Patent litigation in Australia: overview
A Q&A guide to patent litigation in Australia.
The Q&A gives a high level overview of patent disputes, including how patent infringement is assessed; the conditions for a declaratory judgment; invalidation proceedings; preliminary relief and enforcement options.
To compare answers across multiple jurisdictions visit the patent litigation Country Q&A tool.
This Q&A is part of the global guide to Patent Litigation. For a full list of jurisdictional Q&As visit www.practicallaw.com/patentlitigation-guide.
Sources of law
The principal sources of patent law and regulation in Australia are the Patents Act 1990 and the Patents Regulations 1991. Rules of civil procedure, such as the Federal Court Rules 2011, also affect patent litigation. Court decisions have precedential value and can bind lower courts in subsequent cases.
Australia is a party to major international intellectual property treaties, including the:
WIPO Paris Convention for the Protection of Industrial Property 1883.
Patent Cooperation Treaty 1970.
WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994.
International treaties apply only to the extent that they are incorporated into domestic law.
Patent infringement and post-grant revocation actions are invariably commenced in the Federal Court of Australia, which has jurisdiction over patents and other federal law matters. A number of judges who preside over patent cases have experience in patent litigation through their former careers as solicitors or at the Bar, and some have technical qualifications. Upcoming reforms will lead to the creation of an intellectual property division within the Federal Court (see Question 38).
IP Australia (incorporating the Australian Patent Office) is responsible for:
Amendments to patents and patent applications.
IP Australia does not have jurisdiction to determine patent infringement.
The Federal Court typically deals with infringement and invalidity simultaneously. The two claims are heard and determined together, unless a discrete preliminary issue is heard separately first.
IP Australia deals primarily with invalidity in the context of pre-grant examinations, pre-grant oppositions and re-examinations.
Given the complex nature of patent proceedings, parties are usually represented in court proceedings. Only lawyers and barristers admitted in an Australian jurisdiction can represent parties in court proceedings.
Registered Australian patent attorneys, lawyers and barristers admitted to practice can appear in proceedings before IP Australia.
A party can be self-represented in proceedings before the Federal Court or IP Australia, although this is generally not advisable.
Single judges of the Federal Court are bound by the decisions of:
The Federal Court sitting as a Full Court (that is, three or more judges).
The High Court of Australia (the highest appellate court).
A single judge of the Federal Court will consider the decisions of other single judges of the Court, as well as decisions of state courts. Higher courts will often follow their previous decisions, although they are not bound to do so.
The Australian legal system is based on the common law, and Australian courts consider decisions of UK courts, as well as decisions of other common law jurisdictions such as Canada and New Zealand. Decisions of US courts are sometimes considered. However, there is no requirement for national courts to follow decisions of any foreign court.
The first requirement is that the defendant's product or process must have all of the essential features of a claim of the patent. Australia does not have a "doctrine of equivalents". Instead, Australian courts adopt a purposive approach to the construction of claims (that is, what a skilled person would have understood the claim to mean in light of the common general knowledge and the specification as a whole) so that the defendant's product or process may fall within the claim as construed despite any differences or variations.
The second requirement is that the defendant must have engaged in conduct amounting to infringement. A defendant infringes a patent if it "exploits" the invention in any claim without the patentee's permission. "Exploit" includes the manufacture, supply, importation and exportation of infringing products (or products resulting from the use of infringing processes) and the use of infringing processes. In some circumstances, contributory infringers may also be liable for infringement (see Question 15).
The defendant can argue that it does not infringe the patent either because its product or process does not fall within the scope of the claims or because its conduct does not amount to infringement. The defendant can also counter claim for revocation of the patent (section 121, Patents Act).
The Patents Act also provides for a number of specific defences, including:
Prior use by the defendant (section 119).
Acts connected with obtaining regulatory approval (sections 119A and 119B).
Acts done for experimental purposes (section 119C).
The patent was the subject of a void contractual condition (section 144).
Under Australian law, the "Gillette" defence (that is, the patentee cannot prevent another trader from doing what is disclosed in the prior art) is not a discrete defence existing independently of an invalidity action for lack of novelty (Otsuka v Generic Health  FCA 239, ).
A patent can be invalidated in a post-grant revocation action under section 138(3) of the Patents Act on any of the following grounds:
The patentee was not entitled to the patent.
The invention was not a patentable invention for any of the following reasons:
lack of patentable subject matter (manner of manufacture);
lack of novelty;
for a standard patent, lack of inventive step (obviousness);
for an innovation patent, lack of innovative step;
lack of utility; and
Fraud, false suggestion or misrepresentation.
Non-compliance with sections 40(2) or 40(3) for any of the following reasons:
insufficiency (lack of full description);
non-disclosure of best method;
lack of clarity;
lack of succinctness; and
lack of support (fair basis).
An innovation patent is a second tier patent, similar to a utility model in other jurisdictions. For a patentee, an innovation patent is especially advantageous because it can be granted quickly (no pre-grant opposition) and does not require an inventive step (the invention can be obvious provided that there is a material difference compared to the prior art). Innovation patents have a shorter patent term (eight years, compared to 20 years), which is adequate for many technologies. Innovation patents confer the same exclusive rights as standard patents, and the remedies for infringement are also the same (that is, injunction and monetary relief). For information on the use of innovation patents in infringement cases see Question 24.
A court can partially invalidate a patent (section 138(3), Patents Act). In practice, the defendant seeks revocation of the specific claim(s) in respect of which infringement is alleged. Although other claims will be unaffected, they may require amendment to the extent that they depend on revoked claims.
Australian law does not recognise utility models but provides for second tier patents known as "innovation patents" (see Question 9). The courts cannot convert a standard patent into an innovation patent following a successful revocation action. The Patents Regulations prohibit such conversion after acceptance of the patent application by IP Australia (regulation 10.2B, Patents Regulations).
It is possible to amend patent claims during proceedings, subject to two limitations:
The proposed amendment must not be of a kind prohibited by section 102 of the Patents Act (which includes a prohibition against claim broadening).
The patentee must persuade the court to exercise its discretion to order the amendment of the patent (section 105, Patents Act).
The court's discretion to order amendment must be exercised in light of all relevant matters. The court considers the patentee's conduct and whether there are any circumstances that can lead to refusal of the amendments. Relevant matters include whether the patentee (Bayer Pharma v Generic Health  FCA 1510, -):
Has made full disclosure.
Has sought amendment promptly and without unreasonable delay.
Had sought to obtain unfair advantage from the patent.
There are grounds on which an otherwise valid patent can be unenforceable against a defendant, including:
Expiry of the statutory limitation period.
Anshun estoppel (that is, where an infringement claim should have been but was not raised in earlier proceedings between the parties).
Equitable defences such as laches (that is, delay in making a claim with prejudice to third parties).
If the defendant successfully raises these grounds, the claimant can be barred from bringing an infringement claim, or the court can decline to grant or limit any injunctive relief.
Infringement proceedings must be commenced within three years from the date of grant or six years from the date of the infringing conduct, whichever is the latest (section 120(4), Patents Act).
Under the Patents Act, the court retains discretion in granting remedies, including injunctions and monetary relief. Misconduct by a patentee can be so egregious that the court declines to grant the remedies sought.
Parties to litigation
A patentee has the right to sue for patent infringement (section 120(1), Patents Act).
An exclusive licensee can sue for patent infringement (section 120(1), Patents Act).
An "exclusive licensee" is defined as a licensee who has the right to exploit the patented invention to the exclusion of the patentee and all other persons (Schedule 1, Patents Act). Therefore, a licensee who is granted an "exclusive" licence to exploit the invention excluding the right to manufacture is not an "exclusive licensee" within the meaning of the Patents Act, and cannot sue for infringement (Bristol-Myers Squibb Company v Apotex  FCAFC 2).
If an exclusive licensee sues for patent infringement, the patentee must be joined as a defendant, unless it is joined as a claimant (section 120(2), Patents Act).
A non-exclusive licensee cannot sue for patent infringement.
A distributor cannot sue for patent infringement, unless it is also the exclusive licensee (see above, Exclusive licensee).
No other persons can sue for patent infringement.
A party who has done, is doing or intends to do an act can apply to the Federal Court for a non-infringement declaration (section 125(1), Patents Act). A declaration can be sought at any time after the patent is granted (or after it is certified, in the case of innovation patents), whether or not the patentee has made any assertion of infringement (section 125(2), Patents Act).
However, declarations of non-infringement are rare for three reasons:
The alleged infringer must request the patentee to admit non-infringement and pay the patentee's reasonable costs for obtaining advice on infringement (section 126, Patents Act).
The declaration is limited to the specific acts that are the subject of the declaration.
The declaration does not preclude the patentee from taking subsequent action against the alleged infringer and only protects the alleged infringer from paying compensation if the patentee is successful (section 127, Patents Act).
Any natural or corporate person that is exploiting the patented invention without the patentee's permission can be sued for patent infringement.
A person can also be liable for infringement if the person:
"Authorises" another person to infringe.
Is a joint tortfeasor.
Is supplying products in certain circumstances where the products are used by another person to infringe a patent (section 117, Patents Act).
Company directors can be liable on the ground of authorisation or joint tortfeasance, depending on the nature and degree of their involvement in the infringing acts.
The patentee's monopoly includes the exclusive right to authorise another person to exploit the invention (section 13(1), Patents Act). Therefore, it is an infringement for a person to authorise, without the patentee's permission, another person to exploit the invention. A person "authorises" another person if it "sanctions, approves or countenances" the other person's infringement (UNSW v Moorhouse  HCA 26). Authorisation can also be found where a company director has knowledge of, and was personally involved in, the infringing conduct (Inverness v MDS Diagnostics  FCA 108, ).
A person can be liable as a joint tortfeasor if it procures, induces or incites another person to infringe, or joins in a common design with another person to infringe (CBS v Amstrad  AC 1013).
In the case of company directors, Australian courts appear to have adopted slightly different considerations. A director can be liable for the company's infringement in the following cases (Inverness v MDS Diagnostics  FCA 108, ):
The director directed or procured the infringements.
The director was personally involved in the infringements.
The director made the infringing conduct his or her own.
Infringement by supply of products
The supplier of a product is liable for infringement if "use of [the] product" by another person would infringe a patent (section 117(1), Patents Act). The phrase "use of a product" means any of the following:
If the product is capable of only one use: that use.
If the product is not a staple commercial product: any use, if the supplier had reason to believe that the product would be put to that use. A "staple commercial product" has been interpreted as raw materials or other basic products commonly used for various purposes (AstraZeneca v Apotex  FCAFC 99, -).
Use of the product in accordance with any instructions or inducements given by the supplier.
A patentee or exclusive licensee can commence patent infringement proceedings in a competent court, such as the Federal Court of Australia.
The Patents Act does not provide for criminal proceedings for patent infringement.
The Patents Act does not provide for the seizure of imported goods by Australian Customs or any other border measures.
While it is not compulsory, a cease and desist letter is usually sent to an alleged infringer unless the claimant is seeking urgent preliminary relief. A letter can serve as a genuine step by the claimant to resolve the dispute, as required by the Civil Dispute Resolution Act 2011.
Any person affected by a threat of infringement proceedings (including a cease and desist letter) can commence an action for unjustified threats and seek to recover damages and an injunction against further threats (section 128, Patents Act). In practice, there is less risk of an action for unjustified threats if the cease and desist letter is sent directly to the alleged infringer. The risk may be higher if the communication is sent to the alleged infringer's customers and distributors.
Australian patents only have effect within the "patent area" (that is, Australia, its continental shelf, waters and airspace). Therefore, injunctions are limited to restraining exploitation within the patent area. An injunction can be granted to restrain an entity from exporting infringing goods (Seafood Innovations v Richard Bass  FCAFC 83, order 3.1). An injunction can also be granted to restrain a foreign entity from authorising, procuring, inducing or joining in a common design with a local entity to exploit the invention within the patent area. While these injunctions will have extra-territorial effect, an injunction against a foreign entity can be difficult to enforce if the entity has no presence in Australia.
In a related context, the Federal Court has previously declined to order the delivery up of infringing goods exported from Australia to a foreign country (Roussel Uclaf v Pan Laboratories  FCA 1176).
Australian courts do not recognise the blocking effect of foreign "torpedo" actions. An Australian court is unlikely to stay a proceeding concerning an Australian patent merely because there is a foreign proceeding concerning a corresponding foreign patent. These circumstances do not make the Australian court a "clearly inappropriate forum" to determine the proceeding concerning the Australian patent (Voth v Manildra Flour Mills  HCA 55). In TS Production v Drew Pictures  FCAFC 194, the Full Court of the Federal Court set aside the stay of a proceeding concerning the Australian copyright in a film and book for this reason.
The following matters are not arbitrable (Larkden v Lloyd Energy Systems  NSWSC 268 (Larkden), ):
The grant of a patent.
The determination of the validity of a patent.
Other statutory powers exercisable by the Commissioner of Patents and the Federal Court.
However, a dispute between parties as to their rights in, and entitlements to, a patent application is arbitrable (Larkden, ). The arbitrator's decision will not bind the Commissioner of Patents or the Federal Court (Larkden, ).
ADR methods, such as negotiation and mediation, are commonly used in patent cases across all industries. The Federal Court requires parties to consider ADR methods as early as reasonably practicable (rule 28.01, Federal Court Rules). The parties can refer their dispute to any ADR method, in which case the court proceeding will usually be stayed. The Federal Court can also refer proceedings to an ADR method (section 53A, Federal Court of Australia Act 1976). Court-ordered mediation is commonly conducted by a registrar acting as mediator.
Competition and anti-trust
A patent holder can bring proceedings claiming both patent infringement and unfair competition, although this will depend on the facts of the case.
In addition to the Patents Act, proceedings can also be commenced pursuant to the Competition and Consumer Act 2010 (Cth), which contains the Australian Consumer Law (ACL). The ACL contains provisions prohibiting misleading or deceptive conduct and certain false or misleading representations.
In theory, enforcement of a patent can expose a patentee to liability for anti-competitive conduct, although there have been no decided cases in Australia on this issue. In the Apple v Samsung litigation, it was reported that Apple raised a "misuse of market power" claim in response to Samsung's infringement action against Apple based on Samsung's standards essential patents relating to 3G technology, but the dispute was settled before a judgment was issued.
Section 51(3) of the Competition and Consumer Act 2010 (Cth) excludes certain conduct relating to patent licences from the scope of competition law, but does not exclude the application of the prohibitions against misuse of market power and resale price maintenance.
Procedure in civil courts
The Federal Court is a national superior court with jurisdiction over patents and other federal matters. It operates an individual docket system, under which a case is allocated to a judge from filing to final hearing.
Efficiency is an important aspect of the Federal Court's practice. Federal Court judges actively manage cases in their docket, and expect parties to conduct their litigation as quickly, inexpensively and efficiently as possible (section 37N, Federal Court of Australia Act). Upcoming reforms will further streamline the Court's case management practices (see Question 38).
In Australia, patentees often commence proceedings for infringement of innovation patents because these patents can be granted quickly (no pre-grant opposition) and do not require an inventive step (the invention can be obvious provided that there is a material difference compared to the prior art). It is common for innovation patent claims to be specifically drawn to capture the defendant's product or process. Innovation patents must be examined and certified by IP Australia before the commencement of proceedings (section 120(1A), Patents Act).
Patent infringement proceedings, like other proceedings, proceed through a number of pre-trial steps (such as discovery and evidence) before the final trial. Consistent with its drive for efficiency, the Federal Court is increasingly limiting discovery and minimising the number of interlocutory disputes.
Witnesses can be cross-examined and expert evidence is common. The Federal Court has adopted the innovative practice of concurrent expert evidence. See Question 25 for further details on witness and expert evidence.
Proceedings in the Federal Court are usually decided by a single judge, without a jury. In the Apple v Samsung litigation, the dispute was divided into five proceedings and heard by two judges concurrently.
It is common for patent infringement cases to be "split" so that issues of infringement and patent validity are heard before and separately from issues of monetary relief.
A more recent development is the hearing of claim construction issues before and separately from all other issues, similar to a Markman hearing in the US. For example, in Konami Gaming v Aristocrat Technologies Australia  FCA 92, at the parties' request, the Federal Court determined issues of claim construction before all other issues.
The Federal Court issues written decisions, which are published on its website and on AustLII (see box, Online Resources).
Evidence in patent cases is usually given in the form of written affidavits, which are read and admitted as evidence. Documents can be annexed or exhibited to affidavits, which are then tendered in court and admitted as evidence.
Witness evidence in patent cases is usually confined to confirming the contents of the witness' affidavit. The opponent can cross-examine the witness. The party calling the witness can then re-examine the witness in relation to matters arising out of cross-examination.
The use of expert evidence in patent cases is common. Experts are almost always appointed by the parties. However, they are expected to be independent and owe duties to the court (Federal Court Practice Note CM 7). The Federal Court can appoint its own expert or assessor (technical assistant), although these powers have been rarely used (see Genetic Institute v Kirin-Amgen (No 2)  FCA 1058). Like other witnesses, experts can be cross-examined.
Expert evidence can assist the court on a number of issues, including patent construction, novelty and inventive step. In relation to construction, expert evidence can assist the court in understanding the patent and technical terms. Regarding novelty, expert evidence can assist the court in understanding the prior art. On inventive step, expert evidence is used to establish the common general knowledge before the priority date.
In most patent cases, the Federal Court has adopted the innovative practice of concurrent expert evidence (also known as "hot tubbing"), whereby experts from each side are questioned in the witness box together at the same time.
Concurrent expert evidence typically involves the following process:
The parties' experts prepare a joint report, identifying their areas of agreement and disagreement.
The experts are called into the witness box together.
Each expert takes turns in giving evidence.
An expert can comment on another expert's evidence.
The parties' representatives cross-examine the experts, with each expert being able to give evidence and comment on another expert's evidence.
This practice allows an expert to immediately review another expert's opinion, and allows the court and the parties to focus on the real issues in dispute.
Concurrent expert evidence has been well-received by judges, experts and parties, and has drawn strong international interest.
Evidence obtained in a civil proceeding can be used in another civil proceeding. However, where documents or information were obtained by compulsion (that is, through a court process or by court order), the party that received the documents or information cannot use them in another proceeding without leave of the court (Hearne v Street  HCA 36).
In the Federal Court, pre-trial discovery is permitted by order of the Court. The Court will order discovery if and only to the extent that this is necessary to facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible. The Court can order standard discovery (that is, directly relevant documents) or non-standard discovery (for example, categories of documents and discovery in electronic format).
The party giving discovery must serve on other parties a list of documents that describes the:
Categories of documents in its control.
Documents previously but no longer in its control.
The list of documents must be verified by affidavit. The party giving discovery then produces the non-privileged documents. If this party does not produce the documents, the other parties can apply for an order for production of these documents.
There are other mechanisms to obtain evidence, including:
Identity discovery. This is an order requiring a party to give evidence or produce documents relating to the identity of a prospective defendant.
Preliminary discovery from prospective defendant. This is an order requiring a prospective defendant to give discovery of documents that are directly relevant to whether the prospective claimant has a claim against him.
Search orders (Anton Piller orders). A search order requires the defendant to permit persons to enter its premises for the purpose of securing the preservation of evidence that may be relevant to an issue in the proceeding (or prospective proceeding).
Inspection orders. These are orders to inspect, sample, observe or conduct an experiment on any document or item.
Interrogatories. These are orders requiring another party to provide written answers to questions, verified on affidavit.
Notices to admit facts or documents. A party can require another party to admit the truth of any fact or the authenticity of any document.
Subpoenas. Subpoenas require attendance in court to give evidence and/or produce any document or item.
Notices to produce. A notice to produce is a request for the inspection of any document or item.
Both infringement and invalidity must be established on the level of proof for civil actions, namely, "on the balance of probabilities". For an infringement action, the claimant must satisfy the court that the defendant's conduct was "more likely than not" infringing. For a revocation action, the party seeking revocation must satisfy the court that the patent was "more likely than not" invalid.
Patent infringement proceedings are usually heard within 12 to 18 months of commencement. A decision is typically issued within three to nine months of the hearing.
Although patent proceedings are excluded from the Federal Court's fast-track procedure, a party can apply for the proceedings to be heard on an expedited basis.
The Federal Court can set a timetable of the proceedings at a directions hearing or a case management conference. Any party can submit a draft timetable for consideration by the Court.
Because of the Federal Court's drive for efficiency and use of judicial case management (see Question 24), it is difficult for a defendant to delay proceedings without a reasonable basis. A defendant can seek to delay proceedings by proceeding slowly, making multiple pre-trial applications or disputing every issue. This will increase costs. A claimant can counter the delay by fixing a timetable and threatening to seek default judgment or strike-out of the defence.
Search and preservation orders
Australian courts have broad powers to make orders, including search orders (Anton Piller orders).
A court can grant a search order if the following conditions are met:
There is a strong prima facie case.
The damage (potential or actual) to the claimant will be serious if the order is not made.
There is sufficient evidence that the defendant has in its possession important evidentiary material.
There is a real possibility that the defendant may destroy such material or cause it to be unavailable in a proceeding or prospective proceeding.
A party can apply to the court for a preliminary (interlocutory) injunction restraining a respondent from doing all potentially infringing acts, until the court determines all issues of infringement and validity.
Preliminary injunctions will only be granted after notice has been given to the defendant. In urgent cases, an application for a preliminary injunction can be made without notice and potentially granted in the absence of the defendant.
In deciding whether to grant a preliminary injunction, the court will consider whether the patentee has delayed its application for an injunction and the reasons for any delay.
Factors that the court can take into account in considering whether to grant a preliminary injunction include:
Whether the alleged infringer was aware of the patent.
The preservation of the status quo.
Any damage that will be suffered by the alleged infringer.
Whether damages will be an adequate remedy if the preliminary injunction is lifted.
Preliminary injunctions are regularly granted in pharmaceutical cases. Unlike in the US, the regulatory approval process of generic pharmaceutical products in Australia is not automatically stayed by the commencement of legal proceedings by a patentee or its exclusive licensee.
Australian courts also have the power to make freezing orders (Mareva orders). The purpose of a freezing order is to prevent the frustration or abuse of a court's process by seeking to meet a danger that a judgment (or prospective judgment) of the court will be wholly or partly unsatisfied. The freezing order can be limited to Australia or can extend to anywhere in the world. A freezing order can only be obtained if the claimant has a cause of action that is justiciable within the jurisdiction; it cannot stand on its own.
Protective writs are not available in Australia. However, where a claimant seeks preliminary relief against a defendant without notice to the defendant (for example, a search order), the claimant is under a duty of candour to disclose to the court all matters that the defendant would have raised in defence (Geneva Laboratories v Nguyen  FCA 1270).
To seek a preliminary injunction, a patentee must commence an infringement action, and file an application, statement of claim and evidence of infringement. The patentee must also offer an undertaking as to damages (see Question 34). The matter is then set down for hearing before the court.
Level of proof
To obtain a preliminary injunction, the claimant must satisfy the court that it has a prima facie case of infringement and that the "balance of convenience" favours the granting of an injunction.
To establish that there is a prima facie case, the claimant must show that it has a real, credible case of infringement, but this requirement is not as high as establishing infringement at the final hearing. If the defendant alleges invalidity, the claimant must also address the defendant's invalidity arguments.
In considering the "balance of convenience", the court considers the harm suffered by the claimant if the preliminary injunction is not granted against the harm suffered by the defendant if the preliminary injunction is granted (Samsung v Apple  FCAFC 156, ). An important factor is whether financial compensation will be an adequate remedy to the claimant if infringement is established.
Evidence is often used by both the patentee and the alleged infringer to establish the case for or against the grant of a preliminary injunction. The volume of evidence is likely to depend on the degree of urgency and the time taken for the matter to be heard.
The defendant will usually assert that the patent is invalid. The onus is on the defendant to establish that there is a serious question to be tried as to the validity of the patent and that it has a sufficiently strong case on invalidity. It is usually difficult for a defendant to articulate a strong case on invalidity in a preliminary injunction proceeding given the practicalities of timing and evidence.
Length of proceedings
The time taken by the court to determine whether to grant a preliminary injunction will depend on the facts of the case. Generally, a decision is made within two months of the filing of the application. In pharmaceutical cases, a decision is usually issued within less than one month from the filing of the application.
To obtain a preliminary injunction, the claimant must give to the court what is known as the "usual undertaking as to damages". The usual undertaking is an undertaking that the claimant will pay compensation to be assessed by the court to any person (including the defendant and third parties) that is adversely affected by the injunction if the claimant is unsuccessful at the final hearing (Federal Court Practice Note CM 14). There is no requirement to provide any security, bond or guarantee with the undertaking.
In one case involving the enforcement of undertakings as to damages, the Australian Government is claiming compensation from a number of originator pharmaceutical companies on the basis that the government's subsidies for medicines were maintained at a higher level due to preliminary injunctions that were ultimately dissolved.
The Federal Court can grant a permanent injunction against an infringer on such terms as it thinks fit (section 122(1), Patents Act). Injunctions are a discretionary remedy. The Court will usually grant an injunction prohibiting infringement generally, not limited to the infringements established at trial (Welcome Real-Time v Catuity (No 2)  FCA 785).
An injunction only binds the infringer. A third party (such as a director or officer of a corporate infringer) who knows of the injunction and assists the infringer in breaching it may be liable for contempt of court (TiVo v Vivo  FCA 1340).
See Question 19 regarding cross-border or extra-territorial injunctions.
The Federal Court can award damages or, alternatively at the option of the claimant, an account of profits (section 122(1), Patents Act). Damages can be calculated based on lost profits, lost royalties, reasonable royalties and other measures. The purpose of damages is to put the claimant in the position it would have been but for the infringement (General Tire v Firestone  1 WLR 819). The patentee can recover damages for any kind of loss that was foreseeable, caused by the infringement and not excluded by public policy (Pacific Enterprises v Bernen  FCA 1372,  (Pacific Enterprises)).
Since 2006, the Court has had discretion to award "additional damages" on top of ordinary damages (section 122(1A), Patents Act). Additional damages are a form of punitive damages. In deciding whether to award additional damages, the court can take into account (section 122(1A), Patents Act):
The flagrancy of the infringement.
The need for deterrence.
The conduct of the infringer.
Any benefit accrued to the infringer.
There has been limited judicial consideration of additional damages (see Pacific Enterprises and Zetco v Austworld Commodities (No 2)  FCA 848). Additional damages were awarded in the Pacific Enterprises case.
As an alternative to damages (and additional damages), the claimant can seek an account of the infringer's profits. This remedy requires the infringer to account for and disgorge the profits it dishonestly made through infringement (Dart v Decor  HCA 54). An account can be attractive because, in some cases, the profits of the infringer may be greater than the recoverable damages.
It is common for cases to be "split" so that infringement and validity are heard before and separately from issues of monetary relief (see Question 24).
Delivery up or destruction of infringing goods
The Federal Court can order the delivery up or destruction of infringing goods as part of its general power to grant equitable relief (Roussel Uclaf v Pan Laboratories  FCA 1176). Delivery up is ancillary to an injunction. The object is to protect the patentee's rights but not to punish the defendant (Streetworx v Artcraft Urban Group (No 2)  FCA 140 (Streetworx), ). In Streetworx, the court refused to make an order for delivery up of non-infringing products that were made by modifying infringing products.
Publication of the decision
The Federal Court issues written decisions, which are published on the Court's website and on AustLII (see box, Online Resources).
The authors are not aware of any decision of an Australian court granting a recall order.
Declaration of infringement and validity
The Federal Court has the power to make declarations of infringement and invalidity. If the Court declares a patent invalid and makes an order to revoke it, the order will be served to the Commissioner of Patents, who will record the terms of the order on the Register of Patents. Revocation operates ab initio (Apotex v Pfizer Ireland Pharmaceuticals  FCA 1150, ), so that the patent is deemed to have never been granted.
Where the Federal Court upholds the validity of a patent claim, it can certify that the validity of the claim has been questioned (section 19, Patents Act). If the court issues such a certificate and the patentee is successful in subsequent proceedings, the patentee is entitled to recover full costs and expenses in relation to that patent claim.
In Streetworx, the Federal Court considered that a springboard injunction (that is, an injunction prohibiting non-infringing conduct resulting from prior infringing conduct) can be granted in a patent infringement case, but declined to grant such an injunction in the circumstances.
Appeals from IP Australia are dealt with by the Federal Court or the Administrative Appeals Tribunal. If the appeal relates to the pre-grant validity of a patent application, the appeal is heard by a single judge of the Federal Court in a de novo hearing (that is, the Court will re-hear the merits of the case afresh).
There are two tiers of appeal above a single judge of the Federal Court:
The first tier is the appellate jurisdiction of the Federal Court sitting as a Full Court. First instance decisions from a single judge of the Federal Court can be appealed to the Full Court, which is constituted of three or five judges drawn from often different parts of Australia. If the decision is interlocutory, leave of the Court is required for any appeal.
The second tier is the High Court of Australia, which is Australia's highest appellate court. Appeal to the High Court is not a right and special leave to appeal is required. Special leave is occasionally granted in patent cases.
Appeals to the Full Court of the Federal Court and the High Court are usually heard within four to nine months, although the time taken for issuing a decision varies.
It is common for issues of infringement and patent validity to be heard before and separately from issues of monetary relief (see Question 24). It is usual that issues of monetary relief are stayed pending the outcome of all avenues of appeal.
It is difficult to accurately estimate the cost of patent proceedings. The cost will depend on factors such as:
The nature of the technology.
The number of patents and claims in issue.
The number of alleged infringements.
The nature and number of any asserted grounds of invalidity.
As a rough estimate, the costs a party can expect to incur in a typical infringement and invalidity proceeding are as follows:
For a fully contested first instance decision, costs are likely to exceed AU$500,000.
For preliminary injunction proceedings, costs are likely to exceed AU$200,000.
For an appeal to the Full Court of the Federal Court, costs are likely to exceed AU$200,000.
Australian courts generally operate under a "loser pays" system, meaning that legal costs are recoverable from the losing party. The extent of recovery is usually about 60% to 70% of the successful party's actual legal costs.
While a party can apply to the Federal Court to cap the maximum recoverable costs (rule 40.51, Federal Court Rules), the authors are not aware of an instance where this has been done in patent proceedings.
The Federal Court is in the process of implementing a National Court Framework, which will move the Court towards a nationally co-ordinated structure divided by subject matter. Intellectual property cases will be dealt with by judges sitting in the Intellectual Property National Practice Area, including the Patents sub-area. The reforms are expected to deliver significant benefits to litigants, including:
Increased access to judges with expertise in intellectual property.
The reform is in the process of implementation and is expected to be completed in March 2016.
Australian courts have recently determined a number of cases on the patentability of various subject matters:
In D'Arcy v Myriad Genetics Inc  HCA 35 (D’Arcy), the High Court held that isolated nucleic acids coding for mutant or polymorphic BRCA1 polypeptides were not patentable subject matter, because the substance of the invention lay in the sequence information, which is used to determine susceptibility to cancers. In D’Arcy, the High Court held that satisfying the criteria set out in National Research Development Corporation v Commissioner of Patents  HCA 67 (that is, an artificially-created state of affairs with economic utility) may not be sufficient to confer patentability, and that policy factors for and against patentability are important in determining patentability.
In Apotex v Sanofi-Aventis Australia  HCA 50, the High Court held that a method of medical treatment was patentable subject matter.
In Research Affiliates v Commissioner of Patents  FCAFC 150, the Full Court of the Federal Court held that a computer-implemented method for generating an index was not patentable subject matter because the method was a mere scheme, and the invention lay in the index as information, not in its computer implementation.
In Commissioner of Patents v RPL Central  FCAFC 177, a decision issued after D’Arcy, the Full Court of the Federal Court held that a computer-implemented method and system of assessing competency relative to qualification standards were not patentable subject matter because they were a mere scheme or business method.
Australian patent law continues to be the subject of review and potential reform. In August 2015, IP Australia undertook a public consultation on whether to abolish innovation patents, following an economic analysis. In the same month, the Productivity Commission began a broad-ranging inquiry on the effect of Australia's IP laws on investment, competition, trade, innovation and consumer welfare.
The "Raising the Bar" amendments came into force on 15 April 2013 and raised the standards of patentability. The effect of these amendments will be determined by Australian courts in the coming years.
Description. ComLaw contains the official text of federal legislation, including the Patents Act and the Patents Regulations.
Federal Court of Australia
Description. The Federal Court's website contains an updated database of all matters commenced in the Federal Court since 1984, accessible through the "Federal Law Search" portal. Orders of the Court as well as judgments can be found on the website.
Description. IP Australia's website provides information on Australian patents and patent applications.
Australasian Legal Information Institute (AustLII)
Description. AustLII is an online repository of Australian (unofficial) legislation, case law and articles. Cases referenced in this chapter can be found on AustLII.
John Lee, Partner
Gilbert + Tobin
Professional qualifications. New Zealand, Lawyer, admitted 1994; New South Wales, Australia, Solicitor, 2000; High Court of Australia, admitted 2000; Registered Patent Attorney
Areas of practice. Intellectual property; mining and resources; life sciences; information technology.
Non-professional qualifications. Bachelor of Laws (Honours), University of Canterbury; Bachelor of Science (Biochemistry), University of Canterbury, 1993
Co-ordinating a patent enforcement regime for BASF (Ciba) in relation to a mining technology.
Advising a global life sciences company on IP litigation, branding, regulatory and commercial IP issues in relation to diabetes and HGH products.
Conducting numerous patent infringement actions for Australia's leading ICT company.
Acting on a complex patent litigation relating to genetically modified crops.
Intellectual Property Society of Australia and New Zealand (IPSANZ).
Licensing Executives Society of Australia and New Zealand (LESANZ).
Institute of Patent and Trade Mark Attorneys.
Australian Institute of Company Directors.
Gilbert + Tobin
Professional qualifications. New South Wales, Australia, Solicitor, 2009
Areas of practice. Intellectual property law particularly patent litigation, anti-counterfeiting and consumer protection.
Non-professional qualifications. Juris Doctor of Law, University of Technology, Sydney; Bachelor of Biomedical Science (Molecular Biology), University of Technology, Sydney
Law Society of New South Wales.
Intellectual Property Society of Australia and New Zealand (IPSANZ).
Gilbert + Tobin
Professional qualifications. New South Wales, Australia, Solicitor, 2009
Areas of practice. Intellectual property; litigation; unfair competition.
Non-professional qualifications. Master of Intellectual Property Law, University of Melbourne; B Com (Fin.), LLB (Hons.), University of New South Wales
Languages. Chinese (Mandarin), Chinese (Cantonese)
Law Society of New South Wales.
Intellectual Property Society of Australia and New Zealand (IPSANZ).
Publications. Co-author of the Australian chapter in D. Bereskin (ed.), International Trademark Dilution.