Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd [1998] FCA 299 (30 March 1998)

Last Updated: 6 April 1998

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - action alleging infringement of "process" patents - arrangements for inspection of and sampling from respondent's process - voluntary admissions provided by respondent as to its process - further discovery and inspection sought as to respondent's process - whether further discovery necessary for fair trial and fair disposition of case in circumstances - significance of inspection and sampling - significance of voluntary admissions - allegations of infringement generally alleged in statement of claim - whether voluntary admissions relate directly to claims in patents in suit - substantial matters remaining in issue - whether discovery necessary under O 15 r 15 Federal Court Rules - orders protecting commercial confidentiality of material of which discovery sought.

PRACTICE AND PROCEDURE - discovery and production - masking of documents to protect commercial confidentiality - whether the masking of sections of discovered documents distorted meaning - whether relevant material masked.

Federal Court Rules, O 15 rr 3, 5, 8, 11(1), 15

Commonwealth v Northern Land Council (1991) 30 FCR 1, applied

WIMMERA INDUSTRIAL MINERALS PTY LTD (ACN 004 302 139) v

RGC MINERAL SANDS LIMITED

VG 215 OF 1994

MANSFIELD J

ADELAIDE (Heard in Melbourne)

30 MARCH 1998

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 215 of 1994

BETWEEN:	wimmera industrial minerals pty ltd (acn 004 302 139) Applicant
AND:	rgc mineral sands LIMITED (acn 008 763 666) Respondent
JUDGE:	MANSFIELD J
DATE OF ORDER:	30 March 1998
WHERE MADE:	ADELAIDE (Heard in Melbourne)

THE COURT ORDERS THAT:

1. On or before 12 May 1998 the respondent make discovery of the following documents:

(i) Computer records of instrumental recordings of process variables for all periods of operation of the respondent's Synthetic Rutile Enhancement Process at its Capel and Narngulu premises during 1994 and 1995 including those observed by the applicant's representatives during inspections of the respondent's Narngulu premises on 6, 7, 20 and 21 May 1995 but not necessarily limited to:

Air flow rate fan no. S4-9;

Speed control; (fan)

Gas temperature;

Bed temperature;

Quick response thermocouple readings (nos. 6 and 10);

Multipoint/slow response thermocouple readings (1-12);

Multipoint trends;

Air rate;

Combustion gas flow rate;

Oxygen partial pressure;

Ilmenite feed rate;

Coarse coal feed rate;

Char feed rate;

Additive feed rate;

Sinter trends (1-4);

Cooler trends;

Kiln rotation rate;

Liquor pump 0804;

Hopper level;

NH4CL FD pump manual;

NH4CL recirc;

Cyclone feed tank percentage levels;

Cyclone feed EH;

Flow rate to oxide cyclones;

Cyclone feed rates;

Discharge feed specific gravity;

Oxide thickener trends;

Thickeners underflow motor;

Slurry flow rate;

Sulphate effluent flow rate;

Slurry specific gravity;

Rate of flow of solids to leach feed cyclone;

H2SO4 flow rate;

Leach pH (caustic);

Acid leach specific gravity;

Leach discharge flow rate;

H2SO4 slurry flow rate to cyclone;

H2S flow rate;

H2S scrubber motors;

H2S scrubber trends;

H2S line amp;

Hcl flow rate;

Delta tank trends;

Delta tank level;

North leach feed rate;

North leach discharge rate;

North leach discharge specific gravity;

South leach flow rate;

South leach discharge density;

South leach discharge flow rate;

Central leach discharge flow rate;

Mass centre south rate;

Wash circuit feed rate;

Oxide flow rate;

FD to dryer M1060;

Aeration tank levels;

Aeration tank temperature;

Aeration batch records - tonnes of reduced ilmenite;

Litres of liquor;

Concentration of NH4CL;

Charge time;

Discharge time;

Completion time;

Aeration time;

Blower amps;

Cycle time;

Discharge pump status;

Agitator amps;

Speed control;

Sulphur feed rate;

pH of dryer feed;

Dryer feed rate;

Dryer feed SG;

Fluid bed temperature;

Wind box temperature;

Wind box pressure;

Airflow rate;

Amp control;

Heat exchange EXT;

Burner output;

Heat exchange temperatures;

Dosing hopper %;

Reagent feed rate;

Reagent airflow rate;

Char airflow rate;

Sinter trends (nos. 1-3, 5);

Kiln gas exit flow rate;

Tonnes solids in aeration;

Temperature profiles for aerator no. 5817;

Southern slurry flow rate to cyclone;

Southern slurry specific gravity;

South leach pH;

Southern discharge specific gravity;

Central discharge specific gravity;

Central discharge pH;

Slurry flow rate to dryer cyclone;

Dryer slurry specific gravity;

Dryer pH;

Dryer temperature;

Dryer feed tank tonnes;

Shell fan motor status;

Cooling fans;

Extract fans;

Slip ring fans;

Girth lube;

Conveyor motor;

Bin vibrator motor;

Decollector;

Fireman feed;

Additive bin;

Coal fireman;

Airflow rate to afterburner;

% oxygen in afterburner;

Temperature profiles for aerator no. 5815.

(ii) All records including, but not limited to, computer records of instrumental recordings of process variables for all periods of operation of the respondent's Synthetic Rutile Enhancement Process at its Narngulu and Capel premises from 1996 onwards, including those observed by the applicant's representative during an audit of the respondent's Narngulu premises on 29 and 30 August 1996, and those provided by the respondent's representatives on 30 April 1996, but not necessarily limited to:

C and D Kiln ilmenite feed rate;

C and D Kiln coal and char feed rates;

C and D Kiln additive feed rates;

C and D Kiln bed/bas temperature at Midkiln (#6);

C and D Kiln bed/bas temperature at discharge end (#10);

C and D Kiln minimum (bed) at midkiln (#6);

C and D Kiln maximum (gas) at midkiln (#6);

C and D Kiln minimum (bed) at discharge end (#10);

C and D Kiln maximum (gas) at discharge end (#10);

C and D Kiln Multipoint thermocouples numbered 1-12;

Aerator temperature;

Aerator temperature profile;

Airflow rate;

Charge time;

Aeration time;

Discharge time;

Tonnes of RI;

Litres of liquor;

% NH4CL;

Leach feed rate;

Leach feed slurry density;

Leach feed specific gravity;

Leach feed flow rate to filter;

Specific gravity to dryer tank;

Second stage leach feed specific gravity;

Sulphate effluent flow rate;

Sulphate wash feed temperature;

HCL wash feed flow set point;

HCL wash feed density;

Mass flow rate;

Caustic wash cyclone feed rate;

pH between HCL leach vessel and dryer;

HCL flow rate;

HCL wash specific gravity;

Leach discharge flow rate;

Leach discharge density;

Dryer tank feed flow rate;

Dryer feed density;

Fluid bed dryer temperature;

Fluid bed dryer air flow rate;

No. 10 bed temperature;

Aeration time;

H2SO4 leach feed rate;

% H2SO4;

H2SO4 discharge liquor flow rate;

Caustic wash feed liquor flow rate;

% NaOH.

(iii) Computer records from which the respondent's Synthetic Rutile Enhancement Process related "graphics" are generated including those necessary to generate the "graphics", the titles of which were observed by the applicant's representatives on 6 May 1995 but not necessarily limited to:

Graphic selection;

Storage graphic;

Bed gas graphic;

Waste gas selection graphic;

Coal graphic;

Graphic help overview;

Fan graphic;

Cooler sequences;

Cooler graphic;

SREP delta tank graphic;

SREP where is it;

SREP overview graphic;

Sulphuric graphic;

Oxide thickener graphic;

SREP cyclone graphic;

SREP flow densities;

SREP sulphate wash trends;

SREP sulphate wash graphic;

Liquor pump help;

Cyclone graphics;

Cyclone circuit selection;

Cyclone graphic motors;

Cyclone sequences;

Pumped liquor help;

Standard grade bypass trends;

SREP cyclone wash trends;

Standard grade bypass graphic;

NH4CL storage graphic;

H2S scrubber graphic;

Wet section trends.

(iv) Records of the composition of the reagent added to the Capel kiln by the respondent prior to 5 June 1994.

(v) Additive related documents relating to the respondent's Synthetic Rutile Enhancement Process during all periods of its operation.

(vi) Memoranda, notes and reports of any kind relating to the Capel operations of the respondent's process for all periods during the relevant period 1980 to 1990 as set out in paragraphs 2A and 10A of the respondent's Particulars of Invalidity dated 20 February 1995.

(vii) Memoranda, notes and reports of any kind relating to the Narngulu operations of the respondent's process for all periods during the relevant period 1987 to 1990 as set out in paragraphs 2A and 10A of the respondent's Particulars of Invalidity dated 20 February 1995.

(viii) The following documents which have been referred to in the respondent's discovered documents but which have not themselves been discovered by the respondent and which are by the context of the cross-reference discoverable:

81. Synthetic Rutile Enhancement Process SR documents to customers.

54. The results of the analytical procedures referred to.

465. Process flow rates used by the respondent in its Materials balance calculation for the respondent's Synthetic Rutile Enhancement Process operating in 1994.

466. The date and time of the non-routine analysis data and process and flow rates from which the continuous and batch aeration survey data relating to the respondent's Synthetic Rutile Enhancement Process operation in 1994 was compiled.

857. The non-routine analysis data from which the acid molarity figures relating to the April/May 1995 operation of the respondent's Synthetic Rutile Enhancement Process are compiled.

882. The non-routine analysis data and process flow rates from which the Synthetic Rutile Enhancement Process aeration survey data relating to the April/May 1995 operation of the respondent's Synthetic Rutile Enhancement Process was compiled.

881. The non-routine analysis data from which the Synthetic Rutile Enhancement Process aerator data and graphs relating to the April/May 1995 operation of the respondent's Synthetic Rutile Enhancement process were compiled.

(ix) Documents of the type referred to in RGC discovered documents RGC 1014-1019, 1021-1023, 1025, 1036-7, 1040, 1042-1043, 1115, 1117, 1120, 1138-9, 1144, 1147, 1153, 1164, 1178, 1179, 1210, 1214, 1218, 1221, 1226, 1230-1, 1242-3, 1247, 1250, 1252, 1254, 1256, 1269 and 1270.

(x) Laboratory note books and diaries of other RGC personnel (other than Harris) involved in the development of the Synthetic Rutile Enhancement Process.

(xi) Scope or proposal documents relating to the 12 CSIRO reports discovered.

2. Inspection of the documents discovered by the respondent to take place after 13 May 1998.

3. Each party have liberty to apply upon not less than 5 days notice in writing to the other party.

4. The respondent pay to the applicant two thirds of the applicant's costs of and incidental to the motion, notice of which was filed on 17 November 1995.

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	VG 215 of 1994

BETWEEN:	wimmera industrial minerals pty ltd (acn 004 302 139) Applicant
AND:	rgc mineral sands LIMITED (acn 008 763 666) Respondent

JUDGE:	MANSFIELD J
DATE:	30 March 1998
PLACE:	ADELAIDE (Heard in Melbourne)

REASONS FOR DECISION

This application by the applicant by notice of motion first made on 17 November 1995 and as amended on 16 February 1996 ("the motion") seeks orders firstly for discovery under O 15 r 5 and r 8 of the Federal Court Rules ("the Rules") and secondly for production pursuant to O 15 r 11(1) of the Rules in an unmasked form of a number of documents already discovered by the respondent but with some masking on them. The application for discovery relates to an extensive list of documents suspected of being, or of having been, in the respondent's possession custody or power which can be described in a general way as computer records and other records relating to a production process and the monitoring of a production process of the respondent in the manufacture and production of synthetic rutile but also relating to its general factory maintenance and equipment. It also extends to certain miscellaneous documents or categories of documents.

The motion is but one of a series of interlocutory matters upon which the parties have engaged the Court since the principal proceeding was first instituted on 30 June 1994. It is not necessary, in determination of the present motion, to refer in detail to the history of the proceeding or to the terms of the pleadings or particulars from time to time in force. I shall refer only, and to the extent necessary, to the current further amended application and statement of claim dated 6 October 1995, the further amended particulars of infringement also dated 6 October 1995, the further amended defence dated 17 October 1995, and to the amended particulars of grounds of invalidity dated 20 February 1995. They are sufficient in my view to identify the issues relevant for determination of the motion. It will however be necessary to refer in a little detail to the history of events in the proceedings concerning both the discovery by the respondent, and to other orders sought and obtained by the applicant against the respondent to obtain samples from, or records relating to, the production process of the respondent. It will also be necessary to refer to the respondent's notice of voluntary admissions dated 7 February 1996 and notice of further voluntary admissions dated 11 November 1996, and to the applicant's notice of matters remaining in issue dated 18 November 1996. All those documents featured to some extent in the submissions on the motion. As the documents in respect of which discovery or inspection is now sought are said to relate essentially to the question in the proceedings whether the respondent has infringed the patent or patents of the applicant by its production processes and matters subsidiary but complementary to that question, it is not necessary to refer in any detail to the cross claim or the defence to the cross claim.

The issues as identified by the current pleadings may be recorded shortly. The applicant is registered under the Patents Act 1990 (Cth) as the proprietor of Australian Petty Patent No. 649,946 ("the petty patent") and Australian Standard Patent No. 639,089 ("the standard patent"). Both patents are for an invention entitled "Production of Synthetic Rutile". The applicant claims that the respondent is infringing both the petty patent and the standard patent. Effectively, each is said to involve a process to remove impurities from titaniferous ores in a manner which makes cost effective the mining of deposits of titaniferous ores which previously were not commercially viable.

The petty patent proceeded to grant and was published on 2 June 1994. The specification of the petty patent claimed it to be for the production of synthetic rutile and described the invention as relating to the treatment of titaniferous ores, or upgrading the titania content thereof. It refers to the prior art and concludes that section of the specification as follows:

"In summary, existing processes for the formation of synthetic rutile products from titaniferous minerals such as ilmenite will either not be effective in the removal of deleterious impurities in many circumstances or will not be cost effective, due to the need to regenerate large quantities of expensive reagents, dispose of large volumes of leachate liquors or to operate largely impractical and economically unattractive thermal processing schemes. It is the object of the present invention to overcome, or at least alleviate some of these difficulties."

It then describes the invention in the following terms:

". . . a process for upgrading the titania content of a titaniferous material which process comprises the steps of

(i) reducing the titaniferous material using a solid carbonaceous reductant at a temperature of at least 900C to form metallic iron, a rutile phase and a separate impurity bearing titaniferous phase to produce a thermally reduced product;

(ii) cooking the thermally reduced product in an environment which prevents substantial reoxidation to produce a cooled reduced product;

(iii) subjecting the cooled reduced product of step (ii) to an aqueous chemical treatment to convert metallised iron into a readily removable form;

(iv) subjecting the product of step (iii) to a leaching treatment with sulphuric and/or hydrochloric acid to convert impurity elements in the minor impurity bearing titaniferous phase to a readily removable form; and

(v) removing the readily removable form of the iron and the readily removable from of the impurity elements to produce a synthetic rutile."

There is a reduction phase carried out in the kiln, aeration phase during which iron is converted to a removable form, and a leaching phase, as a result of which the remaining substance constitutes commercial titaniferous material.

The standard patent was published on 18 September 1991 and proceeded to grant on 11 May 1994. A definition of the standard patent is similar to, but much more detailed than, the petty patent. It is not necessary at this point to set out the claims in full in relation to the standard patent.

Each of the claims in the petty patent and in the standard patent is a "process" claim, relating to a process for upgrading the titania content of titaniferous ores so as to produce synthetic rutile of commercially useful quality. Each involves a series of steps and phases in the process whereby ultimately there is left a content of a titaniferous ore or concentrate.

It is clear that the respondent produces synthetic rutile by what is called the Synthetic Rutile Enhancement Process ("the SREP"), a process also designed to enhance the production of synthetic rutile from titaniferous minerals. The respondent has undertaken that production, on the evidence before me, at least at its Capel plant in Western Australia between 28 March and 5 July 1994 using a reduction kiln and then subsequent aerating and acid leaching of the reduced product, and at its Narngulu plant also in Western Australia between 23 February and 27 February 1995 and between 6 April and 27 May 1995 and then subsequent production from about late August 1995 and thereafter in the same manner. There are nineteen other occasions during 1993-1995 when synthetic rutile was produced by the SREP of the respondent, either at its Capel or Narngulu plants, including what it called a "pilot project" or "kiln trials" and "commercial scale trials".

The applicant alleges that the respondent has, since 18 September 1991, infringed the standard patent and since 2 June 1994 infringed the petty patent and in each instance continues to do so. That infringement is said to be occurring by the respondent using the process claimed in the specification in each of the standard patent and the petty patent, thereby manufacturing and then supplying and selling synthetic rutile produced by that process and also by storing and seeking to sell synthetic rutile produced by that process. In effect, it is alleged that the production of synthetic rutile by the respondent by the SREP infringes the standard patent and the petty patent. The respondent has in fact produced synthetic rutile by a process involving steps similar to the process described in the petty patent and the standard patent. As one deponent described the similarities and the critical difference in the two processes, each involves a "pyrometallurgical" roasting process and then a "pyrometallurgical" aeration/acid leaching process, but the applicant's process at its "pyrometallurgical" part has critical differences in its control and operation so that it produces "not only rutile and iron but also an additional titaniferous phase into which impurities . . . are concentrated" such that the impurities can be readily removed by leaching during its "hydrometallurgical" part. It is that aspect which, it is complained, that the SREP infringes.

Of course, whether those matters are made out is ultimately for the trial. Those matters are to a significant degree disputed by the respondent. Indeed, as counsel for the respondent noted, there are a number of matters asserted on behalf of the applicant which are vigorously contested by the respondent. It is neither appropriate nor necessary to resolve them on this application. Relief is sought to restrain those alleged infringements.

The respondent denies those claims. It has cross claimed against the applicant and against the Commissioner of Patents for orders that each of the petty patent and the standard patent are invalid and should be revoked. I do not need to refer to its grounds for its cross claim in detail. The respondent asserts, amongst other matters, that the applicant's two patents are invalid for lack of specificity, for lack of novelty, for obviousness having regard to the prior art and prior use, for inutility, and for having been obtained by fraud or false suggestion or misrepresentation. The last of those assertions is founded upon an alleged non-disclosed purpose of expressing the claims in the petty patent and the standard patent so as to cover the respondent's process, namely the SREP.

SAMPLING, DISCOVERY AND INSPECTION TO DATE

Promptly upon issue of these proceedings, the applicant by motion dated 1 July 1994 sought orders to permit it to inspect and make observations of the respondent's production process at its Narngulu plant, and to take samples at various stages of the process. The applicant then feared that the opportunities to acquire such information would be limited, as the respondent's allegedly infringing process might continue in its then form for a short time only.

On 4 July 1994, Jenkinson J by way of a temporary order directed the respondent to maintain records relating to its process and itself to take and retain samples from the various stages of the process. On 8 July 1994, Jenkinson J further made orders whereby the applicant was permitted upon certain terms to attend the respondent's Narngulu plant to examine and inspect the SREP and to take samples at stages of the process itself. That order was in part discharged by consent on 14 September 1994, and certain other arrangements between the parties on those matters substituted. Those arrangements involved the respondent maintaining full records relating to the process of manufacturing synthetic rutile using its reduction kiln at its Capel plant on or after 28 March 1994 and up to and including 5 July 1994 and its subsequent aerating and acid leaching of the product of such reduction, including any intermediate or uncompleted part of that process, and otherwise to retain and maintain the samples already taken in accordance with the earlier orders. When a further trial of SREP was undertaken at the respondent's Narngulu plant between 23 and 28 February 1995, and on 28 March 1995, the applicant again applied by motion for orders that it be permitted to inspect and take samples during the respondent's process to produce and manufacture by the SREP upon certain terms. That issue was resolved and an order by consent made on 4 April 1995. That order was varied, again by consent, and only in minor ways, on 8 May 1995 and again on 13 December 1995.

As a result of those various orders, it appears that the applicant upon terms has attended the respondent's plant at Narngulu, inspected the SREP for the production of synthetic rutile, and has taken samples of the end product and at intermediate stages on four occasions for periods of two days each in October 1994 and in April 1995 and in May 1995 (twice). There is no material before me to indicate that that arrangement between the parties did not come to fruition. No subsequent similar applications or issues have been pursued before the Court.

At least up to about November 1995, the applicant through an affidavit of its solicitors of 2 November 1995, was asserting that the issue of infringement of the standard patent and the petty patent by the respondent applying the SREP for the production of synthetic rutile was "likely to be determined fundamentally" on the basis of evidence of its inspection of the SREP used by the respondent and from the analysis of samples, including samples of intermediate products or samples taken at intermediate stages of the SREP used by the respondent.

It is apparent from the nature of the present application that the information so obtained by the various steps permitting inspection of, and sampling from, the respondent's premises of the SREP no longer satisfies the applicant that it should seek to make out the infringement alleged only upon that material. I do not know more about what the information disclosed by those inspection and sampling processes might establish.

The applicant has therefore now pursued discovery from the respondent in the widest possible terms relating to its plant and processes and of records relating to its plant and its processes. I will refer to the details below.

I should note that, of course, issues as to discovery extend more widely than to those concerning the alleged infringement. From time to time directions have been made by the Court, mainly by consent, including as to the exchange of lists of discoverable documents and for inspection of discovered documents. Those orders have also addressed questions arising from claims to confidentiality of discoverable documents. The issues on the present motion are however largely confined to discovery of documents touching specifically on the topic of the alleged infringement. My observations hereunder are therefore also confined to the general question of discovery material to that topic. I will deal separately with the miscellaneous material said not to have been discovered, and to the issue concerning the production for inspection of discovered documents in a masked form.

On 14 June 1995 the respondent filed and served its verified list of documents in this matter. The applicant was not satisfied with the list. Directions were given by consent on 3 October 1995, setting out a timetable for the conduct of the matter generally included directions for the respondent to discover certain further documents. It did not do so in the time specified. The present motion dated 17 November 1995 was therefore initiated. On 14 December 1995, orders were made by consent that the respondent give further and better discovery of certain documents by 7 January 1996. The motion was otherwise adjourned. On 5 January 1996 the respondent filed and served a verified supplementary list of documents. Again, it appears that the applicant was not satisfied. Accordingly the motion of 17 November 1995 came on for further hearing. The respondent had also, by then, filed and served a document dated 7 February 1996 entitled "Respondent's Notice of Voluntary Admissions" and a further verified supplementary list of documents on 13 February 1996. After a hearing on 26 and 27 February 1996 Sundberg J again adjourned the motion (and certain other motions before him) by consent to a date to be fixed. It was then contemplated that the respondent would make certain further voluntary admissions on matters which could obviate the need for further discovery going to the topic of the alleged infringement.

On 11 September 1996, a further order by consent was made on the motion, including that the respondent give further discovery of certain categories of documents. Then on 1 November 1996 the respondent applied by motion for directions generally, including a timetable for the filing of proposed affidavit evidence to prepare the matter for trial. In accordance with the earlier arrangement, the respondent also on 11 November 1996 filed and served notice of further voluntary admissions made by it. It was hoped that such admissions, and the earlier voluntary admissions filed and served on 7 February 1996, would obviate the need for further discovery. At least so far as the applicant is concerned, that has not proved to be the case. On 11 November 1996, further directions were given with respect to the motion now before me and on other matters. In accordance with those directions, written submissions have been filed and exchanged, and orders have been made that they are each confidential. Orders have also been made that the notices of voluntary admissions of the respondent (or at least that filed on 11 November 1996) also be confidential. To some extent, therefore, I have as a result been somewhat circumspect in expressing my reasons for my decision. I have not concluded that it is necessary for any part of my reasons themselves to be confidential, but I reserved to the parties the right to make submissions with respect to that.

THE PRINCIPLES

It was not submitted before me that the law applicable generally to discovery, including O 15 of the Rules, was inappropriate to the present application: Wellcome Foundation Ltd v V R Laboratories (Aust) Pty Ltd [1981] HCA 12; (1981) 148 CLR 262, and in this Court: (1980) 29 ALR 261; Murex Diagnostics Australia Pty Ltd v Chiron Corporation [1995] FCA 1040; (1995) 55 FCR 194; Minnesota Mining and Manufacturing Co v C Jeffries Pty Ltd [1992] FCA 392; (1992) 37 FCR 294. I turn then to briefly discuss those general principles.

It is by reference to the pleadings that matters in issue are to be determined, and in turn that documents which relate in some way to a matter in issue are identified as discoverable. A document relates in some way to a matter in issue if it would, or would lead to a train of inquiry which would, either advance a party's own case or damage that of its adversary: Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341. That formulation is the appropriate one under O 15 of the Rules: Commonwealth v Northern Land Council (1991) 30 FCR 1; per Black CJ, Gummow and French JJ at 23.

Order 15 r 3 of the Rules provide:

"(1) The Court may, before or after any party has been required under Rule 1 to give discovery order that discovery under Rule 2 by any party shall not be required or shall be limited to such documents or classes of documents, or to such of the matters in question in the proceeding, as may be specified in the order.

(2) The Court shall, on application, make such orders under sub-rule (1) as are necessary to prevent unnecessary discovery."

That rule entitles the Court in appropriate circumstances to limit discovery: Australian Broadcasting Commission v Parish [1981] FCA 7; (1981) 48 FLR 292.

Thus the Rules establish a regime where a party may, unless the Court otherwise orders, require another party to give discovery of documents and that other party is obliged to do so: O 15 r 1 and r 2. That discovery relates to any documents in the general sense described above. On application, the Court may nevertheless by order limit the discovery which would otherwise have to have been given so as to prevent unnecessary discovery: O 15 r 3, and may at any stage order general discovery: O 15 r 5. The Court is also empowered, at any stage of a proceeding, to order an affidavit to be filed giving discovery by a party which has a particular document or class of documents if there are grounds for a belief that some document or class of documents relating to any matter in question in the proceeding may be or may have been in the possession custody or power of a particular party: O 15 r 8. Burchett J in Murex Diagnostics Pty Ltd v Chiron Corporation (No 2) (1995) 62 FCR 424 has explained that O 15 r 8 does not merely provide a support for O 15 r 1 and r 5, but also enables the Court where it is otherwise appropriate to make a different or further order for particular discovery or class of documents.

The critical rule for present purposes is O 15 r 15, which provides:

"The Court shall not make an order under this Order for the filing or service of any list of documents or affidavit or other document or for the production of any document unless satisfied that the order is necessary at the time when the order is made."

It is clear that an applicant for an order for discovery bears the onus of satisfying the Court that the documents sought to be discovered, and then produced for inspection, are necessary: Trade Practices Commission v CC (New South Wales) Pty Ltd (No 4) (1995) 58 FCR 426 per Lindgren J at 436. As his Honour there pointed out, the measure of necessity is against the purpose properly served by the procedure of discovery of documents, namely documents relating to any matter in question in the proceedings. In turn the pleadings will identify the matters in question in the proceedings.

It is not the case under the Rules that further discovery is routinely to be available, once a matter is identified as an issue through pleadings. The Court may require more than that to reach the level of satisfaction required to make an order for further discovery in a particular matter. Sometimes an order for discovery will be quite confined. It is impossible to generalise. Discovery can be a prolonged and repressive process, and on occasions quite fruitless. It can sometimes be apparent that it is not necessary to fairly resolve a matter, or at least not an order for full discovery. The interests of the parties and the community, and of the Court in ensuring the prompt and efficient disposition of litigation, invite a careful supervision of claims for discovery, and a thoughtful assessment of claims that general or particular discovery is "necessary".

That there is no right to discovery routinely was made clear by the decision of the Full Court of this Court in Cameron v Rural Press Ltd (Burchett, Gummow and Hill JJ, 20 July 1990, unreported) and in Trade Practices Commission v Rank Commercial Ltd (1994) 53 FCR 303 at 322 as recently acknowledged by Burchett J in Murex Diagnostics (above at 199) when his Honour refused an application for discovery in the particular circumstances of that case. In Commonwealth v Northern Land Council (above at 36) the Full Court noted that O 15, and the Rules generally, imposed a system of judicial case management in matters of practice and procedure which is not necessarily common to all jurisdictions.

Order 15 r 15 of the Rules requires that the Court be satisfied that an order of the kind sought is necessary in the interests of a fair trial and for the fair disposition of a case. The respective capacities of each party to know what documents exist, or to open up a legitimate line of inquiry, or to prove or disprove particular matters, will be relevant to that assessment. In Trade Practices Commission v CC (New South Wales) No 4 (above), Lindgren J observed (at 437):

"In a case such as this, where one party and not the other is likely to have documents relating to the matter in question, it seems to me to be prima facie "necessary" in the sense referred to that discovery be ordered. But this general position is subject to the well established exception that discovery should not be ordered to enable a mere "fishing expedition"."

In MacKay Sugar Co-operative Association Ltd v CSR Ltd (1996) 63 FCR 408, Spender J reflected the balancing of the conflicting considerations which arise when documents are sought to be discovered which are both relevant and without which one party cannot fairly present its case but which, on the other hand, involved disclosure of a secret process of great commercial significance. His Honour did so order but made a carefully framed order both limiting discovery and restricting access to the discovered documents.

On the present application, the respondent accepts that there are in existence documents relating to its plants at Narngulu and at Capel, and to the SREP by which synthetic rutile is produced at those plants. Subject to considerations relating to specific documents or classes of documents, it seems to me clear enough that such documents (or some of them) would contain information which would enable the respondent to advance its case and to damage the applicant's case, or vice versa. Accepting that it is a simplification, if the document showed either a step in the SREP or a description of an intermediate product in the SREP, it is "reasonable to suppose" (to use the words of the Full Court in Northern Land Council, above at 23) that such document might show whether the SREP does or does not infringe the petty patent or the standard patent.

THE CONTENTIONS

Assuming that the defence and cross claim challenging the validity of the standard patent and of the petty patent does not succeed, at the heart of the case is the nature and character of the SREP of the respondent. As counsel for the applicant put it,

"Because it is a process case and because the material in relation to the nature and character of the [SREP] process resides exclusively with the respondent, discovery processes are perhaps all the more important."

The material before me discloses detail as to the inspection and sampling processes referred to above. It also establishes the existence or probable existence of the records for which an order for further discovery is now sought, as documents relating to or recording some one or more stages or steps in the SREP. Indeed, the respondent has not disputed that such documents exist, nor that they have not been discovered. Those documents comprise instrumental recordings of the SREP stored on the respondent's computer system relating to various specified process variables of the SREP. There are one hundred and fifteen specific process variables identified in the material before me.

Those inspections also enabled the identification of thirty menus or graphics of specific data also displayed or capable of display on the respondent's computer screens relating to the SREP. The material indicates that each of those process variables either affects or reflects aspects of the process conditions through which material passes during the SREP. Also, the material indicates that the proper engineering evaluation of any one element of the process requires information on the process as a whole.

The respondent did not, on this application, dispute those matters except in limited respects to which I will refer. Nor did it seek to contend either that it was not established that such records existed, or that they had not been discovered. Nor did it seek to isolate only some one or more of those recordings of process variables as relevant or potentially relevant to the matter of the alleged infringement. It accepted that on this aspect of the application, in general terms, it was a case of all or nothing at all. There was also material, not controverted by the respondent on this application, that important information referred to in the claims in the standard patent and in the petty patent may not all be readily available as part of any routine analysis records already discovered by the respondent.

Thus, the applicant contends, that detailed primary material is necessary for it to conduct such analysis for the purpose of such direct comparison as it can establish between the SREP of the respondent and the process the subject of the standard patent and the petty patent. There are examples given.

As an additional component of the applicant's claim for discovery, it seeks discovery of records relating to the instrumentation used for process control and measurement, to its sampling identification, to its sampling and analytical procedures, and to its instrument calibration. That material is said to be in existence because it would reflect good engineering practice. It is said to be necessary to enable the applicant to appreciate the meaning of the instrumental recordings reported and recorded by the respondent. It is said that the respondent's documents already discovered provide illustrations of analytical and calibration errors, so that the instrumental and calibration information is necessary to identify errors and to interpret what has been reported as having been measured or analysed. Similarly, the respondent's records of its detailed engineering drawings relating to its plant touching on those matters, and including vessel and equipment volumes and the flow rate of material passing in to and out of the vessel or equipment are sought.

There is also said to be a volume of documentary material of the respondent relating to its production parameters which, it is contended, directly affect or are directly affected by the production data and parameters which discovery has already disclosed. It is argued that the non-disclosed parameters measure or record part of a series of process steps which are the cause of the result measured and recorded in the disclosed information or which are caused by process steps including those measured and recorded in the disclosed information. It is further said that the extent of the variation and the specified disclosed information will depend upon the nature and quantum of the change in the non-disclosed information. Within that non-disclosed information as identified are sixty-seven matters of the specific process variables referred to above, and which are said to relate to twelve of the disclosed measurement topics.

As an additional basis for seeking all the information sought by further discovery, it is contended that all the information is relevant to properly understand reported measurement or analyses, to identify errors or to validate other records of measurements or analyses, to enable the determination of "unmeasured or unmeasurable" process parameters, to enable interpolation between measurement or sampling times for measured parameters and to enable experiments to be conducted to reproduce and investigate relevant aspects of the process. Each of those aspects is then explained in the material before me.

I deal separately with the issues relating to the masking of documents and to what might be called the miscellaneous or sundry claims for discovery. At this point in my reasons, I am addressing only the matter of principle which is the main issue debated before me.

The responses of the respondent are as follows:

(1) by reason of the voluntary admission and the further voluntary admissions, the further discovery sought is not necessary;

(2) the further documents sought to be discovered, or at least a substantial proportion of them, are not necessary to be discovered as they do not relate to any matter in issue in the proceedings; and

(3) by reason of the inspection sampling process which has been undertaken, the further discovery sought is not necessary.

The respondent's submission principally is that the discovery sought is not necessary because, by reason of its voluntary admissions, there are no longer matters in issue in the proceedings. By virtue of O 18 r 1 of the Rules, its voluntary admissions constitute binding admissions. They may only be withdrawn by leave. They may provide the basis for an application for judgment: O 18 r 4. It contends that the voluntary admissions are, subject to certain exceptions, in terms of the integers of the claims of the standard patent and of the petty patent. To the extent that the admissions do not precisely admit those integers, it acknowledges that it is obliged to give discovery. It argues that it has done so.

The claim for discovery of material relating to the multitude of process variables referred to above are not expressly mentioned in the claims of the standard patent or of the petty patent. It contends that there is no proper reason to require discovery of those materials in the circumstances. It has identified in its submission what it contends to be the essential differences, or at least certain of them, between the SREP and the process of the standard patent and of the petty patent, and to an extent what it acknowledges to be the coincidental overlap between them. One aspect of the differences, and the coincidental overlap, relates to the reduction phase at which, in the applicant's process, "a separate impurity bearing titaniferous phase" results and is then removed by the step of leaching that separate impurity bearing titaniferous phase. It contends that it has made all appropriate and necessary admissions as to those matters. It also asserts that the sampling permitted to the applicant admits of analysis by the applicant, in the light of which the applicant can determine whether the voluntary admissions accurately report the phase assemblages, the phase compositions and the elements leached in the SREP. It is willing to facilitate further sampling more or less upon request. It also disputes that the more extensive analysis and calculations proposed by the applicant, from the further documents of which it seeks discovery, by an overall materials balance analysis can usefully indicate what it calls "the phase chemistry" of the SREP.

The initial notice of voluntary admissions of the respondent dated 7 February 1996 comprised admissions as to the nature and stages of the SREP. Those were general in nature, and referred in a more or less consistent way with some specific data enumerated as to the nature and stages of the applicant's processes for the same purpose as described in the standard patent and in the petty patent. The notice of further voluntary admissions dated 8 November 1996 is considerably more detailed, in relation to the SREP process, as it compares that process with the process described in the standard patent and in the petty patent. It includes admissions as to the measured effect or consequence of each of the stages of the SREP, including as to that measured effect or consequence during the operations of the SREP in May/June 1994, February 1995, April/May 1995 and since July 1996. The first notice of voluntary admissions clearly was not a full and detailed response to the allegations that the SREP infringed the standard patent and the petty patent. It was enhanced by the much more detailed further notice of voluntary admissions.

To the extent that the applicant seeks to take advantage of the voluntary admissions of the respondent, it may do so. It nevertheless thinks that those admissions do not go far enough for it to make out its case. It may seek to prove facts beyond, but consistent with or independent of, the voluntary admissions. If there are such relevant facts, then discovery of documents relating to them may be necessary. It may wish to controvert one or more of those voluntary admissions. If so, again it may be entitled to discovery of documents relating to such fact or facts. It contends that in some respects the voluntary admissions are not consistent with information procured during the sampling processes referred to above.

The applicant has identified the matters remaining in issue in its notice of 18 November 1996. That notice identifies many matters where, on its case, the respondent's admissions do not go far enough. It also identifies specifically many matters which are not expressly referred to in the voluntary admissions, although there are some "catchall" expressions as well. That notice addresses in detail the matters said to be remaining in issue despite the admissions of the respondent, separately with respect to each of the separate claims in each of the standard patent and the petty patent, and separately in respect of each of the SREP productions in May/June 1994, February 1995, April/May 1995, and since July 1996. It also deals separately with those matters said to be remaining in issue which relate directly to a particular admission made by the respondent, and which are not expressly referred to in those admissions.

As noted, it is common ground that the matter is one of principle rather than of detail. I am not asked to consider separately each of the topics or matters in issue for which records are sought to be discovered. I am grateful to be relieved of that burden.

Overall, the applicant contends that without knowledge of the whole of the process parameters, it is unable to "deal fully" with the issue of infringement. It also says it is prevented from having information relevant to validating (or contesting) the matters in the voluntary admissions. It says it needs all the information as to what has "gone in to and come out of" the SREP and as to operations of the SREP. It has explained why that information is needed. Its claims, based upon the standard patent and the petty patent, involve a process by defining inputs and outputs and process conditions and by defining the results of process steps including a reduction step or phase and leaching step or phase. The parameters referred to, for which further discovery is sought, are each said to be parameters which may directly affect, or may be directly affected by, the results of the process in relation to matters not already admitted, or respect of which the admissions is not accepted. Each is said to be relevant "as an engineering matter" to the question of whether the SREP process has obtained or generated the result referred to in the claims in the standard patent and in the petty patent. The applicant also asserts that, as a result of its consideration of the documents already discovered and made available for its inspection, at least certain of the admissions made by the respondent will be in dispute. Those admissions are also said to not deal with certain aspects of the SREP.

CONSIDERATION OF SUBMISSIONS

The parties in February 1996 embarked upon a process designed, so far as possible, to limit the matters in issue in the proceedings, at least on the topic of the alleged infringement. It was then contemplated that the respondent would provide voluntary admissions setting out

(a) the phase assemblage and phase composition produced in the reduction step of the SREP carried out during trials in 1994 and 1995,

(b) analysis of the substances leached from those phases, and

(c) the extent to which that information was acknowledged by the respondent as representative.

The respondent has complied, at least in large measure, with that proposal. However, it is clear that the applicant does not accept the accuracy nor, for its purposes, the adequacy of much of that material.

The parties, but in particular the respondent, have not conducted this application on the basis that the applicant is bound by the settlement terms arrived at on 27 February 1996 with a view to generating the voluntary admissions and thereby restricting discovery. It is accepted that, in considering the application, the Court should approach the matter as one of general principle. The dealings between the parties, and including both the terms of settlement then reached and the terms of the voluntary admissions provided by the respondent, are nevertheless relevant to determination of the application. In particular, they are of course relevant to identifying what matters are really in issue between the parties and whether in respect of those issues the further discovery sought is necessary under O 15 r 15 of the Rules.

The infringement of the standard patent and of the petty patent alleged in the further amended statement of claim remains in issue. The particulars of that infringement in the current further amended particulars of infringement is said to be "using the process as claimed in each and all of claims 1 to 3 (inclusive)" of the complete specification of the petty patent and in "claims 1 to 11 and 13 to 15 (inclusive)" of the complete specification of the standard patent and the making and sale of synthetic rutile produced by that process. Putting aside infringement by supply of synthetic rutile said to have been produced by infringing the petty patent and the standard patent, the particular acts of infringement are common to both patents, and identified only in a general way by the respondent's trials of and production by the SREP, involving a reduction phase or aeration phase and a leaching phase, on the occasions or periods mentioned earlier.

Thus the infringement alleged, and disputed, relates at large to the SREP, although it can be discerned that the focus of the alleged infringement is largely upon the reduction phase or some part of it, rather than the aeration phase or the leaching phase. Discovery of documents of the general description now sought and relating to the issue of infringement appears first to have been requested in the detailed way, including by enumerating a large number of process variables, by letter from the applicant's solicitors of 22 August 1995. That letter followed the respondent's first list of documents. By letter from the respondent's solicitors of 2 November 1995, the issue of relevance as to much of the material sought was joined. The supplementary list of documents filed in January 1996 did not resolve that issue. Nor has the process agreed upon in February 1996 for the respondent to provide voluntary admissions resolved that issue.

As noted above, there is no significant dispute between the parties as to the applicable law. Each regards it as appropriate for the measure of the discoverability of documents to be that expressed in Mulley (above) and in Compagnie Financiere et Commerciale du Pacifique v The Perurian Iguano Co (1882) 11 QBD 55 at 60, 62-63.

I propose, therefore, to address the application in the following stages:

(1) on the pleadings, and having regard to the respondent's voluntary admissions, or the sampling processes, are the documents sought discoverable?

(2) if so, having regard to O 15 rr 3 and 15, is it necessary to order discovery of them. Any residual discretionary considerations are addressed within this stage.

It is convenient to refer to the documents of which further discovery is sought by reference to the motion. It was refined or enhanced during dealings between the parties. It ultimately found expression in a proposed draft order included as part of the applicant's written submissions. I append it to these reasons for convenience of reference. I shall refer to the paragraph numbers within it. Paragraph 2 of the draft order refers to the issue about the masked documents, which I deal with separately below. Paragraphs 1(i)-(vii) relate to the principal issue. The balance of par 1 namely subpars (viii)-(xvi) relate to the miscellaneous documents in issue, which I also deal with separately below.

I have carefully considered the helpful submissions, both oral and written, of counsel for the parties and the extensive material those submissions canvassed. Needless to say, my decision must be based upon that material, but in particular on this aspect I must have regard to the expert engineering material upon which the claim to "relevance" (in the appropriate sense) is asserted and resisted. From the applicant's viewpoint, it is set out conveniently in Exhibit GHC-3 to the affidavit of Geoffrey Harold Covey ("Dr Covey") sworn on 15 January 1996 and in Annexure C to the written submissions of the applicant. Dr Covey's further affidavits of 16 February 1996 and 23 February 1996 also relate to those matters. For the respondent, there is responding material in the affidavits of John Michael Afaras sworn on 7 and 22 February 1996 but more particularly in the information to which Mr Afaras refers firstly from Dr Iain Scott of the respondent and secondly from Dr Ian Edward Grey, Chief Research Scientist, CSIRO Division of Minerals. There is significant scientific dispute apparent as to the potential significance of the documents sought to be discovered.

At this point of my consideration, it is sufficient to say that in my view the material from the applicant demonstrates that records of the respondent may, either directly or by provoking a line of inquiry - perhaps involving the detailed materials balance calculations - touch upon or disclose the detail of the respondent's SREP so as potentially to illuminate whether the alleged infringement has occurred. That material also indicates that there is interdependence between the various stages or phases of the SREP, so that information relating to a later stage or phase may be necessary to enlighten the detailed nature of the process at an earlier stage. It also indicates that the interdependence is such that it is not or may not be really possible, or practicable, to isolate some one or more of the process variables of the SREP so as to limit in a meaningful way the discoverable material. No doubt, it was at least partly for that reason that I was not asked by the respondent to separately consider each of the process variables and other sources of data to determine separately and severally the discoverability of documents relating to them.

On the other hand, the respondent says that the SREP does not infringe the standard patent nor the petty patent because, in the reduction step to generate or promote the formation of a particular minor impurity bearing titaniferous phase, which is then removed by an acid leach, it aims to and does produce an entirely different glassy phase. It is the glassy phase which the respondent then seeks to remove by its leaching process. The respondent's leaching stage is not directed to removing, and does not remove, much of the impurity bearing titaniferous phase which the SREP also produces during its reduction phase. It identifies the critical question to be whether the claims in the standard patent and in the petty patent (see s 40(2) Patents Act 1990) involving the promotion and leaching of a separate impurity bearing titaniferous phase cover the SREP so as to give the applicant the exclusive right to exploit the process: s 13 Patents Act 1990.

Sometimes the Court can identify by reference to the pleadings issues in dispute so as to meaningfully limit discovery. This is not such a case. The pleadings are in conventional form. They do not particularise with any detail what it is that is said by the applicant to constitute the infringement by the respondent by use of the SREP. The respondent has not sought further particularity. The pleadings do not set out what the applicant says is the particular stage or stages of the process at which the SREP contravenes the standard patent or the petty patent. Nor do they assert what the particular phase compositions or assemblages are at the various stages of the process, against which the respondent can admit or deny those phase compositions or assemblages and acknowledge that in its SREP the same phase compositions or assemblages apply or plead what it says are the phase compositions or assemblages applicable to its SREP.

The respondent's voluntary admissions dated 11 November 1996 go some way to limiting the issues. They admit almost verbatim a number of the steps of the SREP as equating the steps in the claims for the standard patent and the petty patent. They do not indicate why, despite those admissions, the contravention alleged is disputed. It appears from submissions that two principal reasons are the respondent's glassy phase and that its leaching process is directed at removing impurities in the glassy phase rather than impurities in a different phase produced at the reduction step. I do not suggest that those are the only process differences; I do not know. Nor is any reply filed by the applicant which in any way accepts that the issues addressed by the respondent in its voluntary admissions have somehow led to issues as to infringement being limited in some way. Its notice of matters remaining in issue of 18 November 1996 does not have such effect. Thus, in my view, I must approach the question of discovery with the issue of infringement being a general one, not refined or limited in any way by the pleadings.

The other main feature of the respondent's voluntary admissions of 11 November 1996 is its detailed admissions as to phase compositions and assemblages during the SREP from time to time. It must be commended for presenting that material. Those admissions do not directly correspond to any particular allegations in the statement of claim, nor to any particular content of the claim in the petty patent or the claims in the standard patent. That is, it cannot be seen that at a certain stage in the respective processes the applicant says that (for example) a certain percentage of iron had been removed from the reduced ilmenite in its process and the respondent says the same or a different percentage of iron had been removed from the reduced ilmenite during the SREP. The pleadings do not present that picture. Nor does the applicant's notice of matters remaining in issue indicate that it accepts that the detailed admissions of the respondent, including as to phase compositions or assemblages, are accepted as correct. Those voluntary admissions have not therefore served to limit the issues between the parties, as defined by the pleadings. The applicant may later accept certain of the facts so admitted by the respondent. Presently, it does not formally do so. The respondent will probably not be entitled to endeavour to prove facts directly inconsistent with its admissions. But again, those sort of matters are for the trial.

In those circumstances, and notwithstanding the respondent's attempt to refine and limit the ultimate issue on infringement in the way set out above, I do not think I can properly go behind the expert material adduced by the applicant to which I have referred. It asserts that, due to the nature of the process, each of the process variables is interdependent and relevant to determining the question of infringement. I acknowledge a dispute on that score. The material before me makes out a case that such information may nevertheless either directly, or by a train of inquiry, go to the issue of infringement alleged.

Claim 1 of the standard patent is as follows:

"1. A process for upgrading the titania content of a titaniferous ore or concentrate which process comprises the steps of:-

(i) reducing the titaniferous ore or concentrate using, a solid carbonaceous reductant under temperature conditions which promote the formation of metallic iron, a major rutile phase and a separate minor impurity bearing titaniferous phase to produce a reduced product;

(ii) cooling the reduced product of step (i) in an oxygen free environment to produce a cooled reduced product;

(iii) subjecting the cooled reduced product of step (i) to a first stage leaching or aeration to convert metallised iron into a readily removable form to produce a leached or aerated product;

(iv) removing iron from the leached or aerated product of step (iii) to produce an intermediate product;

(v) subjecting the intermediate product of step (iv) to further leaching processes to form a residue and convert other impurity elements to a readily removable form; and

(vi) removing the other impurity elements from the residue of step (v) to produce a synthetic rutile."

Claims 2 to 15 involve various permutations or variations on claim 1 which were not separately identified as significant in submissions, so I do not record them.

Despite the respondent's criticism that the claimed need is for "proper engineering evaluation", in my view that is sufficient to warrant the documents being discoverable. I do not think that expression was used as other than a shorthand way of saying that the full information of all inputs, applicable process variables on any one occasion, and outputs at each stage of the SREP will, or may, enable detailed mass balance analysis to be carried out so as to determine the phases of the SREP. The purpose is comparison with the phases of the process encompassed by the standard patent and the petty patent. I acknowledge that the bow may be a longish one, as demonstrated by the applicant's asserted need not only to know what those process variables were but also to know in detail the engineering design of the respondent's plant and to know, and to have access to, its calibration records to determine the degree of accuracy of the reported or recorded process variables, and so as to identify any errors in what is reported as measured or analysed.

I have also had regard to what has already been discovered by the respondent. Those documents include documents relating to the reagent and kiln on-off times, composition of feed ilmenite and reduced ilmenite, metallisation percentage, reduced ilmenite percentage, the temperature at number ten bed, product compositions, and certain other data. That is because the respondent has identified for itself the point at which the alleged infringement critically occurs, or from its viewpoint does not occur, and discovered documents directly touching on that stage of the SREP. It has not discovered records relating to the process variables generally which together (according to the applicant) contribute or may contribute to, or which may be affected by, the particular product compositions and line outputs concerning which it has given discovery. I share the view, put on behalf of the respondent, that it is not overly clear why all those process variables are relevant, in the sense that term is used, to determining whether the claims in the standard patent and the petty patent are infringed. However, having regard to the nature and extent of the claims in each, including to the examples given as part of the complete specification, and having regard to the material explaining its relevance presented to me, I am satisfied that the broader scope of documents touching on the process variables set out in pars 1(iii), (iv) and (v) of the proposed draft order are discoverable.

There were other claims as to the relevance of those process variables, although clearly there is some overlap in the scope of the claims. They were that the documents were discoverable to enable the applicant

(i) to properly understand reported measurements or analyses;

(ii) to identify errors or to validate other records of measurements or analysis;

(iii) to enable the determination of unmeasured or unmeasurable process parameters;

(iv) to enable interpolation between measurement or sampling times for measured parameters;

(v) to enable experiments to be conducted to reproduce and investigate relevant aspects of the process.

Each aspect is explained by the applicant in some detail in the material before me. I have considered the explanations in each instance.

In view of the conclusion I have reached on the principal issue, it is not necessary to assess in detail each of those separate reasons for relevance. Suffice it to say that, in my view, provided material may lead directly, or through a chain of inquiry, to proof of infringement or may assist in proof of infringement, then it is discoverable. I am not prepared to so discount the views deposed to by Dr Covey, or the contentions based upon them, to conclude that such materials are simply not relevant. In that conclusion, I stress that I am not choosing to prefer Dr Covey's views to those of Dr Grey. Without the benefit of having seen and heard them give evidence, I could not do so.

I will deal separately with the documents referred to in par 1(i), (ii), (vi) and (vii) of the draft order after I consider the discretionary considerations urged upon me by the respondent, and O 15 r 15.

The sampling process which the respondent has accommodated is or should provide the primary foundation for the proof of infringement. The respondent has indicated that it will facilitate further sampling of the SREP by the applicant. It is not necessarily the case that the SREP result or output, at one or more of its various stages, even if identical with the applicant's result or output at material stages of its process necessarily means that the applicant's process is being exploited by the respondent. Proof of that matter may be a significant part of the proof of infringement of the standard patent or the petty patent.

However, as I have endeavoured to express above, even if the sampling process may provide the best evidence of infringement, it is not necessarily the only evidence. I am satisfied for the reasons given that the documents referred to are discoverable as going to the issue of infringement in a relevant way. The decision as to the discoverability of those documents has also been reached having regard to the voluntary admissions filed by the respondent. Again, I have discussed above the significance of those voluntary admissions in the context of this action.

The question under O 15 r 15, once I have reached that view, is whether I am satisfied that such discovery is necessary to ensure a fair trial and a fair disposition of the case. Although I have not been informed as to the outcome of tests upon the samples from the SREP made available to the applicant, it is a reasonable inference that the applicant is no longer satisfied that they will fundamentally determine the issue of infringement as it first asserted. I am mindful also of the no doubt genuine attempts of the parties to make an arrangement which limits discovery, but attempts which ultimately have proved unsuccessful. Again, it may be inferred that the applicant is not satisfied that a combination of the tests conducted on samples from the SREP made available to it, and the detailed voluntary admissions filed by the respondent, or the admissions of themselves, provide evidence sufficient for it to be confident of establishing infringement. One answer may be that there is no infringement. However, in those circumstances, I do not think I should preclude the applicant from access to documents, which I have concluded are otherwise discoverable, by reason of O 15 r 15. Its claim is a significant one. The commercial implications are self-evident, and confirmed by the submissions of both parties. There is available relevant documents which may lead the applicant to the means of proof of the infringement alleged. Other available procedures have not apparently achieved that end, or on the other hand have not apparently persuaded the applicant that the SREP does not infringe the standard patent or the petty patent.

Subject to any particular discretionary considerations, and having regard to the terms of O 15 r 15 in particular, I am satisfied that those documents should be discovered.

The respondent's reluctance to discover more than is necessary is entirely understandable. As was pointed out, it has been producing synthetic rutile for many years, and the SREP is in its view "the state of the art". Although confidentiality orders of the Court will no doubt be complied with, the persons including independent experts who may have access to its documents will be unable to wipe the information from their minds at the completion of this matter. The respondent wishes to be protected from the accidental and innocent use of certain of the information later in time, perhaps when one of those experts is consulting with the applicant. That concern is heightened by the breadth of the discovery sought. However, those matters were addressed when Heerey J on 15 March 1995 made an order to protect the confidentiality of commercially sensitive documents produced after discovery. There is no evidence to indicate that order has not, to date, proved efficacious. If the documents the subject of the motion are also to be discovered and inspected, that order will operate on them. If their commercial sensitivity is such that that order is inadequate, then the respondent may apply to vary that order in respect of some or all of the documents the subject of the motion.

It was also contended that the voluminous material for which discovery is now sought by the applicant contrasts dramatically with the brevity of the process description set out in the petty patent and the standard patent, and with the material discovered by the applicant for its part relating to it. It is said to be so disproportionate that, bearing in mind the relatively limited nature of the ultimate issues as to infringement, the Court should not be satisfied that its discovery should be ordered. It was put, rather attractively, that there will not at the trial be a dispute about what the SREP is or what output it produces, but firstly whether the process - because of the so called "glassy phase" - means that there is no infringement, or alternatively whether it falls nevertheless within claim 1 integer 1 of the standard patent and of the petty patent as the minor impurity bearing titaniferous phase, and secondly whether the minor impurity bearing titaniferous phase then produced is treated differently and to different degrees at the leaching stage of the process. I have referred to those matters in greater detail above. I do not think that, even if correct, they are sufficient to warrant the exercise of a discretion against ordering discovery when I otherwise regard it as necessary under O 15 r 15. I note that the applicant did not accept that its own discovery was relatively small in the amount of documentation discovered.

The respondent does not contend that it would be oppressive to order discovery of all the documents requested. It is accepted that neither the unmasking of presently masked documents, nor the provision of current computer stored data relating to the current process variables, would be oppressive to the respondent. However, it is urged that in respect of data previously stored on computer and which is no longer current, it would involve very considerable expense and time to restore the information in a form where it could now be reproduced.

The difficulty with that submission is that I am not aware of the relative significance to the applicant of information relating to the operation of the SREP by the respondent on the several past short periods referred to in the pleadings, as distinct from its current operations. I am not prepared to assume that it is of slight significance. I note that the respondent, in its further voluntary admissions of 11 November 1996, addressed the detailed phase assemblages and compositions separately with respect to each of those separate occasions of operation of the SREP. It has clearly expended very considerable sums in doing so. It did not then seek to make out that it should not do so on the basis that the earlier periods of its production of synthetic rutile by the SREP were not of much overall significance. Although the effect involved in procuring the recall of computer stored records relating to those earlier periods will be both long and costly, involving a number of weeks work, I do not think that it would be so oppressive to expect that in the circumstances that I should not order the discovery sought.

There were no other matters put to me by the respondent which, in my view, should lead to the exercise of any discretion not to order the discovery sought.

I am satisfied, in the light of those considerations, that the applicant should be given the benefit of discovery of the further documents identified in par 1(iii), (iv) and (v) of the draft order. It is, in my view, necessary in the interests of justice that I should so order.

I do not think that all of the remaining categories of documents in par 1(i), (ii), (vi) and (vii) of the draft order are necessarily discoverable. If there is anything further by way of relevant inputs or outputs of the SREP beyond those described in pars 1(iii), (iv) and (v) of the draft order, they were not identified in submissions. I have no reason to conclude that the respondent has concealed from the applicant the existence of any such materials. Indeed, I think the contrary is apparent from the applicant's ability to enumerate in the detail it has done the recordings of apparently material information in pars 1(iii), (iv) and (v) of the draft order. Consequently, I do not propose to make an order in terms of par 1(i) of the draft order. For similar reasons, I do not propose to make an order at this point in terms of par 1(ii) of the draft order. In my view, the relevant records to be discovered are those which record process variables for the SREP at relevant times and its inputs and outputs. It is my intention, of course, that the documents discovered and then produced for inspection be comprehensible to the experts of the applicant. If some software program is necessary to enable that to occur, then in my view the respondent should enable that to be done. At this point, I am reluctant to make any order of the type sought unless and until it becomes apparent that it is necessary for the inspection of the documents to be discovered is meaningful. I assume that the respondent will enable that to be achieved. The draft order par 1(ii) may direct more extensive disclosure of material than that which I have determined to be appropriate, and in its present terms I decline to make it.

I also am not persuaded that all the documents referred to in par 1(vi) and (vii) of the draft order should be discovered. I have recorded above the applicant's reasons for seeking discovery of what amounts to the documents recording the calibration checks of the respondent's measuring devices, and the document recording its more general plant design and layout. I reject the contention that calibration records are discoverable. They do not relate to, or record, any part of the SREP. At best, they would enable the applicant to discount or adjust any particular record relating to the SREP. There is no material before me to suggest that there was any persistent misrecording of information by the respondent. It is suggested that there may be some inconsistencies in data recorded, perhaps simply due to recordings at different times or on different occasions. If the point comes at which the respondent wishes to disavow one or more of its own records, the question may resurface. At this point, it is my view that the claimed relevance is speculative only. I am not satisfied that discovery of such records is necessary. For similar reasons, I think the request for "sampling procedures" and "analytical procedures" is not one to which I should accede. I also decline to order the respondent to discover its sample identification records for much the same reasons. The applicant has its samples. It can procure more. It has, or will have, access to the respondent's primary records relating to the SREP. It may, as it has foreshadowed, conduct material balance calculations in the light of them. It may conduct its own experiments, based upon them. But it is a different thing to seek access to the documents of the respondent of its sampling procedures at this point. Unless and until it is clear that the applicant wishes to challenge a particular sample analysis of the respondent, and that the validity of that sample analysis is itself a proper matter to challenge, in my view the documents so sought are at least one dimension removed from the relevant topic, the nature of the SREP and whether it infringes the standard patent or the petty patent. That includes the request for documents relating to the XRD, XRF and microprobe analyses. I am also not persuaded that records relating to the transport and storage of reduced ilmenite are relevant at this point in the proceeding. The parties have not given discovery of documents going to any issue of damages, as they intend the issues as to the validity of the patents and their alleged infringement to be first litigated. On the basis that the "kiln conditions" referred to do not extend beyond matters referred to in par 1(iii), (iv) and (v) of the draft order, and I have not been persuaded that they do, then that aspect of the proposed order is also declined. On the same basis, and for the same reason, I do not make any further specific order as to the composition of the ilmenite feed material referred to.

I am unclear whether the request for discovery of records as to the composition of the reagent added to the Capel kiln by the respondent prior to 5 June 1994 should be allowed. The respondent indicated during submissions that it may well plead that it introduced material to generate its glassy phase during the reduction step of the SREP. It acknowledged that that topic was directly relevant to the issue of infringement. If that reagent relates to that topic, in my view the records relating to its composition are discoverable. If it relates to some other topic, I suspect as an input during the SREP on that occasion, then it is discoverable in any event, consistent with my general ruling. As I am uncertain, and propose to give the parties the opportunity to consider these reasons before making formal orders, I will simply defer that question.

I also decline to make an order for discovery of the documents referred to in par 1(vii) of the draft order. That really follows from the preceding part of my reasons. I am not satisfied that such information has a sufficient relationship to the SREP as to be relevant to proof of the SREP infringing either the standard patent or the petty patent. Again, if it subsequently emerges that a feature or features of the respondent's plant or equipment design is relevant to infringement, and there is an issue as to its nature, then such documents or some of them may become discoverable. At present I am not satisfied that that is the case. Nor, in terms of O 15 r 15 of the Rules am I satisfied that, at this point, discovery of such documents is necessary.

THE MASKED DOCUMENTS

The respondent has discovered extensive documentation with significant sections deleted or marked. Its reason is simply that the concealed sections of those documents do not touch upon, or relate to, any matter in issue in the proceedings. In certain circumstances, that is or may be an appropriate course of action: Science Research Council v Nassé [1980] AC 1028 at 1066, 1085. The applicant does not contest that proposition, so long as the irrelevant part of the document can be covered without destroying the sense of the rest of the document or making it misleading: GE Capital Corporate Finance Group Ltd v Bankers Trust Co [1995] 1 WLR 172 at 175.

Thus the applicant sensibly and appropriately accepts that the masking of truly irrelevant material is not improper in the circumstances. To that extent, it has accepted that, despite its claimed prima facie entitlement to inspect all discovered documents without restriction: cp. O 15 r 6(7), some masking may be appropriate.

What is really in issue is whether the masking process has excluded only irrelevant material. The applicant contends to the contrary. It also contends that, in significant respects, the masking carried out has presented, or is capable of presenting, a distorted or misleading or incomplete picture. The respondent joins issue with the applicant on those matters. It contends that the Court should permit the masking to remain.

The applicant has identified a significant number of discovered documents which have been discovered in duplicate, and each masked to some degree in different ways. It is able to point to sections of a document produced in one form which contains data which, it contends, is relevant and which has been masked in the document produced in another form. The respondent accepts that. It is hardly a surprising outcome given the scope of the documents discovered. In those cases, the respondent generally contends that the unmasked section of the document has been exposed in error, inconsistently with its claimed limit on the material which is discoverable in these proceedings. I accept that is so in most cases.

The masking has been undertaken by the respondent to protect its claim to commercial confidentiality of the material. As noted above, the power to order discovery or production of documents is a discretionary one, albeit one which the Court should not order unless satisfied that it is necessary in the interests of justice. If I am satisfied that it is necessary to achieve justice between the parties that further production should be made of the masked documents in an unmasked form, at least to some degree, then balancing the respective interests may require such an order notwithstanding the confidential nature of the material. The order may be upon terms. The Court has the power, for example, to restrict the persons to whom production of that material should be given and to ensure that such persons do not otherwise publish the material inspected by them either absolutely, or only to a limited extent: Warner-Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354. As noted above, the order of Heerey J made on 15 March 1995 in this matter explicitly addresses such issues. At present, there is nothing before me that indicates that that form of order would not be appropriate, were I to direct the discovery and inspection of the masked documents, or some of them, in an unmasked or less masked form.

The applicant has indicated firstly that, depending upon my ruling on the principle issue dealt with above, it may need to revisit its masking processes. Much of the information apparently masked relates to "process variables" in respect of which the applicant seeks further and better discovery. The respondent has indicated that, if I rule adversely to it on that issue, it will review the masked documents produced for inspection and reconsider any masked data to ensure that material is made available if the ruling requires it. As is apparent from the above, I have ruled that documents relating to the "process variables" should be discovered by the respondent. In accordance with that information from the respondent, through its counsel I note that the masking of the documents will be the reviewed. Indeed, the respondent through its counsel indicated that, were I to rule against it on the principle issue, it may adopt the expedient of simply producing all the masked materials in an unmasked form, but of course subject to the confidentiality order concerning inspection of those documents.

The applicant, in addition, points to certain discovered documents produced in a partially masked form and which leads the applicant into asserted uncertainty as to whether certain further work was carried out and if so when, or as to the potential relevance of the document because the masked data may be useful to determine the significance (if any) of the data disclosed. The respondent's submission is partly to acknowledge that complaint. It has agreed to provide further production of discovered documents numbered 567 and 568 to enlighten the applicant as to its query on those documents, but otherwise it says that no masked material has been shown to be relevant. It is also acknowledged that any errors in masking will be corrected.

In the light of those acknowledgements, I do not propose to make any further order with respect to the masked documents. Primarily that is because - apart from the masking of "process variables" which will now require to be unmasked in accordance with my ruling above - I am not satisfied that otherwise the masking has excluded from production relevant material. Inconsistency in masking does not convince me that that is the case. Nor am I satisfied, beyond that material, that further unmasking of the documents is necessary. Beyond disclosure of "process variables" I am not persuaded that any masked data is otherwise relevant. Nor, even if it were of marginal relevance, do I think that it is necessary to further unmask documents in the interests of justice. I make that ruling specifically on the basis of the intimations made by counsel for the respondent during submissions that any error in masking will in any event be corrected.

I note in the course of submissions on this topic that six bundles of documents were produced to the Court by the respondent pursuant to a notice to produce, and then made available to solicitors for the applicant for inspection. It may be necessary, as part of the formal order of the Court, to deal specifically with the further access (if any) to those documents in the light of the outcome of the motion generally for further and better discovery. I mention that matter simply so that it is not overlooked.

MISCELLANEOUS DOCUMENTS

Ultimately, there was not much issue about the remaining documents of which discovery was sought. They are the documents listed in par 1(viii)-(xvi).

The respondent, during submissions, indicated that it would discover the documents referred to in pars 1(viii), (xi), (xii), (xiv), (xv) and (xvi). On the basis of that acknowledgement, I will make an order for discovery of those documents if the discovery has not yet occurred.

The respondent also asserted that it had no documents of the nature described in par 1(x). I am not persuaded to the contrary, and indeed the applicant sensibly did not urge me to do so.

Within the documents referred to in par 1(xiii), the respondent asserts that it is unable to locate and doubts the existence of the documents numbered 96, 100, 102, 157 160, 164, 260, 348 and 386 although references elsewhere suggest their existence. I do not propose to order their discovery in those circumstances. They will be discovered if identified. The respondent disputes that the document numbered 426 is relevant. I can see no apparent relevance from its description. I do not order its discovery. The respondent also disputes the relevance of documents numbered 54, 81, 465, 466, 857, 881 and 882, but accepts that such documents as exist within those categories or descriptions will be discoverable if I generally ruled in favour of the applicant on the principal matter argued. It will in the circumstances be appropriate to order discovery of those documents, or at least to the extent that they exist; the respondent accepted that they probably existed but had not positively identified them at the time of submissions.

There remains the documents referred to in par 1(ix). I do not order discovery of those photographs. I am not persuaded that they are relevant. In addition, I do not think that it is necessary to discover them, even if they are arguably discoverable. Having said that, the parties appreciate whether it would be of general assistance to the trial judge to have access to photographs or drawings of the relevant equipment or plant, or whether a view would be desirable, to enable the trial judge better understand the evidence proposed. No doubt it is in the interests of each party for the trial judge to comprehend the physical layout and size of the relevant equipment or plant. I am confident the parties will co-operate in that regard.

GENERAL

The respondent requested me to publish reasons and allow the parties to then make any further appropriate submissions in the light of them. I have adopted that course. It may be appropriate to introduce some temporal or other limitation on the scope of the orders for discovery which I propose to make. There are a few minor matters which, in my reasons, I have left for the parties to further address. The time for compliance with the proposed orders will also need to be addressed. There may be matters of commercial sensitivity which I have inadvertently exposed.

Accordingly, I have published these reasons privately to the parties in the first place. I will call the matter on for further hearing when the parties have had an opportunity to consider my reasons, for the making of orders in accordance with them and to address any matters which properly arise from them.

I certify that this and the preceding thirty-four (34) pages are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.

Associate:

Dated:

Counsel for the Applicant: Mr A Archibald QC

with him

Mr J Beach

Solicitors for the Applicant: Arthur Robinson & Hedderwicks

Counsel for the Respondent: Mr D Catterns QC

Solicitors for the Respondent: Allen Allen & Hemsley

Dates of Hearing: 7 and 8 April 1997

Date of Decision: 30 March 1998