estoppel

To be estopped or not …

O’Bryan J has ruled that Vehicle Management Systems (VMS) is not estopped from seeking revocation of Orikan’s patent despite earlier opposition proceedings in which VMS could have raised the allegations, but did not.

Under the pre Raising the Bar versions of the Patents Act, it was clearly established that an unsuccessful opponent was not estopped from subsequently seeking revocation on the same grounds. This was at least because of the different onus: an opponent had to show that it was “practically certain” the patent application was invalid to succeed whereas a party seeking revocation only had to satisfy the balance of probabilities standard.[1] The Raising the Bar amendments, however, sought to change the burden at the examination and opposition stages to the balance of probabilities standard. The debate since then has been whether this meant an unsuccessful opponent was estopped from seeking revocation on the same grounds.

Overview

Orikan is the registered owner of Australian Patent No. 2013213708 titled “Vehicle Detection”, having been assigned the patent by SARB Management Group. It has sued VMS for infringement. In addition to denying infringement, VMS has cross-claimed seeking revocation of the Patent. So, this is another campaign between VMS and SARB-related entities over competing systems and apparatus to detect cars which have overstayed parking.

In this particular application, Orikan was seeking to have VMS’ cross-claim stayed on grounds of Anshun estoppel or, alternatively, as an abuse of process.

Some background

Back in happier days, VMS and SARB had explored jointly developing systems for detecting vehicles which were parked without paying the fee or after the alotted time had expired.

Things didn’t work out and, by a decision handed down in 2013, VMS successfully sued SARB for infringement of one of VMS’ patents for vehicle detection systems.

In 2008, however, SARB had applied for its own patent. That application led to two divisional patents: Australian Patent No. 2011101179 (Innovation Patent), which was filed in 2011, and secondly the Patent the subject of these proceedings, which was filed in 2013. As you might suspect, there was considerable overlap between the claims of the Innovation Patent and the Patent.

In 2012, SARB sued VMS for infringement of the Innovation Patent. VMS defended, including a cross-claim for invalidity on grounds including lack of novelty, secret use and lack of sufficiency and best method. This proceeding settled before trial in 2014.

In 2016, VMS opposed the grant of the Patent. That opposition failed in both the Office and the Court.[2] The Opposition Proceeding in the Court involved extensive evidence and 5 days’ trial. According to O’Bryan J, however, it did not involve the grounds of invalidity or particulars that VMS sought to argue in this proceeding.

In addition to challenging the priority date, clarity and sufficiency grounds, VMS sought to revoke the Patent in this proceeding on grounds of lack of novelty, secret use and failure to disclose the best method.

Given this prior history, Orikan contended VMS’ cross-claim should be stayed on grounds of either Anshun estoppel or abuse of process.

Legal tests

The parties were not really in dispute about the principles.

Anshun estoppel

At [26], O’Bryan J explained:

Anshun estoppel operates to preclude the making of a claim, or the raising of an issue of fact or law, in a subsequent proceeding if the claim or issue was so connected with the subject of an earlier proceeding that it would have been unreasonable, in the context of the earlier proceeding, for the claim not to have been made or the issue not to have been raised in that proceeding …. [3]

Thus, at [28] his Honour considered three conditions needed to be satisfied:

(1) the relevant cause of action, defence or issue must be one that could have been raised in the earlier proceeding;

(2) the same or substantially the same facts must arise for consideration in the second as in the first proceeding; and

(3) it must have been unreasonable in all the circumstances for the party not to have raised the issue in the first proceeding – i.e. it is not enough that the issue could have been raised; in all the circumstances it should have been raised.

The third requirement means the test has an element of discretion and evaluation.

The requirement of “unreasonableness” is a “severe test” and not to be made lightly. O’Bryan J noted one situation where unreasonableness was likely to be established is where a judgment or order made in the second proceeding was likely to conflict with a judgment or order in the earlier proceeding. But, the doctrine is not limited only to such situations.

Abuse of process

Abuse of process is not capable of explanation in terms of closed categories. At [38], O’Bryan J noted the principles governing its application are broader and more flexible than those governing estoppels.

In general terms what needs to be shown is that the use of the Court’s procedures would be unjustifiably oppressive to the party or would bring the administration of justice into dispute. At [39], O’Bryan J noted that this brought into play considerations of the overarching purpose of civil litigation as set out in s 37M.

Why O’Bryan J dismissed Orikan’s application

At [71], O’Bryan J accepted that Orikan, as the assignee of the rights in the Innovation Patent and the Patent, could take the benefit of an Anshan estoppel arising from the earlier proceedings. It had not been a party to the earlier proceedings but, as the assignee, was a “privy” of the SARB entity which had been.

It was not in dispute between the parties that VMS could have raised the invalidity issues it now wished to argue in the earlier Opposition Proceeding. The matters VMS now sought to rely on were either known to it or it ought to have been aware of them. In fact, the grounds and particulars had been asserted by VMS in the Innovation Patent Proceeding and, while they were different patents, they were both derived from the same parent and the claims were substantially similar.

Nonetheless, O’Bryan J considered that it was not unreasonable for VMS not to have raised the issues it now sought to agitate in the Opposition Proceeding.[4]

First, at [75] his Honour considered there was not a relevant risk of inconsistent judgments. His Honour accepted that a finding that the Patent was invalid in this proceeding would be inconsistent with the result in the Opposition Proceeding. As the grounds and particulars relied on in this proceeding were different, however, the basis of an invalidity finding in this proceeding would be different to the basis of the findings in the Opposition Proceeding.

Secondly, O’Bryan J considered at [76] there was a fundamental difference between the nature and consequences of an opposition proceeding and a revocation proceeding. The Opposition Proceeding involved an election by VMS to challenge the Patent on limited grounds. In contrast, in this proceeding, VMS was being sued for infringement and so compelled to come to court. Later, at [80] O’Bryan J noted that his conclusion might have been different if VMS had initiated the proceedings rather than being the respondent.

O’Bryan J also noted that the Innovation Patent Proceeding had not proceeded to trial and so the invalidity claims had not been tested in court.

Thirdly, O’Bryan J considered that allowing the invalidity claims to go forward in this proceeding would not result in more costs and delay than would have been the case if the claims had been brought in the Opposition Proceeding.

There was one overlap with the Opposition Proceeding in that one of Orikan’s witnesses, a Mr Del Papa, had been cross-examined about a particular document and both Mr Del Papa and the document were involved in this proceeding. However, the relevance and cross-examination in the Opposition Proceeding was limited to an issue of entitlement, not in issue in this proceeding.

Finally, O’Bryan J did not place “significant weight” on the public interest in the integrity of the Register or the fact the Act specifically provided for pre-grant oppositions.

O’Bryan J dismissed the abuse of process attack for essentially the same reasons.

An observation

Interestingly, while O’Bryan J did have regard to the in rem nature of patents, the public interest in the integrity of the Register and the specific provision in the Act for pre-grant opposition (and the change in onus), his Honour did not give those considerations much weight. His Honour eschewed adopting a general principle and instead applied an approach very heavily based on the particular facts of the case.

For example, it is often said (as is the case) that defeating an opposition is not a guarantee that the patent is valid. That is also true of an unsuccessful revocation proceeding. The fact one person’s revocation proceeding failed does not preclude anyone else seeking to revoke the patent. And there are cases where the second challenger succeeded despite the failure of the first.

In considering the fundamental difference between the nature and consequences of opposition proceedings and infringement/revocation proceedings, O’Bryan J emphasised VMS’s choice to fight the Opposition Proceeding on limited grounds in light of the nature and purpose of opposition proceedings. At [76], his Honour explained:

But the Opposition Proceeding involved an election by VMS to challenge the validity of the Patent. It did so on limited grounds, and did not raise the grounds and particulars of invalidity that had been raised in the earlier Innovation Patent Proceeding. There is no proper basis to criticise that election. …. The election made by VMS confined the scope of the issues in dispute in the Opposition Proceeding and therefore the costs and time required for its determination. That course was consistent with the overarching purpose of civil litigation expressed in s 37M of the Federal Court of Australia Act 1976 (Cth). It was also consistent with the character and purpose of pre-grant opposition proceedings, which are intended to provide a swift, economical means of settling disputes: Genetics Institute at [19]. Although it is desirable to avoid a multiplicity of proceedings and to ensure that parties address, as far as possible, the issues arising between them in a single proceeding, parties ought not to be encouraged to raise each and every possible claim or issue irrespective of the time and cost associated with doing so. Anshun estoppel must operate conformably with the demands of s 37M, as well as the substantive statutory context in which it is said to arise. (Emphasis supplied)

This suggests his Honour’s conclusion might reflect a reaction to Beach J’s heartfelt paragraph 1784. It is also consistent with a number of extra-judicial comments encouraging some effort on the part of parties to simplify proceedings. It does seem a little odd, however, that an opposition proceeding taking up 5 days’ of the Court’s time and a carefully reasoned 274 paragraph judgment might qualify as a swift economical means of resolving the dispute between the parties especially when the consequences lead to a further infringement proceeding with what promises to be an even more involved revocation component.

Orikan Group Pty Ltd v Vehicle Monitoring Systems Pty Limited [2023] FCA 1031


  1. In at least one case (which I haven’t been able to find again in the time available), the judge did warn the opponent / revoker that it was at risk of indemnity costs if its revocation action also failed.  ?
  2. There was also an appeal to the Full Court which, by the time of the hearing, was limited to the issue of entitlement.  ?
  3. Citing Anshun at 598, 602–3 (Gibbs CJ, Mason and Aickin JJ); Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507 at [22] (French CJ, Bell, Gageler and Keane JJ).  ?
  4. Yes I realise that double negatives are “awkward” (to say the least) but that the point!  ?

To be estopped or not … Read More »

Will unsuccessful opponents be estopped?

As noted previously, the “Raising the Bar” bill aims to change the standard of proof required for acceptance of a patent application and for successful opposition from the prevailing “practically certain” or “clear” standard to a balance of probabilities.

Currently, an unsuccessful opponent is not estopped from bringing revocation proceedings, largely because of the difference in onus applying at the opposition versus revocation stage: Genetics Institute v Kirin-Amgen at [17] and note Clinique at [13] (trade mark). At [17], the Full Court in Kirin-Amgen said:

17       During the hearing there was some discussion as to the possibility of the owner of a patent the grant of which was unsuccessfully opposed, defending a revocation proceeding instituted by the pre-grant opponent by raising an issue estoppel in respect of the findings of fact of the single judge. In the present case, however, the respondent has conceded that no issue estoppel would apply to the findings of fact of Heerey J in any revocation proceeding instituted by the applicant in respect of the patent. In any event, the difference between the issue determined by his Honour in the pre-grant opposition proceeding, and the issue that would arise for determination in any revocation proceeding instituted by the applicant, is in our view sufficient to preclude the operation of issue estoppel principles in that second proceeding. The overriding issue in the pre-grant opposition proceeding before Heerey J was whether it was practically certain that the patent to be granted on the specification would have been invalid on the ground that the content of the specification was not in accordance with the requirements of s 40 of the Patents Act 1952 (Cth) (Genetics Institute Inc v Kirin-Amgen Inc (No 3) (1998) 156 ALR 30 at 39-41). Even if revocation of the patent was subsequently sought by the applicant on the virtually identical ground of non-compliance with subs 40(2) or subs 40(3) of the current Act (see par 138(3)(f) of the Act), the issue for determination by the judge hearing that revocation application would be whether the patent should be revoked for the specification’s non-compliance with subs 40(2) or subs 40(3). The decision of Heerey J that it was not practically certain that the patent should be so revoked would be inconclusive of this issue. Accordingly, there would be no scope for the operation of an issue estoppel in relation to the decision of Heerey J in any post-grant revocation proceeding instituted by the applicant in respect of the current patent. (emphasis supplied)

What the Full Court said in the emphasised passages was obiter as the point was conceded. Given the reason why the Court accepted the concession, however, it may well be that an unsuccessful opponent will be estopped from from bringing revocation proceedings in those cases where the “practically certain” standard no longer applies.

The absence of discovery and, usually, cross-examination and, possibly, the very nature of opposition proceedings may however lead to a contrary conclusion: see the Court of Appeal’s ruling in Special Effects v L’Oreal (commentary by IPkat and Birds), albeit

(a) involving an opposition in the Registry and not the Court; and

(b) recognising the possibility that the revocation proceedings may be stayed as an abuse of process.

The fact the earlier UK proceeding was in the Registry and did not involve discovery or cross-examination could be a highly important point of distinction as cross-examination and, sometimes, discovery do occur when opposition proceedings are appealed to the Court.

When the change takes effect, prospective opponents would still be very well advised to consider carefully whether to oppose, or keep their powder dry, and, if they do oppose, do it properly right from the start. Of course, even under the current standard, a half-hearted opposition can seriously prejudice the outcome of both the opposition and subsequent revocation proceedings.

 

Will unsuccessful opponents be estopped? Read More »

No copyright in newspaper headlines

Bennett J’s reasons for ruling that Fairfax does not hold copyright in the Australian Financial Review’s headlines have now been published.

In conclusion, Bennett J stated:

159 As to the subsistence of copyright in the contended works, I have reached the following conclusions:

  • None of the ten selected headlines are capable of being literary works in which copyright can subsist.
  • Fairfax has failed to prove that any of the ten selected Article/Headline Combination is a discrete work of joint authorship in which copyright can subsist.
  • Copyright subsists in the Article Compilation and the Edition Work in each of the June and November editions as original literary works and this copyright is owned by Fairfax.
160 Reed takes the whole of each headline. As to whether Reed, in reproducing and communicating headlines of the AFR as part of the Abstracts, takes a substantial part of any of the contended works:
  • Even if the Article/Headline Combination constitutes a copyright work, Reed does not take a substantial part of such a work.
  • Reed does not take a substantial part of either the Article Compilation or the Edition Work.
161 Although it is not necessary to decide whether Reed is entitled to rely on the defences claimed, I nonetheless consider that:
  • Reed’s conduct in reproducing and communicating the AFR headlines as part of the Abstracts is a fair dealing for the purpose of reporting news such that Reed’s conduct would not constitute an infringement of copyright by reason of s 42(1)(b) of the Act;
  • Fairfax is not estopped from asserting that Reed’s reproduction and communication of AFR headlines in the Abstracts as part of the ABIX service amounts to infringement of its copyright in the contended works.
162 It follows that Fairfax’s application should be dismissed.

[160] is strikingly reminiscent of her Honour’s ruling at first instance in IceTV. As you will see from [161], her Honour also addressed the fair dealing defence and rejected Reed’s argument that Fairfax was estopped.

While the courts have been careful not to say there can never be copyright in film titles and the like, one wonders, if there wasn’t copyright in The Man Who Broke The Bank at Monte Carlo, whatever were they thinking?

The Australian (rather ironically given News Corp’s campaign) has some fun at Fairfax’ expense picking out some key points and repeats Alan Kohler’s question what would they have achieved commercially even if they succeeded?

Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd [2010] FCA 984

No copyright in newspaper headlines Read More »

Procul Harum: paler shade of white afterall

In its last ever IP judgment, the House of Lords restored Matthew Fisher’s claim to a declaration that he owned 40% of the copyright in Whiter Shade of Pale, after the Court of Appeal found his claim barred by delay.

IPKat has an extensive post and explanation.

As summarised by IPKat, their Lordships focused on the fact that Mr Fisher was seeking a declaration and not an injunction. In doing so, they indicated that the remedy of injunction might well not follow as opposed to damages:

If the declarations set aside by the Court of Appeal are reinstated, then, were Mr Fisher subsequently to apply for injunctive relief to prevent unauthorised use of the work, such an application would be dealt with on its merits. If the court was satisfied that it would be oppressive to grant an injunction in the particular circumstances, for instance because of prejudicial delay, it would refuse an injunction to restrain the infringement, and leave Mr Fisher to his remedy in damages …

Their Lordships also pointed out that the Copyright legislation, unlike real property, does not recognise a concept of acquisition of property by adverse possession.

Fisher v Brooker [2009] UKHL 41

In October, their Lordships (?) return as members of the Supreme Court of the United Kingdom: Wikipedia here and Lord Bingham  here (pdf).

Procul Harum: paler shade of white afterall Read More »

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