Oxford Nanopore Technologies Plc v MGI Australia Pty Ltd (No 2)

This case arose at the very start of a patent dispute, before any infringement claim had been fully launched. Oxford Nanopore Technologies Plc, or ONT, believed that certain nanopore sequencing devices used by MGI Australia Pty Ltd might fall within claims of six Australian patents owned by ONT. But ONT said it could not yet decide whether to sue for infringement because it needed access to particular materials first.

That is where preliminary discovery came in. ONT asked the Federal Court for orders that would let it obtain the materials it said were necessary to assess whether a substantive patent case should be filed. The judgment records that MGI had refused ONT's requests for samples since December 2024. So the dispute was already about more than technical patent questions. It was also about access to information and how the parties were conducting themselves before the main case had even begun.

After the preliminary discovery proceeding started, the matter moved forward in the usual procedural way. Orders were made for evidence, and MGI filed evidence in answer on 28 May 2025. The judgment also refers to an earlier interlocutory ruling in which the Court set aside a notice to produce issued by MGI. That tells business readers that the proceeding had already become contested and procedurally active.

Then the commercial position changed. ONT told MGI on 26 June 2025 that it had independently obtained some of the materials it had been seeking through the preliminary discovery application. ONT said its review was still ongoing, but its initial examination suggested those materials would likely give it a sufficient basis to commence substantive patent infringement proceedings. In other words, the preliminary discovery application may no longer have been the only path to the information ONT needed.

Because of that change, the parties jointly proposed that the scheduled hearing of the preliminary discovery application on 24 July 2025 be vacated and that the proceeding be stayed for three months from 4 July 2025. They also proposed that if ONT filed a substantive proceeding within that period, ONT could discontinue the preliminary discovery case and the costs of that application would be dealt with by the judge hearing the later case.

The only point they could not agree on was costs said to have been thrown away by vacating the hearing. MGI wanted an immediate order that ONT pay those costs. ONT said that was too early and that the issue should be decided later, in the full context of how both sides had behaved.

The Court was not deciding whether MGI's products infringed ONT's patents. It was not deciding whether ONT's patents were valid. It was not deciding whether ONT was entitled to any final remedy. The issue was much narrower and more procedural.

The question was whether ONT should immediately be ordered to pay MGI's costs said to have been thrown away because the hearing of the preliminary discovery application on 24 July 2025 had been vacated. MGI argued that ONT was effectively seeking an indulgence from the Court by changing course after the matter had been prepared for hearing. On that view, the ordinary result should be that ONT pay the wasted costs.

ONT argued that this framing was wrong. It said the costs issue was premature because the proper costs outcome could depend on later events, including whether ONT actually commenced a substantive infringement proceeding. ONT also said that MGI's own conduct could be relevant to costs. In particular, ONT pointed to MGI's repeated refusal to provide samples since December 2024 and ONT's contention that MGI had sought to conduct the preliminary discovery proceeding as a preliminary trial or mini-trial.

The Court therefore had to decide whether to make an immediate wasted-costs order in MGI's favour, or whether to reserve that issue for later determination when the broader procedural history and the parties' conduct could be assessed together.

Justice Jackman accepted ONT's position that MGI's application for costs thrown away by the vacation of the hearing was premature. The Court held that the appropriate course was to reserve that question for later determination.

The orders made were practical. First, the proceeding was stayed for three months from 4 July 2025. Second, if ONT commenced a substantive proceeding against MGI within three months of that date, ONT would have leave to discontinue the preliminary discovery proceeding and the costs of that preliminary discovery application, including any costs thrown away by the vacation of the 24 July 2025 hearing, would be determined by the judge hearing the later proceeding. Third, if no such substantive proceeding was commenced, the question of costs claimed by MGI to have been thrown away by the vacated hearing was otherwise reserved.

The Court rejected the idea that this should simply be treated as ONT seeking an indulgence. The judgment says the circumstances involved a sensible agreement between both parties to vacate the hearing and pause the matter while ONT considered its future course. The Court said that in the new circumstances, which did not appear to have been anticipated when the proceeding was commenced, both parties had acted consistently with the overarching purpose of resolving disputes justly, quickly, inexpensively and efficiently.

Importantly, the Court also accepted that ONT's complaints about MGI's conduct might well be relevant to the eventual costs outcome. That included ONT's proposed argument that MGI had unreasonably resisted requests for samples and had run the preliminary discovery application in a way that resembled preparation for a mini-trial. The Court did not decide those allegations in this judgment. But it accepted that ONT should be able to put those arguments later when costs were considered in full context.

This is the most useful practical part of the judgment for business readers. The Court did not say that the party who changes course must always pay wasted costs. Nor did it say that the party resisting early requests will necessarily be penalised. Instead, the Court treated the costs question as something that could only be answered properly after looking at the whole procedural picture.

MGI argued that the vacation of the hearing was not caused by any conduct on its part and that the outcome of the proceeding was not relevant to whether costs thrown away should be ordered. ONT responded that the broader history did matter. ONT said MGI had repeatedly refused requests for samples since December 2024, and that this refusal had created the need for the preliminary discovery application in the first place. ONT also said MGI had sought to conduct the matter as a preliminary trial, contrary to the principle ONT relied on from earlier authority.

The Court did not resolve those competing factual and forensic positions in this judgment. But it accepted that ONT's contentions, if made out, may well be relevant to the costs said to have been thrown away by vacating the hearing date. The Court also said it was open to ONT to argue later that MGI's resistance to producing the relevant material had necessitated the preliminary discovery application.

That is significant because it shows that costs in procedural patent disputes are not always compartmentalised. A business cannot safely assume that a vacated hearing will be viewed in isolation. The Court may ask broader questions such as: who created the need for the application, who resisted practical solutions, whether the matter was run efficiently, and whether either side pushed the process beyond what was appropriate for a preliminary discovery case.

For businesses, this means conduct before the hearing can matter just as much as conduct at the hearing. Emails requesting samples, responses refusing access, internal decisions about whether to cooperate, and the way evidence is prepared may all become relevant later if costs are disputed.

For most businesses, the value of this case is procedural rather than technical. It shows how quickly a patent dispute can generate real legal cost exposure before the Court has said anything about infringement. If your business owns patents and suspects a competitor's product may infringe, you may need samples or technical material before deciding whether to sue. Preliminary discovery can help, but it is still litigation and it can become expensive if the other side resists.

If your business is on the receiving end of those requests, this judgment is a reminder that a refusal to provide material may later be raised on costs, even if the immediate hearing never goes ahead. That does not mean you must always hand over samples. It means you should make those decisions carefully, document your reasons, and understand that the Court may later look at whether your conduct contributed to the need for the application.

If your business is the applicant, this case shows that obtaining the material another way can change the procedural landscape. That may justify vacating a hearing and pausing the case while you decide whether to file a substantive claim. But changing course does not automatically end the costs debate. You should expect the Court to examine the whole sequence of events, including whether the application was necessary when filed and how both sides handled it.

The judgment also reinforces that preliminary discovery should remain a focused information-gathering process. ONT argued that MGI had sought to conduct the matter as a mini-trial. The Court did not decide that point, but it accepted that the allegation could be relevant later. Businesses should take from that a simple lesson: early procedural applications should not be overloaded with merits disputes unless the rules and the circumstances genuinely require it.

From a management perspective, there are four practical habits worth adopting early in any patent dispute. First, keep a clear written record of requests for samples, technical information and responses. Second, align legal strategy with commercial objectives so that procedural steps are proportionate. Third, review whether a targeted exchange of material could narrow the dispute before hearing costs escalate. Fourth, assume that if costs are later argued, the Court may look closely at whether your business acted reasonably, efficiently and consistently with the proper conduct of litigation.

The judgment was delivered on 29 July 2025 by Justice Jackman in the Federal Court of Australia. The question was determined on the papers, with the date of last submissions recorded as 28 July 2025. The orders stayed the preliminary discovery proceeding for three months from 4 July 2025 and set out what would happen to costs if ONT commenced a substantive proceeding within that period.

This means the decision should be read as an interlocutory procedural ruling. It explains how the Court handled the immediate costs dispute after the hearing was vacated, but it does not provide a final account of the broader patent controversy between the parties.

This page is based on the Federal Court judgment in Oxford Nanopore Technologies Plc v MGI Australia Pty Ltd (No 2) [2025] FCA 869. The judgment is sufficient to explain the procedural setting, the parties' competing positions on costs thrown away, the orders made, and the Court's reasons for reserving the costs issue.

The judgment itself is short and focused. It does not decide the substantive patent issues and does not confirm on its own whether later infringement proceedings were filed or how any later costs questions were ultimately resolved. Readers should therefore treat this page as an explanation of this specific procedural ruling, not as a final account of the entire dispute.