Austal Ships Sales Pty Ltd (ACN 079 160 651) v Stena Rederi Aktiebolag

THE PRIMARY DECISION 4 At first instance Stena sued Austal for infringement of the patent, seeking to restrain further infringement. Stena's case was that the hull forms of three types of vessel manufactured, sold or promoted by Austal, infringed its patent. The allegedly infringing vessels were described as the "Austal 94", the "Austal 196" and the "Austal 285". By cross-application, Austal sought to revoke the patent for alleged invalidity, lack of novelty, lack of an inventive step, and/or failure to comply with the requirement in s 40(3) of the Patents Act 1990 (Cth) (the "Patents Act") that the claim be clear. 5 The patent specification included 10 claims defining the invention. Only claims 1 and 7 were in issue in the proceedings. It was common ground that claims 2 to 6 were dependent upon claim 1. For clarity, claim 1 is set out below. The figures in parenthesis are used to identify the integers of the claim. 1. A hull for multi-hull seagoing vessels capable of speeds greater than 30 knots (1.1), wherein: in the case of the sternward half of the hull, located between the stern and midships of the hull, the vertical distance from the hull base line to the volumetric centre-of-gravity of that part of the respective half of the hull below a water line corresponding to a normally occurring hull draft is greater than 55% of the normally occurring draft (1.2); in the case of the foreward half of the hull, located between the forebody of the hull and midships, said vertical distance is less than 55% of the draft (1.3); at a position corresponding to 75% of the total length of the underwater body of the hull calculated from the stern of the hull, the distance between the base line and the centre-of-gravity of the frame area (as defined herein) below the water line, and at that position is less than 55% of the draft (1.4); and the width of the hull at the water line is substantially greater in the after body of the hull than in the foreward body of the hull and continually decreases in a forward direction (1.5), and wherein the cross-section or shape of the hull throughout a substantial portion of the forward half of the hull located between the bow and midships has a bulbous underwater part and a narrow waisted part which extends through the water line (1.6). … 6 Claim 7 is as follows: 7. A hull according to any one of claims 1 to 5, wherein the width of the hull at the water line is substantially constant in the case of the sternward quarter part of the vessel and then narrows towards the prow of the vessel. 7 The primary Judge (Tamberlin J), found that the Austal 94 design infringed the patent and dismissed the cross-claim, holding that the patent was valid in all respects. His Honour made the following orders (the "primary orders"): THE COURT ORDERS THAT: 1. The second respondent has infringed claims 1, 2, 3, 4, 5, 6, 7 and 9 of Australian Patent No 648634 (the Patent) by making and selling a multi-hull seagoing vessel incorporating the Austal 94 hull form, namely the Carmen Ernestina. 2. The third respondent has infringed claims 1, 2, 3, 4, 5, 6, 7 and 9 of the Patent by making and selling multi-hull seagoing vessels incorporating the Austal 94 hull form, namely the Adnan Menderez, the Turgut Ozal and the Jonathan Swift. THE COURT CERTIFIES THAT: 3. For the purposes of s 19 of the Patents Act 1990 (Cth), the validity of claims 1 to 9 of the Patent was questioned unsuccessfully in these proceedings. THE COURT ORDERS THAT: 4. Each of the second and third respondents, by its directors, servants or agents or otherwise howsoever during the term of the Patent is restrained from infringing claims 1, 2, 3, 4, 5, 6, 7 and 9 of the Patent, and in particular from: (a) importing, making, hiring, selling, supplying or otherwise disposing of, offering to make, hire, sell, supply or otherwise dispose of, or using or keeping for the purpose of doing any of those things: (i) any hull for multi-hull seagoing vessels according to the Austal 94 hull form; and (ii) any multi-hull seagoing vessel incorporating such a hull; and (b) authorising, aiding and abetting, counselling or procuring any other person to do any of the acts specified in sub-paragraph (a) above. 5. The respondents' cross-claim be dismissed. 6. The operation of paragraphs 3 and 4 above be stayed, if a notice of appeal … to the Full Court of the Federal Court from paragraphs 1, 2, 3, 4 and 5 above is filed by the Respondents within the period prescribed [by] the Federal Court Rules, until 21 days after the final determination of that appeal. THE COURT DIRECTS THAT: 7. The Applicant and Respondents file and exchange written submissions concerning the appropriate order for costs in the proceedings on or before 31 July 2007. 8. The Applicant and Respondents file and serve any written submissions in reply on the appropriate order as to costs in the proceedings on or before 7 August 2007. THE COURT NOTES THAT: 9. The parties agree that the question of costs be determined on the papers. 8 His Honour based his conclusion that the Austal 94 design infringed both claims 1 and 7 upon a construction of the two claims which, in his view, gave "content" to both integer 1.5 of claim 1 and claim 7. In other words, his Honour read claim 7 as adding to integers of claim 1.

THE MOTION 19 Following the unsuccessful special leave application Austal filed the notice of motion with which we are now concerned. Austal seeks the following orders pursuant to O 35 r 7(3): The order made by the Full Court on 3 July 2008 in the within proceedings that: "1. The appeal be dismissed with costs." be recalled, varied and corrected by amending the terms of the same so as to order as follows: 1. The appeal be upheld. 2. The applicants pay the respondent's costs of the appeal. 3. Set aside all of the orders made on 20 July 2007 by Tamberlin J (Primary Judge) in the Federal Court proceedings No. (P) NSD 1602/2005 (Infringement Proceedings) save and except for costs orders made pursuant to paragraph 9 of said orders. 4. In lieu thereof order that the proceedings be remitted to a single Judge of the Court, for further hearing and determination of the respondent's claim of infringement of claims 2,3,4,5,6,7 and 9 of [the Patent] and any cross claim which the Judge may in his or her discretion permit by amendment or otherwise, for revocation of the Patent, either wholly or so far as it relates to any claim thereof, such further hearing and determination to proceed and to be made on the basis directed and be made in order 5 below. 5. The further hearing and determination as referred to in order 4 above shall proceed and be made on the basis that: (a) The Austal 94 hull, is not within claim 1, as referred to in paragraph [41] of the reasons for decision of the Full Court (Reasons); (b) Claim 1 of the Patent has not been infringed by the Austal 94 hull, as referred to in paragraph [41] of the Reasons; (c) Claims 2,3,4,5,6 and 9 are dependent on claim 1; (d) Claims 2,3,4,5,6 and 9 are not infringed by the Austal 94 hull; (e) The Austal 94 hull is within claim 7, (assuming claim 7 to be valid) as referred to in paragraph [41] of the Reasons; (f) Claim 7 is an alternative to claim 1, in so far as the latter is limited by integer 1.5, as referred to in paragraph [41] of the Reasons; (g) Integer 1.5 of claim 1 and claim 7 speak of different concepts, as referred to in paragraph [41] of the Reasons; (h) The "substantially constant" of claim 7 and the "continually decreases" of integer 1.5 (of claim 1) are true alternatives, as referred to in paragraph [47] of the Reasons; (i) The finding by the Full Court that the Austal 94 Hull does not infringe claim 1 as referred to in paragraph [41] of the Reasons, requires a determination by the Primary Judge of a further and separate question as to whether, having regard to the matters referred to in (v), (vi), (vii) and (viii) hereof, claim 7 is a valid claim of the Patent, and as to whether the Patent is valid, either wholly or so far as it relates to any claim thereof, in light of the provisions of subsection 40(4) of the [Patents Act]. 20 At first glance, the breadth of the proposed relief appears to be quite extraordinary. However, on closer examination, it emerges that the point is quite narrow. Austal relies upon the Full Court's conclusions that its design was not within claim 1, but within claim 7, and submits that it follows from those conclusions that claim 7 is invalid because it claims a second invention contrary to s 40(4) of the Patents Act. That section requires that the claims in a complete specification relate to only one invention. That point was not raised in Austal's special leave application. 21 We should add, at this stage, that one member of the Full Court who heard the appeal, Heerey J, has retired. The parties have agreed that the motion should be heard and determined by the remaining members of the Court, Finn and Dowsett JJ. 22 We agree that we must correct the error in the orders which we have already identified. It is unfortunate that it should have occurred. However Austal seeks wider relief. In effect, it asserts that given the Full Court's construction of claim 7, the claims in the specification did not meet the requirement in s 40(4) that they relate to one invention only. Implicit in that proposition is the assertion that claim 7 is for a different invention from that which is the subject of claim 1. No such submission was made at first instance, on appeal or in the High Court. Austal submits that the Full Court's reasons were based upon a case which was not advanced at trial. However it is clear that Stena asserted that claim 7 was a true alternative to claim 1. Infringement of one claim, but not the other, was plainly a possible outcome. One might reasonably have expected Austal to have considered that possibility. 23 It would go well beyond the accepted ambit of operation of O 35 r 7(3) for the Court to revisit its own decision in order to consider that question. See Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 at 391 (per Lockhart J) and 404-405 (per Lindgren J); and Griffiths v Boral Resources (Qld) Pty Ltd (2006) 154 FCR 554 at [32]-[33] and [68] (per Spender ACJ and Dowsett and Collier JJ). 24 Austal submits that the public interest in finality in the disposition of litigation is outweighed in this case by the need to defend the integrity of the Register of Patents. However that assertion is difficult to accept given that the purported problem seems only to have been isolated and identified after the refusal of special leave. It is not clear to us that there has been an error which might undermine the integrity of the Register of Patents, but it is clear that to revisit this matter at this late stage would comprise an extremely unusual derogation from the perception that final judgments are final. It is difficult to see how such an approach can contribute to the object of finality in the quelling of disputes or to the reputation of the law, the legal process or the Courts. Nonetheless, the primacy of the law in our society dictates that the motion must be considered and disposed of on its merits. In other parts of its submission Austal seems to suggest that it may have other available means of challenging the patent. If so, it would be better that it pursue them than that we revisit our decision in the present circumstances. We note also that non-compliance with s 40(4) is not a ground for revocation of a patent pursuant to s 138 of the Patents Act. 25 We do not accept that O 35 r 7(3) permits this Court to re-visit any and every decision simply because one party alleges error in the reasoning process leading to the ultimate resolution of the substantive questions in issue. The sub-rule requires a clerical mistake or an error arising in a judgment or order from an accidental slip or omission. Whilst either limb of O 35 r 7(3) offers a sufficient basis for correcting the inadvertent failure to reflect in the order the fact that the Full Court had found no infringement of claim 1, neither limb offers a basis for revisiting the correctness of the reasons underlying that, or any other, part of the orders. An error in reasoning cannot amount to a clerical mistake. Nor is an error in reasoning an error arising in a judgment or order. The Court may be in error in its reasoning, but a judgment or order which reflects the consequences of that error is, itself, free from error, although appealable. We do not understand these propositions to have ever been doubted, although it may be, that from time to time, the operation of the rule has been stretched to accommodate a hard case. 26 In our view, the application is misconceived. It must be dismissed. 27 There can be no doubt that costs should follow the event. The only question is whether Stena should have the benefit of an order for indemnity costs. In view of our conclusions, the motion was always destined to fail. It should not have been brought. Those circumstances justify an order for indemnity costs. We order that the appellants pay the respondents' costs of the motion to be taxed on an indemnity basis. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Finn and Dowsett.

At a glance

Court

Decision date

Before

Source

Judgment (9 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (3)