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Temporary vs permanent injunctions in recent Federal Court patent infringement proceedings

23 March 2022

#Intellectual Property, #Dispute Resolution & Litigation

Published by:

James Phillips

Temporary vs permanent injunctions in recent Federal Court patent infringement proceedings

The central principle underpinning the patent regime in Australia is that a patent holder has an exclusive right to exploit the invention that is the subject of the patent. For this reason, injunctive relief, rather than damages or an account of profits, is often the primary goal of an applicant in patent infringement proceedings.

Two recent Federal Court cases illustrate very different circumstances in which injunctions – one a temporary injunction and one a permanent injunction (or rather, an injunction for the remainder of the term of the patent) – were deemed appropriate.

Case 1: UbiPark Pty Ltd v TMA Capital Australia Pty Ltd

In UbiPark Pty Ltd v TMA Capital Australia Pty Ltd [2022] FCA 111, Justice Moshinsky granted an interlocutory injunction pursuant to section 128 of the Patents Act 1990 (Act) to restrain threats of patent infringement proceedings. 

Section 128 of the Act provides that:

“(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…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”.

In this case both UbiPark Pty Ltd (UbiPark) and TMA Capital Australia Pty Ltd (TMA) were providers of technology systems in carparks. TMA was the patentee of a patent titled “System, method and computer program for an access control system”, which related to a system controlling access to carparks.

UbiPark provided carpark owners and operators with technology that allowed their customers to access and pay for parking via an App (UbiPark App).

In November 2021, TMA’s solicitors sent letters of demand to UbiPark alleging that the UbiPark App infringed the TMA patent and threatened to commence infringement proceedings. TMA’s solicitors also sent letters of demand to a number of UbiPark’s customers also threatening to commence patent infringement proceedings against them.

UbiPark took the view that the letters of demand – particularly those directed to UbiPark’s customers – had the potential to damage UbiPark’s business. UbiPark also took the view that the UbiPark App did not infringe the TMA patent (for the reasons outlined in the next section).

Consequently, UbiPark took the relatively uncommon step of filing an application against TMA for unjustified threats of infringement pursuant to section 128 Patents Act. UbiPark sought:

  • a declaration that the threats made by TMA were unjustifiable
  • both interlocutory and final injunctions restraining TMA from making further threats.

TMA defended the UbiPark claim and cross-claimed that UbiPark had infringed the TMA patent.

In accordance with section 129 of the Act, in defending UbiPark’s claim, TMA bore the onus of establishing that the UbiPark App infringed the TMA patent. In other words, the combined operation of sections 128 and 129 of the Act meant that TMA had to prove the threats of infringement made against UbiPark and UbiPark’s customers were justified.

In determining the matter, Justice Moshinsky had regard to the usual factors underpinning the grant of an interlocutory injunction. That is, (1) was there a serious question to be tried, with sufficient likelihood of success at the final hearing to justify preserving the status quo? and (2) did the balance of convenience favour the making of the interlocutory injunction?

Serious question to be tried/sufficient likelihood of success at final hearing

The issues in dispute in this matter were not the nature of each party’s respective technology, nor the relevant science, but rather, as is often the case in patent infringement matters, the proper construction of the patent. In brief, the parties disagreed on the interpretation of two particular integers in claim of the patent. Both parties led expert evidence in support of their respective interpretations.

The first integer in dispute centred on the meaning of “receives”, in the context of a smartphone App receiving a Bluetooth entry signal from a Bluetooth beacon when a customer approaches the boom gate of a carpark.

UbiPark contended that that a smartphone only “receives” an entry signal from a Bluetooth beacon when the signal is strong enough that the smartphone can decode it. On the other hand, TMA contended that a smartphone “receives” an entry signal from a Bluetooth beacon whenever a signal is received, regardless of whether the smartphone can decode it.

His Honour held that both constructions of the term “receives” were plausible and that each party’s construction had merit and could succeed at trial.

The other integer in dispute provided that the mobile app generate and transfer an entry request to the Bluetooth beacon “in response to” one or more entry criteria being satisfied.

UbiPark contended that, under its system, an entry request was generated and transferred in response to users pressing a button on the relevant screen of the UbiPark App (on the user’s smartphone), rather than in relation to the satisfaction of entry criteria contemplated by the patent.

TMA contended that one of the entry criteria is the receipt (and continued receipt) of a signal from a Bluetooth beacon of sufficient strength to be decoded. Therefore, under the UbiPark system, the generation and transfer of an entry request depended upon the continued satisfaction of that criterion.

Again, His Honour held that both constructions of the phrase “in response to” had merit and could succeed at trial.

Given the interlocutory nature of the proceeding, His Honour did not consider it necessary or appropriate to make a determination of the proper construction of the patent during the proceeding.

His Honour concluded that UbiPark had established both that there was a serious case to be tried and that UbiPark had sufficient prospects of success at final hearing that the TMA letters of demand constituted unjustified threats of infringement for the purposes of section 128(1) of the Act.

Balance of convenience

In considering the balance of convenience question, His Honour noted that an interlocutory injunction would not prevent TMA from:

  • notifying UbiPark’s customers and potential customers about the existence of the TMA patent
  • informing UbiPark’s customers and potential customers about the proceedings between TMA and UbiPark
  • commencing infringement proceedings against UbiPark and or UbiPark’s customers.

Rather, the injunction would merely prevent TMA from threatening infringement proceedings.

His Honour also found no evidence of any pressing need for TMA to threaten UbiPark’s customers and potential customers with infringement proceedings.

His Honour found that damages would not be an adequate remedy for the harm suffered by the UBiPark if the injunction was not granted. This finding was based on the difficulties of proving and quantifying the damage caused by the threats. For example, the loss of existing and potential customers.

His Honour ultimately found that the balance of convenience favoured granting the injunction because it preserved the status quo and it was preferable, from a practical perspective, that no further threats be made before determining whether those threats were unjustifiable under the Act.

The interlocutory injunction was granted on the condition that UbiPark provide security for compensation for any loss suffered due to the injunction.

Case 2: Pharmacia LLC v Juno Pharmaceuticals Pty Ltd

In Pharmacia LLC v Juno Pharmaceuticals Pty Ltd [2022] FCA 92, the Federal Court of Australia found that Juno Pharmaceuticals Pty Ltd (Juno) had, by selling and supplying parecoxib products in Australia, infringed a patent held by Pharmacia LLC (Pharmacia).

Pharmacia sought an injunction restraining Juno from infringing its patent and pecuniary relief. As common in patent infringement or validity cases, orders were made early in the matter to split the trial so that all issues of pecuniary relief were determined separately and after the determination of liability.

Juno opposed the grant of an injunction on two bases:

  • although Juno registered their products on the Australian Register of Therapeutic Goods and launched the products on the Australian market in April 2018, Pharmacia did not commence proceedings until 22 August 2019
  • the patent was due to expire in a matter of weeks[1] and the injunction would disrupt the supply lines to hospitals.

Justice Burley was not swayed by either of these submissions. He did not consider that the delay in Pharmacia commencing proceedings was significant, particularly in circumstances where it was apparent from documents tendered in evidence that the parties had engaged in continuous correspondence from May 2018 until the commencement of proceedings.

His Honour was also not satisfied that there was sufficient evidence to demonstrate that supply lines to hospitals would be disrupted and went on to say:

“[at 419] while the patent is valid and infringed the patentee is prima facie entitled to enforce its rights under it. The fact that they will cease shortly does not of itself diminish the entitlement of the patentee to the rights that accrue to it.”

The court granted a permanent injunction restraining Juno from continuing to infringe the Pharmacia patent, even though the patent would expire within two months of the delivery of the court’s judgement. The matter is now listed for further case management to determine Pharmacia’s case for pecuniary relief.

Key takeaways

  1. An application for an interlocutory injunction under section 128 of the Act can be an effective means of restricting or limiting damage caused by a patentee threatening infringement proceedings. However, the applicant should be aware that it will, in many cases, be necessary to prepare expert evidence to show that it has sufficient prospects of success at final hearing to justify preserving the status quo. The applicant will also likely be required to provide of security to the respondent before an interlocutory injunction will be granted. 
  2. When determining whether a permanent injunction should be granted, the court is not concerned with the length of time that injunction may continue in effect. Where a patentee has an entitlement to enforce its rights under a patent, the court should uphold those rights regardless of their commercial or practical value, having regard to the term of the patent.

Authors: Tanya Jackson & James Phillips

[1] The patent is due to expire on 2 April 2022, less than seven weeks after the court’s decision was handed down.

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

James Phillips

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