New Zealand High Court says ‘No’ to Milking the Discovery Process

Friday 22nd June 2012

New Zealand’s Chief High Court judge has recently re-affirmed the New Zealand courts’ disapproval of fishing expeditions by parties during discovery.  The decision has also highlighted the difficulties of suing only the contributory infringer in proceedings for infringement of process or use style clams.

DairySense LLC (DairySense) owns a patent claiming the use of a system where parameters about milk stored on a farm are transmitted to a dairy factory, which then makes determinations about the quality of the milk and when to pick it up.

BayCity Technologies Limited (BayCity) sells a remote data logger marketed as being suitable for the dairy industry (as well as for other uses).  DairySense sued BayCity for patent infringement, accusing BayCity of contributory infringement.

New Zealand dairy giant Fonterra Co-operative Group (Fonterra) acts and relies on the data transmitted to it from the logger.  DairySense did not consider it “commercially prudent”  to name Fonterra as the primary infringer.

The only defendant was therefore DairySense as the contributory infringer.

During the proceedings, DairySense sought details and even disassembly of BayCity’s logger.  The orders sought were very broad and were not even restricted to use in the dairy industry or use by the primary infringer.

The High Court Rules for patent proceedings require the plaintiff to provide particulars of alleged breaches giving at least one instance of each type of infringement.  Additionally, a party may not request discovery in support of an alleged infringement not specified in the statement of claim.  DairySense argued that these rules did not apply since contributory infringement is a tort to be determined under common law (not being specifically provided for in the patent legislation)and therefore these were not strictly patent proceedings.

Winkelman CJ held that the same policy of restricting discovery underpinning proceedings generally also applied here. Consequently she held the application for further discovery was for documents not sufficiently closely related to the infringement proceedings.  Her Honour also held that even if

DairySense did not wish to pursue Fonterra in the proceeding, it must still be identified as the primary infringer.

This outcome highlights weaknesses in process/use claims as well as contributory infringement actions.  There are provisions for indirect infringement in the Patents Bill 2008 but this bill is still languishing at the bottom of the parliamentary order paper.

BayCityTechnologiesLtdvUttinger&Another HC AK CIV 2006-4-4-7709 [21 March 2012]

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