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[2002] FCA 282
plaintiff. Claims 1-32 of Australian Patent No 702534 revoked; revocation stayed pending appeal (28 days initial, then until determination of appeal if lodged), subject to undertakings by Lockwood (prosecute...
The Federal Court (Hely J) revoked claims 1-32 of Lockwood's patent and stayed that revocation pending appeal. Doric sought an undertaking that Lockwood pay damages to anyone disadvantaged by the stay; the court refused to impose such an undertaking because Doric did not identify a specific risk requiring that protection. On costs, although Doric succeeded overall, it failed on several important issues; after considering overlaps and the circumstances, the court ordered Lockwood to pay 75% of Doric's costs, leaving detailed questions about unused evidence costs to the taxing officer.
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1,747 words · generated 14/06/2026
Doric Products Pty Ltd brought proceedings in the Federal Court challenging the validity of claims 1–32 of Australian Patent No 702534 owned by Lockwood Security Products Pty Ltd. Hely J concluded at trial that those claims should be revoked and directed that orders be prepared to that effect [1]-[2]. Before the order for revocation was put into effect, the Court made a stay of the revocation pending appeal, an initial 28-day stay, and thereafter, if an appeal were lodged, a stay until determination of that appeal, subject to undertakings given by Lockwood: to prosecute the appeal expeditiously, to notify the Commissioner of Patents and seek registration of the orders, not to threaten infringement proceedings, and not to seek to amend claims except in connection with the proceedings (Short Minutes of Order and paras 2-3).
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Doric sought a further condition on the stay: that Lockwood give an undertaking to pay damages to any person (including Doric) for any disadvantage they may sustain by reason of the stay of revocation. Hely J considered authorities and practice, and refused to require such an undertaking because Doric had not identified any perceived risk of injury that would make such an undertaking necessary [3], [4], [8].
The Court also resolved costs. Doric succeeded in the primary relief (revocation) but there was mixed success on several issues, including findings for Lockwood on some aspects of infringement (eg claim 7), and for Doric on others; Doric failed on obviousness and on some novelty points, and had prepared evidence it did not ultimately rely upon. After considering the overlapping nature of patent issues and the circumstances of the litigation, Hely J exercised his discretion to reduce Doric’s recoverable costs and ordered Lockwood to pay 75% of Doric's costs [9]-[19].
Two discrete questions drove the decision.
Hely J began by observing that it is usual to stay an order revoking a patent pending appeal and set out the public policy reasons for that practice: doubts over the Full Court's power to reinstate a patent on the register if revocation is entered and public reliance on the register could give rise to conduct that might later be infringing should an appeal succeed [4]. He noted that English practice often sees certain undertakings proffered (not to threaten proceedings, to prosecute appeal quickly, etc.) and that some authorities have been cited where undertakings were discussed. However, the key point in this case was necessity: a party should be required to give an undertaking as to damages only where it is necessary to protect persons against a perceived risk of injury. Doric had not identified any such risk. Lockwood provided undertakings that addressed the primary procedural and public-interest concerns (no threats of infringement proceedings; prosecuting appeal expeditiously; serving orders on the Commissioner) and there was no interlocutory injunction preventing Doric from dealing with its product. On that basis the Court concluded there was no sufficient reason to exact an undertaking to pay damages as the price of the stay [6]-[8].
Hely J reiterated the well-known principle that costs normally follow the event, but the court has a judicial discretion especially where a litigant succeeds only on part of the claims [10]. He emphasised the need for caution in mechanical apportionment: patent cases frequently involve overlapping issues (construction, sufficiency, fair basis, obviousness) and penalising a successful litigant for testing multiple issues can deter litigation of matters material to the case [10]. In the present case, however, Doric had failed on several significant issues: novelty as to particular prior art (Abloy rim and sliding door locks), obviousness, and copying; Lockwood had substantial success on infringement as to at least one claim. There was overlap in evidence and issues, and some evidence prepared by Doric was not used. The court accepted that whether costs for unused evidence are recoverable is a matter for the taxing officer, but on the overall exercise of judicial discretion the judge made a compensatory reduction: Lockwood to pay 75% of Doric’s costs [11]-[13], [15]-[19].
Before this decision the established position was that it is usual to stay revocation pending appeal, grounded in authorities and standard texts (Terrell; CIPA Guide) and previous Australian decisions such as Atlantis (Emmett J) explained the rationale [4]. The judgment does not change that practice; rather it clarifies the circumstances in which an undertaking as to damages should be imposed as a condition of staying revocation, namely that such an undertaking is not a routine condition but one to be ordered only where necessity is shown by an identifiable risk of injury to persons affected by the stay [6]-[8]. The Court also reaffirmed existing principles about costs discretion in cases of partial success (citing Hughes, Cretazzo, and other authorities) and emphasised that apportionment must be considered carefully in the patent context because of overlapping issues [10], [13].
So the practical effect: the stay-pending-appeal practice continues; courts will continue to seek undertakings addressing procedural and public-interest concerns, but will not as a matter of routine require an undertaking to pay damages unless a specific risk is demonstrated. On costs, the judgment affirms that trial judges should balance the event-based rule against practicalities of complexity and overlap in patent litigation and may make a global adjustment rather than rigid issue-by-issue taxation.
Passage: “It is usual to stay an order for revocation of a patent pending an appeal...” [4]. Plain English: Courts commonly pause a revocation order while an appeal runs to avoid procedural and public harm if the appeal succeeds.
Passage: “A party should only be required to give an undertaking as to damages where it is necessary for the protection of persons against a perceived risk of injury.” [8]. Plain English: The court will only force someone to promise to pay compensation for harm caused by a stay if there is a real danger of harm to someone because of that stay.
Passage: “Costs normally follow the event, but the Court has a general discretion...” [10]. Plain English: The usual rule is the winner gets costs, but the judge can decide otherwise, especially when each side wins on different parts of the case.
Passage: “Ultimately the question ... is a matter for the taxing officer...” [13]. Plain English: Whether costs for evidence that was prepared but not used can be recovered is a technical taxation question for the costs officer, not a question for the judge to resolve in the substantive order.
Passage: “My overall assessment is that Lockwood should pay 75 per cent of Doric's costs of these proceedings.” [19]. Plain English: Balancing successes and failures, the judge decided Doric should get most but not all of its costs; Lockwood must pay three quarters of those costs.
Applications for stays of orders revoking patents pending appeal where the successful party seeks an undertaking to pay damages: this decision is relevant where the respondent offers other undertakings (eg not to threaten proceedings, to prosecute appeal quickly) and the applicant cannot point to a specific risk of injury flowing from the stay [3]-[8].
Mixed-success patent cases where the successful party wins primary relief (eg revocation) but loses on substantial secondary issues (eg obviousness, particular novelty allegations) and where there is overlap in evidence: the court will apply a discretionary assessment of costs rather than a rigid event-based approach and may make a partial reduction in recoverable costs [9]-[19].
Situations involving preparation of evidence later not used at trial: this judgment reminds practitioners that taxation of such costs is a matter for the taxing officer under Order 62 rule 19; trial judges will not ordinarily make a special order without evidence and findings on necessity [13].
This deep dive confines itself to the present judgment. The decision cites and applies precedent such as Atlantis, Hughes, Cretazzo and Minnesota Mining & Manufacturing, and considers English authorities (Amalgamated Carburetters; Cincinatti Grinders; Raychem) in context. Hely J’s treatment is conservative: he distinguishes English authorities on the point of undertakings as to damages where they do not directly support extraction of such an undertaking, and accepts that in injunction contexts undertakings as to damages may be apt [6]. Later courts considering identical procedural settings should treat Hely J’s approach as persuasive: require an undertaking to pay damages only when necessary to prevent a proven risk of injury; otherwise rely on standard procedural undertakings. For costs, this judgment is aligned with established Australian authorities cautioning against mechanical apportionment and will be cited for the proposition that overlap and complexity in patent litigation justify global rather than strictly issue-by-issue cost adjustments [10]-[13], [18]-[19].
What constitutes a sufficiently “perceived risk of injury” to justify an undertaking as to damages? Hely J’s statement is practical but leaves the evidentiary threshold open. Future cases will need to identify the degree and nature of risk (eg imminent market harm, threats of enforcement) that will tip the balance.
The proper balance between protecting public reliance on the patent register and allowing parties to rely on trial outcomes remains fact-sensitive. How courts weigh public interest considerations against commercial realities where patentees are likely to enforce patents during the stay is to be further developed.
The yardstick for apportioning costs in complex patent litigation: Hely J exercised a broad discretion and chose a 75% award here. Future decisions will be needed to develop more granular guidance on when particular percentages or issue-based reductions are appropriate, and how to treat the cost of evidence prepared but not called in different factual matrices.
Interaction with interlocutory injunctions: Hely J noted the difference in Westaflex where an injunction was stayed and an undertaking as to damages was clearly apt [6]. Where an interlocutory injunction exists, courts may be more inclined to seek undertakings as to damages; the boundaries of that distinction will be refined by later cases.
In short, Doric v Lockwood reinforces the established practice of staying patent revocations pending appeal, emphasises the conditional and necessity-driven nature of undertakings to pay damages, and applies a pragmatic approach to costs in mixed-success patent litigation, leaving some evidential and calibration questions for future decisions.
REASONS FOR JUDGMENT 1 On 21 December 2001 I gave my reasons for concluding that claims 1 - 32 (inclusive) of Australian Patent No 702534 ("the Patent") should be revoked. I stood the matter over so that the parties could bring in Short Minutes of Order to give effect to my decision. 2 It is now common ground that it would be appropriate for orders to be made in terms of the attached document in order to give effect to that decision. Accordingly, I make orders in terms of the attached Short Minutes of Order. 3 That leaves two matters outstanding. First, the applicant ("Doric") submits that it should be a condition of any stay that the respondent ("Lockwood") undertake to pay any person (including Doric) such damages or loss, whether legally claimable or not, as a judge may think just and fair as compensation to any person (including Doric) for any disadvantage they may sustain by reason of the stay of the order revoking claims 1 - 32 (inclusive) of the Patent. Lockwood submits that it should not be required to give such an undertaking as the price of a stay, but would be willing to proffer such an undertaking if a stay would otherwise be refused.
An undertaking as to damages? 4 It is usual to stay an order for revocation of a patent pending an appeal: Terrell on the Law of Patents 15th ed. 2000 at [14.19]; C.I.P.A. Guide to the Patents Acts 5th ed. 2001 at [72.14]. The reasons for this practice were explained by Emmett J in Atlantis Corporation Pty Ltd v Peter Schindler (unreported, 27 May 1997). The first reason is that if the order were given effect to, and the patent revoked on the register, there is some doubt as to the power of the Full Court to reinstate the patent in the event that the appeal is upheld. The second reason is that the determination of the validity of the patent affects the community generally. But for the stay, members of the public might, in reliance on the state of the register, engage in conduct which may ultimately amount to an infringement if the appeal is upheld. The stay furthers the public interest as a notification that the order for revocation may be overturned. 5 In Atlantis (supra) the applicant offered undertakings: (a) as to damages (but confined to damage to the respondent); (b) not to threaten infringement proceedings; (c) not to seek to amend the patent otherwise than in the course of the proceedings; (d) to obtain the earliest possible date for the hearing of the appeal. 6 Emmett J noted that the terms proffered were consistent with authority in the United Kingdom: Amalgamated Carburetters Ltd v Bowden Wire Ltd (1931) 48 RPC 105 at 122 and Cincinatti Grinders Inc v BSA Tools Ltd (1931) 48 RPC 33 at 59-60. However, in neither of these cases was there any mention of an undertaking as to damages nor was any undertaking as to damages proffered. Emmett J also referred to the decision of Gray J in Westaflex (Aust) Pty Ltd v Wood (1990) 18 IPR 168 at 173. But that was a case in which an injunction against an infringer was stayed pending an appeal, where an undertaking as to damages was proffered and was obviously appropriate. 7 Atlantis (supra) does not decide that it is appropriate to extract an undertaking as to damages as the price of a stay. In that case the applicant simply volunteered an undertaking to that effect, and the other undertakings proffered accorded with the usual English practice. 8 There is no interlocutory injunction in place restraining Doric from dealing with its product. Lockwood has undertaken not to threaten or commence infringement proceedings against any party during the course of the stay. A party should only be required to give an undertaking as to damages where it is necessary for the protection of persons against a perceived risk of injury. Doric did not identify any such risk in the circumstances of the present case. Neither the cases to which I was referred, nor the standard texts, refer to any practice of exacting such an undertaking. In those circumstances, there is no sufficient reason for requiring an undertaking as to damages as the price of a stay.
Costs 9 The second outstanding matter concerns costs. Doric was the successful party in the proceedings, as its contention that claims 1 - 32 of the Patent were invalid and should be revoked was upheld. There were a number of issues in the proceedings including infringement, novelty, obviousness, fair basis, sufficiency and uncertainty. Doric succeeded on some of those issues; Lockwood succeeded on others. Lockwood contends that the proper order as to the costs of the proceedings is that each party should bear its own costs. Doric contends that it should receive its costs of the proceedings, and should not be penalised by reason of the fact that it was unsuccessful on some issues. 10 Costs normally follow the event, but the Court has a general discretion to award costs, albeit the discretion must be exercised judicially. Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which it has failed. A successful party who has failed on certain issues may not only be deprived of the costs of those issues, but may be ordered as well to pay the other party's costs: Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136. The courts have cautioned against too ready a resort to apportionment according to issue based outcomes. See, eg, Australian Trade Commission v Disktravel [2000] FCA 62. Justice may not be served if the parties are dissuaded by the risks of costs from canvassing all issues which might be material to the decision in the case: Cretazzo v Lombardi (1975) 13 SASR 4 at 16. That may be particularly so in patent cases in which one often encounters overlapping between issues. Thus, for example, there is often an overlap or interconnection between issues of construction, sufficiency, fair basis and obviousness. 11 Lockwood's submission as to the proper order for costs was based upon the fact that: (a) Doric filed a considerable body of evidence upon which it ultimately did not rely; (b) Doric pleaded a large number of prior art documents as relevant to its assertion of invalidity of the Patent only to abandon many of them at the commencement of the hearing (after Lockwood had prepared and filed extensive evidence in response); (c) Doric failed on many of its pleaded grounds of invalidity, most notably the ground of obviousness, which occupied a significant proportion of the hearing time and considerable evidence; (d) Lockwood substantially succeeded on its claim for infringement; (e) the ground upon which Doric succeeded in relation to invalidity did not require evidence. 12 In assessing these grounds, some account needs to be taken of the fact that this case was brought on quickly for a final hearing. At the time of preparation of its evidence-in-chief on validity, Doric did not have any physical locks. Doric largely abandoned the Patent specifications and a number of locks pleaded in its particular of invalidity when it acquired the physical Lockwood storeroom locks shortly prior to the hearing. In Minnesota Mining & Manufacturing Co v Tyco Electronics Pty Ltd [2001] FCA 1624 at par 12, Sackville J said: "A successful party who abandons reliance on certain evidence prepared or compiled on its behalf is, however, not necessarily deprived of any of its costs merely because the evidence is not used in the proceedings." 13 Ultimately the question of whether Doric should receive its costs of preparing evidence which was not used in the proceedings is a matter for the taxing officer, who has to assess whether the costs in question were necessarily or properly incurred in terms of Order 62 rule 19. The circumstance that the evidence was not used in the proceedings raises for consideration whether its preparation in the first place was necessary, but as the passage from the decision of Sackville J illustrates, it is not necessarily determinative of that question. However, this is a matter for the taxing officer, rather than a matter which requires a special costs order. It is not appropriate for me to make such an order, as I am not familiar with material which was not adduced in evidence, nor do I know what the circumstances were which led to the decision not to introduce that material as evidence. 14 Lockwood contends that it won the "infringement event", and that it should have the costs of the infringement proceedings; and that there was no overlap between the infringement case and the fair basis case. Lockwood further contends that it lost the "validity event"; the time taken on infringement and validity was roughly equal; hence, on an "event" approach, the costs should be borne equally. 15 I do not think that this is the right way of approaching the matter. Questions of construction arose during the infringement part of the case, the resolution of which had an impact both on infringement and on validity. The infringement case centred on claims 1 - 6 on the one hand and claim 7 on the other. Infringement of the other claims was largely consequential or not in issue. I found that the storeroom locks, which were Lockwood's own product, anticipated claims 1 - 6, and I found for Doric on infringement of claim 7. 16 So far as validity is concerned, I found that the storeroom locks, the Boyd mortice locks and the Lockwood 530 anticipated some of the claims of the Patent. I found against Doric in relation to the Abloy rim lock and the sliding door locks. 17 A great deal of evidence was tendered in relation to the obviousness issue, on which Doric failed, but there was some overlapping between this issue, and the fair basis objection to validity on which Doric succeeded. Doric failed on the sufficiency issue, but that was not an issue which materially increased the costs of the proceedings. Whilst not an "issue" as such, Doric lost on the question of copying, which was a question addressed by the evidence and which occupied some time at the hearing. 18 The large number of claims, and the interrelationship between them, contributed towards the length and complexity of the hearing. In Raychem Corp's Patents [1998] RPC 31 at 36 - 37 Laddie J criticised the practice of drafting numerous subsidiary claims of ever narrower scope, and reflects upon the difficulty for a party attacking the validity of those claims to direct the evidence to proving the invalidity of all of them. Laddie J noted that: "Although the patentee cannot be prevented from asserting independent validity for numerous subsidiary claims, it must not be forgotten that the court has the power to penalise, at least in costs, a party who abuses the system in a way which inflates the duration and expense of litigation unreasonably." Having found that the structure of the claims was not such as to invalidate them for uncertainty, I do not think that it would be appropriate for me to take into account this consideration on the issue of costs. I reject Doric's submission that I should do so. 19 My overall conclusion is that Doric should suffer some reduction in terms of the costs which might otherwise have been awarded to it to take into account, in particular, its failure on the novelty claim in relation to the Abloy rim lock and the sliding door locks, as well as its failure to succeed on the obviousness issue and on the copying issue. My overall assessment is that Lockwood should pay 75 per cent of Doric's costs of these proceedings. That assessment takes into account the reserved costs of directions hearings. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.
Counsel for the Applicant: D K Catterns QC, S J Goddard
Counsel for the Respondent: A J L Bannon SC, S Burley
Solicitor for the Respondent: Phillips Ormonde & Fitzpatrick
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1089 OF 2000 BETWEEN: DORIC PRODUCTS PTY LTD APPLICANT AND: LOCKWOOD SECURITY PRODUCTS PTY LTD RESPONDENT
Doric Products Pty Ltd
Lockwood Security Products Pty Ltd
Claims 1-32 of Australian Patent No 702534 revoked; revocation stayed pending appeal (28 days initial, then until determination of appeal if lodged), subject to undertakings by Lockwood (prosecute appeal expeditiously; serve orders on Commissioner of Patents; not threaten infringement proceedings; not seek to amend claims outside proceedings). First cross-claim dismissed. Lockwood granted leave to appeal as necessary. Lockwood to pay 75% of Doric's costs.