Federal Court of Australia Vald Performance Pty Ltd v Kangatech Pty Ltd (No 3) [2021] FCA 1265 File number(s): QUD 440 of 2019 Judgment of: GREENWOOD J Date of judgment: 18 October 2021 Catchwords: INTELLECTUAL PROPERTY – consideration of procedural orders in relation to patent proceedings having regard to the earlier procedural history of the matter Division: General Division Registry: Queensland National Practice Area: Intellectual Property Sub-area: Patents and Associated Statutes Number of paragraphs: 16 Date of hearing: 24 August 2021 Counsel for the Applicant: Mr D Logan QC Solicitor for the Applicant: Holding Redlich Counsel for the Respondents: Mr B Fitzpatrick Solicitor for the Respondents: Wray Lawyers ORDERS QUD 440 of 2019 BETWEEN: VALD PERFORMANCE PTY LTD (ACN 603 446 171) Applicant AND: KANGATECH PTY LTD (ACN 609 070 340) Respondent order made by: greenwood j DATE OF ORDER: 18 OCTOBER 2021 THE COURT ORDERS THAT: 1. By 4.00pm on 7 December 2021 the respondent file and serve any affidavits on which it proposes to rely by way of evidence-in-chief on the question of validity and in answer on the question of infringement. 2. The costs of the directions hearing on 24 August 2021 are reserved for later determination. 3. Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for judgment in support of these orders are made and published from Chambers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GREENWOOD J: 1 These proceedings are concerned with the resolution of contested questions which were the subject of a case management hearing in order to determine the most efficient way of moving the proceeding forward. These reasons ought to be read together with the reasons for judgment in support of the orders made on 20 May 2021. Those reasons explain the contextual background to the present matter: Vald Performance Pty Ltd v Kangatech Pty Ltd [2021] FCA 539 (the "earlier judgment"). 2 In simple terms, the applicant contends that the respondent has engaged in conduct in relation to a device in a way which infringes Claims 1 to 17 of the patent in suit. The patent is a patent for an invention entitled Apparatus and Method for Knee Flexor Assessment. The impugned device of the applicant, otherwise described as the infringing device, is said to be a device used to assess a person's knee flexor muscle strength (including hamstring strength) whilst the person performs an eccentric knee flexor contraction by lowering the upper body from a kneeling position. 3 By its amended defence, the respondent seeks to deal with the contention that its device is an infringing device by drawing attention to a particular chronology. The respondent says that prior to around November 2018 it engaged in conduct (which the applicant characterises as infringing conduct) in relation to a product called the "KangaTech Product" (particularised in the way described in the earlier judgment): see [8] of the earlier judgment. The respondent also says that since around December 2018, it has engaged in conduct in relation to a product called the "KangaTech 360". Thus, there are two products in issue which are said to be infringing devices. As to the "KangaTech Product", the respondent says that since July 2019 it has permanently disabled all but two of the products and replaced them with the KangaTech 360. It says that in any event, the KangaTech Product cannot secure a lower leg of the subject in a position that is substantially fixed as claimed by the patent. That aspect of the respondent's pleading is in the same terms as the pleading in relation to the KangaTech 360 set out below. 4 As to the KangaTech 360, the respondent denies that it infringes any of the claims of the patent on a very particular footing. It says that (leaving aside claims as to invalidity which are the subject of a cross-claim and an entirely separate matter), the "KangaTech 360 does not and cannot assess a subject's [person's] knee flexor muscle strength (including hamstring strength) whilst the subject performs an eccentric knee flexor contraction by lowering [the subject's] upper body from a kneeling position": para 10(e)(ii), amended defence. 5 Having regard to those contentions of the respondent on the facts, it has become convenient in these proceedings to describe the KangaTech Product as Version 1 and the KangaTech 360 as Version 2. The short point of importance is that the respondent has chosen (but for the invalidity contentions) to answer the applicant's claims of patent infringement on the particular basis identified above: see generally the earlier judgment. 6 In the previous case management hearing, the exchanges between the parties revealed that it was contended by the respondent that the Version 2 device had been further modified (beyond the contention the subject of the pleading as described above) in a way described in a document attached to a letter dated 16 December 2020 from the solicitors for the respondent to the solicitors for the applicant. That document is described as "KT 360 Nordic Curl removal Technical information": see [14] of the earlier judgment. As to the contextual description of the primary muscle group relevant to the question of knee flexor contraction, see [16] of the earlier judgment. The point of the document was that it set out contended changes to the KangaTech software so as to remove the "Eccentric Hamstring" option and the "Nordic drop" and "Nordic return" options. Thus, it provides for prevention of the Nordic curl and a mechanism for detecting attempts to engage in a Nordic curl. When a person seeks to do so, the sensors disable any measurement which might otherwise be of utility to a person seeking to undertake the exercise. 7 This modification was described in the earlier judgment, for ease and simplicity, as Version 3. In fact, it is unhelpful to describe it as Version 3 because it suggests that there is a third device. There are only two devices in issue according to the respondent, that is, the KangaTech Product and the KangaTech 360, both of which are said not to infringe for the reasons set out earlier. The software changes simply provide another basis to support the proposition that the KangaTech 360 does not infringe for an additional reason due to the modification. 8 Having regard to the matter of the software changes, the applicant sought to understand how those software changes actually functioned. It expressed concern that they might be able to be reversed. As a result, the Court ordered on 20 May 2021 that the respondent provide the applicant within 21 days with details of the content of the changes made to the software in relation to the KangaTech 360 device. That order was necessary as the content of the changes were entirely within the knowledge of the respondent. There was also a virtual inspection of the KangaTech 360 device. That inspection was made a little difficult because it had to be conducted virtually having regard to the COVID 19 difficulties. 9 In a letter dated 9 June 2021, KangaTech set out information in relation to the question of whether the changes to the KangaTech 360 can be reversed or whether they were permanent. KangaTech's position statement is that the changes cannot be reversed by any user/owner/lessee of the KangaTech 360 device as modified according to the software changes. The position statement says that it is "only KangaTech who has access to and therefore the ability to make any change to the KangaTech software". Thus, the applicant remains concerned that the software changes to the KangaTech 360 are able to be reversed by KangaTech. 10 The applicant is also concerned about data provided in relation to the display of alerts in each month in 2020 and the nominated months in 2021. The question was asked of KangaTech whether, since software changes were made to the KangaTech 360, alerts as to whether or not a person has sought to use the device to undertake a Nordic curl, occur and if so, are they logged? The answer is that the device is alerted should a person seek to undertake a Nordic curl and the alerts are logged. The applicant, having regard to para 24 of the KangaTech letter of 15 July 2021 is concerned about the number of alerts in each month in 2020 and particularly the 357 alerts in March 2021. There were 215 and 276 alerts respectively in the months of May and June 2021. The number of alerts each month suggests to the applicant that there have been many attempts to use the device to undertake a Nordic curl which suggests a high level of demand for the facility through the device, which is said not to infringe for the reason that the software disables the functionality. The respondent says that these statistics are consistent with the prevention of the functionality about which the applicant is concerned. 11 The real point of contention for the moment is that the respondent says that the applicant should plead each and every integer of each and every claim said to be infringed and when that is done the respondent will respond to it. The respondent says it is entitled to be delivered of a pleading which properly and comprehensively sets out every material fact going to a contention of infringement. This was the contention put at the previous case management hearing; see the earlier judgment. 12 The difficulty with respondent's proposition is that the respondent chose to plead its case on a very particular basis. It answered the patent infringement case by asserting and relying upon the facts already identified in its amended defence. There was no suggestion in the entire procedural history of this matter that the respondent was not able to plead to the case made against it. It elected to answer the case on the precise basis it formulated. On the face of the pleadings as then developed, the applicant put on its evidence and filed its material including an expert report of Dr Tania Pozzari which addresses the elements of the patent claims and their application to the impugned devices comprehensively. 13 The case as presently framed asserts infringement in relation to the KangaTech Product and the amended defence of the respondent raises the assertion in relation to that product and the point of distinction concerning the KangaTech 360 device. In other words, the respondent says that there is no infringement in relation to Version 1 due to permanent disablement and in any event it does not reflect the relevant functionality as pleaded by the respondent and as to Version 2, it is now the device being used by the respondent and it does not infringe because it lacks the relevant functionality. The case made against the respondent is answered on the footing of para 10(c), 10(d)(ii) and 10(e)(ii) of the amended defence. Otherwise, the claims of the applicant are answered on the basis of an assertion of invalidity supported by particulars of invalidity. However, the respondent has not yet put on any evidence in the matter. 14 Procedural orders were made on 29 March 2021 for the filing of evidence. The applicant has put on its evidence. The respondent was to file and serve its affidavits by 1 July 2021. However, contested questions arose which were the subject of the orders made on 20 May 2021 and now further questions have arisen which need to be addressed. 15 Rather than go back to the beginning and re-plead the entire case from the outset, the proper course is for the respondent to put on its evidence in the case as it framed its amended defence. Accordingly, the respondent will be ordered to file and serve any affidavits on which it proposes to rely by way of evidence-in-chief on the question of validity and in answer on the question of infringement by Tuesday, 7 December 2021. The matter will be listed for case management on Wednesday, 8 December at 9.30am. 16 The costs of the directions hearing will be reserved for later determination. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Greenwood. Associate: Dated: 18 October 2021