Introduction
The patent litigation landscape in Australia has some special features. In the course of a hearing recently, during an exchange with counsel, Lord Justice Pumfrey observed:
‘If I am to look at other jurisdictions, we really ought to look at the Australians… who have the most eccentric approach to obviousness known to man.’
We will come to a discussion of the law regarding obviousness and the treatment of common general knowledge, each of which have some special features, in due course.
The Australian patent litigation landscape also includes features such as a two-tiered patent system and a pre-grant opposition procedure. The pre-grant opposition procedure in particular gives rise to a body of litigation by way of appeals from patent office decisions. These appeals to the Federal Court are treated as hearings de novo.
1.1 What are the principal sources of law and regulation relating to patents and patent litigation? (Briefly describe the role of international, federal or state laws and relevance of court decisions, list and briefly describe relevant statutes and international treaties)
The Patents Act 1990 (‘the 1990 Act’) provides the legislative framework for administration of the Australian Patent System. The 1990 Act commenced operation on 1 May 1991 and repealed the Patents Act 1952 (‘the 1952 Act’).
A threshold complication arises in relation to patents that had been granted under the 1952 Act at the time that the 1990 Act came into operation. The 1990 Act applies to these patents and their validity therefore is to be determined under the 1990 Act. However, the 1990 Act also provides that grounds of invalidity under the 1990 Act cannot be relied upon to invalidate a patent granted under the 1952 Act unless that ground was also available under the 1952 Act.
The 1990 Act is an enactment pursuant to federal constitutional power to make laws with regard to ‘copyrights, patents of inventions and designs, and trade marks’. However, the shape and content of the 1990 Act has been significantly influenced by Australia’s obligations to give effect to international treaties to which it is a signatory.
Australia’s accession to the Paris Convention for the Protection of Industrial Property of 1883 (‘the Paris Convention’) is reflected in Part 2 of Chapter 8 of the 1990 Act, which is headed ‘Convention Applications’. In particular, ss 94 and 95 of the 1990 Act, give priority to filings made under the Paris Convention.
Australia is also a signatory to the Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the purpose of Patent Protection 1987 (‘the Budapest Treaty’). Section 6 of the 1990 Act deals with deposit requirements. Sections 41 and 42 are concerned with the contents of a specification where the invention is a micro-organism.
Chapter 8 Part 1 of the 1990 Act is headed ‘Convention applications’ and contains ss 88–93 reflecting Australia’s accession to the Patent Co-operation Treaty.
Finally, as a result of Australia’s accession to the Agreement on Trade-Related aspects of Intellectual Property Rights (‘TRIPS’), made as part of the final round of negotiations of the Uruguay Round of the General Agreement on Tariffs and Trade (‘GATT’), Australia introduced the 20-year term for Australian patents.
As can be seen, these international treaties profoundly affect the scope and content of patent rights in Australia, however, that influence is only to the extent that any particular requirement of a treaty has found its way into the specific provisions mentioned.
1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?
On a question of construction of the 1990 Act, a court may have regard to the intent and purpose of a treaty or international instrument. Indeed there are a number of examples of Australian courts interpreting a statute sympathetically to the intention and purpose of a foreign treaty to which Australia is a signatory.1 In the event of a conflict between the 1990 Act and a treaty, the 1990 Act will take precedence.
Finally it is essential to bear in mind that the statute is only the starting point in considering the matrix of legal rights and obligations which arise under the 1990 Act. The Australian courts vested with the relevant jurisdiction must also be considered a source of law because, critically, their decisions give meaning and clarity to the statute.
2.1 In which courts are patents enforced? Are they specialised patents courts? If not, what level of expertise can a patent holder expect from the courts?
Australia has both state and federal court systems. Both the state and federal courts exercise federal jurisdiction and are prescribed under the 1990 Act as courts in which proceedings under the Act may be commenced.2 However, with regard to matters arising as appeals against decisions or directions of the Commissioner of Patents, the jurisdiction of the Federal Court is exclusive of the jurisdiction of the other courts except the High Court.3
Matters arising under the 1990 Act are likely to fall into one of the following three categories.
Although the state courts have jurisdiction to hear patent infringement and validity actions, the Federal Court is very much the favoured court by litigants seeking adjudication of patent disputes. In the first instance, patent infringement or revocation matters will be heard by a single judge. An appeal lies as of right to the Full Court of the Federal Court against a judgment at first instance. If a matter involves an appeal from a Patent Office decision, an appeal lies to the Full Court only with the leave of the Federal Court. An appeal lies to the High Court against a judgment of the Full Court with the special leave of the High Court.
Although there are no specialised patent courts, the Federal Court has had considerable experience in patent matters as a result of the reasonably high volume of patent litigation conducted in Australia. Consequently, litigants can expect a very high level of expertise in the adjudication of patent law disputes, particularly in the Federal Court and the High Court.
Technical expertise is provided by expert witnesses and their role in proceedings in the Federal Court will be discussed below.
2.2 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?
There are a number of factors which militate against the Australian courts giving weight to the matters relating to decisions of courts or tribunals in other jurisdictions in relation to a foreign equivalent of the patent under its consideration. First, as a patent constitutes a territorial right it must be determined in accordance with the applicable laws in Australia. Secondly, the terms of the patent, either in the body of the specification or the claims, may well be different in scope to the patent’s international counterparts, often due to differences in substantive legal requirements and prosecution practice. Thirdly, as will be seen in this chapter, Australian jurisprudence has developed its own unique features in some important respects. Accordingly, an Australian court dealing with a patent dispute must come to its own views on each of the legal issues raised in the proceeding before it, based solely upon the evidence in that proceeding. To have regard to the outcome of proceedings in other jurisdictions is likely to involve the court compromising its own views, and to risk, to a greater or lesser extent, substituting the view of the foreign court for its own.4
This is not to say however, that Australian courts will not refer to decisions of foreign courts. They often do with a view to comparing their views and opinions against those of foreign courts. As seen in this chapter, Australian courts borrow heavily from principles of patent law in England which were established before the heavy influence of European decisions.
2.3 Do the courts deal with infringement and invalidity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or government agency (eg the Patent Office)?
An infringement action will usually be met with a counter-claim for invalidity and both proceedings will be dealt with in the same timeframe in the court. Independently of infringement proceedings, any person may commence proceedings in court to revoke a patent at any time.
2.4 Who can represent parties before the courts handling patent litigation and/or the government agency dealing with patent validity issues?
At a general level, Australian legal practice has many parallels with UK practice. Lawyers generally practise either as barristers or solicitors. Barristers are specialist advocates who present the case to the court, instructed (ie assisted) by solicitors.
As mentioned above, pre-grant oppositions are heard in the Patent Office before a hearing officer who is a delegate of the Commissioner of Patents. In this proceeding, a party to a hearing has a variety of choices in terms of representation. A party may appear in person or by an agent, which might be a patent agent, solicitor or barrister.
Proceedings in court, on the other hand, are far more formal, and the practice is to engage barristers to appear at the hearing instructed by solicitors.
2.5 What is the language of the proceedings? Is there a choice of language?
All proceedings are conducted in English and all evidence must be in English. When documents which are in a language other than English are involved, it is essential to provide a translation of the document and in the case of technical documents, this can give rise to considerable controversy. If the translation is disputed, the court will have to rule on the proper translation after hearing expert opinion on that issue.
2.6 To what extent are courts willing to grant cross-border or extraterritorial injunctions?
Unlike in the European context, Australian patent litigation is unlikely to see cross-border issues. As mentioned above, an Australian patent is an Australian territorial right which will be infringed by activity in Australia. That is not to deny that, often, infringements involve a series of acts some of which occur offshore. However in order to succeed in an infringement action in Australia the patentee must show that acts occurring within Australia come within the scope of the patent monopoly and it is only in respect of such activity that an injunction will be granted.
There is some scope for arguing that acts which give rise to patent infringement also give rise to a breach of the Trade Practices Act. In some limited circumstances it may be possible to argue that acts occurring offshore give rise to (or contribute to) a breach of the Trade Practices Act in Australia and these may provide a basis for seeking injunctions that have extra-territorial application.
2.7 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?
Torpedo actions will not have application in Australia for the reasons set out under the previous heading and because generally speaking, there is little opportunity to argue that the jurisdiction of an Australian court would be blocked by something equivalent to Article 21 of the Brussels Convention.
However, more generally, a party may seek to stay proceedings in Australia on the basis that a counterpart of the patent is being litigated in another jurisdiction, although as discussed below, there is no generally applicable rule.
3.1 How is patent infringement assessed? To what extent does the doctrine of equivalents apply in an infringement action?
A patentee’s right is essentially to exclude others from exploiting the invention during the patent term. The exclusive right granted by the patent is personal property.
Under the 1990 Act, the scope of the patentee’s rights are set out in s 13, as being ‘the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention’. ‘Exploit’ is further defined to include the right:
‘(a) where the invention is a product – make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or
(b) where the invention is a method or process – use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.’
Construction of the patent
Naturally, the first task in any infringement analysis is to construe the patent and the claims. The task is to arrive at a meaning of the claims which a person skilled in the relevant art would give them, against the background of the common general knowledge. ‘The construction of documents is a function of the court, being a matter of law, …’ .5 ‘Evidence can be given by experts as to the meaning which those skilled in the art would give to technical or scientific terms and phrases and on unusual meanings or special meanings given by such persons to words which might otherwise bear their ordinary meaning’.6
‘Where the patent contains technical terms, the court must, by use of evidence, be put in a position of a person of the kind to whom the patent is addressed, that is, a person acquainted with the surrounding circumstances of the state of the art at the relevant time.’7 And, the document must be looked at through the eyes of the person who would be expected to practise the field of the invention. The court ought not attempt to construe a technical document itself and it should be reluctant to place its own construction upon a technical document unaided by expert evidence8 because the ‘court should be careful to avoid assuming a technical expertise which it does not have’.9 However, as important as the evidence of the skilled reader might be, it cannot ever be determinative of any issue which arises on a question of construction of the patent10 given that the task of construing the patent is ultimately for the court and not the expert.11
Constructional questions must be approached bearing in mind the character of a patent as a document which confers a public monopoly. Therefore, the patent is not to be construed as a written document affecting only the rights between particular parties.12
Any question of construction must be resolved only after reading the specification as a whole.13 Construction should not be unduly narrow14 and it is appropriate to construe the claim in a way which is benevolent to the inventor with a view to making the invention work.
If grammatical questions surrounding the claims can be resolved according to the ordinary rules for construction of written documents, so that the meaning is not left uncertain, there is no need to resort to the specification to elucidate that meaning;15 Indeed, it is impermissible to do so.16
However, in those cases where the language is obscure or doubtful, it is permissible to have resort to the specification in an attempt to resolve the doubt. This is referred to as the ‘dictionary principle’17 which was expressed in the Interlego case18 as follows:
‘If the expression is not clear it is then permissible to resort to the body of the specification to define or clarify the meaning of words used in the claim without infringing the rule that clear and unambiguous words in the claim cannot be varied or qualified by reference to the body of the specification’.
However, whilst it is permissible to refer to the body of the specification in the circumstances indicated, it is not permissible unless the claim itself carries an express reference to it, to ‘import into a claim, features of the preferred embodiment. The preferred embodiment cannot properly be used to introduce into the definite words of a claim an additional definition or qualification of the patentee’s invention.’19
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Finally, in the context of construction, section 116 of the 1990 Act must be mentioned which, on any question of construction involving a patent which has been amended, permits reference to the unamended claim.
In an ideal world, construction of the patent and claims would occur before reference was made to the alleged infringement. The task essentially being one of ascertaining the meaning of the patent and claims as understood by a relevantly skilled person, the court should be free to undertake this task absent the distraction of being driven to (or away from) a particular meaning by reference to the alleged infringement.20
There is indeed considerable merit in such an approach, as the tasks of construction and infringement analysis are two separate and distinct functions. The first being a question of law, while the second is a question of fact.21
In practice, the question of which of the parties to the action should be required to put forward their construction of the patent first also arises. This arises because almost invariably an infringement action will attract a counter-claim for revocation based upon alleged invalidity of the patent. In such circumstances, the applicant in an infringement action will want to know what construction the cross-claimant places upon the patent when alleging invalidity. At the same time, the applicant will not wish to put forward a construction of the patent for infringement which will expose it to the cross-claimant’s invalidity claim.
Generally speaking, the Federal Court has tended to deal with issues of this nature on a case-by-case basis, declining to lay down any generally applicable principle.
The foregoing discussion on construction may suggest that the steps of construing the patent and considering questions arising on the infringement case are dealt with in distinct phases in the litigation process. Closer to the truth, however, is that the construction of the patent and the attention to infringement (or indeed validity) issues all occur as part of a process. In the result, the patent is in fact construed in a context where, at least at a level of generality (but often specificity) the implications of the construction analysis for the infringement or validity cases, will be known to the court. Nevertheless, the court must strive to not ‘impermissibly construe…the claim with an eye to the allegedly infringing article’.22
Patent infringement
Turning to the question of infringement, but bearing in mind the discussion above, in applying the foregoing principles on a question of infringement, the court is applying a purposive rather than ‘textual’ or ‘literal’ test on infringement. It was no surprise therefore when the Federal Court, in considering the comments of Lord Diplock in Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183, declared that the Catnic case should not be taken ‘as having propounded any novel principle or new category of ‘non-textual infringement’ …’ .23 This is because the High Court had long ago adopted from English law the principle that an infringer could not escape infringement by introducing variants if in truth it had taken the ‘pith and marrow’ of the invention.24
Although the patent is to be construed purposively, ‘to establish infringement…the patentee must show that the defendant has taken each and every one of the essential integers of the patentee’s claim. Therefore if, on its true construction, the claim in a patent claims a particular combination of integers and the alleged infringer of it omits one of them he will escape liability.’25
Even so, the court will not allow the claim of infringement to be defeated by a technical or
narrow reading as the following passage from Radiation Ltd v Galliers and Klaerr Pty Ltd26 suggests: ‘But on a question of infringement, the issue is not whether the words of the claim can be applied with verbal accuracy or felicity to the article or device alleged to infringe, it is whether the substantial idea disclosed by the specification and made the subject of a definite claim has been taken and embodied in the infringing thing’.
Moreover, the Full Court in the Populin case27 approved of the comments of the English Court of Appeal in Clark v Adie28 where James LJ said: ‘The patent is in the entire combination, but there is, or may be, an essence or substance of the invention underlying the mere accident of form; and that invention, like every other invention, may be pirated by a theft in a disguised or mutilated form, and it would be in every case a question of fact whether the alleged piracy is the same in substance and effect or is a substantially new or different combination.’
However, where the form in which the invention has been expressed is found to be deliberately limited by the patentee, the ‘pith and marrow’ doctrine cannot be invoked to find infringement. Such a finding would result in ‘too general a level of abstraction and comparison’.29 In Minnesota Mining & Manufacturing Co v Beiersdorf (Aust) Ltd30 Aickin J said, referring with approval to Clark v Adie:
‘it remains the law that a defendant may not take the substance of an invention unless the wording of the claims make it clear that the relevant area has been deliberately left outside the claim’.
In Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd31 the Full Court of the Federal Court was called upon to consider the boundaries of such a doctrine. At first instance, the court had construed the claims of the patent by reference to a finding as to the ‘substance’ or ‘essence of the invention’. The Full Court said:
‘… the ‘modern approach to construction’ is to read a document in its context and …
not merely when ambiguity exists in the claim … . That does not mean, however, …
that integers not present in the claims are thereby added...
...the words of the claim are in the patentee’s own choosing and they fix the boundaries
of the monopoly. It is the patentee that determines the essential integers of the drafted
claim.’
This approach is entirely consistent with the implicit recognition in the High Court in the Minnesota Mining case where Aickin J, referring to the ‘pith and marrow’ doctrine, said:32 ‘the doctrine … concerning the taking of the pith and substance of an invention, but none the less staying outside the express words of the claim, is less often applicable at the present time …’
This is because in the modern day, the patentee is able, indeed obliged, to state the limits of the invention in terms of claims, with the result that in any infringement analysis it is ‘the substantial idea disclosed by the specification and made the subject of a definite claim’33 that falls for consideration.
The addition (more accurately substitution) of integers therefore may well lead to a new working of the invention, if variants are substituted for essential integers. However, where the variants merely replace inessential integers which do not lead to a new working of the invention, infringement will not be avoided.34
Doctrine of equivalents
The above discussion suggests that the question whether the ‘doctrine of equivalents’ applies to infringement actions in Australia, is not straightforward. On the one hand, the patent will not be defeated by a textual or literal interpretation. However, there are limits to the application of this principle, in particular, that the patent will not be infringed unless all of the essential integers of the claimed invention have been taken.
Having determined which of the integers of the claimed invention are essential, a comparison will be made between the claim and the accused device or process. However, liability for infringement of a patent is not limited to the person who directly infringes the claim. A party may be liable in an infringement action in circumstances where s 117 of the Patents Act applies, or where the party has authorised the infringement, jointly participated in it or has otherwise contributed to the act of infringement.
Section117 of the 1990 Act is as follows:
'Infringement by supply of products
(1) If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.
(2) A reference in subsection (1) to the use of a product by a person is a reference to:
The application of s 117 of the 1990 Act has not been without controversy and the High Court has not yet had occasion to consider its meaning. However, the current view in Australia is that a literal reading of s 117 is to be preferred.35 In those circumstances s117 provides a statutory basis for a finding of infringement where previously recourse to principles of indirect infringement (possibly with uncertainty as to outcome) was required. Accordingly, where a person supplies goods to the market and those goods are used in a way that infringes a patent, that supply of itself, if the conditions of s 117 are satisfied, will be a primary infringement.
In those cases where the s 117 criteria are satisfied, there is also likely to be a separate claim based upon indirect infringement, since engaging in conduct which leads others to infringe a patent may give rise to a finding of indirect infringement. Unquestionably, there are limits as illustrated in the following passage:
‘…it is settled law that the exclusive property in a combination invention is not infringed upon by the sale of the components …; that selling articles to persons to be used for the purpose of infringement of a patent is not an infringement of the patent….; and that sale with a knowledge that the purchaser will use the articles for infringement is not itself an infringement although the vendor gives the purchaser an indemnity: the vendor must have made himself a party to the act of infringement …. Further … it is not enough that the article sold has no other use than a use in the course of what amounts to infringement … The basis upon which these rules rest is that whatever is not included in the monopoly granted is publici juris and may be freely used as a common right.’ [emphasis added]36
Accordingly, the current view in relation to contributory infringement in Australia is that liability will only be found if the party takes part, or is implicated, in the act of infringement. In Ramset Fasteners,37 the Full Court of the Federal Court, after reviewing a line of English cases, said:
‘The necessary circumstances have been variously described: the defendant may ‘have made himself a party to the act of infringement’; or participated in it; or procured it; or persuaded another to infringe; or joined in a common design to do acts which in truth infringe. All these go beyond mere facilitation. They involve the taking of some step designed to produce the infringement, although further action by another or others is also required. … some link the customer can easily furnish, particularly if the customer is actually told how to furnish it and how to use the product in accordance with the patent, ….’
In the Ramset case, the court found that Ramset determined to enter into the market and to compete with the patentee at a time when it was aware of the patent. The court also found that ‘the nature of the product supplied by Ramset, the nature of the work in connection with which it was to be used, and the circumstances of the sales, all pointed to the probability that it would be so used as to infringe the patent.’38 Ramset had produced some 6,000 copies of a brochure, for distribution to contractors and engineers in support of their marketing efforts which demonstrated use of its products in a way which would infringe the patent. In addition, presentations by Ramset’s manager of research and development had illustrated the use of the products in a way which would infringe the patent.
The necessary implication or participation in the infringement may be found in the sale of a kit of parts which when assembled by the purchaser, infringes the patent. And, the sale of a product which had non-infringing uses was held to be an infringement when sold with instructions which, when carried into effect, infringed the patent.39
There are some limited opportunities to claim defences to infringement. Section 119 contains the exemption based on prior use. In very limited circumstances, a party to an infringement action may rely on the exemption to do, in terms of the claimed monopoly, exactly that which it did prior to the patent. There has also been a suggestion that a pleading that the infringement is not novel will survive a strike-out application. The importance of such a defence has been held to enable (unlike a novelty attack) a patent case to be determined without reference to the patent in suit. ‘Whereas, a plea of invalidity for want of novelty can only be resolved after there has been a close examination of the patent in suit and the claimed invention has been compared with the prior disclosures’.40
Lack of knowledge may also be pleaded as part of a defence of innocent infringement (s 123) which, if made out may result in the court declining to award monetary compensation.
A further exemption to infringement is found in s 163 which provides that if an invention is exploited by the Crown (or by a person authorised in writing by the Crown) for the services of the Crown, such exploitation is not an infringement. Even so, appropriate compensation must be made (s 165).
3.3 To what extent can enforcement of a patent expose the patent holder to liability for an antitrust violation?
There will be circumstances where an alleged infringer will be able to invoke the antitrust laws in answer to a claim of patent infringement but they will be rare. The antitrust laws are found in Part IV of the Trade Practices Act 1974 (Cth) which deals with restrictive trade practices involving agreements which lessen competition; agreements in relation to price; horizontal and vertical restraints imposed by tying arrangements and misuse of market power. While, section 51(3) of the Trade Practices Act excludes its operation in relation to certain assignments or licences relating to patents, such exclusion does not affect the operation the Trade Practices Act in relation misuse of market power, agreements affecting price and mergers.
Even so, there are very few cases which deal authoritatively with this issue and the boundary between legitimate enforcement of a statutory monopoly and enforcement which would give rise to antitrust violation is not clear. However, it would seem that more is required than the mere enforcement of a patent to re-establish the statutory monopoly. Probably the most relevant provision of the Trade Practices Act for present purposes is s 46 which is in the following terms:
'Misuse of market power
(1) A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of:
(a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market;
(b) preventing the entry of a person into that or any other market; or
In a discussion in the High Court of Australia in Queensland Wire Industries Pty Ltd v The Broken Proprietary Co Ltd41 Mason CJ and Wilson J, in the context of a discussion of market power said:
‘Barriers to entry may be legal barriers – patent rights, exclusive government licences and tariffs for example.’42
And, in giving meaning to the phrase ‘take advantage of’ they said: ‘The phrase ‘take advantage’ in s46(1) does not require a hostile intent enquiry – nowhere is such standard specified.’43
Similarly, Deane J said: ‘If the substantial degree of market power exists and is ‘take[n] advantage of’ for one or other of those purposes, it is not to the point that that degree of market power was acquired by praiseworthy means… that is, of course, unless the words ‘take advantage of … power’ introduce a need for some distinct examination of the morality or social acceptability of the conduct involved. In my view, they do not.’44
Plainly enough therefore there will be circumstances where enforcement of patent rights may well be seen to go beyond a mere re-establishment of the statutory monopoly provided by the patent and in those circumstances given the threshold established by the Queensland Wire Industries case, it is certainly arguable that the Trade Practices Act could be invoked to preclude the enforcement of patent rights in certain circumstances.
Section 138(3) sets out the grounds on which a patent may be invalidated. Section 138(3) is in the following terms: ‘Revocation of patents in other circumstances...
(3) After hearing the application, the court may, by order, revoke the patent, either wholly or so far as it relates to a claim, on one or more of the following grounds, but on no other ground:
(f) that the specification does not comply with subsection 40(2) or (3).’
Paragraph (3)(c) was intentionally omitted by amendments in April 2002, it read: ‘(c) that the patentee has contravened a condition of the patent’. Typically cases involving claims of invalidity will raise issues under s 138(3)(b) and (f). The present discussion will be limited to a consideration of the issues that arise under those provisions. The ‘patentable invention’ sub-heading (s138(b)) relates back to s 18(1) of the 1990 Act which
is in the following terms: 'Patentable inventions for the purposes of the standard patent
(1) Subject to subsection (2), an invention is a patentable invention for the purpose of the standard patent if the invention, so far as claimed in any claim:
(2) Human beings, and the biological processes for their generation, are not patentable inventions.’
The most common issues that arise under the s 18(1) headings are: (1) manner of manufacture; (2) novelty; and (3) inventive step. These will be dealt with in turn.
(1) Manner of manufacture
A decision of the High Court in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd in 199545 established that the introductory words of s 18(1) which include the phrase ‘a patentable invention is an invention that’ imported a threshold requirement of inventiveness into s18(1) over and above the requirement of novelty and inventive step. The court said:
‘The effect of those opening words of s18(1) is that the primary or threshold requirement of a “patentable invention” is that it be an “invention”. Read in the context of s18(1) as a whole and the definition of “invention” in the Dictionary in schedule 1, that clearly means “an alleged invention”,…that threshold requirement of “an alleged invention” will, notwithstanding an assertion of “newness”, remain unsatisfied if it is apparent on the face of the relevant specification that the subject matter of the claim is, by reason of absence of the necessary quality of inventiveness, not a manner of new manufacture for the purposes of the Statute of Monopolies.…if it is apparent on the face of the specification that the quality of inventiveness necessary for there to be a proper subject of letters patent under the Statute of Monopolies is absent, one need go no further.’46
In upholding the decision of the Full Court of the Federal Court revoking the patent, the
majority of the High Court held that it was apparent on the face of the specification that: ‘…the present case was no more than a new use of a particular known product … and, consequently, not a “patentable invention”.’47
(2) Novelty
Section 7(1) of the 1990 Act provides that an invention is to be taken to be novel unless it is not novel in light of information made publicly available either in Australia or elsewhere. Such information may be in the form of a single document or through doing a single act or through two or more related documents or through doing two or more related acts if the relationship between the documents or acts is such that a skilled person would treat them as a single source of information. The ‘documents’ or ‘acts’ may be available, or done, in or outside of Australia.
Also for consideration, is information in a patent specification which even though published after the claim under consideration, has a priority date which precedes it and the information under consideration formed part of the specification both on its filing date and when it was published.
In Myers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137CLR 228 at 235 Aickin J said: ‘The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement’.
In Bristol-Myers Squibb Company v FH Faulding & Co Ltd the Full Court of the Federal Court48 stated that in the case of a paper anticipation the reverse infringement test cannot be applied literally and pointed out that the ‘infringement’ arises because someone hypothetically does or makes what the document describes. The Full Court49 quoted Lord Westbury in Hill v Evans as follows:
‘…the antecedent statement must be such that a person of ordinary knowledge of the subject would at once perceive, understand, and be able practically to apply the discovery without the necessity of making further experiments and gaining further information before the invention can be made useful. If something remains to be ascertained which is necessary for the useful application of the discovery, that affords sufficient room for another valid patent.’
In similar vein is the rule laid down by the English Court of Appeal in the General Tire &
Rubber Co case cited by Justice Gummow in the Nicaro Holdings case (at p 529) as follows: ‘To anticipate the patentee’s claim the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented: …A signpost, however clear, upon the road to the patentee’s invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee.’
In applying the principles distilled from these cases the Full Court of the Federal Court in the Bristol-Myers case held that for a prior publication to destroy the novelty of a claim of a patent it ‘must give a direction or make a recommendation or suggestion which will result, if the reader follows it, in the claimed invention’.50
(3) Obviousness
The High Court of Australia has had occasion most recently to consider the law of obviousness as it applies in Australia in the context of a patent for the formulation of the Omeprozole drug.51 The High Court there observed that there had been a divergence between the Australian and UK courts to such an extent that the recent English cases dealing with the law of obviousness should be treated with caution.52
Observing that ‘obvious’ within the context of the 1990 Act takes one back to what was known or used prior to the relevant priority date in the relevant geographical area, the High Court expressly reaffirmed the notion of common general knowledge as set out in the Minnesota Mining case as:
‘…the use of that which is known or used by those in the relevant trade. It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge’.
The High Court expressly rejected the idea that being able to make a mosaic from several individual pieces of information by combining them to arrive at the alleged invention equates to the use of common general knowledge.
The High Court held that for the purposes of the law of obviousness in Australia, the question was not whether the knowledge was available by means of online databases or the like but rather whether in fact the knowledge said to make the invention obvious was ‘common knowledge’. Whereas the English court had adopted the European standard where the skilled worker was assumed for the purpose of obviousness to have read and understood all of the available prior art, the position in Australia remained that such available prior art would not be taken into account unless it had formed part of the knowledge of the hypothetical addressee, ie, common general knowledge.
Against this background the court was able to apply the test which had been laid down by Aickin J, in the Wellcome Foundation case: ‘the test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have lead from the prior art to the invention, whether they be the steps of the inventor or not.’53
In rejecting the standard which had been applied by the court at first instance the High
Court said: ‘The tracing of a course of action which was complex and detailed, as well as laborious, with a good deal of trial and error, with dead ends and a retracing of steps is not the taking of routine steps to which the hypothetical formulator was taken as a matter of course.’54
It also rejected the standard laid down by the Full Court of the Federal Court being that there would be no inventive step if each of the integers of the claimed invention was at least worthwhile trying. The High Court said:
‘That view of the matter wrongly takes as the starting point the assumed result. It succumbs immediately to the seduction of hindsight. Also, the notion of trying out possibilities invites the repetition of criticism made earlier in these reasons.’55
Ultimately, the statement of principle in the Astra case is found in the adoption of the reformulation of the ‘Cripps question’ by Graham J in Olin Mathieson Chemical Corpn v Borex Laboratories Ltd:
‘Would the notional research group at the relevant date, in all the circumstances, which include the knowledge of all the relevant prior art and of the facts of the nature and success of [the compound] directly be lead as matter of course to try the…[invention]…in the expectation that it might well produce a useful alternative to or better drug than [the compound] or a body useful for any other purpose?’56
Another aspect of the law of obviousness which was discussed in the Full Court of the Federal Court in a recent decision of Lockwood Security Products Pty Ltd v Doric Products Pty Ltd involves the notion that it may be evident from the specification itself that the alleged invention involves no inventive step. This is particularly so if the objects clause in the specification contains an admission of what was known at the priority date and it is evident upon a reading of the specification that the alleged invention involves no inventive step from that which is admitted to have been part of the common general knowledge. This decision of the Full Court is on appeal to the High Court and a ruling on this reasoning process will clarify the scope, if any, for such an approach.
Returning now to sub-section (f) of s 138, the issues of sufficiency and fair basing arise. Section 138(f) refers to s 40 sub-sections: ‘(2) A complete specification must:
(a) describe the invention fully, including the best method of performing the
invention;
…; and
(3) The claim or claims must be clear and succinct and fairly based on the matter described in the specification.’
(4) Sufficiency
In Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1, the High Court held that a question of sufficiency must be determined after consideration of the patent as a whole and that for these purposes the claims of the specification are as much part of the disclosure as the body of the specification itself.
The requirement of full description found in s 40(2)(a) of the 1990 Act must be assessed taking into account the complete specification read in light of the common general knowledge at the relevant priority date. The relevant question, formulated by the High Court in Kimberly-Clark is:
‘…will the disclosure enable the addressee of the specification to produce something
within each claim without new inventions or additions or prolonged study of matters
presenting initial difficulty?’
The court also later affirmed in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 212 ALR 1 that for the purposes of s 40(2)(a) it is not necessary for the inventor to disclose every way of performing the invention but rather that it is sufficient if the disclosure enables the skilled addressee to produce something within each claim without new invention or addition or prolonged study.
(5) Fair basis
Section 40(3) of the 1990 Act introduces the requirement that the claims of a patent must be fairly based on matter described in the specification.
Fair basis is a very important concept under Australian patent law in that only claims which are fairly based will have entitlement to the priority date of the patent. In similar vein, a complete specification will only be entitled to the priority date of its provisional filing if the claims of the complete specification are fairly based on the provisional filing.
The question of whether a claim is fairly based on the specification has been held to be a question of textual comparison with a view to determining whether the claim as expressed travels beyond the matter disclosed in the specification. In the Rehm Pty Ltd case Gummow J stated the test as follows:
‘… the question is whether there is a real and reasonably clear disclosure in the body of
the specification of what is then claimed, so that the alleged invention as claimed is
broadly, that is to say in a general sense, described in the body of the specification.’
This passage was approved in the Lockwood Security case in the High Court which has been referred to above.
3.5 Can a court only partially invalidate a patent? Can it transform the patent into a utility model?
Section 20 of the 1990 Act is headed ‘Validity Of Patent Not Guaranteed’ and it provides:
‘(1) nothing done under this Act or the PCT guarantees the granting of a patent, or that
a patent is valid, in Australia or anywhere else.’
Section 21 is headed ‘Validity not Implied by Making or Refusal Of Non-infringement Declaration’ and provides that:
‘the making of or refusal to make a non-infringement declaration in relation to a claim
of the patent does not imply that the claim is valid.’
Then s 22 of the 1990 Act is headed ‘Invalidity In Relation To One Claim Not To Effect Validity In Relation To Other Claims’ and it provides as follows:
‘The invalidity of a patent in relation to a claim does not effect its validity in relation to
any other claim.’
A declaration of invalidity in relation to a claim results in that claim being invalid, while other claims may survive. In the event that all claims are invalid and are not in a position to be amended, the patent will be revoked.
The court will not transform the patent into a utility model in the event of a finding of invalidity or partial invalidity. However, in certain circumstances and within certain time frames, an innovation patent may be obtained which has a lower threshold than a standard patent. An innovation patent has been likened to the German Utility Model. The standard of invention for an Innovation patent under the 1990 Act, is set out in s 18(1A) which provides that an invention is a patentable invention for the purposes of an innovation patent if the invention ‘involves an innovative step’.
The term innovative step is defined in s 7(4) of the 1990 Act in a way that provides that an invention will involve an innovative step unless the invention, to a person skilled in the art, in light of common general knowledge, varies from the prior art only ‘in ways that make no substantial contribution to the working of the invention’.
There are two ways in which an application to amend a patent may be made. The scheme in relation to amendments is set out in chapter 10 of the 1990 Act and it requires that amendments may be made retaining the original priority date of the patent, provided that the complete specification does not, as a result of the amendment, claim matter not in substance disclosed in the specification as filed.
Moreover an amendment made after acceptance of the specification is not allowable if as a result of the amendment, the claim of the specification would not in substance fall within the scope of the claims of the specification before amendment or would not be sufficiently described or fairly based, as previously discussed.
An amendment directed by the Commissioner of Patents does not give rise to the exercise of discretion by the Commissioner. Rather he/she is obliged to apply the strict statutory test.
However amendments sought whilst a patent is the subject of litigation can only be directed by the court. In fact, applications for amendment are often made in the course of litigation. Section 105 of the 1990 Act deals with the scheme where amendments are directed by the court and it provides that the court has a discretion whether or not to allow the amendment.
In Novartis AG v Bausch and Lomb (Australia) Pty Ltd [2004] FCA 835 the court distinguished between amendments which sought to validate a claim that was otherwise invalid and amendments which merely corrected errors or mistakes. The court held that where the amendments requested were ‘validating amendments’, the applicant bore a higher onus especially given the public nature of the patent instrument. In the final result the court found that the patentee was aware that the claims were too broad and took no steps prior to the litigation to amend the patent choosing instead to seek to enforce a broad claim. In arriving at this conclusion the court said:
‘the values were selected in pursuance of a policy on the part of [the] attorneys to express the claims in the patent as broadly as possible, irrespective of whether the scientific evidence then available to the patentees supported those claims.’57
In the circumstances, the court refused to exercise its discretion in favour of amendment.
3.7 Are there any grounds on which an otherwise valid patent can be deemed unenforceable, owing to misconduct by the patent holder, or for some other reason (eg expiry of time limit)?
There may be circumstances where a patent claim is defeated by the conduct of the patentee but more than mere delay would be required. The grant of an injunction is at the discretion of the court. Under the general law a party may be estopped from asserting rights in certain circumstances and particularly where it has led another person to believe that it would not assert rights. If, in reliance upon such a representation the other party changes its position, an estoppel might arise resulting in the exercise of discretion against the grant of an injunction. Such cases would be extremely rare in the context of patent disputes. A claim for relief in the event of infringement of a patent must be made within six years of the claim arising.
3.8 Can a patent holder bring a law suit claiming both patent infringement and unfair competition for the same set of facts?
Australia does not have a law of unfair competition. However the Trade Practices Act has a number of provisions for the protection of consumers. For example, s 52 of the Trade Practices Act provides:
‘A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive.’
The courts have held that the label ‘misleading or deceptive’ is a very general one and has extremely broad application. Even statements which are literally true might be misleading in a particular context.
Section 53 of the Trade Practices Act sets out particular proscribed conduct. Such conduct includes false representations in relation to goods or services including in relation to title, history, standard, quality, sponsorship, approval or affiliation. For example, the sale of a product carries with it an implied warranty of good title. The sale of an article which infringes a patent may be seen to be misleading since the representation of good title is false.
Given the broad nature of ss 52 and 53 of the Trade Practices Act there are also a number of representations which may be implied in a sale transaction and which might be found to be false.
Accordingly, although Australia does not have a law of unfair competition, the same facts that give rise to patent infringement may well give rise to other causes of action under the Trade Practices Act.
4.1 Who can sue for patent infringement (patent holder, exclusive licensee, non-exclusive licensee, distributor)? Does a licensee need to be registered to sue?
Section 120(1) of the 1990 Act provides that ‘infringement proceedings may be started in a prescribed court, or in another court having jurisdiction to hear and determine the matter, by the patentee or an exclusive licensee’.
‘Exclusive licensee’ is defined to mean ‘a licensee under a licence granted by the patentee and conferring on the licensee, or on the licensee and persons authorised by the licensee, the right to exploit the patented invention throughout the patent area to the exclusion of the patentee and all other persons’. On a plain reading, this definition would suggest, that the term exclusive licensee (and by inference exclusive licence) is narrowly defined. However in Pharmacia Italia SPA v Interpharma Pty Ltd Sundberg J, on an interlocutory basis, held that there is room for the argument that this definition might contemplate multiple exclusive licences.
4.2 Under what conditions, if any, can an alleged infringer bring a law suit to obtain a declaratory judgment on non-infringement?
Sections 125, 126 and 127 deal with procedures for seeking a declaration of non-infringement from the court. Section 125 provides that an application may be made to the court at any time after the complete specification has become open to public inspection. Section 126 provides a procedure whereby the applicant for the declaration must have given notice to the patentee, including detailed particulars of the proposed exploitation, and an undertaking to pay the patentee’s expenses of obtaining advice as to whether the proposed exploitation would infringe the claim.
The validity of the claim cannot be questioned in proceedings for a non-infringement declaration and the costs of all parties in the proceedings must be paid by the applicant, except if the court otherwise orders.
4.3 Who can be sued for patent infringement? Can the company directors be sued personally? Under what conditions, if any, can someone be sued for inducing or contributing to patent infringement by someone else?
From the discussion which is set out in relation to infringement, it can be seen that a person may be sued for direct or indirect infringement. Indirect infringement includes acts of authorisation, joint tortfeasor and contributory infringement. A company director therefore may be sued personally for patent infringement in the event that the company director also actively assists in the infringement in a way that involves the director authorising, contributing to or jointly participating in, the infringement. However this would require the director acting in a personal capacity rather than as an agent of the company.
It is possible to add or subtract parties during the litigation but the addition or subtraction will always be at the discretion of the court. In the Federal Court, the addition and subtraction of parties is dealt with by Order 6 of the Federal Court Rules.
Two or more persons may be joined as applicants or respondents to proceedings provided that some common question of law or fact arises.58 However, proceedings shall not be defeated by reasons of misjoinder of parties. Rather the court will make such orders as are appropriate to the parties before it.59
A party may be joined to proceedings where it is determined that the party’s joinder is necessary to ensure that all matters in dispute are effectually determined.60
Similarly, a person who has been improperly or unnecessarily joined as a party to a proceeding may be removed.61
5.1 What options are open to a patent holder when seeking to enforce its rights in your country?
Enforcement of Patent rights in Australia is undertaken in the court, as discussed above. There are no administrative or alternative processes open to a patentee. Naturally a patent holder might wish to write a letter before action or, even less threatening, a letter advising of the existence of the patent. However, asserting rights in this way is potentially problematic given the content of s 128 of the 1990 Act. Section 128 provides that where a person threatens another with infringement proceedings, the aggrieved person may apply to a court for relief including for a declaration that the threats are unjustifiable and an injunction against the continuance of the threats.
The person against whom the threats are made may recover damages, to the extent that any are sustained, as a result of the threat. The section applies whether or not the person who made the threats is the patent owner or a person entitled to the patent. The scheme of the Act provides that a person against whom unjustified threats proceedings have been taken, may defend those proceedings by bringing an infringement suit. The 1990 Act goes on to provide that in those same proceedings the validity of the patent may be challenged.
In circumstances where a potential defendant seeks to obtain a forensic or strategic advantage by being a plaintiff in the proceedings, availing itself of the unjustified threats procedure is ideal. Accordingly, whilst the option of writing a letter before action is certainly available, it must always be borne in mind that it may give rise to infringement and validity proceedings as a result of an unjustified threats action.
There are no relevant criminal sanctions available in the context of infringement.
Unlike for other intellectual property rights such as trade marks and copyright, there are no border measures available in relation to patent infringements.
5.4 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve patent disputes? If arbitration is available to assess invalidity, will your Patent Office recognise and execute an arbitral award declaring a patent invalid?
Alternative dispute resolution is certainly available by consent of the parties. In certain circumstances the court may order or encourage mediation however in practice this is very rarely done in patent litigation. However if the parties saw fit, they could very well avail themselves of the opportunity of an alternative dispute resolution process with the option of making the process binding.
Typically, patent infringement proceedings in Australia are commenced in the Federal Court. The Federal Court operates on the ‘docket’ system. That is to say, each of the judges will be allocated matters to their docket and the matter will remain with the judge until hearing. Proceedings are commenced by an Application which sets out the relief claimed.
The Application must be supported by a Statement of Claim in which a claimant must set out the factual matters pleaded as giving rise to the claim for relief. In addition to a Statement of Claim, separate Particulars of Infringement must be provided, the function of which is to identify the particular acts and circumstances of the infringement.
For proceedings filed in the Federal Court, the proceedings will be listed for a directions hearing soon after initiating process is filed with the court registry. At the directions hearing, the court will make orders for such interlocutory steps as it determines will be required to have the matter for a hearing. These will include, in appropriate cases, orders for further particulars to be provided, a defence to be filed; any counter-claim to be filed; discovery, if applicable, to be provided; and, evidence to be filed.
Evidence is prepared in the form of affidavit and it is customary for the court to order that evidence on infringement be filed simultaneously with the counter-claimant’s evidence on invalidity. In the following round of evidence, all evidence in chief will be answered by the respective parties; and, in the final round, any reply evidence will be filed.
All disputed issues are decided by a judge as described above.
6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses?
As described above, witnesses (including expert witnesses) provide their evidence to the court by way of affidavit. At the commencement of the hearing the affidavits are formally read and subject to any objections, admitted into evidence at which time the witnesses may be called for cross-examination. The affidavit of a witness cannot be read unless the witness is available for cross-examination.
Some special considerations arise in relation to the use of experts in patent disputes in Australia. First, as indicated above, given the requirements in relation to common general knowledge, it is important that experts be able to give their opinions in relation to the state of common general knowledge in Australia at the priority date. Secondly, an expert must abide by the guidelines for expert witnesses laid down by the court. In particular, the guidelines stress the importance of experts remaining independent of the clients they represent; the expert’s primary obligation is to the Court. In this regard the guidelines require that the expert must disclose all that is relevant to the matter irrespective of whether it favours the party that has filed the expert’s evidence. Thirdly, the courts have been critical of evidence presented by experts where those experts have been ‘briefed’ beyond what may in fact be their general level of knowledge. For example, in Minnesota Mining & Manufacturing Co v Tyco Electronics Pty Ltd62 the court said:
‘The manner in which the evidence of some of the experts in the present case was brought into existence suggests that relatively little weight should be given to certain of that evidence. For example, witnesses were provided with a copy of the patent. They were either provided with a large number of other documents or found them in response to the task that was set them. That is hardly calculated to result in objective evidence as to what the hypothetical uninventive but skilled worker would have done.
To give the patent to a prospective witness is tantamount to leading the witness. Further, unless the other documents were part of the common general knowledge in Australia before the priority date, they are not relevant to any question of obviousness.’
6.4 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?
The opportunities for pre-trial discovery are limited. Indeed typically, pre-trial discovery is limited to documentary discovery. It is possible, but only with the leave of the court, to administer written interrogatories which must be answered on oath. However, these are very rarely used.
The court is generally concerned to ensure that the pre-trial processes and particularly the costs of pre-trial processes, are not unduly burdensome. For that reason, it is increasingly common for the court to give serious thought to whether documentary discovery is required at all. To the extent that the court deems it appropriate to order documentary discovery, it will seek to limit its scope within reasonable bounds.
Documents must be itemised in a list of documents and any privileged or confidential documents separately identified and the appropriate claims made.
Subpoenas are available to obtain documents from third parties and in some limited circumstances third party discovery might be available. In appropriate cases the court may make orders seeking information or assistance from third parties offshore provided there is sufficient connection between a party to the proceeding and the third party. The court may also seek assistance from a court overseas in appropriate cases.
6.5 What level of proof is required for establishing infringement or invalidity?
The standard of proof in civil litigation in Australia is the balance of probabilities and patent litigation is conducted on that basis. However, in cases which arise as appeals from patent office decisions on oppositions to grant of patent, the test which has been applied in a number of decisions of the Federal Court is that the court ‘must be clearly satisfied that the patent, if granted, would not be valid.’63 Whereas in Genetics Institute Inc v Kirin-Amgen Inc64 the court asked whether it was ‘practically certain that the patent to be granted on the specification would have been invalid’.
6.6 How long do patent infringement proceedings typically last? Is it possible to expedite this process?
It is difficult to estimate the time that patent infringement proceedings will typically take since a number of factors come into play. Probably the most influential factor in introducing complexity into the proceedings, and therefore the requirement of time, is the defendant’s cross-claim for invalidity. The interlocutory steps towards preparation for trial could be completed within 12 months and the parties would then be able to take the next available hearing date in the judge’s diary. It is not unusual for a period of some 18 months to elapse between commencement of proceedings and trial. However in certain circumstances it is possible to expedite proceedings and particularly if there is an urgent need for a determination of the issues. Expedition usually requires the co-operation of both parties however a court may be persuaded to order expedition in appropriate circumstances. The Court endeavours to deliver judgment within three months of the hearing, although it may take a substantially longer period.
6.7 What options, if any, are available to a defendant seeking to delay the proceedings? Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of defendant?
Given that proceedings are continually under the supervision of the court and must be conducted in accordance with the court timetable, the opportunity to deliberately cause extensive delay is limited. If a party is in default of the timetable, the other party can re-list the proceedings before the court on short notice. The most likely source of delay is the complexity of issues in the proceedings and the time which involved in addressing such issues.
The Federal Court Rules (Ord 20 r 2) provide for stay of proceedings in specified limited circumstances. Generally speaking the court is unlikely to grant a general stay of a local proceeding, even when the parties consent.
However the court will usually accommodate the needs of the parties if, for example, the proceedings have to be delayed to accommodate witnesses who are engaged in proceedings overseas involving a counterpart of the patent in suit.
7.1 What remedies are available against a patent infringer (final injunction, delivery up or destruction of infringing goods, publication of the decision, recall-order, monetary remedies, etc)?
All of these remedies are available against a patent infringer except, as set out above, in the case of innocent infringement a court may refuse to award damages or make an order for account of profits.
7.2 To the extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or consumers?
In order for a final injunction to bind the infringer’s suppliers or customers, those persons must be parties to the action and an injunction obtained against them. It is possible that such persons may be joined to the proceedings, but agree to be bound by the Court’s orders without any active participation in the proceedings. In the discussion above in relation to infringement, principles relating to contributory infringement are discussed.
7.3 What monetary remedies are available against a patent infringer (reasonable royalty, lost profits, account of profits, or some other basis)? Are punitive damages available? If so, under what conditions?
Section 122 of the 1990 Act provides that the relief which a court may grant includes ‘at the option of the plaintiff, either damages or an account of profits’. Before making such an election, the plaintiff is entitled to obtain discovery of documents in relation to the issue. Punitive damages are not presently available although amendments to the 1990 Act are being discussed which may give rise to the possibility of claiming punitive damages.
8.1 Is preliminary relief available? If so, what preliminary measures are available (eg preliminary injunction) and under what conditions?
Generally speaking, a preliminary injunction may be granted by a court in order to preserve the status quo until the final hearing. The grant of injunctions, including interlocutory injunctions, is discretionary. The principles which govern the exercise of the court’s discretion are clear and the applicant for relief must establish that:
An interesting complexity arises in patent cases where validity of the patent is put in issue. It has been held that in such cases the court must consider not only whether there is a serious question to be tried in terms of infringement (that is whether on a final hearing the patentee is likely to establish infringement) but also that the issues relating to validity must be taken into account.
In this respect it has been held that where validity is put in issue, evidence relating to validity must be taken into account by the court in exercising its discretion as to whether or not to grant interlocutory relief. The more powerful the evidence going to invalidity, the stronger will be the case for exercising discretion against the grant of an injunction. These principles were most recently discussed by Stone J, in Hexal Australia Pty Ltd v Roche Therapeutics Inc.
Generally speaking, contested questions of fact will not be determined at the interlocutory hearing, indeed it has been held that where there are significant issues either of fact or law it would be inappropriate to determine any of those without the benefit of full argument at a final hearing.
Arguments in relation to irreparable harm, will usually centre around the fact that if the statutory monopoly is disturbed, even for a period, it will be difficult for the patentee to restore its statutory monopoly after the final hearing. In addition, it may be argued that it will be impossible to actually calculate, in monetary terms, the damage sustained. However in the Hexal case which involved the sale of a drug subsidised by the Commonwealth Government, the court held that the statutory monopoly would be easily restored soon after the final hearing if the judgment was in the patentee’s favour and that any issue of damages could be determined given the highly regulated circumstances in which such products were sold.
‘Balance of convenience’ involves weighing the detriment to the plaintiff of not granting the injunction against the detriment to the defendant of granting it. Matters going to the balance of convenience might include disruption to marketing plans, inability to sell stock on hand, and interruption of established supply contracts including the prospect that the party may be put in breach of contract by virtue of the injunction.
In the Hexal case the court held that the question of validity of the patent also went to balance of convenience, the court finding that ‘the concerns about invalidity probably have more weight’. The court also held that the likely damage which would be caused by delaying the defendants’ entry into the market was difficult to assess whereas, as discussed above, the damage to the patentee was more easily quantified.
An applicant for interlocutory relief must give a cross-undertaking to the court that in the event that it is unsuccessful at the final hearing, it will compensate the enjoined party for any damages suffered as a result of the injunction.
8.2 Is ex parte relief available where defendant is given no notice at all? If so, under what conditions?
Ex parte relief is, generally speaking, available but almost never given in patent cases due to the complexity of such cases.
8.3 Is plaintiff entitled to ask for an order that defendant’s premises are searched and a description of the infringing goods (and the accounting relating thereto) is made in order to establish proof of infringement (saisie-contrefaçon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?
There are search and seizure orders available in the Federal Court however these are usually awarded on an ex parte basis and for the reason given above, are unlikely to have application in the patent context.
8.4 Can the defendant put the validity of a patent in issue in preliminary injunction proceedings?
See the discussion under preliminary relief above.
Claims for preliminary injunction are made in proceedings for final relief. However, the evidence in support of the application, which must be given by affidavit, must be filed at the time of commencement of the proceedings. At the earliest opportunity after filing the proceedings, the court will hold a hearing at which the claim for preliminary injunction will be determined. There is usually no cross-examination of witnesses at a hearing for a preliminary injunction.
8.6 To what extent are documents, affidavits, witnesses, and/or (court-appointed or private) experts used in preliminary injunction proceedings?
The patentee must show a prima facie case as a threshold to entitlement to interlocutory relief. At the same time, the defendant is likely to argue for invalidity of the patent. Therefore almost certainly experts will be involved in proceedings for interlocutory injunction. However, as discussed above, there is unlikely to be any cross-examination of witnesses and all evidence will be given by affidavit. Similarly, relevant documents will be proved and tendered into evidence by way of affidavit. Accordingly, to the extent that evidence from expert witnesses is required, the same issues apply as were discussed above in relation to proceedings for final relief.
8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?
See the discussion under the first question in this section.
Given the nature of these proceedings and the fact that evidence is given in brief and that there is no cross-examination of witnesses, a preliminary injunction hearing will take considerably less time than the final hearing. The preliminary injunction hearing may occur within weeks of commencement of the proceedings. The hearing, given the process involves oral argument, may last two to three days.
8.9 Where a preliminary injunction is granted, is it necessary to start main proceedings to confirm the preliminary injunction?
As described above, preliminary injunction proceedings are actually proceedings within an application for final relief and therefore, unless the matter is resolved, it will proceed to a final hearing.
9.1 What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?
A decision of the court granting final relief may be appealed as of right to the Full Court except if it is a decision of the court in relation to an appeal from a patent office opposition proceeding. In the latter case, such a decision can only be appealed with leave of the court. Similarly, a decision in relation to a preliminary injunction, being an interlocutory decision of the court, can only be appealed (to the Full Court or a single judge) with leave of the court.
9.2 How long do appeal proceedings typically last?
Appeal proceedings (from main proceedings) may be determined within 6 to 9 months of the decision under appeal.
10 LITIGATION COSTS
10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?
It is difficult to estimate the level of costs attending patent proceedings and, it is difficult to generalise since every case will have its own level of complexity.
10.2 Are costs recoverable from the losing party?
Generally, costs are recoverable from the losing party but only in accordance with the court scale. The effect of applying the court scale of costs is that, in the Federal Court, a successful party is likely to recover 30–50% of its actual costs.
11.1 What are the important developing and emerging trends in your country’s patent law?
The Federal Government of Australia recognises the importance and significance of intellectual property law as it affects innovation. For that reason patent law is regularly reviewed and amended.
11.2 To the extent it relates to patent enforcement, please outline any major patent legislation in the pipeline.
There are some significant amendments in a bill to amend the 1990 Act which is currently before the parliament. They include provisions for:
| (1) | an exception to infringement for experimental use; |
| (2) | amendments to s 119 relating to prior use; |
| (3) | the ability for generic drug manufacturers to prepare for marketing approval during |
| the patent term; | |
| (4) | the award of additional damages at the court’s discretion. |
12 USEFUL REFERENCES
12.1 Please identify any useful works of reference relating to patent law and patent litigation in your country including useful websites.
www.ipaustralia.gov.au/ www.fedcourt.gov.au/
FOOTNOTES
1 See for example, the following comment by Dawson J. in Dietrich v The Queen (1992) 177 CLR 292 at 348–9: ‘There is authority for the proposition that, in the construction of domestic legislation which is ambiguous in that it is capable of being given a meaning which either is consistent with or is in conflict with a treaty obligation, there is a presumption that Parliament intended to legislate in conformity with that obligation’. 2 See s 155 and the dictionary to the 1990 Act which defines prescribed court: ‘means the Federal Court, the Supreme Court of a State, the Supreme Court of the Australian Capital Territory, the Supreme Court of the Northern Territory or the Supreme Court of Norfolk Island.’ 3 See s 154(2). 4 See the judgment of Justice Gyles in Arrow v Merk where he referred to the outcome in various jurisdictions in which counterparts to the Australian patent were litigated.5 Gummow J Nicaro Holdings Pty Ltd v Martin Engineering Co 91 ALR S13 at 523/524 quoting the English Court of Appeal in General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485. 6 Per Bennett J in Sachtler GMBH & Co KG v R E Miller Pty Ltd (2005) 221 ALR 373 [20] 7 Ibid. 8 Per Gummow J. Nicaro Holdings Pty Ltd v Martin Engineering Co. 91 ALR 513 at 542 citing Van der Lely NV v Bamfords Ltd [1963] RPC 61 at 71. 9 CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 at 285. 10 Minnesota Mining & Manufacturing Co v Beiersdorf (Aust) Ltd (1980) 29 ALR 29. 11 Blanco-White Patents for Inventions (4th edn) at 2-204 citing Nobel Explosives Company Ltd v Anderson [1894] RPC 519 at 523. 12 Martin v Scribal Pty Ltd (1954) 92 CLR 17. 13 Décor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385. 14 Martin v Scribal. 15 Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588. 16 Interlego AG v Toltoys Pty Ltd (1972) 130 CLR 461. 17 Martin v Scribal. 18 Interlego AG v Toltoys Pty Ltd (1972) 130 Ch R 461. 19 Gummow J in Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 89, referring to Erickson’s Patent (1923) 40 RPC 477 at 491. 20 Blanco-White Patents for Inventions (4th edn) at 2-204 citing Nobel Explosives Co Ltd v Anderson [1894] RPC 519 at 523.21 See the comments of Gummow J in Nicaro Holdings Pty Ltd v Martin Engineering Co, quoting General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485. 22 Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd 67 IPR 230 at 246.23 See comments by Gummow J in Nicaro Holdings Pty Ltd v Martin Engineering Co 91 ALR 513 at 528.24 Commonwealth Industrial Gases Ltd v MWA Holdings Pty Ltd (1970) 180 CLR 160.25 Populin v HB Nominees Pty Ltd 41 ALR 471 at 475. 26 (1938) 60 CLR 36 (per Dixon J at 51).27 See fn 23 above.28 (1875) LR 10 Ch App 667 at 675.29 Rehm v Websters at 91.30 (1980) 29 ALR 29 at 52-53.31 67 IPR 230.32 Minnesota Mining 29 ALR 29 at 52-5333 Radiation Ltd v Galliers and Klaerr Pty Ltd (1938) 60 CLR 36 at 5134 Fresenius 67 IPR 230 at 242.35 Bristol-Myers Squibb Co v FH Faulding & Co Ltd 46 IPR 553.36 The Full Court of the Federal Court in Ramset Fasteners citing Dixon J in Walker v Alemite Corp.37 Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd 44 I PR 481 at 498.38 Ramset at para [42]. 39 Innes v Short (1898) 15 RPC 449 referred to in Ramset Fasteners above at 496. 40 Per Finkelstein J Woodbridge Foam Corpn v AFCO Automotive Foam Components Pty Ltd 58 IPR 56 at 58/59.41 167 CLR 177.42 Queensland Wire Industries at 190.43 Queensland Wire at 191.44 Queensland Wire at 194.45 183 CLR 655.46 183 CLR 655 at 663 to 66447 At p 668.48 97 FCR 524 at 546.49 97FCR 524 at 546.50 Page 548.51 Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 41152 Paragraph [36].53 Paragraph [50].54 Paragraph [58].55 Paragraph [78].56 Paragraphs [52] and [53]57 Paragraph [126].58 Order 6, r 2.59 Order 6, r 5.60 Order 6, r 9. 61 Order 6, r 962 56 IPR 248 at 258. 63 Per Bennett J in Austal Ships Pty Ltd v Stena Rederi Aktiebolag [6] citing F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 at [67]. 64 Ibid, (1999) 92 FCR 106 at [17].
