Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 6)
[2024] FCA 101
•20 February 2024
FEDERAL COURT OF AUSTRALIA
Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 6) [2024] FCA 101
File number: NSD 1089 of 2016 Judgment of: BESANKO J Date of judgment: 20 February 2024 Date of publication of reasons: 21 February 2024 Catchwords: PRACTICE AND PROCEDURE — Interlocutory application by respondents for stay pending determination of the appeal in NSD 968 of 2022 — where previous application for a stay of this proceeding refused (Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd [2022] FCA 445) — whether changes in circumstances since last application support a stay — where judgment on the appeal is reserved — where applicants successful in establishing infringement of patent in this proceeding and all appeal rights have been exhausted — where freezing orders made against the respondents — where the damages assessment and account of profits assessment heard in June 2023 — where reasons for decision on damages and account delivered — held the balance of relevant factors does not favour a stay Cases cited: Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd [2022] FCA 445
Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 3) [2022] FCA 1189; (2022) 169 IPR 1
Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 5) [2024] FCA 58
Martinuzzi v Fair Work Ombudsman [2012] FCA 636; (2012) 205 FCR 106
Virgin Atlantic Airways v Zodiac Seats UK Ltd [2013] UKSC 46; (2013) RPC 29
Wentworth v Rogers (No 3) (1986) 6 NSWLR 642
Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Number of paragraphs: 17 Date of hearing: 14 February 2024 Counsel for the Applicants: Ms P Arcus Solicitor for the Applicants: Gilbert + Tobin Counsel for the Respondents: Mr A Fox SC Solicitor for the Respondents: Griffith Hack ORDERS
NSD 1089 of 2016 BETWEEN: AUSTRALIAN MUD COMPANY PTY LTD (ACN 009 283 416)
First Applicant
REFLEX INSTRUMENTS ASIA PACIFIC PTY LTD (ACN 124 204 191)
Second Applicant
AND: GLOBALTECH CORPORATION PTY LTD (ACN 087 281 418)
First Respondent
GLOBALTECH PTY LTD (ACN 086 012 393)
Second Respondent
ORDER MADE BY:
BESANKO J
DATE OF ORDER:
20 FEBRUARY 2024
THE COURT ORDERS THAT:
1.The respondents’ application for a stay dated 8 February 2024 be refused.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BESANKO J:
This is an application by the respondents to a proceeding for a stay pending the determination of the appeal in Federal Court of Australia Proceeding No. NSD 968/2022. The trial in this proceeding has taken place. On 5 February 2024, the parties were advised by the Court that reasons for judgment in this proceeding would be delivered on Friday, 9 February 2024. The parties were advised that as the reasons for judgment may contain material which falls within existing confidentiality orders, the reasons for judgment would not be published at that time, but emailed to the parties entitled to receive it, having regard to the confidentiality clubs. The parties were advised that the Court would then hear the parties on any necessary redactions. The matters which were agitated at trial were of such a nature that further calculations would have to be performed after the delivery of reasons before final amounts could be calculated and made the subject of final orders.
The application for a stay was issued on 8 February 2024. The respondents do not seek to prevent the delivery of reasons and the calculations of amounts which could be the subject of final orders. What they do seek is a stay of the proceeding so that no orders are made or judgment entered. I decided to hear the respondents’ application before handing down my reasons for judgment.
The respondents made a previous application for a stay of this proceeding. That application was made some time ago and it was refused (Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd [2022] FCA 445 (the earlier reasons)).
The earlier reasons set out the circumstances as they existed at the time of the reasons and my reasons for refusing the application. The orders sought in the application, which is the subject of the earlier reasons, was as follows:
1.Proceedings No. NSD1089/2016 be stayed until all issues as to liability for patent infringement in Proceedings No. NSD1040/2019 have been determined (including any appeals therefrom in relation to the question of validity of Australian Standard Patent No. 2010200162).
The present application is supported by an affidavit of their solicitor, Leanne Michelle Oitmaa, sworn on 8 February 2024. AMC relies on an affidavit sworn by their solicitor, Christopher Edmund Duvall Williams, on 12 February 2024 and the affidavit of Mr Williams sworn on 8 June 2021 which was relied upon in the earlier reasons. I use the same abbreviations as were used in the earlier reasons.
These reasons should be read with the earlier reasons and I will not repeat what is set out in the earlier reasons.
The events which have occurred since the previous application for a stay was refused are as follows.
First, Proceeding No. NSD 1040/2019 (the 2019 Proceeding) has been heard and determined by a judge of this Court and orders have been made (Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 3) [2022] FCA 1189; (2022) 169 IPR 1 (the decision at first instance in the 2019 Proceeding)). Globaltech was found to have infringed the Patent by a further version of the Orifinder Tool known as the v6 or UPIX Tool. Boart Longyear Australia (BLYA) failed with respect to its external fair basis argument (see the earlier reasons at [18]–[21] and the decision at first instance in the 2019 Proceeding at [371]–[439]). BLYA and Boart Longyear Ltd have appealed against the decision at first instance in the 2019 Proceeding and that appeal was heard by a Full Court of this Court on 22 and 23 May 2023. That is Proceeding No. NSD 968/2022. Judgment is reserved.
Secondly, I made a freezing order against Globaltech on the application of AMC on 26 May 2023. That freezing order provided, among other things, that Globaltech must not remove from Australia or in any way dispose of, deal with or diminish the value of any of their assets in Australia, including by disposal to Votraint No. 1069 Pty Limited up to the unincumbered value of AUD7,619,720.
Thirdly, AMC made their election in this proceeding and the damages assessment and account of profits assessment proceeded to hearing in June 2023. The details of the election by AMC are set out in my other reasons provided to the parties today (Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 5) [2024] FCA 58). In this proceeding, Globaltech acknowledges that they could not maintain an argument that any damages or profits should be reduced because Globaltech would have developed the v6 Tool in light of the decision at first instance in the 2019 Proceeding.
Fourthly, I have prepared substantial reasons in this proceeding for my decision on damages and an account of profits. As I have said, they will need to be checked by the parties to ensure that no matters covered by the existing confidentiality orders are disclosed. Once that is done, and I anticipate that that will not take a long time, there is no reason the reasons cannot be published in the normal course. As I have said, it is in the nature of this matter that further calculations would have to be performed by one or both of the experts. However, in light of my conclusions, that should take only a very short time.
Finally, the parties were advised on 5 February 2024 that the reasons for judgment in this proceeding would be delivered on 9 February 2024. The application for a stay was made on 8 February 2024.
At the heart of Globaltech’s argument on this application is the proposition that should final orders be made in this proceeding and judgment entered, they may be unable to have those orders or judgment set aside should they be successful in their appeal in the 2019 Proceeding in obtaining an order that the Patent is, and always has been, invalid. Globaltech refers to some observations made in Virgin Atlantic Airways v Zodiac Seats UK Ltd [2013] UKSC 46; (2013) RPC 29 (Virgin Atlantic Airways) (see earlier reasons at [24]–[25]).
I have reached the conclusion that the application for a stay should be refused. Globaltech contends that a decision in the 2019 Proceeding by the Full Court of this Court must be imminent. They contend that there is nothing to indicate that the argument is not a substantial one and they took me to the transcript of the hearing before the Full Court to support that proposition. They referred to the observations of Lord Sumption and Lord Neuberger in Virgin Atlantic Airways as they had on the earlier application. They referred to the freezing order made by the Court against them on 26 May 2023.
AMC submits that the circumstances have not changed from the circumstances as they were at the time of the earlier reasons, or, if they have, they support a refusal of a stay. AMC relies on the fact that they now have a judgment of a single judge of the Court to the effect that BLYA’s validity challenge fails. AMC also points to the fact that there has been a substantial hearing and that the normal outcome of that hearing is the delivery of reasons and the making of orders. It submits, correctly, that whilst the freezing order provides a measure of protection, it does not confer security interest in assets or result in the payment of any money. It further submits that putting aside the one argument about invalidity, there is no dispute in this proceeding that AMC are entitled to a substantial award of some millions of dollars. That proposition is correct and I refer to the other reasons I delivered today.
In my opinion, the balance of the relevant factors lies where it did at the time of the earlier reasons, that is to say, the balance does not favour a stay. As I said in the earlier reasons, it is important to come back to the fact that AMC have a judgment in this proceeding after all appeal rights have been exhausted which it is entitled to enforce. Furthermore, there is now a judgment of a judge of this Court in the 2019 Proceeding to the effect that BLYA’s challenge to the validity of the Patent fails.
I mention one further matter that I raised with the parties. I told the parties that I would not be in a position to make final orders after early May this year. That is because my term of office expires on 7 May 2024. There is a risk that final orders could not be made or judgment entered by another judge (see Martinuzzi v Fair Work Ombudsman [2012] FCA 636; (2012) 205 FCR 106; Wentworth v Rogers (No 3) (1986) 6 NSWLR 642). The time is fast approaching when that is a relevant consideration. However, I can say that irrespective of that matter, the application for a stay should be refused.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Besanko. Associate:
Dated: 21 February 2024
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