Higher costs awards second time round

Pursuant to section 19(1) of the Patents Act, a Court may certify that the validity of a claim was questioned in relevant proceedings. If such a certificate is issued, then under section 19(2) the patentee may be entitled to a more favourable costs award in subsequent proceedings. The application of section 19 was recently considered in AstraZeneca AB v Alphapharm Pty Ltd [2014] FCA 419.

Section 19(3) makes the effect of section 19(2) subject to any direction of the Court. As a preliminary matter the Court considered whether section 19(3) left any scope to order that the successful party not have costs at all. The Court rejected the possibility that section 19(2) provided an entitlement not only to have costs taxed at a higher rate but also to have costs regardless of what the Court might otherwise have ordered. Rather, section 19(3) provided a broad discretion, empowering the Court to direct that section 19(2) have no effect and returning the case to realm of ordinary costs considerations.

As to the application of that discretion, the Court held that the patentee’s entitlement to a higher level of costs was the “ordinary rule” and that the other party bore the burden of establishing that there was a good reason for departing from it. In this case, whilst the conduct of the respondent was “reasonable and co-operative” it did not justify the conclusion that the patentee need not have commenced the proceeding. Ultimately the Court was not satisfied that there was a basis to exercise its discretion and ordered costs be taxed conformably with section 19(2).

BEng(Civil)(Hons) LLB LLM FIPTA

Adrian is an intellectual property lawyer who combines legal expertise with deep technological knowledge to advise Australian and international businesses in the resolution of commercial IP disputes.