Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited (No 3) [2022] FCA 1373

FEDERAL COURT OF AUSTRALIA

Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited (No 3) [2022] FCA 1373 File number: NSD 1429 of 2011

Judgment of: NICHOLAS J

Date of judgment: 18 November 2022

Catchwords: PATENTS – account of profits – apportionment of profits – availability of apportionment – characterisation of invention – consideration of form of claims – consideration of substance of the invention – whether broadest claim for an electronic gaming machine ("EGM") including feature game with proportional trigger or to feature game with proportional trigger – whether substance of invention an EGM, a feature game with a proportional trigger or a proportional trigger – apportionment of profit made on sale of EGMs and conversion kits including feature game with proportional trigger – whether apportionment precluded by form of declaratory and injunctive relief – whether apportionment precluded by previous finding that invention was for a manner of manufacture – whether apportionment not available because infringing EGMs and conversion kits would not have been made or sold without a feature game with the proportional trigger – significance of the applicant's commercial embodiments of the patented invention – extent to which their commercial success attributable to invention – allowable deductions – whether respondent entitled to deduction in respect of a proportion of general overheads – whether respondent suffered opportunity cost in making and selling infringing products – whether respondent would have made and sold non-infringing products in place of infringing products – significance of surplus manufacturing capacity – whether allocation method proposed by respondent provides a reasonably acceptable basis for allocating overheads – whether respondent's proposed allocation of overheads should be discounted on basis that alternative non-infringing products would have been less successful than infringing products – whether loss made by respondent in certain financial years should be excluded from profit calculations – whether profit should be calculated on a pre-tax basis – whether respondent should be required to account for future tax benefit – whether award of profits calculated on a pre-tax basis would have that effect – whether adjustment should be made to take account of tax related contingencies – whether damages awarded based on user principle (see below) are an expense attributable to profits from sale of infringing products for which respondent may claim a deduction in calculating profit DAMAGES – compensatory damages in respect of conversion kits supplied by respondent free of charge – calculation of damages based on user principle – whether as a matter of discretion no damages should be awarded due to mixed nature of applicant's election – consideration of expert evidence and various licence agreements relating to reasonable royalty rate – consideration of other relevant terms of hypothetical licence governing circumstances in which royalty would be payable – circumstances in which no royalty should be payable – additional damages in respect of conversion kits supplied by respondent free of charge – whether evidence established basis for award of additional damages