Emory University v The Commissioner of Patents

[1997] FCA 1465

FEDERAL COURT OF AUSTRALIA

PATENTS - opposition proceeding before Deputy Commissioner of Patents in relation to the applicant’s patent application - applicant wishes Deputy Commissioner to consider, on a confidential basis, seventeen documents discovered in proceeding in United States District Court which are subject to a confidentiality order made in that proceeding - if filed in the opposition proceeding the documents would be open to public inspection under Patents Act 1990 (Cth), s 55 (2) - Commissioner of Patents unable to agree to confidentiality restriction in order to satisfy condition of United States’ District Court’s order - exception in s 55 (2) of “prescribed documents”, defined in reg 4.3 (2) - application in Federal Court for orders for sole purpose of making the seventeen documents “prescribed documents” - whether the Patents Act 1990 (Cth) or reg 4.3 (2) confers power on the Federal Court to make confidentiality orders for purpose of invoking the exclusion provided by s 55 (2) and reg 4.3 (2).

Patents Act 1990 (Cth), ss 55 (2), 174, 228
Patents Regulations, reg 4.3 (2)

EMORY UNIVERSITY v THE COMMISSIONER OF PATENTS & ANOR

NG 859 of 1997

LINDGREN J
19 DECEMBER 1997
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 859  of   1997

BETWEEN:

EMORY UNIVERSITY
APPLICANT

AND:

THE COMMISSIONER OF PATENTS
FIRST RESPONDENT

BIOCHEM PHARMA INC
SECOND RESPONDENT

JUDGE:

LINDGREN J

DATE OF ORDER:

19 DECEMBER 1997

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed.

1. The applicant pay the respondents’ costs of the proceeding, including their costs of the second respondent’s motion brought by amended notice of motion filed on 9 December 1997.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 859 of 1997

BETWEEN:

EMORY UNIVERSITY
APPLICANT

AND:

THE COMMISSIONER OF PATENTS
FIRST RESPONDENT

BIOCHEM PHARMA INC
SECOND RESPONDENT

JUDGE:	LINDGREN J
DATE:	19 DECEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

The second respondent (“Biochem”) moves by an amended notice of motion filed on the hearing on 9 December 1997 for an order that the application “be dismissed or alternatively, be struck out.” The first respondent (“the Commissioner”) makes no submissions in relation to the motion or the substantive issues to which it gives rise, but wishes to have the opportunity to make submissions about the form of orders sought by the applicant (“Emory”), if Biochem’s motion fails.

BACKGROUND

Emory commenced the proceeding on 16 October 1997 and filed an amended application in Court on 9 December 1997. The amended application claims the following substantive relief:

“1.A declaration that the documents listed in the Schedule to this Application, being the confidential documents which are the subject of the Order of Judge Tidwell of the United States District Court for the Northern District of Georgia, Atlanta Division dated 7 May 1997 (Documents) are confidential.

2.An order prohibiting the disclosure of the Documents and the information contained in them.

3.An order that the First Respondent not disclose to any person any of the Documents or the contents of any of the Documents.

4.An order that the First Respondent be at liberty to use the Documents in his consideration of the patent opposition filed by the Second Respondent in relation to the Applicant’s application for Australian Letters Patent number 658,136.”

As these orders suggest, the background to the present application lies in two other proceedings. One is a case between Emory as plaintiff and Glaxo Wellcome, Inc (“Glaxo”) and Biochem as defendants in the United States District Court for the Northern District of Georgia, Atlanta Division (“the US proceeding”). The other is Biochem’s opposition before the Commissioner to Emory’s patent application number 658,136 (“the opposition proceeding”). Emory wishes to have the Commissioner consider in the opposition proceeding, certain documents which it says will contradict, or assist to contradict, a submission by Biochem that a technical problem addressed in Emory’s patent application, how to separate the left and right enantiomers of the chemical compound BCH - 189, was so simple and routine that any non-inventive chemist of ordinary skill could have solved the problem quickly and easily. Apparently, Emory will submit that seventeen documents which have been produced to it in the course of discovery in the US proceeding, and which are referred to in Order 1 set out above (“the Documents”), will show that Biochem, despite having a high level of skill, did not succeed in effecting this separation.

On 7 May 1997, Judge Tidwell granted a motion by Emory for permission to disclose the Documents upon the following conditions:

“(1)the Australian tribunal in which Emory seeks to disclose the seventeen documents it has identified will ACCEPT AND REVIEW them on a CONFIDENTIAL BASIS; and

(2)Emory will not oppose, either in this court or in the Australian tribunal, BioChem’s efforts to rebut the information contained in the seventeen documents Emory has identified by disclosing to the Australian tribunal any confidential material, which BioChem has gained from Emory during discovery in this matter, that bears upon the patentability of Emory’s application in Australia.”

In seeking to take advantage in the opposition proceeding of the permission obtained from Judge Tidwell in the US proceeding, Emory has encountered a problem arising from condition (1) in the form of s 55 (2) of the Patents Act 1990 (“the Act”). That subsection provides as follows:

“55.(2)           Where a notice is published under paragraph 49 (5) (b) in relation to an application for a standard patent, ... the following documents are open to public inspection:

(a)all documents (other than prescribed documents) filed in relation to the application or the patent, whether before or after the acceptance or grant;

(b)... ;

(c)... ;

being documents that have not already become open to public inspection.” (emphasis supplied)

Section 228 (1) empowers the Governor-General to make regulations, not inconsistent with the Act, prescribing various matters. He has made the Patent Regulations (“the Regulations”), which commenced, as the Act did, on 30 April 1991. Regulation 4.3 (2) is as follows:

“4.3(2) For the purposes of paragraphs 55 (2) (a), (b) and (c) of the Act, a document is a prescribed document if it is subject to an order of:

(a)       a prescribed court or a court; or

(b)       the Tribunal or a tribunal;

prohibiting its disclosure or prohibiting the disclosure of information contained in it.”

I will refer to orders prohibiting disclosure of documents or of information in them as “confidentiality orders”.

The expression “prescribed court” is defined in Schedule 1 to the Act to mean:

“the Federal Court, the Supreme Court of a State, the Supreme Court of the Australian Capital Territory, the Supreme Court of the Northern Territory or the Supreme Court of Norfolk Island”.

The expression “the Tribunal” is defined in reg 1.3 (1) to mean the Administrative Appeals Tribunal (“the AAT”). Section 224 of the Act provides that application may be made to the AAT for review of decisions of the kinds there described. The AAT is referred to in reg 22.26.

It is not in dispute that a notice of the kind referred to in s 55 (2) has been published and that the Documents would be open to public inspection if they were to be filed. It is not in dispute that s 55 (2) prevents the Commissioner from proceeding to “accept and review [the Documents] on a confidential basis” as stipulated in condition (1) of Judge Tidwell’s order.

By the present proceeding, Emory seeks to take advantage of the exception of “prescribed documents” in s 55 (2) (a) of the Act by obtaining an order from this Court of a kind referred to in reg 4.3 (2). Biochem, however, submits that the Court is not able to make such an order in the present proceeding.

Before I address the issues involved, there are two further matters of background to be mentioned. First, Emory moved in the US proceeding for reconsideration of condition (1) attached to Judge Tidwell’s order of 7 May 1997. That motion was supported by a declaration of William Pickering, Australian patent attorney, who stated that a Deputy Commissioner of Patents of the Australian Industrial Property Office (“AIPO”) had told him in relation to condition (1) that he knew of no way that the AIPO could accept and review documents on a “confidential basis”. Mr Pickering’s declaration contained the following:

“The Deputy Commissioner explained that because patents fulfill [sic] the public interest, the public is entitled to know the basis on which a patent is granted and that would include knowing the content of any documents that were considered in reaching such a conclusion. While Emory can follow up that inquiry with a formal request, the Deputy Commissioner informed me that the request will almost certainly be denied on the basis that Australian law and practice does not allow for confidential submissions.”

Judge Tidwell noted Emory’s submission that condition (1) rendered his order of 7 May a nullity because Australian law prevented the Commissioner from accepting and reviewing the documents on a confidential basis, but denied Emory’s motion for reconsideration and adhered to his ruling of 7 May.

The second matter is that on 23 September 1997 in the opposition proceeding, a Deputy Commissioner of Patents (“Deputy Commissioner”) allowed Emory three months from that date in which to serve further evidence in response to new matter raised in Biochem’s evidence in reply. Since this period will expire on 23 December 1997, there is an element of urgency touching the present proceeding. In this respect it is appropriate, in view of a submission by Biochem that Emory has been guilty of delay, to note briefly certain aspects of the history of the opposition proceeding. Patent application 658,136 was advertised and accepted on 6 April 1995. Biochem filed its notice of opposition on 19 May 1995 and a statement of grounds and particulars on 21 August 1995. This statement has been amended several times. Biochem’s evidence in support of its opposition was filed on 21 November 1995, Emory’s evidence in answer on 14 June 1996, and Biochem’s evidence in reply on 24 January 1997. In the meanwhile, on 23 July 1996, the US proceeding had been commenced by Emory against Glaxo and Biochem. Discovery was given in that proceeding on 20 and 21 February 1997. On 4 March, Emory advised that it would request to serve further evidence in the opposition proceeding, and, to that end, it filed an application in that proceeding on 17 March. On 28 April, Biochem filed submissions as to why Emory’s request should not be granted and asked for an immediate hearing if those submissions were deemed an insufficient basis on which Emory’s request should be refused. On 22 July, a Deputy Commissioner heard Emory’s application for permission to serve further evidence. She gave the decision on 23 September to which I have earlier referred. Also as noted earlier, Emory commenced the present proceeding on 16 October.

BRIEF OUTLINE OF PARTIES’ SUBMISSIONS

Brief outline of Biochem’s submissions

Ms A C Bennett SC, who, with Ms K Howard of counsel, appears for Biochem submits, in terms of O 20 r 2, that no reasonable cause of action is disclosed and that the proceeding is oppressive, vexatious and an abuse of process. In the alternative, she submits, in terms of O 11 r 16, that no reasonable cause of action is disclosed, that the proceeding has a tendency to cause prejudice, embarrassment or delay, and that the proceeding is an abuse of process. However, reliance on O 11 r 16 is misplaced: O 11 generally, and r 16 in particular, are addressed to pleadings, and a pleading “does not include an application, notice of motion or affidavit” (O 1 r 4). To date, no pleadings have been filed in this proceeding.

Biochem’s submissions proceeded generally along the following lines:

Emory has no cause of action available to it. It is a misconception for Emory to rely on s 154 of the Act or s 39B (1A) of the Judiciary Act 1903 (Cth) because there is no “matter arising under” the Act in respect of which either of those sections can operate. Those sections do not create rights. The Act expressly confers jurisdiction in various respects, for example, in respect of infringement proceedings (s 120 (1)), declarations of non-infringement (s 125 (1)), applications for compulsory licences (s 133 (1)) and applications for revocation (s 138 (1)). As well, the Act expressly gives jurisdiction to hear and determine appeals from various decisions of the Commissioner. If Emory’s submission were correct, there would be no need for express provisions of these kinds.

A second misconception is to be found in Emory’s reliance on s 55 (2) of the Act. It is true that s 55 (2) deals with the same subject matter as was dealt with in s 54B of the Patents Act 1952 (Cth) (“the 1952 Act”). The 1952 Act specified the documents which were to be open to public inspection. Emory’s submission that s 55 (2) substitutes a regime of general publication except for documents which a court or a prescribed court, the Tribunal or a tribunal, orders for the purpose of s 55 (2) not to be published, should be rejected. The policy underlying s 55 is different from that which underlay s 54B of the 1952 Act. The new policy is that all documents must be open to public inspection, the exception of “prescribed documents” being provided to cover documents ordered by a court or tribunal, as part of an unrelated proceeding, not to be disclosed.

It is inappropriate for Emory to seek the present orders when it has not applied for them to the Commissioner. It is an abuse of process for Emory to make the present application having regard to the information given to Mr Pickering by the Deputy Commissioner as to the stance taken. As a matter of discretion, in view of Emory’s delay, the relief which it seeks should not be granted. Again, as a matter of discretion, that relief should not be granted because it would be inappropriate for the Commissioner to have before him or her only the Documents, out of the context provided by the other documents discovered in the US proceeding.

Brief outline of Emory’s submissions

Mr D K Catterns QC, who appeared for Emory, made submissions generally along the following lines.

The Act did not alter the provision of s 54B of the 1952 Act in material respects, and it has always been the legislature’s intention that some classes of document would not be open to public inspection. Under the 1952 Act, that objective was achieved by identification in s 54B itself of those categories of documents which were to be open for inspection, while under the Act a wider range of documents is to be open for inspection subject to the power of a prescribed court or the AAT to prohibit disclosure. While reg 4.3 (2) does not expressly confer power on the Court to make an order restricting publication of documents or information contained in them, it is a direct implication that the Court has that power. If it were otherwise, reg 4.3 (2) would not have any effective operation. There should not be attributed to the legislature an intention to exclude only documents the subject of an order made in an unrelated action. According to that construction of s 55 (2) and reg 4.3 (2), a document could become a “prescribed document” only where, in some incidental use, or by virtue of some separate issue, a question of disclosure arose. That construction involves manifest absurdity, injustice and inconvenience. The construction supported by Emory is in harmony with the fact that this Court has exclusive jurisdiction to hear an appeal from a decision of the Commissioner in opposition proceedings, in which appeal the documents in question could be relied on.

REASONING

Subsection 19 (1) of the Federal Court of Australia Act 1976 (Cth) provides that this Court has such original jurisdiction “as is vested in it by laws made by the Parliament.” Subsection 154 (1) of the Act provides:

“The Federal Court has jurisdiction with respect to matters arising under this Act.”

Subsection 39B (1A) of the Judiciary Act 1903 (Cth), which was introduced into that Act by the Law and Justice Legislation Amendment Act 1997 (Cth) with effect on and from 17 April 1997, provides:

“(1A) The original jurisdiction of the Federal Court of Australia ... includes jurisdiction in any matter:

(a)      ... ; or
(b)      ... ; or
(c)       arising under any laws made by the Parliament.”

In substance, and in the present context, these provisions invest the Court with jurisdiction with respect to matters arising under the Act.

I have reached the conclusion that there is no justiciable matter arising under the Act in the present case because the Court is not given power by or under the Act to make a confidentiality order for the purpose of s 55 (2) and reg 4.3 (2).

Several considerations support this conclusion. First, subs 55 (2) clearly does not give such power and the language of reg 4.3 (2) is ill adapted to confer power to make an order having the effect of converting a document into a “prescribed document”. Rather, the regulation speaks of a document which “is [already] subject to” a confidentiality order.

Secondly, if possible, reg 4.3 (2) should be construed so as not to lie beyond the regulation making power conferred by the Act on the Governor-General, yet the construction contended for by Emory would, in my view, produce that result. Section 228 of the Act empowers the Governor-General to make regulations. There is no express grant of a power to make a regulation conferring power on a court or tribunal to make a confidentiality order. Paragraphs 228 (1) (a) and (b) are as follows:

“228.(1)         The Governor-General may make regulations, not inconsistent with this Act:

(a)prescribing matters required or permitted by this Act to be prescribed; and

(b)prescribing matters necessary or convenient to be prescribed for carrying out or giving effect to this Act; ...”

While the Governor-General is clearly granted power to make regulations identifying the documents that are to qualify as “prescribed documents” for the purpose of s 55 (2), in my opinion s 228 does not empower him to make a regulation conferring on this Court power to make confidentiality orders for the purpose of s 55 (2) and reg 4.3 (2). Regulation 4.3 (2) is well open to the construction that it does not purport to grant such a power, and assumes the antecedent existence of a confidentiality order made by a court or tribunal in exercise of a power possessed by it otherwise.

Thirdly, it is unlikely that it was intended to confer on all the “courts” and “tribunals” referred to in reg 4.3 (2) power to make confidentiality orders for the purpose of effecting an exclusion from s 55 (2) of the Act. The vast array of specialist Commonwealth tribunals come to mind. The reference to “a prescribed court or a court” and “the Tribunal or a tribunal” in reg 4.3 (2) is curious. It may be suggested that the intention was to give only prescribed courts and the AAT power to make orders for the specific purpose of s 55 (2), while the references to “a court” and to “a tribunal” were intended to catch confidentiality orders made by other courts and tribunals for other purposes and in exercise of power derived by them from other sources. On the other hand, it is arguable that the intention was not to differentiate but treat all courts and tribunals in the same way, the express references to “prescribed courts” and “the Tribunal” being included for more abundant caution, to make clear that they, being the subject of definitions, were not intended to be excluded. Although the language is not felicitous, I think that the latter is the more likely explanation. There is simply no basis to be found within reg 4.3 (2) for differentiating between the kinds of confidentiality orders of prescribed courts and the AAT on the one hand and those of other courts and tribunals on the other hand, to which the regulation refers.

Fourthly, the Act contains express provisions for proceedings to be brought in the Court (cf ss 120 (1), 125 (1), 133 (1), 138 (1) and the numerous provisions for appeals to the Court against decisions of the Commissioner). It is to be expected that the same course (express provision) would have been followed if the legislature had intended the Court to have power to make confidentiality orders for the purpose of s 55 (2) and reg 4.3 (2).

Fifthly, the legislature has seen fit to empower the Commissioner to make orders prohibiting publication of specific classes of information in Part 4 of Chapter 17 of the Act (called “Prohibition Orders” in the heading to that Part). Again, this suggests that if it had been intended that the Court be empowered to make confidentiality orders for the specific purpose of s 55 (2), the legislature would have effected a similar express conferral of power to that end.

Sixthly, extrinsic documents to which regard may be had do not suggest a different construction, and, if anything, support that which I have adopted. Senior counsel for Emory submits that the legislature intended to replace the regime found in s 54B of the 1952 Act which provided that only particular identified classes of documents were to be open for public inspection, with a regime of general openness subject to exclusion by order made for the purpose. Similarly, he submits that it was always intended that some classes of document be excluded by order from the general operation of s 55 (2). That intention is not to be found in any document to which I have been referred or which my own researches have revealed. If Parliament intended that result, I regret to say that in my opinion the legislation has failed to give effect to it. There can be no doubt that an objective of Parliament in enacting the Act was to simplify the patents legislation and to remove detail from the Act and relegate it to regulations; cf the second reading speech of The Honourable Barry Jones MP, Minister for Science, Customs and Small Business (Parl Debs, HR, 1 June 1989, Hansard, pp 3479-84). This does not necessarily signify, however, that one should expect to find a grant of power in the regulations directed to making possible the same result as had obtained under s 54B of the 1952 Act.

The report of the Industrial Property Advisory Committee entitled “Patents, Innovation and Competition in Australia” dated 29 August 1984 to the Minister for Science and Technology gave rise to the introduction of the Bills of 1989 and 1990 which formed the basis of the Act. The report included the following passage:

“In the case of petty patents all documents lodged in respect of the application and all documents sent by the Office to the applicant become open to public inspection. We consider it desirable in the public interest to extend access to all information on the file of both standard and petty patents.

A broader right of access in more general terms is given by the Freedom of Information Act. We subscribe to the approach of that Act in relation to documents on patent files, while noting that it may not have been framed with a view to use by competitors wanting to obtain commercial information about patentees. The classes of exempt documents under the Freedom of Information Act are such as to adequately safeguard patentees’ rights and the public interest, particularly those exemptions relating to national security and defence, and to trade secrets, business, commercial and financial affairs.

Prior to the date on which a specification becomes open to public inspection, however, the applicant is entitled to expect absolute confidentiality for his application, examiners’ reports and any correspondence concerning it.

[28]WE RECOMMEND that standard and petty patent application files be confidential until the date on which they become open to public inspection, but that after that date, public access be granted to all documents contained on patent files consistently with the principles and subject to the exemptions contained in the Freedom of Information Act.” (at 62)

The subject of “public interest exemptions” is addressed in Part 4 of Chapter 17 of the Act by means of the “prohibition orders” to which I have earlier referred, and the subject of “private interest exemptions”, that is “trade secrets, business, commercial and financial affairs”, is addressed through s 55 (2) and reg 4.3 (2) in the form of the respect which those provisions require to be accorded to any confidentiality order made for the protection of private interests by any court or tribunal having power to make such an order.

CONCLUSION

There will be an order dismissing the application for lack of jurisdiction, and an order that the applicant pay the respondents’ costs.

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

Associate:

Dated:             19 December 1997

Counsel for the Applicant (Respondent to the motion):	Mr D K Catterns QC
Solicitors for the Applicant:	Andersen Legal
Counsel for the First Respondent:	Mr N J Williams
Solicitors for the First Respondent:	Australian Government Solicitor
Counsel for the Second Respondent (Applicant on the motion):	Ms A C Bennett SC with Ms K J Howard
Solicitors for the Second Respondent:	Cullens Intellectual Property Lawyers
Date of Hearing:	9 December 1997
Date of Judgment:	19 December 1997