Mizzi Family Holdings Pty Ltd v Morellini  FCA 14351
This federal court judgement provides a timely reminder to patent owners to be cautious of their actions, which may be deemed as a threat of infringement proceedings.
The applicant, Mizzi Family Holdings Pty Ltd (‘Mizzi’) alleged that the respondent, Mr Morellini (‘Morellini’) infringed their patent for a ‘cane billet planter’ (Innovation Patent 2010100955) with the ‘Morellini device’. Morellini denied infringement and cross-claimed for revocation of the innovation patent for invalidity based on lack of novelty, lack of an innovative step and false suggestion or misrepresentation. Morellini also alleged unjustified threats of infringement were made by Mizzi.
Morellini’s cross-claim for invalidity failed as Morellini was unable to successfully show anticipation and the construction given to the specification and claims by Dowsett J negated the arguments presented for false suggestion and misrepresentation. The innovation patent was therefore found valid.
Mizzi’s case for infringement failed. Independent claims 1 and 5 require that a mound of soil over a planted cane billet be profiled to have an incline of 20-60°. Following consideration of evidence from a demonstration of the Morellini device and opinions from expert witnesses, it was held that the demonstrated Morellini device did not produce such mounds. Independent claim 4 requires that the top of the mound be ‘relatively flat’. It was held that the Morellini device did not produce mounds with a relatively flat top.
However, Morellini’s claim of unjustified threats succeeded.
Under s128 of the Patents Act 1990:
(1) where a person, by means of circulars, advertisements or otherwise, threaten a person with infringement proceedings, or other similar proceedings, a person aggrieved may apply to a prescribed court, or to another court having jurisdication to hear and determine the application, for:
a. a declaration that the threats are unjustifiable; and
b. an injunction against the continuance of the threats; and
c. the recovery of damages sustained by the applicant as a result of the threats.
For an innovation patent, s129A relates to the court’s power to grant relief and it is fairly well known that a patentee should not assert their rights without the innovation patent having been certified. Under s129A(3) the courts have power to grant relief in respect of threats made by the patentee of a certified innovation patent:
If an application under section 128 for relief relates to threats made in respect of a certified innovation patent, the court may grant the applicant the relief applied for unless the respondent satisfies the court that the acts about which the threats were made infringed, or would infringe, a claim that is not shown by the applicant to be invalid.
Threats are therefore considered prima facie unjustifiable and the onus is on the patentee to prove justifiability2.
There were two “threats” raised by Morellini. The first was a direct threat to Mr Charles Girgenti of Ingham Queensland, who used a cane billet planter made in accordance with the design and specifications of the Morellini Device. Mr Mizzi stated to Mr Girgenti that the Morellini Device infringes the innovation patent and demanded that Mr Girgenti pay royalties.
The second was not a direct threat but perhaps deemed by Mizzi as a general warning. An advertisement for the Mizzi machine that is the subject of the Mizzi patent appeared in ‘Canegrowers’ magazine listing the patent application number and describing the method of operation. Next to this advertisement was an article entitled ‘Infringement danger’ by Mr Hurlock from Invention Pathways Pty Ltd. The article states that there is a patent application for a new cane planting unit and that “We know of farmers who are manufacturing their own version of the new invention”. The article then explains that a patent owner may pursue their rights, extending back to the filing date, and that small changes from an invention will not avoid infringement and that infringement can be costly.
It was stated that Mr Mizzi ‘demonstrated an evasiveness which strongly suggested close involvement in the circumstances which led up to the appearance of the two items in the same publication’3. Furthermore, it was admitted by Mizzi that they caused both the advertisement and the accompanying article by Mr Hurlock to be published4. Dowsett J held ‘that the advertisement and article, appearing in the same publication, were designed to threaten infringement proceedings and, viewed objectively, had that effect’.
Having lost the infringement case, the two threats were therefore unjustifiable under s129A(3) of the Patents Act 1990. While the threats were not made directly against Morellini, his claim of unjustifiable threat succeeded and further submissions on appropriate relief are to be made.
This reaffirms that a broad interpretation is given to s128, such that if infringement is ultimately not found, any threat of infringement is likely to be considered unjustifiable.
Patent applicants and owners should take a conservative approach as to how they make it known that they have a pending or granted patent on their invention. Under s131 ‘the mere notification of the existence of a patent, or an application for a patent, does not constitute a threat of proceedings for the purposes of s128’. Therefore, the Mizzi advertisement alone would not be considered a threat of infringement proceedings; it was only when in combination with Mr Hurlock’s article that it constituted a threat.
2 JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (2005) FCA 1474; 
3 Mizzi Family Holdings Pty Ltd v Morellini  FCA 1435; 
4 ibid,