Ecologic Holdings Pty Ltd v Hopley [2004] FCA 16 (20 January 2004)

Last Updated: 20 January 2004

FEDERAL COURT OF AUSTRALIA

Ecologic Holdings Pty Ltd v Hopley [2004] FCA 16

PROCEDURE – order for particular discovery – patent action – whether orders should be made in relation to research and development material, manuals and approval material – evidence raising existence, relevance and necessity – orders made




Patents Act 1990 (Cth) ss 7(1), 7(2)

Federal Court Rules O 15 r 8


Wundowie Foundry Pty Ltd v Milson Foundry Ltd (1993) 44 FCR 474 applied



















ECOLOGIC HOLDINGS PTY LTD v RONALD FREDERICK HOPLEY and BEVERLEY ELIZABETH HOPLEY and JOANNE MARGARET HOPLEY
W74 of 2001

RD NICHOLSON J
20 JANUARY 2004
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W74 OF 2001

BETWEEN:	ECOLOGIC HOLDINGS PTY LTD APPLICANT
AND:	RONALD FREDERICK HOPLEY BEVERLEY ELIZABETH HOPLEY JOANNE MARGARET HOPLEY RESPONDENTS
JUDGE:	RD NICHOLSON J
DATE OF ORDER:	20 JANUARY 2004
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The respondents’ notice of motion dated 24 November 2003 be allowed in terms of the following orders.
2. So far as the motion relates to Schedule 2 of the motion, the parties file a consent order within 10 days.
3. So far as the motion relates to Schedule 1, the applicant do within 14 days after the date of this order make and serve on the respondents a further and better list of all documents or class of documents as specified or described in Schedule 1 to these orders that are, or have at any time been, in the applicant’s possession, custody or power, and stating, if they are not now in the applicant’s possession, custody or power, when the applicant parted with them and what has become of them after making all reasonable and proper inquiries, and efforts to identify such documents and their location from persons directly or indirectly connected or involved in the matters raised in these proceedings.
4. Until further order, access to the documents produced for inspection pursuant to orders 2 and 3 be restricted to the respondents’ legal advisers, Counsel and expert witnesses.
5. The respondents have liberty to apply in respect of the content of any further and better discovery provided by the applicant pursuant to order 3 above for further orders or direction so as to give full effect to these orders.
6. The applicant pay the respondents’ costs of this application, to be taxed.

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

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W74 OF 2001

BETWEEN:	ECOLOGIC HOLDINGS PTY LTD APPLICANT
AND:	RONALD FREDERICK HOPLEY BEVERLEY ELIZABETH HOPLEY JOANNE MARGARET HOPLEY RESPONDENTS

JUDGE:	RD NICHOLSON J
DATE:	20 JANUARY 2004
PLACE:	PERTH

REASONS FOR JUDGMENT

1 The respondents bring a notice of motion seeking orders for the applicant to produce documents for inspection or provide further and better discovery. The grounds of the application are said to be found in the affidavit of Mr GS French sworn on 24 November 2003 and also the contents of a letter from Gadens Lawyers to Tottle Partners dated 21 November 2003.

2 The orders were sought in relation to two schedules. Schedule 2 relates to the applicant’s list of documents. This was dealt with in court and provisional rulings made in respect of each of the remaining contested documents. It was agreed between counsel that the matter would be dealt with between solicitors in the light of those provisional rulings without the necessity of such rulings being further reduced to writing.

3 In relation to Sch 1 there were undetermined issues concerning what are described as research and development documents. The respondents seeks support for the orders in relation to the four categories of documents enumerated, in reliance on Wundowie Foundry Pty Ltd v Milson Foundry Ltd (1993) 44 FCR 474 at 478, where French J stated that it did not follow from the nature of design and development documents that they were brought into existence for the purpose of communication with patent attorneys. Consequently they were not of themselves privileged communications or were made for the purposes of a privileged communication. There he limited orders for production to class of documents which recorded or evidenced steps taken in the design and development of the invention.

4 There are three annexures to the affidavit of Mr French which are said by the respondents to be relevant to its case in respect of Sch 1. The first is a document headed ‘Ecomax Septic Systems Development History’ (‘GSF 11’). This discloses the conception of the system in 1989; the testing of eight pilot scale test cells; subsequent contacts with the Health Department and other authorities and the commencement of sales and installations in 1992. That information is in the context of the priority date of the patent being 2 May 1990. The second document (‘GSF 12’) is a Technology Licence Agreement dated 14 September 2000 between the applicant and another company. The third document is a letter dated 29 March 1989 to the Health Inspector at the Environmental Health Division of the Health Department from Mr Bowman, who claimed to be taking instructions from Messrs Maddesta and Rowe. The letter indicates that before the applicant actually lodged the patent application it had been marketing and selling (‘GSF 13’).

5 The categories of documents sought in Sch 1 may be broadly described as:

(a)	research and development material (‘R&D’);
(b)	promotional and instruction manual material regarding the construction and installation of the Claimed Invention (‘manuals’);
(c)	material related to approval, licensing, permits and the like for the use including trials, proposed installation and installation (‘approval material’); and
(d)	documents constituting or recording the results of searches and enquiries carried out by the applicant or their attorneys in relation to the Claimed Invention (‘search material’).

In view of the rulings made in relation to Sch 2 it is no longer necessary to further consider the application of Sch 1 to documents in par (d) above.

6 The application is made in reliance on O 15 r 8 of the Federal Court Rules empowering the Court to order discovery of documents ‘... related to any matter in question in the proceeding.’ Here it is said that the relevance arises from the cross-claim by the respondents putting in issue the validity of the patent. The grounds in issue are that the patent suffers from lack of novelty and lack of inventive step (obviousness). It is said that this requires a comparison with the prior art base as it existed before the priority date of the relevant claim being 2 May 1990: see s 7(1) of the Patents Act 1990 (Cth). In relation to the issue of obviousness or lack of inventive step, the Court will be required to consider it by reference to s 7(2) of the Patents Act and to consider evidence of any prior publication anticipating the subsequent invention. This will involve a detailed comparison of the claimed invention with the cited documents including use of the reverse infringement test to determine whether a patent lacks novelty because of its similarity to a product previously disclosed, by description or by manufacture.

7 These propositions are not disputed on behalf of the applicant. For the applicant, however, it is submitted that the discretion arising under O 15 r 8 also takes into account the requirement that any discovery be necessary. Here it is said that the affidavit of Mr French involves no more than considered speculation on the existence (or otherwise) of documents. It is submitted that it does not establish any factual basis to determine whether and to what extent the categorised documents being sought: do in fact exist; are properly the subject of a belief that they are or may be in the possession, custody or power of the applicant; are relevant to the matters in issue; and are, even if they fall within one or other of the above categories, necessary for discovery having regard to the nature of the issues.

8 In relation to the research and development material, I accept the submission for the respondents that the material in exhibit ‘GSF-11’ supports the possibility that there are R&D documents likely to have been produced during the creation of and testing associated with the invention not yet the subject of discovery. I consider they would be both relevant and necessary.

9 In relation to the manuals, both the affidavit of Mr French and its supporting exhibit of the Technology Licence Agreement (GSF-12) support the conclusion that the documents in the form of manuals are likely to exist which relate to matters in question in the proceedings.

10 In relation to the approval material, the evidence in the three exhibits relied upon, (GSF-11, 12 and 13) and particularly the latter, supports the likely existence of approvals, consents and permits.

11 The issues raised by exhibit GSF-13 going to the issues of novelty and public disclosure further support the orders sought. I agree with the submission for the respondents that as there is a possibility that the documents sought are not in the possession of the applicant but may be in the possession, custody, control of persons directly or indirectly connected or involved in the matters raised by these proceedings, such as the named inventor of the patent and a director of the applicant company, it is relevant the obligation of the applicant to give discovery includes the making of proper enquiries and efforts to identify and disclose all relevant documents not in that party’s possession.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson.

Associate:

Dated: 20 January 2004

Counsel for the Applicant:	Mr R Wilenski
Solicitor for the Applicant:	Tottle Partners
Counsel for the Respondent:	Mr RJL McCormack
Solicitor for the Respondent:	Gadens Lawyers
Date of Hearing:	18 December 2003
Date of Judgment:	20 January 2004