Load and Move Pty Ltd v Container Rotation Systems Pty Ltd

Link copied
Case Copied 20 min read

FEDERAL COURT OF AUSTRALIA

Load and Move Pty Ltd v Container Rotation Systems Pty Ltd

[2016] FCA 843

File number: NSD 1715 of 2015
Judge: RARES J
Date of judgment: 15 April 2016
Catchwords: PATENTS – Patents Act 1990 (Cth) – infringement – where goods manufactured in China sold f.o.b. or ex works for shipment to Eritrean purchaser by Australian vendor through Australian websites or online – whether such sale within meaning of the patentee’s exclusive right to sell or exploit the patented invention in the patent area under Patents Act 1990 (Cth) – where goods never entered patent area, being Australia – application for preliminary discovery to determine whether sale of goods infringed Australian patent
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 37M, 37N

Federal Court Rules 2011 (Cth) r 7.23

Patents Act 1990 (Cth) s 13, Sch 1

Sale of Goods Act 1893 (UK)

Sale of Goods Act 1923 (NSW)

Statute of Monopolies 1623 (UK)

Cases cited:

Badische Anilin Und Soda Fabrik v Hickson [1906] AC 419

George v Rockett (1990) 170 CLR 104

James v Commonwealth (1939) 62 CLR 339

Paul’s Retail Pty Limited v Lonsdale Australia Limited (2012) 294 ALR 72

PST Energy 7 Shipping LLC v OW Bunker Malta Ltd [2016] 2 WLR 1193

Saffron v Société Minière Cafrika (1958) 100 CLR 231

Date of hearing: 8, 15 April 2016
Registry: New South Wales
Division: General Division
National Practice Area: Intellectual Property
Sub-area: Patents and associated Statutes
Category: Catchwords
Number of paragraphs: 36
Counsel for the Applicant: Mr JS Cooke with Mr DB Larrish
Solicitor for the Applicant: Harris Gomez Group
Counsel for the Respondents: Mr AR Lang with Ms F St John
Solicitor for the Respondents: Norman Waterhouse Lawyers

ORDERS

NSD 1715 of 2015
BETWEEN:

LOAD AND MOVE PTY LTD

Applicant
AND:

CONTAINER ROTATION SYSTEMS PTY LTD

First Respondent

AUSTRALIAN MOBILE MINING EQUIPMENT SYSTEMS AND ACCESSORIES PTY LIMITED

Second Respondent

JUDGE:

RARES J

DATE OF ORDER:

15 APRIL 2016

THE COURT ORDERS THAT:

1.The originating application by the prospective applicant for discovery, filed on 22 December 2015, be dismissed.

2.The prospective applicant pay 75% of the prospective respondents’ costs.

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


REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)

RARES J:

  1. This is an application for preliminary discovery under r 7.23 of the Federal Court Rules 2011 (Cth). Load and Move Pty Limited is the patentee of patents for equipment known as spreaders or tipplers that are large machines for loading and tipping over shipping containers.  It also manufactures shipping containers that are adapted to carry, among other things, minerals and bulk materials that can be loaded and unloaded by the spreaders or tipplers through being opened or turned over so as to allow their contents to enter or leave through the containers’ specially adapted roofs.  Such containers can carry, among other products, wheat, copper concentrate, coal, mineral sands, nickel and iron ore.

  2. Matthew Chalmers is the…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Load and Move Pty Ltd v Container Rotation Systems Pty Ltd 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
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2016] FCA 843
Decision Date

CaseChat Overview and Summary

Load and Move Pty Ltd sought a preliminary discovery order against Container Rotation Systems Pty Ltd and AMMESA International Pty Ltd for documents relating to sales of containers to a purchaser in Eritrea and sales through one or more of their websites. The containers in question were manufactured in China and never entered Australia. The court had to determine if there was a reasonable belief that a sale of the containers in Australia could constitute an infringement of Load and Move's Australian patent. The court considered whether it was reasonable for Load and Move to believe that a sale of containers manufactured and shipped from China to Eritrea, without ever entering Australia, could infringe their patent rights. The court found that such a sale did not interfere with the exclusive rights to exploit the invention by a patentee, as the goods never entered the patent area, i.e., Australia. Consequently, the court dismissed the application for preliminary discovery and ordered Load and Move to pay 75% of the respondents' costs. The court held that it was not reasonable to believe that a sale of goods manufactured and dealt with outside the patent area, which never entered the patent area, could constitute an infringement of a patent if the sale was made outside the patent area. Therefore, Load and Move could not bring a case for infringement based on such transactions.

Orders

Orders of the court

1. The originating application by the prospective applicant for discovery, filed on 22 December 2015, be dismissed.

2. The prospective applicant pay 75% of the prospective respondents’ costs.

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

Background

Background to the litigation

Relevantly, Load and Move now seeks orders for preliminary discovery for only two categories of documents, first, documents relating to sales of containers by the vendor (i.e. Container Rotation or AMMESA) to a purchaser in Eritrea and, secondly, sales by the vendor of containers through one or other’s website. That was because Load and Move asserts that it does not presently believe it has sufficient information to make a decision as to whether it should bring proceedings for infringement of its patents. Background Mr Tye said that each vendor had not manufactured containers in, or exported them from, Australia, in respect of which Load and Move sought preliminary discovery in respect of sales from their websites or to the Eritrean mine It appears that each of Load and Move and each vendor manufacture containers at the same factory in China that are adapted for use with their respective spreader or tippler machines. Mr Tye said (in his affidavit of 10 March 2016) that the vendor had sold containers to Nevsun Bisha Mine in Eritrea that were not manufactured in Australia but were made in China and exported from China to Eritrea. Mr Tye annexed, as examples, copies of three purchase orders issued by Bisha addressed to AMMESA or Container Rotation as supplier to Bisha in Eritrea that required delivery of various items, including the containers. Two of the purchase orders, under the heading “shipping/special instructions”, provided that the goods were to be sent sea freight, ex works Nantong, China and, the third, provided that they were to be sent sea freight, free on board (f.o.b.) a nominated port. Each of the purchase orders referred to Bisha’s standard terms and conditions, that were attached, as being applicable to the orders. However, the purchase orders, of themselves, do not present the full contractual picture of the dealings between AMMESA or Container Rotation on the one hand and Bisha on the other. It was common ground that at no point did the containers, that were manufactured in China, ever come into the patent area (i.e. Australia). Rather, they went from the factory in which they were manufactured in Nantong, China to Eritrea, ultimately to be delivered to Bisha for use in its mining operations.The legislative scheme Relevantly, r 7.23 provides:7.23 Discovery from prospective respondent(1)A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant:(a)reasonably believes that the prospective applicant may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and(b)after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and(c) reasonably believes that:(i)the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent’s control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and(ii)inspection of the documents by the prospective applicant would assist in making the decision.(2)If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

For that reason, I am satisfied that it is not reasonable to believe that a cause of action for infringement based on such a contract for sale, where the goods never have come into the patent area, is capable of giving rise to any interference with the exclusive rights to exploit the invention by a patentee pursuant to s 13(1) of the Patents Act. Therefore, no case could be brought for infringement of those rights by reference to such a transaction.Conclusion Accordingly, I am satisfied that it is not reasonable for Mr Chalmers to believe, as I accept he does believe, that Load and Move may have a right to obtain relief in the Court from the vendor in respect of the containers the subject of any contracts that the vendor made on its website, or otherwise involving the vendor’s actions in Australia, for sale of the containers in Eritrea that were manufactured in China. It is therefore not necessary for me to decide whether there are other discretionary reasons for refusing relief. For those reasons, I will dismiss the originating application. I will order Load and Move to pay 75% of Container Rotation’s and AMMESA’s costs.

Ratio Decidendi

Legal Principle Established

Load and Move acknowledged that there was no case in which consideration had ever been given to the argument that it was advancing. In essence, it contended that an infringement of a patent could occur, for the purposes of the Patents Act or analogous legislation protecting patents, involving goods that were manufactured or dealt with outside a patent area and had never entered the patent area, but where the seller and or buyer had made the contract for a sale of those goods within the patent area and either had paid or received the price there as a means of creating a transfer of the property in, or entitlement to, the goods the subject of the contract of sale.Consideration The issue is whether objectively it is reasonable for Load and Move to believe, as I accept Mr Chalmers does believe, that it may have the right to obtain relief in the Court from either vendor in respect of the way in which the vendor’s contract for the manufacture of the containers in China, their sale and carriage by sea from China to Eritrea, operated. Mr Chalmers formed that belief on the basis of what he thought were or would be conditions in the contracts for those sales, and he drew what he considered was the reasonable inference that, at some point, the money that constituted consideration for those sales came to, or had to be received by, the vendor in Australia. The question whether a person reasonably believes a matter involves a consideration of whether there are objective circumstances from which a reasonable person could form such a belief. Belief is a state of mind. In George v Rockett (1990) 170 CLR 104 at 112, Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ said:When a statute prescribes that there must be “reasonable grounds” for a state of mind – including suspicion and belief – it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person. In other words, it must be made to appear to the Court that the basis for which the prospective applicant contends under r 7.23 that he, she or it holds that state of mind is also sufficient to induce that state of mind in a reasonable person. Their Honours went on to say (170 CLR at 116):The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture. (emphasis added) Their Honours said that it was necessary to identify the subject matter of the relevant belief. Here, the subject matter of Mr Chalmers’ belief is that a sale, for the purposes of both the Sale of Goods Act and the definition of “exploit” in the Patents Act, occurred in Australia in respect of the containers that were made in, and then shipped from, China to Eritrea and never came into this jurisdiction.