CQMS Pty Ltd v ESCO Group LLC [2025] APO 7
Key Takeaways
- An expert's current or past employment relationship with one of the parties does not, on its own, mean their evidence is automatically biased or will be inadmissible.
- However, an expert's employment history is a factor the court can consider when weighing the evidence.
- Experts should strive for objectivity and transparency in their role at all times, and where there has been previous affiliation with a party there is likely to be additional scrutiny.
Background
This case involved a patent dispute initially filed by ESCO Corporation on 5 May 2017 and later transferred to ESCO Group LLC in 2018. After examination, it was accepted and advertised in October 2022. CQSM Pty Ltd filed an opposition on 27 January 2023, citing multiple grounds under the Patents Act 1990 (Cth), including lack of novelty, inventive step, and sufficient disclosure.
Expert evidence
CQSM relied onexpertevidence provided by Dr JD, an engineer with considerable experience on wear parts and locking assemblies, who was also presented as proxy for the person skilled in the art (PSA). ESCO presented expertevidence from Mr DMC, who used to work for ESCO as a Design Engineer, Senior Mechanical Design Engineer, and after a short five-year retirement, as a New Product Development Engineer.
ESCO challenged the impartiality of Dr JD's expert testimony and pointed out that his current role as Principal Engineer at CR Mining Pty Ltd, a company related to CQSM, presented a clear conflict of interest, suggesting his evidence could not be unbiased. Conversely, ESCO underscored that its expert Mr DMC had been retired since 2020 and was therefore free from any potential influence from his former employer when providing his evidence.
CQSM countered that Dr JD's employment did not disqualify his relevant expert testimony, citing a previous case where a similar criticism against him was dismissed (CQMS Pty Ltd V Hensley Industries, Inc. [2024] APO 36). CQSM also argued that ESCO's expert Mr DMC also had a potential conflict of interest, given his prior employment with ESCO and his direct involvement in the development of the prior art discussed in the opposition.
The APO held that both Dr JD and Mr DMC were well placed to provide evidence as to what a PSA knew or would have done at the priority date.[34]
Concerning ESCO's criticism of Dr JD's impartiality, the APO said that expert evidence from individuals employed by the involved parties is not unusual in patent opposition proceedings. The APO noted that Dr JD explicitly stated that he had read, understood, and adhered to the Federal Court of Australia's Expert Evidence Practice Note when preparing his declarations, which effectively acknowledges his obligation to provide an objective and unbiased assessment to aid the decision-maker.[35]
Despite ESCO's emphasis on Mr DMC's retirement from ESCO in 2020, the APO stated that his prior employment with ESCO also presents a potential for bias. Similarly, the APO recognised that Dr JD, as a current employee, may have a greater vested interest in his employer's success.
While the employment history of both experts will be considered when evaluating their evidence, the APO was not convinced, without further evidence to suggest bias, that either expert has exhibited a level of bias that warranted disregarding their testimony or automatically favouring one over the other. Where their evidence conflicted, specific reasons were provided for the APO's preference.[36]
The APO held that CQSM's opposition was successful, and ESCO was allowedtwo (2) monthsto propose suitable amendments.
Read the full decision here.
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