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.
- The third party would infringe by importing. ?
- Badische Anilin Und Soda Fabrik v Hickson [1906] AC 419 at 422 – 423 cited by Rares J in Load and Move at [26]. ?
- FCR r 7.23. ?
The patent was not infringed Read More »
