Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd

[1998] FCA 1355

FEDERAL COURT OF AUSTRALIA

PATENTS – amendment to specification – discretion to allow amendment – s 115 Patents Act 1990 (Cth) – whether original specification was framed in good faith and with reasonable skill and knowledge – consideration of full factual background and all relevant evidence.

Patents Act 1990 (Cth) s 115

JosephLucas (Batteries) Limited v Gaedor Limited [1978] RPC 297, cited
Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (1997) 40 IPR 110, cited

Chartered Institute of Patent Agents Guide to the Patents Acts 4^th edn (1995) at 574
Terrell on the Law of Patents, 14^th edn 1994 at 247

GAMBRO PTY LIMITED AND GAMBRO AB v

FRESENIUS MEDICAL CARE SOUTH EAST ASIA PTY LIMITED & ORS

NG 474 of 1997

TAMBERLIN J
SYDNEY
15 OCTOBER 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 474  of   1997

BETWEEN:

GAMBRO PTY LIMITED
(ACN 001 288 491)
FIRST APPLICANT

GAMBRO AB
SECOND APPLICANT

AND:

FRESENIUS MEDICAL CARE
SOUTH EAST ASIA PTY LIMITED
(ACN 067 557 877)
RESPONDENT

FRESENIUS MEDICAL CARE
SOUTH EAST ASIA PTY LIMITED
(ACN 067 557 877)
CROSS-CLAIMANT

GAMBRO PTY LIMITED
(ACN 001 288 491)
FIRST CROSS-RESPONDENT

GAMBRO AB
SECOND CROSS-RESPONDENT

JUDGE:

TAMBERLIN J

DATE OF ORDER:

15 OCTOBER 1998

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1. The Notice of Motion is granted.

2. Any issue as to damages or account of profits under s 115 of the Patents Act 1995 (Cth) is to be heard and considered with all other issues as to quantum.

3. The respondent pay the costs of the applicants.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 474 of 1997

BETWEEN:

GAMBRO PTY LIMITED
(ACN 001 288 491)
FIRST APPLICANT

GAMBRO AB
SECOND APPLICANT

AND:

FRESENIUS MEDICAL CARE
SOUTH EAST ASIA PTY LIMITED
(ACN 067 557 877)
RESPONDENT

FRESENIUS MEDICAL CARE
SOUTH EAST ASIA PTY LIMITED
(ACN 067 557 877)
CROSS-CLAIMANT

GAMBRO PTY LIMITED
(ACN 001 288 491)
FIRST CROSS-RESPONDENT

GAMBRO AB
SECOND CROSS-RESPONDENT

JUDGE:	TAMBERLIN J
DATE:	15 OCTOBER 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

This Notice of Motion presently before me arises out of an application to amend a patent.  The proceeding also involves questions as to infringement, validity, damages and account of profits.

The principal order sought by the applicants on this motion is that any enquiry as to the availability of an award of damages or an order for an account of profits in respect of any infringement of the patent in the period prior to the date of the amendment should be heard together with all other issues as to quantum.

Under s 115 of the Patents Act 1990 (Cth) (“the Act”), where a specification is amended, damages or an account of profits cannot be ordered in respect of any infringement before the date of the order allowing the amendment, unless the Court is satisfied that the specification without the amendment was framed in good faith and with reasonable skill and knowledge. It is to this issue that the motion is directed.

In the present case the parties have agreed, subject to the consent of the Court, to litigate the amendment application first and to hear the other issues at a later stage.

The respondent submits that it is both convenient and appropriate on the hearing of the amendment question for evidence to be taken and a finding to be made on the further question of whether the original specification was framed in good faith and with reasonable skill and knowledge. It is submitted that this will avoid duplication, thereby saving time and expense because some at least of the witnesses on the amendment application will be those likely to give evidence on the s 115 question.

Furthermore, it is said that the Court should follow the usual English practice, which is to consider the issues of good faith and reasonable skill and knowledge at the same hearing as an application to amend the patent: see Chartered Institute of Patent Agents Guide to the Patents Acts 4^th edn (1995) at 574, where it is said:

“The requirements for a showing of good faith and reasonable skill and knowledge should normally be considered at the same hearing as an application to amend the patent (for which see para. 63.04), see Kahn (David) v Conway Stewart ([1974] RPC 279); and Hallen v Brabantia ([1990] RPC 307), where the hearing was adjourned for the responsible patent agent to be present to give the necessary evidence, and likewise in Chiron v Organon Teknika (No. 7) ([1994] FSR 458). Unless the defendant admits the point, the witness presented to discharge this onus can be expected to be cross-examined at least as to the instructions given to him by the inventors or the proprietor and his state of knowledge of the relevant prior art at the relevant time. The task of “framing the patent” would seem to include the framing of any amendment thereto, either before or after grant. As an exercise of discretion is required, it is probable that, if pressed by the defendant, the plaintiff will be required to give full discovery of documents, including those which could be made the subject of a claim to privilege, just as is required when discretion is requested to allow a patent to be amended ….”

In Terrell on the Law of Patents 14^th edn 1994 at 247, the matter is referred to as follows:

“The question under section 62(3) of the 1977 Act is sometimes left to the hearing of any enquiry as to damages.  However, at least in cases where amendment is sought in an infringement action it is submitted that it is better practice to hear this question as part of the amendment proceedings since usually the court has most of the relevant facts before it as part of the question of the allowability of the amendment…”

Terrell relies on the decision in JosephLucas (Batteries) Limited v Gaedor Limited [1978] RPC 297 to support the above proposition. In that case, Whitford J observed at 386:

“ Somewhat unusually, for the point is usually dealt with after judgment, I was addressed by counsel on the position under s 59(3) of the Patents Act.  The section is now relevant only to the poly case patent, which as I have said may be amended in the senses I have indicated.”

The subsection under consideration in that case was, in broad terms, similar to s 115.

There is no Australian authority on the question, although the matter of procedure was referred to by Sundberg J in Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (1997) 40 IPR 110 at 115 in the course of considering an application to set aside a notiec to produce and a subpoena. His Honour simply noted that the s 115 question was not an issue on the amendment application before him.

The question raised for consideration before me is essentially one of the exercise of discretion in a matter of practice and procedure in respect of which there are no clear guidelines. Certain considerations, however, are of importance. The question raised under s 115(3) calls for a determination as to the existence of good faith and reasonable skill and knowledge. Such matters, in my view, call for a full investigation and close consideration of all the material facts against which they are to be measured. The full factual background will only be known when the Court has had an opportunity to consider all the relevant evidence in the case. There is a danger that if s 115 findings are made at the amendment stage, without all the facts, later evidence might shed a different light on the earlier factual matrix. Although it may eventually prove to be necessary to recall some witnesses in the event that the s 115 question is heard in order to separately consider the question of quantum, it may not be in fact necessary to determine the question at all if the respondents are successful in their submissions as to infringement or invalidity. Moreover, under the docket system, the judge hearing the matter can direct the parties in such a way that any inconvenience or duplication of evidence is avoided or minimised. These considerations lead me to the conclusion that the more appropriate time to consider the s 115 issues is after all the evidence in the proceeding has been addressed.

Orders

Accordingly, I grant the Notice of Motion and order that any issues as to damages or an account of profits under s 115 of the Patents Act 1995 (Cth) if necessary, are to be heard and considered with all other issues as to quantum.  The applicants have been successful and the respondent is to pay their costs.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin

Associate:

Dated:  15 October 1998

Counsel for the Applicant:	D K Catterns QC
Solicitor for the Applicant:	Blake Dawson Waldron
Solicitor for the Respondent:	Allen Allen & Hemsley
Date of Hearing:	12 October 1998
Date of Judgment:	15 October 1998