In the application before the Court, Dairysense sought orders for further and better discovery and answers to interrogatories. It also sought inspection of the data logger manufactured by Baycity and a sample of each version of software intended for use with that data logger.

Baycity opposed on the grounds that Dairysense had not particularised any instance of contributory infringement sufficient to support any of the applications.

The patent in issue covered the use of a system by which at least one parameter of milk in a vat (for example volume or temperature) was sensed and then transmitted to a processing station such as a dairy factory. The dairy factory then used the transmitted information to facilitate an assessment of the quality of the milk stored in the milk vat and, based on that assessment, a determination was made by the dairy factory whether:

•  The milk should be collected from the farm; and/or

•  What form of processing was appropriate for the milk in light of its quality.

The other principal claim covered a method of allocating the type of processing accorded to milk collected from a vat which contained a sensor capable of reading the parameters of milk in the vat and transmitting those to the processing company. The processing company then used that information to assess the quality of the milk and to co-ordinate the type of processing based on that quality. Both claims required a dairy factory to use the information transmitted to it to assess quality and to act on that information.

The statement of claim on Dairysense’s counterclaim did not allege that Baycity was using the system claimed in the patent. Rather it was alleged that Baycity was a contributory infringer in the sense that it was wrongly involved in some way in the infringement of the patent by another. The statement of claim did not plead who the primary infringer was. However it was clarified during the hearing by counsel that this was the dairy company Fonterra, and that Fonterra was using the Baycity data logger to monitor milk quality. The information was then transmitted to it at some location remote from the farms in question.

Baycity was said to be implicated because it sold the product as being capable of being used to transmit such information to a milk processing company and it installed its products on Fonterra farms knowing that Fonterra intended to use the data logger as part of an infringing system.

Winkelmann J noted that in cases of infringement, High Court Rule 22.22 provides that the plaintiff must deliver with the statement of claim, particulars of the breaches relied on and give at least one instance of each type of infringement. Rule 22.24 provides that a party may not (without leave of the Court) be heard to adduce evidence in support of an alleged infringement if it relates to matters that are not specified in, or at variance with, the particulars. The judge noted that these rules are clearly directed to restricting discovery and trial to the specific instances or infringement alleged and particularised – the policy being to avoid unnecessary expense and delay.

Here, the counterclaim was not for infringement but more correctly characterized as an action based on the tort of procuring an infringement by others. Whatever the characterization of the action, Winkelmann J held that the policy underlying the Rule governing pleading in infringement actions applied with equal force, and that policy informed the assessment of the particulars required of an allegation of contributory infringement – even if the issue were to be considered in the context of the usual rules as to requirements for particularity and pleading.

Winkelmann J noted that a contributory infringer was one who in some way procures or induces an infringement of the patent by another. To contribute in this way to infringement, there must be a primary infringer. It is not enough to constitute contributory infringement to merely facilitate the primary infringement. Therefore the sale of an item, knowing that it is to be used in an infringing way, is not sufficient to make out a contributory infringement .

Winkelmann J held that, even if Dairysense were able to prove that the system marketed and sold by Baycity could be used for no purpose other than an infringing purpose, that would not (without more) constitute contributory infringement as such a system could nevertheless be disposed of without infringement. For example, the purchaser might export the system.

As to the interlocutory applications, Winkelmann held that the application for discovery and interrogatories was couched in such general terms as to be objectionable and a fishing exercise. The difficulty in addressing the Dairysense applications was the deficiency in the pleading of the cause of action. Baycity was entitled to particulars of the identity of the primary infringer, particulars of the infringement alleged and also particulars of Baycity’s acts of procurement or inducement.

The judge noted that although Dairysense need not sue the primary infringer (and it might have valid commercial reasons for being obscure in its pleadings) this could not relieve it from its obligations to properly plead its claim nor to state plainly whom the primary infringer was, the instances of infringement and how Baycity procured or induced that or those infringements. Dairysense could not seek discovery or issue interrogatories or indeed seek rights of inspection in reliance on unmade or unparticularised allegations.

Winkelmann J held, that even if the defendants were to narrow the scope of the interrogatories and discovery sought, the absence of any adequate pleading of the particular instance of primary breach or the acts of procurement and inducement meant that even more limited discovery and interrogatories would not be “anchored to any present pleadings or particulars in the counterclaim”.

As to the right to inspect the data logger, in circumstances where the functionality of this seemed clear cut, and not to be at issue in the proceedings, the relevance of the inspection exercise had not been made out and was therefore declined. 

All applications were therefore refused.