The patent was not infringed

Thank you to all those readers who expressed a view in last Tuesday’s poll. The good news is that better than 80% of you answered correctly. According to the traditional view, recently applied by Rares J, there would be no infringement in Australia in the circumstances outlined.

On the traditional view, a patent (like any other intellectual property right in Australia) is a territorial right. A patent, of course, confers the exclusive right to exploit the claimed invention in the patent area. Exploit in this context meaning:

(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.

Under the old form of the patent grant, the patentee was granted the exclusive right to make, use, exercise and vend the invention. In BASF v Hickson, the House of Lords ruled that a defendant in England, who entered into a contract with another party to make some goods for that third party in Switzerland and deliver them to that third party in Switzerland, did not infringe even though the third party subsequently imported the goods into England.[1] Lord Davey said:[2]

It must be such a vending as will be in a sense a working or use and exercise of the invention in this country or an appropriation by the vendor of some advantage which the patentee can derive from such use and exercise. A contract to deliver the goods abroad does not in any way interfere with the patentee’s rights to work and utilize his invention in this country. It is a contract to do a perfectly lawful act, and whether the contract be made in this country or abroad does not in itself affect the patentee’s monopoly of working his invention. Nor is it material to consider whether or when the property in the goods passed to the purchaser. It is lawful to be the owner of the goods if made and situate abroad, and neither the vendor nor the purchaser in my opinion thereby infringes the patent. The goods may or may not be afterwards brought into this country, and a different question will then arise, but that is no concern of the vendor after he has parted with them. I am of opinion that “vending the invention” in the common form of patent is confined to selling goods made or brought into this country ….

Load and Move has a patent in Australia for spreaders and tipplers, which are apparently used in the loading and tipping of shipping containers. CTS, another Australian company, entered into a contract with a mine in Eritrea to supply the mine with spreaders and tipplers which Load and Move considered would infringe its patent. However, CTS agreed to have the spreaders and tipplers made in China and delivered to the port in China FOB or ex works for delivery directly to the mine in Eritrea. The spreaders and tipplers would never come into Australia.

Load and Move was seeking preliminary discovery from CTS to establish whether payments for the contract with the Eritrean mine were received in Australia.

Rares J has refused preliminary discovery.

One of the conditions that must be established to obtain preliminary discovery is that the applicant reasonably believes it has a right to obtain relief against a prospective respondent.[3]

Rares J began by pointing out that a subjective belief that one’s right was being infringed was not enough; the belief had to be reasonably held. That required the existence of facts from which a reasonable person could form the required belief. That is, the belief was tested objectively.

Here, the question was whether there were facts from which a reasonable person could conclude that Load and Move’s patent was being infringed in Australia. In light of BASF v Hickson, however, Rares J held that a reasonable person could not hold such a view.

Load and Move Pty Ltd v Container Rotation Systems Pty Ltd
[2016] FCA 843

ps Sorry no post on Friday: let’s just say there was a synchronisation glitch.


  1. The third party would infringe by importing.  ?
  2. Badische Anilin Und Soda Fabrik v Hickson [1906] AC 419 at 422 – 423 cited by Rares J in Load and Move at [26].  ?
  3. FCR r 7.23.  ?

Dallas Buyers Club No 5

Perram J has rejected Dallas Buyers Club’s latest attempt to get permission to send those letters of demand out.

Last time out, Perram J said DBC could get the names and addresses of the 4726 “downloaders”[1] only if it gave undertakings to use the information for the purposes of resolving its infringement allegations. limited the demands for compensation to the retail price of a download and some part of the unrecovered costs of detection and put up a bond of $600,000.

This time round, DBC wanted to claim monetary compensation on a different basis, including additional damages under s 115(4) and restrict the bond to $60,000 as it was only seeking release of details of about 10% of the “downloaders”. It also did not offer up the undertakings.

Perram J told them, no sale; they had their shot at what they wanted in the previous hearing(s). His Honour gave them until 11 February 2016 to comply with his previous orders or he would dismiss the application.

Dallas Buyers Club LLC v iiNet Limited (No. 5) [2015] FCA 1437


  1. By which I really mean the account holders whose accounts the ISPs’ records showed were using the IP addresses at the time of the alleged infringements.  ?

Dallas Buyers Club sues to identify internet subscribers

When the (inaptly named) Online Copyright Infringement Discussion Paper was released, Minister Turnbull was reported as suggesting copyright owners should sue the downloading end-users.

Last month, Dallas Buyers Club LLC was reported to have started that process. It has commenced proceedings against various telcos and ISPs seeking preliminary discovery from them of the identities of their customers who were using IP (as in Internet Protocol) addresses at times Dallas Buyers Club LLC says illegal copies of the film were being downloaded from those addresses.

Last Monday, Perram J rejected an application by some journalists and others for access under FCR r 2.29 to most of the documents on the court file. His Honour noted the usual rule that affidavits are not “public” until they have been used in court and the potential privacy sensitivities or releasing, amongst other things, subscriber identification information at this very early stage of the proceeding.

Apparently, Dallas Buyers Club LLC’s application for preliminary discovery will be heard all the way off on 17 – 18 February 2015.

For cases where the record companies successfully obtained preliminary discovery from the Universities of some student details alleged to be engaging in infringing activities, see Sony v University of Tasmania here, here, here and here.

On a slightly different tack, it was reported on 19 November that some Universities have been suspending staff and student access to the internet, and in at least the case of UNSW, issuing fines where “internet piracy” has been discovered.

Dallas Buyers Club, LLC v iiNet Limited (No 1) [2014] FCA 1232