Air-Cell Innovations Pty Ltd (ACN 100 405 025) v Tanwing International Pty Ltd (ACN 106 121 868) (No 2)

[2006] FCA 1266

FEDERAL COURT OF AUSTRALIA

Air-Cell Innovations Pty Ltd (ACN 100 405 025) v Tanwing International Pty Ltd (ACN 106 121 868) (No 2) [2006] FCA 1266

AIR-CELL INNOVATIONS PTY LTD (ACN 100 405 025) v TANWING INTERNATIONAL PTY LTD (ACN 106 121 868)
QUD 241 OF 2006

COLLIER J
21 SEPTEMBER 2006
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 241 OF 2006

BETWEEN:	AIR-CELL INNOVATIONS PTY LTD (ACN 100 405 025) Applicant
AND:	TANWING INTERNATIONAL PTY LTD (ACN 106 121 868) Respondent

JUDGE:	COLLIER J
DATE OF ORDER:	21 SEPTEMBER 2006
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1.Judgment be entered for the applicant against the respondent.

2.It be declared that claims 1, 2, 3 and 5 of Australian Innovation Patent No 200310663 (‘the patent’) has been infringed by the respondent.

3.The respondent, whether by itself, its directors, officers, servants, agents or otherwise howsoever, be permanently restrained during the term of the patent or any extension thereof, from infringing the patent, including by the making, offering to make, selling, offering for sale, disposing of, offering to dispose of, importing, using, or keeping for the purpose of doing any of those things, the insulation product known as Super Bubble, or authorising the doing of any of those acts.

4.By 5.00 pm on 28 September 2006 the respondent shall deliver up to the applicant’s solicitors, for destruction, all stock of the ‘Super Bubble’ product in its power, possession or control.

5.By 5.00 pm on 28 September 2006 the respondent shall deliver up to the applicant’s solicitors all documentation or any other material whatsoever (whether held in hard copy, electronic or any other form) in the possession, custody, power or control of the respondent, depicting in any manner or advertising the Super Bubble product.

6.The respondent pay the applicant’s costs of and incidental to this notice of motion and the proceeding to 21 September 2006, including reserved costs on a party party basis.  The applicant have leave to tax these costs forthwith.

7.The applicant have liberty to apply on three days’ notice to make application to the Court in respect:

·of damages, or, at the election of the applicant, an account of profits made by the respondent in respect of its infringement of the patent

·all necessary accounts and inquiries, including so far as may be necessary, inquiries as to damages, and an order for payment of any sum found due on such account or inquiry by the respondent to the applicant

·interest pursuant to s 51A of the Federal Court Act 1976 (Cth) upon such sum or sums as the respondent shall be adjudged to pay the applicant for such time and at such rate as to the Court may seem appropriate.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 241 OF 2006

BETWEEN:	AIR-CELL INNOVATIONS PTY LTD (ACN 100 405 025) Applicant
AND:	TANWING INTERNATIONAL PTY LTD (ACN 106 121 868) Respondent

JUDGE:	COLLIER J
DATE:	21 SEPTEMBER 2006
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. On 21 August 2006, I made an order that the applicants be granted an interlocutory injunction in this matter.

2. At that hearing, the applicant, in submissions from the bar table, sought a final injunction.  I decided not to order a final injunction for the reasons given in my judgment of 21 August 2006, namely, that the matter had to that point proceeded on the basis that the applicant sought interlocutory relief and that it was reasonable to presume that the respondent was expecting to have its day in court when the application for permanent relief was heard.

3. Following the delivery of my reasons for judgment I ordered that the matter be listed for trial on 21 September 2006.  I note that on 8 September 2006 the applicant filed a notice of motion seeking a permanent injunction.  During the hearing today I sought clarification from counsel for the applicant as to which orders they sought in the way of final relief.

4. Mr Logan for the applicant has indicated that the applicant seeks those orders set out in the notice of motion filed 8 September 2006 by way of final relief but seeks liberty to apply to have those outstanding issues in the application filed 28 June 2006 resolved at a later date.

   SERVICE

5. There has been no appearance by the respondent today.  I have asked the court officer to call the matter outside the Court but the respondent has not appeared.

6. I have inquired of counsel for the applicant as to the measures taken to ensure that the respondent is aware of the hearing.  It appears that personal service has been effected upon the respondent in relation to the notice of motion as well as the orders of 21 August 2006 and a copy of my decision of that date.

7. I understand that service of these documents and others has also been effected upon Champion Legal who appear to still be acting on behalf of the respondent.

8. Two affidavits were filed in Court today in which it was deposed by Mr Paul McCowan, solicitor for the applicant, to this effect.

9. Further, I understand that court staff arranged for my reasons for judgment in the interlocutory relief application delivered 21 August 2006 to be sent by post to the respondent.  I am satisfied that the respondent is aware of today’s hearing and that it has been given the opportunity to be heard in this matter.

   INFRINGEMENT ISSUES

10. As is outlined in my judgment of 21 August 2006 five claims define the invention, and the applicant claims that the actions of the respondent infringe claims 1, 2, 3 and 5.

11. During the interlocutory relief hearing, expert evidence was tendered by the applicant in the form of an affidavit by Dr John Scheirs filed 28 June 2006.  For the purpose of that hearing, I accepted that Dr Scheirs was in a position to provide expert evidence in relation to analysis of insulation products, including those containing polymer compositions.  I further accepted that in Dr Scheirs’ opinion, Super Bubble embodied all of the integers of claims 1, 2, 3 and 5 of the patent as described earlier in that judgment.

12. In order to establish infringement of the patent, the applicant must show that the respondent has taken each and every one of the essential integers of the relevant claims.  I sought clarification from the applicant today as to whether the actions of the respondent infringed the essential integers of the claims.  Mr Logan for the applicant drew my attention to the affidavit of Dr Scheirs and the opinions expressed therein.

13. I accept the evidence that those claims which Super Bubble infringes, namely claims 1, 2, 3 and 5 of the patent as described in my judgment at 21 August 2006, are the essential integers of the claim such that the patent is infringed.

    CONCLUSION

14. I am satisfied on the evidence that there has been an infringement of Australian Innovation Patent number 2003100663 by the respondent.  In my opinion the applicant is therefore entitled to the order sought in the notice of motion filed 8 September 2006 in relation to permanent relief.

15. However the applicant also raised issues relevant to costs and the finality of the relief sought today, and I will address them now.

    COSTS

16. In relation to costs, the applicant has sought costs on an indemnity basis from the respondent to be taxed forthwith.  In his submission Mr Logan for the applicant drew the Court’s attention to the following points:

    ·     no defence has been filed by the respondent since their present solicitors commenced acting on their behalf

    ·     there has been some correspondence between his instructing solicitors and Champion Legal, who appear to be acting on behalf of the respondent.  The last written communication from Champion Legal was on 17 August 2006 and there has apparently been no further communication from that firm to the instructing solicitors of Mr Logan until a telephone message yesterday from a solicitor at Champion Legal to the effect that there would be no appearance today by the respondent and in respect of certain other matters

    ·     the respondent has deliberately acted so as to cause increased costs by inter alia refusing to reply to correspondence and declining to consent to final orders as it originally offered.

17. I addressed the issue of indemnity costs in my judgment of 21 August 2006 as to the interlocutory matter.  I note once more that special or unusual features must be presented to justify the court departing from the ordinary practice of ordering party party costs.

18. I note, as Mr Logan submitted, that the respondent has still presented no defence.  However, it is difficult to draw the conclusion on the basis of the evidence before me that the respondent has acted in such a way as to cause the applicant to incur substantial additional expense.  While it is true that the respondent has appeared to ignore the proceedings, in many ways, it is questionable whether, as Mr Logan submitted, that course of conduct can be said to be a course of conduct contributing to increased costs to the applicant.  Neither could it be said that the failure to respond to correspondence resulted in unnecessarily prolonging the proceedings.  Indeed, it is more likely that contentious proceedings would cause costs to escalate.  Further, I note Mr Logan’s submission that despite some discussion as to consent orders in respect of some issues in contention no Calderbank offer has been made by either party and accordingly this is not a situation as occurred in Donnelly v Edelston (1994) 121 ALR 333 (where indemnity costs were ordered).

19. Accordingly while, in my view the applicants are entitled to costs it should not be on an indemnity basis.  I note however, the applicant has sought an order under O 62 r 3, Federal Court Rules that the applicants have leave to tax their costs forthwith.  I am prepared to make that order in the circumstances, that in making the order sought in the notice of motion issues raised in the application filed 28 June 2006 as to account of profits and damages are not at this point, and in future may not be, pressed by the applicant.  However, I note that the applicant seeks liberty to apply to have these issues pursued at a later date.

    THE COURT ORDERS THAT:

    1.Judgment be entered for the applicant against the respondent.

    2.It be declared that claims 1, 2, 3 and 5 of Australian Innovation Patent No 200310663 (‘the patent’) has been infringed by the respondent.

    3.The respondent, whether by itself, its directors, officers, servants, agents or otherwise howsoever, be permanently restrained during the term of the patent or any extension thereof, from infringing the patent, including by the making, offering to make, selling, offering for sale, disposing of, offering to dispose of, importing, using, or keeping for the purpose of doing any of those things, the insulation product known as Super Bubble, or authorising the doing of any of those acts.

    4.By 5.00 pm on 28 September 2006 the respondent shall deliver up to the applicant’s solicitors, for destruction, all stock of the ‘Super Bubble’ product in its power, possession or control.

    5.By 5.00 pm on 28 September 2006 the respondent shall deliver up to the applicant’s solicitors all documentation or any other material whatsoever (whether held in hard copy, electronic or any other form) in the possession, custody, power or control of the respondent, depicting in any manner or advertising the Super Bubble product.

    6.The respondent pay the applicant’s costs of and incidental to this notice of motion and the proceeding to 21 September 2006, including reserved costs on a party party basis.  The applicant have leave to tax these costs forthwith.

    7.The applicant have liberty to apply on three days’ notice to make application to the Court in respect:

    ·of damages, or, at the election of the applicant, an account of profits made by the respondent in respect of its infringement of the patent

    ·all necessary accounts and inquiries, including so far as may be necessary, inquiries as to damages, and an order for payment of any sum found due on such account or inquiry by the respondent to the applicant

    ·interest pursuant to s 51A of the Federal Court Act 1976 (Cth) upon such sum or sums as the respondent shall be adjudged to pay the applicant for such time and at such rate as to the Court may seem appropriate.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

Associate:

Dated:        27 September 2006

Counsel for the Applicant:	D Logan
Solicitor for the Applicant:	Gilshenan & Luton
Counsel for the Respondent:	The Respondent did not appear
Date of Hearing:	21 September 2006
Date of Judgment:	21 September 2006