Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 3)

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judge: YATES J
• Judgment Date: 07 April 2020
• Neutral Citation: [2020] FCA 471
• Date: 07 April 2020

FEDERAL COURT OF AUSTRALIA

Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 3) [2020] FCA 471

File number:	NSD 200 of 2019
Judge:	YATES J
Date of judgment:	7 April 2020
Catchwords:	PRACTICE AND PROCEDURE – application to set aside a subpoena - whether subpoena impermissible attempt to seek preliminary discovery from a non-party
Legislation:	Patents Act 1990 (Cth) ss 40(2)(a), 138(3)(a) Federal Court Rules 2011 (Cth) r 24.15(1)
Cases cited:	Bailey v Beagle Management Pty Ltd [2001] FCA 60; 105 FCR 136 Wong v Sklavos [2014] FCAFC 120; 319 ALR 378
Date of hearing:	7 April 2020
Registry:	New South Wales
Division:	General Division
National Practice Area:	Intellectual Property
Sub-area:	Patents and associated Statutes
Category:	Catchwords
Number of paragraphs:	16
Counsel for the Applicant:	Mr C Burgess and Ms J Ambikapathy
Solicitor for the Applicant:	Johnson Winter & Slattery
Counsel for the First Respondent:	Ms C Cunliffe
Solicitor for the First Respondent:	Norton Rose Fulbright Australia

ORDERS

		NSD 200 of 2019
BETWEEN:	VEHICLE MONITORING SYSTEMS PTY LIMITED ACN 107 396 136 Applicant
AND:	SARB MANAGEMENT GROUP PTY LTD (T/AS DATABASE CONSULTANTS AUSTRALIA) ACN 106 549 722 First Respondent ; CITY OF MELBOURNE Second Respondent
AND BETWEEN:	SARB MANAGEMENT GROUP PTY LTD (T/AS DATABASE CONSULTANTS AUSTRALIA) ACN 106 549 722 Cross-Claimant
AND:	VEHICLE MONITORING SYSTEMS PTY LIMITED ACN 107 396 136 Cross-Respondent

JUDGE:	YATES J
DATE OF ORDER:	7 APRIL 2020

THE COURT ORDERS THAT:

1. The subpoena issued on 19 March 2020 addressed to Peter Crowhurst be set aside.

2. The first respondent pay the applicant’s costs in relation to the interlocutory application dated 27 March 2020.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Revised from transcript)

YATES J:

INTRODUCTION

1. By interlocutory application dated 27 March 2020, the applicant, Vehicle Monitoring Systems Pty Limited, seeks to set aside a subpoena addressed to Peter Crowhurst. The subpoena was issued at the request of the first respondent, SARB Management Group Pty Ltd, which is also the cross-claimant in the proceeding. The subpoena was issued on 19 March 2020 and seeks the production of the following documents:

Documents, both hardcopy and electronic copy in the possession, power or control of Peter Crowhurst evidencing or recording his involvement in the development of the alleged inventions the subject of Australian Patent No. 2005243110 titled “Method, apparatus and system for parking overstay detection” and Australian Patent No 2011204924 titled “Method, apparatus and system for parking overstay detection” …

2. The subpoena was issued in the following circumstances. The applicant sues the first respondent and the second respondent, the City of Melbourne, for infringement of the two patents. The first respondent/cross-claimant (the cross-claimant) has cross-claimed seeking revocation of each patent.

3. As to the first-mentioned patent (the 110 patent), the cross-claimant alleges that the invention as claimed lacks an inventive step; the complete specification does not comply with s 40(2)(a) of the Patents Act 1990 (Cth) (the Act) in that it does not fully describe the invention and does not include the best method of performing the invention; and claim 29 thereof is not clear.

4. As to the second-mentioned patent, the cross-claimant alleges that the invention as claimed in claims 1 to 25 and 27 to 29 is not novel if the priority date of those claims is not earlier than 21 July 2011; the invention as claimed does not involve an inventive step; and the complete specification does not comply with s 40(2)(a) of the Act in that it does not fully describe the invention and does not include the best method of performing the invention.

5. The applicant moves under r 24.15(1) of the Federal Court Rules 2011 (Cth) which provides:

The Court may, on the application of a party or any person having a sufficient interest, set aside a subpoena in whole or in part, or grant other relief in relation to it.

6. The cross-claimant supports the subpoena on the basis that, following discussions with Mr Crowhurst on 24 January and 17 February 2020, the cross-claimant’s solicitors formed the view that the cross-claimant was likely to have grounds to include an additional particular of invalidity in respect of the two patents, namely that the applicant was not entitled to the patents: see s 138(3)(a) of the Act.

7. This view is based on the following facts obtained from Mr Crowhurst. Mr Crowhurst said that he had worked with Fraser Welch and Paul Rolfe to develop a parking overstay detection system. The purpose of the parking overstay detection system was to determine whether vehicles had overstayed parking limits, and to communicate this to parking enforcement officers. Mr Welch subsequently applied for a patent in respect of the parking overstay detection system on which Mr Crowhurst had worked (with Mr Welch) to develop. Mr Crowhurst was not named as an inventor in the patent application; nor was Mr Rolfe. Mr Crowhurst says that he believes that he should have been named as an inventor, based on his involvement in the development of the parking overstay detection system. He said that he had not assigned his rights in the parking overstay detection system to Mr Welch or to the applicant or anyone else, and that he has contemporaneous documents, including design notes, recording his involvement in the development of the parking overstay detection system.

8. Mr Ottaway is a solicitor and senior associate at the cross-claimant’s solicitors. He has sworn an affidavit on information and belief in which he has deposed to a conversation with Mr Crowhurst in which the above facts were revealed. However, he has also deposed that, given the passage of time since “the events in question” (by which I take him to mean the events outlined above), neither he nor his colleagues consider it possible, without reviewing the documents sought by the subpoena, to reach a final view on whether the applicant’s entitlement to the two patents can be challenged.

9. Mr Ottaway’s evidence is that Mr Crowhurst has collected documents which respond to the subpoena. However, Mr Crowhurst is concerned that some of the documents might be subject to a non-disclosure arrangement between himself and the applicant. The terms of the asserted non-disclosure arrangement are not in evidence.

10. The cross-claimant’s solicitors have engaged in correspondence with the applicant’s solicitors regarding the documents. They have sought the applicant’s consent to Mr Crowhurst’s disclosure of the documents, under a confidentiality regime if need be. The question of consent to disclosure was first raised by the cross-claimant’s solicitors the day before the cross-claim was due to be filed. The cross-claimant took the forensic decision to file its cross-claim without raising...