Parke Davis Pty Ltd v Sanofi

[1981] FCA 216

Re: PARKE DAVIS PTY. LIMITED
And: SANOFI, a French Corporation and THE COMMISSIONER OF PATENTS (1981) 54
FLR 122
No. G108 of 1981
Patents

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.(1), Deane(1) and Ellicott(1) JJ.

CATCHWORDS

Patents - Practice and Procedure - Application for leave to appeal - Applicant not party to decision below - Decision below directing regrant of patent after expiration of patent - Whether applicant had standing to appeal - Whether important question of law justifying leave to appeal.

Patents Act 1952, s.90(1)

Federal Court Rules, Order 52 r.15(2)

Patents - Practice and procedure - Application for leave to appeal - Applicant not party to primary decision - Decision directing regrant of patent after it had expired - Whether applicant had standing to appeal - Whether important question of law justifying leave to appeal - Patents Act 1952 (Cth), s. 90 (1) - Federal Court Rules, O. 52, r. 15 (2).

HEADNOTE

After the expiry of its letters patent the respondent applied for and was granted by the Supreme Court of Victoria an extension of time in which to petition for an extension of the patent, and an order was made directing the grant of new letters patent from the date of expiry of the original grant. The applicant, in the belief that the patent was about to expire, had spent money in preparing to market a product which could not be marketed if there were an extension or regrant of the respondent's patent. Being unaware of the respondent's applications the applicant had not filed any caveat against the extension of the patent, and nor was it a party to the proceedings in the Supreme Court.

Held: (1) The applicant was a "person interested" within s. 91 of the Patents Act and so had locus standi to apply for leave to appeal from the orders of the Supreme Court, although it had not been a party to those proceedings.

Cuthbertson v. Hobart Corporation (1921), 30 CLR 16; R. v. Rhys Jones Mactaggart & Burch Ltd. (1915), 20 CLR 544; Attorney-General (Q.) v. Wilkinson (1958), 100 CLR 422, referred to.
(2) The applicant had demonstrated "special reasons" within O. 52, r. 15 (2) of the Federal Court Rules, and would be granted leave to appeal, limited to the question of whether under s. 90 (1) of the Patents Act the Supreme Court had jurisdiction to extend the time for petitioning for an extension of a patent, or to extend a patent, when the petition for extension and the application for extension of time for petitioning were both made after the patent had expired.

HEARING

Sydney, 1981, November 23-24, 26; December 1-2. #DATE 2:12:1981

APPLICATION FOR LEAVE TO APPEAL.

The facts appear from the judgment.

K. R. Handley Q.C., J. J. Garnsey and J. Harris, for the applicant.

J. F. Lyons Q.C. and R. Merkel, for the respondent.

P. J. Deakin, for the Commissioner of Patents.

Cur. adv. vult.

Solicitors for the applicant: Minter Simpson.

Solicitors for the respondent: Moule Hamilton & Derham.

Solicitor for the Commissioner of Patents: B. J. O'Donovan, Commonwealth Crown Solicitor.

R. R. BOADEN

ORDER

1. Leave to file and serve within 14 days a notice of appeal from the orders of Fullagar J. of 24 June 1981 be granted to Parke Davis Pty. Limited, limited to the grounds:

(a) That an extension of time within which to lodge a petition under s.90 of the Patents Act 1952 cannot, on the proper construction of the section, be granted on an application filed after the patent has expired.

(b) That, upon the proper construction of the section, an order extending the term of a patent or directing a regrant of a patent for a further term cannot be made under s.90 of the Patents Act 1952 unless proceedings for extension of the term of the patent are commenced either by petition or by application for extension of time for filing a petition prior to the expiration of the patent.

2. The application by Parke Davis Pty. Limited for special leave to appeal from the order of Murray J. of 10 June 1980 be stood over to the hearing of the limited appeal from the orders of Fullagar J.

3. Subject to (1) and (2) above, the application for special leave to appeal be dismissed.

4. Costs be reserved.

JUDGE1

The applicants apply for leave to appeal from an order made on 10 June, 1980, in the Supreme Court of Victoria, by Murray J. and from a judgment and orders given and pronounced on 24 June, 1980, in the same Court, by Fullagar J. The order of Murray J. was an order extending, until 29 August, 1980, the time within which a petition might be presented by the respondent, pursuant to s.90(1) of the Patents Act, 1952, seeking an extension of Australian Letters Patent No. 272333. The judgment and orders of Fullagar J. provided, inter alia, that new letters patent be granted to and in the name of the respondent for a term of ten (10) years from the date of expiry of the abovementioned Letters Patent in respect of the matters comprised in them.

The original Letters Patent No. 272333 had expired on 16 October, 1979. At the time of expiry, the registered proprietor of the patent was a French Corporation called Labaz S.A. On 28 December, 1979, Labaz S.A. merged with the respondent which, at that time, was named Omnium Financier Aquitaine pour 1' Hygiene et la Sante (Sanofi). The result of that merger, under French law, was that the respondent was the universal successor of Labaz S.A. It was conceded by the applicant that the respondent became entitled to all the property of Labaz S.A. including any right, title and interest Labaz S.A. may have had in and in respect of the expired Australian patent. The respondent's notice of motion for an extension of time to present a petition under s.90 is dated 10 June, 1980, that is more than seven months after the patent had expired. The petition for extension of the Patent was presented on 29 August, 1980.

The applicant was not a party to the proceedings before Murray J. or, up until the time that Fullagar J. delivered the judgment and pronounced the orders against which leave to appeal is sought, to the proceedings before Fullagar J. Subsequently, by application to Fullagar J., it unsuccessfully sought to prevent the orders which he had pronounced being passed and entered. According to the applicant, the reason for its failure to lodge a caveat and become a party to the substantive proceedings before Fullagar J. was that it was not aware of the proceedings (which had been duly advertised) until it was too late for it to participate in them. Be that as it may, it is apparent that the applicant had and has a real and special interest in opposing an extension or regrant of the subject Letters Patent and that the applicant was a "person interested" within s.91 of the Patents Act, 1952. In the belief that the patent was about to expire and, after 16 October, 1979, that it had expired, the applicant had spent substantial sums of money in developing and preparing to market a product which could not be marketed if there were an extension or regrant of the patent. If it had been aware of the proceedings, it could have filed a caveat and become a party to the proceedings. In the circumstances, we consider that the applicant possesses locus standi to bring the application for leave to appeal from the judgment and orders of Fullagar J. and that the Court may, if persuaded by the applicant that the case is an appropriate one, grant the applicant leave to appeal from that judgment and those orders notwithstanding that the applicant failed to file a caveat against extension in the Supreme Court of Victoria and was not a party to the relevant proceedings in that Court (see, generally, Cuthbertson v. Hobart Corportion (1921) 30 C.L.R. 16 at p.23ff). In this regard, we do not consider that the common test of whether an applicant for leave to appeal could have been made a party by being served (see Cuthbertson v. Hobart Corporation, supra, at p. 25) should be treated as having the effect that the result of the failure of the applicant to file a caveat in proceedings of which it was unaware is that it cannot, as a matter of law, enjoy locus standi to apply for leave to appeal. Nor do we think that the decisions of the High Court in The King v. Rhys Jones ((1915) 20 C.L.R. 544) or Attorney General of Queensland v. Wilkinson ((1958) 100 C.L.R. 422) are properly applicable to the circumstances of the present case. We put to one side, for the moment, the question whether the applicant needs, or has, locus standi to apply for independent leave to appeal from the order of Murray J. Both applicant and respondent have submitted that that order of Murray J. was interlocutory in nature.

The applicant has limited the grounds upon which it seeks to attack the order of Murray J. and the judgment and orders of Fullagar J. These grounds are:

1. That the order of Mr. Justice Murray of 10th June, 1980 extending the time within which Sanofi might present a petition under Section 90 of the Patents Act 1952 was not properly made and should be set aside in view of the evidence of Sanofi that its predecessor in title had made a deliberate decision to allow the patent to expire without seeking an extension of the term of the patent. In that event the order for the grant of a new patent made by Mr. Justice Fullagar on 24th June, 1981 should also be set aside.

2. That the order of Mr. Justice Murray of 10th June, 1980 as aforesaid should be set aside because it was made ex parte without any notice to Parke Davis Pty. Ltd, and seriously prejudiced that Company; and had the Supreme Court been aware that Parke Davis Pty. Ltd. had taken steps to exploit the invention after the expiration of the patent, it would have been bound to refuse an extension of time in which to present a petition under Section 90 of the Act. In that event the order for the grant of a new patent made by Mr. Justice Fullagar on 24th June, 1981 should also be set aside.

3. That the order of Mr. Justice Murray of 10th June, 1980 as aforesaid should be set aside because Sanofi was estopped from seeking an extension of the patent. In that event the order for the grant of a new patent made by Mr. Justice Fullagar on 24th June, 1981 should also be set aside.

4. That the said order of Mr. Justice Murray should be set aside because an extension of time within which to lodge a petition under Section 90 of the Patents Act cannot be granted on an application filed after the patent has expired. In that event the orders made by Mr. Justice Fullagar on 24th June, 1981 for the grant of a new patent should also be set aside.

5. That an order extending the term of a patent or directing a regrant of the patent for a further term cannot be made under Section 90 of the Patents Act unless proceedings for extension of the term of the patent are commenced either by petition or by application for extension of time for filing a petition prior to the expiration of the patent. Accordingly the Supreme Court should have dismissed the petition.

5A. That an order for extension of the time within which a petition might be presented under Section 90 of the Patents Act whether upon a petition or a separate application for that purpose may not be made unless the applicant under Section 90 has previously advertised in accordance with Section 90 and Regulation 37 of the Patents Regulations.

6. That Sanofi having become the universal successor of Labaz S.A. the former patentee some two and one half months after the expiration of the patent was not "the patentee" in respect of the expired patent for the purposes of Sections 90 and 94, accordingly it had no standing to present a petition for an extension of the term or the grant of a new patent, and the Supreme Court should have dismissed the petition.

7. That Sanofi having become the successor of Labaz S.A. as aforesaid after the expiration of the patent the Supreme Court should not have found that it had been inadequately remunerated by the patent within the meaning of Section 94 of the Act, and should have dismissed the petition.

8. In the alternative that an order in the general form made in Ex parte Celotex Corporation 57 C.L.R. 19 at p. 25 should be made having the effect of conferring on Parke Davis Pty. Ltd. a non exclusive royalty free licence to make use, exercise and vend the intention the subject of the order for the grant of a new patent for the term of such grant.

It can be seen that grounds 4 and 5 are based on an argument as to the proper construction of s.90(1) of the Patents Act, 1952 and raise a general question of jurisdiction unrelated to the merits of the particular case. Ground 5A draws specific attention to one aspect of s.90. Ground 6 would raise for consideration the locus standi of the respondent in the unusual circumstances of the present case. The other grounds, to a greater or lesser extent, involve matters related to the merits of the case of one or other of the parties in relation to the application for extension of time for petitioning or the application for extension of the patent.

A considerable body of affidavit evidence was read to the Court and there has been cross examination of some of the deponents of affidavits. This evidence, in the main, related to certain conversations which occurred between employees of the applicant and employees of the respondent and to what the applicant knew on the subject of the status of the patent and the proceedings in the Supreme Court of Victoria. As senior counsel for the respondent has demonstrated, the evidence is, in some respects, unsatisfactory and incomplete. We do not propose, for the purposes of this application for leave to appeal, to examine the content of the evidence in detail. It suffices to say that we are, after some hesitation, persuaded by the evidence that, whatever might have been said in some general conversations at the level of hospital and medical representatives, the applicant was, at the corporate level appropriate for considering, and reaching decisions in relation to, proceedings by the respondent to extend the patent, unaware that any proceedings for the extension of the patent had been instituted until 17 or 18 June, 1981 and unaware of details of those proceedings until 24 June, 1981 which was the day on which Fullagar J. published his reasons for judgment and pronounced orders. Nor do we propose, in this application for leave to appeal, to set out the arguments which have been advanced for and against the grant of leave to appeal or the reasons which have ultimately led us to the conclusions which we have reached. In this regard, we follow the ordinary practice adopted in this Court in respect of applications for leave to appeal. Naturally, since the application for leave to appeal is pursuant to Order 52 Rule 15(2), we have approached the matter on the basis that leave to appeal should only be granted "for special reasons".

The conclusion which we have reached is that the applicant should be granted limited leave to appeal to enable it to challenge, on the ground set out in grounds 4 and 5 (supra) advanced on behalf of the applicant, the judgment and order that there be a regrant of the patent, that is to say, on the ground that, upon the proper construction of s.90(1) of the Patents Act, 1952, the Supreme Court did not possess jurisdiction either to extend the time for petitioning for an extension of the patent or to extend the patent in circumstances where neither the petition for the extension of the patent nor the application for extension of time for petitioning were lodged until after the patent had expired. Subject to what is said hereunder as to the application for leave to appeal from the order of Murray J., we are of the view that the application for leave to appeal should otherwise be refused.

The issue whether independent leave to appeal from the order of Murray J., limited to the same ground, should be granted involves a number of distinct questions. It was submitted by the respondent, and disputed by the applicant, that the Supreme Court lacked power to permit the applicant to become a party to that application and that, after the order had been made by Murray J., the applicant possessed no locus standi to apply for a revocation of that order. It followed, so the respondent said, that the applicant possessed no locus standi to appeal from that order. As has been mentioned, both applicant and respondent submitted that the order of Murray J. was interlocutory in nature. The applicant submitted, and the respondent disputed that, that being the case, it could attack the interlocutory order of Murray J. if leave to appeal were granted against the judgment and order of Fullagar J. The resolution of these questions plainly involves the consideration of the overall structure of s.90 of the Patents Act, 1952. We consider that their resolution should be left to the hearing of the appeal pursuant to the limited leave to appeal which we have indicated should be granted. The same comment applies in respect of a further submission on behalf of the respondent that there would, in any event, be no point in setting aside the order of Murray J. for the reason that, the petition having been presented within the time allowed by that order, the operation of the order could not be undone retrospectively (cf. Wilde v. Australian Trade Equipment Co. Pty. Limited (1981) 55 A.L.J.R. 280 at p. 285).

We therefore propose to grant, at this stage, Limited leave to Parke Davis Pty. Limited to appeal from the judgment and orders of Fullagar J. given and pronounced on 24 June, 1980. The leave to appeal is limited to allow Parke Davis Pty. Limited to attack the judgment and orders of Fullagar J. on, and only on, grounds 4 and 5 (supra). We propose to stand over the application for leave to appeal from the order of Murray J. until the hearing of the appeal. Otherwise, the application for leave to appeal will be dismissed. On the hearing of the appeal, Parke Davis Pty. Limited will be at liberty to submit that they should, if necessary, be granted limited leave to appeal from the order of Murray J. of 10 June, 1980 on, and only on, the grounds set out in ground 4 (supra). The costs of all parties (including the Commissioner of Patents who intervened on the application) should be reserved. We indicate that, on the hearing of the appeal, we consider that provision should be made for the payment of the costs of the Commissioner of the application for leave to appeal.