Scidera, Inc. v Meat and Livestock Australia Limited (No 3)

Scidera, Inc. v Meat and Livestock Australia Limited (No 3) [2025] FCA 1569 is a Federal Court costs judgment in a patent proceeding. The immediate question was not whether any patent had been infringed. The question was what costs orders should follow after Zoetis Australia Pty Ltd failed in an interlocutory application for summary dismissal of all infringement claims against it.

The Court ordered Zoetis to pay Scidera's costs of and incidental to that application. But the amount is to be determined by a Registrar on a lump sum basis only after the hearing and determination of the proceeding. The Court did not order those costs to be payable forthwith. For business readers, that is the key practical point. A procedural win can produce a costs entitlement without producing immediate cash recovery.

The parties were already involved in a broader Federal Court patent case. Scidera was the applicant. Meat and Livestock Australia Limited and Agricultural Business Research Institute were respondents, and Zoetis Australia Pty Ltd was the third respondent. The available judgment does not set out the full patent story in detail, because this is a later costs ruling rather than the main merits decision.

What the judgment does show is that Zoetis brought an interlocutory application seeking summary dismissal of all infringement claims against it. That is a serious procedural step. It is an attempt to end claims early, before the case proceeds to a full hearing. On 10 October 2025, the Court dismissed that application in reasons published as Scidera (No 2) [2025] FCA 1236.

Once Zoetis lost that application, the next fight was about costs. At the time of the earlier judgment, the Court had already indicated that, subject to further orders, Zoetis should pay Scidera's costs of and incidental to the application. The remaining issue was the form of the final costs orders.

Scidera wanted a stronger and more immediate result. It asked for the costs to be fixed by a Registrar on a lump sum basis and then paid forthwith after the amount was determined. Scidera said the proceeding was still at an early stage, that the application had caused significant delay and cost, and that it was receiving litigation funding and would be prejudiced if interlocutory costs could not be recovered until the end of the case.

Zoetis resisted that approach. It argued there was no basis to depart from the general practice reflected in r 40.13 of the Federal Court Rules. It also tried to connect this costs dispute with an earlier costs order already made in the proceeding. That earlier order, dated 7 April 2025, required Scidera to pay the respondents' costs thrown away by reason of the 9 May 2024 hearing. Zoetis wanted that earlier order varied so those costs could also be fixed on a lump sum basis and made payable forthwith, and then set off against Scidera's costs of the failed summary dismissal application.

So the commercial reality of this judgment is not about patent technology. It is about litigation economics. The parties were arguing over timing of payment, method of assessment, and whether one costs order should be used to reduce the practical effect of another.

The legal issue was narrow but commercially important. After Zoetis failed in its summary dismissal application, what should the Court do about costs? More specifically, the Court had to decide three things. First, should the application costs be assessed on a lump sum basis rather than by a more traditional taxation process? Secondly, should those costs be payable forthwith rather than later? Thirdly, should those costs be set off against an earlier costs order in Zoetis' favour in the same proceeding?

The parties' submissions also raised the relationship between the Court's broad costs discretion under s 43 of the Federal Court of Australia Act, the general practice reflected in r 40.13 of the Federal Court Rules, and the role of practice notes including IP-2, CPN-1 and GPN-COSTS. The judgment's catchwords confirm that the Court considered whether there were discretionary bases to dispense with r 40.13, whether the respondent's conduct was draining the ability of one side to conduct the litigation, and whether the practice notes displaced the effect of the rule.

The formal order is clear. The Court ordered that the third respondent pay the costs of and incidental to its interlocutory application for summary dismissal of all the infringement claims against it dated 6 June 2025 to the applicant. The amount of those costs is to be determined by a Registrar on a lump sum basis following the hearing and determination of the proceeding.

That means Scidera succeeded in obtaining a costs order for the failed application. But it did not obtain the immediate-payment outcome it had sought. The Court expressly said that because it did not propose to order that the costs be payable forthwith, it did not consider the lump sum should be determined until after the hearing and determination of the proceeding.

On lump sum assessment, the Court referred to s 43 of the Federal Court of Australia Act and noted that the Court has discretion to award costs in a specified sum. The Court rejected Zoetis' criticism of Scidera's reliance on authority about lump sum costs and noted that both parties in substance agreed that the application costs should be assessed by lump sum rather than taxation. So on that issue, the Court was prepared to make a lump sum order.

On set-off, the visible part of the reasons shows the Court identifying the governing principles. The Court referred to authority explaining that the power to allow set-off of costs comes from the Court's inherent jurisdiction over its own proceedings, that unliquidated costs do not necessarily prevent set-off, and that the discretion is broad. The Court also noted that relevant factors may include the public interest, the efficient administration of justice and the conduct of the parties.

However, the available reasons are truncated part-way through the set-off discussion. Because of that, the full reasoning on how the Court dealt with Zoetis' set-off request is not fully visible in the material available here. What can be stated confidently is the final order that was made: a costs order in Scidera's favour for the failed summary dismissal application, with lump sum assessment deferred until after the hearing and determination of the proceeding, and no order for costs payable forthwith.

That is enough to understand the practical result. Scidera won the costs issue in principle, but not in the stronger form it wanted. Zoetis avoided an immediate payment order even though it lost the interlocutory application.

This case is a reminder that litigation costs are part of business planning, not just legal housekeeping. If your business defeats an interlocutory application, you may expect the other side to pay. But this judgment shows the Court may separate the right to costs from the timing of recovery. You can be awarded costs and still have to wait until much later in the proceeding before the amount is fixed and recoverable.

That matters for cash flow. Legal fees paid now may remain unrecovered for a long time. If your business is self-funding litigation, that can affect budgets, reserves and board reporting. If your business is using litigation funding, delayed recovery may affect how much funding remains available for the substantive case. Scidera expressly raised that kind of prejudice in its submissions.

The case also shows that costs orders should be viewed across the whole proceeding, not one application at a time. Zoetis tried to use an earlier costs order in its favour relating to costs thrown away by reason of a previous hearing as part of the present costs fight. In practical terms, that means a business can be ahead on one application and behind on another. The real commercial position may depend on whether the Court allows set-off, delays assessment, or leaves competing costs orders to be worked out later.

For decision-makers, the lesson is to ask for a costs map whenever a procedural application is proposed. That map should cover likely legal spend, prospects of success, likely costs consequences if you win or lose, whether immediate payment is realistic, whether there are existing costs orders in the case, and whether the application is likely to narrow the issues enough to justify the expense. Those questions are often as important as the legal merits of the application itself.

The judgment refers to several procedural sources that shaped the parties' arguments. These included s 43 of the Federal Court of Australia Act, r 40.13 of the Federal Court Rules, and practice notes including IP-2, CPN-1 and GPN-COSTS. Scidera argued those materials supported a more immediate costs outcome. Zoetis argued they did not displace the default position and that there was no special feature justifying costs payable forthwith.

The Court's visible reasoning also shows that party conduct and case stage can matter. The proceeding was described as being at a relatively early stage. The catchwords and submissions refer to arguments about whether the conduct in question was draining one side's ability to conduct the litigation, whether the application had caused substantial delay, and whether there was any reason to think the final determination was unusually far away. Those are the kinds of practical facts that can influence costs timing even where the underlying legal entitlement is straightforward.

The judgment is dated 10 December 2025 and was delivered by Rofe J in the Federal Court of Australia, General Division, Victoria Registry, within the Intellectual Property National Practice Area. The order concerns Zoetis' interlocutory application dated 6 June 2025. The earlier reasons dismissing that application were delivered on 10 October 2025 in Scidera (No 2) [2025] FCA 1236.

This page explains the costs decision only. It should not be read as a full account of the underlying patent dispute or as a complete account of the Court's reasoning on set-off, because the available reasons are truncated before the end of the analysis.

The official judgment page provides the formal order, catchwords, case details and a substantial portion of the reasons. The visible reasons clearly support the description of the parties' competing positions, the Court's acceptance of lump sum assessment, and the refusal to make the costs payable forthwith.

The visible text cuts off during the Court's discussion of set-off. Because of that, this page does not go beyond what can be stated confidently from the order and the available reasons. If a reader needs the complete treatment of set-off or the broader patent context, the full judgment and related decisions should be checked directly.