FEDERAL COURT OF AUSTRALIA
Welcome Real-Time SA v Catuity Inc (No 2) [2001] FCA 785
PATENTS – infringement claim and cross-claim for invalidity – form of order – injunction – whether confined to conduct considered at trial – delivery up – combination patent involving devices and software – costs – interlocutory order – whether costs should be payable forthwith
Patents Act 1990 (Cth) s 117
Federal Court Rules O 62 r 3(3)
Coflexip SA v Stolt Comex Seaway MS Ltd [2001] RPC 9 followed
Commonwealth Industrial Gases Ltd v MWA Holdings Pty Ltd (1970) 180 CLR 160 at 171 applied
Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 606, 622 applied
Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 489 applied
Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 at 299 applied
Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 498 applied
Vavasseur v Krupp (1878) 9 Ch D 351 at 360 mentionedCodex Corporation v Racal-Milgo Ltd [1987] FSR 87 at 90-91 mentioned
WELCOME REAL-TIME SA v CAUITY INC & ORS (No 2)
V 526 OF 2000HEEREY J
24 JULY 2001
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 526 OF 2000
BETWEEN:
WELCOME REAL-TIME SA [RDC 403 099 625 00036]
APPLICANTAND:
CATUITY INC [ARBN 089 327 882]
FIRST RESPONDENTCHIP APPLICATION TECHNOLOGIES LIMITED
[ACN 057 883 333]
SECOND RESPONDENTCIT CARDS (AUSTRALIA) LIMITED [ACN 072 773 052]
THIRD RESPONDENTCATUITY INC [ARBN 089 327 882]
FIRST CROSS-CLAIMANTCHIP APPLICATION TECHNOLOGIES LIMITED [ACN 057 883 333]
SECOND CROSS-CLAIMANTCIT CARDS (AUSTRALIA) LIMITED [ACN 072 773 052]
THIRD CROSS-CLAIMANTWELCOME REAL-TIME SA [RDC 403 099 625 00036]
CROSS-RESPONDENTJUDGE:
HEEREY J
DATE OF ORDER:
24 JULY 2001
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
In these orders:
“CiT Transcard system” means the smart card system for use in public transit and retail described in paragraphs 20 to 25 of the affidavit of Anthony Benjamin Garton dated 3 August 2000 and slides 6 to 8, 13 to 22 and 25 to 26 of the Catuity Technical Briefing slides which are exhibit DBBM 4 confidential to the affidavit of Doron Berl Ben-Meir made 6 December 200.
“Catuity system” means the smart card system for use in multiple every-day consumer applications described in paragraphs 28 to 36 of the affidavit of Anthony Benjamin Garton dated 3 August 2000 and slides 10, 25 and 26 of the Catuity Technical Briefing slides which are exhibit DBBM 4 confidential to the affidavit of Doron Berl Ben-Meir made 6 December 2000.”
“CiT Transcard device” means a device for use in the CiT Transcard system for processing coded information during a purchase or payment operation by a user, holder of a card with a chip, possessing each of the integers described in paragraphs 3.36-3.53 of confidential exhibit DBBM-5 to the affidavit of Doron Berl Ben-Meir made 6 December 2000.
“Catuity device” means a device for…
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- Case
- [2001] FCA 785
- Decision Date
CaseChat Overview and Summary
The court held that the applicant was entitled to an injunction restraining all acts of infringement, not just those specifically proven at trial. It emphasised that a patent owner, having established the validity of their patent and its infringement, is generally entitled to an injunction in the usual form, which restrains the defendant from infringing the patent. The court referenced the English Court of Appeal decision in Coflexip SA v Stolt Comex Seaway MS Ltd, which supported the view that the standard form of injunction in patent cases is appropriate. The court concluded that the injunction should be broad enough to protect the patentee’s statutory monopoly as defined in the patent claims, as construed by the court.
Consequently, the court granted the applicant’s requested declarations of infringement and ordered an injunction against the respondents from infringing the patent, effective from specific dates. The injunction against the CiT Transcard system was to commence on 17 October 2001, allowing the respondents time to wind down that system. The court also ordered the respondents to provide financial details to assist the applicant in electing between damages and an account of profits. The cross-claim was dismissed, and the respondents were ordered to pay the applicant’s costs.
Orders
Orders of the court
In these orders:
“CiT Transcard system” means the smart card system for use in public transit and retail described in paragraphs 20 to 25 of the affidavit of Anthony Benjamin Garton dated 3 August 2000 and slides 6 to 8, 13 to 22 and 25 to 26 of the Catuity Technical Briefing slides which are exhibit DBBM 4 confidential to the affidavit of Doron Berl Ben-Meir made 6 December 200.
“Catuity system” means the smart card system for use in multiple every-day consumer applications described in paragraphs 28 to 36 of the affidavit of Anthony Benjamin Garton dated 3 August 2000 and slides 10, 25 and 26 of the Catuity Technical Briefing slides which are exhibit DBBM 4 confidential to the affidavit of Doron Berl Ben-Meir made 6 December 2000.”
“CiT Transcard device” means a device for use in the CiT Transcard system for processing coded information during a purchase or payment operation by a user, holder of a card with a chip, possessing each of the integers described in paragraphs 3.36-3.53 of confidential exhibit DBBM-5 to the affidavit of Doron Berl Ben-Meir made 6 December 2000.
“Catuity device” means a device for use in the Catuity system for processing coded information during a purchase or payment operation by a user, holder of a card with a chip, possessing each of the integers described in paragraphs 4.2-5.4 and 5.6 of confidential exhibit DBBM-5 to the affidavit of Doron Berl Ben-Meir made 6 December 2000.”
“The Patent” means Australian Patent 712925.
1. The Court declares that the operation of the CiT Transcard system involves infringement of claims 1 to 4 of the Patent and the use of the CiT Transcard system involves infringement of claims 6 and 7 of the Patent and that:
(a) the first respondent is liable for the said infringements from 23 November 1999;
(b) the second respondent is liable for the said infringements from 31 July 1997;
(c) the third respondent is liable for the said infringements from 31 July 1997.
2. The Court declares that the operation of the Catuity system involves infringement of claims 1 to 5 of the Patent and the use of the Catuity system involves infringement of claims 6 and 7 of the Patent and that:
(a) the first respondent is liable for the said infringements from 1 April 2000;
(b) the second respondent is liable for the said infringements from 1 April 2000.
3. The Court orders that, in Australia and during the term of the Patent, the respondents (and each of them) be restrained from, whether by their directors, officers, servants or agents or otherwise howsoever, infringing the Patent provided that in relation to the CiT Transcard system and the CiT Transcard device such restraint shall operate only on and after 17 October 2001.
4. The Court declares that in respect of the said infringements of the patent the applicant is entitled to any damages suffered by it and interest thereon, or, at the applicant’s election, an account of any profits made by the respondents (and each of them) by reason of these said infringements and payment of the amount found to be due on the taking of such account and interest thereon.
5. For the purpose of enabling the applicant to make the election referred to in paragraph 5 hereof, order that on or before 17 September 2001 the respondents file and serve an affidavit setting forth an estimate of the sums received or receivable in respect of the following matters and the cost of obtaining those sums and particulars as to how that estimate is made:
(a) operating or using the CiT Transcard system;
(b) making, hiring, selling or otherwise disposing of and offering to make, hire, sell or otherwise dispose of and using and keeping for the purpose of doing any of the aforementioned things, any Transcard validator, chip card or software for use in the CiT Transcard system;
(c) operating or using the Catuity system;
(d) making, hiring, selling or otherwise disposing of and offering to make, hire, sell or otherwise dispose of and using and keeping for the purpose of doing any of the aforementioned things, any point of sale terminal or validator or any chip card or software for use in the Catuity system.
6. Reserve to the applicant liberty to apply for limited discovery to assist in the making of the election referred to in paragraph 5 hereof.
7. The Court certifies under s 19 of the Patents Act 1990 (Cth) that the validity of each claim of the patent was questioned.
8. Order that the cross-claim be dismissed.
9. Order that the respondents pay the applicant’s costs to date of the claim and the cross-claim, such costs to be taxed in default of agreement and paid forthwith.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Established by: HEEREY J
The definitions should also include “‘The Patent’ means Australian Patent 712925”.Declarations Paragraphs 1 and 2 of the applicant’s minutes are as follows:“1.The Court declares that the operation of the CiT Transcard system involves infringement of claims 1 to 4 of the Patent and the use of the CiT Transcard system involves infringement of claims 6 and 7 of the Patent and that:(a)the first respondent is liable for the said infringements from 23 November 1999;(b)the second respondent is liable for the said infringements from 31 July 1997;(c)the third respondent is liable for the said infringements from 31 July 1997.2. The Court declares that the operation of the Catuity system involves infringement of claims 1 to 5 of the Patent and the use of the Catuity system involves infringement of claims 6 and 7 of the Patent and that:(a)the first respondent is liable for the said infringements from 1 April 2000;(b)the second respondent is liable for the said infringements from 1 April 2000.” Although initially opposed, on the hearing before me senior counsel for the respondents did not object to these declarations. They appear to be in appropriate form. Declarations will be made accordingly.Injunction The applicant proposed the following:“3.The Court orders that, in Australia and during the term of the Patent, the respondents (and each of them) be restrained from, whether by their directors, officers, servants or agents or otherwise howsoever, doing or authorising or causing the doing of any of the following acts:(a) operating or using, or promoting in any way the operation or use of, on or after 17 October 2001, the CiT Transcard system;(b) making, hiring, selling or otherwise disposing of and offering to make, hire, sell or otherwise dispose of and using and keeping for the purpose of doing any of the aforementioned things, on or after 17 October 2001, any Transcard validator, chip card or software, for use in the CiT Transcard system;(c) operating or using, or promoting in any way the operation or use of, the Catuity system;(d) making, hiring, selling or otherwise disposing of and offering to make, hire, sell or otherwise dispose of and using and keeping for the purpose of doing any of the aforementioned things, any point of sale terminal or validator device or any chip card or software, for use in the Catuity system,or otherwise infringing the patent.” The commencing date of 17 October 2001 in relation to the CiT Transcard system reflects the agreement of the parties that it is reasonable to allow some time for the respondents to wind down this system and make necessary arrangements with third parties. In the course of the correspondence between the parties the respondents at one stage suggested that the injunction should only go to restrain infringing conduct of the kind considered at the trial. This position was not taken by senior counsel for the respondents at the hearing before me. I wish to make it clear that there is no basis for it. Particularly when the validity of the patent has been an issue, the patentee is entitled to an injunction restraining all infringement, and not just the particular form of infringement which was the subject of evidence at the trial. The point was dealt with very recently by the English Court of Appeal in Coflexip SA v Stolt Comex Seaway MS Ltd [2001] RPC 9. The trial judge had found a patent valid and infringed. However he refused to grant an injunction in the usual form, which restrained the defendants from “infringing patent no …”, but instead granted an injunction restraining the defendants from using or offering to use in the United Kingdom a process for laying a flexible conduit employing a system defined by reference to the actual process found to infringe. On the plaintiff’s cross-appeal the Court of Appeal granted an injunction in the usual form. Aldous LJ, with whom the other members of the Court agreed, said:“12.… I … will deal generally with the reasons why injunctions in patent actions are usually granted in the form which prevents the defendant from infringing the patent.13.The court has under s.37 of the Supreme Court Act 1981 a general power to grant an injunction ‘in all cases in which it appears to the court to be just and convenient to do so’. Section 61 of the Patents Act 1977 provides for ‘a claim for an injunction restraining the defendant … from any apprehended acts of infringement’. In so doing the section accords with the general law prior to the passing of that Act. An injunction is a remedy against further injury and the court will not make the order if satisfied that no such injury is likely to occur. It is not because a defendant has done a wrong that an injunction will be granted against him. Where a patentee has conclusively established the validity of his patent and that it had been infringed, as a general rule an injunction will be granted. However that will not happen as a matter of course as an injunction is a discretionary remedy. It is for that reason there have been cases where injunctions have been refused, for example, where the defendant satisfied the court that further infringement was not likely. In the present case the judge was not satisfied that no further infringement was threatened and therefore concluded that an injunction was an appropriate remedy. The contrary was not suggested in this Court. The issue argued concerned the terms of the injunction.14.It is important that an order, such as an injunction, is drafted so as to set out, with such clarity as the context admits, what may not be done. It is for that reason that the standard form of injunction is in the terms restraining the defendant from infringing the patent. Such an injunction is limited in term and confined to the right given by section 60(1) and (2) of the Patents Act. It also excludes acts, carried out by the defendant and which fall within the ambit of the monopoly, but are excluded from infringement by the Act; for example, private use coming within section 60(5)(a) of the Act. Such an injunction is confined to the monopoly as claimed. The claim has been construed by the court with the aid of the parties and in the context of the acts alleged by the plaintiff to infringe and any other potentially infringing acts which the defendant wishes to bring before the court. Of course a dispute can arise as to whether acts, not brought before the court, amount to a breach of the injunction. But such a dispute arises against the background where the ambit of the claim and therefore the injunction has been the subject of consideration by the court and has been construed by it.…18.When deciding what is the appropriate form of injunction in a patent action, it must be borne in mind that the injunction is being granted to prevent apprehended use of the patentee’s statutory monopoly, as defined in his claim. The decision as to form is taken against the background of the claim having been construed by the court as between the parties. That, of course, does not happen in other intellectual property cases. An injunction which just restrained breach of confidence would not be appropriate for many reasons, including because the extent of the confidential information would not have been determined. In passing-off cases a change of circumstances can alter the representation made and therefore the injunction normally sets out the act which is to be prevented, qualified by such words as ‘so as to pass-off’.19.The judge seemed to believe that injunctions which restrained infringement of a patent were broad injunctions: but they equate to the statutory right given, a right which has been held to have been validly granted and infringed. The injunction granted by the judge would allow the defendant to do other acts even though they may infringe. The defendant in those circumstances would be better off in that a change from that which is described and shown in the process description would allow him to continue in business without having to seek guidance from the court before adopting the change. The advantage to the defendant of only having the injunction cover a particular article or process is clear. If he makes a change he will not be in breach and it will be up to the patentee to bring another action. However, the disadvantage to the patentee is equally clear. To obtain an injunction he has to establish his monopoly and that it has been infringed, and the judge must conclude that further infringement is apprehended. From his point of view, it is the infringer who should seek guidance from the court if he wishes to sail close to the wind. In the normal course of events that would be reasonable.20.The usual form of injunction which protects the right established by the patentee, with its ambit construed by the court, does in general provide a fair solution. However, each case must be determined on its own facts and the discretion exercised accordingly.21.In the present case, nothing has been brought to my attention which would suggest that anything other than the usual form of injunction would be appropriate. The injunction suggested by the judge was in my view inappropriate.”