Oxford Nanopore Technologies Plc v MGI Australia Pty Ltd [2025] FCA 572

1. In these proceedings, the Prospective Applicant (ONT) seeks preliminary discovery from the Prospective Respondent (MGI) under r 7.23 of the Federal Court Rules 2011 (Cth). The preliminary discovery application has been set down for hearing on 24 July 2025.
2. ONT is engaged in the field of nanopore sequencing, which permits the sequence of bases making up a polynucleotide, such as DNA or RNA, to be determined. MGI offers for sale in Australia certain nanopore sequencing devices (CycloneSEQ sequencers) along with related products. ONT intends to rely on affidavits from Dr White (Senior Director at ONT) and Dr Willcocks (Chief Strategy Officer at ONT) at the preliminary discovery hearing.
3. Dr White deposes that, based on information that is public about the CycloneSEQ sequencers, he considers that those devices or their use may fall within the scope of one or more claims of each of six identified Australian patents owned by ONT, but is not able to ascertain whether this is the case without certain materials. He considers each of those patents in turn, and explains his reasons for holding that view, including the documents and information upon which it is based. The materials he deposes that he requires are primarily samples of the CycloneSEQ sequencers themselves, including their related components, consumables and user instruction manuals, although he observes that the provision of certain documents would be more efficient. Dr Willcocks deposes that he is responsible for providing a recommendation to ONT's CEO, Dr Sanghera, whether to commence legal proceedings, and that if he makes such a recommendation, Dr Sanghera will present it to the board of ONT for approval. However, he is not in a position to make that recommendation until Dr White is in a position to assess whether the CycloneSEQ sequencers fall within the scope of any relevant patent claim. MGI served a notice to produce on ONT on 15 April 2025 seeking production of four categories of documents. Two of them are no longer pressed. ONT applies for the balance of the notice to produce to be set aside.

1. Category 1 of the notice to produce is as follows:

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.

[Definition in original].

During the course of oral argument, counsel for MGI corrected the reference to para [33] in that category so that it refers to para [32] of the Affidavit.

1. Para [32] of the Affidavit is an introductory paragraph to the proposition that Dr White considers the CycloneSEQ sequencers may fall within the scope of each of the six ONT patents in question, and giving reasons for that belief. Paras [36] to [74] of his affidavit express that belief in terms of the six ONT patents individually, giving reasons specifically referable to claims within each of those six patents. If that evidence is accepted, then it appears to me at this stage that ONT is likely to have established the element set out in r 7.23(1)(a) that the Prospective Applicant reasonably believes that the Prospective Applicant may have the right to obtain relief in the Court from a Prospective Respondent whose description has been ascertained.
2. Documents answering the description in category 1 on its face will likely further enhance ONT's prospects of establishing that element, although it would seem to be unnecessary for ONT to tender those documents in addition to relying on Dr White's affidavit. What MGI apparently is hoping for is either a nil return or gaps in the contemporaneous documents evidencing ONT's belief in relation to at least some of the patents in question. MGI intends to submit that Dr White and Dr Willcocks in their affidavits are giving evidence which they know to be false in relation to their subjective beliefs, and also intends to submit that if those beliefs are subjectively held, then they are not reasonable beliefs.
3. As to the question of whether Dr White and Dr Willcocks subjectively hold the beliefs which they claim in their affidavits to hold, the notice to produce strikes me as a speculative exercise or, to put the matter more colloquially, a fishing expedition. Even put at its strongest, it is difficult to see how the expedition will catch the intended fish. An inference can realistically only be drawn from an absence of documentary records if one has available all or substantially all of the relevant documentary records which would bear on the issue. However, in the present case, at least a significant number of documents relating to ONT's belief as to the infringement of any of the six patents are very likely to be the subject of a valid claim for legal professional privilege.
4. MGI says that any claim for legal professional privilege would be waived by the application for preliminary discovery, citing Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341 (Rio Tinto). But the reasoning in that case does not support the submission. 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].
5. Dr White's affidavit has not put the contents of any privileged document in issue or necessarily opened up the contents of such a document to scrutiny. He does depose to his state of mind, but as the Full Court said in Rio Tinto, that does not generally raise a relevant inconsistency. There would thus be no relevant inconsistency for ONT to maintain any claim for privilege. I do not think that considerations of fairness as referred to by Stewart J in Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (No 6) [2019] FCA 337; (2019) 369 ALR 267 lead to any different result. As Stewart J said at [24]:

Inconsistency is accordingly at the heart of the inquiry. Whilst unfairness may inform the consideration of whether or not there is inconsistency, the test is not one of unfairness "operating at large".

1. Accordingly, any lack of or deficiency in documents recording or evidencing the relevant belief by ONT would likely show no more than that the belief was expressed in documents over which claims for privilege have been maintained. No adverse inference can be drawn from a claim for legal professional privilege, and I recently collected the relevant authorities on that point in ASIC v HCF Life Insurance Company Pty Limited (Penalty) [2025] FCA 454 at [81].
2. I am not persuaded that the material sought in category 1 is reasonably likely to add in some way to the relevant evidence in the proceedings, that being the test accepted by MGI in its written submissions at [5]. To adopt the language of the overarching purpose of the civil practice and procedure rules, as expressed in s 37M of the Federal Court of Australia Act 1976 (Cth), to require production of this category would not facilitate the just resolution of the dispute according to law and as quickly, inexpensively and efficiently as possible.
3. To the extent that MGI will contend that ONT's claimed beliefs are not reasonably held, it is open to MGI to do so, and MGI may well lead evidence relating to that issue of reasonableness at the hearing for preliminary discovery. MGI knows its own products and the technology embodied in them. That evidence does not depend on access to ONT's own documents to demonstrate some hypothetical internal disagreement between Dr White and others at ONT.
4. I accept that applications for preliminary discovery may conceivably involve contestable factual issues for which a notice to produce may be appropriate: see Tyco Australia Pty Limited v Leighton Contractors Pty Limited [2005] FCAFC 115; (2005) 142 FCR 428 at [36]- [37] (Hill J, with whom Hely J agreed at [54]); [58] (Conti J). However, category 1 of the notice to produce in the present case is not justified by reference to the factual issues which have been identified by MGI.

1. Category 3 of the notice to produce is as follows:

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).

See paragraphs 8, 9 and 38 of the Affidavit.

1. ONT's evidence does not refer to any such delegation. Irrespective of whether such a delegation exists, ONT's evidence, to which I have referred above, is that the decision to commence proceedings against MGI is to be taken by ONT's board (on the recommendation of ONT's CEO, Dr Sanghera, and in turn Dr Willcocks). Dr Willcocks, in turn, is dependent upon Dr White forming an opinion as to patent infringement. In light of that evidence, if Dr White lacks sufficient information to recommend that there is a reasonable case of patent infringement, then that is where the process will stop. Any written delegation is therefore beside the point, given the way in which the decision as to whether to commence proceedings for patent infringement will be made on the part of ONT.

1. ONT seeks the costs of its interlocutory application dated 2 May 2025 and the notice to produce to be paid on the ordinary basis up to 28 April 2025, and on the indemnity basis thereafter. ONT is entitled to an order for costs, but I do not think that there is sufficient justification for indemnity costs, nor for an order that those costs be payable forthwith.

I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman.