In Australia, a Patentee should obtain as much information as possible about the infringing activities of a third party before attempting to enforce its Patent. Otherwise, the Statement of Claim may be struck down by an Australian Court for lacking sufficient detail of the “type of infringement” alleged. Simply relying on Discovery during Court Proceedings to uncover the nature of the infringing activities will not assist a Patentee when initiating Infringement Proceedings in Australia.
A Patentee alleging infringement in Australia is obliged to serve an Application under Section 120(1) of the Patents Act 1990 together with a Statement of Claim or Affidavit, which includes the Particulars of the alleged infringements. The Patentee is required to give at least one (1) instance of each type of infringement alleged, so that the Defendant has sufficient information with regard to the case that it has to meet.
In a recent case, UPaid Systems Ltd vs Telstra Corporation Limited (2013) handed down on the 23 December 2013, the Federal Court had the opportunity to assess what is meant by “type of infringement.” This case highlights the importance of particularising patent infringement when initiating Infringement Proceedings in Australia.
This case is of relevance to any Australian Patentee, who/which is aware of infringing activities of third parties and is considering taking action to enforce its Patent in Australia.
UPaid is the Patentee of Australian Patent No. 2008203853 and Australian Patent No. 770646, which are directed to technology used in electronic commerce and communication services. Telstra, an internet provider which offers various mobile plans, was alleged to have infringed the Patents owned by UPaid.
UPaid claimed that Telstra infringed 53 Claims from Patent No. 2008203853 and 100 Claims from Patent No. 770646. After filing its originating Application on 21 August 2013, UPaid then filed an Amended Statement of Claim on 8 November 2013 setting out amended Particulars of Infringement.
Telstra submitted that the examples given by UPaid in their Amended Statement of Claim were insufficient and simply illustrated that there were multiple potentially infringing methods, rather than a single method by which different services, or a different combination of services, were provided. Telstra asserted that it provided a service or combination of services, which differed from the features of the patented method and that there was no infringement.
In considering the Amended Statement of Claim, the Court found that UPaid had not met its obligation to provide examples of infringement and to particularise an instance of each type of infringement alleged. The Court remained unconvinced by UPaid’s argument that it was not possible for them to provide, prior to Discovery, “an exhausted list of products or services” the provision of which by Telstra infringes the Patents when Telstra uses “system, platform, method or devices.” The Court found that the Statement of Particulars did not comply with the requirement of Federal Court Rule 34.43(3), and the Statement was accordingly struck out.
UPaid is now required to file further Particulars of Infringement by no later than 28 February 2014, and is required to pay Telstra’s costs of the Interlocutory Application.
Furthermore, the Court commented on the large number of Claims advanced by UPaid in support of its infringement case. This was held to be superfluous in achieving effective relief adding unnecessarily to the complexity and costs of the proceeding, and leading to delay. The Court considered that such conduct may well attract special cost orders. This was brought to UPaid’s attention before the filing of further Amended Particulars of Infringement falls due.
Take home Message
This case highlights the obligation of a Patentee to comply with Rule 34.42(3) of the Federal Court Rules when enforcing Patent claims. It is necessary to provide detailed examples of instances of infringement for each type of infringement alleged. The Court applies a strict understanding of the notion “type of infringement” in Australia and is unlikely to accept a Statement of Claim broadly describing the types of infringement without adequate particularisation, together with an assertion by the Patentee that details cannot be given prior to Discovery. Patentees who fail to provide detailed examples of instances of infringement for each type of infringement alleged, risk their Statement of Claim being struck out and a costs order being made against them.
It is also worth bearing in mind that more is not always better, and that the assertion of infringement of an excessive number of Claims may attract special cost orders for conduct, thereby adding unnecessarily to the complexity and costs of proceedings and leading to delay.