SARB Management Group Pty Ltd trading as Database Consultants Australia v Vehicle Monitoring Systems Pty Limited (No 2)

[2024] FCAFC 53

FEDERAL COURT OF AUSTRALIA

SARB Management Group Pty Ltd trading as Database Consultants Australia v Vehicle Monitoring Systems Pty Limited (No 2) [2024] FCAFC 53

File number(s):	NSD 605 of 2023
Judgment of:	BURLEY, JACKSON AND DOWNES JJ
Date of judgment:	1 May 2024
Catchwords:	PATENTS – form of orders following hearing of appeal –whether injunctions granted by trial judge should be set aside – utility of injunctions – patents lapsed on day of hearing of appeal – application for extension of time filed to pay renewal fees – impact on final orders – whether costs should be awarded against litigation funder – orders in relation to stay and case management
Cases cited:	SARB Management Group Pty Ltd trading as Database Consultants Australia v Vehicle Monitoring Systems Pty Limited [2024] FCAFC 6
Division:	General Division
Registry:	New South Wales
National Practice Area:	Intellectual Property
Sub-area:	Patents and associated Statutes
Number of paragraphs:	23
Date of last submission/s:	20 March 2024
Date of hearing:	Determined on the papers
Counsel for the Appellant:	Mr T Bannon SC and Ms C Cunliffe
Solicitor for the Appellant:	Norton Rose Fulbright
Counsel for the First Respondent:	Mr R Cobden SC, Ms PL Arcus and Ms JPS Ambikapathy
Solicitor for the First Respondent:	Johnson Winter Slattery
Counsel for the Second Respondent:	Mr HPT Bevan SC and Mr AN McRobert
Solicitor for the Second Respondent:	Ashurst

ORDERS

NSD 605 of 2023

BETWEEN:

SARB MANAGEMENT GROUP PTY LTD T/A DATABASE CONSULTANTS AUSTRALIA ACN 106 549 722

Appellant

AND:

VEHICLE MONITORING SYSTEMS PTY LIMITED ACN 107 396 136

First Respondent

CITY OF MELBOURNE

Second Respondent

ORDER MADE BY:	BURLEY, JACKSON AND DOWNES JJ
DATE OF ORDER:	1 MAY 2024

THE COURT DECLARES THAT:

1.None of the claims of Australian Patent Nos. 2005243110 and 2011204924 is infringed by the vehicle detection system known as Pinforce Version 3.

THE COURT ORDERS THAT:

2.The appeal be allowed in part.

3.The notice of contention be dismissed.

4.As to the orders of the Court made on 21 June 2023 in NSD 200 of 2019:

(a)declarations 2 and 4 be set aside;

(b)order 19 is varied to refer only to declarations 1, 3, 5 and 6; and

(c)orders 10(a), 11(a), 20 and 21 are varied to delete any reference to “Pinforce Version 3” and order 10(e) is varied to refer to “sub-paragraphs (b) to (d) above”.

5.The First Respondent and Balance REV Ltd are jointly and severally liable for the Appellant’s costs of the appeal and the notice of contention.

6.Pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth), the Appellant’s costs payable pursuant to Order 5 be paid on a lump sum basis, with such sum to be assessed and quantified by a Registrar in the absence of agreement being reached by the parties on that question within 14 days after the making of this order or within such further period as the parties might agree.

7.The question of the costs of any assessment pursuant to Order 6 hereof be reserved for determination by the Registrar.

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

REASONS FOR JUDGMENT

THE COURT:

1. On 9 February 2024, we delivered our judgment in this appeal: SARB Management Group Pty Ltd trading as Database Consultants Australia v Vehicle Monitoring Systems Pty Limited [2024] FCAFC 6 (J).  These reasons should be read in conjunction with that judgment, and we adopt the abbreviations in those reasons.

2. By Order made on that date, the parties were required to confer and supply to the chambers of Justice Burley draft short minutes of order giving effect to these reasons.  The parties were unable to reach agreement and, by a further Order made on 7 March 2024, the parties were given the opportunity to file submissions.

3. These reasons address the matters of disagreement.

   Orders sought in relation to injunctions granted by the primary judge

4. SARB seeks an order setting aside orders 10–13 of the primary judge, which were permanent injunctions.  An order setting aside 10(a) and 11(a) of the primary judge is warranted, as it reflects our reasons and is not opposed by VMS.  There should also be a consequential amendment to order 10(e) to refer to sub-paragraphs (b) (instead of (a)) to (d) above. 

5. The balance of the order (being that the entirety of orders 10–13 be set aside) is sought by SARB on two bases.

6. The first basis is that there is no utility in the injunctions in relation to Pinforce Versions 1 and 2 because of a negligible risk of infringement, and that this itself provides a reason to set aside these orders.  However, as VMS submits, such a conclusion cannot be reached on the material before this Court.  Further, the issue of the utility of the injunctions in relation to Pinforce Versions 1 and 2 ought to have been advanced in the appeal.  As it was not, no finding was made in the judgment about this issue.  It should not be raised at this late stage.

7. The second basis relates to the fact that the patents in suit ceased on 23 November 2023 due to a failure to pay renewal fees.  There is no dispute about this.

8. However, an application has been filed to extend the time to pay the renewal fees, and the solicitor for VMS has sworn an affidavit deposing that he anticipates that the applications for extension of time will be determined in the next 2 to 3 months.  SARB has opposed the application for extension of time, but whether that opposition succeeds is a matter which is unknown at present.  We therefore cannot proceed on the basis that the patents will not be restored.

9. For these reasons, the order sought by SARB will not be made.

10. Conversely, VMS seeks an order that orders 10–13 “be amended to have ongoing effect from the date when the Patents are restored”.  However, we are not prepared to make an order which assumes that the patents in suit will be restored.

11. For this reason, the order sought by VMS will not be made.

12. In due course and depending upon the outcome of the application for extension of time by VMS, an application can be brought to this Court in its trial division by either party for a variation to orders 10–13 of the primary judge.  We consider it to be premature for any such orders to be made now.

    Costs of the appeal

13. In the reasons for judgment, we stated at J [9] that:

    Having regard to the outcome of the appeal, we consider that VMS should pay SARB’s costs of the appeal.

14. This conclusion was referred to again at J [139].

15. By our orders, we did not invite the parties to make submissions about the appropriate form of costs order which involves a different conclusion to that which we reached above.   

16. Having said that, we agree that the lump sum process is appropriate but, as submitted by VMS, the procedural steps can be determined by the Registrar who will also determine the lump sum itself.

17. We also agree with SARB’s contention that this is an appropriate case to order that the litigation funder of VMS, Balance REV Ltd, be jointly and severally liable for the appellant’s costs of the appeal and the notice of contention.  That Balance REV Ltd was the litigation funder is not in dispute having regard to the correspondence exchanged between the solicitors acting for the parties.  Further, although VMS asserts that it is not insolvent as a basis for resisting this order, it does not point to any evidence in support of that submission.

    Orders in relation to existing stay and case management

18. SARB seeks an order extending an existing stay on the quantum determination of pecuniary relief for infringement of the patents by Pinforce Versions 1 and 2.  It relies on VMS’s impecuniosity and submits that the stay is required because it may be appropriate for a set-off order to be made.

19. However, as VMS submits, the refusal of the order extending the stay will not prevent SARB from making an application for a set-off in the future.

20. For this reason, we will not make the order sought by SARB extending the existing stay.

21. VMS seeks an order in these terms:

    By reason of order 4 of the orders of the Court made on 12 October 2023 in NSD 200 of 2019, the stay referred to in that order will expire upon the making of these orders.

22. It is unclear whether this is intended to be a declaration or an advisory opinion, but we are not prepared to make an order in these terms.

23. VMS also seeks an order in the proceeding below to, in effect, list the matter for case management.  Such an order can be sought by VMS from the docket judge in that proceeding.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Burley, Jackson and Downes.

Associate:

Dated:       1 May 2024