Northern Territory of Australia v Collins

[2008] HCATrans 122

[2008] HCATrans 122

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Darwin  No D9 of 2007

B e t w e e n -

NORTHERN TERRITORY OF AUSTRALIA

Applicant

and

VINCENT COLLINS AND MARYANN COLLINS

Respondents

Application for special leave to appeal

KIRBY J
HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 7 MARCH 2008, AT 10.30 AM

Copyright in the High Court of Australia

MR S.J. GAGELER, SC:   If the Court pleases, I appear with MR G.R. NICHOLSON for the applicant.  (instructed by Clayton Utz)

MR B.J. FITZPATRICK:   If the Court pleases, I appear on behalf of the respondent.  (instructed by De Silva Hebron)

KIRBY J:   Mr Gageler, you have been working so hard this morning we are going to give you a little rest for a moment and call on Mr Fitzpatrick.

MR FITZPATRICK:   Thank you.

KIRBY J:   Why is this not an appropriate matter for the grant of special leave?  We have the dissent of Justice French in the Full Court, a contrary view expressed by the primary judge in careful reasons, Justice Mansfield, several novel concepts concerning section 117 of the Patents Act and a patent in an area which, at least if you scanned the international literature, is of growing importance of the grant of patents in respect of something which it is said is not a staple commercial product, so why is this not something that would attract our attention?

MR FITZPATRICK:   Your Honour, could I provide three broad reasons as to why we say it is not an appropriate vehicle for this Court to consider.  First, your Honour, in our submission, the input argument, as it is put by the applicant, is not available as it was not considered by either Justice Mansfield at first instance or, indeed, any of the judges of the Full Federal Court. 

This argument seems to rely upon the construction of section 117 adopted by Justice Gummow at first instance in the Rescare decision and that was a decision and a construction that was subsequently considered in detail by the Full Federal Court in Bristol‑Myers Squibb v FH Faulding and it is clear, in my respectful submission, your Honours, that Justice Mansfield at application book page 9, Justice French at application book page 70 and the majority in the Full Court at application book pages 95 and 96 specifically indicated that that issue of statutory construction that arose between Rescare and BMS v Faulding, if I can adopt the shorthand reference, was not considered by any of the judges in this particular case.

HAYNE J:   Is the point you are now making a point about whether an issue can be taken on appeal, that is, are you saying that this is something that the appellant, or applicant if leave were granted, would be barred from taking?

MR FITZPATRICK:   No, your Honour, I would not put it as high as that.

HAYNE J:   Because, is it not an essential step in the argument, if leave goes, to work out what is the product?

MR FITZPATRICK:   In my submission, your Honour, the two issues that would arise based on the separate questions that were proposed by Justice Mansfield would be, firstly, whether or not the licences that the Territory entered into with ACOC were relevantly a supply within the meaning of section 117 and, secondly, whether the timber, the subject of the licence, Callitris Intratropica, was a staple commercial product within the meaning of section 117, that they would be the two issues that would arise.

CRENNAN J:   But embedded in both of the separate questions was the issue of the supply of a product.  So on one view it might be said that that issue was not considered by Justice Mansfield or the majority perhaps ought to have been considered, particularly having regard to what is said in Rescare and Bristol‑Myers.

MR FITZPATRICK:   Your Honour, it is true that Justice Mansfield indicated in his judgment that he did not go on to consider the constructional argument because of his findings in relation to the supply and staple commercial product.

CRENNAN J:   So what I am putting to you really is the product issue is embedded in the supply issue.

MR FITZPATRICK:   Yes, I accept that proposition, your Honour.  Could I put a second proposition to your Honours in relation to this issue and that is that the construction or controversy, if it be that, was ended by the Full Court in Bristol‑Myers Squibb v FH Faulding.  His Honour Justice Gummow in Rescare did construe section 117 in a way which seems to have the effect that in order to fall within section 117 the product that was supplied needed to be an infringing product.  One of the criticisms made by the Full Court in BMS v Faulding was that such a construction would render that section otiose.  It would simply play no role because the product would infringe anyway, therefore, there would be no requirement or work for section 117 to do. 

Secondly, your Honours, the Full Court in Rescare, Justice Lockhart considered and approved and followed his Honour Justice Gummow’s reasoning at first instance in a single paragraph and Justice Wilcox merely agreed globally with the decision of Justice Lockhart.  In contrast, the later decision of the Full Court in BMS v Faulding considered the issue in detail and had recourse to the IPAC report which, of course, was an important document preceding the introduction of the 1990 Act and, based on the wording of the section and the intention of the section, the Full Court in BMS v Faulding gave it the construction which has applied without controversy, if I may say, since 2000, the year of the Full Court decision.  So, in my submission, whatever uncertainty there may have been in relation to that particular constructional issue was resolved by the Full Court in BMS v Faulding.

Can I go to my second proposition, your Honour, and that is that this is not an appropriate vehicle to test the proper construction of section 117 and that is because this is a fact‑specific case but it is an unusual fact‑specific case.  For example, the question of supply turns upon the construction of the agreements entered into between the Territory Government and ACOC and questions as to whether or not it might constitute an interest in the land as Justice French found or, relevantly, a supply as the majority in the Full Court found.

KIRBY J:   It is an interesting question, is it not, the interface between the normal activities of the polity of the Northern Territory which will involve the disposal of land and the application of the patents law?  It is quite an interesting and intriguing problem.

MR FITZPATRICK:   It is an interesting and intriguing problem, your Honour.

KIRBY J:   That is why it led to the division in the court below.

MR FITZPATRICK:   Your Honour, my point is that I accept that it is an interesting and intriguing problem, but if one considers the facts in Rescare and BMS v Faulding, they are the more typical section 117 type scenario which, indeed, was the situation posited in the explanatory memorandum in the IPAC report.  For example, in Rescare it was a method for treating sleep apnoea which involved the application of a mask and pressurised air, BMS v Faulding was a method of treating ovarian cancer.

KIRBY J:   I could understand an argument in such a case that is very fact specific, but we are dealing here with a unit in the governance of the country and that is what seems to me to at least merit the consideration by this Court of the issue which is presented by the appeal.

MR FITZPATRICK:   Your Honour, my simple point is that a determination of this particular issue is unlikely to shed light on the application of section 117 as raised by this case for the more typical example where section 117 comes into play which is the provision of a pharmaceutical product in the context of a patent where there is a method claim or an agricultural product rather than a licence allowing a person to enter into land and to mill a particular species of timber.

CRENNAN J:   I may have this wrong, but I thought this was a method patent for extracting blue cypress oil from the bark and wood of a particular species of tree.

MR FITZPATRICK:   Yes, your Honour.  But, your Honour, my point is that in a more typical situation the supply is of a product, for example, in BMS v Faulding it was the supply of taxol to the doctors for the use and the treatment of ovarian cancer and in the Rescare Case it was the supply of the masks for the treatment of sleep apnoea.  This case is very unusual because it is not the supply of the timber in the sense that there is a physical supply by the government, it is the government entering into a licence with ACOC which entitles ACOC to go onto the Crown land to harvest the timber and then to extract the oil from the timber.

So, your Honour, my point is that that is an unusual factual circumstance compared to the more typical situation where section 117 would apply and, therefore, although I accept that it is an intriguing legal question, my submission is that it would not shed much light on the application of section 117 for the more typical users of the patent system, if I can put it that way.

KIRBY J:   Of course, we get a lot of legal questions which are not intriguing, so when we get a matter which it is conceded is an intriguing legal question, it takes a lot of advocacy to persuade me that we may not look at it.

CRENNAN J:   The other point, I think, is that that set of facts that you describe of all the possible facts might throw up very acutely whether or not section 13(1) of the Patents Act, which deals with exploitation, should have a bearing on the construction of use in section 117.

MR FITZPATRICK:   Yes, which is precisely the reasoning that Justice Gummow applied in Rescare.  Your Honour, if one looks at the explanatory memorandum leading up to the 1990 Act and section 117, the discussion actually consistently referred to the supply of goods rather than the supply of product.  When the section was actually drafted the term “product” was inserted into section 117 which, as your Honours noted, finds its way into the definition of “exploit” in the schedule which one can arrive at through section 13 of the Act. 

In my submission, though, a consideration of the wording of section 117 and the explanatory memorandum in the IPAC report makes it clear that that was not the intention of the legislature to so limit section 117 such that in order to fall within its scope the product supplied needed to be an infringing product.  As the Full Court in BMS v Faulding indicated, to adopt such a construction would seem to reduce section 117 to irrelevance because infringement would be established in any case.

KIRBY J:   Yes, thank you very much.  Is there anything else?

MR FITZPATRICK:   No, your Honours.

KIRBY J:   Thank you very much, Mr Fitzpatrick.  Yes, the Court does not need your further assistance, Mr Gageler.

There will be a grant of special leave to appeal in this matter.  I assume this is a matter that would take no more than a day, is that correct?

MR GAGELER:   Yes, your Honour.

KIRBY J:   It is a matter that may be listed in the Brisbane sitting of the Court, so the parties should prepare on that basis just in case that is the way in which the Registry assigns the matter.

The Court will now adjourn to be reconstituted for the sixth application.

AT 10.43 AM THE MATTER WAS CONCLUDED