The Federal Court in MMD Design and Consultancy Limited v Camco Engineering Pty Ltd [2019] FCA 1803 recently granted preliminary discovery to a patentee, giving the patentee information about repair works carried out on rock-breaking equipment used at mine sites.
In granting preliminary discovery, O'Bryan J followed the principles set out by the Full Federal Court in Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193 (Pfizer v Samsung): an application for preliminary discovery (under Rule 7.23 of the Federal Court Rules) will be granted where a prospective applicant subjectively believes it may have a right to obtain relief, and that belief is, based upon the evidence, reasonably open, even if it is contested. The prospective applicant is not required to reasonably believe he or she actually has the right to obtain relief. We comment further on Pfizer v Samsung here.
The parties' activities in this case
The applicants, MMD Design and Consultancy Limited (MMD UK) and MMD Australia Pty Ltd (MMD AU), are part of the MMD group (MMD). MMD designs and supplies equipment and provides services to the mining industry. This case concerns MMD's mineral breakers, which are used in mines to break up large rocks. MMD supplied a number of its mineral breakers to mine sites in Western Australia.
MMD UK holds an Australian patent, exclusively licensed to MMD Australia, for a method of constructing a drum assembly for a mineral breaker and to the drum assembly itself. The drum assembly includes teeth, which after prolonged use wear down and require repair.
Camco Engineering Pty Ltd (Camco) is a mechanical engineering business, which offers repair and maintenance services to mining companies. Between 2012 and 2015, MMD provided Camco with confidential technical information and drawings relating to MMD's mineral breakers to enable Camco to repair MMD mineral breakers. That confidentiality agreement was terminated in November 2015.
MMD's preliminary discovery application
Photographs of MMD mineral breakers (allegedly) being repaired by Camco on a mine site, and of mineral breakers (allegedly) being repaired at Camco's workshop, were provided to MMD in 2017 and 2018. After examining the photographs, MMD believed that in the process of repairing the mineral breakers, Camco may have infringed MMD's patent.
MMD sought an order for preliminary discovery of engineering drawings prepared by Camco in the course of repairing the 'tooth' component of mineral breakers, to enable MMD to assess whether Camco had infringed the relevant patent.
How the Federal Court reached its decision
The Court was required to resolve two central issues:
- whether MMD held a reasonable belief that it may have the right to obtain relief from Camco for infringement; and
- whether MMD satisfied Federal Court Rule 7.23(b) by demonstrating that, after making reasonable enquiries, it did not have sufficient information to decide whether to commence proceedings.
As to the first issue, MMD established, on the following evidence, that it held a reasonable belief of possible patent infringement:
- Camco had repaired MMD's mineral breakers at certain mine sites while having access to confidential information from MMD, and continued to do so following the termination of the confidentiality agreement;
- the photographs of repaired mineral breakers (mentioned above), and that Camco did not rule out the possibility that it was responsible for repairing the mineral breakers in those photographs; and
- MMD's patent attorney considered that the mineral breakers in those photographs represented a 'tooth' construction likely to infringe the relevant patent.
As to the second issue, the Court accepted that MMD, after making reasonable enquiries, did not have sufficient information to decide whether to commence infringement proceedings. Notably:
- the repaired mineral breakers were located on (private) mine sites. Camco argued that MMD had not made reasonable enquiries because MMD had not asked the mines for access to the mineral breakers to inspect the repairs. However, because MMD would only be able to see relevant parts of the mineral breakers if they were disassembled and partially destroyed, it was not reasonable that MMD make such an enquiry of the mines.
- Camco also argued that MMD had sufficient information from the photographs and from representative construction techniques, drawings and models provided by Camco to MMD. However, the Court held that these did not give a sufficient basis for MMD to decide whether to bring infringement proceedings. There was a question mark over whether the representative material produced by Camco was reliable. The relevant information was the engineering drawings actually used by Camco in the course of repairing mineral breakers.
The Court ordered preliminary discovery, on a confidential basis, of drawings of any 'welded tooth constructions' for a mineral breaker overhauled, repaired or replaced by Camco since 1 January 2016.
Davies Collison Cave would like to thank our seasonal clerk Alex Horgan for his contributions in writing this article.
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