Occupational and Medical Innovations Ltd ACN 091 192 871 v Retractable Technologies Inc (No 2)
[2008] FCA 1414
•19 August 2008
FEDERAL COURT OF AUSTRALIA
Occupational and Medical Innovations Ltd ACN 091 192 871 v Retractable Technologies Inc (No 2) [2008] FCA 1414
OCCUPATIONAL AND MEDICAL INNOVATIONS LTD ACN 091 192 871 v RETRACTABLE TECHNOLOGIES INC
QUD 146 OF 2008
DOWSETT J
19 AUGUST 2008
BRISBANE
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD 146 OF 2008
BETWEEN:
OCCUPATIONAL AND MEDICAL INNOVATIONS LTD ACN 091 192 871
ApplicantAND:
RETRACTABLE TECHNOLOGIES INC
Respondent
JUDGE:
DOWSETT J
DATE OF ORDER:
19 AUGUST 2008
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.The applicant pay the respondent’s costs of the proceedings incurred on or prior to 29 July 2008, including reserved costs.
THE COURT DECLARES THAT:
2.Pursuant to s 125 of the Patents Act 1990 (Cth) exploitation in Australia by the applicant (including by causing to be manufactured in China for exploitation in Australia) of the invention which is the subject of the applicant’s Australian patent number 775427 as defined by the syringes exhibited to the affidavit of Gareth Jenkins as “GJJ2” filed in these proceedings on 25 June 2007 (but not limited to the sizes of syringes exhibited to Mr Jenkins’ affidavit) will not infringe the respondent’s Australian Patent No 701878.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD 146 OF 2008
BETWEEN:
OCCUPATIONAL AND MEDICAL INNOVATIONS LTD ACN 091 192 871
ApplicantAND:
RETRACTABLE TECHNOLOGIES INC
Respondent
JUDGE:
DOWSETT J
DATE:
19 AUGUST 2008
PLACE:
BRISBANE
REASONS FOR JUDGMENT
This matter comprises part of an ongoing battle between the parties in connection with retractable needle technology. I have previously disposed of proceedings in which the present applicant alleged unjustified threats by the present respondent. In the course of those proceedings, the applicant sought a declaration of non-infringement pursuant to Ch 11, Pt 2 of the Patents Act 1990 (Cth) (the “Patents Act”). I have also disposed of that matter. The parties are obviously in commercial competition, or expect to be. It may be that the respondent has an interest in deterring the applicant from entering the retractable technology market and that its conduct has been motivated by that interest. I do not suggest any infringement of the Trade Practices Act 1974 (Cth) in this regard. The applicant has responded in kind, with great energy and aggressiveness, no doubt also motivated by its commercial interests.
I am presently concerned with the costs of the application pursuant to s 127 of the Patents Act for a declaration of non-infringement. The prosecution of the application has been somewhat irregular. Initially, the applicant’s claim was based upon a petty patent which had expired. That, in itself, caused some delay in the proceedings. The particulars of the applicant’s proposed exploitation of its own patent emerged fairly late, as did the evidence in support of those allegations. However the respondent has also contributed to the difficulties encountered in these proceedings. Its pleadings have not been designed to assist in their speedy resolution. It may also be true, as the respondent’s counsel submitted, that the applicant sought unduly wide relief and has, until quite recently, persevered in that course. In any event, the matter was heard on 1 April 2008, judgment being reserved and delivered on 29 July 2008. I indicated that I would make appropriate declarations. The parties have been unable to agree as to the appropriate form, and so I have had to dispose of that matter today.
I turn to the question of costs. Section 126(3) provides, in connection with such a declaration:
The costs of all parties in proceedings for a non-infringement declaration must be paid by the applicant for the declaration unless the court otherwise orders.
It is easy to understand the intention which underlies this provision. A declaration as to non-infringement is obviously of substantial commercial value to the party acquiring it. It is reasonable that such a declaration should generally be obtained at the cost of the party seeking it. Section 126 provides that a person seeking a declaration must advise the relevant patentee of the proposed exploitation and undertake to pay the reasonable expenses of such person in obtaining advice as to whether the proposed exploitation would infringe a claim in his or her patent. This was eventually done in the present case. However the Patents Act contemplates that notwithstanding such process, proceedings may follow. In other words, the Patents Act does not assume that such advice will necessarily result in agreement. Obviously, there will be matters of degree and judgment about which minds may differ. Clearly enough, the requirement that an applicant offer to pay the costs of advice obtained prior to action was not intended to prevent the party receiving such advice from contesting the applicant’s prayer for declaratory relief at the latter’s expense.
Where proceedings go to trial, the costs of the proceedings are, in the general course, to be met by the party seeking the relevant declaration. The question, then, is whether, in the present case, the circumstances militate against such an order. There has been conduct on both sides which might have affected any costs order, were I commencing with the proposition that costs are entirely in the discretion of the court. However, given the different position prescribed by s 126(3), the question is whether the circumstances constitute a basis for depriving the respondent of its costs. The applicant pointed out that the respondent did not admit that there would be no infringement, but did not run a positive case of infringement. That is true. However it is difficult to criticize the respondent’s conduct in leaving the matter to the Court. The respondent sought to demonstrate that the applicant’s allegedly proposed exploitation did not amount to exploitation of the applicant’s patent. That was a relevant matter.
In all of the circumstances, I am unpersuaded that I should exercise my discretion so as to deprive the respondent of the costs contemplated by s 126(3). Had the hearing extended beyond one day as a result of the way in which the respondent had conducted the case, I may have taken a different view as to the costs of subsequent days, but that was not the case. I order that the applicant pay the respondent’s costs of the proceedings up to, and including, the publication of my reasons for judgment.
The costs of today have primarily been the result of the lack of agreement as to the form of the declaration. That should not have been a matter of dispute. I also feel that the parties should have been able to settle the question of costs. In all of the circumstances, I order that there be no orders as to the costs of the hearing today.
I order that the applicant pay the respondent’s costs of the proceedings for a declaration pursuant to s 125 of the Patents Act 1990 (Cth) incurred on or prior to the date of publication of my reasons for judgment, that is 29 July 2008, including reserved costs.
The Court declares that pursuant to s 125 of the Patents Act 1990 (Cth) exploitation in Australia by the applicant (including by causing to be manufactured in China for exploitation in Australia) of the invention which is the subject of the applicant’s Australian patent number 775427 as defined by the syringes exhibited to the affidavit of Gareth Jenkins as “GJJ2” filed in these proceedings on 25 June 2007 (but not limited to the sizes of syringes exhibited to Mr Jenkins’ affidavit) will not infringe the respondent’s Australian Patent No 701878.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate:
Dated: 15 September 2008
Counsel for the Applicant: Mr J M Horton Solicitor for the Applicant: Clayton Utz Counsel for the Respondent: Mr D M Logan Solicitor for the Respondent: Davies Collison Cave
Date of Hearing: 19 August 2008 Date of Judgment: 19 August 2008
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