Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd

Introduction 87 This is an application by Pfizer Ireland Pharmaceuticals, Wyeth LLC and Pfizer Australia Pty Ltd (together 'Pfizer') for leave to appeal from orders made by a judge of the Court dismissing Pfizer's application for preliminary discovery orders against the Respondent, Samsung Bioepis AU Pty Ltd ('Samsung'). The application for leave to appeal should be granted and the appeal allowed with costs. The question of the form of the orders should be remitted to the primary judge, along with the issue of costs at first instance. 88 Pfizer is the owner of three process patents: Australian Patent No. 2005280034 'Production of Polypeptides' ('the 034 Patent'); Australian Patent No. 2005280036 'Production of TNFR-Ig fusion protein' ('the 036 Patent'); and Australian Patent No. 2008242632 'Use of low temperature and/or low pH in cell culture' ('the 632 Patent'). 89 Pfizer contends that it reasonably believes that it may have the right to obtain relief in this Court from Samsung. The relief that it has in mind relates to the alleged infringement of the above three patents. Samsung manufactures a drug called BRENZYS (active ingredient, etanercept) and Pfizer says that it reasonably believes that Samsung is using the patents in the production of BRENZYS. Pfizer itself manufactures an etanercept product, ENBREL. It is important to be clear that Pfizer's complaint is not that it holds a patent for the production of etanercept which BRENZYS infringes. It is that the three patents may be being infringed by Samsung's method of producing BRENZYS. 90 Rule 7.23 of the Federal Court Rules 2011 (Cth) ('FCR') allows this Court to grant a prospective applicant, like Pfizer, preliminary discovery if a number of conditions are met. The principal (but not sole) condition is that the prospective applicant 'reasonably believes that the prospective applicant may have the right to obtain relief in the Court from a prospective respondent…' (FCR 7.23(1)(a)). In this case, there was no doubt that the belief was held but the primary judge concluded that it was not reasonably held. One of Pfizer's senior employees, Mr Silvestri, gave evidence about the existence of the requisite belief. The primary judge reached the conclusion that the belief was not reasonably held because his Honour thought Pfizer's claims for patent infringement were speculative: Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCA 285 at [97], [138], [145] and [153].

Etanercept 91 Etanercept is used in the treatment of autoimmune diseases such as rheumatoid arthritis, juvenile rheumatoid arthritis and psoriatic arthritis, plaque psoriasis and ankylosing spondylitis. Etanercept is a biological medicine. There are a range of medicines meeting that description but relevantly, for this case, they include proteins generated by living animal cells (which themselves have been genetically engineered to produce that protein). One class of such proteins includes a group known as 'cepts' which are large and complex molecules with complicated three dimensional structures. As the name might suggest, etanercept is a 'cept'. 92 The production of biological medicines, generally, and cepts, in particular, was agreed by the parties to involve four phases. These were: Phase One: the development of a cell-line and the creation of cell banks. By way of background, genes are made from DNA and DNA acts as a set of instructions to a cell to produce proteins. It is possible to take a cell and insert into it foreign DNA with the result that it then produces the protein associated with the foreign DNA. This is known as recombinant DNA technology. In phase one, the aim is to produce a bank of cells which will produce the desired protein. Many different types of cell can be used to begin the process. In this case, Chinese hamster ovary cells were used by both Samsung and, as will be seen, also by Pfizer. There are a number of sophisticated steps between the initial insertion of the foreign DNA into the Chinese hamster ovary cells and the final creation of a bank of cells of sufficient quality to enter production; but they do not call for explanation on this appeal. In any event, at the end of phase one there exists a bank of cells which, if cultured, will produce the desired protein. This is called the 'cell bank'. It is a valuable commercial asset. Phase Two: Upstream Bioprocessing. In this phase, cells from the cell bank are placed in a culture and grown in some sort of container, often called a bioreactor. There are many different ways this can be done. The bioreactor can be gradually fed nutrients or the nutrients can be loaded all at once; the medium in which the cells are cultured can be altered in various ways; the heat can be turned up or down; and the contents of the reactor can be stirred with fluctuating degrees of vigour. There can be variations also in the pH levels. These differences in process impact on the amount of protein produced in the bioreactor and also, as might be expected, on its characteristics. The detail of this can be postponed for now, but by way of a place marker, it is useful to note that Pfizer's three patents all relate to ways of carrying out this second phase of upstream bioprocessing. Phase Three: Downstream Processing. After the bioreactor has ceased generating fresh protein and the processes taking place within it have reached an endpoint it is necessary to harvest its contents and to extract the protein from those contents. The main goal of this third phase is to extract contaminants from the active substance. Phase Four: Product Characterization. This final phase involves an examination of all of the quality attributes of the biological product using a variety of methods. Following this, the protein is finally put in a form suitable for storage, transportation and, ultimately, administration.

The Patents 93 With the knowledge that phase two is effectively the phase in which the genetically modified Chinese hamster ovary cells are cooked in a bioreactor to produce protein, it is useful briefly to describe the processes disclosed in the three patents. I should say, for completeness, that the case was conducted only on the basis of claim 1 of each patent. Claim 1 of the 034 Patent was as follows (with integer numbers added): ' A method of producing a polypeptide in a large-scale production cell culture comprising the steps of: 1 providing a cell culture comprising; 2 mammalian cells that contain a gene encoding a polypeptide of interest, which gene is expressed under condition of cell culture; and 3 a medium containing glutamine and having a medium characteristic selected from the group consisting of: 4 (i) a cumulative amino acid amount per unit volume greater than 70 mM, 5 (ii) a molar cumulative glutamine to cumulative asparagine ratio of less than 2, 6 (iii) a molar cumulative glutamine to cumulative total amino acid ratio of less than 0.2, 7 (iv) a molar cumulative inorganic ion to cumulative total amino acid ratio between 0.4 to 1, 8 (v) a combined cumulative amount of glutamine and asparagine per unit volume of greater than 16 mM, and combinations thereof; 9 maintaining said culture in an initial growth phase under a first set of culture conditions for a first period of time sufficient to allow said cells to reproduce to a viable cell density within a range of 20% - 80% of the maximal possible viable cell density if said culture were maintained under the first set of culture conditions; 10 changing at least one of the culture conditions, so that a second set of culture conditions is applied; 11 maintaining said culture for a second period of time under the second set of conditions and for a second period of time so that the polypeptide accumulates in the cell culture.' 94 There are some observations which may help to simplify this somewhat. First, this is not a patent for the production of etanercept. It is a patent for a process related to the production of polypeptides. Secondly, a polypeptide is a sequential chain of amino acids linked together via peptide bonds and forms a constituent element of a protein. Thirdly, integers 1-3 describe every process for producing etanercept from gene encoded cells. There was no dispute before us that it was inevitable that howsoever Samsung was creating its etanercept product BRENZYS, in this, its second phase of production, it must have been utilising integers 1-3. It is also, as the primary judge correctly observed at [58] of the judgment below, a neutral matter in the debate. It is neutral in the same way that one ought not to be too surprised that a method for boiling eggs includes water which is boiling. 95 Leaving, therefore, integers 1-3 aside, the interesting features of the 034 Patent are: (a) its specification of a medium containing glutamine (an amino acid) at particular levels and, in particular, specified ratios between glutamine and other constituents; and, (b) the maintenance of the culture for a particular period of time at one set of conditions before changing to a second set of conditions for another period of time. That is to say, the 034 Patent is a process for producing a polypeptide involving the use of a medium with a particular composition treated in two particular ways. Claim 1 of the 036 Patent was essentially the same, although it was concerned not with the creation of a polypeptide but with the production of TNFR-Ig, a protein. 96 The 632 Patent was different to the 034 and 036 Patents. It involved a method of producing a protein in a cell culture. The important aspects of claim 1 were that the culture would be kept at a reduced temperature range of between 27°C to less than 30°C and a reduced pH range of between 6.8 to less than 7.0. The prior art taught that ordinarily cell cultures in such situations would be heated to at least 30°C and kept at a pH of at least 7.0. The advantage of the process disclosed in the 632 Patent was said to be a better quality protein. 97 This quick description of the three patents confirms that they are directed to the second phase described above, that is, upstream bioprocessing. It also demonstrates that the patents are concerned with production processes for proteins and polypeptides generally and not with the production of any particular protein. It is true, as Pfizer feintingly submitted, that the 034 and 036 Patents did, at various points, refer to etanercept but the fact remains that the first claim of each of the three patents does not disclose a process for the production of etanercept specifically.

Preliminary Discovery 98 Preliminary discovery is dealt with in Division 7.3 of the FCR. There are two types: preliminary discovery to identify a prospective respondent (FCR 7.22) and preliminary discovery against a prospective respondent to ascertain whether a proceeding can be commenced against that prospective respondent (FCR 7.23). This appeal is concerned with the latter. 99 An important part of the context in which Division 7.3 appears is the requirement of FCR 16.01 that in cases which proceed by way of a pleading, the name of the person preparing the pleading must be stated and, where that person is a lawyer, that lawyer must certify that there is a proper basis 'for each allegation in the pleading'. So too, where a case proceeds by way of an originating application accompanied by an affidavit, the affidavit must set out the material facts on which the case is based: FCR 8.05(2). In either case, the rules contemplate that a proceeding may only be commenced where a proper basis exists for the making of the allegations. Preliminary discovery is a procedure, therefore, which necessarily exists in a domain where that level of certainty has not been reached. 100 This is illustrated by the terms of the rule itself. FCR 7.23 provides: '7.23 Discovery from prospective respondent (1) A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant: (a) 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; and (b) after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and (c) reasonably believes that: (i) the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent's control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and (ii) inspection of the documents by the prospective applicant would assist in making the decision. (2) If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i).' 101 FCR 7.23(1)(b) confirms that the process is not available where sufficient information is available to allow the commencement of a proceeding. The central part of the rule, however, is contained in FCR 7.23(1)(a). Leaving aside that aspect of the rule concerned with whether the prospective respondent's identity has been ascertained, the rule has two features: there must be a reasonable belief as to a particular state of affairs; and that state of affairs consists of the possibility (required by the word 'may') that the prospective applicant has a right to obtain relief from the prospective respondent. 102 FCR 7.23 replaced Order 15A Rule 6 under the former Federal Court Rules 1979 (Cth). The two rules are not textually identical. Importantly, former Order 15A Rule 6 did not contain a requirement that a belief be held by the prospective applicant. What it said was this: 'Order 15A Rule 6 6. Discovery from prospective respondent Where: (a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court forma person whose description has been ascertained; (b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and (c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision; the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).' 103 It is apparent that the drafter of FCR 7.23, in an attempt to put the rule in plainer English, has reasoned that where there is a reasonable cause to believe, there must also be a person who holds that belief. Further, whilst the former rule required the belief to relate to a case which did or might exist ('has or may have the right to obtain relief') the new rule only requires the belief to relate to a claim which may exist. This was perhaps done on the basis that if the rule was simplified so that it required only a belief which related to a claim which 'may' exist, this would necessarily include within its scope that narrower class of case where the belief related to claims which did exist. 104 These observations about the relationship between the new and the old rule might be dismissed as irrelevant except for s 15AC of the Acts Interpretation Act 1901 (Cth) ('the Interpretation Act') which provides: '15AC Changes to style not to affect meaning Where: (a) an Act has expressed an idea in a particular form of words; and (b) a later Act appears to have expressed the same idea in a different form of words for the purpose of using a clearer style; the ideas shall not be taken to be different merely because different forms of words were used.' 105 The effect of s 59(4) of the Federal Court of Australia Act 1976 (Cth) is that s 13 of the Legislation Act 2003 (Cth) applies to the FCR. This means that s 15AC applies to those rules as if they were an Act. Consequently, it is necessary to consider the Explanatory Statement which accompanied the introduction of the new FCR. It contains this general statement (at p 5): 'The new Rules do not substantially alter existing practice and procedure but rather explain it in a way that it can be more easily followed and applied. They do contain a number of new provisions and some innovative and streamlined procedural approaches. All provisions have been developed with ease of understanding in mind and so that, individually and collectively, the new Rules speak for themselves.' 106 It also says this about Part 7 (at p 10): 'The provisions in Divisions 7.1 (Injunctions, Preservation of Property and Receivers), 7.2 (Approval of Agreement for Persons under a Legal Incapacity) and 7.3 (Preliminary Discovery) adopt, simplify and streamline the process and procedures which operated under the former Rules and do not substantially alter existing practice. Divisions 7.4 (Freezing Orders) and 7.5 (Search Orders) are harmonised with the rules of other courts and are substantially identical to the equivalent rules in the former Rules.' 107 Section 15AC and parts of the Explanatory Statement have been used on several occasions to ameliorate what otherwise appear to be drafting infelicities in the new rules: see, most recently, Thomas v Commissioner of Taxation (No 2) [2017] FCAFC 144 at [20]. On other occasions, they have not been able to overcome the plain wording of the new rules: see, e.g., Voxson Pty Ltd v Telstra Corporation Limited (No 7) [2017] FCA 267 at [12]. On this occasion, it is difficult to ignore the plain words of FCR 7.23 which now seem to require the prospective applicant actually to hold a subjective belief that they may have a right to obtain relief. Section 15AC of the Interpretation Act does not permit the Court to ignore words of plain meaning. Accordingly, I would accept as correct the statement of Katzmann J in EBOS Group Pty Ltd v Team Medical Supplies Pty Ltd (No 3) [2012] FCA 48; (2012) 199 FCR 533 at 540 [32] that the prospective applicant must demonstrate both a subjective belief and also show that the belief is a reasonable one objectively viewed. Other judges have since come to the same view: see Objectivision Pty Ltd v Visionsearch Pty Ltd [2014] FCA 1087; (2014) 108 IPR 244 at 255 [34]-[35] per Perry J; see also Poole v Australian Pacific Touring Pty Ltd [2017] FCA 424 ('Poole') at [53] per Bromwich J. 108 As I have noted already, it is not the requirement of this rule that there be a reasonable belief that there is a right to obtain relief. This is an important qualification and it colours necessarily the analysis involved in assessing the reasonableness of the belief. FCR 7.23(1) is not about giving preliminary discovery to those who believe they do have a case. Its wording unequivocally shows that it is about those who do not know that they have a case but believe that they may. In terms, it authorises what traditionally have been referred to as fishing expeditions; that is to say, evidentiary adventures in which the goal is not to find proof of a case already known to exist, but instead to ascertain whether a case exists at all. 109 The former Order 15A Rule 6 took effect on 26 April 1988 and as early as 1990 it was held that it authorised 'fishing' in this sense. Burchett J observed in Re Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 500; (1990) 99 ALR 728 at 733 [13] that it was 'no answer to the applicant's application under rule 6 to say that the proceeding is in the nature of a fishing expedition…'. That statement was, in turn, assumed to be correct by the Full Court in Bailey v Beagle Management Pty Ltd [2001] FCA 60; (2001) 105 FCR 136 at 143 [27]. 110 Consistently with this broad view, recent authority in this Court has affirmed that the question is whether there is a belief that a right to obtain relief may exist: see, e.g., Bonham v Iluka Resources Ltd [2017] FCAFC 95 at [49]. And some first instance judges have, with respect, been astute to observe that a belief that a right to obtain relief in fact exists is certainly not what the rule requires: Toll Transport Pty Ltd v Fleiter [2017] FCA 376 at [15] per Logan J; Poole at [39(5)] per Bromwich J. 111 There are, nevertheless, passages in some well-known authorities which, when read out of context, may appear to suggest that the procedure under the former Order 15A required there to be reasonable grounds to believe that the prospective applicant actually had a cause of action. 112 Prominent amongst these is the judgment of Hely J in St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; (2004) 211 ALR 147 ('St George'). At 155 [29] there is a part of the reasons which says: 'While St George does not need to go so far as to establish a prima facie case, St George does have to establish that there is reasonable cause to believe that each of the necessary elements of a potential cause of actions exists. The evidence must incline the mind to the view that Rabo and/or Rabo CF deliberately withheld material information from St George.' (my emphasis) 113 Also relevant is 154 [26(d)]: '(d) belief requires more than mere assertion and more than suspicion or conjecture. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of actions exists, that would dispose of the application insofar as it is based on that cause of action: John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679; BC 200403021 at [13], [14], [17] and [73];' 114 These two passages - especially that at 154 [26(d)] - may be apt to suggest that the necessary inquiry is into a belief as to a fact. 115 However, as Nicholas J has been kind enough to point out to me, there are other passages in St George which show that this is not what Hely J intended. At 153-154 [26] his Honour set out a number of principles which included not only (d) (above) but also (c): '(c) the test for determining whether the applicant has "reasonable cause to believe", as required by subpara (a), is an objective one: Hooper at FCR 11-12 [39]; ALR 367; IPR 30; Malouf v Malouf [1999] FCA 710; BC9902833 at [16]; Quanta Software International Pty Ltd v Computer Management Services Pty Ltd (2000) 175 ALR 536 at 541-2 [24]; 49 IPR 25 at 31; Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 391; BC 9602085 at 23. Further, the words "or may have" cannot be ignored. The applicant does not have to make out a prima facie case: Quanta Software at ALR 541-2 [24]; IPR 31; Paxus Services at ALR 733; IPR 85;' (emphasis added) 116 Read in light of this statement, it is clear that the passages at 154 [26(d)] and 155 [29] are not to be read as requiring the presence of reasonable grounds for believing in a factual state of affairs. 117 Nevertheless, 154 [26(d)] and 155 [29], when cited out of their context, both have the capacity to cause some confusion. Similar remarks may be made about what fell from Emmett J in John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 ('John Holland') where his Honour, at [16] asked himself 'whether there is reasonable cause to believe that there is a cause of action' when perhaps it might have been more accurate to ask whether there was such a belief that there might be a cause of action. 118 That the confusion has arisen at some times is clear because the Court has occasionally applied the necessity for the reasonable belief to relate to the existence of a right to obtain relief rather than a possible existence of a right to obtain relief: see, for example, Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2007] FCA 1560; (2007) 163 FCR 554 ('Optiver'); Higgins v Hancock as Liquidator of Arabella Investments Pty Ltd (in liq) [2011] FCA 1492 at [57]-[59]; Reeve v Aqualast Pty Ltd [2012] FCA 679 at [63(a)] and [65(g)]; United Voice v Accolade Wines Australia Limited [2013] FCA 285 at [9]. 119 The practical effect of this misapprehension has been that, in recent times, applications under FCR 7.23 have tended to become in many instances mini-trials because of a perceived need to show the reasonableness of a belief that a right to relief exists rather than might exist. In my opinion, St George does not require this and, to the extent that John Holland does, it is difficult to reconcile with the text of the rule. 120 The following propositions about preliminary discovery applications should be accepted: (i) the prospective applicant must prove that it has a belief that it may (not does) have a right to relief; (ii) it must demonstrate that the belief is reasonable, either by reference to material known to the person holding the belief or by other material subsequently placed before the Court; (iii) the person deposing to the belief need not give evidence of the belief a second time to the extent that additional material is placed before the Court on the issue of the reasonableness of the belief. That belief may be inferred; (iv) the question of whether the belief is reasonable requires one to ask whether a person apprised of all of the material before the person holding the belief (or subsequently the Court) could reasonably believe that they may have a right to obtain relief; and (v) it is useful to ask whether the material inclines the mind to that proposition but very important to keep at the forefront of the inclining mind the subjunctive nature of the proposition. One may believe that a person may have a case on certain material without one's mind being in any way inclined to the notion that they do have such a case. 121 In practice, to defeat a claim for preliminary discovery it will be necessary either to show that the subjectively held belief does not exist or, if it does, that there is no reasonable basis for thinking that there may be (not is) such a case. Showing that some aspect of the material on which the belief is based is contestable, or even arguably wrong, will rarely come close to making good such a contention. Many views may be held with which one disagrees, perhaps even strongly, but this does not make such a view one which is necessarily unreasonably held. Nor will it be an answer to an application for preliminary discovery to say that the belief relied upon may involve a degree of speculation. Where the language of FCR 7.23 relates to a belief that a claim may exist, a degree of speculation is unavoidable. The question is not whether the belief involves some degree of speculation (how could it not?); it is whether the belief resulting from that speculation is a reasonable one. Debate on an application will rarely be advanced, therefore, by observing that speculation is involved. 122 There are cases to the contrary. For example, in Specsavers Pty Ltd v Canstar Blue Pty Ltd [2010] FCA 1153 Edmonds J ('Specsavers') said at [21] that 'a claim based on mere speculation is an insufficient basis for a conclusion that there is reasonable cause to believe that the applicant has a right to obtain relief' (emphasis added). I pause to observe that this enunciation of the rule suffers from the same vice as the other cases to which I have drawn attention in [118] above. However, putting that to one side for present purposes, his Honour then proceeded to cite four examples of speculative applications for preliminary discovery which were dismissed in this Court. For myself, I do not, with respect, read the four examples cited in Specsavers as precluding a degree of speculation on the part of the prospective applicant in such applications. Hence in Strang Aniokaka Ltd v Lihir Gold Ltd (No 2) [2010] FCA 1065 (one of the cases cited by Edmonds J) Rares J said at [117], '[t]here must be an element of speculation, conjecture or surmise - if the applicant's case is too well established, the order will not be made because the applicant has sufficient information to justify commencing proceedings'. 123 It may be that Edmonds J had in mind, by using the phrase 'mere speculation', something so speculative as to be unreasonable; but this demonstrates the risks associated with using a composite phrase not anchored to the text of the legislative provision being construed. Indeed, straying from the words of the rule is what has left FCR 7.23 in its current state of flux. Ultimately, a degree of speculation on a preliminary discovery application is an inevitable consequence of the nature of the application itself. However, the concept of speculation operates on a broad spectrum. There will, obviously enough, be cases where the prospective applicant's claims are so speculative as to warrant the dismissal of the preliminary discovery application. But what must be shown by the prospective respondent to defeat the application in such cases is not the existence of speculative reasoning on the part of the prospective applicant, but rather that the applicant's belief that there may be a right to obtain relief in the circumstances is not a belief reasonably held. 124 There are three further observations I would make in the present context. First, many, if not most, preliminary discovery applications will rest on case architecture which is circumstantial in nature. In assessing such cases it is to be kept in mind that it is not to be asked whether each integer of the circumstances may prove the case. Rather, it is to be asked whether they do when taken together: Palmer v Dolman [2005] NSWCA 361 at [41]. 125 Secondly, it may prove practically difficult to disprove a reasonable belief that a case may exist by seeking to demonstrate that the internal legal mechanics of the suspected case are faulty or contestable. In many cases this will have little impact on the question of whether the belief that a case may exist is reasonably held. More likely fruitful will be arguments to the effect that no reasonable person apprised of what the prospective applicant puts before the Court would think that a right to obtain relief might exist. Couched in those terms the difficulty confronting a prospective respondent on a preliminary discovery application may be clearer. 126 Thirdly, so viewed, it should be apparent that it will be unusual for it to be useful for a prospective respondent to conduct the application as if it were a preliminary trial. The procedure is interlocutory and summary with cross-examination almost never allowed. The Court should not indulge efforts to conduct a prospective respondent's case as if it were a dress rehearsal for a trial.

Pfizer's case 127 Pfizer's case on preliminary discovery was that there were grounds to think that Samsung's etanercept BRENZYS product had been produced using the three patents in the upstream bioprocessing phase. The case had seven elements and, in legal structure, its first six steps constituted a circumstantial case. The seventh element stood alone from the circumstantial case and was a final deductive step. The seven elements were: (i) Samsung admitted that it used the first three integers of the 34 and 36 patents and integer 1 of the 632 patent in the second phase of its production of BRENZYS; (ii) at the time that Samsung was developing its process for BRENZYS it had access to the three patents so that it had had the opportunity to take advantage of them; (iii) both the Pfizer process and the Samsung process were 'serum free'. This was a reference to the medium in which the cells were placed inside the bioreactor. At one time it had been general practice to use foetal bovine serum as the basis for such media. However, both the Pfizer process, since 2009, and the current Samsung process use an artificial serum not manufactured from an animal product. Senior Counsel for Samsung, Mr Catterns QC, informed the Court from the bar table that this switch to a synthetic medium was related to concerns which existed about Bovine Spongiform Encephalopathy, that is to say, the Mad Cow Disease. There is no doubt that both Samsung's and Pfizer's products were serum free in this sense. Dr Ibarra, an employee of Pfizer who gave expert evidence on its behalf, said that until Samsung's BRENZYS product, Pfizer's ENBREL product was the only etanercept of which she knew that was produced by a serum free process. (iv) both the Pfizer and Samsung products were 'biosimilar'. Because biological medicines are the result of the complex processes described above, it is possible for the same protein to result from different processes of production. These differences in production processes may result in differences in the final product. It is the first product to reach the market which is approved for regulatory purposes and it is called the reference product. Subsequent production by other manufacturers of the same product but by different processes does not need to be approved afresh by the regulator. But it is required to be biosimilar. This is not a standard of identicality but it does need to be shown that such differences as do exist are not material from a safety or efficacy point of view. It is this which is meant by the concept of biosimilarity. (v) both the Pfizer and Samsung product had very similar 'glycosylation profiles'. This term requires some explanation. The biological drugs produced by the kind of four phase process under consideration usually acquire during their production, complex sugar structures which are inserted onto the amino acid 'backbone' of the relevant protein. This process of insertion is called 'glycosylation' and is central to the present dispute between the parties. In this case, the glycosylation profile of Pfizer and Samsung's products was very similar. Pfizer claimed that changes in the process by which a biological medicine was made could impact on the glycosylation profile even where the changed process produced a biosimilar drug. In this regard, Pfizer pointed to its own history of producing etanercept. Prior to 2009, it had made its etanercept product, ENBREL, by means of one process which, as I have said, included the use of foetal bovine serum but since 2009 it had used a different process, which inter alia, did not. The product produced by the new process was biosimilar to the product resulting from the former process but had been accompanied by a change in the glycosylation profile. (vi) steps 1-5 just described could reasonably sustain the proposition that Samsung was using the same manufacturing process in its second phase as Pfizer was. Put another way, there was an inference available that both companies were using the same upstream bioprocessing procedures to make their respective etanercept products; and (vii) Pfizer then said that the process it used to manufacture its etanercept product involved the use in its second (upstream bioprocessing) phase of processes claimed in each of the three patents. From this it was said to follow that Samsung must be using the processes described in the patents too. 128 These then were the various matters put forward by Pfizer to point to the infringement of the patents. For completeness, it should be noted that before the primary judge this case was pursued as a case involving only five steps. I have arrived at the seven steps described above by breaking down a few of the steps pursued before the primary judge into smaller steps in the interests of clarity. I have omitted, in Samsung's favour, consideration of Pfizer's Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 contention which may, on one view, be seen as part of its circumstantial case. In doing so, I have not changed the substance of what was put to the primary judge.

The glycosylation debate 129 The primary judge analysed each element of this circumstantial case and came to this view at [153] of the reasons: '153 I have examined each of these contentions in detail above (see [73] to [128] above). Each is confronted with significant difficulties. Taken together, as Pfizer urges, I am not satisfied that the evidence warrants the conclusion for which Pfizer contends. To the contrary, I am left with the firm view that this particular chain of inferences does not rise above speculation.' 130 Although Pfizer's draft notice of appeal contained a large number of arguments, one of its principal focuses was the manner in which the primary judge had dealt with the topic of the glycosylation profiles of BRENZYS and ENBREL. The issue appears to have gathered significance as the hearing progressed. The primary judge observed at [154] that, given its centrality to Pfizer's case, it was surprising that it did not appear more substantively in its case-in-chief. As will appear shortly when discussing in more detail the glycosylation profiles issue, I am not sure this is necessarily a fair criticism of Pfizer's position. However, no error is alleged to flow from that feature of [154] and I can pass over it. 131 The evidence about glycosylation was given for Pfizer by Dr Neysi Ibarra who is the Director and Group Leader of Process Development, Manufacturing Science and Technology at Pfizer Ireland Pharmaceuticals (the Prospective Applicant). Her evidence concerned, inter alia, the fact that the nature of biological medicines was a function of the processes by which they were manufactured. There was no dispute on appeal as to her expertise. For Samsung, evidence was adduced, relevantly, from Professors Stephen Mahler and Peter Gray, who are both bioengineers at the Australian Institute for Bioengineering and Nanotechnology at the University of Queensland. The debate between Dr Ibarra and Professors Mahler and Gray went this way: (i) Pfizer, through Dr Ibarra, suggested that because Pfizer and Samsung's products were biosimilar they must have been derived as a result of the same process. In this regard she drew attention to an article entitled 'Evaluation of the structural, physiochemical, and biological characteristics of SB4, a biosimilar of etanercept' by Cho et al ('the Cho article'). There was no dispute that SB4 is a reference to Samsung's BRENZYS product. The article conducted a side-by-side comparison between the BRENZYS product and Pfizer's ENBREL. A number of similarities, not presently relevant, were noted. But, as the primary judge observed at [83] of the reasons, it was agreed between the experts that the Cho article showed that the glycosylation profiles of the Pfizer and Samsung products were 'very similar'. Thus the first move in the glycosylation debate which followed was, therefore, Pfizer's and it was that the two products had very similar glycosylation profiles. This evidence was given by Dr Ibarra in her first affidavit and did not emerge until late in the case. It was one of a number of similarities she drew to the Court's attention (including biosimilarity). (ii) Samsung responded to this by arguing through the evidence of Professor Mahler that the fact that the two products were biosimilar did not entail that they had been manufactured using the same process. Mention has already been made of the fact that Pfizer itself had changed the process by which it manufactured ENBREL in 2009. This was of some significance as there was another paper which suggested that biosimilar products could result from different manufacturing processes. The article which did so was entitled 'Acceptable changes in quality attributes of glycosylated biopharmaceuticals' by Schiestl et al ('the Schiestl article'). It compared the two etanercept products made by Pfizer before and after 2009. The article made two points relevant to this case: (a) the glycosylation profile of the two products was different (even though they were biosimilar); and (b) the glycosylation profile was defined by the processes used in each of phases one, two and three (i.e. cell-line production, upstream bioproduction and downstream bioproduction). (iii) Professor Mahler reasoned from the Schiestl article that it followed that the biosimilarity of the BRENZYS and ENBREL products did not necessarily imply the presence of the same production process. (iv) Pfizer, through Dr Ibarra, then pointed out that the Schiestl article also showed that a different manufacturing process could result in a different glycosylation profile. This mattered because the Cho article was evidence that BRENZYS and ENBREL had very similar glycosylation profiles. These aspects of the Schiestl and Cho articles were then said to support the idea that the same production process had been used. The argument was based not only on the Cho article but also on the Schiestl article. (v) Samsung sought to thwart the drawing of that inference with evidence from Professor Gray, also resting on the Schiestl article, that changes in the glycosylation profile of a protein could arise as a result of changes at the level of any of phases one, two or three. Professor Gray also noted that there were some differences between the glycosylation profile of the BRENZYS and ENBREL products although he did not gainsay Cho's conclusion that they were very similar. (vi) Dr Ibarra then denied that this was necessarily so, saying the changes principally arose from phase two. 132 A matter not pursued before this Court, but which appears problematic, is that Professor Gray's evidence at point (v) that changes in the glycosylation profile of a protein could result from changes in the production process does not seem, directly at least, to address Dr Ibarra's evidence which was about the similarity of two glycosylation profiles. But neither party made any point about this and it would be unsafe, in relation to a technical topic such as this, to pursue a point which the parties have not.

Whether the primary judge erred 133 The primary judge's reasoning on this topic was twofold. First, his Honour rejected Dr Ibarra's evidence that the first phase was unlikely to affect the glycosylation profile because, as she had argued, both firms used Chinese hamster ovary cells to produce their cell lines. This his Honour did because it was, in his view, contrary to the teaching in the patents. At [94]-[96] of the reasons, his Honour said this: '94 Dr Ibarra's second answer to Professor Gray is that glycosylation may be affected in phase (b) and that because of the common use of CHO mammalian cells it is unlikely to occur in phase (a). That observation does not accord with the teaching of the patents. For instance, in relation to the 632 patent integers 2 and 3 of claim 1 of the 632 patent direct attention to growing cells in a cell culture at a reduced temperature (to a range of 27˚C to less than 30˚C) and a reduced pH (in a range of 6.80 to less than 7.00). However, the examples in the 632 patent indicate that glycosylation is a step which takes place prior to the process steps the subject of the claims. For instance, at [0114] of the 632 patent it says (emphasis added): '…For instance, growing cells at a reduced temperature of 29.5˚C significantly reduced concentration of both misfolded and aggregated TNFR-Fc, while having minimal effects on TBFR-Fc glycosylation. 95 Similar observation was made in relation to reduced pH which at [0123] was said to significantly reduce the proportion of misfolded and aggregated TNFR-Fc protein, "while having minimal effects on glycosylation of TNFR-Fc". 96 The consequence is that claim 1 of the 632 patent is directed towards minimising an adverse effect on glycosylation, but not the step of glycosylation itself. The 034 and 036 patents barely refer to glycosylation at all. Each patent assumes, naturally enough, that phase (a) has taken place where, the experts agree, the characteristics of the glycosylation profile may be determined. It is not, in my view, persuasive to dismiss the effects of this phase, on the basis that both Pfizer and the BRENZYS process use CHO mammalian cell line. Not only is cell variation within CHO inevitable (as the evidence indicates), in addition, phases (a) and (c) influence glycosylation.' (underlining in original) 134 With respect to the primary judge, whose experience in patent law is much greater than mine, this involved error. What was before his Honour was a preliminary discovery application. The question was not whether Professor Gray was right and Dr Ibarra was wrong. The question was whether the belief held by Mr Silvestri, the Assistant General Counsel and directing mind of Pfizer, was reasonable (either on what was before him or subsequently, the Court). Ultimately, his Honour dismissed Dr Ibarra's evidence about glycosylation as mere speculation. This is apparent from [97] of the reasons: '97 Ultimately, Dr Ibarra's evidence in this respect does not rise above speculation (Pfizer refers to it as an inference) that the similarities observed might mean that the BRENZYS Process is similar to the Pfizer Process. That speculation, in my view, clings tenuously to the coincidences identified in Cho. These coincidences are cogently explained by a far more available inference; that the end products are biosimilar. That fact does not suggest similarity of process.' 135 But it was not possible to dismiss Dr Ibarra's evidence on glycosylation as speculation just because it appeared contrary to the teachings of the three patents. Dr Ibarra was not cross-examined about this, nor generally speaking could she be on such a summary application. Further, Professor Gray was not cross-examined about the differing glycosylation profiles of the two biosimilar Pfizer products (nor could he be). That was evidence which tended to undercut his reasoning that similar glycosylation profiles might be explained by the biosimilarity of the products. The two Pfizer products were biosimilar and yet had different glycosylation profiles. 136 None of this is to express any view on the correctness of these matters in either direction. What they do show, however, is the impossibility of resolving such an issue on a preliminary discovery application. The primary judge, it should be said, was very much alive to this risk. At [56] his Honour said this: '56 In the present application, SBA led evidence to challenge the basis upon which Pfizer contended that the requisite objectively held belief arose. To a substantial extent, that evidence raised factual conflicts which it was not possible for me to determine on an application of this kind, there being no cross-examination, among other difficulties. Those difficulties were compounded by the fact that Dr Ibarra gave evidence in reply that generally took issue with the evidence of SBA's witnesses, and then challenged only specific propositions which were advanced. That had the effect of leaving unclear precisely which matters were the subject of disagreement.' 137 Despite his Honour being aware of the forensic limitations of the process with which he was seized, I am unable to avoid the conclusion that at [94] of the reasons, his Honour seems momentarily to have overlooked his own counsel and entered the fact finding arena. This is hardly surprising, however, given the various statements in John Holland and St George which have the capacity to invite precisely this kind of error. 138 This argument corresponded with Ground 2 (Particular iii) and Ground 5 in Pfizer's draft notice of appeal. In my opinion, Pfizer has made good these Grounds. 139 I have set out above at [134] of these reasons, [97] of the judgment below. I accept Pfizer's further submission that this paragraph also discloses error. The gist of the reasoning in the second and third sentences is that the similarity in glycosylation profiles between BRENZYS and ENBREL was more cogently explained by their biosimilarity than by Dr Ibarra's hypothesis. As Pfizer submitted, that conclusion overlooks the Schiestl article wherein it was noted that two biosimilar products (i.e. Pfizer's original and current ENBREL products) were biosimilar but nevertheless had different glycosylation profiles. The cogent explanation at [97] of the primary judge's reasons is not necessarily so cogent at all. 140 Samsung sought to buttress this aspect of his Honour's reasoning by submitting that the statement at [97] was not a factual conclusion but rather merely an inference. The inference was said to be supported by the quality guideline on biosimilarity issued by the Therapeutic Goods Administration ('TGA'). As mentioned briefly above at [127(iv)], when a biological medicine is first approved it becomes 'the reference medical product' for later versions of the same medicine. In such cases, different production processes for the same protein may lead to slight variations in the resulting end product. The yardstick against which later biosimilar products are measured for safety and related purposes is the initial, or reference, product. In this case, the reference product was Pfizer's original ENBREL product. The TGA issues guidelines on the topic of biosimilarity. One of the guidelines says this: 'The presence of glycosylation structures…not observed in the reference medicinal product may raise concerns and would require appropriate justification with particular attention to non-human structures (non-human linkages, sequences or sugars).' 141 This suggests that if a new version of biological medicine were to be produced with a different glycosylation profile this would need to be justified to the regulator. Mr Catterns QC submitted that this demonstrated that producers were encouraged to ensure a new biological medicine had the same glycosylation profile as the reference product. I am not sure it goes that far (as the history of ENBREL's own glycosylation profile shows). But regardless, the primary judge's inference that the coincidences in Cho are cogently explained by biosimilarity cannot be correct. The picture is more complex. 142 So far as the submission that [97] of the reasons had involved only the drawing of an inference rather than a finding of fact, this does not appear to provide any reason which would protect it from appellate scrutiny. Whether it was a finding of fact or an inference, it seems to me to have involved error in that it failed to deal with significant evidence to the contrary. Samsung submitted that, even so, it was difficult to see how this might bear upon his Honour's view that Dr Ibarra's evidence was no more than mere speculation. I do not accept this submission; it goes directly to its correctness. 143 This argument corresponded with Ground 5 (particular (iii)) which I accept has been substantiated. Subject to the notice of contention, I would grant leave to appeal and allow the appeal on the basis of these arguments. Pfizer had a number of other criticisms of the judgment with which it is not now necessary to deal.

The Notice of Contention 144 Turning then to Samsung's notice of contention, it is necessary to know by way of background that at the hearing Samsung had objected to various portions of Dr Ibarra's evidence. These portions related to the seventh element of its case wherein she had expressed the view that the process by which Pfizer manufactured its ENBREL product involved, at its second phase, the use of the processes described in the three patents. 145 Samsung said that Dr Ibarra's evidence that her employer, Pfizer, used the processes described in the three patents to make ENBREL was in the nature of expert evidence and was inadmissible because it did not sufficiently identify the facts and assumptions upon which it was based (see Evidence Act 1995 (Cth) ('Evidence Act') s 76; Makita (Australia Pty Ltd v Sprowles [2001] NSWSC 305 ('Makita'); (2001) 52 NSWLR 705). 146 The primary judge agreed with the submission that Dr Ibarra's evidence was inadmissible as expert evidence but only if the Evidence Act applied ([114]). His Honour concluded, however, that it did not apply in preliminary discovery applications. In reaching this conclusion he followed observations in this Court at first instance that this was the case (Optiver at 556 [5]); C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864 ('C7') at [17]). He was also inclined to agree with my conclusion in Dallas Buyers Club LLC v iiNet Ltd [2015] FCA 317; (2015) 112 IPR 1 ('Dallas Buyers Club') that the Evidence Act should not be applied to preliminary discovery applications by use of the dispensing power in s 190. 147 Some examples of Dr Ibarra's evidence about the use by Pfizer of the patents in the manufacture of ENBREL were contained in paragraph 45 of her first affidavit of 5 January 2017 which was in these terms: '45. As part of my work described above, I have observed that, since 2007, Wyeth Ireland, and then Pfizer Ireland, has manufactured the etanercept for ENBREL® using a serum-free process; that is, a process that uses chemically defined media, and that does not contain foetal bovine serum (the Current Pfizer Process). The Current Pfizer Process has at all times fallen within at least claim 1 of each of the Etanercept Patents.' (emphasis in original) 148 (This evidence also appeared in other parts of her first affidavit). Then at paragraph 9 of her affidavit of 6 February 2017 she said: '9. I refer to the first two columns of Annexure NI-12 of My First Affidavit, and confirm that I am aware, based upon my personal observations of the Current Pfizer Process in the course of my work, that the Current Pfizer Process has each of the features identified in that table as integers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12 of claim 1 of the '034 Patent.' 149 Equivalent evidence was also given in relation to the 036 and 632 Patents. Dr Ibarra then produced a fourth affidavit of 8 February 2017 in which she explained, in relation to the 632 Patent, as follows: '15. I am aware, based upon my personal observations of the Current Pfizer Process in the course of my work, that in the Current Pfizer Process, the etanercept for ENBREL® is produced in a cell culture where the cells are grown at a temperature in a range of 27.0˚C to less than 30.0˚C, and at a pH in a range of 6.80 to less than 7.00, and misfolded proteins and/or aggregated proteins are measured at less than 25% (see also page 1143 in the Cho paper annexed as NI-11 to my First Affidavit, which reports 13.5% to 13.6%) of the protein produced.' 150 Samsung's objection went beyond these particular paragraphs and in its entirety was set out in Annexure A to its notice of contention. The above examples are, however, sufficiently representative to deal with the objection. The objection was that evidence of this kind was inadmissible because it was opinion evidence in respect of which Dr Ibarra had failed to identify the facts or assumptions upon which her opinion had been based (citing Makita; see also Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 at 604 [37]). 151 Section 76(1) of the Evidence Act provides: '76 The opinion rule (1) Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed. …' 152 Subsection (1) contains a prohibition on the use of an opinion 'to prove the existence of a fact about the existence of which the opinion was expressed'. If evidence of an opinion is led to prove a fact about which the opinion is not expressed to be, s 76(1) simply does not apply. There is a specific exception in the Evidence Act to this effect contained in s 77. There are many circumstances in which evidence of an opinion might be led to prove a fact which is not expressed in the opinion. For example, a statutory power of a Minister may be made contingent on the existence of a particular opinion held by the Minister or a question may arise in employment litigation as to whether an employee was dismissed because the employer held a particular opinion about the employee. In both cases, the fact to be proved is the mental state of a person consisting of an opinion, but it is the fact of the opinion, and not the opinion as fact, which is being proved in such circumstances. Consequently, and in an orthodox fashion, s 76(1) is not engaged. 153 In this case, Pfizer was not required to prove the fact that the process by which it made its own ENBREL etanercept product involved the use of the three patents. What it needed to prove was that Mr Silvestri's belief that Pfizer might have a right to obtain relief from Samsung for patent infringement was a reasonable one. The question, therefore, was whether the material before Mr Silvestri or the Court made that belief reasonable. The question of whether Mr Silvestri's belief was reasonable (either on the material before Mr Silvestri himself or subsequently before the Court) was, it is true, a question of fact. However, the reasonableness of that belief was not what Dr Ibarra's opinion was about. It was about ENBREL. Section s 76(1) was, in that circumstance, inapplicable to Dr Ibarra's evidence. 154 Once it is accepted that the fact in issue on a preliminary discovery application is the reasonableness of a belief, this has consequences for a number of exclusionary rules in the Evidence Act. For example, s 59(1) makes inadmissible evidence of a representation made by a person in order 'to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation'. On a preliminary discovery application, it is quite possible that the prospective applicant's belief may have been engendered by what others have said. Evidence of those statements is not caught by s 59(1) because they are not led to prove the truth of the fact asserted but rather the fact of the reasonableness of the belief of the person who heard the representation. It is difficult to see, therefore, that hearsay objections will usually have much purchase in preliminary discovery applications (at least on the question of whether there is a reasonable belief held by the prospective applicant). More is this so when the interlocutory nature of the proceedings is brought to account: Evidence Act s 75. 155 The primary judge concluded that Dr Ibarra's evidence was opinion evidence but admitted it anyway. In doing so, he followed three decisions in this Court which have reached the conclusion that there are difficulties in applying the approach of the Evidence Act to preliminary discovery applications. The first of these is C7 at [17] where Gyles J said: '17. …I should say that I have not limited myself to considering evidence which is in a form which would be strictly admissible at a final trial. During the hearing I ruled that press reports and other hearsay material were not necessarily excluded on that account. The issue against which the admissibility of evidence is to be tested is whether there is reasonable cause to believe that the applicant may have the right to obtain relief. This does not tender an issue of fact in the usual way. Furthermore, the proceeding is, in essence, interlocutory. My approach to the press reports and other hearsay reports (such as judgments of the Court in other cases) is to have regard to them to the extent that they help to fix dates and times of known events, where a sourced fact is reported rather than speculation or opinion, or where, for example, a press release by one of the respondents is reported. Another circumstance where I have had regard to them is where C7 has raised the contents of a press report with a respondent and sought a reaction. A good example of the appropriate use of press reports in this context is the decision of Davies J in Hughes Aircraft Systems International v Civil Aviation Authority (NG 913 of 1994 Fed, 28 June 1995) particularly at pars [8] to [11]. It will become apparent from what follows that I have made limited use of this kind of material.' 156 Tamberlin J applied similar reasoning to conclude in Optiver at 557 [7] that it was 'not appropriate to strictly apply the laws of evidence as if the application for preliminary discovery involved a final hearing of the issues in the prospective substantive application'. I reached a similar conclusion in Dallas Buyers Club at 23 [99]. To the extent that these decisions suggest that the Evidence Act does not apply to a preliminary discovery application they need to be qualified. Section 4(1) of the Evidence Act relevantly provides: '4 Courts and proceedings to which Act applies (1) This Act applies to all proceedings in a federal court, including proceedings that: (a) relate to bail; or (b) are interlocutory proceedings or proceedings of a similar kind; or (c) are heard in chambers; or (d) subject to subsection (2), relate to sentencing. …' 157 An application for preliminary discovery is a proceeding in a federal court, so there can be no room for the view that the Act does not apply to such applications. The point, however, is that once the fact in issue in a preliminary discovery application is identified as the reasonableness of the belief of the prospective applicant, the various exclusory provisions of the Act are likely to have a somewhat qualified application. Of course, it is true that even on a preliminary discovery application there may be ordinary facts in issue such as whether, for example, in a case under FCR 7.22, the prospective applicant is able to identify the wrongdoer. In relation to facts of that kind the difficulties just identified do not arise. 158 In any event, on the evidentiary analysis I prefer, the admissibility of Dr Ibarra's report flows readily. Samsung, however, submitted that before the primary judge the forensic reality was that Pfizer had sought to prove, as a fact, that the Pfizer process used the method of the patents. Regardless of the niceties I have just sought to explain above, Samsung submitted that Pfizer had sought to use Dr Ibarra's evidence to prove facts. 159 There is some support for Samsung's submission. It is at T48-49 at first instance where this exchange between the primary judge and then counsel for Pfizer took place: 'His Honour: Or if you haven't - I was going to raise one point. There seems to be a point being raised about the extent to which the Pfizer process is a process which falls within the claims of each of the patents. Mr Macaw: Yes, yes. His Honour: That's, in particular, an objection to evidence which no doubt we will come to in a moment, but is there anything that - it may be that I've missed your position on that, but - and you've addressed it - but I would benefit from a little of your response to that. Mr Macaw: The admissibility of the evidence, or the relevance of the point? His Honour: Well, the relevance of point. Mr Macaw: Yes. His Honour: As I understand it, the way that the respondent puts it, the underpinning for your entire argument depends on the proposition that the biosimilar was made - or the similarities between the Samsung product and the reference product connotes a similarity of process for the manufacture of the two and that in turn leads to the available inference that the Samsung process infringes the claims. So the argument is contingent on the proposition that the Pfizer process falls within the claims also. Mr Macaw: Yes. Indeed. His Honour: There - so do you accept as the foundational proposition that if you don't make out that as a matter of evidence, you have a problem? Mr Macaw: Yes. Yes, we do. That's the bridge. Your Honour had identified it precisely, with respect. His Honour: Very well. Mr Macaw: That's the relevance.' 160 There is force in Samsung's submission but it needs to be considered in the context of the later debate which then took place about admissibility. This was at T60-61 and involved, inter alia, the contention that the rules of evidence did not apply with the usual strictness to preliminary discovery applications. That discussion cannot be reconciled with the idea that actual facts were being debated. 161 Read in that context, I would read the passage at T48-49 not as an assertion of Dr Ibarra's evidence as a fact but rather only a pragmatic acceptance that her evidence about Pfizer's processes was an essential step in the syllogistic structure of its case. But that did not entail that Pfizer was conceding that it was required to prove that fact on the balance of probabilities and I do not think that, read as a whole, this is what Pfizer sought to do 162 It follows that whilst I agree with the primary judge that Dr Ibarra's evidence was an opinion, it was not inadmissible under s 76(1). Nevertheless, his Honour's conclusion that the material should be admitted was not erroneous. His Honour arrived at that point by waiving the rules of evidence under s 190 of the Evidence Act. On the view I take, this was not necessary as those rules did not prevent the evidence being adduced. It is not necessary to consider Samsung's argument that his Honour erred in considering whether to exercise the power in s 190.

Result 163 For the reasons already given, there is no doubt that Mr Silvestri's belief that Pfizer might have a claim against Samsung was reasonably held. It was supported by Dr Ibarra's evidence which was not shown to have been outlandish or absurd. In principle, therefore, there should be an order for preliminary discovery. 164 I should say for completeness that the primary judge did indicate that had the preconditions to the exercise of the power been established, he would have refused to exercise the discretion in favour of Pfizer. This was on the basis that Pfizer had not revealed the nature of its own production processes so as to allow the testing of the opinion of Dr Ibarra that Pfizer had used the processes in the patents to make ENBREL. The judge recorded Samsung's submission at [174] of the reasons: '174 In the present case, SBA contends that there has been less than full disclosure by Pfizer about the process it uses to manufacture ENBREL. It submits that Dr Ibarra's opinion that the Pfizer process falls within the asserted claims is central to her reasoning, and yet no evidence of that process has been provided. As a consequence, the Court has no evidence to assess whether or not Dr Ibarra's opinion is correct or where within the quantitative boundaries described by the claims the Pfizer Process may sit.' 165 His Honour then observed at [175] that the submission 'has some force' and that Samsung was thereby denied the opportunity 'to test the correctness of the conclusion' (my emphasis). Although it is not necessary to express a view on these obiter remarks, it may be that the focus should not have been on the correctness of Dr Ibarra's view but instead on the reasonableness of the belief held by Mr Silvestri based on the view that Pfizer may have had a right to obtain relief. Again, the primary judge's approach seems understandably to have been heavily influenced by John Holland. 'Testing' ordinarily has no place in preliminary discovery applications. 166 Samsung sought an opportunity to make further submissions on the form of any orders in the event that the appeal was allowed. In my opinion, it would be best for that issue to be remitted to the primary judge. 167 I would make the following orders:

1. The Prospective Applicants be granted leave to appeal.
2. The appeal be allowed.
3. Set aside the orders made by the primary judge on 21 March 2017 and in lieu thereof order that the Prospective Respondent give the Prospective Applicants preliminary discovery on terms to be the subject of further orders.

NICHOLAS J: 168 I have had the advantage of reading the reasons for judgment of Allsop CJ and Perram J. I agree that leave to appeal should be granted, that the appeal should be allowed, and that the primary judge's orders should be set aside. I think the preferable approach is to remit the proceeding to the primary judge so that he may hear from the parties in relation to the scope of the preliminary discovery to be ordered and the mechanisms to be adopted for preserving any confidentiality in the material to be produced in accordance with his orders. 169 The background to the application for leave to appeal, including the terms of the applicable rule of court (r 7.23) and its predecessor (O 15A, r 6) and the primary judge's detailed reasons for dismissing the application for preliminary discovery are set out in the reasons for judgment of both the Chief Justice and Perram J. 170 The former rule used the expression "reasonable cause to believe". In the context of the former rule these words ensured that an order for preliminary discovery could only be made pursuant to the rule if there existed grounds sufficient to induce in a reasonable person the requisite belief. Previous decisions concerned with the former rule held that the evidence in support of an application for preliminary discovery need not demonstrate that the prospective applicant held the requisite belief: Austrac Operations Pty Ltd (in liq) v New South Wales [2003] FCA 1013 at [10]. However, the language of the current rule makes clear that the prospective applicant must hold the requisite belief at the time of making the application. 171 Leaving that difference aside, there does not appear to me to be any basis for holding that the current rule was intended to change the requirements that must be satisfied before the discretion to make an order for preliminary discovery is enlivened. Nor do I see any basis for concluding that the existing rule was intended to disturb what was, by the time the Federal Court Rules 2011 (Cth) came into operation, the settled principles governing the application of the former rule. 172 In St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 ("St George") Hely J distilled a number of propositions which he said emerged from the authorities in which the proper application of O 15A, r 6 was considered. The following five propositions, as set out by his Honour, are directly relevant to the present matter: (a) the rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the court, exercised in the particular circumstances of each case: Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 at 733; 20 IPR 79 at 85; Minister for Health and Aged Care v Harrington Associates Ltd [1999] FCA 549 at [27]; (b) each of the elements prescribed in subparas (a), (b) and (c) of the rule must be established: Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 11 [38]; 167 ALR 385 at 367; 47 IPR 21 at 30. Preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves: Airservices Australia v Transfield Pty Ltd (1999) 92 FCR 200 at 202-3 [5]; 164 ALR 330 at 332; (c) the test for determining whether the applicant has "reasonable cause to believe", as required by subpara (a), is an objective one: Hooper at FCR 11-12 [39]; ALR 367; IPR 30; Malouf v Malouf [1999] FCA 710 at [16]; Quanta Software International Pty Ltd v Computer Management Services Pty Ltd (2000) 175 ALR 536 at 541-2 [24]; 49 IPR 25 at 31; Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 391 at 23. Further, the words "or may have" cannot be ignored. The applicant does not have to make out a prima facie case: Quanta Software at ALR 541-2 [24]; IPR 31; Paxus Services at ALR 733; IPR 85; (d) belief requires more than mere assertion and more than suspicion or conjecture. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action: John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 at [13], [14], [17] and [73]; (e) while uncertainty as to only one element of a cause of action might be compatible with the "reasonable cause to believe" required by subpara (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe: Glowatzky v Insultech Group Pty Ltd (1997) 39 IPR 215. 173 The central question in St George was whether there was reasonable cause to believe that the first prospective respondent (Rabo) or the second prospective respondent (Rabo CF) deliberately withheld information from the prospective applicant (St George) concerning the parlous financial position of a banking customer. 174 Hely J did not refuse to grant the prospective applicant any preliminary discovery. Rather, his Honour considered that the requirements for preliminary discovery were satisfied in respect of some postulated claims for relief but not others. As to those in respect of which his Honour was not so satisfied, it is apparent that his Honour was of the view that the evidence did not suggest that Rabo or Rabo FC deliberately failed to disclose information known by them to St George. It is tolerably clear from a reading of his Honour's reasons as a whole that his conclusion was that the evidence did not establish a reasonable basis to believe that St George either was or may be entitled to relief on the basis of any such deliberate withholding of information. As to this, his Honour said at [28] "…at its lowest level, subpara (a) requires that there be reason to believe that the applicant may have the right to obtain relief in this court in relation to those claims". Referring to the possibility that either Rabo or Rabo FC may have deliberately withheld relevant information from St George, his Honour said at [29]: If the evidence established that Rabo and/or Rabo CF had relevant information which was withheld from St George, otherwise than inadvertently, then the requirements of subpara (a) of the Rule may well be satisfied in relation to a foreshadowed claim. But the authorities establish that the bare possibility that Rabo and/or Rabo CF may have deliberately withheld material information from St George is insufficient to enliven the operation of the rule. While St George does not need to go so far as to establish a prima facie case, St George does have to establish that there is reasonable cause to believe that each of the necessary elements of a potential cause of action exists. The evidence must incline the mind to the view that Rabo and/or Rabo CF deliberately withheld material information from St George. The threshold test under subpara (a) may be set at quite a low level (Gull Petroleum (WA) Ltd v Tah Land Pty Ltd [2001] FCA 1531; BC200107024) but, as I said earlier, it is not sufficient to point to a mere possibility that St George may have a claim, when that claim is completely dependent on the as yet unknown facts. The fact that the evidence before his Honour did not eliminate the possibility that Rabo or Rabo FC deliberately withheld information from St George was not sufficient to enliven the discretion to grant preliminary discovery relevant to a claim for relief based on such a hypothesis. 175 Hely J's reasons at [28]-[29] recognise the nature of belief and the important role it plays in the operation of the rule. Belief is not the same as suspicion. As the High Court explained in George v Rockett (1990) 170 CLR 104 at 115-116: Suspicion, as Lord Devlin said in Hussien v. Chong Fook Kam [[1970] AC 942 at p 948], "in its ordinary meaning is a state of conjecture or surmise where proof is lacking: 'I suspect but I cannot prove.'" The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown. […] The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture. 176 In that case the High Court was concerned with the requirement that a magistrate issuing a search warrant have reasonable grounds for believing that the subject matter of the search warrant would afford evidence of the commission of an offence. Neither the current nor the former rule require anything quite so definite. Nevertheless, in my opinion, a requirement that a person reasonably believe that a particular state of affairs may exist will not be satisfied by evidence that does not incline the mind to the existence of that state of affairs. 177 The function of the words "or may have" in the former rule was to make clear that the relevant belief need not incorporate a firm view that there is a right to relief. This was the view expressed by French J in East Grace Corporation v Xing (No 2) [2005] FCA 1266 at [36], which was later endorsed by a Full Court in Telstra Corporation Limited v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64 at [58]. Consistently with that view, I do not think those words were intended to allow a prospective applicant to obtain an order for preliminary discovery in circumstances where there existed nothing more than a mere possibility that the prospective respondent may have engaged in conduct which, if proven, would entitle the prospective applicant to relief. 178 Hely J's summary of the relevant principles in St George has been applied in many previous cases both before and after the introduction of the current rule including by Full Courts in Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 and Apache Northwest Pty Ltd v Newcrest Mining Ltd [2009] FCAFC 39; (2009) 182 FCR 124 ("Apache"). His Honour's decision has also been applied by the New South Wales Court of Appeal in the context of r 5.3(1) of the Uniform Procedural Rules 2005 (NSW); see, for example, Hatfield v TCN Channel Nine Pty Ltd [2010] NSWCA 69. However, as Flick J rightly observed in Apache, there is a danger in too readily applying Hely J's summary rather than focusing on the words of the rule itself. As his Honour said at [63]: … Certainly, his Honour would have been the first to agree that it is the terms of r 6 which must be applied. The propositions of his Honour remain a very valuable guide as to those considerations which should be addressed and the manner in which those considerations should be applied when making an order for preliminary discovery. The greater the uncertainty there may be in respect to one or other of the elements of the cause of action being advanced, the greater may be the judicial reluctance to accept that an applicant has a "reasonable cause to believe"; the greater the certainty as to one or other of the principal elements of a cause of action, the less reason there may be to question the reasonableness of an applicant's belief that he "may have" a cause of action. The rule remains a rule to be "beneficially construed". To adopt a too inflexible approach to the rule may be to deny the utility of preliminary discovery in those circumstances where it is most needed. 179 The principal submission of the applicants (collectively, "Pfizer") was that the authorities, including the decision in St George, were misapplied by the primary judge who was said to have directed himself to a higher standard than is required to satisfy the relevant rule. In my opinion, this submission should be accepted. 180 I agree with the Chief Justice that the evidence established that there were reasonable grounds for Pfizer to believe that it may have a right to relief for patent infringement. That the respondent ("SBA") or its supplier may have used a method within one or more of the broadly defined claims of the patents was more than a mere possibility or mere speculation. Dr Ibarra's evidence pointed clearly in that direction and provided a rational basis for believing that the relevant methods may have been used to make SBA's BRENZYS product. I also agree that, given the nature of the proceeding before the primary judge, which was interlocutory in character, and which did not require Pfizer to establish a prima face case of patent infringement, it was not open to his Honour to dispose of Pfizer's application on the basis that he preferred the evidence of SBA's expert witnesses to that of Dr Ibarra, or that their evidence was more persuasive than her evidence. Even if the primary judge was of that view, that could not of itself provide the answer to the question whether Pfizer reasonably believed that it may have the right to obtain relief for patent infringement. 181 The only other matter about which I wish to make some additional observations concerns the admissibility of Dr Ibarra's evidence that Pfizer's ENBREL product was manufactured using a process falling within the relevant claims of the patents. 182 I agree with the Chief Justice for the reasons he has given that this evidence of Dr Ibarra, which had been relied upon by Mr Silvestri in forming his view, was admissible to establish the grounds for Mr Silvestri's belief. Having been correctly admitted into evidence, this material was also capable of supporting a finding that there were reasonable grounds to believe that SBA's BRENZYS product may have been manufactured using one or more of the methods claimed in the patents. Of course, the position would have been different had an order been made under s 136 of the Evidence Act 1995 (Cth) precluding the use of such material for that purpose. 183 Once admitted into evidence, Dr Ibarra's opinion that Pfizer's ENBREL product was manufactured in accordance with one or more of the claims of the patents should have been given weight. Her evidence disclosed that she was familiar with the patents and Pfizer's manufacturing processes, and that she had the necessary technical knowledge and experience to give probative evidence relevant to that topic. Given that her evidence was otherwise admissible, it was not necessary for Pfizer to advance it in a form required to ensure its admissibility at a trial of an infringement proceeding. I also agree with the Chief Justice that the form of Dr Ibarra's evidence does not provide any basis for refusing to make an order for preliminary discovery in favour of Pfizer on discretionary grounds. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas.