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Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2)

Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2)

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FEDERAL COURT OF AUSTRALIA
Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2) [2011] FCA 848

Citation: Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2) [2011] FCA 848

Parties: ZETCO PTY LTD (ACN 084 301 986) v AUSTWORLD COMMODITIES PTY LTD (ACN 006 882 631)

File number: NSD 194 of 2009

Judge: BENNETT J

Date of judgment: 1 August 2011

Catchwords:
PATENTS – expert evidence – relevance of experience level of expert witnesses

PATENTS – construction – plumbing valve for use with instantaneous gas and hot water systems – meaning of “valve” – meaning of “valve housing” – whether component parts of valve prefabricated or pre-attached – meaning of “being the same size” – meaning of “pipe coupling” – meaning of “substantially constant internal diameter” – whether valve being “rated” requires compliance with relevant Australian standards – whether certification required to appear on body of valve

PATENTS – infringement – whether infringement of method claims of patent pursuant to s 117 of Patents Act 1990 (Cth) – whether respondent’s valves have only one reasonable use – whether respondent’s valves are not staple commercial products – whether respondent had reason to believe its valves would be put to certain use

PATENTS – novelty – prior art valves missing essential integer of claim – whether enabling disclosure of missing integer to skilled reader – whether skilled reader would add missing information to prior art valves as a matter of course

PATENTS – novelty – whether prior art valve was “prior art information” for purposes of s 7(1)(a) of Patents Act 1990 (Cth) – whether prior art valve was offered for sale or sold prior to priority date – whether prior art valve was supplied with parts of valve joined together – whether part of prior art valve was detachable – relevance of patent filed by developer of prior art valve after priority date of patent-in-suit

PATENTS – novelty – whether prior art valves disclose method claims of patent – whether method claims of patent already in use prior to priority date

PATENTS – inventive step – whether combination of integers formed part of common general knowledge – whether applicant’s prior art valves formed part of common general knowledge – whether prior art valves relied upon by respondent for novelty purposes formed part of common general knowledge

PATENTS – inventive step – relevance of being first to introduce new product – relevance of failure of inventor to give evidence – relevance of evidence of whether inventor thought claimed valve was inventive – relevance of evidence of commercial success

PATENTS – whether to grant additional damages for infringement pursuant to s 122(1A) of the Patents Act 1990 (Cth) – relevance of invalidity defence – relevance of copying – whether applicant has onus to prove copying by respondent – whether inference of copying can be drawn

TRADE PRACTICES – whether contravention of ss 52 and 53 of the Trade Practices Act 1974 (Cth) – whether passing off – whether applicant has established…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] FCA 848
Decision Date: 1 August 2011

CaseChat Overview and Summary

Zetco Pty Ltd sought to enforce its patent against Austworld Commodities Pty Ltd, alleging that the latter had infringed the patent and contravened certain trade practices provisions. Zetco also sought additional damages for infringement. The court had to determine a range of issues concerning the patent's validity, infringement and damages. It also had to consider Zetco's trade practices claims.

The court first considered the validity of the patent, including whether it was novel and inventive. It examined whether the prior art disclosed the claimed invention and whether the claimed invention would have been obvious to a person skilled in the art. The court also considered whether the patent's claims were properly constructed. Next, the court assessed whether Austworld had infringed Zetco's patent, including whether Austworld's valves had only one reasonable use and were not staple commercial products. The court then examined whether Zetco was entitled to additional damages for infringement and whether Austworld had contravened the trade practices provisions. The court considered the relevance of the invalidity defence, whether Zetco had proved that Austworld had copied its valves, and whether Zetco had established the requisite reputation and likelihood of consumer confusion for its passing off claim.

The court found that Austworld had not established that Zetco's patent lacked novelty or an inventive step. It held that Austworld had infringed Zetco's patent, but Zetco had not proved that it was entitled to additional damages for infringement. The court also found that Zetco had failed to make out its trade practices claims. The court ordered that the parties submit proposed agreed orders within 7 days. If the parties could not agree, each party was to submit proposed orders, including orders as to costs, within 14 days. The matter was listed for the making of orders.

Orders

Orders of the court

1. The parties are to submit proposed agreed orders by 8 August 2011.

2. If the parties are unable to agree proposed orders, each party should submit proposed orders, including orders as to costs, by midday on 11 August 2011. If there is no agreement as to costs, the proposed orders should be accompanied by short written submissions as to costs of no more than 2 pages.

3. The matter be listed for the making of orders at 9:30 a.m. on 12 August 2011.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Zetco is not entitled to additional damages pursuant to s 122(1A).CONCLUSION Austworld has failed to establish that the Patent lacks novelty or an inventive step. Austworld has infringed claims 1 to 5, 8 and 9 of the Patent. However, Zetco has failed to establish that this infringement should attract additional damages pursuant to s 122(1A). Zetco has also failed to make out its claim for contravention of ss 52 and 53 of the TPA and passing off by Austworld. The parties should submit proposed agreed orders within 7 days. If there is no agreement, each party should submit proposed orders, including orders as to costs, within 14 days. If there is no agreement as to costs, the proposed orders should be accompanied by short written submissions of no more than 2 pages.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:	Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2) [2011] FCA 848
Parties:	ZETCO PTY LTD (ACN 084 301 986) v AUSTWORLD COMMODITIES PTY LTD (ACN 006 882 631)
File number:	NSD 194 of 2009
Judge:	BENNETT J
Date of judgment:	1 August 2011
Catchwords:	PATENTS – expert evidence – relevance of experience level of expert witnesses PATENTS – construction – plumbing valve for use with instantaneous gas and hot water systems – meaning of “valve” – meaning of “valve housing” – whether component parts of valve prefabricated or pre-attached – meaning of “being the same size” – meaning of “pipe coupling” – meaning of “substantially constant internal diameter” – whether valve being “rated” requires compliance with relevant Australian standards – whether certification required to appear on body of valve PATENTS – infringement – whether infringement of method claims of patent pursuant to s 117 of Patents Act 1990 (Cth) – whether respondent’s valves have only one reasonable use – whether respondent’s valves are not staple commercial products – whether respondent had reason to believe its valves would be put to certain use PATENTS – novelty – prior art valves missing essential integer of claim – whether enabling disclosure of missing integer to skilled reader – whether skilled reader would add missing information to prior art valves as a matter of course PATENTS – novelty – whether prior art valve was “prior art information” for purposes of s 7(1)(a) of Patents Act 1990 (Cth) – whether prior art valve was offered for sale or sold prior to priority date – whether prior art valve was supplied with parts of valve joined together – whether part of prior art valve was detachable – relevance of patent filed by developer of prior art valve after priority date of patent-in-suit PATENTS – novelty – whether prior art valves disclose method claims of patent – whether method claims of patent already in use prior to priority date PATENTS – inventive step – whether combination of integers formed part of common general knowledge – whether applicant’s prior art valves formed part of common general knowledge – whether prior art valves relied upon by respondent for novelty purposes formed part of common general knowledge PATENTS – inventive step – relevance of being first to introduce new product – relevance of failure of inventor to give evidence – relevance of evidence of whether inventor thought claimed valve was inventive – relevance of evidence of commercial success PATENTS – whether to grant additional damages for infringement pursuant to s 122(1A) of the Patents Act 1990 (Cth) – relevance of invalidity defence – relevance of copying – whether applicant has onus to prove copying by respondent – whether inference of copying can be drawn TRADE PRACTICES – whether contravention of ss 52 and 53 of the Trade Practices Act 1974 (Cth) – whether passing off – whether applicant has established…