of novelty, for argument’s sake, but must necessarily be taken into account for the purposes of an extension of term.

MR BURLEY:   That was one of the consequences of the Full Court decision in an earlier version of the case, if I can put it that way.  The racemic mixture contains, as required under section 70(3) of the Act, the relevant pharmaceutical substance.

CRENNAN J:   So a broader provision than simply consisting of the relevant pharmaceutical substance.

MR BURLEY:   Yes, indeed, and explicitly the word “contains”, which, as your Honour knows, the racemic mixture would contain each of the enantiomers.

CRENNAN J:   Does that mean if there is a compound on the therapeutic goods register, which is not necessarily associated with the patentee but which contains the substance which is the subject of the patent claims that then would be the relevant date that an applicant for an extension of term would need to rely upon?

MR BURLEY:   That may have the effect of triggering the application.  But, of course, your Honour is dealing with this in a more general sense as to the context of the provisions which enable extensions of time, and the provisions themselves, in our submission, deal, as a matter of policy, with the requirement for there to be certainty as to the time of an application and whilst there may at the edges be concerns which each party, each side of the ledger would put forward to say that that has an effect on their own position ‑ ‑ ‑

CRENNAN J:   During all this litigation would the register have indicated to a stranger, say, doing a search, that an extension of term was under consideration?

MR BURLEY:   Yes, indeed, as I understand it.

CRENNAN J:   Because relevant advertisements would have been made and ‑ ‑ ‑

MR BURLEY:   Yes.

CRENNAN J:   Yes.

MR BURLEY:   Your Honour will see when we come to the sections that – and no doubt has already seen that by the Act there is a requirement to advertise an application for an extension of term.  The general policy concern as to balances is that for patents with extendable terms there is uncertainty as to the duration of the monopoly and that uncertainty, of course, commences with the question of whether or not an application is going to be made by the patentee to extend the term, which is entirely within the remit of the applicant.  As your Honour has observed from the history of this litigation, the first respondent, Lundbeck, had within its camp knowledge of the racemic mixture which triggered the regulatory date as well as its own knowledge of its compounds.

CRENNAN J:   Alphapharm, as I understand the facts, would always have known that Lundbeck wanted to extend the term if it could satisfy the requirements for an extension of term.

MR BURLEY:   On the facts of this particular case, Lundbeck resisted the proposition that it needed an extension of term because it did not file any application for an extension of term until the day before the entire term of the patent ceased.

CRENNAN J:   But this turned on the view they took about the racemic compound.

MR BURLEY:   Indeed, indeed.  So notification in any formal sense by an application to extend the term did not take place until the day before the cessation of the patent. 

CRENNAN J:   You would not be able, would you, to have two extant applications for extensions of term based on different entries on the Australian Therapeutic Goods Register?

MR BURLEY:   It would be possible, in our submission, for an application to have been filed and stayed. 

CRENNAN J:   Stayed.

MR BURLEY:    Indeed.  Part of the – it is not strictly relevant on the factual matrix for this particular application because, of course, it is a matter of power that we are before your Honours, but as a matter of the factual matrix, from the first time at least, a decision of the Federal Court, Justice Lindgren in 2005, indicated a contrary view to that which Lundbeck took such an application could have been made.  On our submission, that is not strictly relevant, other than as the background material.

CRENNAN J:   But we have just the short construction point before us in terms of the special leave grant?

MR BURLEY:   Indeed, your Honour, yes.

KIEFEL J:   How do you say the policy which favours certainty of the register is evident?  Is it in section 71(2) as well as the regulations?

MR BURLEY:   It is, your Honour, and if your Honour will permit me, I will come to that in just a second.  The point I was going to make, preliminary to that, was that there are two forms of uncertainty present as a result of there being an existing extension of term regime.  The first uncertainty is how long is the patent going to last for?  It is not going to be 20 years.  It could be two years beyond the 20, or five years, which is the maximum amount allowable.  The second is whether an application can be made. 

It is the second which – it has been compounded, we say with great respect, by the decision of the Full Court, because the Full Court’s decision was such that there is uncertainty introduced to the otherwise strict time limit that we say applies under section 71(2), to which I now direct your Honours.  If your Honours have the version of the Act – I think, the 2012 version your Honours have been provided with.  Section 70, which is the commencement of Chapter 6, Part 3 of the Act - section 70 is the extension of term – it sets out the requirements.  Subsection (1):

The patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subsections (2), (3) and (4) are satisfied.

We note – because this becomes important as a matter of construction – that there is only one application for an extension of term relevantly applicable at any time, and we will see that further in later sections.  Then the conditions in subsections (2) and (3) are first - if I can summarise them – the patent must disclose and claim a pharmaceutical substance per se, or a pharmaceutical substance produced when using recombinant DNA.  It is not necessary to go any further into that for the current application.  Subsection (3) ‑ which, again is not strictly relevant, but provides background – requires that two conditions be satisfied.  The first is that –

goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods ‑

or the ARTG, and the second is that –

the period beginning on the date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years.

This provides a formula which is later applied to determine the period of the extension based on the first regulatory approval date for the particular substance identified in 3(a).

CRENNAN J:   So in broad terms, the policy of the provisions for an extension of term seem to be that a patentee who has to wait at least five years for regulatory approval in order to exploit the patent may be entitled to an extension of term which compensates once the date of the patent has expired.

MR BURLEY:   Yes.

CRENNAN J:   That is the broad policy.

MR BURLEY:   That is the broad policy and the secondary materials reflect that, and so the starting point for the extension period relevantly concerns the regulatory approval date, which is a proxy for the date from which an exploitation can take place.

CRENNAN J:   Yes.

MR BURLEY:   Section 71 deals with the form and timing of the application.  Subsection (1) concerns the application and the form in which it should take place and subsection (2) adopts some significance in this appeal.  It provides:

An application for an extension of the term of a standard patent must be made during the term of the patent and within 6 months after the latest of the following –

three dates.

CRENNAN J:   If I may go back, just for a moment, when you were answering Justice Kiefel’s questions about certainty, you said one uncertainty is how long an extension will be for.  In circumstances where the regulatory approval is a proxy, as you just put, once you work out the correct proxy it is not difficult to work out the extension of term, is it?

MR BURLEY:   That is correct, your Honour, with respect, but, of course, that is entirely within the hands of the patentee, at least at first instance as to when the marketing approval is provided, and so on the side of the ledger that favours the patentee is, of course, a patent with knowledge of the substance which it is the subject of together with the travelling through of marketing approval.

CRENNAN J:   Yes.  When an application for an extension of term is advertised, I presume it is in the official journal, what details are given for anyone looking at the official journal?

MR BURLEY:   I cannot answer that comprehensively other than to note that it would be advertised ‑ ‑ ‑

CRENNAN J:   So you are not sure whether it does or does not mention the relevant regulatory approval?

MR BURLEY:   I will find that out, your Honour.

CRENNAN J:   Yes, thank you.

KEANE J:   Mr Burley, before you go on, looking at section 70(3)(a), entry for inclusion in the ARTG is a condition of an application for an extension.  Apart from being a condition for an application for extension, is there any freestanding, as it were, requirement of the Act for inclusion of a substance or goods containing the substance in the ARTG?

MR BURLEY:   In the Patents Act, not to my knowledge, your Honour.  Under the Therapeutic Goods Act it is necessary for a pharmaceutical substance to have such regulatory approval before it can go to the market.

KEANE J:   But there is no requirement of the Act, this Act, that that happen?

MR BURLEY:   No.  No, the patent would otherwise remain valid and in force, notwithstanding an absence of regulatory approval.

KEANE J:   It is just one of the conditions that you need to satisfy so far as the Act is concerned for an extension of term.

MR BURLEY:   Yes, your Honour.

CRENNAN J:   Well, it is a sine qua non, is it not, for exploitation of a pharmaceutical substance for therapeutic uses?

MR BURLEY:   Under the umbrella of the Therapeutic Goods Act, yes, your Honour.

KEANE J:   Is that because it is effectively an approval to market so that advantage cannot be taken of the patent until the approval is given and the extension provisions recognise ‑ ‑ ‑

MR BURLEY:   Yes, indeed, as your Honours would appreciate, the pharmaceutical substance being put into the human body has a whole host of regulations which would apply to that, and that is the regulatory scheme which is sitting as an umbrella over this particular part of the Patents Act.  The reason why I took your Honours to section 71(2) is that the wording of that adopts an importance when considering the extension term.  It provides for a composite formula by which the deadline for filing an application is required.  The application must be filed within the term of the patent and within six months of the three dates listed.  The first date - the date of the grant of the patent - the patent cannot be extended until the patent itself is granted.  The second - the date of commencement of the first inclusion in the ARTG of goods, that is the requirement under section 70, and the third is the date of commencement of the section.

So the parliamentary intention, we would submit, arising from this formula is to calculate a deadline for filing such an application to extend the term in precise terms calculated to ensure that the application is filed at the first opportunity the criteria in section 70 are satisfied, plus six months to enable a pharmaceutical company to put it together.

KIEFEL J:   Do you place much emphasis or reliance upon the mandatory language of “must” in the section?

MR BURLEY: Yes, indeed. However, the language of section 223 would also be considered in prescribed action, but we do submit that the word “must” rather than “may”, for instance, is a more imperative term, if I can put it that way, to reflect that intention to which I have just described.

KIEFEL J:   Well, at least, I suppose, in the sense that the time for doing certain things can be stated in legislation neutrally, usually an imperative if chosen is intended to convey a needle purpose for ensuring the terms.  In relation to the three dates identified in (a), (b) and (c) in subsection (2), I think in your submissions you refer to the period of six months from the date of first inclusion in the ARTG, the ARTG as being relatively – not beneficial but ‑ ‑ ‑

MR BURLEY:   Generous ‑ ‑ ‑

KIEFEL J:   Generous.

MR BURLEY:   ‑ ‑ ‑might be the word we used.

KIEFEL J:   Thank you, that is the word I was looking for.  Yes, that is the word you used.  Do I take it from that submission that you are saying that that would be – most often would be the operative date?

MR BURLEY:   No, your Honour, it does depend on – I am unable to answer empirically – it may well be that it is ‑ ‑ ‑

KIEFEL J:   But not necessarily.

MR BURLEY:   Indeed.  It depends on how long it takes for the passage of the patent through grant and the time that it takes to get regulatory approval.  Subsection (c) is the one which applied in the present case ‑ ‑ ‑

KIEFEL J:   Is the relevant one for this case, yes.

MR BURLEY:   Yes, and I will come to that with some indication of the times.  Your Honours, section 72 provides the provision that your Honour the presiding Judge referred to being the requirement for advertisement and publication in the official journal, and section 75 provides for any person is able to oppose an application.  So we submit that this reflects again the policy of recognition within the Act seen throughout it of third party interests, including public interest and competitive interest, being recognised as significant within the scheme of the Act.

CRENNAN J:   Just in terms of how this matter might play out, if for argument’s sake you lost the construction point, would your client have the ability to oppose the grant of an extension of term under section 75?

MR BURLEY:   Yes, your Honour, and that is currently on foot, it has not waited pending the outcome of this.  Your Honour, turning to the question of the precise dates relevant to the current application, and again this is by way of background more than a strict need for the determination of the appeal, the first respondent’s application was required to be filed within six months after 26 January 1999 which is the date of the commencement of the section, 26 July 1999.  Instead the application was filed on the day before the patent expired on 12 June 2009, almost 10 years later.  Now, subsection (a) did not apply within six months of the date the patent was granted.

CRENNAN J:   There used to be provisions in the Patents Act that undue delay in making an application to oppose, for example, would be relevant in considering.

MR BURLEY:   Yes.

CRENNAN J:   Anything like that in this scheme?

MR BURLEY: No, there is not, your Honour. Your Honour is, no doubt, aware that under section 223 there is a discretionary component as well as the power question that is before your Honours and the discretionary component has been considered by the courts below and found in favour of the first respondent, but there is no specific provision in relation to excessive delay.

In relation to subsection (a) of 71(2), that did not apply because the patent in suit was granted in August 1997.  Subsection (b) did not apply because the first respondent’s application refers to Cipramil, which is the relevant substance included in the ARTG which was listed on 9 December 1997.  So by the date of the commencement of that section there had been some use over some period of time in terms of the proxy given of the entry in the Register of Therapeutic Goods.  So it was subsection (c) which applied within six months of the commencement of the proceedings of the section.

CRENNAN J:   Was the racemic compound the subject of patent protection?

MR BURLEY:   Yes, indeed.  There was a separate ‑ ‑ ‑

CRENNAN J:   And the same patentee?

MR BURLEY:   Yes, the same patentee.  That is what gave rise, amongst other things, to the novelty challenge earlier on.

CRENNAN J:   Yes.

MR BURLEY: If I could turn now to the specific provisions concerning extensions of term? Section 223(2) is the relevant provision. Your Honours see that it provides:

Where, because of:

(a)       an error or omission . . . or

(b)       circumstances beyond the control of the person concerned;

a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.

The particular inquiry, for present purposes, is the question as to the identity of a relevant act and that is the subject of a definition in subsection (11) which provides, relevantly, a:

relevant act means an action (other than a prescribed action) in relation to a patent –

So, we submit, that in appreciating the role that the section has to confer an ability to extend the term, there are two steps that need to be taken.  The first step is for one to identify what is an action in relation to a patent.  The second is to consider whether that action is a prescribed action.

In the present case, the first step is simply answered by looking at section 70 and 71 of the Act and the scheme of that part.  Section 70 indicates that an action in relation to a patent, we would submit, would be the act of applying to the Commissioner for an extension of term, that is, the act.  No doubt that that is only one act.  Your Honours can see in section 71, both subsections begin with the words “An application for an extension”.  So there, we submit, is the first step, that is, an application to extend the term of the patent.  That is the relevant act.

The second inquiry is to ascertain whether the relevant act is prescribed and for that it is necessary to go to the regulations.  Your Honours have been provided various forms of the regulations.  The one that might conveniently be located is on the very last page of our submissions in‑chief but there are about five other places that your Honours could find them.  The relevant – the regulations as considered by the Tribunal in July 2012 are those, we submit, which your Honours would consider in this appeal.  That regulation is at the top of page A5 in annexure to our submissions and provides relevantly:

For the definition of relevant act in subsection 223(11) of the Act, each of the following actions is prescribed . . . 

(b)filing, during the term of a standard patent as required by subsection 71(2) of the Act, an application under subsection 70(1) of the Act for an extension of the term of the patent ‑

The second inquiry is what is the act that is prescribed, and the act that is prescribed is “filing, during the term of a standard patent” and so on, of an application.

KIEFEL J:   The regulation has been changed since ‑ ‑ ‑

MR BURLEY:   The regulation has been changed and the version of the change appears immediately underneath in our outline of submissions and instead of the words “as required by” the word “under” is in its place.  Your Honours ‑ ‑ ‑

CRENNAN J:   Does that verbal formula during the term of the standard patent – you are resisting the notion, are you, that that relates back to 71(2) the first two lines?

MR BURLEY:   The proposition we put, if I can put it in terms of the first step and second step that I was referring to, is the second step is having identified a relevant act which under section 70 and section 71 is the application for an extension, the inquiry is well, is that act prescribed?  The regulations, we submit, very clearly demonstrate that it is that act.  There is only one act which is done in relation to the patent in section 70 and section 71, in our submission.  That is the act of making an application for an extension of term.  When asking rhetorically what it is that is prescribed by the regulations, it is the:

filing, during the term of a standard patent as required by subsection 71(2) of the Act, an application under subsection 70(1) of the Act for an extension of the term of the patent ‑

Taken as a whole, that is a very clear and plain English statement that the act that is prescribed is the act of an application for an extension of term.

KEANE J:   It is an accurate exegesis of 71(2).

MR BURLEY:   Yes, yes, indeed.

BELL J:   What it leaves unanswered is why it takes so much to say no more on your construction than that the prescribed action catches an application for an extension of term.

MR BURLEY:   Yes, indeed.  The high point, if we can put it this way, as we see it of our friend’s statement of construction about the regulation against us, is that there are some unnecessary words used in the regulation.

BELL J:   Indeed, and that does present an issue for construction.

MR BURLEY:   It does but for this, your Honour.  The words that we contend – the way that we contend the words should be construed are completely consistent with the description and the power conferred under section 233(11).  Subsection (11) only confers power to prescribe an act.  The section 70 and 71 only contain one act.  The dissection of that one act by reference to different time limits is something which is not countenanced under the statutory regime under subsection (11).

CRENNAN J:   There is that “and” in section 71(2).  There are two timing requirements, are there not, that the applicant for an extension of term must apply within the 20 years, before the expiration of 20 years, and within six months of the latest of those dates.

MR BURLEY:   Yes.

KEANE J:   But there is only one action.

MR BURLEY:   Indeed.  There is one action and there is one time for every one action.  It is a formula for a calculation.  It is not two separate actions.

KEANE J:   There is one time.

MR BURLEY:   Indeed.

KEANE J:   It is one time for one action.  It is an application for an extension.  The time that it has to happen is during the term of the patent and within six months.

MR BURLEY:   Yes, indeed, your Honour.

KIEFEL J:   On your construction ‑ ‑ ‑

KEANE J:   There is certainly not a second action because no one is suggesting that it is an action, that an action is involved in the granting of the patent, the date of the first inclusion or the commencement of the section.

MR BURLEY:   No.

KEANE J:   None of them are an action ‑ ‑ ‑

MR BURLEY:   No.

KEANE J:   ‑ ‑ ‑ or a relevant act.

MR BURLEY:   Yes, with respect.

KIEFEL J:   On your construction of the regulation, 22.11(4), you would say the relevant act is identified by the words:

filing . . . an application under subsection 70(1) ‑

and that the words appearing between the commas might be treated almost as if in parenthesis ‑

during the term of a standard patent as required by subsection 71(2) ‑

as doing no more than identifying that action.

MR BURLEY:   Yes, indeed.  In fact, as the final words of the regulation do also, the words:

for an extension of the term of the patent ‑

They are also descriptive because section 70(1) refers to that in terms.

CRENNAN J:   Now, a patent ‑ ‑ ‑

KIEFEL J:   As I understand what you say, the words, “during the term of a standard patent as required” et cetera can do no more than identify the action of filing because that is the power given by 223(11).

MR BURLEY:   Yes, indeed, your Honour.

CRENNAN J:   So a person who wishes to apply for an extension of time there is one action, but they will need to keep their eye on two time limits.  Do you accept that?

MR BURLEY:   Yes.  Well, they have to comply with section 71(2) which involves making sure that any application is done before the expiry of the term.

CRENNAN J:   Yes.

MR BURLEY:   Also that they file within the six months required for the subsections (a) through to (c), and there is no dispute on the Full Court’s construction or, as we understand our friend’s construction, that the hard deadline of the expiry of the term of the patent exists and the debate lies in the other points.  But one point I might say while your Honours have subsection (b) of the regulation open, our friend’s construction would have it that the words:

filing, during the term of a standard patent as required by subsection 71(2) ‑

identify only as prescribed the filing during the term of the standard patent.  That has the vice that it involves ignoring the words “as required by subsection 71(2)” and possibly even the worst vice that involves adding the words, “but not otherwise” as required by section 71(2), because we know that section 71(2) has the whole formula and not just part of it present within it, and so we, with respect, submit that that is an aspect of the construction of the regulation that would be impermissible on ordinary principles of construction.

KIEFEL J: If regulation 22.11(4) was intending to allow section 223 to operate with respect to the second time period – that it operated on the six month period – could that have the effect that an extension that an application for the extension of time for doing the act could have the effect that it was made outside the term of the standard patent?

MR BURLEY:   I think, as our friends put it, it would be during the term of the standard patent, but otherwise unconstrained – in other words, the prescribed action would only be that it happened during the term of the patent.  Your Honours, if I can now turn to the Full Court decision and identify where we submit, with respect, that that court fell into error.  The decision appears in the appeal book at page 140, and the relevant passage is to be found at page 160 of the decision.  Justice Yates delivered the judgment with Justices Jessup and Jagot agreeing.  If I could pick up the text at paragraph 50, there, his Honour says:

The making of an application under s 70(1) of the Act is governed by two time limits:  the application must be made “during the term of the patent”, and within six months of the applicable date in s 71(2)(a) to (c).  Both time limits must be observed in order to make an application.

No doubt from his Honour’s reasoning that there is only one application.

CRENNAN J:   One action.

MR BURLEY:   One action, indeed.  Reading on:

There is nothing in s 223(2) of the Act that would deny the Commissioner the power to extend either or both time limits, other than the meaning to be given to “relevant act” in s 223(11). Relevantly for present purposes, s 223(11) provides that a “relevant act” is an “action” in relation to a patent, other than a “prescribed action”. Regulation 22.11(4)(b) does not simply prescribe the filing of an application under s 70(1) of the Act. The words “during the term of a standard patent under subsection 71(2) of the Act” specifically identify the action that is prescribed.

Just pausing there ‑ his Honour there quoted the later version of the regulation, and so was not attending to the particular words before the Tribunal.  Reading on:

The words “under subsection 71(2)” in the phrase do not, by mere reference to the subsection, incorporate the second action of filing the application within six months of the applicable date under s 71(2)(a) to (c).  Properly understood, reg 22.11(4)(b) distinguishes between separate actions and prescribes one, not the other.  The result is that the action of filing the application under s 70(1) during the term of the patent is prescribed ‑

We respectfully submit that several errors emerge as to the construction of the legislative scheme from that passage.  The first is that the Full Court artificially treats section 70(1) and section 71 as relating to two actions, when plainly there is only one action in relation to the patent and I have made my submission in relation to that.  In paragraph 50, his Honour refers to the one action, but then refers to two time limits and, of course, time limits are different to relevant actions, in our respectful submission.

Section 223(11) identifies a relevant act as an action. An action is – and we have referred to the dictionary definition of that to the extent necessary – something done, an act, a deed. There is only one act within section 70(1) and it is done once and the first respondent only filed one application. The Full Court relief on predominantly the wording of section 71(2) to justify the conclusion that there are relevantly two actions in relation to the patent tied up with an extension of term.

CRENNAN J:   Two actions or two time limits?

MR BURLEY:   Well, two time limits were identified but ultimately it must have been two actions because – and the final words that I read to your Honours reflects that view, there being two separate actions.  As the Full Court reasoned:

an application under s 70(1) of the Act is governed by two time limits –

and only one is prescribed, and the difficulty with that is the prescription of two time limits does not meet the requirements of section 223(11) ‑ ‑ ‑

KEANE J:   When his Honour was referring to two separate actions, if one sort of goes on to inquire what is the second action, the second action – the only candidates seem to be things that are not actions at all, at least not actions by a person other than the Patent Office, because it is the grant of a patent, the inclusion in the ARTG, or the commencement of the section.

MR BURLEY:   Yes.

KEANE J:   So where is the second action?

MR BURLEY:   Indeed, and none of those are actions in relation to a patent.  They are actions in a different context anyway.  Further, with respect, we submit that the Full Court incorrectly used the wording of the regulation apparently as the basis for determining that section 71(2) did identify two actions in relation to the patent.  The last part of the passage that I read to your Honours, picked up about five lines from the bottom of paragraph 51:

Properly understood, reg 22.11(4)(b) distinguishes between separate actions and prescribes one, not the other.

Now, if that is the genesis of the reasoning, then it incorrectly, with great respect, uses the wording of the regulation to govern the construction of the section which is not in accordance with orthodox principle.

KEANE J:   But on any view, with respect, the regulation is not purporting to distinguish or to separate actions.  It is just prescribing an action.

MR BURLEY: Yes, your Honour, yes, and I have made my submission about the power delegated under section 223(11) confined to an action and I do not need to repeat that. I have also made submissions as to the natural and ordinary meaning of the regulation itself because – although we probably do not need to get that far. In our submission, the regulation under consideration does not, as we respectfully agree with your Honour Justice Keane, provide as his Honour appeared to consider that there were two actions identified and the natural and ordinary meaning of those words. An extraordinary act of gymnastics is required in order to glean from that two separate actions in any event.

CRENNAN J:   Now, is it a consequence of your argument that if any error is made, whether it is by the patentee or a patentee’s agent or however it is made in relation to (a), (b) and (c) of subsection (2) of section 71, no power to extend time?

MR BURLEY:   Yes, that is a consequence.  We submit – and I will come to some of the legislative policy – that that reflects a balancing of interests.  The provision of a need for some urgency on the part of a patentee who is seeking an extension to move on to applying for the extension after the criteria in section 71 is satisfied is a recognition of the interests of third parties in knowing some certainty of the term.  There is some material in the legislative history which supports that proposition.  Of course, it is not ‑ ‑ ‑

CRENNAN J:   That would be balanced, I daresay, against the public interest in encouraging inventors of pharmaceutical substances to expend the money required in research, notwithstanding the fact that they may not get marketing approval for some years post‑patent.

MR BURLEY:   Yes, and that balance is achieved by giving them the extension of term.  It is also achieved in terms of administrative matters, and so forth, by allowing six months within which to make an application.  The US equivalent provides for an extension of term and we have referred to that in our outline of submissions.  That provides 60 days, or two months, within which to file an application and there is no extension permitted.  So on comparison with a major trading partner, that ‑ ‑ ‑

CRENNAN J:   Is the term the same?

MR BURLEY:   Yes, your Honour.

CRENNAN J:   Initial term?

MR BURLEY:   Yes, I think it is.  I will inform your Honour if that is not the case.

KIEFEL J:   Is that relevant to our process of construction?

MR BURLEY:   No, not at all, your Honour.  It is just the interest the Court sometimes has in what goes on overseas to which that is referred.

KIEFEL J:   The Full Court in relation to the extrinsic material – that is to say the explanatory memorandum in relation to the 1998 legislation upon which the respondent relies and the explanatory statement in relation to the preceding regulation to 22.11(4) which was in the same terms upon which you rely, the Full Court decided that neither of them were particularly relevant to the construction of the regulation or to ascertaining the purpose, but you put some store upon both the timing and the language of the explanatory statement?

MR BURLEY:   Yes, your Honour.  The explanatory statement set out in paragraph 57 by his Honour, we would respectfully submit, does not support the construction that his Honour reached because the words, relevantly:

This paragraph prescribes the action of filing an application for extension of term under section 70 of the Act during the term of the patent as being an action for which an extension of time under section 223 of the Act is not available.

That is on all fours with our construction, in our respectful submission.  Any application filed before – during the term ‑ ‑ ‑

CRENNAN J:   Well, a possible point of view, though, in relation to that would be, would it not, that the reference to “during the term of the patent” emphasises the need to file, by way of prescription, before the effluxion of the 20 year term.

MR BURLEY:   Yes, indeed.  However, there is no suggestion of qualification in the terms of (a) through to (c) recognising that section 71(2) definitely had that provision in it, and so we would respectfully submit that what can be gleaned from this is that it is making very clear that any application for an extension of term is a prescribed act within section ‑ ‑ ‑

KEANE J:   The EM has to be read that way, does it not, because it would be silly otherwise because if you have actually applied within the term of the patent you do not need any extension of the time in terms of the patent.  You are there.  You do not need to invoke 223(2) or any similar provision.

MR BURLEY:   Provided you have complied with the requirements of 71(2).

KEANE J:   Quite.

MR BURLEY:   Yes.  So we would respectfully submit that the explanatory statement supports the construction we contend for and certainly does not support the notion of dissected action by reference to time limits.  The explanatory memorandum is of no assistance as the Full Court, with respect, correctly held - that is set out in paragraph 55 - because that provides simply that the extension of term provisions will apply to all acts required to be done under the extension of term scheme provided that the relevant criteria are satisfied.  So that brings us back to a question of what the relevant criteria are and does not add to the construction debate.

Your Honours, if I could turn now to some matters of legislative history.  We have arranged for a bundle additional materials to be sent up to the Court, “Appellant’s List of Additional Authorities”, which hopefully your Honours will be able to track through with relative ease.

KIEFEL J:   I see that the materials, the extrinsic materials that you rely upon - I suppose I should allow you to develop this, but the respondent refers to the legislative history, not just the earlier 1952 provisions, but really the 1903, 1952, the 1990, 1994, getting a fuller picture.  Are you going to refer to the complete history of ‑ ‑ ‑ 

MR BURLEY:   Right now, your Honour.

KIEFEL J:   Right.

MR BURLEY:   I am going to, however, qualify that by saying I am starting in 1952 because ‑ ‑ ‑

KIEFEL J:   Yes, 1903 does not seem to add much to it.

MR BURLEY:   ‑ ‑ ‑ it goes back a long way.  Our friends refer to the decision of this Court in Sanofi v Parke Davis and that does provide a summary of the history which I will return to once I have concluded what I am saying now.  But the appellant’s construction, we respectfully submit, serves to minimise uncertainty as to term by ensuring that extension of term applications are filed expeditiously or not at all, that is, within the six month periods nominated. 

It has not always been the case that the patents legislation has taken a strict approach to extensions of term, but changes since 1984 demonstrate a shift in parliamentary approach.  Under the 1952 Act, if I could summarise the position rather than taking your Honour to the provisions laboriously, a patentee could apply for an extension of term for any type of patent on the basis either that it had been inadequately remunerated or as a result of war loss.  That is provided in sections 90 and 95 of the 1952 Act.

Under each provision, an application was advertised and made to the court, and the court could consider that application.  It needed to be made, according to section 90, at least six months before expiration of the patent or within such further time as the court sees fit.  Now, the construction of the words, “or such further time as the court sees fit” was the central matter for consideration under the Sanofi v Parke Davis decision.

CRENNAN J:   But what happened after Sanofi were that there were some very expensive and elaborate applications for extensions of term.

MR BURLEY:   I am not aware of those, your Honour, but I am sure that is right.

CRENNAN J:   Well, it is part of, if you like, the legislative resistance to having the ability to extend the term of any patent.

MR BURLEY:   Yes, and, of course, the scheme under the 1952 Act was such that the court was empowered by a broad discretion to grant an extension for inadequate remuneration on such terms or conditions as it saw fit.  In Sanofi, the High Court decided that those terms and conditions would include recognising any harm that was suffered as a result of applying for an extension of term even after the term of the patent had expired.

CRENNAN J:   It looks like the present scheme is predicated on an assumption that the delay in getting regulatory approval can be taken to be indicative of inadequate remuneration during that period.

MR BURLEY:   Yes, it certainly ‑ ‑ ‑

CRENNAN J:   Without the need to prove elaborately ‑ ‑ ‑

MR BURLEY:   It makes it a much more streamlined ‑ ‑ ‑

CRENNAN J:   ‑ ‑ ‑any calculus – any sort of sums as between the research expenditure and the remuneration enjoyed.

MR BURLEY:   Yes.  Of course, when you are applying for an extension of term for inadequate remuneration it is natural that the application for the extension would take place at the end of the patent when the amount of remuneration that has been obtained can be quantified and considered, whereas regulatory approval is something which is a far cleaner method – a proxy, if one likes – for exploitation.

CRENNAN J:   So feeding into your guillotine argument, is that right?

MR BURLEY:   Yes, indeed, your Honour.  The starting point of the shift in terms of secondary materials is really the report of the Industrial Property Advisory Committee, or the IPAC report, which is located behind tab 2 of the bundle.  This report was completed on 29 August 1984 and was entitled “Patents, Innovation and Competition in Australia”.  If your Honours turn to page 38, if I could just pick up a relevant paragraph or two, for brevity’s sake, at the bottom of the page:

The Committee is agreed that all existing procedures for seeking extensions on the grounds of inadequate remuneration, or war loss, should be eliminated.  There is no evidence that the extension procedure contributes to social benefits provided by the Australian patents system.  On the other hand, there are likely to be social costs arising from the uncertainty faced by competitors who are unsure when rights in patented inventions will terminate.

These observations herald the matters that I have been submitting to your Honours as to a change, or shift, from 1952 Act to later Acts that were significantly more restrictive as to the grounds of term extensions, and the policy change underlying that being a recognition of the social costs caused by the uncertainty of term caused by the change.

The next two paragraphs contain recognition by the committee that there is some debate as to whether extensions of terms should be permitted in limited circumstances where regulatory approval takes a while and the committee did not accept in the absence of empirical evidence that such extensions of term would be justified on that basis and recognised that such extensions would increase social costs.  As we learn later, the government initiated some inquiries and obtained sufficient empirical material to warrant the extension of term that we now have.

The recommendation which is recommendation 11 is that the present patent term of 16 years not be altered and that extensions of terms be eliminated.  Behind the next tab, your Honours, is the government response to the IPAC report and whilst the pages extracted there are relevant to the extension of term provision, I just invite your Honours to turn to the final page where your Honours see that recommendation 11 was approved in principle with the notation that:

the Government will announce a decision at an appropriate time on pharmaceuticals and agricultural and veterinary chemicals for which effective patent life is eroded by regulatory delays.

The next aspect of the legislative history to which we draw attention is the Patents Amendment Act 1989 and this was an Amendment Act introduced to effect changes to the 1952 Act. The Act only remained on the books for about a year before the 1990 Act was passed, and although interesting I will not take your Honours through all of the reasons for those changes. The effect of the 1989 Act was to abolish all extensions of term for inadequate remuneration and war loss, institute an extension of term for four years from 16 to 20 years for patents relating to pharmaceutical substance, based on the receipt of a marketing approval certificate and of interest is that under the regime under the 1989 Amendment Act an application could only be made to extend the term of the pharmaceutical patent not later than 12 months before the end of the term of the patent.

This provision requiring the application to be within 12 months before the end of the patent carried with it an ability to extend the time by three months – so up until nine months before the end of the term of the patent, but after that there was no entitlement at all to any extension, and so that represents a guillotine, if one liked, under that regime.  The explanatory memorandum is reproduced relevantly behind tab 4 of the bundle for the 1989 amendments, and if I could invite your Honours to turn to page 7, that provided in item 31 as to the new section 160(4A) - the next sentence describes the limitation that I have described to your Honours - the final sentence:

This provision recognises the need to ensure that the new procedures for extensions of term operate expeditiously, leaving those involved and third parties with the minimum period of uncertainty consistent with the need to resolve matters fairly.

Again, we submit that that reflects the recognition of the balance – the pendulum of the balance swinging in favour of third parties.  If there is going to be an extension of term, it needs to be applied for expeditiously and it needs to do so to ensure there is certainty as to term. 

When the 1990 commenced in April 1991, it incorporated essentially the same terms, as far as extension of term, is concerned as the 1989 Amendment Act to which I have just referred to your Honours. The second reading speech that we have reproduced behind tab 6, I do not propose to take your Honours to it, but it endorsed the IPAC report recommendations and section 160(4A) which was the term - the section I have just taken your Honours to from the 1989 Act was reproduced in section 223(5).

The next stage in the lengthy and, some might say, tortured history of patent extensions is that in 1994 the “extension of term” provisions were removed entirely from the 1990 Act.  They were removed, in part, because the term of all standard patents was changed from 16 years to 20 years and that was a reflection ‑ ‑ ‑

KIEFEL J:   These were the World Trade Organisation amendments?

MR BURLEY: Yes, indeed, the World Trade Agreement known as Trade Related Aspects of Intellectual Property or TRIPS which guaranteed a term of 20 years. No extensions of term were mentioned. Of course, section 223, without section 223(5), applied because that is a broad section which applies to other aspects of timing within the Act. The 1997 Intellectual Laws Amendment Bill was proposed and passed as an Act in July ‑ ‑ ‑

CRENNAN J:   When does 223 first come in?

MR BURLEY:   With the 1990 Act, your Honour, in April 1991. The 1997 Intellectual Property Laws Amendment Bill was passed as an Act in July 1998 and that contained a form of Chapter 6, Part 3 which included amendments to section 223 by adding subsection (11) and I have taken your Honour to the explanatory memorandum and the explanatory statement.

So we would submit that when one considers the legislative history it is not helpful to look particularly at the 1952 Act or the decision in Sanofi v Parke Davis because really there was a perceptible change in policy arising from the IPAC report and from the wording of the legislation and those matters to which I have taken your Honours. 

The prescription contained in section 71(2) clearly, in our submission, on the face of the wording of the Act indicates the legislative intent to ensure that applications for extensions of term are filed within the time formula that is prescribed there. That is antithetical to the concept that one would try to squeeze within the section 223(11) structure and the prescribed Act the notion that somehow one part of the time limit could be dissected from the other.

KIEFEL J:   For the sake of completeness, regulation 22.11(3)(c) which was the precursor of the regulation with which we are concerned and which was in the same terms came into effect at the end of 1998, I think, which was subsequent to the 1998 Act taking effect.  Do you know the date the regulation came into effect?

MR BURLEY:   I will find that for your Honour, if I may.

KIEFEL J:   I think it became regulation 22.11(4)(b) because something was inserted so it simply dropped down a space.

MR BURLEY:   Yes, indeed, it is the same language.  We will find that date for your Honour.

KIEFEL J:   And the date of the explanatory statement?

MR BURLEY:   Yes, and I think the observation is made in the Full Court decisions that we have made in our submissions that the explanatory statement is more immediately approximate to the regulation than the explanatory memorandum. 

If I can turn now to the decision of the Court in Sanofi, because the first respondent refers to that to support the proposition that the power to grant relief from a time limit in the context of an extension of term has been part of the legislative fabric since 1914.  We would respectfully submit that does not do justice to the more recent legislative history which abolished any right to extend time for an extension of term by those provisions to which I have just taken the Court.  Indeed, the consistent history since the IPAC report has shown a policy of disapproving such extensions of time for applications to extend the term.

CRENNAN J:   But then reinstituting them for pharmaceutical substances.

MR BURLEY:   Yes.

CRENNAN J:   It seems to be a special exception to a general disinclination to have extensions of term.

MR BURLEY:   What I was meaning by those words was to convey that there has been a disapproval of the idea of extending the time for making an application for an extension of term as opposed to the special case of extensions of term by themselves, which of course is present in the Act, and for the reasons identified in the explanatory memorandum in recognition of the time it takes to get regulatory approval.  But the balance, we would submit, that the legislation seeks to achieve is to ensure, as I have submitted, that any such application would take place within the formula prescribed carefully in section 71(2).  The decision in the Sanofi Case is behind tab 19 of the first respondent’s bundle of authorities.

BELL J:   I am sorry, which tab did you say?

MR BURLEY:   Tab 19.  As a background, the patentee filed an application to extend term for inadequate remuneration under the 1952 Act after the term of the patent had expired and Parke Davis contended that the Court had no power to permit a late application to be filed.  The relevant section, section 90, appears on page 6 of the decision, and your Honours see:

“A patentee of a standard patent who considers that he has been inadequately remunerated by his patent may, after advertising, as prescribed, his intention to do so, present to a prescribed court, at least 6 months before the expiration of the term of the patent, or within such further period as a prescribed court allows, a petition praying that his patent be extended for a further term.”

The Court found in passages not relevant to the present appeal that, as a matter of language, it did have power to grant an extension beyond the term of the patent and considered that such an extension was not inimical to the true purpose or object of the legislation.  Now, there is no dispute in the current case that it is, at the very least, inimical to the purpose or object of the Act to extend time for filing an application beyond the term.  On every construction of the relevant Act, including the Full Court’s ‑ ‑ ‑

CRENNAN J:   It is possible, is it not, just going back for a moment to 161 of the appeal book and the explanatory statement which you were discussing with Justice Keane which is extracted in paragraph 57 of Justice Yates’ decision, one possible reading of that text is that it is being made plain that the new regime is not like the old regime considered under Sanofi, that is to say, a patentee very clearly cannot make an application for an extension of term outside the period of the patent.  What I am suggesting is there has been a long history ‑ ‑ ‑

MR BURLEY:   Yes.

CRENNAN J:   ‑ ‑ ‑ of which we are all aware, where the relevant section of the Act provided that it had to be done within six months or such other time as the High Court might allow, when it had original jurisdiction, and Sanofi stands for the proposition that there could be an extension of time granted, notwithstanding the effluxion of the term of the patent.  What I am suggesting is, one possible explanation for the text of the explanatory statement, set out at the bottom of page 161, is to make it very, very clear that what is prescribed is filing before the effluxion of the 20‑year term, just given the long history of a different regimen for extensions.

MR BURLEY:   That may be one purpose underlying it.  Of course, that does not adversely affect the way we encourage the Court to construe the statement because the focus being on the words, “the action of filing” and ‑ ‑ ‑

CRENNAN J:   Yes, it does not detract from your “one action” argument, but it is a possible explanation of the text.

MR BURLEY:   Yes.  In fact, we would say that the historical overlay enables one to understand perhaps that component.  The wording demonstrates that any action of filing an application under section 70 is a prescribed action, which is the point we seek to draw from the statement.  But indeed, as always, particularly with a lengthy history of such applications, it does colour and enable an understanding of the way things are phrased. 

The point that we draw from the observation that it is now inimical to the policy and purpose of the legislation to have an extension of time beyond the term of the patent is that that change in policy is made very plain from the wording of section 71 and the preceding Acts to which I have referred and also from the IPAC report. 

If your Honours now turn to page 14 of the High Court decision, we would respectfully submit that the position as to policy has been reversed such that it might be said that the policy identified by the Full Court, to which some reference is made by the High Court in Sanofi, is apposite for the current legislation.  On page 14 at about point 6, picking up from the fifth line down in the second paragraph, I read:

Their Honours expressed that purpose in terms of the encouragement of inventors by granting a monopoly for an invention which on the expiry of the monopoly was to be fully available to the public unless for reasons of inadequate remuneration a court extended its term.  Speaking of the right to petition for an extension of the term of a patent, their Honours considered that if it were left unrestricted it would seriously encroach upon the interests of the public which the Act otherwise sought to secure.  They thought it would also mean an undetermined de facto extension of the monopoly, since no commercial concern would consider the expenditure of capital moneys in connexion with exploitation of the invention while the patent remained under threat of extension.

We would respectfully submit that the words that appear at the end of that paragraph on page 15 of the decision where the Court said –

In the light of this practice –

Referring to the lengthy history of extensions –

implemented consistently in Australia for nearly eighty years, we can only assume that it is not inimical to the true purpose or object underlying the patent legislation.

We would respectfully submit that position no longer attains under the policy which I have just identified is one which now applies.  As I have observed, and as the Court goes on to say on page 15 in the next paragraph, the Court, under sections 90 and 94 of the 1952 Act had a wide discretion in respect of the manner in which any extension would be granted, including to make a grant subject to such terms and conditions as it saw fit.  That discretion is not to be seen in the 1990 Act. 

Finally, your Honours, we have referred in our statement of propositions to the overseas position.  I do not think I need to say anything more than what is written in that, so I will not add to that further.  If I could give those dates in response to your Honour Justice Kiefel’s question – regulation 22.11(3)(c) commenced on 29 January 1999.  As to the explanatory statement, the amending regulations were made on 24 November 1998 and, as we understand it, the explanatory statement accompanied those, although we do not have a precise date on that.  I might have said for the regulation 11(3)(c) that it commenced 29 January.  If I did, I meant to say 27 January.

CRENNAN J:   Thank you, Mr Burley.

MR BURLEY:   May it please the Court.

CRENNAN J:   Yes, Mr Niall.

MR NIALL:   If the Court pleases.  Your Honours should have a copy of our outline of oral propositions which has been provided to the Court this morning.  Would your Honours like a moment to read that, or not?

CRENNAN J:   No.

MR NIALL:   I will commence my submissions.  Can I say something very shortly about the facts, not because it is a factual case, but just to posit the way that the construction issue arose in this case, and then take your Honours to the interplay between 223 and 71, and then finally come to the regulation.  Now, in doing it in that order, it is important, in our submission, to emphasise that the regulation is really – has no role to play in the construction of the Act.  So the scheme of the Act is that enacted through the interplay of 223 and 71, which contains no carve‑outs of the type achieved in the regulation.  Do your Honours have the chronology provided by the appellant?

CRENNAN J:   Well, if they were one day late on this scenario they would have no remuneration, would they?  The policy served by section 70 would not have any application.

MR BURLEY:   That would be right.  But it is not in a vacuum, it is in the context of the particular time in which it is allowed and we drew attention to the position of the United States where, under their regime, 60 days, a third of the time allowed for in the Australian regime, and clearly no extension.

A point was made by our learned friends, which was made in written submissions and we respond to it, as to the position of if the Commissioner made an error.  It is hard to conceive of a circumstance under section 70 where the Commissioner would make an error because it is the act of the patentee which is to file an application.  The application by the patentee is for an extension of term.  That is the relevant application, and there is not, in our respectful submission, a sensible hardship proposition to be drawn out of what the Commissioner may do.

KIEFEL J:   You mean if a patentee filed the application electronically, it would be the date that they made the application, not when it was received.

MR BURLEY:   Indeed.  Whatever the Commissioner did would not be the applicant’s error.

CRENNAN J:   Do they have to make it electronically?

MR BURLEY:   I am not aware of whether the regulations require it be done ‑ ‑ ‑

CRENNAN J:   Can they make it at a local sub‑office, not at the central office?

MR BURLEY:   It may be possible to do that, your Honour, the regulations would provide, no doubt, for the procedure of it – but upon establishing that the applicant did file the application one way or another, if the Commissioner made a mistake, then there would not be hardship visited because they would have complied with the requirements of the section.

BELL J:   The application would not have been made within six months of the relevant date unless it were received in accordance with whatever procedures there are within the office for the making of it.

MR BURLEY:   The question then becomes whether or not the applicant has provided the application.  It becomes a ‑ ‑ ‑

BELL J:   The statute provides that an application must be made, relevantly, within six months of a date.

MR BURLEY:   Yes, yes, indeed.

BELL J:   If the application is not made in the sense of received by whatever mechanism is available for the making of the applications, it has not been made.

MR BURLEY:   Your Honour, that does depend a little on the precise mechanism and I am sorry I cannot assist by looking at the regulation there.  Our submission is that if a filing event occurs, then if the failure lies in the seat of the Commissioner, then that is not that the application for an extension has been made – it might not have been received – but that does depend a little on the precise wording of the mechanism.  That circumstance would, in our submission, be a circumstance that would not ‑ ‑ ‑

KEANE J:   The problem is not peculiar to sections 70 and 71.

MR BURLEY:   Indeed.

KEANE J: It applies to all the things in relation to section – that section 223 applies to ‑ ‑ ‑

MR BURLEY:   Yes.

KEANE J:   ‑ ‑ ‑ and which are prescribed under 223(11).

MR BURLEY:   Yes.  

KEANE J:   So there is no reason to take a different view about applications under 70 and 71 because of a hardship proposition.

MR BURLEY:   Yes, indeed, your Honour.

KEANE J:   The hardship is the same for everybody.

MR BURLEY:   The further proposition put by our friends was that there is a principle of beneficial construction that would apply in the present circumstance.  With great respect to our friends, we do not see how the Australian Paper Case, in the decision of Justice Stephen in that, admits to that conclusion. His Honour was applying orthodox principles of construction to construe section 141 of the then Patents Act, and there is not to be seen a principle as such of beneficial construction. 

The loose words or concepts tied up with beneficial construction also raise the concern, beneficial to whom and why?  That is to be seen in the context that there are competing interests.  “Beneficial to the patentee” is to be balanced against “beneficial to other parties” such as third parties, for the reasons that we have submitted.  The loose concept that there should be a beneficial or remedial construction which is to the benefit of the patentee is to be balanced.

The further point is that the mandatory wording of section 71(2) and the secondary materials through which I took the Court suggest that whereas section 71 and the concept of an extension of term for pharmaceutical patents is one which swings in favour of the patentees, the balancing point is to be understood by having regard to the certainty of an application for an extension of term.  If there was to be a reading which met with the policy and purpose of the Act, it would be one which favoured that swing of the pendulum as identified by the wording of section 71(2).

My learned friend made a reference to opposition proceedings and made a statement in passing that the argument propounded by Alphapharm was the opposite of that which had been propounded elsewhere.  That is not how it has been put in the opposition and we resist that proposition, but it is not for debate here.

CRENNAN J:   It does not bear on our construction task anyway, does it?

MR BURLEY:   No, it does not, your Honour.  Insofar as Australian Paper is concerned, there is another factual component which is of interest in the context of section 223(11). That case concerned whether or not an extension of time would be permitted where the relevant provision of the Act allowed a party to make an application to obtain the benefit of a priority date based on a Convention application, an overseas application which had been filed earlier. The requirement under section 141 was that the application be made within 12 months in order to get the benefit of that earlier priority date.

It was in that context that the Court was considering whether or not there would be – the provisions, the equivalent of section 232 which had a time limit required, was the benefit of the section 141 provision applicable where there was not an adverse consequence that arose from the failure to file. It is just that you did not get the benefit of the additional 12 months relation back period. In that context, when your Honours look at section 223(11), your Honours see that the relevant Act and the final words:

and includes the making of a Convention application within the time allowed –

and we emphasise the word “allowed” –

for making such applications.

In our submission, that arises because in the particular case of a Convention application, even though the application, as argued in the Australian Paper Case was not required as such, it is to benefit from being described as a relevant act.  That explains the particular presence of that wording within the subsection.

GAGELER J:   Mr Burley, while we are focusing on subsection (11), as I understand the argument of Mr Niall – and this may not be against you – he says that on your construction of subsection (11) the relevant act could only be the single, physical action of filing the application under section 71(2).  If that is a correct construction, then the regulation could only validly refer to that single act, could it not?

MR BURLEY:   Yes.

GAGELER J:   It really relegates the question of construction to a subsidiary status in this case – the construction of the regulation, I mean.

MR BURLEY:   Yes.  I comfortably put that as a power point – the regulation could not regulate for something which was other than to identify a relevant act, and that relevant act is, as the regulation says, filing during the term of a standard patent, et cetera.

My learned friend, in his submissions in relation to section 223, drew attention to the language which is “a relevant act that is required to be done within a certain time” and sought to connect the question of time with an act. Of course, the structure of subsection (2) is such that the words “a relevant act” appear before any reference to time, and it is that relevant act which is defined in subsection (11), and subsection (11) does not, in its terms, incorporate a concept of time as opposed to action, the action in

relation to a patent, and we respectfully submit that that analysis is not supported by the wording of the section.

My learned friend made a submission as to the explanatory memorandum and I do not think I need to go further than to observe that the reference in the explanatory memorandum to all acts does not, even on our friend’s construction, apply to an action of filing beyond the term of the patent, and so the explanatory memorandum should be read in the context of the following words, which is that all acts required to be done under the extension of patent term scheme provided that the relevant criteria are satisfied.  So, for that reason, we submit that the Full Court was correct in concluding that the memorandum was of no assistance on the question of construction.

My learned friend, in addressing the statutory history, made the observation that in earlier iterations of patents regimes there were requirements that extension of time applications be made before the term of the patent had expired.  That, as I submitted in‑chief, is but half of the story, because as the authority to which I took your Honours in my submissions in‑chief made clear, there was always a discretion on the part of the Court to extend an application for extension of time to enable it to be filed after the conclusion of the term.

Really, the shift in the policy perspective, beginning with the IPAC report and following right through, has been that the guillotine has been successively applied and, in our respectful submission, the application of the guillotine by section 71(2) and the prescribed terms as we would construe them, is a continuum of that history that has taken place since the IPAC report and reflects an accurate exposition of the policy balance which the Act attempts to achieve.  If it please the Court.

CRENNAN J:   Yes, thank you.  The Court will reserve its decision. 
Adjourn the Court until 10.15 am on Wednesday, 13 August next.

AT 12.23 PM THE MATTER WAS ADJOURNED