FEDERAL COURT OF AUSTRALIA

Multigate Medical Devices Pty Ltd v B Braun Melsungen AG (No 2) [2016] FCAFC 41

ORDERS

THE COURT ORDERS THAT:

1.    Paragraph 1 of the Order of Pagone J made 28 October 2014 in the proceeding below be vacated.

2.    Paragraph 3 of the Order of Pagone J made 28 October 2014 in the proceeding below be varied to read:

Orders the Respondent be restrained from, whether by its director, servants, agents or howsoever otherwise, until 18 August 2018 or any earlier expiry of both of the 327 Patent and the 577 Patent, from importing, offering for sale, selling and/or keeping for the purpose of offering for sale or selling, or supplying, the Multigate Products, or any other products within the scope of claim 1 of the 327 Patent or any of claims 1 to 6 of the 577 Patent (Infringing Products), or authorising any such conduct.

3.    Paragraphs 5 and 8 of the Order of Pagone J made 28 October 2014 in the proceeding below be vacated.

4.    Paragraph 4 of the Order of the Full Court made 3 March 2016 be vacated.

5.    The appellant pay 70% of the respondents’ taxed or agreed costs of and incidental to each of appeal proceedings VID 681 and 693 of 2014 including all reserved costs.

6.    The appellant pay 70% of the respondents’ taxed or agreed costs of and incidental to the proceeding below including all reserved costs.

7.    The matter be remitted to the trial judge for further directions with regard to the respondents’ claims for an assessment of damages or an account of profits.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    This matter is before the Full Court for the making of final orders and for the determination of costs. The parties have each provided draft orders and made submissions on costs. Apart from the question of costs, there is a degree of agreement on the final orders that should be made. We propose to say nothing more on that topic.

2    As to costs, the appellant has argued that it has succeeded in defending the case brought against it for infringement of Australian Patent Number 2012258327 (the 327 Patent) but not in defending the case brought against it for infringement of Australian Patent Number 2012260577 (the 577 Patent). Its principal submission is that no order should be made as to costs either at first instance or on appeal, because the parties have had an equal measure of success on the question of infringement. Alternatively, it argues that the Court should make orders that it is entitled to its costs of defending the case on infringement of the 327 Patent and that the respondents are entitled to their costs in relation to the bringing of the case on infringement of the 577 Patent.

3    The appellant has raised, as a consideration in the determination of costs, that there should be no provision for the recovery of costs in relation to the preparation of parts of the affidavit evidence which were, at the primary judge’s direction, not read at the trial or in relation to the preparation of the Court Book and opening written submissions which, ultimately, were not used.

4    For their part, the respondents argue that, for the purposes of assessing the costs of the trial and the appeal, it is just and convenient that the matter be analysed according to four roughly equal parts, namely the case challenging the validity of the 327 Patent, the case challenging the validity of the 577 Patent, the case on infringement of the 327 Patent, and the case on infringement of the 577 Patent. The respondents argue that it is reasonable to proceed on the basis that roughly equal time was spent on each part and that, on this basis, one may apportion costs by measuring the success of the parties on each part.

5    In our view, that is the appropriate approach to adopt in the present case.

6    In this vein, the respondents refer to the fact that, both at trial and on appeal, they were wholly successful on the appellant’s challenge to the validity of the 327 Patent and the 577 Patent, and that they were also wholly successful on their case for infringement of the 577 Patent.

7    Pausing there, this would indicate that, overall, the respondents had achieved 75% success which should be reflected in the costs to be awarded in their favour. However, the respondents also argue that they are entitled to one-fifth of their costs in relation to the case on infringement of the 327 Patent. The respondents say that, by adopting this approach, the appellant should pay 80% of their (the respondents’) combined costs at trial and on appeal.

8    It is not clear to us how the respondents have calculated an entitlement to one-fifth of their costs in relation to the case on infringement of the 327 Patent. The respondents did not succeed on that case, although they were able to overcome a number of contentions advanced by the appellant in its defence. That would not entitle them to costs, but the success on those contentions may serve to reduce the costs that they would otherwise have to pay to the appellant.

9    We do not think that there should be a corresponding order that the respondents pay 25% of the appellant’s costs at trial and on appeal. This is because, although the appellant succeeded in defending the case on infringement of the 327 Patent, it ultimately succeeded on only one of the arguments it raised in that regard.

10    We accept that, in this case, it is appropriate to make a global order as to costs. In our view, the just outcome is that, in order to recognise the success that the appellant had in respect of the case for infringement of the 327 Patent, a reduction should be made to the costs that the appellant should otherwise pay, so that the appellant should pay 70% of the respondents’ costs at trial and on appeal.

Associate:

Dated:    16 March 2016