Federal Court of Australia

Kumiai Chemical Industry Co., Ltd v Kenso Corporation (M) SDN. BHD [2026] FCA 1219

ORDERS

In these orders:

Judgment means the reasons delivered by the Court in this proceeding on 26 August 2026, Kumiai Chemical Industry Co., Ltd v Kenso Corporation (M) SDN. BHD [2026] FCA 1219.

THE COURT ORDERS THAT:

Statement of Claim

1.    The Applicant/Cross Respondent has leave to file and serve:

(a)    an amended originating application in the form annexed as “AJC-4” to the affidavit of Anthony James Conaghan affirmed 11 August 2026 (Conaghan Affidavit);

(b)    a further amended statement of claim:

(i)    in the form annexed as “AJC-7” to the Conaghan Affidavit insofar as it advances the First FASOC Amendment, as defined in the Judgment; and

(ii)    a revised pleading in respect of the Second FASOC Amendment, as defined in the Judgment, with further and better particulars of the material facts relied upon, including the circumstances of the alleged Representation; and

(c)    an amended defence to the Respondents/Cross-Claimants’ proposed amended statement of cross-claim.

Cross-Claim & Defence

2.    The Respondents/Cross-Claimants have leave to file and serve:

(a)    the proposed amended statement of cross-claim in the form annexed as “AJC-1” to the Conaghan Affidavit; and

(b)    the proposed further amended defence in the form annexed as “AJC-2” to the Conaghan Affidavit.

3.    The Respondents/Cross-Claimants pay the Applicant’s/Cross Respondent’s costs thrown away by reason of the proposed further amended defence referred to in order 2(b) above.

Discovery

4.    The parties confer in respect of any further categories of discovery sought from the Applicant/Cross Respondent and, if the parties are unable to agree by 1 September 2026, any issue of discovery be referred to a Registrar of the Court for determination.

Other

5.    The Parties provide agreed or competing minutes of order by 4.00 pm on 1 September 2026 on the compliance dates for each of the orders 1–3 above.

6.    Costs be reserved.

7.    Liberty to apply.

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

REASONS FOR JUDGMENT

ROFE J:

Background

1    This proceeding concerns a claim by Kumiai Chemical Industry Co., Ltd (the Applicant), the patentee of Australian Patent No 2023100061 (061 Patent), that Kenso Corporation (M) Sdn Bhd (the First Respondent) and Kenso Agcare Pty Ltd (the Second Respondent) (together, the Kenso Parties) have infringed claims 1 and 5 of the 061 Patent. The pleaded infringement is said to arise from dealings with the Kenso Parties’ KUDOS® 850 WG Herbicide (Kudos Product), within the patent area, including selling, offering to sell, using, importing and keeping that product for those purposes, and, in the case of the First Respondent, authorising the Second Respondent and customers to engage in those acts. By its originating application, the Applicant seeks declarations of infringement, injunctive relief restraining further infringement during the term of the patent, damages or an account of profits, interest, delivery up for destruction of infringing products, and costs. The Kenso Parties deny infringement and, via the statement of cross-claim filed on 15 November 2024 (the SOCC), they seek revocation of the 061 Patent on various grounds of invalidity.

2    On 10 July 2026, the Kenso Parties filed evidence-in-chief in support of the SOCC. On 27 July 2026, the solicitors for the Kenso Parties wrote to the Applicant’s solicitors providing a copy of the proposed amended statement of cross-claim (the Proposed ASOCC) and of the proposed further amended defence (the Proposed Further Amended Defence).

3    On 28 July 2026, I held a joint case management hearing for this proceeding and for the related proceeding, Proceeding No VID 1233 of 2024, Kumiai Chemical Industry Co., Ltd v Conquest Crop Protection Pty Ltd (the Related Proceeding). At that time, Senior Counsel for the Applicant noted inter alia that the Kenso Parties sought to make extensive amendments to the statement of cross-claim, with the addition of at least one ground of invalidity to which the Applicant objects. During oral submissions, Senior Counsel for the Kenso Parties relied on the affidavit of Prof Patrick Perlmutter affirmed on 9 July 2026 (the Perlmutter Affidavit), which refers to the Applicant’s standard patent, Australian Patent No 2020300922 (the 922 Patent). Prof Perlmutter is an Adjunct Professor at La Trobe University, Institute of Molecular Science and gives expert evidence concerning the chemistry of the claimed processes. The Kenso Parties further relied on the affidavit of Anthony James Conaghan affirmed on 11 August 2026 (the Conaghan Affidavit). Mr Conaghan is a solicitor for the Kenso Parties and gives evidence on a number of procedural and factual matters of the conduct of this proceeding and the history of the 922 Patent.

4    The Applicant relied on the evidence of Professor Christopher John Easton, Emeritus Professor in the Research School of Chemistry at the Australian National University. Prof Easton affirmed an affidavit on 26 June 2026 (the Easton Affidavit), in which he provides expert evidence on the 061 Patent and related technical matters such as organic impurities analysis, residual solvents and metal content analyses. Prof Easton also opines on various affidavits pertaining to experiments, as well as the Kudos Product’s safety data sheet.

5    On 5 August 2026, the Applicant’s solicitors wrote to the Kenso Parties’ solicitors indicating that the Applicant consents to the amendments sought in the Proposed ASOCC, with the exception of amendment at [8A]. The correspondence further noted that the Applicant proposed to file a further amended statement of claim. On 10 August 2026, the Applicant’s solicitors wrote to the Kenso Parties’ solicitors providing an amended proposed further amended statement of claim (the Proposed FASOC).

6    At present, the following issues arise:

(a)    Proposed ASOCC: the Applicant consents to the Kenso Parties’ filing of a Proposed ASOCC save for [8A], which claims that the 061 Patent does not comply with the requirements of s 40(2)(aa) of the Patents Act 1990 (Cth) because the complete specification does not disclose the best method of performing the invention known to the Applicant (the Best Method Claim). The Kenso Parties therefore seek leave to file the Proposed ASOCC including the Best Method Claim.

(b)    Proposed Further Amended Defence: the Kenso Parties seek leave to file a proposed further amended defence (FAD), which raises a defence of prior user under s 119 of the Patents Act.

(c)    Proposed FASOC: the Applicant does not object to the introduction of the s 119 defence via the Proposed Further Amended Defence if it is allowed to file a proposed amended originating application and the Proposed FASOC, which makes additional allegations against the Kenso Parties on the basis of joint tortfeasorship in respect of the alleged infringement by its customers and a failure to warn claim under Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law).

(d)    922 Patent Claims Revocation Proceedings: the Kenso Parties foreshadow that they will commence separate revocation proceedings against some of the claims of the 922 Patent in the event that the Applicant does not include the 922 Patent in the present infringement proceedings. The 922 Patent is a standard patent whereas the 061 Patent is an innovation patent.

(e)    Proposed Discovery: the Kenso Parties seek orders that discovery be referred to a Registrar of the Court for determination. The Applicant does not disagree.

Proposed ASOCC

7    By way of the Proposed ASOCC, the Kenso Parties seek leave to make amendments to the amended statement of cross-claim, including leave to plead the Best Method Claim:

No disclosure of best method

8A.    Furthermore and alternatively, the complete specification of the 061 Patent does not comply with the requirements of section 40(2)(aa) of the Patents Act in that the complete specification does not disclose the best method known to the applicant of the 061 Patent of performing the invention.

Particulars

i.    The complete specification of the 061 Patent purports to provide an industrial process for the manufacture of pyroxasulfone. However, the specification does not disclose any industrial process and, in particular, does not disclose the reactants, other components and conditions including the best method of industrial production. Such industrial production process method which would involve identification of the (i) metal catalyst, solvent(s) and oxidant; (ii) industrial quantities and concentration of oxidant, catalyst and solvent; (iii) process steps including addition of any pre-added water and timing of addition of raw materials, catalyst, solvent(s) and oxidant; (iv) whether there are any other catalysts including any phase transfer catalyst and / or any acid catalyst; and (v) timing of addition of other components.

ii.    As at the filing date, the Cross-respondent manufactured a product called Sakura® 850 WG Herbicide containing the active constituent pyroxasulfone which is the active agent produced by the process claimed in claim 1 and 5 of the 061 Patent. In those circumstances, it can be inferred that the Cross-respondent knew of an industrial process for the production of pyroxasulfone which is not disclosed in the 061 Patent.

iii.     Further particulars may be provided following discovery.

(Emphasis in original.)

8    The principles governing the question of leave to amend pleadings are distilled in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, which include consideration of the following factors:

    the nature and importance of the amendment to the party applying for it;

    the extent of the delay and the costs associated with the amendment;

    the prejudice that might be assumed to follow from the amendment, and that which is shown;

    the explanation for any delay in applying for that leave;

    the parties’ choices to date in the litigation and the consequences of those choices;

    the detriment to other litigants in the Court; and

    potential loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification.

Nature and importance of the amendment

9    As a preliminary matter, the Kenso Parties contend that the amendment is important given that if the 061 Patent is found to lack a best method, it will provide a complete defence to the Kenso Parties by way of invalidating all the relevant claims of the 061 Patent. The Kenso Parties also contend that the public interest requires ensuring that only valid patents remain on the register and that only valid patents are successfully enforced, noting that the Applicant has alleged infringement of the 061 Patent against multiple entities, including in the Related Proceeding.

10    The Kenso Parties summarise their Best Method Claim as follows. The invention described, claimed and promised in the 061 Patent is an industrial process for the production of pyroxasulfone but the specification discloses only laboratory-scale examples. In particular, there is no disclosure of the reactants, components and conditions of production at an industrial scale. The Kenso Parties submit that there is a material difference between a laboratory-scale process and an industrial-scale process. They submit that it can be inferred that the Applicant had knowledge of an industrial process of performing the invention—and failed to disclose it in the specification of the 061 Patent (the Specification)—because now, and at the time of filing the 061 Patent, the Applicant has been a manufacturer of pyroxasulfone and the Specification promises industrial advantages.

11    The Kenso Parties also contend that it is sufficient that they have identified that the better method would be an industrial one, having the parameters particularised in proposed [8A] as set out above, as no industrial process is described in the Specification. The Kenso Parties rely on the Full Court’s decision in Zoetis Services LLC v Boehringer Ingelheim Animal Health USA Inc (2024) 182 IPR 20, where Perram, Nicholas and Downes JJ held at [65]:

We accept Boehringer’s submission. It would be possible, as Zoetis submits, for Boehringer to prove that one of the IVPs was the best method known to Zoetis and then to demonstrate that that method had not been disclosed. But what is involved is a factual question: did Zoetis disclose the best method known to it of performing the invention? Whilst that fact could be proved in the manner suggested by Zoetis this is not the only way it could be proved. Forensically, it was equally open to Boehringer to demonstrate that Zoetis knew of a best method which it had not disclosed without identifying that best method […]

(Emphasis added.)

12    In response, the Applicant submits that:

    the Kenso Parties mischaracterise the invention—the invention is not an industrial process generally. The relevant advantage of the 061 Patent concerns solvent selection avoiding disadvantages of prior art oxidants and/or solvents; and

    the Kenso Parties’ Best Method Claim is speculative. The Kenso Parties do not identify any actual undisclosed feature said to be material, and there is no evidentiary basis from which to infer that the Applicant had knowledge of an industrial process embodying the claimed invention at the date of filing. Industrial suitability derives only from solvent choice. The written evidence of Prof Perlmutter identifies no specific industrial parameter affecting the promised advantages, and no evidentiary basis exists from which to infer knowledge of a superior industrial process.

Best Method: s 40(2)(aa)

13    Sub-section 40(2)(aa) of the Patents Act stipulates that a complete specification must disclose the best method known to the patent applicant of performing the invention. The best method is to be assessed at the filing date of the 061 Patent and imposes on the patentee “an obligation to include aspects of the method of manufacture that are material to the advantages it is claimed the invention brings”: Les Laboratoires Servier v Apotex Pty Ltd (2016) 117 IPR 415 at [135] (Bennett, Besanko and Beach JJ).

14    The words of the statute require that a complete specification must disclose the best method known to the applicant of performing the invention. The key to understanding the best method obligation is to understand that the section is directed to the method of performance of the invention: Servier at [124]. The statutory monopoly is circumscribed by the claims, but the nature of the invention is as described in the whole of the specification.

15    For the purposes of determining whether the best method of performing the invention has been disclosed, it is necessary to consider both the description of the invention and the claims: Zoetis at [14]–[15] (Perram, Nicholas and Downes JJ). The nature of the invention will determine what is the best method in the circumstances in a particular case: Servier at [129], citing Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2005] RPC 9 at [104] (Lord Hoffman). The nature and extent of the disclosure required depends on the nature of the invention itself: Zoetis at [15].

16    In GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Ltd v Generic Partners Pty Ltd (2018) 131 IPR 384 at [191], Middleton, Nicholas and Burley JJ further explained that a patentee could not avoid disclosing the best method of performing the invention on the basis that the skilled addressee could ascertain such information by routine experiment.

Characterisation of the invention

17    The characterisation of an invention is to be decided on the construction of the claim in light of the specification as a whole and the common general knowledge, and it is to be determined as a matter of substance, not merely the form of the claim: Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents (2022) 274 CLR 115 at [73] (Kiefel CJ, Gageler and Keane JJ), [101]–[103] (Gordon, Edelman and Steward JJ); Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents (2025) 187 IPR 46 at [126] (Beach, Rofe and Jackman JJ).

18    At this stage, there are competing characterisations of the invention. The Applicant characterises the invention as directed to the use of particular solvent systems to avoid the disadvantages of m-chloroperoxybenzoic acid (mCPBA), whereas the Kenso Parties characterise the invention as an industrially advantageous process involving step (iii). The Applicant’s expert, Prof Easton, has not yet been asked to address the proposed Best Method Claim directly. In those circumstances, I do not consider it appropriate to resolve the characterisation of the invention on an interlocutory basis. It is a matter for trial.

19    I turn now to the facts relied upon by the Kenso Parties. The question at this stage is not whether the proposed Best Method Claim will ultimately succeed, but whether it is sufficiently arguable to justify its inclusion in the pleadings. Having regard to the material presently before the Court, I am satisfied that the proposed ground is not hopeless, is supported by an adequate factual foundation, and should be permitted to proceed to trial.

20    The Perlmutter Affidavit refers to WO2021/144796 A1, defined as the Adama Patent. From [382] of the Perlmutter Affidavit, Prof Perlmutter deposes that the Adama Patent discloses a general procedure for pyroxasulfone, which he considers to fall within the scope of Claim 1 of the 061 Patent. At [387], he further states that the procedure described on page 8 of the Adama Patent is “an industrial (or pilot) scale procedure for the production of pyroxasulfone. The procedure uses a significantly greater amount of reaction components than those described in the examples in any of […] or 061 Patent.”

21    Prof Perlmutter then turns to the best method issue. At [404], he states that he has been informed that a patentee is required to disclose the best method known to it of performing the invention. On that basis, he expresses the view that the invention disclosed in the 061 Patent is an industrial process involving step (iii), but that the Specification does not disclose any industrial process falling within the claims, or otherwise. He observes that, if the claimed invention is an industrial process, he would expect the best method of performing it to be disclosed in substantially greater detail than the laboratory-scale examples provided in the Specification, including as to the quantities of reactants, scale-up conditions, temperatures, reaction times and other process conditions.

22    The Kenso Parties referred to the Specification said to support the proposition that the invention or advantage of the method lies in its suitability for industrial application. At [0020] of the Specification under the subheading “Summary of Invention”, embodiments of the invention are described as relating to a process for producing a compound that is “superior in yield” and “industrially advantageous”:

Embodiments of the present invention relate to a process for producing the compound of the formula (4) that can safely and simply produce the compound of the formula (4), is superior in yield and is novel and industrially advantageous.

(Emphasis added.)

23    At [0021], the Specification makes further reference to further embodiments of the invention that are “superior in yield”, “advantageous for the production on an industrial scale” and “industrially advantageous”:

Further embodiments of the invention relate to a process for producing the compound of the formula (5) from the compound of the formula (4) that affords a product containing the compound of the formula (6) in a sufficiently low percentage, is superior in yield, advantageous for the production on an industrial scale, and industrially advantageous.

(Emphasis added.)

24    At [0033], the Specification further notes the importance of “superior yield” with respect to the invention:

Furthermore, the present invention provides a process for producing the compound of the formula (5) (sulfone derivate: SO2 derivative) from the compound of the formula (4) (sulfide derivative: S derivative), wherein the proportion of the compound of the formula (6) (sulfoxide derivate: SO derivative) in the product is sufficiently low, the yield is superior, and the process is advantageous for production on an industrial scale.

(Emphasis added.)

25    At [0034], the Specification records that “the process of the present invention can be implemented on a large scale using low-cost materials, and is superior in economic efficiency, and is suitable for production on an industrial scale”.

26    As discussed above, the Applicant’s main argument against the grant of leave for the Proposed ASOCC is that the invention of the 061 Patent is directed to a specific step (iii) in a process for producing pyroxasulfone (formula 5) from the compound of formula 4 that comprises reacting the sulfide with an oxidising agent—specifically hydrogen peroxide—in the presence of a catalyst, one or more specific organic solvent(s) and a water solvent. At [0013], the 061 Patent identifies that the manufacture of pyroxasulfone on an industrial scale gives rise to one issue, namely that mCPBA, used in the prior art, is “expensive for industrial use and has problems in handling and waste”, and is therefore not practical for use on an industrial scale. As such, the Applicant submits that the use of alternative, less expensive and more readily handled solvents is what makes the claimed process suitable for use on an industrial scale.

27    The Kenso Parties’ reply is that Prof Easton’s evidence is taken out of context because that evidence is not given by reference to the Specification in the infringement allegation. The totality of Prof Easton’s written evidence at [294] of the Easton Affidavit is as follows:

Methanol and ethanol are the most commonly used C1–C4 alcohols at industrial scale because they are readily available in bulk quantities and are easily recyclable due to their low boiling points (64.7 °C and 78.4 °C respectively). By contrast, propanol and butanol are less readily available, more expensive, have higher boiling points (making them harder to remove from the product during work-up), and are less miscible with aqueous solutions, which would reduce their effectiveness in a mixed alcohol-water reaction system.

28    I accept that Prof Perlmutter’s evidence is expressed at a level of generality. Prof Perlmutter does not identify with specificity the particular variables that would change on scale-up or explain precisely how those variables would affect the level of the desired compound or the yield of pyroxasulfone. However, that criticism goes to the strength and ultimate weight of the proposed Best Method Claim, rather than to whether the pleading is so untenable that leave should be refused. I consider that Prof Perlmutter’s evidence is sufficient, at this interlocutory stage, to support the proposition that scale-up of a sulfide-to-sulfone oxidation reaction may involve material process choices not disclosed in the laboratory-scale examples of the Specification and is at least arguable.

29    Nor is it necessarily an answer that a skilled addressee might, by routine scale-up work, arrive at an industrial-scale process. If an industrial method, including material process conditions, was known to the patentee and was necessary to perform the invention according to the advantages described in the Specification, the authorities indicate that the patentee could not withhold that information merely because it might be ascertainable by routine experiment. Whether the omitted scale-up information was of that character is a matter for trial.

30    The Kenso Parties’ position is sufficiently arguable at this stage to allow the Best Method Claim to be pleaded. First, the language of the Specification itself identifies the invention as one that is directed not merely to a laboratory-scale reaction, but to a process that is “industrially advantageous”, “advantageous for the production on an industrial scale” and “suitable for production on an industrial scale”. Those statements are relevantly contained under the subheading “Summary of the Invention” and the description of the advantages said to be conferred or achieved by the invention. Absent concluding evidence, on one available view, they may form part of the invention as described in the Specification as a whole.

31    Secondly, the Kenso Parties rely upon the uncontested evidence of Prof Perlmutter, whose evidence is that the invention disclosed in the 061 Patent is directed to an industrial process involving step (iii), yet the Specification does not disclose an industrial-scale process falling within the claims. He further deposes that, if the invention is indeed directed to an industrial process, a person skilled in the art would expect the best method to be disclosed in substantially greater detail, including details concerning scale, quantities of reactants, reaction conditions and other process parameters. At present, there is no evidence before me contradicting those opinions of Prof Perlmutter. Nor has there been any opportunity to test those opinions through cross-examination. In the present circumstances, I do not consider it appropriate, at this interlocutory stage, to reject or discount Prof Perlmutter’s evidence. Whether Prof Perlmutter’s opinions should ultimately be accepted is a matter that can only properly be determined at trial following any cross-examination and the consideration of any competing expert evidence.

32    Insofar as the Applicant submits that the Kenso Parties have not precisely identified the undisclosed information said to constitute the best method, I consider that the Proposed ASOCC is, in part, to permit the issue to be investigated, as the relevant knowledge is likely to be with the Applicant rather than the Kenso Parties. That conclusion is consistent with Zoetis at [65], where the Full Court accepted that a best method case may, in an appropriate case, be advanced by demonstrating that the patentee knew of a best method which it had not disclosed, without identifying that method with precision.

33    In support of the inference that the Applicant had knowledge of an industrial-scale process, the Kenso Parties relied not merely on general commercial supply, but on statements made on the Applicant’s behalf. The Kenso Parties referred to a letter from the Applicant’s solicitors dated 19 January 2024 describing the Applicant as the manufacturer of the Sakura® pyroxasulfone herbicide product range:

1    Kumiai’s Patents

Kumiai is one of the world’s leading agrochemical companies with over 70 years’ experience in developing and selling herbicide products, both in Australia and around the world. Kumiai is the manufacturer of the market leading Sakura® pyroxasulfone herbicide product range which is distributed in Australia under licensing arrangements with Bayer CropScience Pty Ltd.

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

34    Ms Karen Eames of Bayer CropScience also gave evidence to that effect in her affidavit affirmed on 1 July 2026 (the Eames Affidavit). At [5] of the Eames Affidavit, Ms Eames deposed that “The Sakura Product is manufactured by Kumiai Chemical Industry Co., Ltd, and is distributed exclusively in Australia by Bayer in a number of pack-size variants […]”.

35    While the written evidence is not determinative, it provides some foundation for the inference the Kenso Parties seek to draw given the filing date of the 061 Patent vis-à-vis the APVMA approval dates for the relevant Sakura® products. This is further fortified when the written evidence is read against the statements in the Specification concerning industrial-scale production. The significance of that temporal proximity is underscored by the Full Court’s decision in The Noco Co v Brown & Watson International Pty Ltd (2026) 316 FCR 400, which confirms that the best method requirement is concerned with the method known to the applicant at the filing date of the patent itself. On that basis, evidence tending to show that the patentee possessed industrial-scale manufacturing knowledge at or around the filing date is capable of supporting an inference that such knowledge formed part of the best method known to the patentee at the relevant time. The 061 Patent was filed on 30 June 2023.

36    That the Applicant is identified as the manufacturer of the Sakura® pyroxasulfone product range some six months after the filing of the 061 Patent supports the inference that the Applicant was likely to have knowledge of industrial-scale methods for manufacturing those products. I do not treat that inference as determinative, but it is sufficient, at this interlocutory stage, to support the proposition that the Best Method Claim is at least arguable.

37    I am fortified in that view by Beach J’s observations in Juno Pharmaceuticals Pty Ltd v Celgene Corporation (2021) 157 IPR 427 at [83]–[86], which I address further below under discretionary factors.

Delay

38    The Kenso Parties submit that the amendments sought in the Proposed ASOCC arise from the evidence of Prof Perlmutter filed on 10 July 2026. The Kenso Parties assert that no substantial delay has been occasioned by the Proposed ASOCC because it was provided at around the same time as the evidence-in-chief on invalidity. The Applicant contends that the basic facts that the Kenso Parties rely upon for its Best Method Claim are the promise in the Specification that relates to the method being “suitable for production on an industrial scale”; the fact that the examples are at laboratory scale, rather than industrial scale; and the fact that Kumiai has been a commercial supplier of a pyroxasulfone product.

39    Those facts relied upon by the Kenso Parties were always known in light of the 061 Patent’s reference to industrial-scale and laboratory examples, and the Applicant’s commercial product.

40    I consider that whilst the core facts were available earlier, the timing in seeking the amendment is, to a certain extent, explicable. The Kenso Parties’ explanation is that the best method allegation assumed its present form only following receipt and consideration of Prof Perlmutter’s evidence filed a little over a month ago. Once in possession of that evidence, the amendment was raised in a timely manner. In these circumstances, I do not regard the timing or the alleged delay as weighing significantly against the grant of leave. In addition, the trial in this matter is not imminent, being some 10 months away. Accordingly, there remains time to allow the parties to file evidence with respect to the Best Method Claim prior to trial.

Prejudice, detriment and discretionary factors

41    Regarding considerations of prejudice and detriment to the Applicant, the Kenso Parties submit that the Proposed ASOCC is sought 10 months before trial, and in circumstances where the Applicant has been provided with evidence-in-chief in respect of the claims. The issue of best method that is in contention is a narrow issue, and there is ample time for the Applicant to respond to it as it sees fit. In that sense, the Kenso Parties assert that the Applicant is not in any materially different position than if the Best Method Claim was raised at the time of filing the SOCC.

42    The Applicant contends that the proposed amendment adding the Best Method Claim would give rise to real prejudice and disruption. The Kenso Parties have indicated that they will seek discovery in respect of that ground of invalidity. However, the Applicant says that the shortcomings in the proposed pleading and supporting evidence suggest that such discovery would likely involve a fishing exercise directed to identifying a basis for the ground, rather than obtaining documents relevant to an adequately articulated case. The Applicant submits that the Kenso Parties have not explained why any such discovery was not sought earlier, particularly given that its evidence-in-chief on invalidity was due in July earlier this year. The Applicant submits that the Kenso Parties’ proposed course would give rise to additional costs for all parties, and should the relevant documents be discovered, the Kenso Parties would presumably seek leave to file further evidence-in-chief addressing those documents. The Applicant considers that this would have consequences for the timing and manner in which it could prepare its evidence in answer on invalidity, placing it at a forensic disadvantage if required to prepare that evidence in a disjointed way.

43    Finally, the Applicant submits that the Proposed ASOCC would also add to the costs of preparing written and oral submissions, expand the issues to be addressed by the experts in any joint report, and require additional time for cross-examination. Given the present uncertainty as to the bounds of the Kenso Parties’ proposed Best Method Claim, the Applicant says it cannot reliably assess the likely effect on the conduct or duration of the trial.

44    In assessing prejudice, I consider that it is relevant that the proposed Best Method Claim does not introduce an entirely discrete factual inquiry. Though [8A] of the Proposed ASOCC raises a new ground of invalidity, I accept the Kenso Parties’ oral submissions that in this case, the Best Method Claim overlaps substantially with issues raised by the existing amended statement of cross-claim. First, the identification of the invention, including whether the invention is properly characterised as an industrially advantageous process rather than merely the selection of a lower-cost solvent system, is also relevant to the utility case and to the priority objections. Secondly, the process parameters said by Prof Perlmutter to be absent from the Specification—including catalyst loading, oxidant concentration, sequence of addition, reaction time, temperature, pre-added water and other reaction conditions—are also relied upon in the support and sufficiency case.

45    Further, the discovery concerning the Applicant’s industrial processes is said to bear not only on best method, but also on infringement, given the inferential manner in which infringement is put and the parties’ dispute about possible industrial processes for producing pyroxasulfone. This overlap arises because the Applicant’s infringement case is said by the Kenso Parties to proceed inferentially in circumstances where the Applicant seeks to put aside the Australian Pesticides and Veterinary Medicines Authority (APVMA) documentation on the basis that it does not reflect the true process used to manufacture the Kudos Product, and then to invite an inference that a process within the claims of the 061 Patent must have been used. On that case, evidence concerning alternative industrial processes for producing pyroxasulfone, including the available combinations of catalysts, oxidants, solvents and reaction conditions, may bear directly on whether that inference can be drawn.

46    The Kenso Parties also submitted that contrary to the Applicant’s position, the oxidant remains in issue. Their submission was that their position statement must be understood in the context of the APVMA documentation. If the Applicant seeks to say that the APVMA documentation does not reveal the true process, then the Applicant must establish what the true alternative process was, including the oxidant used. On that submission, the Applicant cannot take one integer of the position statement out of context while rejecting the remaining integers.

47    Finally, the proposed revocation proceedings concerning the 922 Patent claims may well raise substantially similar technical issues involving the characterisation of the invention as I consider below. The Kenso Parties contend that certain claims of the 922 Patent overlap with certain claims of the 061 Patent. The Kenso Parties could not be prevented from raising the best method challenge in any new revocation proceeding commenced in respect of the 922 Patent, albeit the relevant filing date on which the best method requirement would be assessed would be 30 October 2020.

48    With regard to discretionary factors, Beach J distilled the following at [81]–[86] in Juno Pharmaceuticals in the context of summary dismissal or strike out of a pleading to revoke claims on the ground of best method:

In my view it is arguable that given the nature of the invention described in the 779 patent, the respondent did not satisfy its obligations in respect of the best method requirement and I cannot say that this ground has no reasonable prospect of success.

But even if there was a basis for otherwise finding, there are discretionary reasons that would justify me in not summarily dismissing or striking out the ground at this stage.

First, there needs to be a trial on the question of inventive step anyway which will involve substantial technical and expert evidence.

Second, if I take the best method point off the table now and consequently have no evidence led on the topic, and ultimately on appeal I turn out to be wrong after I had completed the trial on inventive step and other matters, there would have to be a new trial on the question with new evidence led. That would be an unsatisfactory outcome.

Third, I will need to consider the boundaries and content of “the invention” for the ground of lack of inventive step. It would be unsatisfactory to summarily dispose of such questions now and to possibly reach a different or modified view later in the context of the other ground(s).

Fourth, the relative additional time at trial in dealing with the best method point is not so great that it is worth procuring a saving by now getting rid of the point. But I should say that I may grant indemnity costs to the respondent if it ultimately wins on this point anyway.

(Emphasis added.)

49    Senior counsel for the Applicant sought to distinguish Juno Pharmaceuticals on the basis that, in that case, the patent itself revealed that relevant work had been undertaken—namely, the testing of certain compounds—but the information concerning, or results of, that testing had been omitted. By contrast, the Applicant submits that the Kenso Parties have identified no concrete undisclosed feature of an industrial-scale process known to the Applicant and instead seek discovery in order to identify support for an otherwise speculative case.

50    I reject the Applicant’s submissions in this regard and refer to my observations above. I further consider that analogies between this case and Juno Pharmaceuticals exist. In particular, [6A] of the Proposed ASOCC, to which the Applicant does not object, alleges that the invention—as far as is claimed in claims 1 and 5 of the 061 Patent—is not a patentable invention within the meaning of s 18(1A)(b)(ii) of the Patents Act because it did not involve an innovative step when compared to the prior art base at the relevant priority date. As such, whilst the proposed Best Method Claim would add a distinct legal issue, I consider that much of the factual, expert and documentary context is already engaged by other aspects of the proceeding.

51    For these reasons, based on the preliminary evidence and submissions before me, at this interlocutory stage I consider that the discretionary factors weigh in favour of granting the leave sought by the Kenso Parties.

Conclusion

52    I grant leave for the Kenso Parties to file the Proposed ASOCC in the form set out in Annexure “AJC-1” to the Conaghan Affidavit.

Proposed FAD

53    The Kenso Parties seek to file the Proposed FAD to raise the defence of prior user exemption under s 119 of the Patents Act for three reasons (the Prior Use Case). First, though the Applicant’s infringement case is pleaded as arising from the Kenso Parties’ commercial dealings occurring since at least October 2021, the evidence relied on by the Applicant includes steps taken towards obtaining APVMA registration that had commenced by 25 September 2019. On the Kenso Parties’ case, those earlier activities are relevant to the proposed prior use allegations.

54    It is further contended that the Prior Use Case depends on an unchallenged amendment regarding the 061 Patent’s priority date which is sought in the Proposed ASOCC. The Kenso Parties note that Prof Perlmutter’s evidence is that the documents he considered do not disclose the invention as claimed in claims 1 or 5. Whether those documents form part of the prior art for present purposes will depend at least in part on the priority date ultimately determined by the Court.

55    Finally, the Kenso Parties submit that the Applicant would suffer no prejudice if leave to amend were granted, particularly where the Kenso Parties will agree to an order as to costs thrown away arising from the Proposed FAD.

56    The Applicant does not oppose the Proposed FAD. However, the Applicant sought to make its consent conditional upon it being given leave to file the Proposed FASOC, in part to advance an alternative basis for relief that is responsive to the issues raised by the Proposed FAD. I discuss this further below.

Proposed FASOC

57    The Applicant seeks to file the Proposed FASOC in the form set out in Annexure “AJC-7” of the Conaghan Affidavit. In summary, the Proposed FASOC seeks to amend the amended statement of claim by:

    inserting an allegation that after becoming aware of the 061 Patent, the First and Second Respondents encouraged, authorised, and participated in customers’ infringing use of the Kenso Product through APVMA registration, marketing, sales, labels, and directions for use, such that each respondent is liable as a joint tortfeasor for customer infringement (the First FASOC Amendment); and

    the Second Respondent contravened s 18, and further or in the alternative, s 29(1) of the Australian Consumer Law by selling and advertising the Kudos Product in a manner that implicitly represents that customers can lawfully use and deal with the product in Australia, when those activities allegedly infringe the 061 Patent and are not authorised by the patentee Applicant (the Second FASOC Amendment).

58    The Kenso Parties contend that the amendments sought in the Proposed FASOC do not naturally follow in light of the Proposed FAD. They submit that the Applicant has not sufficiently elucidated the bases for the proposed new claims. In circumstances where the Applicant’s evidence-in-chief is complete, and assuming that the Applicant will not seek an opportunity to file further evidence in support of the Proposed FASOC, the Kenso Parties consider that the Applicant ought to particularise its pleadings in a detailed manner to give notice of the case to be met. In oral submissions, junior counsel for the Kenso Parties ultimately accepted that the Kenso Parties had no substantive objection to leave being granted in respect of the First FASOC Amendment. In those circumstances, I consider it appropriate to grant leave in respect of that amendment.

59    Regarding the Second FASOC Amendment, the Kenso Parties refer to rr 16.02(1)(d), 16.02(2)(d) and 16.08(b) of the Federal Court Rules 2011 (Cth) and contend that the amendment falls foul of these provisions. The Second FASOC Amendment is proposed to be pleaded as follows:

Second Respondent – Breach of the Australian Consumer Law

31.    When undertaking each of the acts referred to in paragraph 20 above, the Second Respondent has not provided and does not intend to provide any warning or indication to purchasers or potential purchasers of the Kenso Product that the use, sale, disposal of, offer to sell, offer to dispose of or keeping of those products for the purpose of doing any such acts in Australia is an infringement of the Patent.

32.    By offering to sell or supply, and selling or supplying the Kenso Product, including by advertising the Kenso Product on the Kenso Website, without any warning to the contrary, the Second Respondent has represented and continues to represent that purchasers of the Kenso Product are lawfully entitled to use or supply the Kenso Product and keep the Kenso Product for the purposes of using or supplying it in Australia (the Representation).

33.    The making of the Representation is conduct in the course of trade or commerce within the meaning of the Australian Consumer Law.

34.    The Representation is false, misleading or deceptive or likely to mislead or deceive in that:

(a)    the Kenso Product is a product resulting from the use of the process claimed in each of claims 1 and 5 of the Patent;

(b)    selling, offering to sell, disposing of, offering to dispose of or keeping the Kenso Product for the purpose of doing any such acts in Australia without the authorisation of the Applicant during the term of the Patent infringes at least each of claims 1 and 5 of the Patent;

(c)    the Second Respondent and purchasers of the Kenso Product have not been authorised by the Applicant to use, sell or dispose of, offer to sell or dispose of or keep the Kenso Product for the purposes of doing such acts in Australia.

35.    By reason of the matters pleaded in paragraphs 20 and 31 to 34 above, the Second Respondent has contravened section 18, and further or in the alternative, section 29(1) of the Australian Consumer Law.

(Emphasis in original.) (Emphasis added underlined.)

60    The Kenso Parties submit that the word “including” in the definition of the “Representation” renders the definition a non-exclusive list of matters which lacks the disclosure of the material facts required by the Federal Court Rules. The Kenso Parties rely on Black CJ’s observations in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 40, wherein his Honour observed the following in the context of s 52 of the Trade Practices Act 1974 (Cth):

[…] But in any case where a failure to speak is relied upon the question must be whether in the particular circumstances the silence constitutes or is part of misleading or deceptive conduct […]

61    The Kenso Parties further sought to rely on MMD Design and Consultancy Ltd v Camco Engineering Pty Ltd (2023) 176 IPR 152 at [461], where I drew a distinction between the circumstances in which silence as to possible infringement may be misleading and those in which it may not. In that case, the inference that customers would be concerned about infringement of third-party intellectual property rights was available in relation to large mining companies entering long-term, high-value refurbishment contracts, but not in relation to purchasers acquiring products on an as-required basis without any comparable long-term arrangement:

I am prepared to infer from the evidence that large mining companies preparing to enter long term refurbishment contracts involving large sums of money are concerned about the potential for infringement of third party intellectual property rights by the use of non-OEM parts. However, I am not able to make the same inference in relation to mining companies that purchase tooth constructions on an as required basis with no long-term refurbishment agreement, as there was no evidence to support such an inference.

62    The Kenso Parties submit that the same distinction is relevant here. In their submission, where the alleged Representation, as defined in the Second FASOC Amendment, is said to arise from a failure to warn, it is necessary to assess the particular circumstances of supply in order to determine whether any representation is conveyed at all. The criticism is that the Proposed FASOC does not allege any express representation, nor does it plead with clarity the facts and circumstances from which the alleged Representation is said to be implied. In particular, it does not identify the particular customers, transactions, communications or circumstances in which the absence of a warning would convey the pleaded Representation. Nor are particulars provided. Instead, the pleading appears to assume that the same Representation arises across all sales or supplies of the Kenso Product.

63    In response, the Applicant submits that it could not have known the precise defence that would be raised, but that no prior user defence had been foreshadowed in correspondence, unlike in the Related Proceeding. As to the Second FASOC Amendment, the Applicant submits that [31] of the Proposed FASOC sufficiently identifies the case as one based on a failure to warn. The Applicant accepts that the alleged Representation is put by reference to all supplies of the Kenso Product, rather than by reference to additional features of particular transactions or classes of customers. On the Applicant’s case, any supply of the Kenso Product, without a warning to the contrary, conveys the pleaded Representation. It further submits that if the Kenso Parties contend that particular circumstances of supply make the pleaded Representation less likely to arise, that is a matter which may be pleaded by way of defence.

64    I accept the Kenso Parties’ submission that the Second FASOC Amendment, in its present form, does not adequately plead the material facts said to give rise to the alleged Representation. The allegation is not one of express representation. It is a case in which the Representation is said to arise from the absence of a warning. In such a case, the circumstances in which the silence is said to convey the Representation are not merely evidentiary detail and comprise material facts necessary to give the opposing party fair notice of the case to be met. The pleading in its present form assumes that the Representation arises upon any offer to sell, sale or supply of the Kudos Product, including by advertising on the Kenso Parties’ website, without identifying the relevant class of purchasers, transactions, communications or other circumstances said to give that silence its alleged misleading quality. In my view, that is insufficient for the purposes of r 16.02(1)(d), and risks ambiguity or prejudice within r 16.02(2)(c) and (d) of the Federal Court Rules. Accordingly, I am not minded to grant leave to the Applicant to file the Second FASOC Amendment in its present form, although I consider that the Applicant should be given an opportunity to reformulate or particularise that allegation.

65    I therefore grant leave to the Applicant to file the Proposed FASOC insofar as it advances the First FASOC Amendment. In relation to the Second FASOC Amendment, I will grant leave to the Applicant to file a revised version of it with further and better particulars of the circumstances of the Representation. I also grant leave to the Kenso Parties to file the Proposed FAD.

922 Patent Claims Revocation Proceedings

66    The history of the 922 Patent is set out in the Conaghan Affidavit. In summary, the 922 Patent was granted on 8 January 2026 and belongs to the same patent family as the 061 Patent. Although the Applicant has indicated that it does not presently intend to commence infringement proceedings in respect of the 922 Patent, it has declined to give an undertaking that the 922 Patent will not be asserted in the future. The Kenso Parties submit that, insofar as the claims of the 922 Patent overlap with those of the 061 Patent, those claims are vulnerable to invalidity on the same, or substantially the same, grounds and evidence given by Prof Perlmutter. The Kenso Parties therefore contend that it is appropriate to bring a cross-claim seeking revocation of the relevant claims of the 922 Patent.

67    In oral submissions, Senior Counsel for the Kenso Parties referred to claim 1 of each of the 061 Patent and the 922 Patent, which claims as follows:

(a)    Claim 1 of the 061 Patent:

1.    A process for producing a compound of the formula (5), the process comprising the following step iii, wherein the reaction step iii is performed in the presence of organic solvent(s) having an acceptor number of 0 to 50 and a water solvent, wherein the organic solvent for the reaction step iii is one or more organic solvents selected from (C1 – C4) alcohols, and wherein the water solvent comprises water from aqueous hydrogen peroxide solution:

(step iii) a step of reacting a compound of the formula (4) with hydrogen peroxide in the presence of a metal catalyst, wherein the metal catalyst in the step iii is a tungsten catalyst, to produce the compound of the formula (5) […]

(Emphasis added.)

(f)    Claim 1 of the 922 Patent

1.    A process for producing a compound of the formula (5), the process comprising the following step iii, wherein the reaction step iii is performed in the presence of organic solvent(s) having an acceptor number of 0 to 50 and a water solvent, wherein the organic solvent for the reaction step iii is one or more organic solvents selected from alcohols, nitriles, carboxylic acid esters and amides:

(step iii) a step of reacting a compound of the formula (4) with hydrogen peroxide in the presence of a metal catalyst, wherein the metal catalyst is selected from a tungsten catalyst, a molybdenum catalyst and a niobium catalyst, to produce the compound of the formula (5) […]

    (Emphasis added.)

68    The Kenso Parties submit that the overlap between the 922 Patent and the 061 Patent is apparent from the claims themselves. In particular, Claim 1 of the 922 Patent is said to include the same sulfide-to-sulfone oxidation step as Claim 1 of the 061 Patent, involving hydrogen peroxide and a metal catalyst. Although the solvent language in the 922 Patent is broader, extending beyond C1–C4 alcohols to other categories of organic solvents, the Kenso Parties contend that the subject matter covered by the claims substantially overlaps. On that basis, they foreshadow that any revocation proceeding concerning the 922 Patent would involve substantially similar technical issues and evidence, including the evidence of Prof Perlmutter, albeit not in an identical form.

69    In light of that overlap, the Kenso Parties submit that any best method ground advanced in respect of the 922 Patent would raise substantially the same threshold issue as arises in relation to the 061 Patent, namely whether the specification sufficiently discloses the method of performing the relevant oxidation step on the footing that the invention is said to have industrial application. That is particularly so where the APVMA approvals for the Sakura® pyroxasulfone product range also pre-date the filing of the 922 Patent, such that the same temporal foundation for the asserted inference of industrial-scale manufacturing knowledge may be relied upon in a best method challenge to that patent.

70    Without deciding the merits of any such ground in advance of a pleaded revocation case, I accept that the proposed challenge to the 922 Patent cannot presently be dismissed as merely theoretical or unrelated to the issues already raised in this proceeding. That conclusion lends some force to the Kenso Parties’ contention that the proposed Best Method Claim in the Proposed ASOCC should not be shut out at this stage, where a substantially similar contention could in any event be advanced in a revocation proceeding concerning the 922 Patent.

71    The Applicant submits that it is premature to determine how any proposed revocation claim concerning the 922 Patent should be accommodated within this proceeding. It contends that the appropriate course is for the Kenso Parties to commence any such proceeding and then apply for appropriate case management directions once the scope of the proposed invalidity case, and any proposed expedited timetable, is known.

72    I accept the Applicant’s submissions in that regard. Questions concerning whether any proceeding in relation to the 922 Patent should be joined with, or heard together with, the present proceeding should be dealt with if and when such a proceeding is commenced.

Proposed Discovery

73    The Kenso Parties also sought discovery to be referred to a Registrar of the Court for determination. The Proposed Discovery categories were provided to the Applicant in the form of “Annexure B – the Kenso Parties’ Proposed Categories of Discovery” annexed to the Kenso Parties’ outline of submissions (the Proposed Discovery).

74    The Applicant does not oppose, in principle, the referral of discovery issues to a Registrar. However, it disputes the Kenso Parties’ contention that the scope of discovery would be materially unaffected by the introduction of the Best Method Claim. The Applicant submits that the Proposed Discovery, insofar as it is directed to best method, risks becoming a search for material to substantiate a case that has not presently been adequately articulated. In particular, it says that the Kenso Parties have not identified any specific undisclosed feature of an industrial-scale process said to have been known to the Applicant and material to the performance of the invention. For the reasons I set out above, I do not accept this submission.

75    The Kenso Parties, by contrast, contend that the discovery they seek is not confined to the Best Method Claim. They submit that the Proposed Discovery categories are directed, first, to documents concerning the infringement case itself, which is substantially founded on the evidence of Prof Easton. In particular, they say Prof Easton’s experimental results are put no higher than being “consistent with” the claimed process, and depend on assumptions about which catalysts, oxidants and solvents would be capable of, or commercially apt for, use in a sulfide-to-sulfone oxidation reaction for the production of pyroxasulfone. The Kenso Parties seek discovery of documents disclosing alternative processes for producing pyroxasulfone in order to test those assumptions and the weight to be given to the inference of infringement. They give as examples Prof Easton’s opinion that hydrogen peroxide is the only commercially viable oxidant with which a tungsten catalyst would be employed, and his evidence concerning the realistic suitability of particular oxidants and solvents. The Kenso Parties also rely on the fact that the Applicant is a manufacturer of pyroxasulfone and has published substantially in the relevant field, such that it can reasonably be expected to have documents concerning commercially efficacious combinations of catalysts, oxidants, solvents and reaction conditions.

76    Secondly, while that inquiry is directed principally to questions of infringement, the Kenso Parties submit that the same documents may also bear on their Best Method Claim by evidencing any industrial process known to or used by the Applicant and therefore potentially relevant to the allegation that the Applicant knew of, but failed to disclose, an industrial process at the relevant time.

77    In those circumstances, having granted leave to the Kenso Parties to advance the Best Method Claim, I accept that the Proposed Discovery is not confined to that case alone. The documents sought may have relevance to the way in which the infringement case is put and to the Kenso Parties’ challenge to the inferential reasoning on which that part of the Applicant’s case depends. I also accept, at least at this preliminary stage, that the overlap between the infringement issues and the Best Method Claim is a matter appropriately considered by a Registrar of the Court when determining the scope of any discovery categories. I also note that the allowance of the Best Method Claim is not to be taken as opening the door to broad-ranging discovery as to the Applicant’s industrial process as at 30 June 2023. The Kenso Parties’ Best Method Claim is that the Specification provides no details of an industrial-scale process. The question is whether the Applicant had knowledge of an industrial process falling within the claims of the 061 Patent at that date.

Disposition

78    I will grant leave to the Kenso Parties to file the Proposed ASOCC and the Proposed FAD. The Applicant will have leave to file the Proposed FASOC insofar as it advances the First FASOC Amendment and to file a revised pleading in respect of the Second FASOC Amendment containing further and better particulars. The question of discovery will be referred to a Registrar of the Court. Any issues concerning the 922 Patent will be dealt with if and when a revocation proceeding for that patent is commenced.

Associate:

Dated:    26 August 2026

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