Federal Court of Australia

CPC Patent Technologies Pty Ltd v Apple Pty Limited (No 2) [2025] FCA 1671

ORDERS

THE COURT ORDERS THAT:

1.    By 4pm on 30 January 2026, the parties confer and provide to the chambers of Burley J draft short minutes of order reflecting these reasons, including a clean version of the final suppression orders and schedule annexed to the affidavit of Ms Sanders dated 30 October 2025.

2.    Until further order, the reasons for judgment not be disclosed to or published by any person, save for the parties’ solicitors (including the solicitors for International Litigation Partners No. 10 Pte Ltd, International Litigation Partners No. 12 Pte Ltd and Lyndcote Holdings Pty Ltd) and those persons who have executed suitable confidentiality agreements as determined in the first instance by the solicitors acting for the parties.

3.    By 4pm on 30 January 2026, the parties confer and provide to the chambers of Burley J a copy of these reasons for judgment with the paragraphs or parts therefore which are said to contain confidential information highlighted.

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

REASONS FOR JUDGMENT

BURLEY J:

1.    INTRODUCTION

1.1    The disputes

1    In CPC Patent Technologies Pty Ltd v Apple Pty Limited [2025] FCA 489 (judgment), I delivered reasons that address a claim brought by CPC against Apple Pty Limited and Apple Inc. (collectively, Apple) for the infringement of the asserted claims in two patents by a broad range of Apple products containing biometric security systems. I also addressed Apple’s cross-claim alleging the invalidity of those claims. In the result, the infringement claim was rejected and the cross-claim largely, but not entirely, dismissed.

2    Three issues are now before the Court for resolution:

(a)    the appropriate orders to make in relation to costs. In this regard there is much at stake. The evidence indicates that the costs of each party exceed $8.5m.

(b)    whether Apple is entitled to orders that each of four third parties be jointly and severally liable for any costs order made against CPC being: Charter Pacific Corporation Ltd; International Litigation Partners No. 10 Pte Ltd (ILP-10); International Litigation Partners No. 12 Pte Ltd (ILP-12); and Lyndcote Holdings Pty Ltd.

(c)    whether suppression orders sought by Apple should be made.

3    These reasons assume familiarity with the judgment and adopt the same abbreviations as are used in it.

4    In relation to costs, CPC contends that separate costs orders should be made on the claim and the cross-claim. It accepts that it should pay the costs of its infringement claim, which should include pre-trial case management costs and costs relating to the issue of claim construction, but submits that any amount payable should be subject to a reduction of 35% to take account of what it submits were “significant additional costs” caused by Apple’s conduct relating to the evidence on the operation of its devices. CPC submits that Apple should pay CPC’s costs of defending the cross-claim to reflect its substantial success in this regard, subject only to a 15% reduction to reflect the limited success that Apple achieved in invalidating three claims. It submits that the costs should be assessed on a lump sum basis.

5    Apple disputes that separate orders should be made for costs of the claim and the cross-claim, as it argues that its cross-claim was advanced primarily in a defensive manner. It submits that a global costs order should be made and that CPC should pay 90% of Apple’s costs of the claim and the cross-claim combined on a party-party basis prior to an offer of compromise being made by Apple in October 2023, as it was the successful party in the litigation, the 10% reduction being in recognition of the aspects of the cross-claim on which it was not substantively successful. Apple also contends that it should have the whole of its costs on an indemnity basis after the time when the offer of compromise was not accepted, relying on Federal Court Rules 2011 (Cth) (FCR) r 25.14(1) or (2). It submits that if separate costs orders are made costs should proceed to taxation, rather than assessment on a lump sum basis.

6    In relation to third party costs orders, Apple contends that each of the third parties is liable for any costs order. Charter Pacific is a private company associated with CPC, and accepts that a third party costs order is appropriate for it. Of the other third parties, ILP-10 and ILP-12, which were represented and Lyndcote Holdings, which was also separately represented, took differing stances. ILP-10 and ILP-12 accept that a third party costs order should apply to ILP-12, but dispute that this should apply to ILP-10. Lyndcote Holdings disputes that it should be held liable at all.

7    In relation to suppression, Apple seeks final orders for suppression of information characterised as confidential to Apple. CPC makes some submissions questioning whether sufficient evidence has been adduced to justify the necessity of orders, and whether some of the material claimed has already been publicly disclosed or could not be said to be confidential to Apple.

1.2    Summary of conclusions

8    For the reasons set out below I find that costs should be ordered separately for the claim and the cross-claim, that CPC should pay all of Apple’s costs of the infringement claim – which include costs of the pre-trial case management hearings and the construction issues – and that Apple should pay 85% of CPC’s costs of the cross-claim. I reject Apple’s claim for indemnity costs arising from the offer of compromise. The costs should be assessed on a lump sum basis in accordance with the Federal Court’s Costs Practice Note (GPN-COSTS).

9    I find that each of the four third parties are jointly and severally liable to pay the costs orders against CPC and I will make the suppression orders in the form sought by Apple.

2.    COSTS

10    In relation to the costs argument, CPC relies on three affidavits of its solicitor, Michael Williams, dated 22 August 2025, 19 September 2025 and 29 October 2025. Apple relies on an affidavit of its solicitor, Robynne Sanders, of 17 September 2025.

2.1    Introduction

11    Section 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) gives the court a wide discretion going to the award of costs, which must be exercised judicially. The ordinary rule is that costs follow the event, although a successful party may be awarded less than its costs, or costs may be apportioned, based upon success on the issues; Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 at [3], quoted in GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Limited v Generic Partners Pty Limited (No 2) [2018] FCAFC 100 at [5].

2.2    Separate costs should be assessed for the claim and invalidity cross-claim

12    The first issue between the parties is whether costs should be global, or instead separately allocated between the claim and the cross-claim.

13    In GlaxoSmithKline the Full Court said:

6    Every case must be decided on its own facts. There is no doubt that this Court could address the costs of the appeals and the cross appeals compendiously. In Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (No 3) [2014] FCAFC 126 (‘Sanofi-Aventis’) the Full Court addressed the costs of the appeal and cross-appeal together at [26], despite Apotex failing in its challenge to validity on various grounds (see at [8]). In Tramanco Pty Ltd v BPW Transpec Pty Ltd (No 2) [2014] FCAFC 58 (‘Tramanco’) the Full Court similarly dealt with costs compendiously (at [13]), and noted the difficulties with disentangling the costs of different issues (at [12]).

7    Further, a percentage reduction approach may also be appropriate in some cases. Such an approach was adopted in Idenix and in Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd (No 2) [2017] FCAFC 158.

8    A claim for patent infringement and a cross-claim for patent invalidity are typically treated as separate events upon which the ordinary rule applies as to costs: see PAC Mining Pty Ltd v Esco Corporation (No 2) [2009] FCAFC and Damorgold Pty Ltd v Blindware Pty Ltd (No 2) [2018] FCA 364. Departure from this position is usually taken in complex patent cases where the relevant issues concern a “common substratum of fact” (see eg Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27 at [306]) or may have been “wrapped up” with other issues (see eg Sanofi-Aventis at [23]-[25]) or could not be “readily disentangled” (see eg Tramanco at [12]).

14    CPC submits that there is no basis to depart from what it characterises as the “typical” position of treating an infringement claim and a revocation cross-claim as separate events, because Apple’s cross-claim raised separate and distinct issues and there was no common substratum of fact between the validity and infringement claims. It submits that the issues can be readily separated. It submits that Apple could have succeeded in defending the infringement allegations without the invalidity cross-claim and that in the result, Apple’s invalidity cross-claim was largely unsuccessful and a significant amount of evidence and time at trial was devoted to the question of invalidity which uneconomically broadened the scope of the proceedings.

15    Apple submits that a single, global order for costs should be made. It submits that the whole of the proceedings, being the claim and the cross-claim, should be seen as a single event with the cross-claim simply giving rise to a further basis upon which Apple was defending the infringement claim. It submits that most of the cross-claim was premised on CPC’s construction of certain features rather than on Apple’s construction, and that it would have been highly risky for Apple not to make and maintain a cross-claim of that kind, given the ambulatory and unclear approach that CPC took to various construction issues, particularly the meaning of transmitter sub-system, receiver sub-system, accessibility attribute and the Series Feature. It submits that most of its cross-claim was advanced on the basis that the asserted claims of the 163 patent would be invalid if the Court adopted CPC’s construction, and that other issues that were advanced defensively (such as inventive step and manner of manufacture) may also have resulted in the 293 patent claims being invalid, but were not decided.

16    In Tramanco Pty Ltd v BPW Transpec Pty Ltd (No 2) [2014] FCAFC 58, the Full Court (Allsop CJ, Greenwood and Nicholas JJ) observed that the making of issues-based costs orders where each of the validity and the infringement cases substantively fail is an approach commonly taken in patent litigation, citing PAC Mining Pty Ltd v Esco Corporation (No 2) [2009] FCAFC 52 and saying at [9]:

… that approach will often be appropriate unless the validity issues raised by a respondent are closely connected to the infringement case, for example, where a respondent asserts that on an applicant’s construction, the claims will necessarily lack fair basis or where a respondent raises a so-called “Gillette defence”. One of the difficulties with the approach taken in PAC Mining is that it may make the task of assessing costs particularly difficult and time consuming.

17    In Hanwha Solutions Corporation v REC Solar Pte Ltd (No 2) [2024] FCA 336, after referring to PAC Mining and Tramanco, I said:

32    In some cases, as noted in PAC Mining and Tramanco, a cross-claim may be characterised as more in the nature of an adjunct to the defence to a claim for patent infringement, especially where consistent construction arguments are put as an alternative to the infringement case presented by the patentee. One example may be where it is put that if the construction advanced by the patentee is accepted, the claims do not satisfy the requirements of s 40 of the Patents Act because the breadth of the construction accepted will necessarily result in the claims lacking support or fair basis. This was so in the case of grounds 6, 7 and 8 of the present cross-claim, each of which was advanced on this basis (see judgment [465]). None of these grounds occupied any significant time at the hearing beyond the general construction questions.

33    However, by putting lack of inventive step, lack of utility and novelty publications into issue, each of LONGi, Jinko and REC Solar introduced into the litigation a range of substantial questions which were ultimately decided against them, each of which did not need to be determined for them to defend the infringement case advanced. These represent a further alternative way – a third – in which REC Solar sought to defend the proceedings. All of these challenges failed, with the exception of the challenges based on the Nakano publication, which succeeded only in respect of the anticipated claims.

18    Apple characterises its cross-claim as ‘defensive’ on the basis that it was advanced predominantly on the premise that if the construction of the claims pursued by CPC was upheld, then the claims would be invalid. However, although that was true for the manner in which much of the cross-claim was advanced in closing submissions, it was not how the invalidity case was pleaded or, as best one can tell, addressed in the expert evidence.

19    The Statement of Cross Claim as initially filed, dated 14 December 2021, pleaded that the asserted claims of the 168 patent (in broad terms):

(1)    have a deferred priority date;

(2)    lack novelty over seven prior art documents, one combination of two documents, two categories of prior acts and the information contained in one published specification on the basis of the originally claimed priority date (amounting to 11 alternatives);

(3)    lack novelty over two further documents and the information contained in one alternative published specification if the priority date is deferred, in addition to the prior art information identified in (2);

(4)    lack inventive step at the originally claimed priority date in light of the common general knowledge alone, or alternatively in combination with nine of the items of prior art information and acts identified in (2) above, or alternatively again in combination with information made publicly available by offers for sale;

(5)    lack inventive step at the deferred priority date on a similar basis;

(6)    lack manner of manufacture; and

(7)    do not fully describe the invention within s 40(2)(a), lack fair basis within s 40(3) and lack clarity within s 40(3) of the Patents Act 1990 (Cth) (Patents Act).

20    The Statement of Cross Claim pleaded that the asserted claims of the 293 patent (in broad terms):

(1)    have a deferred priority date;

(2)    lack novelty if the claims have the original priority date over seven prior art documents, one combination of two documents, two categories of prior acts and the information contained in one published specification (amounting to 11 alternatives);

(3)    lack novelty if the claims have the deferred priority date in light of the information in (2) plus two others and one alternative published specification;

(4)    lack inventive step at the earliest priority date in light of the common general knowledge alone or alternatively in combination with nine of the items of prior art information and acts in (2) above, or alternatively again in combination with information made publicly available by offers for sale;

(5)    lack inventive step at the deferred priority date on a similar basis;

(6)    lack manner of manufacture; and

(7)    do not fully describe the invention within s 40(2)(a), lack fair basis within s 40(3) and lack clarity within s 40(3) of the Patents Act.

21    Although in an Amended Statement of Cross Claim filed in June 2023, Apple pleaded its case in a more confined manner, leaving aside the grounds relied upon arising from s 40 of the Patents Act, it was not apparent from the face of either the Statement of Cross Claim or the Amended Statement of Cross Claim that Apple’s case was “defensive” in the sense that it depended or was contingent upon the construction of the integers of the claims advanced by CPC.

22    Also in the June 2023 Amended Statement of Cross Claim, very limited parts of the invalidity case were expressed to be contingent upon the acceptance of evidence adduced by Associate Professor Boztas, an expert called by CPC. Shortly before the commencement of the hearing, Apple also filed a Further Amended Statement of Cross Claim dated 4 October 2023.

23    The hearing commenced on 16 October 2023 and closing submissions were concluded on 9 February 2024.

24    The “defensive” position was only addressed by Apple in closing submissions and not finalised then but in correspondence received by the Court after closing submissions, to which reference is made at [468] of the judgment.

25    As a result of adopting this position in closing submissions, Apple narrowed the scope of the dispute between the parties in accordance with its obligations under s 37M and s 37N of the FCA Act. However, the consequence of this timing is that, whilst much of the case advanced by Apple in its closing submissions may properly be described as “defensive” in that it relied upon a challenge to the validity of the claims based upon CPC’s construction, that was not the case as pleaded and was not the case that CPC was obliged to meet in responding to the cross-claim, at least until closing submissions.

26    Accordingly, considered in overview, in my view it is not correct to consider the cross-claim as pleaded and advanced for most of the case as being “defensive”. Although elements of the case may be considered in that way towards its conclusion, they are not sufficient to displace my view that it is appropriate for costs to be awarded separately for the claim and the cross-claim.

27    In this regard, CPC accepts that costs relating to the construction of the patents and the asserted claims should be allocated to costs it pays in relation to its failed infringement claim. It also accepts that the costs of case management hearings in the proceedings should be allocated to the infringement case, for which it must pay Apple.

28    This means that, subject to any discounting factors – to which I refer below – it is appropriate that CPC pay Apple’s costs of the infringement claim and Apple pay CPC’s costs of the cross-claim.

2.3    CPC should pay all of the costs of the infringement claim

29    The amount that CPC is obliged to pay Apple in respect of its costs of the infringement claim turns on CPC’s contention that Apple’s conduct concerning the disclosure of information regarding the operation of the Apple Devices was “extraordinary and unsatisfactory” or otherwise deserving of the conclusion that as the successful party, Apple should nonetheless not receive its party-party costs.

30    I disagree with that characterisation.

31    As is apparent from the judgment, the Apple Devices are complicated devices which deploy sophisticated software to conduct complex operations.

32    At no stage was Apple required in directions to provide a comprehensive description of all of the operations of the Apple Devices for the purposes of the proceedings. Nor was general discovery sought. Rather, CPC proposed and Apple agreed to provide a product or process description (PPD) of the “relevant features of each of the Apple Devices” in accordance with the Federal Court Intellectual Property Practice Note (IP-1) at paragraph 6.15, in response to a position statement as to infringement first provided by CPC in accordance with paragraph 6.12. This was formalised in Orders made on 16 December 2021.

33    It is apparent from the correspondence annexed to the affidavits relied upon in this application that, in order for Apple to provide a targeted response to the case advanced against it, it was necessary for CPC to provide some specificity as to the construction that it adopted of the contested features of the claims. In particular, in the early case management stages of the proceedings it became apparent that Apple struggled to understand what CPC contended was a “transmitter sub-system” and a “receiver sub-system” within the claims. Apple was of the view that its devices possessed neither on a proper construction of the claims. CPC took a different view, but precisely what that view was remained unclear to Apple.

34    The affidavit of Mr Williams sworn on 22 August 2025 says at [22] that at a case management hearing on 15 July 2022, the issue of the “deficiencies” in Apple’s PPD and amended position statement on infringement was “ventilated” before the Court and orders were made requiring Apple to provide a response to matters raised in correspondence by his firm regarding these claimed deficiencies. Mr Williams asserts that Apple failed to provide the required response. That characterisation is not entirely accurate. The annexures to the affidavit of Ms Sanders of 17 September 2025 indicate that the “correspondence” to which Mr Williams refers is a letter received by Apple the day before the case management hearing. At the case management hearing, senior counsel for Apple indicated that Apple would provide a response to that letter by 29 July 2022, and Orders were made to that effect. A detailed letter was duly sent by Apple’s solicitors on 29 July 2022. In it, in broad terms, Apple contended that CPC had failed to nail its colours to the mast as to what it alleged the integers of the claims to mean. To give one example, it said that it was not clear what CPC alleged to be the transmitter sub-system, in part because it did not understand what, within the Apple Devices, amounted to a “transmitter”. A number of other examples were given. Apple invited CPC to respond to various enquiries as to the construction that it adopted so that Apple could, if appropriate, amend its own position statement or PPD. Ms Sanders gives evidence that CPC did not respond to the letter, despite this invitation.

35    Immediately after sending the correspondence regarding claimed deficiencies and prior to receiving Apple’s responsive letter referred to above, at the 15 July 2022 case management hearing CPC sought an order for the inspection of the Apple source code. Notably, senior counsel for CPC indicated that “if Apple’s position was made clearer and the other components were identified” regarding the transmitter sub-system, then that might limit the extent of source code inspection required. A protocol was determined and Orders giving effect to the protocol made on 7 October 2022, and Associate Professor Boztas was permitted to inspect the source code in Washington. The code inspected matched that to which CPC had been granted access in corresponding patent infringement proceedings in the United States. The protocol involved no restriction on CPC as to the number of days during which the source code may be inspected by its expert and lawyers, beyond the specific time frames proposed (being 28 to 30 November 2022 and 5 to 9 December 2022, which were dates agreed between the parties). As it transpired, the inspection was conducted over four of the five days arranged during the period from 5 to 8 December 2022.

36    Following the inspection of the source code, at a case management hearing on 12 December 2022, counsel for CPC informed the Court that the inspection had gone relatively smoothly, however it had not been feasible to review all of the source code in the available time and CPC was considering whether further inspection was necessary and would write to Apple about that. Counsel also informed the Court that CPC had identified from the source code certain hardware components that it asserted were involved in the Touch ID and Face ID systems that were not referred to in Apple’s PPD and that further targeted discovery might be required. CPC also expressed the view that Apple’s PPD should not stand as evidence in the case, and to the extent that Apple wished to rely on matters disclosed in the PPD, it should put on evidence in the usual way to enable CPC to cross-examine on that evidence.

37    Ms Sanders gives evidence in her affidavit that CPC did not write to Apple as foreshadowed at the case management regarding a further source code inspection or production of documents. On 2 March 2023, CPC filed its evidence in chief.

38    Ms Sanders gives evidence that upon reviewing the evidence in chief filed by CPC, Apple formed the view that it was materially incorrect in its characterisation of how the Apple devices operated. In particular, it mistakenly identified a component mentioned in the source code as being a relevant “transmitter” in the Apple Devices. It also considered that the evidence represented a departure from the case advanced in CPC’s original position statement as to the identity of the transmitter sub-system and receiver sub-system.

39    Ms Sanders gives evidence that to address these matters, and given CPC’s position that the PPD should not stand as evidence, on 12 July 2023 Apple filed the evidence of Apple engineers Mr Benson, Mr Kostka and Ms Wells.

40    On 18 August 2023, CPC filed a third affidavit of Associate Professor Boztas. Ms Sanders gives evidence that in this affidavit, Associate Professor Boztas altered his view as to the identity of the “transmitter” in the Apple Devices.

41    In response, on 7 September 2023, Apple filed an affidavit from Mr Paaske, an Engineering Director at Apple. As I note in the judgment at [220], this affidavit and the affidavits of the other Apple engineers expanded upon or qualified aspects of the PPD.

42    In his affidavit sworn on 22 August 2025, Mr Williams gives evidence that this new material (not including Mr Paaske’s affidavit) identified a number of additional components, biometric functionalities and communications within the Apple Devices which were not referred to in Apple’s PPD, including two micro-architecture documents annexed to Mr Benson’s affidavit of 12 July 2023.

43    In the course of a case management hearing conducted on 21 July 2023, Apple was directed to serve further information on CPC (in the form of either an amended PPD or an indication as to the new material’s relationship to the PPD), which it did on 25 July 2023 by way of an amended PPD, however, CPC opposed the filing of this document and it remained unfiled.

44    CPC filed additional expert evidence in answer to the additional evidence filed by Apple, in the form of an affidavit of a further expert, Professor Smith, dated 15 August 2023, and the third affidavit of Associate Professor Boztas referred to above. Mr Williams gives evidence that in the course of preparing Professor Smith’s evidence, CPC became aware that there were additional documents that had not been produced by Apple in relation to the functioning of the Touch ID and Face ID which were “relevant to CPC’s understanding of the hardware and software components in the Apple Devices”. The affidavit of Mr Paaske referred to in [41] above was then filed by Apple in response to the affidavit of Professor Smith and the third affidavit of Associate Professor Boztas.

45    The affidavits of Mr Williams and Ms Sanders provide further details of the events leading up to and during the trial.

46    After reliving the experience of the case management hearings and trial through these affidavits, in my view it may fairly be said that this was hard fought patent litigation in which the representatives of both sides sought to understand and respond to the case raised against them. I do not consider that Apple behaved improperly in the conduct of the case or that it shirked its obligations to assist in the disclosure of its processes. Its obligation to set out in the PPD the operations of the Apple Devices was constrained to a considerable extent by the fact that the case as advanced by CPC had amorphous elements that changed. One might surmise that CPC was unwilling to commit itself to a particular construction of the important elements of the asserted claims so that it could adjust that construction as it learnt more about the operation of the Apple Devices.

47    On a number of occasions, Apple expressed concern that it was unable to identify the “relevant features” of the Apple Devices because of deficiencies in the position statement provided by CPC. This included CPC’s failure clearly to identify what it relied upon as the transmitter sub-system or receiver sub-system in the Apple Devices and CPC’s failure to identify any alleged “conditions” attaching to the access provided to the Apple Devices.

48    As events transpired, there was merit in Apple’s concerns. In the judgment, I made the following observations in relation to the approach taken by CPC to construction in relation to the transmitter sub-system and receiver sub-system:

407    It may be seen that by the time of his oral evidence, whilst Associate Professor Boztas had a fairly confusing view as to the identity of the transmitter sub-system and its relationship with the receiver sub-system, he did not share the view that CPC now adopts, that the “matching” integer resides solely in steps 19 and 20 or that the relevant components are [redacted] [redacted]. Nor did Dr Dunstone give evidence that supports CPC’s approach.

408    Indeed, as Apple convincingly demonstrated in cross examination, Associate Professor Boztas repeatedly changed his position during the course of his oral evidence as to what components were within the transmitter sub-system and receiver sub-system within the claims, having identified at least four different variants. None of Associate Professor Boztas’ opinions as to the components of the transmitter sub-system and receiver sub-system have been adopted as the construction now favoured by CPC and I have not been asked to consider their veracity. As such, it is unnecessary to traverse these.

409    CPC submits that its changing position, and the changing evidence of Associate Professor Boztas arose because of the oral evidence of the Apple Engineers given in cross examination, which contained significant detail absent from their affidavit evidence. In the present context, I do not accept that submission. Most of the evidence of Associate Professor Boztas in relation to the operation of the Apple Devices did not alter as a result of the oral evidence given by the Apple engineers. The consistent evidence of Dr Dunstone was that there is no identifiable transmitter sub-system or receiver sub-system within the Apple Devices.

410    Furthermore, there is a logical fallacy in seeking to justify changing approaches to the construction of the claims by reference to further disclosures as to the operation of the impugned product. Doing so pointedly suggests that the construction advanced by CPC is with an eye to the infringing article, an approach that has repeatedly been abhorred by the authorities, construction being a matter that should be objectively determined on the basis of the disclosure of the patent, read through the eyes of the person skilled in the art in the light of the common general knowledge; CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 396; (1994) 51 FCR 260 at 267–268 (Spender, Gummow and Heerey JJ); Hanwha at [92] (Burley J).

49    Having considered the material before me, I am unable to conclude that fault lies with Apple for the moving sands, to which I referred in the judgment at [227], concerning the operation of the Apple Devices. I do not consider that Apple behaved in a manner that warrants the conclusion that the costs order on CPC’s infringement claim should be adjusted in CPC’s favour, notwithstanding Apple’s success in the litigation.

50    Accordingly, CPC should pay the costs of its infringement claim, including costs of all of the case management steps and the costs of the claim construction issues.

2.4    Apple should pay 85% of the costs of the invalidity cross-claim

51    I now turn to consider the appropriate costs order on the cross-claim.

52    Apple submits that it largely succeeded on the cross-claim when one takes into account the fact that it would have been “highly risky” for it not to make a cross-claim of that kind because CPC’s position on construction and infringement of the key terms in issue remained – to an unusual extent in patent proceedings before this Court, Apple submits – ambulatory and unclear throughout the course of the proceedings.

53    I accept that there was an amorphous quality to the construction arguments as formulated from time to time by CPC. As much is noted in the judgment at [407]–[410] in relation to the transmitter sub-system integer and the malleable proposition, unsupported by any expert evidence, of the transmitter sub-system and receiver sub-system as being defined by reference to the “quintessential” hardware and/or software components responsible for effecting functionalities (see the judgment at [148], [168], [388], [393]–[394], [399] and [402]–[403]).

54    However, that is not to say that the choice that Apple made to advance multiple lines of challenge to the validity of the patents in suit ought to result in a costs judgment entirely in its favour on the cross-claim.

55    Considered in broad terms, the first line of defence advanced by Apple was that the construction arguments advanced by CPC were incorrect, with the consequence that when analysed against the operation of the Apple Devices, the infringement case failed. Further lines of defence flowed from the cross-claim. The second line was lack of novelty in relation to multiple items of prior art, each of which was separately said to invalidate the asserted claims. The third was lack of inventive step which also relied upon multiple alternatives, including the common general knowledge considered alone or in combination with one or multiple other items of prior art. The fourth was lack of manner of manufacture. The fifth was failure to comply with s 40 of the Patents Act, encompassing insufficiency, lack of fair basis and lack of clarity arguments. This countdown of alternatives does not account for the various separate prior art documents advanced in permutations that address different forms of Apple’s case based on lack of novelty and lack of inventive step, or the alternative arguments based on the deferred priority dates which would add yet further separate lines of defence.

56    The ticket to success as a respondent to patent infringement litigation may be non-infringement – which usually involves questions of claim construction – and it may also be invalidity. If the respondent chooses to buy numerous tickets to hedge its bets against failure on others, it becomes relevant to ask whether it is just that an unsuccessful applicant should fund each of them? In the present case, no arguments advanced by Apple serve to justify the five alternatives to which I have referred. In this regard, even had Apple succeeded in all of its alternative challenges to validity, it is doubtful that it would be entitled to a costs order for each. See, for instance, TCT Group Pty Ltd v Polaris IP Pty Ltd (No 2) [2023] FCA 284 at [28]–[31].

57    Of its alternative defensive responses, Apple succeeded on the first. It also succeeded in part on one novelty disclosure, on the basis of the construction that it advanced (being Wuidart; see the judgment at [646]). Otherwise, it secured for itself some insurance against the prospect that its construction arguments failed by advancing prior art documents, noting however that these largely failed to invalidate the claims because of the construction adopted in the judgment.

58    These matters lead to the conclusion that Apple must pay CPC’s costs of the cross-claim except to the extent that Apple succeeded in invalidating three of the asserted claims. I accept the submission advanced by CPC that an appropriate allowance is that Apple should pay CPC’s costs of the cross-claim subject to a discount of 15% to allow for Apple’s limited success in the cross-claim.

2.5    The offer of compromise does not change the position

59    Apple submits that it should have its costs on an indemnity basis from October 2023 onwards, when it made an offer of compromise to CPC which was not accepted. The offer was made shortly before the commencement of the hearing, and was, in short, that the claim and cross-claim be dismissed and that CPC pay 80% of Apple’s costs of the proceeding on a party-party basis.

60    Apple submits that there are two scenarios in which indemnity costs are triggered as a result of the offer being made:

(1)    where CPC obtains a judgment that is less favourable than the terms of the offer (FCR r 25.14(1)); or

(2)    where CPC unreasonably fails to accept the offer and the proceeding is dismissed (FCR r 25.14(2)).

61    Apple submits that, despite both the claim and the cross-claim being substantively dismissed, CPC did still “obtain a judgment” in that it was successful in defeating the cross-claim made against it. Apple hence submits that both scenarios may apply to its offer. Apple further submits that its offer contained two compromises of substance: dismissal of the cross-claim, and discounting of its party-party costs.

62    CPC submits that the first scenario does not apply to Apple’s offer, on the basis that an ordinary reading of the rule requires that CPC obtain judgment on at least part of its claim and that Apple is incorrect to characterise dismissal of the cross-claim as “obtaining a judgment”. CPC submits that only the second scenario applies, and hence Apple must establish that CPC’s failure to accept the offer was unreasonable (assessed at the time of the offer), which it denies for a number of reasons. CPC says Apple’s offer to accept 80% of its costs was not a genuine compromise, because CPC would be ordinarily be entitled to its costs of the cross-claim should it be dismissed, and when the offer was made Apple had already abandoned various aspects of the cross-claim. It also submits that Apple did not disclose the amount of its costs when making the offer and that the evidence was far from complete at the time the offer was made. It submits that the figure of 80% is consistent with the discount typically applied when costs are assessed on a lump sum basis, and taxation of party-party costs typically results in much larger discounts, citing the Full Court in Rakman International Pty Limited v Boss Fire & Safety Pty Ltd [2023] FCAFC 202; 178 IPR 20 at [165]. Finally, CPC submits that following its argument that separate costs orders are appropriate in this case, it was not unreasonable for it to fail to accept the offer as it was advanced on the basis that a global costs order would be made.

63    In relation to the first scenario, regardless of whether CPC “obtained” a judgment by way of defeating the cross-claim within FCR r 25.14(1), in my view it cannot be said that it was less favourable than the terms of Apple’s offer. I accept Apple’s submission that the judgment was marginally less favourable on the cross-claim for CPC than Apple’s offer, in that the offer was to dismiss the cross-claim completely whereas I found ultimately that Apple had some limited success on the cross-claim. However, I have found above that CPC should receive 85% of its costs of the cross-claim, whereas on Apple’s offer CPC would receive none of its costs of the cross-claim (and in fact, would have paid a substantial portion of Apple’s costs). Furthermore, CPC secured an order pursuant to s 19(1) of the Patents Act, certifying that the surviving claims had been questioned and held to be valid. Accordingly, Apple has not established that CPC has obtained a judgment less favourable than the terms of the offer.

64    In relation to the second scenario, I am not persuaded that it was unreasonable for CPC to not accept Apple’s offer. I have found that it is appropriate in this case for separate costs orders to be made on the infringement and cross-claim, whereas Apple’s offer was premised on a global costs order being made. The offer also proposed that CPC pay 80% of Apple’s costs on the cross-claim despite proposing it be dismissed, where in the ordinary course if the cross-claim had been dismissed CPC would be entitled to some, if not all, of its costs on it (as has occurred here).

65    For these reasons, I am satisfied that neither of the scenarios in which indemnity costs are triggered under FCR r 25.14 have arisen here. Accordingly, Apple’s offer does not change the position on costs.

2.6    A lump sum costs order is appropriate

66    As I have noted above, the parties also disagreed on whether it was appropriate for costs to be taxed or assessed on a lump sum basis. CPC submits that the proceedings do not justify any departure from the usual position of lump sum costs, and notes the preference in the Federal Court’s Costs Practice Note (GPN-COSTS) to avoid taxation where possible. It submits that this applies in both complex and straightforward proceedings, and such an order is suitable even where separate costs orders are made on the claim and cross-claim. Its submits that lump sum assessment has significant time and costs savings compared to taxation. In oral submissions, senior counsel for CPC referred to Paciocco v Australia and New Zealand Banking Group Limited (No 2) [2017] FCAFC 146; 253 FCR 403, in which the Full Court noted that lump sum procedures do not prevent the Court from applying the necessary scrutiny to costs (at [29]–[30]).

67    Apple relies on the statement by Ms Sanders in her affidavit of 17 September 2025 to the effect that a lump sum costs order would not be appropriate given the size and complexity of the case, and the time and cost of assessment is justified in these circumstances. In oral submissions, senior counsel for Apple submitted that it would not resist a lump sum approach if a global costs order was made, however if separate costs orders were made it contended that assessment is appropriate. It submitted that assessment was preferable given the attention required to apportionment on separate costs orders.

68    As noted above, I consider it appropriate to make separate costs orders for the claim and cross-claim, subject to the discounting to which I have referred. I consider that it will be most efficient and cost-effective that those costs are assessed on a lump sum basis, noting that this is the Court’s preference and I am not persuaded that there are sufficient reasons to depart from it in these proceedings. Noting CPC’s submission, which I have accepted, that the pre-trial case management costs and costs associated with construction should form part of the infringement claim costs, I do not think that the division of costs on the claim and cross-claim will be excessively complicated so as to make taxation preferable.

3.    THIRD PARTY COSTS

3.1    Introduction

69    I have found above that CPC is liable to pay Apple’s costs of its infringement case. The question now arises whether its liability for costs should be joint and several with the liability of the third parties.

70    Apple relies on affidavits given by Ms Sanders of 8 October 2025, 30 October 2025 and 5 December 2025 and tenders the following three funding agreements in support of its application:

(1)    A ‘Charter Pacific Litigation Funding Deed’ between ILP-10 as “Funder”, and Charter Pacific and CPC, dated 2 September 2021 (ILP-10 agreement);

(2)    A ‘Charter Pacific Litigation Funding Deed’ between ILP-12 as “Funder”, and Charter Pacific and CPC, dated 5 August 2022 (ILP-12 agreement); and

(3)    A ‘Litigation Funding Deed’ between Lyndcote Holdings as “Funder”, and CPC, dated July 2024 (Lyndcote Holdings agreement).

71    Charter Pacific is relevantly a private company associated with CPC, and the directors of CPC also appear to be directors of Charter Pacific. Charter Pacific concedes that a third party costs order against it is appropriate.

72    ILP-12 accepts that, by reason of the terms of the ILP-12 agreement, should a costs order be made against CPC it will be subject to the third party costs orders. However, ILP-10 disputes that it should be jointly and severally liable on the sole basis that the ILP-12 agreement superseded and replaced the ILP-10 agreement which thereafter ceased to have effect. Otherwise, they accept that the terms of the ILP-10 agreement are such that, but for the ILP-12 agreement replacing ILP-10 agreement, ILP-10 would be liable too to the third-party costs order. Neither relied on any evidence beyond the terms of the ILP-10 and ILP-12 agreements.

73    Lyndcote Holdings disputes that it should be liable. It advances five reasons for its position, to which I refer below. It relies on an affidavit sworn by David Murray, one of its directors, on 1 December 2025.

3.2    Relevant principles

74    As noted above, section 43 of the FCA Act empowers this Court with a broad discretionary power to award costs. That discretion is to be exercised judicially and in accordance with general principles pertaining to the law of cost: Knight v FP Special Assets Ltd [1992] HCA 28; 174 CLR 178 at [32] (Mason CJ and Deane J). In Knight the Court considered a variety of circumstances in which considerations of justice may, in accordance with general principles relating to awards of costs, support an order for costs against a non-party (at [33]). One general category arises where: (1) the party to the litigation is an insolvent person or a “person of straw”, (2) where the non-party has played an active part in the conduct of the litigation, and (3) where the non-party (or its agent) has an interest in the subject of the litigation; Knight at [34].

75    In FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340 at [205] Basten JA (Beazley and Giles JA agreeing at [1] and [83] respectively) observed that the authorities upon which the joint judgment in Knight drew were replete with references to the awards of costs being made against the “real party” to the proceedings.

76    After reviewing a number of cases, Basten JA said at [210]:

… the principle established in Knight v FP Special Assets cannot be limited to the specific circumstances of the case, the joint judgment having expressed a conclusion in more general terms. A further example, not encompassed by those identified to date, is illustrated by Gore v Justice Corporation Pty Ltd (2002) 119 FCR 429, a decision of the Full Court of the Federal Court in relation to an order sought against a litigation funder. The judgment contains an extensive analysis of the case law, including consideration of the judgment of Callinan J in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406. It is clear that the categories of case which may attract the exercise of the power are by no means closed, nor should they be. Nevertheless, the requirements of justice should not be allowed to expand an exception to the general rule, so as to undermine the rule itself. What is significant from a survey of the cases in which orders have been made against non-parties is that they tend to satisfy at least some, if not a majority, of the following criteria:

(a)    the unsuccessful party to the proceedings was the moving party and not the defendant;

(b)    the source of funds for the litigation was the non-party or its principal;

(c)    the conduct of the litigation was unreasonable or improper;

(d)    the non-party, or its principal, had an interest (not necessarily financial) which was equal to or greater than that of the party or, if financial, was a substantial interest, and

(e)    the unsuccessful party was insolvent or could otherwise be described as a person of straw.

77    The parties primarily relied on the principles set out in the decision of the Full Court in Court House Capital Pty Ltd v RP Data Pty Limited [2023] FCAFC 192 (Charlesworth, Sarah C Derrington and Raper JJ). In that case, the Full Court endorsed the reasoning of the primary judge in Hardingham v RP Data Pty Limited (Third Party Costs) [2023] FCA 480 (Thawley J), and articulated a number of points relevant to the present application:

(1)    The power to order costs against a third party will only be exercised in circumstances where a non-party has a connection to the litigation which is sufficient to warrant the exercise of power: Court House Capital at [10]; Hardingham at [19], citing Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50; 200 FCR 154 at [89], and Skelin v Self Care Corporation Pty Ltd (No 2) [2022] FCA 50 at [21];

(2)    There is no rigid checklist of factors which may be taken into account: Court House Capital at [11];

(3)    One example of where a connection is typically insufficient is where family members provide financial support to an applicant in litigation in which the supporting family member has no commercial interest in the outcome, such assistance being founded on family or social ties: Hardingham at [20], Court House Capital at [12]; Skelin at [20], [63]–[70];

(4)    Whilst the usual order is for the burden of a negative costs order to fall on a party to the litigation, it is not the case that third party costs orders are rare or exceptional. When there is a sufficient connection between the litigation and a third party, and the circumstances are such that the making of a costs order is fair in all the circumstances, the making of a third party costs order is normal: Hardingham at [21], citing Mistrina Pty Ltd v Australian Consulting Engineers Pty Ltd – Costs [2020] NSWSC 633 (Hammerschlag J) at [26]; Court House Capital at [12];

(5)    Many cases now recognise the fairness in ordering a party who funds litigation for their own commercial benefit to pay, if they fail, the successful party’s costs. This is so whether or not the funder has given an indemnity for the costs ordered against an unsuccessful litigant: Hardingham at [22] (and the cases cited there), Court House Capital at [12];

(6)    Where a litigation funder has a commercial interest in proceedings, even if it has no control over the proceedings, the requisite connection may be established: Court House Capital at [35]–[36], citing Gore v Justice Corporation Pty Ltd [2002] FCAFC 83; 119 FCR 429 at [64] and Wigmans v AMP Limited (No 3) [2019] NSWSC 162; 366 ALR 59 at [58]–[59].

3.3    ILP-10 and ILP-12

78    ILP-10 and ILP-12 accept that the ILP-12 agreement demonstrates that ILP-12 has sufficient interest in the litigation such that it is liable as a non-party to pay Apple’s costs of the infringement case. They further accept that the terms of the ILP-10 agreement are sufficient to warrant the same conclusion. However, they submit that ILP-10 should not also be liable in this way. That is because ILP-10’s engagement as a litigation funder was replaced by ILP-12 by way of the ILP-12 agreement, and thereafter ILP-12 took over the rights and obligations of ILP-10.

79    Given the limited manner in which the argument was put, it is not necessary to address the respective agreements in detail.

80    In the ILP-10 agreement, ILP-10 agreed with Charter Pacific and CPC by clause 3 that it would pay the Costs of the Proceedings, such costs being both “Incurred Legal Costs” (being legal costs and disbursements of $368,214.40) and also all legal costs and disbursements incurred, as agreed, in relation to or incidental to the proceedings. By clause 4, ILP-10 agreed to fund the litigation in return for the repayment of the amount that it paid to CPC multiplied by two times and a percentage payment of 30% of the “Net Resolution Sum”. By clause 4.7, the obligations on Charter Pacific and CPC to make payments under clause 4 are expressed to be continuing obligations that survive termination of the agreement.

81    The ILP-12 agreement commences by reciting that ILP-12 has been providing funding under the ILP-10 agreement and states that it “replaces the [ILP- 10 agreement] dated 2 September 2021 for the existing proceedings in Australia”. It also recites that ILP-12 has agreed on the terms set out, to provide funding and other related and agreed matters to CPC and Charter Pacific.

82    The terms by which ILP-12 is to fund the litigation are in similar terms to those of the ILP-10 agreement. By clause 3, ILP-12 agrees to pay the Costs of the Proceedings and any other agreed costs. The term “Costs” is defined to mean Legal Costs, which means, in essence, future costs as agreed and “Incurred Legal Costs” which are defined as follows:

Incurred Legal Costs means [first redacted portion] and the amount of AUD$1,506,956.93 (as set out in Schedule 2 to this Deed), which has been paid by [ILP-12] or its nominee in relation to the existing (Australian) proceedings prior to the execution of this Deed [second redacted portion]

83    I was informed during argument that the redacted portions arise because of a claim to confidentiality made by CPC when the ILP-12 agreement was produced on subpoena. Schedule 2 to the ILP-12 agreement is entirely redacted.

84    ILP-10 and ILP-12 submit that it is apparent from the terms of the ILP-12 agreement that ILP-12 has entirely replaced ILP-10 as the funder of the litigation, such that the Court can accept that ILP-10 should not be characterised as a relevant third party funder of the litigation.

85    For the following reasons, I am unable to accept that submission.

86    First, the terms of the ILP-10 agreement plainly put ILP-10, from the date of that agreement, in the position of a litigation funder with a commercial interest in the proceedings. By clause 4.7, that interest would survive the termination of the Deed. Nowhere does the evidence suggest that the ILP-10 agreement was terminated in accordance with its terms.

87    Secondly, the ILP-12 agreement is between different parties, ILP-12 being a separate legal entity to ILP-10. Accordingly, it does not of itself represent a termination of the ILP-10 agreement.

88    Thirdly, it is submitted that I should infer by the terms of the ILP-12 agreement that the ILP-10 agreement has been wholly supplanted by the ILP-12 agreement such that ILP-10 retains no interest in the outcome of the litigation. However, I am not prepared to draw that inference on the basis of the materials before me. The recital that the ILP-12 agreement “replaces” the ILP-10 agreement does not address the point. Not only is it not binding on ILP-10, it is also ambiguous as to the consequences of such “replacement”. Most particularly, it does not say (even if it could be binding on ILP-10) that ILP-10 no longer retains its ability to recoup the amounts that it has advanced under the ILP-10 agreement.

89    I was invited to infer from the following facts that the definition of “Incurred Legal Costs” in the ILP-12 agreement included any amount paid by ILP-10 under the ILP-10 agreement, such that ILP-10 no longer had any ability to recoup:

(1)    The definition of “Incurred Legal Costs” under the ILP-12 agreement refers to AUD$1,506,956.93 as incurred costs “paid by [ILP-12] or its nominee” (the ILP-12 amount);

(2)    As noted above, the definition of “Incurred Legal Costs” under the ILP-10 agreement refers to $368,214.40 as incurred costs which had been reimbursed to Charter Pacific and CPC by ILP-10 (the ILP-10 amount); and

(3)    Clause 4.1 of the ILP-12 agreement provides that upon receipt of any Resolution Sum, an amount equal to the Costs (defined as the Incurred Legal Costs and all legal costs and disbursements incurred, as agreed, in relation to the proceedings) be held on account for ILP-12.

90    There are several difficulties with this proposition. One is that it is by no means clear that the ILP-10 amount is included within the ILP-12 amount. Nor is it clear that the “nominee” of ILP-12 is ILP-10. Such matters could easily enough have been established by evidence from a person with knowledge of the position, but none was given. Furthermore, the redactions in the definition of Incurred Legal Costs in the ILP-12 agreement render obscure the meaning of that term, as does the fact that Schedule 2, to which the definition refers, is also completely redacted.

91    When presented with this difficulty in the hearing, a partial extract from Schedule 2 was tendered by senior counsel for ILP-10 and ILP-12, which consisted of a list of invoices indicating that a total of $853,774.99 had been paid to Gilbert + Tobin in the “Australian Proceedings” and $100,000 had been held as security for costs. However, this provided no further support for the position for which ILP-10 and ILP-12 contended.

3.4    Lyndcote Holdings

92    The terms of the Lyndcote Holdings agreement determine its relationship with CPC insofar as the provision of funding for the litigation is concerned. I summarise below some of the salient terms.

93    The recitals identify that CPC has requested that Lyndcote Holdings, defined as the “Funder”, provide “further litigation funding” for its Costs in relation to the Proceedings. “Costs” is defined to mean “Legal Costs” and the “Proceedings” are defined to include the Australian proceedings the subject of the judgment. The lengthy definition of “Legal Costs” provides, in summary, that the term means incurred legal costs and all legal costs and disbursements incurred by any of CPC or Lyndcote Holdings as agreed in writing between CPC and Lyndcote Holdings in relation to or incidental to the Proceedings.

94    The recitals further say that Lyndcote Holdings has agreed to provide further funding and other related and agreed matters to CPC in the Proceedings and that CPC acknowledges that Lyndcote Holdings has, by virtue of the terms of the agreement, an interest in the Proceedings.

95    Lyndcote Holdings agreed to pay further Costs of the Proceedings as set out in clause 3.1. Relevantly, that included $1,500,00.00 paid to CPC prior to the date of the agreement. There is no dispute that Lyndcote Holdings advanced this sum. In addition, Lyndcote Holdings agreed to make such payment “at the discretion of the FUNDER” upon written notification requesting payment. The affidavit of Mr Murray indicates that no such further payments in relation to the Australian proceedings were made.

96    Clause 4 provides for the repayment of Costs and Funding Fee by CPC to Lyndcote Holdings in the following terms:

4    Repayment of Costs and Funding Fee

4.1    Upon receipt of any Resolution Sum by CPC it must irrevocably direct the Solicitors to pay out or deal with that sum as follows:

(a)    to pay any unpaid invoices of the solicitors; thereafter

(b)     until the Costs are fully repaid to the FUNDER an amount on account of the Legal Costs to be paid to or held in trust on account of the FUNDER or as it may direct; thereafter

(c)    an amount equal to the Funding Fee to be held in trust on account of the FUNDER until the Repayment Date when it is to be paid to the FUNDER or as it may direct; thereafter

(d)    the balance of the Resolution Sum be paid to CPC or as it may direct.

97    The term “Resolution Sum” is defined to mean the gross amount received by CPC from Apple, whether by way of settlement or otherwise, less any legal costs recovered pursuant to a costs order and net of any outstanding costs payable to the solicitors for CPC (over and above the legal costs) and payment of costs pursuant to the ILP-12 agreement and an earlier funding agreement between CPC and Lyndcote Holdings. The Net Resolution Sum is the Resolution Sum less three times Legal Costs paid by Lyndcote Holdings pursuant to the earlier agreement. The “Funding Fee” is defined to mean two times the Costs plus the Percentage Fee. The “Percentage Fee” is not defined in the agreement, but the “Percentage Payment” is defined and the sensible reader would understand this to be the term intended. The Percentage Payment, in effect, provides that it is 30% of the Net Resolution Sum adjusted for the proportion paid by Lyndcote Holdings of the total Legal Costs such that if Lyndcote Holdings paid half of the total costs then the percentage payment to it would be reduced to 15%.

98    Clause 4.4 allows CPC a discretion to pay to Lyndcote Holdings at any time before a repayment trigger, twice the sums paid by Lyndcote Holdings, in which event Lyndcote Holdings will have no further obligations to make payments.

99    Clause 7 is entitled “Representatives and Conduct of Proceedings”. By clause 7.2, CPC acknowledges and agrees that Lyndcote Holdings in consultation with any representative of CPC “shall give the day-to-day instructions to the Solicitors for the conduct of the Proceedings”. Other terms are provided for the involvement of Lyndcote Holdings in the conduct of the proceedings in clauses 7.3 to 7.7.

100    On the face of the agreement, it is apparent that Lyndcote Holdings has provided a substantial sum of money to CPC in order to support the litigation against Apple. By the terms set out above, Lyndcote Holdings stood to recover its contribution in costs plus a percentage of any damages or settlement sum. The size of the percentage is dependent upon the contributions made by Lyndcote Holdings in relation to those made by other persons to the costs of the proceedings. On its face, in my view the terms of the agreement would generally be sufficient to warrant the exercise of the discretion in favour of the third party costs order.

101    Mr Murray gives evidence in his affidavit that he is a retired banker and former Chief Executive Officer of the Commonwealth Bank of Australia. He says that Lyndcote Holdings is the trustee for his family trust and in this capacity undertakes private investments for its beneficiaries who are members of his family. Around 2019, Lyndcote Holdings acquired converting notes from Charter Pacific, which Mr Murray understood to be the parent company of CPC. At around the same time Lyndcote Holdings also became the sole shareholder of CPC. In June 2021, it acquired further converting notes from Charter Pacific and transferred its shares in CPC to Charter Pacific. Since June 2021, Lyndcote Holdings has lent money to CPC and Charter Pacific from time to time to assist them in meeting operating costs and for their operations, separately to funding the litigation. In late 2021 or early 2022 Mr Murray learnt that an entity associated with Paul Lindholm was providing funding to CPC for legal costs.

102    Mr Murray gives evidence that he attended some of the public hearing of the trial in the present proceedings out of interest to observe its process. He occasionally requested updates from Kevin Dart, a director of CPC, to hear about the proceedings’ status. After the closing submissions were completed, but before the delivery of judgment, Mr Murray was informed that outstanding legal fees were owed by CPC to Gilbert + Tobin and that Mr Lindholm (or his company) was not prepared to pay them. This was the first occasion on which Mr Murray recalled speaking about providing funds for the purpose of the proceedings. Mr Murray was concerned that if CPC did not pay its lawyers quickly, then there was a risk it would be unable to maintain its legal representation in the lead up to judgment. He and his wife decided that Lyndcote Holdings should lend money to CPC to help it pay the fees. They wanted to protect Lyndcote Holdings’ investment in Charter Pacific, particularly given that CPC was so close to receiving judgment. Lyndcote Holdings then entered into the Lyndcote Holdings agreement with CPC. Mr Murray understood that the agreement was prepared based on a document that CPC had already agreed with an entity associated with Mr Lindholm. Mr Murray gives evidence that at no time did he or Lyndcote Holdings provide instructions to CPC in relation to the conduct of the proceedings.

103    Lyndcote Holdings relies on five arguments in its submissions to militate against the conclusion that a third party costs order should be made against it.

104    The first is that by the time of its contribution in July 2024, the judgment was reserved and accordingly Lyndcote Holdings did not by its payments facilitate the litigation or put Apple to the cost of defending it. It submits that the rationale for the Court exercising its discretion to order costs against non-party litigation funders is that it would be wrong to allow someone to fund litigation in the hope of gaining a benefit without a corresponding risk that they will share the costs if they ultimately fail, citing Court House Capital at [12], [13]. It submits that this rationale has less force in the present case where funding was provided well after trial in order to meet outstanding legal costs. The effect of such an order would be to punish Lyndcote Holdings for funding CPC rather than to compensate Apple for costs incurred by CPC.

105    Next, Lyndcote Holdings submits that it played no active role in the proceedings. The evidence of Mr Murray indicates that he gave no instructions, although he apparently kept a watch over how the proceedings were conducted and asked Mr Dart for the occasional report. The agreement plainly by clause 7 entitled Lyndcote Holdings to intervene, but it chose not to. In oral submissions, senior counsel for Lyndcote Holdings referred to the decision of Shariff J in Davis v Wilson [2025] FCA 666 at [63]–[64] as support for the proposition that a third party costs order is justified where a funder has taken an active role in litigation and exercised a high degree of control in the conduct of the litigation, rather than merely obtaining a commercial benefit as was the present case. Thirdly, Lyndcote Holdings refers to its status as an investor in CPC as a basis for the Court to consider its connection to the litigation as “less direct” than would be the case in a typical litigation funding situation. Fourthly, it submits that Lyndcote Holdings is not a professional litigation funder. Its primary purpose in funding CPC was to protect its investment in CPC’s parent company, Charter Pacific. This, it submits, makes its position analogous to that of a director or shareholder of a litigant who ought to be protected from a non-party costs order, absent exceptional circumstances. Finally, Lyndcote Holdings submits that Apple ought to be sufficiently protected without an order being made against it because Apple has secured orders for the provision of security for costs. It will also have the benefit of any costs order made against CPC and other funders.

106    The principles to which I have referred above demonstrate that the question of the commercial benefit accrued by the funder looms as a significant consideration in a third party cost order. As I have noted above in [77(5)], there are many cases which recognise the fairness in ordering a party which funds litigation for its own commercial benefit to pay the successful party’s costs, on the basis that it is wrong to allow someone to fund litigation in the hope of gaining a benefit without a corresponding risk that that person will share in the costs of the proceedings if they ultimately fail: Hardingham at [22], quoting Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2004] UKPC 39; [2005] 4 All ER 195.

107    I accept that the involvement of Lyndcote Holdings as a funder came late in the proceedings. Until the Lyndcote Holdings agreement was entered into, after judgment was reserved, it appears that the role of Lyndcote Holdings was as an investor in CPC. However, two points serve to dilute the consequence of this position.

108    The first is that the purpose of the Lyndcote Holdings agreement is undoubtedly to ensure that the proceedings were able to, and did, continue. Mr Murray clearly perceived that without adequate representation, CPC’s interests would be adversely affected, notwithstanding that the bulk of the proceeding had been completed. That concern was vindicated by the events that followed judgment. The evidence given by Ms Sanders in her affidavit of 5 December 2025 is that from the end of July 2024 until the end of November 2025, Apple has incurred legal fees and disbursements of over $500,000, arising from disputes between the parties concerning the form of final orders, case management and disputes about costs. It is safe to assume that CPC would also have incurred similar legal costs in this period.

109    The second, related point is that the effect of the Lyndcote Holdings agreement is plainly to ensure that Lyndcote Holdings achieved a commercial benefit from the outcome of the litigation. Whilst I accept that ILP-10 and ILP-12 were funding the litigation earlier than Lyndcote Holdings, the terms of the Lyndcote Holdings agreement demonstrate that it had, from the time of the agreement, a direct and substantial financial interest in the outcome of the case. Although it would not appear that it would receive as much as 30% of the Net Resolution Sum, the Percentage Payment that it would receive clearly marks that it would receive a percentage of the outcome, even though Lyndcote Holdings provided the funding at the later stage in the litigation. This point serves also to answer the third argument raised by Lyndcote Holdings, to the effect that its role is more one of investor than funder. That argument overlooks the commercial interest in the outcome to which I have referred. I do not consider in such circumstances that the position of Lyndcote Holdings is sufficiently analogous to that of a director or shareholder to be of material weight.

110    Finally, I am not persuaded that Apple is “sufficiently protected” without an order being made against Lyndcote Holdings, either because CPC and the other funders have sufficient assets to meet an order for costs or because Apple obtained in December 2021 and February 2023 orders for the provision of security for costs. The first of these arguments proceeds on the assumption that Lyndcote Holdings is deserving of separate and more beneficial treatment insofar as costs are concerned than the other third parties or CPC. For the reasons given, I do not consider that this is the case. I do not make that observation as a moral judgment, but simply to demonstrate that as a party that, like ILP-10 and ILP-12, had a substantial commercial interest in the outcome of the litigation, its position is, in principle, no different to that of those other two funders. The second is not established on the facts. The evidence indicates that the security for costs provided to date is likely to be inadequate to meet the costs incurred by Apple. Such evidence as is available of the assets of CPC, Charter Pacific, ILP-10 and ILP-12 does not indicate that they have sufficient assets in Australia to meet a substantial costs order.

111    Taking these matters into account, in my view Lyndcote Holdings has a connection to the litigation which is sufficient to warrant the exercise of power in favour of granting the third party costs order sought against it.

112    In oral submissions, senior counsel for Lyndcote Holdings submitted that if I found Lyndcote Holdings liable for a third party costs order, such an order should be limited to liability for adverse costs from the point in time that the funding was provided, being July 2024. As I have noted above, Lyndcote Holdings was to receive a financial benefit by way of a percentage of the outcome, regardless of the fact that it provided the funding at a later stage in the proceedings. In these circumstances, I do not consider that there is any basis to limit the costs order against it to exclude costs incurred by Apple prior to the Lyndcote Holdings agreement.

4.    SUPPRESSION

113    Apple seeks final suppression orders preventing the disclosure of confidential information, in the form annexed to the affidavit of Ms Sanders dated 30 October 2025. The orders are proposed on the ground that they are necessary to prevent prejudice to the proper administration of justice, pursuant to s 37AG(1)(a) of the FCA Act. The proposed orders would apply to confidential information contained in various pleadings, evidence and other documents prepared in the course of the proceedings, as well as the judgment itself, listed in a schedule to the orders. The proposed suppression order would operate for a period of ten years, or until further order of the Court.

114    Apple relies on the affidavit of Garrett Sakimae, Principal Counsel at Apple Inc., dated 11 August 2025 and another affidavit of Ms Sanders dated 30 October 2025 in support of the orders.

115    Apple submits that it was accepted by the parties, and in the judgment at [11], that the internal operations of the Apple Devices are confidential. It notes that the confidentiality of this information was preserved through a confidentiality regime and through a number of interim confidentiality orders. It submits that while some high level information about the Apple Devices’ internal operations is publicly available, the information covered by the proposed orders is not in the public domain and Apple has taken considerable steps to preserve its confidentiality. Apple submits that none of the documents identified in the proposed orders have ever been published by Apple. It submits that publication of such information could give rise to significant security risks for both Apple and users of the Apple Devices, in that the information pertains to biometric security, which also carries significant risks of reputational damage for Apple. Apple also notes that litigation with CPC remains ongoing in other jurisdictions, and submits that if the confidential information is not protected it may be deployed by CPC to advance its interests to Apple’s detriment. Apple submits that a suppression period of 10 years is appropriate, given the security risks to Apple Devices and their users.

116    CPC accepts that certain material, including source code, microarchitecture specifications and schematics and diagrams, is indeed confidential and warrants suppression. However, it takes issue with suppression of other documents, on the basis that Apple has not adduced sufficient evidence to show it is necessary and because in some instances the information has already been publicly disclosed. In relation to the latter, it refers to a document sent to my chambers on 11 July 2025, which set out redacted portions of the judgment which CPC contends have already been publicly disclosed.

117    Having regard to the submissions and evidence advanced, I am content to make the suppression orders in the form sought by Apple. The orders proposed provide that the duration of the orders is 10 years. Having regard to the nature of the information sought to be suppressed and the ongoing materiality of that information, I am satisfied that this is appropriate.

5.    DISPOSITION

118    I will direct the parties to confer and provide draft short minutes of order to my chambers reflecting these reasons by 30 January 2026, including a clean version of the final suppression orders and schedule annexed to the affidavit of Ms Sanders dated 30 October 2025.

Associate:

Dated:    24 December 2025

SCHEDULE OF PARTIES