Resmed Limited v Fisher & Paykel Healthcare Limited
[2017] NZHC 2384
•29 September 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-001968 [2017] NZHC 2384
UNDER THE Patents Act 1953 and 2013 IN THE MATTER OF
Infringement of New Zealand Letters
Patent No. 592064, Letters Patent No.
597689, Letters Patent No. 608551 and
Letters Patent No. 527088BETWEEN
RESMED LIMITED Plaintiff
AND
FISHER & PAYKEL HEALTHCARE LIMITED
Defendant
Hearing: 2 June 2017 Further submissions:
Appearances:
12 and 16 June 2017
J G Miles QC and J R Wach for Plaintiff
A R Galbraith QC and G Arthur for DefendantJudgment:
29 September 2017
JUDGMENT OF GILBERT J
This judgment was delivered by me on 29 September 2017 at 3.30pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
RESMED v FISHER & PAYKEL HEALTHCARE [2017] NZHC 2384 [29 September 2017]
Introduction
[1] ResMed Ltd and Fisher & Paykel Healthcare Ltd (FPH) are substantial multi- national businesses. They are competitors in the field of developing and selling medical equipment for diagnosing, treating and managing sleep-disordered breathing and other respiratory disorders. ResMed claims that FPH is infringing four of its patents by manufacturing, distributing and selling the Simplus, Eson and Eson 2 continuous positive airway pressure masks, and the Icon fixed pressure machine. ResMed seeks a permanent injunction restraining FPH from manufacturing, distributing or selling these products and an enquiry into damages.
[2] FPH denies infringement and counterclaims that ResMed’s patents are invalid. It seeks an order revoking the four patents relied on by ResMed on the grounds set out in s 41(b), (d), (e), (f), (h), (i) and (j) of the Patents Act 1953. It relies particularly on s 41(f), asserting that the claimed inventions are obvious and do not involve any inventive step.
[3] In accordance with usual practice, the parties have agreed that there should be separate trials for liability and quantum.
[4] The present application addresses the parties’ dispute about the scope of tailored discovery that each should provide for the purposes of determining liability.
[5] The principal issues on the pleadings which define the scope of discovery at this stage are:
(a) infringement — Resmed’s claim; and
(b) obviousness and lack of novelty — FPH’s counterclaim.
[6] There is no dispute that documents relevant to infringement should be discovered subject to any proportionality concerns. The principal area of dispute concerns the extent to which documents potentially comprising secondary evidence of obviousness should be discovered and, if so, over what date range. It is helpful to summarise the parties’ competing contentions and the authorities upon which they
rely before examining the specific categories of documents for which discovery orders are sought.
Secondary evidence of obviousness
[7] Section 41(1)(f) of the Patents Act provides that a patent may be revoked on the ground:
that the invention, so far as claimed in any claim of the complete specification, is obvious and does not involve any inventive step having regard to what was known or used before the priority date of the claim in New Zealand.
[8] The Supreme Court confirmed in Lucas v Peterson Portable Sawing1 that the appropriate test for obviousness was as stated by the English Court of Appeal in Mölnlycke AB v Procter & Gamble Ltd, 2 namely whether the alleged inventive step would be obvious to a person skilled in the art having regard to any matter which forms part of the state of the art at the relevant times. The primary evidence of this will be from properly qualified expert witnesses; all other evidence is secondary and is merely an aid to the assessment of the primary evidence. Secondary evidence can be important in providing a check against hindsight reconstruction to which the
primary evidence can be prone, particularly where the inventions in issue long pre- date the preparation of the primary evidence.
[9] The Court in Mölnlycke explained the purpose of secondary evidence as a check on the primary evidence but warned of the limitations and difficulties with such evidence:3
In the nature of things, the expert witnesses and the court are considering the question of obviousness in the light of hindsight. It is this which may make the court’s task difficult. What with hindsight, seems plain and obvious, often was not so seen at the time. It is for this reason that contemporary events can be of evidential assistance when testing the experts’ primary evidence. For instance, many people may have been industriously searching for a solution to the problem for some years without hitting upon the allegedly obvious invention. When this type of evidence is adduced, the court can quickly find itself caught up in an investigation of what was or was
1 Lucas v Peterson Portable Sawing Systems Ltd [2006] NZSC 20, [2006] 3 NZLR 721 at [54]–
[55].
2 Mölnlycke AB v Procter & Gamble Ltd [1994] RPC 49 (EWCA) at 112.
3 At 113.
not obvious to certain identified individuals at certain dates during the history of the development of the product or process involved. This gives rise to complications because the state of knowledge of these individuals, though skilled, may not correspond to the statutory definition of the state of the art. A particular inventor may have been unaware of some aspect of the state of the art as defined in section 2(2), and may therefore have genuinely taken what was actually an inventive step, but nevertheless be unable to claim a patentable invention since the step was, in the terms of the statute, obvious. Further, this type of evidence invites the court to speculate whether particular individuals were of an inventive disposition, because the earlier making of the same invention by another or others does not necessarily mean that at a later date the invention was obvious. Yet again, evidence of the commercial success of the invention can lead into an investigation of the reasons for this success; there may be commercial reasons for this success unrelated to whether the invention was or was not obvious in the past.
[10] These considerations led the Court to caution that while secondary evidence can be helpful in particular cases, it should be kept in check recognising that it is merely an aid to the assessment of the primary evidence:4
Secondary evidence of this type has its place and the importance, or weight, to be attached to it will vary from case to case. However, such evidence must be kept firmly in its place. It must not be permitted, by reason of its volume and complexity, to obscure the fact that it is no more than an aid in assessing the primary evidence.
[11] ResMed submits that the following categories of documents will contain secondary evidence relevant to inventiveness and therefore should be discovered irrespective of when they were created (up to the date the proceedings were issued,
17 August 2016):
(a) documents recording the commercial success of FPH’s allegedly
infringing products;
(b)documents indicating that there was a long-standing problem that was solved by the invention — “long-felt want”;
(c) documents recording contemporaneous reaction by FPH or others to
the claimed inventive features in ResMed’s patents;
4 At 113.
(d)documents recording contemporaneous reaction by FPH or other parties to features of FPH’s allegedly infringing products which correspond to the inventive features claimed in ResMed’s patents; and
(e) FPH’s patent applications to the extent that these address the novelty
or advantage of the same features claimed by ResMed in its patents.
[12] Mr Miles QC submits that such documents are relevant and an order requiring discovery of them would be proportionate. He emphasises the critical importance of intellectual property to the success of these substantial multi-national businesses. This is reflected by the vast sums each spends annually on research and development and the many millions of dollars being spent on the current litigation which is being pursued in a number of jurisdictions around the world.
[13] However, Mr Arthur argues that cases where secondary evidence assumes importance are the exception, not the rule. He maintains that this is a routine patent infringement case and involves no technical complexity. He notes that the deemed filing dates for the relevant patents are respectively 14 February 2002, 15 June 2005,
24 October 2006 and 10 December 2009 and these are therefore the latest possible priority dates. FPH’s products were launched many years after ResMed’s patents — between four and eight years later. For that reason, Mr Arthur argues that any reaction to the alleged infringement will reflect the market at the time of the launch and the alleged infringer’s improvements, not the invention disclosed in the patents obtained many years earlier. Similarly, he submits that evidence of the commercial success of FPH’s products is irrelevant to whether ResMed’s patents involved inventive steps many years earlier. He contends that such documents are either not relevant at all or have such marginal relevance that discovery of them would not be proportionate.
Commercial success and long-felt want
[14] Mr Miles submits that documents showing the commercial success of FPH’s allegedly infringing products will be important in assessing whether the claimed inventions were obvious at the relevant times. He says it makes no difference
whether it was ResMed or FPH that commercialised ResMed’s patent. Either way, commercial success indicates recognition of inventiveness by the market. Mr Miles referred to Laddie J’s judgment in Haberman v Jackel International Ltd in support of this submission:5
How well has the patentee’s development been received? Once the product or process was put into commercial operation, to what extent was it a commercial success. In looking at this, it is legitimate to have regard not only to the success indicated by exploitation by the patentee and his licensees but also to the commercial success achieved by infringers.
[15] This passage was endorsed by Jacob LJ in giving the judgment of the Court of Appeal for England and Wales in Schlumberger Holdings Ltd v Electromagnet Geoservices AS.6 However, it is worth noting that this was an appeal following trial, not a decision scoping discovery requirements. In his earlier dissenting judgment in Nichia Corporation v Argos Ltd, which was a discovery case, Jacob LJ stated that where a patent is attacked on the ground of obviousness and there is no attempt to rebut the attack based on commercial success or long-felt want, proportionality generally requires that such disclosure should not be ordered.7
[16] I accept that discovery of these types of documents may be appropriate in particular cases. The difficulty in the present case is that FPH’s products were not commercialised until many years after the relevant priority dates for ResMed’s patents. For that reason, this type of evidence is unlikely to provide material assistance in establishing at the relevant times whether the inventive features asserted by ResMed were obvious or involved an inventive step even if the cost and effort required to locate and discover such documents would otherwise be proportionate.
Contemporaneous reaction by FPH and third parties
[17] Mr Miles relies on Jacob LJ’s observations in Schlumberger that
“contemporaneous real reactions of real experts in the field” can be of “real value” in
5 Haberman v Jackel International Ltd [1999] FSR 683 (EWHC) at [80(h)].
6 Schlumberger Holdings Ltd v Electromagnet Geoservices AS [2010] EWCA Civ 819, [2010] RPC 33 at [80].
7 Nichia Corporation v Argos Ltd [2007] EWCA Civ 741 at [53]-[54].
deciding a patent case.8 This is because such reactions do not suffer from the risks associated with expert evidence which is usually selected and tailored for trial many years after the event and can be susceptible to hindsight reconstruction. While this category of documents may well be important in particular cases, what matters are the reactions around the time when the issues of obviousness/inventiveness of the claimed invention must be assessed.9
FPH’s patent applications
[18] The potential relevance of this type of secondary evidence is also discussed by Jacob LJ in Schlumberger:10
Also of clear common sense relevance (though of course not decisive) is a situation where another party has thought the development sufficiently important to apply to patent it itself. … One has to be a bit careful about this: even where an invention is obvious, someone has to be first to get there. And, these days, people apply for patents for all sorts of reasons, including as a precaution against attempts by others to preclude the field. But where another party has not only applied to patent the same invention but has given reasons for why it is inventive, greater weight can be given to the fact — the reasons can be compelling evidence of inventiveness.
Proportionality
[19] Proportionality is an important consideration when determining the scope of discovery, particularly following the amendments to the High Court Rules in 2012. In the United Kingdom, there is now a practice direction applying to patent infringement cases which excludes from the scope of standard disclosure documents relating to any ground on which the validity of a patent is put in issue save for those documents which came into existence in the period commencing two years before
and ending two years after the earliest claimed priority date.11 While this rule does
not apply in New Zealand, it provides useful guidance on what might be considered a reasonable time limitation for discovery of these types of documents in cases
where the validity of a patent is challenged. However, each case must be considered
8 Schlumberger, above n 6 at [115].
9 At [81]–[82]; see also Unilever Plc v Chefaro Proprietaries Ltd [1994] RPC 567 (Pat) at 585.
10 At [83].
11 Civil Procedure Rules (UK), r 63.9 and Practice Direction 63.
on its own merits. Proportionality will depend on many factors including the nature, significance and complexity of the proceeding.
[20] In the light of these general principles, I now turn to the specific discovery requests. The parties helpfully identified the areas of contention by providing two schedules listing the categories of documents that each of them has requested the other to discover. These schedules were updated following the hearing to reflect the parties’ current positions. I will use the same category descriptions in this judgment because they effectively modify the formal application.
ResMed’s discovery requests
Category 1
All packaging, marketing and promotional materials, briefing packages for salespeople, and instructions for use concerning the Simplus, Eson and Eson 2 products which relate to their advantages over other masks or mask systems and the manner in which the products are marketed, used or intended to be used (including as prescribed by clinicians) — to the present.
[21] This category is agreed with one qualification — FPH contends that discovery should be limited to documents and material for use in New Zealand (save in relation to the Eson 2 product with the first and second cushion component packaged for sale together). In its written submissions, FPH maintained that documents prepared for use overseas could not be relevant to whether the New Zealand products have the integers of the New Zealand claims. However, at the hearing, Mr Arthur quite properly conceded that such documents could be relevant to that issue. Nevertheless, he submitted that it would be wholly disproportionate to require discovery of all such material worldwide, at least in the first instance. I agree. This category of documents is very broad in scope — all packaging, marketing, promotional materials, briefing packages for salespeople and instructions for use. I accept that it would be a major undertaking to discover all documents in this category prepared for use anywhere in the world. Given that all of the products are marketed and sold in New Zealand, I consider that the proper course
is to direct discovery of all such documents prepared for use in New Zealand at this stage. ResMed could then apply for further discovery if it can demonstrate that this is appropriate and proportionate in view of what it obtains on discovery in the initial tranche. If further discovery is justified, consideration could then be given to whether it should be limited, for example, to one or more other specified countries.
Category 2
Any document containing a statement or representation relating to the interchangeability of the various sizes of Simplus, Eson and Eson 2 cushion modules
— prior to 17 August 2016. [22] This is agreed. Category 3
Documents (such as Excel spreadsheets) illustrating volume of sales (in terms of units) into New Zealand of Simplus, Eson and Eson 2 frames and cushion modules (of sufficient detail to disclose volume of sales of the various sizes of cushion module) — prior to 17 August 2016.
[23] ResMed withdrew this aspect of its application after the hearing without conceding that the documents are not relevant.
Category 4
For the Simplus product and related patent applications, documents in the following subcategories that are relevant to integers of claims asserted against the defendant:
(a) Development file(s) and notes of members of the development team;
(b) Email correspondence, meeting notes, or internal memoranda concerning the development process;
(c) Documents received from, sent to, or drafted to send to design firms, consultants, toolmakers or other third parties involved in design and development;
(d) Detailed design and manufacturing drawings sufficient to disclose the design and assembly of the Simplus product and/or any design variations since launch;
(e) Reports to the Board concerning the development of the Simplus product in New Zealand;
(f) Third party commentary or reviews;
(g) Patent filings, internal communications, memoranda, marketing material or correspondence with any patent office specifically addressing the novelty or advantage of the rolling bridge and/or roll fit seal and/or common frame in the Simplus product.
[24] There are several areas of dispute concerning this category. The first is as to the appropriate date range. ResMed originally proposed that all documents in this category, with the exception of those described in (d), should be discovered for the period up to the date of the launch of the Simplus product. Kevin Pearson, senior legal counsel employed by FPH, deposes that the first sale of the Simplus product was in April 2013. For those documents covered by subcategory (d), ResMed proposed that the cut-off date should be 17 August 2016, the date the proceedings were filed. FPH accepts that those date ranges should apply to any documents in this category that may be relevant to the issue of infringement and it acknowledges that this will include documents in subcategories (a) to (d).
[25] However, ResMed subsequently modified its position and now seeks discovery of documents in all subcategories up to the date the proceedings were filed. It contends that post-launch documents will be relevant to infringement to the extent that they acknowledge the incorporation by FPH of the inventive features relied on by ResMed within the allegedly infringing products. Whether post-launch documents should be discovered is best evaluated with reference to each subcategory.
[26] To the extent that the documents in subcategories (a) to (d) are relevant to the issue of infringement, I consider that the date range initially proposed by ResMed and agreed to by FPH is appropriate. If it emerges from discovery of the documents in subcategory (d) that there have been design variations since launch, further discovery could be justified.
[27] The next issue concerns subcategory (e). ResMed initially sought discovery of all reports to the Board of FPH concerning the development of the Simplus product that relate to integers of claims asserted by ResMed. However, after the hearing, ResMed agreed to FPH’s proposal to limit discovery of all documents in category 4, including (e), to those “relevant to” integers of claims asserted against FPH. Despite that concession, FPH seeks to emphasise this by repeating the qualification in the description of subcategory (e) by adding the words “relating to integers of claims against the defendant”. This seems unnecessary. FPH also seeks to refine the subcategory by limiting it to “technical” reports to its Board. That reflects the discussion with counsel during the hearing. I accept that this further limitation is appropriate given that the purpose of the evidence is as a check on the primary evidence as to whether the allegedly inventive step would have been obvious to the notional skilled addressee at the relevant time. The same date range as for subcategories (a) to (c) should apply to this subcategory.
[28] FPH opposes discovery of documents in subcategory (f) — third party commentary or reviews. The issue here is whether documents in this subcategory will contain useful secondary evidence on the issue of obviousness/inventiveness at the relevant priority date. ResMed argues that evidence of the commercial success of the allegedly infringing products will be relevant secondary evidence on validity. Because ResMed has not itself commercialised the inventive concept, it says that such evidence will only have been created post-launch by FPH. For that reason, ResMed contends that the date of launch limitation is inappropriate. However, given that the Simplus product was not launched until many years after the relevant priority dates (approximately four years for one patent and eight years for the other), I am not persuaded that it would be proportionate to require discovery of documents in this subcategory. The time lapse is so great that any such documents are unlikely to be of material assistance in assessing the primary evidence of inventiveness at the relevant dates.
[29] Subcategory (g) is only partially resisted. FPH agrees to provide discovery up to the date of launch of the Simplus product of all internal communications and memoranda specifically addressing the novelty or advantage of the rolling bridge and/or roll fit seal and/or common frame in the Simplus product. It resists providing
discovery of marketing material specifically addressing these features but I am unclear about the justification for the distinction between internal communications and memoranda on the one hand and marketing material on the other. So long as these documents are limited to those prepared for use in New Zealand, I consider that they should be discovered to the extent that they do not already fall within category 1. For the reasons already given, I consider that discovery of these documents should be provided up to the date of launch of the Simplus product, at least in the first instance.
[30] FPH resists discovery of its patent filings and correspondence with any patent office. This is because these documents were created years after the priority dates of ResMed’s patents and are concerned with the developments claimed by FPH. Further, FPH says that all this material is publicly available so should not need to be discovered. I accept these submissions.
Category 5
For the Eson product and related patent applications, documents in the following subcategories that are relevant to integers of claims asserted against the defendant:
(a) Development file(s) and notes of members of the development team;
(b) Email correspondence, meeting notes, or internal memoranda concerning the development process;
(c) Documents received from, sent to, or drafted to send to design firms, consultants, toolmakers or other third parties involved in design and development;
(d) Detailed design and manufacturing drawings sufficient to disclose the design and assembly of the Eson product and/or any design variations since launch;
(e) Reports to the Board concerning the development of the Eson product in New Zealand;
(f) Third party commentary or reviews.
(g) Patent filings, internal communications, memoranda, marketing material or correspondence with any patent office specifically addressing the novelty or advantage of the common frame in the Eson product.
[31] The same considerations apply to this category as for category 4. The only difference is that this category relates to the Eson product. The earliest priority date for the ResMed patent upon which the claim relating to this product is based is
25 October 2005 and the deemed filing date is 24 October 2006. I note that Mr Pearson states that the first sale of the Eson product was in July 2012, some six years later. Tailored discovery in this category should be given in the first instance on the same basis as for category 4.
Category 6
For the Eson 2 product and related patent applications, documents in the following subcategories that relate to integers of claims asserted against the defendant:
(a) Development file(s) and notes of members of the development team;
(b) Email correspondence, meeting notes, or internal memoranda concerning the development process;
(c) Documents received from, sent to, or drafted to send to design firms, consultants, toolmakers or other third parties involved in design and development;
(d) Detailed design and manufacturing drawings sufficient to disclose the design and assembly of the Eson 2 product and/or any design variations since launch;
(e) Reports to the Board concerning the development of the Eson 2 product in New Zealand;
(f) Third party commentary or reviews.
(g) Patent filings, internal communications, memoranda, marketing material or correspondence with any patent office specifically addressing the novelty or advantage of the common frame in the Eson 2 product.
[32] The relevant priority dates for the ResMed patents underpinning the claim relating to the Eson 2 product range from 25 October 2005 at the earliest to
10 December 2009. Mr Pearson states that the first sale of the Eson 2 product was in December 2015. The same considerations apply. Tailored discovery in this category should be given in the first instance on the same basis as for category 4.
Category 7
For the Icon product and related patent applications, documents in the following subcategories that relate to integers of claims asserted against the defendant:
(a) Development file(s) and notes of members of the development team;
(b) Email correspondence, meeting notes, or internal memoranda concerning the development process;
(c) Detailed design and manufacturing drawings sufficient to disclose the design and assembly of the Icon product and/or any design variations since launch;
(d) Reports to the Board concerning the development of the Icon product in New Zealand;
(e) Third party commentary or reviews.
[33] The relevant priority dates for the ResMed patent relied on in relation to the Icon product range from 16 February 2001 at the earliest to 14 February 2002, the deemed filing date. Mr Pearson states that the first sale of the Icon product was around eight years later, in late 2009. The same considerations apply. Tailored discovery in this category should be given in the first instance on the same basis as for category 4.
Category 8
Documents generated in the course of or as a result of clinical evaluations, human factor studies or evaluations, clinical studies, usability studies or evaluations, mask fitting studies or evaluations, marketing studies or evaluations, or user experience studies or evaluations, which address or relate to the following issues:
(a) Facial marking caused by CPAP headgear;
(b) Patient discomfort caused by CPAP headgear design;
(c) Improved comfort and fit through substitution of different cushion modules of a CPAP mask;
(d) The development of sores or marks on the faces of patients engaging in CPAP therapy particularly in the nasal bridge area;
(e) Facial distortion caused by excessive mask pressure in CPAP
applications;
(f) Broken or ineffectual mask seals caused by forces exerted on a CPAP
mask in use;
(g) Water running or spilling from the humidifier into the blower outlet of a humidifier and blower in a CPAP system; and
(h) Indirect connection between the inlet of a humidifier and CPAP
apparatus.
[34] The parameters of this category are extraordinarily wide and are not limited to the integers of the claims of ResMed’s patents asserted against FPH. The category seeks documents created over a lengthy timeframe — the entire period since FPH commenced operations in 1968 until 17 August 2016. Mr Pearson estimates that around 40 studies or trials involving in excess of 1,000 patients would fall within this category. He says that a wide variety of documents will have been “generated in the course of” or “as a result of” each of these studies or evaluations. In pursuing discovery of all documents in this category over such a wide timeframe, ResMed seeks to cast the net well beyond those documents that will be truly relevant to the matters in issue and I accept that it would be a burdensome and disproportionately onerous task for FPH to source and discover them. In my view, this category is far too broad and does not fit within the legitimate scope of a tailored discovery order.
[35] ResMed proposed a refinement to this category in its memorandum filed on
16 June 2017, after the hearing. Recognising the need for proportionality, ResMed now proposes to limit the start date for discovery in this category to three years prior to the earliest relevant priority date. My direction permitting updated schedules to be filed after the hearing was to enable the parties to identify areas of subsequent agreement. It was not intended as a vehicle for making substantial amendments to the application. FPH has not had an opportunity to file evidence or make any submissions focusing on the refined proposal set out in ResMed’s latest memorandum. It seems to me that it would be wrong in principle to grant what is in effect a significantly amended application without allowing FPH an opportunity to be heard on it. Any attempt to resolve the newly defined issue without the benefit of evidence and submissions directed specifically to it could lead to injustice for both parties. In my view, the better course is to decline an order for tailored discovery of this category as presently drafted and leave open the possibility of further and better discovery on a more targeted basis at a later stage if this can be shown to be justified.
Category 9
Analyses, commentary, studies, trials or evaluations of ResMed masks or ResMed mask features or ResMed components, including ResMed headgear which address or relate to the following issues:
(a) Facial marking caused by CPAP headgear;
(b) Patient discomfort caused by CPAP headgear design;
(c) Improved comfort and fit through substitution of different cushion modules of a CPAP mask;
(d) The development of sores or marks on the faces of patients engaging in CPAP therapy particularly in the nasal bridge area;
(e) Facial distortion caused by excessive mask pressure in CPAP
applications;
(f) Broken or ineffectual mask seals caused by forces exerted on a CPAP mask in use;
(g) Water running or spilling from the humidifier into the blower outlet of a humidifier and blower in a CPAP system; and
(h) Indirect connection between the inlet of a humidifier and CPAP
apparatus.
[36] This category is similarly cast in very broad terms and is insufficiently targeted to the relevant issues. It is not limited to the particular features of the ResMed masks in issue. Some indication of the potential breadth of this category comes from the evidence of David Lewis, global IT infrastructure director at ResMed. He states that ResMed is a global leader in the manufacture of such products and owns or has licensed rights to over 3,000 patents with many others pending. Mr Arthur points out that ResMed, the world’s biggest mask manufacturer, is seeking discovery in this category of any analysis, commentary, study, trial or evaluation by FPH of any ResMed mask feature or component addressing or relating to any of the eight listed issues over a 50-year period.
[37] I am not persuaded that the broad terms of this category can fit within the legitimate scope of a tailored discovery order. ResMed also proposed a substantial refinement of this category after the hearing but FPH has not had an opportunity to file evidence or submissions directed to this. The same observations as for category 8 apply here.
Category 10
Analyses, commentary or reviews of the patented technology which address or relate to the following issues:
(a) Facial marking caused by CPAP headgear;
(b) Patient discomfort caused by CPAP headgear design;
(c) Improved comfort and fit through substitution of different cushion modules of a CPAP mask;
(d) The development of sores or marks on the faces of patients engaging in CPAP therapy particularly in the nasal bridge area;
(e) Facial distortion caused by excessive mask pressure in CPAP applications;
(f) Broken or ineffectual mask seals caused by forces exerted on a CPAP
mask in use;
(g) Water running or spilling from the humidifier into the blower outlet of a humidifier and blower in a CPAP system; and
(h) Indirect connection between the inlet of a humidifier and CPAP
apparatus.
[38] This category is directed at obtaining relevant secondary evidence, being contemporaneous reaction by FPH or third parties to the patent claims under attack by FPH. The period for which such documents are sought commences with the publication date for each patent in issue and ends on the date the proceedings were filed, 17 August 2016. Unlike categories 8 and 9, this category is targeted to documents addressing “the patented technology”. In order to address any difficulty in interpreting this expression, ResMed proposes to replace these words with “ResMed’s patented claims in issue, or the inventive concepts underlying those claims”. That issue having been addressed, FPH’s principal objections to this category are the breadth of the proposed date range and the scope of documents that could meet the description “commentary”. Mr Pearson says that it would be a very difficult task to search all potential repositories for documents over such a wide timeframe and review them for a potential link to the patented technology, particularly if the category extends to informal comments made by sales and marketing teams.
[39] In my view, this category of discovery is appropriately targeted, subject to refinements to meet FPH’s concerns which I consider are justified. In the first instance, the category should exclude informal comments made by members of FPH’s sales and marketing teams. The date range should also be restricted reflecting that any relevant secondary evidence will be of contemporaneous reactions. For this reason, I consider that discovery in this category should be limited in the first instance to the period of two years from publication date for each patent.
Category 11
All electronic documents generated by the defendant or commissioned by the defendant from third parties and related to product design, development or testing of CPAP mask products which include the words "gusset."
All electronic documents generated by the defendant or commissioned by the defendant from third parties and related to product design, development or testing of the alleged infringing products which include the words "roll fit," "rollfit," or "roll- fit" (in all type case variations).
[40] This category was modified by agreement following the hearing by inclusion of the words “CPAP mask products”. With that amendment, the parties are now agreed that FPH should provide discovery of these documents to the present time.
Category 12
In relation to the contentions that all relevant claims of NZ 592064, 608551, 597689 and 527088 comprise "no more than collocating features [...] known before the earliest priority date", all documents produced by or referred to by FPH research, design, and/or development personnel that disclose or confirm that the features pleaded by the defendant as being part of the common general knowledge were known in New Zealand as at the relevant deemed filing date(s).
[41] This category was also modified by agreement following the hearing by
substituting the words appearing after the word “documents”. With that
modification, the parties are now agreed that FPH should provide discovery of all documents in this category up to the present time.
Category 13
All documents produced by or referred to by FPH research, design, and/or development personnel that disclose or confirm the common general knowledge known in New Zealand prior to the relevant deemed filing date(s).
[42] This category was also modified by agreement following the hearing by substituting the words appearing after the word “documents”. With that modification, the parties are now agreed that FPH should provide discovery of all documents in this category up to the present time.
Category 14
All documents that confirm or disclose the publication of the prior art relied on by the defendant in the counterclaim in New Zealand prior to the relevant deemed filing date(s).
[43] This is another category that was modified by agreement following the hearing. The parties are now agreed that FPH should provide discovery of all documents in this category up to the present time.
Category 15
High level documents (such as for example project reviews or other documents which collate or summarise research for the purpose of reporting to superiors) relevant to:
(a) The issue of facial marking in CPAP therapy and detailing solutions the defendant has considered to address that issue;
(b) The issue of CPAP mask comfort in the nasal bridge region and detailing solutions the defendant has considered to address that issue;
(c) The issue of substitutability of cushion components of CPAP masks and detailing solutions the defendant has considered to address that issue;
(d) The issue of preventing liquid from undesirably entering an inlet of a
CPAP humidifier and/or the elimination of a supply tube.
[44] ResMed seeks discovery of all documents in this category up to the present time. FPH agrees to provide discovery of documents falling into this category but says that the date range should be restricted to the deemed filing date. It claims that research conducted after that date is not relevant because it cannot approximate the knowledge of the notional skilled addressee at the relevant date. Mr Miles submits in response that documents created after the deemed filing date will be relevant to the issue of whether ResMed’s solutions were obvious at the priority date to the extent that they show attempts by FPH to resolve the same problems in the same or some other manner after that date.
[45] I agree with FPH that discovery of documents created in 2017 will not be relevant to whether the invention was obvious at the relevant priority date many years before. However, I accept that documents in this category created within a limited time after the relevant date could assist the required assessment. In my view, an appropriate cut-off date to apply, at least in the first instance, is two years after the relevant priority date.
Category 16
Documents held within the defendant's prior art library which address or relate to the following issues:
(a) Facial marking caused by CPAP headgear;
(b) Patient discomfort caused by CPAP headgear design;
(c) Improved comfort and fit through substitution of different cushion modules in a CPAP mask;
(d) The development of sores or marks on the faces of patients engaging in CPAP therapy particularly in the nasal bridge area;
(e) Facial distortion caused by excessive mask pressure in CPAP
applications;
(f) Broken or ineffectual mask seals caused by forces exerted on a CPAP
mask in use;
(g) Water running or spilling from the humidifier into the blower outlet of a humidifier and blower in a CPAP system; and
(h) Indirect connection between the inlet of a humidifier and CPAP
apparatus.
[46] Mr Pearson’s evidence is that FPH does not have a prior art library. ResMed therefore proposes a modification by replacing the initial descriptive words with “prior art documents held by FPH”. That solves the problem that the category as defined has nothing to bite on but exposes a consequent difficulty. Mr Pearson explains that there is no system for such prior art to be searched or categorised for discovery purposes. He states that on the assumption that this category captures all pieces of prior art held by FPH, there are likely to be thousands of documents from hundreds of sources which would have to be located and reviewed to determine whether they fit within any of the eight subcategories identified. Nevertheless, FPH agrees to provide discovery of documents falling within this category up to the deemed filing date. In my view, discovery of documents in this category should be dealt with on the same basis as for category 15 and be provided for the period expiring two years after the deemed filing date.
Category 17
High level financial documents illustrating the financial performance within
New Zealand and internationally of the Simplus, Eson, Eson 2 and Icon products.
[47] ResMed argues that the commercial success of FPH’s products will provide secondary evidence relevant to obviousness. It therefore seeks financial documents in this category up to the date these proceedings were filed. Mr Pearson states that there will be a very large number of sales reports, forecasts and other documents held in many different locations that relate to the financial performance of these products at various times and in various jurisdictions. He expects that there are likely to be thousands of such documents which will include commercially sensitive information relating to other products. He says that it would be a very time consuming process to provide discovery of these documents which would necessitate redacting a considerable amount of irrelevant material. I accept that.
[48] I am not persuaded that discovery of documents in this broad category over such a wide date range is justified. This is particularly so when one considers the lengthy time lapse between the launch of FPH’s allegedly infringing products and the deemed filing dates for ResMed’s associated patents. As noted above, the Icon product was first launched in late 2009, nearly eight years after the deemed filing date of the patent relied on by ResMed, 14 February 2002. The Eson product was launched in July 2012, nearly six years after the deemed filing date of the relevant ResMed patent, 24 October 2006. The Simplus product was launched in April 2013, four to eight years after the deemed filing dates of the patents relied on by ResMed, being 15 June 2005, 24 October 2006 and 10 December 2009 respectively. The Eson 2 product was launched in December 2015, six to nine years after the deemed filing dates of the relevant patents, being 24 October 2006 and 10 December 2009. I decline to make an order for discovery of documents in this category.
Category 18
High level financial documents illustrating the allocation of research and development expenditure by the defendant into categories including patient interface, ventilation, CPAP, humidifier, and monitoring.
[49] ResMed seeks all documents falling within this category up to the date these proceedings were filed on 17 August 2016, a period of some 48 years. The same
considerations apply as for category 17. I decline to make an order for discovery of this category of documents.
[50] I now turn to address the categories of documents sought by FPH. As will become apparent, ResMed resists many of these requests on exactly the same basis as FPH resists discovery of similar categories of documents sought by ResMed, namely that the requested discovery is unjustifiably broad and it would be disproportionately burdensome to provide it. The parties recognise that it is appropriate that the scope of the discovery orders made against each should be consistent.
FPH’s discovery requests
Category 1
For NZ 592064, documents in the following subcategories that are relevant to integers of claims relied on by the plaintiff in the particulars of breach:
(a) Development file and inventor's notes;
(b) Email correspondence, meeting notes, or internal memoranda directly concerning the development process;
(c) Third party commentary or reviews of any commercial products which embody the inventive concept(s) of the claims asserted;
(d) Examination reports and correspondence with IPONZ concerning prosecution of the patent application; and
(e) Documents received from, sent to, or drafted to send to design firms, consultants, toolmakers or other third parties involved in design and development.
[51] There are two remaining disputes concerning this category. The first is the date range. FPH seeks documents up to the deemed filing date whereas ResMed submits that the earliest priority date should be the cut-off. Given the need for reciprocity, I accept FPH’s submission that the deemed filing date should be adopted.
[52] The second issue concerns the inclusion of “design” in subcategory (e). ResMed argues that product design, as distinct from the conception and development of the claimed inventive concept, cannot be relevant to the issue of obviousness/lack of inventiveness raised by FPH’s counterclaim. I accept Mr Arthur’s submission that it may be difficult to draw the line between “development” and “design” and both words are apt to describe the documents that should be discovered in this category. Only those relevant to the integers of claims relied on by ResMed in their particulars of breach will be discoverable. This is one of those categories where reciprocity is appropriate.
Category 2
For NZ 608551, documents in the following subcategories which directly relate to integers of claims relied on by the plaintiff in the particulars of breach:
(a) Development file and inventor's notes;
(b) Email correspondence, meeting notes, or internal memoranda directly concerning the development process;
(c) Third party commentary or reviews of any commercial products which embody the inventive concept(s) of the claims asserted;
(d) Examination reports and correspondence with IPONZ concerning prosecution of the patent application;
(e) Documents received from, sent to, or drafted to send to design firms, consultants, toolmakers or other third parties involved in design and development.
[53] ResMed says that it has not commercialised this patent and subcategories (c) and (e) are therefore not applicable. On the basis of that assurance, I agree. In all other respects, this category of discovery should be provided in the same terms as for category 1.
Category 3
For NZ 597689, documents in the following subcategories which directly relate to integers of claims relied on by the plaintiff in the particulars of breach:
(a) Development file and inventor's notes;
(b) Email correspondence, meeting notes, or internal memoranda directly concerning the development process;
(c) Third party commentary or reviews of any commercial products which embody the inventive concept(s) of the claims asserted;
(d) Examination reports and correspondence with IPONZ concerning prosecution of the patent application; and
(e) Documents received from, sent to, or drafted to send to design firms, consultants, toolmakers or other third parties involved in design and development.
[54] This category raises the same issues as for category 2 — ResMed states that it has not commercialised this patent either. The equivalent order should be made as for category 2.
Category 4
For NZ 527088, documents in the following subcategories which directly relate to integers of claims relied on by the plaintiff in the particulars of breach:
(a) Development file and inventor's notes;
(b) Email correspondence, meeting notes, or internal memoranda directly concerning the development process;
(c) Third party commentary or reviews of any commercial products which embody the inventive concept(s) of the claims asserted;
(d) Examination reports and correspondence with IPONZ concerning prosecution of the patent application; and
(e) Documents received from, sent to, or drafted to send to design firms, consultants, toolmakers or other third parties involved in design and development.
[55] This category mirrors category 1. ResMed has commercialised this patent. The same order as for category 1 is appropriate.
Category 5
Documents generated in the course of or as a result of clinical evaluations, human factor studies or evaluations, clinical studies, usability studies or evaluations, mask fitting studies or evaluations, marketing studies or evaluations, user experience studies or evaluations, which address or relate to the following issues:
(a) Facial marking caused by CPAP headgear;
(b) Patient discomfort caused by CPAP headgear design;
(c) Improved comfort and fit through substitution of different cushion modules in a CPAP mask;
(d) The development of sores or marks on the faces of patients engaging in CPAP therapy particularly in the nasal bridge area;
(e) Facial distortion caused by excessive mask pressure in CPAP
applications;
(f) Broken or ineffectual mask seals caused by forces exerted on a CPAP
mask in use;
(g) Water running or spilling from the humidifier into the blower outlet of a humidifier and blower in a CPAP system; and
(h) Indirect connection between the inlet of a humidifier and CPAP
apparatus.
[56] The only dispute with this category concerns the date range. FPH seeks discovery of all documents in this category up to the deemed filing date whereas ResMed proposes that it should be limited to the three-year period prior to the earliest priority date for each relevant patent. In the interests of proportionality, I consider that ResMed’s proposal is reasonable, at least in the first instance.
Category 6
Documents relevant to establishing the priority dates of the patents relied on by the plaintiff.
[57] This is agreed.
Category 7
Assignment documents and other records relevant to establishing the plaintiff's entitlement to apply for the patents relied on.
[58] This is agreed.
Category 8
Documents which relate to the defendant's alleged infringing conduct such as documents detailing purchases made by the plaintiff.
[59] This is agreed.
Category 9
Documents disclosing or discussing any analysis by the plaintiff of the Simplus, Eson, Eson 2 or Icon products, or any such analysis of these products the plaintiff has commissioned from a third party which are relevant to validity or infringement.
[60] Following a post-hearing modification by adding the words “which are
relevant to validity or infringement”, this category is also now agreed.
Category 10
Documents which summarise at a high level the allocation of R&D expenditure by the parties to the proceeding and other competitors in the assisted breathing market.
[61] This is agreed.
Category 11
All documents produced by or referred to by ResMed research, design, and/or development personnel that disclose how the following word/phrases are used and defined by the plaintiff in relation to the inventions described and/or claimed in the patents:
· "gusset"
· “notch”, alone or with “underside”
· “projected outer area”
· “joined at a joint”
· “rounded edge”
· “positioned away from the patient’s face”
· “different structurally”
· “connected”
[62] ResMed claims that documents in this category are irrelevant because the legal test requires consideration of how the words and phrases are used and defined by the skilled addressee, not the patentee’s personnel. Further, it argues that the category is unworkably broad and vague. However, it agrees to provide discovery of documents in this category subject to amendments which I consider are reasonable and appropriate, at least in the first instance. The first qualification is that discovery should be limited to documents produced by those teams who developed the inventive concepts sued upon. The second is to delete the words “or referred to”.
Category 12
Documents relating to the practices of the plaintiff's development team(s) that show what sources of information the team refers to as part of standard product development practice.
[63] This category is extremely broad and inadequately targeted to the issues in dispute. As ResMed points out, any relevant documents in this category are likely to
be captured in categories 1 to 4. I decline to make an order for discovery of this category of documents.
Category 13
Analyses, commentary, studies, trials, or evaluations of the patented technology which address or relate to the following issues:
(a) Facial marking caused by CPAP headgear;
(b) Patient discomfort caused by CPAP headgear design;
(c) Improved comfort and fit through substitution of different cushion modules in a CPAP mask;
(d) The development of sores or marks on the faces of patients engaging in CPAP therapy particularly in the nasal bridge area;
(e) Facial distortion caused by excessive mask pressure in CPAP
applications;
(f) Broken or ineffectual mask seals caused by forces exerted on a CPAP
mask in use;
(g) Water running or spilling from the humidifier into the blower outlet of a humidifier and blower in a CPAP system; and
(h) Indirect connection between the inlet of a humidifier and CPAP
apparatus.
[64] This category raises the same issues as for category 5. ResMed proposes that discovery should again be limited to the three-year period prior to the earliest priority date for each relevant patent. I agree that this is appropriate, at least in the first instance.
Category 14
In relation to the contentions that all relevant claims of NZ 592064, 608551, 597689 and 527088 comprise "no more than collocating features [...] known before the filing date", all documents produced by or referred to by ResMed research, design, and/or
development personnel that disclose or confirm that the features pleaded by the defendant as being part of the common general knowledge were known in New Zealand.
[65] Mr Lewis explains in his affidavit why it would be extremely difficult for ResMed to comply with an order requiring discovery of such a broadly described category of documents. I accept his evidence about this. An appropriately qualified expert ought to be able to give evidence about what the common general knowledge was at the relevant time without recourse to documents held by the patentee. Further, as ResMed observes, discovery under categories 1 to 4 is likely to reveal any relevant documents coming within this category. For these reasons, I decline to make a discovery order in terms of this category.
Category 15
All documents produced by or referred to by ResMed research, design, and/or development personnel that disclose or confirm the common general knowledge known in New Zealand prior to the relevant filing dates.
[66] The same considerations apply to this category as for category 14. I decline to make an order for discovery of documents in this category.
Category 16
All documents that confirm or disclose the publication of the prior art relied on by the defendant in the counterclaim in New Zealand prior to the relevant filing dates.
[67] ResMed agrees to provide discovery of documents in this category with two qualifications, both of which appear to me to be reasonable. The first is to add the words “generated by ResMed” after the words “publication of prior art”. The second is to add a qualification at the end “with the exception of documents admitted by ResMed to have been published in New Zealand prior to the relevant filing dates”. With those amendments, I direct discovery of documents in this category.
Category 17
All documents disclosing the consideration of, assessment of, or comment on, the prior art by any of the plaintiffs’ employees involved in the development of the inventive concepts.
[68] ResMed agrees to provide discovery in this category if it is limited to those teams who developed the inventive concepts sued upon. That seems reasonable, at least in the first instance.
Category 18
All documents relevant to the issue of whether the prior uses relied on were sold or otherwise published in New Zealand prior to the relevant priority dates.
[69] ResMed has not yet pleaded to the prior uses relied on by FPH in its counterclaim so the scope of this issue is not yet defined by the pleadings. Nevertheless, ResMed agrees to provide discovery if the category is refined as follows: Documents illustrating the dates of first sale in New Zealand of ResMed products relied on by FPH as prior uses if those dates of first sale preceded the relevant priority dates (with the exception of any prior uses of ResMed products which are admitted). This amendment seems reasonable. If the documents do not fall within this amended category, they would not appear to be relevant.
Category 19
All documents that confirm or disclose that products as disclosed in the prior art relied on were sold or otherwise published in New Zealand prior to the relevant filing dates.
[70] Subsequent to the hearing ResMed proposed a similar amendment to this category as for category 18. This also seems reasonable and I make a direction accordingly: Documents illustrating the dates of first sale in New Zealand of ResMed products relied on by FPH as prior uses (if those dates of first sale preceded
the relevant priority dates) with the exception of any prior uses of ResMed products which are admitted.
Category 20
High level documents (such as for example project and technology reviews or other documents which collate or summarise research for the purpose of reporting to superiors) relevant to:
(a) The issue of facial marking caused by CPAP headgear and detailing solutions which the plaintiff has considered to address that issue;
(b) The issue of CPAP mask comfort in the nasal bridge region and detailing solutions the plaintiff has considered to address that issue;
(c) The issue of substitutability of cushion components in a CPAP mask and detailing solutions the plaintiff has considered to address that issue.
(d) The issue of preventing liquid from undesirably entering an inlet of a CPAP humidifier and/or the elimination of a supply tube and detailing solutions the plaintiff has considered to address that issue.
[71] This category raises the same issues as for categories 5 and 13 and should be dealt with in a similar manner. In the first instance, discovery should be limited to the three-year period prior to the earliest priority date for each relevant patent.
Category 21
Documents held within the plaintiff's prior art library which address or relate to the following issues:
(a) Facial marking caused by CPAP headgear;
(b) Patient discomfort caused by CPAP headgear design;
(c) Improved comfort and fit through substitution of different cushion modules in a CPAP mask;
(d) The development of sores or marks on the faces of patients engaging in CPAP therapy particularly in the nasal bridge area;
(e) Facial distortion caused by excessive mask pressure in CPAP
applications;
(f) Broken or ineffectual mask seals caused by forces exerted on a CPAP
mask in use;
(g) Water running or spilling from the humidifier into the blower outlet of a humidifier and blower in a CPAP system; and
(h) Indirect connection between the inlet of a humidifier and CPAP
apparatus.
[72] The contest here is again as to the appropriate date range. This should be dealt with in the same manner as for categories 5, 13 and 20.
Result
[73] I make orders for discovery in accordance with this judgment. [74] Costs are reserved.
M A Gilbert J
Counsel/Solicitors:
James & Wells, Auckland for Plaintiff
A J Park, Auckland for Defendant
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