Damorgold Pty Ltd v Blindware Pty Ltd (No 2)

In the case of Damorgold Pty Ltd v Blindware Pty Ltd (No 2), the dispute involved a patent infringement claim brought by Damorgold against Blindware, with Blindware mounting a cross-claim for revocation of the patent and ancillary claims for groundless threats and misleading and deceptive conduct. The Federal Court of Australia was tasked with determining the incidence of costs following the successful defence of the infringement claim and the upholding of the patent's validity in the cross-claim. The central legal issues revolved around whether the court should consider the claim and cross-claim globally, the appropriate event for cost allocation, the apportionment of costs, and the effect of offers of compromise and conduct prior to and during litigation.

The court deliberated on the principles of patent law and costs, particularly under section 19 of the Patents Act 1990 (Cth). The Federal Court held that the appropriate approach was to consider the claim and cross-claim globally, reflecting the overall success and failure of the parties. The court reasoned that while Blindware was successful on its cross-claim, it was not entirely successful overall due to its lack of success on ancillary claims. The court also noted the importance of Blindware's early stance on non-infringement and its attempts to resolve the dispute amicably, including offers of compromise and efforts to narrow the issues. The court exercised its discretion under section 19(3) of the Patents Act, directing that costs be taxed on a party/party basis, effectively nullifying the impact of section 19(2) in the context of the cross-claim.

The court concluded that Blindware, having been successful on the key issue of patent validity, was entitled to its costs, subject to a deduction to reflect its overall lack of success. The court emphasised the overarching purpose of case management and the importance of making judicial determinations where necessary, while also considering the conduct of the parties and the public interest in the validity of patents. The final orders included a costs direction that recognised Blindware's success in establishing the validity of the patent but also accounted for the global nature of the litigation and the conduct of both parties.