Mainmark Corporation Pty Limited v Resinject Pty Limited

JUDGE: YATES J DATE: 21 OCTOBER 2015 PLACE: SYDNEY

REASONS FOR JUDGMENT (REVISED FROM TRANSCRIPT) 1 The applicant, The Mainmark Corporation Pty Limited, sues the first respondent, Resinject Pty Limited, for infringement of claims 1, 2 and 4 of patent number 731637 for an invention entitled "Method for increasing the bearing capacity of foundation soils for buildings". 2 The applicant alleges that it is the exclusive licensee of the patent. As exclusive licensee, it has standing to sue for infringement under s 120(1) of the Patents Act 1990 (Cth) (the Act). However, in this circumstance, the patentee must be joined as a defendant if not joined as a plaintiff: s 120(2) of the Act. 3 The second respondent, Uretek Worldwide Oy, is the patentee and has been joined as a defendant. No relief is specifically sought against it. It is resident in Finland. 4 The applicant seeks leave pursuant to r 10.43 of the Federal Court Rules 2011 (the Rules) to serve its amended originating application and amended statement of claim on the second respondent in Finland. The application for leave to serve the amended originating application and the amended statement of claim is supported by the following affidavits: Samuel John Pearlman affirmed 15 September 2015; John Snelgrove sworn 23 December 2014 (paragraphs 1 to 15 thereof); Michael Beveridge affirmed 8 September 2015; Jan Lindberg affirmed 29 September 2015, annexing a report dated 15 September 2015; and Jan Lindberg affirmed 29 September 2015, annexing a report dated 28 September 2015. 5 Service of an originating application on a person in a foreign country is effective for the purpose of a proceeding only if certain requirements of the rules are met. It is sufficient if, before the originating application is served, the Court has given leave to do so under r 10.43(2) of the Rules: see r 10.43(1). 6 Rules 10.43(2) to (4) provide: (2) A party may apply to the Court for leave to serve an originating application on a person in a foreign country in accordance with a convention, the Hague Convention or the law of the foreign country. (3) The application under subrule (2) must be accompanied by an affidavit stating: (a) the name of the foreign country where the person to be served is or is likely to be; and (b) the proposed method of service; and (c) that the proposed method of service is permitted by: (i) if a convention applies - the convention; or (ii) if the Hague Convention applies - the Hague Convention; or (iii) in any other case - the law of the foreign country. (4) For subrule (2), the party must satisfy the Court that: (a) the Court has jurisdiction in the proceeding; and (b) the proceeding is of a kind mentioned in rule 10.42; and (c) the party has a prima facie case for all or any of the relief claimed in the proceeding. Note 1: The law of a foreign country may permit service through the diplomatic channel or service by a private agent - see Division 10.5. Note 2: Rules 10.63 to 10.68 deal with service of local judicial documents in a country, other than Australia, that is a party to the Hague Convention. Note 3: The Court may give permission under subrule (4) on conditions - see rule 1.33. 7 As I have noted, the applicant wishes to serve the second respondent in Finland. Finland is a signatory to the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 (the Hague Convention). It is proposed that, in accordance with Art 5 of the Hague Convention, the amended originating application be served by the Central Authority in Finland, which the evidence shows to be the Ministry of Justice, by the method prescribed by Finnish law. 8 Rule 10.42 sets out in tabular form the kinds of proceedings for which an originating application may be served on a person in a foreign country. The applicant relies on a number of separate items in the table. It is only necessary for it to rely on one such item. Item 1 in the table refers to a proceeding based on a cause of action arising in Australia. As the applicant's claim is for infringement of an Australian patent by conduct allegedly occurring in Australia, it is clear that the present proceeding is of a kind falling within r 10.42. 9 There is also no doubt that the Court has jurisdiction in the proceeding: s 154(1) of the Act. 10 The only question is whether the applicant has a prima facie case for all or any of the relief it claims. Here the applicant claims, amongst other things, declaratory relief, injunctive relief, and pecuniary relief, namely, damages, including additional damages or, alternatively, an account of profits. 11 In Australian Competition and Consumer Commission v Yellow Page Marketing BV [2010] FCA 1218, Gordon J said (at [25]): [25] The requirement to demonstrate a prima facie case in this context is not particularly onerous. The question is whether on the material before the Court, inferences were open which, if translated into final findings of fact, would support the relief claimed. A prima facie case exists, provided there is such evidence, even on a hearsay basis, as to sufficient elements of the proceeding leading to any (and not necessarily all) of the relief sought: Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 at [39], [55], [58] and [97]. (Emphasis in original.) See also, in this connection, Bayer Pharma Aktiengesellschaft v Genentech Inc (2012) 98 IPR 424 at [6]; GE BetzDearborn Canada Company v Memcor Australia Pty Ltd [2013] FCA 78 at [24]. 12 In Vringo Infrastructure Inc v ZTE (Australia) Pty Ltd (No 4) (2015) 323 ALR 138, I noted (at [41]) that: [41] In considering whether a prima facie case has been established, it is not the task of the court to reach a definitive conclusion as to the accuracy of the facts advanced by the parties or to express any preference for competing accounts. The question is whether the evidence supports the facts for which the party seeking leave contends: Caterpillar Inc v John Deere Ltd (1999) 48 IPR 1; [1999] FCA 1503 at [31] (Caterpillar). 13 In the normal course, the ascertainment of whether a prima facie case exists for all or any of the relief claimed should not call for a substantial inquiry. The evidence required should be in proportion to the nature of the issue at hand: WSGAL Pty Limited v Trade Practices Commission (1992) 39 FCR 472 at 476. 14 Here, the issue is whether a controversy exists between the applicant and the first respondent that warrants the use of the Court's processes to resolve it, and whether the involvement of the second respondent in litigation in the Court in Australia is justified: Ho v Akai Pty Limited (in liquidation) (2006) 24 ACLC 1,526 at [10], quoting, with approval, the observations of Lee J in Century Insurance Limited (in provisional liquidation) v New Zealand Guardian Trust Limited [1996] FCA 376; see also Bell v Steele (2011) 198 FCR 291 at [21]. 15 In order to consider this question, it is only necessary for me to have regard to whether there is a prima facie case for all or any of the relief claimed in respect of the infringement of claim 1 of the patent. Claim 1 is as follows: A method for increasing the bearing capacity of foundation soils for building comprising: providing a plurality of holes spaced from each other deep in the soil; injecting into the soil, through said holes, a substance which expands as a consequence of a chemical reaction; producing compaction of the soil contiguous to the injection zone due to the expansion of said substance injected into the soil, characterized in that it further comprises the step of constantly monitoring the level of the soil and/or building overlying the injection zone to detect the moment when the building and/or the soil surface, overlying said injection zone, begins to raise which is the amount in which the compaction of the soil has reached levels generally higher than the required minimum value and in that the injection zone includes at least the foundation soil under the building and the expansion of the injected substance is very fast with the potential increase in volume of the expanded substance being at least five times the volume of the substance before the expansion. 16 For the purpose of the present application, the applicant has provided a table addressing the features of claim 1 by reference to relevant parts of the evidence read on the application. The particular evidence is given, principally, by Mr Snelgrove, a partner in the firm of solicitors acting for the applicant, and Mr Beveridge, who is the applicant's Project Manager. From 20 July 2011 until July 2013, Mr Beveridge also worked for the first respondent. He has given evidence of the first respondent's practices relevant to the method of claim 1 of the patent. 17 I have marked the table as Administrative Exhibit A. Aided by the table, and taking into account the evidence to which it refers, I am satisfied that the applicant has established a prima facie case - within the meaning of the cases to which I have referred - for the declaratory relief it claims. It is not necessary for me to go further and consider the applicant's entitlement to the other relief it claims. 18 The evidence before the Court shows that, since 28 April 2015, an administrator has been appointed to the second respondent, pursuant to s 8 of Ch 3 of the Restructuring of Enterprises Act - Finland (47/1993) (the Restructuring Act). A company that is subject to the Restructuring Act is, essentially, a debtor that is in financial difficulty, but with prospects of being sustainably rehabilitated. Under the Restructuring Act, an administrator is appointed to, amongst other things, review the company's financial situation, prepare a restructuring plan, and supervise the company's business activities during the administration. 19 As I have noted, the applicant has provided two affidavits by Jan Lindberg. Mr Lindberg is an attorney-at-law practising in Helsinki, Finland. Mr Lindberg has specialised knowledge and experience in proceedings taken under the Restructuring Act. Mr Lindberg's opinion was sought on a number of questions relevant to the present application. 20 In essence, it would appear that Finnish law and, in particular, the Restructuring Act, does not preclude either the second respondent or, in its stead, the administrator being served with the amended originating application or, indeed, the amended statement of claim, as proposed, or would otherwise prevent the present proceeding being brought against the second respondent. 21 Mr Lindberg's evidence establishes that there are no additional service requirements in respect of the second respondent, simply on the basis that it is subject to proceedings under the Restructuring Act. 22 The principal effect of the Restructuring Act is to initiate a moratorium on the collection and payment of pre-administration debts whilst the company is in administration. In general terms, the debtor company otherwise retains authority to dispose of its property and to decide on its activities after the administration commences. In this latter connection, the company continues to exercise its rights in litigation commenced by or against it, unless the administrator seeks to exercise those rights on the company's behalf. To this end, the administrator also has the power to commence and prosecute proceedings on the company's behalf. 23 There is nothing in Mr Lindberg's affidavits which indicates that there are discretionary reasons why I should not grant the leave that is sought. I am satisfied that the formal requirements of r 10.43(2), as informed by r 10.43(3) and (4), have been established and that leave should be granted to serve the originating application and the amended statement of claim on the second respondent in Finland, in accordance with the Hague Convention. 24 Although initially indicating that it would oppose the present application, the first respondent has played no active role in the hearing apart from providing some brief written submissions and making some short oral submissions. The first respondent submits that the costs of the application should be costs in the cause. The applicant does not oppose that course. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.