FEDERAL COURT OF AUSTRALIA

JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (No. 2) [2005] FCA 1490

PRACTICE AND PROCEDURE – costs – where each party enjoyed a measure of success – applicant ordered to pay a percentage of the respondent’s costs

Federal Court of Australia Act 1976 (Cth) s 43(2)

Federal Court Rules O62 r 15

Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261

Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2001) 54 IPR 495 followed

Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (unreported, Sundberg J, 12 November 1997) referred to

JMVB ENTERPRISES PTY LTD v CAMOFLAG PTY LTD

V1190 of 2001

CRENNAN J

21 OCTOBER 2005

MELBOURNE

RULING

1                     On 18 October 2005 a decision was delivered in respect of the claim and cross‑claim in this proceeding. 

2                     The parties brought in short minutes on 19 October 2005 which were agreed, except as to costs, and an order sought by the applicants that the orders be stayed for a period of 28 days from that date of the making of the order or further order by a single Judge of the Court. 

3                     Section 43(2) of the Federal Court of Australia Act 1976 (Cth) confers an unfettered discretion on the Court to make orders as to costs.  See also O 62 r 15 of the Federal Court Rules.  When results are mixed, it can be an appropriate exercise of the Court’s discretion to take account of the respective success or failure of parties in relation to certain issues: see Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495 at 497-498 (‘Doric v Lockwood’) and to the cases there referred to by Hely J. 

4                     I agree with Hely J in Doric v Lockwood the parties should not be dissuaded by the risks of costs, from canvassing all issues, which may be material.  I also agree that there can be considerable overlap between issues in a patent case, as there was here.

5                     The applicant in this case submitted that even though the respondent was successful overall, this success was qualified by losses on a number of substantive issues, including the application to amend the patent, infringement of the patent and design, novelty and fair basis challenges to the patent and the unjustified threats claim.  Accordingly, the applicant argued that the overall costs payable to the respondent should be reduced by 30%. 

6                     The respondent contended that it should have all its costs, or alternatively, that any reduction should be extremely modest.  The respondent also submitted that the costs ordered should be assessed on an indemnity basis because of two offers it made to the applicant to settle.  These offers were described by the respondent as ‘Calderbank’ offers.  The applicant resisted this application for indemnity costs, on the basis that the offers were made at a time when the particulars of invalidity were very different from the final form relied upon by the respondent and so the rejection of the offers at that time was reasonable and that the offers could not be ‘Calderbank’ offers because they were not in the form required.

7                     When exercising the discretion to award costs in this case, it is relevant to take into account that it is normal practice to require an applicant seeking an amendment to the patent to pay the respondent’s costs: Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (unreported, Sundberg J, 12 November 1997), referring to T Terrell, Terrell on the Law of Patents, 14^th edn, Sweet & Maxwell, London, 1994 at 245.  It is also relevant in this case to take into account the two offers to settle.

8                     Further, it needs to be mentioned that an allocation of costs in a case of mixed results can never be done with mathematical precision: Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272 per Gummow, French and Hill JJ.

9                     I substantially accept the respondent’s submissions on costs, although I do not regard this case as one in which it would be appropriate to award full indemnity costs, nor is the reduction in costs which I have in mind ‘extremely modest’ as urged by the respondent.  Rather, it is a modest reduction recognising that there were substantial amendments over time to the particulars of invalidity. 

10                  In all the circumstances, and balancing all the factors relevant to the exercise of my discretion, I ordered that the applicant pay to the respondent 85% of the respondent’s taxed costs, including reserved costs.

Associate:

Dated:              21 October 2005