G S Technology Pty Ltd v the Commissioner of Patents

[1997] FCA 1460

FEDERAL COURT OF AUSTRALIA

Intellectual Property - patents - judicial review of a decision of the Commissioner of Patents to refuse to issue a summons - Commissioner’s power under s 210(c) of the Patents Act 1990 - power to issue a summons - whether the Commissioner was in error in considering whether the documents sought are relevant to the issues in the principal proceeding - whether Commissioner addressed the correct legal question.

Practice and Procedure - costs of application for security for costs.

Patents Act 1990 - s 210(c)

Clyne v Official Trustee: Re Weiss; Ex parte Official Trustee (1983) 52 ALR 167 - cons.
R v Barton [1981] 2 NSWLR 414 - appl.
Sinclair v Maryborough Mining Warden (1975) 132 CLR 473 - cited
Byron Environment Centre Incorporated v The Arakwal People (1997) 148 ALR 46 - appl.

G S TECHNOLOGY PTY LTD V THE COMMISSIONER OF PATENTS

QG 141  OF   1997

JUDGE:        BEAUMONT J.
PLACE:        BRISBANE
DATE:          19 NOVEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 141  of   1997

BETWEEN:	G S TECHNOLOGY PTY LTD APPLICANT
AND:	THE COMMISSIONER OF PATENTS RESPONDENT
JUDGE:		BEAUMONT J.
DATE OF ORDER:		19 NOVEMBER 1997
WHERE MADE:		BRISBANE

ORDERS:

1. The Commissioner's decision made on 4 September 1997 refusing to issue summonses for the production of documents is set aside.

1. Remit to the Commissioner for reconsideration in accordance with law the application made by G S Technology under s 210(c) of the Patents Act.

1. G S Technology receive its costs of today’s hearing but otherwise, G S Technology pay the costs of the Commissioner of these proceedings;  costs may be set off.

1. Dismiss the application for security for costs.

1. The Commissioner receive his costs of the application for security for costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 141 of 1997

BETWEEN:	G S TECHNOLOGY PTY LTD APPLICANT
AND:	THE COMMISSIONER OF PATENTS RESPONDENT

JUDGE:	BEAUMONT J.
DATE:	19 NOVEMBER 1997
PLACE:	BRISBANE

REASONS FOR JUDGMENT

BEAUMONT J:

THE APPLICATION FOR JUDICIAL REVIEW

On 8 December 1995 G S Technology Pty Limited (“G S Technology”) applied to the Commissioner of Patents (“the Commissioner”) for the extension of the term of its petty patent No. 662284. Davies Shephard Pty Limited (“Davies Shephard”) has given notice pursuant to the provisions of s 28 of the Patents Act 1990 (“the Act”) that it asserts that the patent is invalid on one or more of the grounds: (a) that the patentee was not entitled to be granted the petty patent; (b) that the invention is not a patentable invention because it does not comply with s 18(1)(a) or (b) of the Act; and (c) that the patent specification does not comply with s 40(2) or (3) of the Act. GSA Industries (Aust) Pty Limited (“GSA Industries”) has also given such notice.

In connection with its application for extension, G S Technology applied to the Commissioner for the issue of summonses for the production of certain documents. Section 210(c) of the Act is in the following terms:

“210.   The Commissioner may, for the purposes of this Act:

(c)       require the production of documents or articles...”

The Commissioner refused G S Technology's request and G S Technology now seeks judicial review of that decision.  In its request for the issue of summonses, G S Technology sought that a summons be issued to the Brisbane City Council in the following terms:

“All documents including models, samples, drawings, test results, correspondence, records of interview, diary notes, touching upon or concerning the products and options for products mentioned and referred to in exhibit “GRB3” and “GRB7” to the declaration of Garth Robert Bellingham, Director, Water Utility Branch, Brisbane Water, Brisbane City Council (BCC) of 69 Ann Street Queensland Australia including all documents and records pertaining to drawing WM 8 mentioned and referred to in Exhibit GRB 4 thereto including (3) contracts and Quotations Contract - Water Supply (R) Supply of Water Meter Assemblies for a period of Two Years file reference (0)243/98-55/92/93(P1) AND (4) Contracts and Quotations Contract - Water Supply (R) R55/92/93 Supply of Water Meter Assemblies for a period of Two Years file reference (8)243/98-55/92/93(P2).”

G S Technology also requested that a summons issue to GSA Industries for:

“All documents including models, samples, drawings, and test results touching upon or concerning water meter assemblies Brisbane City Council tender WS 104/89/90;  Brisbane City Council Contract WS 34/90/91;  Brisbane City Council Tender R55/92/93;  Brisbane City Council Contract R22/93/94;  and Brisbane City Council Contract R12/94/95 including all drawings resulting in the sales of WM 213 MAN mentioned and referred to in each of each of 3 RMC invoices dated 30 June 1993, 10 July 1993 and 10 August 1993 on sale and delivery of RD WM213 MAN manifold meters to the Noosa Shire Council as mentioned and referred to in Exhibit “PK 3” to the Declaration of Peter Kliens filed in 662284 and including all records of interview of the type mentioned and referred to in Exhibit GRB 13 to the Declaration of Garth Robert Bellingham as filed in 662284 in respect of the aforesaid Tenders and Contracts and all correspondence and diary notes passing between BCC and RMC in respect of the aforesaid Tenders and Contracts.”

Finally, a request was made for a summons to issue to Davies Shephard for:

“All documents including models, samples, drawings, and test results touching upon or concerning water meter assemblies for Brisbane City Council tender WS 104/89/90;  Brisbane City Council Contract WS 34/90/91;  Brisbane City Council Tender R55/92/93;  Brisbane City Council Contract R22/93/94;  and Brisbane City Council Contract R12/94/95 including all records of interview of the type mentioned and referred to in Exhibit GRB 13 to the Declaration of Garth Robert Bellingham in respect of the aforesaid Tenders and Contracts as filed in 662284 in respect of the aforesaid Tenders and Contracts and all correspondence and diary notes passing between BCC and Davies Shephard in respect of the aforesaid Tenders and Contracts.”

These requests were refined by G S Technology from time to time in the course of extensive correspondence between the Commissioner and the legal representative for G S Technology.  In response to an earlier version of these requests, the Acting Commissioner, by letter dated 13 June 1997, indicated that:

“It is not apparent to me that the production of any of the documents... would be for the purposes of the Patents Act.”

Earlier in that letter, the Acting Commissioner had said:

“It is clear from s.210 that the making of an order for the production of documents is a matter for the exercise of the Commissioner's discretion.  At this time I am not satisfied that I should accede to your request...”

Lengthy and subsequent correspondence ensued.  In a letter dated 7 July 1997, the Acting Commissioner restated that the power in question:

“...is a power which is exercised on his or her discretion that the particular facts or circumstances of any matter before the Commissioner warrants same and that the exercise of such power is for the purposes of the Act.”

In the letter, the Acting Commissioner went on to say:

“It is not apparent to me how documents held by a non-party to the proceedings presently before the Commissioner can have any bearing on the entitlement of your client to the invention, particularly in the absence of any reliance on those documents by the present s.28 informants.”

In that letter, the Acting Commissioner again requested further information and further explanation or justification in support of the request for the issue of an order for the production of documents, and specific identification of the class or nature of the documents sought to be produced. 

Finally, by letter dated 4 September 1997, the Commissioner communicated the decision to refuse to issue any summons for these reasons:

“I refer to your request for summons in your letter of 6 June, and the further requests for summonses incorporated in your letter of 11 July. As explained in our letter of 7 July, before exercising my discretionary power under s.210(c) I must consider whether:

·   the production of documents is for a purpose under the Act;

·   the documents sought are relevant to the matter before the Commissioner;  and

·   the documents sought can be sufficiently identified.

In support of the summons in respect of the Brisbane City Council, you state:

‘there are records held by BCC which do provide or are likely to provide an objective record, of the state of the art in water meter technology;  the prior art;  what that prior art may have taught and what the prior art did not teach after the priority date of the Claims of Petty Patent 662284 and those documents would enable a thorough determination of the fair basing issues which are discernible on the material filed in respect of 662284.’

and you have made similar statements in support of summonses on GSA Industries (Aust) Pty Ltd, and Davies Shephard Pty Ltd.

The present proceedings derive from notices made under s.28(1) of the Patents Act 1990. Accordingly the matters that the Commissioner has to decide are those set out in s.28(1) - viz. entitlement to the grant of the patent, compliance with s. 18(1)(a) and (b), and compliance with s.40. Consequently before issuing the requested summonses, I need to consider whether the production of the documents would be relevant to these matters.

On the matter of entitlement:

I note that your letter of 11 July contains no further justification in response to our letter of 7 July.  I repeat the observation then made that it is not apparent to me how documents held by third parties to the proceedings before the Commissioner can have any bearing on the entitlement of your client to the invention.  Accordingly I consider the documents sought to be produced are not per se relevant to the determination of the entitlement of your client to the patent.

On the matter of s.18(1)(a) and (b)

·   Subsection (a) is either assessed on the basis of the specification in isolation, or by having regard to public knowledge.  It is not assessed against private knowledge;  and

·   subsection (b) is assessed against the prior art base, which comprises public knowledge, and common general knowledge.

Some of the documents sought to be produced are documents that are available under FOI provisions.  From the material you filed on 6 June 1997 it is apparent that those documents [had] been made available to you.  Accordingly I see no purpose in an order for production of those documents.  Further, the date of publication of the documents made available to you under FOI is the date of their release to you, which I understand to be after any relevant priority date.  That is, the documents obtained under FOI cannot per se form the basis of consideration under s.18(1)(a) or (b).

I understand you have been refused access under FOI to the remainder of the documents on the files that you seek to be produced.  Consequently I have reason to believe that those documents are not themselves publicly available.  That is, those documents to which access has been refused under FOI cannot themselves form the basis of consideration under s.18(1)(a) or (b).

On the matter of compliance with section 40:

I note that section relates to whether the patentee fully described the invention, and whether the patentee provided claims that are clear, succinct, and fairly based.  It is well established that these issues must be assessed in the context of what the notional person skilled in the art would understand from the specification.  That is, to the extent that evidence is required to assess compliance with s.40, that evidence must relate to material that is at least in the public domain.  The documents sought to be produced are either already available to you, or are not publicly available and therefore not per se relevant to the determination of compliance with s.40.

Accordingly, I consider the requested summonses are not relevant to the proceedings before the Commissioner.  Consequently, I do not intend to issue the summonses.  I have thus remitted this case to the opposition clerk, who will shortly be in contact to re-set the date for the hearing into the s.28 matters.

Please be advised that should you wish to pursue the matter of the summonses further, you may either request a hearing before the Commissioner, or seek review by the courts.  I further advise that the hearing of the s.28 requests will likely be before a delegate of the Commissioner;  and pursuant to regulation 21.2 that delegate will not possess the power to consider or issue an order for the production of documents.”

G S Technology, as I indicated earlier, now moves the Court for an order of judicial review on the ground that the Commissioner's decision involved an error of law. 

It is common ground that the power to issue such a summons is, in its nature, administrative and that it does not lose its administrative character by reason of the circumstance that in exercising the power, the Commissioner must act judicially (see Clyne v Official Trustee: Re Weiss; Ex parte Official Trustee (1983) 52 ALR 167 at 171). It is also common ground, and correctly so in my view, that the appropriate test to be adopted in this context is that described by Cantor J in R v Barton [1981] 2 NSWLR 414. It is true that his Honour was there concerned with the issue of a subpoena by a Court. However, it is accepted, and again I think correctly, that a similar approach is appropriate in the present context which, although as I have said is administrative in character, calls for the exercise of the power in a judicial fashion.

In Barton, Cantor J enunciated the following principles (at 419-420):

“It seems to me that there is involved within this field the resolution by the court of competing interests.  To require a witness to produce to the court his documents in proceedings in which he is not a party and in which he has no interest must involve an invasion of his private rights including his right to privacy and his right not to be required to busy himself seeking, identifying, bringing together and producing his documents to the court.

The other right which seems to me to be involved is the right of a party to litigation to obtain access to documents, even where they are in the possession of a stranger, in order to further the ends of justice in those proceedings so that he may advance his case on all issues in the case.  These respective rights of the stranger and the litigant will generally conflict.

In many instances a mere consideration of the nature of perusal of documents in such a subpoena will disclose that they have or may well have relevance to the issues in the litigation.  On the other hand consideration of the nature of the documents sought in such a subpoena may indicate with equal clarity that on the face of the subpoena the documents do not and can not bear any relevance to the issues in the litigation.

There is a significant area between these two extremes which is the area in which, it would appear, there is no simple guideline to follow.  What is required, as I have stated, is a balancing of the competing and generally conflicting interests of the party to the proceedings and the stranger to the proceedings.

The Court will consider the nature of the documents specified and will determine as best it can the issues likely to arise.  If it appears an issue may arise in litigation to which the documents may relate than [sic] I believe the right of the litigant should prevail over the right of the witness.  Unless it appears that an issue may arise to which the documents may relate then the right of the witness will prevail.

It will be noted I do not postulate that the issue must arise in the litigation nor do I postulate that the documents must relate to an issue.  It seems to me on this first step in relation to the subpoenaing of documents from a stranger the court will consider possible issues.  This does not include fanciful issues.  The court should take a realistic attitude.  Similarly in considering the type of documents and how they may bear upon an issue in the litigation the court will act realistically and not require the production of documents which only would have a bearing upon an issue on an unreal, fanciful or speculative basis.

It is in this fashion that I propose to consider the question of striking out these subpoenas or paragraphs of the schedules to these subpoenas on the basis of their relevance to the trial.

It follows that I do not accept the argument of Mr Gruzman that every document which may have any conceivable relationship to an issue or to some matter that may arise in the trial must be produced by strangers to the trial in response to a subpoena to produce.”

As I have indicated in the course of argument, the application of these principles in the present case is not an easy matter.  However, I have come to the conclusion that the Commissioner's letter of 4 September 1997 does not adequately distinguish between “substantive relevance” on the one hand, and “adjectival relevance” on the other.  That is to say, as Cantor J observed in Barton, whilst it would be appropriate to reject a request for the issue of a summons on the ground that the request is fanciful or purely speculative, it is true nonetheless that an applicant for the issue of a summons need not show that the documents requested are actually relevant to the matter at hand.  It is sufficient, in accordance with the conventional test in this area, that the material sought by the summons is, on reasonable grounds, arguably relevant to the issues in the litigation. 

I accept that in one of the statements made in the letter of 4 September 1997, the Commissioner stated that he needed to consider "whether the production of the documents would be relevant to these matters".  If that statement stood alone, it may have been possible to interpret it as imposing no more than a test of adjectival relevance.  In other words, the statement could have been read as if the Commissioner were doing no more than indicating that he was addressing the question whether the production of the documents could arguably be relevant to the issues in the principal proceeding. 

However, I have come to the conclusion that on a full reading of the letter, the Commissioner did not address this question.  Rather, the Commissioner addressed a test of substantive relevance.  That this is so appears most clearly in his opening statement, where he said that he must consider whether “the documents sought are relevant to the matter” (emphasis added).  This method of expressing his task was, as has been seen, also found in the earlier letter dated 7 July 1997.  Moreover, reinforcement of this conclusion is found in the subsequent statement made by the Commissioner in the letter dated 4 September that some of the documents sought “are not per se relevant” (emphasis added).

It must follow, in my opinion, that in the context of exercising the power conferred by s 210(c), the Commissioner has not addressed the real legal question involved (see Sinclair v Maryborough Mining Warden (1975) 132 CLR 473 per Barwick CJ at 480 and Gibbs J at 483). It must further follow that the Commissioner's decision is affected by an error of law.

Given the adjectival character of the function now reviewed, it is appropriate that the decision refusing to issue the summons be set aside, but that the matter be remitted to the Commissioner for reconsideration in accordance with law (see Byron Environment Centre Incorporated v The Arakwal People (1997) 148 ALR 46). Consistent with the approach taken in Byron Environment Centre, it will be a matter entirely for the Commissioner to decide on the material before him whether the summonses requested should be issued.  I express no view on that matter.

COSTS IN THE APPLICATION FOR JUDICIAL REVIEW
The question of costs in this application is itself a matter of some difficulty.  As I have already indicated, from time to time G S Technology refined its request for the issue of summonses during the course of the lengthy correspondence which passed between the parties.  Moreover, the present application for judicial review has itself been refined at various stages of the litigation.

The ground upon which G S Technology has succeeded in obtaining an order for judicial review was only one of many grounds of review which, no doubt for good reason, were not ultimately pursued by it.  In all the circumstances, I agree with the submission made on behalf of the Commissioner that G S Technology should receive its costs of today's hearing, but that otherwise, G S Technology should pay the costs of the Commissioner of these proceedings.  I further order that those costs may be set off. 

THE APPLICATION FOR SECURITY OF COSTS
The Commissioner moved for security for his costs in the application for judicial review.  That motion came before me on 17 November.  In the course of hearing that matter, it became apparent to both parties that there was a benefit in dealing with the principal proceedings on an expedited basis.  Directions were then given so that a final hearing of the application for judicial review could be dealt with today.  In the meantime, the application for security for costs was not pursued and was stood over until today.  In the circumstances, it only remains for me to dismiss formally that application. 

The question then arises as to the costs of the application for security.   In my opinion, G S Technology should pay the Commissioner's costs of that application.  The evidence adduced on behalf of the Commissioner in pursuit of its claim for security indicated, prima facie at least, that G S Technology would not be able to meet an order for costs if it were unsuccessful in the principal proceeding.  No attempt was made by G S Technology to adduce evidence in any acceptable form in response to that prima facie case. 

In those circumstances, looking at the matter broadly, it seems to me that the prospects of the Commissioner succeeding in the application for security were sufficient to warrant my ordering that he receive his costs.  Also in this connection, the Court takes into account the circumstance that last week, the Commissioner's solicitors informed the legal representatives of G S Technology, by way of an open offer, that the application for security would not be pursued, provided that G S Technology's claim for an order of judicial review was confined to a question of law.  That was a sensible and commendable course to be adopted on the part of the Commissioner and has led to an expeditious resolution of the principal proceedings.  In those circumstances, it is fair that the Commissioner should receive his costs of the application for security.

ORDERS
The orders I make then are as follows:

1. The Commissioner's decision made on 4 September 1997 refusing to issue summonses for the production of documents is set aside.

1. Remit to the Commissioner for reconsideration in accordance with law the application made by G S Technology under s 210(c) of the Patents Act.

1. G S Technology receive its costs of today’s hearing but otherwise, G S Technology pay the costs of the Commissioner of these proceedings;  costs may be set off.

1. Dismiss the application for security for costs.

1. The Commissioner receive his costs of the application for security for costs.

I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont

Associate:

Dated:            19 November 1997

Solicitor for the Applicant:	Mr A P Abaza
Counsel for the Respondent:	Mr P E Hack
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	19 November 1997
Date of Judgment:	19 November 1997