Wimmera Industrial Minerals Pty Ltd (ACN 004 302 139) v RGC Mineral Sands Limited (ACN 008 763 666) and RGC Mineral Sands Limited v Wimmera Industrial Minerals Pty Limited and the Commissioner Of Patents
[1997] FCA 693
•30 JULY 1997
FEDERAL COURT OF AUSTRALIA
PATENTS - Infringement proceeding - Application to court to amend specification - Notice to produce documents - Application to set aside - Patentee's duty of disclosure on application to amend - Relevance of non-disclosure to exercise of court's discretion to allow amendment - Documents relevant to duty of disclosure - Privileged documents - Disclosure on application to amend - Whether notice to produce an abuse of process - Subpoenas to non parties to produce documents - Whether to be set aside.
Patents Act, 1990 ss40(2), (3), 114, 115, 200.
Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] 1 FSR 561
Chevron Research Company's Patent [1970] RPC 58
Hsiung's Patent [1992] RPC 497
Bentley Engineering Co Ltd's Patent [1981] RPC 361
Terrell on Patents 14th ed (1994)
Commissioner for Railways v Small (1938) 38 SR (NSW) 564
Finnie v Dalglish [1982] 1 NSWLR 400
Re Excel Finance Corporation (1993) 41 FCR 346
Lucas Industries Ltd v Hewitt (1978) 45 FLR 174
Universal Press Pty Ltd v Provest Ltd (unreported, 14 July 1989)
WIMMERA INDUSTRIAL MINERALS PTY LTD (ACN 004 302 139) v RGC MINERAL SANDS LIMITED (ACN 008 763 666) and RGC MINERAL SANDS LIMITED v WIMMERA INDUSTRIAL MINERALS PTY LIMITED and THE COMMISSIONER OF PATENTS
VG 215 of 1994
SUNDBERG J
MELBOURNE
30 JULY 1997
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIA DISTRICT REGISTRY ) No VG 215 of 1994
)
GENERAL DIVISION )
BETWEEN:WIMMERA INDUSTRIAL MINERALS PTY LTD (ACN 004 302 139)
Applicant
and
RGC MINERAL SANDS LIMITED (ACN 008 763 666)
Respondent
AND:RGC MINERAL SANDS LIMITED
Cross-Claimant
and
WIMMERA INDUSTRIAL MINERALS PTY LIMITED
First Cross-Respondent
and
THE COMMISSIONER OF PATENTS
Second Cross-Respondent
JUDGE:SUNDBERG J
PLACE:MELBOURNE
DATED:30 JULY 1997
MINUTES OF ORDER
THE COURT ORDERS THAT:
The motions notices of which are dated 26 and 27 June 1997 be dismissed.
The applicant pay the respondent's taxed costs of the applicant's motion notice of which is dated 26 June 1997 in so far as it pertains to the notice to produce.
Chemistry Centre of Western Australia, the Mineral Processing Laboratory and Brian O'Brien pay the respondent's taxed costs of their motions notices of which are dated 27 June 1997.
Griffith Hack & Co and Michael Hollitt pay the respondent's taxed costs of their motions notices of which are dated 27 June 1997.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIA DISTRICT REGISTRY ) No VG 215 1994
)
GENERAL DIVISION )
BETWEEN:WIMMERA INDUSTRIAL MINERALS PTY LTD (ACN 004 302 139)
Applicant
and
RGC MINERAL SANDS LIMITED (ACN 008 763 666)
Respondent
AND:RGC MINERAL SANDS LIMITED
Cross-Claimant
and
WIMMERA INDUSTRIAL MINERALS PTY LIMITED
First Cross-Respondent
and
THE COMMISSIONER OF PATENTS
Second Cross-Respondent
JUDGE:SUNDBERG J
PLACE:MELBOURNE
DATED:30 JULY 1997
REASONS FOR JUDGMENT
APPLICATION TO AMEND SPECIFICATION
In the course of this infringement proceeding the applicant has applied to amend the specification of Australian patent 639089 pursuant to s105 of the Patents Act 1990. Section 105(1) empowers the Court to direct the amendment of a patent, the patent request
or the complete specification in the manner specified in its order. As a result of sub-s(4) an amendment is not to be directed which is not allowable under s102. That section is in part as follows:
“(1)An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim matter not in substance disclosed in the specification as filed.
(2)An amendment of a complete specification is not allowable after the specification has been accepted if, as a result of the amendment:
(a)a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment; or
(b)the specification would not comply with subsection 40(2) or (3).”
Section 40(2) requires that a complete specification describe the invention fully, including the best method known to the applicant of performing the invention, and end with a claim or claims defining the invention. Sub-section (3) requires the claim or claims to be clear and succinct and fairly based on the matter described in the specification.
OBJECTIONS TO AMENDMENT
The respondent has objected to the amendment on two grounds. The first is that the amendment is not allowable under s102 for the following reasons: as a result of the amendment, the specification would claim matter not in substance disclosed in the specification as filed; as a result of the amendment, certain of the claims would not in substance fall within the scope of the claims of the specification before amendment; as a result of the amendment the specification would not comply with s40(2) or (3) because the specification would not describe the invention fully, it would not describe the best method known to the applicant of performing the invention, each of the claims would not define the invention and would not be clear and succinct, and each of the claims would not be fairly based on the matter described in the specification. The second ground is that the amendment should be refused in the exercise of the Court's discretion. The respondent also claims that if the amendment is directed to be made, the applicant is not entitled to damages or an account of profits in respect of any infringement of the patent before the date of the order directing the amendment. This claim reflects s115(1) which provides in part as follows:
“Where a complete specification is amended after becoming open to public inspection, damages shall not be awarded, and an order shall not be made for an account of profits, in respect of any infringement of the patent before the date of the decision or order allowing or directing the amendment:
(a)unless the court is satisfied that the specification without the amendment was framed in good faith and with reasonable skill and knowledge; or
(b)if the claim of the specification that was infringed is a claim mentioned under sub-section 114(1).
...”
Section 114(1) provides that
“Where a claim of a complete specification claims matter that was in substance disclosed as a result of amending the specification, the priority date of the claim must be determined under the regulations.”
The particulars to the s115 claim assert that the applicant has not discharged the onus of showing that the specification without the amendment was framed in good faith and with reasonable skill and knowledge, and that s114(1) applies to each of the claims both before and after the amendment.
NOTICE TO PRODUCE
On or about 13 June 1997, after the completion of discovery in relation to the amendment application, the respondent served on the applicant a notice to produce under O 33 r 12. Paragraph 1 of the notice describes the following class of documents:
“1.All documents including examiners reports, correspondence, letters of advice, file notes, notices of meetings, notes of telephone conversations, memoranda and official communications which refer or relate to the application, prosecution and subsequent grant of United States patent no 5427749 or any divisional application, continuation, continuation in part or re-issue of that patent.”
Paragraphs 3, 5, 7 and 9 refer to the same range of documents relating to:
“3.... the application and prosecution of European patent application 91905528.5 - 2309 or any divisional application of that patent application.
5.... the application, prosecution, and subsequent grant of Australian patent No 639089 or any divisional application of that patent or any subsequent application to amend Australian Patent No 639089.
7.... the decision of the Applicant to apply to amend Patent No 639089 in accordance with amendments filed with the Commissioner of Patents on 16 June 1994 and the subject of a letter dated 16 June 1994.
9.... the decision of the Applicant to amend Patent No 639089 in accordance with amendments specified in the Applicant's Notice of Motion dated 20 January 1997.”
The patent referred to in pars 5, 7 and 9 is the patent the subject of the current application to amend under s105. The application referred to in par 7 is an application to amend made to the Commissioner under s104. This application is still on foot, though the applicant has undertaken to the Commissioner that if amendments under s105 are directed, it will thereupon withdraw the s104 application. The notice of motion referred to in par 9 is the current application to amend under s105.
Paragraphs 2, 4, 6 , 8 and 10 are respectively more detailed descriptions of the classes of documents the subject of pars 1, 3, 5, 7 and 9. Each of the even numbered paragraphs is in essentially the same form. I will take par 2 as the example. It seeks production of all documents being:
“(a)examiners reports, correspondence, letters of advice, file notes, notes of meetings, notes of telephone conversations, memoranda and official communications, from or to
(i)the Applicant;
(ii)the Applicant's officers or agents;
(iii)the Applicant's attorneys, solicitors or counsel in the United States or Australia;
(iv)the Applicant's patent attorneys in the United States or Australia;
(v)the United States Department of Commerce, Patent and Trademark Office;
(vi)the co-inventors of the patent, namely;
(A)Michael John Hollitt; or
(B)Ian Edward Grey; or
(C)Brian Anthony O'Brien; and
(b)all instructions from the Applicant, its Australian patent attorneys, its Australian solicitors, the co-inventors or any of them to the Applicant's United States patent attorneys,
in relation to:
(1)the preparation of;
(2)the lodgment of;
(3)the prosecution of;
(4)any amendment during the prosecution of; or
(5)the subsequent allowance of,
the United States application on which United States patent no 5427749 issued, or any divisional, continuation, continuation in part or re-issue application with respect to that patent or in relation to US patent 5427749 after its issue.”
Paragraph 11 seeks production of all documents which record or evidence the advice from the applicant's counsel in relation to amendment of the specification, instructions given to its patent attorney to draft an application to amend under s104, and the applicant's solicitor's advice about the s104 application and his instructions to make the s105 application.
THE SUBPOENAS
On 16 and 17 June 1997 the respondent caused to be issued five subpoenas for production of documents under O 27 r 2. The description of the documents in each subpoena is substantially the same as that in the notice to produce. Two of the subpoenas are directed to the inventors referred to in par 2(a)(vi)(A) and (C) of the notice to produce. The other three are directed to the applicant's patent attorneys, the Chemistry Centre of Western Australia and the Mineral Processing Laboratory.
THE SET ASIDE APPLICATIONS
The applicant has applied to have the notice to produce set aside, and the applicant and the recipients of the subpoenas have applied to have the subpoenas set aside. The applicant asserts that the notice to produce is an abuse of process because it is a substitute for discovery, and that the notice and the subpoenas seek irrelevant documents, are of undue width, are an exercise in fishing, and that some of the documents are on their face subject to privilege. The subpoenaed parties attack the subpoenas on the same grounds.
DISCRETION TO ALLOW AMENDMENT
In Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] 1 FSR 561 at 566
Aldous J referred to Chevron Research Company's Patent [1970] RPC 58 at 586 where Graham J
“drew attention to the fact that a patentee seeking amendment bears the onus of establishing that the amendment is allowable and can only discharge that onus if he provides evidence to prove his case and, in doing so, places the whole story before the court. This must be right. Many of the matters which need to be considered by the court in amendment proceedings may be exclusively within the knowledge of the patentee, and therefore the court will refuse to exercise its discretion to allow amendment if there has not been full disclosure.”
And later at 569, his Lordship said:
“The discretion as to whether or not to allow amendment is a wide one and the cases illustrate some principles which are applicable to the present case. First, the onus to establish that amendment should be allowed is upon the patentee and full disclosure must be made of all relevant matters. If there is a failure to disclose all relevant matters, amendment will be refused. Secondly, amendment will be allowed provided the amendments are permitted under the Act and no circumstances arise which would lead the court to refuse the amendment. Thirdly, it is in the public interest that amendment is sought promptly. Thus, in cases where a patentee delays for an unreasonable period before seeking amendment, it will not be allowed unless the patentee shows reasonable grounds for his delay. Such includes cases where a patentee believed that amendment was not necessary and had reasonable grounds for that belief. Fourthly, a patentee who seeks to obtain an unfair advantage from a patent, which he knows or should have known should be amended, will not be allowed to amend. Such a case is where a patentee threatens an infringer with his unamended patent after he knows or should have known of the need to amend. Fifthly, the court is concerned with the conduct of the patentee and not with the merit of the invention.”
This passage was cited with approval by the Court of Appeal in Hsiung's Patent [1992] RPC 497 at 522. See also Bentley Engineering Co Ltd's Patent [1981] RPC 361 at 376.
The relevance of foreign applications to the exercise of the discretion to amend is illustrated by Bentley Engineering. The patentees' original specification had a very broad claim for a knitted jumper, with sleeves that were integral to the body of the jumper and attached to it by armpit sutures. The patentees applied for a number of foreign patents corresponding to their British patent and in particular for a patent in the United States. These foreign applications originally also had very broad claims similar to the original broad English claim. During the prosecution of the application in the United States a Swiss application in the name of Pfäuti was cited. The patentees then limited the original broad claim in the United States application so as to exclude the construction of the garment disclosed in Pfäuti. In order to avoid disclosing the Pfäuti document, the patentees waited for more than eight years before applying to amend the English claims. The Superintending Examiner refused leave to amend the English claim on the ground that the patentees had knowingly and deliberately sustained and maintained a claim of unjustifiable width in their English specification. The patentees' appeal was dismissed. Graham J said:
“After some argument I came to the conclusion that perhaps the patentees had not realised the necessity in amendment proceedings of the fullest disclosure to the court of all the circumstances of their conduct ....
...
The files relating to the US application have been made available and so has the file of the British patent agents, but the patentees are unable to produce their own file relating to their British patent. This they say cannot be found and must have been lost in moving their office. Again it is not suggested that there is anything sinister in this non-production but it is unfortunate from the patentees' point of view as this file could be expected to have had material in it relevant to the points in issue.
On these facts it seems to me that [the Superintending Examiner] was amply justified in saying that a prima facie case had been made out against the patentees on the following basis. There was a clear anticipation of their original broad claim; they understood the position fully and had to limit their claims both in the USA and in a later but for present purposes otherwise irrelevant application in Germany. They used their unamended broad claim against the opponents to try to get a specific reference to their own UK patent .... At the time of so doing they knew or ought to have known that the breadth of their UK patent was unjustified.”
In Hsiung's Patent [1992] RPC at 512 Aldous J, after observing that amendments, once made, cannot be questioned except for fraud, that patents can affect persons not before the court, and that accordingly a patentee has a duty, whether discovery has been sought or not, to make full disclosure of all relevant matters, went on to say:
“Further, there has been no disclosure of whether there may have been corresponding patent applications in other countries and, if so, whether any patent office has raised an objection based on the prior art cited in this case. If so, those objections could have been met by amendments similar to those now proposed, showing that the patentee was put on notice of the need to amend.”
I refer to these decisions, not to suggest any similarity between their facts and those of the present case, but to illustrate the relevance of applications in other countries to a patentee's duty of disclosure on an application to amend.
PRIVILEGED DOCUMENTS
Under s200(2) a communication between patent attorney and client, and any record or document made for the purposes of such a communication, are privileged to the same extent as is a communication between solicitor and client. One of the objections taken to parts of the notice and subpoenas is that some of the documents sought are on their face subject to privilege. See for example pars 8(a)(iii) and (iv) and 11 of the notice to produce. But as Terrell points out, it is usual on an application to amend for the patentee to disclose all relevant documents, even though some are privileged: Terrell on Patents 14th ed (1994) at 243. The patentee is not, of course, required to produce them. He may take the objection if he wishes, but to do so may bear on the exercise of the court's discretion. Cf Hsiung at 512, 523.
THE PRESENT CASE - NOTICE TO PRODUCE
I now turn to apply what I have said thus far to the present case. The peculiar nature of an application under s105, in particular the duty on the patentee to disclose all matters relevant to the application and the related discretionary considerations, bears on the various objections taken to the notice to produce - relevance, fishing, width, privilege and abuse of process. I accept the submissions of the applicant that the documents sought are not relevant to the issues thrown up by pars IA to C1-4 of the Particulars of Objection to the proposed amended claims. I also accept that par III (the s115 point) is not an issue on the amendment application. But par II, which raises the applicant's duty of full disclosure, and discretionary considerations, makes relevant documents the seeking of which might otherwise appear as fishing.
(a)United States and European patents (pars 1 to 4)
For the reasons I have given, these documents are relevant to the full disclosure and discretionary issues. To ask for them is not to fish. The description of the documents (whether in the abbreviated form (pars 1 and 3) or in the more detailed form (pars 2 and 4)) is not of excessive width. The applicant does not contend that it would be burdensome to comply with the notice. Cf Commissioner for Railways v Small (1938) 38 SR (NSW) 564 and Finnie v Dalglish [1982] 1 NSWLR 400. It is true that pars 2 and 4 seek documents that are prima facie privileged. But for the reasons I have given, it is not improper in a case such as the present to seek privileged documents. There is, however, no obligation to produce them.
(b)Standard patent application (pars 5 and 6)
The documents sought in relation to the application for the patent in suit are properly the subject of a notice to produce. The duty of disclosure justifies what might otherwise be a fishing expedition. I refer to what I have said in (a) above.
(c)Section 104 application (pars 7 and 8)
What I have said in (b) is applicable here. The amendments sought under s104 are the same as those now sought under s105.
(d)Section 105 application (pars 9 and 10)
What I have said in (b) is applicable here.
(e)Paragraph 11
I refer to what I have said in (a) in relation to privileged documents.
ABUSE OF PROCESS
I deal separately with the applicant's claim that the notice is an abuse of process because it is a substitute for discovery. As I have said, discovery has taken place. The applicant contends that the proper course for the respondent to pursue, if it considers the applicant's discovery incomplete, is to proceed under O 15 r 8 for particular discovery. There is no dispute that the classes of documents the subject of the notice to produce "may be or may have been" in the possession of the applicant (to use the language of O 15 r 8), and for the reasons I have given, they relate to a matter in question in the proceeding (namely the duty of disclosure) within r8. While an application under r 8 may have been the preferable course, I do not intend to impose it upon the respondent. I have, at the instigation of the applicant, set aside 15 to 18 September for the hearing of the amendment application: see my reasons for judgment of 2 May 1997. It would be disruptive of the preparation of the amendment application, prejudicial to the retention of the hearing date, wasteful of resources, and be an elevation of form over substance, to force the respondent to make a fresh application for substantially the same relief, though differently framed because of the mechanics within O 15 r 8.
SUBPOENAS
Reliance was placed upon the well-known passage in Small's Case at 573:
“If [the subpoena] be addressed to a stranger, it must specify with reasonable particularity the documents which are required to be produced. A subpoena duces tecum ought not to be issued to such a person requiring him to search for and produce all such documents as he may have in his possession or power relating to a particular subject matter. It is not legitimate to use a subpoena for the purpose of endeavouring to obtain what would be in effect discovery of documents against a person who, being a stranger, is not liable to make discovery. A stranger to the cause ought not to be required to go to the trouble and perhaps to expense in ransacking his records and endeavouring to form a judgment as to whether any of his papers throw light on a dispute which is to be litigated upon issues of which he is presumably ignorant.”
In Small the subpoena had sought five categories of documents. The first related to documents that had already been produced. The remaining categories were very wide, commencing with a request for records, papers etc relating to the installation of automatic or self-closing safety doors on electric trains in New South Wales "or any other places", and concluding with a request for all documents etc relating directly or indirectly to "complaints about the running and control of electric trains". Understandably, Jordan CJ said it was a serious abuse of the process of the court for a subpoena relating to those four categories to have been procured: at 575. Although it has been said by Rath J that a subpoena is oppressive as requiring discovery if it requires the production of documents "relating to a matter of fact that is capable of being an issue in the proceedings" or documents relating to "a defined issue in the proceedings" (Finnie v Dalglish [1982] 1 NSWLR 400 at 407), it has more recently been said that too literal an interpretation should not be given to his Honour's language, and that "common sense must prevail": Re Excel Finance Corporation (1993) 41 FCR 346 at 357. Even prior to Finnie, it had been said in Lucas Industries Ltd v Hewitt (1978) 45 FLR 174 at 190 that it is to be assumed that the recipient of a subpoena will read it sensibly and with reference to the circumstances known to him.
In applying the established principles to the circumstances of the present case, a number of considerations must be borne in mind. First, some of the persons to whom the subpoenas are directed are not "strangers" in the strict sense in which Jordan CJ used the word - ie those who are ignorant about the issues in the litigation. Cf Universal Press Pty Ltd v Provest Ltd (unreported, 14 July 1989) at 8-9. Griffith Hack & Co are the applicant's patent attorneys. Dr Hollitt and Dr O'Brien are two of the three co-inventors of the subject of the patent. At material times Dr Hollitt was general manager of the applicant. I was told from the bar table that Mineral Processing Laboratory and Chemistry Centre of Western Australia are "places at which Dr O'Brien worked". Secondly, because at least three of the subpoenaed persons can be assumed to have an understanding of the invention, the patent and the proceedings, no question of "ransacking" their records will be involved. Cf Lucas Industries at 189. Thirdly, although there is some generality in the description of the documents sought - the phrases "refer or relate to" and "in relation to" being used - as was pointed out in Lucas Industries at 188, "a degree of generality in the description of documents may, according to circumstances, be compatible with reasonableness". In the case of the present subpoenas the relationship posited is not to some nebulous issue, or to an issue in the proceedings, but to defined matters - the application, prosecution and subsequent grant of United States patent no 5427749 and Australian Patent No 639089, the application and prosecution of European patent application 91905528.5 - 2309, the decision of the applicant to apply to amend the Australian patent in accordance with the attached application, and the decision of the applicant to apply to amend the Australian patent in accordance with attached amendments filed with the Commissioner. It is true that the subpoenas require those to whom they are addressed to read not only the seven pages of the schedule in which the documents are described, but some twenty four pages of attachments. But that will not be burdensome or difficult for the patent attorneys or the inventors. I have had more doubt about Dr O'Brien's former employers. But given that they apparently employ inventors, and appear to operate in scientific areas, I do not think they will be unduly troubled in their understanding of what the subpoenas require or involve.
CONCLUSION
The applications are dismissed.
I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment of the Honourable Justice Sundberg
Associate:
30 July 1997
Counsel for the Applicant,
Griffith Hack & Co and Michael Hollitt: J McL Emmerson QC and P W Collinson
Solicitors for the Applicant,
Griffith Hack & Co and Michael Hollitt: Arthur Robinson & Hedderwicks
Counsel for the Chemistry Centre of
Western Australia, the Mineral
Processing Laboratory and Brian O'Brien: M Roberts
Solicitors for the Chemistry Centre of
Western Australia, the Mineral
Processing Laboratory and Brian O'Brien: Deacons Graham James
Counsel for the Respondent: D Catterns QC
Solicitors for the Respondent: Allen Allen & Hemsley
Date of Hearing: 1 July 1997
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