Nakamura-Tome Precisons Industry Co v Commissioner of Patents

[1991] FCA 851

DERAL COURT OF A U S W I A	)
j

VICTO- DISTRICT REGISTRY No VG 396/91

1

GENERAL DIVISION 1

BETWEEN:	--TOME	PRECISION
INDUSTRY CO

First Applicant

FANIX LIMITED

Second Applicant

KABUSHIKI KAISHA MIYANO

Third Applicant

AND:	MORI SEIKI SEISAKDSHO CO
LTD

Fourth Applicant

a:  THE COMMISSIONER OF PATENTS

First Respondent

AND:  YAWAZAKI MMAK CORPORATION

Second Respondent

m: Ryan J

D&:	16 December 1991
h:	Melbourne
be set down for hearing in Canberra on 16 and 17 December 1991.

On 4 December 1991 the respondent Commissioner of Patents gave notice that

the hearing of an application by the second respondent, ("Yamazaki"), for an extension of Australian petty patents numbers 601, 640, and 601, 699, would

The patent attorney for the first applicant, ("Nakamura"), by a lengthy letter dated 10 December 1991, applied:

'for an adjournment of the hearing until after the determination of the (hearing until after the determination of the) appeal presently pending

in the Full Court of the Federal Court of Australia in proceedings

number G45711991 between Interact Machrne Tools (NSW) Pty. Ltd.,
I M T International Machrne Tools Pty. L t d , and [Nakamura],

(Appellants), and [Yamazaki], (Respondent)."

Extensive reasons were set out in that letter in support of that request and the

letter concluded:

" In summary, our clrents' submissron is that:

(a) hav~ng regard to the pending Federal Court decisron, the hearing of

the present applicatrons for extension of term of the petty patents should

be deferred until frnal resolutron of the appeal; and

(b) the time for preparsng and f i l ing evidence or material in reply and

for preparation for the hearing is in the circumstances outlined

inadequate for our client to ensure proper representation at the hearing

so that in any event the hearing should be deferred at this time to allow

arr client sufficient time to prepare and present its case properly."

The appeal to which reference was made on behalf of Nakamura was an appeal

from an order made in this Court by Gummow J, on 23 September this year.

On behalf of the Commissioner for Patents, a response was made to the letter

of 10 December 1991 by a letter dated 13 December 1991, addressed to

Nakamura's patent attorneys which, omitting formal parts, was in these terms:

"Requests have been received for deferment of the hearrng in the above

matter.	The patentee has been advised of these requests, and objects to
any deferment.	The delegate of the Commissioner has considered the
matter of deferring the hearing.	It rs the Commissioner's

understandrng that, although the decision of Justice Gummow is subject

to appeal, it has not been stayed. In the absence of a stay of that

decisionthe hearrng set down for 16 and 17 December wrll proceed."

That letter prompted the patent attorneys for Nakamura to write a further

letter dated 12 December 1991 to the Commissioner in these terms.

"It has been indicated by Mr Herald to Mr Pryor of thrs office that the Commissroner proposes to exercrse hrs drscretron adversely to our clrent

Nakamura-Tome Precision Industry Company Lrmited, in deciding not

to accede f o rts request for an adjournment of the hearrng under Section

69 of the Patent Acts in relation to the applrcatrons for extensron of the

terms of Petty Patent numbers 601, 140, and 601, 669.
In view of this, our client requires that you give effect to the rights given
to rt by Section 216 of the Patents Acts and Regulation 22.22 of the

Patents Regulations. In particular, our clrent requires to be heard on its

application for an adjournment and requires ten (10) days notice of the
time when, and the place where, it may be heard.

Please let us have the decisron of the Commissioner on this request for a

hearing by return facsimile, and if the Commissioner has, in fact, made

an adverse decision refusing our client's application for an adjournment of the Sectron 69 hearing, please also let us have a copy of that decision by return facsimile."

M r Herald, an Assistant Comm~uioner of Patents, replied to that letter by a

further letter dated 13 December 1991, which again, omitting formal parts,

read;

"I refer to your fax of last nrght, in which you request that your client be heard in relation to a purported exercrse of a discretionary power

under the act - viz to defer the hearing in the above matter.

I hereby advise that the Commissioner wrll not be settrng your request

for deferment of the hearmg, for hearmg.

Section 216 of the Act states that, the Commrssroner must not exercise a

drscretionary power under the Act to any person applying for the

exercise of that drscretionary power without first giving that person a

reasonable opportunrty to be heard.
This provrsron is expanded m regulatron 22.22 to cover the exercise of a

discretionary power under the Act or Regulatrons, and including the

situation where a party other than the person requestmg the exercise of
that power, is adversely affected.

I n the present matter a hearing has been set down with a l l parties having

at least 10 days notrce as rs required by regulatrons 22.22 and 22.23.
Subsequent to the matter being set down for hearing you have requested

a deferment of that hearmg. I am unable to f ind any provision in the
Act or Regulatrons whlch gives me any formal power to defer a hearing

after i t has been set down. I t follows that, in not acceding to your

request for deferment of the hearing, I have not exercised a

discretionary power under the Act or Regulations - that is, the

preconditions for the operation of section 216 and regulation 22.22 have

not been met. I am thus of the view that there rs no basis or

requirement for settrng down for hearing your request for deferment of
the hearing."

After an exparte hearing late on the afternoon of Friday, 13 December 1991,

Olney J , made an order in these terms:

"Upon the usual undertakmg as to damages being grven by Counsel on
behalf of the First Applicant:

I.    The First Respondent be restrained from commencing the hearrng of

applications by the second Respondent for extension of	the terms of
Australian Petty Patents Numbers 601,140 and 601,699	untrl 4.15 pm on
Thursday. 19 December 1991.

2.    The Applicants to have leave to serve this Order by forwarding a

Minute hereof to the respondents by facsimile transmission.

3.    The Applrcants to have leave to serve with the Application and

supporting affrdavrt a Notice of Motion returnable at 10.15 am on 19

December 1991 for a continuation of the injunction.

4.   All partres to have liberty to apply to set aside or vary this Order on

24 hours notice in writrng.

5.   The Directions Hearing be set down at 10.15 am on 19 December

1991.

6. Costs be reserved."

The second respondent, Yamazaki has now moved on notice of motion dated

15 December 1991 for orders including:

"2. That, so far as necessary, compliance with order 4 of his Honour

Mr Justice Olney's order made on 13 December 1991 be dispensed with.

3.    That orders I and 5 made by his Honour Mr Justrce Olney be

vacated.

4. That the Applicants wrthrn one hour of the makmg of order 3

communicate such fact to the Commissroner of Patents by facsimile
transmission.

5. That the Applicants give security for the costs of the proceedings in a form determined by the Court m the sum of $20,000.

6.    That the proceedings be stayed until seven days after the solicitors

for the Applicants make file and serve m affidavit stating that they are

retained by each of the second, thrrd and fourth Applicants, setting out

the date on which such retainer was obtained, and annexing copies o f

their letters of retainer.

7. In the alternatrve to order 3, that the Applicants give security for the

First Applrcant's undertakrng as to damages in the sum of $250,000.

8. In the alternatrve to order 3, that the Frrst Applicant be restrained

until further order from:

(a)	procurrng or arding or abetting the supply or offering to supply in Australia by Interact Machrne Tools (NSW) Pty Limited or I.M.T. Internatronal Machrne Tools Pty Limrted of any Nakamura- Tome TW- 10, TW-20 or TW-30 machine tool;
(b)	supplyrng to any person in Australia any Nakamura-Tome TW-
10, TW-20 or TW-30 mach~ne tool."

No reasons were given by Olney J for the order to which I have referred

which was made by him on 13 December this year. It does appear to me that the Commissioner has dealt with Nakamura's request for an adjournment or a

deferment, as it has been called in some of the correspondence, on the basis

that the Commissioner had no discretion to adjourn the hearing of the
applications for extension of the petty patents over the objection of the .

applicant or in the absence of a stay of the orders of Gummow J to which I

have referred. It also appears from the Commissioner's letter of 13 December

1991 that he has proceeded on the assumption that notice having been given of

the hearing fixed for this day, that notice being at least 10 days in duration, he

had no power, either by way of an inherent discretion or by virtue of any

express provision in the Act or Regulations, to adjourn the hearing. If I am

correct in so characterising the views taken by the Commissioner, I consider, as presently advised, that it is at least strongly arguable that he was in error.

Moreover, I would infer that it was the same perception of error which

induced Olney J to grant the injunction which he did last Friday evening.

However, I do not take the view that the discretion to hear an application, for

and if thought fit grant, an adjournment involves the exercise of a discretion

of the kind contemplated by Reg 22.22. That regulation provides:

" ( I ) The Commrssioner must, before exercisrng a discretronary power

under the Act or these Regulations adversely to a person, give the person
at least 10 days notrce of the trme when, and the place where, that

person may be heard in relation to the exercrse of the power.

(2) The Commissioner may exercise that power, i f the person:

(a) informs the Commissioner that he or she does not wish to be

heard; or

(b) does not attend the hearing; or

(c) berng an applicant or patentee, requests the Commissioner to

exercrse the power of the Commissioner without the applicant or
patentee being heard.

(3) A request:

(a) must be m the approved form; and

(b) must be accompanied by written submissions.

(4) The commissioner must after hearing the person notify him or her

of the decision."

In my view, at least as presently advised, that regulation prescribes a

procedure to be followed by the Commissioner before exercising a discretion

which is capable adversely of effecting the substantive rights of a person. It does not apply to discretionary decisions of a procedural nature one of which

is contemplated by regulation 22.23 (2) which is in these terms:

'The commissroner may adjourn a hearing from trme to time or from

place to place by notifying the parties to the hearing accordingly."

I note also that a similar procedural discretion is conferred by sub-reg. 22.23

(3). Further support for the view which I have taken is to be found in

regulation 22.24 Accord~ngly, I consider that the Commissioner is obliged to

afford a hearing in conformity with the requirements of such of the rules of natural justice as may be applicable in respect of Nakamura's request for an adjournment of the hearing which, but for his Honour's order, would have

proceeded today.

In the light of the conclusion to which I have come, I consider that his

Honour's order to the extent that it completely prohibits until 4.15 pm on next

Thursday the commencement of the hearing of applications by Yamazaki for

extension of the terms of the two petty patents goes further than is necessary to protect the rights of Nakamura. For these reasons I am persuaded to vary

the order of Olney J by substituting for paragraph 1 thereof an order in these
terms:

"That the frrst respondent be restrained until 4.15 pm on 6 February,

1992, or further order, from continurng with the hearrng of applications

by the second respondent for extension of the terms of Australian Petty

Patents Numbers 601,640 and 601.699, without first affording, the

applicant and any other person who wrshcs to be heard, an opportunity to
be heard on the question of whether the said hearing should be

adjourned for any and what period."

Secondly, I would vary his Honour's order by deleting paragraph 3 thereof and

substituting an order in these terms:

"That lrberty be reserved to any party to apply on not less than 48 hours

notice in writrng to the other partres."

I would further delete paragraphs 4 and 5 and substitute therefor a paragraph

in these terms:

" a t the directrons hearing herein be set down at 10.15 am on

6 February 1992."

I am not disposed on the present material or in the circumstances of the

present application to deal with Yamazaki's application for security for the

costs of these proceedings. The challenge to the retainer of counsel for

Nakamura is not pursued. Again, I am not persuaded in the circumstances in

which this hearing has occurred to make any order in respect of security for the undertaking as to damages which has been given on behalf of Nakamura. Mr Catterns of counsel for Yamazaki has conceded that there is no power in

the Court to grant injunct~ons in the form of paragraph 8 of the motion on

notice dated 15 December 1991.

Accordingly, in addition to the orders varying the order of Olney J, which I

have indicated, the only further order which I make is that the costs of

Nakamura and Yamazaki of this day be reserved.

I certify that this and the

preceding ten pages are a true
copy of the Reasons for

Judgment of His Honour Mr

Just~ce Ryan.

Assoclate:

Date: /6 december /q9/

Counsel for Applicant	: Mr D M Yates
Solicitor for Applicant	: Davies Ryan de Boos
Counsel for Second
Respondent	: Mr D K Catterns
Solicitor for Second
Respondent	: Freehill Hollingdale

& Page

Date of Hearing:	16 December 1991
Date of Judgment	16 December 1991