| Date of decision: | 29 July 2025 |
| Body: | Federal Court of Australia |
| Adjudicator: |
Jackman J |
Highlight
Justice Jackman has confirmed that, in the context of a preliminary discovery application, where a prospective applicant vacates a hearing date and the prospective respondent has incurred costs in preparing for the vacated hearing, the question of costs should be determined later, either in the course of disposing of the preliminary discovery proceedings or in any substantive patent infringement proceedings that are later commenced. As a result, MGI Australia failed in its application for costs incurred in preparing for the vacated preliminary discovery hearing.
Background
In March 2025, Oxford Nanopore Technology (ONT) commenced an application for preliminary discovery from MGI Australia (MGI) in order to decide whether to commence patent infringement proceedings against MGI. Since December 2024, MGI had refused to provide samples of its nanopore sequencing devices to ONT so that ONT could determine whether ONT’s patents were infringed by those devices. In the course of these proceedings, the hearing of the application for preliminary discovery was listed for 24 July 2025 and MGI had filed evidence in answer to the application on 28 May 2025.
In late June 2025, ONT informed MGI that it had been able to independently acquire some, but not all, of the materials the subject of the application and that ONT expected to have sufficient basis to commence substantive proceedings for patent infringement. On 4 July 2025, the parties proposed that, among other things, the hearing listed for 24 July 2025 be vacated and that the current proceedings be stayed for three (3) months so that ONT could decide whether to file substantive proceedings within that three (3) month period. In addition to those proposed orders, MGI proposed that ONT pay MGI’s costs incurred in preparing for the vacated hearing. ONT opposed this order, so Justice Jackman indicated that he would decide the matter on the papers, with parties to make suitable submissions.
Key Issues
The key issue under consideration was whether ONT should be responsible for MGI’s costs in preparing for the hearing that was vacated. MGI’s position was that ONT would ordinarily be required to pay costs thrown away by its application and vacated hearing, while ONT’s position was that MGI’s costs were reasonably incurred as the work done would be useful for the purpose of a hearing if substantive proceedings were commenced. ONT argued that any order for costs would be premature and should be deferred until ONT commenced substantive proceedings as ONT expected to rely on MGI’s behaviour in refusing to provide samples of the allegedly infringing devices when requested. If substantive proceedings were not commenced in due course, the costs of the preliminary discovery application would be determined as part of the disposal of the application.
Outcome
Justice Jackman accepted ONT’s submission that an order for costs would be premature as, at the time the hearing was scheduled, MGI had resisted ONT’s requests to produce relevant material, thereby necessitating the preliminary discovery application. His Honour ordered that the question of costs should be reserved for later determination, either in the course of disposing of the current proceedings or in any substantive proceedings that ONT commenced, given that MGI’s conduct between December 2024 and June 2025 in refusing to provide samples had played a part in ONT commencing the application for preliminary discovery.
Implications
This decision turns on the fairly specific circumstances of a hearing for an application for preliminary discovery being vacated because the patentee had been able to independently obtain evidence that would allow it to determine whether substantive proceedings should be commenced. Parties to patent proceedings are required to act with an overarching purpose of facilitating the just resolution of a dispute as quickly, inexpensively and efficiently as possible, and often this assessment cannot be made until all of the relevant circumstances have been revealed.
Subsequent developments
The application for preliminary discovery was withdrawn on 18 September 2025, with ONT commencing patent infringement proceedings against MGI on 6 August 2025.
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