FEDERAL COURT OF AUSTRALIA

Multisteps Pty Limited v Source and Sell Pty Limited (No 2) [2013] FCA 844

THE COURT DECLARES THAT:

1.     The respondent has infringed Patent No. 2008100153 (the first patent) by importing, selling and supplying in Australia produce containers in the form of exhibit PCT-13 (the first Kumato container) without the licence or authority of the applicant.

2.    The invention as claimed in each of claims 1, 2, 3 and 4 of Patent No. 2009100783 (the second patent) is not a patentable invention because, as so claimed, the invention does not involve an innovative step when compared with the prior art base as it existed before the priority date of each claim.

THE COURT ORDERS THAT:

3.    The respondent whether by itself, its servants, agents or otherwise, be restrained from infringing Design No. 328917 (the registered design) by, without the licence or authority of the applicant, importing, offering for sale or supplying in Australia produce containers in the form of exhibit PCT-38 (the Kumato container) during the term of the registered design or any renewal thereof.

4.    Claims 1, 2, 3 and 4 of the second patent be revoked and, pursuant to s 140 of the Patents Act 1990 (Cth), the Registrar serve a copy of these orders on the Commissioner of Patents.

5.    The respondent, by an appropriate officer with sufficient personal knowledge of the facts, serve by no later than 4.00 pm on 13 September 2013 an affidavit setting out:

(a) in respect of the first Kumato container –

     (i)    the total number of units of the container imported into Australia;

    (ii)     the total number of units of the container sold or otherwise supplied in Australia;

      (iii)    the price or other consideration for which the containers were sold or otherwise supplied;

      (iv)    the person or persons to whom the containers were sold or otherwise supplied, stating with respect to each such person the number of units of the container sold or otherwise supplied to that person;

      (v)    the cost to the respondent of acquiring, importing and selling or otherwise supplying the containers;

      (vi)    the approximate profit the respondent contends it has made in respect of the sale or supply of the containers, giving the steps or reasoning by which it has arrived at that calculation;

    (b)     in respect of the Kumato container –

     (i)    the total number of units of the container imported into Australia;

    (ii)     the total number of units of the container sold or otherwise supplied in Australia;

      (iii)    the price or other consideration for which the containers were sold or otherwise supplied;

      (iv)    the person or persons to whom the containers were sold or otherwise supplied, stating with respect to each such person the number of units of the container sold or otherwise supplied to that person;

      (v)    the cost to the respondent of acquiring, importing and selling or otherwise supplying the containers;

      (vi)    the approximate profit the respondent contends it has made in respect of the sale or supply of the containers, giving the steps or reasoning by which it has arrived at that calculation,

and annexing or exhibiting to the affidavit all documents directly relevant to the matters referred to in (a) and (b).

6.    Subject to further order of the Court, the applicant notify the respondent and the Court on or before 27 September 2013 of its election or elections between damages and an account of profits in respect of the respondent’s infringement of the first patent and the respondent’s infringement of the registered design. At the time of notifying its election or elections, the applicant is to provide particulars of the amount or amounts it claims, giving the steps or reasoning by which it has arrived at the calculation of that amount or those amounts.

7.    Costs of the proceedings to date be reserved.

8.    On or before 18 October 2013, the parties participate in a mediation before a Deputy District Registrar of the Court, to attempt to resolve all remaining issues in the proceedings. No less than three business days before the appointed date for the mediation, the parties are to exchange position papers.

9.    The proceedings be otherwise adjourned for further directions at 9.30 am on 23 October 2013.

10.    Liberty be granted to the parties to apply on two days’ prior notice.

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

REASONS FOR JUDGMENT

1    On 31 July 2013, I published reasons for judgment in which I found that the respondent had infringed Design No. 328917 (the registered design) and that the applicant was not precluded from maintaining its claim against the respondent for infringement of Patent No. 2008100153 (the first patent). I found that other claims made by the applicant did not succeed. I also found that claims 1 to 4 of Patent No. 2009100783 (the second patent) were invalid: Multisteps Pty Limited v Source and Sell Pty Limited [2013] FCA 743.

2    At the time of publishing those reasons, I made orders requiring the parties to bring in agreed draft orders giving effect to the reasons. In the absence of agreement, each party was to provide a draft of the orders it proposed, supported by written submissions.

3    The parties have been unable to agree upon the form of orders. As a result, they provided competing drafts supported by written submissions, as required. In my view, neither draft reflects the orders that should be made.

4    I am satisfied that it is appropriate that two declarations be made. The first relates to the respondent’s infringement of the first patent. In my reasons published on 31 July 2013, I concluded that, in the absence of evidence suggesting any continued threat of infringement of the first patent, an injunction to restrain further infringement is not warranted. Absent the granting of an injunction, there is utility in granting a declaration declaring the rights of the parties in relation to that particular claim. The second declaration relates to the invalidity of claims 1, 2, 3 and 4 of the second patent. There is utility in granting such a declaration as it will make clear the basis upon which those claims will be revoked: Novozymes A/S v Danisco A/S (No 2) [2013] FCAFC 55 at [4]; Rural Press Limited and Others v Australian Competition and Consumer Commission (2003) 216 CLR 53 at [95].

5    An injunction restraining the further infringement of the registered design should be made, for the reason stated in [196] of my reasons published on 31 July 2013.

6    In my reasons published on 31 July 2013, I concluded that, in relation to the respondent’s infringements of the registered design and the first patent, the applicant is entitled to discovery sufficient, in the case of the infringement of the registered design, to enable the applicant to elect between a remedy in damages or an account of profits and, in the case of the infringement of the first patent, to decide whether it wishes to pursue a claim for pecuniary relief, including as to the specific form of relief: [196] and [259], respectively.

7    The parties have submitted competing orders for discovery. The respondent submits that the orders sought by the applicant are too wide because, by their terms, they would catch documents going well beyond those relating to the question of damages or an account of profits. Leaving aside this debate, I am of the view that discovery should be provided in a more directed way by the provision of an affidavit specifying certain information supported by directly relevant documents. The order which I propose to make is of a kind that has found favour in other cases of intellectual property infringement in this Court: LED Builders Pty Ltd v Eagle Homes Pty Ltd (No 3) (1996) 70 FCR 436; Sony v Reilly [1999] FCA 1694; Sony Computer Entertainment Australia Pty Ltd v Busselmann [2000] FCA 805; Sony Computer Entertainment Australia Pty Ltd v Hinson [2000] FCA 1290; Sony Computer Entertainment Australia Pty Ltd v Stirling [2001] FCA 784; Sony Computer Entertainment Australia Pty Ltd v Turner [2002] FCA 142; Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd (No 2) (2005) 225 ALR 569; Optus Networks Pty Ltd v Telstra Corporation Ltd (No 4) [2011] FCA 485; Solahart Industries Pty Ltd v Solar Shop Pty Ltd (No 3) [2011] FCA 884; Tivo Inc v Vivo International Corporation Pty Ltd (No 3) [2013] FCA 797; see also Island Records Limited v. Tring International PLC and Another [1995] FSR 560; Brugger v. Medicaid [1996] FSR 362; Polyaire Pty Ltd v K-Aire Pty Ltd & Ors (No 2) [2005] SASC 386; Polyaire P/L v K-Aire P/L & Ors (No 4) [2007] SASC 36.

8    Both parties were content for an order to be made requiring the applicant to make an election between damages or an account of profits by a stipulated date. The only matter in issue between the parties in that regard was the specification of the date (the applicant sought a date one week later than that sought by the respondent). In my view, the appropriate date is two weeks after the latest date on which the respondent’s affidavit is to be provided, subject to further order of the Court. It is possible that, even after the affidavit is provided, the applicant might require additional discovery. In case that is necessary, I will grant liberty to apply on not less than two days’ prior notice.

9    The respondent sought an order that the applicant pay 50% of its costs of the claim and pay its costs of the cross-claim. The applicant sought an order that costs be reserved. In the particular circumstances of this case, I think that costs should be reserved.

10    Finally, the parties were in agreement that the matter should be sent to mediation in an endeavour to have all remaining issues resolved by agreement between the parties. That is a commendable course and an order to that effect should be made.

Associate:

Dated:    20 August 2013