FEDERAL COURT OF AUSTRALIA Apotex Pty Ltd v ICOS Corporation (No 2) [2017] FCA 589 File number: VID 280 of 2016 Judge: BESANKO J Date of judgment: 26 May 2017 Catchwords: PRACTICE AND PROCEDURE – consideration of an application for an order for production in terms of a Notice to produce a document in a pleading or affidavit – whether documents are mentioned in an expert report – where no direct allusion to a document in the relevant sense – where reference by inference is not sufficient – where fact document almost certainly exists is not sufficient – where no procedural unfairness to the applicant as statement not made to bolster or support expert opinion. Legislation: Federal Court Rules 1979 (Cth) O 15 r 10 Federal Court Rules 2011 (Cth) r 20.31 Cases cited: Apotex Pty Ltd v ICOS Corporation [2017] FCA 466 Australian Competition and Consumer Commission v Australialink Pty Ltd (2009) 177 FCR 35; [2009] FCA 265 Australian Competition and Consumer Commission v Visy Industries [2006] FCA 136; (2006) ATPR 42-102 Harman v Secretary of State for Home Department [1983] AC 280 Hearne and Another v Street and Others (2008) 235 CLR 125 King v GIO Australia Holdings Ltd [2001] FCA 1487 Oztech Pty Ltd v Public Trustee of Queensland (No 10) [2016] FCA 970 Welker v Rinehart [2012] NSWSC 588 Date of hearing: Heard on the papers Date of last submissions: 18 May 2017 Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 21 Counsel for the Applicant: Mr N Murray and Mr M Fleming Solicitor for the Applicant: Herbert Smith Freehills Counsel for the Respondent: Mr J Cooke and Mr C Burgess Solicitor for the Respondent: Wrays Lawyers Pty Ltd ORDERS VID 280 of 2016 BETWEEN: APOTEX PTY LTD ACN 096 916 148 Applicant AND: ICOS CORPORATION Respondent AND BETWEEN: ICOS CORPORATION Cross-Claimant AND: APOTEX PTY LTD ACN 096 916 148 Cross-Respondent JUDGE: BESANKO J DATE OF ORDER: 26 MAY 2017 THE COURT ORDERS THAT: 1. The applicant/cross-respondent's application for an order for production in terms of paragraph 2 of the Notice to produce a document in a pleading or affidavit dated 24 April 2017 be refused. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BESANKO J: 1 This is an application by the applicant and cross-respondent (applicant) for an order under r 20.31 of the Federal Court Rules 2011 (Cth) (the Rules) that the respondent and cross-claimant (respondent) produce the documents mentioned in the affidavit of an expert witness filed by the respondent. 2 The general nature of the proceeding is sufficiently stated in Apotex Pty Ltd v ICOS Corporation [2017] FCA 466. The trial of the claim and cross-claim is listed for 11 days commencing on 1 June 2017. 3 On 24 April 2017, the applicant served on the respondent a Notice to produce a document in a pleading or affidavit filed by the respondent. There is one outstanding issue in relation to the Notice and that concerns an affidavit of an expert, Professor James E Polli. The Notice to produce relevantly provides: The applicant/cross-respondent requires you to produce for inspection the following documents mentioned in the affidavit of Professor James E Polli dated 30 March 2017 (the Polli affidavit) …: 1. … 2. The expert evidence (insofar as it is recorded in writing, including all annexures, exhibits and transcripts) given by Professor James E Polli in the proceedings relating to raloxifene hydrochloride referred to in paragraph 6 of the Polli affidavit. 4 Professor Polli is a Professor of Pharmaceutical Sciences and he holds a Chair in Industrial Pharmacy and Pharmaceutics at the University of Maryland School of Pharmacy in Baltimore, Maryland. He has affirmed a lengthy affidavit and the respondent proposes to call him as a witness at the trial. In a section of his affidavit, which is entitled "B. Prior involvement with parties to this proceeding", Professor Polli states as follows: 6. I understand that Eli Lilly is the parent company of ICOS. I have been previously engaged on behalf of Eli Lilly to provide expert evidence relating to raloxifene hydrochloride. 5 Rule 20.31 provides as follows: (1) A party (the first party) may serve on another party (the second party) a notice to produce, in accordance with Form 39, for the inspection of any document mentioned in a pleading or affidavit filed by the second party. (2) The second party must, within 4 days after being served with the notice to produce, serve the first party with a notice: (a) stating: (i) a time, within 7 days after service of the notice, when the document may be inspected; and (ii) a place where the document may be inspected; or (b) stating: (i) that the document is not in the second party's control; and (ii) to the best of the second party's knowledge—where the document is and in whose control it is; or (c) claiming that the document is privileged and stating the grounds of the privilege. (3) If the second party does not comply with paragraph (2)(a) or (b) or claims that the document is privileged, the first party may apply to the Court for an order for production for inspection of the document. 6 The respondent opposes the application for an order for production. It relies on an affidavit of Mr Gary Cox affirmed on 18 May 2017. Mr Cox is a principal of Wrays Lawyers. 7 Mr Cox deposes to the fact that Professor Polli has been engaged by Eli Lilly to give expert evidence in relation to raloxifene hydrochloride in three sets of court proceedings in Australia, Canada and the United States of America respectively. 8 Eli Lilly and Company and Eli Lilly Australia Pty Ltd brought a proceeding against Apotex Pty Ltd (Apotex) (NSD 622 of 2012) and a proceeding against Generic Health Pty Ltd (NSD 1902 of 2013). The respondent was not a party to those proceedings. Wrays Lawyers acted for the Eli Lilly applicants and Herbert Smith Freehills acted for Apotex and they act for the applicant in this proceeding. 9 Professor Polli prepared two affidavits dated 4 November 2013 and 4 March 2014 respectively in the proceeding against Generic Health. The first affidavit was read into evidence at an interlocutory hearing on 12 November 2013. The second affidavit was prepared for the trial which did not take place because the proceeding settled. The second affidavit was not served on the applicant because the proceeding was against Generic Health. 10 In relation to the claim against Apotex, Professor Polli prepared two affidavits for the trial on 4 March 2014 and 8 May 2014 respectively. The affidavits were served on Apotex's solicitors, but they were not read into evidence because the proceeding settled. 11 Eli Lilly Canada Inc, Eli Lilly and Company, Eli Lilly SA and Lilly SA brought three proceedings against Apotex Inc in relation to raloxifene hydrochloride in the Federal Court of Canada. The respondent was not a party to those proceedings. Professor Polli prepared an expert report in those proceedings. Mr Cox has been informed that Professor Polli prepared a single expert report in each of the three Canadian proceedings and Professor Polli's report was served on Apotex Inc. Professor Polli's report was never read into evidence and he did not give oral evidence because the proceedings were settled before trial. Professor Polli's report was designated "Confidential Information" and remains the subject of protective orders made by the Federal Court of Canada that prohibits its disclosure, otherwise than in accordance with the terms of the orders. The protective orders include the following: 16. Subject to the terms of this Order, and unless this Court orders otherwise, or the Party disclosing Confidential Information provides its consent in writing: (a) Access to, disclosure of, and discussions concerning Confidential Information shall be limited only to the Designated Persons; (b) Designated Persons shall not disclose or use Confidential Information except in accordance with this Order; and (c) Confidential Information shall be used solely for the purpose of the within proceeding and may not be used for any other purpose whatsoever, except with leave of the Court. 23. … The provisions of this Order shall continue after the final disposition of these proceedings and this Court shall retain jurisdiction to deal with any issues relating to this Order, including, without limitation, its enforcement. 12 Eli Lilly and Company brought proceedings against Teva Pharmaceuticals USA, Inc in the United States District Court Southern District of Indiana (Indianapolis Division). Professor Polli prepared an expert report in the US proceeding for Eli Lilly and Company. Mr Cox has not been able to ascertain whether or not it is subject to a protective order of the United States District Court, and if so, the terms of any such order. He states in his affidavit that he is continuing to seek instructions in this regard. 13 The applicant submits that Professor Polli has mentioned documents in paragraph 6 of his affidavit. It submits that he does not have to have expressly referred to documents to have mentioned them within the rule and a direct allusion to a document is sufficient. It further submits that relevance has not been challenged and, even if it was, it is not a ground for resisting an order because it is not a ground referred to in r 20.31(2) of the Rules. 14 The grounds upon which the respondent opposes an order for production are as follows. First, the respondent submits that no document is mentioned in paragraph 6 of Professor Polli's affidavit. Secondly, the respondent submits that the applicant would already have unread affidavits of Professor Polli which would be subject to the implied undertaking to use documents obtained in the course of a proceeding only for the purpose of that proceeding. Thirdly, the respondent submits that some of the documents are the subject of confidentiality orders made by overseas courts. Finally, the respondent submits that the documents are not relevant and that the applicant is fishing for evidence or information to support its case. 15 The previous rule (Federal Court Rules 1979 (Cth) O 15 r 10) used the word "refers" whereas the present rule uses the word "mentioned". Neither party suggested that there is any material difference between the two words. 16 In Australian Competition and Consumer Commission v Australialink Pty Ltd (2009) 177 FCR 35; [2009] FCA 265, Spender J discussed the previous rule. His Honour referred to the following observations of Heerey J in Australian Competition and Consumer Commission v Visy Industries [2006] FCA 136; (2006) ATPR 42-102 at [33]: In contrast to discovery under O 15 rr 1, 5 or 8, production under O 15 r 10 does not depend on any leave being given by the Court. The reason is obvious enough. When a document is directly relied on by an opposing party, basic procedural fairness would require that a party be able to inspect the document, if only to see whether it is what it is alleged to be. … 17 Justice Spender referred to a lengthy passage from the reasons for judgment of Moore J in King v GIO Australia Holdings Ltd [2001] FCA 1487 and then said (at [20]): The observations by Moore J in King from [12]-[17] … make it plain that there has to be a direct allusion to a document or documents. It is insufficient to refer to a transaction or information, even though it appears almost certain that the transaction must have been effected by, or the information contained in, a document. 18 That approach has been applied in later cases (Welker v Rinehart [2012] NSWSC 588 at [14] per Brereton J; Oztech Pty Ltd v Public Trustee of Queensland (No 10) [2016] FCA 970 at [13] per Yates J). 19 I do not consider that a document has been mentioned in paragraph 6 of Professor Polli's affidavit. There is no direct allusion to a document in the relevant sense. A reference by inference or an implied reference (if that be different) is not sufficient and the fact that a document almost certainly exists is not sufficient. Another way of approaching the issue leads to the same result. If one considers the matter from the point of view of "basic procedural fairness" there would be no procedural unfairness in this case because the statement appears to have been made to describe Professor Polli's prior involvement with the parties to the proceeding and not with a view to bolstering or supporting in some way his expert opinion. 20 I refuse the applicant's application for an order under r 20.31 of the Rules. 21 In the circumstances, it is not strictly necessary for me to consider the respondent's other arguments against the making of an order. It would be difficult to do so in the case of the relevance objection in light of my conclusion about the construction of paragraph 6 of Professor Polli's affidavit. I would only add this. Assuming I understood the argument correctly, I have difficulty in seeing how the fact that prior to mentioning a document in an affidavit the document was subject to the implied obligation often referred to as the Harman undertaking (Harman v Secretary of State for Home Department [1983] AC 280; Hearne and Another v Street and Others (2008) 235 CLR 125) is a valid objection to an order under r 20.31(3) of the Rules. The rule operates according to its terms and I cannot see how a party with the document (albeit subject to the implied undertaking) would be in a worse position than a party who did not have the document. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate: Dated: 26 May 2017