Patent enforcement proceedings

Lawsuits and courts

What legal or administrative proceedings are available for enforcing patent rights against an infringer? Are there specialised courts in which a patent infringement lawsuit can or must be brought?

The Federal Court of Australia is the primary venue for patent infringement proceedings in Australia. There is no specialised court that exclusively handles patent matters. Rather, there is an Intellectual Property National Practice Area within the Federal Court of Australia. Supreme courts of the states and territories of Australia also have jurisdiction, but it is unusual for a patent infringement proceeding to be heard in any of those courts.

Trial format and timing

What is the format of a patent infringement trial?

The format of a patent infringement trial in Australia is an oral hearing. The order of business of a patent infringement trial in Australia is up to the trial judge, but traditionally the applicant will present its case first, then the respondent will present its case and any cross claim with each side presenting detailed oral and written opening and closing submissions.

The evidence of independent experts led by each party will almost always be critical to the assessment of infringement and to any cross claim seeking revocation of the patents-in-suit. Evidence in chief is given before the trial in the form of detailed written affidavits, and witnesses are cross-examined on that material. It is common for expert witnesses to be cross-examined concurrently. The trial itself will often last between five and 10 days, although complex cases can take longer.

Proof requirements

What are the burdens of proof for establishing infringement, invalidity and unenforceability of a patent?

The standard of proof required in Australian patent proceedings involving claims of infringement or invalidity is the civil standard of proof – that is, proof on the balance of probabilities. In relation to the specific case of a claim for infringement of a patent for a process for obtaining a product, in certain circumstances detailed in section 121A of the Patents Act 1990 (Cth) the onus of proof is reversed and the defendant’s product is taken to have been obtained by the patented process.

Standing to sue

Who may sue for patent infringement? Under what conditions can an accused infringer bring a lawsuit to obtain a judicial ruling or declaration on the accusation?

In Australia, only patentees and exclusive licensees have standing to sue for patent infringement. To qualify as an exclusive licensee, a licensee must be conferred a licence to all forms of exploitation of the claimed invention throughout Australia, to the exclusion of the patentee and all other persons. As a practical matter, any licence should be reviewed in advance and, if necessary, amended before commencing patent infringement proceedings. 

Any person can apply to the court for a non-infringement declaration provided that the declaration is in relation to an act the person has done, is doing or proposes to do.

Inducement, and contributory and multiple party infringement

To what extent can someone be liable for inducing or contributing to patent infringement? Can multiple parties be jointly liable for infringement if each practises only some of the elements of a patent claim, but together they practise all the elements?

Patent infringement is a statutory tort in Australia. Common law principles apply, making causes of action for ‘joint infringement’ and ‘inducement to infringe’ available, including against multiple parties. These principles are applied in Australia in a similar way as in other common law countries.

Australian courts consider that authorising infringement is also an act of infringement. Current authority favours relatively a broad concept of authorisation, namely to ‘sanction approve and countenance’.

Infringement by supply of products is codified under section 117 of the Patents Act 1990 (Cth). Assessing potential liability under section 117 can be distilled down to three central questions: is there a supply of a product? What is the use of the product? Does that use infringe the patent? At the risk of undue abbreviation, subsection 117(2) can be described as inviting attention in the scenarios identified in each paragraph of the subsection, to ‘only use’, ‘known use’ and ‘instructed use’.

Joinder of multiple defendants

Can multiple parties be joined as defendants in the same lawsuit? If so, what are the requirements? Must all of the defendants be accused of infringing all of the same patents?

Multiple parties can be joined as defendants in the same claim. Joinder of multiple defendants may occur where all rights to relief claimed in the proceeding (whether joint, several or alternative) arise out of the same transaction or event or series of transactions or events. It is, however, not necessary that all of the defendants are accused of infringing the same patents. Whether joinder of multiple defendants is permitted is ultimately a matter for the court in the exercise of its inherent jurisdiction.

Infringement by foreign activities

To what extent can activities that take place outside the jurisdiction support a charge of patent infringement?

Where the invention claimed is a method, exploiting the method includes (in accordance with the statutory definition) importing, selling, offering to sell, etc, ‘a product resulting from such use’.

When a patented process is used overseas to make an intermediate product, which is then further modified before being imported, an infringement issue may nevertheless arise, depending on whether the modified product is still aptly described as a product ‘resulting from the use of the process’. Information that could not itself constitute patentable subject matter, such as the results of a diagnostic test that takes place outside the jurisdiction, is not considered to be such a product.

Infringement by equivalents

To what extent can ‘equivalents’ of the claimed subject matter be shown to infringe?

Australia does not have a doctrine of equivalents in the US sense. The High Court of Australia has confirmed that to establish patent infringement, all the essential features of a claim must be embodied in the alleged infringement. Accordingly, in Australia there are some parallels to a doctrine of equivalents surrounding what constitutes essential or inessential features. If an inessential feature of a claim has been substituted by a mechanical equivalent, or omitted altogether, there will still be infringement if all of the essential features of the claim have been taken. It is, however, rare for a claim feature to be found to be inessential.

Discovery of evidence

What mechanisms are available for obtaining evidence from an opponent, from third parties or from outside the country for proving infringement, damages or invalidity?

Discovery is available and common in patent litigation in Australia. The court is, however, conscious of keeping discovery within a narrow range, and discovery must be applied for – it is not automatic. The approach of Australian courts to discovery in patent matters is more like that in the UK than in the US.

Discovery is typically by categories in patent litigation in Australia. The categories of discoverable documents must be referable to specific matters in dispute.

A court order for discovery is binding in that a failure to comply may constitute contempt of court, which is an offence, and there may also be adverse costs awards. Discovered documents are also subject to the implied Harman undertaking derived from UK law that the use of information obtained or produced under the compulsory processes of the court cannot be used for a ‘collateral or ulterior purpose’ unrelated to the proceedings.

Litigation timetable

What is the typical timetable for a patent infringement lawsuit in the trial and appellate courts?

Patent infringement proceedings in Australia are typically bifurcated with liability and validity the subject of an initial trial and, if liability is established, a second trial as to remedies. A second trial as to remedies is not common. Where liability is established, the parties typically settle.

The initial trial typically takes place 12 to 18 months after commencement of a proceeding with a detailed written judgment handed down six to 12 months after completion of the initial trial. Any appeal is typically heard within six to nine months of the first judgment, and an appeal judgment handed down a further six to nine months later. Expedited trials and judgments are possible where the court considers it is justified.

Litigation costs

What is the typical range of costs of a patent infringement lawsuit before trial, during trial and for an appeal? Are contingency fees permitted?

The range of costs of a patent infringement lawsuit in Australia is quite broad and depends on numerous factors. A typical range of costs from filing a proceeding to the conclusion of a trial would be AU$500,000 to over AU$2 million. Broadly, about 50 per cent of the costs of a patent infringement lawsuit in Australia are incurred in preparing for and conducting the trial. The typical range of costs for an appeal would be AU$150,000 to over AU$300,000.

Contingency fees, in the sense of fees based on a percentage of the amount recovered, are not permitted. ‘No win, no fee’ contingency fee arrangements are permitted, as are uplift fee arrangements up to 25 per cent of fees billed, but neither are common in patent disputes in Australia.

Court appeals

What avenues of appeal are available following an adverse decision in a patent infringement lawsuit? Is new evidence allowed at the appellate stage?

A claim for patent infringement will typically be heard and determined by a single judge of the Federal Court of Australia. The decision of the trial judge can be appealed as of right to the Full Court of the Federal Court of Australia. The Full Court usually sits as a panel of three judges. An appeal to the Full Court is not a complete rehearing of the original proceeding. Thus, additional evidence cannot normally be introduced.

To appeal a decision of the Full Court of the Federal Court of Australia, an application for special leave must be made to the High Court of Australia. Applications for special leave are rarely granted and additional evidence cannot normally be introduced.

Competition considerations

To what extent can enforcement of a patent expose the patent owner to liability for a competition violation, unfair competition, or a business-related tort?

There is, to the best of our knowledge, no precedent in Australia for a patent owner being held liable for a competition violation, unfair competition or a business-related tort as a result of enforcing a patent. There are, however, no specific exemptions under Australia law against such liability.

Alternative dispute resolution

To what extent are alternative dispute resolution techniques available to resolve patent disputes?

In proceedings before the Federal Court of Australia, the primary venue for patent disputes in Australia, it is common for the Court to order the parties to conduct mediation, sometimes multiple times. In this context mediation takes the form of a confidential and without prejudice negotiation conference between the parties and their legal advisers, facilitated by an independent mediator, typically a court registrar.

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1 November 2021.