Viskase Corporation v Cryovac Inc - [2000] FCA 1695

FEDERAL COURT OF AUSTRALIA
Viskase Corporation v Cryovac Inc [2000] FCA 1695
PRACTICE AND PROCEDURE – pre-action discovery – patents – claimed reasonable grounds for belief in invalidity of patent – obviousness and want of novelty – based on public prior art – application for order for discovery of research and development documents and other papers – formulaic opinion evidence – no reasonable grounds for belief – discretion – relevant considerations in patent litigation
Federal Court Rules O15A
Patents Act 1990 s 18, s 138
Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 cited
Airservices Australia v Transfield Pty Ltd (1999) 92 FCR 200 cited
Hooper v Kirella Pty Ltd (1999) 96 FCR 1 cited
Paxus Services Ltd v People Bank Ltd (1990) 99 ALR 728 cited
Hodder & Associates Pty Ltd v National Mutual Trustees Ltd [1999] FCA 708 cited
Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd (24 May 1996, Lindgren J, unreported) cited
Glowatzky v Insultech Group Pty Ltd (1997) 39 IPR 215 cited
The Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 cited
F Hoffmann-La Roche AG v Chiron Corporation (2000) 171 ALR 295 cited
Bray, Law of Discovery and Digest (1885), Legal Book Pty Ltd (1985) p 611
Branson, Pre-Action, Subsequent and Third Party Discovery in Zariski (ed) Evidence and Procedure in a Federation, LBC (1993) pp 108-110
VISKASE CORPORATION v CRYOVAC INC
W86 of 2000
FRENCH J
22 NOVEMBER 2000
PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

W86 OF 2000

BETWEEN:

VISKASE CORPORATION
APPLICANT

AND:

CRYOVAC INC
RESPONDENT

JUDGE:

FRENCH

DATE OF ORDER:

22 NOVEMBER 2000

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.        The application is dismissed.
2.        The Applicant is to pay the Respondent’s costs of the application.
Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

W86 OF 2000

BETWEEN:

VISKASE CORPORATION
APPLICANT

AND:

CRYOVAC INC
RESPONDENT

JUDGE:

FRENCH

DATE:

22 NOVEMBER 2000

PLACE:

PERTH

REASONS FOR JUDGMENT
Introduction

Viskase Corporation (“Viskase”) and Cryovac Inc (“Cryovac”) are both United States based corporations. Viskase has an established market base in Australia in which it is considering selling a packaging bag for holding vacuum-sealed meat products. However, Cryovac is the registered holder of Australian Patent No 692957 entitled “Patch Bag Comprising Homogenous Ethylene/Alpha-Olefin Copolema Patches” (the “Cryovac Patent”). The priority date of that patent is 12 December 1994, which was the filing date of US Patent Application No 08354177 from which the Cryovac Patent claims priority. The Cryovac Patent was originally registered in the name of WR Grace & Co-Conn.
An application for registration of the patent in Australia was filed with the Australian Patent Office on 5 December 1995. It was sealed on 5 November 1998. The assignment of the patent from WR Grace & Co-Conn to Cryovac was registered on 30 March 1999. The first claim of the patent is…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] FCA 1695
Decision Date: 22 NOVEMBER 2000

CaseChat Overview and Summary

Viskase Corporation applied to the Federal Court of Australia for an order compelling Cryovac Inc to produce documents related to the development of a patent, potentially in preparation for a revocation proceeding. The dispute arose from Viskase's intention to market a packaging bag in Australia that might infringe upon Cryovac's patent. The application was brought under O 15A r 6 of the Federal Court Rules, seeking disclosure of documents relating to the invention's development, prior art, and related commercial activities. Cryovac opposed the application, arguing that the documents sought were not relevant to the potential revocation proceedings and that the application was an abuse of process.

The court had to determine whether the documents requested were relevant and necessary for the purpose of deciding whether to commence revocation proceedings and if the application for disclosure was an abuse of process. The court considered the scope of discovery in patent revocation proceedings under s 138 of the Patents Act 1990 and whether the documents sought were discoverable in such proceedings. Additionally, the court examined whether the application was made in good faith or if it constituted an abuse of process.

The court found that the documents requested were not relevant to the potential revocation proceedings, and the application was an abuse of process. The court held that the applicant's request for documents was overly broad and not confined to what was necessary for the limited purpose of deciding whether to commence revocation proceedings. The court dismissed the application and ordered that the applicant pay the respondent's costs of the application.

Orders

Orders of the court

1. The application is dismissed.

2. The Applicant is to pay the Respondent’s costs of the application.

Background

Background to the litigation

An application for registration of the patent in Australia was filed with the Australian Patent Office on 5 December 1995. It was sealed on 5 November 1998. The assignment of the patent from WR Grace & Co-Conn to Cryovac was registered on 30 March 1999. The first claim of the patent is for: “1.A patch bag having a single seal along one or more edges thereof, and comprising a heat-shrinkable patch adhered to a heat-shrinkable bag, the heat-shrinkable patch comprising a first heat-shrinkable film and the heat-shrinkable bag comprising a second heat-shrinkable film, the first heat-shrinkable film comprising homogenous ethylene/alpha-olefin copolymer.”The product which Viskase is considering marketing in Australia may fall within the claims of the patent. The company therefore wishes to form a view about the validity of the patent and, if so advised, commence proceedings for its revocation. It seeks an order for the production by Cryovac of documents related to the development of its invention which may help Viskase to decide whether or not to pursue revocation. It relies upon O 15A r 6 of the Federal Court Rules in bringing its application.Factual Background Richard Baddeley, a Patent and Trade Mark Attorney based in Perth, was instructed by Viskase to consider a possible challenge to the patent. As a result of inquiries and requests to IP Australia and the Australian Patent Office in February and March 2000 he obtained copies of the patent file, a status report, Examination Reports, responses and other correspondence between the original applicant, WR Grace & Co-Conn, and IP Australia. Company searches and other information were obtained regarding Cryovac and WR Grace & Co-Conn and the relationship between them. WR Grace & Co-Conn is said to own approximately 63% of Sealed Air Corporation, of which Cryovac is a wholly owned subsidiary. On 22 February 2000 Blake Dawson Waldron, on behalf of Viskase, and apparently acting under instructions from Mr Baddeley, wrote to Cryovac. They recited their client’s intention to develop a market in Australia in relation to a packaging bag, the features of which might fall within the scope of some of the claims of Patent 692957. They referred to prior art documents and said that there was reasonable cause for Viskase to believe that it had or might have the right to seek an order from the Federal Court revoking the Cryovac Patent on the grounds that the invention claimed was not patentable by reason of obviousness and want of novelty. The letter went on to observe that the issues involved in each of the potential grounds of revocation were complex and that further information concerning the development of the Cryovac Patent was required for examination and consideration by Viskase in order to enable it to make a decision on whether to commence a revocation proceeding. Many of the classes of documents which they sought in that request were not available or generally available in the public domain. Viskase’s solicitors requested Cryovac to provide an opportunity to inspect certain categories of documents in its possession, custody or power. The classes requested comprised documents constituting or recording the results of searches and inquiries carried out by WR Grace or Cryovac, documents relating to research and experimentation on the subject matter of the Cryovac Patent recording or evidencing steps in the design and development of the invention and documents recording or evidencing or otherwise relating to dealings in trade or commerce by WR Grace or Cryovac in respect of the Cryovac Patent with any other patent. Copies of all documents relating to any prior disclosure or exhibition to any member of the public before the priority date and all prior art documents relating to any of the claims of the Cryovac Patent were also sought. An undertaking was provided that documents supplied would be kept confidential with access restricted to legal advisers, counsel, patent attorneys and expert witnesses and their use limited to considering whether legal proceedings ought to be commenced by Viskase for revocation of the Cryovac Patent. In the event that such legal proceedings were commenced they would be restricted to use in such proceedings. It was suggested that the documents sought would all be discoverable in a revocation action under s 138 of the Patents Act 1990. The request was made on the basis that if Cryovac did not comply application would be made to the Federal Court for an order pursuant to O 15A r 6 of the Federal Court Rules. A written response was sought by 29 February 2000.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

FRENCH J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: FRENCH J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W86 OF 2000

BETWEEN:	VISKASE CORPORATION APPLICANT
AND:	CRYOVAC INC RESPONDENT
JUDGE:	FRENCH
DATE OF ORDER:	22 NOVEMBER 2000
WHERE MADE:	PERTH

JUDGE:	FRENCH
DATE:	22 NOVEMBER 2000
PLACE:	PERTH