DSM Nutritional Products, LLC v Suntory Holdings Limited

REASONS FOR JUDGMENT 1 The Applicant ("DSM") has commenced a proceeding in the Court in which it appeals from a decision of the Registrar of Patents (by her delegate) on an application for registration which was made by the present respondent ("Suntory"). 2 DSM made application to the docket judge for an order that Suntory give discovery of what were referred to as Suntory's "research and development documents" relating to the invention which was the subject of the patent application. The research and development documents which DSM sought were experimental and developmental records which were presumed to have been created in the course of the inventor's work over a decade earlier. It was this work which gave rise to the specification and the claims which were considered by the Registrar. 3 Having heard argument over two days the docket judge, on 7 May 2013, refused the application: see DSM Nutritional Products, LLC v Suntory Holdings Limited [2013] FCA 474. His Honour gave very short ex tempore reasons. The principal paragraph of his Honour's reasons explained his decision as follows: "The research and development documents of the respondent are at best of secondary relevance to the issues in the proceeding. The documents do not address the common general knowledge in Australia but at best address knowledge in Japan. They have not been sought previously in the detailed proceedings before the Commissioner of Patents. Further, it would be disproportionate to order such discovery in view of the evidence of the difficulties of procuring those documents, which evidence I accept." 4 On 21 May 2013 DSM filed an application for leave to appeal from the docket judge's order refusing its application for discovery. 5 On 12 June 2013 Jessup J, as duty judge, refused an application by DSM for a direction that DSM's application for leave to appeal be heard and determined by a Full Court. 6 DSM's application for leave to appeal came on before me this morning as duty judge. 7 In order to succeed in its application DSM must demonstrate that the order made by the docket judge is attended by sufficient doubt to warrant the appellate intervention of the Full Court and that substantial injustice would result if leave to appeal were to be refused, supposing the docket judge's decision to be wrong: see Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-9. 8 A party to litigation in this Court has no presumptive right to discovery. A party may not apply for an order for discovery "unless the making of the order sought will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible": see Rule 20.11 of the Federal Court Rules 2011. If discovery is desired an application must be made to the Court: see r 20.13. If such an application is made, the Court has a discretionary power to make an order for discovery. In exercising this discretion under the Rules, the Court is required to act in the way that best promotes "the overarching purpose" of the provisions in the Rules. This purpose is identified in s 37M of the Federal Court of Australia Act 1976 (Cth) as being to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. 9 DSM accepted that the docket judge's decision arose from an exercise of judicial discretion which would only be reversed on appeal if attended by error of the kind identified by the High Court in House v The King (1936) 55 CLR 499 at 505. DSM contended that the docket judge's reasons disclosed a number of appellable errors. It will be convenient to deal with them separately. 10 DSM submitted that the docket judge had applied the wrong test when he said that the research and development documents were "at best of secondary relevance to the issues in the proceeding." This, it was submitted, deflected his Honour from the criterion prescribed by Rule 20.14(1) which required him to determine whether the documents were "directly relevant to the issues raised by the pleadings." 11 Under the Rules a document may be relevant if it meets one or more of the criteria prescribed by Rule 20.14. Relevantly these criteria include documents which adversely affect a party's own case or support another party's case. A document may be relevant in this sense but, nonetheless, be of less significance than other relevant material. So much was recognised by Rix L.J. in Nichia Corp v Argos Limited [2007] FSR 38 at [72], an authority on which DSM placed considerable reliance. 12 A reading of the transcript of argument before the docket judge makes it plain that he considered that the research and development documents were, having regard to the pleadings, relevant or potentially relevant documents. In describing them as being "of secondary relevance" to the issues in the proceeding he is not, fairly, to be understood as holding that they fell outside the range of documents comprehended by Rule 20.14; rather, he was saying no more than that they were likely to be relatively less significant in determining the issues in dispute than some other material. 13 DSM next complained that the docket judge's reasons "on their face amount to a blanket refusal of discovery of the research and development documents". The term "blanket refusal" was used in argument in the sense of the adoption of a rigid rule that discovery of research and development documents would not be ordered on patent appeals. This term had its inspiration in the judgment of Pill L.J. in Nichia Corp at [89] where His Lordship said: "I see no merit in making distinctions between "justice", "perfect justice" and "rough justice". In aspiring to achieve justice, the principle of proportionality is important. However, I do not accept that it was "introduced" by the CPR; it has long been a feature of judicial decision making though now given a specific identity and prominence in the Rules. It does not require or justify a blanket approach which has no regard to the needs of the particular case." (Emphasis added). 14 Nichia was an appeal from a single judge who had held that, as a matter of principle and in the absence of pleas of commercial success or long-felt need, disclosure of such material should not normally be required in the context of the issue of obviousness. Unlike the present case there had been no detailed evidence before His Lordship about the cost in time, money and resources, which would be incurred in the event that a discovery order were made. Pill L.J.'s observation is to be understood in this context. Rix and Pill L.J.J. were not prepared to endorse the trial judge's "blanket approach" to applications for discovery for research and development documents in the absence of "any evidence or focussed submission.": see at [76] (per Rix LJ). 15 There was evidence before the docket judge that the research and development documents had been created, in some instances, more than 22 years ago. They were written in Japanese. They were held in different places. They were contained in boxes and folders but were not catalogued. It was estimated that, were discovery of them to be ordered, it would take a number of people two to four months to undertake the necessary search and retrieval exercise. Once that was done the documents would, were they to be deployed at trial, have to be translated. 16 As the remaining parts of the docket judge's reasons makes clear he had regard to this evidence. He accepted it and it led him to conclude that, in the circumstances of this case, an order for discovery would impose a disproportionate burden on Suntory when the forensic benefits which might flow from discovery were compared with the cost involved. This finding was both open and unexceptionable. It did not constitute a "blanket refusal" to grant discovery in cases where research and development documents were sought to deal with the issue of obviousness. 17 DSM next challenged the docket judge's assertion that the documents sought did not address the common general knowledge in Australia at relevant times "but at best addressed knowledge in Japan." This assertion was made immediately after his Honour's statement that the documents were "of secondary relevance". The assertion reflected the well established position expounded by Aickin J. in The Wellcome Foundation Limited v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 284 where his Honour said that: "It is important, particularly in relation to convention patents, to bear in mind that the common general knowledge which is material to the question of obviousness is common general knowledge in Australia and not the common general knowledge in the country of origin. … What must be proved is common general knowledge in Australia and the inventiveness or otherwise of the alleged invention must be judged against that background." The common general knowledge in Australia is to be assessed at the priority date. There is a dispute between the parties as to whether the priority date in the present proceeding falls in 1996 or 2000. Nothing turns on this difference. There was no material difference between the applicable legislation (s 7(2), 7(3) and 18 of the Patents Act 1990 (Cth)) or the relevant case law between 1996 and 2000. 18 DSM also objected to the docket judge's reference to its failure, during the lengthy period the matter was before the Registrar, to seek access to the documents. DSM sought to explain this failure by pointing to certain forensic differences between the manner in which applications of the present kind are processed before the Registrar and the manner in which they are dealt with in this Court. My attention was also drawn to certain authorities in this Court which, it was suggested, had wrought a material change in the law which will be applied at trial by this Court but which did not govern the outcome of the application before the Registrar. Counsel also stressed the fact that any appeal to this Court will be heard de novo. 19 I do not accept these submissions. The first of the authorities which, it was contended effected a material change in the law, was handed down in 2009. This was well before the Registrar made her decision. The research and development documents could have been, but were not, sought at that time. This was a matter that the docket judge was entitled to take into account. What weight he gave to it was a matter for him. 20 For these reasons I do not consider that any error of the kind referred to in House v The King has been demonstrated. The docket judge's reasons are not attended, in my view, with sufficient doubt such as to warrant the attention of a Full Court. 21 DSM's application will, therefore, be refused. 22 I would add that in my opinion, no substantial injustice would be occasioned to DSM were the docket judge's discretionary decision be found, on appeal, to be wrong. 23 The order of the Court will be that the application for leave to appeal be refused. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.