Dincel Construction System Pty Limited v AFS Systems Pty Ltd

THE COURT ORDERS THAT:

1. Pursuant to s 19 of the Patents Act 1990 (Cth) a certificate be issued certifying that the validity of each of claims 1, 2, 3, 4, 7, 8, 9, 11, 14 and 25 of Standard Patent No 2002328693 was questioned in this proceeding.
2. The applicant pay the first respondent's costs of the application.
3. The costs payable to the first respondent in accordance with order 2 are to include the first respondent's costs of and incidental to the preparation of any affidavit evidence directed to the issue of infringement which was read by the first respondent at the final hearing notwithstanding order 1 made 17 March 2017.
4. The first respondent pay the applicant's costs of the cross-claim.
5. There be no order as to the second respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

NICHOLAS J: 1 I gave judgment in this matter on 14 July 2017 (Dincel Construction System Pty Limited v AFS Systems Pty Ltd (No 2) [2017] FCA 791) dismissing the application and the cross-claim. Both the applicant and the first respondent have filed written submissions in relation to costs. 2 The relevant principles are well known and not in dispute. They are discussed by the Full Court in Roadshow Films Pty Ltd v iiNet Ltd (No 2) (2011) 91 IPR 482, Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 and Tramanco Pty Ltd v BPW Transpec Pty Ltd (No 2) [2014] FCAFC 58. 3 There was a previous interlocutory hearing which led to the grant of an interlocutory injunction (Dincel Construction System Pty Limited v AFS Systems Pty Ltd [2017] FCA 262). On 17 March 2017 I ordered that the costs of the interlocutory application be the applicant's costs in the proceeding. 4 Most of the affidavit evidence relevant to the question of infringement was read at both the interlocutory hearing and the final hearing. 5 The applicant's principal submission was that each party should bear its own costs. However, it also suggested that the existence of the previous order precludes the respondent from recovering any costs associated with the preparation of the written evidence directed to the question of infringement that was relied on by the respondent at the interlocutory hearing. 6 The applicant also submitted ("alternatively, but less preferably") that costs should follow the relevant event viz. the applicant should pay the costs of the application save for the costs of the application for interlocutory relief. 7 The first respondent submitted that the Court should make the following orders: (1) The applicant pay the first respondent's costs of and incidental to the application, other than costs which arose solely in respect of the claim for interlocutory relief. (2) For the purposes of order 1, the first respondent's costs of preparing infringement evidence relied upon at both the hearing of the interlocutory application and at the final hearing, be treated as costs of the application rather than as costs of the interlocutory application. (3) The applicant pay the first respondent's costs of and incidental to the cross-claim only in so far as these costs relate to the issues of novelty and fair basis. (4) The first respondent pay the applicant's costs of and incidental to the cross-claim only in so far as these costs relate to the issue of obviousness. 8 I do not agree with the applicant that it would be appropriate to order that each party bear its own costs. My strong impression is that much more preparation and hearing time was directed to the infringement question than to the issues arising under the cross-claim. 9 I agree with the first respondent that it would not be appropriate to deprive the respondent of its cost of preparing affidavit evidence directed to the issue of infringement merely because the same affidavit evidence that was relied on by the first respondent at the final hearing was also relied on at the interlocutory hearing. 10 I will order that the applicant pay the first respondent's costs of the application. However, I will also make an order that permits the first respondent to recover its costs of and incidental to the preparation of any affidavit evidence relevant to the question of infringement that was read by the first respondent at the final hearing. 11 I turn now to the costs of the cross-claim. 12 So far as the obviousness case is concerned, the first respondent accepts that the applicant should have this component of the costs of the cross-claim. 13 As to the lack of the novelty case, it is true that the respondent's position at the final hearing was that this only need be considered if the applicant's construction of the ramp surface integer was accepted. But the applicant was still required to address this component of the cross-claim. Moreover, as I explained in the principal judgment, I would have rejected the lack of novelty case even if I had accepted the applicant's construction of the ramp surface integer. In those circumstances, I think the applicant's costs of defending this component of the cross-claim should be borne by the first respondent. 14 As to the fair basis case, it seems to me that it did not add significantly to the length of the hearing and, in any event, was not material to the resolution of the question of construction. I think any additional costs attributable to this component of the cross-claim (which are likely to be very minor) should be borne by the first respondent. 15 In all the circumstances I consider the following costs orders are appropriate: (1) The applicant pay the first respondent's costs of the application. (2) The costs payable to the first respondent in accordance with order 1 are to include the first respondent's costs of and incidental to the preparation of any affidavit evidence directed to the issue of infringement which was read by the first respondent at the final hearing notwithstanding order 1 made 17 March 2017. (3) The first respondent pay the applicant's costs of the cross-claim. (4) There be no order as to the second respondent's costs. 16 The first respondent did not oppose the making of an order for the issue of a certificate under s 19 of the Patents Act 1990 (Cth). Accordingly, there will also be an order that a certificate be issued pursuant to that section to certify that the validity of each of claims 1, 2, 3, 4, 7, 8, 9, 11, 14 and 25 of the Standard Patent No 2002328693 was questioned in this proceeding. 17 There will be orders accordingly. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas.