General Steel Industries Incorporated v Commissioner for Railways (NSW), A.E. Goodwin Ltd., Tulloch Ltd
[1964] HCA 69
High Court of Australia
1964-01-01
cited 63×
Leading authority
Treatment by later cases (129)
5 positive
124 neutral
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Applicant: General Steel Industries Incorporated
Respondent: Commissioner for Railways (NSW), A.E. Goodwin Ltd., Tulloch Ltd.
Ratio
A State railway commissioner is an "authority of the State" within Patents Act 1952–1960 (Cth) s125, and use of a patented invention in constructing railway carriages for the State railway system falls within s125(1) as use "for the services of the State", thus precluding infringement action against the Commissioner under s125(8); moreover, where a contract with such an authority requires the contractor to manufacture in a manner that infringes the patent, the contract itself constitutes sufficient written authority under s125(1) for the contractor to do so.
Outcome
Against applicant
dismissed
Authority signal
Leading authority
Signal-weighted score: 132.9
Derived from how later decisions have treated this case. Dark green = leading authority,
green = positively treated, grey = neutral or sparse data,
amber = caution, red = treated negatively.
Key facts · 6
- General Steel Industries Inc. held letters patent for a railway vehicle body and truck central bearing invention under Patents Act 1952–1960 (Cth)
- Plaintiff sued Commissioner for Railways (NSW), A.E. Goodwin Ltd., and Tulloch Ltd. for patent infringement
- Commissioner had contracted with A.E. Goodwin Ltd. and Tulloch Ltd. for manufacture of railway carriages incorporating the patented invention
- Defendants sought summary dismissal under inherent jurisdiction and Order 26 r18 of High Court Rules
- A.E. Goodwin Ltd. and Tulloch Ltd. were provided written authorities by Commissioner dated 16 July 1964 (after commencement of action) purporting to authorize use of any patented invention in relation to supply of articles to the Commissioner
- Commissioner for Railways is a body corporate under Government Railways Act 1912, Transport (Division of Functions) Act 1932, with property of railway system vested in him, revenues collected for Crown, under Ministerial direction
Factors
For
- Commissioner for Railways is a statutory body corporate under multiple State Acts with railway system property vested in him
- Commissioner collects revenues for the Crown and pays them into a Treasury fund
- Commissioner has control and management of parliamentary appropriations for the railway system
- Commissioner is subject to Ministerial direction as head of a sub-department of government
- Railway system management is a function historically connected to government in NSW
- Contracts for manufacture of railway carriages would necessarily be in writing under s22 of Government Railways Act 1912
- Manufacture of railway carriages to be used in State railway system constitutes use 'for the services of the State'
- Statutory purpose of s125 Patents Act 1952–1960 would be defeated if State railway systems were not covered
Against
- Commissioner for Railways has not been directly held by prior judicial precedent to be an 'authority' of the State for purposes of Patents Act
- Commissioner has certain immunities of the Crown but is not identical with the Crown
- Plaintiff's statement of claim did not expressly allege that agreements between Commissioner and other defendants were in writing
- Written authorities provided to contractors were given after commencement of action
- Question whether subsequent written authorities given to contractors could validate antecedent acts
Legislation referenced
- Patents Act 1952–1960 (Cth) ss125, 132
- Patents Act 1952–1960 (Cth) s125(1)
- Patents Act 1952–1960 (Cth) s125(5)
- Patents Act 1952–1960 (Cth) s125(7)
- Patents Act 1952–1960 (Cth) s125(8)
- Patents Act 1952–1960 (Cth) s132
- Transport (Division of Functions) Act 1932–1956 (NSW) ss3, 4
- Government Railways Act 1912–1957 (NSW) ss4, 11, 13, 14, 22, 41B, 41C
- Ministry of Transport Act 1932–1950 (NSW) s9
- Audit Act 1902 (NSW)
- High Court Rules Order 26 r18
- High Court Rules Order 35
- High Court Rules Order 63 r2
Concept tags · 6
Principles · 15
articulates para 8
The jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion.
articulates para 8
A plaintiff ought not to be denied access to the customary tribunal dealing with actions of the kind brought unless the lack of a cause of action is clearly demonstrated by one of the tests expressed as 'so obviously untenable that it cannot possibly succeed', 'manifestly groundless', 'so manifestly faulty that it does not admit of argument', 'discloses a case which the Court is satisfied cannot succeed', 'under no possibility can there be a good cause of action', or 'be manifest that to allow them to stand would involve useless expense'.
Test: Summary dismissal threshold
articulates para 10
A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner, and once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous, vexatious and an abuse of process.
articulates para 10
Great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for trial by the appointed tribunal.
articulates para 10
The exercise of the summary dismissal jurisdiction should not be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim; argument, perhaps even of extensive kind, may be necessary to demonstrate that the case is so clearly untenable that it cannot possibly succeed.
articulates para 22
A State railway system is undoubtedly a service of the State, and use of an invention in the construction of railway carriages to be used by the Commissioner in that railway system is a use for a service of the State within the meaning of Patents Act 1952–1960 s125(1).
articulates para 24
The Commissioner for Railways is an authority of the State within the meaning of Patents Act 1952–1960 ss125 and 132 because: (1) the Commissioner is a body corporate under statute, a statutory body representing the Crown with railway system property vested in him; (2) he collects revenues for the Crown and pays them into a Treasury fund; (3) he has control and management of moneys appropriated by Parliament for the railway system; (4) he is subject to Ministerial direction as head of a sub-department of government managing a function historically connected with government.
articulates para 28
Where a contract with a State authority for manufacture of an article requires the contractor to perform acts that necessarily infringe a patented invention (whether knowingly or inadvertently), the contract itself being in writing constitutes sufficient written authority under Patents Act 1952–1960 s125(1) for the contractor to make, use, exercise or vend the invention; by contrast, where contractual terms leave the contractor with choice as to method and design, express written authority is required.
Test: Contract sufficiency as written authority
articulates para 32
Although a statement of claim may not expressly state that agreements are in writing, the combination of a statutory requirement that agreements be in writing and the high degree of improbability that agreements for manufacture of railway carriages be made orally enables the court to conclude with necessary certainty for summary dismissal purposes that such agreements were in writing.
A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court, and once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.
cites para 20
The Commissioner for Railways is so far identified with the Crown as not to be bound by Fair Rents legislation.
cites para 20
An 'instrumentality' of the Crown is that which serves or is employed for some purpose or end, a means or agency; a statutory body managing Crown assets on behalf of the Crown is an instrumentality of the Crown.
cites para 28
Where a contract with an authority requires the contractor to manufacture in a manner that infringes a patent, the contract itself constitutes sufficient written authority to do so.
cites para 28
Contract itself may constitute sufficient written authority where contractual terms require acts that infringe a patent.
cites para 29
Where a State contracts for sale of goods which infringe a patent, the Crown is not liable for infringement; however, where the Crown employs a manufacturer to produce goods that infringe, a different situation arises.
Cases cited in this decision · 8
Cited
(1964) 112 CLR 125
(not in corpus)
"…ions ] [ Noteup ] [ Help ] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 (9 November 1964) HIGH COURT OF AUSTRALIA GENERAL STEEL INDUSTRIES INC. v. COMMISSIONER FOR...…"
Cited
(1949) 78 CLR 62
(not in corpus)
"…ay be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian...…"
Cited
[1955] HCA 72
(not in corpus)
"…s as those of s. 125 of the Patents Act. It has been decided that the Commissioner for Railways is so far identified with the Crown as not to be bound by Fair Rents legislation (see Wynyard Investments Pty. Ltd. v....…"
Cited
(1955) 93 CLR 376
(not in corpus)
"…125 of the Patents Act. It has been decided that the Commissioner for Railways is so far identified with the Crown as not to be bound by Fair Rents legislation (see Wynyard Investments Pty. Ltd. v. Commissioner for...…"
Cited
(1920) 37 RPC 57
(not in corpus)
"…ters patent. In the former case it would seem that the contractor needs some written authority to make use of the invention. In the latter case the contract itself being in writing is a sufficient authority. Pyrene...…"
Cited
(1923) 40 RPC 107
(not in corpus)
"…ntion. In the latter case the contract itself being in writing is a sufficient authority. Pyrene Co. Ltd. v. Webb Lamp Company Ltd. (1920) 37 RPC 57, at p 65; Aktiengesellschaft fur Autogene Aluminium Schweissung v....…"
Cited
[1908] HCA 57
(not in corpus)
"…away v. Bury (1892) 66 L.T. 599. Healey v. Bank of New South Wales (1898) 24 V.L.R. 405. Hubbuck & Sons v. Wilkinson, Heywood & Clark (1899) 1 Q.B. 86. Goodson v. Grierson (1908) 1 K.B. 761. Burton v. President and...…"
Cited
[1949] HCA 1
— Ellen Malvina Dey (widow of Gordon Dey) v Victorian Railways Commissioners
"…y-General (1911) 1 K.B. 410. Mayor & Councillors of City of London v. Horner (1914) 111 L.T. 512. Wright v. Prescot Urban District Council (1917) 115 L.T. 772. Agar v. J.C. Williamson Ltd. (1920) 42 A.L.T. 98. Dey v....…"
Subsequent treatment · 129
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General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 (9 November 1964)
HIGH COURT OF AUSTRALIA
GENERAL STEEL INDUSTRIES INC. v. COMMISSIONER FOR RAILWAYS (N.S.W.)
[1964] HCA 69
; (1964) 112
CLR 125
Practice - Patents
High Court of Australia
Barwick C.J.(1)
CATCHWORDS
Practice - Summary power to terminate action - Principles applicable -
Inherent jurisdiction - Jurisdiction under rule of court
- High Court Rules,
O. 26, r. 18.
Patents - Invention - Use for services of Commonwealth or State - "Authority
of the State" - Commissioner for Railways - Construction
of carriages for use
in State railway system - "Services of the State" - Written authority to use
invention - When contract itself
sufficient authority - Patents Act 1952-1960
(Cth), ss. 125, 132*.
HEARING
Sydney, 1964, July 23; August 6; November 9. 9:11:1964
SUMMONSES.
DECISION
November 9.
BARWICK C.J. delivered the following written judgment:-
General Steel Industries Incorporated commenced this action against the
injunctions to restrain the infringement by the defendants
or any of them of
letters patent granted to the plaintiff under the Patents Act 1952-1960 (Cth)
in respect of an invention entitled
"Railway Vehicle Body and Truck Central
Bearing". (at p127)
2. The plaintiff, by its statement of claim, identifies the Commissioner for
Railways as being the Commissioner for Railways under
the Transport (Division
of Functions) Act, 1932 (N.S.W.) as amended, and asserts that the
Commissioner, without the leave or licence
of the plaintiff, "has been . . .
contracting to have manufactured . . . railway vehicle central bearing
structures . . . made .
. . and manufactured in infringement of the letters
patent of the plaintiff and of the claims in the complete specification
thereof".
(at p127)
3. The plaintiff further asserts that the defendant A.E. Goodwin Ltd.,
"without the leave or licence of the plaintiff, has been
making and
manufacturing railway vehicle central bearing structures made and manufactured
in infringement of the letters patent and
of the claims of the complete
specification", and that the defendant Tulloch Ltd., "without the leave or
licence of the plaintiff,
has been . . . assembling . . . railway vehicle
central bearing structures made and manufactured in infringement of the
letters patent"
and of the said claims. (at p127)
4. The plaintiff then proceeds to assert that the acts of the defendant A.E.
Goodwin Ltd. and of the defendant Tulloch Ltd., of
which it complains, "have
been done pursuant to agreements between each of them and the Commissioner for
Railways respectively, pursuant
to which complete railway carriages have been
made and assembled for use by the said Commissioner for Railways". (at p127)
5. The defendants, by the three separate summonses now heard by me, seek to
set aside the writ and the statement of claim in this
action, or
alternatively, to stay further proceedings thereon upon the grounds that the
plaintiff neither has nor discloses a reasonable,
or for that matter any,
cause of action against the defendants or any of them. For this purpose the
defendants each calls in aid
the inherent jurisdiction of the Court to prevent
the abuse of its process, the provisions of Order 26, r. 18, and those of
Order
63, r. 2, of the Rules of this Court. (at p127)
6. Each defendant in support of its application founds itself upon Pt XIV,
and particularly on the terms of ss. 125 and 132, of
the Patents Act
1952-1960. The defendants A.E. Goodwin Ltd. and Tulloch Ltd., in addition, in
their applications rely upon authorities
in writing given to each of them by
the defendant Commissioner on 16th July 1964 purporting to authorize each of
them to make, use
and vend any invention in respect of which letters patent
have been granted under the Patents Act 1952-1960. The authorities are
identical except as to the name of the contractor, and each was proved by
affidavit. They were not only given after the commencement
of the action, as
appears from the date, but each is in general terms and reads as follows:
"THE COMMISSIONER FOR RAILWAYS a body corporate created
under or by virtue of the Government Railways Act, 1912, as
amended, the Ministry of Transport Act, 1932, and the Transport
(Division of Functions) Act, 1932, as amended being an
Authority of the State of New South Wales for the purpose of
owning maintaining and operating inter alia the railways and
rolling stock constructed and acquired by or on behalf of Her
Majesty in the said State and for that purpose empowered to
contract for any matters or things whatsoever necessary for
enabling him to carry into effect the purposes of the Government
Railways Act, 1912 as amended HEREBY pursuant to s. 125(1)
of the Patents Act 1952 of the Commonwealth of Australia
AUTHORIZES A.E. GOODWIN LIMITED a Company duly incorporated
and carrying on business in the State of New South
Wales aforesaid (hereinafter called the Contractor) and any
of its Subcontractors IN RELATION to the supply by the Contractor
to the Commissioner of any article to be used by the
Commissioner in or in relation to the exercise of his powers and
the operation of the said railways TO MAKE USE EXERCISE OR
VEND any invention to which the provisions of the said s. 125(1)
relate AND TO USE any model plan document or information
relating to any such invention which may be required for that
purpose.
DATED this Sixteenth day of July, 1964." (at p128)
7. At the outset the plaintiff submits that whatever conclusion I might reach
upon the legal questions involved, I ought not to
deal summarily with the
action but should allow it to proceed, leaving the defendants to raise their
points in opposition to the
plaintiff's claim in proceedings on demurrer or by
points of law taken on the pleadings and dealt with under Order 26, r. 16, or
perhaps by special case under Order 35. (at p128)
8. The plaintiff rightly points out that the jurisdiction summarily to
terminate an action is to be sparingly employed and is not
to be used except
in a clear case where the Court is satisfied that it has the requisite
material and the necessary assistance from
the parties to reach a definite and
certain conclusion. I have examined the case law on the subject, to some of
which I was referred
in argument and to which I append a list of references.
There is no need for me to discuss in any detail the various decisions, some
of which were given in cases in which the inherent jurisdiction of a court was
invoked and others in cases in which counterpart rules
to Order 26, r. 18,
were the suggested source of authority to deal summarily with the claim in
question. It is sufficient for me
to say that these cases uniformly adhere to
the view that the plaintiff ought not to be denied access to the customary
tribunal which
deals with actions of the kind he brings, unless his lack of a
cause of action - if that be the ground on which the court is invited,
as in
this case, to exercise its powers of summary dismissal - is clearly
demonstrated. The test to be applied has been variously
expressed; "so
obviously untenable that it cannot possibly succeed"; "manifestly groundless";
"so manifestly faulty that it does
not admit of argument"; "discloses a case
which the Court is satisfied cannot succeed"; "under no possibility can there
be a good
cause of action"; "be manifest that to allow them" (the pleadings)
"to stand would involve useless expense". (at p129)
9. At times the test has been put as high as saying that the case must be so
plain and obvious that the court can say at once that
the statement of claim,
even if proved, cannot succeed; or "so manifest on the view of the pleadings,
merely reading through them,
that it is a case that does not admit of
reasonable argument"; "so to speak apparent at a glance". (at p129)
10. As I have said, some of these expressions occur in cases in which the
inherent jurisdiction was invoked and others in cases
founded on statutory
rules of court but although the material available to the court in either type
of case may be different the
need for exceptional caution in exercising the
power whether it be inherent or under statutory rules is the same. Dixon J.
(as he
then was) sums up a number of authorities in Dey v. Victorian Railways
Commissioners
[1949] HCA 1
; (1949) 78 CLR 62 VOL CXII-9
where he says (1949)
78 CLR, at p
91 : "A case must be very clear indeed to justify the summary intervention
of
the court to prevent
a plaintiff submitting
his case for determination in the
appointed manner by the court with or without a
jury. The fact that a
transaction
is intricate
may not disentitle the court to examine a cause of
action alleged to grow out of it
for the purpose of seeing whether
the
proceeding
amounts to an abuse of process or is vexatious. But once it appears
that there is
a real question to be determined
whether of fact
or law and that
the rights of the parties depend upon it, then it is not competent
for the
court to dismiss the action
as frivolous
and vexatious and an abuse of
process." Although I can agree with Latham C.J. in
the same case when he said
that the
defendant should
be saved from the vexation of the continuance of
useless and futile proceedings
(1949) 78 CLR, at p 84, in my opinion
great
care
must be exercised to ensure that under the guise of achieving expeditious
finality
a plaintiff is not improperly deprived
of his
opportunity for the
trial of his case by the appointed tribunal. On the other hand,
I do not think
that the exercise of the
jurisdiction
should be reserved for those cases where
argument is unnecessary to evoke the
futility of the plaintiff's claim.
Argument,
perhaps
even of an extensive kind, may be necessary to demonstrate
that the case of
the plaintiff is so clearly untenable that it
cannot
possibly
succeed. (at p130)
11. In the present applications the defendants seek an exercise of the
inherent jurisdiction of the Court to stay actions which
are frivolous and
vexatious and an abuse of process. For this purpose the defendants rely on
affidavits whereof the only material
outcome is my knowledge of the existence
and particulars of the authorities from the Commissioner to the other
defendants to which
I have already referred. (at p130)
12. The defendants also seek orders under Order 26, r. 18. For this purpose
the information before the Court is confined to the
statement of claim. The
defendants finally seek an order under Order 63, r. 2, for which purpose the
abovementioned evidentiary material
may be used. (at p130)
13. I propose to deal in the first place with the applications for orders
under Order 26, r. 18. (at p130)
14. The defendant Commissioner says that he is an authority of the State of
New South Wales within the meaning of ss. 125 and 132
of the Patents Act
1952-1960, and that therefore no action for infringement of a patent granted
under that Act can be brought against
him in connexion with the use of the
invention in the construction of railway carriages or the constituent parts
for assembly into
railway carriages to be run in the railway system of the
State, such a use being in his submission a use for the service of the State.
(at p130)
15. Section 125 contains the following relevant provisions: "(1) At any time
after an application for a patent has been lodged at
the Patent Office or a
patent has been granted, the Commonwealth or a State, or a person authorized
in writing by the Commonwealth
or a State, may make, use, exercise or vend the
invention for the services of the Commonwealth or State." . . . "(3) Authority
may
be given under sub-section (1) of this section either before or after a
patent for the invention has been granted, and either before
or after the acts
in respect of which the authority is given have been done, and may be given to
a person notwithstanding that he
is authorized directly or indirectly by the
applicant or patentee to make, use, exercise or vend the invention." . . .
"(5) Subject
to sub-section (2) of this section, where a patented invention is
made, used, exercised or vended under sub-section (1) of this section,
the
terms for the making, use, exercise or vending of the invention are such terms
as are, whether before or after the making, use,
exercise or vending of the
invention, agreed upon between the Commonwealth or the State and the patentee
or, in default of agreement,
as are fixed by the High Court." . . . "(7) An
agreement or licence (whether made or given before or after the commencement
of this
Act) fixing the terms upon which a person other than the Commonwealth
or a State may make, use, exercise or vend an invention is
inoperative with
respect to the making, using, exercising or vending of the invention, after
the commencement of this Act, under
sub-section (1) of this section, unless
the agreement has been approved by the Attorney-General of the Commonwealth or
of the State."
. . . "(8) No action for infringement lies in respect of the
making, use, exercise or vending of a patented invention under sub-section
(1)
of this section." (at p131)
16. Section 132 provides: "In this Part" (which begins with s. 125)
"references to the Commonwealth include references to an authority
of the
Commonwealth and references to a State include references to an authority of
the State." (at p131)
17. The question in relation to the defendant Commissioner, therefore, is
whether it is as clear as the authorities to which I have
referred require it
to be if there is to be a summary dismissal of the plaintiff's action against
him, that the Commissioner is an
authority of the State for the purposes of Pt
XIV of the Patents Act and that his use of the invention, of which the
plaintiff complains,
is a use for the service of the State. (at p131)
18. Section 3 of the Transport (Division of Functions) Act, 1932- 1956
creates a Ministry of Transport under the Minister for Transport
and provides
that it shall be divided into departments which include the Department of
Railways, to be administered by the Commissioner
for Railways. By s. 4 the
Commissioner is made a body corporate and for the purposes of any Act is to be
deemed a statutory body
representing the Crown. He is not to be removed from
office except on the resolution of each House of the State Parliament: s. 11.
The property of the railway system is vested in him: s. 11, Government
Railways Act, 1912- 1957; s. 9, Ministry of Transport Act,
1932-1950; and s. 4
Transport (Division of Functions) Act, 1932-1956. He collects and receives the
revenues of the railway system
on behalf of the Crown and pays them into the
Government Railways Fund established in the State Treasury (see ss. 14, 41B
and 41C
of Government Railways Act), a fund which is subject to the Audit Act,
1902 and which shares certain financial benefits and burdens
of the State as
if it had continued to form part of the Consolidated Revenue Fund. All moneys
appropriated for the maintenance or
management of the railways and vested by
the Government Railways Act in him are to be expended under his control and
management:
s. 13, Government Railways Act. In s. 4 of the Government Railways
Act the Commissioners - to whose position the defendant Commissioner
has
succeeded - were nominated as the "authority" to carry out the Government
Railways Act. (at p132)
19. The result of these provisions is that the Commissioner is in charge of a
sub-department of government under the direct control
and direction of a
Minister of the Crown. That subdepartment is to manage and control the railway
system of the State, a function
historically connected with government in New
South Wales. He collects its revenues for the State and pays them into a
Treasury fund;
and he has the control and management of moneys appropriated by
Parliament for the running of the railway system. (at p132)
20. There is no direct judicial precedent for deciding that the Commissioner
is an "authority" of the State for such purposes as
those of s. 125 of the
Patents Act. It has been decided that the Commissioner for Railways is so far
identified with the Crown as
not to be bound by Fair Rents legislation (see
Wynyard Investments Pty. Ltd. v. Commissioner for Railways (N.S.W.)
[1955] HCA 72
; (1955) 93
CLR
376) and that in certain other respects he is entitled to the privilege or
protection which the law accords the Crown;
see Skinner
v. Commissioner for
Railways (1937) 37 SR (NSW) 261; 54 WN 108. But, to my mind, these authorities
are not decisive of
the present
question which is whether in the Commonwealth
statute dealing with patents for inventions the expression "an authority
of
the State"
embraces the Commissioner for Railways. That he has some of the
immunities of the Crown and is not bound by some statutes
may be
elements for
consideration but cannot be conclusive. Perhaps the judicial decision most
relevant to answering this question
is Electricity
Trust of South Australia v.
Linterns Ltd. (1950) SASR 133 where Ligertwood J. held that the Electricity
Trust of South
Australia
was an "instrumentality" of the Crown within the
meaning and operation of the Landlord and Tenant (Control of Rents) Act,
1942-1949
of South Australia. His Honour rightly perceived the inadequacy for
this purpose of merely deciding that the Electricity
Trust was
entitled to the
immunities of the Crown. He adopted the view that an "instrumentality" is that
which serves or is employed
for some
purpose or end, a means, an agency. He
applied this view in the following passage: "The Trust, in my opinion, exactly
fits
this conception.
By virtue of s. 15 of the Electricity Trust of South
Australia Act, the Crown is the owner of the undertaking for
the supply of
electricity
and the mining of coal in South Australia. The Trust serves the
purposes of the Crown in managing the undertaking
and in making electricity
and coal available for the public. It exercises its functions on behalf of the
Crown and is the means or
agency for managing the
Crown assets. It is not the
servant or agent of the Crown because it has independent powers and is not
subject
to the control of
the Govenor in Council or any Minister of State.
Nevertheless, it is an instrumentality or agency of the Crown,
because it
serves
the purpose of the Crown in managing Crown assets in the interests of
the public." (1950) SASR, at pp 139, 140
But his Honour's conclusion
that the
Electricity Trust was an instrumentality of the Crown turned of course on the
statute his Honour
was construing and the
nature of the functions performed by
and the relationship of the statutory body to the Crown and to its revenues.
The concept of
an "instrumentality" accepted by his Honour in that case is not
identical with the concept of an authority of the
State for present
purposes
though the two concepts may have some common elements and be closely allied.
Thus, though the considerations
which weighed
with his Honour in that case
have their relevance here, they are not decisive. (at p133)
21. The evident purpose of s. 125, having regard to sub-s. (7), is to ensure
that the Governments of the Commonwealth and of the
States have the invention
available to them for the benefit of the services of the respective
Governments at once, rather than at
the end of the term of the letters patent.
Under s. 132 the Patents Act recognizes that in Australia those services are
managed or
performed, not exclusively by departments of government, but as
well by "authorities" of the Commonwealth or State. Cf. Patents Act,
1949
(U.K.), s. 46. Sub-section (8) of s. 125, in providing that no action for
infringement shall be brought for what would otherwise
be an infringement of
the letters patent, emphasizes the clear intention of sub-s. (1) and with
sub-s. (7) provides a means of securing
the untrammelled use of the invention
by the Governments and the authorities of the Commonwealth and of the States.
On the other
hand, sub-ss. (5) and (6) ensure that proper compensation shall
be paid to the owner of the letters patent for the acts of a Government
or an
authority of Commonwealth or State which makes use of the invention. (at p134)
22. The railway system of the State is, in my opinion, undoubtedly a service
of the State and the use of the invention in the construction
of railway
carriages to be used by the Commissioner in that railway system is a use for a
service of the State or for the services
of the State within the meaning of
the expression in the Patents Act 1952, whichever may be the proper way to
read the final words
of s. 125(1). One could scarcely imagine that sections
such as ss. 125 and 132, with their evident practical purpose, did not extend
to include within the expression the use of the services of the Commonwealth
or State, the use of an invention for the purposes of
one of the Government
railway systems in Australia. (at p134)
23. In the case of the Commissioner, therefore, there are present not merely
the circumstances to which I have already called attention,
but the asset of
the State which is under his control and management, subject to Ministerial
direction, is itself for relevant purposes
a service of the State. (at p134)
24. All these factors combine, in my opinion, to require the answer that the
Commissioner is an authority of the State within the
meaning of ss. 125 and
132 of the Patents Act. I am also of opinion that the use by the Commissioner
- if his contracting with the
other defendants in the circumstances amounts to
a use of the invention by him, as indeed the plaintiff claims - is a use for
the
services or for a service of the State, within the meaning of those
sections. These conclusions are, in my opinion, of that clear
and definite
nature which is requisite if an order based on them is to be made denying the
plaintiff a right further to proceed with
its claim against the Commissioner.
(at p134)
25. It follows that I am fully convinced to the requisite degree that the
Commissioner's acts in relation to the invention for which
the plaintiff holds
letters patent and of which the plaintiff complains are covered by s. 125
aided by s. 132, and that the plaintiff's
action for infringement is precluded
by s. 125 (8). Accordingly, I hold that the plaintiff's statement of claim
does not disclose
a cause of action against the defendant Commissioner and
that its action against the defendant Commissioner ought not to be allowed
to
proceed. (at p135)
26. I should mention that during the hearing of the summonses the question
was raised whether the plaintiff's action could be converted
into a claim for
compensation under sub-s. (5) of s. 125 but it seemed clear that this course
was not open. (at p135)
27. I turn now to the position of the contractors to the Commissioner who are
co-defendants in these applications. Again I deal
first with submissions based
on Order 26, r. 18. Confining myself to the plaintiff's statement of claim,
which in case of ambiguity
must be read, to use the pleader's convenient
phrase, against him, I observe that the plaintiff, in pars. 10, 13 and 14 of
the statement
of claim, which I have abstracted in the opening portion of
these reasons, says that the agreements made between the Commissioner
and the
other defendants call for and require the use of the plaintiff's invention.
These paragraphs allege that the Commissioner
has contracted with each of the
other defendants to manufacture the invention and use it as part of complete
railway carriages for
use by the Commissioner on the railway system of the
State. I do not think these paragraphs merely say that the agreement with the
Commissioner requires the doing of acts which happen because of the manner in
which the other defendants have chosen to perform them
to infringe the letters
patent. I read them as saying that the agreement stipulates the use of a
coupling which necessarily infringes
the letters patent, whether knowingly or
inadvertently being immaterial. (at p135)
28. No doubt in the case of a contract with an authority of a State for
manufacture or for supply of an article, it may be that
the contractual terms
leave the contractor with such a choice as to his method and design of
manufacture that he is free to perform
the contract without infringing an
invention, or it may be that, as I think it is here, the contractual terms
require the very act
which amounts to an infringement of some patentee's
letters patent. In the former case it would seem that the contractor needs
some
written authority to make use of the invention. In the latter case the
contract itself being in writing is a sufficient authority.
Pyrene Co. Ltd. v.
Webb Lamp Company Ltd. (1920) 37 RPC 57, at p 65; Aktiengesellschaft fur
Autogene Aluminium Schweissung v. London
Aluminium Co. Ltd. (No. 2) (1923) 40
RPC 107, at pp 116, 117 (at p136)
29. In the absence of written authority, where the contract itself is
insufficient as such an authority, express or implied, the
contractors may be
held to infringe the patent, whereas the act of the Commissioner in
contracting for the infringement or otherwise
using the invention does not
itself amount to an infringement: see Dixon v. London Small Arms Co. (1875) LR
10 QB 130 But the present
is not a situation such as gave rise to that case
and this for two reasons; first, these are contracts for manufacture and not
for
sale or supply, and the contracts do require the infringement. In Dixon v.
London Small Arms Co. (1875) LR 10 QB 130 the contract
was for the sale by the
manufacturer to the Crown of rifles which undoubtedly by their specification
would infringe the letters patent.
Cockburn C.J. did reserve the question
whether the Crown might not employ the manufacturer, in which case he believed
there would
be a totally different situation from what the Court was there
considering, see (1875) LR 10 QB, at p 133 . But Cockburn C.J. and
Lush J.
thought the transaction there was one of sale and not for manufacture. (at
p136)
30. By contrast, in this case, as I have mentioned, according to the
plaintiff's allegations in the statement of claim, the agreements
themselves
require the other defendants to manufacture and in such manufacture to do that
which amounts to a use of the invention.
I conclude that the plaintiff's claim
is that the other defendants were authorized by the Commissioner, whom I find
to be an authority
of the State, to use the invention, i.e. to make a railway
vehicle body and truck central bearing of a design which in fact incorporates
the plaintiff's invention. (at p136)
31. The remaining question is whether the agreements between the Commissioner
and those defendants respectively were in writing;
for s. 125 calls for an
authority in writing. The agreements are not expressly said by the statement
of claim to be in writing. Can
I infer from the statement of claim that the
agreements between the defendant Commissioner and the other defendants were in
writing
and do so with the requisite certainty to warrant my dealing summarily
with the action against the second and third defendants? This
has given me
some pause because of the degree to which the absence of a cause of action
must be demonstrated if an action is to be
halted at the very threshold. (at
p136)
32. It is, of course, highly unlikely, apart from statutory provisions, that
agreements dealing with so complicated a matter as
the manufacture of railway
carriages should be made by parol. However, s. 22 of the Government Railways
Act, 1912, in empowering
the Commissioners to contract for any authorized work
or any other matter or thing necessary for enabling them to carry the purposes
of the Act into full effect, required the Commissioners to contract in writing
specifying, inter alia, the work to be done and the
materials to be furnished.
The manufacture of such items as railway carriages and their components
clearly falls within this section.
It seems to me, therefore, that although
the statement of claim does not say that the defendant Commissioner duly
contracted with
the other defendants, and although it may not be that in every
situation one can presume regularity for purposes such as those on
which I am
presently engaged, the combination of the statutory requirement and the high
degree of improbability that agreements such
as those referred to in the
statement of claim should be made by parol enables me to conclude with the
necessary certainty that the
agreements by the Commissioner with the other
defendants were each in writing. I do so conclude. I am therefore satisfied
with the
requisite certainty that the plaintiff's statement of claim does not
disclose a cause of action against either of those defendants.
(at p137)
33. Having reached this conclusion, it is unnecessary for me to consider
whether or not, had I not been of this opinion, I should
have concluded that
the statement of claim, together with the evidentiary material in the
affidavits, was sufficient to warrant my
taking action under the inherent
jurisdiction of the Court. Consequently I express no opinion on the adequacy
of the written authorities
as proved by the affidavits or upon the
consequences, if any, of their having been given after the date of the
commencement of the
action. (at p137)
34. Order 26, r. 18, authorizes me to strike out a pleading which does not
disclose a reasonable cause of action. I am satisfied
that the plaintiff's
statement of claim does not do so. It seeks to restrain an infringement of the
plaintiff's letters patent in
stated circumstances which preclude the
plaintiff having such a cause of action against any of the defendants.
Accordingly, I strike
out the whole of the plaintiff's statement of claim. (at
p137)
35. Rule 18 further authorizes me, if I consider it just so to do, to stay or
to dismiss the plaintiff's action. This is not a case
in which the plaintiff
by amendment of the pleading could improve its position. I have been mindful
throughout my consideration of
this matter of the principles to which I have
called attention and which govern the exercise of the power summarily to
terminate
an action. I have reached the firm conclusion that consistently with
those principles I ought to intervene by order under this rule
to prevent
further proceedings in the action, as, in my opinion, to use one of the
expressions which I have quoted, the plaintiff's
claim is "manifestly
groundless" and that to allow it to proceed "would involve useless expense".
In my opinion the proper course
is to dismiss the plaintiff's action, which I
now do. (at p138)
36. My order is that I strike out the whole of the plaintiff's statement of
claim and dismiss the plaintiff's action with costs.
The plaintiff's remedy,
if any, for the acts it complains of is for compensation under sub-s. (5) of
s. 125. (at p138)
ORDER
In each summons strike out the whole of the plaintiff's statement of claim
and dismiss the plaintiff's action with costs.
APPENDIX OF CASES
Metropolitan Bank v. Pooley (1885) 10 App. Cas. 210. Republic of Peru v.
Peruvian Guano Co. (1887) 36 Ch.D. 489, at p. 496. Wall v.
Bank of Victoria
Ltd. (1890) 16 V.L.R. 2. Lawrance v. Norreys (1890) 15 App. Cas. 210, at p.
219. Attorney-General of Duchy of Lancaster
v. London and North Western
Railway Co. (1892) 3 Ch. 274. Kellaway v. Bury (1892) 66 L.T. 599. Healey v.
Bank of New South Wales
(1898) 24 V.L.R. 405. Hubbuck & Sons v. Wilkinson,
Heywood & Clark (1899) 1 Q.B. 86. Goodson v. Grierson (1908) 1 K.B. 761.
Burton
v. President and Councillors of Shire of Bairnsdale
[1908] HCA 57
; (1908) 7 C.L.R. 76,
at p. 92. Dyson v. Attorney-General
(1911) 1 K.B. 410. Mayor
& Councillors of
City of London v. Horner (1914)
111 L.T. 512. Wright v. Prescot Urban District
Council
(1917) 115 L.T. 772. Agar
v. J.C. Williamson Ltd. (1920) 42 A.L.T. 98.
Dey
v. Victorian Railways Commissioners
[1949] HCA 1
; (1949)
78 C.L.R. 62. Kemsley v. Foot
(1951)
2 K.B. 34.
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