FEDERAL COURT OF AUSTRALIA

Orikan Group Pty Ltd v Vehicle Monitoring Systems Pty Limited [2023] FCA 1031

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application dated 16 December 2022 be dismissed.

2.    The applicant pay the respondent’s costs of and incidental to the interlocutory application dated 16 December 2022.

3.    The proceeding be listed for further case management at 9.30 am on Friday 15 September 2023.

4.    The parties are to confer as to appropriate orders to prepare the proceeding for trial and provide to the Court agreed or competing orders by 12 noon on Wednesday 13 September 2023.

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

REASONS FOR JUDGMENT

O’BRYAN J:

Introduction

1    The applicant, Orikan Group Pty Ltd (formerly DCA Cities Holdings Pty Ltd) (Orikan), is the registered owner of Australian Patent No. 2013213708 titled “Vehicle Detection” (Patent) granted under the Patents Act 1990 (Cth) (Act), following an assignment of the Patent to Orikan by a related entity, SARB Management Group Pty Ltd (SARB), in 2022. The Patent, which has a priority date of 23 August 2007, concerns vehicle detection technology. Briefly described, the invention identifies the overstay of a vehicle in a parking space, and involves a subterraneous detection apparatus (a “vehicle detection unit”) to detect the presence of a vehicle in a parking space, the storage of data in that apparatus, the wireless transmission of that data to a data collection apparatus and the indication by that apparatus to a parking officer or other relevant operators.

2    In the present proceeding, Orikan alleges that the respondent, Vehicle Monitoring Systems Pty Limited (VMS), has since at least August 2013 infringed the Patent in connection with the manufacture, sale and use of in ground vehicle detection sensor units in two different methods of vehicle detection. VMS denies that it has infringed the Patent and claims further that it is not liable for infringement by reason of prior use.

3    By notice of cross-claim, VMS also seeks a declaration that claims 1 to 28 of the Patent are, and were always, invalid and an order that claims 1 to 28 of the Patent be revoked. By its statement of cross-claim, VMS alleges that each of the claims of the Patent are and were at all material times invalid on the grounds set out in the accompanying particulars of invalidity. I will refer to those claims as the “invalidity cross-claims”. VMS also seeks a declaration that Orikan’s threat to commence proceedings against VMS for infringement of the Patent was unjustifiable, and seeks damages pursuant to ss 128(1)(c) and (1A) of the Act.

4    The present proceeding is the latest iteration of a long-running dispute between Orikan, its related entities, and VMS in connection with vehicle monitoring technology and associated patent rights. Relevantly, there have been three earlier proceedings concerning the Patent and related patents, which are detailed further below. In short compass, those proceedings concerned: the infringement and validity of a patent for a vehicle monitoring device held by VMS; the infringement and validity of a patent held by SARB, which patent is related to the Patent the subject of this proceeding; and opposition by VMS to the grant of the Patent to SARB.

5    By interlocutory application dated 16 December 2022, Orikan seeks an order that the proceeding be stayed in respect of the invalidity cross-claims advanced by VMS on the basis of Anshun estoppel as stated in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 (Anshun). In the alternative, Orikan seeks an order pursuant to r 16.21 of the Federal Court Rules 2011 (Cth) (Federal Court Rules) that the invalidity cross-claims be struck out as an abuse of the process of the Court.

6    These reasons concern Orikan’s interlocutory application.

7    Orikan’s central contention is that VMS could, and should, have raised the invalidity cross-claims in the third and most recent of the earlier proceedings, being the opposition by VMS to the grant of the Patent to Orikan’s successor in title (SARB), and that VMS made a forensic decision not to do so. Orikan contends that VMS is estopped from advancing the invalidity cross-claims in the present proceeding because the claims were so closely connected to the subject matter of that earlier proceeding that it was unreasonable not to have raised them at that time. Alternatively, Orikan contends that the pursuit by VMS of the invalidity cross-claims is an abuse of process. In support of that contention, Orikan submits that Orikan’s related entity and major shareholder, SARB, ought not to be vexed again with challenges to the validity of the Patent that could and should have been determined in the earlier opposition proceedings; the invalidity cross-claims will cause further delay to the resolution of the validity of the Patent; and both Orikan and the Court will incur significant additional costs if VMS is permitted to prosecute the invalidity cross-claims.

8    In support of its interlocutory application, Orikan relies on outline submissions dated 10 February 2023 and 9 March 2023, and a bundle of documents dated 10 March 2023 that were tendered without objection.

9    In response, VMS relies on outline of submissions dated 3 March 2023 and bundle of additional documents dated 3 March 2023 that were tendered without objection.

10    There was no factual dispute on the application.

11    For the reasons that follow, I dismiss the interlocutory application with costs.

Background

12    VMS is the patentee of Patent No. 2010101354 titled "Method, apparatus and system for parking overstay detection" (VMS Patent). In April 2011, VMS commenced proceedings in this Court against SARB alleging infringement of the VMS Patent (proceeding no. NSD 395 of 2011, which will be referred to as the VMS Patent Proceeding). By cross-claim, SARB alleged that the VMS Patent was invalid and sought its revocation. The VMS Patent Proceeding was heard in April and May 2012 and judgment was delivered on 3 May 2013: Vehicle Monitoring Systems Pty Ltd v Sarb Management Group Pty Ltd (No 2) [2013] FCA 395. VMS succeeded in its claims. The claims made by the parties in the VMS Patent Proceeding are not directly relevant to the present application. However, that proceeding underscores the length of the ongoing dispute between VMS and SARB/Orikan in relation to vehicle monitoring system technology.

13    On 22 August 2008, SARB filed Australian Patent Application No. 2008288710 titled “Vehicle detection”. This “parent” patent resulted in two divisional patents: Australian Patent No. 2011101179 (Innovation Patent), which was filed by SARB on 15 September 2011; and the Patent the subject of these proceedings, which was filed by SARB on 7 August 2013. It is not disputed in the present application that the independent claims of the Innovation Patent overlap considerably with a number of the independent claims of the Patent.

14    In April 2012, SARB commenced infringement proceedings in this Court against VMS in respect of the Innovation Patent (proceeding no. VID 318 of 2012 which will be referred to as the Innovation Patent Proceeding). In that proceeding, VMS brought a cross-claim asserting that the Innovation Patent was invalid on 11 different grounds, including, relevantly, no entitlement to claim a priority date before 21 August 2008, lack of novelty, secret use and lack of sufficiency and best method. In the particulars to its lack of novelty and secret use grounds, VMS relied on information made publicly available by SARB, which comprised the following pieces of prior art (among others):

(a)    a press release published by SARB and dated 18 October 2006 (2006 Press Release);

(b)    information made publicly available by SARB supplying and/or offering to supply its vehicle detection technology products for trial and/or use from 18 October 2006, as referred to in the 2006 Press Release and on SARB’s website at the time;

(c)    information made publicly available by the presentation by SARB of each information session and workshop regarding its vehicle detection technology products, as referred to in the 2006 Press Release;

(d)    information made publicly available by SARB regarding its vehicle detection technology products at the 10th National Parking Steering Group Conference in Hobart in October 2006, as referred to in the 2006 Press Release;

(e)    information made publicly available by SARB regarding its vehicle detection technology products at the 10th National Parking Workshop in Hobart in November 2006, as referred to in the 2006 Press Release; and

(f)    the tender (and all documents related thereto) submitted by SARB to the Campaspe Shire before the earliest claimed priority date for the supply of SARB’s vehicle detection technology products.

15    In respect of the lack of sufficiency and best method ground, VMS alleged that the complete specification of the Innovation Patent did not describe the best data format known to SARB, and that the best method known to SARB of performing the invention is one in which the vehicle detection unit and the portable device possess the features identified in, and function in the manner described in, the reasons in the VMS Patent Proceeding (published in Vehicle Monitoring Systems Pty Ltd v Sarb Management Group Pty Ltd (No 2) [2013] FCA 395).

16    On 18 June 2014, the Innovation Patent Proceeding settled prior to trial.

17    On 4 August 2016, following the acceptance of the Patent the subject of this proceeding, VMS filed a notice of opposition to the grant of the Patent in the Australian Patents Office (APO) on the grounds of lack of entitlement, lack of compliance with s 18(1)(b) of the Act (lack of novelty and inventive step), and lack of compliance with ss 40(2) and (3) of the Act (sufficiency, clarity and support). In the proceedings before the APO, VMS did not rely upon the prior art that it relied on in the Innovation Patent Proceedings (and now relies on in this proceeding). VMS’s opposition was unsuccessful.

18    On 24 January 2018, VMS filed a notice of appeal in this Court against the APO’s decision (proceeding no. NSD 75 of 2018, which will be referred to as the Opposition Proceeding). Since the appeal was conducted as a hearing de novo, VMS was entitled to rely upon different grounds of invalidity and new evidence. VMS amended its grounds of appeal in the Opposition Proceeding on several occasions. VMS did not, however, rely on any of the grounds of invalidity or the particulars (including the prior art) on which it relied in the earlier Innovation Patent Proceeding or on which it relies in this proceeding. Extensive evidence was filed in the Opposition Proceeding, and the final hearing took place over five days. In the final days of the trial, VMS cross-examined one of SARB’s witnesses, Mr Sandy Del Papa, in relation to the 2006 Press Release. As noted above, this document was relied on by VMS in support of its lack of novelty and secret use grounds of invalidity claimed in the Innovation Patent Proceeding. The document was tendered at the hearing of the Opposition Proceeding. The Opposition Proceeding was heard in March 2019 and judgment was delivered on 30 March 2020: Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2020] FCA 408. VMS was unsuccessful in its opposition.

19    On 23 July 2020, filed an application for leave to appeal the decision in the Opposition Proceeding. The appeal was ultimately confined to the ground of lack of entitlement. The appeal was heard in February 2021 and was dismissed on 8 December 2021: Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2021] FCAFC 224.

20    On 27 January 2022, the Patent was granted, identifying SARB as the registered owner. On 31 May 2022, SARB assigned the Patent to Orikan as part of a corporate restructuring. SARB is an indirect shareholder of Orikan. SARB holds 31% of the issued shares in a company called Ignition TopCo Pty Ltd which is the ultimate parent company of Orikan (via a series of wholly owned subsidiaries). Orikan and SARB also share a common director. In the present proceeding, VMS accepts that, since 4 August 2022, Orikan has been recorded in the Australian Register of Patents as the patentee of the Patent.

21    On 9 September 2022, Orikan commenced the present proceeding for alleged infringement of the Patent. Orikan alleges multiple and repeated infringements by VMS of the Patent since at least 2013, and seeks declaratory, injunctive and pecuniary relief. By cross-claim, VMS advances the invalidity cross-claims and also alleges that Orikan has made unjustifiable threats contrary to s 128(1) of the Act. The particulars of invalidity are pleaded by VMS as follows:

A.     PRIORITY DATE

1.        Claims 1 to 28 of the Patent are not entitled to claim priority before 21 August 2008, being the date of filing of Australian Patent Application No. 2008100796.

PARTICULARS

(a)     Claims 1 to 28 of the Patent claim a priority date of 23 August 2007 based on the matter disclosed in Australian Provisional Patent Application No. 2007904549 (the Provisional Application).

(b)     The Provisional Application does not disclose data items communicated from the vehicle detection unit being in a format suitable for pre-population into infringement issuing software in a manner that is clear enough and complete enough for the alleged invention in claims 1 to 19 and 21 to 24 to be performed by a person skilled in the art.

(c)     If, properly construed, claims 20 and 25 to 28 encompass an invention wherein data items communicated from the vehicle detection unit are in a format suitable for pre-population into infringement issuing software, the Provisional Application does not disclose the alleged invention in a manner that is clear enough and complete enough for the alleged invention in those claims to be performed by a person skilled in the art.

(d)     Further, or in the alternative to sub-paragraphs (b) and (c):

(i)     The alleged invention disclosed in the Provisional Application is one wherein the vehicle detection unit initiates the communication upon occurrence of a notifiable event (see, without limitation, the Provisional Application page 3 lines 14-15, page 3 lines 25-26, page 8 lines 26-27).

(ii)     The Provisional Application does not disclose the alleged invention in claims 1 to 10 and 20 to 24 in a manner that is clear enough and complete enough for the invention to be performed by a person skilled in the art, as those claims are not so limited.

(iii)     If, properly construed, claims 25 to 28 encompass an invention wherein the vehicle detection unit initiates the communication upon occurrence of a notifiable event, the Provisional Application does not disclose the alleged invention in those claims in a manner that is clear enough and complete enough for the invention to be performed by a person skilled in the art, as those claims are not so limited.

B.     NOVELTY

2.         The alleged invention, so far as claimed in claims 1 to 3, 5 to 14, 16 to 28 of the Patent, is not a patentable invention within the meaning of s 18(1)(b)(i) of the Act in that, when compared with the prior art base as it existed before the priority date of each claim, the alleged invention is not novel.

PARTICULARS

(a)     The respondent / cross-claimant relies upon the information made publicly available in the following documents and/or acts considered separately, or alternatively, in the case of sub-paragraphs (i) to (v), considered together on the basis that the relationship between the documents and/or acts is such that a person skilled in the relevant art would treat them as a single source of that information:

(i)     The DCA “Vehicle Detection Technology” Press Release published by SARB Management Group Pty Ltd (SARB), the predecessor in title to the alleged invention, on or about 18 October 2006 (DCA Press Release).

(ii)     Information made publicly available by SARB supplying, promoting and/or offering to supply its “Vehicle Detection Technology” products for trial and/or use from 18 October 2006, as referred to in the DCA Press Release and on the applicant / cross-respondent’s website at that time.

(iii)     Information made publicly available by the presentation by SARB of each Information Session and Workshop regarding its “Vehicle Detection Technology” products, as referred to in the DCA Press Release, on the days and times, and at the places referred to, in that press release.

(iv)     Information made publicly available by SARB regarding its “Vehicle Detection Technology” products at the 10th Australian National Parking Steering Group Conference in Hobart in October 2006, as referred to in the DCA Press Release.

(v)     Information made publicly available by SARB regarding its “Vehicle Detection Technology” products at the 10th National Parking Workshop in Hobart in November 2006, as referred to in the DCA Press Release.

(vi)     Transcript of the cross-examination of Mr Sandy Del Papa, project director of SARB, in Federal Court of Australia proceeding number NSD 75 of 2018, on 21 March 2019 at p 353 line 15 to p 367 at line 2.

(b)     Further particulars may be provided following discovery, interrogatories and/or other interlocutory steps.

C.     SECRET USE

3.         In the alternative to paragraph 2 above, the alleged invention, so far as claimed in claims 1 to 3, 5 to 14, 16 to 28 of the Patent, is not a patentable invention within the meaning of s 18(1)(d) of the Act in that it was secretly used in Australia before the priority date of each claim by, or on behalf of, or with the authority of, the applicant / cross-respondent or its predecessor in title to the alleged invention.

PARTICULARS

(a)     If the doing of the acts referred to in sub-paragraphs 2(a) above did not make publicly available details of each and every integer of the alleged invention claimed in each of the claims of the Patent, then those acts involved secret use of the alleged invention for the purposes of trade or commerce.

(b)     Tender (and all documents related thereto) submitted by SARB to Campaspe Shire on 22 August 2007 for the supply of the applicant / cross-respondent’s “Vehicle Detection Technology” products.

(c)     Further particulars may be provided following discovery, interrogatories and/or other interlocutory steps.

D.     BEST METHOD

4.         The complete specification of the Patent does not comply with s 40(2)(aa) of the Act in that it does not describe the best method known to the patentee of performing the alleged invention.

PARTICULARS

(a)     The complete specification does not describe the best data format known to the patentee, or indeed any data format, that is suitable for pre-population into infringement issuing software.

(b)     The best method known to the patentee of performing the alleged invention is one in which the VDU and the portable device possess the features identified in, and function in the manner described in, paragraphs 81 to 93 of the un-redacted version of the judgment of Justice Yates in Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd (No 2) [2013] FCA 395.

(c)     The patentee was aware of the method referred to in sub-paragraph (b) above at the time of filing of the complete specification of Australian Patent Application No. 2008288710 on 22 August 2008, or alternatively, at the time of filing of the complete specification of the Patent on 7 August 2013.

(d)     The complete specification of the Patent does not disclose the method referred to in sub-paragraph (b) above.

22    VMS acknowledged that the first ground of invalidity concerning the priority date does not itself establish the invalidity of the Patent. Rather, its effect is that, if the priority date of the Patent is in fact later in time, prior publications and uses between August 2007 and August 2008 may found the basis for other grounds of invalidity.

23    Immediately prior to the hearing of the interlocutory application, VMS provided the Court with a proposed amended statement of cross-claim. The only proposed amendment was to renumber two of the particulars of invalidity. The proposed amendment can be ignored for present purposes.

24    It is common ground that there is substantial overlap between the particulars of invalidity alleged by VMS in this proceeding, and the particulars of invalidity alleged in the Innovation Patent Proceeding. It is also common ground that these particulars of invalidity were not raised in the Opposition Proceeding. Orikan’s interlocutory application is based on VMS’s failure to raise those particulars of invalidity in the Opposition Proceeding.

Relevant principles

25    There was little dispute between the parties as to the principles which govern Anshun estoppel and abuse of process. Rather, the dispute concerned the application of the principles to the facts of this case.

Anshun estoppel

26    Anshun estoppel operates to preclude the making of a claim, or the raising of an issue of fact or law, in a subsequent proceeding if the claim or issue was so connected with the subject of an earlier proceeding that it would have been unreasonable, in the context of the earlier proceeding, for the claim not to have been made or the issue not to have been raised in that proceeding: see Anshun at 598, 602-3 (Gibbs CJ, Mason and Aickin JJ); Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507 (Tomlinson) at [22] (French CJ, Bell, Gageler and Keane JJ).

27    As observed by Ormiston JA in Gibbs v Kinna (1999) 2 VR 19 (Gibbs) at [1], the double negative present in the formulation of the test for Anshun estoppel is significant. The relevant question is not whether it would have been reasonable to rely on a particular defence or cause of action, or to have raised an issue, in the earlier proceeding; rather, the question is whether it was unreasonable to defer doing so. The assessment of unreasonableness depends not so much on legalities, as on practicalities.

28    There are two necessary, but not sufficient, conditions to enliven Anshun estoppel. First, the relevant cause of action, defence or issue must be one that could have been raised in the earlier proceeding. Second, the same or substantially the same facts must arise for consideration in the second as in the first proceeding: Gibbs at [23] (Kenny JA). The critical integer, however, is unreasonableness. The mere fact that proceedings may be closely related is insufficient to attract an Anshun estoppel: Egglishaw v Australian Crime Commission (2007) 164 FCR 224 (Egglishaw) at [28] (Finn, Kenny and Edmonds JJ) and the cases cited therein. Moreover, although it may have been technically possible for a party to have relied on a defence or claim, or to have raised an issue, in an earlier proceeding, failing to do so may not have been unreasonable in all the circumstances: Gibbs at [1] (Ormiston JA). As Allsop P (as his Honour then was) observed in Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245 at [4] (emphasis in original):

One fundamental error in the approach of the respondent was to build on the proposition that because the matter could have been raised in the first proceeding to draw a conclusion, it should have been…The mere fact that the matter could have been raised does not mean it should have been raised (for the operation of the principle). Rather, it has to be so relevant as to make it unreasonable not to raise it.

29    In Anshun, Gibbs CJ, Mason and Aickin JJ stated that (at 602-3):

… there are a variety of circumstances, some referred to in earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of a particular issue, motives extraneous to the actual litigation, to mention a few.

30    There is at least one factor which is generally indicative of “unreasonableness” in not asserting a cause of action in an earlier proceeding. If any judgment or order which might be made on a claim in the second proceeding would conflict with a judgment or order made in the first proceeding, it will ordinarily be regarded as unreasonable to have refrained from raising the claim in the first proceeding: Anshun at 602-3 (Gibbs CJ, Mason and Aickin JJ); Gibbs at [25] (Kenny JA); Egglishaw at [32].

31    However, Anshun estoppel may arise even though there is no risk of inconsistent judgments. As Kenny JA stated in Gibbs (at [28]):

… to decide whether or not it was unreasonable for a plaintiff not to litigate closely related issues in the one proceeding requires consideration of all the relevant facts, including the character of the previous proceeding, the scope of any pleadings, the length and complexity of any trial, any real or reasonably perceived difficulties in raising the relevant claim earlier, and any other explanation for the failure to raise the claim previously.

32    A finding of unreasonableness is not to be made lightly. Unreasonableness is a “severe test”, to be distinguished from a test of inconvenience. The starting point must be that there is free access to the courts: R & J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232 at [23] (Bryson AJ).

33    An exception to the operation of Anshun estoppel arises where, even though there is every reason why a claim, defence or issue should have been raised in the earlier proceeding but was not, there are special circumstances that prevail to permit a party to raise it in a subsequent proceeding. The court has a discretion, if it determines that special circumstances exist, to allow a matter to be raised even if the court has concluded that the matter was unreasonably omitted from the earlier proceeding. The circumstances in which that would be permitted must be exceptional: Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 146 FCR 10 at [38] and the cases cited therein.

34    The benefit and the burden of Anshun estoppel also extends to the privies of the party that enjoys the benefit or suffers the burden as the case may be: Tomlinson at [23] (French CJ, Bell, Gageler and Keane JJ). In Tomlinson, the plurality explained the bases on which a privity of interest can arise for these purposes (at [33]):

… a party to a later proceeding (A) can be privy in interest with a party to an earlier proceeding (B) on either of two bases. One basis is that A might have had some legal interest in the outcome of the earlier proceeding which was represented by B, or that B has some legal interest in the outcome of the later proceeding which is represented by A. The extent to which the representation by A or B will be sufficient to bind the other is the critical issue which will be explored later in these reasons. The other basis is that, after that earlier proceeding was concluded by judgment, A might have acquired from B some legal interest in respect of which B would be affected by an estoppel which A then relies on in the later proceeding.

Abuse of process

35    The power of this Court to stay proceedings for an abuse of process is reflected in r 16.21(1)(f) of the Federal Court Rules 2011 (Cth), which relevantly provides as follows:

(1)     A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

…

(f)     is otherwise an abuse of the process of the Court.

36    Abuse of process is insusceptible of a formulation which comprises closed categories: Tomlinson at [25] (French CJ, Bell, Gageler and Keane JJ). Accordingly, whether the use of the Court’s processes amounts to an abuse requires a “broad, merits-based judgment” which takes into account the public and private interests involved and all of the facts of the case. There can be no “hard and fast rule” to determine whether, on given facts, an abuse arises or not: UBS AG v Tyne (2018) 265 CLR 77 (UBS) at [7] (Kiefel CJ, Bell and Keane JJ) citing Johnson v Gore Wood & Co [2022] 2 AC 1 at 31 (Lord Bingham of Cornhill); see also UBS at [69] (Gageler J).

37    Abuse of process is capable of application in any circumstances in which the use of a court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute: Tomlinson at [25] (French CJ, Bell, Gageler and Keane JJ); UBS at [1] (Kiefel CJ, Bell and Keane JJ) and [62] (Gageler J). In UBS, Gageler J said that, in the context of the application of the doctrine to the bringing of successive proceedings it is better to eschew the extremes of private “oppression” and of public “disrepute” and that the relevant public interest is appropriately identified in more general and less emotive terms as the timely and efficient administration of civil justice (at [72]).

38    The principles governing an abuse of process are broader and more flexible than those which govern estoppels (whether res judicata, issue estoppel or Anshun estoppel). In Tomlinson, the plurality observed (at [25] and [26], citations omitted):

25    Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.

26     Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.

39    The determination of whether the bringing or continuance of proceedings is an abuse of the process of the court must take into account the procedural law administered by the court whose processes are engaged: UBS at [34], [38], [45] (Kiefel CJ, Bell and Keane JJ). The application of the procedural law in this Court is subject to the overarching purpose of civil litigation set out in s 37M of the Federal Court of Australia Act 1976 (Cth), which is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. The overarching purpose includes the following objectives:

(a)    the just determination of all proceedings before the Court;

(b)    the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c)    the efficient disposal of the Court’s overall caseload;

(d)    the disposal of all proceedings in a timely manner; and

(e)    the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

40    Other factors relevant to the determination of whether the bringing or continuance of successive proceedings constitutes an abuse of process include: substantial delay in resolving the dispute; increased costs; and the inconvenience of being compelled to respond again to a claim or issue that ought to have been resolved in earlier proceedings: UBS at [45], [58] (Kiefel CJ, Bell and Keane JJ) and [72], [75] (Gageler J).

41    It is not necessary to demonstrate that the subsequent proceeding has been pursued for a collateral purpose, or that the party seeking to advance the claim or issue in that proceeding has acted dishonestly, although this may assist in establishing an abuse of process: UBS at [67] (Gageler J).

Orikan’s submissions

42    Orikan contends that VMS is estopped from bringing the invalidity cross-claims in the present proceeding in circumstances where that claim was so relevant to the subject matter of the Opposition Proceeding that it was unreasonable for VMS not to rely on the claim in that proceeding.

43    Orikan submitted that it can be inferred from all the circumstances that, by the time of the Opposition Proceeding, VMS and its instructing solicitors (who acted for VMS in each of the VMS Patent Proceeding, the Innovation Patent Proceeding and the Opposition Proceeding):

(a)    were aware of the specific facts and documents relied upon by VMS in the Innovation Patent Proceeding, and had analysed the application of those facts and documents to very similar claims regarding invalidity in that proceeding, having prepared an invalidity pleading relating to the Innovation Patent and having filed evidence in support of that pleading;

(b)    were aware of the similarity between the claims of the Innovation Patent and the claims of the Patent;

(c)    had given detailed consideration to all potential grounds that could be raised in a challenge to the validity of the Patent in the Opposition Proceeding, having opposed the grant of the Patent before the APO and having dedicated significant time and resources to prepare its case in the Opposition Proceeding (as demonstrated by the fact that VMS amended its grounds of appeal shortly before the hearing to add a further ground); and

(d)    were aware of the relevance to its invalidity case of the 2006 Press Release, which was tendered in the Opposition Proceeding and in respect of which Mr Del Papa was cross-examined.

44    Moreover, Orikan submitted that there was no juridical disadvantage to VMS in advancing the invalidity cross-claims in the Opposition Proceeding. Prior to the amendment of the Act by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth), the Commissioner for Patents (and the Court on review) was required to accept a patent application unless it appeared “practically certain” that it would be invalid. Following the amendment to the Act, the Commissioner (and the Court) must determine whether the grounds of opposition have been established on the balance of probabilities: s 60(3A) of the Act. The Opposition Proceeding was governed by the Act as amended, such that VMS was only required to prove the grounds of invalidity relied on in opposition to the grant of the Patent on the balance of probabilities. That same standard of proof applies to the invalidity cross-claims in the present proceeding.

45    Orikan argued that VMS has proffered no explanation as to why, in all of the circumstances and having taken an “aggressive and expansive approach” to its opposition to the Patent, it could not have raised the grounds of invalidity and prior art now asserted in the Opposition Proceeding. Orikan submitted that, not only is it plain that VMS could have raised the grounds of invalidity and prior art relied on in this proceeding in the Opposition Proceeding, it should have done so. Orikan said that VMS’s failure to do so was a forensic decision intended to preserve those grounds to enable them to be raised at a later time if the outcome of the Opposition Proceeding was adverse to VMS. The fact that the course of action taken by VMS is permitted under the Act does not overtake the principles of Anshun estoppel (or abuse of process). Furthermore, the fact that patents are rights in rem is not a “special circumstance” that takes the present case outside the scope of Anshun estoppel. If the grounds of invalidity now advanced by VMS have merit (which Orikan does not concede) and an unrelated third party is affected by the Patent, it could seek revocation of the Patent on the same grounds in separate proceedings, without giving rise to an Anshun estoppel.

46    Finally, Orikan submitted that, although it was not a party to the Opposition Proceeding, it has a privity of interest with SARB, the respondent in that proceeding, as explained in Tomlinson at [33]-[35] (French CJ, Bell, Gageler and Keane JJ) and Trawl Industries of Australia Pty Ltd (In Liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 413 (Gummow J). Orikan advanced two alternative bases for its privity of interest with SARB: first, it acquired the Patent from SARB (together with the right to take actions for past infringement); and second, SARB and Orikan are related entities in circumstances where SARB remains a major shareholder in the holding company of which DCA is a wholly owned subsidiary and where SARB and Orikan share a common director.

47    In the alternative, Orikan contends that the pursuit of the invalidity cross-claims in the present proceeding amounts to an abuse of process. The invalidity cross-claims represents the fourth occasion on which VMS has challenged the validity of the Patent, following its opposition before the APO, the Opposition Proceeding, and the appeal from the Opposition Proceeding. SARB has expended significant time and expense successfully defending the validity of the Patent. As a related entity and major shareholder of Orikan, SARB ought not to be vexed again with challenges to the validity of the Patent on grounds that could, and should, have been determined in the Opposition Proceeding. Moreover, by failing to raise the grounds of invalidity and prior art on which it now relies in the Opposition Proceeding, VMS has further delayed the resolution of the question of the validity of the Patent. Allowing VMS to pursue the invalidity cross-claims now would impose significant additional costs on both Orikan and VMS, and an additional burden on the Court’s limited resources. Such an outcome is contrary to s 37M of the Federal Court of Australia Act 1976 (Cth) and the public policy rationale of the abuse of process doctrine. The fact that pre-grant opposition proceedings are intended to be swift and economical should not have precluded the inclusion of the grounds of invalidity and the prior art which constitute the present invalidity cross-claims.

48    Orikan submitted that either of the two conditions that enliven the power to stay a proceeding for abuse of process are satisfied here. Orikan argued that the second condition is plainly satisfied in that the pursuit of the invalidity cross-claims would bring the administration of justice into disrepute, having regard to the additional time and cost required to determine the invalidity cross-claims now, which could have been avoided had VMS raised the grounds on which that claim is premised in the Opposition Proceeding. Orikan argued that the first condition is also satisfied in that it will suffer unjustifiable oppression if VMS is allowed to pursue its invalidity cross-claims, having regard to the relationship between Orikan and SARB. Orikan is a privy of SARB, which suffices to establish oppression on the part of Orikan for the purpose of an abuse of process. Further, the fact that Orikan must engage again in litigation on the issue of the Patent’s validity undermines SARB’s substantial investment in Orikan. Orikan contends that it would be anomalous if the assignment of the Patent would operate to defeat an abuse of process: that is, had SARB not assigned the Patent and now stood in the place of Orikan, it would give rise to unjustifiable oppression constituting an abuse of process but, because the Patent has been assigned, no such oppression arises.

VMS’s submissions

49    In respect of Anshun estoppel, VMS contends that it was not unreasonable for VMS to refrain from raising the invalidity cross-claims in the Opposition Proceeding. VMS accepts that it could have raised the particulars of invalidity on which it presently relies in the Opposition Proceeding, but rejects Orikan’s contention that it should have done so. VMS relies on the following circumstances.

50    First, the character of the each of the earlier proceedings is distinct from that of the present proceeding. The Opposition Proceeding involved an opposition to the grant of the Patent pursuant to s 59 of the Act, whereas the present proceeding involves a cross-claim for revocation of the Patent in response to infringement proceedings brought pursuant to s 121 of the Act. The Act therefore creates several distinct avenues through which the validity of a patent may be challenged. The grant of a patent is not the final word on validity. VMS challenged the validity of the Patent through one avenue (being opposition to the grant) and now seeks to do so through another (by way of cross-claim in response to infringement proceedings). Put simply, VMS has pursued its claims in different contexts as contemplated by the Act, and ought not to be shut out from doing so. VMS accepted that the position may have been different had VMS sought to agitate the invalidity of the Patent again by way of a suit for revocation of the Patent.

51    The Innovation Patent Proceeding was also distinct in character from the present proceeding, and the Opposition Proceeding. It concerned a different patent filed at an earlier point in time, comprising a different bundle of rights. The claims of invalidity with respect to the Innovation Patent and the Patent are not identical and are subject to different tests of invalidity (as between a standard patent and an innovation patent). Further, an expansive approach was taken by VMS in the Innovation Patent Proceeding, in which every possible ground of invalidity was advanced. In the circumstances, VMS would have been required to undertake significant further work to deploy the grounds of invalidity that were advanced in the Innovation Patent Proceeding in the Opposition Proceeding. Accordingly, while VMS may have been aware that it was possible to advance similar grounds of invalidity in the Opposition Proceeding, its awareness can rise no higher than that.

52    Second, the grounds pursued in the Opposition Proceeding were not “expansive” consistently with the purpose of pre-grant opposition proceedings, which are intended to provide a swift and economical means of settling disputes: Genetics Institute Inc v Kirin-Amgen Inc (1999) 92 FCR 106 (Genetics Institute) at [19]. Only three grounds of invalidity were advanced, and only one was pursued on appeal to the Full Court of the Federal Court. Had VMS sought to pursue the grounds particularised in the invalidity cross-claims, the Opposition Proceeding would have been lengthier, more complex and more expensive. Significant additional work would have been required to deploy those grounds in the Opposition Proceeding, including for the reasons identified above. Further, VMS contends that Orikan’s criticism of VMS as to its failure to adduce evidence explaining why it did not raise the grounds of invalidity which it now advances in the Opposition Proceeding is misplaced, as such evidence would likely require VMS to waive privilege in respect of legal advice it received in the conduct of the Opposition Proceeding.

53    Third, the confined approach taken by VMS in the Opposition Proceeding accorded with the public interest in confining litigation to a scope sufficient to quell the underlying dispute between the parties, and thus ensuring the efficient use of judicial resources. If VMS had succeeded on the grounds of invalidity advanced in the Opposition Proceeding, the Patent would not have proceeded to grant and no subsequent infringement proceedings would have been possible.

54    Fourth, the risk of inconsistent findings between the present proceeding and the Opposition Proceeding is very low, in circumstances where different grounds of invalidity are advanced in this proceeding, and therefore different facts arise for consideration. VMS accepts that if it were to succeed on one or more grounds of the invalidity cross-claims, the outcome of this proceeding would be inconsistent with the outcome of the Opposition Proceedings in the sense that the Patent would be found to be invalid. However, the basis upon which the Patent is found to be invalid would not conflict (which VMS says would not found an Anshun estoppel, citing AIO21 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2022) 294 FCR 80 at [77]-[82]). More generally, there is nothing inconsistent with a Court finding that a patent is acceptable for grant and then subsequently finding that a granted patent is invalid. Indeed, ss 59 and 121(1) of the Act provide for that possibility.

55    Fifth, one of the particulars relied on in the novelty and secret use grounds in the invalidity cross-claims only became apparent during the cross-examination of Mr Del Papa in the second last day of the trial in the Opposition Proceeding shortly before the close of evidence. Mr Del Papa made an admission on which VMS now seeks to rely. VMS argued that it was not unreasonable to refrain from seeking to amend the notice of appeal at that stage of the proceeding to introduce two new grounds of appeal and to rely on new prior art and particulars. Had it done so, the trial of the Opposition Proceeding would likely have been vacated and evidence reopened. VMS submitted that this course would have been wholly inconsistent with s 37M of the Federal Court of Australia Act 1976 (Cth). VMS rejected the submission that it intentionally sought to “hive off” or hold in reserve from the Opposition Proceeding the grounds of invalidity relied in this proceeding, or that it sought to engage in a “dry run” of its cross-examination of Mr Del Papa in the Opposition Proceeding. The specific matter on which Mr Del Papa was cross-examined in that proceeding related to the “entitlement” ground of opposition.

56    Finally, even if it can be accepted that VMS ought to have raised the invalidity cross-claims in the Opposition Proceeding, there are special circumstances which prevail to permit VMS to raise these matters in the present proceeding (relying on Wong at [28]). Here, the fact that the rights conferred by the Patent operate in rem is a “special circumstance”. VMS contends that there is a public interest in allowing it to pursue the invalidity cross-claims in circumstances where the integrity of the Register of Patents will be adversely affected by an invalid patent remaining on the Register, and where any other third party would be permitted under s 138(1) of the Act to pursue the same grounds in a separate revocation proceeding.

57    VMS accepted that, should an estoppel arise, Orikan may take the benefit of it as a privy of SARB.

58    VMS contends that no abuse of process arises for four reasons.

59    First, VMS submitted that Orikan has not suffered harassment or oppression at the hands of VMS. Orikan was not a party to the Opposition Proceeding or to the Innovation Patent Proceeding, and did not acquire the Patent until after the Opposition Proceeding concluded and the Patent proceeded to grant. It has not suffered the burden, cost or expense associated with those proceedings. There is no evidence to suggest that the relationship between SARB and Orikan is such that the effect of the conduct by VMS with respect to SARB has been absorbed by Orikan, or that the same individuals and the same resources across the two entities have been involved in the various proceedings. Nor has Orikan been delayed in pursuing infringement proceedings against VMS. The present proceedings are the first occasion on which Orikan will be required to address the issue of the validity of the Patent. VMS contends that the effect of any conduct towards SARB by VMS in the context of the Opposition Proceedings did not carry with the assignment of the Patent to Orikan.

60    Second, SARB has not suffered prejudice or unjustifiable oppression. It is no longer the registered owner of the Patent, it is not a party to the present proceeding, and it is entitled to receive payment of its costs of the Opposition Proceeding from VMS in accordance with orders made in that proceeding.

61    Third, the course taken by VMS in opposing the grant of the Patent pursuant to s 59 of the Act, and seeking revocation for invalidity by way of cross-claim pursuant to s 121 of the Act, is permitted by the statute. VMS has sought to exercise two distinct statutory rights, the latter of which did not exist under s 121 of the Act until the Patent had proceeded to grant. VMS contends that exercising a statutory right is not a misuse or abuse of the process of the Court, especially in the present circumstances, and that there would need to be special circumstances to find abuse by a party availing itself of such a right (relying on Special Effects Ltd v L’Oreal (2007) 71 IPR 188).

62    Fourth, VMS would be severely prejudiced in its defence of the infringement allegations in the present proceeding if it is not permitted to advance the invalidity cross-claims under s 121(1) of the Act. By its application, Orikan seeks to, in substance, deprive VMS of a substantive defence to the proceeding. VMS submitted that this ought to weigh against a finding of abuse of process.

Consideration

Opposition and revocation proceedings

63    A person may challenge the validity of a patent through three forms of proceeding that are contemplated by the Act:

(a)    a pre-grant opposition proceeding brought under s 59 of the Act;

(b)    a post-grant revocation proceeding brought under s 138 of the Act; and

(c)    a post-grant revocation application brought by a defendant to an infringement proceeding by way of cross-claim under s 121 of the Act.

64    Under each of those forms of proceeding, the validity of a patent may be challenged on the following bases (amongst others):

(a)    that the applicant/patentee is not entitled to the grant of the patent;

(b)    that the invention is not a patentable invention within the meaning of s 18; and

(c)    that the specification does not comply with ss 40(2) or (3),

as per ss 59, 121(2) and 138(3).

65    As noted earlier, it is common ground that the grounds and particulars of invalidity raised by VMS by way of cross-claim in this proceeding (brought pursuant to s 121(2) of the Act) were capable of being raised, but were not raised, in the earlier Opposition Proceeding (brought pursuant to s 59 of the Act).

66    On this application, Orikan placed reliance on the change that occurred in the standard of proof applicable in pre-grant opposition proceedings as a result of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). As explained by the Full Court in Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2021] FCAFC 224 at [12]-[16] and [19], prior to the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth), the Commissioner of Patents (under s 60(3A) of the Act) and, on appeal by way of de novo hearing, the Court, could only refuse the grant of a patent in pre-grant opposition proceedings if it was “practically certain” that the patent, if granted, would be invalid. Following amendment, the test now is whether, on the balance of probabilities, a ground of opposition to grant exists. The same test applies in post-grant revocation proceedings.

67    Prior to the amendment, it was accepted that a finding by a single judge of the Federal Court in pre-grant opposition proceedings could not found an issue estoppel in post-grant revocation proceedings because the two proceedings were sufficiently different. A finding in pre-grant opposition proceedings – that it was not “practically certain” that a patent granted on an unopposed application would be invalid – would be inconclusive of the question whether, in post-grant revocation proceedings, the patent should be revoked on the same ground, which question was to be determined on the balance of probabilities: Genetics Institute at [17].

68    In the appeal in the Opposition Proceeding, VMS submitted that leave to appeal should be granted because, as a consequence of the change to the standard of proof in pre-grant opposition proceedings, the finding by the primary judge in the Opposition Proceeding in respect of the ground of invalidity the subject of the appeal could raise an issue estoppel in post-grant revocation proceedings. SARB accepted that an issue estoppel could arise for the reasons identified by VMS. In granting leave to appeal, the Full Court found it unnecessary to reach a concluded view on the question whether an issue estoppel would be available to SARB in subsequent proceedings between the parties, observing only that the “legal landscape has changed” and “earlier cases dealing with the question of leave [to appeal] should be read with that change in mind”: Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2021] FCAFC 224 at [19].

69    On this application, Orikan accepted that, prior to the amendment of the Act, the different standards of proof applicable in pre-grant opposition proceedings and post-grant revocation proceedings would likely have precluded the operation of Anshun estoppel, as well as issue estoppel. The basis for that view is apparent: a party is unlikely to have acted unreasonably in withholding a ground of invalidity in opposition proceedings having regard to the higher standard of proof required to establish that ground, and the attendant costs and inconvenience of meeting that standard. Following the amendment, such an obstacle no longer exists. The questions of Anshun estoppel, and abuse of process, are to be considered in circumstances where the standard of proof applicable in pre-grant opposition proceedings is the same as in post-grant revocation proceedings.

70    In a similar manner to how the parties advanced their arguments before the Court, it is appropriate to consider Anshun estoppel before considering abuse of process.

Anshun estoppel

71    For the purposes of Anshun estoppel, I am satisfied that Orikan is a privy of SARB by reason of holding a successive legal interest (Tomlinson at [33] per French CJ, Bell, Gageler and Keane JJ). Orikan is now the registered owner of the Patent, the validity of which was the subject of dispute in the Opposition Proceeding in respect of which the Anshun estoppel is said to arise. This issue was not in contest between the parties. Orikan is therefore entitled to take the benefit of an Anshun estoppel to the extent it arises from the Opposition Proceeding as a privy of SARB. It is unnecessary to determine whether Orikan is also a privy of SARB by reason of its corporate relationship.

72    It is common ground that, save in one respect, the grounds and particulars of invalidity raised in this proceeding could have been raised in the Opposition Proceeding. At the time of the Opposition Proceeding, VMS either was aware, or ought to have been aware, that those grounds and particulars of invalidity were available, or likely to be available, in that proceeding. That conclusion is supported by the following matters. First, those grounds and particulars of invalidity were raised by VMS by way of cross-claim in the Innovation Patent Proceeding, and were the subject of detailed pleadings and evidence in that proceeding. Second, VMS was represented by the same solicitors in the Innovation Patent Proceeding, the Opposition Proceeding, and now this proceeding. Third, although the Innovation Patent Proceeding concerned a different patent to that which is the subject of the Opposition Proceeding and this proceeding, both were the product of the same parent provisional application and the claims made by the two patents are substantially similar. These matters were not seriously contested by VMS.

73    The particulars of invalidity raised in this proceeding include one matter that was not raised in the Innovation Patent Proceeding and only became known to VMS in the course of the Opposition Proceeding. The matter concerns evidence given by Mr Del Papa during cross-examination in the final days of the hearing of the Opposition Proceeding. Mr Del Papa was cross-examined with respect to a press release issued by SARB on 18 October 2006 with respect to its vehicle detection technology. It was put to Mr Del Papa, in effect, that the press release disclosed an aspect of the invention. VMS contends that the answers given by Mr Del Papa constitute an admission in that regard. It is not necessary on this application to reach a conclusion whether and to what extent Mr Del Papa’s answers constitute a relevant admission. In my view, the admission, if made, does not materially add to the particulars of invalidity which otherwise include reference to the disclosures made through the press release. For that reason, I do not regard this additional matter as having significance in the determination of the present application.

74    The critical question for determination in this application, therefore, is whether it was unreasonable for VMS not to have pursued the grounds and particulars of invalidity the subject of its invalidity cross-claims in this proceeding as grounds of opposition in the Opposition Proceeding. For the reasons that follow, I do not consider that VMS has acted unreasonably in failing to advance the grounds and particulars of invalidity on which it now relies in the Opposition Proceeding.

75    First, I am not satisfied that there is a relevant risk of inconsistent judgments between this proceeding and the Opposition Proceeding. It can be accepted that, if VMS were to succeed on one or more grounds of its invalidity cross-claims, the outcome of this proceeding would be inconsistent with the Opposition Proceeding in the sense that the Patent would be declared invalid. I accept VMS’s submission, however, that the basis upon which the Patent would be found to be invalid in this proceeding would not conflict with the basis on which VMS’s opposition was dismissed in the Opposition Proceeding. For that reason also, this proceeding is likely to raise different facts and issues for consideration, such that the risk of inconsistent findings of fact or law between the two proceedings is low.

76    Second, there is a fundamental difference in the nature and the consequences of the Opposition Proceeding and this proceeding. The Opposition Proceeding involved pre-grant opposition to the Patent. It can be accepted that VMS had a commercial interest in opposing the Patent, having regard to the history of dispute and litigation between the parties. But the Opposition Proceeding involved an election by VMS to challenge the validity of the Patent. It did so on limited grounds, and did not raise the grounds and particulars of invalidity that had been raised in the earlier Innovation Patent Proceeding. There is no proper basis to criticise that election. The earlier Innovation Patent Proceeding did not proceed to trial and the invalidity claims made in that proceeding had not been tested. The election made by VMS confined the scope of the issues in dispute in the Opposition Proceeding and therefore the costs and time required for its determination. That course was consistent with the overarching purpose of civil litigation expressed in s 37M of the Federal Court of Australia Act 1976 (Cth). It was also consistent with the character and purpose of pre-grant opposition proceedings, which are intended to provide a swift, economical means of settling disputes: Genetics Institute at [19]. Although it is desirable to avoid a multiplicity of proceedings and to ensure that parties address, as far as possible, the issues arising between them in a single proceeding, parties ought not to be encouraged to raise each and every possible claim or issue irrespective of the time and cost associated with doing so. Anshun estoppel must operate conformably with the demands of s 37M, as well as the substantive statutory context in which it is said to arise.

77    In contrast to the Opposition Proceeding, the present proceeding is an infringement proceeding. VMS has not elected to come to court; rather, it has been compelled to do so by Orikan. To defend itself against allegations of infringement, VMS has brought a cross-claim challenging the validity of the Patent. In doing so, it has alleged grounds and particulars of invalidity that were previously raised in the Innovation Patent Proceeding, which ultimately settled. In the present circumstances, that is not unreasonable. Put simply, the stakes are different. Indeed, this underscores the significant prejudice that VMS would suffer were its invalidity cross-claims to be stayed: it would lose what is, in substance, a defence to the allegations of infringement made against it. This weighs against a finding of unreasonableness.

78    Third, I am not satisfied that the invalidity cross-claims, if allowed in this proceeding, will produce additional cost and delay than that which would have arisen if the same grounds and particulars of invalidity had been pursued in the Opposition Proceeding. The time and expense required to litigate these grounds would have arisen at some stage, either in the Opposition Proceeding or in this proceeding. There is no material before me to indicate that the time and expense involved in determining these issues will be greater now than they would have been during the Opposition Proceeding. There is no significant overlap between the grounds of invalidity now being pursued and those raised in the Opposition Proceeding. I accept that the grounds and particulars of invalidity raised in this proceeding concern events that are now more distant in time than they were at the hearing of the Opposition Proceeding, which creates some additional difficulty and inconvenience, especially for witnesses such as Mr Del Papa. I do not consider, however, that this renders VMS’s election not to raise them in the earlier proceeding unreasonable. Moreover, VMS bears the risk that delay will make it more difficult to establish the grounds of invalidity on which it relies.

79    Orikan submitted that the unreasonableness of VMS’s conduct is shown by the fact that, in the Opposition Proceeding, VMS cross-examined Mr Del Papa on matters that will now be in issue in this proceeding. I do not accept that VMS’s cross-examination of Mr Del Papa renders its conduct as unreasonable. The cross-examination was confined and, as VMS submitted, directed to the issue of entitlement, which was one of the pleaded grounds of invalidity in the Opposition Proceeding. The cross-examination did not materially traverse the issues of novelty raised in this proceeding. I also do not accept Orikan’s characterisation of that cross-examination as a “dry run”.

80    In reaching the conclusion that VMS is not estopped from maintaining its invalidity cross-claims, I have not placed significant weight on the in rem nature of the rights conferred by the Patent and the public interest in the integrity of the Register. Nor have I placed significant weight on the fact that the Act expressly contemplates that the validity of a patent may be challenged through pre-grant opposition proceedings and post-grant revocation proceedings and that a patent may be accepted for grant despite opposition, and yet be found invalid following grant. Those features of the patent regime have contextual relevance to the principles of estoppel, but are not determinative. As the authorities emphasise, the test is one of unreasonableness considered in the particular circumstances of the case. The conclusion on the present application may have been different if, rather than raising the invalidity cross-claims by way of defence to an infringement proceeding, VMS had instituted a revocation proceeding against Orikan, relying on the same grounds and particulars of invalidity. That is not, however, a matter for determination on this application.

Abuse of process

81    As noted above, Orikan advanced its case with respect to abuse of process on two bases. First, that the pursuit of the invalidity cross-claims by VMS would cause Orikan unjustifiable oppression; and second, that it would bring the administration of justice into disrepute.

82    Turning to the first basis, I consider that it is open to Orikan to contend that it will suffer unjustifiable oppression if the invalidity cross-claims are allowed to proceed, notwithstanding that Orikan was not a party to the Opposition Proceeding. As explained in Tomlinson and UBS, the principles governing an abuse of process are broader and more flexible than those which govern estoppels. It would be anomalous if the principles governing estoppels operate to the benefit of a privy of a party to an earlier proceeding, but the principles governing an abuse of process do not operate in the same way. I do not, though, consider that Orikan will in fact suffer unjustifiable oppression if the invalidity cross-claims are allowed to proceed, largely for the same reasons given in respect of Anshun estoppel. Orikan has not demonstrated that it will incur additional cost by reason that VMS elected not to raise in the Opposition Proceeding the grounds and particulars of invalidity that are now raised in this proceeding. The Opposition Proceeding was narrowly confined and, for that reasons, less costly than it would otherwise have been. It is true that VMS’s election has deferred and thereby delayed the determination of the issues now raised by the invalidity cross-claim. I do not, though, consider that the delay has caused unjustifiable oppression to Orikan. Orikan could not reasonably have believed that the determination of the Opposition Proceeding brought to an end all possible challenges to the validity of the Patent. Orikan should reasonably have expected that if it chose to bring an infringement proceeding against VMS, it would be likely to face a cross-claim that challenged the validity of the patent. There is nothing oppressive about that circumstance.

83    As to the second basis, I do not consider that the pursuit of the invalidity cross-claims by VMS would bring the administration of justice into disrepute, largely for the reasons explained in the context of Anshun estoppel. As the matters raised by the invalidity cross-claim do not overlap with the issues raised in the Opposition Proceeding, there is no realistic prospect of inconsistent findings being made and there is no duplication of cost. In the Opposition Proceeding, VMS confined its approach and contained its costs, consistently with the nature and purpose of that proceeding and its obligations as a litigant. Further, the fact that the invalidity cross-claims are raised by way of defence to an infringement proceeding requires the Court to exercise particular caution, as striking out the invalidity cross-claim would deprive VMS of a substantive defence to the allegations of infringement. The present case bears no resemblance to the circumstances considered in UBS, where claims were pursued, and then abandoned, by a party in one court, and then raised again by a related party against the same defendant in a subsequent proceeding in another court.

Conclusion

84    For the reasons given above, the interlocutory application dated 16 December 2022 should be dismissed with costs.

85    The proceeding will now be listed for further case management so that it may progress toward trial.

Associate:

Dated:    29 August 2023