Federal Court of Australia

Scidera, Inc. v Meat and Livestock Australia Limited (No 2) [2025] FCA 1236

ORDERS

THE COURT ORDERS THAT:

1.    Zoetis Australia Pty Ltd’s (the Third Respondent’s) interlocutory application for summary dismissal of all the infringement claims against it, pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) or alternatively r 26.01 of the Federal Court Rules 2011 (Cth), (the Application) be dismissed.

2.    Subject to further orders as to costs, the Third Respondent pay costs of and incidental to the Application to Scidera, Inc.

3.    The parties are to confer and provide to the Chambers of Justice Rofe a mutually available date for a case management hearing between 11 and 13 November 2025, such hearing to be conducted in-person.

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

REASONS FOR JUDGMENT

ROFE J:

1.    Introduction

1    By its interlocutory application dated 6 June 2025, the third respondent, seeks summary dismissal of all the infringement claims against it pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and, or alternatively, r 26.01 of the Federal Court Rules 2011 (Cth) (the Application).

2    The Application follows an earlier attempt by the first, second, third, fourth and formerly fifth respondents to strike out the applicant’s Statement of Claim filed on 1 December 2023, or parts thereof: see Scidera, Inc. v Meat and Livestock Australia Limited [2025] FCA 308 (Scidera SO). I adopt the background and defined terms used in those reasons.

3    None of the other respondents have made a similar application that the infringement claims against them should be summarily dismissed, including those claims that involve Zoetis or its related company in the US, Zoetis, Inc (Zoetis Inc.) In particular, none of the remaining respondents being MLA, ABRI or DataGene have sought summary dismissal of the claims that each of them, together with Zoetis, have: (a) used a method for identifying a trait of a bovine subject from a nucleic acid sample of the bovine subject; and (b) acting in concert, infringed either indirectly or directly the asserted claims 1, 8, 9, 10 and 12 of the Patent (the Asserted Claims).

4    Genotyping Australia Pty Ltd (trading as Xytovet) is the sixth respondent joined to the proceeding on 10 April 2025. Scidera alleges that Xytovet has infringed the Patent by offering genotyping services in Australia. Similar to MLA, ABRI and DataGene, Xytovet has not sought summary dismissal of the claims against it.

5    MLA, ABRI and DataGene submit that, if Zoetis’ Application is successful, the case against them could not proceed—or could only proceed on a more limited basis—for various reasons as follows:

(a)    MLA submits that the case against it will be “untenable and should also be dismissed”. MLA further submits that should Zoetis’ Application be successful, it will make an application for summary judgment in relation to the parts of the case against it;

(b)    ABRI submits that the case against it “could not proceed” because it relates to indirect infringement only, which cannot exist without an act of primary infringement by Zoetis. ABRI further submits that “there could be no primary infringement by ABRI “acting in concert” with Zoetis […] where an essential feature of the [A]sserted [C]laims is wholly performed outside the patent area by a non-party”; and

(c)    DataGene accepts that the case against it which involves Xytovet could still proceed even if the proceeding against Zoetis is summarily dismissed. However, the case will be “of a far more limited scope […], requiring that the Applicant […] articulate the basis for that contention”.

6    The matter remains at an early stage. While pleadings have closed, no discovery and no evidence corresponding to the substantive proceeding has been filed.

2.    Overview

7    Zoetis’ Application raises a novel question of law: whether all the essential integers of a claimed method or process must be performed within the patent area for there to be infringement of said method or process claim that does not result in a product.

8    Zoetis contends that as a step in the claimed method (i.e., the genetic analysis of a bovine sample) is performed in the US, with the results—in the form of information—sent back to Australia, the performance of that step cannot infringe the claims of the Patent.

9    Scidera argues that the Patents Act does not require that all the essential integers of a claimed method be performed within the patent area to give rise to infringement. Scidera also contends that Zoetis’ Application raises questions of claim construction which ought not be resolved in the absence of expert evidence as to common general knowledge and the meaning of technical terms. Scidera contends that these issues cannot be appropriately resolved on a summary judgment application.

10    Scidera further submits that Zoetis’ Application should be dismissed as it is not possible to say, at this stage, that Scidera has no reasonable prospect of success on any of its infringement claims against Zoetis.

3.    Evidence

11    Zoetis relies on the affidavits of the following witnesses in support of its Application:

(a)    Frederick Bruce James Schwenke, Director of the Livestock Business Unit at Zoetis, affirmed on 10 September 2024; and

(b)    Emily Kate Piper, the Head of Business Process & Strategic Projects—Precision Animal Health at Zoetis Inc, affirmed on 5 June 2025.

12    Scidera relies on the evidence of Jeremy Francis Taylor—a Curators’ Distinguished Professor Emeritus (Prof) of the University of Missouri, Columbia—affirmed on 3 July 2025. Prof Taylor provides responsive evidence to Dr Piper’s evidence regarding single nucleotide polymorphism (SNP) Chips, the SNP text file (Genotype File), and the identification and the making of an inference of a trait of a bovine subject using the Genotype File.

13    Mr Schwenke is responsible for Zoetis’ livestock animal genetics testing business in Australia. Mr Schwenke provides evidence, in broad generality, of Zoetis’ company history and the process by which testing samples are obtained and tested by Zoetis Inc.

14    Although Dr Piper has resided in the US since 2016, she commenced employment with Zoetis as a Technical Manager—Genetics, at Zoetis in Queensland, Australia in 2014. In this role, Dr Piper managed the technical aspects of the Zoetis’ animal genetics business in Australia and provided technical advice to the business and its customers.

15    From October 2021 to January 2024, Dr Piper was Zoetis Inc.’s Head of Global Genetics Operations—Precision Animal Health. In this role, Dr Piper was, amongst other responsibilities, in charge of Zoetis Inc.’s in-house genetic evaluation services, being custom genetic evaluations developed by Zoetis Inc.

16    Dr Piper considered that, as a result of her experience and qualifications, she has specialised knowledge of livestock genetics, the provision of livestock genetic testing, including SNP genetic testing (SNP Testing) of beef and dairy cattle, and the analysis of results from such testing.

17    Prof Taylor is a retired academic quantitative geneticist, with over 45 years’ experience in the field of livestock breeding and the genetic improvement of cattle. Prof Taylor obtained his Bachelor of Science and PhD in Quantitative Genetics in Australia before moving to the US in 2001.

18    From 2005 to 2009, Prof Taylor was a member of the BovineSNP50 iBMC Consortium, a collaborative project between the University of Missouri, the University of Alberta, the United States Department of Agriculture, and Illumina, Inc. (Illumina). The project’s aim was to develop the first high density (50,000+ SNPs) bovine SNP assay. The project involved identifying a large number of SNPs (greater than 62,000) and resulted in the development of the BovineSNP50 assay, which was publicly released by Illumina in 2007. Prof Taylor’s collaborative work with Illumina on developing and improving the accuracy and reliability of bovine genotype assays continued until at least 2016.

19    Scidera also tendered four documents, the first of which was referred to in Zoetis’ defence dated 6 June 2025 (Zoetis Defence). The remaining three documents were referred to in the particulars of the Amended Statement of Claim (ASOC):

(a)    “Services and Limited Licence Agreement” between DataGene, Zoetis and The Holstein-Friesian Association of Australia Inc. dated 3 August 2017 (the Tripartite Agreement) ([78(a)] of Zoetis Defence);

(b)    Zoetis “Science of Selection” brochure dated 2018 (particular (vii) of [23C] of the ASOC);

(c)    Zoetis “Science of Selection” brochure dated August 2018 (particular (xxii) of [33B] of the ASOC); and

(d)    Zoetis Clarifide brochure (particular (xi) of [83A] of the ASOC).

20    None of the witnesses were examined or cross-examined.

4.    Background

21    As I stated at [10] of Scidera SO, this proceeding concerns a patent infringement case which relates broadly to the use of a method or system to identify or infer a trait of a bovine subject from a nucleic acid sample of the bovine subject, comprising identifying in the nucleic acid sample an occurrence of at least three SNPs wherein each of the at least three SNPs satisfies particular requirements identified in the claims in suit.

22    Zoetis is one of two genomic testing laboratories which is alleged in the ASOC to have provided genomic selection services in Australia for identifying bovine traits of economic interest in beef and dairy cattle, using high-density beadchip arrays (known as SNP Chips) to perform SNP Testing of genetic material. Scidera alleges infringement of the Asserted Claims.

23    Before going further, I note the comments of the Full Court in Meat and Livestock Australia Ltd v Branhaven LLC (2020) 154 IPR 402 at [106] (per Kenny, Nicholas and Burley JJ) that the specification of the Patent (the Specification) relates to a highly specialised field of biotechnology:

In this case the specification relates to a highly specialised field of biotechnology. Due to the complexity of this field, expert evidence had an important role to play in enabling the Court to develop a proper understanding of the nature and scope of the invention described in the specification. As previously mentioned, we were not taken to any of the expert evidence that was before the primary judge, but we were referred to those parts of his Honour’s reasons in which the expert evidence was discussed and in which relevant findings based on that evidence were made

(Emphasis added.)

24    I set out below the evidence relevant to the summary dismissal application.

25    Mr Schwenke’s evidence was that all SNP Testing on the samples from beef and dairy cattle in Australia (together, the Samples) was and has at all times, since Zoetis commenced carrying on business in Australia on or about 29 October 2012, been conducted by Zoetis Inc. in the US. According to Mr Schwenke, Zoetis has never had the capacity, including the relevant equipment, to perform SNP Testing whether inside or outside of Australia.

26    Dr Piper gave evidence that Zoetis offers a number of services in Australia for beef and dairy cattle which involve collecting biological material from such cattle in Australia and sending it to Zoetis Inc. for SNP Testing in the US. Broadly, the steps involved in the services were as follows:

Receipt and preparation of biological material by Zoetis in Australia

(a)    Biological material from beef and dairy cattle such as hair, semen, blood or ear notches, is received by Zoetis at its Queensland premises. The Samples are accompanied by a test request form completed by the relevant customer.

(b)    A Zoetis employee counts the Samples of biological material and verifies that each sample matches the description on test request form. The employee enters the information about the biological material into an electronic order management system (GeneSys for biological material from dairy and beef cattle; NGP for biological material from beef cattle) and packages the Samples of biological material and arranges them to be shipped to Zoetis Inc. in the US.

SNP Testing by Zoetis Inc. in the US

(c)    Zoetis Inc. conducts, in the US, SNP Testing on the deoxyribonucleic acid (DNA) of the Samples (DNA Samples) prepared from biological material (or DNA extracted therefrom), sent by Zoetis.

(d)    The SNP Testing on DNA Samples is conducted using SNP Chips supplied by Illumina. The Illumina SNP Chips are capable, when used together with other equipment and software provided by Illumina, of detecting 50,000 or more SNPs in a DNA Sample. The detectable SNPs are fixed at the time the chips were manufactured.

(e)    The DNA Samples undergo whole genome amplification and DNA fragmentation, which ensure that there are sufficient quantities of DNA which are cleaved into small fragments that are suitable for hybridisation to SNP Chips.

(f)    The processed DNA Samples are hybridised to the SNP Chips. Each SNP Chip contains tiny beads embedded in the chip’s surface. Each bead is coated with a different DNA oligonucleotide probe. On each bead are hundreds of thousands of copies of the probe. The probe can be composed of either nucleotides adjacent to the relevant SNP nucleotide or of nucleotides which are complementary to the relevant SNP nucleotide. This ensures that the SNP nucleotides are segregated from nucleotides not containing the SNPs of interest. During the hybridisation, the DNA Sample is applied to the SNP Chips, where it anneals to the probes.

(g)    After hybridisation has occurred, a single-base extension reaction is performed, wherein a DNA polymerase enzyme adds a single base (i.e., nucleotide) to the 3’ end of each probe. These nucleotides are labelled with a fluorescent dye (i.e., fluorophore), which emits either a green or a red fluorescence signal. The unhybridised DNA fragments are then washed away from the SNP Chips. Finally, the extended probes are stained to enhance the fluorescence signals emitted from them.

(h)    The Illumina iScan System uses red and green lasers to excite the fluorophores now attached to particular nucleic acids. The fluorescent signals produced are either red or green. The system records high-resolution images of the fluorescent signals emitted from the fluorophores, creating a visual representation of SNPs in the nucleic acid sample.

(i)    The high-resolution images captured by the Illumina iScan System are input into the GenomeStudio software program. GenomeStudio generates a SNP text file of the genetic data obtained from the DNA Sample. These data include the sequences of nucleotides (A, T, C and G) at specific positions in the genome (“markers”) and indicate the results for each SNP in the DNA Sample.

(j)    The results of Zoetis’ SNP Testing are reviewed by Zoetis Inc., in the US, using GenomeStudio, to ensure that they are clear and free from any errors. In particular, the results for certain markers referred to by Zoetis Inc. as markers for genetic conditions and qualitative traits are checked by a Zoetis Inc. employee in the US to ensure that a clear result has been returned for those markers. These are conditions and traits that are controlled by a single SNP or a small number of SNPs. Examples are coat colour and horn development.

(k)    The SNP text file is then uploaded to GeneSys or NGP, as the case may be, for further processing and customer distribution.

27    According to Dr Piper, the type of further processing performed by Zoetis Inc. in the US depends on the particular services ordered by the customer. GeneSys or NGP can calculate results for markers for the genetic conditions and qualitative traits that are controlled by a single SNP or a small number of SNPs. Examples are coat colour and horn development (polledness). Depending on the services the customer has ordered, Zoetis Inc. in the US prepares a report with some or all of these results, using GeneSys or NGP, in PDF, Excel or text format.

28    Regardless of the service ordered by the customer, the results for the markers for the genetic conditions and qualitative traits are removed from the SNP text file using GeneSys or NGP, before this modified SNP text file (the Genotype File) is provided to the customer. Dr Piper gave an example for beef cattle customers. If the customer orders only a “HD50K” service (for example, HD50K for Angus or HD50K for Wagyu), Zoetis Inc. provides the Genotype File only. If the customer orders both an HD50K service and a HornPoll test, for example, Zoetis Inc. provides the Genotype File and a PDF/Excel/text report with the HornPoll test results.

29    According to Dr Piper, before 31 December 2023, Genotype Files were sent to customers by Zoetis Inc. in the US via a Secure File Transfer Protocol (SFTP) to a SFTP address nominated by the customer. Occasionally, before 31 December 2023, Zoetis Inc. in the US also provided Genotype Files to Animal Genetics and Breeding Unit (AGBU) either via a file sharing platform or a SFTP address nominated by AGBU.

30    Dr Piper’s “understanding” of what happened to the Genotype Files provided to Australian customers is that they were analysed by the associations or institutes representing breeders, using software programs, to create reports for their customers (for example, cattle breeders), such as Estimated Breeding Values (EBVs) (relevant to beef cattle) and Australian Breeding Values (ABVs) (relevant to dairy cattle). In the case of beef cattle, breeders ultimately received the EBVs in Australia via the relevant breed association or ABRI.

31    In the case of dairy cattle, Dr Piper’s understanding is that DataGene prepares the ABVs, which are subsequently received by GeneSys and then made available to breeders through “Zoetis’ online reporting application”, SearchPoint. It is unclear whether this online reporting application is managed by Zoetis Inc. or Zoetis in Australia, as Dr Piper does not provide such a specification, referring to “Zoetis” generally. The reports on genetic conditions and qualitative traits are also made available to breeders on SearchPoint. However, no SNP text files, including the Genotype File, are stored on SearchPoint.

32    Dr Piper, Zoetis and Zoetis Inc. do not have access to the software programs used by the associations or institutes for creating EBVs or ABVs reports. Accordingly, Dr Piper does not know the details of how the software programs of the associations or institutes generate EBVs or ABVs, or what other data are used in those processes.

33    To the best of Dr Piper’s knowledge, information and belief, having made thorough inquiries:

(a)    no genetic testing, using SNP Chips, on any nucleic acid samples has ever been performed by Zoetis, whether inside or outside Australia;

(b)    specifically, no genetic testing, using SNP Chips, on DNA Samples prepared from biological material obtained in Australia has ever been performed by Zoetis, whether inside or outside Australia;

(c)    Zoetis does not possess, has never possessed, does not use and has never used, whether inside or outside Australia, the equipment (such as an Illumina iScan System) required to conduct the SNP Testing; and

(d)    Zoetis has never purchased or used, whether inside or outside Australia, any of the SNP Chips.

34    Prof Taylor deposed that he expected that the SNP text files described by Dr Piper to typically include the genetic data obtained from a DNA Sample from a bovine subject, including genotypes that indicate the results for each SNP.

35    Based on his experience and familiarity with the Illumina bovine SNP assays, Prof Taylor deposed that he expected that each of the SNP Chips would include a manifest (master decoder ring) file, which includes, amongst other things, the SNP name, chromosome and position within the chromosome, detection probe sequence and the pair of nucleotides (Adenine, Thymine, Cytosine and Guanine) defining the alleles present at each SNP along with the code explaining which nucleotide is coded as “A” and which as “B”. To enable convenient computer processing of the genotypes, the genotypes for individual animals are typically output in “A/B” format (i.e., AA, AB, or BB) for each SNP. The manifest file allows these to be recoded to the actual alleles present at the SNP, e.g., CC, CG, or GG (A = C, B = G), if this is ever necessary.

36    Prof Taylor anticipated that the Genotype File, which might in fact comprise a number of separate files, would include a means of identifying:

(a)     an animal;

(b)     the SNPs; and

(c)     a genotype for each combination of (a) and (b) above (i.e., for each SNP for the animal). For example, genotypes could be coded AA, AB or BB, or to save computer storage and facilitate analysis, could be further recoded such that, for example, a missing genotype is coded as ‘0’, an AA genotype coded as ‘1, AB coded as ‘2’ and BB coded as ‘3’.

37    Based on his experience and familiarity with Illumina bovine SNP assays, Prof Taylor explained the steps that would typically be undertaken to identify or infer a trait of a bovine subject from a Genotype File. These steps may include:

(a)    The person or entity undertaking the trait identification process (the Service Provider) would typically have data sets containing phenotypic (i.e. trait value) data and SNP genotypes (on one or more SNPs) for a population of cattle, ideally for the same breed of animals as the Subject. Qualitative traits (for example, horns or coat colour) are usually determined by a single SNP or variant, whereas quantitative traits (the great majority of production traits in cattle) are determined by numerous SNPs or variants. For example, these data sets could be for a population of Australian Angus cattle containing, for each animal in the population, its SNP genotypes and a value for feed intake. These data sets are continuously updated as more genotype and phenotype data are collected.

(b)    Using these data, the Service Provider could either:

(i)    perform an analysis of the combined data sets to build a statistical model to estimate the additive SNP effects (the additive contribution of each SNP to the trait value) for each trait and use the SNP effect estimates from this model and the Genotype File for the Subject to predict the trait of the Subject; or

(ii)    alternatively, combine the Genotype File for the Subject animal with the genotype data in sub-paragraph (a) above and using the phenotype data in sub-paragraph (a) above perform an analysis to simultaneously predict the traits of all animals. This builds a statistical model which is statistically equivalent to that described in sub-paragraph (b)(i) above.

(c)     In addition to animals that have both trait values and SNP genotypes, the Service Provider may also have a historic database of animals with traditional information like pedigree information and trait values but that have no corresponding genotypes (Legacy Data). In this case, a statistical procedure can be used to combine all available data (animals with trait values and pedigrees but no genotypes, animals with trait values and SNP genotypes, and animals with genotypes only) into a single analysis in which all available information is used to estimate the trait values of all animals in the analysis.

(d)    More sophisticated analyses are possible if the objective is to identify traits for use in the management of animals (for example, how animals should be grouped into pens in a feedlot) as opposed to breeding selection. Dominance deviations (a form of non-additive genetic effect where the AB genotype has a phenotype that is not the average of the AA and BB genotypes) could be estimated at each SNP and the trait value would be estimated as the sum of additive and dominance deviation effects at each SNP when summed across all SNPs (additive genetic values and nonadditive genetic values).

(Emphasis in original.)

38    Prof Taylor’s evidence was that the preparation of Molecular Value Predictions, EBV or ABV reports would require ABRI, DataGene or other breed associations to undertake analysis steps similar to those in [37] above, using data sets of the kind described in [37(a)] or [37(c)] when Legacy Data are available. In Prof Taylor’s experience, data sets of the kind described in [37(a)] and Legacy Data are typically controlled by breed associations who provide these data to service providers like ABRI or DataGene to enable the performance of trait identification and predictions to produce the EBV and ABV reports.

5.    Statutory provisions

39    A patentee’s exclusive rights are defined in s 13 of the Patents Act which provides:

13    Exclusive rights given by patent

(1)     Subject to this Act, a patent gives the patentee exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention.

[…]

(3)    A patent has effect throughout the patent area.

(Emphasis added.)

40    “Exploit”, in relation to an invention, is defined in the Sch 1 of the Patents Act as including:

(a)    where the invention is a product—make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b)     where the invention is a method or process—use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.

41    The parties referred to the doing of an act in [(a)] above in relation to the product of a method or process in [(b)] as the “extended definition of exploit”.

42    The Patents Act now includes an object clause in s 2A which provides:

2A    Object of this Act

The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public.

(Emphasis added.)

43    I refer to the above statutory provisions collectively as the Relevant Statutory Provisions.

6.    Summary judgment principles

44    The Court may give summary judgment in favour of a person defending a proceeding if the person prosecuting the proceeding “has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding”: s 31A(2) of the FCA Act. The proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success: s 31A(3) of the FCA Act. The party seeking summary dismissal bears a “heavy onus”. In Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 at [6], Gilmour J expounded the following principles of general application to an application s 31A of the FCA Act:

(a)    the Court must be very cautious not to do a party an injustice by summarily dismissing proceedings;

(b)    the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to trial, it may succeed;

(c)    in a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading;

(d)    it is not Parliament’s intention to require the Court to engage in lengthy or elaborate trials on an interlocutory basis for the purposes of determining whether or not a proceeding has no reasonable prospects of success. It may be necessary for the opposing party to provide no more than an outline of evidence, sufficient to show that there is a genuine dispute, to prevent the summary application becoming a trial;

(e)    if there is a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial. It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claim succeeds that there is ‘no reasonable prospect of success’;

(f)    it ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt. On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a trial;

(g)    evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects;

(h)    in determining if there are real issues of fact in issue so as to preclude summary judgment the courts must draw all reasonable inferences in favour of the non-moving party.

(Emphasis added.) (List numbering amended.)

45    The basic principles of summary judgment were not in dispute. Summary disposition is available where “the pleadings disclose no reasonable cause of action and their deficiency is incurable” and includes cases in which “there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment”: Spencer v Commonwealth (2010) 241 CLR 118 at [22] (per French CJ and Gummow J). The exercise of powers to summarily terminate proceedings “should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried”: Spencer at [24], quoting Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99. See also DHI22 v Qatar Airways Group QCSC (No 1) [2025] FCAFC 91 at [64] (per Mortimer CJ, Stewart and Stellios JJ). The Full Court has held that the power to summarily dismiss should be used with caution “particularly where complex questions of fact or law are involved”: Upaid Systems Ltd v Telstra Corp Ltd (2016) 122 IPR 190 at [48] (per Perram, Jagot and Beach JJ).

46    As to the evaluation of “reasonable prospects of success” which turns upon questions of law, French CJ and Gummow J observed the following in Spencer at [25]:

[...] Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.

(Emphasis added.)

47    In Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 at [131], Gordon J recognised that the existence of a real issue of law does not necessarily preclude summary judgment. Where there is no relevant factual dispute, it may be appropriate to determine a question of law summarily rather than allow the proceeding to go to trial as ordinarily the course. Even if there is a question of fact that arises only from a plausible—as opposed to reasonable—inference, the statute makes clear that the court need not, and indeed must not, refuse summary judgment. In determining whether a real issue of fact exists such as to preclude summary judgment, the court must draw all reasonable inferences—but only reasonable inferences—in favour of the non-moving party: Jefferson Ford at [132], citing with approval Commonwealth Bank of Australia v ACN 000 247 601 Pty Ltd (in liq) [2006] FCA 1416 at [30] (Jacobson J).

48    As I indicated above, in the context of a patent case, the Full Court in Upaid Systems emphasised the need for caution, particularly where the matter involves complex questions of fact or law. At [50], the Full Court observed that whilst the fact that a substantive case concerns a patent infringement claim does not render it immune from a summary dismissal order, where the technology is complex or the Court is unable to confidently construe the relevant claim, summary determination may not be appropriate.

49    These observations were approved in the United Kingdom by Jacob LJ in Virgin Atlantic Airways Ltd v Delta Air Lines Inc [2011] EWCA Civ 162 at [13], [14] and by Floyd LJ in Nampak Plastics Europe Ltd v Alpla UK Ltd [2014] EWCA Civ 1293 at [7]. Notably, the Full Court in Upaid Systems observed that the United Kingdom test of “no real prospect” of success is more stringent than the s 31A of the FCA Act test that refers to “no reasonable prospect”, which according to their Honours “[…] permit[ted] greater ambit for summary dismissal under s 31A(2) of a patent infringement claim than under the U[nited] K[ingdom] analogue”.

7.    Zoetis’ submissions

50    Scidera’s allegation of infringement against Zoetis is the use, in the patent area, of the claimed method or system. Zoetis submits that as the SNP Testing is conducted outside the patent area, the conduct of its animal health business, which includes “receiving biological material from beef cattle in Australia (Beef Cattle Samples) and sending those Beef Cattle Samples (or in some cases, DNA extracted therefrom) to Zoetis Inc. […]” does not infringe the Asserted Claims.

51    First, Zoetis contends that as a matter of statutory construction, the language of ss 13(1) and (3) of the Patents Act requires that the act of exploitation, which in the case of a method claim is the performance of all the essential integers the claim, occur within the patent area.

52    Zoetis refers to the “fundamental rule” that “[…] there will be no infringement [of a patent claim] unless the alleged infringer has taken all of the essential features or integers of the patentee’s claim” as expressed by Gibbs J (as his Honour then was) in Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 at 246.

53    The exclusive right to exploit an invention is a right to prevent others from exploiting the combination of each essential integer of the invention. Where, as in this case, an essential integer of the method claim—the SNP Testing—is performed in the US, Zoetis contends that there can be no infringement of the method claims in Australia.

54    The “invention” in s 13(1) of the Patents Act over which the patentee is granted a monopoly to “exploit”, is the patentable invention as claimed in any claim of the patent, which is clearly defined by that claim according to ss 40(2)(b) or (c) and s 40(3) of the Patents Act. The “invention” is “the embodiment which is described, and around which the claims are drawn”: AMP Inc v Utilux Pty Ltd (1971) 45 ALJR 123 at 127 (per McTiernan J). In Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1, the High Court cited AMP Inc and the work of Mr Blanco White QC to further elucidate the meaning of “invention”. At [21] (per Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ) their Honours noted the four meanings of the word “invention” and considered the appropriate or preferable meaning in the context of s 40(2) of the Patents Act:

“They are: 1. The embodiment which is described, and around which the claims are drawn. This is the sense used in the Act: cf the phrase of s 32, ‘the invention so far as claimed in any claim.’ 2. The subject matter of a claim—especially that of the broadest claim. 3. The inventive step taken by the inventor. 4. The advance in the art made by the inventor; as (to take Lord Justice Moulton’s example) ‘he applied electricity for the first time to such-and-such a purpose’. This is likely to be broader and more fundamental than would correspond with any claim.”

It is this first meaning which, with respect, McTiernan J correctly adopted in construing s 40(1) of the 1952 Act, and the same is true of the s 40(2) of the present legislation...

(Emphasis added.) (Citations omitted.)

55    Second, at the intersection of infringement and territoriality, Zoetis contends that any suggestion that only the “substance” of the invention must be exploited within the patent area in order to infringe must be rejected. Zoetis submits that there is no textual basis for the insertion of the words “substance of the invention” into s 13 of the Patents Act. According to Zoetis, it would be an error to follow the United Kingdom case law which has, for policy reasons, inserted an “in substance” test into the s 60 of the Patents Act 1977 (UK) (UK Patents Act), the United Kingdom equivalent of s 13 of the Patents Act. Zoetis submits that that is not the test in Australia. Even if the Australian test included the language “where, in substance, …the [method or process is] used”—which, on the United Kingdom authorities, admits of only a single answer—Zoetis contends that the answer in the present case could only be “in the United States”.

56    Third, Zoetis argues that there is no reasonable prospect of Scidera establishing that the essential integers of the Asserted Claims were used in Australia. According to Zoetis, each claim requires a physical examination of molecules (i.e., in the form of nucleic acids or polypeptides) or hybridisation, none of which, on the face of the current evidence, occurs in Australia. Any suggestion by Scidera that the identifying or the inferring of the traits, which takes place after the physical step, is the use of the claimed method would be contrary to the words of the Asserted Claims and the Specification, thereby courting invalidity. Zoetis further submits that without the physical step as an essential integer, there would be no manner of manufacture, as the Asserted Claims would only claim an invention dealing with information or information processing.

57    Fourth, even if the Court were to adopt the “in substance” approach of the United Kingdom authorities, there is no reasonable prospect that Scidera could establish on the evidence that the substance of the invention occurs in Australia. Again, Zoetis submits that if Scidera propounds a construction of the Asserted Claims which is limited to the processing of information without a physical step, the claimed invention would not be a manner of manufacture.

8.    Scidera’s submissions in answer

58    Scidera contends that it is not possible to say that it has no reasonable prospects of success on its infringement case against Zoetis. There are real issues of fact and law, as well as issues of mixed fact and law including the proper construction of the Asserted Claims, that warrant the matter proceeding to trial.

59    According to Scidera, Zoetis’ Application assumes, in its favour, an unduly narrow—and new—construction of the claims, particularly of claim 1 of the Asserted Claims. This construction impermissibly focusses on discrete integers in isolation and requires a physical act via the examination of a molecule or hybridisation. Scidera submits that this construction will not accord with the evidence regarding the common general knowledge that it proposes to advance at the final hearing. Scidera further submits that it cannot be said that there is no reasonable prospect of the court accepting Scidera’s different and broader construction, which it contends aligns with that of Beach J in Meat and Livestock Australia v Cargill, Inc. (2018) 129 IPR 278 at [282], wherein his Honour construed the method of claim 1 as “a method of identifying (or inferring) a trait”.

60    Scidera submits that there are two issues that arise on claim construction: one regarding the identification or the making of an inference of a trait, and the other relating to the requirement (in claim 1 of the Asserted Claims) that an occurrence of at least three SNPs be identified in the nucleic acid sample. According to Scidera, it is clear on the language of the Specification that the identification or inference of a trait is not limited to conducting a physical test on the nucleic acid sample. The definition of “infer” or “inferring” at [0079] of the Specification is such that SNPs can also be identified indirectly by examining a polypeptide encoded by a particular gene where the polymorphism in that gene is associated with an amino acid change in the polypeptide.

61    Scidera submits that Zoetis overlooks important facts, including that, as the tendered documents show and as Zoetis admits in [33B] and [83A] of the Zoetis Defence, Zoetis is the entity who offers, provides and is paid for the genotyping services rendered to Australian customers which enable SNPs to be identified and traits to be inferred from nucleic acid samples of bovine genetic material. In the case of the dairy cohort, Zoetis is a party to a written agreement with DataGene pursuant to which it holds itself out as generating genotypes from the Samples provided, and as collaborating with DataGene in the provision of ABV(g)s (i.e., relevantly, the identification or the making of an inference of traits) to Australian farmers. Zoetis’ evidence does not deal with these matters. In addition, there has been no discovery in the proceeding.

62    Further, as Scidera pleads in its reply to the Zoetis Defence dated 4 July 2025 (the Scidera Reply), there is a reasonably arguable case that the acts which Zoetis alleges were undertaken by Zoetis Inc. in [22(b)(iv)], [33B(d)–(k)], [75(b)(iv)] and [83A(d)–(i)] of the Zoetis Defence (i.e., acts of physical SNP Testing of the nucleic acid molecules), were in fact undertaken by Zoetis in conjunction with its related US entity, Zoetis Inc., or alternatively by Zoetis Inc. on behalf of, or at the direction of and with the knowledge of Zoetis. Scidera says inter alia that those acts, to the extent that they occurred, were undertaken by Zoetis pursuant to a common design with Zoetis Inc., or by Zoetis Inc. on behalf of, or at the direction of and with the knowledge of, Zoetis.

63    As I indicated above, the question of whether infringement of a method or process claim which does not yield a product requires that all the essential integers be performed in the patent area is a novel question of law that has not been determined in Australia. Scidera submits that it is open on the language of the Patents Act for something less than the full performance, use, or occurrence of all essential integers of such a method or process claim in Australia to provide sufficient territorial nexus for infringement of said method or process claim to arise. As an example, Scidera submits that the act of identifying or inferring a trait based on the occurrences of the SNPs constitutes use of the claimed method. If such use of identifying or making of an inference is performed in Australia, that use will provide sufficient territorial nexus with the patent area to give rise to infringement.

64    Scidera further submits that the language of the Patents Act does not preclude an “in substance” approach to assessing where the claimed method or process is exploited. An “in substance” approach is not foreign to the Patents Act, as the High Court mandates regard to the claimed invention as a matter of substance, not form, in determining whether an invention is patentable subject matter. On Scidera’s reading, s 13 of the Patents Act is less favourable to Zoetis’ contention than the language of the equivalent United Kingdom provision, under which the United Kingdom courts have adopted an “in substance” approach to infringement of method claims involving “offshoring” of elements of the claimed method: see Illumina, Inc v Premaitha Health Plc [2017] EWHC 2930 (Pat) and Menashe Business Mercantile Ltd v William Hill Organisation Ltd [2003] 1 All ER 279.

65    Scidera refers to the United Kingdom cases of Illumina and Menashe, noting that those cases adopted the “put the invention into effectiveness” or the “in substance” type approaches, to find that not all integers of a claimed method need to be performed in the United Kingdom in order for infringement to occur. Scidera submits that these United Kingdom cases highlight that the applicability of the “in substance” approach is a fact-sensitive issue that requires a case-by-case analysis of the particular facts, including the particular features of the claims in each case, and the facts relating to the method which is said to infringe. This understanding of “exploit” gives rise to legal and factual inquiries which remain unanswered at this stage. Consequently, Scidera submits that the resolution of such “complicated issues of fact and law, including overseas authority not considered in Australia to date” cannot be appropriately determined on a summary dismissal application.

66    If Zoetis’ contention on the principal question of law was to be accepted, Scidera submits that it would mean that there could be no infringement of a method claim if one or some of the essential integers was conducted “offshore”. Infringement could be avoided in both the “offshore” jurisdiction and the “home” jurisdiction if all essential integers are required to be performed in the relevant “home” jurisdiction or patent area. Scidera submits that it is in recognition of such an outcome that the “in substance” test applicable in the United Kingdom has been developed.

9.    Consideration

67    For the reasons which follow, I reject Zoetis’ arguments and dismiss its Application. Zoetis propounds an unduly narrow claim construction focussed on the physical genetic testing which I consider to be at odds with the construction of Beach J in Cargill, as adopted by Scidera. Once Zoetis’ proposed construction is rejected, the issue of summary dismissal is not as clear-cut as Zoetis contends. The present dispute involves combined questions of fact and novel questions of law which warrant that the matter proceed to trial to be fully argued with the benefit of expert evidence.

9.1    Claim Construction

68    The issues of construction include not only the determination of the precise scope of the claims, but also, depending on the resolution of the novel question of law, whether particular steps that fall within the scope of the claims are “essential”. A further third construction issue, on the basis of the United Kingdom cases, if applicable, is where “in substance” the method is performed or used.

69    Justice Beach had cause to extensively consider the Patent and its claims first in the appeal from the opposition decision in Cargill, and subsequently in the amendment application in Meat and Livestock Australia Ltd v Cargill, Inc (No 2) (2019) 139 IPR 47 (Cargill (No 2)). Despite the extensive consideration of the Patent and its claims by Beach J, the parties continue to disagree on the construction of claim 1.

70    Claim 1 of the Patent is as follows:

A method for identifying a trait of a bovine subject from a nucleic acid sample of the bovine subject, comprising identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs) wherein each of the at least three SNPs are significantly associated with the trait, with the degree of statistical significance being p≤0.05, and wherein the at least three SNPs occur in more than one gene; and wherein (a) at least one of the SNPs [meets the limb (a) requirement], or (b) the SNP [meets the limb (b) requirement].

(Emphasis added.)

71    Zoetis contends that the bolded integer in claim 1 above is the step in the method performed by Zoetis Inc. in the US. That is an essential integer in the allegation of infringement by use of the claimed method. Zoetis further contends that there can be no construction of claim 1 that does not involve, as the central requirement, the physical act of conducting SNP Testing on a nucleic acid sample in order to identify the SNPs in the sample.

72    Zoetis also submits that claim 1 stipulates a purpose constraint via the underlined integer “a method for identifying a trait”. Zoetis argues that the physical act of conducting the genetic testing has to be done with the purpose of resulting in the ability to identify or infer a trait. In the alternative, the carrying out of the genetic testing must result in an ability to identify or infer the trait. According to Zoetis, the claim is met by the mere ability to identify or infer, regardless of whether an identification or inference is actually drawn. The claim therefore does not require the drawing of an inference, as Mr Flynn SC submitted “[…] if we do the steps with that purpose, and no one ever actually ends up drawing the inference, the claim is met”.

73    In recasting the underlined integer as a purpose constraint rather than an essential integer, Zoetis seeks to dismiss Scidera’s contention that the identifying or the drawing of an inference of a trait is an essential integer of the claim that, when performed or used by Zoetis in Australia, satisfies the territorial nexus required by the acts of exploitation and infringement as contemplated by the Patents Act.

74    On its construction, Zoetis contends that the claim is met by carrying out the genetic testing in the US with the mere purpose of being able to infer. Because nothing further is required, the integers of the claim are entirely carried out outside the patent area. Anything further such as the identification or inference of a trait is merely information manipulation or processing which cannot be the substance of the invention as it would not be a manner of manufacture. Zoetis’ purpose-oriented construction elevates the physical testing steps and relegates the remaining identification or inference integer merely to the purpose for which the testing is being conducted, to be assessed at the time of testing. According to Zoetis, these identification or inference integers are satisfied a priori by the purpose for which the genetic testing is carried out, rather than by the actual identifying inferring of a trait.

75    Zoetis contends that Scidera has changed its construction and now relies on a construction of the claim that has a new integer: the actual identification or inferring of traits. It is not just the purpose of identifying or inferring, or the ability to identify or infer, but the actual identification or making of the inference of a trait. Zoetis submits that this construction where the identification or inference is an essential integer is how Scidera grounds the substance or the centrality of the invention within the patent area. This is because the actual identifying or inferring of a trait takes place in Australia.

76    Scidera rejects Zoetis’ suggestion that the characterisation of its construction has changed. Scidera contends that its pleading adopts the construction of claim 1 of Beach J in Cargill, which elucidates that the drawing of the inference of a trait is part of the method. In other words, the claim is infringed by a method which takes all the integers, including the actual identification or inference of a trait. Scidera refers to [34A] of the ASOC which particularises the taking of a claimed integer “[...] [t]he identification of the trait occurs upon the provision of the EBV reports pleaded in [33D(c)] above (for Zoetis) and [33H(c)] above (for Xytovet) […]” to show that its pleading of infringement was consistent with Beach J’s construction in Cargill.

77    At [264] of Cargill, Beach J identified the terms of claim 1 requiring construction, noting at [265] that the various aspects of the claim cannot be considered in isolation. In his Honour’s words, “[t]he claim [was] directed […] to a method for identifying, in the sense of inferring […], a trait in a bovine subject”. Justice Beach observed that such a purpose “inform[ed] the nature and scope of other aspects of the claim, including the requirement that the at least three SNPs identified from the nucleic acid sample of the subject be associated with the trait”. Thus, the “requirement of association is to be understood having regard to the purpose for which the SNPs are to be used”. In other words, the association must be suitable to enable the method to be carried out by drawing an inference of the kind referred to in the claim. The claim was subsequently amended to stipulate the degree of association required.

78    At [322] of Cargill (No 2), Beach J clarified that the claim(s) did not require an association study to be carried out as part of the claimed method. While the claimed method utilises the fact of the association to infer traits, the collection of the information including as to the degree of association does not form part of the claimed method. The method is directed to the utilisation of the fact of the association of an SNP with a trait, not the collection of data demonstrating or confirming that association via statistical significance.

79    At [323] of Cargill (No 2), Beach J distinguished the identification of SNPs in a nucleic acid sample from the determination of the association between the identified SNP and a trait (i.e., identification or inference of a trait):

Further, there is a distinction between identification of the occurrence of a SNP in a nucleic acid sample, on the one hand, and determination and characterisation of the degree of association between that SNP and a trait, on the other hand. The claims require the former, but not the latter. This is apparent from the wording of claim 1, which states that the method “compris[es] identifying in the nucleic acid sample an occurrence of at least three … SNPs”, and that those SNPs “are associated with the trait”, but does not require that that association or its degree be determined or characterised as part of the method.

(Emphasis added.)

80    Zoetis seeks to draw support for its construction from Beach J’s comments at [282] of Cargill, which were made in the context of discussing what a prior art document must disclose to be an anticipatory disclosure, and whether in circumstances where the prior art described something suitable for the claimed purpose, it would anticipate. Relevantly, Beach J stated:

In my view, the word “for” in this context [in claim 1] means more than that something must be “suitable for” use in the method claimed. The word “for” in the expression “method for identifying a trait” places a limit on what is claimed such that the method claimed must result in being able to identify, in the sense of infer as I have discussed, a trait. It is clear in context that claim 1 stipulates a purpose constraint. It is not simply that the method must be suitable for a trait. Now on MLA’s case, it does not matter if the prior art does not actually teach the claimed method; a disclosure of something that could be used for that purpose would be sufficient. But I agree with Branhaven that this is misconceived. The word “for” might be given such a construction in the context of a product claim, where the word can be understood as intended to characterise the construction of the product by reference to its suitability for the use to which it is to be put. But in the context of a method claim, such a construction is inapposite. Such a construction involves disregarding what is an important limiting and characterising feature of the claim.

(Emphasis added in bold.) (Emphasis in original in italics.)

81    Thus, in order to be anticipatory, it is not sufficient for a document to disclose something that could be used for the purpose or could be used for something else. Regarding the applicability of Beach J’s reference to “purpose” in the construction of claim 1, it is clear that his Honour’s reference to “purpose” was made in the context of whether a prior art document taught the claimed method. The comments on “purpose” were not directed to his Honour’s claim construction. Secondly, even if the reference to “purpose” was intended to inform the construction of claim 1 by virtue of the reverse infringement test, his Honour distinguishes the meaning of “for” in product claims from the word’s meaning in method claims. Notably, Beach J held that for method claims, a construction of the word “for”—for the purposes of anticipation—as merely requiring that a disclosure of something that could be used for that purpose is “misconceived” and “inapposite”. Such a construction “involves disregarding what is an important limiting and characterising feature of the claim”. Thus, I do not accept Zoetis’ submission that the identification or inference integer can be read out of the method claim by virtue of its characterisation as a purpose constraint. I agree with Beach J’s observations that doing so would disregard an important limiting and characterising feature of the method claim.

82    For those reasons, my provisional view based on the information before me is that Scidera’s construction, which I consider aligns with that of Beach J, is to be preferred. Claim 1 claims a method for identifying a trait, such that in addition to the identification of the at least three SNPs, there is a step of identifying or drawing an inference about the trait of interest.

83    Scidera submits that it will contend at trial that the inference of a trait—to which it argues that the claim method is in fact directed—would itself provide a sufficient territorial nexus. Scidera contends that this is because the analysis of the genetic sequence information to infer the ABVs and EBVs, the reports of which are provided to end customers, is conducted in Australia.

84    Contrary to Zoetis’ contention, when claim 1 is read in the context of the Specification rather than in the abstract, it is clear that the scope of the claim cannot be limited to the physical testing steps alleged to be performed by Zoetis Inc., such as the SNP Testing. In addition, those steps are not the only “essential” steps required by the claim. As the evidence of Prof Taylor explains, further steps need to be undertaken before one can identify or infer a trait of a subject from the Genotype File. These steps, which I outline in [37] above, appear on the present evidence to be undertaken in Australia.

85    At present, I consider that Zoetis’ approach has two flaws. First, Zoetis impermissibly disaggregates the integers of the claimed method, and by its purpose-oriented construction, it focusses solely on the physical testing integer, relegating the remainder of the integers to a purpose for which the testing is carried out. Whilst this approach suits its case that the method is carried out entirely in the US, it is inconsistent with Beach J’s construction of claim 1 and impermissibly reads out the essential identification or inference integer. Second, to support that construction, Zoetis looks to the remaining integers in isolation and submits that those integers are in substance merely the processing of information and as such are not a manner of manufacture. Thus, Zoetis contends that for the claim to be a patentable subject matter, the identification or inference integer must be rolled into the purpose rather than be separately satisfied for infringement purposes.

86    Zoetis’ approach is not sustainable. Regarding the first flaw, it is not permissible to artificially disaggregate a method claim into integers and point to only the physical testing as the substance of the invention. The invention is a “unitary concept” and “it is the whole process that must be considered […]”: Ariosa Diagnostics, Inc v Sequenom, Inc (2021) 159 IPR 371 at [114] (per Middleton, Nicholas and Burley JJ); see also National Resource Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC) at 264 (per Dixon CJ, Kitto and Windeyer JJ). It is impermissible to disaggregate the integers of the method; the identification of the substance of the invention does not permit disregarding material aspects of the claim language: Ariosa Diagnostics at [155]. Similarly, as Beach J observed in Cargill at [454], it is “inappropriate to fasten upon individual elements of the claims […]”.

87    On the second flaw, Zoetis’ submission that the invention claimed in claim 1, upon its construction as being limited or characterised by the identification or inference integer, is not a manner of manufacture contradicts Beach J’s findings in Cargill, Indeed, his Honour held claim 1 to be a manner of manufacture in Cargill at [455] and [501]. At [455], Beach J said:

The claimed method involves human interaction and the creation of an artificially created state of affairs. It requires the taking of a nucleic acid sample of the bovine subject through an appropriate procedure. It requires the identification in that sample of at least three SNPs that meet the requirements of the claim, which involves analysing the sample to identify SNPs present that are associated with the trait. It involves the creation of an artificially created state of affairs of economic significance through human interaction. Now I accept that it involves drawing an inference about the potential for the trait of interest to exist in the bovine subject, which involves discerning the natural state of affairs, but the claim is more than this. All of this is a practical application that results in an artificial state of affairs, and with undoubted economic significance [...]

(Emphasis added.)

88    The above passage makes clear that in Beach J’s view, the method involves not merely the identification of SNPs in a given nucleic acid sample, but also the identifying or drawing of an inference about the potential for the trait of interest to exist in the bovine subject.

89    Absent expert evidence, for the purposes of this Application I have no reason not to follow Beach J’s finding that the claimed invention is a manner of manufacture. This is particularly so considering that the proposed amendments in Cargill (No 2) do not alter the construction of the relevant integers for the present purpose. Zoetis seeks to ignore that finding to suggest that if the identification or inference integer is considered separately, it is not a patentable subject matter. Such an approach is impermissible for the reasons I set out above and is contrary to Beach J’s finding that the claimed invention is a patentable subject matter.

9.2    Scidera’s infringement case

90    It is not suggested by Scidera that the claims are infringed because the “substance” of the invention is taken. There is also no suggestion that Zoetis has adopted a “mechanical equivalent” to avoid infringement. Scidera does not resort to a “pith and marrow” approach to infringement. All the essential integers are asserted to have been taken by the respondents; however, not all the essential integers of the claimed method have been performed in the patent area.

91    Importantly, after the physical genetic testing (i.e., SNP Testing) is undertaken, the genetic analysis is carried out wherein the relevant traits are identified or inferred and EBVs and/or ABVs are ultimately provided to end customers such as farmers. On Scidera’s case this latter identification or inference integer is an essential integer, and it is carried out in Australia.

92    Scidera submits that there is no dispute that Zoetis operates in Australia, and that it is the entity that offers, provides and is paid for the genotyping services that enable the steps of the claimed method to occur. Further, as I have delineated above, Scidera contends that any act or acts said to have been undertaken in the US were undertaken by Zoetis in conjunction with its related US entity, or on behalf of, or at the direction of and with the knowledge of Zoetis. The evidence read by Zoetis does not relevantly address this.

93    Scidera contends that the position put forward by Zoetis in its submissions, namely that all steps subsequent to the identification of the SNPs are “simply independent mental or computational steps that use information that has previously been generated outside the patent area”, is inconsistent with documents already produced or identified in this proceeding. In particular, Scidera refers to the “Services and Limited Licence Agreement” between DataGene, Zoetis and The Holstein-Friesian Association of Australia Inc executed on 14 August 2017 (Tripartite Agreement), which was referred to in [78] of DataGene’s defence dated 5 June 2025 and [78(a)] of the Zoetis Defence. The Tripartite Agreement elucidates inter alia the activities to be undertaken by Zoetis in Australia:

(a)    Recital C states that “Zoetis wishes to collect Samples and Animal Data directly from Australian dairy farmers; generate genotypes from the Samples; and provide ABV(g’s) calculated by DataGene back to the Australian dairy farmers to assist them in managing their dairy herds.”

(b)    Recital D states that “[i]n order to provide the services referred to in Recital C, Zoetis requests […] (ii) DataGene to undertake a genomic evaluation of the Animal Data and the genotype derived from the testing of a Sample from the relevant animal”.

(c)    Recital E states that “The parties have agreed to collaborate with each other with respect to the services referred to in Recital D to enable Zoetis to undertake the activities referred to in Recital C on the terms and conditions set out in this Agreement”.

(d)    Clause 4.1 provides that:

4.1    In order to conduct the Purpose, Zoetis shall undertake the following activities:

a.    the collection of the Animal Data and Samples from dairy farmers;

b.    making the Animal Data available to HA for the HA Services;

c.    interacting with HA and dairy farmers to address any inaccuracies or incompleteness of the Animal Data;

d.     making the Samples available to NATA, ISO or other accredited laboratories for genotyping;

e.     making the genotypes available to DataGene for the genomic evaluation in accordance with the Delivery Schedule;

f.     upon receipt of ABV(g)s from DataGene, using the ABV(g)s for the Purpose.”

(Emphasis added.)

94    The Tripartite Agreement is silent as to any role for Zoetis Inc., the US entity. Scidera submits that the steps taken by Zoetis and DataGene are plainly not “discrete” or the unilateral acts of unrelated parties, and that the steps subsequent to the SNP Testing (i.e., the identification or making of an inference of a trait) are not “simply independent mental or computational steps”. Rather, Zoetis is contractually obliged to undertake the activities in clause 4.1 in order to conduct the “Purpose”, being “the provision of animal ABV(g)s, calculated by DataGene using Animal Data and genotypes provided by Zoetis, to the owning farmer and advising that farmer on appropriate management strategies for the farmer’s dairy herd”.

95    As illustrated by this material, Scidera’s infringement case against Zoetis involves more than the carrying out of genetic testing which purportedly occurs outside the patent area. It is not appropriate to delve further into that case at this juncture because this proceeding has already reached a point where it ought to go to trial rather than be summarily dismissed.

9.3    Novel question of law

96    This proceeding raises a novel and important question of law: whether all the essential integers of a claimed method or process must be performed within the patent area for there to be infringement of a claim to said method or process that does not produce a product.

97    I consider that adopting Scidera’s construction of claim 1 leaves the question less clear-cut than on Zoetis’ case wherein the substance of the invention, purportedly being the physical testing, is conducted entirely outside the patent area. On Scidera’s case, whilst the physical testing may be conducted outside the patent area, an essential integer comprising the identifying or making of an inference of the trait linked to the SNPs of interest is carried out in the patent area. The end result of the claimed method, regardless of whether it can be considered as a “product”, also yields in the patent area.

98    I refer to s 13 of the Patents Act and the statutory definition of “exploit”, which I set out above. Statutory provisions must be construed as a whole to ensure that the construction is consistent with the “language and purpose of all the provisions of the statute”: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] (per McHugh, Gummow, Kirby and Hayne JJ). The language which has actually been used in the text, in light of context and purpose, is the surest guide to legislative intention: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47] (per Hayne, Heydon, Crennan and Kiefel JJ). In interpreting a statutory provision, the construction that would best achieve the purpose or object of the relevant statute, whether that purpose or object is expressly stated in the Act, is to be preferred to each other interpretation: s 15AA of the Acts Interpretation Act 1901 (Cth).

99    As noted above, the Patents Act now includes an object clause under s 2A. The object clause was introduced via the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2019 (Cth). The explanatory memoranda of the corresponding bill (EM to the Productivity Commission Bill) stated the following regarding the parliamentary intention of the introduction of the object clause:

Part 1 – Object of the Act

Introduction

8.    This Part amends the Patents Act to insert and objects clause to provide additional clarity and guidance on the purpose of the legislation.

[…]

10.    The introduction of an objects clause will clarify the underlying purpose of the patent system and over time will reduce uncertainty in the operation of the Patents Act. It will also provide broad guiding principles that will help ensure that the patent system remains adaptable and fit-for-purpose as new innovations are developed in the future.

Item 1: After section 2

[…]

13.    The purpose of the objects clause is to articulate the underlying purpose of the patents system in Australia. The clause provides that the benefits of the patents system to society are primarily economic in nature, and these benefits are achieved through incentivising innovation and the dissemination of technology. Among other things, this results in better access to technology and new inventions, which will lead to improved economic wellbeing.

14.    These objects are not new, but reflect existing goals of the patent system. The clause is intended to clarify and clearly articulate these goals, and to assist courts in interpreting the Patents Act in cases where the text of the legislation is uncertain or ambiguous. Given this, the objects clause does not alter the ordinary meaning of the legislation or overturn existing case law and established precedent.

(Emphasis in original in bold.) (Emphasis added in italics.)

100    Thus, in addition to the principles of construction set forth in Project Blue Sky, the EM to the Productivity Commission Bill expressly contemplates that “where the text of the legislation is uncertain or ambiguous”, s 2A “is intended to clarify […] and to assist courts in interpreting the Patents Act”.

101    Neither party addressed the object clause and how that might influence construction of the remainder of the Relevant Statutory Provisions, or whether it might evidence a legislative intention that patentees are entitled to enjoy the full benefit and advantage of their statutory right such that infringers may not circumvent the exclusive rights conferred to the patentee to “exploit” the invention. Furthermore, neither party addressed whether a “patent system [which] remains adaptable and fit-for-purpose […]” is one which provides a patentee the exclusive right to exploit their claimed method or process in a manner that treats carrying out an essential integer of the claimed method outside the patent area, with other essential integers performed in Australia, as effectively carrying out the claimed method in Australia.

102    Australian courts have previously considered the infringement of method claims involving the use of the claimed method overseas. However, each of these cases involved the extended definition of “exploit”, wherein a product resulting from the use of a method overseas had been imported into Australia: see e.g., Apotex Pty Ltd v Warner-Lambert Co LLC (No 2) (2017) 123 IPR 30 at [296]–[298] (per Nicholas J), endorsed in Warner-Lambert Co LLC v Apotex Pty Ltd (No 2) (2018) 129 IPR 205 at [167] (per Jagot, Yates and Burley JJ) (Warner-Lambert FC) (together, the Warner-Lambert Cases).

103    It was common ground that Scidera does not rely in this proceeding upon the extended definition of “exploit” in the Patents Act relating to a product resulting from the use of a patented method, in contrast to the methods considered in the Warner-Lambert Cases. In Ariosa Diagnostics, the Full Court held that the Harmony Test results did not constitute a “product” in the sense relevant to “exploit” under s 13 and Sch 1 paragraph (b) of the Patents Act.

104    Like the present case, in Ariosa Diagnostics, samples were taken from patients in Australia and sent to the US for genetic testing and analysis. However, unlike the present case, in Ariosa Diagnostics, the method of detecting was carried out, to its entirety, in the US. All that remained was for the results of the tests to be communicated electronically to the medical practitioner in Australia, who would inform the results to the respective patient. No further steps of the method remained to be performed in the patent area. Because the Full Court considered the results of the testing to be mere information, they did not constitute a product resulting from the use of the claimed method for the purposes of paragraph (b) of the definition of “exploit” in Sch 1 of the Patents Act: Ariosa Diagnostics at [269].

105    Zoetis submits that in the case of the extended definition of exploit, the Patents Act still requires an act of exploitation of a product, resulting from the use of the method, in the patent area. Zoetis contends that it is the exploitation of that product in Australia, or its importation—not the use of the method abroad—that gives rise to infringement of an Australian patent: Warner-Lambert at [297].

106    There is no fundamental requirement expressed in the Patents Act that all essential integers of a method claim that does not result in a product must be performed in the patent area. It is apparent from the statutory text of the Patents Act, and its construction in the Warner-Lambert Cases, that the Patents Act contemplates consideration of method steps performed outside the patent area in the context of the patentee’s exclusive right to “exploit” and therefore infringement. To establish infringement of a method claim wherein the use of the method results in a product, for example a Swiss-style claim, it would be necessary to demonstrate that the essential integers of the method or process had been used in the course of producing the product which was ultimately imported into Australia, whether the method steps were undertaken in Australia or overseas. Thus, that an integer of a method is carried out outside the patent area does not in itself appear to be a bar to infringement, at least where the product resulting from the use of the method abroad is ultimately imported into Australia. The performance of one step of a claimed method outside the patent area, with the remaining steps carried out within the patent area to produce a product which is subsequently sold or supplied in Australia falls within the scope of infringement contemplated by the Patents Act.

107    On Zoetis’ case, it is the production of a product by a claimed method and the exploitation of that product within the patent area that grounds the infringement, regardless of whether some or all the steps of the method or process have been used outside the patent area to produce the product. According to the extended definition of “exploit”, the product results from “such use”, so the relevant use of the claimed process or method can be entirely outside the patent area in the case of an imported product and still be caught within the scope of infringement. Alternatively, the product can also be completed in Australia for products which are sold or supplied in Australia.

108    There seems to be little basis in the terms of the Patents Act, including s 2A against the background of the EM to the Productivity Commission Bill, to draw a distinction between the carrying out of some steps of a claimed method outside the patent area in case of a method or process that does not produce a product, and where a product is produced that would substantiate the differential treatment of the latter as infringing and the former as not.

109    Such an arbitrary distinction would appear to be inconsistent with the line of United Kingdom authorities beginning in 1880 with Von Heyden v Neustadt (1880) 14 Ch D 230 to Saccharin Corp Ltd v Anglo-Continental Chemical Works Ltd [1901] 1 Ch 414 and Beecham Group Ltd v Bristol Laboratories Ltd [1978] 95 RPC 153 which evince a disinclination on the part of United Kingdom courts to enable a putative infringer to avoid infringement simply by performing an integer of a claimed method or process outside the patent area.

110    In Von Heyden at 233, James, Brett and Cotton LJJ stated:

[…] A person who makes, or procures to be made, abroad for sale in this country, and sells the product here, is surely indirectly making, using, and putting in practice the patented invention. Any other construction would, in fact, in the case of any really valuable invention of a process, render the whole privilege granted by the Crown futile. When the patent was an English patent only, an imitator would only have had to establish his factory on the other side of the border, and now such an imitator would only have to establish his factory or use the chemical process at Boulogne or Ostend, and he would effectually deprive the inventor of the “whole profit, benefit, commodity, and advantage” of his invention; and, the more valuable the invention, the more certain it would be that the prohibition in the letters patent would be so indirectly avoided […]

(Emphasis in original.)

111    Sir William James VC in Elmslie v Boursier (1869) LR 9 Eq 217 found infringement in a case where tin-foil made in accordance with the patented process was imported from France into the United Kingdom, describing the conduct as a violation of the privileges granted by the letters patent. In so doing, his Honour stated at 222:

[…] it would be a very strange thing if a person in England could send an order to someone in France, get the same thing manufactured there in exactly the same way, and bring it here so as to compete with the person to whom the Crown has granted “the whole profit, benefit, commodity, and advantage” arising from the patent. It would be a short mode of destroying “every profit, benefit, commodity, and advantage” which a patentee could have from such a thing, if all that a man had to do was to get the thing made abroad, import it into this country, and then sell it here in competition with the English patentee."

112    The doctrine of infringing importation applied in Elmslie and Von Heyden was extended in Saccharin to cover the importation of a product made outside the patent area using an intermediary product manufactured via use of a patented process. In that case, the defendant had used the patented process to produce ortho-toluene-sulpho-chloride, which it then used in the manufacture of saccharin that was subsequently imported into England. At 416, Buckley J observed:

[…] the grant contained in letters patent is a grant to the patentee to make, use, exercise, and vend the invention, and to have and enjoy the whole profit and advantage by reason of the invention, and, to the end that […] [the patentee] may have and enjoy the sole use and exercise and the full benefit of the invention, all others are precluded from either directly or indirectly making, using, or putting in practice the said invention, or any part of the same, or in anywise imitating the same. […]

113    Justice Buckley then considered the decisions in Elmslie and Von Heyden and held that whilst neither case entirely covered the point to be decided in Saccharin, “their principle does determine it”. Justice Buckley held at 416–7 that there was an infringement in the importation of saccharin synthesised using ortho-toluene-sulpho-chloride made with the patented process, even though the process was carried out outside the United Kingdom. In so holding, his Honour stated:

[…] If the patented process were the last stage in the production of the article sold, the importation and sale of the product would, in my opinion, plainly be an infringement; and does it make it any the less an infringement that the article produced and sold is manufactured by the use of the patented process with the subsequent use of certain other processes? In my opinion it does not. By the sale of saccharin, in the course of whose production the patented process is used, the patentee is deprived of some part of the whole profit and advantage of the invention, and the importer is indirectly making use of the invention. In my judgment, therefore, this contention fails.

(Emphasis added.)

114    Lord Simon of Glaisdale qualified the scope of Buckley J’s test in Beecham Group by adding a proviso that, for there to be an infringement “the process must have played more than an unimportant or trifling part in the manufacture abroad of the product, each case depending on its own merits”: see Beecham Group at 204. Diplock LJ rejected the suggestion that the qualification introduced any aspect of the pith and marrow doctrine.

115    Justice von Doussa applied the Saccharin reasoning in Bedford Industries Rehabilitation Association Inc v Pinefair Pty Ltd (1998) 40 IPR 438, a case involving the creation of edging material that had all the integers of claim 1 of the patent in suit as a step in the manufacture of the Pinefair product. In a decision that was upheld on appeal, von Doussa J considered that the manufacture of the Pinefair product constituted a use of the claimed invention, as the respondents were “taking commercial advantage of the invention to advance them in the marketplace, even though at the point of sale the Pinefair product ha[d] been altered so that it no longer possesse[d] all the integers of the claim”. Justice von Doussa then observed at 451 that:

Although the Saccharin case was concerned with the application of the doctrine of infringing importation of an invention that was a process, the meaning given to the notion of “use” in my opinion applies to the present case. The creation of the garden edging that has all integers of claim 1 and its subsequent use in the manufacture of the Pinefair product was not an unimportant or trifling part of the manufacture, rather it was the sole ingredient for the finished product, and the only additional step to produce the Pinefair product was the cutting of the plastic strip.

(Emphasis added in bold.)

116    Both Saccharin and Beecham were cases decided under the Patents Act 1949 (UK) or its earlier iterations, before the divergence between Australian and United Kingdom patent law brought by the introduction of the UK Patents Act. The UK Patents Act introduced inter alia s 60(1)(c), which provides that, where the patented invention is a process, it is an infringement to dispose of, offer to dispose of, or use or import, any product obtained “directly” by means of that process or to keep any such product whether for disposal or otherwise.

117    In Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd (2019) 138 IPR 402 at [305], Nicholas J noted that the Court of Appeal (Civil Division) in Pioneer Electronics Capital Inc v Warner Music Manufacturing Europe GmbH [1997] RPC 757 considered the impact of s 60(1)(c) of the UK Patents Act on the Saccharin doctrine. At 765, the Court of Appeal in Pioneer Electronics observed that “it would […] be difficult to say that Buckley J’s test had survived the enactment of s 60(1)(c) […]”, at least insofar as that test captured an imported product obtained indirectly by means of a patented process as falling within the meaning infringement.

9.3.1    Relevance of United Kingdom Case Law

118    Neither party put forward argument on why or how consideration of the United Kingdom case law will be of assistance. While it is assumed that the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (Raising the Bar Act) had the general purpose of bringing Australian patent law in line with the law in the United Kingdom, the relevance of United Kingdom case law in informing the present novel question of law merits further exploration. This is because it is not apparent that the Raising the Bar Act reformed the legislative wording of the Relevant Statutory Provisions to give effect to the foregoing alignment. The only consideration of an amendment to the definition of “exploit” by the Raising the Bar Act was contemplated in the context of experimental use as an exemption to patent infringement.

119    In the absence of any reforms to the Relevant Statutory Provisions arising from the Raising the Bar Act, it is necessary to consider the overlap between the wording of the Australian statutory provisions I set out in Part 5 above and s 60 of the UK Patents Act, if any, to determine the textual basis and the extent to which United Kingdom case law is transposable to Australian law and its development in the present case.

120    It is noteworthy that in paragraph (b) of the definition of “exploit”, the concluding words used are “a product resulting from such use”. Whilst it is unclear whether the words are intended to limit the application of that part of the definition of “exploit” to products obtained directly from patented processes or something broader, the corresponding United Kingdom provision referring to “any product obtained directly by means of” the patented process under s 60(1)(c) UK Patents Act may assist in clarifying the meaning of “resulting from”.

121    The Macquarie Dictionary (online edition, accessed 15 September 2025) defines the verb “result” as “to spring, arise, or proceed as a consequence from actions circumstances, premises, etc.; be the outcome”. The adverb “directly” is defined as “in a direct line, way, or manner; straight” or “absolutely; exactly; precisely”. At first blush, it appears that the words “resulting from” in Australia gives the definition of “exploit” a wider application than the patentee’s exclusive right afforded in the United Kingdom. If that position is correct, paragraph (b) of the definition of “exploit” may give statutory effect in Australia to United Kingdom case law relating to circumstances where there had been an importation of a product in which a patented process was used as an intermediate step in its production, rather than the imported product being the end product of the patented process. This would include the doctrines elucidated in Saccharin and Pinefair.

122    However, as I have indicated above, the present case concerns the use of a method or process which does not result in a product as required by both paragraph (b) of the definition of “exploit” in Australia and s 60(1)(c) of the UK Patents Act. As such, the United Kingdom cases such as Saccharin, which hold the proposition that the importation of the ultimate product of a multistage process in which a patented process has been used at an intermediate stage outside the patent area may constitute infringement under s 60(1)(c) of the UK Patents Act do not readily apply to this case.

123    With reference to the wording of s 60 of the UK Patents Act, it appears that only ss 60(1)(b) and 60(2) are immediately relevant to the present case as they do not require that there be a “product”. Therefore, the later United Kingdom cases of Illumina and Menashe decided under ss 60(1)(b) and 60(2) of the UK Patents Act may be of assistance, insofar as they have applied an “in substance” test under those sections and not under s 60(1)(c) to find infringement of method claims where an essential integer of said claims has been performed outside the United Kingdom. The parties’ submissions were limited to these United Kingdom cases.

124    I note that in addition to the applicability of Illumina and Menashe considering the text of the relevant legislations, the parties made submissions on the latter case regarding the appropriacy of adopting the same “policy-based approach” in construing the Patents Act. As I stated above, neither party addressed the object clause and how that might influence the construction of the remainder of the Relevant Statutory Provisions, or whether it might evince a legislative intention that the construction of the definition of “exploit” ought to align with the policy-based approach taken by the courts in Menashe and Illumina.

9.3.2    Menashe

125    As set out in Menashe at [2], the matter concerned an infringement action wherein the claim, so far as relevant, was to:

a gaming system for playing an interactive casino game comprising a host computer, at least one terminal computer forming a player station, communication means for connecting the terminal computer to the host computer and the program means for operating the terminal computer, the host computer and the communication means […] characterised in that the terminal computer is situated at a location remote from the host computer[…]

126    The respondent there raised the preliminary issue of whether s 60(2) of the UK Patents Act provided a defence to infringement considering that the host computer and part of the communications means of the apparatus claimed in the patent were not present in the United Kingdom but were connected to the rest of the apparatus.

127    Section 60 of the UK Patents Act provides:

60    Meaning of infringement.

(1)    Subject to the provisions of this section, a person infringes a patent for an invention if, but only if, while the patent is in force, he does any of the following things in the United Kingdom in relation to the invention without the consent of the proprietor of the patent, that is to say—

(a)    where the invention is a product, he makes, disposes of, offers to dispose of, uses or imports the product or keeps it whether for disposal or otherwise;

(b)    where the invention is a process, he uses the process or he offers it for use in the United Kingdom when he knows, or it is obvious to a reasonable person in the circumstances, that its use there without the consent of the proprietor would be an infringement of the patent;

(c)    where the invention is a process, he disposes of, offers to dispose of, uses or imports any product obtained directly by means of that process or keeps any such product whether for disposal or otherwise.

(2)    Subject to the following provisions of this section, a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom.

(3)    Subsection (2) above shall not apply to the supply or offer of a staple commercial product unless the supply or the offer is made for the purpose of inducing the person supplied or, as the case may be, the person to whom the offer is made to do an act which constitutes an infringement of the patent by virtue of subsection (1) above.

[…]

(Emphasis in original in bold.) (Emphasis added in italics.)

128    The respondent submitted that s 60 was confined to acts committed within the United Kingdom. As in the present case, the respondent argued that the “hole” in the internationally agreed rules for infringement could have been plugged by more ingenious claim drafting: Menashe at [18]. A more ingenious claim drafting in Menashe would have included, i.e., separating the claims to the terminal and the host computers, wherein one of the two resultant claims would be fully performed in United Kingdom via the respondent’s conduct.

129    At [28], Aldous LJ observed that “[…] section 60(2) is concerned with putting something, the invention, into effect. It does not look to something which merely has an effect within the United Kingdom.”

130    At [32], Aldous LJ commented that “[…] [i]n the age we live in, it does not matter where the host computer is situated. It could be in the United Kingdom, on a satellite, or even on the border between two countries.” Aldous LJ considered that it would be wrong to apply the antiquated ideas of location to inventions of the type under consideration in Menashe. It was of no relevance to the punter nor the patentee as to whether the host computer was situated in the United Kingdom. Rather it was the input to and output of the host computer that was important to the punter, and “in a real sense the punter use[d] the host computer in the United Kingdom” even though it was situated in Antigua and operated in Antigua. Lord Justice Aldous then considered the question of where the player uses the claimed gaming system:

[…] In those circumstances it is not straining the word “use” to conclude that the United Kingdom punter will use the claimed gaming system in the United Kingdom, even if the host computer is situated in, say, Antigua. Thus the supply of the CD in the United Kingdom to the United Kingdom punter will be intended to put the invention into effect in the United Kingdom.

(Emphasis added.)

131    Lord Justice Aldous (with whom Dyson LJ, Sir Denis Henry J agreed) concluded at [34] that: “[…] [a] punter who uses the William Hill system will be using the whole system as if it was in the United Kingdom. He will in substance use the host computer in the United Kingdom, it being irrelevant to the punter where it is situated.”

132    In other words, while the introduction of s 60(1)(c) of the UK Patents Act confined the Saccharin doctrine such that now only imported products obtained directly, as opposed to directly and indirectly, by means of a patented process could fall within the meaning of infringement, the wording under s 60(2) captures any of the means (i.e., means in jurisdictions outside of the United Kingdom), relating to an essential element of the invention, for putting the invention into effect when, subjectively or objectively, those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom. In essence, a means to put into effect an essential integer of the claimed method abroad is “in substance” put into effect in the United Kingdom if it is intended—subjectively or objectively—to be used to put into effect the invention within the United Kingdom.

133    Zoetis submitted orally that the approach adopted in Menashe is “policy-based” and is not to be adapted in Australia to construe the Patents Act. Scidera contended that Menashe was indicative of the “hole which would exist in the internationally agreed rules for infringement should [it be] accepted that carrying out an integer [of the claimed method or process] outside the jurisdiction couldn’t give rise to infringement” and that Jacob J considered that a problem “as a matter of policy”.

134    Zoetis did not, however, explain why Menashe is inapplicable given the “hole” in the Patents Act regarding method claims that do not yield a product.     

9.3.3    Illumina

135    Illumina involved patents which concern non-invasive prenatal diagnosis, i.e., genetic testing on a foetus that required only sampling of the mother’s blood, or other non-invasively collected analyte. Relevantly, claim 1 of the “Lo 1” patent claimed:

1. A detection method performed on a maternal serum or plasma sample from a pregnant female, which method comprises detecting the presence of a nucleic acid of foetal origin in the sample, wherein said nucleic acid is a paternally inherited sequence which is not possessed by said pregnant female.

136    Premaitha, the respondent, sought a non-infringement declaration in respect of its proposed alternative process, in which some steps of the process were conducted in Taiwan. The DNA preparation and sequencing was to be conducted in the United Kingdom, but the raw unmapped sequence data would be analysed at a site in Taiwan where the remainder of the steps were carried out, following which a PDF format test report would be sent back to the United Kingdom. The laboratories offering the testing services were located in the United Kingdom.

137    Justice Carr considered that the crucial question was whether, in substance, the alternative proposed process was used in the United Kingdom. His Honour found that question in the affirmative. At [508], Carr J accepted Illumina’s submission that any other result would make it far too easy to avoid infringement of patents of this nature “given the ease of digital transmission and the ability to offshore computer processing”. Justice Carr considered Illumina’s best case of infringement was under s 60(1)(b) and therefore did not determine the dispute under ss 60(1)(a), 60(1)(c) or 60(2) of the UK Patents Act. In other words, Carr J’s holding did not result from the application of the “in substance” doctrine in Menashe insofar as it concerned s 60(2) of the UK Patents Act.

9.3.4    Conclusion on infringement

138    Scidera submits that s 13(3) of the Patents Act requires an assessment of where the method is exploited. By analogy with the United Kingdom cases of Illumina and Menashe, Scidera submits that it is more than reasonably arguable that in this case the method is “in substance” taking place in Australia.

139    Scidera submits that in assessing where, “in substance” the process was used, the court in Illumina focussed on the introductory words of the claim. The answer to Carr J’s crucial question in this case, Scidera submits, would be Australia. The identifying or inferring of the trait takes place in Australia. In contrast to the facts in Ariosa Diagnostics, further analysis including the identification of SNPs and the drawing of inferences of particular traits in the form of ABVs or EBVs, take place in Australia. Lastly, the results of ABVs or EBVs in the form of SNP File and Genotype File are then made available to the end customer, also in Australia.

140    I have included discussion of the United Kingdom authorities both before and after the enactment of the UK Patents Act to demonstrate that the novel question of law is not a simple one, capable of a binary “yes or no” answer at this stage. In each of the United Kingdom cases, the corresponding courts have approached the meaning of “infringement” with caution to ensure that an infringer is not enabled, contrary to the legislative wording and intention, to take the benefit of a patented method merely by carrying out certain essential integers of the claimed method outside the patent area.

141    At this preliminary stage, I note that there may be an arguable case that the policy-based approach taken by the United Kingdom courts in Menashe and Illumina may align with a construction of “exploit” which gives effect to the object clause of the Patents Act. Such objects include, according to the EM to the Productivity Commission Bill, that the Australian patent system “remain adaptable and fit-for-purpose” and “provide […] benefits [that] are achieved through incentivising innovation and the dissemination of technology […]”. This, however, remains to be fully argued by the parties at trial.

142    Further, in each of the United Kingdom cases, the question of law was inextricably tethered to the factual circumstances of each case, namely the construction of the relevant claims, the essentiality of the specific integers therein, and the corresponding infringing acts which occurred both within and outside of the United Kingdom.

143    Whether the introduction of the object clause under s 2A of the Patents Act is consistent with a legislative intention towards a construction of infringement that patentees are entitled to enjoy the full benefit of their statutory right that ought not be set at naught by offshoring a step of a claimed method, is a question that merits fulsome argument and consideration on the facts of the case.

10.    Conclusion

144    Both questions of claim and statutory construction differ from that proposed by Zoetis in the present Application. The issue of whether the Asserted Claims and the Patents Act, properly construed, capture Zoetis’ conduct—including its completion of the claimed method via the identification or inferences of the trait it makes from the information provided by Zoetis Inc.—is complex and inextricably tied to the facts of the case, the nature and scope of the claimed method and the extent of Zoetis’ conduct.

145    Regarding the proper construction of the Patents Act, the relevance and applicability of the United Kingdom case law in light of the object clause and the differing statutory language between the Patents Act and the UK Patents Act has not been the subject of argument. These matters warrant full consideration and detailed submissions by the parties at trial.

146    For the above reasons, I consider that the matter is not a straightforward case that is appropriate to be summarily dismissed.

11.    Disposition

147    For the reasons set out above, I dismiss Zoetis’ Application.

148    Zoetis should pay Scidera’s costs of its Application.

Associate:

Dated:    10 October 2025

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