The orders sought by the Applicant
15 It is not disputed that an order should be made that the application be dismissed and I will make such an order.
16 On the face of it, this proceeding seeking an order for information discovery and other orders is a separate proceeding in the Court. In those circumstances, the applicant seeks leave to use the four affidavits filed and served by the second respondent in any subsequent proceeding brought by the applicant against the first and second respondents for patent infringement.
17 Order 15 r 18 of the Federal Court Rules provides as follows:
"18 Use of documents
Any order or undertaking, whether express or implied, not to use a document for any purpose other than those of the proceedings in which it is disclosed shall cease to apply to such a document after it has been read to or by the Court or referred to, in open Court, in such terms as to disclose its contents unless the Court otherwise orders on the application of a party, or of a person to whom the document belongs."
18 Although the applicant did not argue that the four affidavits, or any one or more of them, had been read to or by the Court or referred to, in open Court, in such terms as to disclose their contents, it is arguable that that has occurred. As the matter was not argued, I do not base my decision to grant leave on that ground.
19 Even though an application under O 15A r 6 is a separate proceeding, it is arguable that an order made as a result of such an application does not involve or give rise to an implied undertaking by the applicant not to use the documents provided to it as a result of an order. The purpose of an order for information discovery is to give an applicant sufficient information to enable it to make a decision whether to commence a proceeding in the Court to obtain the relief identified in the application.
20 In Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217, Wilcox J considered the circumstances in which a party will be relieved of the implied undertaking not to use a document for any purpose other than those of the proceeding in which it is disclosed. I refer to his Honour's discussion at 221-225 and, in particular, his Honour's identification (at 225) of some of the factors which are relevant to the exercise of the discretion. In this case, the four affidavits were prepared with a view to them being read in open Court. They were prepared with a view to defending the application for an order for information discovery. It was not suggested that there is anything inherently confidential about the information contained in the affidavits. In my opinion, it is in the interests of justice to make an order enabling the applicant to use the affidavits in order to decide whether to bring a proceeding for patent infringement against the respondents, and it is also in the interests of justice to make an order enabling the applicant, should it decide to bring such a proceeding, to use the affidavits in the proceeding. As far as I can see, such an order will facilitate the expeditious disposition of any such proceeding.
21 I will make an order that the applicant have leave to use the four affidavits in any subsequent proceeding brought by it against the respondents for patent infringement.
22 The costs of the application are in the discretion of the Court: Federal Court of Australia Act 1976 (Cth) s 43(2). In the ordinary case, costs follow the event. The respondents contend that the event in this case is the failure of the application. As I have said, I will make an order dismissing the application. In those circumstances, the respondents contend that the applicant should pay their costs. For its part, the applicant contends that it was necessary for it to bring the application because the respondents did not comply with reasonable requests before the application was brought for the information now disclosed by the respondents. It has now received the information it needs and its contention is that the respondents should pay its costs.
23 Both parties referred me to a number of cases. It is apparent that a range of orders have been made on applications for information discovery. In the ordinary case, where an applicant brings an application, and, after argument, it fails, the applicant should pay the respondent's costs of the application. Where an applicant brings an application which is contested and which succeeds, the Court may or may not make an order for costs in favour of the applicant. It must be borne in mind that, even if an applicant obtains an order for information discovery, the discovery may not lead to a proceeding, or a successful proceeding, for the substantive relief claimed by the applicant.
24 I was referred to two cases in which the Court has made an order which is contingent upon whether the applicant brings a proceeding for the substantive relief identified in its application for information discovery. Where the applicant does not bring a proceeding for the substantive relief identified within a specified period of time, the order has been that the applicant pay the respondent's costs of the application for information discovery. Where the applicant does bring a proceeding within the specified period of time, then the order has been that the costs of the application for information discovery be costs in the cause in the proceeding for substantive relief. Those two cases are Cappuccio v Australia & New Zealand Banking Group Ltd [1999] FCA 1188 and SmithKline Beecham plc v Alphapharm Pty Ltd [2001] FCA 271. I have considered the submissions made by the applicant in support of the order it seeks and the submissions made by the respondents in support of the order they seek. I have reached the conclusion that I should make a similar order in this case.
25 The applicant submits that it made reasonable requests for the information before it issued its application for information discovery. It submits that it had no alternative but to issue its application and that, in substance, it obtained the information it was seeking. It is true that the applicant made requests for information about the Omni cutter, but it must be remembered that there is no obligation on a respondent to respond to requests for information and a respondent is entitled to remain passive: Glencore International AG v Selwyn Mines Limited (2005) 223 ALR 238 at 241 [15] per Lindgren J. As it happens, sufficient information was disclosed and there was no argument on the application. I do not think that, in those circumstances, the applicant should receive its costs of the application at this stage. My conclusion is fortified by two additional matters. First, in the absence of any contrary evidence from the applicant, I think that, before bringing the application, the applicant should have searched for other patents and patent applications. If it had done so, it would have found the Omni patent application. That material could have been put forward on the application. Furthermore, as I understand it, the Omni patent application would have enabled the applicant to identify a fourth possible method of solving the problem referred to in the applicant's patent. Secondly, I have read the requests made by the applicant before the application was issued. Those requests are wider than what in fact has been provided and, on the face of it, the respondents were justified in their concern that, had they done what the applicant requested, they may have disclosed other confidential information about their product. I am not critical of the requests made by the applicant, but the width of the requests is a relevant consideration on the question of costs.
26 The respondents' key submission is that, had the applicant acted diligently, it would have found the Omni patent application and the application for information discovery would not have been necessary. To a point this is true, but it is by no means a complete answer because it would not be unreasonable for the applicant to seek information which confirmed that the Omni cutter was constructed in accordance with the Omni patent application. The respondents also submit that, on the evidence, I can find that the applicant's patent has not been infringed by the Omni cutter and therefore, had the application for information discovery proceeded, it would have failed. The answer to this submission is that I cannot, nor should I, make such a decision on this application.
27 The respondents also submit that the application for information discovery would have failed because a good deal of the applicant's evidence on the application would have been excluded because it had been obtained in breach of various obligations of confidence. The point seems to raise some complex factual issues and there is a good deal of evidence on the issue. I cannot resolve it on this application for costs.
28 Finally, the respondents submit that there is evidence supporting a conclusion that I cannot exclude the possibility that the applicant's application for information discovery has been brought for an improper purpose, namely, to damage or harm the respondents' commercial interests. The respondents put the submission in this way because they accept that, in the absence of cross-examination of the deponents of the affidavits, I cannot make a positive finding of an improper purpose. I reject this submission because I do not think that, on the evidence before me, there is anything to suggest that the applicant had an improper purpose in bringing this application. The case relied on by the respondents, Stratford Sun Limited v OM Holdings Limited (2009) 74 ACSR 698, was a very different case. In that case, Siopis J was not satisfied that the applicant had identified with sufficient specificity the benefit it would obtain from any relief founded on the breach alleged (see 708 [66]). By contrast, there is nothing in this case to suggest that the applicant is not seeking to protect the legal rights it has as a result of the registration of its patent.
29 I will order that the respondents' costs of the application be paid by the applicant if the applicant does not bring a proceeding against the respondents for infringement of its patent within two months. If such a proceeding is brought, then the costs of this application should be costs in the cause in that proceeding.