INSIGHT

Reasonable belief or a mere suspicion? Full Court lowers the bar on preliminary discovery applications

By Miriam Stiel
Consumer law Cybersecurity & Privacy Data Health Industrials Intellectual Property Litigation Media, Advertising & Marketing Patents & Trade Marks

In brief

The Full Federal Court has handed down a significant decision on preliminary discovery in a result that will be welcomed by IP owners, as the court has clarified the requirements for a successful preliminary discovery application while emphasising the need for such applications to be met with brevity. Senior Associate Jonathan Adamopoulos and Vacation Clerk Bryanna Workman report.

Background

The Full Federal Court handed down its decision in Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193 on 29 November 2017

Pfizer is the owner of patents in relation to the process of production of etanercept, a biological medicine marketed as ENBREL. It sought preliminary discovery to assist it in deciding whether to sue Samsung Bioepis in relation to its product BRENZYS, which Pfizer believes may be infringing Pfizer's patents. Pfizer's application was refused at first instance, but succeeded on appeal.

The value of preliminary discovery

Preliminary discovery is a valuable tool to IP rights owners who believe that their rights are being infringed, but require further information in order to make an informed decision about whether to sue for infringement. It is also available to rights owners who have an infringement claim but are unsure of which person to sue. In this case, Pfizer only sought discovery in relation to the issue of whether it had grounds to sue Samsung Bioepis.

The applicant must demonstrate that:

  1. it reasonably believes that it may have the right to obtain relief (eg damages or an injunction for IP infringement) against a potential respondent;
  2. after making reasonable inquiries, it does not have enough information to decide whether to sue; and
  3. it reasonably believes that the potential respondent has or is likely to have in its possession documents relevant to the issue of whether the respondent is infringing the relevant IP right, and the applicant's inspection of such documents would assist in deciding whether to sue for infringement.

The Pfizer case focused on the first element.

'Reasonable belief'

Departing from previous rulings, the Full Court held that applicants seeking preliminary discovery must satisfy the court that they have a subjectively- held belief that they may be entitled to relief. The reasonableness of that belief will be assessed by the court objectively, based on all of the evidence presented to it. This evidence does not necessarily need to be in the form of admissible evidence, nor does the person holding the belief have to have seen the evidence.

The court cautioned against attempting to paraphrase the 'reasonable belief' test, which has tended to overcomplicate the rules.

Not a 'dress rehearsal'

The court held that a preliminary discovery application will not fail just because the respondent contests some of the evidence that the applicant relied upon when forming its belief, or simply because the judge favours the evidence of the respondent more than that of the applicant. The application is not intended to be a fact-finding exercise nor should it be a 'dress rehearsal' for trial. To defeat an application for preliminary discovery, you will need to show either that the applicant does not subjectively hold the belief, or, if it does, that there is no reasonable basis for holding that belief. Put simply, the belief must not be 'outlandish', 'untenable, irrational or baseless'.