FEDERAL COURT OF AUSTRALIA

Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd [2001] FCA 235

PRACTICE AND PROCEDURE - patents - discovery in revocation proceedings - general principles - discovery in relation to documents produced after the priority date - discovery in relation to documents relating to creating the invention

Federal Court Rules O 15

Practice Note 14

The Wellcome Foundation Limited v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 applied

Lubrizol Corp Inc v Imperial Chemical Industries plc [2000] FCA 1464 cited

F Hoffman-La Roche A G v Chiron Corporation (2000) 47 IPR 516 applied

Vickers plc v Horsell Graphic Industries Ltd [1988] RPC 421 applied

GAMBRO PTY LIMITED AND GAMBRO AB v

FRESENIUS MEDICAL CARE AUSTRALIA PTY LIMITED, FRESENIUS MEDICAL CARE AUSTRALIA PTY LIMITED (CROSS-CLAIMANT), GAMBRO AB (FIRST CROSS RESPONDENT) AND GAMBRO PTY LIMITED (SECOND CROSS RESPONDENT)

NG 474 OF 1997

TAMBERLIN J

SYDNEY

12 MARCH 2001

THE COURT ORDERS THAT:

1.         The following categories of discovery be made:

Category 1

All documents brought into existence before the priority date which record, constitute or refer to any research or studies carried out before that date in relation to:

(a)        preparation of dialysis fluids (in particular, dissolving of hardly soluble bicarbonate into a highly concentrated liquid);

(b)       chemical stability of dialysis fluids (in particular, shelf life of the liquid concentrate, CO₂ loss, precipitation);

(c)        sterility of dialysis fluids (in particular, bacterial growth in the liquid concentrate and connecting tubes which may give rise to endotoxins crossing the dialysis membrane and unauthorised use); and

(d)       transport, handling, storage and disposal of dialysis fluids and containers.

to the extent that such research or studies were carried out in the course of making the invention claimed.

Category 6

All layouts, flowcharts and service manuals relating to dialysis machines or systems manufactured by the First Applicant or any licensee or any related Body Corporate of the First Applicant and sold prior to the priority dates which were themselves published before the priority date.

Category 7

All documents concerning any test performed by, at the request of, or on behalf of the Applicants to evaluate or determine the validity, enforceability or infringement by anyone of the Patent.

2.         Cost of this application are reserved.

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

REASONS FOR JUDGMENT

1                     In this matter the applicants seek declarations against the respondent that the respondent has infringed an Australian patent in relation to dialysis machines and associated products.  In its Amended Defence the respondent attacks the validity of the patent on a wide range of grounds.  These comprise lack of inventive step; lack of utility; sufficiency of description of the invention including the best method for performing the invention; and lack of fair basis.

2                     The aspect of the dispute presently before me concerns categories of discovery.  The relevant provision of the Federal Court Rules (“FCR”) is O 15 rr 2 and 3 which relate to discovery on notice. Also relevant is Practice Note No 14 which notifies practitioners that the Court does not order general discovery as a matter of course, but is concerned with the necessity for discovery and the limitation, subject to appropriate considerations, of the extent and nature of discovery.  The Note, which is designed to avoid unnecessary expense and waste of time by unduly exhaustive discovery, also indicates that in cases where there are many documents discovery should be given in stages with liberty to apply for further or broader discovery if a need for this can be substantiated.  The Note adds that discovery will ordinarily be limited to the documents required to be disclosed by O 15 r 2(3) which provides:

“(3)     Without limiting rules 3 or 7, the document required to be disclosed are any of the following documents of which the party giving discovery is, after a reasonable search, aware at the time discovery is given:

(a)       documents on which the party relies; and

(b)       documents that adversely affect the party’s own case; and

(c)        documents that adversely affect another party’s case; and

(d)       documents that support another party’s case; and

(e)        documents that the party is required by a relevant practice direction to disclose.”

Present dispute

3                     This dispute concerns three categories of documents.  The parties have quite sensibly reduced their dispute to a narrow compass.  The dispute turns on the wording which is sought to be added by the applicant to limit the extent of discovery in respect of three categories.  The words the applicants seek to add are set out in bold below.  These are:

“Category 1

All documents brought into existence prior to 6 February 1989 which record, constitute or refer to any research or studies carried out before the priority date in relation to:

(a)       preparation of dialysis fluids (in particular, dissolving of hardly soluble bicarbonate into a highly concentrated liquid);

(b)       chemical stability of dialysis fluids (in particular, shelf life of the liquid concentrate; CO₂ loss, precipitation);

(c)        sterility of dialysis fluids (in particular, bacterial growth in the liquid concentrate and connecting tubes which may give rise to endotoxins crossing the dialysis membrane and unauthorised use); and

(d)       transport handling, storage and disposal of dialysis fluids and containers.

to the extent such research or studies led to the invention claimed in the Patent.

Category 6

All layouts, flowcharts and service manuals relating to dialysis machines or systems manufactured by the First Applicant or any licensee or any related Body Corporate of the First Applicant and sold prior to the priority dates which were themselves published before the priority date.

Category 7

All documents concerning any test performed by, at the request of, or on behalf of the Applicants to evaluate or determine:

(a)       the validity or enforceability of the Patent on  any of the grounds particularised by the Respondent; or

(b)       the infringement by the Respondent of the Patent.” (Emphasis added)

Reasoning

4                     In relation to the Category 1documents the respondent resists the proposed limitation and submits that to restrict the category by addition of the words in bold print would be artificial because it is possible that the patentee had projects in the four specified areas in circumstances where not all of them led to the invention.  An alternative wording is suggested by the respondent.  It submits that the limitation could be made less restrictive by substituting a limitation to the effect that the research or studies be limited to those “in the course of which the invention was made.”

5                     The restrictive wording for which the applicants contend is similar to that referred to in the High Court decision in The Wellcome Foundation Limited v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 287 where Aickin J, with whom the other members of the Court agreed, said after a detailed review of the authorities:

“… I have concluded that evidence of research and experiments (if any) of a patentee leading up to his claimed invention is generally admissible though not always likely to be helpful,” (Emphasis added)

6                     However, his Honour added at 287-288:

“So far as discovery of documents is concerned, the test is wider than the test of admissibility. …  It may be that in many cases documents recording such research and experiment could properly be said to relate solely to the inventor’s own case but that ground for refusing discovery is no longer available in New South Wales….” (Emphasis added)

7                     In the present case I consider that the latter observations of by Aickin J are apposite. The documents which should be discovered in this matter should have some relationship with the invention in dispute.  As submitted Category 1 is too open-ended in that it makes no reference to the invention.  However, it is too restrictive to limit the material to research or study which led to the invention.  More appropriate wording should be used to expand it to research or studies in “the course of which the invention was made”.  This wording does not require a decision by the party making discovery that the material in fact led to the invention.   It is not dissimilar to the criterion of documents “relating to” referred to by Branson J in Lubrizol Corp Inc v Imperial Chemical Industries plc [2000] FCA 1464 at par 32 in that it requires a connection with the making of the invention which is wider than that required for admissibility.

8                     In relation to the other suggested limitation of the Category 1discovery namely that it be limited to documents concerning research “carried out not later than the priority date” I consider that the comments of Burchett J in F Hoffman-La Roche A G v Chiron Corporation (2000) 47 IPR 516 at 521 are applicable.  His Honour there said:

“Where an order for discovery is made by a patentee, on the issue of obviousness, of documents relating to research and development in respect of the invention, Wellcome Foundation is authority for the proposition that the discovery should be limited to the period ending at the priority date.”  (Emphasis added)

9                     In this case the discovery sought is discovery by the patentee.  I respectfully agree with his Honour’s remarks and therefore consider that these words of limitation should form part of the order.

10                  In relation to the Category 6 documents, the respondent says that the wording should not be restricted because as drafted it would cover documents published after the priority date which may refer to or contain material about dialysis machines or systems where such material was available before the priority date.  It is therefore said that such documents would be relevant to the state of the art before the priority date because they could lead to a line of inquiry which may identify documents published before that date which could be relied on by the respondent.

11                  In my view the limitation sought to be imposed by the applicant is appropriate.  It is a matter of pure conjecture that there may be publications in existence published after the priority date in the possession of the applicants which refer back to other pre-priority date publications which in turn may assist the respondent.  The priority date is the critical date.  The category is also very wide because there is no limitation on the period over which the documents published after the priority date might have come into existence.  On the face of it, identification of these documents could be an onerous task which may be unwarranted in the absence of any evidence to the effect that there are any such documents of this type in existence.  The respondent is in effect requiring the applicant to carry out its research for it.  I am persuaded that the words of limitation pressed are appropriate and that the category should be so restricted by addition of the words in bold.

12                  In relation to Category 7the respondent submits that the restrictions sought would deprive the respondent of documents which may assist it in determining:

“… the line which may be taken in connection with the defence to the attack upon the validity which is going to be put forward.  They disclose the approach to the issue of infringement.”

13                  The above quotation is from the judgment of Whitford J in Vickers plc v Horsell Graphic Industries Ltd [1988] RPC 421 at 423 where his Lordship, after referring to the general desirability of discovery of documents, went on to add:

“On the other hand, it is of equal significance to avoid unnecessary discovery with the consequent endless duplication of papers which at the end of the day nobody bothers to refer to and which have merely been discovered because it is felt cheaper to discover everything, photocopying being cheaper than a consideration of the relevance of any particular material which can be photocopied.”

14                  These remarks were cited with approval by Burchett J in Hoffman-La Roche.

15                  In my view the statement by Whitford J in the passage first quoted are appropriate in the present case.  Such documents could assist the applicants’ defence to the attack on validity advanced by the respondent.  They should not be restricted to the period before the priority date.  This line of inquiry formulated in this Category differs from that in Category 6 because the line of inquiry is more specific.  Accordingly, the words of limitation in bold, sought to be imposed, are not appropriate, in relation to this category.

16                  The costs of this application are reserved.

Associate:

Dated:              12 March 2001