FEDERAL COURT OF AUSTRALIA Nichia Corporation v Arrow Electronics Australia Pty Ltd (No 2) [2015] FCA 824 Citation: Nichia Corporation v Arrow Electronics Australia Pty Ltd (No 2) [2015] FCA 824 Parties: NICHIA CORPORATION v ARROW ELECTRONICS AUSTRALIA PTY LTD ACN 065 151 626; ARROW ELECTRONICS AUSTRALIA PTY LTD ACN 065 151 626 v NICHIA CORPORATION File number(s): NSD 558 of 2014 Judge(s): YATES J Date of judgment: 11 August 2015 Catchwords: COSTS – applicant successful at interlocutory hearing – whether costs should be ordered to be taxed and paid forthwith Legislation: Federal Court Rules 2011 r 40.13 Cases cited: Nichia Corporation v Arrow Electronics Australia Pty Ltd [2015] FCA 699 Date of hearing: Determined on the papers Date of last submissions: 22 July 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 8 Counsel for the Applicant/Cross-Respondent: Mr SCG Burley SC with Ms CL Cochrane Solicitor for the Applicant/Cross-Respondent: Allens Counsel for the Respondent/Cross-Claimant: Mr RJ Webb SC with Mr HPT Bevan Solicitor for the Respondent/Cross-Claimant: Norton Rose Fulbright Australia IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 558 of 2014 BETWEEN: NICHIA CORPORATION Applicant AND: ARROW ELECTRONICS AUSTRALIA PTY LTD ACN 065 151 626 Respondent AND BETWEEN: ARROW ELECTRONICS AUSTRALIA PTY LTD ACN 065 151 626 Cross-Claimant AND: NICHIA CORPORATION Cross-Respondent JUDGE: YATES J DATE OF ORDER: 11 AUGUST 2015 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The separate question ordered on 25 February 2015 be answered as follows: (a) Claim 3 of Australian Standard Patent Number 720324 (the Patent) is entitled to a priority date of 29 July 1996. (b) Claim 1 of the Patent is entitled to a priority date of 29 July 1996 to the extent that it claims a light emitting device, including a light emitting component and a phosphor capable of absorbing a part of light emitted by the light emitting component and emitting light of wavelength different from that of the absorbed light; wherein said light emitting component comprises a nitride component semiconductor and said phosphor contains a garnet fluorescent material including at least one element selected from the group consisting of Y, Gd and Sm, and at least one element selected from the group consisting of Al and Ga, and being activated with cerium. (c) Claim 1 of the Patent is entitled to a priority date of 17 September 1996 to the extent that it claims a light emitting device, including a light emitting component and a phosphor capable of absorbing a part of light emitted by the light emitting component and emitting light of wavelength different from that of the absorbed light; wherein said light emitting component comprises a nitride component semiconductor and said phosphor contains a garnet fluorescent material including any one of: (i) La and Al; (ii) La and Ga; (iii) La, Al and Ga; (iv) Y, La and Al; (v) Y, La and Ga; (vi) Y, La, Al and Ga; (vii) La, Gd and Al; (viii) La, Gd and Ga; (ix) La, Gd, Al and Ga; (x) Y, La, Gd and Al; (xi) Y, La, Gd and Ga; or (xii) Y, La, Gd, Al and Ga, and being activated with cerium. (d) Aside from the subject matter described in paragraphs (ii) and (iii) above, claim 1 of the Patent is entitled to a priority date of 29 July 1997. 2. The respondent pay the applicant's costs of and incidental to the determination of the separate question, such costs to be taxed (if not agreed) and paid forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 558 of 2014 BETWEEN: NICHIA CORPORATION Applicant AND: ARROW ELECTRONICS AUSTRALIA PTY LTD ACN 065 151 626 Respondent AND BETWEEN: ARROW ELECTRONICS AUSTRALIA PTY LTD ACN 065 151 626 Cross-Claimant AND: NICHIA CORPORATION Cross-Respondent JUDGE: YATES J DATE: 12 AUGUST 2015 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 10 July 2015, I made certain findings in relation to a separate question concerning the priority dates of the invention claimed in claims 1 and 3 of Patent No. 720234: Nichia Corporation v Arrow Electronics Australia Pty Ltd [2015] FCA 699. I ordered that the parties provide draft orders giving effect to my published reasons and that if a disputed question of costs remained, I would determine that question on the papers. 2 The parties have agreed on the form of the orders that should be made in respect of priority dates. They have also agreed that the appropriate order for costs is that the respondent should pay the applicant's costs of and incidental to the determination of the separate question. Where they disagree is whether, as the applicant seeks, an order should be made that the costs awarded to the applicants should be taxed and paid forthwith. 3 Rule 40.13 of the Federal Court Rules 2011 provides: If an order for costs is made on an interlocutory application, the party in whose favour the order is made must not tax those costs until the proceeding in which the order is made is finished. Note: The Court may order that costs of an interlocutory application be taxed immediately. 4 The applicant argues that there should be a departure from this rule in the present case because the fixing of the correct priority dates is a separately identifiable matter which has now precluded the respondents from relying on seven prior art citations in respect of its allegation that the invention is not novel, and nine prior art citations in respect of its allegation that the invention lacks an inventive step. The applicant also argues that there is likely to be a considerable lapse of time before the final determination of the proceeding. 5 Each of these arguments is correct and stands as a reason why there should be a departure from the usual position. 6 The respondent argues that the determination of the correct priority dates has not resulted in the determination of substantive rights and obligations between the parties, and that this makes the present case unlike some other cases in which the Court has seen fit to order that costs be taxed and paid forthwith. The respondent also points to the undesirability of having taxation issues dealt with seriatim, rather than at the end of a trial on all issues. 7 I accept that the determination of the correct priority dates has not finally determined the substantive rights of the parties in relation to the question of claim validity and the related question of claim infringement. However, the fixing of the disputed priority dates has been an important intermediate step which has had significant consequences for the respondent's pleaded case. Insofar as that case was dependent on one or more of the cited prior art documents published after the priority dates as I have found them to be, it cannot be prosecuted by the respondent. This step has eliminated what ultimately would have been a trial on unnecessary issues had the separate question not been determined in advance. A discrete and substantial part of the respondent's case has now been determined against it (that is, the case on claim invalidity based on each of these prior art citations), in circumstances where the final determination of the parties' competing claims will not be heard for some time. I am satisfied that these circumstances justify a departure from the normal position. 8 For these reasons, I will order that the costs be taxed and paid forthwith. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 12 August 2015