Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia

1. The subpoena issued on 19 March 2020 addressed to Peter Crowhurst be set aside.
2. The first respondent pay the applicant's costs in relation to the interlocutory application dated 27 March 2020. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

(Revised from transcript) YATES J: INTRODUCTION 1 By interlocutory application dated 27 March 2020, the applicant, Vehicle Monitoring Systems Pty Limited, seeks to set aside a subpoena addressed to Peter Crowhurst. The subpoena was issued at the request of the first respondent, SARB Management Group Pty Ltd, which is also the cross-claimant in the proceeding. The subpoena was issued on 19 March 2020 and seeks the production of the following documents: Documents, both hardcopy and electronic copy in the possession, power or control of Peter Crowhurst evidencing or recording his involvement in the development of the alleged inventions the subject of Australian Patent No. 2005243110 titled "Method, apparatus and system for parking overstay detection" and Australian Patent No 2011204924 titled "Method, apparatus and system for parking overstay detection" … 2 The subpoena was issued in the following circumstances. The applicant sues the first respondent and the second respondent, the City of Melbourne, for infringement of the two patents. The first respondent/cross-claimant (the cross-claimant) has cross-claimed seeking revocation of each patent. 3 As to the first-mentioned patent (the 110 patent), the cross-claimant alleges that the invention as claimed lacks an inventive step; the complete specification does not comply with s 40(2)(a) of the Patents Act 1990 (Cth) (the Act) in that it does not fully describe the invention and does not include the best method of performing the invention; and claim 29 thereof is not clear. 4 As to the second-mentioned patent, the cross-claimant alleges that the invention as claimed in claims 1 to 25 and 27 to 29 is not novel if the priority date of those claims is not earlier than 21 July 2011; the invention as claimed does not involve an inventive step; and the complete specification does not comply with s 40(2)(a) of the Act in that it does not fully describe the invention and does not include the best method of performing the invention. 5 The applicant moves under r 24.15(1) of the Federal Court Rules 2011 (Cth) which provides: The Court may, on the application of a party or any person having a sufficient interest, set aside a subpoena in whole or in part, or grant other relief in relation to it. 6 The cross-claimant supports the subpoena on the basis that, following discussions with Mr Crowhurst on 24 January and 17 February 2020, the cross-claimant's solicitors formed the view that the cross-claimant was likely to have grounds to include an additional particular of invalidity in respect of the two patents, namely that the applicant was not entitled to the patents: see s 138(3)(a) of the Act. 7 This view is based on the following facts obtained from Mr Crowhurst. Mr Crowhurst said that he had worked with Fraser Welch and Paul Rolfe to develop a parking overstay detection system. The purpose of the parking overstay detection system was to determine whether vehicles had overstayed parking limits, and to communicate this to parking enforcement officers. Mr Welch subsequently applied for a patent in respect of the parking overstay detection system on which Mr Crowhurst had worked (with Mr Welch) to develop. Mr Crowhurst was not named as an inventor in the patent application; nor was Mr Rolfe. Mr Crowhurst says that he believes that he should have been named as an inventor, based on his involvement in the development of the parking overstay detection system. He said that he had not assigned his rights in the parking overstay detection system to Mr Welch or to the applicant or anyone else, and that he has contemporaneous documents, including design notes, recording his involvement in the development of the parking overstay detection system. 8 Mr Ottaway is a solicitor and senior associate at the cross-claimant's solicitors. He has sworn an affidavit on information and belief in which he has deposed to a conversation with Mr Crowhurst in which the above facts were revealed. However, he has also deposed that, given the passage of time since "the events in question" (by which I take him to mean the events outlined above), neither he nor his colleagues consider it possible, without reviewing the documents sought by the subpoena, to reach a final view on whether the applicant's entitlement to the two patents can be challenged. 9 Mr Ottaway's evidence is that Mr Crowhurst has collected documents which respond to the subpoena. However, Mr Crowhurst is concerned that some of the documents might be subject to a non-disclosure arrangement between himself and the applicant. The terms of the asserted non-disclosure arrangement are not in evidence. 10 The cross-claimant's solicitors have engaged in correspondence with the applicant's solicitors regarding the documents. They have sought the applicant's consent to Mr Crowhurst's disclosure of the documents, under a confidentiality regime if need be. The question of consent to disclosure was first raised by the cross-claimant's solicitors the day before the cross-claim was due to be filed. The cross-claimant took the forensic decision to file its cross-claim without raising entitlement as a ground of invalidity. As events have transpired, the applicant's consent to disclosure of the documents has not been forthcoming. 11 The applicant submits that the subpoena should be set aside because it has been issued for an improper purpose. The documents sought do not have an apparent relevance to the issues raised in the pleadings and the cross-claimant's purpose in seeking its issue was to enable it to engage in a "fishing" exercise to see whether, in substance, it does have a case that the applicant is not entitled to the two patents. The applicant argues that the subpoena is an impermissible attempt to seek preliminary discovery from a non-party. 12 I accept those submissions. The question of apparent relevance is determined principally by recourse to the pleadings, not by whether the party issuing the subpoena is presently in possession of some evidence supporting it: Bailey v Beagle Management Pty Ltd [2001] FCA 60; 105 FCR 136 at [28]; Wong v Sklavos [2014] FCAFC 120; 319 ALR 378 at [12]. There is no issue before the Court concerning the applicant's entitlement to the patents. Raising a potential issue in correspondence between the parties, such as here, does not mean that the issue is a justiciable one that would support the issue of a subpoena seeking documents directed to that issue. 13 I would add that the somewhat skeletal information provided in Mr Ottaway's affidavit does not, in any event, rise above a statement that Mr Crowhurst worked with the two other gentlemen to develop a parking overstay detection system and a mere assertion that he, Mr Crowhurst, believes that he should have been named as an inventor. Those facts alone provide little support to challenge a patentee's entitlement to a patent. I also note that the 110 patent was granted on 13 March 2008. There is no evidence before me that Mr Crowhurst has raised the issue of entitlement before now. 14 In the absence of some articulated claim on the pleadings, I do not see how the subpoena can be used for the purpose for which the cross-claimant seeks to use it. In my view, it constitutes an abuse of the Court's process. 15 The applicant raised an argument to the effect that Mr Ottaway's affidavit did not address the requirement of s 138(4) of the Act that a patent should not be revoked on entitlement grounds unless, in all the circumstances, it is just and equitable to do so. It is not necessary for me to address that submission. 16 For these reasons, the subpoena should be set aside, with costs to follow the event. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.