Federal Court of Australia

EIS GmbH v LELO Oceania Pty Ltd (Expert Evidence) [2024] FCA 1334

ORDERS

THE COURT ORDERS THAT:

1.    Mr Michael Duff is not permitted to participate in the joint expert conferences concerning novelty and inventive step identified in the ‘Topics for Joint Expert Conferences’ marked ‘MFI-2’.

2.    The question of whether the Respondents/Cross-Claimants are entitled to rely upon [14]–[49] of the affidavit of Mr Michael Duff affirmed on 15 November 2024 at trial is reserved to trial.

3.    The Applicant/Cross-Respondent has leave to file any affidavit in reply to [14]–[49] of the affidavit of Mr Michael Duff affirmed on 15 November 2024, such affidavit to be filed and served by 6 December 2024.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DOWNES J:

1    The applicant, EIS GmbH (EIS), has brought patent infringement proceedings NSD 376 of 2023 against the respondents, LELO Oceania Pty Ltd and LELOi AB (LELO) and patent infringement proceedings NSD 1411 of 2023 against Calvista Australia Pty Ltd, one of LELO’s Australian distributors, with respect to eight products sold in Australia. The allegations of infringement concern certain claims of Australian patent number 2018200317. LELO denies infringement and cross-claims for revocation of the asserted claims. The dispute on validity includes (inter alia) allegations of lack of novelty and lack of inventive step.

2    The proceedings are set down for trial and will be heard together in February 2025, with evidence in one being evidence in the other.

3    EIS seeks the following orders:

(1)    Mr Michael Duff is not permitted to participate in the joint expert conferences concerning novelty and inventive step identified in the ‘Topics for Joint Expert Conferences’ provided to the Court on 13 November 2024;

(2)    LELO not be permitted to rely on [14]–[49] of the affidavit of Mr Michael Duff affirmed on 15 November 2024 at trial.

4    LELO seeks an order to the effect that Mr Duff be entitled to participate in the Joint Expert Conferences, which are scheduled to commence next week.

5    Because of the proximity of the conferences, the matter came on for an urgent case management hearing yesterday afternoon.

6    Mr Duff has affirmed 10 affidavits in this proceeding, all of which are sought to be relied upon by LELO at the trial which commences on 10 February 2025. The affidavit which is the subject of the proposed order is the ninth of these affidavits (Duff 9), and [14]–[49] of that affidavit is intended to be relied upon by LELO at trial as evidence ‘in reply’ on the issues of novelty and inventive step. LELO submits that Mr Duff has given evidence-in-chief on the issues of novelty and inventive step, and so, for this reason, it is entitled to rely upon this evidence.

7    However, it is not apparent that Mr Duff has in fact given expert evidence on the issues of novelty and inventive step for the following reasons:

(1)    the first four affidavits affirmed by Mr Duff did not contain the expert declaration required by r 23.13(1)(b) of the Federal Court Rules 2011 (Cth) or the acknowledgement required by r 23.13(ga) of the Federal Court Rules;

(2)    Mr Duff does not appear to have been specifically instructed to address those issues in any of the first eight affidavits;

(3)    there is a lack of clarity around the precise paragraphs of, and annexures to, Mr Duff’s affidavit material which are relied upon by LELO as being Mr Duff’s evidence-in-chief on novelty and inventive step. If there has been compliance with r 23.13(e), (f) and (g) of the Federal Court Rules and the Expert Evidence Practice Note (GPN-EXPT) at [5.2], those parts of Mr Duff’s affidavits which address these issues should be readily apparent, but they are not.

8    As to this last point, such clarity is required so that the trial judge, as well as the other party and its experts, knows the expert evidence that is being relied upon for particular issues.

9    As it has transpired, EIS proceeded on the basis that Mr Duff was not being called as an expert witness in relation to novelty and inventive step. The affidavit of Ms Irini Lantis, sworn 18 November 2024 and on which she was not cross-examined, was to the effect that the solicitors for EIS were taken by surprise that Mr Duff would be called as a witness on novelty and inventive step (being something which was only appreciated on 13 November 2024 when the proposed ‘Topics for Joint Expert Conferences’ was served), and that they have prepared for trial on the understanding that LELO was calling only one expert on these issues (being someone other than Mr Duff). I accept that evidence.

10    At the hearing yesterday, LELO relied upon an oral submission made by its senior counsel during the hearing of an application for an interlocutory injunction in December 2023 as providing notice to EIS of Mr Duff’s status as an expert on the issues of novelty and inventive step. That submission related to only one affidavit, being the first affidavit of Mr Duff (of which only four paragraphs are, in truth, arguably relevant to novelty and inventive step). Other oral statements made during later case management hearings were also relied upon to attempt to demonstrate that EIS had been made aware that Mr Duff was relied upon as an expert in relation to novelty and inventive step. I do not accept that these statements were sufficient to put EIS on notice.

11    In any event, any such submissions do not overcome the non-compliance with r 23.13 of the Federal Court Rules or the Expert Evidence Practice Note (GPN-EXPT) which serve the purposes described above.

12    Nor was it raised with me as the docket judge at any time since April 2024 (when I took over this matter) that LELO intended to call two experts in relation to novelty and inventive step. Had that proposition been raised, I would have raised a concern about the prospect of having two experts called by one party in relation to these same issues. As observed by Beach J in Novartis v AG Pharmacor Pty Ltd [2022] FCAFC 58; 290 FCR 345 at 351 [25], with which statement I respectfully agree, “the default position is that a party should not adduce expert evidence [in the context of patent litigation] from more than one expert in any single discipline, absent telegraphing its intention to do so to the opposite party and the Court at the earliest opportunity”.

13    The joint expert conferences are scheduled to commence next week. If Mr Duff is allowed to participate, the expert called by EIS on the topics of novelty and obviousness would need to review the first four affidavits of Mr Duff (which she has not seen), coupled with the impugned paragraphs of Duff 9, prior to the conferences. This is unsatisfactory for obvious reasons: the expert should not be required to absorb, consider and deal with evidence “on the run” in this way, especially as the affidavit material is somewhat opaque insofar as it purports to contain expert evidence concerning novelty and inventive step. Further, there is a real prospect that, with an additional expert and additional material before them, the three experts would have insufficient time to deal with the topics that they have been asked to address, which defeats the purpose of having the expert conclaves and will lead to inefficiencies at the trial.

14    LELO has an existing independent expert witness who has provided affidavit evidence on the issues of novelty and inventive step. It is not the case that, absent the evidence of Mr Duff, LELO will not have an expert able to attend the joint expert conferences on its behalf in relation to these issues.

15    EIS has forecast an intention to challenge Mr Duff’s independence (and I note that the expressed concern about Mr Duff’s independence has been raised before). While the determination of this challenge is a matter for trial, it is another factor which tells against Mr Duff’s participation in the conferences.

16    For these reasons, Mr Duff will not be permitted to attend the joint expert conference in relation to novelty and inventive step, and I will make the first order sought by EIS (with some modifications). It follows that Mr Duff will not be entitled to participate in the concurrent evidence session at trial relating to novelty and inventive step.

17    As to the second order which is sought, I will defer the issue of whether LELO is entitled to rely on [14]–[49] of Duff 9 until trial because it is premature to decide that issue at this stage.

18    I will grant leave to EIS to file and serve any affidavit in reply to [14]–[49] of Duff 9 should they wish to do so, and for this to be done by 6 December 2024 (being after the conclusion of the joint expert conferences).

Associate:

Dated:    19 November 2024

SCHEDULE OF PARTIES