FEDERAL COURT OF AUSTRALIA Great Western Corp Pty Ltd v Grovehill Pty Ltd [1999] FCA 1456 PATENTS - validity of standard patent - prohibition on multiple patents duplicating protection - analysis of rights conferred where extension application pending for lapsed petty patent - distinction between inchoate rights based on future expectation and monopoly rights contemplated by statutory prohibition. Patents Act 1990 s 69(1), 64, 68 Sartas No 1 Pty Ltd v Koukourou (1994) 30 IPR 479 Cited Sanofi v Parke Davis Pty Ltd (1983) 1 IPR 383 Discussed, Refd to Croudace v Zobel [1899] AC 258 Refd to Glamagard Pty Ltd v Enderslea Productions Pty Ltd [1985] 1 NSWLR 138 Refd to In the Matter of Two Applications for Patents by Henry Dreyfus (1927) 94 RPC 291 Discussed GREAT WESTERN CORPORATION PTY LTD v GROVEHILL PTY LTD QG 144 of 1997 KIEFEL J 22 OCTOBER 1999 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 144 OF 1997 BETWEEN: GREAT WESTERN CORPORATION PTY LTD (ACN 064 434 475) Applicant AND: GROVEHILL PTY LTD (ACN 010 117 610) Respondent GROVEHILL PTY LTD (ACN 010 117 610) Cross-Claimant GREAT WESTERN CORPORATION PTY LTD (ACN 064 434 475) Cross-Respondent JUDGE: KIEFEL J DATE OF ORDER: 22 OCTOBER 1999 WHERE MADE: BRISBANE THE COURT DECLARES THAT: 1. That the petty patent 678130 was not in force at the time the standard patent was granted; and there was not at the date of that grant, a patent to which s 64(2) applied. THE COURT ORDERS THAT: 2. The respondent should pay the applicant's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 144 OF 1997 BETWEEN: GREAT WESTERN CORPORATION PTY LTD (ACN 064 434 475) Applicant AND: GROVEHILL PTY LTD (ACN 010 117 610) Respondent GROVEHILL PTY LTD (ACN 010 117 610) Cross-Claimant GREAT WESTERN CORPORATION PTY LTD (ACN 064 434 475) Cross-Respondent JUDGE: KIEFEL J DATE: 22 OCTOBER 1999 PLACE: BRISBANE REASONS FOR JUDGMENT 1 Petty Patent No 678130 ("the petty patent") was registered in favour of the applicant with effect from 15 May 1997. It was the subject of an application for an extension of the initial 12 month term pursuant to s 69(1) Patents Act 1990. A notification under s 28(1) of the Act was given by the respondent of matters affecting the validity of the petty patent. The application for extension of the term of the petty patent was not decided by the Commissioner prior to the grant of the standard patent on 26 August 1999. The standard patent was granted before the petty patent was surrendered and before the extension application was withdrawn, as is normally required by the Commissioner. Paragraphs 17.2.1 - 17.2.3 of the Australian Patent Office Manual of Practice and Procedure provide: "17.2.1 Examiners should object to an application which claims an invention which is the same as the invention claimed in a granted patent by the same inventor where the claims have the same priority date. The basis for the objection is that the application contravenes sec 64(2). Reg 3.18 provides that one of the prescribed matters to be reported on under sec 45(1)(c) and 48(1)(b) is whether a patent cannot be granted on the application because of sec 64(2). 17.2.2 Examiners are to interpret the reference to a 'patent' in sec 64(2) as meaning a patent that is in force. This is in line with Government policy as expressed in the response to the Industrial Property Advisory Committee (IPAC) report which preceded the 1990 Act. It means that the grant of a petty patent does not prohibit the grant of a standard patent for the same invention provided that the petty patent is not in force (eg it has been surrendered) at the time of the grant of the standard patent. 17.2.3 Where the initial term of a petty patent has expired, and an application for the extension of term of that petty patent is pending, that petty patent is treated for the purposes of sec 64(2) as a patent." 2 In its further amended statement of claim, the applicant seeks damages for infringement of the petty patent and for infringement of the later standard patent. It is alleged that the petty patent was in force between 15 May 1997 and 15 May 1998. Section 68 of the Act provides: "Term of petty patent 68. The term of a petty patent is: (a) the period of 12 months beginning on the date of sealing of the patent; and (b) if an extension of the term of the patent is granted -- an additional period beginning on the day immediately following the end of that 12 months' period and ending at the end of 6 years after the date of the patent." 3 The respondent however alleges, in its amended defence, that the petty patent was "in force" at the time the standard patent was granted and that the two patents claim the same invention and have the same priority date. The status of the petty patent, and whether it could be said to be in existence or force, were further addressed by the respondent on this application. Questions as to the claims and priority dates are not presently to be addressed. The issue to be determined is whether s 64(2), which prohibits multiple patents, applies to circumstances such as these. 4 Section 64 provides: "64(1)Subject to this section, where there are two or more applications for patents for identical, or substantially identical, inventions, the granting of a patent on one of those applications does not prevent the granting of a patent on any of the other applications. (2) Where: (a) a patent application claims an invention that is the same as an invention that is the subject of a patent and is made by the same inventor; and (b) the relevant claim or claims in each of the complete specifications have the same priority date or dates; a patent cannot be granted on the application." The question then posed for determination in the action was: "Was the petty patent in force at the time the standard patent was granted?" 5 The parties agree, subject to a point of clarification by counsel for the respondent, that if the answer is "no" then s 64(2) is not contravened. I observe that the effect of such non-compliance would not be to render the standard patent void, and would be dealt with through the mechanism of revocation: Sartas No 1 Pty Ltd v Koukourou (1994) 30 IPR 479, 506. 6 Mr Hess, for the respondent, submitted that the issue is more accurately stated as: "Whether at the date of the grant of the parent application there was a patent to which s 64(2) applies?" or "Was the petty patent a patent to which s 64(2) applies?" 7 This reflects the tenor of the respondent's submissions which were to the effect that the unresolved application for extension created some type of expectant right. 8 The applicant submits that s 64 refers only to a patent that has force and effect at the time of the later grant and that that is the plain meaning of subsection (2). Mr Nicholas, for the applicant, referred to the report of the Industrial Property Advisory Committee of 29 August 1984 on this part of the then proposed amendments. The Committee recommended that a "grant of a standard patent not be permitted where there has previously been granted to the same applicant a petty patent for the same invention and having the same priority date, and vice versa". This recommendation was not accepted in the government response to that report (Official Journal of Patents, Trade Marks and Designs Vol 56, No 47, 1462) which suggested instead that "Petty and standard patents for the same invention should not, however, be permitted to be simultaneously in force" (emphasis added). The Advisory Council on Industrial Property in its report "Review of the petty patent system" (28 August 1995) observed that s 64 was based on the decision in the Dreyfus case, in which it was decided that "having two patents granted for the same invention was not in the public interest … Where a petty patent has been granted and a standard patent application is still being processed, it is usual for the patentee to let the petty patent cease or surrender it" (p 50). The decision in In the Matter of Two Applications for Patents by Henry Dreyfus (1927) 44 RPC 291, 293-4 concerned applications for patents with overlapping claims, the inventor believing that he would thereby derive greater security. It was however regarded as illogical to say "twice over that a man is to have a monopoly in respect of one and the same invention" (294) and that it would lead to considerable public inconvenience. It had earlier been observed that if two patents were permitted, there was no basis for denying the grant of more. The basis for the statutory prohibition therefore has regard to two patents both having force and effect as monopoly rights. 9 It is plain that at the expiration of twelve months a petty patent will expire by force of s 68. There is, in my view, nothing in the statutory scheme which suggests that it is in some way revived after that time by an application for extension. On the grant of an extension however, the earlier term may be retrospectively enlarged. In Sanofi v Parke Davis Pty Ltd (1983) 1 IPR 383, it was held that the holder of an expired convention patent could apply for an extension and that "extended" and "extension" denote retrospective enlargement of the term of a monopoly as an extension of such a monopoly (388). 10 It was submitted that rights were created by an application for extension. They were described as amounting to an expectation on the part of the applicant that an extension would be granted, at least if the grounds notified in opposition were found to have been baseless. This was said to be the combined effect of s 69(3) and reg 6.6(3). It is not necessary to determine whether that is their effect. In support of the general contention it was submitted, in the course of argument, that the nature of the expectant right might be such as would ground an injunction. 11 It has been held that a real prospect of obtaining a right by statute is a sufficient interest to oppose actions which may adversely affect the subject matter sought: see Croudace v Zobel [1899] AC 258. The extent of the injunction to be granted is however limited to preventing the action until the application for the statutory right was determined, that is to say the relief which would be granted, in accordance with the nature of the inchoate right was one so long as it subsisted: see the discussion in Meagher Gummow & Lehane 3rd ed [2165]. This might suggest that the applicants here might have had the standing to bring and prospects of obtaining an injunction, during the pendency of the application for extension, to protect the enlargement of term, at least until that determination. Such a right may be contrasted with the monopoly right which arises only on a grant of the patent, or an extension of it, and which may, thereafter, found an action for infringement: see Glamagard Pty Ltd v Enderslea Productions Pty Ltd (1985) 1 NSWLR 138, 139-40 and the cases there cited and see s 120 of the Act. That is the right, in my view, with which s 64(2) is concerned. 12 The questions may conveniently be answered by declaration: that the petty patent 678130 was not in force at the time the standard patent was granted; and there was not at the date of that grant, a patent to which s 64(2) applied. The respondent should pay the applicant's costs. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel . Associate: Dated: 22 October 1999 Counsel for the Applicant: J V Nicholas Solicitor for the Applicant: Lees Marshall Warnick Lawyers Counsel for the Respondent: B Hess Solicitor for the Respondent: Hunt & Hunt Date of Hearing: 4 October 1999 Date of Judgment: 22 October 1999