Warner-Lambert Company v Cardinal Health, Inc

[2006] APO 14

ABSTRACTS OF DECISIONS

DECISION OF A DEPUTY COMMISSIONER OF PATENTS

Application  :          No. 762692 in the name of Warner-Lambert Company

Title:          Modified Starch Film Compositions

Action:          Opposition by Cardinal Health, Inc under s.59 of the Act, and lawful excuse for not complying with a Notice requiring production of certain documents.

Decision:          Issued  20 April 2006.

Abstract

Lawful excuse for not complying with a Notice requiring production of certain documents including drafts of declarations considered. Lawful excuse not found in relation to all of the documents covered by the notice - ASIC v Southcorp Limited [2003] FCA 804 applied.

PATENTS ACT 1990

DECISION OF A DEPUTY COMMISSIONER OF PATENTS

Re:Patent Application No. 762692 in the name of Warner-Lambert Company, Opposition by Cardinal Health, Inc under s.59 of the Act, and lawful excuse for not complying with a Notice requiring production of certain documents.           

BACKGROUND

1. This matter arises in the context of opposition proceedings in relation to patent application 762692. The relevant particulars are apparent from the Delegate’s decision in Warner-Lambert Company v Cardinal Health, Inc [2005] APO 26 where an extension was granted for serving evidence in support of the opposition. This evidence when filed included statutory declarations made by two expert witnesses, Dr John Besida and Dr David Dunstan.

1. On 20 September the applicant requested the Commissioner to issue a notice to produce certain documents pursuant to s.201 of the Act. The justification for the request was given in the following terms:

“We are currently reviewing the opponent's Evidence-in-Support and wish to establish whether the opponent's experts were properly instructed in the matter of evidence preparation. The applicant's Evidence-in-Reply is due for service on 22 October, 2005. As production of the requested documents may have a bearing on the case the applicant has to answer, we request that the date for delivery of the documents requested be set for two months from the date of the Notice, if possible. The time period of two months has been requested because some of the documents requested may be overseas. Specifically, we know from the opponent's extension of time applications relating to service of their Evidence-in-Support that some of the Experts' draft declarations were sent for review and comment to the opponent's overseas attorneys.”

1. I then on 23 September issued the Notice to “ The Proper Officer CARDINAL HEALTH INC.” which required the following documents to be filed by 23 November 2005:

“1.All documents sent by the opponent or representatives of the opponent, including the opponent's attorneys, to Dr. David Dunstan regarding preparation of Evidence-in-Support including instructions to Dr. Dunstan in relation to his role.

2.All of Dr. David Dunstan's written responses to 1 above, including drafts of declarations.

3.All documents sent by the opponent or representatives of the opponent, including the opponent's attorneys, to Dr. John Besida regarding his utility experiments including all instructions to Dr. Besida on what experiments were considered or required.

4.All of Dr. John Besida's written responses to 3 above, including drafts of declarations.

5.All file notes and memoranda made by the opponent, the opponent's representatives, including the opponent's attorneys, and made by Drs. Dunstan and Besida relating to the preparation of the declarations by Dr. Dunstan dated 19 July, 2005 and by Dr. Besida dated 22 June, 2005.”

1. On 23 November 2005 the opponent filed three documents relevant to the notice to produce but also objected to the Notice on the basis that it amounted to discovery and that it covered documents that were not relevant to the matter before the Commissioner and were subject to privilege. Further submissions were filed on 12 December 2005 requesting withdrawal of the Notice and the matter was set down for hearing in Melbourne on 21 February 2006. The applicant was represented by Mr T Cordiner of counsel instructed by Ms J Harkins and Mr R Kelson, Callinan Lawrie, Melbourne. The opponent was represented by Mr B Fitzpatrick of counsel instructed by Ms M Gill, Phillips Ormonde & Fitzpatrick, Melbourne.

APPLICABLE LAW

1. The power for the Commissioner to require production is provided under section 210 of the Act:

The Commissioner may, for the purposes of this Act:
(a) summon witnesses; and
(b) receive written or oral evidence on oath or affirmation; and
(c) require the production of documents or articles; and
(d) award costs against a party to proceedings before the Commissioner.

1. The practice of the Commissioner in dealing with a request to issue a Notice requiring production is as recited in Eli Lilly & Company v Novo Nordisk A/S [1999] APO 45 (2 August 1999); that is the Commissioner:

"... will consider ex parte whether a requested notice has adjectival relevance. Unless adjectival relevance is clearly lacking, the Notice will be issued - with the expectation that any issues of lack of relevance will be dealt with as a matter of lawful excuse for non-compliance with the Notice."

Thus the person to whom the notice is given must either produce the documents identified or provide to the Commissioner a lawful excuse. Where there is a dispute as to compliance with the notice it is appropriate that both the party on whom the notice has been served and the party seeking production should be heard.

DECISION

1. Both parties provided helpful submissions prior to the hearing and during the proceedings it became apparent the significant point of difference between them was the nature of the influence which would need to be apparent in relation to the declaratory evidence to establish a waiver of privilege in the communications between the solicitor and the expert witness. Mr Fitzpatrick suggested that this would be limited to communications that suggested undue influence or coaching while Mr Cordiner asserted that the matter went as far as communications that could be said to influence the expert’s evidence.

1. The principles espoused by Lindgren J in ASIC v Southcorp Limited [2003] FCA 804 at [21] are particularly relevant to this matter:

“1. Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 ChD 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 ("Interchase") at 151 per Pincus JA, at 160 per Thomas J.

2. Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 ("Propend"); Interchase, per Pincus JA; Spassked Pty Ltd v Commissioner of Taxation (No 4) (2002) 50 ATR 70 at [17].

3. Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness's own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications: cf Interchase at 161--162 per Thomas J.

4. Ordinarily disclosure of the expert's report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ, 487--488 per Mason and Brennan JJ, 492-493 per Deane J, 497--498 per Dawson J; Goldberg v Ng (1995) 185 CLR 83 at 98 per Deane, Dawson and Gaudron JJ, 109 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 ("ACCC v Lux") at [46].

5. Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents; Interchase at 148--150 per Pincus JA, at 161 per Thomas J.

6. It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report; cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521; Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400; ACCC v Lux at [46].”

1. I do not think that the authorities support the fine distinction sought to be relied on by Mr Fitzpatrick and in applying the principles indicated above I keep in mind the nature of expert evidence and its importance to proceedings before the Commissioner who is concerned with the correct and expeditious resolution of opposition matters. To this end I consider the expectations of expert evidence in matters before the Federal Court to apply equally in proceedings before the Commissioner and I note the Court guidelines for expert witnesses indicate that:

“2.7 There should be included in or attached to the report (i) a statement of the questions or issues that the expert was asked to address; (ii) the factual premises upon which the report proceeds; and (iii) the documents and other materials which the expert has been instructed to consider.”

This is consistent with the expert having an “overriding duty to assist the Court” and the expectation is that the process of reaching an expert opinion should be transparent and open to scrutiny. I note also in this regard Thomas J’s observations in Interchase that:

“In the field of expert evidence it is difficult to sever an opinion from the information and process upon which it is based. … It is undesirable to encourage any tendency to make experts part of a team captained by one party. Opinion evidence is a special kind of evidence, and the courts have traditionally encouraged experts who are qualified to give such evidence to be objective. In my view an expert’s duty to the court is more important than the duty to a client.”

1. In relation to the claim of privilege I have been handed a folder containing 62 documents and have heard the opponent ex parte on particular aspects of those materials. I have no basis to assume other than that the opponent has provided all the materials in its possession encompassed by the notice.

I categorized the documents into the following broad groupings:

A.Instructions provided to the experts by the opponents solicitors, supplementary instructions and documents put before the experts for their information or for specific consideration (Documents 2, 5, 8-10, 12, 15-17, 28, 31, 38, 39, 44, 46, 49, 52 and 53);

B.Reports, opinions or other information provided by the experts to the opponent’s solicitors. These include significantly various versions of Dr Besida’s experimental results (Documents 1, 4, 11, 14, 22, 26, 30, 35, 36, 43, 50, 51, 55 and 57-59);

C.Drafts of the experts declarations (principally Dr Dunstan’s) provided to the experts by the solicitors. These generally are communicated with instructions to the effect that the expert “amend and comment” as they wish (Documents 6, 20, 29, 32, 48, 54 and 62);

D.File notes of discussions with the experts made by the solicitor which include discussions of results and in some cases further instructions (Documents 13, 21, 23, 25, 33, 42, 47and 60; and

E.Miscellaneous communications including emails concerning the obtaining of reagents for testing (Documents 3, 7, 18, 19, 24, 27, 34, 37, 40, 41, 45, 56 and 61).

Of these documents 2, 3 and 4 are the three documents already produced. No claim of privilege is maintained in relation to documents 1 and 50 (versions of Dr Dunstan’s CV), document 8 (email providing Dr Dunstan with a copy of the statement of grounds and particulars) and document 36 (journal articles provided by Dr Dunstan). Of the remaining documents most are emails (including attachments) sent between Ms Gill and the two experts although there are copies of 8 telephone notes and one fax.

1. After reviewing the material I find that a lawful excuse does not exist for all of the documents including drafts of declarations. The experts in this case have been engaged subsequent to the filing of the notice of opposition and the statement of grounds and particulars and apparently for the specific purpose of serving evidence supporting the opposition primarily in relation to the common general knowledge in the art but also on the question of utility. In these circumstances the effect of the principles 4 and 5 elucidated by Justice Lindgren’s in Southcorp would seem to be that privilege in the communications, whether further instructions to the expert, information put to the expert or draft declarations transmitted to them, cannot be maintained at the same time as the opponent seeks to rely on the expert’s declarations in the proceedings. More generally I think upholding a claim of privilege in this case would be unfair (Attorney-General (NT) v Maurice, supra) and allowing production would not be “inconsistent with the maintenance of the confidentiality which the privilege is intended to protect” (Mann v Carnell (1999) 201 CLR 1). Otherwise the documents, including those in category E, are considered sufficiently relevant to justify production.

1. More particularly as to the drafts of declarations, it occurs to me that a process whereby an expert witness is provided with drafts of their declaration to which they are asked to agree or not leads directly to a reasonable inference that the draft may have influenced the expert and accordingly that the effect of those drafts on the experts opinion should rightly be open to scrutiny. I appreciate the practice may be common in opposition proceedings and may be expedient for the parties noting the difficulty often associated with engaging experts. However it does not appear to me that it can be done in the expectation that a claim of privilege is likely to be maintained. Otherwise upholding the claim to privilege would be inconsistent with the objectivity and transparency required in relation to expert evidence. To the extent that I was referred to Renehan v Leeuwin Ocean Adventure Foundation [2005] NTSC 18 as indicating a contrary proposition I find that it relates to a fundamentally different factual situation in so far as the party claiming privilege was not seeking to use the relevant declaration in proceedings. Rather I find the decisions in Tremwell Pty Ltd v DKGR Holdings Pty Ltd [2003] FCA 930 and [2003] FCA 948 to be more on point.

1. On the submissions Mr Fitzpatrick made regarding questions of public policy and the Commissioner’s discretion in applying s.210(c), this would seem to have been explored comprehensively by Justice Beaumont in G S Technology Pty Ltd v the Commissioner of Patents [1997] FCA 1460. The essence of that decision is that effectively the Commissioner must apply the same considerations as would be applied by the Court before refusing a request to issue a notice for production and should pay due regard to 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”.

1. In any event, if a consequence of my decision on the principles above is that confidential communication with experts is now more liable to production in opposition proceedings it does not necessarily deprive those proceedings of their quality of being expedient and relatively inexpensive. Rather it could equally be said that requiring production of documents in appropriate circumstances may assist in the efficient and correct determination of the matter and may, for example, mean that cross examination of witnesses is avoided.

CONCLUSION

1. I have found that a lawful excuse does not exist for production of the documents handed to me at the hearing, as indicated in my decision above.

I allow Cardinal Health, Inc. 14 days from the date of this decision to make any request pursuant to regulation 4.3(2)(b) for the Commissioner to treat the documents as prescribed for the purpose of s.55 and to provide submissions on the conditions under which they should, in that event, be made available to the applicant.

COSTS

1. I have found that the documents in the possession of the opponent should be produced and, in accordance with the normal principle that costs follow the event, I award costs against Cardinal Health, Inc.

Philip Spann
Deputy Commissioner of Patents

20 April 2006

Patent attorneys for the applicant  :  Callinan Lawrie, Melbourne

Patent attorneys for the opponent   :  Phillips Ormonde & Fitzpatrick, Melbourne