Coory v Amcor Packaging (New Zealand) Limited
Venning J, High Court, M 1125-SW/02, 14 July 2004
In this case, the Court dealt with the principles governing the discretion to allow amendment of a patent in a case involving covetous claiming and delay. One of the issues was whether the applicant had any obligation to waive privilege in notes and memoranda passing between him and his patent attorney at a relevant stage in the drafting of the patent.
The applicant was an inventor of caps for containers. In this application he sought amendment of a patent for a foil piercing plastic cap. Prior to applying for the patent, the applicant had attempted to negotiate a licensing agreement for the supply of his caps to the respondent and a third party (Frucor). During the negotiations the applicant disclosed to them information about his foil piercing plastic cap under conditions of confidentiality. He applied for the patent on 16 November 2000. The licence negotiations broke down in December 2000. The patent was granted in February 2002 and sealed in March 2002.
In September 2002, the applicant saw a dietary supplement drink cap sold by Frucor (and manufactured by the respondent) which he considered was developed from his confidential design innovations. He sued the respondent and Frucor for breach of patent and breach of confidence. The respondent counterclaimed for revocation of the patent.
In February 2003 at a priority hearing of the infringement and breach of confidence action, the applicant elected a non-suit as a result of a ruling by the Court declining to accept a number of late-filed briefs of evidence. This left the counterclaim for revocation but in this respect the applicant gave notice of his intention to amend the patent. Following that advice, the respondent sought and obtained an adjournment of the revocation counterclaim on the basis that the amendment application should go first.
Two amendments applications were filed with the second being broader than the first. Further amendments were sought during the hearing. The respondent opposed the amendments on the grounds that the amendments would not cure the invalidity and that the conduct of the applicant, particularly his refusal to disclose relevant privileged correspondence with his patent attorney, was such that the discretion of the Court ought to be exercised against him.
In refusing the amendment, Venning J applied the principles relevant to the discretion outlined in Smith-Kline & French Laboratories v Evans Medical Limited [1989] 1 FSR 561, although he emphasised that these factors were not to be applied mechanically nor was the discretion to be fettered by judge made rules. The relevant findings in the case were:
(a) The fact that even the further amendments sought at the hearing might not resolve all of the issues was a relevant factor which weighed against the exercise of the discretion;
(b) In considering the position of privileged material, Venning J held that there could be no requirement for a patentee to waive privilege when seeking the Court’s exercise of its discretion to amend. However the onus was on the patentee to satisfy the Court that the amendments sought ought to be granted. In order to satisfy this onus, it may in certain circumstances be in the applicant’s interests to waive privileged documentation to the Court. That would only be necessary if the documents were of particular relevance to the issue before the Court;
(c) On the facts, Venning J held that in the absence of disclosure of certain privileged notes and memoranda the Court was not adequately informed as to the breadth of the claims in the patent and the patentee’s failure to disclose prior art, being an earlier patent held by the applicant;
(d) As to covetous claiming, the applicant and his patent attorney had been shown to be aware of the earlier patent and its relevance as prior art. The earlier patent should have been disclosed as prior art. Reasons for the failure to do so given under cross-examination were contradictory and not satisfactory. This failure was blameworthy and weighed against exercising the discretion in favour of the applicant.
Comment:
The decision of the UK Court of Appeal in Oxford Gene Technology Limited v Affymetrix Inc (No. 2) [2001] RPC 310 marked a sea change in the treatment of amendment applications and in particular held that applicants were not obliged to waive privilege, nor could the maintenance of privilege enable the Court to draw an adverse inference against the applicant. Aldous LJ noted:
Of course a patentee’s case may be best advanced by waiver of privilege, but the decision whether to waive privilege is one for him and not for the Court. Certainly the obligation to tell the Court of the facts material to the reason for amendment cannot act as a hidden obligation to waive privilege.
In this case, Venning J applied the principles of Oxford Gene, but found that the applicant had failed to discharge the onus because it had not waived privilege in certain notes and memoranda at a critical period. The judge stated:
While … it cannot be said the Court is completely in the dark, the background lighting is somewhat dim.
The line between (on the one hand) drawing adverse comments from a failure to disclose privileged material, and (on the other) failing to discharge the onus is perilously thin. Further, had some of the privileged communications been disclosed, the respondent could have sought disclosure of all such communications on the basis that the applicant was merely “cherry picking”. The case has gone on appeal.