Inamed Development Company v Morton Surgical Pty Limited [2007] FCA 1359 (29 August 2007)

Last Updated: 30 August 2007

FEDERAL COURT OF AUSTRALIA

Inamed Development Company v Morton Surgical Pty Limited [2007] FCA 1359

PRACTICE AND PROCEDURE – whether leave should be granted to file late expert evidence in patent case – whether admissible – role of case management – proviso to protect other party



Evidence Act 1995 (Cth), s 135
Federal Court of Australia Act 1976 (Cth), s 23
Federal Court Rules, O 10
Patents Act 1990 (Cth), s 7(2), s 7(3)


Jupiters Ltd v Neurizon Pty Ltd (2005) 222 ALR 155 followed
Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388 cited
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) (2007) 235 ALR 202 cited
Sali v SPC Ltd [1993] HCA 47; (1993) 116 ALR 625; (1993) 67 ALJR 841 cited
State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 discussed


















INAMED DEVELOPMENT COMPANY AND INAMED PTY LIMITED (ABN 53 050 287 217) v MORTON SURGICAL PTY LIMITED (ABN 32 056 838 441) T/A MATRIX SURGICAL COMPANY
NSD 2171 OF 2005

GYLES J
29 AUGUST 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2171 OF 2005

BETWEEN:	INAMED DEVELOPMENT COMPANY First Applicant/First Cross-Respondent INAMED PTY LIMITED (ABN 53 050 287 217) Second Applicant/Second Cross-Respondent
AND:	MORTON SURGICAL PTY LIMITED (ABN 32 056 838 441) T/A MATRIX SURGICAL COMPANY Respondent/Cross-Claimant

JUDGE:	GYLES J
DATE OF ORDER:	29 AUGUST 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The respondent/cross-claimant have leave to rely upon the affidavit of Zoran Milijasevic sworn on 6 July 2007 save for paragraphs 23–39 (inclusive), 46 and 52–56 (inclusive) provided that such leave may be withdrawn in whole or in part upon proper cause being shown by the applicants/cross-respondents.

2. The respondent/cross-claimant pay the costs of the applicants/cross-respondents of and incidental to this application for leave and the costs of the applicants/cross-respondents thrown away by the late filing of the said affidavit.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2171 OF 2005

BETWEEN:	INAMED DEVELOPMENT COMPANY First Applicant/First Cross-Respondent INAMED PTY LIMITED (ABN 53 050 287 217) Second Applicant/Second Cross-Respondent
AND:	MORTON SURGICAL PTY LIMITED (ABN 32 056 838 441) T/A MATRIX SURGICAL COMPANY Respondent/Cross-Claimant

JUDGE:	GYLES J
DATE:	29 AUGUST 2007
PLACE:	SYDNEY

REASONS FOR INTERLOCUTORY JUDGMENT

1 The respondent/cross-claimant, Morton Surgical Pty Limited (Morton) seeks a ruling that it is entitled to rely upon an affidavit of Zoran Milijasevic sworn 6 July 2007 notwithstanding that it has been served later than the time limited by the directions of the Court in relation to the filing of evidence. The applicants/cross-respondents, Inamed Development Company and Inamed Pty Limited (together called Inamed), oppose leave being granted. I have decided that leave should be granted. However, I will review this ruling in the event that Inamed satisfies me that it has been unable to deal with the evidence, either in whole or in part, prior to the commencement of the hearing. As will appear, leave is not granted in relation to all of the material sought to be adduced. As this is an interlocutory ruling shortly prior to trial, and as the argument has been fully recorded on the transcript, these reasons will be in short form.

2 The deponent is a design engineer who says that, since 1983, he has been working in the medical device design and manufacturing industry. The patent in suit is a gastric band for the treatment of morbid obesity and may be regarded as a medical device in the general sense. Initially, counsel for Inamed submitted that the deponent was not qualified to give any of the evidence sought to be tendered as the field of expertise so far as was relevant to that evidence is the field of bariatric surgery and not medical device design and manufacture. That point fell away for present purposes during the course of argument and no more need be said about it at the moment.

3 It was then contended that none of the evidence of any significance was admissible or, if admissible, was of such little weight that it ought be rejected pursuant to s 135 of the Evidence Act 1995 (Cth). I agree with that submission in relation to a significant portion of the evidence – namely that relating to construction of both the patent in suit and the priority document. In my opinion, that evidence does not supply technical explanations from the deponent’s field of expertise that would assist in placing the Court in the position of a skilled addressee of those documents. Rather, they constitute the reading of the documents by the deponent. (Jupiters Ltd v Neurizon Pty Ltd (2005) 222 ALR 155 at [67].) In my opinion, that evidence is not admissible and, if it were, it would be rejected pursuant to s 135 of the Evidence Act 1995 (Cth). I do not need to make a formal ruling as to admissibility. I indicate I will not grant leave to read paragraphs 23–39 (inclusive), 46 and 52–56 (inclusive) of the affidavit.

4 Paragraphs 40–44 (inclusive) of the affidavit could conceivably be relevant to the issue of inventive step. Standing alone, they would not be sufficient to establish the point. However, the issues raised by s 7(2) and s 7(3) of the Patents Act 1990 (Cth) involve a number of factual aspects that may be proved from a number of sources. As was said in Jupiters 222 ALR 155 at [154]:

"Section 7(2) of the Act refers to the hypothetical person ‘skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim’. That person is wholly hypothetical. Much evidence is admissible from persons none of whom would precisely answer the statutory description. Some may be more skilled in the relevant art than others. Some may be skilled and inventive; some may be brilliant; some may be plodders; some may be aware of particular pieces of art claimed to be part of the common general knowledge and others not. It is for the Court, having admitted relevant evidence, to come to a conclusion as to the application of the section."

(See also, generally, Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) (2007) 235 ALR 202.) It is not possible to rule in advance as to that issue.

5 It is arguable that paragraphs 47–51 inclusive and 57–61 inclusive of the affidavit are relevant to infringement. I would not prejudge that issue at this stage. A point was made that, on one view, these are experiments otherwise than pursuant to the applicable Practice Direction and the particular directions in this case. That may be so, but the experimental nature of the evidence is very slight and easily replicated and I doubt that the evidence would be rejected on that basis.

6 The fact remains that the evidence has been produced at a very late stage, contrary to the directions of the Court, and is in a new field. The endeavour to justify the evidence as being in reply to matters raised by Inamed’s evidence in reply is unconvincing. The issue goes beyond breach of the orders of the Court. The proceeding commenced in November 2005 and the defence and cross-claim was filed in February 2006. The final hearing has been fixed for 17 September next for some time, with certain witnesses for Inamed to be cross-examined before then. Tender of the disputed evidence will have consequences for Inamed including seeking instructions from and, perhaps, evidence from a similar expert. At the least, cross-examination will have to be prepared. Even if such instructions and evidence can be obtained, there will be a diversion of effort and resources at a critical stage of preparation of the case. I might add that hearing and deciding this application has diverted my attention during a busy Full Court sittings.

7 The role of case management is relevant. The wide scope of O 10 of the Federal Court Rules is well established (eg Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388); see also s 23 of the Federal Court of Australia Act 1976 (Cth). In my opinion, the effect of the decision of the High Court in State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 on case management has been exaggerated. It dealt with a special situation – prevention of litigating a fairly arguable defence some months before a trial date. Even so, it may prove to be the high water mark of anti case-management philosophy, probably as a reaction to some perceived over zealous case management in New South Wales at the time. The decision in Sali v SPC Ltd [1993] HCA 47; (1993) 116 ALR 625; (1993) 67 ALJR 841, still needs to be considered. In any event, the evidence of one expert is not necessary to achieve the attainment of justice.

8 However, on balance, justice to Inamed can be done by reserving its ability to show that it has not been able to satisfactorily deal with all or some of the evidence because of its late filing. If that were established, then the evidence would be rejected. There will also be an order that Morton pay Inamed’s costs thrown away by the late filing of the evidence, including costs of and incidental to this application.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated: 29 August 2007

Counsel for the Applicants/Cross-Respondents:	Mr AJL Bannon SC, Mr N Murray
Solicitor for the Applicants/Cross-Respondents:	Mallesons Stephen Jaques
Counsel for the Respondent/Cross-Claimant:	Ms A Bowne SC, Mr A Fox
Solicitor for the Respondent/Cross-Claimant:	Maddocks
Dates of Hearing:	1 and 2 August 2007
Date of Interlocutory Judgment:	29 August 2007