FEDERAL COURT OF AUSTRALIA Damorgold Pty Ltd v J.A.I. Products Pty Ltd [2014] FCA 448 Citation: Damorgold Pty Ltd v J.A.I. Products Pty Ltd [2014] FCA 448 Appeal from: Application for leave to appeal: Damorgold Pty Ltd v JAI Products Pty Ltd [2014] FCA 150 Parties: DAMORGOLD PTY LTD and VERTILUX CORPORATION PTY LTD v J.A.I. PRODUCTS PTY LTD File number: VID 235 of 2014 Judge: TRACEY J Date of judgment: 6 May 2014 Catchwords: PRACTICE AND PROCEDURE – application for leave to appeal – patent infringement – liability validity of patent determined as a preliminary question – whether orders interlocutory in nature – whether leave to appeal required Legislation: Federal Court of Australia Act 1976 (Cth) s 24 Federal Court Rules 2011 (Cth) r 30.01 Cases cited: City of Camberwell v Camberwell Shopping Centre Pty Ltd [1994] 1 VR 163 – cited Damorgold Pty Ltd v JAI Products Pty Ltd [2014] FCA 150 – cited DÉcor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 – cited TAG Pacific Limited v McSweeney (1992) 34 FCR 438 – considered Cairns B, Australian Civil Procedure (10th ed, Lawbook Co, 2013) Date of hearing: 6 May 2014 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 10 Counsel for the Applicants: Mr G McGowan and Mr W Rothnie Solicitor for the Applicants: Phillips Ormonde Fitzpatrick Lawyers Counsel for the Respondent: Ms H Rofe and Mr C Thompson Solicitor for the Respondent: Griffith Hack IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 235 of 2014 BETWEEN: DAMORGOLD PTY LTD First Applicant VERTILUX CORPORATION PTY LTD Second Applicant AND: J.A.I. PRODUCTS PTY LTD Respondent JUDGE: TRACEY J DATE OF ORDER: 6 may 2014 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The applicants file their notice of appeal on or before 13 May 2014. 2. The operation of the orders made in paragraph 3 of the orders made by Middleton J on 4 April 2014 be stayed until 21 days after the determination of the applicants' appeal or further order. 3. Should leave to appeal from the trial judge's orders be required any application for leave be heard by the Full Court concurrently with the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 235 of 2014 BETWEEN: DAMORGOLD PTY LTD First Applicant VERTILUX CORPORATION PTY LTD Second Applicant AND: J.A.I. PRODUCTS PTY LTD Respondent JUDGE: TRACEY J DATE: 6 may 2014 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 There is before the Court an application by Damorgold Pty Ltd ("Damorgold") and Vertilux Corporation Pty Ltd ("Vertilux") for leave to appeal from orders made by Middleton J on 4 April 2014 in a patent proceeding. The orders gave effect to His Honour's reasons in Damorgold Pty Ltd v JAI Products Pty Ltd [2014] FCA 150. 2 The proceeding involved a claim brought by Damorgold and Vertilux for infringement by J.A.I. Products Pty Ltd ("J.A.I") of an Australian patent held by Damorgold and a cross-claim by J.A.I. for revocation of the patent. 3 The trial of the proceeding was split between issues of liability and the validity of the patent (which were to be heard and determined as preliminary questions) and the issue of pecuniary relief. The orders were made pursuant to Rule 30.01(1) of the Federal Court Rules 2011 ("the Rules"). This Rule provided for the making of "an order that a question arising in the proceeding be heard separately from any other questions." His Honour's orders and reasons dealt with the preliminary questions. 4 The patent had 30 product claims. His Honour held that four of these claims were valid and that two of the four had been infringed. He further held that the remaining claims were invalid and should be revoked. He made orders revoking these claims but stayed their operation for 21 days or, in the event that an application was made for leave to appeal, until 21 days after the final determination of that application or, if leave to appeal was granted, 21 days after the final determination of that appeal. 5 Damorgold and Vertilux wish to appeal from the order revoking the patent "insofar as claimed in the claims which were found not to be valid". They also wish to challenge all of the orders made by his Honour "to the extent that they do not extend" to the invalid claims. They seek leave to do so. 6 The respondent did not oppose the application for leave to appeal. 7 Section 24(1) of the Federal Court of Australia Act 1976 (Cth) ("the Act") confers jurisdiction on the Court to hear and determine appeals from "judgments" of single judges exercising the original jurisdiction of the Court. Section 24(1A) provides that an appeal may not be brought from "a judgment" of a single judge "that is an interlocutory judgment" unless leave to appeal is granted. The word 'judgment' is defined, in s 4, to mean, inter alia, "a judgment, decree or order, whether final or interlocutory …". 8 Although the applicants contend that the orders from which they seek to appeal finally determine substantive rights relating to the validity of the claims found by his Honour not to be valid, they treated those orders as being interlocutory in form. They submit that the orders are attended by sufficient doubt as to warrant reconsideration by a Full Court and that substantial prejudice will flow to the parties and the public if the hearing of the appeal is delayed until determination of the outstanding issue of pecuniary relief: cf DÉcor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. 9 I am not persuaded that the applicants require leave to appeal. In TAG Pacific Limited v McSweeney (1992) 34 FCR 438 Olney J held that, in a split trial in which questions relating to liability are ordered to be determined as preliminary questions, orders finally determining those questions are not to be treated as interlocutory: see at 444-5. A similar conclusion was reached by the majority of the Full Court of the Supreme Court of Victoria in City of Camberwell v Camberwell Shopping Centre Pty Ltd [1994] 1 VR 163 at 173-175. See also Cairns B, Australian Civil Procedure (10th ed, Lawbook Co, 2013) at 568-569. The orders made by His Honour in relation to the revocation of the patent bear the same character of finality as would have attended such orders had they been made following a trial in which questions of liability and relief had been considered in the normal manner. Left undisturbed those orders would finally determine the issues relating to the validity of the patent. They fall within the defined meaning of the word 'judgment' for the purposes of s 24(1) of the Act. 10 The principal concern of the applicants is that, in the absence of a grant of leave, the stay granted by Middleton J would cease to operate. Plainly, Middleton J considered that, if his orders were to be considered by a Full Court, they should remain inoperative pending the hearing and determination of any appeal. Lest I be wrong in my view that His Honour's orders are not interlocutory in nature, I consider that the appropriate course is to continue the stay granted by His Honour until 21 days after the final determination of the applicants' appeal and to direct that, should any application for leave to appeal be necessary, it be heard concurrently with the appeal by the Full Court. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. Associate: Dated: 6 May 2014