Leonardis & Anor v Theta Developments P/L & Ors No. Scciv-93-344

LEONARDIS & ANOR v THETA DEVELOPMENTS P/L & ORS
[2001] SASC 112
Civil

WILLIAMS J On 23 November 2000 I gave reasons for my decision upon the limited issues which were argued at trial but I did not then enter judgment.
On 21 December 2000, the defendants obtained my leave to amend their counterclaim so as to seek a declaration that the Leonardis patent (No. 591816) is invalid and to seek an order that it be revoked. I foreshadowed the possibility of this late application in pars 2, 114 and 156 of the abovementioned reasons. The defendants had previously formally pleaded the effect of the earlier decisions in the Federal Court involving Leonardis v Sartas No 1 Pty Ltd & Anor (“Sartis No 1”) (1996) 35 IPR 23 but without seeking relief under s 138 of the Patents Act, 1990 (Cth).
The defendants have amended their pleading formally to raise the new claims based upon the submissions that if the patent is properly to be construed in the manner which I have adopted, then an essential integer was not sufficiently disclosed in, and fairly based upon, the provisional patent application. The defendants’ submissions before me are summarised in pars 115 and 116 of my earlier judgment. The question at issue is what (as a matter of construction) was “disclosed” by the drawing which was before the Full Federal Court and is now incorporated in the amended letters patent.
The defendants accept that they are unable to succeed in argument before me with respect to their new claims in the light of the decision of the Full Federal Court in Sartas No 1 (supra) as I have applied it. However, the defendants wish to reserve their position to pursue the question elsewhere. Accordingly, there will be judgment in favour of the plaintiffs upon the defendants’ counterclaim. I note that all questions arising for my determination have now been dealt with and judgment should now be entered.
The procedure adopted in this case (whereby the raising of a claim for revocation of patent was deferred) caused me some concern. However, I had the assistance of very experienced counsel on each side who could foresee better than I where the case was heading. The unorthodox procedure appears to have suited the special circumstances which confronted the parties and led to an efficient disposal of the matter at trial. In this respect, the case should be treated as exceptional and unlikely to provide a precedent.
I have heard the parties as to the final orders now to be made (including costs).
The parties have joined issue as to the form of the proposed injunction, bearing in mind that I have decided that Exhibit 3 (Podfix 2) offends the process Claim no. 1 of the patent, but not the product Claim no. 6. The thrust of my decision is that the defendants cannot sell Podfix 2 with instructions for use in foundation formwork. Based upon the evidence before me, I consider that the plaintiffs should be entitled to an injunction expressed in general terms. The Court will supervise such orders and modify them to meet changing circumstances.
As to question of costs, it is appropriate that an order be made to reflect the success generally of the plaintiffs against the corporate defendants in obtaining relief and the success of the personal defendants against the plaintiffs in resisting the claim. Insofar as costs are attributable to the counterclaim, all defendants have been unsuccessful. All defendants were party to the counterclaim and advanced the arguments recorded in par 115 of my earlier judgment as to the construction of the Leonardis patent which lies at the heart of the dispute; this issue occupied a substantial portion of the hearing time.
The plaintiffs and the defendants (corporate and personal) respectively had common representation so that there was basically one set of costs incurred on each side - subject to bringing to account the question of the liability of the personal defendants.
The plaintiffs were unsuccessful on one important issue as to whether Claim 1 was a product claim or a process claim, but I consider that it was reasonable for the plaintiffs to argue as they did in support of their position. In accordance with the principles referred to by Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4 I would not penalise the plaintiffs in costs on this account. At p 16 Jacobs J said:
“But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.”
To award separate costs in respect of those aspects where each party has been successful will leave room for argument upon taxation as to the apportionment of the individual items of costs. That process itself is likely to require the taxing officer to wield a broad brush. I consider that it is better that I now make an assessment. In my opinion, justice will be done if I allow the plaintiffs their taxed costs of the action but subject to a reduction in that amount by one sixth. I consider that the corporate defendants should be responsible for the costs which I have awarded and that there be no further cost orders.
The formal orders will be:
1.A declaration that each of the spacers being exhibits P3, P4 and P5 is a spacer which when used in a building foundation formwork arrangement as described in Claim 1 of Australian Patent No. 591816 includes outermost planar surfaces engaging against the sides of respective adjacent boxes and frame members holding such outermost engaging surfaces which frame members have a lowermost edge which is substantially above the supporting level surface, within the meaning of Claim 1 of the Patent.
2.A declaration that the first, second and third defendants have by their manufacture and sale and/or keeping for sale, and/or advertising for sale and/or supply of building foundation formwork spacers being exhibits P3, P4 and P5 infringed the first plaintiff’s Patent number 591816 sealed by the Commissioner of Patents on 14 September 1991.
3.An order that the first, second and third defendants be restrained and injunctions are hereby granted restraining them and each of them whether by their agents, servants, workmen or otherwise from infringing the plaintiffs’ patent and in particular from manufacturing or selling or offering for sale and keeping for sale and advertising for sale building foundation formwork spacers identified in this action as Exhibits P3, P4 and P5.
4.An order that the first, second and third defendants deliver up on oath, within 21 days hereof, to the first plaintiff for destruction under the supervision of the first plaintiff all material in the possession custody power or control of the first, second or third defendants the use or sale of which would be an infringement of the patent.
5.An order that there be judgment for the plaintiffs on the defendants’ Counterclaim.
6.An order that the first, second and third defendants pay to the plaintiffs their costs of action to be taxed but subject to a reduction in that amount by one sixth
7.An order that the first plaintiff’s application for damages for infringement of the patent or, at the plaintiffs’ option, an account of profits in respect of the infringement of the patent be adjourned for mention to a date to be fixed.
Liberty to apply.

[2001] SASC 112

19 April 2001