This is an informal case summary prepared for the purposes of facilitating exchange during the 2024 WIPO IP Judges Forum.
Session 6
Federal Court of Australia [2019]: Calidad Pty. Ltd. v Seiko Epson Corporation (No 2), [2019] FCAFC 168
Date of judgment: September 27, 2019
Issuing authority: Federal Court of Australia
Level of the issuing authority: Appellate instance
Type of procedure: Judicial (Civin( �/span>
Subject matter: Patents (Inventions); Enforcement of IP and Related Laws
Appellants/Cross-Respondents: Calidad Pty Ltd and Calidad Holdings Pty Ltd (ACN 002 105 502)
Respondents/Cross-Appellants: Seiko Epson Corporation and Epson Australia Pty Ltd (ACN 002 625 783)
Keywords: Patents, Patent infringement, Judgment on appeal, Grant of declaration, Form of declaration, Injunctions, Form of injunctions, Injunction in general form
Basic facts: The present case followed the first hearing where the appeal was dismissed, and the cross-appeal was allowed. The case at first instance regarded the infringement of printer cartridges. This first hearing proceeded to the High Court of Australia and became a seminal patent case in Australia, adopting the doctrine of exhaustion, which permits modifications to a product to prolong its life.
In this case, the parties sought to resolve three matters following the hearings mentioned above:
· a form of declaratory relief; and
· two forms of injunctive relief.
Declaratory Relief: As Calidad had infringed Seiko’s products, Calidad sought declaration that the infringement occurred “since April 2016”. Whilst the primary judge referred to Calidad’s current products as “all cartridges sold after April 2016”, there was nothing to suggest that this excluded the possibility of some of the products being sold before April 2016, or that some of Calidad’s past range of products were not sold after April 2016. The Court did not find a compelling reason to specify this date range (paras. [4]-[7]).
Injunctive Relief: Seiko sought two injunctions (paras. [8]-[11]).
· The first injunction had two limbs:
o Restraining further exploitation or authorization of the further exploitation of Calidad’s current products (referred in the proposed order as “Further Infringing Cartridges”).
o Restraining the exploitation or authorization of the exploitation of the “Materially Modified Cartridges”, which were deemed cartridges that “have had or more of the combinations of modifications set out”.
· The second injunction was an injunction in general form directed simply to restraining Calidad from infringing claim 1 of each of the patents.
Calidad contended as follows (paras. [12]-[15]):
· First, opposing the issuance of an injunction in general form, Calidad proposed a limited form of injunction focused on the Materially Modified Cartridges. They argued that the second limb should not apply to cartridges modified by “one or more of the combinations of modifications set out” but only to cartridges that “have had the combinations of modifications” set out.
· Second, Calidad proposed a single injunction restraining the further exploitation or authorization of further exploitation of its current products and “any other original, single use Epson cartridges modified to enable reuse, by any person not licensed or authorized by the Respondents to do so”, provided the cartridges embody claim 1 of the Patents.
Held: The declaration specified by Calidad was not granted.
Instead, the Court issued an order for a declaration that precisely that identified, with precision, the cartridges within categories 1, 2, 3, and A are infringing cartridges.
The injunction in general form (i.e., an injunction restraining Calidad from infringing claim 1 of each patent in suit) was granted.
Additionally, an injunction specifically directed at the cartridges identified in the subsequent declaration was also granted.
It was proposed that these injunctions be made in a combined order.
Relevant holdings in relation to permanent injunctions:
General Injunctive Principles are as follows (paras. [44]-[50]):
1. It is conventional for injunctions in general form to be granted.
2. The scope of the monopoly right cannot be in doubt and will often provide the definition required for a prohibitory injunction in general form.
3. Proportionality is still relevant when granting injunctive relief.
4. When the infringer has already been found to have engaged in wrongful conduct and is cognizant of the intellectual property rights in question, it is not unjust to expect that the infringer be the party at risk in respect of that person’s future conduct and acts.
Although injunctions are discretionary, in Australia they will ordinarily be granted to restrain infringement “of the claims” found to infringe in general form. It is for a defendant to establish that a carve-out for more specific conduct is warranted.
If the established infringer has any doubt about whether that person’s future acts might infringe the intellectual property rights or is concerned that those acts will be a matter of contention, the onus is on them to seek appropriate declaratory relief.
Relevant legislation:
· Copyright Act 1968 (Cth), s. 85(1)
· Federal Court of Australia Act 1976 (Cth), s. 21
· Patents Act 1990 (Cth), s. 125