Judgment provides encouragement to entities in receipt of patent infringement threats 4 min read
Recently, Justice Moshinsky of the Federal Court granted an interlocutory injunction to restrain a patentee from making further threats of infringement proceedings against the customers and potential customers of an entity against whom the patentee had already made threats. Historically, interlocutory injunctions of this kind are rare. Accordingly, this judgment provides guidance to entities in receipt of, and entities in issuance of, threats of patent infringement proceedings.
Key takeaways
- Pursuant to 128 of the Patents Act 1990 (Cth) (the Act), interlocutory injunctions can be granted against entities who make unjustified threats of patent infringement proceedings.
- In considering the balance of convenience in relation to these applications, it may be preferable from a practical perspective that further threats not be issued until the court determines whether or not such threats are unjustifiable.
- An injunction which restraints the patentee from making threats of infringement proceedings does not prevent the patentee from notifying others of the existence of the patent or the existence of other infringement proceedings. Further, the injunction does not restrain the patentee from actually commencing patent infringement proceedings.
Who in your organisation needs to know about this?
IP teams; patent attorneys; legal counsel.
Threats of infringement proceedings issued by TMA to UbiPark
UbiPark and TMA are suppliers of certain technology systems for carparks.
- TMA is the patentee of an invention which relates to controlling access to restricted car parks.
- UbiPark supplies carpark owners with technology which enables the owners to allow customers to enter, exit and pay for use of the carpark via a smartphone app.
This judgment arises from the letters which TMA sent to UbiPark and a number of UbiPark's customers. The judgment does not provide any detail as to the precise content of those letters; however, the judgment makes clear that the letters threatened patent infringement proceedings against those entities.
In response, UbiPark commenced proceedings against TMA. UbiPark ultimately sought an injunction that would restrain TMA from making further threats of patent infringement proceedings in respect of TMA's patent against UbiPark's customers and potential customers.
Award of interlocutory injunction
Ultimately, Justice Moshinsky of the Federal Court of Australia ordered an interlocutory injunction of a kind that was substantially similar to the one sought by UbiPark (see UbiPark Pty Ltd v TMA Capital Australia Pty Ltd [2022] FCA 111).
In reaching this decision, the court was satisfied that UbiPark had a prima facie case and that the balance of convenience favoured the making of an interlocutory injunction.
The following factors were particularly important to the court's reasoning.
- First, and notwithstanding that the application proceeded on the assumption that TMA's patent was valid, the court considered that UbiPark's prima facie case was not weak.
- Secondly, the court considered that the interlocutory injunction preserved the status quo in a practical sense because it was preferable that TMA did not make any further threats until it was determined (in the principal proceedings between UbiPark and TMA) whether or not such threats are unjustifiable.
- Thirdly, the practical effect of the interlocutory injunction was narrow given the injunction did not prevent TMA from doing certain activities in relation to its patent. For example, the injunction did not prevent TMA from notifying UbiPark's customers (and potential customers) of the existence of TMA's patent nor from commencing proceedings against those entities.
- Fourthly, UbiPark gave various undertakings in support of the injunction. This included an undertaking as to the payment of compensation to any entity affected by the injunction (together with security in support of that undertaking) as well as an undertaking to provide at least 10 weeks written notice to TMA before supplying certain UbiPark technology to any carpark owner or operator in Australia.
Implications
This judgment demonstrates that interlocutory injunctions under s 128 of the Act can be an actual, and not merely hypothetical, recourse to entities who might have received threats of patent infringement proceedings.
This judgment provides encouragement to entities in receipt of threats of patent infringement proceedings. It suggests it may be preferable to restrain a patentee from making further threats of patent infringement proceedings in circumstances where there is an allegation before the court that the patentee has made (or is proposing to make) threats which are allegedly unjustifiable.
Simultaneously, this judgment provides some comfort to patentees in the sense that, even if an interlocutory injunction is granted against the making of threats of patent infringement proceedings, the injunction would not preclude the patentee from giving notice of the existence of the patent to the alleged infringer and its customers (or from commencing proceedings against them). The provision of notice would also deprive the alleged infringer of the benefit of the innocent infringement defence under s 123 of the Act.
Actions you can take now
- Familiarise yourself with the relief that is available under s 128 of the Act.
- Patentees should develop a communications policy or practice around the enforcement of its patents as to avoid the issuance of unjustified threats.
- Recipients of patent infringement threats should consider seeking legal advice on possible injunctive relief.