Lantech Inc. v First Green Park Pty Ltd

[1992] FCA 217

JUDGMENT No. ?!.> / .sz,.;,

FEDERAL COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	)
1
GENERAL DIVISION	1
B E T W E E N :

LANTECH INC

Applicant

A N D :

FIRST GREEN PARK PTY LTD AND OTHERS

Respondents

A N D :

FIRST GREEN PARK PTY LTD AND OTHERS

Cross-Claimants

A N D :

LANTECH INC

Cross-Respondent

COURT :	NORTHROP J
PLACE :	MELBOURNE  D1 MAY I993

kEDERAL COURT OF

m:  6 APRIL 1992

REGISTRY

There are a number of motions before the Court, but the first one argued is a motion by the respondents pursuant to a notice dated 6 April that the issues or questions arising on paragraphs 1 to 14 inclusive, and paragraphs 30 and 31 of the amended statement of claim and paragraphs 1 to 15, both	defence and cross-claim be decided separately from and before	inclusive, and paragraphs 31, 32 and 35 to 41 inclusive of the
any other questions to be tried in this proceeding. The issue comes down, in reality, to a fairly short point. The application in its amended form, or even before it was amended, made a number of claims against the respondent. One group of claims was based upon an infringement of the patentee's right in a patent in relation to machinery used for wrapping pallets with a plastic material. Another ground related to allegations based upon breaches of the Trade Marks
&&. In addition claims are based upon passing-off and upon
contraventions of the Trade Practices Act. The essential claim is based upon the Patents Act.
By an order made by consent on 3 December 1991 orders were made against the respondent in relation to the trade mark claim restraining the respondents from, in effect, advertising or using the trade mark, Lantech, and delivery up of material containing that word. Also orders were made restraining the advertising or selling of material under the name, Lantech, and from representing in the course of trade or commerce the
sale of goods using that name. Interlocutory orders were made
requiring the respondent to keep full and proper accounts of all importation, manufacture or sale by them, or any of them, of any apparatus referred to in sub-paragraph (l)(b) of the application filed on 13 September.
The issues remaining between the parties relate to the infringement of the patent and a cross-claim alleging that the patent is invalid for various reasons. The question between the parties comes down to the issue of whether the question of liability of the respondents, based upon the infringement of the patent including the validity of the patent, should be tried separately from the issue of whether, if successful, the applicant is entitled to damages or, at his option profits and the quantum thereof.
It appears .to be a fairly common practice that in intellectual property cases the question of liability generally is severed from and heard prior to any question of damages or profits. The reason appears to be that, generally, the issues of liability give rise to complex questions of fact and of law. If damages or profits were also to be included it would add greatly to the length of the trial and also could be embarrassing because of the problem of whether the applicant, if successful, should claim damages or profits. The basis upon which in the Federal Court this course has been adopted is normally by consent, but behind that consent there is a power for the Court to so order pursuant to 029 of the Federal
Court Rules. Reference is made to the definition of "question" in rl of 029. Rule 2(a) provides:

EX TEMPORE REASONS FOR JUDGMENT

"2. The Court may make orders for:

(a) the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings;"

I propose to consider whether this is an appropriate case for the exercise of the power conferred by 029 r2(a) to direct that the issues of liability, as identified by references to the specified paragraphs in the statement of claim and defence and cross-claim, should be tried as a question separately from any other question, being the question of damages or the taking of profits.

I rely upon the fact that it is a matter of general practice not only of this Court but also of other courts in matters of this kind to have liability tried as a separate issue. Second, there is much force in the argument that in cases of this kind, where the question of whether the patent is valid or not arises and whether there has been an infringement of the patent or not, are discrete questions which can be tried separately from questions of damages or profits. Third, in cases of this kind, the applicant at some stage must decide, assuming he succeeds, whether to claim damages or profits. Normally that election only arises after the question of liability has been determined. Fourth, it is quite clear that the paragraphs mentioned do cover the case of

of preventing further conduct in breach of the patent, if the	injunctive relief, and the injunction has the immediate effect
patent is valid and there has been an infringement of those rights. Accordingly, prima facie on the facts of this case, I would be disposed to make such an order as sought by the respondents.
Arguments were put by counsel on behalf of the applicant that because of the unusual features of this case, for instance, the fact that the machinery in dispute apparently is being imported and not being manufactured here, the fact that there are three particulars of infringement alleged in the particulars of infringement, and there may be further infringements and that this is a matter that should be determined before the case goes to trial on liability, that the discovery being sought in this case which, on its face, goes to the question of damages or profits, could assist in the question of deciding whether there have been further infringements apart from the three contained in the amended particulars of infringement; that this is a case where the discovery being sought and extending to the damages or profits point should be ordered at this stage. This type of problem could arise in many cases of this kind, but the claim for the injunctions, in my opinion, is sufficient to determine the issue of whether there has been an infringement of the patent, or whether the patent is valid or not. For the reasons I have already given, the submissions made by counsel for the applicants should not be accepted in this case. Further, any
discovery should be limited to the specific particulars of infringement already made.
There ought to be an order made in the form of the first motion sought in the notice to which I have referred.
The other matter referred to in that motion was in relation to the issues raised by the specified paragraphs of the amended statement of claim and defence, but before I make any orders on that there may be other matters to be argued. There remains to be argued also the question of the orders sought by the applicant's motion dated 3 April 1992.
The second order being sought in the motion by the respondents was that discovery be given by each party, but being limited to the issues arising out of the specified paragraphs. Those paragraphs are in conformity with the first order in relation to the issue to be tried separately from any other issues. Questions arise as to whether this is too limiting as far as the applicant is concerned, whether it places it at a disadvantage or whether it should have some means whereby discovery could go further to determine whether any other machines similar to or of the same kind with variations to it of those particularised in the particulars of infringement exist to enable a claim to be made in relation to those machines so that, in due course, any damages and/or profits could relate to them.
In my opinion, the true principle of the question of discovery is that expressed by A'Beckett J in the case of Fox Brothers v W.S. Cook [(1914)] VLR 1 where his Honour expressed the view that there must be some limit to the extent of the discovery given. That question was raised, in that case, on a motion for better discovery, a matter which is not yet before this Court. It may well be that after discovery has been given by the respondents here the parties might come back to the Court for further or better discovery.
The way matters stand at the moment, it is the three allegations of infringement contained in the particulars of infringement which are in issue and the discovery is to be limited to the issues raised by those specified paragraphs of the pleadings. There may be problems later in relation to this matter. It was suggested, in the course of argument, that I should make some order or direction that the applicant should be not limited to these three items if at the trial or thereafter it was found there were other machines that might or might not have infringed the patent if the patent were otherwise valid, but they are matters which I cannot determine today.
I propose to make an order which is, in my opinion, in conformity with the views expressed by A'Beckett J and make the order as sought in motion 2 of the notice by the respondent. I make the orders 1 and 2 as sought in the notice of motion dated 25 March 1992.
copy of the Ex Tempore Reasons for Judgment of the Honourable I certify that this and the preceding six (6) pages are a true
Mr Justice R.M. Northrop.
Associate: 7z-.i.