Correspondents for South Australia, Victoria and Western Australia

Note: Where any of the barristers were involved in a case reported below and the matter is still running, or potentially so, the other correspondents have taken the role of reporting that case.

Damorgold Pty Ltd v JAI Products [2014] FCA 150

The applicants (Damorgold) were the owner and exclusive licensee of a patent for a spring assisted blind mechanism, which had a priority date of 25 August 1999.  The issue of the licensee’s right to relief was stayed.  Damorgold claimed that JAI Products had infringed a suite of claims of the patent and JAI Products asserted the patent was invalid.  In the end, Middleton J found two claims infringed and valid.

On the question of infringement, the claims of the patent were to a roller blind mechanism that included a feature known as a “spring assist”.  JAI Products sold spring assists in circumstances where their only reasonable use was as a component of an infringing roller blind mechanism and with instructions to use the spring assists in that manner.  Middleton J found that the sale of a component in such circumstances constituted an infringement pursuant to section 117 of the Patents Act.  While Middleton J did not cite authority in support of the proposition that the “product” in s 117 of the Patents Act can include a component of the claimed invention, that finding, with respect, appears correct.

The question whether sale of a component of the claimed product can satisfy section 117 was touched upon in Great Western Corporation Pty Ltd v Grove Hill Pty Ltd[2001]FCA 423; at [33]–[35] where it was argued that the sale of a product in separate (but all) parts could not infringe pursuant to that section.  Kiefel J observed that there was nothing in section 117 to suggest such a limitation is necessary.  The appeal from that decision did not clarify the point any further.

Justice Jagot in Beadcrete Pty Ltd v Fei Yu trading as Jewels 4 Pools (No 3) [2013] FCA 187 found that the respondent had infringed a product claim (see [142]) pursuant to section 117 of the Act, notwithstanding that the respondent only supplied only part of the claimed product with instructions to add the missing integer, there “cementitious material”.  Her Honour observed at [128] that “The fact that the respondents supply only the glass beads and Geo Polymer is not to the point. The respondents direct the use of those products with cement, which is a “cementitious material” within the meaning of the claims of the patent.

This approach also appears to be consistent with the recommendations of the Industrial Property Advisory Committee, whose recommendations led to the inclusion of s 117 in the 1990 Act.   Their report recommended that infringement should be found where “goods, materials or parts are supplied to a consumer with the intention that they be used, consumed or assembled in a way which constitutes an infringement of a patent.”

Middleton J also found that JAI Products infringed two claims of the patent by authorising its customers to use the spring assists in a way which would infringe those claims.  Section 13 of the Patent Act includes, as an exclusive right of the patentee, the right to authorise others to exploit the patent.  His Honour found that since authorising third parties in an infringement context has the same meaning as in copyright law, it followed that authorising included “granting or purporting to grant the right to do acts which exploit the patent” which his Honour found had occurred by supplying spring assists which had only one reasonable use (the infringing use) and with instructions to infringe.

His Honour’s broad interpretation of what might constitute “authorisation” would, with the greatest of respect, leave very little for section 117 of the Act to do, especially where the product has only one reasonable use.  The writers observe that there has been some difference of opinion as to whether the meaning of “authorise” in the Copyright Act is the same as that in the Patents Act and what test should be applied to determine whether an act constitutes authorisation.  Nevertheless, the Full Court inBristol-Myers Squibb Co v F H Faulding & Co Ltd [2000] FCA 316; (2000) 97 FCR 524 has made the obiter observation that the term “authorise” should be taken by analogy to have the same meaning as in the Copyright Act and recent single judge authority has certainly followed that view.

Middleton J also found that JAI Products would be liable as a joint tortfeasor for infringement of the Patent, adopting the Full Court’s reasoning in Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1999) 164 ALR 239 that the supply of equipment with instructions demonstrating use in an infringing manner amounts to procuring resulting infringements.

As to validity, JAI Products succeeded in establishing that many (but not all) of the claims lacked novelty.  Middleton J considered the extent of disclosure made by the display and offering for sale in Australia of a RolaShades product and publication of depictions of that product.

His Honour found that the displayed RolaShades could have been “readily pulled apart” by JAI staff to demonstrate how they worked and as such, customers had the opportunity to examine the relevant workings of the RolaShades.  Given that no restrictions were placed on what any potential customer might do with the information gained from such an inspection, there was a relevant publication of that information for the purposes of assessing novelty.  Importantly, it did not matter that few potential customers ever had the opportunity to examine the RolaShades or that no actual disassembly or sale occurred.

As to the depictions of the RolaShades product, the “exploded” view and pictures of the product in a catalogue did not adequately disclose the relevant workings of the product.  Further experimentation would be required to properly understand those workings and without that information, there was no anticipation of the claims of the patent.

JAI Products also asserted that the claimed invention was not a manner of manufacture.  JAI Products argued that certain claims of the Patent were “a mere collocation” of integers where they included a component of “unitary construction” which had no discernable interaction with other integers in the claim.  JAI Products had the onus of establishing this ground and his Honour found that JAI Product had failed to prove that the components of unitary construction had no desirable function or purpose or failed to interact with other integers of the claims.

Damorgold Pty Ltd v JAI Products (No 2) [2014] FCA 377

Following on from his Honour’s decision reported above, JAI Products asserted that, because the only patent claims upon which Damorgold succeeded were dependent on claims that had been found invalid, it was necessary for Damorgold to amend the patent pursuant to section 105 of the Patents Act before it was entitled to an order for injunctive relief.  JAI Products plainly wished to argue that the Court should exercise its discretion not to amend the patent because of culpable delay or the like.

Damorgold had not made an application pursuant to section 105 of the Act to amend the patent and indicated that it had no intention of doing so.  It asserted that certain claims had been found valid and infringed and that was enough for it to be entitled to injunctive relief.  Middleton J agreed and so ordered.

His Honour observed that there has been no suggestion that the two claims had, by incorporating by reference the preceding claims, lacked sufficient clarity so as to make them invalid.  He concluded that those claims “were and will still be able to be read and understood in conjunction with the claims which have been held to be invalid. No interested party reading the public Register, with notification of the Court orders, will have any doubt as to the claim of the monopoly in claims 23 and 27, which they will still be able to read in conjunction with the wording of the other claims.”

Turning to costs, JAI Products asserted that it had been successful in invalidating a majority of the claims and only found to infringe two valid claims and therefore it should pay 20 percent of the Damorgold’s costs on infringement and Damorgold should pay 80 percent of JAI Product’s costs.  Middleton J found that effective resistance to the infringement claim was essentially JAI asserting invalidity and that, while it received a favourable outcome in relation to all but four claims, it failed in its ultimate endeavour in to avoid being found to have infringed.  Further, Damorgold had not unreasonably contested the invalidity case.  As such, JAI Products was ordered to pay Damorgold’s costs.