Aristocrat Technologies Australia Pty Ltd v Konami Australia Pty Ltd (No 3)

Aristocrat Technologies Australia Pty Ltd sued Konami Australia Pty Ltd for infringement of two patents relating to electronic gaming machines (EGMs). The dispute involved claims for an account of profits, damages, and injunctive relief. The case was heard in the Federal Court of Australia. The court had to decide various legal issues, including the characterisation of the invention, the availability of apportionment of profits, and the calculation of damages. The court held that the invention was not limited to the feature game with a proportional trigger but included the entire EGM. Apportionment of profits was deemed appropriate, and the court found that the infringing EGMs and conversion kits would have been made and sold without the feature game with the proportional trigger. The court also determined that the Konami Licence was not a reliable starting point for calculating a reasonable royalty rate. The court calculated damages based on the user principle and considered the expert evidence and licence agreements provided by the parties.

The court’s reasoning and outcome were based on a detailed analysis of the patents, the commercial success of the inventions, and the evidence presented by both parties. The court found that the Konami Licence did not provide a reliable basis for calculating a reasonable royalty rate due to the specific circumstances in which it was negotiated. Instead, the court relied on other licence agreements and expert evidence to determine a reasonable royalty rate. The court also found that the infringing EGMs and conversion kits would have been made and sold without the feature game with the proportional trigger, which supported the apportionment of profits. The court calculated damages based on the user principle, considering the number of infringing products sold and the reasonable royalty rate.

The final orders of the court required the parties to confer and calculate the amounts of profits and damages owed by Konami to Aristocrat, taking into account the court’s reasons for judgment. The parties were also required to notify the court if there were any disagreements regarding the calculations or the form of costs order. The disclosure of the text of the Reasons was initially prohibited, but the parties were allowed to disclose the substance of the Reasons to their respective clients. The court fixed a further hearing to make final orders and any further interlocutory orders restricting publication of any part of the Reasons. Each party was given liberty to apply on three days’ notice.