FEDERAL COURT OF AUSTRALIA
Embertec Pty Limited v Energy Efficient Technologies Pty Limited
[2013] FCA 2
Citation: Embertec Pty Limited v Energy Efficient Technologies Pty Limited [2013] FCA 2 Parties: EMBERTEC PTY LIMITED (ACN 110 367 809) v ENERGY EFFICIENT TECHNOLOGIES PTY LIMITED (ACN 123 181 439) and STAVROS PAPPAS; ENERGY EFFICIENT TECHNOLOGIES PTY LIMITED (ACN 123 181 439) v EMBERTEC PTY LIMITED (ACN 110 367 809) File number: NSD 1167 of 2012 Judge: FOSTER J Date of judgment: 4 January 2013 Catchwords: PATENTS – application for interlocutory injunction restraining the infringement of an innovation patent which is a divisional of a parent patent application – whether patentee has a prima facie case of infringement – whether the alleged infringer has established a prima facie case of invalidity – relevant principles discussed – whether the balance of convenience and justice favoured the grant or refusal of the injunction where interlocutory decision likely to have the practical effect of deciding the whole patent case and where the usefulness of the injunction is probably limited to a few months at most Legislation: Australian Consumer Law, s 18 and s 29(1)
Patents Act 1990 (Cth), ss 18(1A), 40(3), 62, 122, 163
Statute of Monopolies 1623 (21 Jac I, c 3)
Victorian Energy Efficiency Target Act 2007 (Vic), s 15
Victorian Energy Efficiency Target Regulations 2008 (Vic), reg 6(1)(x), Sch 29BCases cited: Apple Inc v Samsung Electronics Co Ltd [2011] HCATrans 341 cited
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 applied
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 applied
Jupiters Ltd v Neurizon Pty Ltd (2005) 222 ALR 155 applied
Populin v HB Nominees Pty Ltd (1982) 59 FLR 37 cited
Ranbaxy Australia Pty Ltd v Warner-Lambert Company LLC (No 2) (2006) 71 IPR 46 followed
Samsung Electronics Co Ltd v Apple Inc (2011) 286 ALR 257 applied
Smith & Nephew Pty Ltd v Wake Forest University Health Sciences (2009) 82 IPR 467 cited
Stack v Brisbane City Council (1995) 59 FCR 71 cited
Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 appliedDate of hearing: 15 and16 November 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 105 Counsel for the Applicant: Ms SJ Goddard SC and Mr AC Harding Solicitor for the Applicant: DibbsBarker Counsel for the Respondents: Mr R Macaw QC and Dr CS Ward Solicitor for the Respondents: Fox Tucker Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1167 of 2012
BETWEEN: EMBERTEC PTY LIMITED (ACN 110 367 809)
ApplicantAND: ENERGY EFFICIENT TECHNOLOGIES PTY LIMITED (ACN 123 181 439)
First RespondentSTAVROS PAPPAS
Second RespondentAND BETWEEN: ENERGY EFFICIENT TECHNOLOGIES PTY LIMITED (ACN 123 181 439)
Cross-ClaimantAND: EMBERTEC PTY LIMITED (ACN 110 367 809)
Cross-Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
4 JANUARY 2013
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The applicant’s application for interlocutory injunctive relief made by Interlocutory Application filed on 10…
Keep reading for free
Create a free CaseChat account to read Embertec Pty Limited v Energy Efficient Technologies Pty Lim... and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
Details
- Case
- [2013] FCA 2
- Decision Date
CaseChat Overview and Summary
In the case of Embertec Pty Limited v Energy Efficient Technologies Pty Limited, Embertec sought an interlocutory injunction to prevent EETECH from allegedly infringing the 197 patent. Embertec claimed that EETECH's conduct, specifically the importation, sale, and supply of a Smart Power Board AV (EETECH power board), infringed upon the 197 patent, which pertains to Embertec's Smart Switch AV and Smart Switch PC products. EETECH contested the infringement claims and argued that the 197 patent was invalid, while also asserting that it was not infringing the patent. EETECH also claimed that Embertec's allegations of deception and reverse engineering were unfounded. The court had to determine whether Embertec had established a prima facie case of patent infringement, the validity of the 197 patent, and the balance of convenience and justice in granting the injunction.
The court found that Embertec had established a prima facie case of patent infringement, as there was sufficient evidence to support the claim that EETECH's power board infringed the 197 patent. However, the court also noted that EETECH had raised arguable cases for invalidity of the 197 patent, particularly in relation to the lack of novelty and fair basis. While the evidence did not allow the court to assess the strength of the invalidity case, it was deemed not to be of sufficient weight to overcome the prima facie case of infringement. Regarding the balance of convenience and justice, the court determined that it was not appropriate to consider Embertec's allegations of deception and reverse engineering without further evidence. Instead, the court focused on the potential commercial impact of the injunction on both parties and the urgency of the situation due to the impending saturation of the market for Smart Power Boards.
The court decided against granting the interlocutory injunction, finding that the balance of convenience and justice did not favour Embertec. The court considered the potential loss of sales and market share for Embertec, as well as the possible reputational damage, but also took into account EETECH's arguments regarding the invalidity of the 197 patent and the lack of evidence to support Embertec's claims of deception and reverse engineering. The court concluded that Embertec had not demonstrated that the potential harm to it outweighed the potential harm to EETECH, particularly given the arguable cases for invalidity raised by EETECH. Therefore, the interlocutory injunction was denied.
The court ordered that Embertec's Interlocutory Application be dismissed, and no injunction would be granted pending the final hearing of the proceeding. The court's decision highlighted the importance of the balance of convenience and justice in interlocutory injunction applications and the need for evidence to support claims of infringement and invalidity. The case underscored the significance of the impending market saturation for Smart Power Boards and the urgency for both parties to continue their commercial activities in relation to the Victorian Energy Efficiency Target Scheme.
The court found that Embertec had established a prima facie case of patent infringement, as there was sufficient evidence to support the claim that EETECH's power board infringed the 197 patent. However, the court also noted that EETECH had raised arguable cases for invalidity of the 197 patent, particularly in relation to the lack of novelty and fair basis. While the evidence did not allow the court to assess the strength of the invalidity case, it was deemed not to be of sufficient weight to overcome the prima facie case of infringement. Regarding the balance of convenience and justice, the court determined that it was not appropriate to consider Embertec's allegations of deception and reverse engineering without further evidence. Instead, the court focused on the potential commercial impact of the injunction on both parties and the urgency of the situation due to the impending saturation of the market for Smart Power Boards.
The court decided against granting the interlocutory injunction, finding that the balance of convenience and justice did not favour Embertec. The court considered the potential loss of sales and market share for Embertec, as well as the possible reputational damage, but also took into account EETECH's arguments regarding the invalidity of the 197 patent and the lack of evidence to support Embertec's claims of deception and reverse engineering. The court concluded that Embertec had not demonstrated that the potential harm to it outweighed the potential harm to EETECH, particularly given the arguable cases for invalidity raised by EETECH. Therefore, the interlocutory injunction was denied.
The court ordered that Embertec's Interlocutory Application be dismissed, and no injunction would be granted pending the final hearing of the proceeding. The court's decision highlighted the importance of the balance of convenience and justice in interlocutory injunction applications and the need for evidence to support claims of infringement and invalidity. The case underscored the significance of the impending market saturation for Smart Power Boards and the urgency for both parties to continue their commercial activities in relation to the Victorian Energy Efficiency Target Scheme.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
These Reasons for Judgment determine Embertec’s claim for an interlocutory injunction pending the final hearing of this proceeding restraining EETECH and Mr Pappas from infringing the 197 patent. The precise order sought is to be found in the Interlocutory Application filed on 10 October 2012. Embertec seeks to restrain EETECH from importing, selling, supplying or dealing in EETECH’s SPC and any other device which has substantially the same features and functionality as that SPC. SOME BACKGROUND MATTERS EETECH carries on business, principally in Victoria, in direct competition with Embertec. EETECH supplies to installers for installation in residential properties, and also itself installs in such premises, a SPC called the “EETECH SMART Power Board AV” (EETECH power board). Embertec supplies two very similar products known respectively as the “Embertec Smart Switch AV” and the “Embertec Smart Switch PC” (Embertec power boards). It is Embertec’s case that the conduct of EETECH in importing into Australia and in supplying here the EETECH power board constitutes an infringement of the 197 patent. EETECH does not dispute that it has imported into Australia EETECH power boards manufactured in China nor does it dispute that it has supplied those boards to installers and consumers in Victoria. It contends that its conduct does not constitute infringement of the 197 patent. EETECH’s arguments in support of this contention are based upon s 163 of the Patents Act 1990 (Cth) (the Patents Act). Alternatively, it argues that the 197 patent is invalid for a number of reasons. EETECH resists interlocutory relief in respect of the alleged infringement of the 197 patent. It says that:(a)Embertec is unlikely to succeed at trial on its patent infringement case;(b)The 197 patent is invalid and should be revoked; (c)EETECH has not infringed the patent (s 163);(d)The balance of convenience and justice is weighted strongly against the grant of any injunction; and(e)Damages are, in any event, an adequate remedy if infringement is ultimately established. The outcome of Embertec’s Interlocutory Application will have very significant ramifications for all parties involved in this proceeding. Both Embertec and EETECH are anxious to continue to take commercial advantage of the opportunities presented to them and to others by the Victorian Energy Efficiency Target Scheme (the VEET scheme). The VEET scheme is a scheme established by the Victorian State Government by legislation and by regulation which is designed to encourage through financial incentives the widespread installation into residential properties in Victoria of various energy saving devices. The purpose of the scheme is to make energy efficiency improvements more affordable and to put in place ways and means of reducing greenhouse gas emissions. Both parties agree that, as more and more SPCs are installed, a saturation point for the supply of such products will be reached. At that point, it will be commercially unviable for suppliers to seek out new households in which to install SPCs. Both parties agree that the saturation point for the Victorian market for the installation of SPCs will be reached very soon. Embertec suggests that that point will be reached about now. EETECH estimates that the saturation point will be reached in about March this year.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
There is enough material in the submissions made by Senior Counsel for EETECH, supported as they were by the evidence of Mr Freund, for me to conclude that EETECH has an arguable case for invalidity on the ground of lack of novelty. However, as matters presently stand, I do not think that I can assess the strength of that case and expressly decline to do so. Conclusions (Prima Facie Case) As presently advised, I do not think that I should accord any weight to EETECH’s argument based upon s 163 of the Patents Act. For that reason, subject to my views as to its case for invalidity, Embertec has established a prima facie case, or serious question to be tried of infringement of the 197 patent by EETECH. However, EETECH has reasonably strong arguments that the 197 patent is invalid based upon the lack of fair basis grounds. It has an arguable case in respect of its other grounds for invalidity. EETECH’s case for invalidity is presently of insufficient weight to overcome altogether the impact of Embertec’s prima facie case of infringement. For these reasons, Embertec has established a prima facie case of infringement but, nonetheless, EETECH has established a prima facie case of invalidity of the 197 patent, that case being reasonably strong insofar as some of the grounds relied upon are concerned.BALANCE OF CONVENIENCE AND JUSTICEAlleged Deception by EETECH Embertec submitted that EETECH had Embertec’s business and products squarely in its sights when it launched the EETECH power board. It went on to submit that the EETECH power board was deliberately and knowingly copied from the Embertec Smart Switch AV product. It argued that the Court may have regard to these matters when assessing the balance of convenience and justice. Particular emphasis was placed upon the infringements of copyright pleaded and relied upon by Embertec. At the hearing before me, Embertec tendered a bundle of documents (Exhibit A) in an endeavour to make good its allegations that EETECH had reverse engineered and copied Embertec’s power boards. EETECH explained the contents of Exhibit A by reading and relying upon a further affidavit of Mr Aganezov sworn on 15 November 2012. In that affidavit, Mr Aganezov specifically denied taking any physical examples of any Embertec or Kambrook product to China. He had previously denied reverse engineering those products. In his affidavit sworn on 25 October 2012, Mr Aganezov gave a detailed account of the steps he took to develop the EETECH power board. On the evidence filed so far in the proceeding, there is a substantial issue of fact as to whether EETECH is guilty of the deliberate copying alleged by Embertec. The evidence filed so far has not been tested at all. At this stage, it would be wrong in principle for me to make any findings about this hotly contested issue. For that reason, I do not propose to take it into account in any way.Other Factors Embertec submitted that, if its application for an interlocutory injunction is refused, it will suffer:(a)Lost sales that would have been made to EETECH (including by way of licence fee);(b)Ongoing and increasing loss of market share;(c)Loss of opportunity to sell, at least to some extent, to Accredited Persons; (d)Loss of opportunity to acquire VEECS from Accredited Persons;(e)Exposure to damages under supply contracts; (f)Lost opportunity to enter new markets; and(g)Damage to reputation.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.