ipwars.com

The Full Federal Court (Finn, Sundberg and Edmonds JJ) has clarified how FCR O62 r 36A operates in IP infringement cases.

FCR O62 r36A provides that the costs of a successful applicant which obtains an order for damages less than $100,000 will be reduced by one third, unless the Court otherwise orders.

Nokia had sued Liu for trade mark infringement arising from a customs seizure. The proceedings settled by consent, with injunctions and delivery up. Nokia pursued damages, but obtained only nominal damages as it was unable to obtain discovery of importation in significant quantities. The trial judge refused to allow Nokia any costs of the damages inquiry.

The Full Federal Court has allowed an appeal, awarding Nokia its (taxed) costs up to the consent judgment and completion of discovery about damages; thereafter costs were at the reduced rate.

The Full Court considered that costs of the trial up to and including the consent orders should be at the usual taxed rate, without the 1/3 reduction because it was common in IP cases for trials to be split – a trial on liability and (if successful) an injunction and a subsequent trial about damages (or an account) and  applicants were required to particularise only a single instance of infringement. The Full Court considered the remedy of injunction “indispensable”. It was also appropriate for the proceedings to be brought in one of the “prescribed courts”, customarily the Federal Court and it was not apparent that it would have been sensible for the matter to be referred down to the Federal Magistrates Court (unlike in copyright proceedings where the Federal Magistrates Court has direct jurisdiction).

Nokia was also entitled to costs of the damages inquiry at least until completion of discovery as it was legitimate and, until it had discovery, it could not have known of the futility. Once discovery was completed, it knew the risks it was running and, given the amount recovered, it was inappropriate to exercise the discretion not to limit the costs of that part of the proceeding by 1/3.

Nokia Corporation v Liu [2009] FCAFC 138

Share on Facebook

VIP Plastic Packaging is suing BMW Plastics for infringing the former’s standard patent for a “Variable-length dip tube for a fluid transfer container”.

BMW Plastics denies infringement and has counter-claimed for invalidity.

Now, Kenny J has refused BMW Plastics’ attempt to get an order to have the Commissioner re-examine VIP Plastic Packaging’s patent.

Section 97 provides for re-examination of a standard “patent” in 3 situations:

1. following acceptance, but prior to grant;
2. following grant (when no other relevant proceedings are on foot in the Court); or
3. following a direction from the Court in the course of relevant proceedings.

In the first situation, the Commissioner can refuse to grant the patent following re-examination. In the second, the Commissioner can revoke. In the third, the Commissioner just prepares a report which (presumably) forms part of the evidence before the Court.

As reported by her Honour, BMW Plastics’ thinking was that the Commissioner could provide the benefit of technical expertise which the Court might otherwise not have and there might be a costs saving. To this end, it was prepared to undertake not to contest the findings of the Commissioner’s report. VIP Plastic Packaging refused to reciprocate and, rather heroically, BMW Plastics contended that Court should order VIP Plastic Packaging to be bound too.

Kenny J was (with respect) justifiably sceptical about the costs savings that might flow:

I doubt that the provision of a report by the Commissioner after re-examination would reduce the cost of this proceeding and expedite its determination. First, the Commissioner’s report after re-examination is not binding on the Court. In the absence of an undertaking of the kind sought by B.M.W. Plastics from VIP Plastic, the provision of a report under s 100 will not necessarily relieve the Court of the task of deciding the issues of novelty and lack of inventive step by reference to the admissible evidence. If the Commissioner’s report were unfavourable to VIP Plastic, it would desire to put on evidence and dispute the report. There may be additional issues for the Court to determine if it receives such a report. Further, both parties said that, regardless of the lack of novelty and inventive step grounds, there will be a need for evidence, including expert evidence, to be adduced before the Court on various other issues. In the circumstances, I am not persuaded that re-examination by the Commissioner would be most expeditious or reduce costs.

(my underlining)

VIP Plastic Packaging Pty Ltd v BMW Plastics Pty Ltd [2009] FCA 593

Share on Facebook