FEDERAL COURT OF AUSTRALIA Stack v Commissioner of Patents [1999] FCA 291 ADMINISTRATIVE LAW –judicial review – whether any error of law demonstrated - where delegate of Commissioner of Patents refused to issue summons under Patents Act 1990 (Cth) s210(c). INTELLECTUAL PROPERTY – patents – procedure – issue of summons by delegate of Commissioner of Patents under Patents Act 1990 (Cth) s210(c) - whether documents sought by summons must be seen in order to determine relevance, including adjectival relevance – whether Patents Act 1990 (Cth) s210(c) confers power on Commissioner of Patents to require production of documents from third parties to determine questions of relevance - correct test to be applied by Commissioner in deciding upon issue of summons is whether, at the time the Commissioner is called upon to decide whether to issue a summons, the material sought by the summons is, on reasonable grounds, arguably relevant to the issues in the litigation. GS Technology Pty Ltd v Commissioner of Patents [1997] 39 IPR 583 discussed R v Barton [1981] 2 NSWLR 414 applied GEORGE STACK AND G S TECHNOLOGY PTY LTD v COMMISSIONER OF PATENTS QG 17 OF 1998 SPENDER J 25 MARCH 1999 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 17 of 1998 BETWEEN: GEORGE STACK and G S TECHNOLOGY PTY LTD APPLICANTS AND: COMMISSIONER OF PATENTS RESPONDENT JUDGE: SPENDER J DATE OF ORDER: 25 MARCH 1999 WHERE MADE: BRISBANE THE COURT ORDERS THAT: The application is dismissed with costs, to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 17 of 1998 BETWEEN: GEORGE STACK and G S TECHNOLOGY PTY LTD APPLICANTS AND: COMMISSIONER OF PATENTS RESPONDENT JUDGE: SPENDER J DATE: 25 MARCH 1999 PLACE: BRISBANE REASONS FOR JUDGMENT 1 This is an application for an order of review of a decision of a delegate of the respondent made on 6 February 1998 not to issue a summons for the production of documents pursuant to s 210(c) of the Patents Act 1990, directed to G S A Industries (Aust) Pty Ltd, Davies Shephard Pty Ltd and the Brisbane City Council. The application is made under the Administrative Decisions (Judicial Review) Act 1977. The grounds of the application, filed 6 March 1998, are: "(7) The refusal of the request was wrong in and contrary to law and involved error of law and the decision was otherwise contrary to law in that: 1. The Respondent purported to determine questions of relevance without seeing or considering the documents sought to be summonsed. 2. The Respondent confused substantive and adjectival relevance in refusing to issue the summons. 3. The Respondent did not properly consider the Reasons and the Order of 19 November 1997." 2 A second limb of the present application, in addition to the above complaints, was dismissed as a result of consent orders on 1 June 1998. 3 The present proceedings are a reprisé of proceedings QG 141 of 1997, the subject of judgment by Beaumont J in G S Technology Pty Ltd v Commissioner of Patents [1997] 39 IPR 583. 4 G S Technology Pty Ltd has a business concerned with the manufacture, development and sale of water meter assemblies. It had applied to the Commissioner of Patents for an extension of its Petty Patent No 662284. Davies Shephard Pty Ltd (Davies Shephard) had given notice pursuant to the provisions of s 28 of the Patents Act 1990 (Cth) (the Act) asserting that the patent is invalid on one or more of the following grounds: "(a) that the patentee was not entitled to be granted the petty patent; (b) that the invention is not a patentable invention because it does not comply with s 18(1)(a) or (b) of the Act; and (c) that the patent specification does not comply with s 40(2) or (3) of the Act." G S A Industries (Aust) Pty Ltd (G S A Industries) has also given such notice. 5 In connection with the application for extension of the term of the petty patent, G S Technology applied to the Commissioner for the issue of summonses for the production of documents. Section 210(c) of the Act relevantly provides: "210. The Commissioner may, for the purposes of this Act… (c) require the production of documents or articles…" 6 The issue of such a summons under the Act is administrative in nature even though in exercising the power the Commissioner must act judicially: Clyne v Official Trustee: Re Weiss; Ex parte Official Trustee (1983) 52 ALR 167. 7 In its request for the issue of summonses, G S Technology sought that a summons be issued to the Brisbane City Council in the following terms: "All documents including models, samples, drawings, test results, correspondence, records of interview, diary notes, touching upon or concerning the products and options for products mentioned and referred to in Exs 'GRB3' and 'GRB7' to the declaration of Garth Robert Bellingham, Director, Water Utility Branch, Brisbane Water, Brisbane City Council (BCC) of 69 Ann St, Queensland, Australia including all documents and records pertaining to drawing WM 8 mentioned and referred to in EX GRDB4 thereto including (3) contracts and quotations contract - Water Supply (R) Supply of Water Meter Assemblies for a period of Two Years file reference (0)243/98 - 55/92/93(P1) AND (4) contracts and quotations contract - Water Supply (R) R55/92/93 Supply of Water Meter Assemblies for a period of Two Years file reference (8)243/98-55/92/93(P2). 8 G S Technology also requested that a summons issue to G S A Industries for: "All documents including models, samples, drawings, and test results touching upon or concerning water meter assemblies Brisbane City Council tender WS 104/89/90; Brisbane City Council contract WS34/90/91; Brisbane City Council tender R55/92/93; Brisbane City Council contract R22/93/94; and Brisbane City Council contract R12/94/95 including all drawings resulting in the sales of WM213MAN mentioned and referred to in each of each of three RMC invoices dated 30 June 1993, 10 July 1993 and 10 August 1993 on sale and delivery of RD WM213 MAN manifold meters to the Noosa Shire Council as mentioned and referred to in Ex 'PK3' to the declaration of Peter Kliens filed in 662284 and including all records of interview of the type mentioned and referred to in Ex GRB 13 to the declaration of Garth Robert Bellingham as filed in 662284 in respect of the aforesaid tenders and contracts and all correspondence and diary notes passing between BCC and RMC in respect of the aforesaid tenders and contracts. 9 Finally, a request was made for a summons to issue to Davies Shephard for: "All documents including models, samples, drawings, and test results touching upon or concerning water meter assemblies for Brisbane City Council tender WS104/89/90; Brisbane City Council contract WS 34/90/91; Brisbane City Council tender R55/92/93; Brisbane City Council contract R22/93/94; and Brisbane City Council contract R12/94/95 including all records of interview of the type mentioned and referred to in Ex GRB13 to the declaration of Garth Robert Bellingham in respect of the aforesaid tenders and contracts as filed in 662284 in respect of the aforesaid tenders and contracts and all correspondence and diary notes passing between BCC and Davies Shephard in respect of the aforesaid tenders and contracts. 10 These requests were refined by G S Technology from time to time in the course of extensive correspondence between the Commissioner and the legal representative for G S Technology. 11 The Commissioner by a letter dated 4 September 1997 communicated the decision to refuse to issue any summons. Beaumont J set aside that decision, holding that the correct test for the Commissioner was whether the material sought by the summons was on reasonable grounds arguably relevant to the issues in the litigation, applying R v Barton [1981] 2 NSWLR 414. Beaumont J held that the Commissioner did not address "the real legal question involved". Accordingly, his Honour concluded that the Commissioner's decision was affected by an error of law and the matter was remitted to the Commissioner for reconsideration in accordance with law. 12 The appropriate test, his Honour concluded, was that enunciated by Cantor J in Barton at 419-20: "It seems to me that there is involved within this field the resolution by the court of competing interests. To require a witness to produce to the court his documents in proceedings in which he is not a party and in which he has no interest must involve an invasion of his private rights including his right to privacy and his right not to be required to busy himself seeking, identifying, bringing together and producing his documents to the court. The other right which seems to me to be involved is the right of a party to litigation to obtain access to documents, even where they are in the possession of a stranger, in order to further the ends of justice in those proceedings so that he may advance his case on all issues in the case. These respective rights of the stranger and the litigant will generally conflict. In many instances a mere consideration of the nature of perusal of documents in such a subpoena will disclose that they have or may well have relevance to the issues in the litigation. On the other hand consideration of the nature of the documents sought in such a subpoena may indicate with equal clarity that on the face of the subpoena the documents do not and can not bear any relevance to the issues in the litigation. There is a significant area between these two extremes which is the area in which, it would appear, there is no simple guideline to follow. What is required, as I have stated, is a balancing of the competing and generally conflicting interests of the party to the proceedings and the stranger to the proceedings. The court will consider the nature of the documents specified and will determine as best it can the issues likely to arise. If it appears an issue may arise in litigation to which the documents may relate than [sic] I believe the right of the litigant should prevail over the right of the witness. Unless it appears that an issue may arise to which the documents may relate then the right of the witness will prevail. It will be noted I do not postulate that the issue must arise in the litigation nor do I postulate that the documents must relate to an issue. It seems to me on this first step in relation to the subpoenaing of documents from a stranger the court will consider possible issues. This does not include fanciful issues. The court should take a realistic attitude. Similarly in considering the type of documents and how they may bear upon an issue in the litigation the court will act realistically and not require the production of documents which only would have a bearing upon an issue on an unreal, fanciful or speculative basis. It is in this fashion that I propose to consider the question of striking out these subpoenas or paragraphs of the schedules to these subpoenas on the basis of their relevance to the trial. It follows that I do not accept the argument of Mr Gruzman that every document which may have any conceivable relationship to an issue or to some matter that may arise in the trial must be produced by strangers to the trial in response to a subpoena to produce." 13 The basis of the judgment of Beaumont J, that the Commissioner had not addressed the real legal question involved, was that the Commissioner in his letter communicating his decision of 4 September 1997 did not adequately distinguish between "substantive relevance" on the one hand and "adjectival relevance" on the other. Importantly for the purposes of the present application and the submissions made on the applicants' behalf in that regard, Beaumont J stated at 588: "That is to say, as Cantor J observed in Barton, while it would be appropriate to reject a request for the issue of a summons on the ground that the request is fanciful or purely speculative, it is true nonetheless that an applicant for the issue of a summons need not show that the documents requested are actually relevant to the matter at hand. It is sufficient, in accordance with the conventional test in this area, that the material sought by the summons is, on reasonable grounds, arguably relevant to the issues in the litigation." 14 In remitting the matter to the Commissioner for reconsideration in accordance with law, Beaumont J commented at 588: "…it will be a matter entirely for the commissioner to decide on the material before him whether the summonses requested should be issued. I express no view on that matter." 15 When the matter was reconsidered, the decision-maker, Mr O'Keeffe read and considered the original request made, the subsequent correspondence, and the reasons for judgment. He decided not to issue any summons. The reasons for his decision are set out in his letter of 6 February 1998. That letter says in part: "You then state that there are records held by the Brisbane City Council (BCC), GSA Industries (Aust) Pty Ltd (GSA) and Davies Shephard Pty Ltd (Davies Shephard) which would provide or likely to provide an objective record of the prior art. Also you believe that these records would enable a determination of the fair basing issues. The test to be applied here is one of 'adjectival relevance'. In other words whether the production of documents could, on reasonable grounds, be arguably relevant to the issues in the principal proceedings." 16 Mr O'Keeffe then outlined what he considered to be the issues in the principal proceeding, namely, whether the invention is not novel or does not involve an inventive step; whether the specification complies with s 40(2) or (3), and whether the patentee is entitled to be granted the petty patent. He then stated: "Now turning to the documents sought. The request is very broad, general, and vague and it is uncertain as to what is being asked for. Against this background, there are classes of documents that can be identified. These are documents relating to tenders for supply of water meters to the BCC, contracts it has with GSA and Davies Shephard, and drawings of meters supplied to Noosa Shire Council. I will confine my consideration on whether to issue a summons to these identified documents." 17 Mr O'Keeffe then expressed his reasons for not issuing a summons in respect of the tender documents and contracts. He said: "So in regard to the question of whether these documents could, on reasonable grounds, be arguably relevant to the issues in the principal proceedings (ie, novelty, inventive step and fair basis) I consider the answer would have to be no." 18 As to the drawings of the meters supplied to the Noosa Shire Council, Mr O'Keeffe said: "Since the patentee already has this information in his possession, I see no reason to request production of the drawings you referred to." 19 On the question of entitlement Mr O'Keeffe said: "In your letter of 6 June 1997, you submit that the patentee is requesting the documents from the BCC to enable him to address this issue. It is not readily apparent, nor is there anything in your submissions, on how tender documents held by a third party have any bearing on the entitlement of the patentee to the invention. Consequently, nothing suggests that these documents could, on reasonable grounds, be relevant to the issue of entitlement in the principal proceedings." 20 In an extensive and at times aggressive written submission, it was acknowledged by Mr Abaza, solicitor for the applicants, that: "The Applicant G S TECHNOLOGY PTY LTD and the Respondent COMMISSIONER OF PATENTS do not get along." 21 The submission is in parts difficult to follow, but the primary contention on behalf of the applicants was that the issue had been decided in G S Technology Pty Ltd v Commissioner of Patents (supra), and that the applicant considers that the respondent has failed to comply with the decision of Beaumont J. 22 It seems to me, however, that there is a misunderstanding on the part of the applicants as to when the question of relevance, including adjectival relevance, has to be considered by the Commissioner. In the written submissions on behalf of the applicants it was said: "Section 210(c) is an adjectival provision as a matter of form and substance: that is, it is an adjunct to the functions carried out under the Patents Act 1990 by the Commissioner. The objective of the Patents Act 1990 taken from the Manual is: 'The objective of the Patents and Designs systems for protection in Australia is the provision of a relatively easy and inexpensive system of protection of a persons's (sic) rights in respect of whichever of those forms or intellectually property.' The request made for a Notice Requiring the Production of Documents is not then the occasion to determine the relevance of the documents." 23 In this context it was submitted that "Section 210(c) is clearly and on reconsideration not understood by the Commissioner". At a later stage in the submissions the statement appears: "relevance does not arise until the documents have been produced and bears on the question of whether or not leave to inspect them should be granted: re Marra Developments Ltd and the Companies Act (No 2) (1979) 4 ACLR 153" 24 The passages to which I have referred in the written submissions indicate that there is a misapprehension on the part of the applicants as to the correct test which the Commissioner is obliged to apply. As Beaumont J pointed out in the earlier proceedings, the correct test is that expressed by Cantor J in Barton. The test is whether, at the time the Commissioner is called upon to decide whether to issue a summons, "the material sought by the summons is, on reasonable grounds, arguably relevant to the issues in the litigation". It is clearly the case that relevance, including adjectival relevance, has to be considered at the time when deciding whether to issue the summons. It is not the case that relevance does not arise until the documents have been produced. Relevance is not the test of whether leave to inspect the documents should be granted. 25 As to the grounds of application earlier set out, it is not necessary to see the documents sought in order to determine questions of relevance, including adjectival relevance. There is no power under s 210(c) properly understood for the Commissioner to require the production of documents from third parties for the purpose of determining whether an order under s 210(c) ought be made. I am satisfied that the decision-maker in the present case considered the classes of documents sought and considered whether the documents arguably had any relevance to the issues in the proceedings. As to the second and third grounds, Mr O'Keeffe not only set out the correct test to be applied in his letter of 6 February 1998, but also applied that test in considering the categories of documents subject to the proposed summonses. His decision does not seem to reflect any of the indecision which tainted the decision of the Commissioner in proceedings QG 141 of 1997, being the confusion between "substantive" and "adjectival" relevance. In the letter communicating his decision, Mr O'Keeffe specifically referred to the question of whether the documents sought might be "arguably relevant" to the issues in the proceedings. 26 In my opinion, there is no error of law which affects the decision by Mr O'Keeffe. The conclusion by Mr O'Keeffe that there was nothing which suggested how tender documents held by a third party could on reasonable grounds be relevant is a decision made by him as to the relevance of those documents. The conclusion, whether it be right or wrong, is a conclusion applying the correct test and does not manifest any legal error. 27 I am not satisfied that any grounds have been made out for impugning the decision of Mr O'Keeffe communicated in the letter of 6 February 1998 as involving any error of law. The application is dismissed with costs, to be taxed if not agreed. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate: Dated: 25 March 1999 Solicitor for the Applicant: Mr Andrew P Abaza Counsel for the Respondent: Mr J A Logan Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 16 December 1998 Date of Judgment: 25 March 1999