If negotiations with your opponent are not working, we can start the litigation process for you. We can also defend you if you have received threats of litigation.
Some background information in regard to the litigation process is as follows:
The orders which a court can make include:
Orders for payment of damages or, in the alternative, an account of profits;
Orders for the payment of additional damages for flagrant infringement;
Interim injunctions to restrain infringing conduct (for example, to prevent a defendant from removing assets or documents from Australia - these are sometimes referred to as “Mareva injunctions”);
Orders for corrective advertising;
Search and seizure orders (sometimes referred to as "Anton Pillar" orders);
Document discovery orders;
Declarations and grant other relief in relation to unjustified threats;
Orders directing amendments to a patent or trade mark registration;
- Orders changing entries in the various intellectual property registers;
Orders for delivery up or destruction of infringing articles; and
Declarations as to ownership, infringement and validity of intellectual property.
Litigation generally involves the following steps:
(a) Genuine steps
Before the court proceedings can be commenced, the parties must make genuine steps to try to resolve the issues in dispute. The steps could include, for instance, sending a letter of demand to an alleged infringer. A statement must be filed with the court application documents (called "pleadings") which details the steps which have been taken to resolve the matter.
If the matter cannot be resolved, then pleadings will need to be filed with a court to initiate proceedings. The pleadings must describe the facts of the case and define the legal issues for trial. A pleading must only contain a statement in a summary form of the material facts on which the party relies, but not the evidence by which those facts are to be proved.
(c) Directions hearings
A judge will be allocated to your matter at the time it is commenced. The same judge will typically preside over the entire matter. At the directions hearing, the judge will make orders to the parties. These orders will include for a timetable for the conduct of the proceedings. Barristers typically appear on behalf of each party at the directions hearing.
In the early stages of a case, the judge will consider whether alternative dispute resolution, including mediation, is likely to assist. In some cases a judge may decide to order the parties to attend mediation even when they do not agree to it. Mediation is a structured negotiation process in which an independent person, known as a mediator, assists the parties to identify and assess options to negotiate an agreement. Mediations are often expensive but they are also often successful in facilitating a settlement.
Discovery is the process of obtaining relevant documents from your opponent in the legal proceedings. The process involves a number of steps. These include agreeing on categories of documents for discovery. Thereafter, the parties list the documents that fall within the categories. These documents may adversely affect a party’s legal position.
The parties are required to exchange sworn written statements called "affidavits" from witnesses setting out the evidence that they intend to rely on at trial. Evidence from expert witnesses will only be admissible if the expert agrees to be bound by a code of conduct that forms part of the court’s rules. The duty of the expert is to assist the court, rather than the retaining party and to remain impartial. An expert witness cannot technically act as an advocate for a party.
A matter will typically have a hearing within 1 to 2 years from the start of the litigation. However, some cases can take longer, depending on the circumstances of the case. Some cases settle much sooner. Proceedings can be fast-tracked (unless they involve patent litigation). Intellectual property trials are heard by a single judge at first instance without a jury.
At the end of the trial, the trial judge is required to deliver a written judgement. The judgement must determine all matters in dispute between the parties and explain how that dispute has been resolved.
3. Split cases
In intellectual property cases, it is common for issues of liability to be heard before issues regarding the quantum (amount) of pecuniary (monetary) relief. This is often referred to as a “split case.” This shortens the trial and limits the costs of the trial. If there is a judgment in favour of the applicant (the plaintiff), the parties will often resolve the regarding quantum outside of court. Consequently, contested hearings on the quantum of damages or account of profits are relatively rare.
4. Interlocutory hearings
During the proceedings, if the parties cannot agree on certain matters, either party can file a Notice of Motion seeking a hearing for the resolution of the matter. After filing a Notice of Motion, the judge will set down a time to hear the parties on the matter and make a determination. Whilst interlocutory hearings are often short, they can often add considerable costs to the proceedings.
(a) Recovery of costs
The loser in court proceedings typically pays a proportion of the legal costs of the winner. “Legal costs” include both the lawyers’ professional fees and out of pocket expenses. However, the actual amount of the legal costs which are recoverable by the successful party will, inevitably, be less than was actually expended. Generally, the successful party will recover approximately 60% of the actual costs expended.
In some exceptional cases, a court will order that the unsuccessful party pay the other sides’ costs on an “indemnity basis.” In this situation, the amount recovered will be much closer to the amount actually expended.
(b) Security for costs
Where a respondent (defendant) has a reasonable apprehension that its legal costs will not be paid by the applicant (plaintiff) if the respondent is successful, the respondent can apply to the court for an order that the applicant provide security for costs.
Security for costs is often sought if the applicant has little or no assets in Australia. This can occur if the applicant is located overseas. Payment of a party’s legal costs can be very difficult to enforce overseas, and so security for costs will often have to be provided. Security for costs can also be ordered where a plaintiff is insolvent, or has a history of vexatious litigation.
Security is usually provided in the form of a bank cheque paid into the court. Security for costs is typically ordered as one or more tranches of $50,000, but can be more or less, depending on the particular facts of the case.
If the respondent is successful, the money can be applied against the costs order. If the applicant is successful, the security is returned to the applicant.
6. Settlement offers
The amount of costs recovered can be impacted by making of an offer of settlement. There are two types of settlement offers:
(a) Formal offers made under the Court rules, referred to as “Offers of Compromise;” and
(b) Informal offers (usually in the form of a letter), which are commonly referred to as “Calderbank letters.”
Offers are typically made on the basis that they do not constitute an admission and will only be seen by the Court after judgment, when the fact that the offer was made can effect the issue of costs.
7. Appeal process
(a) Federal Court and Federal Circuit Court
Intellectual property disputes in Australia are litigated in the Federal Court or the Federal Circuit Court of Australia.
The Federal Court operates from all capital cities in Australia. The Federal Court has jurisdiction to hear matters involving patents, trade marks and designs. The Federal Court is also able to deal with general law actions such as passing off, misleading and deceptive conduct and breach of confidentiality. It is also able to hear appeals from decisions of IP Australia (the statutory authority which deals which patents, trade marks and designs in Australia).
Simple claims can be litigated in the Federal Circuit Court of Australia. This is a lower level court with a more limited jurisdiction and less experienced judges. It aims to provide a cheaper alternative to litigation in the superior Federal Court.
(b) Full Federal Court
Decisions from single judges of the Federal Court or from the Federal Circuit Court can, with leave, be appealed to a Full Court of the Federal Court. The Full Court usually comprises three Federal Court judges. Consequently, Federal Court judges sit as both trial and appellate judges, although never in the same matter.
(c) High Court
The ultimate appellate court is the High Court. There is no automatic right to have an appeal heard by the High Court. Parties who wish to appeal must persuade the High Court in a preliminary hearing that there are special reasons to cause the appeal to be heard, generally because a point of principle is at stake or in the interests of justice.
8. Next steps
If you require any further information in regard to aspects of litigation, please do not hesitate to contact our team.