Patents – preliminary discovery – Pre-action production of samples
CSIRO sought pre-action production of samples from Urrbrae Foods for testing for the purpose of deciding whether to commence a proceeding for patent infringement against Urrbrae. Justice Moshinsky concluded that he had power to order the production of samples and ordered that production.
The prospective applicant (CSIRO) is the registered co-owner of two patents, Australian Patent No. 2005321754 (754 Patent); and Australian Patent No. 2004252186 (186 Patent), both of which claim grain from a wheat plant with a reduced level of a particular starch branching enzyme, that enzyme’s activity, or both.
CSIRO sought preliminary discovery of documents and production of samples of wheat products from the prospective respondent (Urrbrae) for testing for the purpose of deciding whether to commence a proceeding for patent infringement against Urrbrae.
On 9 December 2022, CSIRO had obtained preliminary discovery of certain documents from Urrbrae, and its application for a production of samples was adjourned by consent. CSIRO reviewed the documents produced by Urrbrae and formed the view that it did not have sufficient information to decide whether to commence a proceeding. The balance of CSIRO’s application, namely the application for production of samples, was listed for hearing.
CSIRO sought production of a randomly selected and representative 50g sample of viable seeds of the Urrbrae wheat products from the most recent harvest that was intended to be commercialised in Australia, together with details of the date and place of harvest, for use by CSIRO to perform the testing to decide whether to start a proceeding in the Court in relation to the Urrbrae wheat products and in the conduct of any such proceeding, any related proceedings or any appeals.
The main issue was whether the Court had power to make an order for the production of samples for testing for the purpose of assisting CSIRO to decide whether to commence a proceeding for patent infringement against Urrbrae.
The issue of power
CSIRO contended that the Court has power to make the order sought for production of samples under section 23 of the Federal Court of Australia Act 1976 (Cth) and rule 14.01 of the Federal Court Rules 2011 (Cth). Section 23 provides:
The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.
Rule 14.01 sets out orders for the inspection of property (defined as land, a document or any other thing in the possession, custody or power of a party to the proceeding) and provides (inter alia) that a party may apply for an order for taking a sample of property. A “party” is defined as a party to the proceeding. A “proceeding” is defined in section 4 of the Act as a proceeding in a court, whether between parties or not, which includes incidental proceedings in the course of or in connexion with a proceeding and also includes an appeal.
Urrbrae’s position was that the practical effect of the orders made on 9 December 2022 was that CSIRO’s application for preliminary discovery was already at an end because: preliminary discovery had been given; CSIRO no longer sought relief in the nature of preliminary discovery; and the relief sought by CSIRO was not in aid of resolving the issues arising in the preliminary discovery proceeding. Urrbrae emphasised that the text of rule 7.23 (which provides for preliminary discovery) is limited to the production of documents.
Urrbrae accepted that the Court has power to make orders under rule 14.01 in a preliminary discovery proceeding, but only for the purpose of resolving issues in that proceeding. It submitted that CSIRO could not rely on rule 14.01 to seek orders for the production of documents to assist it decide whether to commence a proceeding. Urrbrae submitted that an order for production of samples would not contribute to resolving the issues in the proceeding, in particular whether the requirements of rule 7.23(1) have been met such that an order for preliminary discovery of documents ought be made. The authors understand that Urrbrae’s contention was that there is only power to make an order under rule 14.01 for a sample of property in aid of the inquiry under rule 7.23(1) (for example, the Court has the power to order a party to allow inspection of a computer where an order is made under r 7.23 to ensure the preliminary discovery orders are complied with, but not the power to order inspection of the computer to obtain the necessary information the subject of the preliminary discovery orders).
The 1979 Rule and the Rules
In the Federal Court Rules 1979 (Cth) (the 1979 Rules), preliminary discovery and discovery from a non-party was dealt with in Order 15A. Rule 12 provided that the Court may make an order for the taking of samples which related to the subject matter of the proceedings or as to which any question arises in the proceedings. Order 17 of the 1979 Rules dealt with inspection of property and provided that the Court may, for the purpose of enabling the proper determination of any matter in question in any proceeding, make orders for the taking of samples of any property.
Under the current Rules, Division 7.3 of Part 7 deals with the topic of preliminary discovery. Division 7.3 does not contain a corresponding provision to former O 15A r 12. Division 14.1 of Part 14 of the current Rules deals with inspection of property. Rule 14.01 corresponds to former O 17 r 1, but the wording is different, in that the words “for the purpose of enabling the proper determination of any matter in question in any proceeding” do not appear.
The explanatory memorandum issued by the authority of the Judges of the Court in connection with the introduction of the Rules stated that the provisions in Division 7.3 and Part 14 adopt, simplify, and streamline the process and procedures which operated under the former Rules and do not substantially alter existing practice.
The parties’ contentions
CSIRO’s position was that an order of the kind that it sought could have been made under old O 15A r 12 and, since the relevant provisions of the current Rules were intended to simplify and streamline procedures, not to effect substantial change to the old rules, it can be inferred that it was intended that rule 14.01 would be available in the circumstances previously covered by O 15A r 12.
Urrbrae’s position was that under both the 1979 Rules and the Rules, an order for production was only available for the purpose of assisting to resolve issues arising in the preliminary discovery proceeding. To that end, Urrbrae relied on the judgment of the Full Court in Tyco Australia Pty Limited v Leighton Contractors Pty Limited  FCAFC 115; 142 FCR 428 (Hill, Hely and Conti JJ).
The Court’s conclusion
Justice Moshinsky concluded that there was power both under the 1979 Rules (under O 15A r 12) and under the current Rules (under rule 14.01) to make an order of the kind sought by CSIRO, although his Honour did not set out the basis on which he concluded that there was power.
His Honour noted that orders for the production of samples for testing to assist a prospective applicant to decide whether to commence a proceeding had been made in SmithKline Beecham plc v Alphapharm Pty Ltd  FCA 271 under O 15A r 12 of the 1979 Rules and in GlaxoSmithKline Australia Pty Ltd v Pharmacor Pty Ltd  FCA 1202 under the current Rules. However, since the contention advanced by Urrbrae was not raised in those cases, they did not stand as precedents on the issue before Justice Moshinsky.
Justice Moshinsky reasoned that the text of former O 15A r 12 suggested it was possible to make an order for production of samples to assist a prospective applicant to determine whether to commence proceedings, and that this was supported by Justice Heerey’s judgment in Pacific Dunlop Ltd v Australian Rubber Gloves Pty Ltd (1992) 23 IPR 456.
His Honour did not consider Tyco (which related to whether provisions of the Rules for the issuing of a notice to produce could be utilised in the course of a proceeding for preliminary discovery under O 15A of the 1979 Rules) to be authority for a contrary position, because Tyco did not need to determine any issue as to whether O 15A r 12 could be utilised only for the purpose of resolving issues arising in the preliminary discovery proceeding. Although there are some observations in Tyco about O 15A r 12 that are consistent with the submissions put by Urrbrae in the present case, there was no holding to the effect of the proposition advanced by Urrbrae.
Justice Moshinsky observed that if an order of the kind sought by CSIRO could have been made under O 15A r 12 of the 1979 Rules, it would be very surprising if such an order could not be made under the current Rules. He inferred that the fact that O 15A r 12 was not replicated in the current Rules was because rule 14.01 was considered sufficient (having regard to the non-replication of the words of limitation that previously appeared in O 17 r 1).
Justice Moshinsky considered that this conclusion was supported by the text of rule 14.01. CSIRO is a “party” to a “proceeding” (as defined by the Rules), and the order sought by CSIRO fell within the terms of the rule. Justice Moshinsky did not consider there to be any disharmony in interpreting rule 14.01 as available where a prospective applicant seeks production of samples for testing to enable it to decide whether to commence a proceeding against the prospective respondent. Whether such an order is appropriate will be informed by considerations of the kind set out in rule 7.23 and by general principles relating to rule 14.01.
Justice Moshinsky observed that in the context of potential patent proceedings, it may be the case that the provision of documents under rule 7.23 will not be sufficient to enable a prospective applicant to decide whether to commence a proceeding and that testing of samples may be required, supporting the view that it was intended that rule 14.01 would cover the circumstances previously covered by O15A r 12. Justice Moshinsky concluded that there was power to make an order of the kind sought by CSIRO and made orders substantially in the terms sought by CSIRO.
This decision confirms the power of the Federal Court to order production of samples prior to proceedings being commenced (consistently with earlier decisions, in which such orders have been made). However, the decision is under appeal, and there is a possibility that the Full Court will conclude that there is no such power.