Gambro Pty Limited v Fresenius Medical Care Australia Pty Limited
[2006] FCA 1720
•6 DECEMBER 2006
FEDERAL COURT OF AUSTRALIA
Gambro Pty Limited v Fresenius Medical Care Australia Pty Limited [2006] FCA 1720
GAMBRO PTY LIMITED AND GAMBRO LUNDIA AB v FRESENIUS MEDICAL CARE AUSTRALIA PTY LIMITED
NSD 474 OF 1997ALLSOP J
6 DECEMBER 2006
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 474 OF 1997
BETWEEN:
GAMBRO PTY LIMITED
First ApplicantGAMBRO LUNDIA AB
Second ApplicantAND:
FRESENIUS MEDICAL CARE AUSTRALIA PTY LIMITED
Respondent
JUDGE:
ALLSOP J
DATE OF ORDER:
6 DECEMBER 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Orders 4 to 10 (inclusive) of the orders dated 3 October 2006 be vacated.
2.The hearing set down from 19 March 2007 to 13 April 2007 be vacated.
3.(a) The Respondent identify to the Applicants by 20 December 2006 for each of the years 1996 – 2006 (up to 19 March 2006):-
(i) total number of PPT treatments per customer;
(ii) PPT treatment revenue per customer (excluding revenue attributed to machines)
(b)The Respondent provide to the Applicants by 14 December 2006 trial balance documents for 1995.
(c)The Respondent inform the Applicants by 14 December 2006 whether Ex. MN‑9 to the Affidavit of Mr Nair sworn on 22 August 2006 includes revenue for machines sold and leased back for use in Nephrocare centres.
(d)With respect to New Zealand:-
(i)the Respondent inform the Applicants by 20 December 2006 as to the nature of the business arrangements for the transfer from Australia to New Zealand of machines and products for each of the years 1995 to 2006;
(ii)the Applicants to identify to the Respondents by 10 January 2007 such further information as is required for the preparation of their evidence on the damages issue and the basis upon which it is claimed that that further information is relevant to the matters in dispute;
(iii)the Respondents to provide to the Applicants by 14 February 2007 the further information identified by the Applicants pursuant to (ii) above and which the Respondent accepts is relevant to the matters in dispute, any such matters remaining in dispute as to this question to be submitted to the Court for determination on 19‑20 March 2007.
(4)On or before 8 December 2006 the Applicants provide the answers to the questions raised by the Respondent as to documents in its discovery in the letter from Allens Arthur Robinson to Blake Dawson Waldron dated 5 December 2006.
(5)On or before 8 December 2006, the Applicants identify the documents or classes of documents which they assert still remain to be discovered by the Respondent and any matters which they assert to be outstanding.
(6)On or before 15 December 2006 the Respondent give discovery of such of the identified outstanding documents in the categories of documents annexed to the Orders dated 3 October 2006 as are discoverable and able to be produced by that date.
(7)With respect to confidentiality claimed by the Respondent as to its documents,
(a)On or before 10 January 2007 the Respondent identify by discovery number all of the documents created prior to 31 December 2000 over which confidentiality is not sought to be maintained.
(b)All representatives of the Applicants who have given interim undertakings as to confidentiality be released from those undertakings with respect to the documents identified as being documents over which confidentiality is not sought to be maintained.
(8)On or before 20 December 2006 the Respondent provide to the Applicants a list of persons to whose RFTs, RFPs or other offers outside formal tender processes, the Applicant responded, for the purposes of the Applicants’ provision of the documents described in category 2.5 in Annexure A to these orders.
(9)On or before 20 December 2006 the Applicants give discovery with verification in accordance with category 4.1 of the schedule to these orders.
(10)On or before 28 February 2007 the Applicants give discovery with verification in accordance with the categories (other than category 4.1) set out in Annexure A to these orders.
(11)On or before 22 December 2006 the Applicants file and serve a skeletal document (which is to be amended and refined from time to time) setting out how the Applicants intend to put their case on damages and how they intend to prove it.
(12)The parties arrange by 2 February 2007 for their accounting experts or advisers to meet to attempt to resolve or clarify any factual issues and for the experts or advisers to continue to meet regularly for that purpose.
(13)The parties notify each other of any further proposed categories for discovery by the other party no later than:
(a)3 weeks following service of the Applicants’ verified list of documents under order 10 above; or
(b)3 weeks following service of the Applicants’ evidence in chief,
whichever is later.
(14)On or before 28 March 2007 the Applicants serve any affidavits on which they will rely in chief on the question of quantum of damages, to be later filed in accordance with the directions of the Court.
(15)On or before 27 July 2007 the Respondent serve any affidavits on which it will rely in answer to the Applicants' evidence in chief on the question of quantum of damages, to be later filed in accordance with the directions of the Court.
(16)On or before 28 September 2007 the Applicants file any affidavits on which they will rely in reply on the question of quantum of damages, to be later filed in accordance with the directions of the Court.
(17)On or before 28 September 2007 the Applicants serve a draft narrative statement of agreed facts.
(18)On or before 19 October 2007 the Respondent serve a marked up version of the Applicants’ draft identifying matters in dispute and additional matters.
(19)On or before 26 October 2007 the Applicants serve a draft template for the structure of submissions. Counsel to agree on the template.
(20)The matter be stood over for further directions on 10 April 2007 at 10.15 am.
(21)The Applicants file and serve by 22 December 2006 points in support of their assertion that damages should be awarded with respect to infringement before the date of amendment of the patent.
(22)The Respondent file and serve by 31 January 2007 points in answer to the claim for damages before the date of amendment of the patent.
(23)The parties have liberty to apply on 3 days' notice.
(24)The proceeding be fixed for hearing commencing 12 November 2007 at 10.15 am for an estimated 4 weeks.
(25)Costs reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
Schedule
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRYNo NSD 474 of 1997
GAMBRO PTY LTD
(ACN 001 288 491)
First Applicant
GAMBRO LUNDIA AB
Second Applicant
FRESENIUS MEDICAL CARE AUSTRALIA PTY LTD
(ACN 067 557 877)
Respondent
CATEGORIES OF DOCUMENTS FOR DISCOVERY BY THE FIRST AND SECOND APPLICANTS ON THE QUESTION OF QUANTUM OF DAMAGES
1.Interpretation
In this document, the following definitions apply:
(a)Dialysis means haemodialysis, haemofiltration or haemodiafiltration.
(b)Document has the meaning given in the Evidence Act 1995 (Cth).
(c)Patent Area has the meaning given in the Patents Act 1990 (Cth)
Capitalised terms used in this document which are not defined in this document have meanings given to them in the Orders dated 12 May 2004, the Orders dated 30 August 2004 or the Orders dated 15 June 2006 as the case may be.
Headings are for convenience and do not affect interpretation.
2.Tender documents, offers and promotional material
2.1All Documents from 1989 to the present date comprising invitations or requests for tender (RFTs) or invitations or requests for proposals (RFPs) to supply machines or monitors for Dialysis or any consumables for use in Dialysis, which the First Applicant considered or to which the First Applicant responded by offering in the Patent Area or proposing in the Patent Area the supply of:
(a)any Dialysis Machine for use with a BiCart cartridge (BCDM); or
(b)any BiCart Cartridge (BCC).
2.2All expressions of interest (EOIs), tender responses and responses to invitations to tender from 1989 to the present date by or on behalf of the First Applicant in the Patent Area to supply:
(a)any BCDM; or
(b)any BCC.
2.3All Documents from 1989 to the present date comprising offers by or on behalf of the First Applicant in the Patent Area outside formal tender processes to supply:
(a)any BCDM; or
(b)any BCC.
2.4One example of every promotional, advertising or marketing Document from 1989 to the present date and communicated by or on behalf of the First Applicant in the Patent Area to any person, relating to:
(a)any BCDM; or
(b)any BCC.
Documents from 1989 to the present date comprising:2.5
(a)internal communications between officers, employees or agents of either the First Applicant or the Second Applicant;
(b)communications between officers, employees or agents of the First Applicant on the one hand and officers, employees or agents of the Second Applicant on the other hand; and
(c)communications between officers, employees or agents of either the First or Second Applicant on the one hand and officers, employees or agents of any other company in the Gambro group of companies on the other hand,
which refer to or relate to the factors taken into account by the Applicants or either of them or any of their officers, employees or agents for the purpose of the First Applicant responding to any RFT, RFP or other offer outside a formal tender process referred to in category 2.1, 2.2 or 2.3, in;
(d)determining the products and services to be offered or supplied; and
(e)determining the price at which products or services will be offered (including any 'price per treatment' price),
including emails, memoranda and notes taken and documents tabled at meetings, limited in the first instance to Documents which:
(f)are created as part or pursuant to any general or common practice or policy of the Applicants or either of them; or
(g)relate to a reasonable sample of RFTs, RFPs or other offers outside a formal tender process to be specified by the Respondents in writing.
2.6All reports from 1989 to the present date of a type described in paragraph 35 or paragraph 37 of the first affidavit of Mr Ben Miller affirmed on 4 December 2006.
3.Agreements to Supply Dialysis Machines and biBags
3.1All Documents (excluding invoices or purchase orders) from 1989 to the present date which comprise or contain the terms of an agreement under which the First Applicant acquired, sold, hired or otherwise disposed of a BCDM within the Patent Area, including without limiting the generality of this category all Documents which contain the price at which the BCDM was acquired, sold or otherwise disposed of by the First Applicant (including any amendments, extensions or renewals).
3.2All Documents (excluding invoices or purchase orders) from 1989 to the present date which comprise or contain the terms of an agreement under which the First Applicant acquired, sold, hired or otherwise disposed of a BCC or an Ancillary Product (as defined in the Orders of Justice Allsop made 15 June 2006), including without limiting the generality of this category all Documents which contain the price at which the BCC and Ancillary Product was acquired, sold, hired or otherwise disposed of by the First Applicant (including any amendments, extensions or renewals).
4.Management accounts and statutory accounts
4.1The management accounts and statutory accounts for each financial year from 1994 to 2006 for each of the Applicants.
4.2All Documents from 1989 to the present date which comprise minutes of meetings which refer to or relate to the management accounts and statutory accounts.
5.Costs
[Not used.]
6.Pricing
[Not used.]
7.Market Analysis and Management Records
7.1All Documents from 1989 to the present date that contain analysis of the market and market shares for Dialysis machines and Ancillary Products in the Patent Area, including without limiting the generality of this category all Documents which comprise or refer to business plans and internal planning of new product development by the Applicants or either of them.
8.Machines
All Documents from 1989 to the present date which are referred to in the first and second sentences in paragraph 54 of the first affidavit of Mr Ben Miller affirmed on 4 December 2006 and contain an analysis of the reliability, profitability or commercial success of any Dialysis machine or Dialysis module manufactured, sold, hired or otherwise disposed of by, or on behalf of, either of the Applicants in the Patent Area.
9.Customer Feedback
9.1The Documents referred to in the first sentence of paragraph 60 of the first affidavit of Mr Ben Miller affirmed on 4 December 2006.
9.2All Documents relating to the two customer satisfaction surveys referred to in the final sentence of paragraph 60 of the first affidavit of Mr Ben Miller affirmed on 4 December 2006.
10.Summary Documents
10.2The “summary of sales of liquid bicarbonate relative to sales in units of Gambro Australia’s BiCart product in the Patent Area” referred to in paragraph 74 of the first affidavit of Mr Miller affirmed on 4 December 2006.
10.3The “summary” referred to in the second paragraph on page 3 of Blake Dawson Waldron’s letter to Allens Arthur Robinson on 30 November 2006.
11.Trials
All Documents which are referred to in paragraph 92 of the first affidavit of Mr Ben Miller affirmed on 4 December 2006 comprising or referring to a trial by any person of any Dialysis machine or Dialysis module provided by, or on behalf of, either of the Applicants in the Patent Area.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 474 OF 1997
BETWEEN:
GAMBRO PTY LIMITED
First ApplicantGAMBRO LUNDIA AB
Second ApplicantAND:
FRESENIUS MEDICAL CARE AUSTRALIA PTY LIMITED
Respondent
JUDGE:
ALLSOP J
DATE:
6 DECEMBER 2006
PLACE:
SYDNEY
REASONS FOR JUDGMENT
1 In this matter there is a hearing fixed commencing in March 2007 for four weeks: the assessment of damages to which the applicants claim they are entitled consequent upon the found infringement of the patent in question in these proceedings by the respondent. The parties are agreed that the volume and extent of the work between now and commencement of the hearing is such as to make commencement of the hearing in March 2007 not possible.
2 The applicants blame the conduct of the respondent, at least in part for this state of affairs. In particular it is said that the respondent failed to comply with orders of the Court in relation to discovery. The respondent denies that it is the cause of any inability to proceed. It is not disputed that there was a failure to comply with the orders of the Court. However, I think it is fair to say that the cause of that is said to be a misreading or a misunderstanding of the orders, or, at the very least, a lack of appreciation that the orders covered an important matter. It is also said by the respondent that the applicants’ adviser should have appreciated earlier than they did that the discovery was in the form it was.
3 I do not propose to resolve these questions as to fault for the vacation of the date. In particular I do not propose to do so because one of the witnesses, central to the resolution of that procedural controversy, will be a witness in the case. If the costs thrown away by reason of the adjournment that I propose to order warrant it, the matter can be taken up during the course of the hearing as a discrete issue.
4 It is most unfortunate that the parties have reached this position. The date was fixed many months ago, and four weeks of hearing and two weeks of judgment writing have been removed from my diary for six months. Other litigants’ affairs have been required to be dealt with on that basis. The likelihood is that the time that I have previously set aside will be taken up with other hearings, but other litigants earlier in the queue could have availed themselves of these dates.
5 Notwithstanding the view that is sometimes glibly expressed that judges in case management are able to deal with every issue of a complex, commercial case, the case management of the case, if it is to be close, requires a significant amount of time both of the judge and of the parties. In this case I think it fair to say that to a significant degree, because of the commercial expertise of the parties and the standing and skill of the solicitors, I have left the preparation of the case to the good sense of the parties. Without intending to be disrespectful to the commercial parties or lawyers involved, I am left with the distinct impression that I have made a mistake in that regard. This matter will come on for hearing next year. I propose to vacate the hearing dates in March and set new hearing dates and new directions. The hearing of the matter will commence on 12 November 2007.
6 There is still a significant amount of interlocutory work to be done, preparation to be done, and I have no doubt that the case will be difficult and time consuming to prepare. Damages, including a springboard case, for the respondent's infringement over a considerable period of time in a not-straightforward area of business is the subject of the hearing.
7 The orders that I will make have been agreed between the parties and I am prepared to make them. What is not clear in the orders is something I have said this morning, which it is better to deal with in these reasons rather than in the orders themselves. Both parties should understand that the conduct of these orders requires their co-operation and the co-operation of their lawyers, so that costs on both sides and costs to the public will be minimised to the extent necessary to resolve an otherwise complex commercial dispute.
8 To that end, the parties should understand that these interlocutory steps are being taken in the light of a liberty to apply on three days’ notice, and also against the background of a willingness to permit, in effect as a standing direction in this matter, any officer of the respective parties and indeed any relevant solicitor to be examined on oath about the conduct of the interlocutory steps. This would, of course, be subject to any question of legal professional privilege, which I do not intend to be dealing with, but if there are debates about what documents exist, how business was conducted, what procedures were adopted and the like, the parties should understand that if they do not wish to co-operate fully, they can come to Court and be examined on oath, at their own cost potentially.
9 For those reasons, and reluctantly, but I think appropriately and necessarily, I propose to make orders in accordance with the short minutes that are initialled by me and dated today.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop J. Associate:
Dated: 13 December 2006
Counsel for the First and Second Applicant: Mr D K Catterns QC Solicitor for the First and Second Applicant: Blake Dawson Waldron Counsel for the Respondent: Mr M Einfeld QC Solicitor for the Respondent: Allens Arthur Robinson Date of Hearing: 6 December 2006 Date of Judgment: 6 December 2006
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