Meth v Norbert Steinhardt & Son Ltd [1962] HCA 31

High Court of Australia Dixon C.J. Kitto, Menzies, Windeyer and Owen JJ. Meth v Norbert Steinhardt & Son Ltd [1962] HCA 31

ORDER Appeal allowed with costs. Except in so far as the judgment appealed from dismissed the action as against the appellant Max Meth, set such judgment aside. Order that the plaintiff pay the defendant Max Meth his costs of the action so far as incurred in relation to the cause of action alleged against him. Order that otherwise the action be reheard by a Justice and that the costs of the former hearing (except the aforesaid costs of the defendant Max Meth) be dealt with by such Justice as in his discretion he may think fit.

Cur. adv. vult.

The following written judgments were delivered:—

July 20 Dixon C.J.

This is an appeal from a judgment or order pronounced by the late Mr. Justice Fullagar on 6th June 1961 in an action under s. 121 of the Patents Act 1952-1960 Cth in respect of an alleged threat by the defendants appellant of proceedings for infringement of a patent or patents: Norbert Steinhardt and Son Ltd. v. Meth [1] . The order from which the appeal is brought consists of a declaration of right and an injunction against the defendant company and an order for costs against both defendants. As to the defendant Max Meth the cause of action alleged against him failed before Fullagar J. and so far as the appeal relates to him it must be regarded as against the order for costs only. It would seem that the formal judgment or order was not drawn up before his Honour's death which occurred on 9th July 1961 and it is not now denied that in its present form it cannot be sustained: it certainly appears to go beyond his Honour's intention. In substance however the case is a peculiar one and having considered it closely I have come to the conclusion, not only that the remedy contained in the judgment as drawn up ought not to be given, but that the plaintiff, in the circumstances of the case, ought not to have any remedy at all. There were two alleged threats, one by or on behalf of the defendant Max Meth contained in a letter sent from the United States to the plaintiff company in England and the other by the defendant company contained in a letter sent from Sydney to a firm of manufacturers in Adelaide. Fullagar J. held that the first was not actionable under s. 121 of the Patents Act 1952-1960 because, in his Honour's opinion, "an action cannot be maintained in an Australian Court for threats made in another country" [1] . His Honour therefore held that the first of the two letters on which the plaintiff relied afforded no cause of action justiciable in this Court. From that decision the plaintiff did not appeal or cross-appeal and we are not now concerned with it. But his Honour considered that the contents of the second letter amounted to a threat within s. 121 and because the threat was addressed to a potential customer of the plaintiff company the latter was a person aggrieved and "entitled to succeed against the defendant company in this action unless the defendant company can establish that the acts in respect of which the proceedings were threatened constitute or if done would constitute an infringement of a valid patent" [1] . The defendants were entitled to a Commonwealth Patent upon which they relied as a justification. His Honour held that the threat expressed in the letter was wider than the claims in the specification because it was expressed in terms which failed to mention certain limitations, appearing in the claims, upon the method or material employed under the patented invention of the defendants. Towards the close of his judgment his Honour remarked: "The truth most probably is that it was merely per incuriam that the "threat" was expressed too widely" [2] . However that might be the result which ensued from his Honour's adoption of the view that too wide or perhaps it is better to say too unqualified or too absolute a statement had been made of the kind of manufacturing process which the defendants asserted a right to stop, seems to be quite paradoxical. For the whole case was thereby made to depend on nothing but a comparison between on the one side the terms in which the defendant company had expressed its claim in asserting its monopoly with on the other side the actual monopoly granted by the patent itself. The entire contest arose actually from an attempt (ultimately successful) on the part of the plaintiff to sell to the trader to whom the threats were addressed a process (secret or quasi-secret) involving some chemical preparations which, or the use of which, the defendants said amounted to an infringement of the defendants' patent. The defendants' threats were levelled against this transaction. Yet the attempt on the part of the defendants to prove that the use of the plaintiff's process would infringe the patent was excluded as irrelevant, and relief by declaration of right and injunction was granted. In what terms his Honour would have drawn the declaration or injunction had it fallen to him to do so I am not sure. But it seems to me that no declaration of right or injunction which covered, in the sense of contained or included, future threats falling within the true ambit of the defendants' actual monopoly could properly have been made and no injunction could be granted which would or might operate to prevent threats if they were confined to that area. That means that the relief given to the plaintiff could properly cover only the margin or difference between the actual monopoly and the wider or unqualified description used in what was held to be the "threat". An injunction covering the whole ground would preclude the defendants from asserting their actual rights granted by a patent ex hypothesi valid. There is nothing to show or even suggest that the plaintiff's process lay within that margin. If not, is it clear that the plaintiff was aggrieved? In any case why should relief, particularly by way of injunction, be granted at all simply because in a communication to a trader a claim to an actual monopoly is stated in good faith in too wide a form? Is not the evident answer to this question that it might be granted if it appears that the excess prejudiced the real interests of the plaintiff but not if it did not appear to be material to his interests?