FEDERAL COURT OF AUSTRALIA Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd (Administrator Appointed) [2010] FCA 465 Citation: Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd (Administrator Appointed) [2010] FCA 465 Parties: DELNORTH PTY LTD (ACN 051 954 977) v DURA-POST (AUST) PTY LTD (ACN 101 287 512) (ADMINISTRATOR APPOINTED) File number: NSD 384 of 2009 Judge: FOSTER J Date of judgment: 13 May 2010 Catchwords: PATENTS – appeal from a decision of a Delegate of the Commissioner of Patents – Delegate refused to grant the claimed patent on the ground that it did not involve an inventive step and thus did not meet the requirements of s 18(1)(b)(ii) of the Patents Act 1990 (Cth) – before commencement of the final hearing, an Administrator was appointed to the respondent – ultimately, the respondent withdrew its opposition to the grant of the claimed patent – no opposition to the grant of the patent and no evidence led in opposition to the grant of the patent – appeal allowed and order made that the claimed patent proceed to grant Legislation: Corporations Act 2001 (Cth), s 440D Patents Act 1990 (Cth), s 60(4) Cases cited: Delnorth Pty Ltd v Dura-Post (Australia) Pty Ltd (2009) 81 IPR 396 related Cadbury Schweppes Plc v Effem Foods Pty Ltd (2006)69 IPR 584 applied European Community v Commissioner of Patents (2006) 68 IPR 539 applied Date of hearing: 15 April 2010 Date of last submissions: 28 April 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 16 Solicitor for the Applicant: Mr J Afaras of Spruson & Ferguson Lawyers Counsel for the Respondent: Ms P Arcus Solicitor for the Respondent: Norman Waterhouse IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 384 of 2009 ON APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS BETWEEN: DELNORTH PTY LTD (ACN 051 954 977) Applicant AND: DURA-POST (AUST) PTY LTD (ACN 101 287 512) (ADMINISTRATOR APPOINTED) Respondent JUDGE: FOSTER J DATE OF ORDER: 13 MAY 2010 WHERE MADE: SYDNEY THE COURT: 1. To the extent necessary, GRANTS LEAVE to the applicant pursuant to s 440D of the Corporations Act 2001 (Cth) to proceed against the respondent for the purpose of seeking the orders set out in Orders 2 to 6 below. 2. ORDERS that the applicant's appeal pursuant to s 60(4) of the Patents Act 1990 (Cth) (the Act) from the decision of the Delegate of the Commissioner of Patents given on 17 April 2009 in respect of Australian Patent Application No 2004249786 (the Patent Application) be allowed. 3. ORDERS that those parts of the decision of the Delegate referred to in Order 2 above specified in subpars (a) and (b) below be set aside, namely: (a) His decision that the invention defined by Claims 1 to 32 of the Patent Application did not involve an inventive step as required by s 18(1)(b)(ii) of the Act; and (b) His decision that the Patent Application should be refused unless the applicant proposed amendments which satisfactorily overcame the decision referred to in subpar (a) above. 4. ORDERS that the opposition by the respondent to the grant of a patent on the Patent Application be refused. 5. ORDERS that the Patent Application proceed to grant. 6. MAKES no orders as to the costs of this proceeding. 7. DIRECTS the solicitors for the applicant to serve as soon as practicable a copy of these Reasons for Judgment and the orders made this day upon the Commissioner of Patents and upon Steven Nicols, the administrator of the respondent, and to inform the Associate to Foster J by email when service has been effected on those persons. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 384 of 2009 ON APPEAL FROM A DELEGATE OF THE COMMISSIONER OF PATENTS BETWEEN: DELNORTH PTY LTD (ACN 051 954 977) Applicant AND: DURA-POST (AUST) PTY LTD (ACN 101 287 512) (ADMINISTRATOR APPOINTED) Respondent JUDGE: FOSTER J DATE: 13 MAY 2010 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this proceeding, the applicant seeks to reverse a decision of the Delegate of the Commissioner of Patents given on 17 April 2009 (Delnorth Pty Ltd v Dura-Post (Australia) Pty Ltd (2009) 81 IPR 396) whereby the Delegate refused to grant to the applicant the patent claimed in Australian Patent Application No 2004249786 (the Patent Application). The claimed patent concerns flexible roadside fence posts. 2 The present proceeding was commenced on 7 May 2009. It was last listed before the Court on 15 April 2010, at which time it was expected that the proceeding would be fixed for final hearing in mid 2010. 3 When the proceeding was called on 15 April 2010, I was informed by the solicitor for the applicant that, on 12 April 2010, Mr BK Hamilton had been appointed as the administrator of the respondent. 4 In light of the fact that an administrator had been appointed to the respondent, the solicitor for the applicant immediately applied on 15 April 2010 for leave to proceed against the respondent and for final orders in the proceeding in the following terms: (1) An order that the applicant's appeal pursuant to s 60(4) of the Patents Act 1990 (Cth) from the decision of the Delegate of the Commissioner of Patents (Mr Major) given on 17 April 2009 be allowed. (2) An order that those parts of the Delegate's decision referred to in par 1(a) and 1(b) in the applicant's Notice of Appeal dated 7 May 2009 be set aside. (3) An order that the opposition by the respondent to the grant of a patent on Patent Application No. 2004249786 be refused. (4) An order that Patent Application No. 2004249786 proceed to grant. (5) An order that the proceeding be stood over to 22 April 2010 in order to deal with the question of costs. 5 On 15 April 2010, I was not prepared to make the orders sought by the applicant on that day because I was of the view that the respondent and its administrator had not had a fair opportunity to consider what response (if any) the respondent might wish to make to the applicant's application. The applicant had given only very short notice of its intention to seek final orders on 15 April 2010. The proceeding had been listed only for directions on that day. 6 For this reason, on 15 April 2010, I made orders and directions designed to afford to the respondent and its administrator a fair opportunity to consider their position and, if they wished, to oppose the orders sought by the applicant. I also informed the parties on that occasion that, if the respondent were to withdraw its opposition to the grant of the patent claimed by the applicant and to inform the Court that it did not oppose the making of final orders in the terms of the orders sought by the applicant, the Court would probably proceed to make those orders without the need for any further listing or hearing. 7 On 22 April 2010, pursuant to a resolution of the creditors of the respondent, Mr Hamilton was replaced by Mr Steven Nicols as the administrator of the respondent. 8 In that capacity, Mr Nicols sent a letter dated 23 April 2010 to the Court in which he stated that the respondent did not oppose orders being made in the terms of those sought by the applicant. 9 In a subsequent letter dated 23 April 2010, Mr Nicols said the following: I formally withdraw any objection to the patent 2004249786 lodged by Delnorth Pty Ltd at issue in Proceedings Number [sic] NSD 384 of 2009. 10 In 2009 the Commissioner of Patents had been informed of the proceeding and of the relief sought by the applicant. In a letter from IP Australia to the Court, sent to the Court in May 2009, the following was said: Re: Delnorth Pty Ltd -v- Dura-Post (Aust) Pty Ltd In the Federal Court of Australia District Registry of New South Wales No. NSD 384/2009 The Commissioner has been served with the Application and Statement of Claim in the above matter in relation to Australian Patent Application No. 2004249786. Please be advised that, having considered these documents, the Commissioner does not intend to exercise any right under Order 58 Rule 3 to appear in these proceedings. If the Court proceeds to make a decision in these proceedings, the Commissioner would appreciate advice of that decision when it is issued. The evidence filed with the Commissioner in relation to the above Australian Patent Application can be provided if needed. 11 In a subsequent letter sent in response to a letter from the solicitors for the applicant notifying her of their intention to seek final orders, in effect by default, the Commissioner of Patents confirmed the position which she had stated in 2009. She again said that she did not propose to exercise her right to appear. 12 I have also recently been informed that the applicant does not seek any order for costs against the respondent in the proceeding. 13 In Cadbury Schweppes Plc v Effem Foods Pty Ltd (2006)69 IPR 584, Lindgren J held that, in circumstances such as the present where there is an appeal from a decision of the Commissioner of Patents to refuse to grant a patent application but no-one tenders any evidence at the hearing of the appeal in support of any ground of opposition to the grant of the patent or otherwise seeks to oppose the appeal, there is no ground of opposition to the grant of the patent application that the Court can uphold. His Honour went on to hold that, in that event, the decision of the Commissioner of Patents must be set aside and that the patent should proceed to grant. 14 At [12]–[20] of his Reasons his Honour said: 12 An appeal under s 60(4) of the Act is a proceeding in the original jurisdiction of the court, and is in the nature of a hearing de novo. None of the evidence in support of the opposition that was before the delegate was before the court. 13 Cadbury submitted that the onus rested on Effem to establish that, if granted, the patent would be clearly invalid: F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56; 176 ALR 108; 50 IPR 305; [2000] FCA 283 at [48]–[67]. 14 Cadbury further submitted that in the circumstances, it was not required to adduce any evidence to counter the ground of opposition that succeeded before the delegate or any other ground of opposition. 15 Recently, in European Community v Cmr of Patents (2006) 68 IPR 539; [2006] FCA 706, Young J dealt with a similar submission made in similar forensic circumstances. Young J accepted the submission and held that the appeal should be allowed and that the application for the patent should proceed to grant. His Honour referred to Caroma Sales Pty Ltd v Philmac Pty Ltd [1972-73] ALR 427; (1972) 46 ALJR 324 per Walsh J; Brickwood Holdings Pty Ltd v ACI Operations Pty Ltd [1983] 2 VR 587 at 588–9 per King J; and Titan Mining & Engineering Pty Ltd v Arnall's Engineering Pty Ltd (1988) 12 NSWLR 73 at 75–6; 86 ALR 290 at 292; (1987) 10 IPR 661 at 663 per McLelland J. 16 I have read those authorities, but will not review them. They support the following propositions: — on the hearing of an appeal under s 60(4) of the Act (the precursor provision, with which the cases to which Young J referred were concerned, was s 60(5) of the Patents Act 1952 (Cth)), the only evidence to be taken into consideration is that adduced on that hearing; — the applicant is not obliged to put into evidence the evidentiary material that was before the commissioner or other evidence, going to the merits of the appeal or going to actual or potential grounds of opposition; — where, as in the present case, the opponent has withdrawn and the commissioner has indicated on the hearing of the appeal that she does not wish to take any active part in the proceeding, and there is no evidence before the court capable of supporting any actual or potential ground of opposition, there is no basis on which the court can uphold any ground of opposition. 17 It is important to note that in the light of the history of the application, and, in particular, the commissioner's acceptance of the application and the complete specification, s 61 of the Act would have obliged the commissioner to grant the patent if there had been no opposition to the grant. In substance, that is now the position on the appeal. 18 The appeal should be allowed, the commissioner's decision allowing the opposition should be reversed, and the patent application should proceed to grant. 19 Notwithstanding his submission that it was not incumbent on Cadbury to lead any evidence addressing any ground of opposition, in order to provide some "comfort" to the court, Mr Burley, of counsel for Cadbury, did read an affidavit of Michael Kenneth Payne of the British Library Document Supply Centre, demonstrating that document D10 was in fact received by the British Library Document Supply Centre on 3 August 1998 — well after the priority date. 20 The making of the orders foreshadowed above will not, of course, foreclose the question of the validity of the patent in any future proceeding, such as a proceeding for revocation of the patent. 15 Lindgren J followed Young J in European Community v Commissioner of Patents (2006) 68 IPR 539 who in turn followed a number of other authorities all to the same effect. The propositions which Lindgren J extracted from the authorities referred to at [16] of Cadbury Schweppes 69 IPR 584 are supported by the authorities cited by Lindgren J. 16 In the present case, there being no opposition to the making of the orders sought by the applicant and no evidence tendered in opposition to the grant of the patent claimed in the Patent Application, the reasoning of Lindgren J in Cadbury Schweppes 69 IPR 584 compels me to make orders substantially in the terms of the orders sought by the applicant. I see no reason not to apply his Honour's reasoning in the present case. It should be noted that the respondent had only succeeded before the Delegate upon the ground that the invention defined by Claims 1 to 32 of the Patent Application did not involve an inventive step. The respondent had failed to establish various other grounds of opposition (including contentions that the claimed patent was not clearly expressed and not fairly based). In addition, in the present case, the respondent, by its administrator, has formally withdrawn its opposition to the grant of the Patent Application. Accordingly, I propose to make orders substantially in the terms of the orders sought. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate: Dated: 13 May 2010