Encompass Corporation Pty Ltd v Infotrack Pty Ltd (No 3)

Encompass Corporation Pty Ltd, an Australian company, brought an action against Infotrack Pty Ltd, also an Australian company, in the Federal Court of Australia. Encompass alleged that Infotrack had infringed patents held by Encompass. Infotrack denied the infringement and, as counterclaims, sought a declaration of invalidity of the patents and damages for misleading and deceptive conduct. Encompass counterclaimed for infringement of its own patents. The dispute came before the Court in several stages, including a proceeding on the cross-claim, and ultimately resulted in Infotrack succeeding on a claim of patent invalidity.

The Court was required to determine the appropriate reduction in costs payable by Encompass to Infotrack. Infotrack was successful on only one of the multiple grounds of invalidity it raised, but Encompass had not contested the invalidity on the successful ground. The Court was required to consider the appropriate reduction in costs, taking into account that Infotrack succeeded on only one of the grounds of invalidity it raised.

The Court found that the reduction in costs should be substantial, as Infotrack had not succeeded on all of the grounds of invalidity it raised. The Court found that a reduction of 45% was appropriate, given that Infotrack was successful on only one of the grounds of invalidity it raised. The Court noted that it was not necessary to consider the costs in relation to the costs argument, as Encompass had not succeeded on any of its claims.

The Court made orders that Encompass pay Infotrack’s costs of the main proceeding and the proceeding on the cross-claim, as taxed or agreed. The Court ordered that the amount payable be reduced by 45%. The Court made no order as to costs in relation to the costs argument.