Biosimilars Deals 2021

Scidera, Inc. v Meat and Livestock Australia Limited [2025] FCA 308

Introduction

Justice Rofe has handed down an interlocutory judgment in Federal Court proceedings between Scidera, Inc. (Scidera) and Meat and Livestock Australia Limited (MLA) and other respondents, in a patent dispute relating to methods for identifying traits in cattle through genetic testing.  Her Honour dismissed the respondents’ application to strike out Scidera’s statement of claim.

Background

Scidera is the patentee of AU2010202253 (the Patent) entitled ‘Compositions, methods and systems for inferring bovine traits’.  Scidera alleges that MLA, along with the Agricultural Business Research Institute (ABRI), Zoetis Australia Pty Ltd, DataGene Limited and Genotyping Australia Pty Ltd (together, the Respondents), directly infringed or authorised infringement of the Patent through the provision of genomic selection services in Australia for identifying bovine traits in cattle using high density SNP chips.

By way of interlocutory applications dated 19 April 2024, the Respondents sought orders pursuant to r 16.21(1) of the Federal Court Rules (the Rules) that Scidera’s statement of claim (SOC), or parts thereof, be struck out.  Following an initial hearing at which the Respondents ventilated their concerns, Scidera prepared an amended statement of claim (ASOC), which among various changes, added a sixth respondent, Xytovet.

Key Issues

The Respondents collectively raised several objections to Scidera’s pleadings, arguing the ASOC should be struck out on various grounds.  These grounds can be summarised as follows:

Multiple and Inconsistent Constructions

The Respondents argued that Scidera advanced multiple, inconsistent constructions of the Patent claims, making it unclear what activities were alleged to constitute infringement:

• MLA contended that the term “beef cattle genotyping” was inadequately defined and that Scidera appeared to be advancing inconsistent claim constructions.
• Zoetis argued that the ASOC propounded at least three inconsistent constructions of the Patent.
• ABRI submitted that the multiple “further or in the alternative” acts alleged to constitute infringement involved inconsistent allegations prohibited by r 16.06 of the Rules.  Rule 16.06 prohibits a party from pleading inconsistent allegations of fact or inconsistent grounds or claims except as alternatives.

“Acting in Concert” Allegations

The Respondents challenged allegations that the genomic testing laboratories were “acting in concert” with ABRI and DataGene to perform the claimed method steps:

• Zoetis contended that no common design or procurement was pleaded to support joint tortfeasorship.
• ABRI argued it was unclear which party committed which acts and that no particulars supported the “acting in concert” allegations.
• DataGene similarly argued that the meaning of “together with” in these allegations was ambiguous.

Territorial Issues and Particulars

Zoetis raised territoriality concerns, asserting that some genetic testing was performed outside Australia and questioned whether this could constitute infringement.  The Respondents also argued that Scidera failed to provide sufficient particulars of instances of infringement as required by r 34.42(3)(b) of the Rules.  Additionally, MLA disputed allegations that it controlled ABRI or encouraged the testing laboratories, arguing these assertions were unsupported by the particularised documents.

Consideration

Prior to giving her substantive reasons, Justice Rofe emphasised that the power to strike out a pleading is discretionary.  Her Honour also emphasised the contemporary pragmatic approach to pleadings in the context of modern case management principles.  Her Honour cited Murphy J in Gall v Domino’s Pizza Enterprises Ltd (No 2) (2021) 391 ALR 675, who observed that courts have often taken a “less strict approach” to pleading principles, preferring to use pre-trial disclosure and interventionist case management.  Justice Rofe noted that Murphy J broadly agreed with the approach of Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82, finding that the courts should be reluctant to spend time debating technical pleading rules, provided that a pleading fulfils its basic functions of identifying issues, disclosing an arguable cause of action and apprising parties of the case to be met.

Justice Rofe also noted that:

• the parties were sophisticated litigants with experienced patent litigation advisers; and
• after the Respondents had provided detailed explanations of their concerns, it was difficult to see how they were not sufficiently apprised of the case against them.

Her Honour then proceeded to address the main arguments raised by the Respondents.

Construction and Consistency Challenges

Justice Rofe rejected concerns that Scidera was maintaining multiple constructions to enable broad discovery, noting that Scidera had been explicit about the construction it propounded and the two bases on which infringement was alleged, being:

• That the acts carried out by each of the genomic testing laboratories, Zoetis and Xytovet, constitutes a use of the claimed method; and
• A “combined infringement case” based on the steps carried out by the genomic testing laboratories, plus the further steps carried out by ABRI or DataGene when they receive the text file of the results of the SNP testing, upon which they analyse the results and provide a report in which the traits are inferred.

Her Honour also made clear that she had set out the Respondents’ complaints and Scidera’s submissions at length in order to:

• mitigate any subsequent misunderstanding of the pleadings; and
• prevent any attempt by Scidera to “seek broad ranging or ‘fishing style’ discovery”, but at the same time noting that she did not have an impression that such a discovery application was likely.

“Acting in Concert”

Justice Rofe was not persuaded that the Respondents were unable to understand the allegations involving parties “acting in concert”.  While acknowledging that the location of these pleadings under the heading “Direct Infringement of the Patent” might be superficially confusing, her Honour did not consider that the Respondents’ sophisticated legal representatives were unable to understand the pleading.  Justice Rofe directed that the final version of the ASOC should remove “Direct” from the heading.

“Further or in the Alternative”

Justice Rofe rejected arguments that pleadings framed as “further or in the alternative” were confusingly intermixed or inconsistent so as to rise to the level of being ‘embarrassing’ or ‘causing prejudice’ under r 16.21(d) of the Rules.  Her Honour noted that r 16.06 explicitly recognises that pleadings may contain inconsistent facts or claims if pleaded as alternatives, and cited Kennet J in Commissioner of Taxation v White (No 2) [2024] FCA 1291 who recognised that alternative pleadings are “a normal, and sometimes necessary, feature” in complex cases.  While the ASOC contained several alternatives, her Honour found that there was a finite and identifiable number of combinations which could be understood.

MLA’s Control Over ABRI

Justice Rofe declined to strike out the Scidera’s allegations regarding MLA’s control over ABRI and that MLA cooperated with, encouraged or had the power to prevent the actions of the testing laboratories, conclusions which MLA claimed were not supported by the pleadings.  Her Honour noted that the prospects of the allegations did not bear upon the consideration of whether they ought to be struck out, and that Scidera only had access to public documents and summaries of certain agreements.

Territoriality Issues

On territoriality, her Honour acknowledged this was likely to be an important issue but found it was not a reason to strike out the ASOC, finding that it would be better addressed with evidence in a summary judgment application or as a preliminary question.

Particulars

Justice Rofe found that the ASOC provided sufficient particulars of each instance of infringement alleged, noting that the pleadings set out in detail the steps undertaken by each respondent and aligned these with the integers of the patent claims, including providing particulars of the SNP chips used and traits identified.  Her Honour found that the pleading of infringement of the claims in the ASOC was “more than ‘an overarching allegation of infringement of certain claims’ referable to ‘generally described acts’ with more details to be provided after discovery”.

Outcome and Implications

Justice Rofe dismissed the Respondents’ applications and allowed Scidera to file the ASOC, subject to minor amendments.  Further, her Honour ordered that Xytovet would be joined as the sixth respondent, Scidera must pay the Respondents’ costs thrown away from the earlier hearing, and other costs would be costs in the cause.

Justice Rofe’s decision reinforces the modern pragmatic approach to pleadings in complex patent litigation.  In particular, her Honour emphasised that the Federal Court Rules should not overshadow the primary purpose of pleadings in identifying issues, disclosing arguable causes of action, and apprising parties of the case they must meet.  Her Honour’s reasoning also highlights that applications to strike out pleadings will face an additional challenge where the legal representatives are sophisticated litigants who are expected to be able to navigate complex pleadings without requiring technical perfection.

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