Commonwealth seeks $60 million on the undertaking as to damages

Sanofi sued Apotex (then known as GenRx) for infringement of its “clopidogrel patent”. It obtained interlocutory injunctions against Apotex against the sale of Apotex’ product and preventing Apotex from applying to list its product under the Pharmaceutical Benefits scheme (PBS). As a condition of the grant of those interlocutory injunctions, Sanofi gave the “usual undertaking as to damages”:

“(a)          submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person whether or not a party, adversely affected by the operation of the interlocutory injunction or any continuation (with or without variation); and

“(b)          pay the compensation referred to in subpara (a) to the person or persons there referred to.”

Sanofi won at trial, but lost on appeal with the Full Court ordering its patent be revoked. Sanofi’s application for special leave to appeal to the High Court was refused on 12 March 2010.

Apotex sought compensation under the undertaking by motion in May 2010. Sanofi and Apotex resolved that application by negotiation.

The Commonwealth also sought compensation under the undertaking as to damages by application made in April 2013. If we did not know before, we now know the Commonwealth is seeking $60 million. Essentially, the Commonwealth contends that is how much less it would have had to pay out under the PBS if the interlocutory injunctions had not prevented Apotex applying to list its product under the PBS:

 

“The Commonwealth has provided some particulars of its damages. It alleges it has suffered financial loss in excess of $60 million as a result of Apotex being prevented by the various interlocutory orders and undertakings from achieving a listing for its clopidogrel products under the PBS. Most of the Commonwealth’s loss is said to flow from statutory price reductions and price disclosure reductions that would have occurred had Apotex not been the subject of the relevant interlocutory restraints.”

 

The case is a long way off resolution. Nicholas J has allowed Sanofi to amend its points of defence to the Commonwealth’s claim to rely on the Commonwealth’s delay in making its application for compensation and to rely on infringement of copyright in Sanofi’s product information documents. Sanofi will be required to particularise the prejudice its claims it suffered as a result of the delay.

Nicholas J however refused leave to amend to plead that the Full Court’s decision invalidating Sanofi’s patent was wrong in light of the Full Bench’s subsequent decision in AstraZeneca (rosuvastatin). That would be inconsistent with res judicata and the principle of finality of litigation.

Commonwealth of Australia v Sanofi-Aventis [2015] FCA 384

Rosuvastatin goes to the High Court

The High Court has allowed special leave to appeal from the Full Federal Court’s decision in AstraZeneca v Apotex (“Rosuvastatin”).

From the special leave transcript, it looks like the main issue will be the operation of s 7(3) and the basis on which a reference ascertained for the purposes of s 7(3) may be combined with common general knowledge under s 7(2).

In Rosuvastatin, a Full Bench of 5 justices held that the “starting point” identified in the patent could be used as the “starting point” for testing whether the solution in the patent was obvious only when shown to be part of the prior art base. The Full Court nonetheless held the patent was invalid as a s 7(3) reference, the Watanabe paper, was added to the common general knowledge.

From the special leave transcript, it appears that all parties were in agreement that the person skilled in the art would undertake a literature search. The resulting search would have thrown up a number of documents. AstraZeneca argues that the Full Court erred in allowing the Watanabe paper to be used as a s 7(3) reference. Its main argument appears to be that the search would have thrown up at least 2 papers, Watanabe and Aoki. AstraZeneca argues that, before the Watanabe paper can be combined with common general knowledge under s 7(2), it needs to be shown that the person skilled in the art would have chosen the Watanabe paper over Aoki. According to AstraZeneca, however, the evidence did not establish that. Again according to Astrazeneca, there was evidence that the skilled person could choose either paper and, if Aoki was chosen, would fail:

If you had gone down the NK-104 path you fail – a relative fail. If you had gone down the other one, you win. The evidence of Professor O’Brien was – others can reasonably make one choice or another. Dr Reece did not even venture on the issue as to which one he would go down.

A second point that AstraZeneca argues is that to choose Watanabe the skilled person would have needed to refer first to Aoki. That is, it argues that it was necessary to engage in impermissible masoning.

If AstraZeneca succeeds, there will also be a dispute about entitlement issues and the operation of new s 22A and 138(4).

No doubt more will become clearer when the appeal documents are posted on the High Court’s website.

Astrazeneca AB & Anor v Apotex Pty Ltd; Astrazeneca AB & Anor v Watson Pharma Pty Ltd; Astrazeneca AB & Anor v Ascent Pharma Pty Ltd [2015] HCATrans 58

 

What conduct makes novelty destroying information publicly available

In finding (2:1) that the primary judge had wrongly held that most of the claims in Damorgold’s patent were invalid because they lacked novelty, the Full Court confirmed that the novelty test under the 1990 Act is stricter than the old law.[1]

Damorgold’s patent relates to a mechanism for raising and lowering a blind. As characterised by Bennett J at [6], claim 1 was a combination of some 27 integers.

The Full Court upheld the primary judge’s finding that a Mr Horner had imported into Australia and shown to some potential customers a product which embodied all the integers in the relevant claims of Damorgold’s patent notwithstanding the imperfections in the evidence.

Although Mr Horner had been showing the product to potential customers to solicit sales, the evidence was that he did not in fact sell any. Nor did he leave any samples with anyone.

Mr Horner only showed the product to his potential customers in its assembled form. It was not possible, however, to tell how the product worked in its assembled form. To ascertain the internal componentry and how all the parts worked together, it was necessary to dissassemble it – to pull the product apart. And that was never done.

Section 7(1)(a) in the form applicable [2] provided that a claim in a patent was taken to be novel unless it was shown not to be novel in light of prior art information made publicly available in a single document or through doing a single act.[3]

The trial judge considered that a potential customer could have asked to see how the product worked and, if they had done so, Mr Horner would have shown them or allowed them to disassemble it; disassembly (and re-assembly) would have been easy. Therefore, his Honour held the novelty destroying information was made publicly available.

On appeal, Bennett J and Yates J held that the requirement in 7(1)(a) that the information be made publicly available meant the question was what information did the prior use communicate (or make available) to the public. As the demonstrations to the public in the assembled form did not disclose the internal workings of the product, the information communicated to the public did not disclose all the integers of any claim. Therefore, the attack on novelty failed.

Bennett J pointed out at [11] that different consequences flowed from whether the prior art relied on was a document or an act:

The question is whether an act can be identified that did in fact make the information being the integers of the invention publicly available. This is not the same requirement for anticipation by prior publication, which is satisfied if the information is in a document which is publicly available. (emphasis supplied)

In his opinion concurring with Bennett J, Yates J was at pains to stress that nothing he said should be taken as dealing with the situation where there had in fact been a sale or a sample had been given to and retained bya potential customer.

In dissent, Jessup J agreed with the primary judge that the appropriate question was what information would have been conveyed by the use.[4]

Damorgold Pty Ltd v JAI Products Pty Ltd [2015] FCAFC 31


  1. As I was junior counsel for the appellant, this post will aim just to identify the court’s ruling.  ?
  2. The applicable prior art base was the form before the amendments made by the Patents Amendment Act 2001 so acts of prior use had to be done in Australia.  ?
  3. Bennett J’s emphasis.  ?
  4. For example at [61], [64], [68] (emphasis supplied).  ?

High Court to review patenting of isolated genes in Australia

According to a media release by Maurice Blackburn,[1] the High Court has granted Ms D’Arcy special leave to appeal the decision that Myriad’s BRCA patent for isolated genes is patentable subject matter, as a manner of manufacture, in Australia.

At first instance, Nicholas J upheld the patentable subject matter of the patent. His Honour’s decision was affirmed by a Full Bench of the Federal Court.

The transcript of the special leave application is not yet up.

Lid dips: Phillips Ormonde Fitzpatrick and Dr Summerfield.

D’Arcy v Myriad Genetics Inc.


  1. The law firm representing Ms D’Arcy the appellant. The High Court’s summary (pdf) of Results of Special Leave applications confirms the grant.  ?

Regency still loses its MPEG appeal

Although it rejected the primary judge’s interpretation of s145 of the Patents Act 1990, the Full Court has nonetheless dismissed Regency’s appeal seeking to terminate its licence of MPEG patents.

In 2009, Regency took a licence of a bundle of patents from the MPEG patent pool so that it could make, amongst other things, DVD and Blu-Ray players. All the patents were necessary to make MPEG–2 compliant equipment, but they related to different inventions. By July 2012, some of the patents, but not all, had expired. Regency sought to terminate the licence early, relying on s145.

Section 145 provides:

(1) A contract relating to the lease of, or a licence to exploit, a patented invention may be terminated by either party, on giving 3 months’ notice in writing to the other party, at any time after the patent, or all the patents, by which the invention was protected at the time the contract was made, have ceased to be in force.

(2) Subsection (1) applies despite anything to the contrary in that contract or in any other contract.

The Full Court agreed with Regency that the trial judge`s interpretation of,s145 was wrong but, even so, the right to terminate the licence under s145 did not accrue until all the patents licensed at the time the licence was granted had expired. As there were patents still on foot, therefore, Regency did not have the right under s145 to terminate.

The Full Court considered that the reference to “a patented invention”, an expression not defined in the Patents Act was simply a reference to an invention that was patented, rather than something which was patentable subject matter.

Further, s23(b) of the Acts Interpretation Act 1901 meant that the reference to the singular – a patented invention – could be read as including the plural. While recognising that s145 was intended to protect licensees from being unfairly required to pay licence fees after the patents had expired, Bennett and Pagone JJ pointed out that, as the licensor could also invoke s145, a licensee could be exposed to even greater unfairness if the licence could be terminated after the expiry of one or only some patents:

30 … if MPEG were entitled to terminate the licence when one of the patents or all of the patents for one of the inventions had expired, Regency would be in the position that, having implemented the Standard, it would be required to cease exploitation of the outstanding patents or negotiate a fresh licence.

31 The primary judge recognised the lack of commercial reality and potential unfairness in such circumstances and so do we. It would lead to the absurd result that parties wishing to negotiate for a patent pool would necessarily have to enter into multiple contracts or face the uncertainties and possible damage caused upon the expiry of a single patent of that patent pool. This would be of particular difficulty for a licensee which had “tooled up”, or entered into financial obligations on the faith of the right to exploit the necessary patent, and could also affect third party end users of a product.

Earlier at [25], Bennett and Pagone JJ had emphasised the importance of certainty provided by contracts:

Regency points to commercial and policy reasons why a licensee should not continue to pay royalties where an invention the subject of the licence is no longer the subject of a subsisting patent. However, this possible disadvantage to a licensee can be taken into account during negotiations for a contract. Regency negotiated a licence fee that included patents now expired but must be taken to have been aware of the expiry of patents during the term of the Contract when it negotiated that fee. This is supported by the fact that the October 2009 amendment to the Contract provided for royalty rates, those rates decreasing over specified periods of time in recognition of the ever approaching end to each of the patents (as observed by the primary judge at [11]).

While this case did not explicitly turn on questions of misuse of market power, that analysis does not bode well for the ACCC`s pending antitrust action against Pfizer.

Nicholas J delivered a concurring judgment.

Regency Media Pty Ltd v MPEG LA, L.L.C [2014] FCAFC 183

How long do you have to pay royalties for?

Vickery J in the Supreme Court of Victoria has had to construe how long an obligation to pay royalties under a sale of patents and technology and associated consultancy agreement lasts: ruling it is as long as the purchaser is using the “invention”.

Roberts came up with the “Roberts Differential Lock”. It enables the driver of a vehicle, such as a 4-wheel drive vehicle, to lock the “dif” from the cabin without having to get out and manually adjust the wheels. The invention could be retrofitted to existing vehicles. Roberts made a provisional patent application for his invention in 1983 and a standard application followed in 1984. Corresponding applications were made in the USA, the UK and Japan in 1985. Roberts and his wife marketed the Roberts Differential Lock though their company, Altair.

In 1987, the Roberts and Altair sold all their rights in the invention to ARB. There was a lump sum payment and royalties to be paid on products made using the invention. Roberts also entered into a Consultancy Agreement for an initial period of 6 months and thereafter until terminated on 30 days’ written notice.

There were two questions before Vickery J:

(1) did ARB have to keep paying roylaties after (presumably) the (1984/1984) patents expired; and

(2) if so, to whom – the Roberts or also Altair?

The terms of the sale agreement

 2. In consideration of the consideration set out in clause 7 of this Sale Agreement and subject to clause 20 hereof, the Vendors hereby jointly and severally sell transfer and assign absolutely to [ARB] all the right title and interest in and to the Roberts Differential Lock including (without limiting the generality of the foregoing) all patent applications, patent rights and proprietary rights relating thereto, and the business name ‘Roberts Diff-Lock’.

11(a). In further consideration of the rights granted hereunder the Company shall pay to the Roberts the following royalties calculated on the net invoice value arising from the sale, lease, hire and use (hereinafter referred collectively as a ‘sale’ or ‘sold’ as the case may be) of the Products by the company and its licensees:-

[a specified dollar amount for each unit sold]. (Those amounts were subject to increase according to increases in the CPI – All Groups Index – Melbourne.)

For this purpose, “Products” were defined to mean:

‘Products’ means the differentials as manufactured pursuant to the patents as specified in the First Schedule

and the First Schedule listed the 1984 Australian patent application and the pending applications in the USA, the UK and Japan – none of which had been granted at that time.

How long?

You will have noticed that clause 11(a) does not say anything about how long the obligation to pay royalties lasted. Vickery J held as a matter of construction the obligation did not end when the “patents”[1] expired. A number of factors led to his Honour’s conclusion.

First, when the sale agreement was executed, the patent terms in the different countries where applications were pending were different. Moreover, as is typical in such agreements, the definition of “patents” extended to divisonals, re-issues, continuations, continuations in part and the like. So, his Honour concluded, the parties contemplated that there would be potentially be different expiry dates in different countries.

Secondly, although the obligation to pay royalties was imposed on sales of Products, what was sold by clause 2 were “all rights in and to the Roberts Differential Lock including … the patents and the proprietary rights relating thereto”. Then “proprietary rights” were defined not just as rights in patents, but also included copyright, confidential information, trade secrets, data, formulae and so on. So ARB was not just buying rights to the patents it was buying all rights to all the technology. Moreover, under the Consultancy Agreement, “all inventions, techniques and improvements developed in the course of the consultancy agreement ‘shall become the sole and exclusive property of ARB …’”

Together, these arrangements indicated the “ambulatory nature” of the proprietary rights ARB obtained.

Thirdly, if ARB was right and its obligations extended only to the “patents”, it had no obligation to pay royalties until at least one of the pending applications was actually registered. However, Vickery J considered it quite clear the obligation to pay was intended to apply to all products ARB sold as soon as the sale took effect whether an application had proceeded to grant or not.

Finally:

109 Further, the object and purpose of the Sale Agreement may be said to be the allocation of the risks and rewards of the patent rights and the proprietary rights to be assigned to ARB by the Vendors. The risk allocation was achieved by means of the mechanism selected for determination of the price to be paid for that assignment.

110 I accept that the Vendors’ construction is commercially sensible in that it provides for an arrangement whereby each party managed its risk as to the proper price to pay (from ARB’s perspective) and to charge (from the Vendors’ perspective) in relation to the bundle of rights sold under the Sale Agreement, which at the time of entry into the contract had a value which was difficult to calculate or even estimate. Accordingly, the Sale Agreement provided for an ambulatory consideration through the royalties regime. If the rights proved to be valuable so that commercialisation of them resulted in a higher number of total sales than anticipated, then ARB would pay a higher total purchase price to the Vendors. On the other hand, if the rights proved to be valuable so that commercialisation of them resulted in a higher number of total sales than initially expected, then ARB would pay a higher total purchase price to the Vendors.

111 I also accept that such a risk-sharing arrangement is not one that had any obvious connection to the life of the patents that might be granted on the assigned patent applications, or to whether any patents became registered at all. In this regard the following is to be noted:

(a) ARB received an immediate and continuing benefit from the sales that it made using the assigned patent rights. In other words, the benefits that ARB received were not contingent upon any patent application listed in the First Schedule of the Sale Agreement proceeding to grant; and

(b) the assigned rights included proprietary rights which did not depend upon a patent proceeding to grant or remaining registered.

Vickery J then rejected ARB’s argument that it would be faced with a perpetual obligation to pay royalties: its obligation was to pay only on products that embodied the invention described in the patents. If it didn’t use that invention, it had no obligation to pay.

Pay the royalty to whom

This is one of those odd arguments where ARB was trying to contend Altair, the Roberts’ company, had no standing to sue. While cl. 11 did say that ARB had to pay “the Roberts”, Vickery J noted that the Roberts and Altair were the “Vendors” as defined and so cl. 11 should be understood as requiring payment to all three.

The conclusions reached by Vickery J, assuming there is no successful appeal, may immediately be contrasted with Maggbury Pty Ltd v Hafele Australia Pty Ltd.[2] One obvious point of difference, is that it appears that patents did actually issue in this case. Moreover, it appears that there was, or may have been, further technology of value apart from the patents – such as copyright, confidential information and further improvements.

The conclusion may also seem at odds with the policy in s 145 of the Patents Act. Even at its strongest, however, that only gives a right to terminate and does not automatically terminate the contract. As we have recently seen, however, the operation of the provision, particularly in a multi-jurisdictional context involving many faceted technologies, is less than clear.[3] In any event, ARB did not invoke the provision and it is not clear from the judgment whether there are other patent, or for that matter other “proprietary”, rights still on foot.

Nonetheless, if ARB could terminate the contract, it is an interesting question how Vickery J’s approach would sit with Maggbury if ARB used only technology now in the public domain.

Finally, as I am sure you have already concluded, if you are acting for the payor in this type of situation this case illustrates the importance of considering very carefully and providing specifically in the agreement for the duration of the obligation to pay royalties and what it is payable on if you are drawing a clause providing for a royalty – especially when the technology comes into the public domain and others may use it royalty free.

ARB Corporation v Roberts & Ors [2014] VSC 495

Lid dip: James McDougall


  1. That is, the patent applications that were pending when the sale agreement was executed.  ?
  2. (2001) 210 CLR 181.  ?
  3. MPEG LA, L.L.C. v Regency Media Pty Ltd [2014] FCA 180  ?

Alphapharm may have a big bill coming

The High Court has dismissed Alphapharm’s appeal from the Full Federal Court’s ruling granting Lundbeck an extension of time to apply to extend the term of the escitalopram patent. It was close though: 3 to 2.

You will recall that Lundbeck applied 10 years late to extend the term of its pharmaceutical patent. So, not only was Lundbeck applying to extend the term of its patent (under s70), it was applying for an extension of time in which to make that application. In granting special leave, the High Court accepted that, if the power were available, the circumstances justified the 10 year extension. The question was a matter of statutory interpretation: was there power to extend.

Section 71(2) specifies when an application to extend the term of a pharmaceutical patent must be made:

(2) An application for an extension of the term of a standard patent must be made during the term of the patent and within 6 months after the latest of the following dates:

(a) the date the patent was granted;

(b) the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, any of the pharmaceutical substances referred to in subsection 70(3);

(c) the date of commencement of this section.

Lundbeck’s application was made within the term of the standard patent (with 1 day to spare), but well outside the dates specified in paragraphs (a) – (c).

Section 223 confers a general power to extend the time for making an application. Under s 223(11), however, the power cannot be used to extend time in relation to “prescribed actions”.[1] One of those prescribed actions related to s 71(2):

(b) filing, during the term of a standard patent under subsection 71(2) of the Act, an application under subsection 70(1) of the Act for an extension of the term of the patent; ….

Crennan, Bell and Gageler JJ, after noting the long history in patents legislation of the power to apply for an extension of time, even after the time had expired, as an important safety valve in the system, ruled that s 71(2) specified 2 requirements. The first time requirement is that the application must be filed within the term of the standard patent. The second time requirement was that the application must also satisfy at least one of the requirements set out in paragraphs (a) – (c).

Crennan, Bell and Gageler JJ held, however, that reg. 22.11 applied only to the first requirement: that the application was made within the term of the standard patent. Their Honours considered this was important otherwise a “gap” could arise between when a patent expired but was then restored. That would be highly undesirable.[2] In contrast, there was no policy reason why reg. 22.11 should apply to the second time requirement. At [71]:

There is nothing in any of the extrinsic materials, or in the long policy debates on simplifying extensions of term, which would suggest any rationale for excluding the second time requirement from the remedial power to extend time under s 223(2)(a). Alphapharm’s senior counsel conceded, correctly, that if Alphapharm’s construction of reg 22.11(4)(b) were correct, the remedial power in s 223(2)(a) could never apply to extend time in relation to the second time requirement, no matter what the quality or provenance of any “error or omission” made in respect of that time. Alphapharm’s construction would introduce an inexplicable asymmetry between a patentee and a competitor opposing a s 70(1) application. An opponent can access the general remedial power to extend times cast upon it in mandatory terms[102]. Had it been the legislature’s intention to exclude the second time requirement in s 71(2) from the general remedial power in s 223(2)(a), that would have been simple to accomplish.

Accordingly, s 223 could be invoked as Lundbeck had satisfied the first time requirement (and so did not need it to be extended) but needed an extension in relation to the second time requirement – which reg.22.11 did not apply to.

In dissent, Kiefel and Keane JJ rather tersely said at [111]:

s 71(2) cannot reasonably be read as referring to two actions. There is but one action referred to in s 71(2) – making an application for extension of the term of a patent. That one action is to be done on a date that satisfies the two requirements as to time set out in s 71(2). It is that action to which s 223(2) would apply, were it not for reg 22.11(4)(b).

Their Honours did explain why they considered policy and historical considerations did not lead to a different conclusion. Of potentially more general interest, however, their Honours took a different stand on the role of statutory interpretation at [121]:

In any event, as was said in Federal Commissioner of Taxation v Consolidated Media Holdings Ltd, legislative history and extrinsic materials cannot displace the meaning of statutory text; nor is their examination an end in itself. (footnote omitted)

While acknowledging the primary role of the text, Crennan, Bell and Gageler JJ invoked the more nuanced role of context espoused in CIC Insurance and Project Blue Sky.

A big bill coming? After the standard term of the patent expired but before the expiry of the extended term, Alphapharm and other generics commenced marketing their own versions of the drug.

Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42


  1. The “prescribed actions” are found in reg. 22.11.  ?
  2. See Crennan, Bell and Gageler JJ at [68].  ?

(Not) patenting business methods

The Full Federal Court has upheld the Commissioner’s refusal to grant Research Affiliates’ patent for a computer implemented method for constructing a portfolio management index.

The central claim reads:

A computer-implemented method for generating an index, the method including steps of:

(a)        accessing data relating to a plurality of assets;

(b)        processing the data thereby to identify a selection of the assets for inclusion in the index based on an objective measure of scale other than share price, market capitalization and any combination thereof;

(c)        accessing a weighting function configured to weight the selected assets;

(d)        applying the weighting function, thereby to assign to each of the selected assets a respective weighting, wherein the weighting:

(i)   is based on an objective measure of scale other than share price, market capitalization and any combination thereof; and

(ii)  is not based on market capitalization weighting, equal weighting, share price weighting and any combination thereof;

thereby to generate the index.

The Court posed the issue before it as being:

whether computer implementation of an otherwise unpatentable business scheme is sufficient to make the claimed method properly the subject of letters patent.

One might think, put that way, there is only one answer. May be. It makes it very important, however, how one determines whether the “scheme” is itself unpatentable.

Another intriguing aspect of the decision is that, before it embarked on analysing whether this was indeed a “manner of manufacture, the Court engaged in a very extensive review of how this issue is approached in other jurisdictions, including the USA and UK.

Time pressures don’t permit extended analysis at this stage. In the meantime:

and no doubt others. It will be interesting to see what happens to the RPL Central appeal.

Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 (Kenny, Bennett and Nicholas JJ)

 

 

Refusing a lapsed patent application and other powers of the Commissioner

The Commissioner of Patents has power to refuse an application even after it has lapsed (but is still capable of revival by payment of “late” fees). The Full Court has also affirmed the Commissioner’s power to set a two month time limit for response (especially where she actually allows six months) and to institute a hearing on her own motion.

In some ways, this is a “silly” case, but it does explain how the application process and restoration of a lapsed application works. The chronology was as follows:

  • In December 2011, Miles requested examination of his patent application.
  • In May 2012, the Commissioner’s delegate raised objections to grant, giving Miles two months in which to overcome the objections or risk the Commissioner making a direction to amend under s 107 or refusing the application.
  • Miles did not respond.
  • In September 2012 (i.e., 4 months later), the Commissioner wrote advising that, as no response had been received, the matter would be set down for hearing and allowing one month for submissions to be filed. The Commissioner’s letter warned that it was possible for the Commissioner to refuse the application or direct amendment and inviting Miles to submit his own amendments.
  • October 2012 was the fifth anniversary of the application and continuation fees were payable. Miles did not pay the continuation fees.
  • On 1 November 2012, the Commissioner refused Miles’ application on the basis that objections to grant had been appropriately raised and not overcome.
  • On 28 March 2013, Miles paid the continuation fee (under s 142) and sought to amend the patent application.

The Commissioner said “bad luck, your application has already been refused” (or words to that effect).

Miles sought judicial review under s 39B of the Judiciary Act unsuccessfully. The Full Court (Bennett, Greenwood and Middleton JJ) dismissed his appeal.

Miles’ first argument was that the Commissioner had no power to refuse his application (in November 2012) because his application had already lapsed in October 2012 when he failed to pay the continuation fees.

The Full Court was having none of that. It was predicated on a misunderstanding of reg. 13.3(1) and 13.3(1A). Section 142(2)(d) provides that a patent application lapses if the applicant does not pay a continuation fee within the “prescribed period”. What constitutes the “prescribed period” is defined by reg. 13.3(1) and (1A):

(1) For paragraph 142(2)(d) of the Act:

>(a) a continuation fee for an application for a standard patent is payable for a relevant anniversary at the last moment of the anniversary; and

>(b) the period in which the fee must be paid is the period ending at the last moment of the anniversary.

(1A) However, if the continuation fee is paid within 6 months after the end of the relevant anniversary (6 month period):

>(a) the period mentioned in paragraph (1)(b) is taken to be extended until the fee is paid; and

>(b) the continuation fee includes the additional fee stated in item 211 of Schedule 7; and

>(c) the additional fee is payable from the first day of the 6 month period.

Reg. 13.3(1) and (1A) were not to be read in some bifurcated manner, but in combination. This meant that, if the continuation fee was paid in the 6 month grace period, the “prescribed period” was extended up until the date the fee was paid, i.e. 28 March 2013. As the continuation fee was paid in this case within the 6 month period, therefore, the application was still on foot when the Commissioner refused it in November 2012.

The Full Court went on to reject Miles’ arguments that the Commissioner had no power to set a two month time limit for response to the Examiner’s report in May 2012[1] or to unilaterally institute a hearing.

One “odd” outcome of this, however, is that Miles’ application would indeed have lapsed in October 2012 if he had not paid the continuation fee in the grace period. In that case, the Commissioner would not have had power to refuse the application. I am not sure how that would help Miles either as, presumably, by that stage it would be too late to file another application.

Miles v Commissioner of Patents [2014] FCAFC 109


  1. The Full Court essentially adopted the primary judge’s reasons at [55] to [93] and pointed out that Miles had been given opportunitites to address the grounds of objection and had failed to take any of them up.  ?

Isolated genes still patentable in Australia

A Full Bench of the Federal Court of Australia (Allsop CJ, Dowsett, Kenny, Bennett & Middleton JJ) have dismissed the appeal in the Myriad litigation; upholding Nicholas J’s ruling that isolated genes and isolated gene sequences are patentable subject matter in Australia.

Kim Weatherall has pointed out this is a different result to the ruling in the USA but, given the illogicality of the US Supreme Court’s position (e.g. here and here), surely that is no bad thing.

D’Arcy v Myriad Genetics Inc [2014] FCAFC 115