CQMS Pty Ltd v Bradken Resources Pty Limited (No 2)
[2016] FCA 1144
•6 September 2016
FEDERAL COURT OF AUSTRALIA
CQMS Pty Ltd v Bradken Resources Pty Limited (No 2) [2016] FCA 1144
File number: QUD 736 of 2013 Judge: DOWSETT J Date of judgment: 6 September 2016 Catchwords: PRACTICE AND PROCEDURE – form of orders – appropriate relief where respondent’s product found not to infringe patent
COSTS – patent law – where applicant made unjustified threats – where expert evidence prepared and not relied on
Date of hearing: 6 September 2016 Registry: Queensland Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 16 Counsel for the First and Second Applicants: A Webb SC Solicitor for the First and Second Applicants: B Coogan of Thomson Geer Counsel for the First Respondent: D Shavin QC with P Flynn Solicitor for the First Respondent: Jones Day
Table of Corrections 20 September 2016 The date of judgment and date of hearing on the cover page have been amended to 6 September 2016. REASONS FOR JUDGMENT
QUD 736 of 2013 BETWEEN: CQMS PTY LTD ACN 122 935 906
First Applicant
CQMS RAZER PTY LTD ACN 010 402 990
Second Applicant
AND: BRADKEN RESOURCES PTY LIMITED ACN 098 300 988
First Respondent
BRADKEN LIMITED ACN 108 693 009
Second Respondent
AND BETWEEN: BRADKEN RESOURCES PTY LIMITED ACN 098 300 988 (and another named in the Schedule)
Cross-Claimant
AND: CQMS PTY LTD ACN 122 935 906 (and another named in the Schedule)
Cross-Respondent
JUDGE:
DOWSETT J
Well, just before I give some very brief reasons in respect of the matters that are substantially in dispute, could I go through the two orders pages and just indicate the orders that I’m proposing to make so that we can formalise them at a later stage. I’m now looking at the applicant’s short minutes of order and I think it’s agreed that there will be orders in terms of paragraphs 1 and 2 but we will add a schedule which identifies the relevant respondent’s products.
Then I note the undertakings in terms of paragraphs 3 and 4, and you’re accepting that, Mr Shavin, I think, aren’t you?
Then I will make orders in terms – I will make – I will certify, pursuant to section 19, because I think it’s in the public interest, but with the deletion of the words “and the claims were found to be valid” in each of them. I will then make an order in terms of paragraph 7 and paragraph 8, which I think are common to both drafts anyway.
Then just going back now to the respondent’s orders, I don’t have to look at – 1 and 2 I’ve already done – dealt with in the other. I will – 4 and 5 have been dealt with in the other. 6 hasn’t been, so there were – assuming there is still to be an issue about damages, 6 will go in.
Yes. Then 7 – and 7 will also go in for that reason. Then I will leave out 8 because I will have to deal with – I’m going to deal with it separately. Then 9 – well, something like 9 and 10 will go in, but it will – they may have to be adjusted a little.
I propose to certify pursuant to s 19. It is in the public interest that I do so. I shall delete the words “and the claims were found to be valid” in each of them. I will then make an order in terms of paras 7 and 8 of the drafts. They are common to both drafts anyway.
Subject to that matter, the form of order made with respect to Mr Wightley’s evidence will be in accordance with paragraphs 9(a), (b), (c) and (d). Well, actually, it won’t be that, will it? It will be that the costs of and incidental to Mr Wightley’s evidence will be paid on a party-and-party basis with respect to paragraphs 9(a), (b), (c) and (d), but on an indemnity basis insofar as concerns his evidence at the trial.
The respondent has been successful and should generally have its costs of the claim. As to the cross-claim, the applicant submits that certain matters, which were the subject of the cross-claim, were either abandoned or were unsuccessfully prosecuted by the respondent. It distinguishes between issues of fair basis, support and sufficiency, which were, as the applicant puts it, corollaries to infringement and the abandoned grounds of novelty, inventive step and utility, which were separate from the issue of infringement and were, at various points in the conduct of the action, discontinued.
In those circumstances, it seems to me to be appropriate to allow the respondent the costs of the issues of fair basis, support and sufficiency and clarity which were ventilated in connection with the infringement case, although by way of cross-claim. The respondent should not have the costs of the issues of novelty, inventive step and utility. An order ought be made in favour of the applicant in connection with those issues. That leaves for determination, I think, only the question of any special order concerning costs associated with the evidence of Mr Wightley and the preparation and costs associated with obtaining the evidence of Mr Briscoe, whose evidence was to be, at least in part, responsive to that of Mr Wightley.
The question of Mr Wightley’s evidence is a matter of some embarrassment to all of us. As early as July 2014 a problem was identified. The respondent considered it to be a problem associated with the way in which the evidence was presented. At that stage, counsel for the applicant made it clear that Mr Wightley’s evidence was intended, to be, in effect, non‑expert evidence going to elements of the infringement case. Subsequently, a number of schedules were prepared, apparently as part of Mr Wightley’s evidence. That evidence may have been primarily designed to facilitate presentation of the infringement case.
However, as counsel for the respondent submits, the schedules appear to have contained aspects which suggested that Mr Wightley’s evidence was again being offered as the evidence of an expert witness. Perhaps, because of this uncertainty, the matter proceeded, from the respondent’s point of view, on the basis that Mr Wightley was still to be called as an expert witness. Further, as I have pointed out, at the beginning of the trial junior counsel for the applicant appears to have indicated that Mr Wightley was being called as an expert witness. To be fair to counsel, I should add that the statement was, to some extent, qualified by statements about the primary role of the Court in the construction of patents.
In the event, counsel for the respondent cross-examined Mr Wightley at some considerable length. It was only either at the end of the applicant’s case, or in the very early part of counsel’s address on behalf of the applicant, that counsel for the respondent realized that Mr Wightley was not being advanced as an expert witness, at least not as a person skilled in the art. The applicant was claiming that he had some degree of expertize as a mechanical engineer. I have dealt with that matter in my reasons for judgment. The question, then, is whether any of the costs associated with Mr Wightley’s evidence should be allowed to the respondent on a party and party basis or on an indemnity basis.
I find the question to be fairly painful. It does seem to me that there was a misunderstanding between the parties, and that the misunderstanding may have been avoided had one or other of the parties spoken out a little more clearly or, alternatively, made inquiries as to what seem to have been ambiguous, or potentially ambiguous statements. At the start of the trial, the respondent was, however, entitled to infer that Mr Wightley was being presented as an expert witness. Even if the exchange in July was ambiguous, counsel’s statement at the beginning of the trial was not. The continued conduct of the case on that basis has undoubtedly incurred additional costs.
In those circumstances, I propose to order that the applicant pay the respondent’s costs of, and incidental to Mr Wightley’s evidence given at the trial, on an indemnity basis. Otherwise the respondent’s costs will be paid on a party and party basis. The form of order made with respect to Mr Wightley’s evidence will be that the respondent’s costs of and incidental to Mr Wightley’s evidence be paid on a party and party basis with respect to paragraphs 9(a), 9(b), 9(c) and 9(d) but on an indemnity basis insofar as concerns his evidence at the trial.
A similar but not identical question arises with respect to Mr Briscoe’s evidence. He was apparently retained and proofed upon the basis that he would give expert evidence in answer to Mr Wightley’s evidence in connection with construction of the patent, and that he would also give evidence concerning a ground of invalidity, namely utility. Since that ground was abandoned prior to the trial, the respondent ought not have any of the costs associated with Mr Briscoe’s status as a witness on that issue. To the extent that he was going to give evidence in relation to the question of construction, upon the basis that Mr Wightley was to give expert evidence, it seems to me that the costs associated with Mr Briscoe’s attendance at the trial, including travel expenses, ought be paid on an indemnity basis, but the costs prior to the commencement of the trial should be paid on a party and party basis.
I appreciate that this order probably doesn’t do perfect justice, but it’s the best I can do in the circumstances.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate:
Dated: 19 September 2016
SCHEDULE OF PARTIES
QUD 736 of 2013 Cross-Claimant
Second Cross‑Claimant:
BRADKEN LIMITED ACN 108 693 009
Cross-Respondent
Second Cross‑Respondent:
CQMS RAZER PTY LTD ACN 010 402 990
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