This IP First Response website has been designed to help IP rights holders navigate IP infringement and enforcement by making it visible, accessible, and to provide information about the factors involved in pursuing different options. It does not provide legal, business or other professional advice, and none of the content should be regarded as recommending a specific course of action. We welcome any feedback via our IP First Response feedback form and by emailing us.
What is it?
If efforts to resolve a dispute are unsuccessful, the case can be escalated with the commencement of court proceedings. Court offers binding, authoritative decisions. The primary venue for patent infringement or revocation proceedings in Australia is the Federal Court. There are a variety of reasons you may initiate legal proceedings, the most common of which are:
- a validity challenge intended to revoke a patent
- allegations of infringement.
In both revocation and infringement proceedings, the trial will be an oral hearing, allowing both parties to present their cases, including the use of evidence and expert witnesses.
Going to court is usually a last resort. Court proceedings are often expensive and time consuming. It is prudent to seek legal advice prior to taking court action.
What are the benefits?
- Court can award damages to cover various losses and costs (should you be successful), including:
- Reputational damage
- Loss of profits by the IP owner
- Profits made by the infringer.
- Court decisions are binding and highly enforceable.
- Many matters can be brought before the courts in one case – including infringement, validity and commercial matters.
- Courts can take into consideration a broader range of factors, that may fall outside the scope of other decision-making bodies.
- Court allows cross-examination of evidence and expert witnesses, which is particularly advantageous in highly technical patent cases.
- The gravity, expense, publicity and sluggishness of court proceedings can encourage parties to negotiate or engage in other forms of dispute resolution.
- In the case of infringement proceedings, the court can place injunctions to prevent the infringer from undertaking infringing conduct.
What are the risks?
The court process does also come with a variety of risks.
- The outcome can be highly unpredictable.
- You could be subject to countersuits or additional filings.
- You may be required to pay costs should you be the unsuccessful party (in addition to the high costs already incurred).
- Cross-examination of evidence and witnesses may allow the other party to undermine you case and reinforce their arguments.
- Court proceedings are public, so evidence and arguments are not confidential by default. This can attract negative publicity and potentially reputational damage.
- Similarly, the mandatory ‘discovery’ phase which is where each side look over all the evidence which will be presented, can expose parts of your business to the other party which you’d prefer to keep confidential.
- There are also significant wait times, with Federal Court wait times approaching 2-3 years, followed by another 6-12 months for the written judgement (following the oral hearings). Additionally, if an appeal is filed, this can add another year or more to the timescale.
What are the possible outcomes?
The outcomes vary depending on the type of litigation.
It is always possible you may reach a negotiated settlement with the other party (prior to the judge’s ruling), including as part of court-ordered arbitration/mediation.
For revocation proceedings, there are three possible outcomes:
- The patent is revoked
- The patent is amended
- The patent is upheld.
For infringement proceedings there are three possible outcomes:
- You may be able to apply for an interim injunction to stop alleged infringement prior to the court date
- If you’re successful in infringement proceedings
- You may be awarded damages
- A final injunction is put in place to prevent further infringement
- If you’re unsuccessful in infringement proceedings
- You may be required to pay legal costs for the defendant
- You may be able to appeal the decision.
What might the costs be?
While simple litigation may cost between $100-500k, major patent litigation can cost in the millions. Appeals (if unsuccessful in the original litigation), cost anywhere from $150k-300k+.
Legal representation typically makes up a large proportion of these costs.
How much time might be involved?
Courts can take a long time to resolve disputes. It usually takes some months and can take years to finalise the entire process. Timelines vary based on factors such as the type of court action, complexity of the case, and which court you are heard in. Patent cases are typically heard at the Federal Court (although state/territory supreme courts do have jurisdiction to hear infringement matters).
Wait times for a Federal Court date range from 1-3 years, additionally, after the court date, there is another 6-12 months until the written judgement is handed down.
A party can appeal to the Full Court of the Federal Court of Australia, which will typically hear the appeal 4-6 months after filing.
Where it is appropriate to do so, parties may seek an expedited or truncated hearing process in any proceeding.
Parties should request any truncated or expedited hearing process at or before the first case management hearing before the Judge. The parties should also make plain at the time of filing any request for a truly expedited procedure and hearing.
How much is this used?
This is still being investigated and will be updated as the tool is refined
Who can use this?
For infringement actions, the owner of the patent usually initiates the action. Exclusive licensees and some authorised users may also have the right to initiate infringement proceedings.
Any third party (i.e. not the patent holder) can appeal the validity of a patent.
Who’s involved?
- The litigant, defendant and the presiding judge.
- Parties to the dispute
- Court
- Legal practitioners representing each party
- Witnesses, including expert witnesses giving expert evidence.
What do you need to proceed?
Find a legal practitioner for advice and representation
Court proceedings can be a stressful, complicated process that can have a serious impacts on you and your business. While professional legal assistance is not mandatory for court actions, the vast majority of cases will utilise legal professionals/practitioners to help navigate the serious and complex matters and processes associated with court proceedings.
Consider your goals before initiating court proceedings
You should decide whether the proceedings are intended to:
- Obtain financial compensation for infringement
- Stop further infringement
- Reverse or vary IP Australia’s decision.
You may be able to achieve more than one of these goals, however it is important to decide what your primary objective is before taking your dispute to court.
Decide who you intend to sue
For instance, more than one person can be liable for IP infringement, so it's important to sue all relevant individuals. For example, a company and its directors may all be liable for the infringement. A legal representative can help you decide who should be a party to the dispute.
Consider the impact of publicity
Unless they're covered by a confidentiality order, evidence and documents used in court will become available to the public and lose confidentiality.
Gather all your documents
Reports, contracts, licences and correspondence could all be relevant to the case. Some contracts require you to participate in alternative forms of dispute resolution before going to court.
Be prepared to write a statement of claim
This document officially starts proceedings. You'll need to state your complaint, the facts supporting your allegations and outcomes you're seeking.
Be prepared for the other party’s defence
They'll respond to your statement of claim by filing a defence document which addresses each of your allegations. In it they'll:
- Either admit if each allegation is correct, not admit if it's correct, or deny it.
- Establish which facts they dispute that need to be addressed by the court.
- Be prepared to disclose all your relevant documents.
Both you and the other party will need to inform each other of any relevant documents with which you or they have access to. These must be disclosed even if they assist the other party in its claim against you.
When you need immediate action
In some cases, your situation might require quick action. For example, if you want to stop an alleged infringer from using your IP now rather than waiting for a court hearing. In these situations you can request an immediate action, such as an interim injunction, through an urgent application. For more information on interim injunction, refer to the IP First Response; Seek an urgent injunction.
Before you take any action, you should consider whether you need legal or professional advice specific to your situation. It is important to know what rights you have, what remedies are open to you, and the cost and likelihood of success. IP Australia provides information on getting professional assistance with your IP. In addition, the Institute of Patent and Trade Mark Attorneys Australia (IPTA) offers free 30 minute consultations with an attorney.