Unjustified threats of Australian patent infringement

Unjustified threats of Australian patent infringement – 20 August 2015

Under Australian law, a person subject to an unjustified threat of patent infringement can obtain Court orders declaring that threat is unjustified, to discontinue the threat and/or to recover damages resulting from the threat.

Whilst the law makes clear that the mere notification of the existence of a patent is not a threat, there is a suggestion in case law that whether a communication is a threat depends on context. A recent decision, BLH v Pro 3 [1], of the Federal Court [2] provides helpful guidance on the topic.

In that decision, Jessup J sets out [3] an exchange between the parties in connection with a patent that was ultimately held to be valid but not infringed. His Honour addressed each piece of correspondence in turn and individually considered whether it constituted a threat.

The following were held to be threats:

1. a ‘conventional’ letter of demand, from an attorney firm to a company interested in similar technology, a including a direct assertion of infringement and seeking undertaking;
2. a letter, from an attorney firm to a company interested in similar technology, a including a direct assertion of infringement and inviting the company “to enter into discussions with our client to seek a commercial agreement to resolve this matter”;
3. a letter, from an attorney firm to solicitors, a including a direct assertion of infringement and “… we have recommended to our client that it takes action against your client to enforce its rights, following re-certification of the Pro 3 Products Patent”.

The following were held not to be threats:

1. an apparently unsolicited letter, from an attorney firm to a company interested in similar technology, explaining that “[o]ur client takes protection of its IP seriously” and enclosing a copy of the patent;
2. an email, from a director of the corporate patentee to a company interested in similar technology, drawing attention to the patent expressly “to ensure there is no confusion as to the legal ownership of this system, therefore hopefully avoiding any IP issues that may arise if another company was to falsely claim ownership or promote a similar product”.

Further reading

• Australian patent infringement
• How to proceed if your patent is being infringed
• How to respond to an allegation of infringement

[1] BLH Engineering and Construction Pty Ltd v Pro 3 Products Pty Ltd [2015] FCA 833

[2] The Court of first instance for Australian patent matters

[3] At paragraphs 84 to 98