Charter Pacific Corporation Limited v Securicom (NSW) Pty Limited (in liq) (No 3)

[2020] NSWSC 1067

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Charter Pacific Corporation Limited v Securicom (NSW) Pty Limited (in liq) (No 3) [2020] NSWSC 1067

Hearing dates:

15, 16 July 2020

Date of orders:

14 August 2020

Decision date:

14 August 2020

Jurisdiction:

Equity - Commercial List

Before:

Henry J

Decision:

Interlocutory relief granted. See paragraph [207].

Catchwords:

EQUITY – Interlocutory relief – where plaintiffs seeks to restrain defendants from asserting an ownership interest or licence to use patents and communicate with patent authorities – where conflicting evidence as to the existence of a licence to use patents – whether plaintiff has established a serious question to be tried that website posts conveyed licence representations that were misleading or deceptive – whether balance of convenience favours the grant of an injunction – interlocutory restraints granted

CIVIL PROCEDURE – Hearings – Suppression and non-publication order – where plaintiffs sought suppression order over letters exhibited to an affidavit – whether suppression order necessary to prevent prejudice to the proper administration of justice – suppression order granted in part

Legislation Cited:

Suppression and Non-publication Orders Act 2010 (NSW), ss 6, 8(1)(a), 12

Uniform Civil Procedure Rules 2005 (NSW), rr 42, 42.7

Cases Cited:

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46

Baller Industries Pty Ltd v Mero Mero Leasing Pty Ltd [2019] NSWSC 1067

Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148; [1986] HCA 58

Charter Pacific Corporation Ltd v Securicom (NSW) Pty Ltd (No 2) (Supreme Court (NSW), Stevenson J, 4 September 2018, unrep)

Charter Pacific Corporation Ltd v Securicom (NSW) Pty Ltd [2018] NSWSC 1246

Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) 92 ALR 563

Devereaux Holdings Pty Ltd v Pelsart Resources NL (No 2) (Supreme Court (NSW), 24 July 1985, unrep)

DRJ v Commissioner of Victims Rights [2020] NSWCA 136

His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporated (No 2) [2007] NSWCA 142

Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216; [1978] HCA 11

In the matter of Blue Sennar Air Pty Limited (in liq) [2016] NSWSC 772

John Fairfax Group Pty Ltd v Local Court of New South Wales (1991) 26 NSWLR 131

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Rinehart v Welker (2011) 93 NSWLR 311; [2011] NSWCA 403

Robin Pty Limited v Canberra International Airport Pty Limited (1999) 179 ALR 449; [1999] FCA 1019

Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729

Welker v Rinehart [2011] NSWSC 1094

Wilson v Basson [2020] NSWSC 512

Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd (No 3) [2013] NSWSC 1069

Texts Cited:

Nil

Category:

Procedural and other rulings

Parties:

Charter Pacific Corporation Ltd (First Plaintiff)
CPC Patent Technologies Pty Ltd (Second Plaintiff)

Securicom (NSW) Pty Limited (in liq) (First Defendant)
Christopher John Burke (Second Defendant)
Microlatch Pty Ltd (in liq) (Third Defendant)
Microlatch Limited (UK Company Number 08625097) (Fourth Defendant)
CJ Burke Nominees Pty Ltd (Fifth Defendant)
Gary Fyvie (Seventh Defendant)
Microlatch Technology Pty Ltd (Eighth Defendant)
Microlatch Limited (HK CR No 0876776) (Ninth Defendant)

Representation:

Counsel:
Mr R Alkadamani and Mr T Krayem (Plaintiffs)

In person:
Chris Burke (Second Defendant and on behalf of the Fourth, Fifth and Ninth Defendants)

Solicitor:
Mr McCartney (Seventh and Eight Defendants)

Solicitors:
Patterson Houen & Commins Solicitors and Attorneys (Plaintiffs)
Simmons & McCartney Lawyers & Attorneys (Seventh and Eighth Defendants)

File Number(s):

2018/56845

Publication restriction:

Nil

Judgment

1. These reasons deal with a notice of motion filed by the plaintiffs seeking, amongst other things, interlocutory orders to restrain the second, fifth, seventh, eighth and ninth defendants (active defendants) from asserting an ownership interest or a licence to use the rights in seventeen patents and from instructing patent attorneys to communicate with patent registries and authorities on that basis.

2. The seventeen patents are identified in the notice of motion [1] and are referred to in these reasons as the Securicom Patents.

   1. The seventeen patents are identified in items (a) to (q) of the definition of “Patents” in the notice of motion.

3. The plaintiffs’ motion was filed in response to website posts associated with the second and ninth defendants that contain content which the plaintiffs assert are misleading and deceptive.

4. The active defendants accept that they do not own the rights to the Securicom Patents. The main contest at the hearing related to the ninth defendant’s claim to have an exclusive and perpetual licence to use the rights associated with the Securicom Patents and whether interlocutory relief should be granted to restrain the assertion of such rights.

The parties and events leading to the plaintiff’s motion

5. The first plaintiff, Charter Pacific Corporation Limited (Charter Pacific), is a diversified investment company.

6. In February 2018, Charter Pacific commenced these proceedings seeking relief in relation to a Share Purchase Agreement (SPA) it entered into on 27 September 2016 with the second defendant (Mr Burke), the first defendant (Securicom), the third defendant (Microlatch AU) and the fourth defendant (Microlatch UK). Under the SPA, Charter Pacific was to acquire the shares in Securicom and Microlatch UK (which were mostly held by Mr Burke), and thereby the patents owned by those companies and Microlatch AU.

7. Mr Burke had originally developed the patents owned by Securicom, Microlatch and Microlatch UK, some of which are the Securicom Patents. The patents relate to technology that assists with the operation of biometric readers and enables mobiles or remote electronic devices to be securely accessed and operated through the application of biometric signatures.

8. After a hearing in July 2018, Stevenson J held that Mr Burke’s purported termination of the SPA was invalid. On 4 September 2018, His Honour made orders for specific performance of the SPA, for Mr Burke to do everything necessary to restore the “Business Intellectual Property” (as defined in the SPA) to Securicom, Microlatch AU and Microlatch UK, and for Mr Burke to reinstate Microlatch UK, which had been deregistered in January 2018: Charter Pacific Corporation Ltd v Securicom (NSW) Pty Ltd [2018] NSWSC 1246; Charter Pacific Corporation Ltd v Securicom (NSW) Pty Ltd (No 2) (Supreme Court (NSW), Stevenson J, 4 September 2018, unrep).

9. The second plaintiff (Patent Technologies) is a company associated with Charter Pacific. Patent Technologies claims to own and have the exclusive rights to manage and use the Securicom Patents based on a deed of assignment it entered into with Securicom (then in liquidation) on 31 July 2019.

10. The fifth defendant, CJ Burke Nominees Pty Limited (CJBN), is the trustee of Mr Burke’s self-managed superannuation fund (SMSF). Mr Burke is the majority shareholder and director of CJBN.

11. During late 2019, Mr Burke asserted that the SMSF was the beneficial owner of patents held by Securicom and Microlatch AU based on two Deeds of Assignment of Patents dated 18 November 2017. The assertion of the SMSF’s ownership of the patents led to a further dispute between the parties.

12. On 31 October 2019, Charter Pacific filed a notice of motion in these proceedings seeking to give effect to Stevenson J’s order that Mr Burke do everything necessary to restore the Business Intellectual Property to Securicom, Microlatch AU and Microlatch UK, which motion was later amended to also seek an order that Mr Burke enter into deeds with Securicom and Microlatch AU to confirm that they were the owners of the Securicom and Microlatch patents, rather than Mr Burke, CJBN or the SMSF.

13. In response, Mr Burke and CJBN filed a cross-claim seeking, inter alia, declarations that the SMSF was the beneficial owner of the Securicom and Microlatch patents.

14. On 2 and 3 December 2019, the plaintiffs’ October motion and the ownership claims made by Mr Burke and CJBN were listed before me for final hearing. After two days of hearing, the parties resolved the issues. On 11 December 2019, consent orders were made reflecting the relief sought by the plaintiffs.

15. Pursuant to the consent orders, Mr Burke and CJBN executed Deeds of Acknowledgement and Assignment of Intellectual Property with Securicom and Microlatch AU that contained acknowledgements that the identified patents had been and continued to be owned by Securicom and Microlatch AU.

16. The ninth defendant (Microlatch HK) is a company registered in Hong Kong of which Mr Burke is a director and majority shareholder.

17. In late December 2019, Mr Burke published an article on which claimed that Microlatch HK had the benefit of an exclusive and perpetual licence to use patents based on a licence from Securicom to Microlatch HK made on 23 August 2013 (Securicom to Microlatch HK 2013 licence).

18. Further website posts appeared in December 2019, January and February 2020 that referred to the Securicom to Microlatch HK 2013 licence and made claims such as that Microlatch HK had exclusivity to deal with the patents to the exclusion of Charter Pacific and its related entities, and that Mr Burke owns or exclusively controls the “entire mobile biometrics patent portfolio”. Correspondence was exchanged between the plaintiffs’ solicitor and Mr Burke’s lawyer, Grant McCartney, in relation to the posts.

19. The seventh defendant, Gary Fyvie, is a director of the eighth defendant (Microlatch Technologies). Mr Burke is also a director of Microlatch Technologies.

20. On 14 February 2020, Mr Fyvie sent an email to Kevin Dart, the Chairman of Charter Pacific and a director of Patent Technologies, copied to Mr Burke and Mr McCartney (14 Feb email). The 14 Feb email relevantly states that:

Every time you try to put a deal together using the Securicom Patents, we will be there undoing the deals and taking them [over] with our exclusive License.

…

The ownership of the patents is disputed by Microlatch.

…

PS: we have also contacted many of CPC’s possible targets, including Apple just to name one and explained the Exclusive Licenses.

21. In early March 2020, the plaintiffs became aware that a request had been made by an agent of Microlatch HK in relation to two of the Securicom Patents to appoint IP Gateway Patent Attorneys (IP Gateway) as the new address for service.

22. On 13 March 2020, the plaintiffs’ lawyers wrote to Mr McCartney. The letter complained about the website posts and the instructions given to IP Gateway. It disputed that Microlatch HK had an exclusive licence or ownership rights to the Securicom Patents and demanded undertakings from the active defendants to cease posting on websites material asserting that they have any ownership interest in or licence to use the Securicom Patents and to desist from interfering by lodging documents or notices on IP Patents registers in relation to them.

The plaintiffs’ motion and issues for determination

23. The plaintiffs’ motion was filed on 27 March 2020 and listed before me for hearing on 15 and 16 July 2020. The hearing was conducted by virtual courtroom facilities with all representatives appearing remotely.

24. Mr Burke represented himself, CJBN and Microlatch HK. In these reasons, I refer to Mr Burke, CJBN and Microlatch HK as the Burke defendants. Mr Burke informed me that he also represented Microlatch UK, although there was some question as to whether it had been reregistered in accordance with Stevenson J’s 4 September 2018 orders. As no relief is pressed against Microlatch UK, it was not necessary to resolve that question.

25. Mr Fyvie and Microlatch Technologies were represented at the hearing by Mr McCartney, who had ceased acting for Mr Burke and CJBN on or around 23 April 2020.

26. There was no appearance by Securicom or Microlatch AU. They are in liquidation and no relief is sought against them.

27. At the hearing, I was informed by plaintiffs’ Counsel that paragraphs 1, 10, 11, 12 and 13 of the motion were no longer in issue.

28. Paragraphs 1, 12 and 13 relate to the joinder of Mr Fyvie, Microlatch Technologies and Microlatch HK. They were joined pursuant to orders made by Hammerschlag J on 24 April 2020 and 8 May 2020.

29. Paragraph 10, which seeks an order restraining IP Gateway from communicating with patent registries, was not pressed as the plaintiffs’ solicitors had received written confirmation from IP Gateway that it would not do so.

30. Paragraph 11 relates to a Further Amended Commercial List Statement, which was filed by the plaintiffs on 1 May 2020 (FACLS). At the hearing, plaintiffs’ counsel informed me that the FACLS would, in due course, be amended as it only pleads fifteen of the patents identified in the plaintiffs’ motion. I have, therefore, proceeded on the basis that the plaintiffs’ claims for final relief will relate to all of the Securicom Patents.

31. In the FACLS, the plaintiffs claim that, since December 2019, the active defendants have made, and continue to make, representations that the Burke defendants and/or Microlatch Technologies have:

1. an ownership interest in the Securicom Patents (ownership representations); and/or

2. an exclusive and perpetual licence to all rights associated with the Securicom Patents (licence representations).

32. The plaintiffs allege that the ownership and licence representations were conveyed in website posts and in Mr Fyvie’s 14 Feb email, were made in trade or commerce, and are misleading and deceptive in contravention of section 18 of the Australian Consumer Law (ACL) because Patent Technologies is the legal and beneficial owner of the Securicom Patents and has not granted to any of the defendants any licence to use them. They also assert that the Burke defendants and Microlatch Technologies do not have any valid interest by way of licence in respect of the Securicom Patents and, alternatively, if Microlatch HK did, that licence was validly disclaimed by Securicom’s liquidator.

33. The plaintiffs also claim that the active defendants’ conduct, by making the ownership and licence representations and representing that entities are liable to Microlatch HK for exploiting the Securicom Patents without its permission, infringes Patent Technologies’ rights as the patentee and that Mr Burke and Microlatch HK have made unjustified threats within the meaning of s 128 of the Patents Act 1990 (Cth). In terms of final relief, they seek declarations, permanent injunctions and damages.

34. The commercial list responses, filed on 31 March 2020 by Mr Burke and CJBN and on 15 May 2020 by Mr Fyvie and Microlatch Technologies, admit that the Burke defendants and Microlatch Technologies have no legal or beneficial ownership interests in the Securicom Patents but deny making any ownership representations. The responses assert that Microlatch HK has an interest in the Securicom Patents under a licence agreement and deny that making representations regarding such an interest is misleading and deceptive. They also deny that the ownership and licence representations were made in trade or commerce. Mr Fyvie and Microlatch Technologies also deny they have infringed Patent Technologies’ rights.

35. The remaining relief sought by plaintiffs’ motion are based on their claims that the active defendants have engaged in misleading and deceptive conduct. They seek orders that:

1. the active defendants be restrained from representing or asserting that:

1. any of them or Microlatch HK have, and

2. Patent Technologies does not have,

3. a licence to use, permit the use of, or otherwise utilise the rights in respect of the Securicom Patents, other than for use in these proceedings: Orders 2 and 3;

2. the active defendants be restrained from representing or asserting that:

1. any of them or Microlatch HK have any ownership interest or proprietary rights in respect; and

2. Patent Technologies is not the owner,

3. of the Securicom Patents: Orders 5 and 6;

3. that Mr Burke do all things within his power or control so that Microlatch HK ceases making or continuing to make the representations or assertions referred to in (a)(i) and (b)(i) above, other than in connection with these proceedings: Orders 4 and 7;

4. Mr Burke do all things within his power or control so that publications or webpages on the Microlatch.com, Microlatch.com.hk and Microlatch.hk websites (as referred to in the particulars to paragraphs 36 to 48 of the FACLS), are removed from the websites and cease to be publicly available: Order 8; and

5. the active defendants be restrained from instructing or purporting to instruct any patent attorneys to communicate with any patent registries or patent regulatory authorities in which they assert or represent that they represent a licensee, owner, or registered patent holder of the Securicom Patents: Order 9.

36. The plaintiffs seek these orders as they say that the active defendants’ continuing conduct is creating legal uncertainty in the marketplace and is undermining Patent Technologies’ attempts to commercialise the Securicom Patents. They also say that the active defendants’ conduct in retaining and purporting to instruct patent attorneys to liaise with regulatory authorities interferes with Patent Technologies’ management and control of the Securicom Patents.

37. Mr Burke accepts that he and “his companies” (by which I understood him to mean CJBN, Microlatch UK and Microlatch HK) do not own the Securicom Patents. At the hearing, he stated that he does not contest the orders restraining him from representing that he and his companies have ownership rights in respect of the Securicom Patents (T4:18-39;T77:3-14). By that, I understood Mr Burke to mean that he does not contest the making of Orders 5 and 6 of the motion.

38. Mr Burke contests the other orders sought in the motion.

39. Mr Bourke submits that no orders should be made restraining the Burke defendants from representing or asserting that they or Microlatch HK have a licence to use the Securicom Patents or from instructing patent attorneys to communicate with patent registries and authorities on that basis as Microlatch HK has an existing and valid licence to use the Securicom patents. He also takes issue that some of website posts convey representations in relation to the Securicom Patents, as alleged by the plaintiffs.

40. Mr Fyvie and Microlatch Technologies consent to all of the orders sought, in terms as varied and agreed by the plaintiffs. The only issue between them and the plaintiffs is costs.

41. Thus, the issues for determination are:

1. whether the plaintiffs have established there is a serious question to be tried that they will likely obtain final relief in respect of their claims that the Burke defendants have engaged in misleading or deceptive conduct by representing or asserting that they have an existing licence to use the Securicom Patents;

2. if a serious question to be tried has been established, whether the balance of convenience and discretionary factors favour the grant or withholding of interlocutory relief; and

3. what costs orders should be made in relation to the active defendants.

42. During the course of the hearing, the plaintiffs also made an application for a suppression order in relation to two letters exhibited to an affidavit. I made an interim order at the hearing and also deal with the application for a longer term order in these reasons.

The evidence

43. The plaintiffs’ read ten affidavits in support of their application for the interlocutory orders.

44. Four affidavits are from Steven Cole, a director of Charter Pacific and the company secretary of Patent Technologies, sworn on 29 March 2020, 4 May 2020, 3 July 2020 and 16 July 2020. Three affidavits are from Kevin Dart, a director of Charter Pacific and Patent Technologies, sworn on 29 March 2020, 30 April 2020 and 3 July 2020.

43. Two affidavits are sworn by David Murray on 13 July 2018 and 1 July 2020. Mr Murray is the sole director and shareholder of Lyndcote Holdings Pty Limited, a minority shareholder in Microlatch AU at the time the SPA was executed.

44. One affidavit is from the plaintiffs’ solicitor, Rodney Commins, sworn on 1 May 2020. Mr Commins’ affidavit annexes various correspondences with Mr McCartney regarding the website posts and notices to produce documents, such as the original Securicom to Microlatch HK 2013 licence and other licences also dated 23 August 2013.

45. The plaintiffs also rely on written submissions. I was assisted by those submissions and aide memoire documents provided to the Court by the plaintiffs during the hearing.

46. The Burke defendants rely on Mr Burke’s affidavit sworn 17 June 2020 and the documents exhibited to that affidavit.

47. The plaintiffs’ objected to all or part of 56 of the 71 paragraphs of Mr Burke’s affidavit. The objections were made on various grounds, including form, opinion, conclusion, argumentative, speculation, relevance and hearsay. While accepting the force of and noting the objections, Mr Burke’s affidavit was admitted into evidence on the basis that I read large parts objected to as submission or assertions by Mr Burke, rather than as evidence of the truth of what was asserted. Plaintiffs’ counsel was content with that approach and did not require specific rulings to be made on any particular objection.

48. In addition to Mr Burke’s affidavit, Mr Burke also relies on an email which he sent to chambers during the course of submissions. That email and its attachments were tendered and the contents of the email read as Mr Burke’s evidence of the matters to which it refers: Exhibit A1.

49. There was no cross-examination of any witnesses.

Further factual matters

52. What follows is a summary of the additional relevant facts that seem not to be the subject of dispute, as well as those key facts contended for by the plaintiffs, noting where they are disputed by Mr Burke.

53. In May 2016, Mr Burke was the sole shareholder of Securicom and the major shareholder in Microlatch UK. Securicom was also the sole shareholder in Microlatch AU. The other shareholders in Microlatch AU and Microlatch UK were Lyndcote Holdings Pty Ltd and Midgeon Pty Ltd.

54. Mr Burke, Microlatch AU, Lyndcote and Midgeon Pty Limited had entered into a Shareholders’ Agreement on 21 July 2006, pursuant to which Lyndcote and Midgeon were each issued with 2.5% of the issued shares of Microlatch AU, with Securicom holding the remaining 95% (Shareholders Agreement). Relevantly, cl 8.5 of the Shareholders Agreement provides that Microlatch AU must not enter into “contracts concerning patents, know-how and trademarks” unless the shareholders have passed a special resolution to do so.

Events leading to the SPA

55. Prior to executing the SPA, Mr Cole undertook due diligence enquiries and obtained information and exchanged correspondence with Mr Burke regarding Securicom, Microlatch AU and Microlatch UK.

56. On 28 July 2016, Mr Cole sent an email to Mr Burke in relation to the operations of Microlatch HK. The email noted that Mr Cole had asked Mr Burke whether there were any licences between Microlatch HK, Microlatch AU and Securicom, that Mr Burke has said there might be, and that Mr Cole had not found any in the material received from Microlatch HK or Peppernells. Mr Cole’s email asked if there were any licences on Mr Burke’s computer as it was “important to know”.

57. In response, Mr Burke sent an email to Mr Cole, copied to Mr Dart, stating that he “thought [he] had [a] license between Securicom and Microlatch [AU] and Microlatch [HK]”, but he had found what was attached and “remain searching for Microlatch HK”. Attached to Mr Burke’s email were two documents.

58. One of the documents is described as a “Patent License Deed” between Microlatch AU as licensor and Securicom as licensee. It is a marked up document signed by Mr Burke on behalf of Microlatch AU and Securicom, and dated 1 July 2013. It states that Microlatch AU is the assignee of the patent applications set out in Schedule 1 and provides for the licence of the intellectual property rights (IPR) in the patent applications from Microlatch AU to Securicom. Relevantly, there is a Schedule A (not a Schedule 1) that is headed “Licensor’s Patent Applications List” although it is blank.

59. The other document attached to Mr Cole’s email is described as a “Patent License Deed” between Microlatch UK as licensor and Securicom as licensee (Microlatch UK to Securicom 2013 licence). It is signed by Mr Burke on behalf of both parties and is dated 23 August 2013. It states that Microlatch UK is the assignee of the patent applications set out in Schedule 1 and provides for the licence of the IPR in the patent applications from Microlatch UK to Securicom. There is a Schedule A (not a Schedule 1) that is headed “Licensor’s & Licencee’s Patent Applications List” and includes the following “Updated from Spruson and Ferguson on 23/08/2013 Documents as below Microlatch Pty Ltd_7766142_1 Securicom (NSW) Pty Ltd­_7766374_1” (Schedule A wording).

60. According to Mr Burke’s evidence, the Microlatch UK to Securicom 2013 licence related to one European patent and was required to secure funding from UK investors.

61. On 5 August 2016, Mr Burke sent an email to Mr Cole in relation to “Patent license deed dated 23 August 2013… between Microlatch AU and Securicom”. In the email, Mr Burke stated that the licence was prepared for a deal with Tyco as they wanted to be assured of patent ownership and that he prepared it himself, without the knowledge of Midgeon and Lyndcote, in order to secure a major manufacturing alliance and multi-million sales deal per annum.

62. Mr Cole’s evidence is that he received a copy of the licence referred to in Mr Burke’s 5 August 2016 email, a copy of which is in evidence (Exhibit B). The licence is in the same terms as the Patent License Deed referred to in [58] above, except that it is dated 23 August 2013, is not marked up and Schedule A includes the Schedule A wording (rather than being blank). I refer to this licence as the Microlatch AU to Securicom 2013 licence.

63. On 26 September 2016, Mr Cole sent an email to Mr Burke, copied to Mr Dart, attaching an amended draft SPA in readiness for exchange. Mr Burke replied by email that day in which he stated that that he had “found the license agreements to Microlatch Hong Kong and will bring with me tomorrow”.

64. On 27 September 2016, Mr Cole, Mr Dart and Mr Burke met. There is a factual dispute as to what was discussed and what documents Mr Burke brought with him to that meeting.

65. Mr Burke’s evidence is that he brought two executed licences deeds to the meeting; one being the Securicom to Microlatch HK 2013 licence that he claims is valid, and the other being an executed version of a Patent License Deed between Microlatch AU as licensor and Microlatch HK as licensee, dated 23 August 2013 (Microlatch AU to Microlatch HK 2013 licence). Mr Burke’s evidence is that he executed the Securicom to Microlatch HK 2013 and Microlatch AU to Microlatch HK 2013 licences on 23 August 2013 while in Hong Kong. His evidence is that both licences were “a combination of the patents at that time”: Exhibit A1.

66. Mr Burke’s evidence is that Mr Cole was given the “printed” Securicom to Microlatch HK 2013 and the Microlatch AU to Microlatch HK 2013 licences at the 27 September 2016 meeting.

67. Mr Cole and Mr Dart dispute Mr Burke’s evidence.

68. Mr Dart’s evidence is that Mr Burke did not produce the Securicom to Microlatch HK 2013 licence or a signed version of the Microlatch AU to Microlatch HK 2013 licence at the 27 September 2016 meeting. Mr Dart gives evidence that he did not became aware of the existence of the asserted Securicom to Microlatch HK 2013 licence until 28 July 2019, when a copy was sent to him by Securicom’s liquidator.

69. Mr Cole gives evidence that Mr Burke brought with him a copy of an unsigned and undated licence agreement between Microlatch AU and Microlatch HK and, because it was unsigned and undated, Mr Cole did not keep a copy.

70. Mr Cole’s evidence is that Mr Burke did not disclose to or show him the Securicom to Microlatch HK 2013 licence at the 27 September 2016 meeting, or at any other time. He says that he was not given the Securicom to Microlatch HK 2013 licence deed prior to 28 July 2019, when a copy was sent to him by Securicom’s liquidator.

71. On 27 September 2016, Charter Pacific, Mr Burke, Securicom, Microlatch AU and Microlatch UK executed the SPA. Schedule 5 of the SPA sets out a list of the patents owned by Securicom and Microlatch AU. 16 patents are listed as owned by Securicom, of which nine are also Securicom Patents.

72. Schedule 8 of the SPA lists “Material Contracts” and relevantly provides:

Schedule 8

Material Contracts

Set out below is a brief summary of the only material contract which has been entered into by the Company [defined in the SPA as Securicom and Microlatch UK]. This is an important contract for the Company and has accordingly been identified as relevant information of which an investor in the Company should be aware.

1.   Microlatch Pty Ltd Patent Licence Deed dated [insert date]

Parties: the Company and Microlatch Limited Hong Kong

Licence to manufacture and sell Biofobs to security industry globally [copy not located]

2.   …

3.   Microlatch Pty Ltd Patent Licence Deed dated 23 August 2013

Parties: Microlatch Pty Ltd and Securicom (NSW) Pty Ltd

Dated 23 August 2013 Exclusive Licence from Microlatch Pty Ltd for exploitation of all patents it owns included in a schedule of patents from Spruson and Ferguson for the manufacture of Microlatch Pty Ltd products: RF Keyfobs, and Biometrics devices, including; BIOFOB RF; BIOFOB BT; BIOFOB ID; BIOCARD ID; BIO-14S; BIO-15S by Securicom (NSW) Pty Ltd for a royalty fee of 5% of gross sales received by the Licensee.

The document was prepared by C Burke for a proposed deal with Tyco in regard to supplying key fobs and Biofobs to Tyco to assure them C Burke had the rights to exploit patents. The deal with Tyco did not proceed.

Document executed by C Burke as sole director and secretary for both parties.

73. Mr Cole’s evidence is that, as the Microlatch AU to Securicom 2013 and the unsigned and undated Microlatch AU and Microlatch HK 2013 licences were the only licences that had been disclosed to him, Schedule 8 of the SPA, which listed Material Contracts, was drafted on that basis.

74. Mr Cole says that he became aware of the executed version of the Microlatch AU to Microlatch HK 2013 licence after the SPA was signed. That licence is in evidence. It is between Microlatch AU as licensor and Microlatch HK as licensee, is dated 23 August 2013 and signed by Mr Burke on behalf of both parties. The licence states that Microlatch AU is the assignee of the patent applications in Schedule 1 and provides for the licence of the IPR in the patent applications to Microlatch HK. Relevantly, Schedule A contains the Schedule A wording.

Concerns about the licence with Microlatch HK and the ASX

75. During late 2016 and early 2017, Mr Cole and Mr Dart were engaged in negotiations with the Australian Stock Exchange in relation to the proposed “back-door listing” of Microlatch/Securicom through Charter Pacific. Mr Cole’s evidence is that the ASX raised some queries in relation to the “licences” which were referred to in Schedule 8 of the SPA and that he had several telephone calls during the period from 17 March to 24 March 2017 to discuss this.

76. On 17 March 2017, Mr Burke sent an email to Mr Cole, copied to Mr Dart, regarding their telephone call on that day. Mr Burke wrote that:

Microlatch Hong Kong and including Microlatch China, Microlatch USA or other affiliated companies will continue to work under the existing license arrangement… The existing license arrangement will continue after the Charter RTO is completed without revision or retraction, unless by mutual agreement. The new Charter RTO business will not have the option of licensing the development or manufacture of the products that would compete with the Microlatch Hong Kong business.

77. On the same day, Mr Dart sent a letter to Mr Lewis, Chief Compliance Officer of ASX, advising that the Microlatch AU to Microlatch HK Licence 2013 licence would be terminated immediately following completion of the acquisition transition, as advised to the ASX in Charter Pacific’s letter dated 2 February 2017.

78. On 20 March 2017, Mr Cole sent an email to Mr Burke stating that that they considered the Microlatch AU to Microlatch HK 2013 licence to be invalid because it was not unanimously agreed to by Microlatch AU’s shareholders by way of special resolution, as required by the Shareholders Agreement. Mr Cole’s email states that David Murray from Lyndcote and Michael Crouch from Midgeon had no knowledge of the licence and suggests immediately terminating the existing arrangements and, following completion of the acquisition transition, entering into a new licence agreement agreed by all parties on an arm’s length and commercial basis. Mr Cole’s email also indicates that he was prepared to support the granting of a new licence provided it clearly set out the terms and conditions upon which the licence is granted.

79. In his reply email on the same day, Mr Burke stated that the licence agreement was prepared for “Microlatch [HK] investment back in 2013”, that he gave a copy to Mr Cole as required and that Mr Murray from Lyndcote was aware that he “took investment into Microlatch [HK]… from the beginning”.

80. Mr Murray’s evidence is that he was not aware of the grant of any licences that Mr Burke says were entered on 23 August 2013 until the due diligence process carried out in relation to the SPA and that Mr Burke did not make him aware of any other licences other than those referred to in Schedule 8 of the SPA.

81. Mr Cole’s evidence is that, on 22 March 2017, he spoke to Mr Burke and told him that he needed to make sure that the licence agreements he was referring to were the same as the ones Mr Burke provided to Mr Cole in the due diligence process. Mr Cole’s evidence is that he asked Mr Burke to send him copies of the licence agreements that Mr Burke had on his laptop.

82. On 23 March 2017, Mr Cole sent an email to Mr Burke repeating his request for copies of the licence agreements on Mr Burke’s laptop to ensure they were the same as the ones provided to Mr Cole during the due diligence process. Mr Cole says that, despite these requests, he did not receive copies of any licence agreements from Mr Burke. There is no evidence that he did.

83. Mr Dart, Mr Cole and Mr Burke exchanged further emails on 24 and 27 March 2017 in relation to the “licence agreement” which Mr Burke’s “Hong Kong company… put in place”.

84. One of the emails, dated 24 March 2017, is from Mr Cole to Mr Burke and refers to discussions over the last few days. In the email, Mr Cole implores Mr Burke to get legal advice on matters such as the SPA, the licence agreements between Microlatch AU and Microlatch HK, the licence agreement between Microlatch AU and Securicom, the Shareholders Agreement and the consequences of granting the licence to Microlatch HK.

85. On 29 March 2017, Mr Burke sent an email to Mr Dart which states that “such an agreement that was taken with Hong Kong after issues with David Murray in Australia are not in our best interests and therefore need to be revised in good faith”.

86. Mr Dart’s evidence is that he spoke to Mr Burke on 31 March 2017 and told him that Mr Murray and Mr Crouch were unhappy with Mr Burke giving himself a global licence in the “Microlatch Hong Kong company” and, in response to Mr Burke asking him what to do, advised him to cancel it as soon as possible.

87. On 31 March 2017, Mr Burke sent an email to Mr Dart in which he states:

Following our discussion with regard the Licence Arrangement with Microlatch [HK], it is considered that the agreement is no longer required and that it therefore will be terminated as of today.

88. On 1 April 2017, Mr Dart sent an email to Mr Burke asking if Mr Burke was “ok” with him advising Mr Murray and Mr Crouch on Monday that the “global license is no longer needed by Microlatch [HK]… and is terminated.” Mr Burke replied to that email later that afternoon in which he states that he was “certainly… ok with that, it is the right thing for company going forward”.

89. On 7 April 2017, Mr Lewis from the ASX sent a letter to Charter Pacific advising that Charter Pacific would not qualify for re-instatement to the official list if it proceeded with the acquisition of Microlatch at this time. Mr Lewis’s letter states:

By way of further example, it was only in response to ASX’s continuing enquiries about the commercialisation of the Microlatch patents that [Charter Pacific] identified (in its letter to ASX dated 30 January 2017) that the Microlatch entities being acquired had entered into an exclusive world-wide licence in perpetuity with Microlatch HK (an entity not being acquired by [Charter Pacific]) to enjoy, commercialise and exploit a number of the Microlatch patents. When we called for a copy of that licence it became apparent that [Charter Pacific] was only entitled to receive a 5% royalty from the gross sales value actually received by Microlatch HK from its sub-licensing of the patents and that any other revenue generated by Microlatch HK from the patents would be held for the sole benefit of Microlatch HK. It was only when ASX pointed that out this potentially place a significant impediment on [Charter Pacific’s] ability to commercialise those patents that [Charter Pacific] indicated that it would procure the cancellation of that licence. Further, when we asked for an explanation of why that licence had been entered into in the first place, the response was unconvincing.

Purported termination of the SPA and purported assignment to CJBN

90. On 31 August 2017 and 1 September 2017, Mr Burke, trading as Microlatch AU, Microlatch UK and Securicom, sent letters to Mr Dart purporting to give formal notice of termination of the SPA.

91. On 4 September 2017, Mr Dart sent an email to Mr Burke in which he suggested that it might be possible to negotiate and “make this deal work” but that it was up to Mr Burke.

92. Mr Burke responded by an email the same day, stating that he was open to completing the opportunity but needed a “non-exclusive license agreement, plus the full payment of 6 months budget”, and that the non-exclusive licence agreement was important “in order to keep everything ongoing and future proof”.

93. Later that day, Mr Burke sent to Mr Dart an email attaching the “non-exclusive licence agreement”. The non-exclusive licence agreement is a document described as a “Patent License Deed” between Microlatch AU and Securicom AU as joint licensors and Microlatch HK as licensee. It is executed on behalf of the parties by Mr Burke and dated 17 August 2017 (Non-exclusive 2017 licence). Mr Burke’s email goes on to state as follows:

The license agreement enables me to take the products and technology forward as has always been my intention, but more recently had been a point of contention. I gave up the ‘exclusive’ license agreement in good faith and now request a ‘non-exclusive’ replacement that maintains my future plans.

94. There is no evidence that Mr Burke’s proposal was accepted, and as noted above, Charter Pacific later commenced proceedings seeking to enforce the SPA.

95. On 18 November 2017, Mr Burke executed two documents as deeds described as “Assignment of Patents”. On them was between Securicom and CJBN, the other between Microlatch AU and CJBN.

96. The Deed of Assignment between Securicom as assignor, and CJBN as assignee, provides for the assignment from Securicom to CJBN for $1.00 all the rights to the seventeen patents listed in Schedule 1 (November 2017 Deed). The November 2017 Deed includes warranties by Securicom to CJBN that Securicom has full right and title to the patents and that it has not granted any licences or other user rights to any person in relation to any rights, title or interest in the patents, other than as specified in Schedule 2: cl 8(c) and 8(f). There is no Schedule 2 to the November 2017 Deed.

94. Mr Dart’s evidence is that he became aware that Mr Burke and CJBN had lodged the November Assignment Deeds with international patent offices after being advised by Securicom’s liquidator by email dated 8 August 2019.

Dealings with the liquidator

98. On 11 April 2019, Securicom and Microlatch AU were placed into liquidation, by reason of insolvency.

99. On 28 July 2019, Mr Burke sent an email to Gavin Moss, the liquidator of Securicom and Microlatch AU, attaching copies of what he refers to as the “License Agreements between Securicom/Microlatch and Microlatch HK”. Mr Burke’s email asserts that the licences were “disclosed in the SPA”, that Charter Pacific requested he withdraw them to gain ASX listing, which he initially indicated was possible but was pending successful completion of the SPA, and that they remain in force. Mr Burke’s email to the liquidator also asserts that the patents were sold to his SMSF in 2013 and that CJBN is the current non-beneficial assignee.

100. The documents attached to Mr Burke’s email are the executed version of the Microlatch AU to Microlatch HK 2013 licence, as referred to at [65], and the Securicom to Microlatch HK 2013 licence which Mr Burke relies on in these proceedings. The Securicom to Microlatch HK 2013 licence is in the same terms as the Microlatch AU to Microlatch HK 2013 licence except that Securicom is identified as a party and the Licensor on pages 1, 3 and 7. Relevantly, Schedule A to the Securicom to Microlatch HK 2013 licence contains the Schedule A wording.

101. On 29 July 2019, Mr Burke sent a further email to the liquidator stating that he had enacted Licence Deeds from Microlatch HK “as per that company’s rights under the Deed dated in 2013”. The attached documents are two “Patent License Deeds”; one between Microlatch HK as licensee and Microlatch Investment Management Limited as licensor and dated 22 May 2019; the other between Microlatch HK as Licensee and Microlatch Technologies as licensor and dated 24 July 2019. Both deeds purport to license to Microlatch HK the rights to sixteen patents owned by CJBN, as referred to in Schedule A to each deed.

102. On 31 July 2019, Securicom (in liq) as assignor, Patent Technologies as assignee, and Charter Pacific as lender, executed a Deed of Assignment of Intellectual Property, pursuant to which Securicom agreed to assign its rights, titles and interests to the Securicom Patents to Patent Technologies, subject to receipt of the purchase price (2019 Securicom Assignment Deed).

103. As noted above, on 10 December 2019, Mr Burke, CJBN (as Assignor) and Securicom (in liq) (as Assignee) executed a Deed of Acknowledgement and Assignment of Intellectual Property in relation to the fifteen patents listed in Schedule 1, all of which are Securicom Patents. The Deed contains an acknowledgement that, at all times, the patents had been and continue to be owned by Securicom, including after the November 2017 Deed (cl 4.1(a)) and an agreement that the November 2017 Deed is rescinded (cl 2.2).

104. On 17 January 2020, the lawyers for Securicom’s liquidator wrote to Mr Burke’s then lawyer, Mr McCartney, advising that the liquidator did not consider the Securicom to Microlatch HK 2013 licence to be valid or binding on Securicom and, even if created, did not accept it had the effect of granting a licence to Microlatch HK.

105. On 30 January 2020, Securicom’s liquidator gave notice to Mr Burke and Microlatch HK that he disclaimed the Securicom to Microlatch HK 2013 licence for the purposes of s 568A(1) of the Corporations Act 2001 (Cth). The liquidator’s letter states that the notice was given “for the avoidance of any doubt” as the liquidator maintained that the licence was not valid or binding on Securicom.

106. A similar notice was given by the liquidator in relation to the Microlatch AU to Microlatch HK 2013 licence.

Website posts

107. Mr Dart and Mr Cole give evidence about various website posts on the Microlatch.com website during the period December 2019 to 3 July 2020. A summary of that evidence follows.

108. Mr Dart became aware of posts on the Microlatch.com website in late December 2019. His 29 March 2020 affidavit exhibits screen shots of sixteen website posts from 2 December 2019 to 25 March 2020, fourteen of which are the posts particularised in the FACLS: at [36] (a) to (n) and [48] (a) to (n). The posts include the following content:

(a)   Chris Burke owns or exclusively controls and manages the entire mobile biometrics patent portfolio and has the sole ability to litigate, monetise and manufacture under license: 2 December 2019;

(b)   It is my [i.e. Mr Burke’s] position that Microlatch [HK] has exclusivity to deal with the patents in all aspects to the exclusion of [Charter Pacific] and its related parties: 12 December 2019;

(c)   It is also relevant to remember that the Microlatch [HK] companies is a beneficiary of two exclusive licence agreements… the terms of the license agreements are very clear. They are exclusive and ongoing… No one, including either of [Charter Pacific] or [Patent Technologies] may deal with the patents at any level without the consent of Microlatch Limited in Hong Kong: 16 December 2019;

(d)   Microlatch is currently in discussions with Chifley to gain their legal position, plus demonstrating the strength of the Securicom (NSW) P/L License Agreement from 2013, where Microlatch Limited in Hong Kong has exclusive control and management of the entire patented portfolio: 19 December 2019;

(e)   Microlatch Limited in Hong Kong is a patent holder now in its own right and a long-standing contactless card/credential manufacturer. Microlatch Limited is the exclusive license holder of both Microlatch [AU] and [Securicom] patents… BIOFOB, BIOCARD, is a global product trade name of Microlatch Limited (Hong Kong) products that are owned and licensed from Microlatch and Securicom. Microlatch Limited (Hong Kong) now combines these older patent descriptions in newer updated patents in its own right: 27 December 2019;

(f)   Microlatch Exclusive Licenses are effective, legally binding, defensible and currently being exploited on a global basis. The Amigos can complain but they cannot cease or decelerate the Microlatch Limited Exclusive License control and management of Chris Burke’s patent portfolio… Any attempt by the Amigos and [Patent Technologies] to initiate commercial business with Chris Burke’s patent portfolio will be met with injunction and legal action to recover any losses incurred: 18 January 202; and

(g)   It is our view that the Securicom licence executed at the same time as the Microlatch licence, remains on foot and can be asserted by Microlatch Hong Kong. It is an exclusive licence and the existence of it in my opinion prevents any other entity including the patent holders asserting or commercialising patents without the consent of Microlatch Hong Kong. That consent has not been sought: 22 January 2020.

109. According to Mr Cole’s evidence, as at 16 April 2020, the fourteen website posts referred to in the FACLS were removed from the Microlatch.com website and twelve new posts had been put up.

110. Mr Burke gives evidence that, on 20 April 2020, sections of the “company website” which “made claims or implications of patent ownership” were removed. On 21 April 2020, Mr McCartney informed the plaintiff’s solicitors that all Microlatch website posts relating to “ownership of the patents” had been taken down and “will remain down until further orders”.

111. On 3 July 2020, Mr Cole carried out a further review of the Microlatch.com website and identified nine posts that remained on the site, about which the plaintiffs complain. Eight of those website posts contain the following content:

(a)   Chris Burke adds new patents for Microlatch Limited HK

This document describes Chris Burke’s and Microlatch Limited (Hong Kong) latest patents focused in the financial payments sector and overarching older outdated patents of both Microlatch and Securicom… Microlatch Limited is the exclusive licensee of both Microlatch P/L and Securicom (NSW) P/L Patents… The new patents will include an additional 20+ year life span, whereas some of the Securicom (NSW) P/L patents are nearing end-of-life. Microlatch Limited (Hong Kong) has exclusivity of the entire patent portfolio to exploit or sub-license.

(b)   Microlatch Limited enacts its exclusive license agreement

Microlatch Limited is proceeding with an unrestricted license, commercialisation and comprehensive exploitation of the patent portfolio in all jurisdictions… Chris Burke is the inventor of the patents… Microlatch Limited, as a Hong Kong company manages and provides expertise with patent updates…

(c)   Microlatch patents under trial by RBS

Chris Burke invented mobile biometrics and created many patents under the category… Mobile biometrics assures User privacy, removes payment infrastructure modifications and biometrically secures the transaction… Chris Burke owns or exclusively controls and manages the entire mobile biometrics patent portfolio and has the sole ability to litigate, monetise and manufacture under license …

(d)   Microlatch exclusive licence agreements prevail

Microlatch Limited (Hong Kong) holds exclusive license agreements for Chris Burke’s patent and inventions since 2013. These agreements prevail over any other arrangements. The agreements are perennial and enforceable. Any company or person attempting to subvert the license agreements is violating them and will be legally held accountable… Securicom and Microlatch P/L in Australia will be the beneficiary of 5% proceeds from the Licensee’s Patent Assertion Program… Should any company wish to conduct business with the Licensee of Chris Burke’s patented inventions, we welcome their formal request. Microlatch Limited in Hong Kong is the Exclusive Licensee for Securicom (NSW) P/L and Microlatch P/L patent portfolios.

(e)    Microlatch update

Microlatch Hong Kong is the exclusive licence holder of Microlatch and Securicom patents since 2013… Chris Burke has recently added several new patents that combine to increase their portfolio value and brings significant strength. The new patents… bring significant extra value to the Microlatch and Securicom patents under exclusive licenses… Chris Burke considers all of the patents would be applied in a patent litigation program simultaneously, supporting each other to achieve a substantial monetisation result for investors, now extending over 20 years for continued and increased monetary proceeds, as litigable volumes increase and expand... It is noted that Securicom (NSW) P/L and Microlatch P/L in Australia would receive 5% of proceeds from the 2013 license agreements.

(f)   Coronavirus, a preview of prevention. Technology restricts future virus progress

Chris Burke is an inventor with an enviable track record for creating valuable patents. The new and timely patent descriptions from Chris Burke offer… monetisation, substantially greater than the original portfolio, which is nearing end of life… add to Microlatch Hong Kong’s Exclusive License Agreements, which manages as licensee, Chris Burke’s original patent portfolio, increasing the value substantially

(g)   The Microlatch license agreements confirmed

Microlatch Exclusive Licenses are effective, legally binding and operational. The Microlatch Hong Kong Exclusive Licenses manage Chris Burke’s patented inventions. Microlatch Limited has gained expert opinion that supports the strength and validity of the License Agreements and continues unabated in its exploitation endeavours;

(h)   Microlatch Limited prepares to sign patent litigation deal

Microlatch Limited is the licensee of a suite of patents that describe mobile device biometrics functions and recently added newer updated patents that add together to a value proposition larger than any in Australian corporate history… Microlatch Limited has received written expert opinion confirming exclusive exploitation of the exclusive and perennial license agreements… The exclusive patent license agreements in favour of Microlatch Limited in Hong Kong enable full management on a global basis to sub-license, monetise, commercialise, exploit and manufacture the entire patent portfolio invented by Chris Burke.

112. During oral submissions, Mr Burke asserted that all references to “ownership” of patents had been removed from the Microlatch.com website. The evidence indicates that, as at 2.53pm on the first day of the hearing, the post referred to at [111(c)] which refers to “Chris Burke owns or exclusively controls and manages the entire mobile biometrics patent portfolio” remained on the website: Exhibit C.

113. On the second day of the hearing, Mr Burke tendered a revised version of that post at [111(c)] which had removed the words “owns or”: Exhibit A2.

Claims for interlocutory orders

Legal principles

114. The legal principles applicable to whether interlocutory relief of the nature sought by the plaintiffs should be granted are well known. The Court must determine whether the plaintiffs have shown that there is a serious question to be tried, that damages will not be an adequate remedy and that the balance of convenience favours the granting of an injunction: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46 at 68 (Gleeson CJ and Crennan J) and 81 to 84 (Gummow and Hayne JJ) (ABC v O’Neill).

115. The plaintiffs must establish that their claim for final relief raises a serious question to be tried in the sense that, if the evidence remains as it is, there is a probability that at the trial of the action they will be entitled to the relief claimed: ABC v O’Neill at 82 (Gummow and Hayne JJ); Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 at 622-3 (Beecham v Bristol). How strong that probability needs to be depends upon the nature of the rights that the plaintiffs asserts and the practical consequences likely to flow from the orders sought: Beecham v Bristol at 622; Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 at 735E, 736G (Shercliff v Engadine).

116. The relative strengths of the parties’ cases are not irrelevant to the exercise of the Court’s discretion. The stronger the case for final relief, the less may be required to tip the balance of convenience. The greater the balance of convenience, the less strong a case for final relief may be required: ABC v O'Neill at 81-84.

Serious question to be tried

117. As noted above, the active defendants do not contest the orders restraining them from making any representations and assertions that they have any ownership interest or proprietary rights in respect of the Securicom Patents.

118. Accordingly, the first issue for determination is whether the plaintiffs have established there is a serious question to be tried in the sense that, if the evidence remains as it is, there is a probability that at the final hearing they will be entitled to relief in respect of the licence representations claims: ABC v O’Neill at 82.

119. To obtain final relief, the plaintiffs must establish that the website posts conveyed the licence representations, were made in trade and commerce and were misleading or deceptive or likely to mislead or deceive: ACL, s 18. While each of these matters is denied by the Burke defendants’ commercial list response, the submissions at the hearing focussed on the first and last issues.

120. I am satisfied that it is seriously arguable that the posts on the Microlatch.com website particularised in the FACLS and in evidence at the hearing (the contents of some being referred to at [108] and [111] above), convey the licence representations.

121. Many of the posts refer to “Securicom patents”, an “exclusive License” of the Securicom patents, Microlatch HK being the “exclusive license holder of… Securicom patents since 2013” and Securicom and the “2013 license agreements”. They also claim that the “exclusive licenses are effective, legally binding and operational” and are in favour of Microlatch HK. In my view, these are statements to the effect that Microlatch HK has an exclusive and perpetual licence to all rights associated with the Securicom patents, which would include the Securicom Patents owned by Patent Technologies.

122. Some of the website posts do not refer to Securicom by name, but refer to Chris Burke as the “inventor of the patents”, the “original patent portfolio”, the “entire mobile biometrics patent portfolio”, “two exclusive licence agreements” and the Microlatch HK “Exclusive Licenses”. They also refer to statements that no one, including Charter Pacific, may deal with patents without the consent of Mr Burke or Microlatch HK.

123. Mr Burke submits that the references to “portfolio” in singular form is a reference to one of two portfolios of patents, one belonging to Securicom and one belonging to Microlatch AU. He also asserted that, to the extent the website posts referred to the “entire patent portfolio”, it was intended to cover the Microlatch portfolio on its own. I am not persuaded by Mr Burke’s submission.

124. There is no dispute that Mr Burke created the Securicom patents. I also accept as seriously arguable the plaintiffs’ submission that the likely class of readers of the website posts would include possible investors and industry participants who know something about Mr Burke in terms of what he has invented before and his relationship with Securicom.

125. In that context, the expressions “entire patent portfolio”, “original portfolio”, “patent portfolio” in the singular and “the patents”, would arguably be understood as incorporating, rather than excluding, the Securicom patents (and other patents) created by Mr Burke.

126. Whether Mr Burke intended to convey something else is also not to the point. A statement does not need to be made with intent to mislead. It is sufficient that the statement is misleading or deceptive, or is capable of being so, even if made innocently: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216; [1978] HCA 11 at 228. Mr Burke’s submission that he intended to convey matters relating to Microlatch patents only is also at odds with his primary contention that Microlatch HK has a licence in respect of Securicom patents and the Burke defendants are entitled to make that assertion.

127. In those circumstances, I consider it to be seriously arguable that an assertion regarding a licence of rights over “an entire patent portfolio”, Mr Burke’s “original patent portfolio” or the “patents” in an unqualified way is likely to convey, as a component of the portfolio, patents held or previously owned by Securicom, which would include the Securicom Patents held by Patent Technologies.

128. It follows that, even without mention of Securicom, the references in the website posts to the “original patent portfolio”, the “entire mobile biometrics patent portfolio”, “two exclusive licence agreements” and the Microlatch HK “Exclusive Licenses”, together with a claim that Mr Burke and/or Microlatch HK control or manage the rights to those patents or that no one else has a right to them, would arguably be understood to be as a representation or assertion by Microlatch HK and/or Mr Burke of exclusive licence rights over patents that were held or owned by Securicom, which include the Securicom Patents, as well as other patents developed and created by Mr Burke.

129. Although not addressed by the parties’ submissions, there seems little doubt that the licence representations were made in trade or commence. They were made to the public at large by Microlatch HK and Mr Burke in the course of their business activities seeking to exploit the patents over which they claimed to have rights, rather than as commentators on industry matters whose views may be unlikely to be considered to be “in trade or commerce”: Robin Pty Limited v Canberra International Airport Pty Limited (1999) 179 ALR 449; [1999] FCA 1019.

130. Whether the licence representations are misleading or deceptive or likely to mislead or deceive depends on the existence and validity of the Securicom to Microlatch HK 2013 licence. That licence is the sole basis on which the Burke defendants claim to be entitled to represent or assert that they or Microlatch HK have an exclusive and perpetual licence to use the Securicom Patents.

117. The plaintiffs submit that they have a strong case that Microlatch HK is not a licensee of the Securicom Patents and, as a consequence, the Court should be satisfied that there is a serious question to be tried that the licence representations are misleading or deceptive.

118. The plaintiffs dispute the existence and validity of the Securicom to Microlatch HK 2013 licence, pointing to the evidence that it was not disclosed by Mr Burke as part of the SPA due diligence or in 2017, and various communications from and documents prepared by Mr Burke which the plaintiffs assert are inconsistent with the licence being on foot, such as the communications in 2017 about the concerns raised by the ASX and the warranty contained in the November 2017 Deed. They also rely on the liquidator’s disclaimer of the alleged licence in January 2020.

119. Mr Burke submits that the Securicom to Microlatch HK 2013 licence is valid. In essence, his submission is that the Court should prefer his evidence that the licence was prepared by him in 2013 and disclosed during the SPA process, over the evidence of Mr Cole and Mr Dart. During oral submissions, he contended that Mr Cole’s and Mr Dart’s evidence was “deceptive” and that Mr Cole’s due diligence efforts on behalf of Charter Pacific was “poor” because Mr Cole never disclosed the signed and dated Microlatch AU to Microlatch HK 2013 licence and the Securicom to Microlatch HK 2013 licence.

120. Pausing here, at an interlocutory hearing with no cross-examination, it is not possible or appropriate to make any findings about factual disputes. In that context, I place no weight on Mr Burke’s assertions regarding Mr Dart and Mr Cole.

121. Mr Burke also submits that the communications between Mr Dart and the ASX in 2017, which refer to the Microlatch AU to Microlatch HK 2013 licence, are consistent with the existence of the Securicom to Microlatch HK 2013 licence as those deeds “went together” as a package to enable Microlatch HK to manufacture and exploit the patents.

122. As to the November 2017 Deed, Mr Burke’s answer to the apparent inconsistency of Securicom giving a warranty that it had not granted any licences and the existence of the Securicom to Microlatch HK 2013 licence is that the warranty was part of a “template licence agreement” downloaded from the website of a large international law firm that he had not “shown to [his] lawyer” or reviewed in a formal legal sense.

123. In determining an application for interlocutory relief, the Court does not undertake a preliminary trial, seek to resolve conflict between the evidence of the parties or grant or refuse the application upon the basis of such findings or a forecast as to the ultimate result of the case: Beecham v Bristol at 622; Shercliff v Engadine at 734D.

124. The Court is to weigh up and take into account the whole of the evidence although where there is a clear conflict of evidence, as there is in this case, the use which may be made of a defendant’s evidence in determining whether a plaintiff has made out a prima facie case is a limited one: Shercliff v Engadine at 734D.

125. In light of those principles and based on all of the evidence before the Court, I am satisfied that there is a serious question to be tried, and the plaintiffs have established a strong prima facie case, that the Securicom to Microlatch HK 2013 licence is not valid and the licence representations are, therefore, misleading and deceptive. I have come to this conclusion for the following reasons.

126. First, the disclosure of the undated Microlatch AU to Microlatch HK licence and the Microlatch AU to Securicom 2013 licence as material contracts in Schedule 8 of the SPA, and not the Securicom to Microlatch HK 2013 licence, is a persuasive factor supportive of the disclosed licences being the only ones in existence and brought to the attention of Charter Pacific at that time.

127. As to Mr Burke’s evidence that he provided a hard copy of the Securicom to Microlatch HK 2013 licence to Mr Cole and Mr Dart at the 27 September 2016 meeting, that evidence is denied by Mr Cole and Mr Dart and is based on Mr Burke’s assertion of conversations and events which were not tested at the interlocutory hearing and were not supported by the contemporaneous emails exchanged around the time of the SPA that are in evidence on this application.

128. Second, the contents of the March 2017 emails between Mr Dart, Mr Cole and Mr Burke and the correspondence between Mr Dart and the ASK which refer only to licences between Microlatch AU and Microlatch HK and Microlatch AU and Securicom (see for example [77], [78], [84], [87], [88] and [89] above) are seemingly inconsistent with the existence of the Securicom to Microlatch HK 2013 licence at that time. If the Securicom to Microlatch 2013 licence existed in 2017, presumably Mr Burke would have referred to it in his emails and sent a copy in response to Mr Dart’s request for any licences on his laptop.

129. Mr Burke’s request on 4 September 2017 for a non-exclusive licence involving Securicom is also seemingly inconsistent with the existence of the Securicom to Microlatch HK 2013 licence. Why would Mr Burke have needed such a licence if a perpetual and exclusive one of the nature now being contended for was in existence?

130. Third, I accept the plaintiffs’ submission that Mr Burke’s execution of the November 2017 Deed, which contained warranties that no licences had been granted in respect of the seventeen patents being assigned, is inconsistent with the existence of the Securicom to Microlatch HK 2013 licence that purported to licence Securicom patents on an exclusive and perpetual basis. This is particularly as fifteen of the seventeen patents referred to in the schedule to the November 2017 Deed are a subset the Securicom patents which Mr Burke now asserts were the subject of the Securicom to Microlatch HK 2013 licence (see [145] below). Mr Burke’s explanation that he did not consider the warranties as they were based on a template document is also at odds with the evidence that suggests he is very experienced at preparing licences, having done so on multiple occasions.

131. Fourth, Mr Burke’s evidence raises a further inconsistency about the form of the Securicom to Microlatch HK 2013 licence, which creates some doubt about validity. Mr Burke’s affidavit exhibits a version of the asserted licence that includes a schedule of seventeen patents and five trademarks. By contrast, the other versions of the Securicom to Microlatch HK 2013 licence in evidence, including the version sent by Mr Burke to the liquidator on 28 July 2019 and the version he produced during the course of the hearing (Exhibit A1), do not include or refer to that schedule of patents. I also note that the “original” Securicom to Microlatch HK 2013 licence, including an original of the version exhibited to Mr Burke’s affidavit, was not produced by any of the active defendants in response to notices to produce issued in connection with these proceedings.

132. There is also the striking similarity between the various licence deeds purportedly entered into on 23 August 2013, of which there are four in evidence. Other than the names of the parties, they are identical in all respects and relevantly purport to assign the identical patent rights by adopting the Schedule A wording in each licence. While not determinative, it is another element which leads me to conclude that there is a serious question to be tried as to the validity of the Securicom to Microlatch HK 2013 licence.

133. Finally, even if I were to accept that the Securicom to Microlatch HK 2013 licence deed existed, the liquidator disclaimed it on 30 January 2020, which he was entitled to do without leave of the Court if it was “an unprofitable contract”: Corporations Act 2001 (Cth), ss 568(1) and (1A).

134. Whether a contract is an unprofitable one is a question of fact and depends on whether it was one under which Securicom had obligation or liabilities (such as to pay money, transfer property or supply goods or services), the burden of which exceeded the benefits for Securicom, and the performance of which impeded the liquidator’s ability to realise the assets and distribute the proceeds to the creditors and contributories: In the matter of Blue Sennar Air Pty Limited (in liq) [2016] NSWSC 772 at [11], [12].

135. Neither party addressed the Court on whether the Securicom to Microlatch HK 2013 licence was an unprofitable contract. In the absence of submissions being advanced by the Burke defendants and in the context where no application was made by Microlatch HK for a Court order setting aside the disclaimer on the basis that it had an interest in the disclaimed property before it took effect, I am satisfied that there is also a serious question to be tried that the liquidator’s notice of disclaimer of the licence was effective.

Balance of convenience and other discretionary factors

150. In relation to the balance of convenience, the Court considers the risks of doing injustice according to whether the injunctions are granted or refused. It considers what would be the loss and inconvenience to the plaintiffs if the injunctions are not granted, compared to the loss to the Burke defendants if they are, and whether damages for the plaintiffs’ loss would be an adequate remedy: Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148; [1986] HCA 58 at 155; Beecham v Bristol at 622–623.

151. The plaintiffs contend that the balance of convenience is strongly weighted in their favour. They submit that the licence and ownership representations are impacting their ability to negotiate with major entities in relation to commercialising the Securicom patents, including seeking compensation for past infringements.

152. Mr Dart’s evidence is that he has spoken to representatives from telecommunications and mobile device companies, banks and credit card entities and various government departments in Hong Kong, Japan, Europe, United States and Australia with the intent of negotiating licence or sale agreements in respect of Patent Technologies’ patent rights in an effort to commercialise them. His evidence is that the postings on the various Microlatch websites by or under Mr Burke’s control have caused significant difficulties in his efforts to commercialise the Securicom Patents as potential investors, joint venture partners and licensees of the patents have indicated that the claims made by Mr Burke and Microlatch HK are a cause of concern and hindered the plaintiffs’ ability to finalise agreements.

153. Mr Dart also gives evidence that the ownership and licence claims affects the strength of Patent Technologies’ position in respect of parties it claims have infringed the Securicom Patents. This is because the conflicting and inconsistent claims of ownership or control are raised by those parties to contend they are not liable to Patent Technologies.

154. Mr Dart’s evidence as to the impacts of the Burke defendants’ conduct is somewhat general in nature and lacks specificity. But there is also Mr Fyvie’s 14 Feb email, on which Mr Burke was copied, that includes threats of hindering the plaintiffs’ rights in respect of patents, by contacting the plaintiffs’ targets, including Apple.

155. While Mr Burke submitted that Mr Fyvie was not authorised to and did not contact Apple, the contents of the 14 Feb email together with Mr Dart’s evidence lead me to conclude that the plaintiffs’ business activities may continue to be negatively impacted and inconvenienced if injunctive relief were not granted. It also seems to me that any loss suffered by the plaintiffs would not be readily quantifiable or adequately compensable by damages.

156. In oral submissions, Mr Burke asserted that it would not be fair if the licences “were [taken] away” from him as they were put together by him to manufacture and exploit the patents and provide “a livelihood” for him.

157. The difficulty with that assertion is that Mr Burke did not adduce evidence of any manufacturing activities based on the Securicom Patents or a livelihood derived from those or other activities related to the patents.

158. Mr Burke’s affidavit refers to a preliminary agreement to licence the “IP involved in these proceedings” to Veridate Financial in a deal valued around USD $500,000 (which might include the Securicom Patents, although it is not clear), but states that Veridate pulled out of the deal last year. No other evidence was adduced to suggest that the grant of interlocutory relief would cause financial or other hardship to the Burke defendants.

159. To my mind, it is also significant that the orders sought relate only to the Securicom Patents. The plaintiffs do not seek to restrain the Burke defendants from dealing with or asserting rights in respect of other patents created by Mr Burke, such as the Microlatch patents or the new and recent patents that Mr Burke and Microlatch HK asserts a right to exploit, as referred to in the website posts in evidence. Nor do they seek to restrain him from developing new patents in the future.

160. In that context, it seems reasonable to infer that all of the business activities of the Burke defendants will not be impacted by the imposition of the restraints. To the extent the Burke defendants are impacted and succeed in defending the claims at a final hearing, they could seek to recover any financial loss on the plaintiffs’ undertaking as to damages.

161. Mr Burke also contended that he “never wanted to show ownership” of the patents after he “lost ownership… with regards to Securicom” and that he had taken down all the postings where the word “ownership” was portrayed. I took this as a submission that might be relevant as to whether the Court should exercise its discretion and grant the relief sought by the plaintiffs.

162. The evidence does not support Mr Burke’s submission. There were posts on the Microlatch.com website in which Mr Burke asserts ownership and control of the patents from late December 2019, just a couple of weeks after he and CJBN signed the 2019 Securicom Assignment Deed in which he agreed that the Securicom patents had been and continue to be owned by Securicom. The 14 Feb email also makes clear that the plaintiffs’ ownership of the Securicom Patents was disputed by Microlatch this year. I accept that some changes were made to the Microlatch.com website in April 2020, but Mr Burke’s claim to “own” patents remained posted as at 15 July 2020.

Conclusion on interlocutory orders

163. The plaintiffs have demonstrated there is a serious question to be tried and that they have a strong prima facie case that the licence representations are misleading or deceptive in contravention of s 18 of the ACL. I have also concluded that the balance of convenience, while not heavily weighted in the plaintiffs’ favour, tends towards the grant of interlocutory relief. There are no discretionary reasons or matters raised by Mr Burke which, in my view, militate against granting that relief in relation to the licence representations pending determination at a final hearing.

164. Accordingly, I propose to grant the relief that restrains the active defendants from making the licence representations and from representing or asserting that Patent Technologies does not have a licence to use the rights in respect of the Securicom Patents.

165. As to the ownership representations, as noted above, Mr Burke informed the Court that he consented to orders restraining him and the other Burke defendants from representing that they have ownership of the patents.  I am also satisfied that orders restraining the Burke defendants from making the ownership representations are warranted in this case.

166. There is no dispute that the active defendants do not have ownership interests or proprietary rights in the Securicom Patents. I am also satisfied that there is a serious question to be tried that the website posts conveyed the ownership representations by the statement that “Chris Burke owns or exclusively controls and manages the entire biometrics patent portfolio”.

167. As to the orders, the restraints sought in paragraphs 2, 3, 5 and 6 of the motion (as varied in the plaintiffs’ submissions) are in terms which, in my view, are appropriate to make on an interlocutory basis.  They seek to restrain the making of specific representations of a kind which are seriously arguable to be misleading or deceptive, are in terms that make clear what the parties restrained are not to assert, and are no wider in ambit than necessary: Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) 92 ALR 563.

168. I do not propose to make the orders requiring Mr Burke to do all things in his power and control so that Microlatch HK ceases making the licence and ownership representations (orders 5 and 6 of the motion), which were included in the motion at a time when Microlatch HK was not a party to the proceedings. Microlatch HK has since been joined and appeared at the hearing represented by Mr Burke and will be subject to the restraints made.

169. I will also not make order 8 as sought by the plaintiffs’ motion. The Microlatch HK posts referred to in that order are the publications or webpages referred to the in the particulars to paragraphs 36 and 48 of the FACLS. As noted at [109], Mr Cole’s evidence is that those posts have already been removed.

170. I am satisfied that it is appropriate to make order 9, which seeks to restrain the active defendants from dealing with patent attorneys. The evidence in relation to IP Gateway establishes that the Burke defendants have, in the past, sought to instruct patent attorneys on the basis that they have a licence or own the Securicom Patents. The making of the order also facilitates compliance with the other orders made.

Suppression order

171. On 15 July 2020, I made an interim order pursuant to s 10(1) of the Court Suppression and Non-publication Orders Act 2010 (NSW) (Suppression Act) to suppress annexure M of the affidavit of Kevin Dart dated 3 July 2020 (Annexure M). Annexure M comprises a letter dated 5 March 2020 from Apple Inc to Mr Dart (2020 letter) which attached a letter dated 6 April 2018 from Apple Inc to Mr Burke (2018 letter).

172. I said I would deal with the merits of the plaintiffs’ application for a longer term order under ss 7 and 8 of the Suppression Act that Annexure M be suppressed in these reasons. The application is made by the plaintiffs on the ground that the order is necessary to prevent prejudice to the proper administration of justice.

173. The plaintiffs submit that a suppression order should be made over Annexure M as the letters are confidential communications and have only been disclosed on a need to know basis to a limited number of people within the plaintiffs’ companies.

174. They say that Annexure M contains the reasons surrounding the legal uncertainty over the ownership of the rights to the Securicom Patents and that disclosure of those reasons could influence the attitude taken by third parties to the plaintiffs’ disadvantage. They also say it is important that the reasons referred to in the letters be suppressed as some of the defendants have threatened to bring matters to the attention of certain parties in order to disrupt the plaintiffs’ potential negotiations with those parties.

175. The plaintiffs’ submit that a suppression order would not impinge on the principles of open justice as Annexure M comprises very specific communications that are not critical to resolving the current dispute between the parties.

176. They also submit that the administration of justice favours the grant of a suppression order because Annexure M would not have been adduced into evidence without the possibility of such an order being made. In support of that submission, they rely on Mr Dart’s affidavit sworn on 15 July 2020, in which he gives evidence that he was hesitant to exhibit Annexure M to his affidavit because of concerns that if the contents were made public it might weaken the plaintiffs’ bargaining position with other entities in respect of the Securicom Patents. Mr Dart says that he nevertheless brought Annexure M into evidence to inform the Court of the plaintiffs’ dealings with third parties.

171. Mr Burke opposes the making of the suppression order. He contends it is an overreach in circumstances where he has never sent information to Apple or done anything otherwise inappropriate and has complied with the Court’s orders.

172. Mr Fyvie and Microlatch Technologies also oppose the making of a suppression order. They submit that there is no inherent confidentiality in the contents of Annexure M as the commercial matters discussed have been well canvassed between the parties and are known to persons within the intellectual property sphere. They also submit that Mr Dart’s evidence does not reach the threshold of establishing that a suppression order is necessary to prevent prejudice to the proper administration of justice.

Consideration

179. In deciding whether to make a suppression order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice: Suppression Act, s 6.

180. Section 8(1)(a) of the Suppression Act requires the Court to be satisfied that a suppression order is necessary to prevent prejudice to the proper administration of justice.

181. The operative condition for the making of a suppression order is that the order is necessary. That is not a matter of discretion. It requires the Court to reach the stage of satisfaction that the order is necessary to achieve the legislative intention of the Suppression Act. It has also been said that orders should only be made in exceptional circumstances: Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 at [30] (Hogan); Rinehart v Welker (2011) 93 NSWLR 311; [2011] NSWCA 403 at [27] (Rinehart); Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd (No 3) [2013] NSWSC 1069 at [42] (Wright).

182. The phrase “necessary to prevent prejudice to the proper administration of justice” does not mean that if the suppression order is not made, the proceedings will not be able to continue. The basis of the implication is that if the kind of order proposed is not made, the result will be, or at least will be assumed to be, that particular consequences will flow, that those consequences are unacceptable, and that therefore the power to make orders which will prevent them is to be implied as necessary to the proper function of the court: Wilson v Basson [2020] NSWSC 512 at [17]; John Fairfax Group Pty Ltd v Local Court of New South Wales (1991) 26 NSWLR 131 at 161; Rinehart at [40].

183. The weight to be given to the public interest in open justice may vary depending on the nature and stage of, and the issues in, the proceedings. It will often be relevant to consider whether the proceedings are criminal or civil, whether they involve questions of public or private law and whether they involve disputes that impact on the public or only the parties: Welker v Rinehart [2011] NSWSC 1094 at [17] (Welker).

184. Having reviewed Annexure M, it is not plain to me that both letters are of an inherently confidential nature.

185. The 2018 letter was written over 2 years ago, is addressed to Mr Burke and is not marked as confidential. I accept that it refers to matters which the plaintiffs may not wish to be placed in the public domain. But it is difficult to see how, or on what basis, the plaintiffs can justify the suppression of the contents of a communication to which the plaintiffs were not copied at the time and in respect of which the party to whom the letter is addressed, the second defendant in these proceedings, makes no claim of confidentiality.

186. In that context, Mr Dart’s evidence, to the effect that the contents of the 2018 letter might advantage other parties to the detriment of the plaintiffs’ bargaining position is not, in my view, a sufficient basis on which to conclude that it is necessary to prevent prejudice to the proper administration of justice to make a suppression or non-publication order over that letter.

187. While finely balanced, I have come to the conclusion that the position in relation to the 2020 letter is different to that of the 2018 letter and consider the appropriate course is to make a suppression order in respect of the 2020 letter until the final determination of the plaintiffs’ claims in these proceedings.

188. It is fair to say, as Mr McCartney’s submissions suggests, that the evidence on which the plaintiffs rely in support of the suppression order lacks detail and the 2020 letter itself refers to matters, some of which have been canvassed between the parties in these proceedings. But the contents of the 2020 letter go beyond matters raised in these proceedings. It relevantly records the status and basis of the plaintiffs’ negotiations and dealings with a third party in respect of the Securicom Patents. According to Mr Dart’s evidence, those matters have not been put into the public domain by the plaintiffs and remain confidential to them.

189. The resolution of the question of the balance of convenience required consideration of the potential impact of the conduct complained of on the plaintiffs’ business activities. An understanding of that impact was informed by the contents of that part of Annexure M which comprises the 2020 letter.

190. It is also relevant that the current dispute is between private parties and the 2020 letter is only one aspect of the extensive evidence tendered on this application, over which no suppression order is sought. Much of the evidence read at the hearing is referred to in these reasons. In that context, the balancing exercise required by the Suppression Act may make the public interest in open justice of less weight in this case: Welker at [17].

191. The plaintiffs’ evidence is that they were hesitant to adduce Annexure M because of its confidential nature and the potential impact it might have on their dealings with others if disclosed, and they reserved the right to seek to withdraw it if no suppression order is made.

192. I am satisfied that 2020 letter is confidential to the plaintiffs. It seems to me to be necessary to prevent prejudice to the proper administration of justice to gain some protection for a letter about the confidential status of commercial dealings, was relevant evidence at the hearing and may be withdrawn if no suppression order is made.

193. As for the period for which the order should apply, the obligation is to specify the duration of the order to ensure that it operates for no longer that is reasonably necessary: Suppression Act, s 12; DRJ v Commissioner of Victims Rights [2020] NSWCA 136 at [47].

194. In my view, the order should apply up until the time at which the plaintiffs’ claims in the proceedings are finally determined. At that time, it could be expected that the contents of the 2020 letter will no longer be of commercial sensitivity and would have lost any character of confidentiality. Based on their status in the commercial list, the proceedings should be completed within 9 to 12 months and I will make an order on that basis. Of course, a further application can be made if a longer period is needed, including at the final hearing.

195. As plaintiffs’ counsel indicated that they may want to withdraw Annexure M from evidence in the event that I declined to make a suppression order, I will defer entry of the suppression order that will apply to the 2020 letter for seven days to enable any such application to be made.

Costs

196. The plaintiffs seek an order for costs in the event that they succeed on this application.

197. They submit that the Burke defendants should pay their costs, in accordance with the usual rule that costs follow the event: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1.

198. The plaintiffs also seek an order for costs against Mr Fyvie and Microlatch Technologies, but only up to and including 9 July 2020, being the day on which Mr McCartney wrote to Hammerschlag J’s Associate and advised that his clients consented to the orders sought on the plaintiffs’ motion. The plaintiffs say that, subject to modest concessions made on 6 April 2020, there has been active opposition to the application by Mr Fyvie and Microlatch Technologies, including Mr Fyvie filing an affidavit after some defaults.

199. Mr Fyvie and Microlatch Technologies submit that no order as to costs should be made against them as they were dragged unwillingly into the matter and, at a reasonable opportunity, indicated they would consent to the orders that were sought.

200. Mr Burke made no submissions on the issue of costs at the hearing.

201. The determination of the issue of costs involves the exercise of a discretionary power. While unfettered, that power must be exercised judicially having regard to established principle: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [134].

202. While the general rule is that costs follow the event, the “default” position in respect of costs of interlocutory applications is that they are to be paid and otherwise dealt with in the same way as the general costs of the proceedings, unless the Court otherwise orders: UCPR, r 42.7.

203. The guiding principles which are applicable to the determination of costs in respect of an interlocutory injunction application establish that ordinarily, where an interlocutory injunction has been granted and a defendant did not concede that relief, the costs of the application would be costs in the cause or the successful plaintiffs’ cause, rather than being paid by the defendant on an ordinary basis: His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporated (No 2) [2007] NSWCA 142 at [23], [26]-[27] (Macedonian Church); Baller Industries Pty Ltd v Mero Mero Leasing Pty Ltd [2019] NSWSC 1067 at [18]; Devereaux Holdings Pty Ltd v Pelsart Resources NL (No 2) (Supreme Court (NSW), 24 July 1985, unrep).

204. The rationale for the usual approach is that, at the stage of an interlocutory injunction, the Court is not usually in a position to adjudicate upon the ultimate outcome of the proceedings and, accordingly, decides the question of the injunctive relief by reference to other considerations, such as the balance of convenience: Macedonian Church at [21].

205. In my view, the appropriate order in relation to the Burke defendants is that the costs of the interlocutory application be the plaintiffs’ costs in the cause. I make that order as I consider it best reflects the outcome on this application, which is that the Burke defendants contested the application on which the plaintiffs achieved success, but did not contest all of the plaintiffs’ claims for relief. The order also recognises that the grant of the interlocutory relief in relation to the licence representations is based on finding there is a serious question to be tried as to the validity of the Securicom to Microlatch HK 2013 licence which will likely be the subject of dispute at the final hearing. The resolution of that dispute, which will include factual findings that could not be determined on this application, may have the consequence that the plaintiffs ultimately fail with their claims.

206. As to Mr Fyvie and Microlatch Technologies, based on the 14 Feb email, I am not persuaded by the submission that they were dragged unwillingly into the matter. That said, the evidence indicates that they had a limited role in the events leading to the claims made in the motion. They also consented to all of the orders pressed at the hearing. In those circumstances, I consider that the costs orders as between them and the plaintiffs should be costs in the cause up to and including 9 July 2020 and, thereafter, there be no order as to costs.

Orders

207. For these reasons, I make the following orders:

1. Upon the plaintiffs giving the usual undertaking as to damages, until further order of the Court or the final determination of the proceedings, order that:

1. the second, fifth, seventh, eighth and ninth defendants, whether by themselves, their servants or agents, be restrained from representing or asserting that any of them or the ninth defendant have a licence to use, permit the use of, or otherwise utilise any of the rights in respect of, the Securicom Patents, other than in Permitted Circumstances;

2. the second, fifth, seventh, eighth and ninth defendants, whether by themselves, their servants or agents, be restrained from representing or asserting that the second plaintiff does not have a licence to use, permit the use of, or otherwise utilise all of the rights in respect of, the Securicom Patents, other than in Permitted Circumstances;

3. the second, fifth, seventh, eighth and ninth defendants, whether by themselves, their servants or agents, be restrained from representing or asserting that any of them or the ninth defendant have any ownership interest or proprietary rights in respect of the Securicom Patents;

4. the second, fifth, seventh, eighth and ninth defendants, whether by themselves, their servants or agents, be restrained from representing or asserting that the second plaintiff is not the owner of the Securicom Patents; and

5. the second, fifth, seventh, eighth and ninth defendants, by themselves, their servants or agents, be restrained from instructing or purporting to instruct any patent attorneys to communicate with any patent registries or patent regulatory authorities in which they assert or represent that they represent a licensee, owner or registered patent holder of the Securicom Patents.

2. Subject to Order 3 below, pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW) (the Act) on the ground set out in s 8(1)(a) of the Act, or alternatively the inherent jurisdiction of the Court, the evidence in the proceedings at Annexure M of the affidavit of Kevin Dart dated 3 July 2020, being the letter dated 5 March 2020 at Courtbook pages 1165 and 1166 inclusive be supressed and not disclosed until 16 August 2021 or until further order of this Court.

3. Extend the interim Order made on 15 July 2020 under s 10(1) of the Act until 21 August 2020 and defer entry of Order 2 above until 21 August 2020.

4. The costs of the plaintiffs’ application for the interlocutory orders sought in the plaintiffs’ notice of motion filed on 27 March 2020:

1. as against the second, fifth and ninth defendants, be the plaintiffs’ costs in the cause against those defendants; and

2. as against the seventh and eighth defendants, be costs in the cause up to and including 9 July 2020 and thereafter there be no order as to costs.

5. List the proceedings for directions in the Commercial List at 9.45 am on 28 August 2020.

6. NOTE that in these orders:

1. the Securicom Patents means the following:

1. Application Number 2535434, Canada;

2. Application Number 200380103206, China;

3. Application Number 200480023223, China;

4. Application Number 201110037781, China;

5. Application Number 04761120, Europe;

6. Application Number 1839273, Germany;

7. Application Number 04761120.7, UK, Belgium, France, Germany and Netherlands;

8. Application Number 10/535,051, United States of America;

9. Application Number 13/572,166, United States of America;

10. Application Number 15/592,809, United States of America;

11. Application Number 10568207, United States of America;

12. Application Number 13572166, United States of America;

13. Application Number 15000818, United States of America;

14. Application Number 11/792,975, United States of America;

15. Application Number 12/063,650, United States of America;

16. Application Number 2004301168, Australia;

17. Application Number 2009201293, Australia.

2. Permitted Circumstances means the following:

1. those steps required for the preparation of pleadings, affidavits, advices or other steps for the defence of these proceedings or the prosecution of any cross claim in these proceedings;

2. privileged communications in respect of these proceedings.

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Endnote

Amendments

14 August 2020 - 14 August 2020: Formatting error corrected.

Decision last updated: 14 August 2020