UNJUSTIFIED THREATS
158 The respondents seek declaratory and injunctive relief concerning, and damages arising out of allegedly unjustified threats particularized in para 9 of the amended statement of cross-claim. Such threats are said to have been contained in:
i. Letter from the [applicants'] patent attorneys, Fisher Adams Kelly, to the [respondents], dated 30 September 2013, which alleged the infringement of:
a. claims 1, 10 and 20 of the 400 Patent and "many claims dependent thereon", which are not specified in the letter; and
b. claims 1, 3 and 5 of the 615 Patent and "many claims dependent thereon", which are not specified in the letter.
ii. Letters from the [applicants'] legal representatives, Thomsons Lawyers, to the [respondents'] legal representatives, Jones Day, dated 18 and 23 October 2013.
iii. Emails from the [applicants] dated 6 or 7 November 2013 and 8 September 2014 to the [respondents'] customers and potential customers that the [respondents'] products infringe the 400 Patent and the 615 Patent.
159 My conclusion that there has been no infringement means that the threats were unjustified.
160 Sections 128-132 of the Patents Act provide:
128 Application for relief from unjustified threats
(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with infringement proceedings, or other similar proceedings, a person aggrieved may apply to a prescribed court, or to another court having jurisdiction to hear and determine the application, for:
(a) a declaration that the threats are unjustifiable; and
(b) an injunction against the continuance of the threats; and
(c) the recovery of any damages sustained by the applicant as a result of the threats.
(2) Subsection (1) applies whether or not the person who made the threats is entitled to, or interested in, the patent or a patent application.
129 Court's power to grant relief if threats related to a standard patent or standard patent application
If an application under section 128 for relief relates to threats made in respect of a standard patent or an application for a standard patent, the court may grant the applicant the relief applied for unless the respondent satisfies the court that the acts about which the threats were made infringed, or would infringe:
(a) a claim that is not shown by the applicant to be invalid; or
(b) rights under section 57 in respect of a claim that is not shown by the applicant to be a claim that would be invalid if the patent had been granted.
129A Threats related to an innovation patent application or innovation patent and court's power to grant relief
...
(3) If an application under section 128 for relief relates to threats made in respect of a certified innovation patent, the court may grant the applicant the relief applied for unless the respondent satisfies the court that the acts about which the threats were made infringed, or would infringe, a claim that is not shown by the applicant to be invalid.
130 Counter claim for infringement
(1) The respondent in proceedings under section 128 may apply, by way of counter claim, for relief to which the respondent would be entitled in separate proceedings for an infringement by the applicant of the patent to which the threats relate.
(2) Where the respondent applies by way of counter claim, the applicant may, without making a separate application under Chapter 12, apply in the proceedings for the revocation of the patent.
(3) The provisions of this Act relating to infringement proceedings apply, with the necessary changes, to a counter claim.
...
(4) The provisions of this Act relating to proceedings under section 138 for the revocation of a patent apply, with the necessary changes, to an application under subsection (2).
...
131 Notification of patent not a threat
The mere notification of the existence of a patent, or an application for a patent, does not constitute a threat of proceedings for the purposes of section 128.
132 Liability of legal practitioner or patent attorney
A legal practitioner or a registered patent attorney is not liable to proceedings under section 128 in respect of an act done in a professional capacity on behalf of a client.
161 Pursuant to ss 128 and 129, where a person threatens infringement proceedings with respect to a standard patent, the Court may grant relief to the recipient of the threats, unless the person threatening satisfies the Court that the relevant acts by the threatened person infringed, or would infringe a claim of the patent, which claim was not shown to be invalid. Sections 128 and 129A(3) provide for similar relief in connection with innovation patents, provided that they have been certified.
162 Section 130 facilitates the resolution of all questions relating to infringement and validity, including revocation. Section 131 is self-explanatory. I note that whilst s 132 provides that a legal practitioner or patent attorney is not liable under s 128 for acts done in a professional capacity on behalf of a client, such conduct may constitute a threat by the client for the purposes of s 128.
163 In considering the alleged threats, one must keep in mind the fact that these proceedings were commenced on 6 November 2013. In the letter of 30 September 2013, the applicants' patent attorneys set out relevant facts concerning the patents, the legislation and the conduct of which the applicants complained. The patent attorneys then asserted the applicants' view that such conduct entitled them to various forms of relief from a court and demanded that the respondents do certain things. At pp 6 and 7, the patent attorneys stated:
Our Client specifically reserves its right to acquire, after receipt of the Statutory Declaration mentioned in 3 above, at its election, either damages or an account of Bradken's profits in respect of all infringing conduct by Bradken.
If Bradken does not provide the undertakings required of it, or fails to comply with any of the undertakings once given, we [are] instructed that our Client may commence legal proceedings against Bradken in the Federal Court of Australia without further notice to you whatsoever.
Genuine Steps
Litigants are required to comply with the requirements of the Civil Dispute Resolution Act 2011 (Cth) to take genuine step[s] to resolve a dispute prior to commencing proceedings in the Federal Court of Australia.
This letter constitutes our Client's genuine steps to resolve this dispute.
Our Client otherwise reserves all of its rights.
164 There can be little doubt that the letter contained a threat of infringement proceedings with respect to both patents. It is not possible to identify exhaustively the claims allegedly infringed, but they included claims 1, 10 and 20 of the 400 Patent and claims 3 and 5 of the Innovation Patent. The reference to the Civil Dispute Resolution Act 2011 (Cth) (the "Dispute Resolution Act") may be of some significance. I shall return to that matter.
165 The solicitors' letter of 18 October 2013 primarily concerned the mechanics of a proposed conference, called for the purpose of resolving the dispute. The letter concludes:
For the purposes of the without prejudice conference, our client is prepared to limit the issues to be discussed to the independent claims referred to in the Letter. Of course, should the matter not resolve and proceedings issue, our client reserves its rights to claim infringement of the dependent claims.
In our view, our client has discharged its obligations under the Civil Dispute Resolution Act 2011.
In my view, the letter could be construed as threatening infringement proceedings, particularly having regard to the reference to the letter of 30 September 2013.
166 The solicitors' letter of 23 October 2013 sought to clarify the allegedly infringing products. It concluded:
As to the issue raised in your letter about the pin, the Letter clearly identifies that the pins in dispute are the pins to attach an adaptor to a nose (such as PLP45H-B). The letter does not refer to the pins that attach the tooth to the adaptor (such as PLP12HA).
Our client remains willing to meet. Please note that as our instructor is travelling, we are currently only available to meet by telephone between 1pm and 3pm today, 23 October 2013. Please let us know if you wish to participate.
Finally, as is abundantly clear from our letter of 18 October 2013, our client has not withdrawn its allegations regarding the dependent claims and it is unhelpful and inflammatory for your clients to make such an assertion.
167 The letter does not, itself, make any express threat. However the reference to the letter of 30 September 2013, and the assertion that the applicants had not withdrawn the allegations concerning the dependent claims, were capable of being so construed.
168 The applicants also sent to "customers" an email dated 6 November 2013 as follows:
CQMS Razer commences court proceedings against Bradken for patent infringement
CQMS Razer Pty Ltd, and its related entity CQMS Pty Ltd (CQMS), have today filed patent infringement proceedings in the Federal Court of Australia against Bradken Resources Pty Limited and Bradken Limited (BKN).
CQMS is the owner of a number of patents relating to ground engaging tools (GET) and manufactures steel engineered wear parts for the mining industry, including GET.
BKN, also manufactures a variety of engineered steel products for the mining industry, has recently introduced a range of GET branded Penetrator Max into the mining sector.
CQMS believes some of these products infringe two of its patents.
After issuing a letter and attempting to resolve the dispute, CQMS commenced the proceedings against BKN alleging that:
1. Certain Penetrator Max products directly infringe CQMS' registered patents. Specifically, the system that the relevant products use to affix the GET to mining machines, infringes the patents;
2. By selling certain components of the Penetrator Max products to its customers to be used as GET, BKN has infringed, and authorised the infringement of, the patents. However, CQMS' dispute is with BKN not with the customers who use the GET.
CQMS has taken this action as a last resort as it believes it is necessary to protect its intellectual property rights.
The proceedings are scheduled for a first directions hearing in the Federal Court of Australia (Queensland Division) on 13 December 2013.
For further information contact:
Willow Forsyth,
General Manager
Willow.forsyth@cqmsrazer.com
+61 2 4985 9000
6 November 2013
Sydney, Australia
169 The respondents allege that the email was sent to their customers. There may be no evidence to that effect, but it is a reasonable inference that it was sent to persons who could be expected to purchase products from the applicants, the respondents or Esco. Given the limited number of suppliers, the customers of one supplier would be potential customers of the others. The applicants appear to accept that the email was sent to customers.
170 In the fifth paragraph the applicants refer to the allegations in their pleadings that certain of the respondents' products infringed their patents, and that by selling such products to other customers, the respondents had both infringed their patents and authorized infringement by others. Fairly clearly, the authorized infringements were by the respondents' customers. The alleged infringement by customers, in the context of litigation against a supplier, would inevitably raise, in the minds of the customers, their own potential liability, should the applicants decide that such litigation was necessary in order to protect their intellectual property rights. The indication that the existing dispute was between the applicants and the respondents may have offered some reassurance, but the threat was still present. That the applicants chose to offer such reassurance suggests that they expected that the email would come to the attention of the respondents' customers. A customer (actual or potential) would inevitably wonder about the reason for sending such a notice. At the very least, that customer would conclude that any future acquisition of one of the respondents' products would be risky. I have no real doubt that the applicants intended that the email produce that effect. It is the effect on the reasonable recipient which is reliant. I have identified that effect. I find that the notice was a threat to the customers.
171 On 8 September 2014, the applicants sent a notice to "customers". It is headed "Notice of Federal Court Proceedings" and reads as follows:
CQMS Razer's patent infringement case against Bradken is progressing to Trial. Potential infringement by Bradken's customers of the CQMS RAZER Wedgelock Patents.
We are writing to you as our records show that your mine site or company may have purchased CQMS Razer's (CR) WedgelockTM hammerless ground engaging tools (GET) locking system, or products associated with that system. This email is an update on the status of CQMS Razer's patent infringement case against Bradken Resources Pty Ltd and Bradken Limited (BKN) which is associated with the WedgelockTM.
CR treats its intellectual property rights seriously and continues to enforce our patents rigorously. CR's claim of patent infringement against BKN is in part, based on BKN supplying product to their customers whereby those customers' use of that product results in BKN's customers infringing CR's patent rights. You may have been unaware of this if you have purchased the particulat GET assemblies from BKN.
CQMS Razer and CQMS Pty Ltd (together CR) commenced proceedings in the Federal Court of Australia against BKN after the introduction of BKN's GET assemblies branded Penetrator Max and Solid Series, claiming:
1. an injunction restraining BKN from infringing two patents relating to GET (Wedgeck Patents);
2. delivery up of products that infringe thise patents; and
3. monetary compensation.
It is CR's WedgelockTM product that is the commerical embodiment of the Wedgelock Patents referred to above.
The Penetrator Max series includes a nose, adaptor and pin assembly. It also includes a tooth and pin assembly to be fitted onto an adaptor but CR makes no complaint in relation to those components in this dispute. The Penetrator Solid Series GET assembly includes a point, pin assembly and a nose.
Further to our update to you on this matter on 7th November last year, the trial of these proceedings has been listed to commence on 7th April 2015 in the Federal Court of Australia.
In thes proceedings , CR alleges that BKN's supply of component parts of Penetrator Max (save for the tooth and pin assembly to be fitted onto an adaptor) and Solid wear assemblies contributes to the direct infringement by BKN's customer of the CR Wekock Patents, when that BKN customer assembles the GET assembly onto the nose of a bucket.
CR has taken the above steps to enfore its patents as it treats its intellectual property rights seriously. It has not made a claim against any other party other than BKN. However, if a Court agrees with CR's position and find that the Wedgelock Patents have been infringed, then CR will consider further action.
For futher information contact:
Willow Forsyth,
General Manager Category Management + Strategy
Willow.forsyth@cqmsrazer .com
(Spelling errors included in original.)
172 Notwithstanding the assertion in the second paragraph that the applicants were writing to their own customers, in the third paragraph, they effectively assert infringement by the respondents' customers, referring to them in the second person. The last sentence of that paragraph plainly indicates that the applicants were also addressing the notice to the respondents' customers. The second last paragraph (commencing "CR has taken ...") is a clear threat of future action, presumably against customers who had acquired the respondents' products. As with the earlier email, it was thought desirable to provide a contact point for the acquisition of further information.
173 I note that the first three letters were generated and sent within a period of about five weeks prior to the commencement of proceedings. The email dated 6 November 2013 was sent on, or shortly after the commencement of proceedings. The email dated 8 September 2014 was sent after the matter had been set down for trial, about ten months after the commencement of proceedings and about seven months before the commencement of the trial.
174 The threats of infringement proceedings have been established. The applicants have failed to prove infringement, or threatened infringement of any claim not shown to be invalid. In those circumstances, the applicants seek injunctive relief and damages.
175 The applicants raise one point of substance. They submit that they have commenced and prosecuted infringement proceedings, at least implying that if infringement proceedings are commenced, the recipient of such threats is no longer an aggrieved person. There is some suggestion to this effect in the decision of the Court of Appeal in Benmax v Austin Motor Coy Ltd (1953) 70 RPC 284 at 295. The thinking which underlies that proposition may be that which appears in the decision of Conti J in Sydney Cellulose Pty Ltd and Anor v Ceil Comfort Home Insulation Pty Ltd and Others (2001) 53 IPR 359 at [35] as follows:
35. The combined operation of ss 128 and 129 is such as to impose the onus of proving justification of the threats upon the patentee or patent licensee who advanced the same: U & I Global Trading (Australia) Pty Ltd v Tasman-Warajay Pty Ltd (1995) 32 IPR 494 at 500 per Cooper J. Earlier in Mechanical Services (Trailer Engineers) Ltd v Avon Rubber Co Ltd [1977] RPC 66 at 75, Graham J found the same statutory requirement to operate in the United Kingdom, for the following policy reason to be identified in its patent legislation:
"A patentee's first and proper remedy when he considers the defendant is infringing is to bring an action for infringement, without making any threats at all. This is however in the life of the market place no doubt a counsel of perfection and, patentees and travellers being human as they are, no doubt threats against potential defendants will continue to be made. That does not mean to say that the law approves of such action, which, as already stated, can obviously cause serious damage which it is often difficult or impossible to recover. On the other hand there is good reason for saying that a patentee who proves that his patent is valid and has been infringed by a defendant ought not to be liable for an action for damages in respect of threats which he is able, in any action brought by virtue of the section, to show are justified.
What the section therefore does is to give to the person threatened (the plaintiff) a right to damages and an injunction against the continuance of the threats in question unless the person making the threat (the defendant) is able to justify them in any action under the section. The section gives a right to the plaintiff but not to the defendant. The latter is only given a shield or defence when he is able successfully to prove justification. He is not given any right to make a threat even if in fact it ultimately turns out to be justified. As patentee he can perfectly well bring his action for infringement without making a threat … If however a defendant does make a threat and it is held that he was unjustified, there is every reason why, if in all the circumstances including the generality of the threat it appears just and convenient, he should be restrained in general terms from making such threats in the future in respect of the plaintiffs' goods or methods of manufacture. Such an injunction causes him no hardship for the reasons given above. The person threatened, on the other hand, will by such an injunction expressed in general terms be properly protected in the future against again having to go through the very expensive business of bringing an action to invalidate another of his rivals' patents in order to show that such threats were unjustified. Only thus can the damage liable to be caused by threats unaccompanied by a patent action be positively prevented."
At [36] Conti J continued:
36 On my reading of the letter of Ceil Comfort's legal representatives the same plainly constituted a threat made at least to Sydney Cellulose of infringement proceedings, in the event that Sydney Cellulose was to undertake the Department of Housing contract. Given that Aussie Fluff, a company related to Sydney Cellulose, was to undertake such contract, the letter by clear implication constituted a threat to Aussie Fluff as well within s 128 of the Act, and no suggestion has been advanced to the contrary on behalf of the Respondents. It has been long established incidentally that a threat of infringement proceedings may be contained in a solicitor's letter: see Halsbury's Laws of England (4th ed) Vol 35, p 375. As indicated in [30] above, the respondents for their part did not initiate any legal process against the applicants, pursuant to the threats made in their lawyers' lengthy letter of demand, notwithstanding that the applicants or one of them at least had been awarded the Department of Housing contract. The respondents were apparently content to make threats of legal proceedings, but to take no further action, notwithstanding the following judicial advice of Bowen LJ in Skinner & Co v Perry (1893) 10 RPC 1 at 8:
"The legislature desires that threats of patent action shall not hang over a man's head; that the sword of Damocles, in such case, should either not be suspended, or should fall at once … "
176 Conti J appears to have adopted both the passage from the judgment of Graham J in Mechanical Services (Trailer Engineers) Ltd v Avon Rubber Co Ltd (1977) 94 RPC 66 and that of Bowen LJ in Skinner & Co v Perry (1893) 10 RPC 1. Two matters must be considered in connection with those decisions and that in Benmax. First, it seems that at the time of the decision in Skinner, the relevant legislation in the United Kingdom provided that it was a defence to proceedings for a declaration as to non-infringement, that infringement proceedings had been commenced. See Terrell, Law of Patents (18th ed, BIRSS (ed), Sweet and Maxwell, 2016) at 24-03. That provision was repealed in 1932. In 1909 a similar provision was inserted into the Patents Act 1903 (Cth) as s 91A. However, in the Patents Act 1952 (Cth), s 121 provided that a person could obtain a declaration, injunctive relief and/or damages, unless the person threatening satisfied the court that the acts in question infringed a claim not shown to be invalid. The present legislation (ss 128-132) is in much the same form. Under the pre-1932 legislation in the United Kingdom and the pre-1952 Australian legislation, statutory relief was not available if the person threatening, with due diligence, commenced and prosecuted infringement proceedings. Since 1952, the threatened person may be entitled to relief unless the person threatening demonstrates infringement of a claim not shown to be invalid.
177 It seems that in their earlier forms, the relevant provisions were designed to induce the commencement of proceedings, presumably in the expectation that the rights and wrongs of the matter would be resolved in those proceedings. A common law remedy was (and perhaps is) available to a threatened person, independent of the statutory provisions. See Terrell at 24-01 and 24-02. Under the current regime, the statutory entitlement to relief will only be lost if infringement is demonstrated. The current legislation is not designed merely to relieve the person threatened of the threat of proceedings. It provides a remedy against the consequences of unjustified threats, which remedy will be available unless infringement is proven.
178 The second matter which tends to detract from the authority of the passages cited by Conti J is the enactment of the Dispute Resolution Act to which I have previously referred. Pursuant to s 6(1) of that Act an applicant in civil proceedings in this Court, or the Federal Circuit Court must file a "genuine steps" statement at the time of filing the application. Although the provisions are somewhat unclear, ss 11-13 seem to contemplate there being adverse consequences for a litigant who has not taken genuine steps to resolve the dispute in advance of litigation. Section 6(2) provides:
(2) A genuine steps statement filed under subsection (1) must specify:
(a) the steps that have been taken to try to resolve the issues in dispute between the applicant and the respondent in the proceedings; or
(b) the reasons why no such steps were taken, which may relate to, but are not limited to the following:
(i) the urgency of the proceedings;
(ii) whether, and the extent to which, the safety or security of any person or property would have been compromised by taking such steps.
179 The term "genuine steps to resolve a dispute" is defined in s 4 as follows:
(1A) For the purposes of this Act, a person takes genuine steps to resolve a dispute if the steps taken by the person in relation to the dispute constitute a sincere and genuine attempt to resolve the dispute, having regard to the person's circumstances and the nature and circumstances of the dispute.
(1) Examples of steps that could be taken by a person as part of taking genuine steps to resolve a dispute with another person, include the following:
(a) notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute;
(b) responding appropriately to any such notification;
(c) providing relevant information and documents to the other person to enable the other person to understand the issues involved and how the dispute might be resolved;
(d) considering whether the dispute could be resolved by a process facilitated by another person, including an alternative dispute resolution process;
(e) if such a process is agreed to:
(i) agreeing on a particular person to facilitate the process; and
(ii) attending the process;
(f) if such a process is conducted but does not result in resolution of the dispute - considering a different process;
(g) attempting to negotiate with the other person, with a view to resolving some or all the issues in dispute, or authorising a representative to do so.
(2) Subsection (1) does not limit the steps that may constitute taking genuine steps to resolve a dispute.
180 Section 7 provides:
(1) A respondent in proceedings who is given a copy of a genuine steps statement filed by an applicant in the proceedings must file a genuine steps statement before the hearing date specified in the application.
(2) A genuine steps statement filed under subsection (1) must:
(a) state that the respondent agrees with the genuine steps statement filed by the applicant; or
(b) if the respondent disagrees in whole or part with the genuine steps statement filed by the applicant - specify the respect in which, and reasons why, the respondent disagrees.
181 It is at least possible that genuine steps taken in anticipation of the commencement of infringement proceedings, may constitute threats of such proceedings. Although the Dispute Resolution Act does not expressly say so, its effect is to require, or at least encourage the taking of such steps, with the possibility of disadvantage in the event that they are not taken. In Mechanical Services Graham J observed:
A patentee's first and proper remedy when he considers the defendant is infringing is to bring an action for infringement, without making any threats at all.
182 In light of the Dispute Resolution Act, that proposition may no longer be a "counsel of perfection". The proposition is, at least potentially, inconsistent with modern views which favour the resolution of disputes without the need for litigation. It may be necessary, in proceedings in which unjustified threats are alleged, that the Court distinguish between genuine steps to resolve a dispute and threats of infringement proceedings. Further, particular conduct may be both a genuine step and a threat. The Court may have to decide whether such a threat is actionable, having regard to the policy and effect of the Dispute Resolution Act.
183 In any event, it is necessary that I consider the alleged threats in light of the Dispute Resolution Act. In the patent attorneys' letter of 30 September 2013, the author asserted that it constituted genuine steps. I accept that such an assertion may be relevant to the characterization of the relevant conduct as a genuine step, but it will not be conclusive of that matter. The letter seems to be more a statement of the applicants' case at its highest, coupled with a demand for all of the relief to which they might, in any circumstances, be entitled, than a genuine step, designed to lead to settlement. It is, in effect, a letter of demand. In my view it is a threat of infringement proceedings.
184 As to the letter of 18 October 2013, the first paragraph is an assertion of authority to act on behalf of the applicants. The second and third paragraphs seem to be designed to facilitate resolution of part, or all of the dispute. The fourth paragraph clarifies an aspect of the applicants' case, undeniably a step towards settlement. The fifth paragraph relates to the agenda for the proposed conference. The solicitors accepted that it should be limited to discussion of the independent claims, but stipulated that the applicants' agreement to that course was not to be taken as compromising its case concerning the dependent claims. In the sixth paragraph the solicitors asserted that they considered that the applicants had satisfied the requirements of the Dispute Resolution Act. The final paragraph is a mere formality. As I have said, the assertion of rights implicitly threatens infringement proceedings. Nonetheless the letter is clearly a genuine step towards settlement. I see no reason to doubt that it was sent in good faith. Similar comments apply to the letter of 23 October 2013. The first and sixth paragraphs are purely formal. The second and third paragraphs clarify the applicants' case. The fourth paragraph is associated with the proposed conference. The fifth paragraph seeks to correct a perceived misapprehension on the part of the respondents or their lawyers. If written in good faith, the letter should be seen as a genuine step towards resolution of the dispute. I see no reason to doubt that it was written in good faith.
185 In my view the letters of 18 October 2013 and 23 October 2013, were genuine steps taken in order to resolve the dispute, as implicitly required by the Dispute Resolution Act. The respondents would have understood that the letters were genuine steps and not threats. In the circumstances, neither contained a threat.
186 The email dated 6 November 2013, the date upon which proceedings were commenced, is of a different kind. It is clearly not a genuine step towards resolution of the dispute. As it was written after the filing of the application, it cannot be said to be a threat to bring infringement proceedings against the respondents. However it refers to sale by the respondents to customers of the allegedly infringing components. Although the letter asserts that any dispute is with the respondents, and not with the customers, one must wonder why the email refers to the sale of infringing products. One must also wonder why it was written at all, unless it was intended to make purchasers and potential purchasers aware of the proceedings. Undoubtedly, the applicants hoped that at the very least, it would discourage potential customers from buying the respondents' products. It could only do so by creating in the customers some apprehension of possible disadvantage to them, should they do so. The only apparent source of such disadvantage was infringement proceedings against them. In my view the email of 6 November 2013 was a threat of future action against customers.
187 The notice of 8 September 2014 is clearly a threat to customers or potential customers. I have previously pointed out that although it starts as if it were addressed to the applicants' customers, its contents suggest that it was also directed to the respondents' customers. The applicants' allegations are set out. The letter refers directly to infringement by the respondents' customers and indicates that if the applicants are successful in these proceedings, they will consider further action, presumably against the respondents' customers. There is no attempt to resolve any such dispute. The notice is an actionable threat.
188 The applicants make one further point concerning the threats. They submit that the respondents have not proven any damage and so are not entitled to seek an "enquiry" as to damages. As I understand it such an enquiry would normally be conducted by a registrar, once liability for damages had been established. Such procedure is regulated by Div 30.4 of the Federal Court Rules 2011 (Cth) (the "Rules"). In the notice of cross-claim the respondents seek declaratory and injunctive relief and damages. I am not sure that they have ever indicated a desire for an enquiry as to damages, but if that is the best way of quantifying their loss, then I see no reason for denying that remedy. However it is not necessary to consider the question of entitlement to an enquiry. On 13 December 2013, I ordered that the issue of liability be determined separately, and prior to determination of the issue of "quantum". That order was of the kind contemplated by r 30.01 of the Rules. At that time, only the applicants' claim was on foot. The notice of cross-claim was not filed until 14 March 2014. Hence the orders made on 13 December 2013 related to the applicants' claim. It seems that in the subsequent case management process, little or no attention was paid to the cross-claim. However the orders made on 25 July 2014 and 17 February 2015 seem clearly to have contemplated evidence-in-chief being given by affidavit, and the exchange of affidavits in advance of trial. If the applicants expected that issues going to the quantum of the respondents' loss were to be heard and determined at this stage in the proceedings, they would surely have sought particulars and access to the evidence to be led. In my view, the case has been conducted on the basis that all issues of quantum were to be addressed after the questions of liability had been resolved.
189 The applicants seem to submit that in order to demonstrate a cause of action sounding in damages, the respondents had to prove some loss, as is generally the case in tort. Hence the applicants seem to submit that on the issue of liability, the respondents had to prove some loss, even if quantification of that loss was to be the subject of a second hearing. There are two possible answers to such a submission. First, it highlights the fact that in case management, the distinction between issues of liability and issues of quantum is not always clear. When used in connection with the conduct of proceedings, the distinction is a matter of convenience rather than principle. The only real necessity is that the parties be accorded procedural fairness. Further, the applicants did not, themselves, lead any evidence as to their own damages. Secondly, the causes of action created by s 128(1), s 129 and s 129A(3), contemplate that upon proof of the threats, the threatened person will become entitled to a range of relief, including damages, unless the party threatening has proven infringements. I see no reason why the question of damages cannot be deferred until other matters have been resolved.