FEDERAL COURT OF AUSTRALIA

Dyno Wesfarmers Ltd v Orica Australia Pty Ltd [1999] FCA 554

DYNO WESFARMERS LIMITED (ACN 003 269 010) AND DYNO NOBEL INC v ORICA AUSTRALIA PTY LIMITED (FORMERLY ICI AUSTRALIA OPERATIONS PTY LIMITED (ACN 004 117 828))

QG 47 OF 1996

DOWSETT J

23 APRIL 1999

BRISBANE

THE COURT ORDERS THAT:

1.         The proposed questions are inadmissible on the pleadings as they presently stand.

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

REASONS FOR JUDGMENT

1                     We have, for the whole of today, been concerned in arguing a question of admissibility of evidence arising out of questions asked of one of the respondent’s witnesses by counsel for the applicant.  The questions relate to the witness’s knowledge of incidents of supply by the respondent to other parties of AN emulsifier explosives mixed with urea, preliminary to a line of questioning which, I think it is common ground, would identify the frequency of such supplies.  This line of questioning was objected to by the respondent upon the basis that it was, in effect, going to incidents of alleged infringement of the patent, which issue has been separated in the conduct of the trial, so that I am presently only concerned with the question of validity of the patent.

2                     The applicant seeks to justify the line of questioning upon the basis that it is seeking to demonstrate industry acceptance of a product such as that the subject of the patent as a solution to a well-known problem in the explosives industry.

3                     Initially, this line of argument was justified by reference to the decision of Menzies J in Commonwealth Industrial Gases v MWA Holdings (1970) 180 CLR 160, especially at pp 163-4.  I will return to the case in a moment.  The applicant submits that such evidence as it proposes to lead may be relevant to prove inventiveness by analogy to that case and alternatively, may go to prove a new manner of manufacture within the meaning of the Statute of Monopolies.  The respondent replies to that submission by saying that the process of using such evidence is a complex one, requiring a detailed examination of the various transactions to ascertain precisely what they involved, and that in the circumstances, if the applicant intended to adduce such evidence, notice ought to have been given in its pleadings.

4                     It is clear that the CIG case does not deal precisely with the present position in that the cogent evidence to which Menzies J refers is evidence of copying by the defendant of the invention.  As was pointed out by Mr Bannon for the respondent, there has not been any suggestion in these proceedings that the respondent copied the applicant’s invention, the allegation of infringement not necessarily involving that allegation.

5                     I was referred to authority which seems to support the view that a defence of commercial success ought be specifically pleaded.  See the decision of Aldous J in John Deks Limited v Aztec Washer Company [1989] RPC 413.  However, there was a relevant rule requiring that notice be given where any party intended to rely upon the commercial success of the patent.  Both CIG and the question with which I am presently concerned relate to use by people other than the patentee of the patented invention.  The issue is therefore different from that in Deks, but there may be an analogy.

6                     As I have said, to attach any probative value to the evidence sought to be lead, it may well be necessary to examine each transaction in detail.  Good reason, therefore, underlies the English rule, and it is perhaps unfortunate that it presently finds no analogue in our rules.  Order 11 r 10, however, requires that any party plead a matter which, “if not specifically pleaded might take the other party by surprise.”  I have little difficulty in concluding that such is the present case, particularly given the fact that the issue of infringement has been separated.  It seems unlikely that anybody would have supported such separation if it were contemplated that the issues to be ventilated in any event included issues of apparent infringement.  The applicant responds by saying that it is not absolutely necessary that I decide whether there was an infringement in order to determine the admissibility of the evidence, and that may strictly be so, but it seems unlikely that the parties intended that such areas be canvassed at this stage.

7                     I should say that the transactions in question for present purposes are only those which have occurred since the priority date, 7 June 1990.  It is accepted that evidence of transactions before that date may be led.

8                     There are a number of other complications which I should mention.  The first is that at some stage, the respondent identified a possibility that the applicant might be going to lead evidence of commercial success of the patent and asked for particulars, which were provided.  The issue of commercial success is not unrelated to the issue with which I am presently concerned, although, as I have said, it is not the same issue.  Secondly, the respondent had planned to lead evidence from a witness called Williams, which included some paragraphs going to acts of supply after the priority date.  The applicant objected to those paragraphs as being irrelevant for present purposes.  The evidence has not been led for other reasons.  Thirdly, there were proceedings at a directions hearing before Cooper J in which various statements were made which may have been taken as implying that the applicants did not consider that any issue relating to the supplies after the priority date were likely to be canvassed at this trial.  However I do not place any weight upon that matter because it seems that the statements in question were capable of other explanations.

9                     In the circumstances, the matter falls to be determined having regard to the rules of pleading.  The material is arguably relevant although, as I have said, its use would not be a simple issue.  In all of the circumstances of this case, it seems likely to me that the evidence was, at the relevant time, of a kind which would take the respondent by surprise if not pleaded.  In those circumstances, I consider that intention to raise the issue of post priority date supply by the respondent ought to have been raised in a pleading so as to avoid the prospect of surprise.  In those circumstances, the proposed questions are inadmissible on the pleadings as they presently stand.

Associate:

Dated:              23 April 1999