Australian Mud Company Pty Ltd v Coretell Pty Ltd

The Family of Patents held by AMC including the Patent in Suit 14 On 3 September 2004, AMC filed the Provisional Patent Application and on 5 September 2005, AMC filed the Parent Application claiming priority from the Provisional Patent Application. The circumstances were such that, in order for a patent to be granted on the Parent Application, it needed to be accepted by 15 January 2010. That did not occur and, as a result, the application lapsed on 16 January 2010. 15 On 15 January 2006, AMC applied for a divisional innovation patent of the Parent Application, No 2006100113 (the Device Patent). The Device Patent was granted on 16 March 2006 and certified on 20 July 2006. It expired on 5 September 2013. 16 As I have said, on 15 January 2010, AMC applied for the Standard Patent as a divisional patent of the Parent Application. The Standard Patent was not granted and sealed until 13 March 2014. The evidence in the case establishes that the application was under examination by the Australian Patent Office between 23 July 2010 and 15 September 2011 when it was accepted. On 14 December 2011, Coretell wrote to IP Australia requesting a reconsideration of its acceptance of the application. A party unrelated to this proceeding filed a notice of opposition on 3 January 2012, but withdrew the notice on 27 March 2012. On 29 June 2012, AMC filed some voluntary amendments to the Patent Application that were accepted by IP Australia on 10 October 2012. Coretell filed a notice of opposition on 21 January 2013. AMC filed further amendments to the Patent Application on 15 October 2013, which were accepted by IP Australia on 25 November 2013. Further correspondence passed between patent attorneys for Coretell and IP Australia in December 2013 and January 2014. 17 On 2 December 2010, AMC applied for a divisional innovation patent of the Standard Patent before it was granted, No 2010101356 (the System Patent). The System Patent was granted on 6 January 2011 and certified on 15 September 2011. It expired on 5 September 2013. 18 On 16 August 2011, AMC applied for a second divisional innovation patent of the Standard Patent before it was granted, Australian Patent No 2011101041 (the Method Patent). The Method Patent was granted on 29 September 2011 and certified on 10 November 2011. It expired on 5 September 2013. 19 The applicants produced a diagram showing the family of patents. I am satisfied that it is accurate and I reproduce it as Annexure A to these reasons.

The Proceedings in this Court 20 There are three relevant proceedings in this Court, including this proceeding.

WA Proceeding (WAD 132 of 2007) 21 The WA Proceeding was brought by AMC and its parent company, Imdex Limited (Imdex) against Coretell and Mincrest Holdings for alleged infringement of claims in the Device Patent. 22 The applicants' tool (the Ace Core Tool or ACT) was released onto the market in late 2004. The market was the mineral exploration drilling industry. Version 1 of the respondents' ORIshot tool (Orishot tool) was released into the market in September 2006 and the first letter of demand in relation to the respondents' tool was sent to Mincrest Holdings on or about 16 November 2006. 23 The proceedings were commenced on 2 July 2007 and proceeded to a trial on liability in April 2010. Judgment was delivered on 29 October 2010 and the applicants' claims for infringement were dismissed as was the respondents' cross-claim that the Device Patent was invalid (Australian Mud Company Pty Ltd v Coretell Pty Ltd [2010] FCA 1169; (2010) 88 IPR 270). An appeal by the applicants in the proceeding was dismissed (Australian Mud Company Pty Ltd v Coretell Pty Ltd [2011] FCAFC 121; (2011) 93 IPR 188). The applicants were ordered to pay costs and subsequently paid the respondents $500,000 by way of costs. Putting the matter generally, the applicants' claim failed because the respondents' equipment which was in two separate and separated parts did not fall within the scope of the monopoly which was limited to a tool in one piece. 24 That was not the end of the WA Proceeding because in addition to finding that the respondents' tool did not infringe the Device Patent and rejecting the claims of invalidity, the primary judge found that the respondents' cross-claim for unjustified threats within s 128 of the Patents Act was made out. The inquiry as to damages was heard by the primary judge in December 2014 and, on 19 August 2016, the applicants were ordered to pay the respondents the amount of $1,506,859 in damages, together with interest and costs (Australian Mud Company v Coretell Pty Ltd (No 7) [2016] FCA 991). That judgment was the subject of an appeal which was allowed in March 2017. Coretell's claim for damages was dismissed and the respondents were ordered to pay the applicants' costs of the appeal and of the inquiry (Australian Mud Company v Coretell Pty Ltd [2017] FCAFC 44). 25 As I have said, the respondents contend that these proceedings are an abuse of process. They put their application on three grounds, considered either individually or cumulatively. Two of those grounds rely on the matters that relate to the first instance proceeding in the WA Proceeding. 26 First, the respondents claim that the applicants could have and should have diligently prosecuted and secured acceptance of the Parent Application and then brought the resulting patent into the first instance proceeding in the WA Proceeding. As I have said, the Parent Application was filed on 5 September 2005 and lapsed on 16 January 2010. 27 Secondly, the respondents claim in the alternative, that the applicants should have divided out of the Parent Application, the System Patent, the Method Patent and, to the extent necessary, the Standard Patent at the same time as they did that in relation to the Device Patent and then brought those patents into the first instance proceeding in the WA Proceeding.

NSW Proceeding (NSD 2082 of 2011) 28 These proceedings were brought by the present applicants against the present respondents other than Goldview for alleged infringement of claims in the System Patent and the Method Patent. 29 The proceedings were commenced on 23 November 2011 and there was a trial on liability in April (starting 14 April 2014), May and July 2014. The System Patent and the Method Patent had expired before the commencement of the trial. The primary judge delivered judgment upholding the applicants' infringement claims and dismissing a cross-claim alleging invalidity (Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 4) [2015] FCA 1372). Unlike the Device Patent, the Method Patent and the System Patent were not restricted to a unitary device. There was an appeal to the Full Court of this Court by the respondents which was successful as to one aspect of the primary judge's decision relating to the date of infringement of the patents, but the appeal was otherwise dismissed with the appellants being ordered to pay 90% of the respondents' costs (Coretell Pty Ltd v Australian Mud Company Pty Ltd [2017] FCAFC 54; (2017) 250 FCR 155). 30 As I have said, the unsuccessful respondents (appellants in the appeal) then sought special leave to appeal from the High Court seeking to raise an issue concerning the secret use provisions in the Patents Act. I have already addressed the fate of that application and what it means in terms of the validity challenge in this case. 31 As I have said, the Standard Patent (the patent in suit) was granted on 13 March 2014. By letter dated 28 March 2014, the applicants' solicitors gave the respondents' solicitors notice of the grant of the Standard Patent. On 4 April 2014, these proceedings were commenced (WAD 74 of 2014) and the proceedings were allocated to the docket of McKerracher J who was the judge due to hear the trial in the NSW Proceedings commencing on 14 April 2014. 32 The sequence of events just described gives rise to the third ground upon which the respondents allege that this proceeding is an abuse of process. The respondents contend that the claims in suit in the present proceeding (i.e., the claims in the Standard Patent) should have been brought into the NSW Proceeding. 33 In connection with the NSW Proceeding, the evidence establishes the following. First, the respondents raised an abuse of process allegation in the NSW Proceeding and then withdrew it. On 30 March 2012, the respondents pleaded in the NSW Proceeding that the proceeding was an abuse of process or subject to an estoppel because of the WA Proceeding (at first instance and on appeal) and then withdrew the allegations when it filed and served an Amended Defence on 25 May 2012. Secondly, the respondents never took any steps to consolidate this proceeding with the NSW Proceeding, rather they consented to an adjournment of this proceeding pending the outcome of the NSW Proceeding. Thirdly, the respondents sought an order in this proceeding that the abuse of process allegations be dealt with as a separate question. I refused to make such an order (Australian Mud Company Pty Ltd v Coretell Pty Ltd [2016] FCA 830). In the course of my reasons, I said the following (at 9): The point that the respondents wish to raise by way of their abuse of process argument appears to be a novel one. They accept that what the applicants have done is "entirely permissible" under the Patents Act 1990 (Cth). However, they claim that "the abuse arises when divided out patents are then used as a basis for litigation in this Court". They claim that the difficulties with what the applicants have done is "a worldwide problem, this issue of divisionals". They claim that it raises "a serious policy issue". It seems to me that the more novel the issue sought to be raised as a separate question, the more likely it is that there may be appeals which would have the potential to delay the overall resolution of the proceeding. I think that is undesirable. 34 Although the applicants were successful in the NSW Proceeding, as I have said, the System Patent and the Method Patent had expired before the trial. They were not available to form the basis for ongoing relief, including injunctive relief.

The Present Proceeding 35 The present proceeding involves claims for the infringement of a Standard Patent and claims for declaratory and injunctive relief, orders for delivery up and damages, including additional damages.

The Corporate Structure of, and the Relationship between, the Respondents 36 As I have said, Mr Kleyn is the sole director of Coretell (incorporated 25 March 2006), Mincrest Holdings (incorporated 17 March 1995), Kleyn Investments (incorporated 29 March 2006) and Goldview (incorporated 22 May 1997). He is the sole shareholder of Coretell, Kleyn Investments and Goldview, and an equal shareholder with Ms Aileen Kleyn of Mincrest Holdings. 37 Mincrest Holdings is the trustee of the Kleyn Family Trust (established 13 June 1994) and it owned the registered business name "Camteq Instruments" between 3 March 1998 and 4 August 2016. Kleyn Investments is the trustee of the Kleyn Investment Trust (established 25 May 2006) and it owned the registered business name "Camteq International Services" between 23 November 2009 and 29 November 2013. 38 Goldview is the trustee of two trusts: the Hicam Trust (established 16 June 1997) and the Kleyn Asset Trust (established 18 May 2004). 39 In terms of the properties from which the companies have, over the years, conducted business, the position is as follows. Coretell's principal place of business prior to September 2010, was Mr Kleyn's residence at Reservoir Road, Orange Grove (the Orange Grove Premises) and after September 2010, it was the Maddington Premises. The Maddington Premises was owned by Goldview as trustee for the Kleyn Asset Trust from approximately 14 December 2007 to November 2016 when it sold the Maddington Premises to Boreline Pty Ltd (Boreline). The two directors and shareholders of Boreline are sons of Mr Kleyn. 40 According to the public records (i.e., Australian Securities and Investments Commission (ASIC) records), Coretell's principal place of business between 25 May 2006 and 25 July 2012 was the Orange Grove Premises and thereafter, the Maddington Premises; Mincrest Holdings' principal place of business was the Orange Grove Premises from 15 March 2004 to 25 July 2012 and thereafter, the Maddington Premises; Kleyn Investments' principal place of business was the Orange Grove Premises from 29 March 2006 to 25 July 2012 and thereafter, the Maddington Premises; and Goldview's principal place of business was the Orange Grove Premises from 28 November 2003 to 25 July 2012 and thereafter, the Maddington Premises. It seems clear that from September 2010, or perhaps January 2011, the whole operation had been moved to the Maddington Premises and that the principal place of business of each of Coretell, Kleyn Investments and Goldview was the Maddington Premises. It is not clear why the public records indicate a date in 2012. 41 The applicants' particulars of infringement against Goldview are that it has infringed various claims in the Standard Patent by reason of the fact that it is the owner of premises at which infringing tools are kept (i.e., the Maddington Premises) (paragraph 11(iv)), has authorised, procured, induced or joined in a common design with persons to whom the infringing tools have been supplied to use those infringing tools and such persons have used the infringing tools in core sample orientation activities (paragraph 12), and has been an accessory to acts of infringement by Coretell (paragraph 28). The applicants plead that Camteq International (i.e., Kleyn Investments) is the lessee of the Maddington Premises used by Coretell for the purpose of exploiting the infringing tools. 42 In terms of the pleadings, the respondents' response is to the effect that from approximately December 2010, Coretell has rented from Goldview a section of the Maddington Premises at which it has from time to time kept for the purpose of sale or hire the alleged infringing tool and that Kleyn Investments has also rented a section of the Maddington Premises. 43 The effect of a Notice to Admit and Notice to Dispute is that there is an admission by the respondents that Goldview has been the owner and lessor of the Maddington Premises since December 2007. 44 Again, the applicants produced a diagram showing the corporate structure of, and the relationship between, the respondents. The diagram is accurate and I reproduce it as Annexure B to these reasons.

Witnesses 45 The applicants called five witnesses. 46 Professor Jonathan Craig Tapson is an engineer and he is Professor of the School of Computing, Engineering and Mathematics at the University of Western Sydney. He examined the respondents' tools. He said that the tools included the features of claims 1 to 58, 64 to 65 and 67 of the Standard Patent. There were four different versions of the respondents' Orishot tool. Professor Tapson said, and I accept, that in terms of a comparison between the claims in the Standard Patent and the alleged infringing tools, each version of the respondents' tool was materially the same. He was not cross-examined by the respondents. 47 Mr Kelvin Laurence Brown is the Global Products Manager of Reflex Instruments. He has been involved in the industry for 20 years and has had dealings with the respondents' business since 2006. Mr Brown gave evidence about a number of matters, including the corporate background of the parties; the nature of core orientation and the invention in suit; and the respondents' infringing tools and their marketing material. Mr Brown was cross-examined about the applicants' strategy in pursuing its patent rights and the allegation that Reflex Instruments was the exclusive licensee of the Standard Patent prior to 14 January 2016, and I will discuss his evidence in the context of considering those matters. Mr Brown was a satisfactory witness. 48 Mr Stephen David Budiselic is the Regional Manager for the Asia Pacific Region at Reflex Instruments. He has worked in the mining industry since the early 1970s. He has known Mr Kleyn for approximately 25 to 30 years. He had dealings with Mr Kleyn and he gave evidence of his contact with Mr Kleyn's "Camteq business". He gave evidence of conversations with Mr Kleyn in July or August 2009 about his (Mr Kleyn's) business structure. He gave evidence about his knowledge of the use of the words "Camteq", "Camteq International" and "Coretell". He gave evidence about the use of the Maddington Premises by Coretell and Camteq International (Kleyn Investments) and the distributors and customers of the respondents' business. Mr Budiselic was challenged in cross-examination about the conversation he said he had with Mr Kleyn in July or August 2009 and with Mrs Kleyn shortly thereafter. Mr Budiselic's evidence was largely directed to the liability of the respondents, other than Goldview. Any dispute about that evidence has been overtaken by the admission made by the respondents, other than Goldview. Neither party addressed Mr Budiselic's evidence in any detail and I do not propose to seek to resolve the dispute about the alleged conversations in July and August 2009, in circumstances where neither party addressed that issue in any detail and neither suggests that it is critical to the resolution of their respective cases that I do so. 49 Mr Christopher Edmund Duvall Williams is the applicants' solicitor. Mr Williams produced documents discovered by the respondents in the NSW Proceeding, including invoices, delivery notes, and supply agreements from the respondents to customers for the supply, hire, sale or use of the tools; documents relating to the manufacture or repair of the tools; and instructions, inducements and promotional materials relating to the tools. He also gave evidence about the history of the applicants' patents and of the proceedings between the parties. He was briefly cross-examined by the respondents. He was a satisfactory witness and I accept his evidence. 50 Mr Andrew Murray Ross is a chartered accountant. He examined a number of documents about the respondents' business or businesses. He prepared two reports in the NSW Proceeding which were to the effect that the respondents in the NSW Proceeding conducted a single business and do not operate independently. Those two reports were tendered in this proceeding, together with a third report to the effect that Goldview is a part of the single business. Mr Ross prepared two further reports which were tendered relating to Goldview's role in the respondent group of companies. Mr Ross was cross-examined briefly. Mr Ross was a satisfactory witness and I accept his evidence. 51 The respondents called two witnesses. Mr Darren James Pratt gave evidence about the applicants' patents and patent applications and of the various proceedings between the parties. He was not cross-examined by the applicants. 52 Mr Nicky Kleyn gave evidence about a number of matters. He was cross-examined at some length. The applicants submitted that Mr Kleyn was an untruthful witness and that his evidence should not be accepted without independent corroboration. I find that Mr Kleyn's evidence was unsatisfactory in a number of respects. His evidence is discussed below.

Abuse of Process 53 This Court has the power to prevent its procedures from being abused. The Court can strike out or dismiss a claim or defence which is an abuse of process. 54 In Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 (Walton v Gardiner), Mason CJ, Deane and Dawson JJ described the inherent jurisdiction of a superior court to prevent an abuse of its processes in the following terms (at 392-393): The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail. Again, proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them. Yet again, proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v. Chief Constable of the West Midlands Police as "the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people". (Citations omitted.) In this passage, their Honours identify a class of case where a proceeding is unjustifiably vexatious and oppressive because, although not giving rise to an estoppel, the plaintiff or applicant seeks to litigate anew a case which has already been disposed of by an earlier proceeding. Their Honours referred to two authorities in connection with that class of case which I refer to in turn below. 55 In Reichel v Magrath (1889) 14 App Cas 665, the plaintiff unsuccessfully brought an action for a declaration that he had not resigned as vicar of a benefice. His successor to the benefice, who had not been a party to the first action, brought a claim against the plaintiff for relief in relation to the benefice. The plaintiff sought to defend the action on the same basis he had advanced in the original action. It was held that his defence was frivolous and vexatious and an abuse of process. Lord Halsbury LC said the following: My Lords, I think it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again. It cannot be denied that the only ground upon which Mr. Reichel can resist the claim by Mr. Magrath to occupy the vicarage is that he (Mr. Reichel) is still vicar of Sparsholt. If by the hypothesis he is not vicar of Sparsholt and his appeal absolutely fails, it surely must be in the jurisdiction of the Court of Justice to prevent the defeated litigant raising the very same question which the Court has decided in a separate action. I believe there must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure and I therefore think that this appeal must likewise be dismissed. 56 The other case their Honours referred to in Walton v Gardiner was a case involving criminal offences: Connelly v Director of Public Prosecutions [1964] AC 1254; [1964] 2 All ER 401. The House of Lords applied a similar principle saying that the doctrines of autrefois acquit and autrefois convict did not exhaust the powers of the Court to prevent a person from being convicted twice in relation to the same matter. 57 The doctrine of abuse of process is not restricted to defined and closed categories. As Gaudron J said in Ridgeway v The Queen [1995] HCA 66; (1995) 184 CLR 19 at 74-75, this is because: … notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values, and, as well, take account of the circumstances of the case. Her Honour went on to say that at the same time the concept of "abuse of process" is not at large or, indeed, without meaning. (See also Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [34] per French CJ.) 58 In Rogers v The Queen [1995] HCA 42; (1994) 181 CLR 251 (Rogers) at 286, McHugh J said that although the categories of abuse of process are not closed, abuses of procedure usually fall into one of three categories which he identified as follows: … (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would being the administration of justice into disrepute. 59 Estoppel is a distinct doctrine from abuse of process, although the doctrines may overlap on the facts of a particular case. There is no plea or argument in this case of res judicata or judgment estoppel, or issue estoppel, strictly so called. The third type of estoppel is Anshun estoppel and it means that an estoppel may arise in relation to an issue, which although not raised in earlier proceedings, should have been raised in those earlier proceedings in the sense that it was unreasonable for the party not to raise it. In Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 (Anshun), Gibbs CJ, Mason and Aickin JJ said (at 602-603): In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. (See also Wong v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 242; (2004) 146 FCR 10 at [36]-[37].) 60 In Tomlinson v Ramsay Food Processing Pty Limited [2015] HCA 28; (2015) 256 CLR 507 (Tomlinson), the High Court explained the difference between estoppel and abuse of process and the fact that they may overlap in a particular case. The Court said (at [24]-[26]): To explain contemporary adherence to the comparatively narrow principle in Ramsay v Pigram, it is appropriate also to explain the relationship between the doctrine of estoppel and the doctrine of abuse of process as it has since come to be recognised and applied in Australia. The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding. Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel. Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel . Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel. (Citations omitted.) 61 This case does not involve Anshun estoppel. It was not pleaded or argued by the respondents. In any event, it could not be made out. The Parent Application could not have been brought into the WA Proceeding because it had not resulted in the grant of a patent at the time of the WA Proceeding and, in fact, did not result in the grant of a patent. The System Patent and the Method Patent had not been granted at the time of the trial in the WA Proceeding and could not have been brought into that proceeding. As I will explain later, it was not unreasonable for the applicants not to bring this proceeding into the NSW Proceeding. 62 I return to the categories of abuse of process identified by McHugh J in Rogers. The first category is not said by the respondents to be relevant. There is no suggestion that the applicants have instituted this proceeding for any purpose other than the legitimate purpose of enforcing their intellectual property rights. It is difficult to see how it falls within the third category which to date has been primarily directed at collateral attacks on earlier judgments, or inconsistent findings (O'Shane v Harbour Radio Pty Ltd [2013] NSWCA 315; (2013) 85 NSWLR 698 at [226]; Rogers at 256-257). There is no possibility of inconsistent findings in this case because infringement is admitted by all respondents other than Goldview, which is a new respondent and, as far as it is concerned, there is a factual issue about its involvement. 63 The case does not fall within the class of case identified by Mason CJ, Deane and Dawson JJ in Walton v Gardiner and discussed above. When the applicants instituted the NSW Proceeding, they had litigated a case about the Device Patent. They were unsuccessful in that case because of the terms of the patent and they paid the costs of that proceeding. They had not litigated a case about the System Patent and the Method Patent. They were not seeking to litigate anew a case which had already been disposed of by earlier proceedings. 64 It is important to note that the applicants pursued their applications for further patents in relation to a complete application for a patent in a manner permitted by the Patents Act. The respondents did not argue to the contrary. 65 "Patent" is defined in the Dictionary in the Patents Act to mean a standard patent or an innovation patent. Chapter 6 of the Patents Act deals with the grant of patents and the terms of patents. The term of a standard patent is 20 years from the date of the patent, and the term of an innovation patent is 8 years from the date of the patent (ss 67 and 68 of the Patents Act). 66 Chapter 6A deals with divisional applications prior to the grant of a patent. Section 79B provides that if a complete application for a patent is made and it is not a divisional application for an innovation patent provided for in s 79C, the applicant may make a further complete application for a patent for the invention disclosed in the specification filed in relation to the first application. The further application can only be made during certain periods and relevant in this case, is the period starting on the day that the first application was made and ending when the first application lapses (s 79B(3)(b)(i)). 67 Section 79C provides that a patentee of an innovation patent may make a complete application for another innovation patent for a further invention disclosed in the first innovation patent if the invention was disclosed in the complete specification filed in respect of the application on which the first patent was granted. 68 The system of innovation patents was introduced into the Patents Act in 2000 (Patents Amendment (Innovation Patents) Act 2000 (Cth)) and it replaced the petty patent system. In the Second Reading Speech for the Act, the Minister referred to the innovation patent system, as a "second tier" patent system designed to better address the needs of business, particularly small to medium size enterprises. The Minister said that the innovation patent will be relatively inexpensive, quick and easy to obtain. The Minister said that it will provide the same scope of protection as a standard patent, but that it will require a lower inventive threshold than that required for a standard or petty patent. The maximum patent term for an innovation patent will be eight years compared to a 20-year term for a standard patent. The Minister stated that a substantive examination of an innovation patent will only occur if directed by the Commissioner of Patents, or is requested by the patent owner or a third party. An owner of an innovation patent may only take action to exercise their rights if their patent has been substantively examined. 69 In Coretell v Australian Mud Company [2017] FCAFC 54; (2017) 250 FCR 155, Burley J (with whom Jagot and Nicholas JJ agreed) identified benefits in filing divisional applications. His Honour said (at [33]): There are several benefits to a patentee in filing divisional applications. One is that where the claims of the divisional are fairly based on matters disclosed in the parent (or, where relevant, the grandparent) the priority date of a divisional mirrors that of its ancestor; reg 3.12(1)(c) and (2C); Bodkin C, Patent Law in Australia (2nd ed, Thomson Reuters, 2014) (Bodkin) at [11120]. Another concerns the procedure for filing patents. As the author of Bodkin explains, the most obvious reason for filing a divisional application is to accommodate the requirement that the claims of a patent relate to a single invention only pursuant to s 40(4) of the Act. If a standard or innovation patent application filed is found upon examination to claim more than one invention, the applicant or patentee must delete or remove claims. The provisions in relation to divisional applications then permit the applicant or patentee to apply for a patent in respect of the invention disclosed, but no longer claimed; Bodkin at [11120]. Another benefit arises where patent applicants have not gained acceptance of their patent application within the available time from the date of the first examination report (normally within 12 or 21 months of the first examination report, depending on when examination was requested; reg 13.4). By filing a divisional application near the due date for acceptance of the parent, a further time extension is effectively granted; Bodkin [11130]. 70 A summary of my conclusions to this point is as follows. There is no Anshun or other estoppel in this case. Furthermore, the case does not fall within the class of case identified in Walton v Gardiner of attempting to relitigate an issue or dispute which has been determined in earlier proceedings, as to which see also Coffey v Secretary, Department of Social Security [1999] FCA 375; (1999) 86 FCR 434 at 443. The manner in which the applicants have pursued their intellectual property rights has been in accordance with the Patents Act. 71 In support of their case of an abuse of process, the respondents placed great reliance, by way of analogy, on the approach taken by the English Courts to an application by a patentee to amend a patent after an unsuccessful defence to a challenge to the validity of a patent. Notions of abuse of process have been employed by the English Courts, either on a challenge to the making of the application for leave to amend, or as part of the consideration of whether the application for leave should be granted. 72 The respondents pointed out, correctly, that each of the patents claim a priority date from the Provisional Patent Application and each of them derive from the invention disclosed in the Parent Application. The respondents submit that suing in multiple proceedings on multiple divisional patents arising from the same original disclosure is, in substance, no different from suing in multiple proceedings on one patent which is continually amended. 73 In Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59 (Windsurfing International), claims in a patent were held to be invalid because they were anticipated by prior use and were obvious in light of a prior written article. The patentee then sought leave to amend the claims, but the primary judge refused leave to amend. The Court of Appeal dismissed an appeal against the primary judge's exercise of discretion to refuse leave to amend. The Court held that the primary judge had not erred in refusing the application for leave to amend under the statutory power to allow an amendment (Patents Act 1949 (UK) s 30). The Court did so having regard to a number of considerations, including the fact that the issue was not raised previously and would necessitate a substantial second hearing. The Court said (at 81-82): In the first place, as Mr Young has pointed out, it was for the plaintiffs, if they wished to support their claim to monopoly on some alternative basis, to raise the point and adduce the appropriate evidence for that purpose at the trial. In fact, however, no-one, from first to last, advanced or considered the specialised qualities of a surfboard as an inventive concept and the suggestion that there should be an adjournment for this now to be raised and investigated as the basis for the claim to monopoly involves, in effect, a fresh trial, the recalling of most, if not all, of the most important witnesses, and a considerable degree of recapitulation of the evidence as well as the calling of fresh evidence on an issue never previously suggested either in the specification or a pleadings. We would require considerable persuasion that the imposition upon a successful defendant of such a manifestly inconsistent and oppressive course would be a proper exercise of discretion even in an otherwise strong case. But, if it is to be justified at all, there must at least be ground for some degree of confidence in that such an exercise is capable of yielding a useful result and that, in our judgment, is conspicuously lacking here. 74 In Generics (UK) Limited (Trading as Mylan) v Warner-Lambert Company LLC [2016] EWCA Civ 1006; [2016] RPC 1, the patentee, after a trial which resulted in a number of claims in its patent being held invalid, sought leave to amend the patent by (relevantly) rewriting one of the claims. The application for leave to amend was opposed and the primary judge held that the application for leave to amend was an abuse of process without deciding the merits of the amendment application. 75 The abuse of process argument was based on the proposition that the Court may regard it as abusive for a party to seek to raise in a second set of proceedings matters which should have been raised in earlier proceedings between that party and the same adversary. Floyd LJ (with whom Patten and Kitchin LJJ agreed) referred at length to the decision of the House of Lords in Johnson v Gore Wood & Co [2000] UKHL 65; [2002] 2 AC 1. In that case, Lord Bingham made the observation that there will rarely be a finding of abuse unless the later proceeding involves what the Court regards as unjust harassment of a party and that the correct approach is to ask if, in all the circumstances, a party's conduct is an abuse (at 31). Lord Millett said (at 59-60): It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen's right of access to the court conferred by the common law and guaranteed by art 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (Rome, 4 November 1950; TS 71 (1953); Cmd 8969). While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression. In Brisbane City Council v A G for Queensland [1978] 3 All ER 30 at 36, [1979] AC 411 at 425 Lord Wilberforce, giving the advice of the Judicial Committee of the Privy Council, explained that the true basis of the rule in Henderson v Henderson is abuse of process and observed that it - 'ought only to be applied when the facts are such as to amount to an abuse, otherwise there is a danger of a party being shut out from bringing forward a genuine subject of litigation'. There is, therefore, only one question to be considered in the present case: whether it was oppressive or otherwise an abuse of the process of the court for Mr Johnson to bring his own proceedings against the firm when he could have brought them as part of or at the same time as the company's action. This question must be determined as at the time when Mr Johnson brought the present proceedings and in the light of everything that had then happened. There is, of course, no doubt that Mr Johnson could have brought his action as part of or at the same time as the company's action. But it does not at all follow that he should have done so or that his failure to do so renders the present action oppressive to the firm or an abuse of the process of the court. As May LJ observed in Manson v Vooght [1999] BPIR 376 at 387, it may in a particular case be sensible to advance claims separately. In so far as the so called rule in Henderson v Henderson suggests that there is a presumption against the bringing of successive actions, I consider that it is a distortion of the true position. The burden should always rest upon the defendant to establish that it is oppressive or an abuse of process for him to be subjected to the second action. 76 Floyd LJ then considered the application of this rule in the context of a patentee who seeks leave to amend claims in a patent after judgment on the issue of validity. His Lordship referred to the reasons for judgment of Jacob LJ in Nokia GmbH v IPCom GmbH & Co KG [2011] EWCA Civ 6; [2011] FSR 15 and Nikken Kosakusho Works v Pioneer Trading Co [2005] EWCA Civ 906; [2006] FSR 4 and identified the following principles. First, the onus is on the party claiming an abuse of process to establish the abuse. Secondly, there is a general procedural rule that a party should normally not be allowed to advance in a second proceeding a matter he could have advanced in the first and this applies in patent litigation so that a party must bring before the Court the issues he seeks to have resolved so as to enable the Court to conclude the litigation between the parties. Thirdly, the Rules of Court which require the early identification of issues and the parties to face up to their cases at an early stage, not a later stage, reinforce the importance of the general procedural rule. Furthermore, not only are the private interests of the parties relevant, but there is an important public interest in the approach embodied in the general procedural rule. Fourthly, if a party fails to advance a case he could have advanced much earlier and does so without any real justification, then that can be an abuse of process because it is not normally procedurally fair to subject the other side to successive cases when that party could readily have put them at the same time. Finally, a finding that a claim or defence is an abuse of process will ordinarily lead to an order for striking out or dismissal and is only discretionary in a limited sense. Nevertheless, it is an evaluation by the primary judge of a number of factors and an appeal court will only interfere with the evaluation on limited grounds. 77 The Full Court of this Court considered the English approach in Woolworths Limited v BP plc (No 3) [2006] FCAFC 160; (2006) 70 IPR 270 (Woolworths v BP). In that case, the trade marks of an applicant for registration had been amended and then the amended trade marks had been contested, both at first instance and on appeal to this Court. The Full Court held that the trade marks had been amended contrary to the terms of s 65 of the Trade Marks Act 1995 (Cth). The applicant for registration sought an order from the Full Court that the applications for the trade marks in their unamended form be remitted to the primary judge for further consideration. The Court refused to make such an order. The Court said (at [7]-[12]): Assuming (which was not seriously disputed) that there is available jurisdiction, we do not propose to make the orders sought by BP. It would not be consistent with the proper administration of justice to do so, and it would be quite unfair to put Woolworths to the trouble, risk and expense of a further trial (and, more likely than not, a further Full Court appeal). Mr Shavin said that the initiative for the amendments came from the registrar but that would not have prevented BP resisting them and appealing any adverse decision by the registrar. At all times the amendments were opposed by Woolworths, and BP chose to assert before the registrar, the primary judge and on the appeal to the Full Court the validity of the marks in their amended form. In Nikken Kosakusho Works v Pioneer Trading Co [2005] All ER (D) 350 the English Court of Appeal was faced with a similar application. An integer of a patent claim was "an annular groove of predetermined depth". The trial judge construed this to mean "a groove whose depth the maker has decided in advance" and not, as the patentee argued, "approximately 3-5mm". The trial judge found the claim as so construed lacked novelty. After judgment the patentee sought an amendment to delete "predetermined depth" and substitute the 3-5mm measurement. The trial judge's refusal was upheld by the Court of Appeal. The leading judgment was that of Jacob LJ. His Lordship (at [13]) pointed out that the proposal would lead to two trials instead of one. An exercise of discretion to allow the amendment would be improper for three reasons. First, there was the "straightforward application" of the principles of Henderson v Henderson (1843) 3 Hare 100; [1843-60] All ER Rep 378. In Australia the corresponding authority, following Henderson, is Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; 36 ALR 3. Generally speaking, after judgment a party to litigation will not be permitted to raise an issue which, acting reasonably, it should have raised in the proceedings before they were finally determined. Second, there was the particular strictness with which courts have applied the Henderson rule in patent litigation: Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59. Third, there was the overriding objective in the Civil Procedure Rules of saving expense. In answer to the argument that all these matters could be dealt with by compensation in costs, Jacob LJ said (at [22]): [22] Moreover I am not satisfied that this case is only about costs. Always when the question of patent validity is in issue commercial uncertainty is created, not only for any of the parties involved but the public in general. The court is particularly entitled to have regard to that. Mutatis mutandis, we think the same considerations apply to trade mark litigation and to the present case. 78 As I have said, the categories of abuse of process are not closed. Furthermore, the matters which informed the English approach are considerations of finality and fairness and they are, broadly speaking, the matters which the respondents rely on for the purposes of their abuse of process argument in this case. Nevertheless, I think that the English cases are a long way (if I may put it that way) from the circumstances of this case. This is not an application for leave to amend within s 105 of the Patents Act after an unsuccessful defence of a validity challenge. Perhaps more importantly, the matter which informs the English approach is Henderson v Henderson (1843) 3 Hare 100; [1843-60] All ER Rep 378 (Henderson) issue estoppel of which the Australian equivalent is, as the Full Court said in Woolworths v BP (at least as to matters not raised, but which should have been), Anshun estoppel. As I have already said, there is no Anshun estoppel in this case. For these reasons, I do not derive any real assistance from the English authorities in determining the abuse of process argument in this case. 79 In my opinion, unless there is something in the particular facts of this case showing an abuse of process - the onus being on the respondents to establish an abuse of process - the respondents' abuse of process argument must be rejected. 80 There is nothing in the particular facts showing an abuse of process. 81 The respondents made a general submission that the applicants had deployed a family of related patents strategically to embark on 10 years of patent litigation, in effect, litigating the same invention (extracted in four patents) in three separate sets of proceedings. They also submitted that the applicants' "patenting and litigation strategy" has allowed them to tailor their patent portfolio to overcome the non-infringement finding in the WA Proceeding and has resulted in a multiplicity of proceedings which have imposed a significant burden by providing ammunition for almost continuous litigation for the last 10 years. They also submitted that the timing of the filing of the Method Patent and the System Patent reflects a deliberate strategy to wait until a final decision was made on the Device Patent and appeals exhausted and then to re-agitate infringement of the Coretell Orishot tool again through more recently filed patents. 82 The evidence of Mr Brown was that there are, within the group of companies of which the applicants are a part, persons who advise and perhaps make the decisions on the applications for patents made by the applicants. None of those persons were called as witnesses by the applicants to give evidence as to the decisions made. Mr Brown was not one of those persons and he was not able to give evidence about the decisions and the reasons for those decisions. He attended meetings which gave him some passing knowledge of the general approach of the applicants with respect to their patent rights, but his evidence did not advance, in any significant way, an understanding of the applicants' approach. In cross-examination, he said that he thought that various decisions had been made as an intellectual property strategy, or to broaden the applicants' intellectual property and protect it. When he was asked to explain the reasons for filing the Method Patent and the System Patent, Mr Brown said: I think it was more to have patents to prevent people from infringing your intellectual property is the - is the stance that the business takes. 83 Insofar as the respondents' general submission is to the effect that the applicants engaged in conduct for the purpose or with the intention of engaging in 10 years of litigation, it must be rejected. There is no evidence of such a strategy which, in any event, could only be described as bizarre and contrary to the applicants' own interests. 84 I agree with the applicants' submission that the main thrust of the respondents' abuse of process argument is the alleged failure to divide out the System Patent and the Method Patent and bring them into the WA Proceeding. 85 The applicants submitted that even if an abuse of process was potentially raised, there were a number of discretionary factors against a grant of relief. A summary of the matters they raised is as follows. 86 First, insofar as the NSW Proceeding is part of the abuse of process argument, it is to be noted that the applicants were successful in that proceeding. 87 Secondly, there was no election by the applicants in this case because they could not have brought the Standard Patent into the WA Proceeding and their actions with respect to the NSW Proceeding were not unreasonable. 88 Thirdly, insofar as fairness is a consideration, the respondents could have given an undertaking about the infringing tools once the Standard Patent had been granted. 89 Fourthly, despite being aware of the Standard Patent, at all material times Mr Kleyn delayed its grant by opposing it, and furthermore, did not suggest that it be brought into the NSW Proceeding. 90 Finally, none of the applicants' conduct has caused any prejudice to the respondents. They have been paid their costs of the proceeding in which they were successful. 91 I would not approach the issue in the manner suggested by the applicants. It is not a question of a potential abuse and then an examination of discretionary factors. On the face of it, and having regard to the existing authorities, this proceeding is not an abuse of process. Is there anything in the particular facts which suggests an abuse of process? The answer to that question is no and, in my opinion, the appropriate analysis involves the following propositions. 92 First, the applicants filed their application for the Device Patent in order to be in a position to enforce its intellectual property rights as soon as possible. That was a course permitted by the Patents Act and was in no way oppressive to the respondents or, indeed, any party. 93 Secondly, pursuing the Parent Application would, if regard is had to the lapse of time between filing and grant of the Standard Patent, delayed the enforcement of the applicants' intellectual property rights. 94 Thirdly, there is no reason to think that the applicants did not have a bona fide belief that they would be able to enforce their intellectual property rights by relying on the Device Patent. As it happens, their belief was incorrect, but that circumstance does not affect the bona fide nature of their belief. 95 Fourthly, in those circumstances, there is nothing oppressive or even unreasonable in the applicants not applying for the Method Patent and the System Patent earlier than they did. 96 Fifthly, if one is to treat the result of litigation as the decisive factor (which I do not think is correct) the respondents could have consented to the orders the applicants sought upon the institution of the NSW Proceeding. They did not do that. 97 Sixthly, it is not irrelevant that the respondents raised abuse of process in the NSW Proceeding and then abandoned it. They could, at that time, have raised two of the three matters they now raise. They could have submitted that the Parent Application should have been pursued and the Method Patent and System Patent should have been pursued much earlier than they were. These arguments were not only available to the respondents, but they were raised and then abandoned. 98 Seventhly, there is no evidence of delay by the applicants in pursuing the Standard Patent from filing to grant. The respondents lodged objections or representations to the application (see [16] above). 99 Eighthly, this proceeding was, in effect, held over pending the determination of the NSW Proceeding. The respondents consented to an order for the filing of defences and to the proceeding being held over and did not apply to consolidate this proceeding with the NSW Proceeding. 100 Finally, the course adopted in relation to this proceeding was a sensible one. Neither infringement nor validity are in issue in this proceeding. Only infringement by Goldview is in issue in this proceeding and Goldview was not a party to either the WA Proceeding or the NSW Proceeding. 101 I reject the respondents' abuse of process argument.

Introduction 102 Earlier in these reasons, I referred to the admission of infringement of the Standard Patent by the respondents, except for Goldview (at [7]). The Standard Patent contains 69 claims, divided by the applicants in their Statement of Claim into the System Claims (33-55 and 65), the Core Drill Claims (56-59) and the Method Claims (1-32, 64, 65 and 67). The applicants allege infringement of these claims and it is these claims which are the subject of the admission by the respondents, except for Goldview. The admission relates to each basis of liability alleged in the Amended Statement of Claim. 103 In the Amended Statement of Claim, the applicants allege that each respondent has in Australia, made, sold, supplied or otherwise disposed of, offered to make, sell, supply or otherwise dispose of, used or kept for the purpose of doing the foregoing, or otherwise exploited, core sample orientation tools which are various versions of a core orientation described as a ORI-tool or Orishot tool. Since November 2007, Coretell has manufactured, kept and supplied the infringing tools to customers in Australia and Mincrest Holdings did the same thing between about 2006 and November 2007. Kleyn Investments is the lessee of the Maddington Premises used by Coretell for the purposes of exploiting the infringing tools. 104 Each respondent, except for Goldview, admits that it has in Australia, authorised, procured, induced or joined in a common design with persons to whom the infringing tools have been supplied to use those infringing tools and such persons have used the infringing tools in core sample orientation activities. 105 By reason of the foregoing, each respondent, except for Goldview, admits that it has infringed the System Claims. As to the Core Drill Claims and the Method Claims, the respondents, except for Goldview, have infringed those claims by supply of the infringing tools within s 117 of the Patents Act or as joint tortfeasors with the persons to whom they supply the tools and who use the tools. Finally, Mincrest Holdings and Kleyn Investments have joined in a common design with Coretell to infringe the claims and Mr Kleyn has joined in a common design with all the respondents, except for Goldview, to infringe the claims. 106 The applicants allege that Goldview is liable for infringement on the following grounds. First, as to the System Claims, Goldview was a direct infringer because it kept the infringing tools at the Maddington Premises for one or more of the purposes falling within the definition of exploit in the Patents Act. Secondly, as to all of the claims Coretell infringed, Goldview is also a direct infringer because it authorised the infringing acts. Finally, Goldview is liable as an indirect infringer because it was a joint tortfeasor with the other respondents.

Relevant Principles 107 With respect to the first alleged basis of liability (the System Claims), in order to keep infringing articles, a party must have possession and mere ownership is not infringement (Schuster v Hine Parker & Co Ltd [1935] 52 RPC 345 at 351 per Romer LJ (with whom Eve J agreed)). Furthermore, the infringing articles must be kept with the intention of using them for trade purposes or for some sort of commercial activity that deprives the patentee of the benefit of the invention (Smith, Kline and French Laboratories Ltd v RD Harbottle (Mercantile) Ltd and Others [1980] RPC 363 at 373 per Oliver J). 108 With respect to the second alleged basis of liability (the System Claims, the Core Drill Claims and the Method Claims), s 13 of the Patents Act provides that a patent gives to the patentee the exclusive rights during the term of the patent to exploit the invention and to authorise another person to exploit the invention. The word "exploit" in relation to an invention is defined in the Dictionary in the Patents Act as including: (a) where the invention is a product-make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or (b) where the invention is a method or process-use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use. 109 The meaning of the word "authorise" in the context of s 36(1) of the Copyright Act 1968 (Cth) was considered by the High Court in the University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1 (Moorhouse). Gibbs J (as his Honour then was) noted that the word "authorise" in legislation of similar intendment to s 36 of the Copyright Act had been held judicially to have its dictionary meaning of "sanction, approve, countenance". His Honour considered that it could also mean "permit" and that in the earlier case of Corporation of the City of Adelaide v Australasian Performing Right Association Ltd [1928] HCA 10; (1928) 40 CLR 481 (Adelaide Corporation v Australasian Performing Right Association), "authorise" and "permit" appeared to have been treated as synonymous. Gibbs J said that a person could not be said to authorise an infringement of copyright unless he had some power to prevent it, although express or formal permission or sanction, or active conduct indicating approval, was not essential to constitute an authorisation. Inactivity or indifference exhibited by acts of commission or omission may reach a degree from which an authorisation or permission may be inferred. Gibbs J considered that the word "authorise" connoted a mental element and it could not be inferred that a person had, by mere inactivity, authorised something to be done if he neither knew nor had reason to suspect that the act might be done. His Honour formulated a principle relevant in that case to the effect that a person who has under his control the means by which an infringement of copyright may be committed - such as a photocopying machine - and who makes it available to another person, knowing, or having reason to suspect, that it was likely to be used for the purpose of committing an infringement, and omitting to take reasonable steps to limit its use to legitimate purposes, would authorise any infringement that resulted from its use. Jacobs J (with whom McTiernan ACJ agreed) adopted a similar approach. His Honour noted that it is a question of fact in each case as to what is the true inference to be drawn from the conduct of the person who is said to have authorised an infringement. 110 In Roadshow Films Pty Ltd & Others v iiNet Ltd [2012] HCA 16; (2012) 248 CLR 42 (Roadshow Films), the High Court again considered the meaning of authorising an act comprised in copyright. By then, the Copyright Act had been amended to include a non-exhaustive list of factors to be considered in deciding whether a person had authorised the doing in Australia of any act comprised in a copyright (ss 36(1A) and 101(1A)). French CJ, Crennan J and Kiefel J (as her Honour then was) referred to the authorities, including the decision in Moorhouse and s 101(1A) and said (at [63]): The appeal can be determined by asking interrelated questions informed by s 101(1A). Did iiNet have a power to prevent the primary infringements and, if so, what was the extent of that power (s 101(1A)(a))? Did reasonable steps to prevent those infringements (after receipt of the AFACT notices) include warnings and subsequent suspension or termination of the accounts of all customers identified as infringing the appellants' copyrights (s 101(1A)(c)), if such customers failed to cease communicating infringing material using the BitTorrent system? How does the relationship between iiNet and its customers (s 101(1A)(b)) bear on each of those questions? It will be observed that these are largely questions of fact and the ultimate question of whether iiNet authorised the infringements will be an inference to be drawn from those facts (Citation omitted.) 111 Gummow and Hayne JJ also referred to the relevant authorities and s 101(1A). Their Honours then said (at [135]): Section 101(1A) is so drawn as to take an act of primary infringement and ask whether or not a person has authorised that act of primary infringement. In answering that question there will be "matters" that must be taken into account. These include, but are not confined to, the matters identified in pars (a), (b) and (c). Was there any relationship that existed between the primary infringer and the (alleged) secondary infringer? If so, what was its nature (par (b))? Did the secondary infringer have power to prevent the primary infringement; if so, what was the extent of that power (par (a))? Other than the exercise of that power, did the secondary infringer take any reasonable steps to prevent the primary infringement, or to avoid the commission of that infringement (par (c))? 112 With respect to the third alleged basis of liability (the System Claims, the Core Drill Claims and the Method Claims), in Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; (1996) 186 CLR 574, the High Court considered, among other matters, the differences between joint tortfeasors on the one hand, and several tortfeasors on the other. Brennan CJ, Dawson and Toohey JJ said (at 580-581): The difference between joint tortfeasors and several tortfeasors is that the former are responsible for the same tort whereas the latter are responsible only for the same damage. As was said in The "Koursk" for there to be joint tortfeasors "there must be a concurrence in the act or acts causing damage, not merely a coincidence of separate acts which by their conjoined effect cause damage". Principal and agent may be joint tortfeasors where the agent commits a tort on behalf of the principal, as master and servant may be where the servant commits a tort in the course of employment. Persons who breach a joint duty may also be joint tortfeasors. Otherwise, to constitute joint tortfeasors two or more persons must act in concert in committing the tort. (Citations omitted.) In the course of his reasons, Gummow J (with whom Gaudron J agreed on this point) said (at 600): In England, Australia and New Zealand, criteria for the identification of joint tortfeasors are to be found in expressions used in The "Koursk". Scrutton LJ there spoke of "two persons who agree on common action, in the course of, and to further which, one of them commits a tort", saying that in such a case there is one tort committed by one of them "in concert with another". Sargant LJ accepted the proposition that persons are joint tortfeasors when their "respective shares in the commission of the tort are done in furtherance of a common design" so that those who "aid or counsel, direct, or join" in commission of the tort are joint tortfeasors. (Citations omitted.) 113 In Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2012] FCA 748; (2012) 293 ALR 272, Bennett J said (at 23): To establish joint tortfeasance, it must be found that one party acted with another in an enterprise pursuant to a common design in the course of which a patent infringement is committed. The parties must agree on a common action and the act of infringement must be in furtherance of that agreement (Morton-Norwich at 512). To show infringement by common design, it is necessary to demonstrate some act in furtherance of the common design. One way would be to show that one company has procured or assisted the other to infringe a patent (Unilever v Chefaro at 138). This involves demonstrating a good arguable case that there are facts from which an inference could clearly and properly be drawn (Unilever v Chefaro at 141). Servier's submissions also refer to matters such as 'directs or procures another to infringe a patent', citing Dow Chemical AG v Spence Bryson & Co Ltd [1982] FSR 397. 114 With respect, there is a helpful summary of the relevant principles by Moshinksy J in Playgro Pty Ltd v Playgro Art & Craft Manufactory Limited [2016] FCA 280; (2016) 117 IPR 489 at [150]-[159]. In that case, his Honour declined to find that the parties had acted as joint tortfeasors because at most the relevant party had merely facilitated the infringement by selling the goods and mere facilitation is not enough to establish joint tortfeasorship. 115 There is a distinction, not always noted, between joint tortfeasors who are persons who act in concert or pursuant to a common design, and those persons who induce or procure an infringement and are thereby liable because of accessorial tortious liability (Collins v Northern Territory [2007] FCAFC 152; (2007) 161 FCR 549 at [24]-[26], [28], [30] per French J (as his Honour then was)). There is no need to consider that distinction in this case. 116 Finally, merely because companies are closely associated, does not establish that they are acting in concert or pursuant to a common design. In Mead Corporation and Another v Riverwood Multiple Packaging Division of Riverwood International Corporation (1997) FSR 484 at 490, Laddie J (as his Lordship then was) said as follows: The court must be satisfied that there are proper grounds before it allows foreign parties to be exposed to the expense and inconvenience of joinder in proceedings here. In particular, it is not enough merely to point to the fact that the English and the foreign defendants are closely related to one another either by shareholding or otherwise. It is for that reason that in Chefaro the Court of Appeal reaffirmed that the fact that the foreign corporation had overall control, both financial and voting, of the English defendant was not sufficiently by itself to enable the court to conclude that there is a good arguable case that the necessary inference of assistance or common design could be drawn. Some evidence that the foreign party was actually involved in furthering the common design of infringement must be shown to the court or, as Glidewell L.J. put it, it is necessary for the evidence to show that the foreign party "took part" in the primary act of infringement. Material which is neutral on this critical issue is of no assistance. It follows that material which merely shows that the foreign and domestic defendants are closely associated with each other, or which shows that the parent regards itself and its subsidiaries as a single economic unit throws no light on the issue of who took part in the acts alleged to infringe the patent. Similarly, the fact that a parent proclaims a strong proprietorial claim to all the assets and activities of its subsidiaries will not normally throw significant light on the crucial issue whether its hands participated in or controlled the primary act of infringement in England. A parent company which does not take part in the act of infringement could just as well say that, in its eyes, it owned the subsidiary's plant and operations. Such general proprietary claims and assertions say nothing about who is responsible for or involved in the detailed day to day activities of a subsidiary. Such evidence is therefore neutral. It does not advance a plaintiff's argument for joinder. The activities conducted by the English subsidiary in England will usually be the concern of the management of the English company alone. To demonstrate a common design involving the parent, the plaintiff will need to show, by evidence, that it is likely that the parent did more than look on with approval.

The Evidence and Findings 117 The applicants submitted that the starting point is that it is admitted by the respondents that, other than Goldview, they were acting interdependently and at the control and direction of Mr Kleyn. The applicants submit that there was but one business operated by Mr Kleyn as he saw fit and it involved all of the corporate entities, including Goldview who he used and directed in the conduct of the one enterprise. 118 The applicants invited the Court to reach similar conclusions in this case as those reached by the primary judge in the NSW Proceeding as to the business conducted by the respondents (other than Goldview) and the relationship between them and then to conclude that Goldview was as much a part of the business operation as the other respondents. I was referred to the following findings: that the business run by the respondents was, for all practical purposes, still the one original Camteq business (at [378]); there was financial and operational interdependence between Coretell and Mincrest Holdings, and Coretell was not operating as an independent company (at [389]); the original Camteq business continues to operate (at [392]); the "payments" for rent (Goldview on the one hand and Coretell and Kleyn Investments on the other) and the management fee (Kleyn Investments and Coretell) were not "commercially based payments, but strategic creations" (at [399]); Coretell does not operate as an independent entity and would suffer substantial losses without financial assistance from Mincrest Holdings and Kleyn Investments (at [401]); and Mr Kleyn had effective total control of each of the corporate respondents (at [417]) and their conduct was his conduct (at [413]). The primary judge in the NSW Proceeding found that the respondents to that proceeding were direct infringers (at [408]), had authorised the acts of customers and users within s 13(1) of the Patents Act (at [405]) and each of them was a joint tortfeasor (at [411] and [412]-[413]). 119 The applicants did not suggest that the parties in this proceeding, other than Goldview, were bound to these findings. That is not how they approached the matter. They submitted that, in view of the evidence in this case, especially that of Mr Ross and the admissions made by the respondents, other than Goldview, similar findings could be made in this proceeding and the only question is whether Goldview was in the same position as the other corporate respondents. 120 Mr Kleyn commenced trading as a sole trader under the business name, "Camteq Instrument Services" on 7 July 1994. He registered Mincrest Holdings on 17 March 1995 and started trading through that entity under the said business name. From 1995, Mincrest Holdings traded from the Orange Grove Premises and the ASIC records show that Mincrest Holdings' principal place of business from 14 January 1997 was the Orange Grove Premises. Mr Kleyn said that over time, the business became known as "Camteq". 121 Coretell and Kleyn Investments were incorporated in 2006 and it was in that year that the first version of the infringing tools were released. The ASIC records show that the Orange Grove Premises was the principal place of business of each of the companies. The evidence of Mr Williams establishes that Mincrest Holdings was still involved in the business through Camteq Instruments (or simply Camteq). 122 I have already referred to the date Goldview was incorporated and its recorded places of business between November 2003 and the date upon which it sold the Maddington Premises. The evidence also establishes that Goldview's principal place of business between incorporation and November 2003 was the Orange Grove Premises. 123 By July 2007, the business stored around 50 kits (100 tools) in stock. Not all of the tools were completely assembled. The tools were assembled at the Orange Grove Premises, orders were received at the premises and tools were despatched from the premises. There were two employees of the business and Mrs Kleyn also worked in the business. 124 By 2009, the business had expanded to the point where Mr Kleyn needed a dedicated workshop and warehouse. He had premises available in the form of the Maddington Premises which he said he had purchased as an investment property in 2007. I do not need to resolve the factual issue as to whether Mr Kleyn had, in fact, bought the Maddington Premises as an investment property (as he claimed) or whether he bought it knowing that sooner or later he would need it for his business. 125 Mr Ross' reports prepared for the NSW Proceeding and tendered in this proceeding establish the following. First, related entities provided funds to Coretell on other than commercial terms. Secondly, related trusts made distributions to Mr Kleyn, Coretell and other related entities and without these distributions, Coretell would not have been able to record profits. Thirdly, Coretell received non-cash benefits from related entities, including the off-setting of its debts. Fourthly, Coretell had not incurred some expenses which Mr Ross considered an independent operating company would incur, such as wages and rent. Fifthly, Coretell had made significant cash payments to related entities and to Mr Kleyn. Sixthly, Coretell had declared significant dividends that had presumably been paid to Mr Kleyn as the sole shareholder. Finally, there were a number of other entities that also appeared to be related in some way. 126 Mr Ross expressed the following conclusion: In my opinion, the absence of these expenses suggests that Coretell was not operating as an independent entity during the period for which I have accounting records. 127 I have already referred to Mr Kleyn's control of, and interest in, Goldview. I have referred to the use of the Maddington Premises and the fact that it is the registered place of business of Coretell, Mincrest Holdings (before 25 July 2012) and Kleyn Investments. The infringing tools are stored in the Maddington Premises, they are assembled there (they can also be assembled on site), orders for the tools are received at the premises and they are despatched from the premises. 128 For the purposes of this case, Mr Ross reviewed the relevant material and he expressed the conclusion that the claimed lease arrangements between Goldview and Coretell did not reflect two independent entities trading at arm's length and that the "rent" payments were "strategic creations" by Mr Kleyn, rather than commercially based payments. 129 Mr Ross gave evidence of the following matters. I accept Mr Ross' evidence and make findings accordingly. First, between 2009 and 2011, the Kleyn Asset Trust of which Goldview was trustee, received distributions from the Kleyn Family Trust of which Mincrest Holdings is trustee. The distributions totalled $217,000 between 2005 and 2009. In 2011, the Hicam Trust of which Goldview was the trustee, was the beneficiary of the Kleyn Family Trust and it received significant distributions. Secondly, the Kleyn Asset Trust and the Hicam Trust also received significant distributions in 2011 ($50,000) from the Kleyn Investment Trust, of which Kleyn Investments was the trustee. Thirdly, without the distributions from the Kleyn Family Trust and the Kleyn Investment Trust, Goldview may not have been able to acquire the Maddington Premises and service the loan taken out with the ANZ Bank at the time it purchased the premises. In 2010, 2011 and 2012, Mincrest Holdings made payments to the ANZ Bank on behalf of the Kleyn Asset Trust (Goldview) to meet interest due and payable on the ANZ loan. Fourthly, in 2009, 2010 and 2011, the Kleyn Asset Trust (Goldview) was only able to report a profit because it received a trust distribution in each year. Fifthly, the 2010 Coretell general ledger shows a loan account to the Kleyn Asset Trust. Sixthly, Mincrest Holdings made monthly payments to the Kleyn Asset Trust's operating bank account through 2010, 2011 and 2012. In 2010, distributions from the Kleyn Asset Trust appear to have been used to reduce its loan account with Mincrest Holdings. Seventhly, in 2010, 2011 and 2012, there were delays in rental payments made to Goldview, up to 13 months after the month to which they related. Eighthly, in 2011 and 2012, Coretell made sizeable payments to Goldview, with descriptions, including "wage fee". Ninthly, in 2012, Mincrest Holdings paid miscellaneous expenses on behalf of the Kleyn Asset Trust. Tenthly, between 2013 and 2015, the Kleyn Asset Trust received cash payments from other respondents or had its expenses paid for by other respondents. Finally, Coretell sometimes made direct payments to the water supplier for the Maddington Premises on Goldview's behalf. 130 Mr Kleyn's evidence, which was directed to events since February 2010, was unsatisfactory in a number of respects. I have formed that view on the basis of the evidence in this case and I have not had any regard to the assessment of Mr Kleyn's credibility and reliability in other cases. 131 I will elaborate on the unsatisfactory aspects of Mr Kleyn's evidence below, but a summary of the unsatisfactory aspects is as follows. First, Mr Kleyn's evidence about whether Coretell and Kleyn Investments paid rent to Goldview for their occupation of the Maddington Premises and operated out of the premises between September and December 2010 was inconsistent and his ultimate explanation was an explanation that one would have thought would have been provided at the outset. Secondly, Mr Kleyn's evidence about the "management fee" paid by Coretell to Kleyn Investments was confusing and unconvincing. Thirdly, for the reasons I will give, to the extent Mr Kleyn's evidence was to the effect that Goldview was no more than a passive landlord, I reject that evidence. Fourthly, Mr Kleyn's evidence about his knowledge of, and involvement in, the actions taken by his lawyers apparently on his behalf, was unconvincing. I formed the view that when it suited him, Mr Kleyn would distance himself from conduct by his lawyers and patent attorneys. He may not have been aware of the technical issues, but I think that he was aware of more than he was prepared to concede. Fifthly, I do not accept Mr Kleyn's evidence that the circumstance that Goldview was the sole shareholder of Coretell International Pty Ltd was a mistake by his accountant. 132 I turn now to examine Mr Kleyn's evidence in detail. Material aspects of his evidence-in-chief were as follows. 133 Coretell is primarily in the business of the hiring out and selling of core orientation devices. Coretell describes its core orientation devices as an ORIshot (Orishot). An Orishot is supplied as part of an Orishot toolkit which contains the Orishot and various other items which are required for its effective operation. 134 The assembly of the Orishot and the toolkit is a simple process which takes a matter of minutes. Mr Kleyn described the component parts from which the toolkit is assembled. It is not necessary for me to set out the details. 135 The components for the Orishot toolkit are currently manufactured by third parties, except for one component, being the specialised plastic housing for the printed circuit boards. Coretell manufactures the plastic housing using specialised machinery. Mr Steven Walton, who is an employee of Kleyn Investments, carries out this task for Coretell. The manufacture of the plastic housings is a very quick process and Mr Kleyn said that it takes Mr Walton approximately three hours to produce 100. The calibration of the printed circuit boards is not completed by Coretell. 136 Mr Kleyn said that the assembly of the Orishot and toolkit is undertaken at Coretell's premises and is not a complicated process. He said that the assembling and checking of the toolkit takes a matter of minutes. 137 Coretell has operated out of the Maddington Premises since September 2010. Before that date, Coretell operated from the Orange Grove Premises. Mr Kleyn said that Coretell did not pay any rent during the time that it operated from the Orange Grove Premises. 138 The Maddington Premises was owned by Goldview as trustee for the Kleyn Asset Trust from September 2010 to November 2016. During that time, Coretell paid rent to Goldview as trustee for the Kleyn Asset Trust. Mr Kleyn said that Coretell was charged $4,400 including GST per month in rent. He said that at times the rent was paid late, but that all rental amounts have now been paid in full. Mr Kleyn produced a copy of a rental payment summary of the amounts of rent paid for the rental period between July 2011 and November 2016. 139 In November 2016, Goldview as trustee for the Kleyn Asset Trust sold the Maddington Premises to Boreline. Mr Kleyn said that since December 2016, Coretell has paid rent of $3,850 including GST per month to Boreline. He said that this is because during this time Boreline also operated from the Maddington Premises. He said that this is no longer the case and that from March 2017, Boreline will be charging Coretell $4,400 including GST per month for rent. 140 Mr Kleyn said that Kleyn Investments provides services to Coretell and receives a management fee of $2,000 per week in respect of the provision of those services. The services include the following: assistance from its employees for various services; phone usage and line rental; vehicle expenses; usage of plant and equipment; and internet usage. Before July 2012, the management fee included water. Mr Kleyn states that Kleyn Investments determined that the management fee needed to be increased. Instead of increasing the fee, Coretell and Kleyn Investments agreed that from July 2012 onwards, Coretell would pay for half of the water usage to Goldview as the owner of the Maddington Premises. Before July 2013, the management fee included electricity. Kleyn Investments decided that the management fee needed to be increased. Instead of increasing the fee, Coretell and Kleyn Investments agreed that from July 2013 onwards, Coretell would pay half of the electricity usage to Goldview as the owner of the Maddington Premises. 141 Mr Kleyn states that Coretell has only ever employed one employee. Coretell employed Mr Stephen Scott from June 2012 until February 2013. From February 2013, he was employed by Kleyn Investments because Coretell did not have sufficient work for him to carry out. His employment with Kleyn Investments ended in September 2013. Mr Kleyn states that Coretell does not currently have any employees and that this is because the assembly of the Orishot and toolkits is a relatively simple process. 142 Mr Kleyn identifies employees of Kleyn Investments who have provided assistance to Coretell from time to time since February 2010. He states that no particular employee would spend more than 10% of their time carrying out tasks for Coretell. 143 Mr Kleyn's wife, Ms Aileen Kleyn, provides administrative assistance to Coretell and Kleyn Investments. Instead of receiving a wage, Ms Aileen Kleyn receives trust distributions from Kleyn Investments. Before 10 June 2016, Ms Aileen Kleyn would receive small distributions from Kleyn Investments on an irregular basis. Since 10 June 2016, Ms Aileen Kleyn has received approximately $12,000 per month from Kleyn Investments when funds are available. 144 Mr Kleyn's daughter, Ms Kathy Kleyn, is an accountant. She performed administrative work for Kleyn Investments between late 2011 and mid-2014. She worked for approximately 2 to 3 hours per week. She also assisted with administrative work for Coretell. Since mid-2014, and after her graduation, Ms Kathy Kleyn has worked full time for Kleyn Investments and continues to do the accounts for Coretell. Instead of receiving wages from Kleyn Investments, Ms Kathy Kleyn receives trusts distributions from the Kleyn Investment Trust. Since commencing to work full time, she has received approximately $25,000 a year in distributions. There are outstanding amounts currently owed to her. 145 Mr Kleyn's son, Mr Nicholas Kleyn, worked as an assistant for Kleyn Investments from January 2004 to January 2014. Instead of receiving wages, he received trust distributions from the Kleyn Investment Trust. 146 Another son, Mr Christopher Kleyn, worked as an assistant for Kleyn Investments from October 2007 to September 2016. Instead of receiving wages, he received trust distributions from the Kleyn Investment Trust. 147 Coretell owns a domain name. It advertises the core orientation tools on this website. Coretell is a named beneficiary of the Kleyn Investment Trust and it has received a number of distributions since 2010. Mr Kleyn states that these distributions have been used to fund this proceeding and the related proceedings commenced against Coretell. 148 Coretell has engaged a number of distributors to sell and hire out core orientation tools to third parties. Mr Kleyn states that, in practice, Coretell does not provide any instructions to the distributors on how to market the core orientation tool. Coretell does not review the websites or marketing materials of the distributors before they are published, and does not require them to obtain approval before exhibiting the core orientation tool at marketing exhibitions. Mr Kleyn states that if it comes to his attention that a distributor has incorrectly referred to a Coretell orientation tool as a Camteq tool in its marketing materials, then he will contact the distributor to advise it of the error. He states that he does not check the materials on a regular basis. Mr Kleyn states that a number of these distributors supply core orientation tools from Coretell and survey equipment and downhole motors from Kleyn Investments. A number of entities purchase or hire core orientation tools directly from Coretell and survey equipment and downhole motors directly from Kleyn Investments. 149 Mr Kleyn states that Kleyn Investments hires out digital survey cameras and downhill motors. It refers to the digital survey cameras as a "Proshot". Kleyn Investments trades as Camteq International Services. 150 Mr Kleyn states that he is the legal and beneficial owner of the sole share in Goldview. As trustee for the Kleyn Asset Trust, Goldview owns the Maddington Premises and did so from on or about 14 December 2007 to on or about 29 November 2016. From September 2010 to November 2016, Coretell and Kleyn Investments leased the Maddington Premises from Goldview and each paid rent of $4,400 including GST per month. Mr Kleyn states that Goldview is not a trading entity. 151 Mr Kleyn said that in late 2004, a Mr Barker was working from the Orange Grove Premises developing version 1 of the orientation tool. He said that Coretell was up and running as a company doing business by May 2006. He agreed that by July 2007, he had 100 core orientation tool units stored at the Orange Grove Premises, although some of these tools were not completely assembled. 152 Mr Kleyn was cross-examined at length and a number of the unsatisfactory aspects, to which I have previously referred, emerged. 153 Goldview borrowed money from the ANZ Bank to assist with the purchase of the Maddington Premises. Loan repayments to the ANZ Bank were made by other companies in the group. Mr Kleyn said that these payments would have been made on a loan account basis. In other words, he sought to characterise the payments as repayments made by or on behalf of Goldview which then became responsible to the company which provided the funds. Mr Kleyn explained the situation as follows. Coretell or Kleyn Investments may not pay its rent on time because it was paying legal fees or wages to Mr Kleyn. In those circumstances, a distribution or loan would be made to Goldview so that it could make loan repayments to the ANZ Bank. 154 Mr Kleyn was cross-examined at length about when Coretell and Kleyn Investments occupied the Maddington Premises and began paying rent. In paragraph 22 of his affidavit, Mr Kleyn said that from September 2010, Coretell had operated out of the Maddington Premises. In paragraph 25 of his affidavit, he said that from September 2010 to November 2016, Coretell paid rent to Goldview as trustee for the Kleyn Asset Trust. Coretell was charged $4,400 including GST per month in rent. In paragraph 27 of his affidavit, Mr Kleyn said that Kleyn Investments also operated from the Maddington Premises and pays $4,400 including GST per month in rent, besides the periods it was paying a reduced rental amount because Boreline was operating from the premises. In paragraph 59 of his affidavit, Mr Kleyn said that from September 2010 to November 2016, Coretell and Kleyn Investments leased the Maddington property from Goldview for $4,400 including GST each per month. It emerged that the true position is that neither Coretell nor Kleyn Investments began paying rent to Goldview in relation to the Maddington Premises until January 2011. Mr Kleyn said that the premises were renovated and that the renovations took about three months. He said that neither Coretell nor Kleyn Investments had operated out of the Maddington Premises during that time and that "operated" is "probably a bad word". There is no reference in his affidavit to the carrying out of renovations at the property. Mr Kleyn said that the two companies took occupancy of the building in September 2010 and that they moved in in January 2011. The affidavit is wrong insofar as it said that Coretell and Kleyn Investments paid rent between September and December 2010. In the course of his cross-examination, Mr Kleyn produced invoices from Mr A Moisley relating to the payment of rent for the lease of the Maddington Premises in the period from September to December 2010. He said that he had remembered overnight that his companies had only got part access to the property and that the rear of the premises was still full of the previous tenants. The previous tenants had paid rent until December 2010. 155 The respondents' case about the occupation of the Maddington Premises from September to December 2010 and the payment of rent thereof was unsatisfactory as it ranged from Coretell and Kleyn Investments operating out of the premises and paying rent to those companies not paying rent and the premises being renovated during that period to a previous tenant continuing to occupy the premises. 156 Mr Kleyn said that there were no defined or discrete areas in the Maddington Premises allocated for Coretell as opposed to Kleyn Investments. 157 Mr Kleyn was asked about the storage of the core orientation tools in the warehouse and the area that that occupied. He gave evidence that the tools were stored on one shelf. It was suggested to him that that evidence was inconsistent with evidence he gave in the NSW Proceeding. I have considered the evidence in the NSW Proceeding with respect to that particular matter and I think that there is sufficient ambiguity in that evidence that no finding of an inconsistency should be made. 158 Mr Kleyn was extensively cross-examined about the nature of the so-called lease agreement between Goldview on the one hand, and each of Coretell and Kleyn Investments on the other hand. He was taken to a letter written by his solicitors on 20 June 2017 in which they said: my clients do not have any lease or other written agreement in relation to Kleyn Investments Pty Ltd's or Coretell Pty Ltd's occupation of the Maddington property. 159 Mr Kleyn said that this was not correct and that there is a verbal lease(s). Mr Kleyn was also taken to part of an affidavit which he swore in the NSW Proceeding wherein he said the following as to this matter: There are no formal lease agreements. 160 The facts are that there are no written lease agreements and Mr Kleyn controls all three companies. Mr Kleyn said that he had never turned his mind to the question of whether there was one lease (between Goldview as lessor and Coretell and Kleyn Investments as lessees) or two leases. He said that the terms of the lease were that Kleyn Investments pays its rent, half the power bill and half the rates and half of everything that "goes through the building", and Coretell pays the other half. The period or term of the lease or leases is indefinite. He said that there was no restricted space within the building that either company could occupy. As I understood his evidence, there are no defined or clearly defined areas as between the two lessees. Mr Kleyn was asked how he determined the rent and he seemed to suggest that someone rang, on his behalf, a real estate agent and asked them what the value of the Maddington Premises was for rental purposes. He said that he thinks the answer was $7,800 and that he put it up to $8,000 for the two companies. Again, Mr Kleyn was taken to evidence that he gave in the NSW Proceeding. In that proceeding, he was asked about the payment of rent. It seems to me that the questions in the NSW Proceeding to which he was referred in cross-examination were directed as to how he determined the proportion of rent to be allocated between the two companies. His answer to that question in the NSW Proceeding was as follows: I can nominate the rent how I see fit, and that's how I saw fit, to allocate the rent half each. 161 It was put to Mr Kleyn that he knew as a matter of fact that Coretell and Kleyn Investments had not paid rent each month. He responded by referring to the fact that when Coretell "got tangled up" in litigation, it ran out of money on a regular basis. He said that sometimes the rent could not be paid. If the other companies had money, he would borrow the money from the other companies to pay the appropriate amounts. He said that rent was always paid and it is paid totally up to date. Mr Kleyn denied the suggestion put to him in cross-examination that he had only suggested that there were leases in place in order to justify the amount to book entries as between the companies for the flow of funds. 162 Mr Kleyn was asked about the management agreement between Coretell and Kleyn Investments and the payment by Coretell to Kleyn Investments of a management fee of $2,000 per week in respect of the services provided. He agreed with the suggestion that the management agreement was neither written nor oral and the only proof of its existence was that Coretell paid $2,000 per week. Mr Kleyn was unable to state when the management agreement commenced. He described it as arising if Coretell needed something to be done and he referred to deliveries. He said that there were no other terms of the management agreement. In terms of the figure of $2,000, Mr Kleyn said: There would have been a calculation at the time of roughly the time that could be spent, bearing in mind telephones, vehicle, fuel costs etc. 163 Mr Kleyn said that Coretell paid it when it had the money to pay. Mr Kleyn was taken to his evidence in the NSW Proceeding. In that proceeding, he said that he calculated the payment of the management fee at the end of each month. When he was asked about that, he said that although that is what he said, that "was not how I meant to come across". He also said in the NSW Proceeding that the management fee was based on the finances of Coretell. He said that he was allowed to work the fees out on the basis of what he considered to be fair and that is "sometimes" what he did. Mr Kleyn denied that he determined the amount that was to be paid depending on what he considered to be fair, having regard to the state of the companies' finances. He agreed that no management fees were paid in 2011 and thereafter until 31 December 2012 and he said that that was because Coretell did not have the money so it did not make the payment. In paragraph 30 of his affidavit, Mr Kleyn said that up until July 2012, the management fee included water, and he made a similar statement in relation to electricity except the date is July 2013, which Mr Kleyn thought must be a mistake. It was put to Mr Kleyn that it was peculiar that as at July 2012, Coretell still had not actually paid any management fees, but, according to Mr Kleyn there was an alteration to the amount of the management fee in July 2012. His evidence with respect to this topic was unsatisfactory. 164 It was put to Mr Kleyn that Goldview was prepared to use the proceeds of the sale of the Maddington Premises for various purposes which indicate the interrelationship between the companies in the group. Mr David Baxter Cox is a solicitor and, in June 2016, he was acting on behalf of the respondents in this proceeding. He swore an affidavit in the NSW Proceeding on a freezing application in which he said the following: 24. I am instructed that Goldview is willing to place any funds derived from any sale of the Kelmscott Property and Maddington Property into a separate bank account in its name from which only funds for specific legitimate purposes will be withdrawn, which include: (a) paying up to $3000 a week on Mr Kleyn's ordinary living expenses; (b) paying legal, accounting and patent attorney expenses incurred by it or any of its related entities or persons; (c) dealing with or disposing of any of its assets in the ordinary and proper course of its business or the businesses of any of its related entities or person, including paying business expenses bona fide and properly incurred by itself or its related entities or persons, such as payments of debts to trade creditors; (d) payment of the sum of $462,000 in payment to Boreline of the invoices annexed at annexure DBC-10; (e) payment of the sum of $80,000 as repayment of the loan made to Goldview by Mrs Aileen Kleyn as part of the proceeds of purchase of the Kelmscott Property into referred to at paragraph 23(a) above; (f) in relation to matters not falling with (a), (b) or (c), dealing with or disposing of any of its assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so it gives the Applicants, if possible, at least two working days written notice of the particulars of the obligation; and (g) dealing with or disposing of any of its assets, provided that the proceeds of such dealings or dispositions are placed in an Australian bank account in its name and only withdrawn from for the purposes of matters falling within (a), (b), (c) or (d). The invoices referred to in paragraph 24(d) were invoices from Boreline to Camteq International (Kleyn Investments). 165 Mr Cox's statements were put to Mr Kleyn. He attempted, to some extent at least, to distance himself from what Mr Cox had said. He said that this is what Mr Cox asked for, but it was not granted that way. As it happens, the balance of the proceeds of the sale of the Maddington Premises were used to pay the legal fees of the solicitors acting for the respondents in the NSW Proceeding. I agree with the applicants' submission that this indicates that Goldview participated in the functioning of the group of companies and that whoever required the funds or to have debts paid off, was accommodated by one or other of the companies in the group. 166 In 2011, Mr Kleyn caused a company called Coretell International Pty Ltd to be incorporated. The company has since been deregistered. From incorporation to deregistration, the sole shareholder of the company was Goldview. Mr Kleyn said that the intention was that Coretell would be changed to Coretell International so the company would have been a significant company in the group. He said that "it would never happen" that Goldview would be the sole shareholder. He said that that was an error by his accountant and that it had never had anything to do with it. He said that he would have instructed his accountant to cancel that before it "got anywhere". Having regard to the whole of Mr Kleyn's evidence, I found this evidence about it being his accountant's mistake particularly unconvincing. 167 Mr Kleyn was taken to a document which summarised various patent applications which he had made through a company called Reservoir Nominees Pty Ltd. It transpires that Mr Kleyn himself has taken advantage of those provisions in the Patents Act which enables one to divide out patents from a parent application. 168 Mr Kleyn was cross-examined at length about his knowledge of the progress of the Standard Patent through the Patent Office. I have already described the key events (at [16]). However, I will recapitulate as to the some of the key events. On 14 December 2011, patent and trade mark attorneys made a representation on his behalf that the Standard Patent should not be granted. That was approximately three weeks after the NSW Proceeding had been commenced on 23 November 2011. On 9 January 2012, IP Australia wrote to Mr Kleyn's patent and trade mark attorneys indicating that it did not accept the objection which they had raised. Mr Kleyn's patent and trade mark attorneys made a further representation on 23 November 2013. The respondents were advised of the grant of the Standard Patent on 28 March 2014. Mr Kleyn was taken through this sequence. He seemed to me to distance himself from the events and his attorneys' actions. I have no difficulty in accepting that he would not have been aware of the intricacies of the patent procedure, but, he advanced his lack of knowledge in a way which I simply do not accept. I set out some examples of this attitude: Do you want to reflect on that, or do you want to maintain that you weren't aware that you had made efforts to try and stop the standard patent being granted?---My lawyers might have made efforts, but I made no efforts. I don't know how this thing works. It's --- … And what you were suggesting to the Commissioner is that in material respects, the standard patent was really the same as the method and system Patents?---I didn't suggest that. Richard suggested that. … And I want to suggest to you that around this time, that is, January 2012, you understood that effectively IP Australia were going to proceed with considering the application and allow the application to progress despite Mr Plummer's complaint. Correct?---I had no idea. No idea at all?---No. I leave this to the lawyers. I don't get involved in it. I consider Mr Kleyn was well able to appreciate his interests and the strategy that might be involved in his long-running dispute with the applicants. 169 On 23 April 2014, the docket judge in this proceeding made an order by consent that the respondents file and serve a Defence and that the first respondent file and serve any cross-claim by 30 May 2014. On 11 July 2014, and again by consent, the docket judge made an order that the directions hearing listed on 14 July 2014 at 9.45 am be adjourned to a date seven days after the delivery of the decision of McKerracher J on issues of liability in Federal Court proceedings NSD 2082 of 2011, or such other date as is convenient to thee Court. Mr Kleyn was asked about this course of conduct: You thought that if you stood this case over until after McKerracher J handed down his decision, that if you were successful in the case, there would be little prospect that AMC would pursue you for infringement under the standard patent, correct?---I didn't decide that. I think, that my lawyers probably did, but I didn't. But on the other hand, I want to suggest to you, you equally appreciated that if AMC won the case before McKerracher J, they would come after you for infringing the standard patent?---Again, I would say I had no idea what the …. were of any of this. The lawyers did what they had to do. They advised me to do certain things and I agreed that they do what they had to do. 170 Again, I have no difficulty in accepting that Mr Kleyn would not have understood the intricacies of the legal procedure, if I can put it that way. However, his professed ignorance went beyond that in a manner I do not accept. As I have said, Mr Kleyn would have been well aware of his own interests and the strategy that might be involved in his long-running dispute with the applicants.

Conclusions 171 My conclusions on whether Goldview infringed the relevant claims in the Standard Patent are as follows. 172 Goldview owned the Maddington Premises and the infringing tools were kept on the premises. The tools were assembled on the premises, although they could also be assembled off the premises. Orders for the tools were received at the premises and they were stored on the premises. The tools were despatched for delivery from the premises. Administrative and sales tasks in relation to the tools were carried out by the employees on the premises. 173 As to the "lease" involving Goldview on the one hand, and Coretell and Kleyn Investments on the other, it was not in writing and it was for an indefinite term. Mr Kleyn did not turn his mind as to whether there was a lease involving Coretell and Kleyn Investments as joint lessees, or two leases with Coretell as one lessee and Kleyn Investments as the other. If there were two "leases", there is a problem with the requirement that a lessee have exclusive possession over the property, the subject of the lease, as there were no defined and allocated areas for Coretell on the one hand, and Kleyn Investments on the other (Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209). There is no evidence as to whether the rent was market value. Mr Kleyn's reference to speaking to a real estate agent does not prove that fact and, contrary to the respondents' submission, I do not accept that Mr Ross gave evidence to that effect. As it happened, the occupying parties did not pay "rent" on time and, in one instance, no payment was made until 13 months after the first payment allegedly became due. This could be construed as one related company providing an indulgence to another in relation to a clearly defined obligation, but in light of all of the evidence and the unsatisfactory nature of Mr Kleyn's evidence, I consider that it reflects on the nature of the "obligation" itself. It was vague and indefinite and entirely within the discretion of Mr Kleyn. 174 Goldview was closely involved with the other companies within the group as shown by the offer as to the use of its assets and the actual use of those assets, its registration as the shareholder of Coretell International and the movement of monies within the group of companies. 175 Mr Kleyn, at all material times, controlled and directed each of the respondent companies, including Goldview. 176 Goldview placed a good deal of reliance on the fact that the applicants had pleaded that it was a lessor of the Maddington Premises. It also referred to the Notice to Admit and Notice of Dispute. Furthermore, it placed reliance on the fact that Mr Brown and Mr Ross said, or proceeded on the basis, that Goldview was a lessor of the Maddington Premises. 177 There was no written lease. If there was a lease, it was because Mr Kleyn as the directing mind and will of Goldview, Coretell and Kleyn Investments decided that there was a lease. He was fully cross-examined on the issue and I do not think there would be a denial of procedural fairness if I was to find that there was no lease. It seems to me that the evidence was complete and that it would be contrary to the interests of justice to find that there was a lease when the facts clearly indicate that there was not. 178 It seems to me that, in any event, whatever right of occupancy there was, it does not provide an answer to the applicants' claims. Mr Kleyn controlled all the relevant companies and if his agreement on behalf of one company with himself on behalf of another company gave rise to an "obligation", it is, as I have said, an obligation of a vague and indefinite nature and entirely within the discretion of Mr Kleyn. 179 I do not think that there was a lease of the Maddington Premises, or at least the type of lease that might provide an answer to the applicants' claims. Further, and in any event, any "lease" was entered into to facilitate the conduct which constituted the infringements and was maintained - bearing in mind that even on the respondents' case it could have been brought to an end at any time - for that purpose. 180 The infringing tools were kept by Goldview in the Maddington Premises for trade purposes with the intention of them being used in trade and Goldview thereby infringed the Systems Claims in the Standard Patent. 181 For similar reasons, Goldview authorised the infringement of the Systems Claims and, in addition, its conduct amounted to infringement of the Core Drill Claims and the Method Claims. As I have said, even if there was an informal oral lease of some nature over the Maddington Premises, Goldview authorised the infringement of the three sets of claims. Mr Kleyn was the directing mind and will of the whole business and of the legal structures used in it. Goldview, through Mr Kleyn, knew precisely how the Maddington Premises were to be used and were used and, in fact, facilitated the arrangement(s) in the sense of causing it to be entered into and carried out. Goldview, though Mr Kleyn, could have brought the arrangement(s) to an end at any time. 182 This case bears no similarity to cases in which the question is whether an independent lessor who fails to act, authorises an infringement of a patent or other intellectual property right. Goldview, though Mr Kleyn, sanctioned, approved and countenanced the relevant acts of infringement by causing an arrangement(s) to be put in place and maintained which involved the acts of infringement. 183 In addition or in the alternative, Goldview was a joint tortfeasor in the infringement of the System Claims, the Core Drill Claims and the Method Claims. Mr Kleyn, acting through the various entities he controlled, pursued a course of action or common design which infringed those claims. The corporate entities were parties to that concerted action or common design. Again, I make the point that I reach the same conclusion, for the same reasons I have given in the context of whether Goldview authorised the infringements, even if there was an informal oral lease of some nature.

The Term of the Exclusive Licence 184 As I have said, there is no dispute about the standing of Reflex Instruments as exclusive licensee of the Standard Patent on and from 14 January 2016. It is the period before that date which is in issue. Reflex Instruments claims an entitlement to sue from 2 April 2010 or, in the alternative, 5 September 2005. 185 An entitlement as a licensee is a prescribed particular which must be registered for the purposes of s 187(1) of the Patents Act (reg 19.1 Patent Regulations). A failure to register does not prevent an exclusive licensee from asserting his or her rights under the licence. An exclusive licence does not need to be in writing (Morton Norwick Products Inc v Intercen Ltd (No 2) [1981] FSR 337 at 342-343; Terrell T, Terrell on the Law of Patents (18th ed, Sweet & Maxwell, 2016 [16.35])). 186 In order to address the issue of whether Reflex Instruments had an exclusive licence before 14 January 2016, the applicants adduced evidence from Mr Brown. He produced a document entitled, "Confirmatory Patent Licence Deed" dated 13 January 2016 between AMC, Imdex and Reflex Instruments. The Deed relates to the Standard Patent, the Device Patent, the System Patent, the Method Patent, and another patent about which there is no direct evidence. 187 The recitals in the Deed are as follows: A AMC is the exclusive owner of the family of patents listed in Schedule 1. B AMC granted Imdex an exclusive licence to Exploit the exclusive right in Australia to Exploit the invention the subject of Australian Innovation Patent No 2006100113, entitled "Core Sample Orientation" ('113 Patent) on 16 May 2007. C Pursuant to the Licence and Agent Agreement AMC revoked from Imdex and granted to Reflex the exclusive right in Australia to Exploit the invention the subject of the '113 Patent with effect from 1 July 2007. D The parties intended by reason of their entry into the Licence and Agent Agreement that all of AMC's rights in and to the Patents including any applications or patents derived from or claiming priority from the provisional application for the Patents were solely and exclusively granted to Reflex in Australia. E On 11 November 2011 AMC confirmed that Reflex is the exclusive licensee of Australian Innovation Patent Nos 2011101041 and 2010101356, each being entitled "Core Sample Orientation". F For recordable purposes, the parties have decided to enter into this Deed to record the exclusive licence in a recordable instrument. 188 Clause 1 contains a definition of the Licence and Agent Agreement as the agreement entered into by AMC, Reflex Instruments and Imdex on or about 13 June 2007. 189 Clause 2(a) provides that pursuant to the Licence and Agent Agreement, AMC has granted Reflex Instruments in Australia an Exclusive Licence to exploit: (i) the Patents, including any and all inventions claimed therein, in Australia; and (ii) any divisional patent applications derived from or claiming priority from Australian Patent Application No 2013201201, including any and all inventions claimed therein in Australia, during the Exclusive Licence Period, to the exclusion of all other persons (Reflex Exclusive Licence). Clause 2 goes on to provide the following: (b) To the extent that the Reflex Exclusive Licence does not constitute an exclusive licence to any of the Patents, AMC grants Reflex in Australia an exclusive licence to exploit: (i) the Patents, including any and all inventions claimed therein, in Australia; and (ii) any divisional patent applications derived from or claiming priority from Australian Patent Application No 20132011201, including any and all inventions claimed therein, in Australia, during the Exclusive Licence Period, to the exclusion of all other persons (Deed Exclusive Licence). 190 Clause 3 defines the Exclusive Licence Period as a period commencing on 1 July 2007 and terminating on the date that the last of the Patents expires, is surrendered, lapses or is revoked, whichever is the later (Exclusive Licence Period). 191 The Licence and Agent Agreement is, in fact, a document in letter form of just over a page. The letter refers to Australian Innovation Patent No 2006100113 which is the Device Patent. The document provides that it sets out the agreement in place between AMC and Imdex in relation to the Device Patent. The document states that AMC is the registered proprietor of the Device Patent and it provides that as and from 5 September 2005, Imdex has been and continues to be entitled on an exclusive basis to exploit in Australia the invention, the subject of the Device Patent. Imdex is appointed as AMC's agent and attorney to assert for the benefit of and at the expense of AMC, as licensee, whatever claims and rights AMC, as licensor, may have arising from any actual or apparent infringement of the Device Patent within Australia and is entitled to the proceeds of, relevantly, any judgment made in any action brought by it. The document provides that as and from 1 July 2007, Reflex Instruments will be entitled on an exclusive basis to exploit in Australia the invention, the subject of the Device Patent. Further, as and from 1 July 2007, Reflex Instruments will be appointed as AMC's agent and attorney to assert for the benefit of and at the expense of AMC as licensee whatever claims and rights AMC as licensor may have arising from any actual or apparent infringement of the Device Patent within Australia and is entitled to the proceeds of, relevantly, any judgment made in any action brought by it. Accordingly, as and from 1 July 2007, Imdex will no longer be entitled on an exclusive basis to exploit in Australia the invention, the subject of the Device Patent. 192 The Licence and Agent Agreement deals only with the Device Patent. As to the other patents, the relevant clause seems to be clause 2(b) in the Confirmatory Patent Licence Deed. That Deed purports, on 13 January 2016, to grant Reflex Instruments an exclusive licence to, among others, the Standard Patent on and from 1 July 2007. 193 Mr Brown was asked about his understanding of the arrangement between AMC and Reflex Instruments in relation to the use of patents. Mr Brown said that his understanding was that AMC would give a licence to the Reflex Instruments' business to commercialise and manage everything to do with a product that resulted from a patent. Mr Brown said that he gained his understanding from his attendance at regular financial meetings. He said that he was not a senior manager, but that members of the senior management group would sit in on these meetings and that he would be called on to provide technical assistance and market intelligence. He said that it was inevitable that in these meetings intellectual property and strategy would be one of the things that would be discussed around the group. There would be line managers, senior managers and others and, during the course of the discussions, the best way forward in terms of managing the intellectual property would be discussed. He said that AMC is primarily a drilling fluid-based business. He said that a strategy developed whereby it was considered more advantageous to the business for the Reflex Instruments' business and the Ace Drilling business to manage an instrument as opposed to having a drilling fluid's business licence and manage intellectual property. Mr Brown said that there were discussions about who would bear the costs associated with the product and it was suggested that it should be allocated to the "right part" of the business, being the business that was managing and was licensed to manage the intellectual property, and that was Reflex Instruments. He said that it was seen as being unfair on the AMC side of the business which had no involvement in the managing of such product line or the IP that they should bear the costs or receive any revenue from the product. He said "that should all be managed by that entity that is licensed to do so". 194 The respondents' submission was that the Licence and Agent Agreement executed on 13 June 2007 related to, and only related to, the Device Patent. The Confirmatory Patent Licence Deed dated 13 January 2016 related to all the patents. However, clause 2(a) cannot change the meaning of the Licence and Agent Agreement which related to the Device Patent only. Furthermore, it is not possible to "backdate" the licence of the Standard Patent. In other words, the attempt to do so in clause 2(b) is not effective. 195 The applicants' submission was that Mr Brown's evidence was sufficient to prove the existence of the licence. He has worked for Reflex Instruments since 2004 and he understood that Reflex Instruments had the right to deal with the tools, which were the subject of the patents. He was not seriously challenged in that evidence and there is no evidence of any other party lawfully exploiting the invention described in the Standard Patent. Furthermore, it is unlikely that different companies in the Imdex Group would be exploiting rights under patents forming part of the same family of patents. 196 Not without some hesitation, I am persuaded by the applicants' submissions and find that Reflex Instruments was the exclusive licensee of the Standard Patent from 1 July 2007.

Conclusion 197 I reject the respondents' abuse of process argument. I hold that the respondents, including Goldview, infringed the relevant claims in the Standard Patent. I hold that Reflex Instruments was the exclusive licensee of the Standard Patent on and from 1 July 2007. 198 I will direct that the applicants bring in draft minutes of order reflecting the conclusions in these reasons. I certify that the preceding one hundred and ninety-eight (198) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

SCHEDULE OF PARTIES WAD 74 of 2014 Respondents Fourth Respondent: GOLDVIEW ASSET PTY LTD (ACN 078 643 428) Fifth Respondent: NICKY KLEYN Cross-Respondents Second Cross-Respondent REFLEX INSTRUMENTS ASIA PACIFIC PTY LTD (ACN 124 204 191)