Deco Australia Pty Ltd v Aliwood Pty Ltd

1. The Respondents' amended interlocutory application dated 3 September 2021 be stood over to 4 April 2022, being the first day of the liability trial of this proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

PERRAM J: 1 The Applicant ('Deco') sues the Respondents (together, 'Aliwood') for infringement of claims 1 to 5 of Innovation Patent 2019101244 ('the 244 Patent') which was applied for on 13 October 2019. The invention claimed in the 244 Patent is said to be waterproof wall cladding for the exterior of buildings and involves wall cladding boards that, when interconnected to form wall cladding, are said to have improved water proofing capability beyond that disclosed in the prior art. Aliwood has cross-claimed against Deco alleging that the 244 Patent is invalid on a number of grounds. One of these includes anticipation. The outcome of the anticipation question turns upon the priority date for the 244 Patent about which there is a debate. 2 According to Deco the priority date is 7 October 2015 which is the date that the provisional application was filed. According to Aliwood, Deco's prospects of establishing that priority date turn on a set of figures which also appear in a document entitled Deco Installation Instructions which was publicly available from 1 March 2016. Expert evidence has been prepared on both sides and Aliwood submits that the experts agree that the figures depict one specific example of an embodiment of the claims of the 244 Patent. 3 Aliwood now seeks summary judgment on its cross-claim. In short, it says that to displace the priority date of 13 October 2019 with the date of the filing of the divisional application, it will be necessary for Deco to establish prior disclosure across the breadth of the claims. It says that the experts' agreement that the figures depict one specific embodiment of the claims of the 244 Patent is fatal to that undertaking. If it is correct in that regard, then the priority date will be 13 October 2019. If that is the case, then it submits the 244 Patent will fail since it will have been anticipated by the publication on 1 March 2016 of the Deco Installation Instructions. 4 The matter has been set down for trial on 4-7 April 2022 with final submissions on 14 April 2022. By order 5 made on 15 February 2021 that trial will be on all issues apart from quantum and will include the question of whether Deco is entitled to additional damages (although not the quantum of those damages). When the matter was last before the Court for directions on 21 July 2021, Aliwood endeavoured to persuade me that the question of the priority date should be ascertained in advance of the trial by means of a separate question. By this time, all of the evidence for the trial had been prepared and it was on that day that I fixed the matter for trial. At T11.27-35 I indicated that I was not disposed to decide the priority date issue as a separate question but that I was not able to prevent Aliwood from filing an application seeking summary judgment. That is what has now occurred. 5 To determine the summary judgment application now would, in my view, be wasteful given the matter has now been allocated a hearing date in April next year. If the matter were now fully argued, it is likely that I would reserve judgment for about 6 weeks. If I acceded to Aliwood's application this would result in the vacation of the trial. It may be inferred that Deco would seek leave to appeal which it would be likely to obtain since the summary judgment application would have determined the entirety of the proceeding. Assuming that Deco filed a notice of appeal in early December 2021, it is apparent that the appeal would not be ready for the February 2022 Full Court sittings and would therefore be listed in the May 2022 Full Court sittings. If the appeal were successful then the result would have been the loss of the trial dates. Any subsequent trial would then be likely to be heard in 2023 with an appeal later in that year. On the other hand, if the priority date issue is resolved at trial, there will be only one appeal and it will most likely be heard in the second half of 2022. 6 Ms Cochrane for Aliwood pointed out that costs would be saved if it were successful which I accept. However, for three reasons I am unpersuaded that the chance of that saving is worth running the risk of delay and multiple appeals which Deco's application presents. First, the legal issue involved, whilst susceptible to a summary judgment application, is reasonably complex. It turns on the proper construction of s 43(2) and (2A) of the Patents Act 1990 (Cth) ('the Act') and reg 3.13C of the Patents Regulations 1991 (Cth). These require that the provisional application 'discloses…the invention in the claim in a manner that is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art' (s 43(2) and (2A)) and 'clearly discloses the invention in the claim' (reg 3.13C). Aliwood's contention turns on acceptance that these require disclosure in the provisional application across the breadth of the claims. So much has been held in relation to s 40(2)(a) of the Act by Burley J in Cytec Industries Inc. v Nalco Company [2021] FCA 970. Even so, this is not straightforward by any means. The provisions are new and not yet subject to any appellate authority. Put another way, this is not a summary judgment application which jumps off the page at one. 7 Secondly, the proceeding was filed a year ago on 21 September 2020 and is now ready for trial. Of course, a party is free to bring a summary judgment application whenever they wish but it is relevant that all of the preparatory steps for trial have already been completed apart from the experts' conclave and the preparation of the joint report. These have included preparations not only for the priority date issue (which has been live for some time) but also on Deco's case on infringement. 8 Thirdly, if the summary judgment application is unsuccessful because the Court concludes that Deco has reasonable prospects of establishing the priority date for which it contends then the entire topic will need to be revisited in the trial judgment when the question of whether its position is actually correct will be considered. Were the argument a short one this might not be a problem, but from the point of view of my docket, there are much more pressing demands on the Court's time to do with the disposition of cases than writing a reasonably complex patents judgment that establishes that a priority date is or is not arguable. More is this so when the question of what the priority date actually is has been scheduled to be determined in April next year. 9 Section 37M(1) and (2) of the Federal Court of Australia Act 1976 (Cth) provide: 37M The overarching purpose of civil practice and procedure provisions (1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes: (a) according to law; and (b) as quickly, inexpensively and efficiently as possible. (2) Without limiting the generality of subsection (1), the overarching purpose includes the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. 10 In my view, s 37M(2)(b), (c) and (d) are particularly pertinent to the current situation. In that circumstance, I will stand the hearing of the summary judgment application over to the trial. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.