Townsend Controls Pty Ltd v Gilead

In the case of Townsend Controls Pty Ltd v Gilead, the applicant, Townsend Controls, sought a declaration that the first respondent, Gideon Gilead, had unjustifiably threatened it with a patent infringement proceeding. The proceedings were brought under s.121 of the Patents Act 1952, and the applicant also sought a permanent injunction restraining further threats of proceedings for infringement of patent. The first respondent's son, Dotan Gilad, was later joined as a second respondent after it was revealed that he had also engaged in conduct likely to be interpreted as a threat.

The court had to decide whether there was a serious issue or question to be tried regarding the applicant's cause of action based on the alleged threats. The respondents argued that the applicant's conduct in relation to the product called "Vinitape" infringed several claims in the patent specification owned by the respondents. However, the court found that there was a real question as to whether the threats were unjustifiable, as the applicant planned to challenge the validity of the patent. Additionally, the recent threats made by the respondents were of a different order, justifying the applicant's return to court.

The court considered the balance of convenience and other matters going to the exercise of the discretion. Factors pointed both ways on the balance of convenience, but the court ultimately decided that the discretion ought to be exercised in favour of the continuation of the interlocutory injunction to the date of trial, on the usual undertaking as to damages, and subject to the applicant being required to keep records of its transactions in regard to the "Vinitape" product in the meantime.

The final orders made by the court were as follows:

1. The orders in paragraphs 1 and 2 of the order made on 3 March 1989 be extended until further order against both respondents.
2. Costs on the notice of motion, including costs of 3 March 1989, to be the applicant's costs in the cause.