Preliminary discovery – possible patent infringement – setting aside notice to produce seeking documents going to prospective applicant’s state of mind – waiver of privilege by making application for preliminary discovery
In order to obtain preliminary discovery in the Federal Court of Australia against a prospective respondent, it is necessary for the prospective applicant to establish that it “reasonably believes that [it] may have the right to obtain relief in the Court from a prospective respondent”: Federal Court Rules 2011 (Cth) rule 7.23(1)(a). The prospective applicant must demonstrate both a subjective belief and that the belief is also a reasonable one, objectively viewed: see e.g., EBOS Group Pty Ltd v Team Medical Supplies Pty Ltd (No 3) [2012] FCA 48; (2012) 199 FCR 533 at [32]. This necessarily entails a deponent of the prospective applicant giving evidence as to their subjective belief as to the nature of the potential claim and why, on the information known to them, it may exist.
A common conundrum for a prospective applicant for preliminary discovery is knowing enough to reasonably believe it may have a case, but not enough that it does in fact have a case, and not so much that it knows it could not have a case. Nevertheless, since the Federal Full Court’s decision in Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193, the Courts have recognised that a significant degree of speculation on the part of the prospective applicant is permissible – indeed it is unhelpful for the court to entertain debate about “suspecting that one does have a right to relief” or “suspecting that one may have a right to relief” or “speculating” in these respects: Pfizer at [8]. There is no need for the Court to find an “inference or an inclination of mind that there was” a claim for relief: Pfizer at [17]. The question is one of possibility – whether the prospective applicant may have a claim for relief. Accordingly, preliminary discovery can be granted in circumstances that would traditionally have been referred to as a “fishing expedition” comprising “evidentiary adventures in which the goal is not to find proof of a case already known to exist, but instead to ascertain whether a case exists at all”: Pfizer at [108].
In the matter presently before Justice Jackman, Oxford Nanopore Technologies Plc asserts that it reasonably believes that it may have a claim for patent infringement against MGI Australia Pty Ltd and, as a result, seeks preliminary discovery from MGI in order to determine whether it in fact has such a claim.
In support of its application for preliminary discovery, Oxford Nanopore intends to rely on affidavits of two employees who depose as to their belief that, in light of publicly available information about MGI’s products, the use of those products may infringe one or more of the claims of Oxford Nanopore’s patents. One of the deponents, Dr Wilcocks, deposed that he is responsible for providing a recommendation to Oxford Nanopore’s Chief Executive Officer as to whether to commence legal proceedings and, if he gives that recommendation, the CEO will present it to the board of Oxford Nanopore for approval.
By notice to produce, MGI relevantly sought the following categories of documents:
[Category 1] Any document/s recording or evidencing the Prospective Applicant's belief that it may have the right to obtain relief in the Court from the Prospective Respondent for infringement of the Oxford Nanopore Patents, as described in paragraphs 33 to 34 of the affidavit of James (Spike) Willcocks affirmed 13 March 2025 (Affidavit), including board minutes and resolution/s.
[Category 3] Any document/s recording or evidencing any delegation of authority relevant to the making of any decision by the Prospective Applicant to start a proceeding in the Court against the Prospective Respondent to obtain relief for patent infringement, including but not limited to any delegation of authority from the Prospective Applicant to:
(a) Dr Willcocks; and/or
(b) Jordan Herman (Senior Vice President and General Counsel); and/or
(c) Stephen Hash (Global Litigation Counsel); and/or
(d) Dr Gordon Sanghera (Chief Executive Officer).
The subject of the present decision is Justice Jackman’s determination of Oxford Nanopore’s application to set aside that notice to produce. While his Honour accepted that applications for preliminary discovery may conceivably involve contestable factual issues for which a notice to produce may be appropriate, his Honour rejected that was the case here for the following reasons.
Justice Jackman first observed that MGI apparently hopes for a nil-return of documents on Category 1 of the notice to produce from Oxford Nanopore, or gaps in the contemporaneous documents as to its subjective belief. His Honour indicated that the purpose of the notice to produce was to enable MGI to submit that the deponents are “giving evidence which they know to be false in relation to their subjective beliefs” or “if those beliefs are subjectively held, then they are not reasonable beliefs”. His Honour considered the first purpose to be a fishing expedition which, at its strongest, was unlikely to “catch the intended fish” and, in any event, “are very likely to be the subject of a valid claim for legal professional privilege”.
There arose an interesting debate as to whether any claim for legal professional privilege would be waived by the application for preliminary discovery itself (relying on Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341. His Honour rejected the proposition that Rio Tinto supported MGI’s submission on waiver of privilege. His Honour observed:
The Full Court in that case distinguished between two situations. First, where a party to proceedings makes an assertion as part of its case that puts the contents of a privileged document in issue or necessarily opens those contents up to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege, then privilege will be impliedly waived, irrespective of whether the privilege holder subjectively intended to lose the benefit of the privilege: see in particular Rio Tinto at [52], [68] and [43]. Second, the mere fact that a party raises an issue as to its state of mind, and the basis for it, does not generally raise a relevant inconsistency, nor does the mere acknowledgement that privileged documents were relevant to reaching the state of satisfaction or the exercise of the relevant discretions: see in particular Rio Tinto at [67] and [71].
In the present case, Justice Jackman found that the deponent in question had not put the contents of any privileged document in issue or necessarily opened up the contents of such a document to scrutiny. The fact that the deponent had deposed as to his state of mind “does not generally raise a relevant inconsistency” leading to a waiver of privilege.
The end result was that any lack of or deficiency of the documents produced on the notice to produce would “likely show no more than that the belief was expressed in documents over which claims for privilege have been maintained” because no “adverse inference can be drawn from a claim for legal professional privilege”. Therefore, the documents sought by the notice to produce would not be “reasonably likely to add in some way to the relevant evidence in the proceedings”, meaning that the notice should be set aside.
Justice Jackman dismissed Category 3 in one paragraph of his decision. To recap, Category 3 concerned whether there had been any delegation of authority of the decision to commence patent infringement proceedings against MGI from Oxford Nanopore to various officers or employees. Justice Jackman observed that Oxford Nanopore’s evidence did not refer to the existence of any such delegation. Indeed, the evidence was that the board would ultimately make the relevant decision to commence proceedings, but only if the deponents recommended that. Accordingly, any delegation to the deponents was beside the point.
So, while Oxford Nanopore continues on its fishing expedition, sadly for MGI it has been told to leave its rod at home.
