Australian patent litigation to be streamlined

Australian patent litigation to be streamlined

The Australian Federal Court has moved to introduce measures to streamline the management of patent litigation. The Court has indicated that the aim of the procedures is to accelerate the identification of issues and generally to improve the facilitation of the trial process in patent proceedings. The overriding policy behind the new procedures is to reduce the time and costs associated with patent litigation.

The Court has established a Patent panel of judges. In the Victorian Registry, the Patent panel currently comprises Justices Middleton (convenor), Sundberg, Jessup and Kenny.

New proceedings will be allocated randomly to individual judges in the Patent panel. The first directions hearing will be listed before a nominated Patents List Judge and subsequent directions may be before the Patents List Judge depending on the nature of the procedural dispute.

The general procedures the Court will adopt in patent proceedings are as follows:

  • On the first return date, the parties should be in a position to explain the issues in the proceedings, including whether infringement is disputed.
  • After the filing of any particulars of invalidity, the party seeking revocation must explain how each ground of invalidity can be supported. The particulars of invalidity should include details of the passages of any prior publication relied upon for novelty purposes.
  • Before discovery is ordered, the parties must confer to discuss the issues to be addressed by discovery and the nature of the documents sought, and whether evidence should precede discovery.
  • If appropriate, a case management conference will be arranged to resolve issues concerning discovery and any interlocutory steps.
  • Before any directions are made for the filing of evidence, the Court will enquire (as appropriate): whether any expert evidence will be required;

    • whether a single expert is appropriate for all or any part of the evidence;
    • whether any of the evidence can be given orally or by reference to standard texts, or by a combination of summary outline and oral evidence;
    • whether a primer is appropriate;
    • as to the appropriate method of evidence (such as evidence of experts and prior meetings of experts to explain or narrow the issues in dispute).
  • Any special matters should be raised at the earliest possible occasion including, for instance, any intended applications for amendment of the patent.
  • At a time nominated by the Patents List Judge, after interlocutory steps have been completed and the parties’ evidence filed, the parties will be expected to reduce to writing as relevant, all matters likely to be in issue in the preparation for and conduct of the trial, for instance:

    • pleadings containing only the matters in dispute including issues in dispute with respect to each ground of claimed invalidity;
    • a statement of non-controversial matters, such as publication dates and priority dates;
    • the issues likely to be addressed by each proposed witness/expert and the mechanism by which each witness will give his or her evidence;
    • any outstanding pre-trial matters and the likely time required for the hearing.

The Court has indicated that the procedures are not overly prescriptive with an emphasis on flexibility of application to each proceeding. However, the Court expects that, with practitioners and litigants following the procedures, it will be informed of the matters required for giving the appropriate directions at the earliest possible stage in the proceedings.

As can be seen from the particular procedures, the Court wants to identify and narrow the issues in dispute as early as possible, narrow the scope of discovery and limit the technical expert evidence to be lead by the parties. In particular, the Court has become concerned at the significant costs incurred by litigants in giving discovery in patent proceedings and also the time and costs associated with the giving of evidence by experts called by the parties. To quote from a Federal Court judge in a recent patent case:

“…Most patent cases begin with an infringement action. The common practice is for the defendant to deny infringement and cross-claim for revocation of the patent. Often there is no merit in the cross-claim. It is brought for tactical reasons, for instance to put pressure on the applicant in the hope of achieving a satisfactory settlement. The idea is that an applicant might be unwilling to run the risk, however slight, of having his patent, which is often a very valuable right, struck down.

It is difficult to know how to deal with this problem, the seriousness of which should not be understated. First of all, patent litigation is expensive. Judges share part of the blame for very often they do not impose adequate restraints on the manner in which the parties conduct their case. The judges are usually not in a position early on to work out which claims are hopeless and make appropriate orders. That only becomes apparent at trial, at which time it is too late to do much about it.

Second, patent litigation is not just expensive, it also takes up a great deal of judicial time. If courts are required to expend scarce resources dealing with hopeless cases, other litigants will suffer as their cases are necessarily put off in the meantime.”

One aspect of the Court’s procedures is likely to benefit patent infringement applicants. Respondents to infringement claims seeking to cross-claim for a revocation of the patent in issue may be at a disadvantage early in the proceeding as the Court will expect that each ground of invalidity pleaded in the cross-claim can be supported and explained soon after the particulars of invalidity have been filed. According to current Court procedure, a cross-claimant will generally have only about two months after being served with infringement proceedings to file its cross-clam and particulars of invalidity. That period will generally be insufficient for the cross-claimant to determine, with certainty, the grounds of its attack on the validly of the patent, let alone be able to satisfy the Court that such grounds are supportable. This will be so because there are likely to be difficulties locating appropriate experts in the relevant technology field willing to assist and, further, once an expert has been selected, to determine what was the common general knowledge in the field at the relevant priority date. That being the case, a cross-claimant to an infringement action is likely to be “on the back foot” early on in such proceedings.

However, the Federal Court’s case management procedures will be welcomed by all patent litigants as the time and cost to pursue patent litigation should be reduced by the implementation of the procedures. Also, as the procedures are designed to identify the contentious issues early in the proceedings, earlier resolution of patent disputes may result.