Gram Engineering Pty Ltd v Oxworks Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Gram Engineering Pty Ltd v Oxworks Pty Ltd [2019] FCA 689

File number: NSD 2048 of 2017
Judge: ROBERTSON J
Date of judgment: 17 May 2019
Catchwords: PATENTS – action for infringement of Australian standard patent – fence plinth – construction of claim: “A fence plinth formed from sheet material having spaced apart end edge margins and being profiled to incorporate stiffening formations that extend along the sheet between the end edge margins” – cross-claim for unjustified threats – determination of separate questions: liability for patent infringement; unjustified threats; and entitlement to (but not quantification of) additional damages
Legislation: Patents Act 1990 (Cth) ss 13, 122
Cases cited:

Davies v Lazer Safe Pty Ltd [2019] FCAFC 65

Fresenius Medical Care Australia Pty Limited v Gambro Pty Limited [2005] FCAFC 220; 224 ALR 168

H Lundbeck A/S v Sandoz Pty Ltd [2018] FCA 1797; 137 IPR 408

1           Industrial Galvanizers Corporation Pty Ltd v Safe Direction Pty Ltd [2018] FCA 1192; 135 IPR 220

Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90; 222 ALR 155

2           Pacific Enterprises (Aust) Pty Ltd v Bernen Pty Ltd [2014] FCA 1372; 321 ALR 715

Welch Perrin & Co Pty Ltd v Worrel [1961] HCA 91; 106 CLR 588

3           Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2) [2011] FCA 848

Date of hearing: 26 and 27 March 2019
Registry: New South Wales
Division: General Division
National Practice Area: Intellectual Property
Sub-area: Patents and Associated Statutes
Category: Catchwords
Number of paragraphs: 126
Counsel for Gram Engineering Pty Ltd: Mr A Franklin SC
Solicitor for Gram Engineering Pty Ltd: Bird & Bird
Counsel for Oxworks Pty Ltd and Oxworks Trading Pty Ltd: Ms L Thomas
Solicitor for Oxworks Pty Ltd and Oxworks Trading Pty Ltd: Thomson Geer

ORDERS

NSD 2048 of 2017
BETWEEN:

GRAM ENGINEERING PTY LTD (ACN 002 193 311)

Applicant
AND:

OXWORKS PTY LTD (ACN 096 695 644)

First Respondent

RISING STAR TRADE PTY LTD (ACN 603 562 509)

Second Respondent

OXWORKS TRADING PTY LTD (ACN 145 873 909)

Third Respondent
AND BETWEEN:

OXWORKS PTY LTD (ACN 096 695 644)

Cross-Claimant of the First Cross-Claim
AND:

GRAM ENGINEERING PTY LTD (ACN 002 193 311)

Cross-Respondent to the First Cross-Claim
AND BETWEEN:

RISING STAR TRADE PTY LTD (ACN 603 562 509)

Cross-Claimant of the Second Cross-Claim
AND:

GRAM ENGINEERING PTY LTD (ACN 002 193 311)

First Cross-Respondent to the Second Cross-Claim

OXWORKS TRADING PTY LTD (ACN 145 873 909)

Second Cross-Respondent to the Second Cross-Claim

JUDGE:

ROBERTSON J

DATE OF ORDER:

17 MAY 2019

THE COURT ORDERS THAT:

1.Within 14 days of the date of this judgment, the parties bring in an agreed form of orders giving effect to these reasons, and for the further conduct of the matter.  

2.If no agreement is reached, within 28 days of the date of this judgment the parties are to file and serve the orders for which they each contend, together with any evidence on…

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Details
Case
[2019] FCA 689
Decision Date

CaseChat Overview and Summary

Gram Engineering Pty Ltd initiated legal proceedings against Oxworks Pty Ltd in the Federal Court, alleging infringement of a standard patent concerning a fence plinth. The dispute centred around the interpretation of the patent claim which described a fence plinth made from sheet material with specific characteristics. Additionally, Gram cross-claimed that Oxworks had made unjustified threats against it. The court was tasked with determining three main issues: whether Oxworks' product infringed Gram's patent, whether Gram had made unjustified threats, and whether Gram was entitled to additional damages, though not their quantification.

The court first addressed the construction of the patent claim. It noted that the term "sheet material" in the claim referred to material that was broad and thin but could have corrugations or profiles. The court found that Oxworks' product, which was made through an extrusion process resulting in a zig-zag cross-sectional shape, met the criteria set out in the patent claim. The court emphasised that the specification's language should not be used to alter the meaning of the claim's terms. The experts' opinions, while considered, did not significantly assist in interpreting the claim.

Regarding the cross-claim for unjustified threats, the court concluded that since Oxworks had indeed infringed the patent, Gram had not made unjustified threats. The court referenced prior authority indicating that a finding of non-infringement was not a basis for a finding of unjustified threats. Consequently, Gram was entitled to additional damages, although the exact amount was not quantified in this instance.

The court directed the parties to reach an agreement on the form of orders within 14 days. If they could not agree, they were to file their proposed orders, evidence, and written submissions within 28 days.

Orders

Orders of the court

1. Within 14 days of the date of this judgment, the parties bring in an agreed form of orders giving effect to these reasons, and for the further conduct of the matter.

2. If no agreement is reached, within 28 days of the date of this judgment the parties are to file and serve the orders for which they each contend, together with any evidence on which they rely and written submissions limited to 3 pages.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Rising Star ceased ordering or importing or selling the plinths after receiving legal advice in relation to a letter from the former lawyers for Gram dated 11 July 2018.The facts as to the manufacture of the Oxworks Plinth I find that the Oxworks Plinth is manufactured in the following way. These facts were not in contention. It is produced from cylindrical aluminium billets. Each billet has a diameter of between approximately 200mm and 250mm, and a length of between approximately 600mm and 1000mm. The billet is first heated to between approximately 800 to 925˚ F (426 to 496˚ C). After the billet reaches the desired temperature, it is transferred to a loader. While on the loader, a thin film of smut or lubricant is added to the billet and to the ram. A ram is a steel rod (with a tight fitting steel block attached to the ram’s stem) that is used to apply pressure to the billet and push it through the die. The billet or log is transferred to the cradle to support the cylindrical log as it enters the press container. The billet is then pushed (using the steel rod and block) into the press container that has a die opening at the opposite end. Under pressure, the billet is crushed against the die. As a result of pressure being added to the billet, the billet squeezes through the die, taking the shape of the die opening. This extrusion process forces the billet into the shape of the Oxworks Plinth, which is a zig-zag shape in cross-section. During the extrusion process, the billet or log is between approximately 200mm and 250mm in diameter and between approximately 500mm and 1000mm in length. When the extrusion reaches a length of approximately between 18 metres and 30 metres, the extrusion is cut with a profile saw or shear. The extrusion is then transferred to a cooling area, and then a stretcher. Stretching straightens the extrusion and performs “work hardening” (molecular realignment which gives the aluminium increased hardness and improved strength). Stretching does not alter the shape of the extrusion other than to ensure straightness. After the stretching process, the extrusion is between approximately 18 metres and 30 metres long, between approximately 153.88mm and 156.12mm wide and between approximately 1.35mm and 1.65mm thick. After stretching has been completed, the extrusion is transferred to a saw table and cut to specific lengths. After the cutting process, the extrusion is between approximately 5500mm and 8000mm long, between approximately 153.88mm and 156.12mm wide and between approximately 1.35mm and 1.65mm thick. After the cutting process, the extrusion is transferred to an aging oven. The aluminium extrusion is then transferred to the powder coating plant to add the colour. The extrusion is hung on a conveyor line and sprayed with chemicals to ensure a clean etched surface. Hexavalent Chromate is then applied to protect the extrusion against oxidisation. The extrusion then passes through a powder coating application booth where the coloured polyester powder is sprayed onto the extrusion, then cured in an oven at 200˚ C.

Evidence

Evidence Before The Court

Relevant figures from the Patent are:Figure 1 – a schematic perspective view of a fence, the plinth being numbered 28:Figure 2 – a perspective view of a plinth used in the fence of Figure 1:The evidence The parties read the following affidavits. The applicant read the affidavit of Mr Christopher Berkeley affirmed 21 December 2018. He annexed to his affidavit pages of the Gram website at various dates. I admitted also one part of a correcting affidavit by Mr Berkeley dated 21 March 2019. I rejected the balance as being served too late, some five or six days before the trial. The applicant read an affidavit by Mr Wing Yuen (Albert) Kwan, the information technology manager at Gram, affirmed 24 January 2019. The applicant also read an affidavit by Ms Suzi Susic, the marketing manager at Gram, affirmed 21 February 2019. Some paragraphs were admitted subject to relevance, noting that it was not said by the applicant that before March 2007 there were records in relation to Oxworks. Paragraphs 5 to 13 and 16 and the corresponding annexures, SS-1 and SS-2, related to time when there was no evidence the Oxworks was a customer of Gram. The applicant tendered an expert report by Mr William Samuel Hunter dated 18 April 2018, exhibited to Mr Hunter’s affidavit dated 26 April 2018. The applicant also tendered a further report by Mr Hunter, dated 21 February 2019, exhibited to Mr Hunter’s affidavit of 22 February 2019. The respondent read only the affidavit affirmed by Dr Hugh Lithgow Stark affirmed 1 March 2019, constituting his expert report. The experts produced a joint report dated 12 March 2019 and gave concurrent oral evidence. The respondent did not read an affidavit affirmed by Mr Glenn Andrew Hosking dated 23 February 2018 which had been filed. Mr Benjamin George Thornton was the director of Rising Star. He affirmed an affidavit dated 14 December 2018, certain paragraphs of which were read by the applicant. He was not cross-examined. His evidence, which I accept, was that in December 2015 the director of Oxworks, Mr Hosking, emailed to him a web link for a product he wanted Rising Star to manufacture and supply (which product would later be known as “ColourSmart Plinths” or “ColourSmart Aluminium Sleepers”). The link ( was to a steel plinth on a page on the Gram website. After Mr Thornton received the web link, he went to the Gram website and looked through the steel plinth web page and looked at the designs/specifications. Between 18 December 2015 and 7 January 2016 Mr Thornton emailed the Gram website link to Rising Star’s purchasing team and found out from them that their selected Chinese manufacturers could only manufacture the product with a heavier wall thickness due to the product being extruded from aluminium and not roll formed from aluminium, steel or metal. He responded requesting that the product be drawn up at that thickness for approval by Oxworks. Mr Thornton discussed with Mr Hosking on a number of occasions between December 2015 and August 2016 Oxworks proposed plinths and the design and specifications (specifications) of those plinths. Numerous variations were made to the specifications at the request of both the Chinese manufacturers and Oxworks. The final specifications were approved and signed in September 2016 to be sent to China. Once the specifications were finalised, Oxworks sent Rising Star a purchase order for the plinths. This occurred in October and November 2016.

Decision

Reasons for decision

In light of my finding that the respondent has infringed the Patent, the applicant has not made unjustified threats.Conclusion and orders I shall direct the parties to bring in an agreed form of order giving effect to these reasons for further conduct of the matter. This should be done within 14 days of the date of these reasons. If no agreement is reached, within 28 days of the date of these reasons the parties are to file and serve the orders for which they contend, any evidence, and short written submissions.

Ratio Decidendi

Legal Principle Established

The applicant submitted that because there was infringement the unjustified threats cross-claim was irrelevant. Also, if there was authority for the proposition that a cease and desist letter can be an unjustified threat, no consequences flowed from it. There was clear authority that a finding of non-infringement alone was not a basis for a finding of unjustified threats: Damorgold Pty Ltd v Blindware Pty Ltd [2017] FCA 1552; 354 ALR 1.Consideration Construing the Patent As the Full Court recently restated in Davies v Lazer Safe Pty Ltd [2019] FCAFC 65 at [42]-[45], although the claims are to be construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification. While it is legitimate to refer to the rest of the specification to explain the background to the claims, to ascertain the meaning of technical terms and resolve ambiguities in the construction of the claims, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses taken from other parts of the specification. The Full Court referred to Welch Perrin & Co Pty Ltd v Worrel [1961] HCA 91; 106 CLR 588 at 610. The importance of the actual language used in the claim to define the invention was emphasised by another Full Court in Fresenius Medical Care Australia Pty Limited v Gambro Pty Limited [2005] FCAFC 220; 224 ALR 168 at [94]:The whole of the specification must be read in order to construe the claim. So much is not in dispute. However, that does not mean that the words of the claim are to be ignored. Nor can it be ignored that the patentee has chosen not to include in a claim matters, integers or aspects of the invention that have been referred to in the body of the specification. This accords with the well-accepted principle enunciated in Welch Perrin at 610 that glosses drawn from the body of the specification cannot be used to narrow or expand the boundaries of the monopoly as fixed by the words of a claim. Neither the parties nor the experts suggested that the words had technical, scientific or special meanings. I find that the words did not have such meanings. With respect, I found the evidence of the experts, Mr Hunter and Dr Stark, otherwise of little assistance in construing the claims in the Patent: see however [82] below. The subject matter of the invention, which provides the general context, is fence elements known as plinths. The question of construction of the relevant claims is the meaning, in context, of “sheet material” when used in claim 1. It seems to me to be clear that the word “sheet”, of itself, refers to certain dimensions of material, being broad and relatively thin. The word does not necessarily convey that the material is flat. It may have corrugations or profiles. The word “sheet” should be taken to mean the same in claim 1 each time it is used. It is used twice in that claim. The second time the word “sheet” is used in claim 1, in the phrase “being profiled to incorporate stiffening formations that extend along the sheet”, on any view the product meant by the word is not flat but has a profile.