NSL Engineering Pte Ltd v Australian Mobile Mining Equipment Systems and Accessories Pty Limited (No 2)
[2016] FCA 1187
•7 October 2016
FEDERAL COURT OF AUSTRALIA
NSL Engineering Pte Ltd v Australian Mobile Mining Equipment Systems and Accessories Pty Limited (No 2) [2016] FCA 1187
File number: VID 631 of 2014 Judge: JESSUP J Date of judgment: 7 October 2016 Legislation: Patents Act 1990 (Cth) s 128 Date of hearing: Heard on the papers Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: No Catchwords Number of paragraphs: 11 Counsel for the Applicant: Mr C Smith Solicitor for the Applicant: Arcadia Lawyers Counsel for the Respondents: Mr I Horak Solicitor for the Respondents: Norman Waterhouse Lawyers ORDERS
VID 631 of 2014 BETWEEN: NSL ENGINEERING PTE LTD
Applicant
AND: AUSTRALIAN MOBILE MINING EQUIPMENT SYSTEMS AND ACCESSORIES PTY LIMITED (ACN 050 966 393)
First Respondent
MURRAY BRIDLE
Second Respondent
AND BETWEEN: AUSTRALIAN MOBILE MINING EQUIPMENT SYSTEMS AND ACCESSORIES PTY LIMITED (ACN 050 966 393)
Cross-Claimant
AND: NSL ENGINEERING PTE LTD
Cross-Respondent
JUDGE:
JESSUP J
DATE OF ORDER:
7 OCTOBER 2016
THE COURT ORDERS THAT:
1.Orders 6, 7, 8, 9 and 10 made on 17 June 2016 be vacated.
2.Save as dealt with in previous orders made by the court, the Application be dismissed.
3.Save for costs incurred only in connection with –
(a)the quantification of damages, or
(b)the case against the second respondent,
the first respondent pay the applicant’s costs of the proceeding.
4.To the extent that the respondents incurred costs only in defence of the applicant’s claim against the second respondent, being costs the incurring of which was identifiably separate from costs incurred generally in the proceeding, the applicant pay those costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
JESSUP J:
Pursuant to an order made on 18 September 2015 in this proceeding, the issue of liability was to be determined separately from, and in advance of, the issue of quantum. By a judgment delivered on 1 June 2016, the issue of liability was determined favourably to the applicant as against the first respondent (on both the claim and the cross claim), and favourably to the second respondent as against the applicant. On 17 June 2016, orders were made standing over the applicant’s claim for declarations under the Australian Consumer Law, granting final injunctive relief in favour of the applicant against the first respondent, dismissing the applicant’s claim against the second respondent, dismissing the cross claim and laying out a timetable for the filing of evidence on damages.
On 5 July 2016, the court was advised by email that the applicant would not be pursuing its claim for damages against the first respondent. On 6 July 2016, the duty Judge made orders, by consent and without a hearing, laying out a timetable for the filing of written submissions on costs. The vacation of so much of the orders made on 17 June 2016 as dealt with a timetable for the filing of evidence on damages was neither sought nor done. Neither was any reference made to the applicant’s claim for declarations under the Australian Consumer Law.
It was only after subsequent correspondence that it became clear that the parties consented to – indeed desired – the vacation of the timetabling orders made in connection with the applicant’s damages claim and the dismissal of the balance of its case left outstanding after the orders made on 17 June 2016. The orders accompanying these reasons will do those things.
That leaves the matter of costs, as to which the parties have filed submissions conformably with the orders made on 6 July 2016.
Commencing with the applicant’s case against the first respondent, the applicant was wholly successful on liability, being the only aspect of that case upon which the court adjudicated. Subject only to the matters dealt with below, the applicant should have its costs.
The first of two matters raised by the respondents was that it was the applicant which had chosen the grounds on which the first respondent’s allegations of patent infringement would be contested. On one of those grounds, the applicant’s case failed in court. It is submitted on behalf of the respondents that the applicant should not recover so much of its costs as related to that unsuccessful ground. I do not accept that submission. The applicant alleged that the first respondent’s threats were unjustifiable within the meaning of s 128 of the Patents Act 1990 (Cth), adding, in particulars, that the RAM Revolver did not infringe a valid claim of the patent. It was then for the first respondent to establish that the RAM Revolver did infringe a valid claim, and it made an allegation to that effect in its Cross claim and Defence. The first respondent was, in the circumstances, obliged to show that every integer of at least one valid claim (and validity was not put in issue by the applicant) was present in the RAM Revolver. In that endeavour, the first respondent fell short.
The applicant was entitled to place the first respondent’s infringement case in issue. The integer on which the applicant failed was reasonably contested, in which respect the applicant had the support of its expert. Additionally, I would have to say, the applicant derived some support from a normal, non-technical, reading of the relevant wording of the claim. This was not, in my view, within the category of cases in which a party should be deprived of some part of its costs on account of its failure on one aspect of what was otherwise a generally successful argument.
The second matter raised by the respondents relates to damages. Although the court never reached the point of assessing damages, my attention has been drawn to early correspondence passing between the parties in which the applicant proposed that its damages were, or would be, of the order of $50,000. It has recovered nothing. Put in various ways, the first respondent’s point is that some percentage of the costs to which the applicant would otherwise be entitled should be disallowed to reflect the existence of a damages claim which was not only not made good, but ultimately not pursued at trial.
The first respondent is not on strong ground in the submission which it makes in this respect. If it was unhappy with the applicant’s failure to sustain its damages claim with particulars, it could have sought an order in that regard. Not only did the first respondent not take that step, it consented to the trial being limited to questions of liability. Moreover, it did not take the conventional step of making an offer of compromise. A respondent who omits to take that step is in no strong position to resist a costs claim from a successful applicant on the ground that the latter was holding out for more by way of damages than was his or her due.
There are two respects in which it would be unjust to require the first respondent to pay the applicant’s costs. The first relates to the applicant’s damages case. The court is not privy to the extent of the applicant’s preparation for its litigation against the first respondent, but, if there were any costs incurred only in the quantification of the applicant’s damages claim, I do not see why the first respondent should be obliged to pay them. The second relates to such costs as the applicant may have incurred in its unsuccessful case against the second respondent. Self-evidently, the first respondent should not be required to pay such costs, if there were any. Subject to those exclusions, I do not propose to qualify the applicant’s entitlement to costs as against the first respondent.
The second respondent was wholly successful in his defence of the applicant’s claims against him. Conventionally, he should have his costs, and I shall make an order to that effect. But, given the joint representation which he shared with the first respondent, I intend that the costs which he will recover from the applicant be confined to costs the incurring of which was identifiably separate from costs incurred generally in the proceeding.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. Associate:
Dated: 7 October 2016
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