Biosimilars Deals 2021

Highlight

This decision concerns the apportionment of costs arising from the substantive decision in Miele & Cie KG v Bruckbauer [2025] FCA 537 (27 May 2025) (Substantive Decision). Justice Rofe considered the appropriate apportionment of costs where Bruckbauer had rejected a Calderbank offer from Miele but ultimately failed in its infringement case, and where Miele had made certain strategic choices which resulted in higher evidence costs being incurred by both parties but with no effect on the overall result of the case.

Background

In the Substantive Decision in May 2025, Miele succeeded in revoking relevant claims of Bruckbauer’s patent AU2012247900 entitled “Hob with central removal of cooking vapours by suction-extraction in the downward direction” (the Patent), which Bruckbauer claimed were infringed by Miele’s cook-top hobs. The revocation of the relevant claims meant that Miele’s cook-top hobs did not infringe Bruckbauer’s Patent.

In the course of the infringement proceedings, and after the close of evidence, Miele served Bruckbauer with a Notice of Offer to Compromise together with a Calderbank offer. The Notice and Calderbank offer together proposed resolution of the proceedings, including that Bruckbauer would pay Miele’s costs in the sum of AUD $250,000, and that the parties would take all necessary steps to facilitate suitable orders being made by the Court to support the resolution of the matter and the payment of costs to Miele. Bruckbauer rejected the offer but subsequently failed in its infringement case.

Key Issues and Consideration

Since Miele succeeded in the Substantive Decision, Miele was entitled to costs. As a result of the Notice and Calderbank offer, Miele argued that it was entitled to indemnity costs. The parties disagreed on two issues affecting the apportionment of costs, namely whether:

1. Miele’s recoverable costs should be discounted due to Miele’s lack of success in relation to certain issues argued in the case (the Chinese Amendments); and

2. Miele should be awarded a portion of its costs on an indemnity basis due to the rejected Calderbank.

In relation to the first point, Miele had argued in the substantive proceedings that the Chinese Amendments (which were amendments made by Bruckbauer to one of its Chinese patent applications) were publicly available in 2015 and disclosed the invention claimed in the Patent, therefore making the relevant claims of the Patent invalid. This argument was ultimately unsuccessful but resulted in a substantial amount of evidence being dedicated to the Chinese Amendments, including unscheduled evidence from Miele which was served days before the start of the trial. Justice Rofe found that a significant portion of the trial was devoted to the issue of the public availability of the Chinese Amendments and the trial was extended due to issues with interpreter-related delays (i.e. lengthening of cross examination due to translation of questions and answers) and uncooperative conduct from witnesses on both sides. Justice Rofe found that it was appropriate to reduce Miele’s costs by 15%, as Miele had initiated the Chinese Amendments issue and the related line of evidence, which ultimately did not add any value to Miele’s invalidity case against the Patent. Accordingly, her Honour considered that the costs would not have been incurred had the issue of the Chinese Amendments not been raised.

In relation to the second point, Justice Rofe considered whether Miele was entitled to indemnity costs under Rule 25.14(3) of the Federal Court Rules 2011 (Cth), which provides:

(3) If an offer is made by an applicant and not accepted by a respondent, and the applicant obtains a judgment that is more favourable than the terms of the offer, the applicant is entitled to an order that the respondent pay the applicant’s costs:

(a) before 11.00 am on the second business day after the offer was served–on a party and party basis; and

(b) after the time mentioned in paragraph (a)–on an indemnity basis.

Bruckbauer argued that, the Substantive Decision was not more favourable to Miele than what was proposed by Miele under the offer, that the offer was not a genuine compromise and, for those reasons it was reasonable for Bruckbauer to reject the offer. Justice Rofe disagreed, saying that Miele had achieved a more favourable judgment than what was proposed in the offer. Her Honour also considered that no exceptional circumstances existed which would justify an order inconsistent with the Federal Court Rules. Justice Rofe was of the view that the Calderbank offer, which explained why Miele believed it would succeed at trial, constituted a genuine offer of compromise as there was little else that Miele could offer to Bruckbauer by way of compromise and that, by the time Miele extended the offer, Bruckbauer should have been aware that its infringement case was weak. As a result, no exceptional circumstances were established.

Outcome and Implications

Bruckbauer was ordered to pay 85% of Miele’s costs on an indemnity basis from the second business day after the offer was served on Bruckbauer. Miele’s overall costs were discounted by 15% because it had chosen to pursue the Chinese Amendments issue and the associated line of evidence which ultimately had no impact on the outcome of the case.

Justice Rofe’s decision highlights the impact that evidentiary decisions and offers of compromise can have on the extent of the ultimate costs orders. This is of great significance given the high cost of patent litigation in Australia.

About Pearce IP

Pearce IP is a specialist firm offering intellectual property specialist lawyers and attorneys with a focus on the life sciences industries.  Pearce IP and its leaders are ranked in every notable legal directory for legal, patent and trade mark excellence, including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, 5 Star IP Lawyers, among others.

In 2025, Pearce IP was recognised by Australasian Lawyer and New Zealand Lawyer’s 5 Star Employer of Choice, and is the “Standout Winner” for inclusion and culture for firms with less than 100 employees. Pearce IP was awarded “IP Team of the Year” by Lawyers Weekly at the 2021 Australian Law Awards. Pearce IP is recognised by Managing IP as the only leading ANZ IP firm with a female founder, and is certified by WEConnect International as women owned.

Oxford Nanopore Technologies Plc v MGI Australia Pty Ltd (No 2) [2025] FCA 869

Highlight

Justice Jackman has confirmed that, in the context of a preliminary discovery application, where a prospective applicant vacates a hearing date and the prospective respondent has incurred costs in preparing for the vacated hearing, the question of costs should be determined later, either in the course of disposing of the preliminary discovery proceedings or in any substantive patent infringement proceedings that are later commenced. As a result, MGI Australia failed in its application for costs incurred in preparing for the vacated preliminary discovery hearing.

Background

In March 2025, Oxford Nanopore Technology (ONT) commenced an application for preliminary discovery from MGI Australia (MGI) in order to decide whether to commence patent infringement proceedings against MGI. Since December 2024, MGI had refused to provide samples of its nanopore sequencing devices to ONT so that ONT could determine whether ONT’s patents were infringed by those devices. In the course of these proceedings, the hearing of the application for preliminary discovery was listed for 24 July 2025 and MGI had filed evidence in answer to the application on 28 May 2025.

In late June 2025, ONT informed MGI that it had been able to independently acquire some, but not all, of the materials the subject of the application and that ONT expected to have sufficient basis to commence substantive proceedings for patent infringement. On 4 July 2025, the parties proposed that, among other things, the hearing listed for 24 July 2025 be vacated and that the current proceedings be stayed for three (3) months so that ONT could decide whether to file substantive proceedings within that three (3) month period. In addition to those proposed orders, MGI proposed that ONT pay MGI’s costs incurred in preparing for the vacated hearing. ONT opposed this order, so Justice Jackman indicated that he would decide the matter on the papers, with parties to make suitable submissions.

Key Issues

The key issue under consideration was whether ONT should be responsible for MGI’s costs in preparing for the hearing that was vacated. MGI’s position was that ONT would ordinarily be required to pay costs thrown away by its application and vacated hearing, while ONT’s position was that MGI’s costs were reasonably incurred as the work done would be useful for the purpose of a hearing if substantive proceedings were commenced. ONT argued that any order for costs would be premature and should be deferred until ONT commenced substantive proceedings as ONT expected to rely on MGI’s behaviour in refusing to provide samples of the allegedly infringing devices when requested. If substantive proceedings were not commenced in due course, the costs of the preliminary discovery application would be determined as part of the disposal of the application.

Outcome

Justice Jackman accepted ONT’s submission that an order for costs would be premature as, at the time the hearing was scheduled, MGI had resisted ONT’s requests to produce relevant material, thereby necessitating the preliminary discovery application. His Honour ordered that the question of costs should be reserved for later determination, either in the course of disposing of the current proceedings or in any substantive proceedings that ONT commenced, given that MGI’s conduct between December 2024 and June 2025 in refusing to provide samples had played a part in ONT commencing the application for preliminary discovery.

Implications

This decision turns on the fairly specific circumstances of a hearing for an application for preliminary discovery being vacated because the patentee had been able to independently obtain evidence that would allow it to determine whether substantive proceedings should be commenced. Parties to patent proceedings are required to act with an overarching purpose of facilitating the just resolution of a dispute as quickly, inexpensively and efficiently as possible, and often this assessment cannot be made until all of the relevant circumstances have been revealed.

Subsequent developments

The application for preliminary discovery was withdrawn on 18 September 2025, with ONT commencing patent infringement proceedings against MGI on 6 August 2025.

About Pearce IP

Pearce IP is a specialist firm offering intellectual property specialist lawyers and attorneys with a focus on the life sciences industries.  Pearce IP and its leaders are ranked in every notable legal directory for legal, patent and trade mark excellence, including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, 5 Star IP Lawyers, among others.

In 2025, Pearce IP was recognised by Australasian Lawyer and New Zealand Lawyer’s 5 Star Employer of Choice, and is the “Standout Winner” for inclusion and culture for firms with less than 100 employees. Pearce IP was awarded “IP Team of the Year” by Lawyers Weekly at the 2021 Australian Law Awards. Pearce IP is recognised by Managing IP as the only leading ANZ IP firm with a female founder, and is certified by WEConnect International as women owned.

Introduction

Newron Pharmaceuticals S.p.A. (Newron) and Zambon S.p.A (Zambon) have succeeded in their preliminary discovery application against Arrotex Pharmaceuticals Pty Ltd (Arrotex) in the Federal Court of Australia.  Newron and Zambon sought production of documents from Arrotex, for the purpose of deciding whether to commence court proceedings for actual or threatened infringement of two patents relating to the product and the process of producing high purity safinamide (which contains two particular impurities at a level less than 0.03% by weight).  Safinamide is the active ingredient in Xadago®, which is used in the treatment for moderate-to-late-stage Parkinson’s disease.

Justice Needham’s decision illustrates the ease with which patentees are able to obtain preliminary discovery in the Federal Court of Australia given the low bar set by rule 7.23 of the Federal Court Rules 2011 (Cth).

Background

In their preliminary discovery application, Newron and Zambon sought production of documents from Arrotex, for the purpose of deciding whether to commence court proceedings for actual or threatened infringement of two patents relating to the product and the process of producing high purity safinamide.  Arrotex had four Australian Register of Therapeutic Goods (ARTG) registrations for safinamide products which had been approved as generic versions of Xadago®.  Arrotex expected to start supply in the near future, following the listing of its products on the PBS.

Rule 7.23 provides that a party may apply to the Court for a preliminary discovery order if that party:

a) reasonably believes that it may have the right to obtain relief in the Court from another person or entity whose description has been ascertained;

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 other person or entity has or is likely to have or has had or is likely to have had in their control documents directly relevant to the question whether the first party has a right to obtain the relief; and

ii. inspection of the documents by the first party would assist in making the decision.

In interpreting rule 7.23, the Full Court (Allsop CJ, Perram and Nicholas JJ) in Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd (2017) 257 FCR 62 (Pfizer) stated that:

• rule 7.23 is a beneficial provision, which enables a person who believes they may have a right to seek relief to obtain information to make a responsible decision as to whether to start court proceedings;
• the party seeking preliminary discovery must prove that it has a belief that it may (not does) have a right to relief, and 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;
• the question of whether the belief is reasonable requires one to ask whether a person, in light 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
• to defeat a claim for preliminary discovery, the party from who discovery is sought will need to show, either 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. That may be done by demonstrating that no reasonable person, faced with the evidence relied on by the prospective applicant, would think that a right to relief might exist.

Newron and Zambon relied on the evidence of Zambon’s General Counsel, Ms De Dominicis, who was the person “primarily responsible for making legal decisions on Zambon’s behalf relating to its concerns” about the possible infringement of the patents.  Ms De Dominicis stated in her evidence that she inferred that the Arrotex products must have been approved on the basis of bioequivalence with Xadago®, and that there was nothing in the material available to her which would lead her to believe that the Arrotex products differed from Xadago® in terms of efficacy and safety.  Accordingly, she believed, but did not know, that the Arrotex products might contain high purity safinamide, and/or might be made using the patented processes.

Arrotex principally relied on the expert evidence of Professor Michael Roberts, an Emeritus Professor of Clinical Pharmacology and Therapeutics at the University of Queensland, and Emeritus Professor of Therapeutics and Pharmaceutical Science at UniSA Clinical and Health Science.  Professor Roberts stated, in his evidence (amongst other things), that determination of bioequivalence did not require determination of whether two drug products have the same or similar levels of impurities, and that there was no reason to believe the percentage of the impurity in the Arrotex products might be below the claimed threshold, because even amounts of the impurity far above that threshold would still result in blood plasma concentrations so low as to be therapeutically meaningless.

Key Issues

The key issue for Justice Needham’s determination was whether Newron’s and Zambon’s belief that they may have a right to relief against Arrotex was reasonable.

In short, her Honour found that Newron’s and Zambon’s belief was reasonable, or, in other words, was not a belief based on “unreasonable, untenable, irrational or baseless” considerations or views.  In reaching this view, Justice Needham noted that rule 7.23 must be applied in a way which gives full weight to its purpose, which is to allow a person to make up their mind whether to commence proceedings.  Her Honour further noted that Newron and Zambon did not need to establish a prima facie case of patent infringement, and that the relevant question was not whether one scientific view was more or less persuasive than another.

Her Honour considered that, giving the views of Professor Roberts the appropriate weight, in the context of the preliminary discovery application, Newron’s and Zambon’s evidence did not demonstrate affirmatively that the safety level of impurities in safinamide was lower than 0.03%, nor did it demonstrate affirmatively that the bioequivalence of the Arrotex products meant that they were the same high purity formulation as Xadago®.  However, her Honour did not consider that she needed to be persuaded to that level.  Instead, her Honour considered that, given the range of scientific views expressed in the patents and Newron’s and Zambon’s evidence, and that given that the Arrotex products did contain safinamide, there was a reasonable basis for the belief that Newron and Zambon might have a right to relief.

Justice Needham did not find persuasive Arrotex’s argument that, as the Therapeutic Goods Administration did not recognise the 0.03% impurity level as a safety threshold, Ms De Dominicis’ belief was unreasonable.  Nor did her Honour accept Arrotex’s submission that bioequivalence of the prospective parties’ products, and reliance on the same testing for each products’ Product Information, did not give rise to a belief that the impurity factor may be present.  Neither ruled out the possibility that the claimed impurity level might be present.

Her Honour also considered Professor Roberts’ reasoning to be circular when he stated that, as his calculations were that safinamide with higher impurity levels were not toxic, then there was no reason to believe that the Arrotex products were high purity products.  To the contrary, her Honour considered that it was equally open to believe that they might be high purity products.  Her Honour also noted that Professor Roberts’ analysis was based on his calculations of toxicity by reason of blood plasma concentrations in vivo, and that in the context of the preliminary discovery application, her Honour had not been able to accept that the calculations on the various assumptions were unassailable.

Accordingly, her Honour held that, when all of the evidence was considered, including the expert evidence of Professor Roberts, a belief that Newron and Zambon might be entitled to relief appeared to be reasonable; that is, it is not a view that could not be held by any reasonable person.

Outcome and Implications

Her Honour ordered Arrotex to provide preliminary discovery, with her Honour then ruling on the access regime for the production of documents by Arrotex and on the issue of costs in a short subsequent judgment.  On the issue of costs, her Honour ordered that the costs of the preliminary discovery application be costs in the cause of any infringement proceedings, but should no infringement proceedings be commenced, then there be no order for the costs of the preliminary discovery application, with the intent that each party bear their own costs.

Justice Needham’s decision applies the principles set out by the Full Court in the Pfizer decision as to the factors relevant to a preliminary discovery application.  Her Honour’s decision illustrates the ease with which patentees are able to obtain preliminary discovery in the Federal Court of Australia given the low bar set by rule 7.23 of the Federal Court Rules 2011 (Cth).

About Pearce IP

Pearce IP is a specialist firm offering intellectual property specialist lawyers and attorneys with a focus on the life sciences industries.  Pearce IP and its leaders are ranked in every notable legal directory for legal, patent and trade mark excellence, including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, 5 Star IP Lawyers, among others.

In 2025, Pearce IP was recognised by Australasian Lawyer and New Zealand Lawyer’s 5 Star Employer of Choice, and is the “Standout Winner” for inclusion and culture for firms with less than 100 employees. Pearce IP was awarded “IP Team of the Year” by Lawyers Weekly at the 2021 Australian Law Awards. Pearce IP is recognised by Managing IP as the only leading ANZ IP firm with a female founder, and is certified by WEConnect International as women owned.

Scidera, Inc. v Meat and Livestock Australia Limited (No 2) [2025] FCA 1236

Introduction

Justice Rofe has handed down an interlocutory judgment dismissing Zoetis Australia Pty Ltd’s (Zoetis) application for summary dismissal of Scidera, Inc.’s (Scidera) patent infringement claims.  The decision addresses a novel question of Australian patent law: whether all essential integers of a claimed method must be performed domestically for infringement to occur where the method does not produce a product.

Background

Scidera is the patentee of patent AU2010202253 (the Patent) which broadly relates to methods for identifying traits in cattle through genetic testing using single nucleotide polymorphisms (SNPs) in nucleic acid samples.  Scidera alleged that MLA, along with the Agricultural Business Research Institute (ABRI), Zoetis Australia Pty Ltd, DataGene Limited and Genotyping Australia Pty Ltd (together, the Respondents), directly infringed or authorised infringement of the Patent through the provision of genomic selection services in Australia.

This decision follows an earlier interlocutory judgment by Justice Rofe in Scidera, Inc. v Meat and Livestock Australia Limited [2025] FCA 308, in which her Honour dismissed the Respondents’ applications to strike out Scidera’s statement of claim.  Following that decision, Scidera was permitted to file an amended statement of claim.

The dispute the subject of her Honour’s decision centres on Zoetis’ business model for genetic testing of Australian cattle.  According to evidence submitted by Zoetis Inc., this testing involved the following steps:

1. Biological samples from Australian cattle are collected and sent to Zoetis’ Queensland premises.
2. Zoetis sends these samples to its US-based related entity, Zoetis Inc., for testing.
3. Zoetis Inc. performs SNP Testing in the US using specialised SNP Chips that detect 50,000+ SNPs through a process involving DNA amplification, hybridisation, and fluorescent imaging.
4. The testing generates a SNP text file containing genetic data (the Genotype Files), which is transmitted back to Australia.
5. In Australia, the Genotype Files are analysed by associations or institutes representing breeders to produce reports such as Estimated Breeding Values (EBVs) and Australian Breeding Values (ABVs).  In the case of beef cattle, breeders received EBVs in Australia via ABRI.

Critically, Zoetis’ evidence stated that all SNP testing has been conducted by Zoetis Inc. in the US since Zoetis commenced business in Australia in 2012, and that Zoetis has never had the capacity to perform SNP Testing in Australia.

Zoetis’ application for summary dismissal raised an issue not previously determined in Australia: whether all essential integers of a claimed method must be performed domestically for infringement to occur where the method does not result in a product.  Broadly, Zoetis contended that as a matter of statutory construction, the act of exploitation must occur within the patent area (Australia), and where their SNP testing is performed in the US, there can be no infringement in Australia.

Consideration

Claim Construction

Despite extensive consideration of the Patent’s claims by Beach J in the appeal from the opposition decision in Meat and Live stock Australia v Cargill, Inc (2018) 129 IPR 278 (Cargill), and subsequently in the amendment application in Meat and Livestock Australia Ltd v Cargill, Inc (No 2) (2019) 139 IPR 47 (Cargill (No 2)), the parties still disagreed on the construction of claim 1, which provides:

A method for identifying a trait of a bovine subject from a nucleic acid sample of the bovine subject, comprising identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs) wherein each of the at least three SNPs are significantly associated with the trait, with the degree of statistical significance being p≤0.05, and wherein the at least three SNPs occur in more than one gene; and wherein (a) at least one of the SNPs [meets the limb (a) requirement], or (b) the SNP [meets the limb (b) requirement].

(Emphasis added)

Zoetis argued that the phrase “identifying in the nucleic acid sample an occurrence of at least three SNPs” refers to the step performed by Zoetis Inc. in the United States.  Zoetis characterised the phrase “method for identifying a trait” as a “purpose constraint”, whereby the physical act of conducting the genetic testing must be done with the purpose of resulting in the ability to identify or infer a trait.  According to Zoetis, the claim is met by the mere ability to identify or infer, regardless of whether an identification or inference is actually drawn.  At [73], Justice Rofe observed that:

In recasting the underlined integer as a purpose constraint rather than an essential integer, Zoetis seeks to dismiss Scidera’s contention that the identifying or the drawing of an inference of a trait is an essential integer of the claim that, when performed or used by Zoetis in Australia, satisfies the territorial nexus required by the acts of exploitation and infringement as contemplated by the Patents Act.

So on Zoetis’ construction, the claim is met by carrying out the genetic testing in the US with the mere purpose of being able to infer, and because nothing further is required, the integers of the claim are entirely carried outside the protected jurisdiction.

Scidera rejected this characterisation, contending that its own construction correctly adopts that of Beach J in Cargill, such that “the claim is infringed by a method which takes all the integers, including the actual identification or inference of a trait”.  Scidera referred to the Amended Statement of Claim which particularises that “[…] [t]he identification of the trait occurs upon the provision of the EBV reports”.

Justice Rofe’s “provisional view” favoured Scidera’s construction.  Her Honour rejected Zoetis’ “purpose constraint” characterisation, noting Beach J’s references to “purpose” in Cargill were made in the context of an anticipation analysis, not claim construction.  Beach J had held that for method claims, construing “for” as merely requiring that a disclosure of something that could be used for that purpose is “misconceived” and “inapposite” as it “involves disregarding what is an important limiting and characterising feature of the claim”.  Justice Rofe found that claim 1 requires both identification of SNPs through physical testing and a separate step of identifying or inferring traits, the latter of which appeared to be undertaken in Australia on the evidence available to her Honour.

Justice Rofe identified two flaws in Zoetis’ approach.  First, Zoetis impermissibly disaggregated the integers of the claimed method, focusing solely on the physical testing integer while relegating the identification or inference of traits to a mere purpose.  Her Honour cited Ariosa Diagnostics, Inc v Sequenom, Inc (2021) 159 IPR 371 (Ariosa Diagnostics) and National Resource Development Corporation v Commissioner of Patents (1959) 102 CLR 252 for the principle that the invention is a “unitary concept” and “it is the whole process that must be considered”.  Second, Zoetis’ submission that the invention is not a manner of manufacture contradicted Beach J’s findings in Cargill, where his Honour held the claim 1 was a manner of manufacture because the method “involves drawing an inference about the potential for the trait of interest to exist in the bovine subject” and creates “an artificially created state of affairs of economic significance”.

Territorial Question

Justice Rofe noted that the case raises “a novel and important question of law: whether all the essential integers of a claimed method or process must be performed within the patent area for there to be infringement of a claim to said method or process that does not produce a product”.

Her Honour considered the inclusion of an object clause under s 2A of the Patents Act 1990 (Cth) (the Patents Act), introduced by the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2019 (Cth), which states that the object of the Patents Act is “to provide a patent system in Australia that promotes economic wellbeing through technological innovation”.  The Explanatory Memorandum to the amending bill further stated that the object clause would “assist courts in interpreting the Patents Act in cases where the text of the legislation is uncertain or ambiguous”, ensuring “that the patent system remains adaptable and fit-for-purpose”.  Justice Rofe noted that neither party addressed the object clause and how it might influence the question of whether potential infringers may circumvent a patentee’s exclusive rights to exploit its invention through divided performance of a method overseas.

Australian courts have previously considered infringement of method claims involving overseas use, but each involved the extended definition of “exploit”, wherein a product resulting from use of a method overseas was imported into Australia.[1]  Justice Rofe also referred to Ariosa Diagnostics, in which samples were taken from Australian patients and sent to the US for genetic testing and analysis, with the Full Court finding that the Harmony Test results did not constitute a “product” for the purpose of the definition of “exploit” in the Patents Act.  However, unlike the present matter, the method of detecting was carried out in its entirety in the US.  Thereafter, no further steps of the method remained to be performed in Australia – only the results of the test had to be electronically transmitted to the relevant medical practitioner in Australia, who would inform the patient of those results.  As those constituted mere information (and not a product), the Full Court held that no infringement occurred.

Justice Rofe noted that there is no fundamental requirement that all essential integers of a method claim that does not result in a product must be performed in the patent area.  Her Honour observed that there seems to be little basis in the Patents Act to distinguish methods which produce products (where offshore steps are considered), and those that do not.  Justice Rofe considered that such an “arbitrary distinction” would be inconsistent with UK authorities[2] which have demonstrated the UK court’s disinclination to enable infringers to avoid infringement by performing an integer of a claimed method offshore.

In reaching this view, Justice Rofe considered two modern UK cases.  Menashe Business Mercantile Ltd v William Hill Organisation Ltd [2003] 1 All ER 279 concerned a gaming system patent where the host computer processing customer bets was located in Antigua but accessed by UK customers placing bets from the UK.  In that case, Aldous LJ held that the UK punter “will in substance use the host computer in the United Kingdom, it being irrelevant to the punter where it is situated”.  Illumina, Inc v Premaitha Health Plc [2017] EWHC 2930 concerned a prenatal diagnosis patent where DNA sample preparation and sequencing occurred in the UK, but the data analysis and processing to generate diagnostic results occurred in Taiwan.  In that matter, Carr J held that the crucial question was whether, in substance, the process was used in the UK, accepting that any other result would make it “far too easy to avoid infringement of patents of this nature ‘given the ease of digital transmission and the ability to offshore computer processing’”.

Justice Rofe observed that these UK authorities demonstrate that the question of divided-performance of a method overseas is “not a simple one”, and that at this stage, “there may be an arguable case that the policy-based approach taken by the United Kingdom courts in Menashe and Illumina may align with a construction of ‘exploit’ which gives effect to the object clause of the Patents Act”.  Her Honour added that in each UK case, the question of law was “inextricably tethered to the factual circumstances”.

Outcome

Justice Rofe concluded that the matter was “not a straightforward case that is appropriate to be summarily dismissed”.  Her Honour noted that the “relevance and applicability of the United Kingdom case law in light of the object clause and differing statutory language” has not been the subject of argument and warrants full consideration at trial, further stating:

Whether the introduction of the object clause under s 2A of the Patents Act is consistent with a legislative intention towards a construction of infringement that patentees are entitled to enjoy the full benefit of their statutory right that ought not be set at naught by offshoring a step of a claimed method, is a question that merits fulsome argument and consideration on the facts of the case.

Consequently, Justice Rofe dismissed Zoetis’ application and ordered it to pay Scidera’s costs of the interlocutory application.

Implications

Should the matter proceed to trial, the proceedings are positioned to produce the first Australian decision addressing whether all essential integers of a method claim must be performed in the patent area (domestically) for infringement to occur where the method does not produce a product.  Justice Rofe’s decision signals that her Honour may adopt an “in substance” approach similar to UK jurisprudence, preventing circumvention of patented methods through the offshoring of essential steps.

[1] See Apotex Pty Ltd v Warner-Lambert Co LLC (No 2) (2017) 123 IPR 30 at [296]–[298] (per Nicholas J), endorsed in Warner-Lambert Co LLC v Apotex Pty Ltd (No 2) (2018) 129 IPR 205 at [167] (per Jagot, Yates and Burley JJ).

[2] See Von Heyden v Neustadt (1880) 14 Ch D 230, Saccharin Corp Ltd v Anglo-Continental Chemical Works Ltd [1901] 1 Ch 414 and Beecham Group Ltd v Bristol Laboratories Ltd [1978] 95 RPC 15.

About Pearce IP

Pearce IP is a specialist firm offering intellectual property specialist lawyers and attorneys with a focus on the life sciences industries.  Pearce IP and its leaders are ranked in every notable legal directory for legal, patent and trade mark excellence, including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, 5 Star IP Lawyers, among others.

In 2025, Pearce IP was recognised by Australasian Lawyer and New Zealand Lawyer’s 5 Star Employer of Choice, and is the “Standout Winner” for inclusion and culture for firms with less than 100 employees. Pearce IP was awarded “IP Team of the Year” by Lawyers Weekly at the 2021 Australian Law Awards. Pearce IP is recognised by Managing IP as the only leading ANZ IP firm with a female founder, and is certified by WEConnect International as women owned.

Dyno Nobel Asia Pacific Pty Ltd v Orica Explosives Technology Pty Ltd [2025] FCA 767

Introduction

In a lengthy 1300+ paragraph judgment, Justice Downes has handed victory to Orica, finding that Orica achieved “almost complete success” in its infringement case regarding three of the four patents in suit, and that Dyno Nobel’s invalidity attacks failed completely as did its unjustified threats claim.

A key takeaway from this decision is her Honour’s robust criticism of the manner in which Dyno Nobel ran its case, with her Honour criticising both the changing nature of Dyno Nobel’s case and its expert evidence.  On the former issue, her Honour declined to make findings sought by Dyno Nobel in its closing submissions about any matter which was not pleaded by Dyno Nobel, if Orica objected and her Honour was not satisfied that Orica knew the nature of the case it had to meet at trial.  Her Honour also adopted a similar approach regarding one aspect of Orica’s infringement case which was not part of its pleaded case.  On the latter issue, her Honour’s significant concerns about Dyno Nobel’s expert evidence led her Honour to place little weight on this evidence, seriously undermining Dyno Nobel’s invalidity case.

Dyno Nobel has appealed her Honour’s decision.

In our article, we focus in on the key grounds alleged in the invalidity case against one of the four patents in suit (Australian Patent No. 2006225079), as her Honour’s findings in this regard highlight the key issues which led to Dyno Nobel’s failure to make out its invalidity case on this patent as well as the three other patents in issue.

Background

The four patents the subject of the proceedings were:

1. Australian Patent No. 2006225079 entitled “Wireless detonator assembly, and methods of blasting”. The claimed invention related to detonator assemblies that were substantially free of physical connections with an associated blasting machine and to improvements in the safety of these wireless detonator assemblies.
2. Australian Patent No. 2007246165 entitled “Wireless electronic booster, and methods of blasting”. The claimed invention related to apparatuses used for wireless blasting and methods of blasting using these apparatuses.
3. Australian Patent No. 2010207873 entitled “Selective control of wireless initiation devices at a blast site”. The claimed invention related to the control of detonators and detonator assemblies used in mining via wireless communication; and
4. Australian Patent No. 2010302943 entitled “A method of underground rock blasting”. The claimed invention related to an improved method of blasting of rock underground.

All four patents were subject to the pre-Raising the Bar version of the Patents Act 1990 (Cth).

The product in issue was Dyno Nobel’s “CyberDet I” wireless electronic detonators (CyberDet I Device) which had been used and supplied for use, in certain blasts at two Australian mine sites: the Big Bell Mine and AngloGold Ashanti’s Sunrise Dam Mine.

Dyno Nobel commenced the proceedings seeking to revoke the four Orica patents and alleging unjustified threats.  Orica countered by cross-claiming that CyberDet I Device infringed its patents.

Australian Patent No. 2006225079 – Key Issues

Novelty

In holding that none of the prior art cited anticipated the claimed invention, her Honour addressed the issue of the date at which the prior art is to be construed.  Dyno Nobel submitted that the prior art should be construed at the priority date of the patent in suit, while Orica argued that construction should occur at the date of publication of the prior art.  After reviewing the statutory provisions and the case law, Justice Downes held that when determining the degree of disclosure required to show lack of novelty, the prior art document must be construed as at the date of its publication.

Inventive Step

Dyno Nobel failed to prove lack of inventive step in light of the common general knowledge (CGK) alone and/or taken together with one of three cited pieces of prior art (namely, two patents and a company website).

Justice Downes found that the objective facts arising out of the evidence provided compelling support for a conclusion that the claimed invention was not achieved by mere “routine” steps, or that the skilled person would have been directly led to carry out particular steps in the expectation that a particular research path “might well produce” a useful result.  Rather, the objective facts demonstrated that:

• a skilled addressee seeking to develop initiation systems for the mining industry at the priority date would have considered the removal of wires from detonators to be counter-intuitive for a range of reasons, including that removing the wires, without more, would have removed one of the major benefits of an electronic detonator, being the ability to obtain status information from the detonator; and that introducing wireless communications would have introduced the concomitant risks of electromagnetic interference and inadvertent detonation; and
• to the extent that there was any focus on removing wires, the industry trend favoured wireless transmission to a receiver which contained components of the blasting machine and which in turn was connected to the detonator.  In its invention, Orica “bucked that trend”: instead of dividing the components of the blasting machine and having wireless signals between those components, it incorporated a receiver into the detonator assembly, with the blasting machine transmitting signals wirelessly to the detonator assembly (including to an assembly the components of which were separated to enable better receipt of the wireless signal).

When considering the question of lack of inventive step in light of the CGK taken together with one of three cited pieces of prior art, her Honour held that the evidence did not demonstrate a reasonable expectation that the skilled person would have ascertained and regarded as relevant the prior art documents.  Her Honour considered that, at its highest, Dyno Nobel’s patent search evidence established no more than that certain prior art documents were capable of being returned by a literature search, which was insufficient.  In reaching this conclusion, her Honour noted that:

• the contemporaneous real world evidence was significant in that each expert in this case was working in the field of improving electronic detonator design (and in Mr Boucher’s case, wireless electronic detonators) or wireless communications for use in mines before the priority date, and no expert was aware of any of the cited prior art (other than Mr Napier being aware of his own company’s website); and
• the manner in which the patent searcher was instructed bore little resemblance to the manner in which the evidence indicated that the searcher would have been instructed by the skilled person, and likely resulted in a broader search being conducted by the patent searcher than would otherwise have occurred.

Crucially, Dyno Nobel’s lack of inventive step case was substantially undermined by her Honour’s opinion of the weight that could be given to its expert evidence.

Justice Downes noted that Dyno Nobel’s case depended significantly on the acceptance of expert evidence given by Mr Boucher and Mr Napier.  Her Honour was unable to place much weight on Mr Boucher’s evidence because her Honour considered that:

• Mr Boucher had misunderstood the concept of CGK, as his evidence indicated that he had wrongly assumed that publication of information was sufficient for the information to be CGK (on the basis that it should have been known), even though he was not aware of this information before the priority date;
• Mr Boucher was not representative of the hypothetical, non-inventive PSA as he was too highly qualified and too inventive;
• Mr Boucher had expressed opinions (including during the trial) based upon the evidence of other experts and the extent to which this occurred was not known; and
• the hypothetical task given to Mr Boucher went beyond the CGK, and was leading because it assumed a starting point (wireless electronic detonators) that the skilled person would not have been motivated to attempt to design based on the expert evidence.

Her Honour was also unable to place much weight on Mr Napier’s evidence because her Honour considered that:

• Mr Napier did not have expertise in the relevant technology, being electronic detonators or detonator technology;
• Mr Napier’s evidence was infected with personal knowledge of facts derived from his work which were not CGK; and
• Mr Napier indicated that his experience with a particular system would have impacted (i.e. biased) his response to the hypothetical task that was posed to him.

Best Method

Dyno Nobel alleged that Orica had failed to disclose the best method of performing the invention.  Her Honour held that this ground was not made out.  In reaching this conclusion, her Honour was again highly critical of Dyno Nobel’s pleading and evidence noting that:

• Dyno Nobel’s best method case was premised on an incorrect characterisation of the invention;
• Orica was only apprised of the full particulars of Dyno Nobel’s best method case during closing submissions.  Consequently, her Honour only considered the best method case which Dyno Nobel pleaded and opened on at the trial, not the case advanced in closing submissions, as in her Honour’s view to do otherwise “would be contrary to the interests of justice to permit it to succeed”;
• Dyno Nobel’s best method case relied upon Mr Boucher’s evidence, and, in particular, his incorrect understanding of the concept of CGK.  To make matters worse, her Honour also considered that Mr Boucher had conflated the requirements of US patent law with Australian patent law regarding what is required to be disclosed in a patent in Australia; and
• Given the low quality of Mr Boucher’s evidence, it was not surprising that Orica did not call any inventor or author of the particularised Orica documents.  Her Honour considered it to be self-evident that doing so would have run the risk that the assumptions underlying Mr Boucher’s opinions could be established through cross-examination of these witnesses.  Accordingly, her Honour declined to draw any adverse inference from the failure by Orica to call such persons as witnesses as there was an obvious forensic reason not to do so.

Her Honour also considered that Orica was not required to disclose idiosyncratic features of the voltage step-up or multiplication means which it had selected for use in its commercial embodiment of the invention.  This selection depended on the particular commercial product being built, and the componentry used elsewhere in the product, all of which was likely to be adjusted in the course of product optimisation.

Outcome and Implications

Justice Downes held that Dyno Nobel’s validity attacks failed completely as did its unjustified threats claim.  Orica, on the other hand, achieved “almost complete success” in its infringement case regarding three of the four patents in suit.

Her Honour’s decision is a salient reminder of the importance of clearly pleading a party’s case so that the other party is on notice of the case it has to meet.  Her Honour’s decision also highlights the central importance of expert evidence, the deficiencies of which in this case significantly undermined Dyno Nobel’s invalidity attack on the four Orica patents in suit.

Dyno Nobel has appealed her Honour’s decision.

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