Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 2) [2018] FCA 1109

Abuse of process – consecutive actions for infringement of divisional innovation patents

Justice Besanko was asked to determine whether it was an abuse for the applicant patentee, Australian Mud Company, continually to divide out innovation patents and assert infringement of them, having been originally unsuccessful on innovation patents from the same parent.  His Honour summarised the complaint as follows (at [81]):

The respondents made a general submission that the applicants had deployed a family of related patents strategically to embark on 10 years of patent litigation, in effect, litigating the same invention (extracted in four patents) in three separate sets of proceedings.  They also submitted that the applicants’ ‘patenting and litigation strategy’ has allowed them to tailor their patent portfolio to overcome the non-infringement finding in the WA Proceeding and has resulted in a multiplicity of proceedings which have imposed a significant burden by providing ammunition for almost continuous litigation for the last 10 years.  They also submitted that the timing of the filing of the Method Patent and the System Patent reflects a deliberate strategy to wait until a final decision was made on the Device Patent and appeals exhausted and then to re-agitate infringement of the Coretell Orishot tool again through more recently filed patents.

His Honour considered that no abuse of process arose for a number of reasons.  Of those, first, Besanko J observed that the filing of the first innovation patent (the Device Patent) and suing first on that patent was a course permitted by the Patents Act 1990 (Cth).

Secondly, the applicants were not obliged to wait until the standard parent patent application was granted (and, indeed, its grant was delayed by the opposition to it by the respondents).

Thirdly, there “is no reason to think that the applicants did not have a bona fide belief that they would be able to enforce their intellectual property rights by relying on the Device Patent. As it happens, their belief was incorrect, but that circumstance does not affect the bona fide nature of their belief”: [94].  Further, as a result of their failure on the Device Patent, there was “nothing oppressive or even unreasonable” in the applicants then applying for the Method Patent and the System Patent and asserting them when granted against the respondents: [95].  There was no evidence to suggest that the applicants had delayed in filing the System Patent and then pursuing it to grant.

For the respondents’ part, his Honour noted that in the other infringement proceedings relied upon by the respondents as founding abuse of process, the matters being raised in the current proceedings could have been raised, or were raised and then abandoned.  Nor did the respondents seek to have those proceedings consolidated.

In any event, the only issue in the current proceedings was infringement by one of the respondents who was not a party to those other proceedings.  In those circumstances, the applicants’ course of action was sensible.

This post was initially posted by The Hon Peter Heerey AM QC, Tom Cordiner QC and Alan Nash on IPForum.

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