Case: D&eacute;cor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
Outcome: cited
In considering the evidence and dismissing RTI's application, the primary Judge exercised a discretion to be exercised according to settled principle. In seeking leave to appeal from the exercise of that discretion, the considerations are whether in all the circumstances the decision of the primary Judge is attended by sufficient doubt to warrant its being reconsidered by the Full Court and whether substantial injustice would result if leave were refused supposing the decision to be wrong ( D&eacute;cor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398 per Sheppard, Burchett and Heerey JJ; Jarrett v Seymour (1993) 46 FCR 557 at 559 and 560 per Lockhart, Sheppard and Beaumont JJ). 20 Although plainly enough an application for leave to appeal does not involve a reconsideration of the primary application other than to determine whether the D&eacute;cor Corporation v Dart Industries test is satisfied, it is necessary to consider the contextual facts of the primary application in dealing with the contended errors on the part of the primary Judge. 21 OMI is the patentee of an Australian patent having a priority date of 22 February 2000 for a device described in the patent, in terms of the object of the invention, as 'a single use syringe having a spring biased needle which can shoot back into a hollow plunger stem after use'. The patent describes the problems reflected in the prior art for needle devices, the features of OMI's invention, exhibits particular drawings and defines the integers of each monopoly claim by reference to claims 1 to 13. On 28 October 2003, OMI (or at least a company described as OMI Manufacturing Pty Ltd which for present purposes has been treated by the parties as OMI) entered into a manufacturing and distribution agreement with CMG. 22 The manufacturing and distribution agreement contains these terms: (a) CMG agrees to manufacture the Product in China (the 'Territory'). OMI grants CMG exclusive rights to manufacture the Product worldwide . If CMG cannot supply the Product OMI reserves the right to source an alternative manufacturer. (cl. 2.1) The Product is defined by the schedule to mean each OMI retractable syringe manufactured by CMG in accordance with nominated specifications. The schedule does not identify any specifications. (b) CMG warrants that the Product shall strictly conform with the specifications listed in the schedule (cl. 2.4(c)) (c) CMG agrees to make the necessary modifications to its plant/s to enable it to manufacture the Product in accordance with the production requirements set out in schedule 3. (cl. 2.5) (d) CMG agrees to manufacture the Product only at the locations agreed between the parties from time to time. (cl. 2.6) (e) CMG agrees that OMI shall have the right, on reasonable written notice, to make inspections including of Product manufactured by CMG and plant locations where CMG manufactures the Product. (cl. 2.8) (f) Schedule 3 deals with 'pricing, annual purchase volumes and production requirements' and sets out the pricing for the Product. The pricing provision contemplates that CMG will supply OMI with a retractable syringe of various dimensions including a 1 ml, 3 ml, 5 ml and 10 ml Product. (cl. 2.9, Schedule 3) (g) Schedule 3(1) contemplates that upon supply and purchase of a substantial number of units of the 1 ml, 3 ml and 5 ml Product, prices payable by OMI will be adjusted. Schedule 3 provides that a production year means each 12 month period commencing on the date of delivery of the first order of 1 ml, 3 ml, 5 ml and 10 ml Products or anniversary thereof. Schedule 3 also provides that CMG will invoice OMI for Product manufactured in accordance with a purchase order, on delivery of the Product and invoices will be paid within 90 days. (h) Schedule 3(2) provides that CMG will provide OMI with a certain number of units of the 1 ml version no later than 31 January 2004 and units of the 3 ml, 5 ml and 10 ml version no later than eight calendar months after the date of agreement. (i) CMG may use such trade marks and names in the Territory as are approved from time to time by OMI on all product. The agreed brand name will be Double Dove and will include the OMI Chinese patent number on all packaging. All such uses shall be consistent with all specifications notified by OMI from time to time. (cl. 2.10, cl. 3.3) (j) Clause 2.11 provides 'CMG agrees to manufacture Product in accordance with written purchase orders received from OMI. Each purchase order must set out the number and type of Product required, the date delivery, the delivery point and any other matters as agreed between the parties from time to time. If CMG is unable to meet a purchase order, it must notify OMI as soon as it becomes aware that it will not be able to meet the purchase order'. (k) CMG may not subcontract any part of the manufacturing process in relation to the Product. (cl. 2.13) (l) CMG will have the exclusive right to distribute the Product in the Territory. (cl. 3.1) (m) The term of the agreement is five years from 28 October 2003 plus one three year option unless terminated by written notice upon material breach by either party. The option might be exercised by either party at least six months before the end of the initial five year term by notice expressing a 'desire to exercise the three year option' and in that event, 'the parties agree to enter into good faith negotiations in respect of extending this agreement for one further term of three years'. (cl. 4.1) (n) Clause 4.1 contemplates that OMI might give its written consent for CMG to incur costs in relation to particular manufacturing equipment and in such a circumstance OMI accepts a cost liability for an unamortized portion of the cost upon certain events. (o) CMG agrees to procure Vital Care to keep in place product liability to a certain value in terms and conditions wholly satisfactory to OMI. (cl. 4.5) (p) CMG agrees that it will provide OMI or its agent with any information as may be reasonably requested by OMI in relation to the manufacture of the Product. (cl. 4.08) (q) CMG and OMI agree to treat any information communicated to it or any other person in relation to the Product as confidential subject to identified permitted disclosure. (cl. 4.9) The confidentiality clause is to survive the termination of the agreement.