Judicial and administrative review

Allocation of jurisdiction over patent matters

10.2 As outlined in Chapter 5, state and federal courts, as well as the Administrative Appeals Tribunal (AAT), have a role in the Australian patent system. Decisions of the Commissioner of Patents may be subject to various types of review by the AAT or the Federal Court of Australia (the Federal Court).^[1] The AAT may undertake merits review of the Commissioner’s decisions with respect to certain procedural matters prescribed by the Patents Act.^[2] Decisions of the AAT on matters of law may be appealed to the Federal Court.^[3] A direct approach may be made to the Federal Court for judicial review in relation to other decisions of the Commissioner, essentially those related to the grant of patents or matters closely allied to the grant (for example, amendments to patent specifications and revocations).^[4] The Federal Court also has jurisdiction to review decisions of the Commissioner under the Administrative Review (Judicial Decisions) Act 1977 (Cth), and under s 39B of the Judiciary Act 1903 (Cth), on the basis of legal or procedural error.^[5]

10.3 The Federal Court and state and territory Supreme Courts share original (first instance) jurisdiction over matters related to the exploitation and enforcement of patent rights,^[6] including infringement proceedings, applications for relief against unjustified threats of infringement, the grant of declarations of non-infringement, and compulsory licences.

10.4 Appeals from decisions of a single judge of the Federal Court and from decisions of state and territory Supreme Courts may be heard by a Full Court of the Federal Court,^[7] and then by the High Court, with special leave to appeal.^[8] The Federal Court’s appellate jurisdiction in appeals from first instance decisions is exclusive.

Reform of jurisdiction in patent matters

10.5 Several reports in recent years have reviewed the allocation of jurisdiction over intellectual property matters (including patents) among various judicial or quasi-judicial bodies.^[9] These reports have identified two competing concerns underpinning criticisms of the current enforcement system for intellectual property rights. On the one hand there is a need for consistency in decision making; on the other hand there is a need to reduce the cost and complexity of the current system to facilitate the enforcement of intellectual property rights, particularly by small and medium-sized enterprises.

10.6 Both of these concerns are evident in the context of gene patents. Gene patents raise a range of complex legal and scientific issues, which require a high level of expertise. There is a need for consistency in decision making by the courts in this relatively new area. However, as discussed in Chapter 9, there are also concerns about the cost of challenging patents, as well as participating in patent infringement suits, whether as plaintiff or defendant. This concern is significant in the context of gene patents because of the prominent role of universities and non-profit organisations in genetic research in Australia.^[10] These institutions have limited resources to undertake patent enforcement actions. Accessible and cost-effective enforcement mechanisms for gene patents are therefore desirable.

10.7 Reports on these issues have focused primarily on the appropriate allocation of jurisdiction for matters arising under the Patents Act, and the expertise of judges appointed to hear patent disputes. Suggestions have been made to: limit or entirely remove the jurisdiction of state and territory Supreme Courts in patent matters;^[11] expand the jurisdiction of the Federal Magistrates Service (FMS) to include patent matters;^[12] and expand the jurisdiction of the AAT to undertake merits review of decisions of the Commissioner.^[13]

10.8 In 2003, the Advisory Council on Intellectual Property (ACIP)^[14] published a report that examined whether the jurisdiction of the FMS should be extended to include patent, trademark and design matters (ACIP FMS Report).^[15] ACIP considered that the jurisdiction of the FMS should be extended in this way, and made a suite of recommendations designed to give effect to this proposal.^[16] However, ACIP also acknowledged that ‘an extension of the jurisdiction of the FMS to IP matters alone will not resolve the current problems’.^[17] The ACIP FMS Report thus made recommendations aimed at streamlining existing court procedures and encouraging a proactive approach to case management in intellectual property matters.^[18]

Practice and procedure of the Federal Court

10.9 Although the Federal Court shares jurisdiction in patent matters with the state and territory Supreme Courts, in practice the vast majority of patent cases are heard in the Federal Court. The practices and procedures of that Court are therefore central to the role of courts in the Australian patent system.

10.10 The Federal Court has provided the ALRC with information about its practices and procedures in relation to patent disputes. The Court keeps its practices and procedures in relation to these matters under regular review. It has meetings with specialist sections of the Law Council of Australia and also has intellectual property ‘user group’ meetings with practitioners in the field in Sydney and Melbourne (the two major patent litigation centres). These meetings deal with emerging problems, examine possible solutions, and seek to improve efficiencies and remove uncertainties in patent practice and procedure, including discovery. The outcomes of the meetings are disseminated throughout the Federal Court.

10.11 The Federal Court is currently exploring ways to make the provision of evidence in patent matters more efficient, including the use of:

• the docket system to ensure early management, enable early definition of issues in dispute, and obviate the need for unnecessary evidence;

• joint experts to narrow issues and identify the areas of agreement between the parties;

• ‘hot tubbing’ of experts;^[19]

• independent qualified experts as assessors to advise the judge in cases involving complex technological issues (see further below);

• an agreed primer on background technology with the possibility of the primer being provided orally to reduce cost and increase its educative value; and

• video-conferencing facilities for the provision of overseas or interstate evidence, reducing inconvenience and cost.

10.12 As a national court, the Federal Court also has the ability to sit anywhere in Australia to hear evidence. In patent cases that do not involve global litigation, parties are also encouraged to consider early alternative dispute resolution, in particular early mediation. If appropriate, the Court may order that mediation occur.

10.13 A patent panel has been established in the Sydney and Melbourne registries of the Federal Court. It is constituted by judges with a special interest in the area, with the aim of promoting a consistent approach to patent practice and procedure throughout the Federal Court.

10.14 The Federal Court’s intellectual property panels conduct regular seminars for its judges and the Federal Court’s broader program of judicial studies includes intellectual property matters. The Federal Court has an ongoing association with the United States-based Einstein Institute of Science Health and the Courts (EINSHAC) and, in 2003, conducted a well-attended three-day seminar on ‘Genetics in the Courtroom’, in association with EINSHAC and leading scientists and ethicists.

Submissions and consultations

10.15 DP 68 proposed that the Patents Act be amended to provide that original jurisdiction in matters arising under the Act be conferred exclusively on federal courts, and that the jurisdiction currently exercised by state and territory courts under the Act be abolished.^[20]

10.16 A number of submissions supported this proposal.^[21] Submissions commented that, given the relatively low frequency of patent cases, such an approach would assist judges to develop specialised skills, knowledge and experience in dealing with patent matters^[22] and increase consistency and certainty in judicial interpretation of the Patents Act.^[23]

10.17 Other submissions commented on the potential disadvantages of concentrating the administration and enforcement of patent matters in a single court. For example, the Attorney-General for South Australia commented that conferring exclusive jurisdiction on the Federal Court might cause additional cost, time and inconvenience to parties who wish to have all claims tried together if some of these claims do not fall within the Federal Court’s jurisdiction.^[24] The submission also observed that specialist courts ‘tend to become narrow in focus and idiosyncratic’ and may also become (or be perceived to become) ‘unduly favourable to a particular category of litigants’.^[25] However, as the ALRC has noted in an earlier Report, the Federal Court has jurisdiction in respect of a large number of federal statutes, and therefore has diverse civil jurisdiction in matters of federal law.^[26]

10.18 Some submissions stated that the jurisdiction of state Supreme Courts over patent matters should be preserved.^[27] The Queensland Government endorsed the submission of the Queensland Supreme Court to the ALRC’s review of the Judiciary Act 1903 (Cth). Among other matters, the Queensland Supreme Court’s submission had suggested that uniformity of decision making could still be achieved if parallel jurisdiction were maintained in the state and federal courts and expressed concerns about the narrowing of legal principles and agency capture if jurisdiction were to be concentrated solely in the Federal Court.^[28]

10.19 The Inquiry heard different views about whether the FMS should have jurisdiction over patent matters.^[29] The patent attorney firm, F B Rice & Co considered that conferring jurisdiction on the FMS might enable small and medium-sized enterprises to enforce their patent rights in a more cost-effective manner.^[30] Other submissions indicated that, given the complexity of legal and scientific issues in many patent cases, the FMS was not generally an appropriate forum for patent litigation.^[31]

10.20 GlaxoSmithKline offered specific suggestions about ways to address concerns relating to the cost and complexity of gene patent litigation, such as: ensuring that any costs award adequately reflects the ‘winner’s’ actual costs; penalising inefficient or oppressive litigation in costs awards; providing public funding for patent litigation; and encouraging alternative dispute resolution.^[32]

ALRC’s views

10.21 Disputes involving gene patents highlight more general concerns that have been raised about the current enforcement system for patent rights in Australia. Genetics is a rapidly developing and highly technical scientific field. It raises complex issues for patent law, suggesting that judges with special expertise are best equipped to handle litigation of this type. However, the biotechnology sector in Australia is dominated by small and medium-sized enterprises and publicly funded institutions, which may be deterred from enforcing their patent rights if the procedures to do so are overly complicated and costly.

10.22 DP 68 suggested that one way to address these issues is to confer original jurisdiction over matters arising under the Patents Act exclusively on federal courts. The ALRC proffered no opinion about how that jurisdiction should be allocated between the Federal Court and the FMS. However, given the absence of FMS jurisdiction in patent matters at the present time, the practical effect of the proposal would have been to capitalise on the substantial expertise that the Federal Court has already developed in handling and determining such cases. Nevertheless, submissions raised concerns about the effectiveness of this approach. In particular, it was suggested that the concentration of jurisdiction in the Federal Court might not address concerns about the time and cost involved in patent litigation. With the benefit of these submissions, the ALRC now believes that these concerns are best addressed directly by examining, and where necessary improving, the practices and procedures of all Australian courts with jurisdiction over patent matters.

10.23 Available statistics suggest that the Federal Court is the forum of choice in most patent matters, and that state courts are used only on an occasional basis.^[33] The impact of the ALRC’s recommendation will therefore fall primarily on the Federal Court. As discussed above, the Federal Court has already adopted a proactive approach in adapting its practices and procedures in patent cases, and it keeps these matters under regular review. It has an established panel of specialist intellectual property judges, as well as continuing education programs to assist judges in keeping up to date with developments in patent law. These practices were noted favourably in submissions.^[34] The Federal Court is also examining ways to facilitate the provision of evidence and the expeditious resolution of patent disputes. The Federal Court’s practices and procedures provide a valuable model for other courts exercising jurisdiction under the Patents Act. But other courts, too, may have particular practices and procedures that are worthy of consideration by courts that hear and determine patent matters. The ALRC therefore recommends that all courts exercising jurisdiction under the Patents Act should continue to develop their practices and procedures for dealing with patent matters with the object of promoting the just, efficient and cost effective resolution of patent disputes.