Case: Advanced Building Systems Pty Limited v Ramset Fasteners (Aust) Pty Limited [1998] HCA 19 ; (1998) 194 CLR 171
Outcome: considered
On the face of these provisions, it is difficult to discern any substantive difference between s 100(1)(d) of the 1952 Act on the one hand, and the combined effect of the opening words of s 18(1), the definition of invention in Sch 1, and para (a) of s 18(1) of the 1990 Act on the other hand. This is, however, an issue to which I will need to return in the context of a fuller discussion of the decisions in Advanced Building Systems Pty Limited v Ramset Fasteners (Aust) Pty Limited [1998] HCA 19 ; (1998) 194 CLR 171 ( 'Ramset' ) and Bristol-Myers . 173 Warner-Lambert submitted that Ranbaxy's case on 'manner of manufacture' is foreclosed by the High Court's decision in Ramset . It pointed out that Ranbaxy had abandoned the grounds of obviousness and lack of inventive step in s 18(1)(b) of the 1990 Act and in the corresponding provision in s 100(1)(e) of the 1952 Act. Against this background, it argued that Ranbaxy's contention that the Enantiomer Patent claimed nothing but a new use of an old substance, and therefore lacked the quality of inventiveness, ought to be regarded as an argument based on obviousness and the lack of an inventive step. It contended that under the 1952 Act such an argument could only be raised under s 100(1)(e) and not under s 100(1)(d). 174 In advancing this argument, Warner-Lambert appeared to accept that, were it not for the transitional provision in s 234 of the 1990 Act, Ranbaxy's argument could have been advanced under the opening words of s 18(1) or possibly under s 18(1)(a) of the 1990 Act, in accordance with the High Court's decision in Philips . However, Warner-Lambert submitted that there is a distinction between revocation under s 100(1)(d) of the 1952 Act and revocation under s 18(1)(a) of the 1990 Act. Relying on Ramset at 190 [34], it submitted that the doctrinal content of s 100(1)(d) is confined to alleged inventions which are 'contrary to law' or 'generally inconvenient', categories which were excluded from the field covered by the expression 'any manner of new manufacture' in s 6 of the Statute of Monopolies. In contrast, it said that the reference to 'invention' in the opening words of s 18(1) is not so confined. 175 For the reasons elaborated below, I do not accept that Ranbaxy's case on 'manner of manufacture' is foreclosed by the High Court's decision in Ramset . In my opinion, Ranbaxy's argument falls squarely within the framework of the High Court's decision in Philips . In Ramset , the High Court did not question the authority of Philips and, as the Full Court of this Court said in Bristol - Myers , nothing in Ramset detracts from the binding effect of Philips in this Court. As to merits of the argument, I have reached the conclusion that Ranbaxy has not established on the facts that the Enantiomer Patent claims 'nothing but ... a new use of an old substance'. Consequently, Ranbaxy has failed to establish that the Enantiomer Patent is invalid, and liable to revocation, on the ground that was recognised and applied in Microcell and Philips . My detailed reasons for this conclusion are also set forth below. 182 The High Court's decision, like that of the Full Court and Hill J, did not depend solely upon a construction of s 18 of the 1990 Act. As the patent in suit in Philips was granted under the 1952 Act, the decision also depended, critically, on a finding that the manner of manufacture ground of invalidity under s 18(1) would also have been available under the 1952 Act. The majority judgment makes it clear, in my view, that the Court considered that the manner of manufacture ground was fully available under the 1952 Act and that s 18(1) had not altered that position. There are several relevant passages. Immediately following the key passage that I have extracted from their judgment, Brennan CJ, Deane and Toohey JJ said that the position under s 18(1) of the 1990 Act remains that indicated in NRDC , namely that under the 1952 Act the Commissioner could reject an application if it was apparent on the face of the specification that the alleged invention fell outside the scope of what is known as an invention: at 663-664. Later in their reasons, Brennan, Deane and Toohey JJ said at 665: 'More important, it seems to us to be highly unlikely that it was the legislative intent that there should be a significant alteration of the law as explained in Microcell by extending the ambit of a patentable invention so as to include what is "nothing more" than "the use of a known material in the manufacture of known articles for the purpose of which its known properties make that material suitable". In that regard, we do not accept the argument on behalf of Philips that Microcell was decided on the question of newness and not on manner of manufacture. It is true that, in Microcell, "counsel for the applicants argued that ... they were required to show no more than that the specification described a manner of manufacture and that it was alleged to be new". But it is clear that the decision of the Court was that "[t]he specification in the present case does not, in our opinion, disclose a patentable invention". Rather, the deliberate retention of the established definition of "invention" in the Dictionary in Sch 1 strongly supports the view that it was the legislative intent that the threshold requirement of "an invention" would continue to exclude from a "patentable invention" any claimed process, method or use which was not, on the face of the specification, a proper subject of letters patent according to traditional principles.' Lastly, when Brennan, Deane and Toohey JJ turned from the introductory words of s 18(1) to consider the proper construction of s 18(1)(a), they noted that NRDC was decided under the 1952 Act and said that the phrase 'manner of manufacture' in s 18(1)(a) should be construed in accordance with the decision in NRDC and earlier judicial decisions about the content of that phrase as used in the saving clause of s 6 of the Statute of Monopolies. They expressly endorsed Lockhart J's statement in the Full Court that the combination of s 18(1)(a) of the 1990 Act and Sch 1 thereto had continued in force the notion of 'manner of new manufacture' present in s 100(1)(d) of the 1952 Act: see also Burchett J's judgment at 270, 278 and 282; and Kirby J's dissenting judgment in Ramset at 194 [42]. 183 The patent in suit in Ramset was granted under the 1952 Act. The proceedings were instituted under the 1952 Act, prior to its repeal on 30 April 1991 by the 1990 Act. Accordingly, the 1990 Act had no application to the litigation. 184 At trial, the grounds of obviousness or lack of inventive step, based upon s 100(1)(e) of the 1952 Act, had been abandoned. Hill J held that none of the prior publications relied upon by the respondent was sufficient to make out a case for revocation under s 100(1)(g) of the 1952 Act on the ground that, on the priority date of the claims, the invention was not novel in Australia. 185 In the High Court, in their joint majority judgment, Brennan CJ, Gaudron, McHugh and Gummow JJ said that the issue was whether the Full Court, in purported reliance upon s 100(1)(d), had strayed into a consideration of issues that would have arisen if the ground of revocation in question had been obviousness (which had been abandoned) or lack of novelty (which the Full Court had put to one side): Ramset at 182 [13]. In the result, the majority held that by going beyond the text of the specification and placing decisive weight upon the prior publications, the Full Court had erred. Prior publications of that kind could not be relied upon in considering the ground of revocation in s 100(1)(d); those matters could only have arisen under other grounds, namely obviousness and lack of novelty, which in the circumstances of the case either did not arise or were to put to one side: at 193 [40]. 186 The majority distinguished Philips as a case in which the absence of the quality of inventiveness necessary for there to be a proper subject of letters patent under the Statute of Monopolies was apparent on the face of the specification: at 192-193 [39] and [40]. 187 Warner-Lambert relied on several passages in the majority judgment in Ramset for its contention that Ranbaxy's manner of manufacture argument was legally unavailable. Its contention that the doctrinal content of s 100(1)(d) of the 1952 Act did not extend to the manner of manufacture argument recognised and applied by the High Court in Microcell was based on the following passage at 190 [33] and [34]: 'In particular, s 100(2) assumes that issues of obviousness and lack of novelty are extracted by pars (e) and (g) of s 100(1) from what otherwise may have been their inclusion (by means of par (d)) in the general concept of invention within the ambit of s 6 of the Statute of Monopolies. Novelty and obviousness are dealt with specifically and exhaustively in pars (e) and (g). There remains no scope for the doctrine of secret use, as a qualification to obviousness and novelty, in par (d), and in s 100(2), no occasion to refer to par (d). What then was left to provide the doctrinal content of par (d)? Section 6 of the Statute of Monopolies excluded any manner of new manufacture which was "contrary to the Law" or "generally inconvenient". The classification of certain methods of treatment of the human body as an inappropriate subject for grants under the Act appears to rest on this footing. Further, it has long been established that "a clear distinction will be drawn between the discovery of one of nature's laws, and of its application to some new and useful purpose". Whilst discovery adds to the sum of human knowledge, s 6 of the Statute of Monopolies is concerned with a manner of new manufacture. Thus, in Neilson v Minister of Public Works (NSW) , Isaacs J, speaking of a discovery which might be applied in the improved treatment of sewage, said: "Assuming, therefore, the idea is original that the best conditions are fermentation short of putrefaction, still without some practical means of carrying out that idea so as to add to the sum of human art -- not merely human discovery -- the idea is not patentable." On the other hand, "manufacture" in s 6 is not restricted to vendible processes or their products and may include agricultural and horticultural processes involving the selective use of herbicides.' In my opinion, this passage does not go so far as to support Warner-Lambert's contention, and ultimately it is inconclusive. 188 The proposition that novelty and obviousness are dealt with specifically and exhaustively in s 100(1)(e) and (g), and not in s 100(1)(d), does not deny Ranbaxy's proposition that the ground of invalidity discussed in Microcell , NRDC and Philips falls squarely within s 100(1)(d) and s 18(1). The remainder of the passage poses, but does not definitively answer, the question of what is left to provide the doctrinal content of s 100(1)(d). Some examples are given, but they do not address the question whether the ground of invalidity recognised in Microcell , NRDC and Philips would fall within s 100(1)(d). So far as it goes, the distinction that is drawn between discovery and any manner of new manufacture tends to suggest that, if revocation were sought, cases like Microcell and NRDC would fall for consideration under s 100(1)(d). Earlier in their reasons at 183 [15], the majority in Ramset said that the right question when applying the definition of invention and the expression 'any manner of new manufacture' under the 1952 Act is: '"Is this a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies?"' The majority's endorsement of this test also tends to suggest that cases like Microcell and NRDC would have fallen within s 100(1)(d) of the 1952 Act, had revocation been sought on that ground. 189 Warner-Lambert also relied on the following passage from the majority reasons in Ramset at 192 [38]: 'Under that law, as the doctrine with respect to obviousness and lack of inventive step developed in the nineteenth century, it was decided that a claim for "nothing but" a new use of an old substance lacked the quality of inventiveness. There also were instances in which this lack of inventive step was admitted on the face of the specification. If so, a grant might properly be refused in the first instance on the footing that the admission of the lack of an inventive step itself disentitled the applicant to argue that even an alleged invention was disclosed. If such an application had proceeded to grant, the grant would be liable to revocation under s 100(1)(e).' Again, I do not think this passage goes so far as to support Warner-Lambert's submission that the argument that a claim lacked the quality of inventiveness because it was for nothing but a new use of an old substance could only be raised under s 100(1)(e), and not under s 100(1)(d), of the 1952 Act. The last sentence of the passage addresses the case where the lack of an inventive step is admitted on the face of the specification; in terms, a case of that kind would fall within para (e). It does not explicitly address the other cases mentioned earlier in the passage, viz, where it appears from the face of the specification that the claim is not for 'a manner of new manufacture', and where the claim is for nothing but a new use of an old substance so that it lacks the quality of inventiveness required by the 1952 Act. The majority do not say that, in cases like those, revocation is only available under s 100(1)(e), or that there can never be any overlap between the grounds in paras (d) and (e) of s 100(1). The possibility that grounds for revocation may overlap in particular cases is well recognised: see Sunbeam Corporation v Morphy-Richards (Aust) Pty Ltd [1961] HCA 39 ; (1961) 180 CLR 98 at 112-113 per Windeyer J; see also Ramset at 189 [31] in the majority judgment, and at 198 [50] and 200 [55] in Kirby J's dissenting judgment. 191 More generally, Warner-Lambert submitted that the majority judgment in Ramset draws a distinction between the grounds that can be relied upon for revocation under s 100(1)(d) of the 1952 Act and those that can be relied upon under the introductory words and/or para (a) of s 18(1) of the 1990 Act. It is correct that the majority drew attention to the significant differences in structure between s 100 of the 1952 Act and the provisions of s 138(3)(b), s 18(1) and Sch 1 of the 1990 Act. The majority also observed that Philips was decided upon a construction of the introductory words of s 18(1) of the 1990 Act. It is unclear, however, where these observations go. With great respect, I doubt that it is entirely correct to say, as Black CJ and Lehane J did in Bristol-Myers at 531 [20], that the Court in Ramset distinguished Philips on the basis that there were significant differences between the 1990 Act and its predecessors. While these differences were noted, the majority ultimately did not rely upon them to distinguish Philips . Rather, as I have already observed, the express basis for distinguishing Philips was that it was a case in which the absence of inventiveness appeared on the face of the specification, rather than emerging from prior publications of the kind that might have supported an objection of obviousness or lack of novelty under s 100(1)(e) or (g). It also needs to be borne in mind that the observed differences between the 1952 Act and the 1990 Act would not have constituted a valid or sufficient basis for distinguishing Philips , given that the case attracted the transitional provisions in s 233(4) of the 1990 Act. 192 In the present case, Ranbaxy based its argument on Microcell and Philips . The majority decision in Ramset does not cast any doubt on the soundness of Microcell . It also expressly approved the High Court's decision in NRDC , which in turn endorsed the principles discussed in Mircocell . 196 The majority in Ramset agreed that NRDC sets out the correct way of approaching the definition of invention in the 1952 Act. As s 100(1)(d) provides for revocation where the claimed invention is not an invention within the meaning of the Act, there is no reason to suppose that the application of s 100(1)(d) should be approached in any different fashion from that explained in Microcell and NRDC . 198 In Wm Wrigley Jr Company v Cadbury Schweppes Pty Ltd (2005) 66 IPR 298 ( 'Wrigley' ) at 314-315 [87]-[93], Heerey J held that a manner of manufacture argument could be advanced under s 100(1)(d) of the 1952 Act so long as the ground in s 100(1)(d) was established on the face of the specification. His Honour expressly stated that this was the effect of the decision in Ramset . Furthermore, his Honour considered that the question whether or not the ground in s 100(1)(d) was established on the face of the specification was to be determined by considering and applying the principles discussed in Microcell . 199 In light of the foregoing authorities, I would sum up the position as follows. There is nothing in the majority judgment in Ramset that casts any doubt on the actual decision in Philips . Ranbaxy's argument on manner of manufacture is not foreclosed by any of the reasoning in Ramset , which does not go nearly as far as Warner-Lambert contends. 201 As the US Patent is substantially identical to the 981 Patent I do not need to consider whether the citation of the 981 Patent as prior art would be sufficient for it to be characterised as information that appears on the face of the specification: see Bristol-Myers at 536 [30]; Microcell at 250; cf Ramset at 192-193 [40]. Nor do I need to consider the additional observations made by the majority in Philips (which were unnecessary for the decision) to the effect that s 18(1)(a) of the 1990 Act would permit the Court to look beyond the face of the specification in determining whether a claimed invention is nothing more than a new use of an old substance, and whether those observations can be reconciled with the reasoning in Ramset . My task is to apply the principles that were enunciated in Microcell , NRDC and Philips to the claims of the Enantiomer Patent. 205 In my view, Ranbaxy's argument requires an extension of the principles that the High Court applied in Microcell , NRDC , Philips and Ramset . Ranbaxy did not accept that this was so. It contended that racemic atorvastatin lactone was a known compound with known properties that were reported in Table 1 (compound 1) of the 981 Patent specification, and that the activity of this racemate is, and was, known to be due to the RR enantiomer. In closing submissions, however, senior counsel for Ranbaxy could not identify any case on 'manner of manufacture' that deals with a situation that is analogous to the present case where a selection process forms the basis of the compounds claimed by the later patent. 206 The decisions in Philips and Ramset do not leave room for the kind of extension that is necessary to accommodate Ranbaxy's argument. My earlier discussion of those cases makes it plain that one of the reasons why the manner of manufacture ground of invalidity has, relevantly, been limited to cases where the lack of inventiveness appears on the face of the specification is to ensure that it does not render otiose the more specific requirements of novelty and inventive step: see Philips at 663-664 and Ramset at 190 [33]-[34] and 192 [38]. Ranbaxy abandoned arguments based on lack of novelty, obviousness and inventive step and it would be inappropriate to allow the manner of manufacture argument to be used as a de facto attack based on obviousness or lack of inventive step. It is also relevant to note that Ranbaxy does not seek to go, and indeed cannot go, behind the claim in the Enantiomer Patent specification that the R-trans enantiomer achieved surprising and unexpected inhibition of the biosynthesis of cholesterol, in the way that it does when pursuing its arguments based on false suggestion and inutility. 207 Later in these reasons, I discuss the authorities on selection patents in the context of the ground of inutility. Those authorities clearly show that a compound selected from a large range of possible compounds can be the subject of a patent, provided special properties are identified through the process of selection. 208 At a factual level, the evidence does not make good Ranbaxy's contention that the gap between the compounds of the 981 Patent and those claimed by the Enantiomer Patent can be dismissed as so routine as to be inconsequential. The expert evidence as a whole establishes that a number of real choices or important selection steps separate the two patents.