Masport Limited v Bartlem Pty Limited
[2004] FCA 591
•7 MAY 2004
FEDERAL COURT OF AUSTRALIA
Masport Limited v Bartlem Pty Limited [2004] FCA 591
MASPORT LIMITED v BARTLEM PTY LIMITED AND GREENFIELD MOWERS PTY LIMITED
N 500 of 2004JACOBSON J
7 MAY 2004
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 500 of 2004
BETWEEN:
MASPORT LIMITED
APPLICANTAND:
BARTLEM PTY LIMITED
FIRST RESPONDENTGREENFIELD MOWERS PTY LIMITED
SECOND RESPONDENTJUDGE:
JACOBSON
DATE OF ORDER:
7 MAY 2004
WHERE MADE:
SYDNEY
THE COURT:
1.Orders that the motion filed on 5 May 2004 be dismissed.
2.Orders that the respondents pay the applicant’s costs of the motion.
3.Notes that respondents by their counsel give the usual undertakings as to damages.
4.Orders that the applicant, whether by itself, its servants, agents or otherwise howsoever be restrained until the determination of these proceedings or further order, from selling, hiring or otherwise disposing of the Masport Shredder (as defined in the Statement of Claim dated 8 April 2004) (the “Masport Shredder”) in Australia, offering to sell, hire or otherwise dispose of the Masport Shredder in Australia or importing the Masport Shredder into Australia
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 500 of 2004
BETWEEN:
MASPORT LIMITED
APPLICANTAND:
BARTLEM PTY LIMITED
FIRST RESPONDENTGREENFIELD MOWERS PTY LIMITED
SECOND RESPONDENT
JUDGE:
JACOBSON
DATE:
7 MAY 2004
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This is the first directions hearing of proceedings brought by the applicant under section 128 of the Patents Act1990 (Cth) for unjustified threats of proceedings for patent infringement. The application was filed on 8 April 2004 and the directions hearing was originally to be held on 30 April 2004 but was adjourned to today.
The applicant says that the directions hearing was adjourned by the respondents unilaterally from 30 April 2004 to today to coincide with the hearing of an application by the respondents to join the applicant to proceedings for patent infringement which were commenced by the respondents in the Supreme Court of Queensland on 2 April 2004. The respondents deny that the adjournment was effected unilaterally.
It is unnecessary for me to decide whether the adjournment was effected in the manner contended by the applicant.
However, on 5 May 2004 the respondents filed a notice of motion returnable today seeking orders in the following terms:
1.
This proceeding be temporarily stayed pending the determination of the First and Second Respondent’s application for joinder of the Applicant as a party to action BS2293 of 2004 commenced by the First and Second Respondents in the Supreme Court in Queensland;
2.
Alternatively, the first directions hearing in this proceeding be adjourned pending the determination of the First and Second Respondents’ application for joinder of the Application as a party to the said Queensland Supreme Court proceeding number BS2293 of 2004;
3.
That the Applicant pay the First and Second Respondents’ costs of and incidental to this motion to be taxed;
4.
Such further or other orders, directions or relief as to the Court may seem appropriate.
Mr Logan of Counsel who appears for the respondents seeks only order 2 but the argument which I heard this morning ranged over issues which are relevant to order 1.
It is necessary to say something briefly about the background. It appears that on 25 March 2004 a certificate of examination was issued in respect of an innovation patent in relation to which the first respondent is the owner and the second respondent is the exclusive licensee. The patent relates to "garden refuse shredding apparatus".
On 2 April 2004 the respondents instituted proceedings in the Supreme Court of Queensland against Masport Pty Limited and Masport Australia Pty Limited by filing a statement of claim and applications for interlocutory relief supported by a number of affidavits. The allegation in the Queensland proceedings is that the two defendant companies have infringed the patent by the sale and distribution of a product known as the Masport Chipper Shredder (“Masport Shredder”).
The applicant alleges in the proceedings before me that the patent which the respondents rely upon is an innovation patent which was not entitled to divisional status because it did not comply with the provisions of section 79B of the Patents Act. The applicant asserts that the invention claimed by the innovation patent was not disclosed in the specification of the divisional patent and did not fall within the scope of the claims of the accepted specification of the standard patent. If this is correct the consequence is that the innovation patent is only entitled to priority according to the filing date and it would follow that the innovation patent is invalid because the standard patent was published before that date.
The applicant has submitted that, assuming these proceedings go ahead without a stay, it would be appropriate to seek to have the issue of whether the relevant patent complied with the provisions of section 79B determined as a preliminary question under O 29 r 2 of the Federal Court Rules. This would be a relatively straightforward question which could, at least on the applicant's submissions, be determined in a fairly short hearing.
I note that Mr Logan submits that there may be disputed facts which would make the issue inappropriate to be determined as a preliminary question under O 29 r 2.
Of course that is not something I can determine on today's application but it does seem to me to be a relevant consideration on the adjournment application that there is at least a real possibility that the matter in this court can be determined within a narrow compass as a preliminary issue.
On 15 April 2004 the respondents filed the joinder application in the Supreme Court of Queensland for the joinder of the applicant to the Queensland proceedings.
Mr Logan submitted that the proceedings in this court are of course only at the stage of a first directions hearing and that the respondents need only a short adjournment to enable the joinder application to be pursued in Queensland. The joinder application was listed in a call over this morning in Queensland and is presently standing in the list awaiting the outcome of the application before me.
Mr Logan said that the joinder application in Queensland is brought under rule 69(1) of the Queensland Rules which deal with the joinder of necessary parties.
Mr Logan submitted that, on the evidence available to his clients when the Queensland proceedings were commenced, Masport Pty Limited and Masport Australia Pty Limited were involved in the sale and distribution of the Masport Shredder in Australia, and that this constituted infringement in Australia of his client's patent.
However, by letter dated 2 April 2004, which was sent on the day the Queensland proceedings were commenced, Mr Logan's instructing solicitors, Messrs Bennett and Philp, wrote to the New Zealand solicitors for the applicant. The letter stated that the Masport Shredder, which was apparently purchased by the respondents in a trap purchase, indicated on a sticker that it was manufactured by "Masport Limited".
The solicitors called upon the New Zealand solicitors to tell them by 12.00 midday Queensland time which of the companies was the Australian arm responsible for the distribution and sale within Australia of the Masport Shredder. The letter also asked, if it was not Masport Pty Limited or Masport Australia Pty Limited, details should be given of the name and Australian Company number of the company that actually conducts the distribution and sale in Australia. The letter also asked, if Masport Limited was in fact registered in Australia, for details of its Australian company number and details.
There was no reply to the letter at the time when the Queensland proceedings were instituted. The letter suggests to me that there must have been some uncertainty in the minds of the respondents as to whether they had joined the correct parties in Queensland when the proceedings were commenced, or at least whether all necessary parties had been joined.
Ms Howard, counsel for the applicant, tells me that Masport Limited is unrelated to the defendants in the Queensland proceedings. Mr Logan submitted that the evidence discloses that there is a connection and that Masport is already, in effect, a party to the Queensland proceedings. On his approach it would follow that joinder in Queensland is a mere formality.
The company searches, to which I have been directed by Ms Howard, indicate no corporate relationship between the defendants in the Queensland proceedings and the applicant in these proceedings. Nevertheless, it does not seem to me to be necessary to determine the question of whether there is fact any corporate relationship on this application.
In my opinion the short answer to today's application, which is only for an adjournment, is that unless there is some real justification for not proceeding with the directions hearing I ought to hear it and give directions for the further conduct of the proceedings.
The only justification put forward is that the respondents want an adjournment so that they can pursue the joinder application in the Supreme Court of Queensland.
Ms Howard however submits that the joinder application is in effect an application to commence fresh proceedings because the applicant is of course not a party to the Queensland action.
Whether or not the joinder amounts to fresh proceedings, it is plain that there are not any proceedings against the applicant on foot in Queensland.
Thus what the respondents wish to do is to raise in the Queensland proceedings, by joining the applicant in those proceedings, the very issue which is already before the Federal Court in the present proceedings.
In my view this is sufficient to dispose of the application adversely to the respondents. There is no suggestion that this court is a clearly inappropriate forum; see Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538. Indeed, it is plain that this Court is an appropriate forum for the hearing of the matter.
Moreover, there is a second very powerful reason for proceeding today.
The applicant has pleaded in [9] of the statement of claim that its reputation and goodwill have been greatly injured by the making of the threats and that it has suffered loss and damage accordingly. The particulars state that the applicant has ceased manufacturing and supplying the Masport Shredder as defined in the statement of claim. The particulars also state that the applicant has ceased manufacturing the components of the shredder.
Mr Logan did not accept that this would be a complete answer because he said that there may still be sales of the shredder which would constitute infringement. However, in order to answer this Ms Howard offered to submit to injunctive relief. The terms of the proposed injunction provide that until the determination of the proceedings in this court the applicant be restrained from selling, hiring or otherwise disposing of the Masport Shredder or offering to sell, hire or dispose of it or from importing the Masport Shredder into Australia.
One of the reasons why the respondents wish to join the applicant in the Queensland proceedings is to pursue a claim for interlocutory relief. I propose to make orders in terms of the short minutes of order submitted by Ms Howard and this seems to me to dispose entirely of the issue because the respondents will have the benefit in this court of injunctive relief in similar terms to the relief which they wish to seek in Queensland.
This seems to me to be a very powerful reason for not adjourning the directions hearing today and for making directions which will enable, if possible, an expedited hearing of the proceedings to be heard by the court.
There were a number of other issues canvassed in the argument. The debate and the written submissions were helpful but I do not think it is necessary to determine them, in particular, because the application has been confined to an application for an adjournment. Moreover, in view of the fact that the Queensland proceedings are standing in the list I do not think it is desirable to take up any further time this morning dealing with issues which are, in any event, peripheral to the central questions which I have determined in this judgment.
Accordingly, the order which I will make is that the adjournment sought in [2] of the notice of motion referred to in [4] above be refused. The motion will be otherwise dismissed.
I will order that the applicant, whether by itself, its servants, agents or otherwise howsoever be restrained until the determination of these proceedings or further order, from selling, hiring or otherwise disposing of the Masport Shredder (as defined in the Statement of Claim dated 8 April 2004) (the Masport Shredder) in Australia, offering to sell, hire or otherwise dispose of the Masport Shredder in Australia or importing the Masport Shredder into Australia.
I will note that the respondents by their counsel give the usual undertakings as to damages.
I think that costs ought to follow the event and I will order that the respondents pay the costs of the motion but not of the directions hearing because the costs of the directions hearing will, of course, be costs in the cause.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate:
Dated: 7 May 2004
Counsel for the Applicant: K Howard Solicitor for the Applicant: Blake Dawson Waldron Counsel for the Respondent: D Logan Solicitor for the Respondent: Bennett & Philp Solicitors Date of Hearing: 7 May 2004 Date of Judgment: 7 May 2004
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