F. Hoffmann-La Roche AG v Chiron Corp

REASONS FOR JUDGMENT 1 The matters for decision here relate to discovery. They arise in a suit for revocation of a convention patent in which, it is important to note, there is no cross-claim for infringement. 2 Before turning to the particular problems, I note some matters of general principle. The starting point is that the Court has wide and flexible powers in respect of the making of orders for discovery: Murex Diagnostics Australia Pty Limited v Chiron Corporation (1995) 55 FCR 194 at 198-199; Murex Diagnostics Australia Pty Ltd v Chiron Corporation (No 2) (1995) 62 FCR 424 at 430; Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (Mansfield J, 30 March 1998, unreported). In exercising its discretion, the Court will remember that Order 15 rule 3 evinces a policy of the Rules that discovery should only be ordered to the extent that is necessary for the attainment of the ends of justice. This policy is also expressed in Practice Note No. 14. 3 The framework within which discovery may be ordered is fixed by the pleadings: Temmler v Knoll Laboratories (Australia) Pty Ltd (1969) 43 ALJR 363, per Windeyer J; Intalite International NV v Cellular Ceilings Ltd (No 1) [1987] RPC 532 at 535; Avery Ld v Ashworth, Son & Co Ld (1915) 32 RPC 463 at 469-470, per Eve J. They determine the issues, and from the issues may be identified the categories of documents the Court should consider when deciding what orders to make in respect of discovery. 4 In the special circumstances of patent litigation, the cases entrench practices which give guidance concerning the classes of documents the discovery of which may be indicated by the raising of particular issues upon the pleadings. For example, in Murex Diagnostics Australia Pty Ltd v Chiron Corporation (No 2) at 425-426, I noted the observation of Hoffmann LJ (as he then was), in Unilever plc v Chefaro Proprietaries Ltd [1994] FSR 135 at 142: "When validity is challenged on the ground of obviousness, it is standard practice to ask for discovery of the research and development which went into the defendant's product. The object is to demonstrate, by reference to the work of the defendant's own researchers, that the subject-matter of the patent could not have been obvious to them." Of course, what was obvious in Australia at the relevant time can only be determined by reference to the factors required to be considered under Australian law. For this reason, it was suggested in argument that research and development carried out in other countries might be irrelevant. However, in Dart Industries Inc v Prestige Group (Australia) Pty Ltd (Ashley J, Supreme Court of Victoria, 4 November 1991, unreported) it was held "that research and development conducted overseas in connection with a product patented in Australia might, by other evidence, be made relevant to what was obvious in Australia at a given time." His Honour referred, as authority for that proposition, to the often cited judgment of Aickin J, speaking for the High Court of Australia, in The Wellcome Foundation Limited v V.R. Laboratories (Aust) Proprietary Limited (1981) 148 CLR 262, where what was in question was discovery of a patentee's research and experiments, the converse of the situation mentioned by Hoffmann LJ. A passage in that judgment does appear to support Ashley J's proposition. Aickin J said (at 284-285): "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. No doubt occasions may occur where there may be no difference or no significant difference in the common general knowledge of the ordinary skilled worker in one country from that of his counterpart in another. However that cannot be assumed and there is certainly no presumption that it is so. 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. Care must be taken to judge the foreign experiments and developments not against their own background but against the proved background of common general knowledge in Australia." So far as the discovery of documents on this basis is concerned, it should be borne in mind that, as Aickin J also pointed out (at 287) "the test is wider than the test of admissibility." While, even as regards admissibility, Aickin J considered (ibid) "that evidence of research and experiments (if any) of a patentee leading up to his claimed invention is generally admissible though not always likely to be helpful", he also made it clear (at 283) that the issue of obviousness "must be judged at the priority date", so that discovery of documents by a patentee on this ground should be limited to a period ending then. 5 In Wellcome Foundation (at 275), Aickin J expressly excluded the issue of novelty as an issue attracting an order for discovery of documents relating to prior experiments. He said: "It is indeed difficult to imagine a situation in which prior experiments as such could throw any light on novelty." This follows from the nature of the exercise in which a court engages when it decides that issue. Similarly, with respect to fair basis, it is stated in Terrell on the Law of Patents, 14th ed (1994) at para 12.148: "The question of fair basis is entirely a matter of construction for the court. The fact that foreign patents had claims which were more restricted is irrelevant and accordingly documents which related to the restriction of the claims in other jurisdictions are not discoverable." For this proposition, the authority cited is Schering Agrochemicals Ltd v ABM Chemicals Ltd [1987] RPC 185, where Falconer J said (at 187): "[T]he question of lack of fair basis is entirely a matter of construction for the court. … I think that such documents cannot be of any possible relevance to the matter which the court has to decide on the issue of lack of fair basis. What the plaintiffs or any of their officers or people acting on their behalf may have thought about the extent of the disclosure or the width of the claim is nihil ad rem to what this court has to decide on this objection. It is a matter for the court to decide what is the construction of the claim and its ambit. It is a matter for the court to decide, as a matter of construction, what is the disclosure and its extent and thereafter to decide whether there is fair basis or not and what some person may or may not have thought, either in the plaintiffs' employ or engaged on behalf of the plaintiffs or indeed, if I may say so, some foreign patent office, has got nothing to do with that and cannot be of any assistance to the court." 6 At the same time, documents which merely disclose potential lines of enquiry may be discoverable. In Haslam Co v Hall (1888) 5 RPC 1, the persons who became the owners of a patent had, before their acquisition of it, prepared (as appears at 7) to contest its validity in legal proceedings. They were required to give discovery of documents so produced, except those that were privileged. The case is cited in Terrell at para 12.143, where it is also stated: "Documents generated in other jurisdictions which disclose potential lines of defences to a particular citation may be discoverable." For that proposition, the learned authors cite Vickers plc v Horsell Graphic Industries Ltd [1988] RPC 421, where Whitford J, after referring to the balance between the importance of "the fullest possible discovery of all relevant documents" and the avoidance of "unnecessary discovery with the consequent endless duplication of papers", and to an argument that "the conclusion which may be reached in other jurisdictions, where the law applied is not necessarily the same and the facts and circumstances may differ" may have little relevance, said (at 423): "I go no further than saying that quite plainly vast numbers of documents are filed in connection with foreign applications, and mostly they are going to be irrelevant. I entirely accept that opinions which may have been expressed or experiments which may have been conducted in connection with foreign applications are at the end of the day not necessarily likely to be conclusive and may indeed prove to be of only limited importance, but they do assist a defendant. They disclose the line which may be taken in connection with the defence to the attack upon the validity which is going to be put forward. They disclose the approach to the issue of infringement." In the particular case, he held the documents should be discovered, but I do not think his Lordship's reasoning would require the same view to be taken in every case of that kind. The balance may, in another case, fall the other way, having regard to the policy of the Rules to which I have already referred. It is also important to bear in mind the consideration mentioned by Windeyer J in Temmler (ubi cit supra) of the difference between the law and technology of Australia and the law and technology of other countries, although, of course, his Honour's remarks must now be read subject to the views of Aickin J in Wellcome Foundation, which have the authority of a full High Court, and in the light of the intensification of the linkages between the technologies of advanced countries throughout the world in the last decades of the twentieth century. 7 A matter of some importance was referred to by Hoffmann LJ in Unilever plc v Chefaro Proprietaries Ltd [1994] FSR 135 at 143, in a passage which I cited in Murex Diagnostics Australia Pty Ltd v Chiron Corporation (No 2) at 426. His Lordship considered (and the other members of the Court of Appeal agreed with him) that, in principle, "discovery of research and development documents should be available against a multi-national on a group basis". That is because relevant work may be done by one member of a group, while the party to the particular litigation in which discovery is to be ordered may be a separate member of the same group. The difficulty thus created is plain. One way of overcoming it was discussed in Unilever plc v Chefaro Proprietaries Ltd. Another was adopted by Lockhart J in Sabre Corporation Pty Ltd v Russ Kalvin's Hair Care Company (1993) 46 FCR 428, following an earlier unreported decision of Foster J in Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (21 February 1990). Their Honours held that where there is a real likelihood that a party to a proceeding would be given access to documents by a particular foreign corporation or individual upon request, the Court has power to direct the party to take steps to obtain access to and discover documents that are in the possession, power or control of the foreign corporation or individual. Sabre Corporation Pty Ltd was followed by Lehane J in Kimberly-Clark Australia Pty Ltd v Carter Holt Harvey Tissue Australia Ltd (1997) 37 IPR 293 at 301. 8 Notwithstanding that the opposite view appears to be suggested, without citation of authority, in Matthews and Malek on Discovery (1992) at para 4.29, it seems to me the issue of the sufficiency of the description of the invention in a patent is an issue which may attract discovery. For this issue is "a pure question of fact", the question being whether "the desired result can be obtained with certainty and without invention": Blanco White, Patents for Inventions and the Protection of Industrial Designs 5th ed (1983) para 4-505; and see Molnlycke AB v Procter & Gamble Ltd (No 3) [1990] RPC 498 at 502; Fuji Photo Film Co Ltd v Carr's Paper Ltd [1989] RPC 713 at 714. According to Blanco White (at para 4-508), the question is not whether the specification is sufficient at the date of its filing, but at the date of publication; see also Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205 at 222, per Gummow J, whose view on this point is not discussed on the appeal: Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1. It seems to me, however, that the same logic which, in Wellcome Foundation and Dart Industries Inc v Prestige Group (Australia) Pty Ltd, was held to enable foreign documents to be made relevant by evidence to the question of obviousness, would also enable material brought into existence after the date of publication to be made relevant by evidence to the question of sufficiency. It is all a matter of degree, and of balancing the desirability of securing discovery of all documents that may really be useful against the undesirability of compelling parties to incur unnecessary expense. 9 In the present case, the grounds of invalidity include allegations that the patent in suit contains misrepresentations as to the novelty of methods employed in work leading to the invention and as to the state of knowledge of non-A, non-B Hepatitis at the priority date; as to "manner of manufacture" or "patentable invention"; as to novelty; as to lack of an inventive step; as to utility; as to lack of sufficient information to enable persons of ordinary skill in the art to perform the invention; and as to ambiguity and uncertainty of various claims. 10 The first category of documents in dispute, referred to as Category 1 of the discovery sought by the respondent patentee, Chiron Corporation, constitutes "[a]ll documents relating to research into non-A, non-B hepatitis (HCV) or the development of HCV PCR kits by the Applicant or any company related to the Applicant, or any person, institution or corporation receiving any financial assistance by grant or otherwise from the Applicant or any corporation related to the Applicant." The extension to related entities was the subject of refinement during the course of the dispute about discovery. If the order sought should be made in principle, the detail can be left to the bringing in of short minutes. The documents sought in category 1 fall neatly into two sub-categories, namely, research into HCV and the development of HCV PCR kits. 11 It seems to me that the sub-category of research into HCV (which Mr P Kerr, the solicitor for the first respondent, limited during the argument to research into the causative agent of non-A, non-B hepatitis), at least during the period up to the priority date, should be the subject of discovery, since obviousness is in issue. But sufficiency of the description is also in issue, and therefore Chiron Corporation is justified (on this basis - I shall come to another shortly) in insisting upon discovery for a reasonable period beyond that date, unless such research can be shown to have been unrelated to the disclosure contained in the specification. It is unnecessary to consider whether the allegations of misrepresentation and lack of utility would provide further grounds for this discovery, and no argument was specifically addressed to them. I have not left out of account the consideration that scientists researching HCV may not have been persons of merely ordinary skill in the art, but may have been themselves inventive; however, I think that raises questions concerning the use that might be made of any information derived from discovery, rather than the discoverability of the information. 12 The second sub-category, documents relating to the development of HCV PCR kits, was the subject of particularly earnest objection from senior counsel for the applicant. The acronym PCR refers to polymerase chain reaction, which is defined in Henderson's Dictionary of Biological Terms, 11th ed (1995, reprinted 1996) as "technique for selectively replicating a particular stretch of DNA in vitro to produce a large amount of a particular gene, which can be carried out using uncloned genomic DNA as the starting material, thus obviating the need for DNA cloning in microorganisms". The discovery of the principle of this technique is said to have been rewarded by a Nobel prize, and counsel urged that the technique is quite separate from the invention claimed by the patentee, which arose out of research to identify the causal agent of non-A, non-B hepatitis, now called Hepatitis C. But the patent the applicant is challenging claims various kinds of HCV PCR kits on the basis, as I understand it, that, granted the PCR technique is a separate discovery, such kits utilize the invention. 13 Mr Kerr pointed out that the applicant's particulars allege the specification does not provide sufficient information to enable persons of ordinary skill in the art to produce a useful kit (including a PCR kit) for the detection of HCV. The discovery which is sought relates, not to the development of the PCR technique, but to the development of a kit specifically designed to detect HCV by means of that independently (as the applicant claims) developed technique. Plainly, if this was done by utilizing the disclosure in the specification, whether or not other things were also utilized, the documents sought would be relevant to chains of enquiry and might be made directly relevant to the issue of sufficiency by other evidence, just as evidence of foreign research may be made relevant to an issue of obviousness by further evidence. 14 Where an order is made for discovery by a patentee, on the issue of obviousness, of documents relating to research and development in respect of the invention, Wellcome Foundation is authority for the proposition that the discovery should be limited to the period ending at the priority date. Further work done by the inventor after that date cannot be relevant. However, where discovery is ordered against a party challenging a patent on the issue of obviousness, it seems to me that similar work done by that party may be shown by other evidence to be relevant, although it was done after the priority date, and, of course, work that is relevant to the issue of sufficiency must necessarily be work done after the priority date. Mr Kerr suggested that guidance could be obtained from an English practice under comparable discovery procedures which limited discovery in relation to the issue of obviousness to a period expiring two years after the priority date. I accept that, in the circumstances of the present case, this would be reasonable so far as concerns the first sub-category in category 1. The second sub-category is related to sufficiency, and the appropriate period should extend, in my opinion, to the completion of the development of the kits in question. I am prepared to make an order for discovery in accordance with category 1, limited accordingly. 15 Category 2 of the discovery sought by Chiron Corporation constitutes "[a]ll documents concerning any search, study or opinion regarding the validity or enforceability, or infringement by anyone of the Patent". In my opinion this request is significantly too wide. So far as validity is concerned, it is not tied to any issue raised by the pleadings; and so far as infringement is concerned, this is not a question raised at all in the case. Haslam Co v Hall might justify an order covering part of category 2, but, bearing in mind the general consideration mentioned at the beginning of these reasons restricting discovery to what is necessary for the attainment of the ends of justice, I do not think that any part of category 2 is really necessary. Accordingly, I shall not make any order requiring discovery in respect of category 2. 16 Category 3 of the discovery sought by Chiron Corporation constitutes "[a]ll documents concerning any test performed by, at the request, or on behalf of the Applicant to evaluate or determine the validity or enforceability, or infringement by anyone of the Patent". Again, infringement not being an issue in the case, I would not make an order in respect of this category that included the reference to infringement. The question is whether I should make an order otherwise in respect of this category. In my opinion, if the category is limited to documents concerning any test to evaluate or determine the validity of the patent in any respect falling within any of the grounds in issue upon the pleadings, it falls fairly and squarely within the principle of Haslam Co v Hall, and is also broadly supportable upon the principles set out in Terrell at para 12.143. The category is relatively narrow, and a search for documents of this kind could hardly be burdensome. I think an order should be made. It is perhaps desirable to add that a far too wide demand for discovery may merit simple rejection, and is likely in any case to have consequences in costs, but I do not think it should necessarily lead to the Court declining to make the proper, narrower, order: cf Fuji Photo Film Co Ltd v Carr's Paper Ltd at 715, per Aldous J (as he then was). 17 Category 4 of the documents sought by Chiron Corporation constitutes "[a]ll documents relating to or comprising any art, to the extent the art is dated on or occurred prior to 18 November 1987 or any later priority date of the Patent alleged by the Applicant concerning the subject matter of the Patent, including but not limited to patents, publications, manuscripts of publications, notes and memoranda, sales, offers for sale and uses and including but not limited to the documents or other particulars referred to in the Amended Particulars of Invalidity". It was pointed out, during argument, that there is some overlap between the first sub-category of category 1 and category 4. Apart from prior art documents that would fall within category 1, there may also be prior art documents that are relied on by the applicant or referred to in the Amended Particulars of Invalidity. These categories of art should be discovered, but I do not think it is necessary to order discovery, which might be burdensome, of art that neither formed part of the applicant's research into the causative agent of non-A, non-B hepatitis or development of HCV PCR kits, nor is relied on or referred to in the Amended Particulars of Invalidity. An order in respect of category 4 should be limited accordingly. 18 I turn to the categories of documents of which the applicant seeks discovery from the respondent Chiron Corporation. Category 1 of these documents comprises: "All documents created to date recording or relating or referring to ('concerning') all communications between the First Respondent (and all persons on its behalf) and any of the following: - the Australian Patent Office concerning the filing, prosecution and amendment of Australian Letters Patent No. 624105 ('AU Patent'); - the European Patent Office concerning the filing, prosecution and amendment of any patent corresponding to the AU Patent; - the United States Patent Office concerning the filing, prosecution and amendment of any patent corresponding to the AU Patent; - the United Kingdom Patent Office concerning the filing, prosecution and amendment of any patent corresponding to the AU Patent; including but not limited to all prosecution histories and 'file wrappers' concerning the above patents (jointly and severally, the 'Patents')." It is pointed out that Chiron Corporation has previously given discovery of these documents in proceedings in this Court which were settled after a hearing had proceeded some distance. In those proceedings, the applicant was not a party, but a company Murex Diagnostics Australia Pty Ltd, which was a party, raised a number of the issues now raised by the applicant. In the present proceeding, Category 1 documents are claimed to be relevant to the issues of false suggestion, inventive step and fair basis. 19 For the applicant, it is urged that "the question of possible admissions contained in the foreign prosecution files is clearly relevant to the allegations of false suggestion". On the other hand, in Dart Industries Inc v Prestige Group (Australia) Pty Ltd, Ashley J took the view that a similar proposition there advanced was "speculative", and that he should exercise his discretion against imposing on a party the inconvenience of searching for and discovering materials so "doubtfully useful". Likewise, Beaumont J in Cave Holdings Pty Ltd v Taperline Pty Ltd (1985) 4 IPR 476 at 483 refused to order discovery designed to elicit material relating to "any purported admission of law by any party or his adviser". Of course, in both of these cases, their Honours were concerned, as I am, with the exercise of a discretion, and the circumstances of one case may not require such a discretion to be exercised in the same way as was appropriate in another. 20 Mr Kerr pointed out that the discovery of Category 1 documents in the earlier case was related to the application there made for amendment. That application demanded full disclosure. The nature of the duty of disclosure was discussed by Sundberg J in Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (1997) 40 IPR 110, where reference is made (at 115) to Re Hsiung's Patent [1992] RPC 497 at 512. In Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd, a notice to produce was upheld which required the production of documents relating to the prosecution and grant of a United States patent, but Sundberg J made it quite clear that the result turned on the special nature of the case. He referred (ubi supra) to "the relevance of applications in other countries to a patentee's duty of disclosure on an application to amend", and this was the consideration that dictated his decision. 21 Dr Bennett SC, who appeared for the applicant, acknowledged that a number of the authorities were against her, but she claimed that the issue of false suggestion resembled the issue arising upon an application for an amendment, so as to enable the applicant's argument on discovery to be supported. However, I do not accept this contention. In my opinion, the applicant for an amendment takes upon himself a duty of full disclosure which places a case involving an amendment in a special category. The issue of false suggestion, on the other hand, is simply another issue in a validity proceeding. I shall not make the order for discovery in relation to the prosecution of foreign patent applications which is sought. 22 The final question relates to the applicant's claim to have discovered to it a category of documents described as Category 4(a), comprising the following: "All documents created to date concerning all communications between the First Respondent and the Second Respondent (and all persons on their behalf) concerning all agreements (including but not limited to licence agreements) and understandings between the First Respondent and the Second Respondent concerning the alleged invention the subject of the Patent (including but not limited to the exploitation thereof)." The second respondent is Chiron Corporation's Australian licensee, and what the applicant is looking for is any document containing admissions as to the scope of the patent. It seems to me that the wording of Category 4(a) is unnecessarily and burdensomely wide, but the licence agreement and any documents containing supplementary or related understandings or agreements would be discoverable, and a requirement to discover them would not be in any way oppressive. An order should be made accordingly. 23 The only formal order that I make at this stage is that the matter be stood over to a date to be fixed for the bringing in of short minutes to reflect these reasons. It is to be hoped the parties will be able to agree on the form of those short minutes. Failing such an agreement, each party should bring in short minutes in accordance with that party's view of the effect of these reasons. At the same time, I shall hear the parties as to the appropriate order in respect of costs. Subject to any argument to the contrary, my present impression is that it would be appropriate to order that the costs be costs in the cause. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Burchett.