Brooke & Mackenzie Pty Ltd v El-Gra Engineering Pty Ltd

Brooke & Mackenzie Pty Ltd brought proceedings against El-Gra Engineering Pty Ltd alleging patent infringement. El-Gra cross-claimed for the patent to be declared invalid. The primary issue before the court was whether Brooke & Mackenzie were entitled to discontinue the proceeding and surrender the patent in light of new evidence of prior art presented by El-Gra, and if so, what costs orders should be made. The court also needed to consider whether El-Gra was entitled to indemnity costs for the Applicants' conduct in the proceedings.

The court found that the Applicants were entitled to discontinue the proceeding and surrender the patent because the evidence presented by El-Gra showed that the patent was invalid. However, the Applicants were not entitled to indemnity costs as they had acted reasonably in prosecuting and defending the proceeding. The court found that the Applicants had not acted unreasonably in failing to earlier discover the prior art evidence presented by El-Gra. However, the Applicants were liable for the majority of the Respondents' costs of the interlocutory application and the application for indemnity costs.

The court ordered that Brooke & Mackenzie discontinue the proceeding, surrender the patent, and pay the majority of El-Gra's costs of and incidental to the proceeding. The surrender of the patent resulted in the dismissal of El-Gra's cross-claim for invalidity. The court also discharged a subpoena issued by Brooke & Mackenzie.