Polyaire Pty Ltd v Kemalex Proprietary Limited [2004] FCA 263

FEDERAL COURT OF AUSTRALIA

Polyaire Pty Ltd v Kemalex Proprietary Limited [2004] FCA 263 POLYAIRE PTY LTD v KEMALEX PROPRIETARY LIMITED & ORS S 520 of 2003 SELWAY J 18 MARCH 2004 ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY S 520 OF 2003

BETWEEN: POLYAIRE PTY LTD

APPLICANT

AND: KEMALEX PROPRIETARY LIMITED & ORS

RESPONDENTS

JUDGE: SELWAY J

DATE OF ORDER: 27 FEBRUARY 2004

WHERE MADE: ADELAIDE

THE COURT ORDERED: 1. The applications by the respondents on the notice of motion filed herein on 7 October 2003 be dismissed. 2. The applicant to file and serve further particulars of paragraph 1.9 of the particulars set out in the letter from the applicant's solicitors to Thomson Playford dated 31 July 2003 in the manner indicated in the transcript, within seven days of today's date. 3. The respondents to file and serve its defence to the statement of claim, including particulars and any cross-claim as the respondents may be advised within five weeks of today's date. 4. The applicant to file and serve any reply and any defence to any cross-claim as it should be advised within nine weeks of today's date. 5. The directions hearing to be adjourned to a date to be advised 6. Costs in the cause. 7. Liberty to apply Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY S 520 OF 2003

BETWEEN: POLYAIRE PTY LTD

APPLICANT

AND: KEMALEX PROPRIETARY LIMITED & ORS

RESPONDENTS

JUDGE: SELWAY J

DATE: 18 MARCH 2004

PLACE: ADELAIDE

REASONS FOR JUDGMENT 1 The respondents have applied by Notice of Motion to have the proceedings struck out for failure to disclose a cause of action and on other grounds. I heard that Notice of Motion on 27 February 2004. At the end of the hearing I made the following orders: '1. The applications by the respondents on the notice of motion filed herein on 7 October 2003 be dismissed. 2. The applicant to file and serve further particulars of paragraph 1.9 of the particulars set out in the letter from the applicant's solicitors to Thomson Playford dated 31 July 2003 in the manner indicated in the transcript, within seven days of today's date. 3. The respondents to file and serve its defence to the statement of claim, including particulars and any cross-claim as the respondents may be advised within five weeks of today's date. 4. The applicant to file and serve any reply and any defence to any cross-claim as it should be advised within nine weeks of today's date. 5. The directions hearing to be adjourned to a date to be advised 6. Costs in the cause. 7. Liberty to apply' These are the reasons for making those orders. 2 The applicant has issued proceedings in this Court claiming that the respondents have infringed letters patent no. 647157 owned by it. The letters patent are for an invention entitled "Air conditioning outlet director improvements" and are for a term of 20 years granted on 30 July 1991. 3 Claim 1 of the patent is in the following terms: 'A plastics outlet director part for use in an air conditioning outlet comprised of a director part frame, a plurality of vanes and one or more control bars, the director part frame holding the vanes in a spaced arrangement with respect one to another, and a perimeter of the outlet director part shaped to permit disengagement of the outlet director part from a common frame of the airconditioning outlet and rotation of the outlet director part to reorient the direction of outlet of air within the common frame, the vanes each have a main spigot at each end thereof, each main spigot being engaged in a respective aperture in the director part frame thereby exerting a frictional grip on a respective vane so as to allow rotation of each vane about a longitudinal axis thereof, the main spigot being press fitted into the respective aperture in the director part frame, said main spigot having expanded end portions to inhibit withdrawal of the fitted main spigots from the respective aperture, and at either or both-ends of the vanes control means engaging with a control bar such that movement of the control bar causes a corresponding movement in the vanes against a collective frictional grip of all the vanes thereby allowing the vanes to be cooperatively adjusted, and means for allowing relative movement of the control means in a direction transverse to the longitudinal axis of the vanes, said relative movement being a collective movement of the control means with respect to the director part frame.' (emphasis added) 4 By letter from its solicitors dated 31 July 2003 the applicant provided further particulars of the alleged infringement of this claim. Paragraph 1.9 of that letter provided: 'One end of the vanes has control means (10) engaging with a control bar (18) such that movement of the frame control member causes corresponding movement in the vane to cause frictional grip of the vanes thereby allowing the vanes to be cooperatively adjusted. The control means is able to move in a direction transverse to the longitudinal axis of the vane by reason of its arrangement within the outlet director part. 5 This particular would seem to be directed to the specification marked in bold above. However, it fails to use the words "relative movement" even though it does refer to movement "transverse to the longitudinal axis of the vane". 6 There was then some correspondence between the respective solicitors as to the adequacy of the particulars provided. That correspondence failed to satisfy the respondents. They filed a Notice of Motion seeking to have the proceedings permanently stayed or struck out pursuant to Order 20 Rule 2 of the Federal Court Rules. 7 I am reminded that such orders should only be made where it is "clear indeed that there is no issue that merits a hearing in relation to the relief sought": see the cases cited by Kenny J in Mycogen Plant Science Inc v Monsanto Australia Ltd [2002] FCA 613 at [28]‑[30]. 8 I am also reminded that where there is an alleged infringement of a combination patent (which this patent clearly is) it is necessary to plead and establish a breach of every essential integer: see Populin v HB Nominees Pty Ltd (1982) 41 ALR 471 at 475-477. 9 The claim set out above is expressed in the arcane language of letters patent. However, it is clear from the diagrams forming part of the claim that it refers to the system of vanes ordinarily used for directing the air flow at the outlet of an airconditioning system. The claim refers to a plastic outlet consisting of a number of plastic vanes attached to a plastic frame by spiggots. It is also clear that the claim requires that the vanes be connected by a bar ("the control bar") so that if one moves then they all move. 10 The respondents say that in addition it is an essential integer of the relevant claim that there also be a mechanism to enable the relative movement of the vanes one to another. Not only must the vanes be connected such that if one moves then all will move, but in addition there must be a capacity for the vanes to move at different rates relative to each other with the consequent effect being that air is distributed over a broader area. The respondents point to the product actually produced by the applicant which has this feature. The respondents say that this integer is essential because otherwise the claim would not have been a new invention. The respondents point to the history of registration of the patent which, they say, show that this issue was identified during that process. 11 The applicant says that it is not necessary that the vanes move relative to each other, at least in relation to claim 1 of the letters patent. The applicant points to claim 6 of the patent which, it says, does specifically require the "relative movement of the vanes". The applicant says that it is clear that claim 6 is a subsidiary claim and that claim 1 is broader than claim 6. The applicant says that the "control means" referred to in claim 1 refers to something different from "the vanes". The "relative movement" referred to in claim 1 is the relative movement of the "control means" to the "longitudinal axis of the vanes", not a relative movement of the vanes one to the other. The applicant supports this argument by reference to the description of the letters patent and by reference to a dispute involving a reconsideration of the patent which seemed to concern the relationship between this patent and other patents elsewhere in the world. 12 It seems to me that there is at least an arguable issue that needs to be considered. The term within claim 1 requiring definition would seem to be "control means". The respondents say that this means the "vanes"; the applicant says it means the "control bar". Without considerably more argument and consideration it is not obvious to me what its meaning is or that either party is correct in their analysis of its meaning. 13 Given that the issue is arguable then it is inappropriate to strike out the proceedings. On the other hand, the argument now put by the applicant has not been revealed by the applicant's current pleadings including the particulars. It is necessary for further particulars to be provided. Those particulars should identify precisely what it is that the applicant says constitutes the "control means" and in what way there is "relative movement" between the "control means" and the "longitudinal axis of the vanes". 14 As I understand the argument that the applicant has put to me it is to the effect that any plastic air vent used to distribute air from an airconditioning system which comprises vanes attached to a frame by spiggots where the vanes are connected to each other by a control bar such that they will move together was the invention of the applicant and is protected by the patent. In the course of argument I expressed my surprise at the proposition that such a claim made in 1990 did not involve "prior art". The respondents have informed me that if the further particulars reflect the argument that has been put to me then they would intend to challenge the validity of the patent. These are issues that will need to be explored if and when they are actually raised and if and when evidence is given in relation to them. However, as I attempted to make clear during argument, the applicant may well have a significant risk in costs if this issue is ultimately pursued and lost. 15 Although the respondents have not succeeded on their Notice of Motion to strike out the proceedings it seems to me that their failure is in large part the result of the failure in the applicant's pleadings and particulars to explain the case that the applicant intends to put. In the circumstances it seems to me that the fair result is that the costs of the Notice of Motion be costs in the cause. 16 Finally I note that the applicant has made an application in the past that this matter be stayed whilst proceedings in relation to alleged rights in the design of its product are finally resolved in other courts. That application was not acceded to. On the other hand this case has not proceeded with the usual expedition because of the prospect, according to the applicant, that other proceedings may resolve the issues. It is clear that the case now put by the applicant is separate from the other proceedings. There is no reason why this case should not proceed expeditiously. 17 For these reasons I made the orders on 27 February 2004. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Selway .