Federal Court of Australia

UbiPark Pty Ltd v TMA Capital Australia Pty Ltd [2022] FCA 111

ORDERS

THE COURT NOTES THAT:

A.    The applicant has, by its counsel, given, and the Court has accepted, each of the following undertakings:

1.    to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not that person is a party) affected by the operation of paragraph 1 of this order or any continuation (with or without variation) of that paragraph of this order;

2.    to pay the compensation referred to in (1) to the person affected by the operation of paragraph 1 of this order;

3.    to provide within 30 days security of $150,000 in support of the above undertaking as to damages, in such form as determined to be appropriate by a Registrar of the Court;

4.    until such time as judgment is given in this proceeding, or the proceeding is otherwise resolved, to provide to the respondent at least ten weeks’ written notice before supplying the applicant’s UbiPark technology to any carpark owner or operator in Australia that involves the UbiPark App being configured to make use of the measurements of the power transmitter level for the Bluetooth signal(s) (as described by William Van De Camp in paragraphs 47 to 51 of his affidavit sworn 4 February 2022).

B.    In these Orders, “carpark” includes any area to which vehicular access is restricted but within which vehicles may be parked.

C.    The cross-claimants do not press their application for interlocutory injunctive relief set out in their notice of cross-claim.

THE COURT ORDERS THAT:

1.    Subject to further order, until the hearing and determination of the proceeding, pursuant to s 128(1)(b) of the Patents Act 1990 (Cth), the respondent be restrained from making any threats of patent infringement proceedings in respect of Australian Patent No. 2019213335 (the 335 Patent) against the owner or operator of any carpark in Australia in respect of that person’s use or proposed use of the applicant’s products and services, other than in respect of a person the subject of a notice given pursuant to the undertaking in paragraph A(4) above.

2.    Paragraph 1 does not operate to restrain or prevent the respondent from:

(a)    notifying a third party of the existence of the 335 Patent;

(b)    notifying a third party of the existence of this proceeding.

3.    Subject to further order, pursuant to s 37AF(1) of the Federal Court of Australia Act 1976 (Cth), on the ground that the order is necessary to prevent prejudice to the proper administration of justice, Confidential Annexure MPH-2 to the Affidavit of Mosstyn Peter Howell sworn 1 December 2021, Confidential Annexures MPH-6 and MPH-7 to the Affidavit of Mosstyn Peter Howell sworn 4 February 2022, and Exhibit R8 be kept confidential and be prohibited from disclosure to any person other than:

(a)    the applicant / cross-respondents and their legal representatives; and

(b)    the respondent / cross-claimants’ legal representatives.

4.    The costs of the applicant’s application for interlocutory injunctive relief in its originating application (and amended originating application) be reserved.

5.    The costs of the cross-claimants’ application for interlocutory injunctive relief in their notice of cross-claim be reserved.

6.    There be liberty to apply.

7.    The proceeding be listed for a case management hearing on a date to be fixed.

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

REASONS FOR JUDGMENT

MOSHINSKY J:

Introduction

1    The applicant (UbiPark) seeks an interlocutory injunction to restrain the respondent (TMA) from making threats of patent infringement proceedings.

2    Both UbiPark and TMA are providers of technology systems for carparks.

3    TMA is the patentee of Australian Patent No. 2019213335 (the 335 Patent), titled “System, method and computer program for an access control system”, which relates to controlling access to a restricted carpark. TMA’s commercial product is known as “ZipBy”.

4    UbiPark supplies carpark owners and operators with technology which enables them to allow their customers to enter and exit the carpark, and pay for the use of that carpark, by way of an application branded “UbiPark”, which the customer has downloaded to, and installed on, their smartphone (the UbiPark App).

5    In November 2021, TMA’s solicitors, Benjamin & Khoury, sent letters of demand to UbiPark alleging that its technology (in particular, the UbiPark App) infringes the 335 Patent, and threatening to commence infringement proceedings. Relevantly for present purposes, TMA’s solicitors also sent letters of demand to a number of UbiPark’s customers threatening patent infringement proceedings against them.

6    In these circumstances, UbiPark commenced the present proceeding by originating application in November 2021. In its original form, UbiPark’s originating application and statement of claim were solely directed to an allegation that TMA had made unjustified threats of infringement proceedings as referred to in s 128(1) of the Patents Act 1990 (Cth) (set out later in these reasons). UbiPark sought a declaration pursuant to s 128(1)(a) that each of the threats made by TMA against UbiPark and its customers was unjustifiable. UbiPark also sought an injunction pursuant to s 128(1)(b) (both on an interlocutory and on a final basis) to restrain TMA from making further threats of infringement proceedings.

7    Subsequently, TMA and two related companies filed a notice of cross-claim against UbiPark and Mosstyn Howell (the Chief Executive Officer of UbiPark) alleging that UbiPark had infringed claims 1, 2, 4, 5, 6, 11, 12, 13, 16, 17 and 18 of the 335 Patent.

8    UbiPark subsequently filed an amended originating application and amended statement of claim alleging invalidity of the relevant claims in the 335 Patent.

9    Although TMA, in its notice of cross-claim, sought interlocutory injunctive relief against UbiPark and Mr Howell, TMA subsequently notified UbiPark and Mr Howell, and the Court, that it did not wish to proceed with its application for an interlocutory injunction. There is an issue of costs in relation to this application. I will deal with this at the end of these reasons.

10    The principal issue to be determined is UbiPark’s application for an interlocutory injunction to restrain TMA from making further threats of patent infringement proceedings. The form of injunction sought by UbiPark in its proposed orders (provided to the Court on 10 February 2022) is as follows:

Until further order, and pursuant to section 128(1)(b) of the Patents Act, the Respondent refrain from making further threats of patent infringement in respect of Australian Patent No. 2019213335 against the owner or operator of any carpark in Australia in respect of that person’s use or proposed use of the Applicant’s products and services.

11    The word “carpark” is defined in the proposed orders as including any area to which vehicular access is restricted but within which vehicles may be parked.

12    In the course of the hearing, counsel for UbiPark accepted that the word “proceedings” should be inserted after “patent infringement” in the above form of order, to reflect the terms of s 128(1). Further, in the course of the hearing, in order to deal with an issue concerning a particular configuration of UbiPark’s system that had been used, or proposed to be used, at Perth Airport (discussed further below), counsel for UbiPark proposed a ‘carve out’ to the form of injunction. By way of context for the proposed carve out, it is necessary to set out one of the undertakings proposed to be given by UbiPark, which was as follows:

3.    Until such time as judgment is given in this proceeding, or the proceeding is otherwise resolved, to provide to the Respondent at least ten weeks’ written notice before supplying its UbiPark technology to any carpark owner or operator in Australia that involves the UbiPark App being configured to make use of the measurements of the power transmitter level for the Bluetooth signal(s) (as described by William Van De Camp in paragraphs 47 to 51 of his Affidavit sworn 4 February 2022).

13    In the context of that proposed undertaking, UbiPark proposed that the following underlined words be added at the end of the proposed injunction:

Until further order, and pursuant to section 128(1)(b) of the Patents Act, the Respondent refrain from making further threats of patent infringement in respect of Australian Patent No. 2019213335 against the owner or operator of any carpark in Australia in respect of that person’s use or proposed use of the Applicant’s products and services, other than in respect of a person the subject of a notice given pursuant to the undertaking in paragraph 3.

14    The key issue before the Court is whether an interlocutory injunction as sought by UbiPark should be granted.

The hearing and the evidence

15    The hearing took place by video-conference (using Microsoft Teams) due to the ongoing COVID-19 pandemic.

16    UbiPark relies on the following affidavits:

(a)    two affidavits of Mr Howell, dated 1 December 2021 and 4 February 2022;

(b)    an affidavit of William Van De Camp dated 4 February 2022 – Mr Van De Camp is UbiPark’s Chief Technology Officer; and

(c)    two affidavits of Michael Tandora dated 26 November 2021 and 4 February 2022 – Mr Tandora is a solicitor employed by Mills Oakley, the solicitors acting for UbiPark.

17    TMA relies on the following affidavits:

(a)    two affidavits of Geoffrey Sizer, dated 19 January 2022 and 10 February 2022 – Mr Sizer is an independent expert, having practised as an electronics hardware and software design engineer for more than 40 years; Mr Sizer has prepared two reports, which are annexed to his affidavits;

(b)    two affidavits of Anthony Karam, dated 21 January 2022 and 10 February 2022 – Mr Karam is the Chief Executive Officer of TMA;

(c)    an affidavit of Gregori Laletin dated 21 January 2022 – Mr Laletin is a business analyst and software developer employed by TMA; and

(d)    an affidavit of Werrdan Khoury dated 25 January 2022 – Mr Khoury is a solicitor at Benjamin & Khoury, the solicitors acting for TMA.

18    In addition to the above, TMA relies on certain documents.

19    There was no cross-examination at the hearing of the application for the interlocutory injunction.

20    For the purposes of the present application for an interlocutory injunction, the parties narrowed the scope of the issues in dispute in the following ways:

(a)    First, UbiPark was content to proceed on the assumption that the 335 Patent was valid (notwithstanding that validity is in issue in the proceeding more generally).

(b)    Secondly, TMA was content to proceed on the basis that the only relevant claim for the issue of infringement was claim 1 (even though, in the proceeding more generally, it alleges that a number of other claims have been infringed).

21    It is important to note that the evidence before the Court at this stage is limited to the evidence set out above and that this evidence was not been tested in cross-examination. If this matter proceeds to trial, the evidence at that stage is likely to be more extensive and is likely to be tested in cross-examination. Any findings or observations made in these reasons are made solely for the purposes of dealing with the present interlocutory injunction application, and the findings and views following the trial may well be different.

Applicable provisions and principles

22    Section 128 of the Patents Act provides as follows:

128    Application for relief from unjustified threats

(1)    Where a person, by means of circulars, advertisements or otherwise, threatens a person with infringement proceedings, or other similar proceedings, a person aggrieved may apply to a prescribed court, or to another court having jurisdiction to hear and determine the application, for:

(a)    a declaration that the threats are unjustifiable; and

(b)    an injunction against the continuance of the threats; and

(c)    the recovery of any damages sustained by the applicant as a result of the threats.

(1A)    The court may include an additional amount in an assessment of damages sustained by the applicant as a result of the unjustifiable threats, if the court considers it appropriate to do so having regard to:

(a)    the flagrancy of the threats; and

(b)    the need to deter similar threats; and

(c)    the conduct of the person who made the threats, being conduct that occurred after the person made the threats; and

(d)    any benefit shown to have accrued to the person who made the threats because of the threats; and

(e)    all other relevant matters.

(2)    Subsection (1) applies whether or not the person who made the threats is entitled to, or interested in, the patent or a patent application.

23    TMA admits that it has threatened UbiPark and its customers with patent infringement proceedings and that UbiPark is a “person aggrieved”: see paragraphs 5, 6 and 8 of TMA’s defence.

24    In defending UbiPark’s claim based on s 128, there will be a partial reversal of onus, in that it is TMA that will bear the onus of establishing that UbiPark’s technology infringes the patent: see s 129 of the Patents Act; see also Sydney Cellulose Pty Ltd v Ceil Comfort Home Insulation Pty Ltd (2001) 53 IPR 359 at [35] per Conti J.

25    As s 128 recognises, the threat of infringement proceedings can potentially cause substantial harm. The relevance of patent litigation commonly being complex and expensive was recognised by Whitford J of the English Patents Court in Johnson Electric Industrial Manufactory Ltd v Mabuchi-Motor KK [1986] FSR 280 at 284-285, in a case concerning an interlocutory injunction to restrain threats of patent infringement:

[T]he expense and the waste of time and money which is involved in patent litigation is likely to mean that the mere threat of proceedings is going to be a very effective deterrent calculated to ensure that anybody who might have embarked upon a course which could bring him into conflict with a patentee will decide that it is better to abandon it.

26    Section 131 of the Patents Act provides:

131    Notification of patent not a threat

The mere notification of the existence of a patent, or an application for a patent, does not constitute a threat of proceedings for the purposes of section 128.

27    The principles relating to interlocutory injunctions are well-established. Applied to the present context, the applicant for the injunction (UbiPark) must establish that it has a prima facie case that would ultimately support the grant of a final injunction (that is, that there is a serious question to be tried) and that the balance of convenience favours the making of an interlocutory injunction: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-623 per Kitto, Taylor, Menzies and Owen JJ; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [19] per Gleeson CJ and Crennan J, [65] per Gummow and Hayne JJ.

28    Those two enquiries are related, as the strength of the prima facie case – the probability of success at trial – is a factor to be considered in weighing up where the balance of convenience lies: Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238 (Samsung) at [59], [64], [67], [70] and [71] per Dowsett, Foster and Yates JJ.

29    Another important factor to be considered as part of the balance of convenience is whether damages would be an adequate remedy: Samsung at [62], [66].

30    There do not appear to be many cases where an interlocutory injunction has been made to restrain threats of patent infringement proceedings, but UbiPark in its submissions provides the following two examples. In Townsend Controls Pty Ltd v Gilead [1989] FCA 862, Von Doussa J granted an interlocutory injunction to restrain threats of patent infringement proceedings. In Durak v Associated Pool Builders Pty Ltd (1983) 1 IPR 545, the Full Court of the Federal Court (Bowen CJ, Fox and Fitzgerald JJ) dismissed an appeal from a decision of the Supreme Court of Queensland, which had granted an interlocutory injunction to restrain the making of further threats of patent infringement proceedings. In that case, it was the validity of the patent that was questioned, rather than an issue of infringement.

Consideration

Prima facie case

31    I will start by considering whether UbiPark has established a prima facie case in relation to its claim for a final injunction to restrain TMA from making threats of infringement proceedings. In considering whether UbiPark has a prima facie case, it is necessary to take into account the partial reverse onus that will apply at trial, namely that it will be for TMA to establish that UbiPark’s technology, in particular the UbiPark App, infringes the 335 Patent.

32    Claim 1 of the 335 Patent (with added numbering, for ease of reference) is in the following terms:

A system including:

(1)    a communication system; and

(2)    a computer program executable by a mobile communication device associated with an entity, the entity being a user which is associated with a vehicle for parking within a restricted area, the restricted area being a vehicular parking area, wherein the mobile communication device is configured to:

(a)    receive one or more entry signals from the communication system when the entity approaches an entry point of a restricted area;

(b)    determine a received signal strength of the one or more entry signals;

(c)    determine if one or more entry criteria have been satisfied based on the received signal strength of the one or more entry signals in order to generate and transfer an entry request;

(d)    in response to the one or more entry criteria being satisfied, generate and transfer, to the communication system, the entry request;

(e)    receive, from the communication system, authorisation data indicative of the entity being granted access to enter the restricted area by an access control system;

(f)    receive one or more exit signals from the communication system when the entity approaches an exit point of the restricted area;

(g)    determine a received signal strength of the one or more exit signals;

(h)    determine if one or more exit criteria have been satisfied based on the received signal strength of the one or more exit signals in order to generate and transfer an exit request; and

(i)    in response to the one or more exit criteria being satisfied, generate and transfer, to the communication system the exit request indicative of the authorisation data in order to exit the restricted area.

33    For the purposes of the interlocutory injunction application, UbiPark is prepared to assume that its system satisfies the integers in paragraphs (2)(a) and (b) of claim 1. UbiPark contends, however, that the integers in paragraphs (2)(c) and (d) are not present in its system (putting to one side the configuration of its system used or proposed to be used at Perth Airport).

34    Before setting out UbiPark’s contentions regarding paragraphs (2)(c) and (d) of claim 1, I note that UbiPark submits that claim 1 is directed to a solution, as described in the specification to the 335 Patent, that allows a user to have the carpark barrier open automatically when their car is located in the correct position at the carpark barrier, without the user having to do anything. UbiPark submits that that solution is based on assessing the strength of the entry signal, and using that to infer the location of the user’s vehicle, and hence when to transmit an entry request to the system so that the barrier can be opened.

35    UbiPark submits that that is also the approach that TMA uses for its commercial product, ZipBy, which it launched soon after filing the priority document for the 335 Patent. UbiPark submits that that is not the approach taken by UbiPark’s system.

36    UbiPark contends that its system does not have the integers in paragraphs (2)(c) and (d) of claim 1.

37    Paragraph 2(c) requires the mobile communication device (that is, the user’s smartphone) to be configured to determine if one or more “entry criteria” have been satisfied “based on the received signal strength” of the one or more entry signals in order to generate and transfer an entry request.

38    While UbiPark accepts that the UbiPark App determines and records the signal strength for each Bluetooth signal that it identifies and receives, UbiPark contends that what the UbiPark App does not do is to determine whether any entry criterion is satisfied based on that determination of received signal strength (putting the Perth Airport configuration to one side). UbiPark relies on the evidence of Mr Van De Camp as to how its system works. Mr Van De Camp states at paragraphs 47-51 of his affidavit that, while the UbiPark App measures and records the signal power for each Bluetooth signal that it receives, the UbiPark App “does not do anything with that information that is relevant to the operation of the App” (putting the Perth Airport configuration to one side). Mr Van De Camp also states, for the sake of clarity, that the UbiPark system “does not determine whether a user can enter, or exit, a car park by reference to the measured signal power for the Bluetooth signal”. Accordingly, UbiPark submits, the integer in paragraph (2)(c) is not present in its system.

39    Paragraph (2)(d) requires the mobile communication device (that is, the user’s smartphone) to be configured to, “in response to” to the one or more entry criteria being satisfied, generate and transfer to the communication system the entry request.

40    UbiPark contends that, even if it be assumed that the message that the UbiPark App sends to the UbiPark server when the user presses the button on the screen is an “entry request”, that entry request is sent “in response to” the user pressing the button on the App; it is not sent “in response to” the App receiving the Universally Unique Identifier (UUID) for the Bluetooth beacon. Again, UbiPark relies on the evidence of Mr Van De Camp as to how the UbiPark system works. At paragraphs 26-30 of his affidavit, Mr Van De Camp refers to the user pressing the entry button for the carpark on the carpark entry message screen. Accordingly, UbiPark contends, the integer in paragraph (2)(d) is not present in its system.

41    I will now refer to TMA’s contentions in response, which rely on the independent expert evidence of Mr Sizer.

42    TMA contends that UbiPark’s case is premised on an incorrect interpretation of the concept of receiving a signal. TMA contends, on the basis of Mr Sizer’s evidence, that Bluetooth signals may be received by a smartphone, even if their signal strength is too low to allow them to be correctly decoded (and the UUID for the beacon ascertained): see, eg, Mr Sizer’s second report at paragraph 8.1.3.

43    Further, TMA contends that each of UbiPark’s two non-infringement contentions is incorrect, relying on the evidence in Mr Sizer’s reports.

44    Mr Sizer addresses the integer in paragraph (2)(c) of claim 1 in row 11 of Annex A to his first report. Mr Sizer expresses the view that this feature of claim 1 is present in the UbiPark system. He states that the mobile communication device (that is, the smartphone) “determines that an entry criterion, being the reception of identifiable Bluetooth signals from an entry beacon, is satisfied by the received signal strength being sufficient to allow the beacon’s Bluetooth messages to be correctly decoded”. In Mr Sizer’s view, that criterion needs to be satisfied in order for the mobile communication device to generate and transfer an entry request.

45    Mr Sizer addresses the integer in paragraph (2)(d) of claim 1 in row 12 of Annex A to his first report. He expresses the view that this feature of claim 1 is present in the UbiPark system. Mr Sizer refers back to his response to the integer in paragraph (2)(c). He also states that: after the user presses the “Open Lane X” button, the smartphone communicates to the server the request to open the boom gate before which their vehicle is located; this communication from the smartphone to the server requesting opening of the boom gate is an entry request sent to the server from the smartphone via the communication system; the App sends a communication message to the server, advising it of the fact that it has received the beacon’s signal; this communication from the smartphone also constitutes an entry request.

46    As is apparent from the above, even though UbiPark focuses its contentions on paragraphs (2)(c) and (d) of claim 1, there is an issue between the parties as to the concept of receiving an entry signal in paragraph (2)(a). This issue appears to be contextually relevant in considering the competing contentions of the parties as to paragraphs (2)(c) and (d). In brief outline, UbiPark contends that a smartphone only “receives” an entry signal from a Bluetooth beacon when the signal is sufficiently strong that the smartphone can decode it. On the other hand, TMA contends that a smartphone “receives” an entry signal from a Bluetooth beacon whenever a signal is received, whether or not the smartphone can decode it. The difference between the parties appears to be largely one of construction of the patent, rather than a different view as to the relevant science. It appears to me that both constructions are plausible. I do not consider it necessary or appropriate to go beyond this at this stage.

47    In relation to paragraph (2)(c) of claim 1, the difference between the parties can be summarised as follows. UbiPark contends that, under its system, the smartphone does not do anything with the signal strength data that it receives. Accordingly, UbiPark contends, the smartphone does not determine if one or more “entry criteria” have been satisfied “based on the received signal strength” of the one or more entry signals (from the Bluetooth beacon). TMA, on the other hand, contends that, under the UbiPark system, one of the entry criteria is the receipt (and continued receipt) of a signal from the Bluetooth beacon that is of sufficient strength to be decoded. Accordingly, TMA contends, the smartphone does determine if one or more “entry criteria” have been satisfied “based on the received signal strength” of the one or more entry signals. It seems to me that this is largely an issue of construction of the patent, as distinct from a dispute as to the relevant science or the facts. In my view, each party’s construction has merit and could succeed at trial.

48    In relation to paragraph (2)(d) of claim 1, the difference between the parties can be summarised as follows. UbiPark contends that, under its system, the entry request is generated and transferred in response to the user pressing the button on the relevant screen on the UbiPark App on their smartphone; the entry request is not generated and transferred in response to the one or more entry criteria being satisfied. TMA’s contentions in relation to paragraph (2)(d) overlap with its contentions about paragraph (2)(c). TMA contends that one of the entry criteria is the receipt (and continued receipt) of a signal from a Bluetooth beacon of sufficient strength to be decoded. TMA contends that, under the UbiPark system, the generation and transfer of an entry request depends upon continued satisfaction of that criterion. Again, it seems to me that the issue is largely one of construction of the patent. In my view, each party’s construction has merit and could succeed at trial.

49    In light of the above, UbiPark has established that it has a prima facie case in relation to its claim for a final injunction pursuant to s 128(1) of the Patents Act to restrain TMA from threatening infringement proceedings against UbiPark and its customers.

50    Insofar as the configuration of UbiPark’s system at Perth Airport is concerned, while it may be accepted that UbiPark’s non-infringement contentions regarding paragraphs (2)(c) and (d) of claim 1 may not be available in respect of that configuration, as noted above, UbiPark proposes a carve out from any interlocutory injunction to address any potential use of such a configuration.

Balance of convenience

51    In considering the balance of convenience, it is important to note that, even if an interlocutory injunction is granted, it would not preclude TMA from giving notice of the existence of the 335 Patent to UbiPark’s existing and potential customers: see s 131 of the Patents Act, set out above. Further, it would not prevent TMA from commencing infringement proceedings against UbiPark’s customers.

52    An issue that emerged in the course of the hearing was whether, if an interlocutory injunction were granted, TMA would be permitted to give notice of the existence of the present proceeding to UbiPark’s existing and potential customers. Counsel for UbiPark accepted that any interlocutory injunction should not preclude TMA from doing so.

53    In light of the above, the practical reach of the proposed interlocutory injunction is quite narrow. It would not stop TMA from notifying customers or potential customers of UbiPark of the existence of the 335 Patent or of the existence of the present proceeding; it would merely prevent TMA from threatening infringement proceedings.

54    It is not apparent, on the material before the Court, why there is any pressing need for TMA to threaten infringement proceedings against UbiPark’s customers or potential customers, and why it would not be sufficient for practical purposes to give notice of the existence of the patent and the existence of the present proceeding.

55    While UbiPark has offered to give the usual undertaking as to damages, a question was raised by TMA as to UbiPark’s financial position and whether it would be in a position to satisfy any order that it pay damages to TMA and/or third parties on the basis of the undertaking as to damages. TMA relies on confidential material as to UbiPark’s current and projected financial position. In response to a question from the Court as to whether UbiPark would be prepared to offer security to support the undertaking as to damages, counsel for UbiPark obtained instructions to provide security of $150,000 in such form as the Court considers appropriate. This could take the form, for example, of a bank guarantee, a payment of money into Court, or payment into a solicitor’s trust account, subject to conditions.

56    Another issue that emerged during the hearing was TMA’s ability to pay damages, in the event that UbiPark is successful at trial in its claim under s 128 of the Patents Act. In the course of the hearing, senior counsel for TMA said that he had instructions to offer an undertaking by a related company of TMA to be jointly and severally liable with TMA for any order that TMA pay damages in respect of UbiPark’s claim under s 128, if the Court were inclined to refuse interlocutory relief subject to the provision of that undertaking. Subsequent to the hearing, a form of words for the undertaking (to be provided by TMA Group of Companies Ltd) was provided to the Court by TMA’s instructing solicitors.

57    In my view, the balance of convenience favours the grant of an interlocutory injunction along the lines sought by UbiPark, to restrain TMA from making further threats of patent infringement proceedings. It seems to me that such an injunction preserves the status quo in a practical sense pending the resolution of UbiPark’s claim that TMA has made and is proposing to make unjustifiable threats of patent infringement proceedings. In my view, it is preferable from a practical perspective that further threats not be made until it is determined whether or not such threats are unjustifiable.

58    In reaching this view, I have taken into account the alternative scenarios, namely: (a) the scenario where an interlocutory injunction restraining TMA from threatening infringement proceedings is not granted, and UbiPark is ultimately successful at trial; and (b) the scenario in which an interlocutory injunction restraining TMA from threatening infringement proceedings is granted, and TMA is ultimately successful at trial. In relation to the first scenario, I consider that there would be a likelihood that UbiPark would suffer harm if further threats were made (for example, the loss of existing and potential customers) and that damages would not be an adequate remedy (among other things, because of difficulties of proof and quantification). In relation to the second scenario, while there is the potential for TMA (and third parties) to suffer harm, I consider the prospect of this occurring to be less likely. I acknowledge, however, that there may also be difficulties of proof and quantification in this scenario.

59    In considering where the balance of convenience lies, I have also taken into account my assessment of the strength of UbiPark’s prima facie case. As indicated earlier, I consider that each party’s contentions in relation to paragraphs (2)(c) and (d) of claim 1 have merit and could succeed at trial. This is not a situation where a prima facie case is found to exist, but it is considered to be a weak case.

60    I have also taken into account UbiPark’s undertaking as to damages and the risk that it may not be able to satisfy any order that it pay damages to TMA and/or third parties (notwithstanding the provision of security of $150,000). It is difficult to assess the potential quantum of damage that could be suffered, by TMA and/or third parties, as a result of the grant of an interlocutory injunction as sought by UbiPark. It is possible that any such damage may exceed, perhaps greatly exceed, $150,000. Nevertheless, in the circumstances, I consider the provision of security of $150,000 in support of the undertaking as to damages to be sufficient. UbiPark’s assets, at least as they presently stand, would enable it to satisfy a much greater damages award should this eventuate. It is not just the $150,000 to be provided by way of security that would be available.

61    A further matter that I have taken into account is that, in the event that TMA wishes to commence a proceeding against a third party, it may be required to take “genuine steps” to try to resolve the dispute before commencing a proceeding, pursuant to the provisions of the Civil Dispute Resolution Act 2011 (Cth). The prospect of TMA suing potential customers seems rather remote. However, I will reserve liberty to apply so that TMA can approach the Court in the event that there are any concerns about this matter.

62    For these reasons, I consider it appropriate to grant an interlocutory injunction along the lines sought by UbiPark.

63    In relation to the security of $150,000, I propose that this be expressed as an additional undertaking to be given by UbiPark. That is, I propose that there be an additional undertaking by UbiPark “to provide within 30 days security of $150,000 in support of the above undertaking as to damages, in such form as determined to be appropriate by a Registrar of the Court”. I will confirm with counsel for UbiPark that he has instructions to give such an undertaking.

64    In relation to the form of the interlocutory injunction, I note that TMA has made submissions on the form of the carve out, and has proposed different wording. On balance, I consider the wording proposed by UbiPark to be preferable as it more clearly identifies the circumstances in which TMA is permitted to threaten infringement proceedings. TMA also made submissions, which I accept, that it would be desirable to make clear in the order that it is not a breach of the injunction for TMA to notify a third party of the existence of the 335 Patent, or to notify a third party of the existence of this proceeding. I agree that this should be set out in the orders for the sake of clarity. I do not consider it necessary to state that the order does not prevent TMA acknowledging the existence of the proceeding to a third party, as I consider this to be sufficiently clear from the preceding clarification. Further, I do not consider it necessary to state that the order does not prevent TMA commencing a proceeding for infringement. It is clear that it can do so. I do not consider it necessary to refer to this in the order. Having regard to these matters, I consider the following form of orders to be appropriate:

1.    Subject to further order, until the hearing and determination of the proceeding, pursuant to s 128(1)(b) of the Patents Act 1990 (Cth), the respondent be restrained from making any threats of patent infringement proceedings in respect of Australian Patent No. 2019213335 (the 335 Patent) against the owner or operator of any carpark in Australia in respect of that person’s use or proposed use of the applicant’s products and services, other than in respect of a person the subject of a notice given pursuant to the undertaking in paragraph A(4) above.

2.    Paragraph 1 does not operate to restrain or prevent the respondent from:

(a)    notifying a third party of the existence of the 335 Patent;

(b)    notifying a third party of the existence of this proceeding.

Costs

65    In UbiPark’s proposed orders, it seeks an order that each party’s costs of UbiPark’s application for interlocutory injunctive relief be its costs in the cause. I think it is simpler to order that the costs of the application be reserved.

66    In relation to TMA’s application for interlocutory injunctive relief, I also consider it appropriate to reserve costs. There is likely to be considerable overlap between the costs of UbiPark’s application and the costs of TMA’s application. I do not consider it to be a worthwhile exercise to seek to identify which costs are referable to which application. Although TMA did not press its application, in the circumstances I consider it appropriate to reserve the costs of the application.

[Further discussion took place, during which counsel for UbiPark confirmed that he had instructions to give the undertakings.]

Associate:

Dated:    16 February 2022

SCHEDULE OF PARTIES