FEDERAL COURT OF AUSTRALIA

NutraSweet Australia Pty Ltd v Ajinomoto Co., Inc. (No 2) [2005] FCA 1907

COSTS – apportionment – where successful party failed on certain issues

NUTRASWEET AUSTRALIA PTY LTD v AJINOMOTO CO., INC.

VID 174 of 2002

FINKELSTEIN J

23 DECEMBER 2005

MELBOURNE

THE COURT ORDERS THAT:

The Respondent pay 85 per cent of the Applicant’s costs of the proceedings, including all reserved costs, such costs to be taxed in default of agreement.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     Although the patent in suit was found to be invalid, Ajinomoto, the patentee, says that it should not be required to pay all the costs.  It points out that it lost only on obviousness but it successfully warded off, or NutraSweet did not press to judgment, the other grounds of alleged invalidity.  Hence Ajinomoto says that the costs should be discounted by an appropriate factor which it submits should be in the order of 30 per cent.

2                     First, some general observations.  I have not had considerable experience of patent litigation but the experience I do have, and the Australian cases which I have read, suggests to me that (in Australia at least) there is an undesirable tendency almost always to plead, and very often to argue, every possible ground of invalidity, whether good, bad, or somewhere in between.

3                     For a long time I have been of opinion that this practice, which happens to be a practice not confined to patent actions though exemplified in that type of litigation, should be discouraged whenever possible.  For an equally long time I have been considering what steps a judge should take to arrest the practice.  The task is very difficult.  More often than not in the early stage of a case, particularly a patent case, the judge will not have a sufficient understanding of the issues to isolate the principal from the trivial and to encourage the moving party to abandon doubtful claims.

4                     While it may not always be possible for the judge to prevent the lawyers from choosing their battleground and them engaging in the contest by whatever means they think fit — taking every point, fair or foul, along the way — it by no means follows that the judge is unable to express his (or her) displeasure at the end of a case.  Here I do not mean to imply that the judge should be confined to making the odd critical comment, which, in any event, will fall on deaf ears.  I mean that the judge should use the costs power as an instrument of punishment in an appropriate case. 

5                     I appreciate that in the past judges have said that costs should not be awarded in a way that will discourage the prosecution of issues.  I have also read cases which say that it may be difficult to assess the costs of discrete issues. I am not persuaded by these views.  The first point, so it seems to me, comes from a bygone age.  There once was a time when litigation was not expensive, where judges would accommodate parties who wanted to run long cases, though for the most part a long case was not as protracted as they are today.  The world of litigation is now a different place.  The costs of litigation are burdensome even for the wealthy.  Courts simply do not have the time to indulge the parties in the same way they were indulged in the past.  Nowadays efficiency is demanded of the courts who in turn are entitled to demand efficiency from the parties and their lawyers.  If costs orders can be a weapon to enforce efficiency, then they should be used for that purpose.   

6                     As to the second point (the difficulty of assessment) there is nothing in it.  The apportionment need not be precise.  A rough and ready estimate will do.  And usually the trial judge can do better. 

7                     Turning now to the case at hand, no criticism is to be directed here to the lawyers.  They raised and argued the points they did because they thought it both proper and appropriate. I have no desire to second-guess their approach.  That will not, however, protect NutraSweet against an adverse costs order in respect of issues which it lost.  In my view it is appropriate that the costs to which it is entitled should be reduced by 15 per cent.  That is my





estimate of the time taken up by lost issues.  There will therefore be an order to that effect.

Associate:

Dated:              23 December 2005