FEDERAL COURT OF AUSTRALIA

Visible Results Properties Inc v Sushi Train (Australia) Pty Ltd [2004] FCA 1720

Visible Results Properties Inc & ANOR v Sushi Train (Australia) Pty Ltd

NSD 460 of 2004

ALLSOP J

8 DECEMBER 2004

SYDNEY

THE COURT ORDERS THAT:

1.             On or before 31 January 2005 the applicants file and serve:

a.       any amended statement of claim, reply and defence to cross-claim if consent to the form of the amended statement of claim, reply and defence to cross claim has previously been obtained; or

b.      any notice of motion to amend the statement of claim, reply and defence to cross claim, if consent is not forthcoming previously requested;

c.       all evidence on the question of the entitlement of the applicants or either of them to sue taking into account the comments and criticisms made by the solicitors for the respondent in correspondence;

d.      a submission settled by counsel dealing with the comments and criticisms and particulars raised by the respondent in relation to the question of parties, title to sue and the licence agreement.

2.             On or before Thursday, 23 December 2004, the applicants provide an indexed bundle of documents, if there be any, concerning any test performed by or at the request of or on behalf of the applicants or either of them to evaluate or determine the validity or enforceability of the patent based on its novelty as particularised by the respondent to the extent that there is no claim for privilege made in respect of such documents.

3.             The matter be stood over to directions on 8 February 2005 at 10.30a.m. (Sydney time).

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

REASONS FOR JUDGMENT

1                     This matter has been called on for directions today.  I accept implicitly, in particular for interstate practitioners (whether they be New South Wales practitioners practising interstate or other state practitioners when their case is being run from a docket in Sydney) that there is an inherent difficulty in the docket system which should be at all times appreciated by Judges of this Court and practitioners: that is, the almost necessary idiosyncrasy that the individual docket system brings about.  Judges attempt at all times to bring consistency to bear.  The different expectations of practitioners and Judges within one city, let alone across a country sometimes must be recognised. However, that said, I want to say something and I will not say it again in those proceedings.  I thought I had made myself fairly plain on the last occasion. I evidently did not.  I sought to make clear that my docket will run in a particular way.  It will be run on a foundation when the matter is between represented parties that the parties will conduct the litigation in the following way.

2                     First, I expect a significant degree of professional co-operation between the parties’ representatives.  A significant factor, which undermines such co-operation, is the requirement to deal with unnecessarily long detailed and combative correspondence.  The telephone is very often a useful method of communication between intelligent practitioners. 

3                     Secondly, I expect that correspondence detailing complaints be kept to a minimum conformable with the attempt co-operatively between practitioners to deal with issue before the necessity to write letters comes about. 

4                     Thirdly, the facility provided by the Court for liberty to apply for directions is not a licence for motions to be brought on without leave at the choice of one of the parties.  In particular, in relation to that I have indicated in the past that I do not wish to have formal motions filed, wholly out of a desire to limit the costs to the parties which the Executive sees fit to levy on litigants for bringing motions to this Court.  However, a docket system cannot run and practitioners cannot be expected efficiently to deal with material that simply pours through the fax machine for a directions hearing relevant only apparently to a notice of motion.

5                     There appear to be two issues between the parties and I am not sure whether they are matters of dispute in full as yet.  The first is what may be a fundamentally important point in this litigation and that is the status of the applicants to sue or the title of the applicants to sue in these proceedings based on the existence of a licence agreement in a particular form.  Correspondence has taken place about that, to a degree, unfortunately, correspondence of the kind to which I earlier referred. 

6                     Notwithstanding my views on the form of that correspondence it does appear at first blush to raise significant issues, which the applicants will need to address.  To do that I propose to order the following:

1.             On or before 31 January 2005 the applicants file and serve:

a.       any amended statement of claim, reply and defence to cross-claim if consent to the form of the amended statement of claim, reply and defence to cross claim has previously been obtained; or

b.      any notice of motion to amend the statement of claim, reply and defence to cross claim, if consent is not forthcoming previously requested;

c.       all evidence on the question of the entitlement of the applicants or either of them to sue taking into account the comments and criticisms made by the solicitors for the respondent in correspondence;

d.      a submission settled by counsel dealing with the comments and criticisms and particulars raised by the respondent in relation to the question of parties, title to sue and the licence agreement.

7                     I would expect the evidence to which I have referred would deal with in some manner, if it is thought appropriate with material of a kind made relevant by cases such as Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, Prenn v Simmonds [1971] 3 All ER 237and Royal Botanic Gardens and Domain Trust v South Sydney City Council  (2002) 186 ALR 289.  That is, material being the factual matrix or background to understanding the licence agreement.  I would also expect, if it is not implicit in what I have already said, that the submissions settled by counsel will provide such further appropriate particulars as are not otherwise contained in the existing pleading or draft or proposed amended pleading.

8                     The second issue, which appears to be agitating the parties, is the question of discovery.  There is no notice of motion filed but that is conformable with what I have previously indicated to be the appropriate approach.  However, the respondents appear to be working on the assumption that orders will be made today in relation to discovery. 

9                     I do not propose to make programming orders in relation to discovery in the respects claimed.  What I propose to do is to identify what seems to me to be the position in relation to the discovery sought.  Parties can consider what I have said and if a view is held by either party that further orders need to be made they can be applied for but they will be applied for after the evidence is filed.

10                  The first class of documents sought by paragraph 1 of the letter of 26 November 2004 is all user operation manual instructions and other documents otherwise described in paragraphs (a) and (b) of that letter.  There appear to be two bases put forward for this documentation:  first, that it is Codelfa or Prenn v Simmonds material to understand the licence agreement.   If it goes to that, the production of those documents or request for those documents can await the evidence-in-chief in complete form of the applicants upon which they will seek to rely to be filed by 31 January, together with any amended statement of claim, reply and defence to cross claim or draft thereof and submissions and particulars taking into account the comments of the respondent.  To the extent it is in some other basis I reject it.  This claim is for the infringement by the respondent's material of a patent.

11                  As to paragraph 2, once again, they are put on the same basis and I do not add anything further about the documents called for in paragraph 2 of the letter of 26 November. 

12                  As to paragraph 3 this is a call for all documents concerning any test performed by, at the request of, or on behalf of the applicants or either of them to evaluate or determine:

(a)     the validity or enforceability of the patent on the ground particularised by the respondent, or

(b)     the infringement of the patent by anyone or alternatively by the respondent.

13                  It is said in submissions what supports these calls are the cases of F. Hoffmann - La Roche AG v Chiron Corporation (2000) 47 IPR 516 at [16] and which itself refers to Haslam Co v Hall  (1887) 5 RPC 1, and Gambro Pty Ltd v Fresenius Medical Care (Australia) Pty Ltd [2001] FCA 35 at [3] and [12] to [15]. 

14                  The question of infringement is one to be tested by examining the impugned art against the patent.  What the applicants think about that is legally neither here nor there.  I am not interested in what the applicants’ solicitor or advisers thought about that as a question of infringement. I will come back to one matter in a moment.

15                  The question of validity raised by the cross-claim is one of novelty. That will depend upon reading the prior art and ascertaining whether all integers of the patent in suit have been anticipated.  There may conceivably be factual questions in relation to that but fundamentally it is a question of law or, if I may be permitted to use the expression, a question of mixed fact and law.  Again, I am not interested in what the applicants’ advisers at a time in the past thought about that. They may have been either right or wrong as a question of anticipation and infringement.  No authority cited or that I am aware of obliges me to order discovery in that regard. 

16                  However, there is a pleading of laches.  If it be the fact that there was a question of infringement tested at some time in the past and no steps have been taken, conceivably that may go to the question of laches at least in terms of preparation.  Further, there may be a question of costs, if I am of the view that the patent is otherwise bad for anticipation and if the applicants have come to that view themselves in the past.  However, I do not propose to order discovery on a question that contingently might arise as to costs.  The respondent can make such an application or issue a subpoena if it otherwise wins on the cross-claim on novelty and wishes to press some order for costs beyond the usual order.  As to the question of laches and the infringement that is not the basis upon which if is pressed. However, I am prepared to indicate at this point that if there are tests in relation to infringement that are not the subject of a claim for privilege being tests of infringement by the respondent, subject to any question of oppression or costs, which can be raised by the applicants, those documents should be discovered.

17                  At the moment, in the exercise of my discretion in dealing with this case in my docket, on the basis of the orders that I have made as to the preparation of the matter by the applicants by 31 January I do not propose to make any order for discovery other than that which I have identified.  I propose to stand this matter over for directions to Tuesday, 8 February 2005.

18                  I will order that on or before Thursday, 23 December the applicants provide indexed photocopies of all documents, if there be any, concerning any test performed by or at the request of or on behalf of the applicants or either of them to evaluate or determine the validity or enforceability of the patent based on its novelty as particularised by the respondent to the extent that there is no claim for privilege made in respect of such documents, save for that I do not in the exercise of my discretion in managing this docket think it appropriate to make an order for discovery at this point.

19                  That is not to say that after parties have had an opportunity to examine the evidence of the applicants in relation to what might be called title to sue I will not revisit the matter if appropriate request is made.

20                  Three further housekeeping matters: First, for now, I will maintain, subject to the order I made about the notice of motion, the procedure whereby the parties do not need to file notices of motion unless ordered.  However, that does not mean parties have the entitlement to tell the other side that orders will be sought on a particular day at their convenience.  If the parties are agreed that it is convenient to them that the Court hear a dispute about a matter on a particular day, my associate can be contacted with an agreed communication making that request.

21                  Secondly, there is an affidavit of Mr Kay filed on 7 December 2004. It was held together by a bulldog clip with no stapling.  It has exhibits, one of which is confidential to the applicants. What I propose to do in relation to Mr Kay's affidavit is return it to the applicants and take it off the file with the direction, that the solicitor for the applicants return it by document exchange to the solicitor for the respondent.  It may be, in the fullness of time, we will need that affidavit, but given that it has confidential material I do not see why it should remain on the court file.

22                  Thirdly, unless there is some difficulty I do not see the need to put clients to the expense of filing affidavits of service of affidavits in the proceedings.  There is an affidavit of 26 October of Angela Zanetti serving two sealed copies of the affidavit of Mr Kay on Cutler Hughes and Harris.  That is an expense that the respondent should not have to bear.  If there is a question as to whether something has been received by the solicitor on the other side the telephone is the appropriate mechanism for ascertaining that.

Associate:

Dated:              23 December 2004