FEDERAL COURT OF AUSTRALIA Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 2) [2020] FCA 447 File number: NSD 200 of 2019 Judge: YATES J Date of judgment: 6 April 2020 Catchwords: PRACTICE AND PROCEDURE – separation of determination of liability and quantum Legislation: Federal Court Rules 2011 (Cth) r 30.01 Patents Act 1990 (Cth) ss 120(4), 122(1A), 123 Cases cited: Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia [2020] FCA 6 Date of hearing: Determined on the papers Date of last submissions: 1 April 2020 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 11 Counsel for the Applicant: Mr R Cobden SC, Mr C Burgess and Ms J Ambikapthy Solicitor for the Applicant: Johnson Winter & Slattery Counsel for the First Respondent: Ms C Cunliffe Solicitor for the First Respondent: Norton Rose Fulbright Counsel for the Second Respondent: Mr H P T Bevan and Mr A N McRobert Solicitor for the Second Respondent: Ashurst ORDERS NSD 200 of 2019 BETWEEN: VEHICLE MONITORING SYSTEMS PTY LIMITED ACN 107 396 136 Applicant AND: SARB MANAGEMENT GROUP PTY LTD (T/AS DATABASE CONSULTANTS AUSTRALIA) ACN 106 549 722 First Respondent CITY OF MELBOURNE Second Respondent JUDGE: YATES J DATE OF ORDER: 6 APRIL 2020 THE COURT ORDERS THAT: 1. Pursuant to r 30.01 of the Federal Court Rules 2011 (Cth), the quantum of any pecuniary relief be heard and determined separately from, and after, the determination of all issues of liability for infringement and patent validity. 2. For the avoidance of doubt: (a) the issues of liability for infringement include all questions of liability for authorisation of any infringement, of liability for additional damages and any question of innocent infringement under s 123 of the Patents Act 1990 (Cth); (b) the issues of quantum include the quantum of any additional damages and the allegations of double-recovery that are pleaded in paragraphs 10(b) and 11(b) of the First Respondent's Defence filed 28 February 2020 and paragraphs 18(d) and 19(e) of the Second Respondent's Defence filed 28 February 2020. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT YATES J: 1 The applicant, Vehicle Monitoring Systems Pty Limited, sues the first respondent, SARB Management Group Pty Ltd, and the second respondent, the City of Melbourne, for infringement of two patents. The background to the proceeding is explained in Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia [2020] FCA 6 at [1] – [11]. The applicant's claims for relief include a claim for additional damages under s 122(1A) of the Patents Act 1990 (Cth) (the Act). 2 The first respondent has cross-claimed seeking revocation of each patent. 3 In their defences to the infringement suit, the respondents plead specific defences to the effect that: (a) the applicant is statute-barred from pursuing any claim for infringement in respect of accused articles sold or supplied in Australia prior to 15 February 2013, having regard to the limitation period prescribed in s 120(4) of the Act; (b) the applicant has already been compensated for loss and damage in respect of accused articles sold or supplied prior to 9 May 2013, having regard to a Deed of Release entered into between the applicant and the first respondent on 18 June 2014 and that, for that reason, the Court would not permit double-recovery; and (c) the applicant authorised the allegedly infringing acts. 4 In its defence, the second respondent also raises a defence of innocent infringement: see s 123(1) of the Act. 5 These specific defences are raised in addition to the general defence that the claims in suit are invalid. 6 The parties agree that there should be a determination of liability for infringement (including claim validity) before the Court proceeds to deal with, broadly-speaking, pecuniary relief. In particular, they agree that the limitation period defences and authorisation defences should be determined as part of a hearing on liability for infringement. However, they are divided on when the questions of double-recovery, liability for additional damages, and innocent infringement should be determined. 7 The parties have proposed competing draft orders and supported their respective positions by short written submissions. On 25 March 2020, I ordered that the form of orders for the separation of issues on liability and quantum be determined on the papers. 8 The applicant submits that the questions of liability for additional damages and innocent infringement should be determined at the same time as liability for infringement, and that the question of double-recovery should be determined at the same time as damages, if any, are assessed. 9 The respondents submit that the question of double recovery should be determined at the same time as liability for infringement and that the questions of liability for additional damages and innocent infringement should be determined at the same time as damages, if any, are assessed. 10 Having considered the competing submissions, I am persuaded that the division proposed by the applicant is appropriate and should be adopted. The question of an applicant's entitlement to additional damages requires the Court to take into account the factors specified in s 122(1A) of the Act. Those factors are most conveniently considered at the time when liability for infringement falls to be determined, recognising that the assessment of additional damages, if any, should await the time when compensatory damages, if any, are assessed. The factors relevant to whether infringement, if found, is innocent are also most conveniently considered at the time that liability for infringement falls to be determined. On the other hand, the question whether damages would constitute impermissible double-recovery is most sensibly considered at the time when the quantum of damages falls to be assessed. 11 Orders will be made accordingly. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 3 April 2020