Trade Practices Commission v International Technology Holdings Pty Ltd & Ors [1995] FCA 502

CATCHWORDS

PRACTICES AND PROCEDURE - Discovery and inspection of documents - documents comprising communications between the respondents and patent attorneys - whether inadequate claim for legal professional privilege made.

Evidence Act 1995 (Cth) - ss 118 and 119

Patents Act 1952 (Cth) - s 55

Patents Act 1990 (Cth) - s 200(2)

Wundowie Foundry Pty. Ltd. v Milson Foundry Pty Ltd (1993) 44 FCR 474 Followed

Trade Practices Commission

v International Technology Holdings Pty. Ltd. & Ors.

QG 74 of 1994

Drummond J

Brisbane

10 July, 1995

IN THE FEDERAL COURT OF AUSTRALIA) No. QG 74 of 1994

QUEENSLAND DISTRICT REGISTRY )

GENERAL DIVISION )

BETWEEN: TRADE PRACTICES COMMISSION

Applicant

AND: INTERNATIONAL TECHNOLOGY HOLDINGS PTY. LTD.

(ACN 054 128 666)

First Respondent

AND: EUROPARK INTERNATIONAL PTY. LTD.

(ACN 062 455 556)

Second Respondent

AND: AUSTRALIAN TECHNOLOGIES PTY. LTD.

(ACN 054 711 081)

Third Respondent

AND: GARTH WILLIAM EATON

Fourth Respondent

AND: WILHELMINA FRANCISCA EATON

Fifth Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER: Drummond J

DATE OF ORDER: 10 July, 1995

WHERE MADE: Brisbane

THE COURT ORDERS THAT:

1. The applicant's application for access to the documents described in Part 4 of the respondents' verified list of documents is dismissed, save for:

(a) the patent attorneys' letter and enclosures of 21 July, 1994 in File 18;

(b) the patent attorneys' letter and enclosures of 15 September, 1994, the Patents Office letter of 22 September, 1994 and the first
part of the patent attorneys' letter of 26 September, 1994 in File 41; and

2. The matter be adjourned for further direction to 11 a.m. on 4 August, 1995.

3. The respondents pay the applicant's costs of and incidental to the hearing on 7 July, 1995 and today.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA) No. QG 74 of 1994

QUEENSLAND DISTRICT REGISTRY )

GENERAL DIVISION )

BETWEEN: TRADE PRACTICES COMMISSION

Applicant

AND: INTERNATIONAL TECHNOLOGY HOLDINGS PTY. LTD.

(ACN 054 128 666)

First Respondent

AND: EUROPARK INTERNATIONAL PTY. LTD.

(ACN 062 455 556)

Second Respondent

AND: AUSTRALIAN TECHNOLOGIES PTY. LTD.

(ACN 054 711 081)

Third Respondent

AND: GARTH WILLIAM EATON

Fourth Respondent

AND: WILHELMINA FRANCISCA EATON

Fifth Respondent

Coram: Drummond J

Date: 10 July, 1995

Place: Brisbane

REASONS FOR JUDGMENT

The respondents, who are all represented before me by the fourth respondent, claim in their list of documents that certain documents are protected from inspection by the Trade Practices Commission ("the Commission") by legal professional privilege. The documents are described in the respondents list in this way:

"All material embracing the development and/or specifications of the patentable subject matter within the Europark technologies."

The Commission contends it is entitled to access to them and that the claim made for privilege is inadequate to justify the privilege asserted. Recognising Mr. Eaton's concerns that Mr. Van der Horst, who once worked with the respondents while the technology was being developed, should not, for reasons of commercial confidentiality, have access to the documents, the Commission is prepared to offer the following undertaking:

"... until further order, the Commission will not disclose any documents or the information contained in those documents to anyone, including to Mr Van der Horst, save only to officers of the Commission involved in the conduct of the litigation, Commission legal advisers and one expert engaged by the Commission to assist in the conduct of the litigation."

That undertaking does not satisfy the respondents. Mr. Eaton failed to comply with my direction of 26 June, 1995 that he should by 7 July last, when the matter was argued, have served and filed, among other things, a brief summary describing each class of documents in Part 4 of the respondents' list of documents and why it was contended that each class should not be available for inspection by the applicant. However, without objection by any party, I have perused the documents in question.

The Commission sues for, among other things, an injunction to restrain the respondents from engaging in conduct in breach of ss. 52, 53(c) and (d) the Trade Practices Act 1974 (Cth) in the course of soliciting investments from the public in connection with the marketing of the Europark Mechanical Car-parking System in the development of which the respondents have been involved. The Commission's action was commenced on 19 July, 1994.

It is accepted by the Commission that legal professional privilege will be available to deny it access to the contents of any documents of the class referred to by the respondent, provided those documents were prepared for the dominant purpose of seeking or obtaining legal advice or for the dominant purpose of being used in contemplated or pending legal proceedings involving the respondents: see ss. 118 and 119 the Evidence Act 1995 (Cth).

Since my perusal of the respondents' material reveals that many of the documents in question comprise communications between the respondents and their patent attorneys with respect to the technology, s. 200(2) the Patents Act 1990 (Cth) is also relevant. This provision provides:

"A communication between a patent attorney and his or her client, and any record or document made for the purposes of such a communication, are privileged to the same extent as a communication between a solicitor and his or her client."

This section was considered by French J in Wundowie Foundry Pty. Ltd. v Milson Foundry Pty. Ltd. (1993) 44 F.C.R. 474. That was an action for infringement of a patent with a cross-claim for revocation. The applicants denied the respondents access to what they described in their list of documents as "design and development documents", in reliance upon this statutory head of privilege. His Honour said at 478 and 479:

"In Australia, the privilege [i.e., that provided for by s. 200(2) of the Patents Act] extends to communications passing between a patent attorney in his capacity as such and the patent attorney's client which would be privileged if the attorney were a solicitor. It is not limited to communications made in the course of conduct of activities under the Patents Act but covers the legitimate professional activities of a patent attorney.

...

[The privilege] operates only `to the same extent as a communication between solicitor and client. This suggests that records or documents made for the purpose of a privilege communication are only privileged if directly related to that purpose. There is a distinction to be made between records or documents which involve confidential communications between patent attorney and client and those which merely evidence various transactions.

While design and development documents in relation to a particular invention may be confidential, it does not follow from their nature that they are brought into existence for the purpose of communication with patent attorneys. It is true that ultimately such documents may form the basis of a brief to an attorney to prepare a patent specification. That does not place them in the category contemplated by s 200(2). They are not of themselves privileged communications, nor can it be said that they are made for the purposes of a privileged communication. Design and development documents are, by definition, necessarily related to the development of the invention. It is not to be assumed that all design and development documents are produced with a view to their incorporation into a patent specification or their transmission to patent attorneys for that purpose."

What his Honour said in the closing words of the passage I have read does not amount to a holding that design and development documents can never be the subject of patent attorney and client privilege. All that his Honour was saying was that a claim to privilege that stated the factual basis for the claim in terms limited to that particular descriptive phrase was insufficient to justify a claim of privilege. If design and development documents relating to an invention were made for the purpose of a communication between the patent attorney and the client, which was a confidential communication because it was prepared for the dominant purpose of seeking or obtaining the patent attorney's advice or for use in legal proceedings, they would be privileged from disclosure on discovery.

The form in which the respondents have made the claim for privilege is plainly insufficient, for the reasons given by French J, to justify that claim, but things have moved on. I have now perused the documents in respect of which the claim for privilege is made.

Apart from a fourth file of documents to which I will refer later, the documents here in question are contained in three numbered files which appear to be prepared by the respondents' patent attorneys and forwarded by those attorneys to the first respondent under cover of the attorneys' letter of 22 June, 1995, which reads in part:

"We refer to your letter of 21 June, 1995 requesting all files in our care in the name of International Technology Holdings Pty Ltd, Australian Technologies Pty Ltd, Europark International Proprietary Limited and Garth Eaton. We do not have any files in the name of Australian Technologies Pty Ltd, Europark International Proprietary Limited or Garth Eaton. You will find enclosed the following files listed below according to our file reference."

The documents contained in the file I will identify as File 48 post date the commencement of this action. They comprise a draft provisional patent specification forwarded by the patent attorneys to the first respondent for the attention of the fourth respondent with a request for the fourth respondent's comments so that they can be taken into account by the attorneys before preparing and lodging the patent application. I regard all these documents as having been brought into existence for the purpose of the respondents obtaining confidential advice from the patent attorneys as to the final form of the patent application. They are therefore privileged from disclosure.

The file I will identify as File 18 opened shortly before the commencement of this action with a letter from the patent attorneys to the first respondent for attention of the fourth respondent. It records the nature of the patent attorneys' retainer as being to prepare certain patent applications and it seeks information from the respondents to enable the patent attorneys to prepare those applications. The rest of the file comprises documents either constituting or recording communications between the attorneys and the respondents with respect to the progress of the preparation of the patent applications or with respect to the provision by the respondents to the attorneys of documents sought by them from the respondents for that purpose or with respect to the provision of advice by the attorneys to the respondents in connection with the preparation of the application. Another category of documents comprises communications between the patent attorneys, the respondents and the respondents' then solicitors, commencing on 26 August, 1994, concerning preparation done by those solicitors in connection with the present proceedings. In my view, all these documents are privileged, the former group as documents brought into existence for the purpose of the respondents' obtaining advice from their patent attorneys as to the final form of the patent application and the last-mentioned group as documents covered by legal professional advice on litigation privilege.

There is in this file a letter and enclosures from the patent attorneys to the first respondent for the attention of the fourth respondent dated 21 July, 1994 which records the result of patent searches carried out by the patent attorneys for the respondents. So far as I can see, this material only records an activity carried out by the patent attorneys for the respondents by way of a search of public records albeit in the general context of the patent attorneys' retainer. It may be relevant to the issues in the case and I would therefore regard it as discoverable, i.e., both the letter of 21 July, 1994 and the enclosures.

The file I identify as File 41 appears to open with a communication between the patent attorneys and the fourth respondent dated 14 September, 1994, forwarding to the fourth respondent a draft provisional specification dated 16 August, 1994. I infer that this was done for the purpose of providing confidential advice by the attorneys to the fourth respondent. This material appears to me to be privileged.

The file also includes a copy of a letter of 15 September, 1994 from the patent attorneys to the Commissioner of Patents enclosing a patent request form and other documents. This letter and the enclosures are not the subject of legal professional privilege, nor is the Patent Office's response of 22 September, 1994 or the first part of the patent attorneys' letter to the first respondent of 26 September, 1994. All this material must be disclosed since it is possible it may be relevant to issues in the action, unless s. 55 the Patents Act 1952 (Cth) is available to the respondents to justify non-disclosure. Other documents, including that part of the patent attorneys' letter to the first respondent of 26 September, 1994 to which I have referred and which I have highlighted in yellow, seem to me to be communications between the attorneys and the first respondent for the attention of the fourth respondent recording confidential advice by the attorneys to the respondents and are therefore privileged.

The fourth folder handed to me by Mr. Eaton I have marked with a capital A for the purpose of identifying it. This folder contains a number of loose documents, i.e., unlike the other three files, it does not appear to comprise what could be called a deliberately assembled file of documents dealing with a particular topic or topics. Some of the documents appear to be plainly privileged, for example, those constituting communications between the respondents' then solicitors relating to the preparation of witness proofs in connection with this action. The documents in this fourth file which I have marked in red ink with capital letters A through to capital K are privileged for these reasons. Others may not be privileged, although, depending on the purpose for which they were prepared and inserted in this folder, they may be privileged.

If the respondents wish to claim privilege for any of the other documents in this folder, they must by the next directions hearing file an affidavit identifying the factual basis upon which any such privilege claim is made. If they wish to claim that s. 55 the Patents Act 1952 (Cth) entitles them to refuse to disclose to the Commission the documents in File 41, i.e., the patent attorneys' letter of 15 September, 1994 to the Patents Office with enclosures and the Patents Office response of 22 September, 1994, they will also have to show that the requirements of s. 55 are satisfied with respect to those documents by the next directions date.

I certify that this and the preceding

nine pages are a true copy of the

reasons for judgment herein of the

Honourable Justice Drummond.

Associate:

Date: 10 July, 1995

Counsel for the applicant: Mr. M. O'Sullivan

Solicitors for the applicant: Australian Government

Solicitor

For all the respondents: Mr. G. Eaton

Date of Hearing: 7 July, 1995

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