Emory University v Biochem Pharma Inc
[2000] APO 53
•7 August 2000
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 658136 in the name of Emory University
Title: Method and composition for the synthesis of BCH-189 and related compounds
Action: Review of taxation of costs
Decision: Issued
Abstract
The construction of Items 12-14, Part 1, Schedule 8 of the Regulations, which sets out costs which may be awarded pursuant to Paragraph 22.8 (2) (a) for proceedings before the Commissioner, was considered.
The word "or" as it is used in Items 12 and 13, Part 1, Schedule 8 of the regulations is used in a disjunctive sense, ie one thing or the other, but not both. Any award of costs according to the Schedule only entitles the claiming of costs in relation to attendance at a hearing by either a patent attorney or a solicitor, not both.
Costs as per Item 14, Part 1 of Schedule 8 relate exclusively to attendance at a hearing by Counsel in the singular, not plural.
Any award of costs which varies from, or goes beyond, Schedule 8 is a matter for determination by the Commissioner, or her delegate, under regulation 22.8(1) in conjunction with the consideration of the matter which was in dispute.
The taxation of the Taxing Officer was altered and a new taxation of costs issued.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 658136 by Emory University, and a review of taxation of costs in an opposition by Biochem Pharma Inc.
BACKGROUND
Emory University (Emory) is the applicant for patent application number 658136. The grant of a patent for the application was opposed by Biochem Pharma Inc (Biochem) and a decision in relation to the opposition issued on 5 August 1999.
In the decision on the opposition the delegate awarded costs in accordance with Schedule 8 of the Regulations against Emory.
On 30 September 1999, Biochem submitted a claim for costs detailing a variety of items totalling $45,585, for taxation and certification by the Patent Office. On 11 October 1999, Emory filed a written submission detailing their objections to the basis and extent of the costs claimed by Biochem. On 21 October 1999, the Patent Office requested Biochem to provide details of the make up of the claim for transport costs. Biochem, on 28 October 1999, provided further information in relation to travel costs as well as further submissions in relation to the overall award of costs.
On 3 November 1999, the Patent Office issued written advice to both parties advising that costs have been taxed at $15,450 and would be so allowed and certified at the expiration of 21 days.
Following a request by Biochem for a specific breakdown of costs, the Patent Office issued a letter, on 18 November 1999, informing both parties that the advice that costs had been taxed in the amount of $15,450, was in error. The amount of costs taxed had been revised to $17,075 and in the absence of any request for a review of taxation the amount would be allowed and certified 21 days from that date.
On 18 November 1999, and in reply to the office letter of the same date, Biochem advised that there had been an error in their claim for costs wherein the opposition fee and the hearing fee were previously overlooked. They therefore requested an additional $1000 be added to their original claim for costs. On that date, Biochem also requested a review of taxation of costs under Regulation 22.8(4), however, on 2 December 1999, they advised that they had decided not to contest the taxation of costs.
On 8 December 1999, in response to the Office letter of 18 November, Emory requested a review of the taxation of costs. Pursuant to the request for taxation by Emory, both parties provided written submissions in relation to the taxation of costs.
THE RELEVANT LEGISLATION
The power to award costs is found in Section 210:
The Commissioner may, for the purposes of this Act: …
(d) award costs against a party to proceedings before the Commissioner.
The award of costs is governed by Regulation 22.8. This regulation states:
(1) The Commissioner must not award costs in proceedings to which this Division applies, other than costs specified in Schedule 8, unless each party to the proceedings has had the reasonable opportunity to make a submission on the matter of the award of those costs.
(2) The Commissioner may award an amount:
(a)for costs in respect of a matter specified in column 2 of an item in Part 1 in Schedule 8; or
(b)in respect of the expenses or allowances of a person in relation to proceedings to which this Division applies.
(3) An amount referred to in subregulation (2) must be taxed, allowed and certified, by an employee appointed by the Commissioner for that purpose, in accordance with:
(a) the amount specified in column 3 of that item; or
(b) Part 2 in Schedule 8;
as the case may be.
(4) A taxation is subject to review by the Commissioner.
THE AWARD OF COSTS
In his decision in the opposition, the Delegate awarded costs against Emory in the following terms:
"I have found that the opposition is successful on the grounds of section 40, novelty and obviousness, but is not successful on the grounds of section 40 (clarity), novelty (of claims 26 and 27), obviousness (of claims 25, 28 - 37) and manner of manufacture. Biochem's success on the substantive grounds of opposition justifies the award of costs in its favour. However, a very large amount of the evidence (including the further evidences) relates to the ground of obviousness, and Biochem was unsuccessful in a large part of its obviousness case. However, the unsuccessful obviousness items were not clearly inappropriate, and were unsuccessful only after a careful consideration of the evidence. On this basis I am satisfied that Biochem should not have its costs reduced on account of its failure on most of the ground of obviousness.
I award costs in accordance with Schedule 8 against Emory University."
THE TAXATION OF COSTS
The Taxing Officer allowed partial costs claimed by Biochem as itemised below:
| Item | Amount |
| Taxing Costs | $65 |
| Notice of Opposition | $65 |
| Statement of Grounds & Particulars | $400 |
| EIS | $480 |
| Receive EIA | $145 |
| EIR | $240 |
| Prepare case for Hearing | $360 |
| Attendance by Patent Attorney (Halliday) | $2600 |
| Senior Counsel fees | $4320 |
| Transport costs to Canberra* | |
| - Haliday | $1100 |
| - Muratore | $200 |
| - Bennett | $100 |
| - Howard | $100 |
| Accommodation and meals* | $6900 |
| Total | $17,075 |
(*Emphasis added)
The Taxing Officer provided a statement of reasons for his assessment of costs, which was forwarded to both parties with the 18 November 1999 letter informing them that the amount of costs taxed had been revised to $17,075. I will quote the reasons of the Taxing Officer where appropriate in the review below.
REVIEW OF THE TAXATION OF COSTS
It is important to stress at the outset that a review of taxation of costs is not an opportunity to review the award of costs itself. The award of costs made by the delegate in his decision on the opposition was, and is, in accordance with Schedule 8. Thus, this review is solely concerned with costs specifically within the bounds of Schedule 8.
There is no dispute between the parties in relation to the first nine items listed above and corresponding amounts as allowed by the Taxing Officer. There are, however, two general matters which are at issue between the parties. The first is the interpretation of items 13 and 14, Part 1, Schedule 8 and whether these items include the provision to claim costs for attendance at a hearing by both a patent attorney and solicitor, or similarly, both senior and junior counsel. The second relates to the interpretation of Part 2 of Schedule 8 and whether expenses under Part 2 are specifically limited to “persons” for whom costs may be claimed under Part 1.
I will deal with these two general issues first then consider how this affects the actual costs allowed in relation to transport, accommodation and meals which have been emphasised above.
Items 12-14, Part 1, Schedule 8 - “or” and “Counsel fees”
The relevant items from Schedule 8 are as follows:
| Item | Matter | Amount |
| 12 | Attendance at hearing by registered patent attorney or solicitor without counsel | $180 an hour or $810 a day |
| 13 | Attendance at hearing by registered patent attorney or solicitor instructing counsel | $145 an hour or $650 a day |
| 14 | Counsel fees for attendance at a hearing | $240 an hour or $1,080 a day |
Submissions from Emory basically assert that costs are only to be claimed for a Patent Attorney (or Solicitor) and Counsel.
Submissions from Biochem can be summarised as:
Mr Muratore is the opponent’s solicitor and due to the extremely complex nature of the case it was essential for him to provide counsel with expert legal support. Item 13 of Schedule 8 provides for costs for “attendance at hearing by patent attorney or solicitor” which does not exclude costs when both a patent attorney and solicitor are in attendance. There is no express statement that the award of costs only relates to one or the other. Patent attorney and solicitor costs should be awarded in this case given the lengthy and complex issues involved;
Item 14 of Schedule 8 refers to “Counsel fees” per se and does not restrict such fees to a single counsel. In view of the complexity of the issues involved and the volume of evidence it was imperative for Biochem to be represented by senior and junior counsel. Precedent for both senior and junior counsel is provided in HPM v Sturdee (1967) 37 AOJP 2077, and in the Patent Office Manual of Practice and Procedure Volume 3 at paragraph 14.2.
The Taxing Officer allowed costs under item 13 for attendance at the hearing of $650 per day. In his reasons he indicated that irrespective of whether attendance by a patent attorney or solicitor are mutually exclusive the maximum amount allowable under item 13 is $650 per day, whether or not both an attorney and solicitor are present.
I agree with the Taxing Officer’s conclusion that $650 per day is the maximum amount allowable under item 13, however, that does not fully deal with the matter nor the interpretation of item 13 (or similarly item 12). The question remains: Is it permissible under items 12 and 13 to claim the costs for both a patent attorney and a solicitor attending a hearing, or is the correct interpretation that costs can only be claimed for either a patent attorney or solicitor under those items? This issue rests solely on the interpretation of the word “or” as it is used in items 12 and 13, and whether it is used in a ‘disjunctive’ or ‘conjunctive’ sense.
In order to arrive at an interpretation for the word “or” I need to consider its plain English meaning and its context in items 12 and 13. The word “or” can be, and is, used either a) disjunctively - eg one thing or the other, but not both or b) conjunctively - eg one thing or the other or both. In its normal usage, when forming part of a sentence or phrase, “or” is generally used in the disjunctive sense, eg ‘the money or the box’. That is, it is used to represent alternatives which are mutually exclusive. I believe that is the sense it is used in items 12 and 13, since in the normal course of events attendance at proceedings before the Commissioner would usually be by one person, either attorney or solicitor, and that is the situation Schedule 8 is designed to cover.
There is nothing in the wording or grammar of items 12 and 13 nor in the structure of Schedule 8 itself to indicate to me that the word “or” as it appears in these items is used in any other way than disjunctively. That is that the word “or” is used to give the two alternatives, ie patent attorney or solicitor, in the true disjunctive sense.
I am aware of the decision in respect of Application 32815/95 in the name of G.S. Technology Pty Ltd issued 6 February 2000 where, in a review of taxation of costs, the delegate found that the proper construction of regulation 22.8(2) was that “cost items as a whole can come from both paragraphs (a) and (b), and any individual cost item can come from either paragraph (a) or (b).” That decision is a clear instance where the word “or”, which separates paragraphs a) and b), in that context is used in a conjunctive sense. I do not think that construction applies in items 12 and 13 of Part 1 of Schedule 8 as the context is clearly different.
To my mind, interpretation of the word “or” in its disjunctive sense in items 12 and 13 is totally consistent with the purpose of Regulation 22.8 and Schedule 8 which is to maintain costs in proceedings before the Commissioner at reasonable and appropriate levels. It is also consistent with a view that in the normal course of events attendance at a hearing will be by one person, ie either an attorney or a solicitor. In the event that more than one person is required then that is a matter for consideration by the delegate at the time of the hearing of the substantive matter or directly thereafter, since that amounts to a variation of costs from the Schedule.
I believe that in the context that the word “or” appears in items 12 and 13 of Part 1 of Schedule 8 that the word is used in a disjunctive and exclusive sense, that is, one thing or the other but not both. Thus items 12 and 13 are restricted to claiming costs either in relation to attendance at the hearing by a solicitor or patent attorney and it does not extend to claiming costs for appearance at a hearing for both a solicitor and patent attorney.
I will now consider the issue of “Counsel fees” as set out in item 14 of Schedule 8 and whether this includes multiple counsel. Firstly, I need to give consideration to Section 23 of the Acts Interpretation Act 1901, which states:
Rules as to gender and number
In any Act, unless the contrary intention appears:(a) words importing a gender include every other gender; and
(b) words in the singular number include the plural and words in the plural number include the singular.
In line with paragraph b) of Section 23, any word in an Act which is in the singular, eg counsel, also includes the plural unless the contrary intention appears. I believe the contrary intention is evident in the purpose of Schedule 8 which is to provide appropriate limitations as to items and amounts for costs in relation to actions before the Commissioner. It would be illogical to think that Schedule 8, which in theory is intended to specify and constrain costs, should be read in such a way as to include an unlimited number of counsel. Thus I am of the opinion that paragraph b) of Section 23 of the Acts Interpretation Act does not apply in relation to item 14 of Schedule 8.
Secondly, I need to consider the decision in HPM v Sturdee (1967) 37 AOJP 2077. In that decision, at page 2079, the hearing officer stated:
“Whilst the matter of costs is reserved, I state at this stage that this is a proper case in which the scale of costs may be varied to take account of the two counsel appearing for the opponent.”
It is necessary to have regard to the ‘scale’ of costs, at that time, as referred to by the hearing officer in the quote above. The Official Notice at 34 AOJP of 9 April 1964 at page 640 sets out Costs in actions before the Commissioner. At Item 13 it specifies:
$ C 13. Counsel fees (maximum) . . 84 00 per day
There is a paragraph at the end of the notice which I think is worthwhile repeating here:
“A party who considers that the above scale of costs should be varied in respect of any particular proceeding must make application for variation at the hearing appointed to determine the proceeding and, unless varied by the Commissioner or registrar, the above scale of costs will apply.”
Two things are clear to me from the decision in HPM v Sturdee. Firstly, the hearing officer made specific mention of variation of costs from scale where more than one counsel was involved, thus it must be the case that he regarded the scale, and more particularly the term “Counsel fees”, to be limited to one counsel. This clearly supports a conclusion that “counsel” in item 14 of Schedule 8 of the present regulations, which is in precisely the same terminology, is used in the singular. Secondly, any variation from scale is a matter for consideration in conjunction with the proceeding to be determined.
In consideration of the above, I have every reason to believe that item 14 relates to counsel, singular, and not multiple. Hence, any claim for costs for both senior and junior counsel is a claim to a variation of costs over and above Schedule 8 and is not appropriate in an award of costs in accordance with the Schedule.
Submissions from Biochem that items 13 and 14 should not be restricted and should be read in a ‘broad’ manner due to the length and complexity of the issues involved in the case are not persuasive as they appear to me to be more relevant to a proposal that costs should be varied from the Schedule. Indeed, the references cited by Biochem in paragraph 14.2, Volume 3, Office Manual of Practice and Procedure and HPM v Sturdee (supra) are clearly pertinent to seeking variation from the scale of costs set out in the Schedule. As I have mentioned earlier, this decision is solely restricted to costs as set out in Schedule 8 and not variation therefrom. As was indicated by the Taxing Officer in his reasons in relation to this item: “the attorney could have requested the scale of costs be varied at the substantive hearing.”
Any award of costs which varies from, or goes beyond, Schedule 8 is a matter for determination by the Commissioner, or her delegate, in conjunction with the consideration of the matter which is in dispute. It is at that point that the decision maker can have due regard to the circumstances of the case and consider submissions from parties to the dispute in relation to a variation of costs from the Schedule.
In summary, costs allowable under items 12 and 13 relate exclusively to either a patent attorney or solicitor, and not both, and under item 14 only to one counsel.
In terms of this review of taxation my conclusion regarding the interpretation of items 12-14 has no direct impact upon the costs allowed by the Taxing Officer, as the maximum amount was allowed in one instance only for each of items 13 and 14. The conclusion does however have relevance for my finding in relation to transport, accommodation and meal expenses below.
Paragraph 2, Division 1, Part 2, Schedule 8 - “person attending”
The relevant paragraph is as follows
2. A person attending proceedings before the Commissioner or the Disciplinary Tribunal must be paid:
(a)a reasonable amount for allowances for transport between the usual place of residence of the person and the place that he or she attends for that purpose; and
(b)if the person is required to be absent overnight from his or her usual place of residence - a reasonable amount for allowances up to a daily maximum of $405 for meals and accommodation.
Submissions from Emory on this point can be summarised as follows:
Part 1 of Schedule 8 sets out the maximum number of persons for whom costs and expenses may be claimed;
Pursuant to items 12-14 of Part 1 costs may be claimed for attendance by a patent attorney (or solicitor) and counsel.
Part 2 should be read in light of Part 1 and expenses for “attending proceedings” as defined in Division 1 of Part 2 should be limited in accordance with items 12-14 of Part 1. It is illogical to conclude that the Act sets a limit for the number of persons for whom costs may be claimed while allowing an unlimited number of persons to claim expenses;
Part 1 clearly sets a limit to the number of persons necessary for representation at a hearing. Part 2 follows logically from Part 1 and relates to expenses incurred by the persons for whom costs may be claimed, ie the persons in items 12-14 of Part 1;
In view of the comments above, travel, accommodation and meal expenses of Muratore and Howard should be excluded.
Submissions from Biochem are as summarised above in relation to the previous point.
On this issue I am in agreement with submissions from Emory. The term “person attending proceedings” as set out in Part 2 of Schedule 8 should be read in light of Part 1. This seems to me to be clearly in line with the purpose of Regulation 22.8 and Schedule 8. It would be illogical to conclude that the Regulations set a limit for the number of persons for whom costs may be claimed (for attendance) while allowing an unlimited number of persons to claim expenses. Hence, expenses for a “person attending” a proceeding before the Commissioner under Paragraph 2, Division 1, Part 2 of Schedule 8 is limited to such persons whose attendance is in accordance with items 12-14 of Part 1 of Schedule 8. Any expenses over and above this are a variation from the Schedule and are a matter for the delegate when deciding on the substantive matter, in line with regulation 22.8(1).
Transportation, Accommodation and Meal Expenses
It is now appropriate to consider the specific amounts allowed by the Taxing Officer in relation to transport, accommodation and meal expenses. Given my conclusions above, the transport, accommodation and meal expenses are necessarily restricted to those of Haliday (Attorney) and Bennett (Senior Counsel) as they are the two persons for whom costs may be claimed under items 13 and 14, Part 1, Schedule 8 respectively. Transport, accommodation and meal expenses of Muratore (Solicitor) and Howard (Junior Counsel) are not allowable.
Allowable transport expenses relate specifically to costs incurred in relation to Haliday ($1100) and Bennett ($100) and total $1200. Transport costs for Muratore and Howard ($200 & $100) are not allowable.
The allowable accommodation and meal expenses relate specifically to costs incurred in relation to Haliday ($1625) and Bennett ($2025), totalling $3650. Accommodation and meal costs for Muratore ($1625) and Howard ($1625) are not allowable.
Other costs allowed by the Taxing Officer
Neither party has queried the other nine items and corresponding amounts as allowed by the Taxing Officer. I have reviewed the taxation and I am in agreement with the determination on all nine items, those items stand as allowed by the Taxing Officer.
Opposition and Hearing Fee
The original claim for costs by Biochem did not include any claim for the opposition or hearing fees, but, Biochem subsequently claimed for these expenses on 18 November 1999, which was not contested by Emory. The opposition fee ($500) was paid on 19 May 1995 and the hearing fee ($500) on 15 April 1999. These fees are prescribed by the Regulations and are necessary in order to file an opposition and to be heard by the Commissioner. It was necessary and proper to pay both the opposition and hearing fees. Consequently, such fees are allowable expenses under Paragraph 1, Division 1, Part 2 of Schedule 8. As these two items were not previously claimed by Biochem they were not considered by the Taxing Officer, hence, $1000 is included in the allowable costs.
CONCLUSION
Costs allowable under items 12 and 13, Part 1 of Schedule 8 relate exclusively to either a patent attorney or solicitor, and not both, and only to one Counsel under item 14.
Expenses for a “person attending” a proceeding before the Commissioner under Paragraph 2, Division 1, Part 2 of Schedule 8 are limited to such person(s) whose attendance is in accordance with items 12-14 of Part 1 of Schedule 8.
The Taxing Officer was correct in the majority of the taxation of costs, but, incorrect in the taxation of transport, accommodation and meal expenses. Transport, accommodation and meal expenses for Muratore and Howard are not allowable (-$3,550). Additionally, the opposition and hearing fees, which were not previously claimed, are allowable expenses (+$1,000). Thus the amount of allowable costs ($17,075) should be reduced by $2,550.
Costs are allowed in the amount of $14,525. A certificate of costs for that amount will now issue.
V. J. Portelli
Delegate of the Commissioner of Patents
Solicitor for the patent applicant : F. B. Rice & Co., Melbourne
Patent attorneys for the opponent : Cullen & Co., Brisbane
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