Patents and unjustified threats—Legal solutions in Australia

Abstract

While intellectual property laws protect rights holders from infringement of their intellectual property, these laws also protect against abuse of those rights where rights holders unjustifiably threaten competitors with infringement proceedings. The introduction of additional damages for flagrant unjustified threats under the recent Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth) may benefit an alleged infringer who is not found to have infringed a valid patent. In particular, new section 128(1A) to the Patents Act 1990 allows additional damages to be awarded against a person for making blatant unjustified threats of infringing a patent. In cases where it is difficult to determine the loss and ordinary damages cannot be awarded, a court could award a nominal amount in compensation, but the difficulty lies in whether, in some cases, damages can be awarded at all. This raises the need to consider other legal avenues to address the issue of unjustified threats relating to patented inventions. In this paper we have identified four such other legal avenues being: specific provisions of the Australian Consumer Law; the misuse of market power provisions in s 46 Competition and Consumer Act 2010 (Cth); the duty of care and diligence in s 180 Corporations Act 2001 (Cth); and the law of joint tortfeasorship. Each of these potential legal solutions will be examined in turn however a comparison of remedies, or interactions with the laws of evidence, and exploration of costs are beyond the scope of this analysis. Further while we acknowledge that other Australian legislation provides a cause of action arising from the making of unjustifiable threats, such as in the Copyright Act 1968, the Trade Marks Act 1995, the Designs Act 2003 and the Circuit Layouts Act 1986, this paper is focused on the Patents Act 1990 only.