Biochem Pharma Inc v Commissioner of Patents

[1998] FCA 184

FEDERAL COURT OF AUSTRALIA

PATENTS - Patents - rights of U.S. attorneys to make submissions before the Patents Commission under the supervision of Australian counsel.

PRACTICE AND PROCEDURE - when acts of a person will amount to conduct of proceedings

WORDS AND PHRASES - “conduct”, “conduct of proceedings”

Patents Act 1990 (Cth) s 200, s 201

Raymond v Attorney-General [1982] 2 All ER 487 - cons.
Hope v Bathurst City Council (1980) 144 CLR 1 - cons.
Cornall v Nagle [1995] 2 VR 188 - cons.
Australian Securities Commissioner v Bell (1991) 32 FCR 517 - applied.

BIOCHEM PHARMA INC v COMMISSIONER OF PATENTS AND ANOR
NG 845 OF 1997

HILL J
SYDNEY
11 MARCH 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 845  of   1997

BETWEEN:

BIOCHEM PHARMA INC
APPLICANT

AND:

COMMISSIONER OF PATENTS
FIRST RESPONDENT

EMORY UNIVERSITY
SECOND RESPONDENT

JUDGE(S):

HILL J

DATE OF ORDER:

11 MARCH 1998

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant to pay the respondents’ costs.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 845 of 1997

BETWEEN:

BIOCHEM PHARMA INC
APPLICANT

AND:

COMMISSIONER OF PATENTS
FIRST RESPONDENT

EMORY UNIVERSITY
SECOND RESPONDENT

JUDGE(S):	HILL J
DATE:	11 MARCH 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

At a time when competition policy has the status of an orthodox religion the monopolies granted to those practising a profession are under challenge.  There is an increasing weighing up of the public interest in the provision of competent professional services against the public interest in opening up competition to all comers.  The present application challenges the power of the Commissioner of Patents to permit, with leave, persons who are neither qualified lawyers nor patent attorneys permitted to practice in Australia to make submissions in an inquiry into the validity of a patent, but under the supervision of well qualified and eminent counsel.

The background facts are not controversial.  Emory University, the second respondent (“the university”) is the applicant for an Australian Letters Patent number 658136 for a chemical compound which is used in the treatment of human immunodeficiency virus, the causative agent of AIDS.  The application is opposed by Biochem Pharma Inc.  The issues involved in the opposition are said by the University to be “subtle and complex” and relate to the state of stereochemistry in the period 1989 to 1990.

The University requested that leave be given to permit two United States Attorneys, Ms Knowles and Mr Baechtold “to make oral submissions on behalf of Emory University at any time during the opposition hearing”.  The request made in respect of Ms Knowles was on the basis that she is:

“a US attorney who represents Emory University’s interests in relation to the opposed application and corresponding applications in the US and a number of foreign jurisdictions including Australia. ....  Ms Knowles’ experience and knowledge of the subject matter of the opposed application is substantial in that she had prosecuted the corresponding US application to grant and has assisted substantially in the prosecution of foreign equivalent applications.  This depth of knowledge and experience would greatly facilitate the Examiner’s thorough understanding of the applicant’s case.”

In respect of Mr Baechtold it  is said that:

“he has been retained by Emory University as lead Counsel in proceedings against the opponent in the US in relation to the opponent’s alleged infringement of Emory University’s corresponding granted US patent.  The conduct of those proceedings and Mr Baechtold’s ongoing representation of Emory University means that his knowledge and understanding of the subject matter and issues in the case are substantial. ... Mr Baechtold is a skilled and experienced practitioner in the field of pharmaceutical inventions and this skill combined with his depth of understanding would also facilitate the Examiner’s thorough understanding of the applicant’s case.”

The University’s application was opposed. The learned Deputy Commissioner gave a decision on 23 September 1997 acceding to the request of the University. The reasons for decision were committed to writing. It is this decision which the applicant now challenges. Although initially the present proceedings were instituted by way of an appeal from a decision of the Deputy Commissioner relying on s 52 of the Patents Act 1990 (Cth) (“the Act”), the applicant now relies for the Court’s jurisdiction on the provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth).  Having regard to the nature of the decision the applicant was correct, in my view, to amend the proceedings to seek judicial review of the Deputy Commissioner’s decision rather than proceedings with an appeal to the Court.

Before the Tribunal, the applicant sought to argue that the Tribunal had no jurisdiction to hear, or give leave to appear before it a person other than the party, a registered patent attorney or legal practitioner.  It was argued in the alternative that if there was jurisdiction that jurisdiction should not be exercised in the present case on discretionary grounds.

The Deputy Commissioner expressed the view that there was no relevant precedent upon which she could rely in reaching her conclusion. She was of the view that ss 200 and 201 of the Act, regulating the practice and privileges of patent attorneys (set out later in these reasons), had no significance to the case. Her decision on jurisdiction is encapsulated in the following paragraph of the reasons:

“I am inclined to agree with Mr Catterns that making oral submissions at a hearing does not constitute carrying on business, practising or acting as a patent attorney. The activities detailed in sub-section 201(7) in relation to carrying on business as a patent attorney do not seem to me to include the making of oral submissions before the Commissioner. While I agree with Dr Bennett that section 210 of the Act defines specifically some of the Commissioner’s powers in relation to opposition proceedings, I can find no such specific provision to limit who should make submissions at a hearing. If there were some limitation as to appearance at a hearing, I think this would have been made explicit in the Act. Consequently I believe the Commissioner does have jurisdiction to accede to Emory’s request.”

The learned Deputy Commissioner distinguished the position of an administrative Tribunal from that of a Court.  The former was, she said “master of its own procedure”.  She was of the view, however, that the discretion should only be sparingly exercised where there was some benefit to be gained in terms of facilitating understanding of the case by the hearing officer.  It was relevant to the exercise of discretion that counsel would continue to be responsible for the submissions to be put and the conduct of the proceedings.  The learned Deputy Commissioner concluded:

“In summary I believe the Commissioner does have a discretion to allow unqualified persons to make oral submissions at a hearing.  However the Commissioner will insist upon a single person being responsible for the conduct of the case for a given party.  This would generally be counsel or a patent attorney who will ensure submissions by unqualified persons are properly made.   Furthermore, when more than one person is to make submissions on behalf of a party, I do not believe the Commissioner’s discretion should be exercised automatically.  It should only be exercised where there is a perceived benefit to the outcome of the hearing and consequently I believe this would be when the submissions would facilitate the understanding of the issues by the Hearing Officer.”

The applicant’s submission that the Deputy Commissioner lacked jurisdiction to make the order she did can be shortly stated:

1. The Commissioner has only such powers as are expressly conferred by legislation or are necessary and incidental to those powers.  No express power is conferred.

1. Far from there being an implied power which is necessary and incidental, the legislation expressly prohibits the making of the order here made for it would be contrary to s 201 of the Act and require or permit the doing of an act which the legislature has made unlawful.

1. Specifically, the order made is within the exclusive domain of patent attorneys under s 200 of the Act in that it permits the overseas attorneys to “conduct” the opposition proceedings which are “proceedings for the purposes of the Act”.

4.        Because the order would involve the overseas attorneys “conducting” the proceedings it would involve them in practising or “acting” as a patent attorney, and thus in an offence under s 201 of the Act.

1. Accordingly, because the Deputy Commissioner’s order involves permitting the overseas attorneys in committing an offence under s 201, it follows that it was outside the power of the Deputy Commissioner to make the order.

These submissions fail in two ways, according to the University. First, it is said that the order falls outside the range of conduct reserved to patent attorneys under s200 for it does not involve the overseas attorneys “conducting” any proceedings. It falls short of that. Instead the opposition proceedings will still be conducted by counsel. Second, it is submitted that the order would not involve the overseas attorneys committing an offence under s 201 of the Act. Once it is accepted that the order involves no offence under s 201 then it is submitted the Deputy Commissioner has power to regulate the conduct of proceedings before her in such way as she believes necessary and that the order made was within power.

There was a brief argument as to whether the Deputy Commissioner had properly exercised her discretion, to which I will later return.  It suffices here to say that the argument was not the most significant aspect of the case and that the applicant accepted that to succeed it was necessary to show that the exercise of discretion had miscarried, because, for example, the Chief Commissioner had taken into account an irrelevant consideration.

Before dealing with the question of jurisdiction it is necessary to set out the statutory provisions against which the argument was made.

The Commissioner of Patents is a statutory office holder by force of s 207 of the Act. A Deputy Commissioner has, subject to any direction by the Commissioner, all the powers and functions of the Commissioner under the Act except the power to delegate. The Commissioner (and thus the Deputy Commissioner) has the statutory powers set out in s 210 including the power to summon witness, receive written or oral evidence and require the production of documents. There is no specific statutory power to permit submissions to be made on behalf of a party. However, s 60, applicable in an opposition proceeding such as in the present case, provides that the Commissioner must given the applicant and the applicant’s opponent a reasonable opportunity to be heard before deciding the case.

Chapter 20 of the Act is headed “Patent Attorneys”.  Section 198 provides for the keeping of a Register of Patent Attorneys and sets out the qualifications required before a person can be registered as a patent attorney. Removal from the register can be effected if prescribed ground are available. Section 200 and 201 relevantly then provide:

“s 200 (1)  A patent attorney:

(a)is entitled to prepare all documents, transact all business and conduct all proceedings for the purposes of this Act: and

(b)has such other rights and privileges as are prescribed.

(2)A communication between a patent attorney and his or her client, and any record or document made for the purposes of such a communication, are privileged to the same extent as a communication between a solicitor and his or her client.

(3)Nothing in this section authorises a patent attorney to prepare a document to be issued from or filed in a court or to transact business, or conduct proceedings, in a court.

s 201.(1)  A person must not carry on business, practise or act as a patent attorney unless the person is a registered patent attorney or a legal practitioner.

Penalty: $3,000.

(3)  A person must not describe himself or herself, or hold himself or herself out, or permit himself or herself to be described or held out, as a patent attorney, or agent for obtaining patents unless the person is a registered patent attorney.

Penalty: $3,000.

(7)  For the purposes of this section, a person or company is to be taken to carry on business as a patent attorney if the person or company undertakes in Australia, for gain:

(a)to apply for or obtain patents in Australia or anywhere else; of

(b)to prepare specifications or other documents for the purposes of this Act or the patent law of another country; or

(c)to give advice (other than advice of a scientific or technical nature) about the validity, or infringement, of patents.”

Legal practitioners are prohibited from preparing specifications or amendments to specifications  unless acing under the instructions of a registered patent attorney or directed to do so by Order of a court: s 202.  Further, registered patent attorneys must not hold themselves out as practising or acting as a patent attorney at an office or place of business where specifications are prepared unless in regular attendance at and in continuous charge of that office or place.

The Act permits Regulations to be made (not inconsistent with the Act) by s 228, prescribing matters necessary or convenient. Regulation 5.10, dealing with opposition proceedings, gives to the Commissioner a wide discretion to regulate proceedings before him or her. The Regulation is in the following terms:

“(1)The Commissioner may, on his or her own motion or on the application of a party:

(a)give a direction that is not inconsistent with the Act or these Regulations for the conduct of proceedings to which this Chapter applies; or

(b) ...”

THE CONDUCT OF THE PROCEEDINGS

The submissions of the applicant proceed upon the basis that the right to conduct proceedings includes “no doubt” the right to put submissions. It is not limited, so it is said, to a mere overseeing role. Rather, it is the right to carry on the proceedings by personally executing the role. This interpretation follows, it is said, from the context of Chapter 20 of the Act.

The words “conduct all proceedings” in s 200 are ordinary English words without undue complexity. It may be dangerous to endeavour to substitute for them other words of equal or greater complexity and retain the precise meaning. The words must be understood in the context in which they appear. The Act is concerned with proceedings before the Commissioner and proceedings before a Court. The latter proceedings are not the domain of the patent attorney; the former are. The Macquarie dictionary includes amongst the meaning of the word “conduct”: “to direct ... manage or carry on”.  Where the context is conducting legal proceedings, it is clear that what is contemplated is the control or management of the proceedings.  The word “conduct” is wider than merely to “carry on” the proceedings: Raymond v Attorney-General [1982] 2 All ER 487 at 491. There is, of course, a question of degree involved. If one asks who would conduct the proceedings if the United States Attorneys were permitted to make submissions by way of clarification it would be hard to resist the conclusion that the Australian counsel were conducting the case. Nor would it be correct, if the matter proceeded as envisaged by the Deputy Commissioner, to conclude that the United States Attorneys together with the Australian counsel conducted the proceedings. In my view, the submission that the leave given would involve the United States attorneys in conducting the case is misconceived. In so deciding I place emphasis upon the role of the Deputy Commissioner hearing the case to ensure that the role of the United States attorneys does not expand to such an extent that they can be said to “conduct” the proceedings.  It is also important to ensure that at all times the Australian counsel in fact act to “conduct” the proceedings.

AN OFFENCE UNDER s 201(1)

The scheme of s 200, when read together with s 201, is designed to confer upon patent attorneys a monopoly, subject to the rights of legal practitioners where those rights are preserved. Section 200 sets out the areas which are reserved to patent attorneys. It describes them as “privileges” and in the context of conduct which the patent attorney is entitled to do. But the section is clearly delineating the areas not merely which the patent attorney is permitted to do, but where others may find themselves in breach of s 201.

The policy which ss 200 and 201 embody follows the recommendation of the Industrial Property Advisory Committee on “Patents, Innovation and Competition in Australia” addressed to the Minister for Science and Technology and presented on 29 August 1984, which report, inter alia, preceded the enactment of the Act in 1990. The Committee expressed the view that it was appropriate for the drafting and filing of patent specifications for reward to be the exclusive domain of patent attorneys. No reference is made in that report to a monopoly for the conduct of proceedings.

Counsel for the applicant was correct in observing that the monopoly is not, as such, conferred by s 200. Rather it stems from the offence provisions of s 201 and, for present purposes, from subsection (1) of that section. Three offences are provided for in subs (1):

“·  carrying on business as a patent attorney:

·   practising (or perhaps carrying on practise) as a patent attorney; and

·   acting as a patent attorney.”

The first offence could not be made out if the United States attorneys were permitted to assist in the proceedings.  They could not be said to be “carrying on business” as a patent attorney for the words “carrying on” import an element of repetition and do not extend to a one-off act: cf Smith v Anderson (1880) 15 Ch D 247 at 277, 288; Hope v Bathurst City Council (1980) 144 CLR 1 at 8 per Mason J.

The provisions of s 201(7) add little in the present circumstances. Notwithstanding the submission of the first respondent, I do not think that the subsection should be construed as an exhaustive definition of carrying on business as a patent attorney. Further, whatever may be meant by the words “undertakes in Australia, for gain”, it is obvious on its face that the subsection has no application to the facts of the present case for the United States Attorneys will neither be applying for patents nor preparing specifications or other documents.

Likewise, it could not be said that the United States Attorneys were practising in Australia as patent attorneys.  The word “practise” in this context likewise contemplates an element of repetition, whether or not the words “carrying on” are implicit.  The Macquarie Dictionary (3d ed) gives as the meaning of the verb “practise” the words “carry out, perform or do habitually or usually”.  A person could not be said to practise law merely if he made a submission at one proceeding for there would be absent that regularity, or holding out to do so regularly, which is to be found in the use of the words “practise law”. 

If, therefore, the Attorneys commit an offence it must be because by making the submissions which the Deputy Commissioner’s order envisages they are acting as a patent attorney.

Counsel for the applicant submits that a person would be found to act as a patent attorney if that person did one or other of the acts stipulated in s 200. With respect that is not correct. Merely because a person conducts a proceeding, or for that matter prepares a document relevant to the patent Act it does not follow that that person is acting as a patent attorney. If this were so persons employed by the Patent office who regularly would prepare documents or transact business, and may even conduct proceedings, would offend the legislation. A company would be unable to conduct proceedings through an agent because that agent would be acting as a patent attorney. To refer to the obligation to afford natural justice in s 60 is no answer to the argument. To the contrary it assumes that s 201 is not to be construed in the way suggested by the applicant.

I was referred by counsel for the University to the decision of J D Phillips J of the Supreme Court of Victoria in Cornall v Nagle [1995] 2 VR 188. In that case the question arose whether a person holding powers of attorney who called himself “an attorney” was acting as a solicitor within the meaning of s 90(7) of the Legal  Profession Practice Act 1958 (Vic).  It may be noted that there was a separate prohibition contained in s 92(1)(b) for a person not being qualified to hold himself or herself out as a solicitor.  It was held that a person did not act as a solicitor merely because the person did an act usually done by a solicitor. It might be otherwise if the act in question could legally only be done by a solicitor, otherwise the case had to be one where the act was done in such circumstances as to lead to the reasonable inference that that person was a solicitor.  In reaching this conclusion, his Honour rejected decisions in England such as In re Horton (1881) 8 QBD 434 and Apothecaries Company v Jones [1893] 1 QB 89, where in the context of s 59 of the Stamp Duties Act 1870 the words “act or practise as a solicitor” were said to import an habitual or continuous course of conduct.

In my view, in s 201(1) the offence of acting as a patent attorney would not be made out unless the act done were such as to lead to an inference that the person doing it was a patent attorney. The circumstances in which the United States Attorney were permitted to assist the Deputy Commissioner, and in the circumstances where the opposition proceedings were under the control of the Australia attorneys, would not bring about the conclusion that they were acting as a patent attorney.

It follows in my view that the orders made by the Deputy Registrar were not such as to cause the United states Attorneys to be in breach of s201(1) of the Act, or for that matter to do something which was a privilege of patent attorneys and so for that reason was not outside the power of the Deputy Registrar to so order.

Once ss 200 and 201 are put to one side the matter becomes quite simple. It is clear law that a Tribunal (a fortiori an official empowered to conduct a proceeding) may regulate its own proceedings and permit those involved in the proceedings to be represented or not as the Tribunal determines: Australian Securities Commissioner v Bell (1991) 32 FCR 517, and cf Parsons v Martin (1984) 5 FCR 235. This follows in any event from the principle that a Tribunal (and the Commissioner) has such powers as are incidental and necessary to its exercise of jurisdiction and powers conferred upon it. As to the position in a court where an application is made by a corporate litigant to be represented by a director cf Hubbard Association of Scientologists International v Anderson and Just [1972] VR 340.

In the course of argument the applicant directed attention to other Tribunals and in particular s 169 of the Copyright Act 1968, s 110 of the Trade Practices Act 1974, s 30(3) of the Victims Compensation Act 1987 and s 101(1) of the Anti-Discrimination Act 1977. In these Acts specific provision is made either for a direct right to representation or for an application to be made for leave to be represented. Little assistance can be derived from these provisions and it would be unsafe to infer from them that because the Patents Act is silent it is to be inferred that no power exists to permit persons not patent attorneys to make limited submissions not amounting to actually conducting the litigation.

In my view the Deputy Commissioner did not err in law in holding that she had power to make the order she did.

The applicant submitted that there were difficulties which might arise if numbers of persons were able to make ad hoc submissions on fact and law at any time during the proceedings.  With respect it is difficult to see why there would be a descent into chaos merely because United States lawyers were available under the control of Australian counsel and subject to the supervision of the Deputy Commissioner to make limited submissions to assist the Deputy Commissioner comprehend what it would seem are quite complicated issues.  Nor does it seem to me to require an exercise of discretion adverse to the University merely because the United States Attorneys have knowledge of documents produced on discovery in the United States proceedings which are confidential.  No doubt both the Australian counsel and the United States Attorneys will ensure that the only evidence to be discussed before the Deputy Commissioner will be the Australian evidence.

One final matter is raised as said to be an irrelevant consideration taken into account by the Deputy Commissioner, namely that in the past submissions had been accepted from persons who were not patent attorneys.  No doubt little turns upon whether in the past there had been participation by non patent attorneys in other proceedings.  The matter received but scant attention in the reasons and in my view could not lead to the conclusion that the discretion was tainted by error.  If there was power, and in my view there was, the fact that the discretion to exercise that power had in the past been favourably exercised was not an irrelevant matter.

I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill

Associate:

Dated:            11 March 1998

Counsel for the Applicant:	A C Bennett SC and K J Howard
Solicitor for the Applicant:	Freehill Hollingdale & Page
Counsel for the Second Respondent:	D K Catterns QC and S J Goddard
Solicitor for the Second Respondent:	Andersen Legal
Counsel for the Third Respondent:	N Williams and M Green
Solicitor for the Third Respondent:	Australian Government Solicitor
Date of Hearing:	27 February 1998
Date of Judgment:	11 March 1998