Grains of Justice | Preliminary discovery order extended to wheat product samples in CSIRO case

Commonwealth Scientific and Industrial Research Organisation v Urrbrae Foods Pty Ltd [2023] FCA 504

15 May 2023

Federal Court of Australia

Moshinsky J

The Court has held that it has the power to order the production of samples for testing (as well as documents) under the preliminary discovery rule for the purposes of assisting the patentee to determine whether to commence proceedings for infringement.

Background

CSIRO is the registered co-owner of two Australian patents relating to (i) wheat grain with reduced SBE II enzyme or activity amylose content and (ii) methods of improving bowel or metabolic health by virtue of such a grain (Australian Patent Nos. 2005321754 and 2004252186).

Starch branching enzyme (SBE II) is an enzyme in wheat  involved in starch synthesis.  Starch, the primary carbohydrate in wheat grain, is generally made up of amylose and amylopectin.  SBE II has the ability to alter the content of amylose within the wheat structure, so as to improve the product’s potential to improve gut health.

In July 2022, CSIRO applied to the Court for an order for preliminary discovery by Urrbrae, seeking documents and production samples of wheat products, for the purpose of deciding whether to commence patent infringement proceedings against Urrbrae.  Urrbrae consented to an order for preliminary discovery and produced the requested documents (but not the requested samples) in February 2022.  Having reviewed the documents and forming the view that it did not have sufficient information to determine whether to commence proceedings, the balance of CSIRO’s application (for the production of samples) was heard.

CSIRO sought and secured orders for the production of a randomly selected and representative 50g sample of viable seeds of the Urrbrae wheat products from its most recent commercial harvest, together with details of the date and place of harvest.  CSIRO proposed to test for SBE II protein levels.

The Court held that it has the power to order the production of product samples for testing under the preliminary discovery rule (which on its face is limited to the production of documents), for the purposes of assisting the patentee to determine whether to commence proceedings for patent infringement.  The decision is now under appeal by Urrbrae.

Key Issues

Preliminary Discovery Orders Apply to Product Samples and Documents

An entity that suspects infringement of its patent may seek an order for preliminary discovery of documents under rule 7.23 of the Federal Court Rules 2011, to determine whether to commence proceedings.  Importantly, rule 7.23 expressly refers only to documents.

CSIRO’s application for preliminary discovery of samples was based on rule 14.01, which permits a party to apply to the Court for an order for inspection, sampling, observation, or experiments on property relevant to the proceeding.  Rule 14.01 is not specific to preliminary discovery applications and applies to a ‘party’.

Urrbrae submitted that as documents had been produced, CSIRO’s discovery application was completed and the effect of rule 14.01 was limited to orders to assist in resolving issues in the preliminary discovery proceeding and not for the purpose of deciding whether to commence proceedings.

Complicating the picture was the fact that the wording of the above rules (or their equivalents) had changed slightly between those applicable at the time the patent applications were filed, and those now in force.

Power to Order Preliminary Discovery of Samples Existed Under Old Rules and Exists Under New Rules

In finding that it has the power to order preliminary discovery in relation to samples in addition to documents, the Court compared the wording of the former rules with the current wording, noting that the explanatory memorandum for the Federal Court Rules 2011 expressed that the provisions “adopt, simplify and streamline the process and procedures which operated under the former Rules and do not substantially alter existing practice.”

The Court noted that although the legal question regarding power raised by Urrbrae had not been raised previously, orders of this nature had been made in two previous cases, one under the old rules¹ and one under the new rules.²

With this in mind, Moshinsky J found that there was power under the former O 15 r 12, and there is power under the current r14.01 to make an order for the production of samples to assist an applicant to determine whether to commence proceedings.   He considered that in preliminary discovery proceedings it may well be the case that production of documents is insufficient for a prospective applicant to determine whether to commence infringement proceedings and that testing of samples may be required.

The Court issued the orders for production of samples for testing, and Urrbrae appealed the decision.

Implications

Subject to the outcome of the Urrbrae appeal, preliminary discovery orders in the Federal Court may relate to both documents and product samples.   This is particularly pertinent in relation to technologies where claimed aspects of a product’s specifications or manufacture are not readily discernible from the finished/marketed product or other documents.

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¹ SmithKline Beecham plc v Alphapharm Pty Ltd [2001] FCA 271

² GlaxoSmithKline Australia Pty Ltd v Pharmacor Pty Ltd [2014] FCA 1202

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