Potter v Broken Hill Proprietary Co Ltd
[1906] HCA 88
•20 March 1906
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479
3 C.L,E,1 OF
A U S T R A L IA .
[HIGH COURT OK AUSTRALIA.]
A p p e l l a n t ;
POTTER
.
P l a in t if f ,
the b r o k e n h i l l p r o p r i e t a r y c o m
R e s p o n d e n t .
pa n y D e f e n d a n t ,
LTD..........................................................
ON APPEAL FROM THE SUPREM E COURT OF VICTORIA.
International L aw —Conjlict o fla w s ~ A c t o f sovereignty— Grant
o f letters patent—
H. C. OF A.
Patent granted in one State o f Commonwealth— Action fo r infringement brought
in another State o f Commonwealth— Patents A c t 1899 (ALN, IK.) [No. 19 o f
1906.
1S99).
Melbourne,
The grant of letters patent for an invention is a grant of a right to exclude
1905
others from manufacturing or using the particular invention within the
Nov. 23, 24.
territory of the State under whose laws it is granted, and the title to the right
must devolve, as in the case of land, according to the laws of that State.
1906
Feb. 27, *28.
The grant of letters patent is an exercise of the sovereign power of the
}far. 1, 2, 20.
State, and therefore, as in the case of title to land, the validity of the grant is
Griffith C.J.. Burton and
not examinable in the Courts of another Stale, except in cases where the
question of that validity arises merely incidentally in an action otherwise
O’Connor JJ.
cognizable by the Courts of that other State.
The circumstance that patent rights cannot be enforced against a person M'ho can prove that the invention was not novel does not exclude the operation of the above rule.
The grant of letters patent is within the powers of sovereignty conferred upon the State of New South Wales by its Constitution, and a grant of such
letters under the Patents A ct 1899 (N.S. W .) is an exercise of such powers.
It is competent for the Courts of one State to inquire as to the limits of the rights of sovereignty possessed by another State, If the act in question purports to be done within those lim its, the case is in principle the same as one of an act done in the exercise of an unlimited sovereignty.
An action was brought in Victoria alleging an infringement in New South ales by the defendants, a Victorian Company carrying on mining operations in New Soxith Wales, of the plaintiff’s New South Wales patent, and claiming
4 S 0 HIGH
COUUT
[1906,
H. C. OF A.
au injunction and damages.
The defendant by its defence alleged that th
1906. plaintiffs patent was invalid on various grounds.
Htld, that the plaintiff's cause of action was not justiciable in Victoria
Potter
V. Decision of the Full Court, P otitr v. T h f Broken Hill Proprielary Co h i
P rOKEN HiLIi (1905) V.L .R., 612; 27 A .L .T ., 74, affinned. '
P roprietary
Y
’
Co^D.
from tlie Supreme Court of Victoria.
An action was brought in the Supreme Court of Victoria by Charles Vincent Potter against tire Broken Hill Proprietaiy ci Ltd., and in the statement of claim it was alleged in paragraphs 1 to 6 that the plaintiff carried on business in Melbourne, in the State of Victoria, where he was resident and domiciled; that the defendant Company was duly incorporated and registered in Victoria under the provisions of the Companies Acts, and that its head otBce and its registered office under these Acts were .situated in Melbourne, where its business was carried on, directed and managed by a board of directors with a secretary and other officers under their control; that the defendant companŷ owned large mines at Broken Hill, in the State of New South Vales, the sulphide ores from whicli they had treated by methods which, prior to their use of the plaintiff’s invention, liad been ineffective to extract the whole of the valuable metals therein; that during the year 1901 the plaintiff had discovered a new and improved process for the extraction or separation of metals from sulphide ores; and that on 29th November, 1901, the plaintiff had duly obtained in New South Wales a patent for his invention, being Patent No. 11,575. In paragraphs 7 and 8 it was alleged that after the plaintiff had obtained such patent, the defendant com pany alleged that its manager, G. D. Delprat, had invented a new and improved process for .separating the metals in sulphide ores from the crade ores, but that such alleged invention was really the plaintifTs process with some colourable variations consisting of the using well known chemical ecjuivalents so as to make the process appear different; and that Delprat, acting for and on behalf of the defendant company, had applied for in New South Wales a patent for his alleged invention, which, although opposed by the plaintiff, was granted, the officers intimating that, as chemical que.stions were involved, the matter should be decided by an action in the Courts.
3 C.L.R.] OF AUSTHALIA,
481
In paragraph 9 it was then alleged that “ the defendant com- H- C. of a .
panj' has infringed, and will, unless restrained by an injunction
of this Honourable Court, continue to infringe the said patent, of
P ottek
which the plaintitf is the first inventor, granted in New South
Wales as aforesaid, by using and vi'orking at its said mine the P k w r ie ta sy
said alleged invention referred to in paragraphs 7 and S hereof.”
J__ ' ’
The plaintiff claimed;—
“ A declaration that the proce.ss referred to in paragraph 7 and S
as an alleged invention of the said Delprat,” and also the process
referred to in paragraph 11 as another alleged invention of the
said Delprat, is each of them an infringement of the plaintiff’s
patent No. 11,57.5 in the State of New South Wales.
“An injunction to restrain the defendant, its agents, or servants, from infringing the said patent No. 11,575 in the State of New South Wales at its mines at Broken Hill.
“ An account of all profits made by the defendant by the use of the said proce.sses or either of them, the alleged inx'entious of the said Delprat, at its mines at Broken Hill.
“ £50,000 damages for infringement of the New South Wales
patent.”
There were similar claims in respect of an alleged infringement of a patent granted in Victoria to the plaintiff for the same inven tion.
By its defence the defendant Company' denied infringement of the plaintiff’s patents, and alleged that such patents were invalid on various grounds. By paragraph 6 the defendant said :—“ It denies each and every' allegation contained in paragraph 9 of the statement of claim, and it will contend further with regard to such allegations that they allege no cause of action ju.stieiable in this State, and that such alleged cause of action is not justiciable Iiere.”
An order was made, on the application of the plaintiff, that the points of law i-aised by paragraph 6 of the defence .should be set down for hearing before tlie trial of the action, and such points were .subsequently referred to the Full Court.
The Full Court held {Hodcjen nxiAHood J.J., uBeckrtt J. dissent-
4.2 h ig h
c o u r t
H. C. OF A. iiig), that tlie cause of action was not justiciable in Victoria ■
Poffer
1906. Brol-en H ill P roprietan / Co. Ltd. (1 ) . ^
PoTiF.R
From this decision the plaintiff now appealed to the Hidi
Broken' H ii.e Court.
Vropriktary
Co. Ltd.
----- Higgins K.C. and Mitchell K.C., (Ptu'ves K.C., w ith th em .)fe the plaintiff appellant. An action will lie in Victoria for an infringement of a New South Wales patent. The action is primarily an equitable one for an injunction and accounts. The Courts of Chanceiy were never hampered by local venue. An action is not local to New South Wales unless it is local as between different parts of New South Wales or of England. At least so far as England is concerned, au action for infringement oi a patent is transitor}- and the venue can be laid in any country: Wel»ter on PutenU. p. 108 (note o); Webster's Patent RepwU,
p. 214 (n); Cameron v. Gray (2); Hindmarch on Patents, p. 6.5.5
(n).
A patent is incorporeal personal property: Rafael v. VereUt
(3); Hindmarch on Patents, p. 233. In Smelting Company oj Australia y. Commissioners of In lan d Revenue (4), it was held that a New South Wales patent is not property locally situated out of the United Kingdom within the meaning of the Stamp Act 1891 (.54 k 55 Viet. c. 39). In the same way it was held in Mulkr <L' Co.’s Margarine Ltd. v. Commissioners of Inland Revenue (h\ that the goodwill of a business is personal property. The decision in British Sovik Africa Co. v. Companhia de Mocambique (6) that an action for trespass to foreign land will not lie in England, is based on the ground that before the Judicature Act 1883 the Courts would not entertain such an action, and that that Act made no change in that re.spect. The reason the Court would not entertain such an action was the impo.ssibility of enforcing a judgment. So an action to enforce a rent chai’ge on foreign land
would not lie: Whitalcer v. Forbes (7).
Such an action being
founded on privity of estate is local.
Those difficulties do not
arise in the case of an infringement of a patent.
The remedy can
UK19fJ.i) V.L.K., 6 \2 ; -27 A.L.T.,74.
15) (1900) 1 Q.B., 310; (1901) A.C..
(2) 6 T.R., .363.
217.
(3) 2 Wm. Bl., 105.5. (6)
(1892) 2 Q.B., 358 ; 11893) A.C.,
(4) US96) -2 Q.B., 179; (1897) 1 Q.B.,
602.
175. 171
L.R. in C .P ., .383 ; 1 C.P.D.. 51.
3 C.L.K.]OF AUSTRALIA,
483
be enforced against tlie defendant in person and his property in H. C. of a .
the jurisdiction.
See Lord Cranstown v. Johnston (1); Buenos
Ayres and Ensenada Fort Railw ay Co. v. Northern R ailw ay Co.
pottek
of Buenos Ayres (2); Bidlen and Leake on Pleadings, 3rd ed., p. ,
2 An action for infringem ent of a patent i.s a personal action, Peoprietakv
and being .so is transito iy . In
R. v. H alifax County Court Judge
1__ '
(3), it was held that, for the purposes o f the E nglish County Courts
Act 1888 (51 & 62 Viet. c. 43) sec. 50, an action for infringem ent
of a patent wa.s a personal action, but that a patent being a
franchise the County Court had no jurisdiction .
[Griffith C.J.—Are not all franchises local to the State ?]
A franchise for a m arket is local.
B ut a patent accompanies
the proprietor of it and is hi.s personal propertj’.
[Griffith C.J.—Is it not just as local a.s any right given by a
Statute ?]
The right of sole m aking and ven d in g i.s contined to N ew South Wales, but it does not fo llow that, if th a t r igh t is infringed, the remedy is confined to N ew South W ales. [On th is point counsel also referred to Duder v. Amsterdamsch Trustees Kantoor (4 );
Livingston X. Jefferson {o f Thompson x. Mendelssohn (6); Alayor i'c. of Beru'ick x. E im rt (7 ); R. x. Cuivle (8 ); Phillip.s x. Eyre
19).]
It is contended for the respondent that an action for a tort will
not lie in Victoria unless the very Act which is alleged to be a tort
would, if committed in Victoria, be actionable ; that, as the patent
is limited to the territory of New South Wales, an act which
infringed it cannot be committed in Victoria ; and therefore that
no action will lie in Victoria for infringement of a New South Wales
patent. The ijuestion is what are the limits in English law within
which a Court of Victoria will entertain actions for wrongs com-
’
mitted outside I’ictoria ? If the Courts of ITctoria enforce liability for wrongs of a paiticular .sort if committed in Victoria—if the enforcing such liability is not contr’ary to the policy of Victorian law—then an action for a wrong of the same kind committed
(1) .3 Ves., 170, at p. 182.(5) 15 Fed. Cas., 660.
(2) 2Q.B.1)., 210.(6) 28 Fed. Cas., 1061,
^̂ (3) (1891) 1 Q.B., 79.3 ; (1891) 2 Q.B.,
(7) 2 Wm. Bl., 1068.
(8) 2 Bur,, 8.34, at pp. 837, 8,59, 861.
(4) (1902) 2 Cl,., 1,32.
(9) L.R., 6 Q.B., 1, at p. 28.
HIGH COURT
484 [1906,
H. C. OF A. abroad will lie in Victoria. In The "Halley" (1), the grouiKl ol
the decision was that the Englisli law does not and will uoj
Potter recognize any principle by which a man will be held liable for the
Broken- H ii l
agent.
See also Foote’s Private
Propriet.akt InternationalJurisprudence. drd. ed., p. SS7; Madrazo v,
C o
LTO
J__ ' (2); Santos v. Illidge (3). In America the Courts go fu r th e r and will enforce liability for a tort committed outside a State unless the defendant shows that such a liability is forbidden bv public policy or by something express or implied in the laws of the State. See M inors Conjlict of Laws, pp. 9, 479; Huntington V. At<)*i/i(4); Herrick v. Minneapolis and St. Louis Railway Co. (5); Dennick v Railroad Co. ((5). [Couu.sel also referred to Tk “il. Moxham” (7V, “J/o?-rocco B ound” Syndicate Ltd. v. ifams (8); Connell \ . Xeill (9); Moore v. Moodyville Lands and Saw Mills Co. (10).]
I.saacs A.-G., Coldham and Gu.%sen, for the respondent A patent is an immoveable: Steers v. Rogers (11). A grant of a
patent is not a grant of property.
It i.s a grant exelnsive of other
people, and can only relate to a certain area. The grant must be local and it is inconceivable that there can be a breach of it in another country : Bloomer v. McQuewan (12); F'ldlerv. Beryer{li). The right to use a patented article or process does not arise out of the gi-aut of the patent, but merely the right to exclude others from using it. In Patterson v. Kentucky (14), it was held that# State law prohibiting the use of a patented article is not in dero gation of a federal grant of a patent. Being a power to exclude others from u.sing, a patent is necessarily local. The rule as to venue relied on by the appellant related merely to procedure and has been done away with, and the locality of an action upon which that rule deperrded is-a different sort of locality from that which attaches to a patent right. The foi’iner merely applied between different parts of England, but tlie latter a p p lie s between
(1) L.R. 2P .C ., I9.S.(S) (IS9.>) 1 Ch., 3.34.
(2) 3 B & A t, 353.(91 7N ..S .W . W .N., 6- , , „
(3) 6 C.B. N .S., S41.(10) -->6 V .L .R ., 226 ; 22 A.L.T., 7-
(4) 146 U.S.. 6.57, at p. 670.(11) (189.31 A.C., 232.
(5) 47 Am. Rep., 771.(12) 14 How., .539, at p. o49.
(6) 103 U.S., 11.(13) 120 Fed. Rep., 274, at p. 2i«.
(71 1 R.D., 107.
(14) 97 U .S., 501.
3 C.L.B.] OF AUSTRALIA.
48.5
different countries. In
Budische A n ilin Fahrik v. Bade Chemical
B. C. of a .
]Yoi'ks (1), Lord U alduinj L.C., said : “ W hat jurisdiction have
we over an act -which is done in Sw itzerland by a Sw iss subject,
Pottek
and which, in all that is done, is ( it cannot be doubted) an act j j „ , within the jurisdiction o f the Sw iss Courts, if there were an}" Tkopkietauy
|iatent la-w applicable to it, but is not w ith in our jurisdiction at
J___’
all?” This principle of locality is not limited to land which, of course, is necessarily local. In Doiihon v. Matthews (2) the test was not -rvhether the action was as to laud but whether the action was local. See also Stephen ov Pleading, 6th ed., p. 224; Stephens Commentaries, 10th ed., vol. in., p. 388; Smith’s Action at Law, 8th ed., p. 79; H indmarch on Patents, pp. 409, 708; Brookes Abridgment, “ Scire facias,” p. 189; M inar’s Conflict of Laics, p.
475. The question is not whether the Court can give a remedy, but
whether the Court can try the action, that is, whether it has juris diction: British South A frica Co. v. Companhia de Mofamhique (3). A judgment here on the ground that the patent is bad could not be pleaded as res ju d ica ta in New South Wales. The Court is asked to restrain the doing of something in New South Wales :
See “ Morrocco Bound ' Syndicate Ltd. v. H arris (4). A s to foreign torts tw o questions m ust be answered in tire affirmative in order that the p la in tiff m ay succeed, viz., (l.) T aking the foreign law as a fact w ould the act com plained of be unlaw ful ? (ll.)
Taking the facts and applying the English law to them, would the act complained of be unlawful ? Pollock on Torts, 6th ed., p. 200.
The very act, if done in V ictoria m ust be unlawful. A n act in breach of a N ew South W ales paten t could not be done in Victoria.
It is not sufficient that an act of a similar character in relation to a \ ictorian patent would be unlawful in Victoria. See Dicey’s Conflict of Latus, p. 659 ; The “ M. Moxham ” (5); Carr v. Fracis Times (£■ Co. (6); Machado v. Fontes (7). In Huntington v. Aitrill (8), the Judges recognized that the American law is in conflict with the English law on this point.
[Counsel also referred to Jackson v. Spittcdl (9); Attorney-
(1) (1898) A.C., 200, at p. ;205.
(6) (1902) A.C., 176.
(2) 4T.R., 50,3. ^
(7) (1897) 2 Q.B., 231.
(3) (1898) A.C., G02, at p. 618.(8) 146 U .S., 637, at p, 670.
(1) (1895) 1 Cli., 534.(9) L.R., 3 C.P., 542.
(5) 1 P.D., 107.
HIGH COURT
48G
[1906.
H.C. OF A, General v. Churchhill (1); Patents Act 1809 (X.S.W.) (No, 19 of
| 1906. | 1899), secs. 17,19 (3).] |
r. ’ Piyi/ins K.C., in reply, referred to Robinson on Patents, p PkofkTewrv 508; Hesse v. Stevenson (2); II. H arrison’s Diyest, Mi-. Co. Ltd. Comyns’ Digest, “ Action,” p. 270 ; Shoe Machinery Co. v. Cii(iu,j
(3); Godanl Gray {-i).]
'
ITth Ftb., ia06. The matter \vas. at the desire of the Conrt, fiuther argued on
the point whether the Courts of one State can inquire into the propriety or validity of an attempted exercise of the sovereign power of another State.
Higgins K.C., and Mitchell K.C In a concrete form the question is whether letters patent granted in Ne\v South Wales can be impugned in A’ietoria ? The grant of a patent right iii New South Wales is not an exercise of the prerogative, but is a grant by virtue of an Act of Parliament. It is not a grant by the King himself.
[G r i f f it h
C.J.—Can it not be attacked by scire faciusl]
Xo. But under the law of New South Wales the grounds on which a patent might have been attacked by scire facias are made grounds for seeking a revocation and defences to an action for infringement: Patents Act 1899 (X.S.W.) (No. 19 of 1899) sec. 19
(3).
So far as the issuing a patent is within the competency of New
.South Wales officials, it cannot be attacked in Victoria. But so far as the letters patent carry with them, by virtue of the law of Xew South Wales, an exception to the operation of those letters, they can be attacked in Victoria. It is the Xew South AValesAct of Parliament which enables letters patent to be issued, and by virtue of that Act and of the letters themselves there is an express exception in the case of want of novelty, &c. The form of letters patent in Victoria contains the same exception ; .See Patents Act 1890, .Seventh .Schedule. If a patent i.s void as between tlie Crown and the patentee it is void also a.s between the patentee and other persons: Morgan v. Seaward (5); Lau'son on Patents,
(1) 8 M. k \V„ 171. (4) L.R., 6 Q.B., 11.89.
(•2) .8 B, k P., 5fi,5. (5) 2 .M.
k W ., 544.
(.8) (1896) 1 Cli., 108.
3 (JL R ,] O F
A U S T R A L IA .
487
3rd ed., p. 125.
The defendant com pany does not im pugn tlie H- C. ok A.
errant of the letters patent, but it attempts to show that the grant
contains within its own boundaries an exception which protects it. p„ttek
It is always open to a defendant in an action for infringem ent to
show that the condition subject to which the patent was granted TRorniETAKY
has happened. If it can be shown that the grant i.s within the
J__ '
statutory powers conferred by the New South Wales Act, no Court can impugn the validity of the grant. Even the Court of New South Wales cannot go into the question of the propriety of the grant, but it can go into the question whether the patentee has brought himself wdthin the condition which makes the exception to tlie grant. There is an ambiguity in the word “validity.” It may be admitted that the grant is valid to the extent to which it goes. The Court of one State must .see who is the sovereign of another State.
[Gr if f it h C.J.—Must not the Governor of an Australian State
be considered as representing the sovereignty of the State?]
No. The Governor of a State is a special agent, and you may in the Courts of another State inquire whether a particular- matter is within the special agenej’. The principles as to sovereign powers are inapplicable to a Governor with special powers. The quotation in British South A frica Co. x. Companhia de Mocam- hique (1), from Vattel, is incorrect. For “ the right of granting property" should be substituted “the right of granting possession,” which is a very different thing. The continental Courts do not go so far as the British and American Courts in inquiring into foreign title to land : See Story’s Conflict of Laws, p. b'H. The Courts of England will go into the title of foreign land when it is incidental to some other matter. Those Courts also will inquire what the foreign pow'er has really done. The whole test is can the Court make its judgment effective: Baron de Bode’s Case (2). In Nelson v. Bridport {%) an intjuiry was ordered before the chief clerk as to the title to laud in Sicily. See also Massie v. Watts (4); Mead v. M erritt (5); Mitchell v. Bunch (C). The reason this point was not raised on the previous argument
(1) (1893) A.C., 60->, at p. 6-23.
(4) 6 Cranch., 148.
, rN'®-’ W) 10 Jur., 871.
P- 24B. (5) 2 Paige Ch., N .Y ., 40-2.
(6) 2 Paige Ch., N .Y ., 606.
HIGH
COURT
4 88 [1906,
H. C. OF A. was that the question for decision "’as, assuming that the plaintiff’s
patent is valid, can the question of infringement be tried in Victoria > If it cannot be it must be because the patent has some
B roken-H ill "'bich it has not in the Courts of New South
P roprietary Wales. Whatever may be pleaded against the patent in New
Co^D.
Wales may be pleaded in Victoria: Good v. Good (1) The letters patent are not impugned here. It is one thin» to say that the Crown ought not to have granted letters patent, and it is another to sa}' that the meaning of the grant is that the patentee shall have the right upon a condition. That condition has attached to patents ever since the Statute of Monopolies (21 Jac. I. c. 3). A grant of a patent under the Patents Act 1883 (4(1 i: 47 Viet. c. 571, is not a prerogative grant. The order for letters patent is made by the Comptrollei', The grant does not purport to be in exercise of the prerogative power of the sovereign. If it is granted bj’ the Governor in Council it is not by virtue of his commission but b}' virtue of the Statute law of New South Wales. See R. v. Clarke (2); R\. Hughes (A). [Counsel also referred to Rohinsnn on Patents,
608; Robertson v. Pickrell (4); K y n n a ird v. Leslie (5); Hunting ton V. A ttn ll (6); Dicey’s Conjlict of Laws, pp . x l i i i ., 235; Miis- gruve v. Pulido (7); Cameron v. K yte (8); Black’s Constitution, 2nd ed., p. 56; Railroad Co. v. Georgia (9); Edmunds on Patents, 1st ed., p. -540; Dill v. M uiphy (10); Osborne v. Morgan (11); Encydopcedia of Laics of England, vol. x., p. 311; Chitty mi Prerogative, p. 25; Patents Act 1890 (Viet.), secs. 16, 73.]
Isa.a.cs A.-G. and Ciissen, (with them Coldham). If the State acts, it is immaterial by what instruments it acts so far as other States are concerned. There i.s no higher act of State than an Act of Parliament. The Statute of Monopolies (21 Jac. I. c. 3), is only a statement of the common law, and enacted that tlie prerogative should be exercised under certain restrictions. The prerogative passes wherever the British Dominions extend. A
(1) 9 Jur., N .S ., 1.333.(7) 5 App. Cas., 102.
(2) 7 Moo. P.C.C., 77, at p. 84.(8) .3 Knapp., 3.32.
(3) L.H. 1 C.P., 81.(9) 98 U .8 ., .359.
(4) 109 U.S., 60S.(10) 1 Moo. P.C.C., 487.
(5) L.R. 1 C.P., 389.(11) 1.3 App. Cas., 227.
(6) (1893) A.C., 150.
3 C.L.R.] OF AUSTRALIA.
489
nt of letters patent is a grant by the Crown through the legis- lature: Frost on Patents, p. 288.
H- C. of a .
Under tlie New South Wales Act,
letters patent are issued in the name of the Governor, that is, of potter
the Governor in Council, and he does not sign in hi.s individual
capacity. They are headed “ Letters Patent
showing that 1’roprietaey
Co.
Ltd .
the grant is intended to be a regal act.
In In re Betts Patent
(1) it was held that the grant of letters is an act of State. There is no distinction between Neiv South Wales and France so far as the jurisdiction of Victorian Courts to inquire into an act of State is concerned. Within the scope of his delegation, the Governor is a sovereign power ; R. v. Barah (2); R attigans Private International Law, p. 174; Underhill v. Hernandez (3). The Governor of New South Wales assumes to act law fully; whether he is so acting is a question for the Courts of that State. A patent is equivalent to a statutory injunction; Steers V. Rogers {‘i); Boesch G ra f (5). In the United States, where patents are granted under the federal law, the jurisdiction of the federal Courts is exclusive; Robinson on Patents, 3rd vol., pp. 9, 703, and an action for infringement directly affects the monopoly: Ibid., p. 16. See also Gaines v. Puentes (6). A Court of Equity would never investigate the title to foreign land unless there was a contract or trust in reference to the land -which made the question of title incidental: Lewin on Trusts, 11th ed., p. 48. In its nature a patent is an immoveable just as much as land is: Dale Tile Manufacturing Co. v. H yatt (7); Teas v. Albright (8). See also The Municipal Council of Sydney v. The Commonwealth (9). A right under a patent granted in a State is only enforcible in that State: Danubian Sugar Factories v. Commissioners of Inland Revenue (10). See also Badische A n ilin Fabrik v. Basle Chemical Works (11); Gladstone v. Ottoman Bank (12). An action for infringement of a patent is an action for trespass, Pollock on Torts, 7th ed., p. 369, the essence of a patent, like that
(1) 1 Moo. P .C .C .,(N .S .),49; 9 Jur. (7) 125 U .S ., 46.
h.S., 137; 7L .T . N .S ., 577.(8) 13 Fed. Rep., 406.
12) .3 App. Cas., 889.
(9) 1 C.L.R., 208, at p. 231.
(3) 65Fed. Rep., 577; 168 U .S ., 250.
(10) (1901) 1 K .B., 245. at 259.
(4) (1893) A.C., 232, per Lord
(11) (1898) A.C., 200, at p. 205, per
Hmchell, at p. 235.
Lord HcUi^huryy L.C.
(5) 133 U.S., 697, at p. 702.(12) 1 H.
k M., 505.
(6) 92 0.S ., 10.
VOL. Ill,
490 HIGH
COURT
[1906.
| H. | C.OF A. of other franeliises. being its exclusiveness, and trespass is tW | |
|
Potter cannot exist apart from locality: In lan d Revenue Commmimn
| r. | Muller ci Co.'s M argarine Ltd. (1). | In Hertzog v. HeymanUi |
Broken H ill
P roi’eietakv it wa.s held that the jurisdiction of a State Court in an action
J__ ' upon a contract is not precluded by the fact that the right of the plaintiff to succeed depends upon the con.struction or validity of a patent. Whether the grant of letters patent is an exercise of the prerogative or is by virtue of an Act of the Legislature is un important. As a matter of law it is an exercise of the prerogative and that exercise is regulated by Act of Parliament. Sec. 2-t of the Patents Act 1890 (Victoria) does not exist in the New South Wales Statute, and its effect is merely that there is no obligation on the Crown to grant a patent. The prerogative exists in Xew
South Wales just as it does in England; In re Bateman's TtvM
(3); Feathery. The Queen (4).
In every sense the grant of letteR
patent is an act of sovereignty. In Boss v. Secretary of State jm India in Council (5), it was held that a debt contracted by a sovereign was an act of sovereignty for which no action woull lie. The allegation that the appellant makes is that the respon dent has infringed his patent by using a process for which the respondent has been granted a patent. The Court must therefore decide which of the two patents is valid, and in deciding that, it must decide that the other is invalid.
It appears to have been assumed from the beginning that the State Courts of the United States have no jurisdiction as to patents; that as to matters as to which Congress has power to legislate it has power to give exclusive jurisdiction to the Federal Courts, and that it has given that jurisdiction in patent matters. See Walker on Patents,]). 274; Parsons v. Barnard (6); Kents Commentaries, vol. I., p. 444; 18 Statutes at Large (U.S.), Parti c. 1.37. The validity of the patent is involved in every action for a piatent: Hindmecrch cm Patents, p. 265. The New South lVale> Statute provides a complete procedure for dealing with the validity of a patent, and several of the provisions are inapplicable
U) (1901) A.C., 217, at p. 237.(4) 6 B . & S.,257.
(2) 151 N .y . Rep., 587.(5) L.R. 19 Kq. 509.
(3) L.R, 15 Eq., 355, at p. 361,
(6) 7 Johns N .Y ., 144.
3 C.LR.]O F A U S T H A L I A .
491
action il l Victoria.
For in.stance, there may be a petition H. C .o f a .
for revocation, or the Court may allow a disclaimer during the
course of the case. A statutory tort mu.st be taken a.s it is found,
Pottkk
and if it appears that the intention of tlie Statute it to make the blokes H ill
enforcement of the remedy exclusive of the Courts of otlier State.s, P ropruitary
then a foreign State will not entertain an action for that tort.
J__
[Counsel also referred to Chitty on Prerogative, p. 330; H ind- march on Patents, pp. 378, 660; Dudley v. Mayhew (1); De Witt V, Elmira Nobles M anufacturing Co. (2); Minor's Conjlict of Laws, pp. 479,490; Pollock on Torts, 7th ed.,p. 113; Liquidators of Maritime Bank of Canada v. Receiver General of New Bruns- M'ick (3); Rodd v. M unicipality of Hamilton (4).
Higgins K.C., in reply. The defendant by its defence does not allege that the plaintiff’s letters patent ought not to have been granted. It alleges that by virtue of the Patents Act under •ivhich the letters patent were granted there is a condition which has not been fulfilled. So far from the letters patent being impeached, if the plaintiff failed in this action, an action could at once be brought against another infringer. The grant of letters patent i.s not an act of state. That phrase has a technical mean ing, and is applicable only to an act done as between a foreigner and one of His Majesty’s subjects: Stephens H istory of the Criminal Law, vol. ii., pp. 61, 65; Ah Toy v. Musgrove (5).
[Gr if f it h C.J.—The term is applicable to any act done by tire
State in the execution of its sovereign power.]
A patent is a personal chattel, and is not an “ immoveable ” in the technical sense Yvhich is limited to real property. It is alway.s competent for a British Court to examine into the validity of an Act bearing tlie imprimatur of a colony, to look into what has been expressed on the face of a judgment or an Act of Parlia ment of that colony, and see whether the Act exceeds the power: In re Watson (6); R ay v. M’Mackin (7). A judgment of a Court is as much an exercise of the sovereign power as is the granting of letters patent, and the argument of the respondent must go to
'(1)3N .Y .,9 . ooo
42) 66N.Y ., 4o9.
| ' ' '(5) 14 V .L .R ., 349 ; 10 A.L.T., 60. |
(3) (1892) 2 A.C., 437, at n. 443.(6) 9 A. & E., 731.
<4) 14 N.S.W. L.R. (Eq.), 221, at p.
(7) 1 V.L.K. (L.), 274.
492 HIGH
COURT
[190G.
H. C. OF A. the extent of saying tliat a judgment of one State is not, as to its
validity, examinable in another State. [Counsel also referred to
p ^ K
Atfomey-Gmeral v. lirown ( 1); mark's Constitutional Lov.
P- -iTd; Gifeoa V. Food!
Pkoprietakv rear’d (2); Par/e v. Dickerson (3 ); Sleinniers Appeal (4)-
C o^n. Y lf/,iYma)! (5), ’
Cur. atlv. VII,It.
The following judgments were read :—
March 2u. GRIFFITH C.J. This is an action brought in the Supreme Court
of Victoria by the appellant against the respondent, who is a company incorporated and registered in Victoria, for (infer alia) the infringement in Xew South Wales of a New South Wales patent. The respondent bj’ its defence denies the novelty and utility of the alleged invention in respect of which the patent was granted. It also denies the infringement. The defences of want of novelty and ivant of utility are, of course, pleaded with an implied reference to the law of New South Wales, of which the Courts of Victoria are required to take cognizance, and which is in this respect the same as that of England. The defence thus raised is therefore, in substance, that the New South Wales patent is invalid. The respondent also sets up that the alleged cause of action for infringement is not justiciable in Victoria, This latter question was ordered to be argued before the Full Court. The points argued before that Court were, as stated by Hodges J., (a) That the Court had no jurisdiction over the cause of action, and, (6) That, if it had jurisdiction, the facts disclose no cause of action, inasmuch as to entitle the plaintiff to succeed he must show not only that the act was wrongful in New South Wales, but also that that very act, if it had been done in Victoria, w’ould have been actionable. The learned Judges differed in opinion. Hodges J. thought that an action for the infringement of a patent is a local action as distinguished from a transitory action, since a violation of the right of monopoly claimed could only take place within the territory where the monopoly existed.
(1) 2 S.C.R. (N.S.W .), ,30, at p. 37. (4) 58 Pa. St., 155.
(2) 8 Paige Ch., N .Y ., I3I. (5) 18 Wall., 457.
13) 9 Amer. Rep., 532.
3 C.LB-]OF AUSTRALIA.
4 9 3
Hood J. concurred in th is view , and held also that the action failed C.
of A.
on the ground that the act com plained of, i.e., the violation of a
Mew South Wales m onopoly, would not have been unlaw ful if done
P o t m e
in Victoria. aBechett J. was o f a contrary opinion on both points, broken Hill
After the appeal had been argued before us on these points, we PaorBreTARY
requested further argument on the question whether it is competent
___
for the Courts of a State to examine into the validity of an act
°"’-
purporting to be done by the supreme authority of another State ia the exercise of its sovereign or quasi-sovereign powers. This question assumes, of course, that the grant of a patent is such an act. The matter has been very fully and ably argued, and we are much indebted to counsel for the assistance which they have given us. There is apparently no decision either of the English or American Courts directly in point, and the question must be determined on principle.
I will consider first what is the nature of a patent for an invention. It is sometimes described as incorporeal personal property, a description which is sufficiently accurate for some purposes. It is, no doubt, personal property as distinguished from real property, and in that sense it may be described as a chattel. In Steers v. Rogers (1), Lord Herschell L.C., said: “What is the right which a patentee has or patentees have? It has been spoken of as though a patent were a chattel, or analogous to a chattel. The truth is that letters patent do not give the patentee any right to use the invention— they do not confer upon him a riglit to manufacture according to his invention. That is a right which he would have equally effectually if there were no letters patent at all; only in that case all the world would equally have the right. What the letters patent confer is the right to exclude others from manufacturing in a particular way, and using a particular invention.”
The same doctrine has been laid down in the Supreme Court of the United States. “The franchise which the patent grants con sists altogether in the right to exclude every one from making, using or vending the thing patented without the permission of the patentee. This is all he obtains by the patent. And when he sells the exclusive privilege of making or vending it for use in
(1) (189;p A.C., 232, a t p. 2:45.
494 HIGH
COURT
H. C. OF A. a particular place, the purclia.ser bu}'s a portion of the franchise
which the patent confers. He obtains a share in the monopoly and that monopoly is derived from, and exercised under, the pro-
Broken H ili ’̂le United States.” {Per Taney C.J.. in Blomer v.
Pkofrif-tarv McQueivan (11, cited by the Court in Boesch v. Graff{2)).
There
Co. Ltd.
is no doubt, also, that this franchise or monopoly has no effective operation beyond the territory of the State under whose laws it is granted and exercised. In this respect it partakes of the nature of an immoveable as distinguished from a moveable. It is true that the distinction taken between moveables and immoveables by writers on international law has never, so far as I know, been expressly applied to the case of patent rights. Yet there can be no doubt that, as the right is the creation of the State, the title to it must devolve, as in the case of land, according to the laws imposed by the State. In two important particulars, therefore, it is analogous to an immoveable. It differs from an immoveable in that it is neither itself visible nor appurtenant to any particular thing that is visible and fixed within the State. It may perhaps be regarded as, in a .sense, appurtenant to the whole territory.
Such then being the nature of the right, how is it created ? In my opinion there can be only one answmr to this question:—By the exercise of the sovereign power of the State. The grant of monopolies was originally regarded as an exercise of the Royal Prerogative. In England this exercise of the sovereign power is now in effect (whether it is or is not in form) exclusively regulated by Statute. And in New South Wales, whether the Royal Prerogative could or could not have been exercised without legislation, the power of creating monopolies is now, and has been since 1852, regulated by Statute. Nor can there be any doubt that the creation of such a monopoly' is within the powers of sovereignty conferred upon the State of New South Wales by its Constitution. We were invited to hold that, since the Australian States are not Sovereign States in the full sense of the term, i.e, as between themselves and foreign Powers, their sovereignty should be regarded as of a different and inferior nature, and that the exercise of it might be examined by the tribunals of another State to the same extent as the tribunals of the State itself might
(1) U How., .)39, at p. 549.
(2) 1.3,3 U..S., 697, at p. 702.
3 C.L.K.] OF AUSTRALIA.
495
make such examination.
I cannot accept thi.s distinction.
In my H. C. of a.
judgment it is competent for any tribunal before which the
question is raised to inquire as to the limits of the rights of PorrEh
sovereignty possessed by another State whose acts are called in
question. But there the inquiry must .stop.
If the act in question PBOPKmTARY
purports to be done within those limits, the case is in principle
J----
the same as that of acts done in the exercise of an unlimited sovereignty. This case must therefore, in my opinion, be con sidered on precisely the same basis as if the patent in question had been granted by the Government of the French Republic or of the United States of America. Now, it is the settled law of all civilized countries that the acts of the Government of a State done within its own territory' are not examinable at all in the Courts of another State. Whether they are examinable in the
Courts of the State itself depends upon municipal law.
In
England many such acts are examinable, though not all. In some countries they' are not examinable at all, and in some only by' special tribunals.
In Underhill v. Hernandez (1), Fuller C.J., delivering the judgment of the Supreme Court of the United States, said— “Every sovereign State is bound to respect the independence of every other sovereign State, and the Courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.”
This is undoubtedly a correct statement of English law. Does then the exercise of the sovereign power involved in the grant of a monopoly fall within this doctrine ? Mr. Higgins contended that the grant of a patent right is not an act of government within the rule just quoted, and, further, that even if it were an act of government when made under the prerogative powers of the sovereign, still the grant in New South Wales, which purports to be made by the Governor, although under the Great Seal of the State, is not such an act. On the latter objection it is sufficient to say that, in my opinion, it is not competent for the Courts of another country, when considering the exercise of the powers of
(1) 16S U .S ., 250, at p. 252.
I
HIGH
COURT
496 [1906,
H.
C. OF A. a State, to draw any distinction as to the branch ofsovereignty
| 1906.under which tlie exercise is made, or as to the mode in which or the instrument by w hich, the pow er is exercised. Such matters |
BkokexHill
8'nd m unicipal concern, and are not open to
P bopbiktarv review or inquiry b y a n y
external tribunal. Regarded from
Co. Ltd.
outside the
State, the sovere ig n ty is one and indivisible, by
whatever hands it may be exercised.
The first objection requires more serious attention. There is no doubt, for some purposes a great difference between an act of State, such as that involved in Underhill v. Hernandez{1)
was an exercise of physical force) and the grant of a monopoly. But I apprehend that any exercise by a de facto repositary of any power of sovereignty, which results in the creation of a right of property that can only be created by such an exercise, must be regarded as an act of the State itself. This appears to be the foundation of the doctrine referred to in the passage cited by Story J. from Vattel, and quoted both by Lord Herschdl L.C. and Lord Halsbury in British South Africa Go. v. Companhk de Mocambique (2). “ The defendant’s judge (that is, the com petent judge), says he,” referring to Vattel, “ is the judge ol the place where the defendant has his settled abode, or the judge of the place where the defendant is when any sudden diffi culty arises, provided it does not relate to an estate in land, or to a right annexed to such an estate. In such a case, inasmuch as property of this kind is to be held according to the laws of the country where it is situated, and as the right oi granting it is vested in tlie ruler of the country, controversies relating to such property can only be decided in the State in which it depends.” {Story, Conflict of Laws, a&c. 553). In C/iitti/’s edition of Vattel, p. 173, the words “as the right of granting it is vested are translated “ as the right of granting the possession is vested, We have not had an opportunity of consulting the original text of Vattel, but I conceive that the variation in language makes no difference to the argument, which is, that the right of creating a title to such property as land, being vested in the ruler, that is in the sovereign power, of the country, controversies relating to such property can only be decided in the State in which the property is
(1) 168 U.S., 2.30.
(■<) (1893) A.C., 602, at pp. 623, 631.
3 C.L.K.] OF AUSTRALIA.
497
situated.
The reason appears equally applicable to patent rights, H- L. or a .
which, as already pointed out, are created by a similar exercise of
the sovereign power. In
In re Belt’s Patent {\), it was held that an
Poitek
instrum ent of grant made by the sovereign authority of Belgium,
and purporting to confer a monopoly within that State, was an act Pâ pamTAKY
of State within the meaning of the Statute (14 & 15 Viet. c. 99 s.
J__
7), which allows “Proclamations . . . and other acts of State”
c.j .
to be proved by sealed copies. The grant was, as said by their Lordships of the Judicial Committee, “ an act of the governing power of the country.” And, applying the rule, which I have cited from Underhill v. Hernandez (2), the Courts of another country ought not to sit in judgment upon such an act. In British South Africa Co. v. Companhia de Mofambique (3), when before the Court of Appeal, Lord Esher M.R., in his jiidgment considered at length the reasons why the Courts of any country do not assume jurisdiction in matters that occur beyond their own territory, and, after pointing out that by general consent the law rei siUe does not govern moveables, and the reason for the adoption of that rule, he said:—“ These are the reasons for the general consent as to personal property that it follows the person, and it is the general consent which gives the general jurisdiction. The jurisdiction is prior to any rule of venue made with regard to the method of exercising the jurisdiction. We then have to consider the question, whether, by general consent, the only v’alid ground on w'hich it can rest, a similar jurisdiction has been given in respect of real or immoveable property.” In the same case in the House of Lords Lord Halshary L.C. said (4): “No two questions can be more dis tinct than the question whether a matter is within the jurisdiction of the English Courts at all, and whether a matter undoubtedly within the jurisdiction of the Courts shall be assigned for trial to particular Courts in England. There is a concurrence of opinion of most jurists, if not all, as to the difference between what we call realty and personalty, by whatever words those things are designated in the jurisprudence of foreign countries, which alfects very materially the right to try.” He then refers to the passage from Vattel already quoted. In my judgment these principles
(3) (1892) 2 Q.B., 358, a t p. 397.
(4) (1893) A.C., 602, a t p. 631.
(2)’i68 U.S., 250.
HIGH
COURT
498 [1906.
H. C. OF A. are equally applicable when the Courts of one country are called
'*'**’• upon to inquire into the validity of the exercise of the powers of
Pottek government of another country in the creation of a right of Broken H ill enjoyed within the territory of the Proprietary latter country.
J__ ' I will next consider what is involved in denying the valid ity of
Griffith C.J. ̂patent right or monopoly purporting to be created by an act of
the Government of a country having power to create it It is not in controversy- that by the law of New South Wales such a right can only be created in respect of a new invention. If the Government of that State assumes to grant a monopoly in respect of an alleged invention which is not new, the Government must have been misled. For it cannot be supposed that it would have assumed to create a right when the facts were such that it could not lawfully do so. By the law of New South Wales the grant may be recalled by the proper tribunal .on proceedings properly instituted, and the objection of want of novelty may be taken by any person against whom the alleged right is sought to be enforced. It was contended that, as in the latter case the decision of the tribunal is only binding as betw-een the parties, the abstract validity of the grant is not put in question, but only its validity as between the parties to the action. But this argument, in my opinion, rests upon a confusion between a fact and the evidence of the fact. Whether the patent is valid or invalid by the law ol New South Wales is a single question, just as the validity or invalidity of a marriage between A and B is a single question. Different decisions may be given by different tribunals before whom the fact i.s called in controversy, as in the Yelverton case, but the fact is single. The fundamental question is whether the tribunal has jurisdiction to inquire into the fact. The matter of parties is subsidiary only', and, if the Court cannot inquire into the fact, no person can be allowed to raise the ques tion in any form of proceedings. It is settled law that an English Court cannot entertain a suit in which the question of title to foreign land is directly in controversy : British South Africa Co. V. Companhia de Mocambique (I). The Courts will no doubt
entertain such a question of title if it arises merely incidentally
(1) (1893 A .C., 60-2.
JPL .E .J A U S T R A L IA .
499
in a case in which the foundation of the jurisdiction is a personal H. C. of a .
obliration arising from contract or quasi-contractual relationship
between the parties. But this is the only exception. In the
Pottkk
United States of America it has always been held that questions
directly arising under patents, which are granted in the exercise Propriemky
of the federal power, are cognizable only in federal Courts. The
reasons assigned for this rule do not appear to throw much light upon the question now in debate, since they seem to rest upon an exercise of the assumed power of Congress to confer exclusive jurisdiction upon federal Courts in proper cases, or else upon the nature of the right created bj' the Acts of Congress under which the grant is made, one of the incidents of which right is that in an action for infringement certain powers, which from the nature of them can only be exercised by a federal Court, may be exer cised by the Court in which the action is pending. But, while this rule is well settled, it is also settled that if the validity of a patent arises merelj’ incidentally in an action otherwise within the cognizance of a State Court that Court will not refuse to entertain the question. The rule followed seems to be in prin ciple identical with that followed by the English and American Courts with regard to the title to foreign land.
In my opinion the same rule must be applied to foreign patents that is applied to foreign land.s. The reasons upon which the rule in the one case are founded are, I think, equally applicable to the other.
It is, however, contended for the plaintiff that the case of a grant of a patent is peculiar in this respect, that the grant is made on the condition that the right granted cannot be enforced against anyone who can prove that the invention was not novel, that it is therefore a conditional and not an absolute grant, since the person claiming rights under it may be put to proof of per formance of the condition. And it is said that to put him to such proof does not involve an examination into the validity of the exercise of the powers of government by the State b\’ which the patent is granted. The same arguments would apply to a grant of land made on tlie faith of representations of fact, if by the law of the eounti-y its validity might be impeached in a suit hy the grantee against a stranger to enforce his rights under the
HIGH
COURT
500 [1906,
H. C. OF A.grant.
Tliis argument is, in my opinion, founded upon a mistaken
igo6.
use of the word “condition.” When a grant is made upon a
Potter condition, properly so termed, it is neces.sary to inquire whether
Broken
condition e.xists in order to discover whether the grant has
P ropriet.skv eome into operation. It is an incident of every contract ov orant
' '
that if it is obtained by misrepresentation it may be avoided by the
Griffith C.J. deceived. But this incident is not properly called a condi.
tion. In the case of an ordinary contract or grant it is clear that the objection can onljt be taken by the person deceived, and the circumstance that in the case of patents the English law allows the objection to be taken by anyone of the inhabitants of the country, all of whom are prejudicially affected by the deceit practised on the Crown, does not alter the nature of the objectioii itself. The distinction is analogous to that between what is void and what is voidable. An inquiry into the performance of a condition assumes that the grant is a valid instrument, and deals only with the question whether the pre.scribed event or condition has or has not happened, while an inquiry into the validity of the grant itself stops short at the period when the instrument is executed.
For these reasons I am of opinion that the substantial (juestion sought to be i-aised by the defendant is the validity of the act of the governing power of New South Wales in granting the patent sued on, and that such a question can only be dealt with by the proper Courts of that State.
B-VETo n j . Though many cases were cited in which the dis tinction between local and transitory actions had been closely discussed, in my’ view, decisions as to what actions are local and what are transitory are not on the question really involved, although much learning may be found in the reports of such cases helping to throw light on the present question, That question, namely, whether the validity of a patent granted by the government of one country’ can be directly tested in the Court of another, is in thi.s Empire one the answer to which depends, so far as we are concerned, on the limits which in the absence of legislative mandate, the Courts impose on their own jurisdiction in recognition of international comity. On the other
OF AUSTRALIA.
501
3 C.L.R ]
hand the extent to which that comity leads Governments to R- C-
tolerate any pronouncement, judicial or otherwise, upon the
validity of their acts by Courts of other nations, is not the
Potter
subject of judicial inquiry. In Companhia de Mocambique v.
B ritish South Africa Co. (1), Lord Esher M.R. was the dissenting
Judge of the Court of Appeal, Fry and Lopes L.JJ. being the
-----
majority. On appeal to the House of Lords his view was adopted, and it was held that an action would not lie in England for trespass to land committed in a foreign country. In that case, notwithstanding the difference between the questions for decision, Lord Esher's reasoning is interesting and helpful in the consideration of the present dispute. He said : “ The main point in the case seems to me to be, whether the English Courts have ever, for the purpose of granting any relief what ever, entertained any action founded directly on an injury to the plaintiff in respect of his right to land or other immoveable property situated abroad, and, if not, what has been the real ground of their refusal to do so. Has the refusal been rested on the purely municipal difficulty with regard to the venue of the place where the action is to be tried, or upon a prior and larger difficulty, that the law of England has declined from the beginning to assume jurisdiction?” . . . . “ The question, whether the Courts of a nation will or will not entertain jurisdiction of any dispute, is to be determined exclusively by the nation itself—i.e., by its municipal law. If by express legislation the Courts are directed to exercise jurisdiction, the Courts must obey. If there is a proper inference to the same effect, the result is the same. But there are certain rules which have by universal consent indicated the circumstances from which the inference may properly be drawn. We have to consider what is the inference in respect of matters arising abroad. The first cardinal rule, agreed upon by all jurists, is one arising necessarily from the division of mankind into nations. ‘ It is plain that the laws of one country can have no intrinsic force, proprio vigore, except within the territorial limits and jurisdiction of that country • ■ . Whatever extra-territorial force they are to have is the result, not of any original power to extend them abroad, but of
(1) (1892) 2 Q.B., 35S, at p. 391.
502 HIGH
COURT
11006.
H. C. OF -A. that respect which from motives of public policy other nation- are disposed to yield to them,’ etc. : Story’s Conflict of Laws sec.;
P otter‘ This is the natural principle flowing from the equality and
Brokes H ill independence of nations ’ (sec.
8 ) , ”
“ With
regard,
PROPRiET.«y then, to acts done w'ithin the territory of a nation all
are agreed that such nation has without more jurisdiction to deter mine the resulting rights growing out of those acts; but, with regard to acts done outside its territory it has no jurisdiction to determine the resulting rights growing out of those acts unless such jurisdiction has been allowed to it by the comity of nations.” The principles there laid down are most material to the proper determination of this case.
Co. Ltd.
Although it may not be quite accurate to call the States of this Commonwealth sovereign in the literal and extensive meaning of that term, .still they may justly be so termed, as to the entire ambit of the legislative powers conferred on them, and of the executive powers either expressly conferred or neces sary for the complete enjoyment of their legislative rights or the complete effect and execution of their laws. In the exercise of that defined sovereignty, apart from the powers and laws of the Imperial Goveri>ment and Parliament, on the one hand, and those of the Australian people in their federal or national capacity, on the other, they are as independent of each other and as much entitled to freedom from interference as any nations in Europe. Their right of making patent laws and of saying in such laws, for example, how their patents should be granted, by whom and to whom, was part of this defined sovereignty, and so remains except so far as it has been affected by the exercise of the federal legislative power as to patents. It is only within the particular State that in the nature of things the patent right granted before 1903 could operate by virtue of a State Statute. For, to quote
| Lord Herschell L.C., in Steers v. Rogers (1), “ hat is the right |
which a patentee has or patentees have? It has been spoken ofas though a patent right were a chattel, or analogous to a chattel. The truth ia that letters patent do not give the patentee any right to use the invention—they do not confer upon him a right to manufacture according to his invention. That is a right which
(1) (189.3) A.C., 232, at p. 233.
3 C.LR-]OF AUSTRALIA.
.503
he would have equally effectually if there were no letters patent H- C- or A.
atall; only in that case all the world would equally have the right.
What the letters patent confer is the r igh t to exclude otliers from
pottek
manufacturing in a particular w ay, and using a particular inven- broken Hum
tion.” That is a right exercisab le on ly w ith in the territory of the T koi'rietaky
Government which grants it. If Mr. Potter, for instance, wished
-----
to exercise such a power of exclusion within Victoria, it would be preposterous for him to ask the Government of South Aus tralia to grant it to him. He must go to the authorities of this State. Is it not then a strange proposition that a right which cannot exist outside New South Wales territory should be enforceable extra-territorial ly by a branch of the governing power of every other country? The proposition, if true at all, is as large as that. The governing power of New South Wales, in the e.xeeution of its Statute, has granted by its patent this right of exclusion from manufacturing and using thi.s invention within the limits of that State. As already pointed out, that is a right which cannot possibly exist outside the limits of New South Wales. In the absence of legislative power to interfere with the right of any other State to exclude its own subjects from the use of a manufacture, the whole subject matter is excluded from the cognizance or competence of the State itself, and its Courts cannot sit in judgment to determine whether such rights are validly granted. Holding that opinion, I concur with the learned Chief Justice in the conclusion to which he has come, that is to say, that the validity of this patent cannot be passed upon in the way proposed.
It was argued that the validity of the grant might be drawn in question here because of a class of cases of which several examples were cited. These are cases such as Davis v. Cornue (1), though that case itself was not cited. There the New York Court of Appeals held that a Court of one State may, where it has jurisdiction over the parties, determine the question whether a judgment between them, rendered in another State, was obtained by fraud, and if so, maj', acting in •personam, enjoin the enfoi'ce- Ment of it, although its subject matter is situated in such other State. In delivering the judgment of the Court to this eft’ect,
(I) 151 N .Y .R ., 172, at p. 17S.
5 04 HIGH COURT
[1906,
| H. | C. OF A. Martin J., referred to tlie familiar rule that a Court of Equit. | |
|
Potterthe property the subject of contract is in another State or country
r.
Broken H iixand in effect stay the execution of a foreign judgment, or, in the
P roprietary United States, of a judgment recovered in a federal Court
’ * when the parties are within the jurisdiction of the Court. He quotes with approval the following statement of the law by Pomeroy, in his Equity Jurisprudence, III., sec. 1318; The juris diction to grant such remedies is well settled. Where the subject matter is situated within another country or State, but the parties are within the jurisdiction of the Court, any suit may be maintained and remedy granted which directly affect and operate upon the person of the defendant and not upon the subject-matter, although the subject matter is referred to in the decree, and the defendant is ordered to do or refrain from certain acts towards it, and it is thus ultimately, though indirectly, affected by the relief granted.
But it is clear that these exceptional cases go to prove the rule, for unless the inquiry is incident to the exercise of the jurisdiction in personam, it may be inferred that the jurisdiction does not exist, that the subject matter must not be dealt with, and that the validity of the records, judgments and acts of State of another Power is not otherwise examinable.
As to the quality of the grant of the patent in this case, it seems to me to be quite immaterial whether it is called an act of State or not, or whether the term “ act of State ” is properly reserved for certain occasions such as those mentioned by S ir J. F. Stephen in his History of the Criminal Law, as cited by Mr. Higgins. The question for us is whether this was an act in exercise of the supreme governing power, and that is a question to be deter mined not merely by considering whether, for instance, there is a prerogative in existence, a subject to which Mr. Mitchell devoted some time in his argument, or whether the act in ques tion is legislative, judicial, or executive. But the question to which an answer must be given is th is:—Is the thing you pro pose to examine, and of which you propose to test the validity, an act of the supreme governmental power in any of its branches of another State in respect of a matter which is within its jurisdic
3 C.L.E.]OF AUSTRALIA.
505
tion and committed to it for the exercise of th a t governm ental H- C. or A.
power?
There can only be one answ er to that question in respect
of the grant of this patent, and w hether the th ing done is called
Potteb
an act of State or not seem s to m e tota lly im m aterial.
The
legislature of N ew South W ales having certain powers of law P koprietary
making, has exercised them for the purpose of regulating the J__ '
grant of patents. Under that legislation what purports to have
been an act of the Governor in Council in the issue of letters patent is put forward as a matter to be examined here. It seems to me the inquiry stops on the threshold. If a grant is put forward as an act of the supreme governmental power of New South Wales in re.spect of a matter in which this State has no share, in respect of which its rights and duties are totally distinct, then it cannot be su.stained that, whether it was an act of State of tho.se two States or anything else, the validity of that grant can be inquired into by the Courts of this State. Mr. Mitchell was strongly impressed with the view that this matter can only be dealt with by an exercise of the executive power, and there fore he argued very earnestly that, if that were so, it could only be dealt with by an exercise of the prerogative, and he said that, as the commission of the Governor of New South Wales gave no delegated right to him in respect of the prerogative to deal with letters patent, so this was an act w'hich could not be looked upon as a prerogative act in the usual sense of the term, but was merely some act derivative from the terms of the Statute. It seems to me that that inquiry is immaterial as between separate States, and the States of the Commonwealth are separate in this respect, that they have separate powers, distinct and operating upon different territories and rights. They are so distinct from each other that the aspect in which their respective exercise of power is to be regarded is not that of municipal but that of international law. In that aspect it is to no purpose to inquire whether an act is executive or legislative or otherwise, so long as it is an active exercise of the supreme governmental power. So I think the inquiry about the prerogative leads to no practical result in this case. As dealing with acts of a government de facto, the case of Underhill v. Hernandez (1), which was much dis-
(1) 168, U .S., 250.
VOL. III.
36
3 C.L.R.1 OF AUSTRALIA.
515
cations of the general principle because there are no circumstances H- O. of A
iu tliis case which make them applicable.
Mr. Higgin.s’ strongest
contention was based upon an ingenious and somewhat new view
potter
of the nature of the grant of a patent. The grant he urges i.s a bj ôkek H iu . conditional grant—the conditions being that the applicant is the P roprietaky
first and true'inventor, that the invention is a novelty, and that
J___
the other circumstances exist -which make the i.ssue of the grant valid under the Statute of Monopolies. He says that the matter therefore for inquiry by the Victorian Court is not the validity of the patent, but whether the applicant has duly fulfilled the conditions upon which the grant was made by the Governor of Xevv South 'Wales, and that .such an inquiry can be made without any breach of the principles of international law. If the grant of the patent is a conditional grant that would be so. But the answer to the contention is obvious. The grant, we have had the terms of it before us, is not a conditional, but an absolute grant. No conditions can be implied from its terms, nor can any conditions be implied from its nature and incidents. The whole purport of the Patents Act of New South Wales is, while recognizing patent grants as under the old law, to provide machinery for inquiry and investigation by officers of the govern ment before a patent is issued, and the cancellation of the grant when it ought not to have issued. But the nature of the grant is not altered. Its incidents ai’e well known, and are the same now as they were w'hen the Statute of Monopolies was passed. The declaration in the Act, that although scire facias is abolished as a method of procedure, the grounds of scire facias will be grounds of defence to an action of infringement, indicate that the legi.slature did not intend to alter the nature of the grant of a patent, but intended it to remain, what it always has been, the absolute grant of a monopoly made bĵ the sovereign executive power to a subject, but liable to be declared void by the Courts, aud withdrawn and cancelled if it should at any time be proved that the sovereign power was misled into issuing it by incoi’rect representations of the applicant. As the grant therefore is not conditional on its face, and cannot from its nature be lield to be conditional, the contention of Mr. Higgins must fail. For these reasoTis I am of opinion that the Supreme Court of Victoria could not try tins case
516 HIGH
COURT
[1906,
| H. | C. OF A. without iiKiuiring into the validity of the patent grant, and could | |
|
Potterof the comity of nations which is binding on the Victorian Couits
V.
Broken Hill
in the absence of any Victorian law authorizing them to make
Pboprietarv such inquiry. The ca.se, therefore, not being justiciable in the
J__ '
Victorian Courts. I am of opinion that the decision of the Supreme
O'Connor J.
right, aud the appeal should be dismi.ssed.
Appeal dismissed with costs.
Solicitors, for appellant, Braham <t P iran i, Melbourne.
Solicitors, for respondent. Mobile, Hamilton cfc Kiddle, Mel
bourne,
B. L.
HIGH COURT OF .AUSTRALIA.]
AUSTIN AND OTHERS
A ppellants;
P l a in t if f s ,
AUSTIN AND OTHERS
R espondents.
D e f e n d a n t s ,
OX APPEAL FROM THE SUPREM E COURT OF
VICTORIA.
H. C. or A. TrmUe— Breach o f trust—Xeglifjence— D ufy o f one. o f two executore^Custody of
1906. documents o f title— Mortyaye deed left in hayids o f solicitor—Solicitor om of executors— Mortyaye not registered— Receipt o f mortgage money hy solicitor-
Melbourne,
executor.
March 6, 8, 9,
12, 13, U.It is the duty of a trustee, in managing the trust uflfairs, to take those precautions which an ordinary man of business would take in iiianagiDg
| Griffith C.J., | similar aflfairs of his own. |
| O'Connor JJ,Executors omitted to register a mortgage given to their testator during bis | Barton and |
lifetime. They also left documents, which in the absence of registration oper ated as an eijuitable mortgage only, in the possession of a firm of solicitors acting
for the estate by express authority of the will, and of which one of them was
111
0
0