Genetic Institute Inc v Kirin-Amgen Inc (No 2)

[1997] FCA 1058

FEDERAL COURT OF AUSTRALIA

PATENTS - Application for appoinment of assessor under s 217 Patents Act 1990 (Cth) - whether appointment overidden or modified by O 34 Federal Court Rules - circumstances in which appointment desirable - role and duties of assessor - whether assessor permitted to exercise judicial function - whether assessor’s function contrary to rules of natural justice.

Patents Act 1990 (Cth) s 217.
Federal Court Rules 1979 (Cth) O 34

Beecham Group Ltd v Bristol-Myers Company [1980] 1 NZLR  185
Beecham Group Ltd v Bristol-Myers Company (No2) [1980] 1 NZLR 192
Valensi v British Radio Corportion Ltd [1973] RPC 337
Adhesives Pty Limited v Aktieselskabet Dansk Gaerings-Industri (1936) 55 CLR 523
Harris  v Caladine (1990) 172 CLR 84
Re JRL; Ex parte CJL (1986) CLR 342
R v Magistrates’ Court at Lilydale; Ex parte Ciccone [1973] VR 122

GENETIC INSTITUTE INC v KIRIN-AMGEN INC  (No.2)

JUDGE:  HEEREY J
PLACE:  MELBOURNE
DATE:    17 SEPTEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG868  of   1995

BETWEEN:	GENETIC INSTITUTE INC APPLICANT
AND:	KIRIN-AMGEN INC RESPONDENT
JUDGE:		HEEREY J
DATE OF ORDER:		17 SEPTEMBER 1997
WHERE MADE:		MELBOURNE

THE COURT ORDERS THAT:

1. Directions hearing adjourned to a date to be fixed.

2. Costs reserved.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 868 of 1995

BETWEEN:	GENETIC INSTITUTE INC APPLICANT
AND:	KIRIN-AMGEN INC RESPONDENT

JUDGE:	HEEREY J
DATE:	17 SEPTEMBER 1997
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

In this patent infringement proceeding the applicant has sought an order for the appointment of an assessor under s 217 of the Patents Act 1990 (Cth). That section provides:

"A prescribed court [which the Federal Court is] may, if it thinks fit, call in the aid of an assessor to assist it in the hearing and trial or determination of any proceedings under this Act."

No application is made for the appointment of a Court expert under O 34 of the Federal Court Rules. I do not accept the respondent's contention that in some way O 34 could "over-ride or modify" s 217, although no doubt in the practical application of s 217 in the present case regard might be had by way of analogy to some of the provisions of the rule.

Of necessity much of the argument today was on an abstract basis and I stress at the outset that care will need to be taken in working out the details both as to the selection and appointment of the assessor and the actual way in which that person will participate in the hearing. There will be full opportunity given to the parties at future stages of this proceeding to have input into that process.  Nevertheless, because I have reached a firm conclusion that the appointment of an assessor is desirable I think it best to deal in principle with the matter now.

I have derived considerable assistance in this matter from the decision of Barker J of the High Court of New Zealand in Beecham Group Ltd v Bristol-Myers Company [1980] 1 NZLR 185. In that case, which was also a patent infringement action involving a pharmaceutical patent, his Honour had to deal with an application for the appointment of an "independent scientific adviser". The relevant New Zealand rule provided for the appointment of:

"... an independent scientific adviser to assist the Court or to inquire and report upon any questions of fact or opinion not involving questions of law or construction."

In comparison with the Australian position, it will be seen that that rule contemplated both the role of an assessor under s 217 and that of a Court appointed expert under O 34.

The application was opposed by one of the parties on grounds which included the contention that the technical matters in issue were "not such as to present any real difficulty"  for the judge.  As to that, his Honour said (at 188) that there was "considerable attraction" in the submission of counsel supporting an appointment:

"... that the Rules permit the Court to be assisted by a scientific adviser, that the Court can determine for itself the limits of such assistance and that, if the matter becomes as easy for the Judge as counsel for the respondent would have it, then no great harm is caused if the scientific adviser in the end becomes somewhat redundant."

After referring to a number of authorities his Honour said (at 190):

"Mr McKay's principal opposition to the appointment of the scientific adviser, apart from his submission relating to the lack of real technical difficulty in the appeal, was derived from the uncertainty of the role of the adviser; the introduction of the adviser brought an unknown and impracticable peril into the hearing.  He submitted that the adviser could readily transgress the limits of his proper role and express views to the Judge which the parties may wish to challenge but would have no opportunity of doing.

I agree that this general criticism is valid, but considered that the criticism is capable of being properly assuaged thus:

(a) The Court, at the commencement of the hearing, should define the role of the scientific adviser.  As far as I would be concerned, his role would merely be to consider the submissions and assist the Judge in Chambers to understand them; if the adviser proffered any views of his own, either contrary to any submission or as additional matters for the Court to consider, then the Judge should seek the comments of counsel.

(b)The Judge should make it quite clear to the adviser that the legislation reposes the power of decision in the Judge alone, and that therefore he should not transgress his role of pure adviser.

(c)At the conclusion of the hearing, I would envisage that the scientific adviser's service would be terminated.  By that stage, the Judge should, with the adviser's assistance, have obtained a sufficient grasp of the issues involved."

The trial duly took place.  His Honour's judgment is reported: Beecham Group Ltd v Bristol-Myers Company (No2) [1980] 1 NZLR 192. It is of value to see how the appointment worked out in practice. His Honour said (at 195):

"Counsel were able to agree on the appointment, as scientific adviser, of Professor R J Ferrier, PhD (Edinburgh), DSc (London), FRSNZ, Professor of Organic Chemistry at Victoria University of Wellington.  I have been greatly assisted by him.  As one without prior scientific knowledge, I found the basic concepts of stereochemistry involved in this appeal, daunting.  Just as the English Court of Appeal in Valensi v British Radio Corporation Ltd [1973] RPC 337, found the appointment of a scientific adviser helpful, Professor Ferrier assisted me towards an understanding of difficult concepts of stereochemistry involved - a necessary basis for any intelligent decision on the merits of the appeal. Professor Ferrier was not asked to make a formal report (as would have been possible under R 5); like the Court of Appeal in Valensi's case,  I did not regard such technical advice as I received from time to time from him throughout the hearing, as constituting a “report” within the meaning of the Rule.

In my judgment of 11 May 1979, I tentatively stated views on the role which the scientific adviser would play at the hearing.  These views were essentially tentative.  This was the first occasion on which such an adviser had been appointed in New Zealand; counsel and the Court were “feeling their way” as to the most effective mode of his operation.  Counsel were happy that the adviser, in the course of the hearing, should comment on any scientific matters raised by counsel's submissions; if he had any thoughts of his own, I encouraged him to articulate them in open Court and to seek counsel's reactions.  Any major question which occurred to the adviser - not being simply a technical instruction to myself in the scientific area - was referred to counsel for their comment.

In my earlier judgment, I expressed the view - again tentative - that the scientific adviser's duties should cease at the conclusion of the hearing of the appeal [ie a rehearing de novo by his Honour].  However, after due discussion with counsel, I considered it appropriate to confer with the adviser after judgment had been reserved to ensure that every statement in this judgment of scientific fact or principle was correct.  I wish it placed on record, in view of Bristol's determined opposition to the appointment of any scientific adviser, that Professor Ferrier fully appreciated the limits of his role.  He was at all times well aware that, under the legislation, he, as scientific adviser, was not empowered to make the ultimate decision on the appeal but now that he was employed purely in the capacity of a scientific adviser to the Court."

In arguing against the appointment of an assessor counsel for the respondent in the present case referred to the infrequency of exercise of the power. Indeed, I was told that ever since the introduction of Commonwealth patents legislation in 1903 there has been an equivalent to s 217, but it has only been used once, and then by consent: Adhesives Pty Limited v Aktieselskabet Dansk Gaerings-Industri (1936) 55 CLR 523.

Counsel also pointed out that a similar rule was rarely applied in the United Kingdom, and then mainly in the Court of Appeal rather than in the trial division.  However, in the United Kingdom, unlike Australia, there are specialist judges who deal in the main with patent matters and who often have scientific qualifications themselves.  This may be a convenient occasion to point out what I see as relevant factors in the present application, namely that this case has been allocated to my docket, that I will be conducting the trial, and that my own scientific education did not proceed beyond the fourth year of secondary school.

Counsel for the respondent relied on two High Court authorities which were said to stand in the way of the exercise of this power.  The first was Harris v Caladine (1990) 172 CLR 84. The question there was whether the power to make a consent order could be validly delegated to a Registrar of the Family Court, that officer not being a judge appointed under Chapter III of the Constitution. In upholding the validity of the delegation a majority of the High Court relied on a number of factors, including the fact that the Registrar was part of the organisational structure of a Chapter III Court and that the order made was subject to review by way of rehearing de novo before a judge.

In my opinion such considerations are not relevant to an appointment under s 217. There is no question of an assessor giving any judgment or making any order (even by consent) or otherwise exercising any judicial functions. An assessor is to assist the judge, both in hearing and trial and/or in determination of any proceeding. The judgment in the case, the exercise of the judicial power, remains that of the judge. In exercising judicial power, a judge is routinely assisted by persons who are not judges: counsel, solicitors, witnesses, the judge's associate and secretary and other Court staff.

The second case was Re JRL; Ex parte CJL (1986) 161 CLR 342. In that case the High Court set aside an order of the Family Court because a Court counsellor had approached a judge of the Court in the judge's private chambers to complain about the intended adjournment of the hearing of a custody application, volunteered information about her qualifications as a prospective expert witness, and canvassed aspects of the proceedings. A majority of the High Court held that a breach of the rules of natural justice had occurred, notwithstanding that the judge subsequently advised the parties of what had occurred.

Features of JRL included the following:

(i)The intervention of the counsellor was a partisan one, made with a view to influencing the conduct and outcome of the litigation: Gibbs CJ at 347, Mason J at 351, Brennan J at 368-369.

(ii)The intervention was not authorized by the applicable legislation (the Family Law Act and Rules): Gibbs CJ at 349, Mason J at 355, Brennan J at 369.

(iii)The counsellor, having provided a report under s 63(2) of the Family Law Act, was a potential witness: Gibbs CJ at 348, Mason CJ at 354, Brennan J at 370.

None of those features appear in the present case or might reasonably be anticipated. 

I do not see the appointment of an assessor as being inconsistent with any principle emerging from JRL.  It should be particularly noted that Mason J cited with approval the well-known decision in R v Magistrates' Court at Lilydale; Ex parte Ciccone [1973] VR 122. In that case McInerney J said (at 127):

"The sound instinct of the legal profession - judges and practitioners alike - has always been that, save in the most exceptional cases, there should be no communication or association between the judge and one of the parties (or the legal advisers or witnesses of such a party), otherwise than in the presence of or with the previous knowledge and consent of the other party.  Once the case is under way, or about to get under way, the judicial officer keeps aloof from the parties (and from their legal advisers and witnesses) and neither he nor they should so act as to expose the judicial officer to a suspicion of having had communications with one party behind the back of or without the previous knowledge and consent of the other party.  For if something is done which affords a reasonable basis for such suspicion, confidence in the impartiality of the judicial officer is undermined."

Mason J then continued (161 CLR at 351):

"This proscription does not, of course, debar a judge hearing a case from consulting with other judges of his court who have no interest in the matter or with court personnel whose function is to aid him in carrying out his judicial responsibilities.  The same standard is applied in the Code of Judicial Conduct for United States Judges, approved by the Judicial Conference of the United States: see Canon 3 and commentary."

An assessor appointed under s 217 is in my opinion to be included in the category of court personnel referred to by his Honour. How the assessor appointed under s 217 performs his or her role in the actual conduct of this case will of course be governed by law, including the rules of natural justice. It is not appropriate at this early stage to lay down any detailed prescription. Suffice to say that the practical experience of Beecham shows how an appointment can work well and be of great assistance to a trial judge, without infringing natural justice.

Counsel for the respondent raised a number of discretionary factors.  It was said (echoing the argument advanced in Beecham) that the issues in the present case were "not difficult" and that the basic concepts were well known, were taught in high schools, and were the subject of discussion in the popular press.  An example was given of an article from the British journal The Economist of 14 September 1996.

From what I know of this case at the moment, scientific issues are obviously hotly disputed between the parties.  The witnesses to be called may be categorised as follows:
  Applicant         Respondent          
           Molecular biology/gene cloning  3  2
           Glycobiology  1
           Glycobiology/carbohydrate analysis  2
           Molecular biology/protein chemistry  1
           Cell culture/product expression  2
           EPO molecular biology/assays/biological activity  1
           Inventor/molecular biology  1
           Renal Physician  2

The issues involve the glyco protein used in the production of red blood cells, the nature of proteins, gene expression, messenger RNA technology, molecular cloning, DNA cloning and screening techniques, amongst other things.

It can be said of many disciplines that the basic concepts can be readily explained to intelligent lay people, including schoolchildren, but that does not prevent disputes arising between experts, who can contest issues with the enormous advantage of a lifetime of experience in the discipline. The resolution of such disputes by a non-expert judge is likely to be aided by expert assistance such as that provided by an assessor. No doubt the judge could reach a decision without such assistance, but that is not the point; s 217 does not posit a criterion of total judicial inadequacy as a pre-condition of appointment of an assessor. It is simply a question whether the judicial task can be better performed.

Other practical problems were advanced by counsel for the respondent.  It was said that more than one discipline were involved in the present case, and that there may be difficulty in finding experts who are not affected by "personal animosities" or membership of one or other of rival schools of thought in this area.  However, these are things which we will have to cope with if and when they arise.

There was reference made to some litigation in which it appeared after the case was over that the Court appointed expert had some financial or commercial connection with one of the parties.  I would think that the practical risk of this appearing in the present case is minimal, providing a reasonable set of queries can be agreed on to be put to any person proposed for appointment.  Such queries would be simple and would not, in my view, need to amount to American style juror inquisition. 

As in the Beecham case, it does not seem that, given the amount at stake in this litigation, the cost of remuneration of an assessor will be disproportionate. The most counsel for the respondent would say was that this case might be a precedent for other cases where there was less at issue.  I do not see that as providing any ground for not making the order if it were otherwise appropriate.  If disproportionate cost  is a relevant consideration in other cases, that is something to be dealt with in those cases.

The directions hearing will be adjourned for further directions to a date to be fixed, some two weeks hence.  In the meantime, counsel can discuss details as to the selection and appointment of an assessor.

The costs of today will be reserved.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey

Associate:

Dated:            17 September 1997

Counsel for the Applicant:	Mr B Caine
Solicitor for the Applicant:	Davies Ryan & De Boos
Counsel for the Respondent:	Mrs A Bennett SC and Ms K Howard
Solicitor for the Respondent:	Sprusons
Date of Hearing:	17 September 1997
Date of Judgment:	17 September 1997