General warning of patent infringement held to be an unjustified threat
On 1 August 2014, Dowsett J made declarations of unjustified threats and costs orders relating to proceedings commenced by Mizzi Family Holdings against Daryl Morellini for patent infringement.
In the trial decision handed down on 24 December 2013, Mizzi alleged that Mr Morellini had infringed its innovation patent number 20101009551 for a cane billet planter and a method of planting sugar cane (the Mizzi Mound Planter) by using his own cane billet planter (the Morellini device). Mr Morellini cross-claimed for revocation of the patent, alleging that it was invalid for want of novelty, lack of innovative step and was obtained by false suggestion or misrepresentation. In addition, Mr Morellini claimed that Mizzi and the inventor of the patent, Paul Mizzi made unjustified threats of patent infringement.
Dowsett J held that the patent was valid, on the basis that the invention was not anticipated and that the allegations of false suggestion or misrepresentation were not made out. The dispute in relation to infringement largely centred on the shape and incline of the mounds produced by the cane billet planter when being used according to the method claims of the invention. His Honour found that the patent was not infringed on the basis that the mounds formed by the Morellini device did not fall within the incline set out in the relevant claims, nor did the mounds created by the Morellini device have a ‘relatively flat’ top as was required by another claim of the patent.
Though Mizzi was ultimately unsuccessful in proving infringement, and Mr Morellini did not succeed in his cross-claim for revocation, the cross-claim for unjustified threats was successful.
Unjustified threats of patent infringement – publication of advertisement and article
The unjustified threats claim relates to threats made by Mizzi and Mr Mizzi regarding the Standard Patent Application from which the innovation patent was derived. It was alleged that Mizzi and Mr Mizzi caused to be published in a magazine called Canegrowers two items:
(a) an advertisement for the Mizzi Mound Planter which set out the patent application number, a description and the method of operation; and
(b) next to the advertisement, an article entitled “Infringement danger” written by Terry Hurlock from “Invention Pathways”.
In the article, Mr Hurlock referred to a “new cane planting unit designed in Ingham which was the subject of an application for patent”. The article stated that “we know of farmers who are manufacturing their own version of the new invention whilst the patenting process is operating”. It then stated that once a patent was granted, patent owners could pursue rights extending back to the application date, that infringement can be a costly exercise and that small changes would not avoid infringement. Remedies for patent infringement, according to the article, could involve fines, forfeiture of the infringing machine plus claims for loss of income.
Section 128 of the Patents Act
Under section 128 of the Patents Act 1990 (Cth),
(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with infringement proceedings, or other similar proceedings, a person aggrieved may apply to a prescribed court, or to another court having jurisdiction to hear and determine the application, for:
(a) a declaration that the threats are unjustifiable; and
(b) an injunction against the continuance of the threats; and
(c) the recovery of any damages sustained by the applicant as a result of the threats.
The publication of the advertisement and article was admitted by Mizzi and Mr Mizzi. His Honour held that the admission by the parties that they had caused the advertisement and article to be published was sufficient to establish that the claim of unjustifiable threats must succeed. Dowsett J held that there could be no doubt that the publication of the advertisement and article in the magazine was designed to threaten infringement proceedings, and, when viewed objectively, had that effect, even though the threat was not explicitly directed at Mr Morellini. Mr Morellini also claimed that Mr Mizzi had directly threatened Charles Girgenti, who had used a cane billet planter made in accordance with the design and specifications of the Morellini device, by saying to Mr Girgenti that the Morellini device infringed the Mizzi patent and demanding that he pay a royalty to Mizzi in respect of the infringement.
In the costs decision handed down on 1 August 2014, Dowsett J made declarations that Mizzi and Mr Mizzi had made unjustifiable threats by virtue of the publication of the advertisement and accompanying article in the Canegrowers magazine and the statement made to Mr Girgenti. Costs in the matter were apportioned, with Mizzi and Mr Mizzi being ordered to pay Mr Morellini’s costs of the infringement claim and unjustifiable threats claim and Mr Morellini being ordered to pay Mizzi’s costs of the cross-claim, to the extent that they related to the issue of validity.
Lessons for patentees (or patent applicants)
- This case provides a timely reminder to patentees to be cautious of their actions, as they may be considered to be a threat of infringement proceedings. Even general warnings (as opposed to mere notice of the existence of an application) which are not directed at anyone in particular, given the right circumstances, can constitute unjustified threats.
- Patent applicants should also always consider whether it is strategically wise to draw attention to a patent application as it might possibly invite an opposition to grant.
Note: both parties appealed this decision on 22 August 2014.
- The innovation patent was derived from Standard Patent Application No 2007202931 which was filed on 25 June 2007. At the time of trial the patent application had not been granted, but grant was anticipated.