July 9, 2019

Why litigate IP cases in Australia and/or New Zealand

Intellectual property (IP) litigation can be a costly, complex, and drawn out process. Whether you’re the plaintiff or defendant, it can be worth considering upfront the best jurisdictions in which to undertake proceedings.

In this article, we outline some of the key reasons that a number of multinational businesses have chosen to undertake litigation in Australia and/or New Zealand before pursuing litigation or threats of litigation, in other, more significant markets.

Well-developed legal systems and laws

Both Australia and New Zealand have sophisticated legal systems, robust intellectual property laws, developed bodies of IP case law, and competent judges and Court systems capable of grappling with complex issues both before and during proceedings.

For example, a key issue in relation to enforcement of patents is the validity of the patents in suit. The question of validity is commonly determined by the issue of prior art, evidence about prior art, and the interpretation of such evidence by judges. In the case of particularly important patents, many rights holders choose to litigate in Australia or New Zealand (both before a court, or before the patent office of either country, such as in an opposition proceeding) to ‘flush out’ the strongest prior art that their opponents can muster. They will use this to determine the evidence developed around that prior art, how it is tested and interpreted, and the way in which decisions are made by judges and decision-makers at the patent office.

We have been involved in many cases of this type. They provide an extremely effective means to determine the true scope and strength of important patent rights, before those rights are pursued or enforced in more economically-significant markets such as the United States, Europe, Japan or China.

Cost management

Although in absolute terms Australia and New Zealand are not necessarily inexpensive jurisdictions in which to litigate, they are relatively less expensive than many others. Typically, legal costs in Australia and New Zealand are about one third (or less) of the costs for equivalent proceedings in the United States or Europe.

The costs of expert witnesses may also be lower than in other jurisdictions.  Courts in Australia and New Zealand will also award costs to successful parties in most cases, which also reduces the total cost of proceedings in the long run.

Low risk ‘testing’ ground

Although there is considerable harmony between the Australian and New Zealand IP systems and those of other jurisdictions, there are also key differences which can allow for testing of the strength of patent rights (as discussed above) whilst also allowing room to distinguish adverse decisions and their impact in other jurisdictions.

An adverse result in Australia or New Zealand is typically not fatal to the outcome in more significant markets but the experience can be used to make amendments to patent applications in other jurisdictions, for example, strengthening those applications, or shaping strategies in those other jurisdictions.

Importantly, Courts in both Australia and New Zealand have robust discovery obligations in litigation. This means that adverse parties will be required to discover a wide array of documents which will provide valuable information about the strength of their position in other jurisdictions. Although such documents could not, technically, be directly used in other jurisdictions when obtained only by way of discovery in Australia or New Zealand, they do give a very useful roadmap to the likely course of events and evidence in those other jurisdictions and will restrict the ability of parties to conceal documents in another jurisdiction when they have been already discovered in proceedings in Australia or New Zealand.

On-ramp to the Global Patent Prosecution Highway

The Intellectual Property Office of New Zealand (IPONZ) and IP Australia are two of 22 patent offices around the world that are participants in an examination regime known as The Global Patent Prosecution Highway (GPPH).

A patent application which has already been examined and had a claim allowed by a patent office in one GPPH country can be used to expedite examination of corresponding applications filed with other GPPH countries.

The benefits of using the GPPH are that a timely, favourable report from a patent office in one country could give greater confidence in filing patent applications, or proceeding with examination of existing patent applications, in other countries under the GPPH.

Accelerated examination of patent applications under the GPPH is likely to mean reduced prosecution cost overall, as well as patent rights being granted sooner. This provides patent owners with a faster ability to commercially exploit and/or enforce their rights in key markets.

Pursuing patent protection in Australia and New Zealand, which may include working through an opposition proceeding (with all of the jurisdictional benefits discussed above) can place applicants in a powerful position where they can press on with applications (including via the GPPH) in other more economically significant markets on an informed basis with respect to risks, costs and benefits.

Publicity shelter

In many cases, the parties involved on either side of a litigation matter prefer to fly under the radar and avoid adverse media attention, particularly when there are significant commercial sensitivities and outcomes at stake.

Although Australia and New Zealand are not insignificant markets – the combined population of the two countries is around 30 million people – they tend not to be primary markets for many products and services. It’s less likely, therefore, that proceedings conducted in this part of the world will attract the same amount of attention as may be the case for equivalent proceedings in the United States or Europe.

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