26 July 2010

Federal Court Reprimands Time-Wasting Litigants

Hunter Douglas Inc v MarketMakers (Aust) Pty Ltd [2010] FCA 751 (20 July 2010)

In a decision that "never was", Justice Yates in the Federal Court of Australia has warned litigants, in no uncertain terms, against wasting the court's time by using litigation as a tool to facilitate negotiations.

Hunter Douglas Inc ("Hunter") is the proprietor of Australian patent no. 660583, relating to a "window covering".  Hunter sued MarketMakers (Aust) Pty Ltd ("Marketmakers") for infringement of that patent by virtue of the importation, promotion and supply of blinds manufactured in Korea.

Hunter sought an injunction on a urgent basis, in view of an upcoming exposition called Expo 2010, to be held in Queensland on 21 to 23 July 2010, at which MarketMakers proposed to exhibit the accused product.  The court duly heard the matter on 15 and 16 July 2010, sitting late on the afternoon of Friday 16 July 2010.  Extensive expert evidence, along with submissions relating to infringement and alleged invalidity of the claims in question, was presented at the hearing.

The court was due to hand down judgement on Monday 19 July 2010 (and we presume, therefore, that Justice Yates spent some time over the weekend preparing a decision).  Yet, when Monday came around the parties sought an adjournment to enable further instructions to be obtained from senior officers of Hunter in the US.  On Tuesday the parties sought a further brief adjournment, before announcing that they had resolved the dispute between themselves.

As the court stated, at paragraphs [6] and [7] of the short judgement:
The resources of the Court have been deployed in conducting a hearing of a controversy that has been, at all times, pressed on the Court as being urgent. In the normal course it would be inappropriate, in my view, for the Court to participate in a course that would delay the timely giving of judgment after a matter has been heard, unless there are exceptional reasons to do so. The fact that the parties wish to negotiate would not, in the normal course of events, constitute an exceptional reason.
Parties to disputes should always be encouraged to seek a resolution of their claims. However, courts, as public institutions involving the use of public resources, exist to determine disputes by the making of orders and the granting of other relief. They do not exist as a forum for parties to ventilate their disputes, with a view to then considering how they might agree to resolve them. The simple fact is that this matter was heard on an urgent basis, and the Court is in a position to deliver judgment as originally requested. Nevertheless I was assured this morning in unequivocal terms that the dispute had been resolved between the parties on a final basis, and that the purpose of the adjournment was to allow the signing of documents as an antecedent step to the making of orders by consent that the proceedings be dismissed, and that there be no order as to costs.
This is, by the standards of the Federal Court, a fairly strong reprimand and, in our opinion, rightly so!

The issue of infringement, and an appropriate remedy, is essentially a matter between the parties.  No substantial wider implications stem from a decision on the facts as to whether or not infringement is established.  If the parties consent to dismissal of infringement proceedings, there is no good reason for the court not to make the requested orders.  Any remedy ordered by the court would presumably be rendered moot by the agreement already reached between the parties.

Validity of a patent, however, has implications for the wider community, not the least of which being that it is clearly against the public interest to allow a patent to remain on the register if it is invalid.  If a court is in a position to deliver judgment on invalidity, it is not apparent that it should agree to dismiss the proceedings simply because the parties request that it do so.  As Justice Yates stated, in normal circumstances negotiations between the parties do not provide sufficient reason to delay delivery of judgment by a court that employs public resources in the determination of disputes between private parties.

We are therefore inclined to conclude that the court was not persuaded by MarketMakers that any of the patent claims are invalid.  Had Justice Yates formed a view that Hunter's patent was not valid, it seem unlikely, given his comments, that the court would have agreed to the parties' requests for adjournment and dismissal.

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