Who does this affect?

Anyone involved in patent disputes in Australia.

What do you need to do?

Be aware of the impact of this decision on the ability to obtain declarations of non-infringement in Australia.

Author
Shyama Jayaswal  
Senior Associate

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Robert Cooper  
Partner
T +61 3 9643 4405

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Wayne McMaster  
Partner
T +61 3 9643 4407

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Sydney
Kim O'Connell  

Brisbane
John Swinson  

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The Federal Court of Australia has handed down a decision which may severely limit the scope for the grant of non-infringement declarations in patent cases. The relevant sections of the Patents Act 1990 have been interpreted to only be available to a party which has a granted patent for the activity which it alleges is non-infringing.

In the recent decision of Occupational and Medical Innovations Ltd v Retractable Technologies Inc [2008] FCA 1102, Dowsett J analyses the words in sections 125 and 126 of the Patents Act 1990 which set out the requirements for a declaration of non-infringement. The relevant part of section 125 reads as follows:

“A person who wishes to exploit an invention may apply to a prescribed court for a declaration that the exploitation of the invention would not infringe a claim of a particular complete specification.”

The relevant part of section 126 reads as follows:

“A prescribed court must not make a non-infringement declaration unless a patent has been granted in respect of the relevant invention.”

The sections distinguish between the “invention” that the applicant proposes to exploit and the respondent’s “particular complete specification”. Further, section 126 refers to a patent in respect of the “relevant invention”. Dowsett J concluded from this that the applicant must be seeking to exploit an invention for which it has a granted Australian patent. Dowsett J further states that:

“there are good policy reasons for limiting the availability of relief … to a person who wishes to exploit a patent which has been granted, excluding mere applicants whose rights have not been finally determined.”

In this particular case, the applicant did own a granted patent and thus this finding was not determinative of the case. Dowsett J did grant the declaration for non-infringement as he held that the proposed activity was within the scope of the applicant’s patent and did not infringe the respondent’s patent.

The decision, if followed, severely limits the scope for the grant of non-infringement declarations in Australia. For example, persons who wish to use technology which is in the prior art, and thus should not fall within the scope of a patent, would not be entitled to seek a non-infringement declaration.

This is a significant change from the previous position under the Patents Act 1952 which referred to someone who desires to “use a process, or to make use or sell an article”, and did not refer to an invention. The 1952 act was consistent with the position under the UK Patents Act which refers simply to “proposed acts”. Neither the IPAC Report 1984 nor the Explanatory Memorandum for the Patents Bill 1990 discussed any need for a change from the position under the 1952 act. Accordingly, this narrow result appears to be an inadvertent result of the drafting of the Patents Act 1990.

Since the decision is based upon interpretation of the words in the Patents Act, it may be necessary for Parliament to amend the act before non-infringement declarations are available in situations where the applicant is not exploiting its own Australian granted patent.

In practice, whilst this decision severely limits the scope of the provision of declarations of non-infringement, the primary reason that declarations of non-infringement are not often sought is because the applicant must pay the costs of all parties in the proceedings. Further, it is not possible to challenge the validity of the patent in proceedings for a non-infringement declaration. As a result, it would be worthwhile for Parliament to consider the non-infringement declaration provisions as a whole if any review was undertaken in light of this decision.