Stylis and Commissioner of Patents
[2014] AATA 796
•28 October 2014
[2014] AATA 796
Division GENERAL ADMINISTRATIVE DIVISION
File Number 2014/4091
Re Stanley Stylis and Daphne Stylis
APPLICANT
And Commissioner of Patents
RESPONDENT
DECISION
Tribunal Deputy President S A Forgie
Date 28 October 2014
Place Melbourne
The Tribunal decides that it does not have jurisdiction to review a decision by the Commissioner not to stay her consideration of an application made under s 17 of the Patents Act 1990.
…[sgd] S A Forgie…..
Deputy President
CATCHWORDS
PATENTS – whether Tribunal has jurisdiction to review decision refusing to stay consideration of a request to make a direction to co-patentees to become joined as parties in Supreme Court proceedings against third party – Commissioner refuses to stay consideration of application – whether Commissioner has made a decision that is reviewable by the Tribunal
PATENTS – WORDS AND PHRASES – decision under an enactment – “decision” – “under”
LEGISLATION
Administrative Appeals Tribunal Act 1975; sections 3, 5, 13, 25
Administrative Decisions (Judicial Review) Act 1977; sections 3, 5, 13
Australian National Airlines Act 1945; section 63
Australian National University Act 1946
Patents Act 1952; sections 151, 160
Patents Act 1990; sections 15, 16, 17, 216, 224
Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT); section 19
Patents Regulations; regulation 7B
Patents Regulations 1991; regulations 22.22, 22.23, 22.24, 22.26
CASES
Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1984) 2 FCR 368; 56 ALR 265
Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321; 21 ALD 1; 64 ALJR 462; 94 ALR 11
Australian National Airlines Commission v Newman (1987) 162 CLR 466; 70 ALR 275
Australian National University v Burns [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67Australian National University v Lewins (1996) 68 FCR 87; 138 ALR 1
Burns v Australian National University [1982] FCA 59; (1982) 40 ALR 707; 61 FLR 76
Carberry v James [1981] 1 NSWLR 163; (1981) 34 ALR 256; 55 ALJR 424
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; 141 ALR 618
Collector of Customs (New South Wales) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; (1979) 24 ALR 307; 41 FLR 338; 2 ALD 1
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297; 35 ALR 151; 11 ATR 949; 55 ALJR 434
Deputy Commissioner of Patents v Board of Control of Michigan Technological University [1979] FCA 84; (1979) 43 FLR 9; 28 ALR 551; 2 ALD 711
Finance Facilities Pty Ltd v Federal Commissioner of Taxation [1971] HCA 12; (1971) 127 CLR 106; 45 ALJR 241; 2 ATR 194
General Newspapers Pty Limited and Others v Telstra Corporation [1993] FCA 473; (1993) 45 FCR 164; 117 ALR 629
Griffith University v Tang [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289
Guttershield Systems Australia Pty Ltd v LBI Holdings Pty Ltd [2004] NSWSC 941
Lamb v Moss [1983] FCA 254; (1983) 76 FLR 296; 49 ALR 533; 5 ALD 446
Leach v R [2007] HCA 3; (2007) 230 CLR 1; 232 ALR 325; 81 ALJR 598
Ralkon Agricultural Co Pty Ltd v Aboriginal Development Commission [1982] FCA 153; (1982) 69 FLR 328; 43 ALR 535; 5 ALD 42
Samad v District Court of New South Wales [2002] HCA 24; (2002) 209 CLR 140; 189 ALR 1; 76 ALJR 871
Scharer v New South Wales [2001] NSWCA 360; (2001) 53 NSWLR 299; 116 LGERA 217
TCN Channel Nine Pty Ltd v Australian Mutual Provident Society [1982] FCA 169; (1982) 62 FLR 366; 42 ALR 496
Wacando v The Commonwealth (1981) 148 CLR 1; 37 ALR 317
Ward v Williams [1955] HCA 4; (1955) 92 CLR 496OTHER MATERIALS
Chambers 21st Century Dictionary, 1999, reprinted 2004
REASONS FOR DECISION
One of three co-patentees of an Australian patent, Mr John Karandonis, has asked the Commissioner of Patents (Commissioner) to direct his co-patentees, Dr Stanley Stylis and Mrs Daphne Stylis, to join with him in taking legal proceedings against Edge Industry Ltd (Edge). Mr Karandonis alleges that Edge is in breach of a licence agreement dated 12 June 2009 relating to the patent. Dr and Mrs Stylis have asked the Commissioner to stay her consideration of the request made to her for a direction but she has refused to do so. Dr and Mrs Stylis have lodged an application for review of the Commissioner’s decision. I have decided that the Tribunal does not have jurisdiction to review it. These are my reasons for reaching that conclusion.
BACKGROUND
Mr Karandonis’ application to Commissioner for direction under s 17 of the Patents Act
Under s 17 of the Patents Act 1990 (Patents Act), Mr Karandonis has asked the Commissioner for a direction that Dr and Mrs Stylis join with him in proceedings in the Supreme Court of Victoria to assert that Edge is in breach of its licence.
Section 17 of the Patents Act provides:
“(1) Where there are 2 or more patentees, the Commissioner may, on the application of any of them, give such directions in accordance with the application as the Commissioner thinks fit, being directions about:
(a)a dealing with the patent or an interest in it; or
(b)the grant of licences under the patent; or
(c)the exercise of a right under section 16 in relation to the patent.
(2)If a patentee fails to do anything necessary to carry out a direction under subsection (1) within 14 days after being asked in writing to do so by one of the other patentees, the Commissioner may, on the application of one of those other patentees, direct a person to do it in the name and on behalf of the defaulting patentee.
(3)Before giving a direction, the Commissioner must give an opportunity to be heard:
(a)in the case of an application by a patentee or patentees under subsection (1) – to the other patentee or patentees; and
(b)in the case of an application under subsection (2) – to the defaulting patentee.
(4)The Commissioner must not give a direction that:
(a)affects the rights or obligations of a trustee or of the legal representative of a deceased person, or rights or obligations arising out of either of those relationships; or
(b)is inconsistent with the terms of an agreement between the patentees.”
Dr and Mrs Stylis challenge the Commissioner’s jurisdiction to entertain application
Dr and Mrs Stylis challenged the Commissioner’s jurisdiction to entertain the s 17 application. They challenged it after receiving notice of the application on 9 August 2013. The Commissioner did not accept their challenge and advised them in a letter dated 18 September 2013.
Dr and Mrs Stylis ask Commissioner to stay consideration of application
Dr and Mrs Stylis then asked the Commissioner to stay consideration of Mr Karandonis’s application. They made that request on the basis that, in order to resist the application made under s 17 of the Patents Act, they will need to resist Mr Karandonis’s assertion that Edge is in breach of its licence. Whether or not Edge is in breach lies at the heart of the proceedings to be decided in the court. The court’s decision will be binding on the parties whereas the Commissioner’s will not. This leads to the conclusion that it is inappropriate and futile for the application under s 17 to proceed.
On 8 July 2014, the Commissioner wrote to the solicitors for Dr and Mrs Stylis stating:
“I am not satisfied that I should either dismiss this action or permanently stay it. I note that Edge and Mr Karandonis may soon be involved in court proceedings relating to the Licencing [sic] Agreement. The Commissioner will comply with any direction of the Court that is relevant to the present matter.”
The Commissioner also said:
“I consider that the Stylises have an argument that the Commissioner does not have jurisdiction. That argument needs to be tested through submissions.”
Edge issues proceedings in the Supreme Court of New South Wales
Edge has since issued proceedings in the Supreme Court of New South Wales (Supreme Court) asserting that Mr Karandonis is in breach of his obligations under the licence agreement. It did so on 21 August 2014.[1] That breach, Edge asserts, has caused it to suffer, and to continue to suffer, substantial loss and damage. It has also claimed that Mr Karandonis is in breach of the licence agreement and that breach has had an impact on the performance of its own obligations under the licence agreement.
[1] Proceedings No. 2014/246121
THE SUBMISSIONS
On behalf of Dr and Mrs Stylis, Mr Saltzman submitted that the Commissioner’s decision to refuse to stay her consideration of Mr Karandonis’s application under s 17(1) of the Patents Act is made in the exercise of her powers under that section. When s 224(1)(a) of the Patents Act provides that an application may be made to the Tribunal for review of a decision “under” s 17, it means that the decision was made “in connection with” or “in the context of” that section. Had Parliament intended that only a decision to make a direction was reviewable by the Tribunal, it would have said so. There is no limitation on the word “decision”. Mr Saltzman relied on the judgment of Ellicott J in Burns v Australian National University[2] as well as those in Australian Broadcasting Tribunal v Bond[3] (Bond).
[2] [1982] FCA 59; (1982) 40 ALR 707; 61 FLR 76
[3] [1990] HCA 33; (1990) 170 CLR 321; 21 ALD 1; 64 ALJR 462; 94 ALR 11; Mason CJ, Brennan, Deane, Toohey and Gaudron JJ
On behalf of the Commissioner, Mr Maat submitted that the Patents Act confers jurisdiction on the Tribunal in respect of decisions made under specified sections of the Patents Act but not generally. A decision is made “under” a specified section if it involves interpretation or application of the elements or criteria of the section under consideration or matters that are necessary and incidental to that consideration. Relying on the cases of Carberry v James[4] and Ralkon Agricultural Co Pty Ltd v Aboriginal Development Commission,[5] Mr Maat submitted that, in order to be made under a specified section, a decision must be subject to the limitations imposed by, and in accordance with the requirements of, that section. Section 17 does not provide power to stay consideration of an application made to it. It is not a decision that is necessary and incidental to consideration of an application under that section. Therefore, the Commissioner’s decision not to stay her consideration of the application was not made under s 17 and, as a consequence, the Tribunal does not have jurisdiction to review it.
EXERCISE OF COMMISSIONER’S POWERS
[4] [1981] 1 NSWLR 163; (1981) 55 ALJR 424; Lord Diplock, Lord Simon of Glaisdale, Dord Edmund-Davies, Lord Keith of Kinkel and Lord Scarman
[5] [1982] FCA 153; (1982) 69 FLR 328; 43 ALR 535; 5 ALD 42; Keely J
Commissioner’s exercise of discretionary powers
Section 216 of the Patents Act relates to the exercise of a discretionary power by the Commissioner. It provides:
“(1) The Commissioner must not exercise a discretionary power under this Act adversely to any person applying for the exercise of that power without first giving that person a reasonable opportunity to be heard.
(2)Subsection (1) does not apply in relation to the Commissioner’s power to direct an applicant to request an examination.”
Regulation 22.22(1) of the Patents Regulations 1991 (Patents Regulations) is expressed in terms similar to those in s 216(1). The ways in which the Commissioner must give that opportunity are set out in r 22.22(2):
“The Commissioner must give the person an opportunity to be heard by:
(a)asking the person for written submissions; or
(b)notifying the person that, on request to the Commissioner, the person may be heard by way of an oral hearing on a date, and at a time and place, determined by the Commissioner; or
(c)notifying the person of the date, time and place of an oral hearing.”
If the Commissioner decides to give the person an opportunity by way of written submissions:
“… the Commissioner must:
(a)notify the person of the period in which the submissions must be filed (being at least 10 business days); and
(b)determine the matter after considering the written submissions; and
(c)notify the person of the Commissioner’s decision in relation to the exercise of the discretionary power.”[6]
[6] Patents Regulations; r 22.23(1)
If the Commissioner decides that the person may be heard by way of an oral hearing, he or she must give the person notice of the date, time and place of the hearing at least ten business days before the day of the hearing is to begin.[7] The Commissioner may adjourn the oral hearing from time to time or from place to place by notifying the person.[8] The person may appear in person or by means of telephone or other means of telecommunications that the Commissioner reasonably allows.[9] Regulation 22.23(5) provides that the Commissioner may direct a person to provide a written summary of submissions. That power is in addition to other powers the Commissioner has. The Commissioner has an obligation to the person who appears at the hearing. He or she must notify a person who appears at the hearing of his or her decision in relation to the exercise of a discretionary power.[10]
[7] Patents Regulations; r 22.23(2)
[8] Patents Regulations; r 22.23(3)
[9] Patents Regulations; r 22.23(4)
[10] Patents Regulations; r 22.23(6)
Regulations 22.23(1) and (2) to (6) are concerned with the procedures the Commissioner must follow if he or she decides that a person may be heard by written submissions or by oral submissions. Regulation 22.22(3) sets out what the Commissioner may do if, having given a person an opportunity to be heard, that person does not take advantage of the opportunity:
“The Commissioner may exercise the discretionary power if the person:
(a)notifies the Commissioner that the person does not want to be heard; or
(b)does not file written submissions if requested under subregulation 22.23(1); or
(c)does not attend an oral hearing if notified under subregulation 22.23(2).”
Finally, r 22.22(4) provides that:
“If the Commissioner exercises discretionary power in any of the circumstances mentioned in subregulation (3), the Commissioner must notify the person of the Commissioner’s decision.”
Commissioner’s power to determine practice and procedure
Regulation 22.24 is relevant where the Act or Regulations authorises the Commissioner to hear an application or matter that is not an opposition or a matter is being decided on the Commissioner’s motion. In those situations, the Commissioner may decide the practice and procedure to be followed for the purposes of enabling the application or matter to be decided.[11]
[11] Patent Regulations; r 22.24(1)
Review of decisions under Patents Regulations
Regulation 22.26 provides for an application to be made to the Tribunal for the review of a decision made under specific regulations. Regulations 22.22, 22.23 and 22.24 are not included in the specific regulations listed in r 22.26. Therefore, as r 22.26 does not provide for an application to be made to it for review of decisions made under those regulations, decisions made in the exercise of those powers are not reviewable by the Tribunal. That means that, in so far as the Commissioner’s refusal to stay her consideration of the application made under s 17 was a decision made in the exercise of all or any of the powers conferred by rr 22.22, 22.23 and 22.24, it is not a decision that may be reviewed by the Tribunal.
REVIEW OF A DECISION UNDER SECTION 17
That brings me to s 17 itself. Section 224(1)(a) provides:
“Applications may be made to the Administrative Appeals Tribunal for review of:
(a)a decision of the Commissioner under section … 17, …”
The word “decision” has the same meaning as in the Administrative Appeals Tribunal Act 1975 (AAT Act).[12]
[12] Act; s 224(4)
Section 3(3) of the AAT Act provides:
“Unless the contrary intention appears, a reference in this Act to a decision includes a reference to:
(a)making, suspending, revoking or refusing to make an order or determination;
(b)giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission;
(c)issuing, suspending, revoking or refusing to issue a licence, authority or other instrument;
(d)imposing a condition or restriction;
(e)making a declaration, demand or requirement;
(f)retaining, or refusing to deliver up, an article; or
(g)doing or refusing to do any other act or thing.”
CONSIDERATION
Conferring power on the Tribunal to review decisions
Section 25(1) of the AAT Act provides that:
“An enactment may provide that applications may be made to the Tribunal:
(a)for review of decisions made in the exercise of powers conferred by that enactment; or
(b)for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.”
Section 25(3) specifies the matters that the enactment must address when making provision in accordance with s 25(1). Those matters are:
“(a) shall specify the person or persons to whose decisions the provision applies;
(b)may be expressed to apply to all decisions of a person, or to a class of such decisions; and
(c)may specify the conditions subject to which applications may be made.”
Even when an enactment has made provision in accordance with ss 25(1) and (3) of the AAT Act, the Tribunal would not have power to review the decision if it were not for s 25(4) of the AAT Act. Section 25(4) complements ss 25(1) and (3) by providing:
“The Tribunal has power to review any decision in respect of which application may be made to it under any enactment.”
In this case, s 224(1)(a) of the Patents Act has authorised applications to be made to the Tribunal “for review of … a decision of the Commissioner under section … 17 …” (emphasis added). By virtue of s 25(4) of the AAT Act, that means that the Tribunal has power to review “a decision of the Commissioner under section …17” for it is a decision in respect of which an application may be made to it under an enactment.
What is a decision made under an enactment or a provision of an enactment?
It follows that I must consider the meaning of both “decision” and when a decision is made “under” a particular section being, in this case, s 17.
A. What is a “decision”?
I have set out the meaning given to the word “decision” by s 3(3) of the AAT Act and so by s 224(4) of the Patents Act at [18] above. It is a word that is also used in the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) when conferring rights of review. In that latter context, and particularly in the context of s 5, in which it was considered by the High Court in Australian Broadcasting Tribunal v Bond[13] (Bond). Under s 5(1), “A person who is aggrieved by a decision to which this Act applies … may apply to the Federal Court … for an order in respect of the decision …” on one or more of the grounds that are then specified. A “decision to which this Act applies” is defined in s 3(1) to mean “… a decision of an administrative character made, proposed to be made, or required to be made (whether in the exercise of a discretion or not …) …” under an enactment as defined in s 3(1) but excluding decisions made by the Governor-General or a decision included in any of the classes of decision set out in Schedule 1 to the ADJR Act.
[13] [1990] HCA 33; (1990) 170 CLR 321; 21 ALD 1; 64 ALJR 462; 94 ALR 11; Mason CJ, Brennan, Deane, Toohey and Gaudron JJ
In Bond, Mason CJ, with whom Brennan and Deane JJ concurred, found that the word “decision” has a variety of potential meanings before turning to the ADJR Act. He looked to the fact that the ADJR Act is a remedial statute. Its being a remedial statute indicates that no narrow view should be taken of the word “decision”. An examination of its provisions, though, suggested that the word should have a relatively limited field of operation. The relevant policy provisions are competing. Mason CJ weighed them:
“… On the one hand, the purposes of the A.D.(J.R.) Act are to allow persons aggrieved by the administrative decision-making processes of government of a convenient and effective means of redress and to enhance those processes. On the other hand, in so far as the ambit of the concept of ‘decision’ is extended, there is a greater risk that the efficient administration of government will be impaired. Although Bowen C.J. and Lockhart J. appeared to emphasize the first of these considerations in Australian National University v Burns …, there comes a point when the second must prevail, as their Honours implicitly acknowledged. To interpret a ‘decision’ in a way that would involve a departure from the quality of finality would lead to a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process.
The policy arguments do not, in my opinion, call for an answer different from that dictated by the textual and contextual considerations. That answer is that a reviewable ‘decision’ is one for which provision is made by or under a statute. That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in the course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment.
Another essential quality of a reviewable decision is that it be a substantive determination. …
If ‘decision’ were to embrace procedural determinations, then there would be little scope for review of ‘conduct’, a concept which appears to be essentially procedural in character. To take an example, the refusal by a decision-maker of an application for an adjournment in the course of an administrative hearing would not constitute a reviewable decision, being a procedural matter not resolving a substantive issue and lacking the quality of finality. Then it is the ‘conduct’ of the hearing in refusing an adjournment that is the subject of review. To treat the refusal of an adjournment in this way is more consistent with the concept of ‘conduct’ than with the notion of ‘decision under an enactment.’.”[14]
[14] (1990) 170 CLR 321; 21 ALD 1; 64 ALJR 462; 94 ALR 11 at 337-338; 11; 469; 23-24
Mason CJ made it clear that a reviewable decision need not be one which ultimately determined all of the issues when he referred to Lamb v Moss.[15] His Honour said:
“ Lest it should be thought otherwise, I should say that, to the extent in Lamb v Moss that the magistrate decided that a prima facie case had been established and that he would proceed with the committal proceedings, a reviewable decision had been made. That decision was one for which s 41(2) of the Justices Act 1902 (NSW) specifically provided. The decision resolved an important substantive issue to be determined before the ultimate decision could be made under s 41(6) of that Act whether to commit the defendant for trial or discharge him from custody.”[16]
[15] [1983] FCA 254; (1983) 76 FLR 296; 49 ALR 533; 5 ALD 446
[16] (1990) 170 CLR 321; 21 ALD 1; 64 ALJR 462; 94 ALR 11 at 338; 12; 469; 24
B.“under an enactment”
The broadly based expression “under an enactment” is used in s 25(4) of the AAT Act while the specific section is nominated in s 224(1)(a) of the Patents Act. The authorities relating both to the broadly based expression and to more specific provisions are equally relevant. I will begin with the case of Australian National University v Burns[17] (Burns). The Full Court of the Federal Court considered whether a decision made by the Council of the University terminating Mr Burns’ appointment as a professor in one of its Departments was “a decision of an administrative character made … under an enactment” within the meaning of s 3 of the ADJR Act. If it was, Mr Burns would be able to apply to the University under s 13 of the ADJR Act for a statement of its reasons for terminating his appointment. He would only be able to do so if he was “… a person who is entitled to make an application under s 5 in relation to the decision”. Section 5 of the ADJR Act entitles a “… person who is aggrieved by a decision to which this Act applies …” to make the application. A “decision to which this Act applies” includes “ … a decision of an administrative character made … under an enactment …”.[18] Section 3(4)(a)(i) provides that a reference to a person aggrieved by a decision includes a reference “to a person whose interests are adversely affected by the decision”. The University told Mr Burns that he was not entitled to request reasons under s 13. That led to Mr Burns’ applying to the Federal Court under s 13(4A)(b) of the ADJR Act for an order declaring that he was entitled to make the request. A single Judge of the Federal Court, Ellicott J, made an order declaring that Mr Burns was entitled to make the request. The University appealed to the Full Court.
[17] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67; Bowen CJ, Lockhart and Sheppard JJ
[18] ADJR Act; s 3(1); paragraph (a) of definition of “decision to which this Act applies”
The Australian National University (ANU) conceded on the appeal that, if the decision had been made under the Australian National University Act 1946 (University Act), it was a decision of an administrative character. The issue that remained for consideration was whether the ANU’s decision had been made “under” the University Act. Mr Burns’ submitted that it had been but the ANU submitted that it had been made, not under the University Act, but under the contract of service between it and Mr Burns entered into on 9 December 1966. Mr Burns contended that the fact that the contract of service existed did not deprive the decision of its true character as a decision made under the University Act.
In allowing the appeal, Bowen CJ and Lockhart J said:
“… [W]e turn to the question whether the decision of the Council [of the Australian National University] to dismiss the respondent was made ‘under an enactment’.
…
The difficulty in the present case does not lie in the definition of the expression ‘under an enactment’. We agree with Fox J who said in Evans v Freimann (1981) 35 ALR 428 at 436; 3 ALD 326 at 333, that the word ‘under’, in the context of the Judicial Review Act, connotes ‘in pursuance of’ or ‘under the authority of’: see also R v Clyne [1941] VLR 200. The difficulty lies in the application of the expression to particular circumstances. The present case poses the problem in an acute form.”[19]
[19] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 173; 31; 72
Bowen CJ and Lockhart J then went on to give some general guidance as to how to apply the general principles:
“ We agree with the primary judge when he said (40 ALR at 716-7): [[20]] ‘In many cases the power to do a particular thing will be precisely stated in the legislation. In other cases the power to do a particular thing will be found in a broadly stated power. The Act should not be confined to cases where the particular power is precisely stated. In each case, the question to be asked is one of substance, whether, in effect, the decision is made “under an enactment” or otherwise.’”[21]
[20] Burns v Australian National University [1982] FCA 59; (1982) 61 FLR 76; 40 ALR 707 at 87; 716-717 per Ellicott J
[21] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 173-174; 31; 72-73
Applying the principles to the facts of the case before them, they said:
“In our opinion the rights and duties of the parties to the contract of engagement were derived under the contract and not under the [Australian National] University Act [1946]. Section 23 [of the University Act] empowered the council to enter into the contract on behalf of the appellant. Even if the council, in considering the position of the appellant under the contract, might be said to be acting under section 23, the effective decision for dismissal taken and notified to the respondent was directly under the contract.”[22]
[22] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 174; 32; 73
In case its conclusion be taken as a general statement of principle to the effect that decisions would be either taken under contract or taken under an enactment, Bowen CJ and Lockhart J later stressed that regard must always be had to the language and operation of the particular enactment and contract. They said:
“ If the making of a contract is authorized by an enactment, and such a contract, when made, in fact provides for the making of certain decisions, it does not necessarily follow that those decisions, when made, are not made under an enactment. This must depend on the language and operation of the particular enactment and contract. …
…
It would be directly relevant to the present case if the Council of the appellant made a statute stipulating the circumstances in which professors could be dismissed, assuming this to be a valid exercise of the power conferred by s 27(1)(g) [of the Australian National University Act 1946]. If the Council subsequently entered into a contract of engagement with a professor and either incorporated by reference the relevant provisions of the statute relating to dismissal or repeated them in the same terms in the contract itself, it may be that a decision to dismiss the professor would be made under the statute; but this would depend on the terms of both the statute and the contract.”[23]
[23] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 175-176; 33-34; 74-75
A little later in their judgment, they said in the same vein:
“… [W]e accept the correctness of the proposition that the same decision may be made both under a contract and ‘under an enactment’ for the purposes of the Judicial Review Act. The difficulty lies, not with the acceptance of that proposition, but in deciding whether it applies in a particular case. This must depend on the circumstances of each case.”[24]
[24] [1982] FCA 191; (1982) 64 FLR 166; 43 ALR 25; 5 ALD 67 at 177; 34; 75
A few years later, the High Court considered a similar issue in the context of the manner in which the former Australian National Airlines Commission conducted its kitchen. That consideration took place in Australian National Airlines Commission v Newman.[25] The High Court considered whether the alleged failure of the Australian National Airlines Commission (Commission) to maintain its flight service kitchen properly and to provide a safe system of work was something “done or purporting to have been done under” the Australian National Airlines Act 1945 (ANA Act). It did so because s 63(1) of the ANA Act provided:
“All actions against the Commission or against any person for or arising out of anything done or purporting to have been done under this Act, shall be commenced within two years after the act complained of was committed.”
[25] (1987) 162 CLR 466; 70 ALR 275; Mason CJ, Brennan, Deane, Toohey and Gaudron JJ
The Commission had argued that s 63(1) was to be read as comprehending all actions arising out of things done or omitted to be done in the exercise by the Commission of its powers and functions under the ANA Act. The Commission’s carrying on a flight services kitchen is a function or power of the Commission. Therefore, what happens in a flight services kitchen is something done under the ANA Act.
In the majority judgment, it was said:
“ The flaw in this argument is that s. 63(1) lends no support to the view that, for the purpose of determining whether the sub-section applies, we should look to the general statutory function or power, pursuant to which the Commission carried on its relevant undertaking, rather than to the particular act of which the respondent complained. The expression at the end of the sub-section ‘the act complained of’ refers back to the earlier words ‘anything done or purporting to be done under this Act’. These words refer to the particular act that causes the injury complained of, rather than to the general function or power pursuant to which the Commission engages in the undertaking in the course of which the injury occurs. …”[26]
[26] (1987) 162 CLR 466; 70 ALR 275 at 471; 278; Mason CJ, Deane, Toohey and Gaudron JJ
Brennan J said of the issue to be decided:
“ As a statutory authority to do something is inconsistent with liability for doing precisely that thing, the protection given by s 63(1) cannot be intended to relate merely to actions founded on the doing of things precisely in accordance with statutory authority. Section 63(1) must be intended to relate also to actions founded on things done in intended or purported exercise of statutory powers and performance of statutory functions, where the manner in which the relevant thing is done founds a liability. The typical case to which s 63(1) would apply is where the relevant act is done in exercise of a statutory power or in performance of a statutory function but it is done negligently: see Benning v. Wong [1969] HCA 58; (1969) 122 CLR 249, at p 256. The Act furnishes no authority for negligence, and s 63(1) can apply when negligence in the doing of the relevant act founds the liability sought to be enforced. …”[27]
[27] (1987) 162 CLR 466; 70 ALR 275 at 474-475; 280-281
His Honour continued:
“ In the present case, the Commission required no statutory authority to conduct a kitchen. That is an activity which, so far as appears, might lawfully be engaged in without statutory authority. The Commission was at liberty to perform the functions prescribed by s 19(1) or by other provisions of the Act by whatever lawful means it chose, and no further grant of power or prescription of functions was needed to authorise the conduct of the kitchen. True it is that the Act expressly confers powers on the Commission to operate services and facilities for the purposes of and incidental to the carrying on of its business (s 19D) and to do ‘all things necessary or convenient to be done for or in connection with, or as incidental to, the performance of its functions’ (s 19H(1)) but the Act is not to be regarded, for the purpose of s 63(1), as the source of power which the commission otherwise possesses. Freedom under the common law to engage in conduct requires no grant of statutory power to confirm it, and a limitation provision which affects liability for things done or purportedly done ‘under’ the statute does not affect liability for things which are and can be done without reliance on a statutory power to do them. The conduct of the kitchen was something which the Commission had capacity to undertake without the grant of statutory power to undertake it. It follows that an act committed in the course of conducting the kitchen is not an act arising out of something done or purportedly done under the Act for the purpose of
s 63(1). As an action founded on such an act does not attract the operation of s 63(1), the appeal should be dismissed.”[28][28] (1987) 162 CLR 466; 70 ALR 275 at 477-478; 282-283
The Federal Court applied similar principles in General Newspapers Pty Limited and Others v Telstra Corporation[29] (General Newspapers). That case was concerned, in part, with whether Telstra’s actions in negotiating the printing of its telephone directories and in deciding to enter a contract with printers without calling for tenders was reviewable under the ADJR Act. In their joint judgment, Davies and Einfeld JJ reviewed a number of the authorities and continued:
“In the present case, the decisions relied upon involved the entry of contracts and the conduct challenged was conduct leading to the making of the contracts. No statute made specific provisions for such contracts, merely conferring upon Telecom all the powers of a natural person including the power to enter into a contract. That was a mere conferral of capacity to act. The contracts were not relevantly authorised or required by and were not made under an enactment. The validity of the contracts and of the acts done was governed entirely by the law of contract, not by the statutes. Thus, the ADJR Act had no application to the conduct or to the alleged decisions.”[30]
[29] [1993] FCA 473; (1993) 45 FCR 164; 117 ALR 629
[30] [1993] FCA 473; (1993) 45 FCR 164; 117 ALR 629 at [27]; 173; 637
It would seem that the most recent occasion on which the High Court has considered the question of whether a decision has been made “under an enactment” occurred in the case of Griffith University v Tang[31] (Tang). It was in the context of the ADJR Act and concerned a decision by the University refusing to allow Ms Tang to participate further in its degree programme. Ms Tang sought review of that decision.
[31] [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289; Gleeson CJ, Gummow, Callinan and Heydon JJ; Kirby J dissenting
Gleeson CJ referred with approval to the following passage from the judgment of Davies A-JA in Scharer v New South Wales[32] when considering questions under the ADJR Act as to whether a decision is under an enactment:
“… The crux of the issue in each case is whether the enactment has played a relevant part in affecting or effecting rights or obligations. A grant of authority to do that which under the general law a person has authority to do is not regarded as sufficient.”[33]
Applying that approach to the facts in Burns, Gleeson CJ said:
“So, to revert to Australian National University v Burns, a grant of authority to make contracts and employ staff does not mean that when a staff member is dismissed for breach of contract the statute under which the employer is operating has played a relevant part in the legal force or effect of the decision.”[34]
[32] [2001] NSWCA 360; (2001) 53 NSWLR 299; 116 LGERA 217; Stein and Hodges JJA and Davies A-JA
[33] [2001] NSWCA 360; (2001) 53 NSWLR 299; 116 LGERA 217 at [77]; 313; 232 per Davies A-JA cited with approval in Tang [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289 at [18]; 110; 729; 294 per Gleeson CJ
[34] [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289 at [18]; 110; 729; 294
A similar approach was taken by Gummow, Callinan and Heydon JJ in their judgment although they emphasised that the fact that the decision must be “of an administrative character” casts some light on the force to be given to the phrase “under an enactment” (emphasis added). The question becomes:
“… What is it, in the course of administration, that flows from or arises out of the decision taken so as to give that significance which has merited the legislative conferral of a right of judicial review upon those aggrieved?
The answer in general terms is the affecting of legal rights and obligations. Do legal rights or duties owe in an immediate sense their existence to the decision, or depend upon the presence of the decision for their enforcement? … To adapt what Lehane J said in Lewins[[35]], does the decision in question derive from the enactment the capacity to affect legal rights and obligations? Are legal rights and obligations affected not under the general law but by virtue of the statute? …
If the decision derives its capacity to bind from contract or some other private law source, then the decision is not ‘made under’ the enactment in question. …”[36]
[35] Australian National University v Lewins (1996) 68 FCR 87; 138 ALR 1 at 96-97; 16
[36] [2005] HCA 7; (2005) 221 CLR 99; 213 ALR 724; 82 ALD 289 at [79]-[81]; 128; 743-744; 308-309 (citations omitted)
Similar principles were applied by the Full Court of the Federal Court in Deputy Commissioner of Patents v Board of Control of Michigan Technological University[37] (MTU case) in considering whether the Tribunal had correctly decided that it had jurisdiction to review two decisions of the Commissioner on the basis that they had been made under s 151 of the Patents Act 1952 (1952PA) and r 7B(8) of the Patents Regulations 1952 (1952Regs). The events leading to the decision began when the Board of Control of the Michigan Technological University (MTU) lodged an application with the Patent Office for letters patent for an invention it described. MTU lodged its application on 14 April 1975. On 8 May 1975, the Patents Office issued a direction under r 7B(3) of the 1952Regs requiring MTU to lodge a substitute specification of its invention in accordance with Part II of Schedule 3 to the regulations. MTU did not comply, with the consequence that its application lapsed on 8 November 1975 by virtue of the operation of s 7B(4).
[37] [1979] FCA 84; (1979) 43 FLR 9; 28 ALR 551; 2 ALD 711; Smithers, Franki and Keely JJ
On 11 June 1976, the period within which MTU might have applied under r 7B(6) to have its lapsed application restored also expired. MTU applied under s 160(2) of the 1952PA for an extension of time within which to comply with the direction. That section provides that where, by reason of its error or omission or circumstances beyond its control:
“… an act or step in relation to an application for a patent or in proceedings under this Act (not being proceedings in a court) required to be done or taken within a certain time has not been so done or taken, the Commissioner may, upon application by the person concerned, but subject to this section, extend the time for doing the act or taking the step.”
The Deputy Commissioner of Patents decided that the authority vested in him by s 160(2) of 1952PA did not apply to an application to extend time for doing an act or taking a step in relation to an application for a patent which had become lapsed under r 7B(4) and that it was not, at that late time, possible to restore the lapsed application. MTU applied to the Tribunal for review of that decision but the Commissioner opposed its application on the basis that a decision had not been made under either s 160(2) or r 7B(4).
In rejecting a submission that the Commissioner had not considered and disposed of the application under the Act, the Full Court made the following points:
(1)“… But it is manifest that he did. He could not decide that he had no power to give relief under s. 160 in the application made under that section until he had acquainted himself with its contents and ascertained that the extension of time sought therein related to a lapsed application for a patent. It was only for the purpose of deciding whether on the facts disclosed in the applications he could or should give relief sought therein that the Commissioner had cause to refer to s. 160(2). It was in the course of deciding what to do with the application, in the course of performing his function under the Act, that he necessarily consulted and construed s. 160(2). Having done that and made his decision that the provisions of s. 160(2) did not apply to an application concerning a lapsed application and that the application for restoration under reg. 7B(8) must therefore necessarily fail, and having informed the defendant that he officially disposed of the applications. In effect he rejected them. It is impossible to regard the Commissioner’s intimation that s. 160(2) did not empower him to grant the relief sought as an exercise independent altogether of the performance of his functions in relation to the applications, or to say that he made the decision merely ‘in gross’ so to speak. When what actually was done is examined it is clear that the applications were dealt with and disposed of by reference to what was regarded as the proper construction of s. 160(2).
In the course of argument counsel for the plaintiff speaking of the Commissioner’s decision said: ‘But we say that in form and in substance and in every other way that it was a decision saying that he had no power to extend the time and therefore did not embark on other questions … As we understand it, what the Commissioner said was that he had no power under s. 160 and that was the end of the story.’ But it was not really the end of the story. To end the story there must be added by implication the words ‘and therefore I will not further consider your applications’. In other words the applications having been thoroughly considered were refused.”[38]
(2)“… Once a bona fide application relevant to the purposes of the Act and seeking relief under s. 160 was lodged at the Patent Office the situation was that in the course of the administration under the Act the Commissioner was authorized and required to deal with it. In doing whatever was necessary to deal with the application or was incidental thereto he was necessarily engaged in the exercise of powers conferred upon him by the Act. In this case it was necessary and incidental to his function that he should make a decision as to his powers under s. 160(2). He made such a decision and when he did so he was acting in the exercise of his powers under sub-s (2). It is a generally accepted principle of statutory interpretation that courts, tribunals and the like possess, subject to correction, the necessary power to rule on the initial question whether they have power to entertain a particular application. If they decline jurisdiction by reason of some statutory provision that is a decision ‘under’ that provision. …”[39]
[38] [1979] FCA 84; (1979) 43 FLR 9; 28 ALR 551; 2 ALD 711 at 18-19; 559-560; 717 per Smithers J
[39] [[1979] FCA 84; (1979) 43 FLR 9; 28 ALR 551; 2 ALD 711 at 21; 561-562; 719 per Smithers J
In his judgment in the MTU case, Franki J referred to the case of Collector of Customs (New South Wales) v Brian Lawlor Automotive Pty Ltd[40] (Brian Lawlor). He referred to the judgments of both Bowen CJ and Smithers J in that case but both may be summarised in the conclusion expressed in the judgment of the Chief Justice:
“ In the view which I take as to the meaning of s. 25 of the Administrative Appeals Tribunal Act … an applicant to the Tribunal has standing and the Tribunal has jurisdiction provided there is a decision in fact and provided further that the decision purports to have been made in exercise of powers conferred by an enactment whether or not as a matter of law it was validly made and whether or not action on the basis there was power to make the decision was right or wrong.”[41]
[40] [1979] FCA 21; (1979) 24 ALR 307; 41 FLR 338; 2 ALD 1; Bowen CJ and Smithers J; Deane J dissenting
[41] [1979] FCA 21; (1979) 24 ALR 307; 41 FLR 338; 2 ALD 1 at [23]; 317; 346; 7
C.Identifying a “decision under an enactment”?
At the outset, it must be acknowledged that, unlike the ADJR Act, the AAT Act is not framed in terms of providing for review of decisions “of an administrative character”. I do not think that this means that the principles identified by the authorities are any less applicable to determining whether a decision has been made under an enactment for the purposes of determining the Tribunal’s jurisdiction than it is when determining that of the Federal Court. As part of the executive arm of government and not a court under the Commonwealth Constitution, the Tribunal is necessarily concerned with decisions, however described, of an administrative character.
What each of the cases shows is that, in order to decide whether there is a decision under an enactment, or under a specific provision of an enactment, regard must first be had to what I will broadly describe as an “action”. Unless there is some indication to the contrary in the particular enactment or provision under consideration, that action will have to come within one or other of the seven types of action specified in s 3(3) of the AAT Act before it will be regarded as a “decision”. In carrying out that task, it must be remembered that inaction may be as relevant as action for inaction may mean that there has been a refusal to make a decision. Refusal to do an act or thing is just as much a decision under s 3(3) as a positive decision to do an act or thing. The MTU case is an example.
It may be that refusal to do an act or thing within the meaning of s 3(3)(g) of the definition of “decision” in the AAT Act is not expressed in terms of the refusal’s being a decision but it is a decision no less even though its making must be implied from the circumstances. Mere delay in making a decision one way or another will not of itself lead to a finding that a decision-maker has refused to do that act or thing. Regard would have to be had to such matters as whether the provision or enactment imposes a time limit for making the decision, whether relevant matters were considered and any reasons for not making a decision. Again, the MTU case provides an example.
Once a decision has been identified, the next task is to analyse if there is a particular provision or enactment conferring powers under which the decision has been made or is purported to have been made. In view of the Brian Lawlor case, it is not relevant at this stage to consider whether the decision was validly made in the exercise, or purported exercise, of the powers conferred by the enactment.
The decision is then compared with the decision that the decision-maker is authorised to decide under the particular provision or enactment under consideration. It can generally be said that an administrative decision of the sort that the Tribunal reviews will create rights or privileges, confer powers or impose duties or obligations or will refuse to do so. The precise nature of those rights, privileges, powers, duties, obligations and so on is determined by the provision or enactment under consideration. Bearing in mind their precise nature, it will be relevant to ask:
(1)Does the decision create rights or privileges, confer powers or impose duties or obligations or refuse to do so?
(2)Is there:
(a)a direct link between the rights or privileges created, powers conferred or obligations or duties imposed by the decision (or would have been if there had not been a refusal to make the decision) and the particular provision or enactment under which the decision is said to have been made; or
(b)is there an intermediate step that must be taken between the provision or enactment and the decision to perfect the link?
If the answer is that there is a direct link, then it is difficult to think of circumstances in which the decision would not be a decision under an enactment. It will generally be a decision under an enactment as was found to be so in the MTU case. If the answer is that an intermediate step has to be taken to perfect the link, it is likely that the decision will not have been made under an enactment. That will be the case even if the intermediate step is authorised by an enactment. The cases of Burns and Tang provide examples. The relevant statutes gave each University the power to enter a contract to engage staff or provide courses to students but it is that contract that lies between the provision or enactment authorising it and the decision to dismiss staff or withdraw a course from a student. The decision cannot be said to have been made under an enactment.
Has the Commissioner made a decision under s 17 of the Patents Act?
A.The decision
The Commissioner has made a decision that she not defer consideration of the application made to her under s 17(1).
B. The enactment
I have already set out the terms of s 17(1). It provides that, if there are at least two patentees and an application is made by any of them, the Commissioner “may … give such directions in accordance with the application as the Commissioner thinks fit …” (emphasis added). Section 17(1) goes on to specify what the directions must be about.
B.1Does s 17 confer a discretionary power?
The word “may” used in s 17(1) is generally not a prescriptive word but a word “used to express permission”.[42] If the word is used in a legislative context to express permission, it will mean that it is used to confer authority but not to impose an obligation. There are occasions, however, in which the word “may” is interpreted as not only conferring authority but as conferring an obligation to exercise that authority.
[42] Chambers21st Century Dictionary, 1999, reprinted 2004
A passage from the judgment of Gummow, Hayne, Heydon and Crennan JJ in Leach v R[43] illustrates the different uses of the word. The context of the High Court’s consideration was s 19(5) of the Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT). It provided that:
“The Supreme Court may refuse to fix a non-parole period if satisfied the level of culpability in the commission of the offence is so extreme the community interest in retribution, punishment, protection and deterrence can only be met if the offender is imprisoned for the term of his or her natural life without the possibility of release on parole.”
[43] [2007] HCA 3; (2007) 230 CLR 1; 232 ALR 325; 81 ALJR 598; Gleeson CJ dissenting
Their Honours concluded that the word “may” was not used to convey a discretion but to confer a power that a court was obliged to exercise once it was satisfied of the matters specified in s 19(5).[44] They referred to a passage to the same effect from the judgment of Windeyer J in Finance Facilities Pty Ltd v Federal Commissioner of Taxation.[45] His Honour had considered whether the Commissioner of Taxation was obliged to allow a rebate when satisfied that certain conditions had been met as to the non-payment of dividends. As explained by Gleeson CJ and McHugh J in Samad v District Court New South Wales,[46] the High Court in Finance Facilities Pty Ltd v Federal Commissioner of Taxation had decided that:
“… The context indicated that it was not intended that the Commissioner should have a discretionary power to defeat that right or entitlement. The word ‘may’ conferred a power; and the statutory intention was that the power be exercised if the condition was fulfilled. …”[47]
[44] Leach v R (2007) 230 CLR 1; 232 ALR 325; 81 ALJR 598; at [87]; 16; 337; 606
[45] [1971] HCA 12; (1971) 127 CLR 106; 45 ALJR 241; 2 ATR 194; Barwick CJ, Windeyer and Owen JJ; McTiernan J dissenting
[46] [2002] HCA 24; (2002) 209 CLR 140; 189 ALR 1; 76 ALJR 871; Gleeson CJ, Gaudron, McHugh, Gummow and Callinan JJ
[47] [2002] HCA 24; (2002) 209 CLR 140; 189 ALR 1; 76 ALJR 871 at [34]; 152-153; 11; 878
When a statutory power is conferred by words of permission, Gleeson CJ and McHugh J said, questions whether it is a mandatory or discretionary power and, if discretionary, the issues that may be taken into account in its exercise:
“… are to be resolved as a matter of statutory interpretation, having regard to the language of the statute, the context of the relevant provision, and the general scope and objects of the legislation …”[48]
[48] [2002] HCA 24; (2002) 209 CLR 140; 189 ALR 1; 76 ALJR 871 at [32]; 152; 10; 878
Gleeson CJ and McHugh J cited the judgment of the High Court in Ward v Williams[49] with approval. I will refer to one passage from that judgment in Ward v Williams:
“… One situation in which the conclusion is justified that a duty to exercise the power or authority falls upon the officer on whom it is conferred is described by Lord Cairns in his speech in the same case [Julius v Bishop of Oxford (1880) LR 5 AC 214 at 235]. His Lordship spoke of certain cases and said of them ‘[they] appear to decide nothing more than this: that where a power is deposited with a public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied by the Legislature of the conditions upon which they are entitled to call for its exercise, that power ought to be exercised, and the Court will require it to be exercised.”[50]
[49] [1955] HCA 4; (1955) 92 CLR 496; Dixon CJ, Webb, Fullagar, Kitto and Taylor JJ
[50] [1955] HCA 4; (1955) 92 CLR 496 at [8]; 505-506
The principles to be drawn from these cases require me to look to the purpose for which the Commissioner was given power to make directions under s 17(1). I should do that having regard to the principle stated by Mason and Wilson JJ in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation:[51]
“... The fundamental object of statutory construction in every case is to ascertain the legislative intention by reference to the language of the instrument viewed as a whole. But in performing that task the courts look to the operation of the statute according to its terms and to legitimate aids to construction.”[52]
[51] [1981] HCA 26; (1981) 147 CLR 297; 35 ALR 151; 11 ATR 949; 55 ALJR 434; Gibbs CJ, Stephen, Mason and Wilson JJ; Aickin J dissenting
[52] [1981] HCA 26; (1981) 147 CLR 297; 35 ALR 151; 11 ATR 949; 55 ALJR 434 at 320; 169 – 170; 966; 443
Regard may be had to the context in which legislation was enacted to ascertain the mischief that Parliament intended to remedy and so ascertain the legislative intent:
“ It is well settled that at common law, apart from any reliance upon
s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure …. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy …. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd (1986) 6 NSWLR 363 at 388, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intention …”[53][53] CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; 141 ALR 618 at 408; 634-5 per Brennan CJ, Dawson, Toohey and Gummow JJ and see also Wacando v The Commonwealth (1981) 148 CLR 1; 37 ALR 317 at 25-26; 335-6 per Mason J; TCN Channel Nine Pty Ltd v Australian Mutual Provident Society [1982] FCA 469; (1982) 62 FLR 366; (1982) 42 ALR 496 at 379-380; 507-508 per Bowen CJ, Lockhart and Ellicott JJ and Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1984) 2 FCR 368; 56 ALR 265 at 375-6; 271-2 per Woodward J)
The context in which s 17 is placed is that of Part 2 of Chapter 2 dealing with the ownership of a patent. Section 15 sets out those who may be granted a patent for an invention. Section 16 provides for situations in which a patent for an invention is granted to two or more patentees. The provisions of s 16(1) are subject to any agreement to the contrary. If there is no such agreement, it provides that:
“… where there are 2 or more patentees:
(a)each of them is entitled to an equal undivided share in the patent; and
(b)each of them is entitled to exercise the exclusive rights given by the patent for his or her own benefit without accounting to the others; and
(c)none of them can grant licence under the patent, or assign an interest in it, without the consent of the others.”
Section 16(2) provides:
“Where a patented product, or a product of a patented method or process, is sold by any of 2 or more patentees, the buyer, and a person claiming through the buyer, may deal with the product as if it had been sold by all of the patentees.”
An example of the way in which ss 16 and 17 may work together is found in the judgment of Campbell J in Guttershield Systems Australia Pty Ltd v LBI Holdings Pty Ltd.[54]Six companies had formed an alliance (Alliance). Clause 3 of their agreement provided that that all intellectual and real property developed by the Alliance remained common property of all of its members. Those associated with the Alliance came to have a falling out and only some of the original members continued under the agreement. Guttershield Systems Australia Pty Ltd (Guttershield) contended that five patents had been developed by the Alliance and that they were intellectual property coming within cl 3 of the agreement. Consequently, Guttershield contended, each patent remained the common property of all members of the Alliance notwithstanding that, by then, for all practical purposes the Alliance had ceased to operate.
[54] [2004] NSWC 941
Campbell J said:
“ If a patent had been developed by the Alliance, and was jointly held, then each of the joint owners could use the patented invention, after the end of the Alliance, for their own benefit. Further, if any of them unreasonably dealt with their rights under the patent, the Commissioner’s powers under section 17 provide a potential source for a remedy. Any such decision of the Commissioner is reviewable in the Administrative Appeals Tribunal: section 224(1)(a) Patents Act 1990. If the members of the Alliance were to have worked on developing a market for a product which was patented under a patent which had been developed by one of their number during the period of the Alliance, and none of the circumstances existed where it had been expressly agreed that rights to use intellectual property associated with that product would cease once that person stopped being a member of the Alliance, that member could continue to sell the product in question. It seems sensible that the agreement work so that effort put into market development while the Alliance was on foot should not be lost if the Alliance ended other than through resignation or knowing breach. It would be a consequence of s 16(1)(c) Patents Act 1990 that (subject to section 16(2)) none of the former Alliance members could grant a licence to use the patent without consent of the others, and this might potentially restrict all of them in franchising a business which involved exploitation of the invention (cf section 13 Patents Act 1990), unless a Commissioner’s direction under section 17 could be obtained to require consent to such franchising activities. …”[55]
[55] [2004] NSWC 941 at [47]
It is apparent that s 17 is intended to be used in resolving the practical problems that arise when co-owners of a patent cannot agree. They may not be able to agree upon, for example, how to deal with a patent (or an interest in it) or the grant of a licence under the patent and seek a direction. One co-owner may disagree with the way in which one of the other co-owners is exercising the exclusive rights given by the patent and may seek a direction in order to resolve the impasse in which they find themselves. It would seem to follow that if one or more of the co-owners of the patent, and so patentees, were to apply to the Commissioner for a ruling, the Commissioner would be obliged to consider the application and come to a decision about what she should do. That would not necessarily be a decision that she give directions for not only does s 17(1) provide that the Commissioner “may” give directions but that she “may … give such directions … as the Commissioner thinks fit” about the three matters specified in ss 17(1)(a), (b) and (c). She may not think it “fit” to make any directions. Whether she does, or does not, and the nature and scope of the directions are, in so far as they come within s 17(1)(a), (b) and (c) and within the confines of s 17(4) and the context of the Patents Act, matters for her discretion.
What I do not think is within her discretion is whether she should consider the application at all. The power given to the Commissioner is a power to resolve practical issues arising from the rights, interests and obligations conferred upon patentees by virtue of their having co-ownership of a patent. It is a power intended to be used if only to decide that no directions should be issued.
B.2What rights or privileges may be created, powers conferred or obligations or duties imposed or affected having regard to the power conferred on the Commissioner under s 17(1)?
If the Commissioner decides to give a direction, it can be presumed that it will have some bearing on the rights, privileges, powers, obligations or duties of one or more of the co-patentees. There will be a direct link between the decision and the power given in s 17(1) to make a direction. The decision will be able to be said to have been made “under an enactment”. That is so without having any regard to the precise nature of the directions given.
If, after considering the application, the Commissioner decides to refuse to give a direction under s 17(1), there is again a direct link between the decision and the enactment. The Commissioner’s decision to refuse to give a direction has a bearing on the right or power of the applicant to apply for a direction and to have a direction made that it might think will have some bearing on its rights, privileges, powers, obligations or duties with respect to others with whom it owns a patent. The decision can be said to have been made “under an enactment”.
Where, as in this case, the Commissioner decides that she will consider the application, she is doing no more than is required of her under s 17 i.e. to decide to consider the application. It is not a decision that relates to the merits of the application. It is not even a decision of the sort described in Bond as a “… conclusion reached as a step along the way in the course of reasoning leading to an ultimate decision …”. It is a step that precedes consideration of the application. There is no link, direct or otherwise, between what is decided by the Commissioner when she says she will proceed to consider the application and not defer it and any rights or privileges she may create, powers she may confer or obligations or duties she may impose or affect after she has considered the application and decided either to make, or not make, a direction. The Commissioner’s decision has not been made under s 17(1). Therefore, it is not reviewable by the Tribunal.
Decision
For the reasons I have given, I have decided that the Tribunal does not have jurisdiction to review a decision by the Commissioner not to stay her consideration of the application made by Mr Karandonis under s 17 of the Patents Act.
I certify that the seventy two preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ………..[sgd]............................................
Leah Berardi Associate
Date of Hearing 17 September 2014
Date of Last Submission 24 October 2014
Date of Decision 28 October 2014
Applicant’s solicitor Mr Darron Saltzman
Davies Collison Cave Law
Respondent’s solicitor Mr Kasper Maat
Australian Government Solicitor
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