Patent marking in Australia can enhance an assessment of damages for patent infringement. Subsection 122(1A) of the Patents Act 1990 (No. 83) (the “Act”) sets out that a court may include an additional amount in an assessment of damages for patent infringement, if the court considers it appropriate to do so having regard to, inter alia, the flagrancy of the infringement.
Subsection 123(1) of the Act permits a court to refuse to award damages, or to make an order for an account of profits, in respect of an infringement of a patent if the defendant satisfies the court that, at the date of the infringement, the defendant was not aware, and had no reason to believe, that a patent for the invention existed. It follows that patent marking in Australia, either on the product itself, or on the packaging, can prevent the defendant from making such a contention.
Patent marking in Australia can also rob an infringer of a defence of innocent infringement. Subsection 123(2) of the Act sets out that if patented products, marked to indicate that they are patented in Australia, were sold or used in the patent area to a substantial extent before the date of the infringement, the defendant is to be taken to have been aware of the existence of the patent unless the contrary is established.
Thus, the patent number should be used to mark the product so that there can be no question that the infringer was not aware that the product was the subject of a granted patent. Patent marking in Australia can take the form: AU Pat [Number] or similar. The purpose of the patent marking is to indicate that the product is patented in Australia. It follows that marking the packaging per se would also be appropriate.
It is not always possible to mark the product per se or the packaging. The product may be the subject of multiple patents and it may not be feasible to list them all on the product. It is therefore common for patentees to have details of the patents listed on an electronic portal, such as a website, on which the product is offered for sale. There is no reference to such “virtual patent marking” in the Act or in any judicial precedent. However, subsection 123(1) does place an onus on the alleged infringer to satisfy the court that it was not aware, and had no reason to believe, that a patent for the invention existed, in order to avoid an award of damages. Even then the Court still has a discretion and is not obliged to refuse to award damages. It follows that virtual marking can rob an infringer of a defence of innocent infringement.
In the absence of judicial precedent, it is difficult to make a call on promotional offline material, such as brochures and pamphlets. It would be reasonable to assume that it would depend on the extent of the distribution and whether the alleged infringer fell within the distribution zone, as it were. There could be reason for the defendant to believe a patent existed if there was no overlap of the distribution zone and the defendant.
Subsection 178(2) sets out that a person must not falsely represent that an article sold by him or her is patented in Australia or is the subject of an application for a patent in Australia. Subsection 178(3) sets out various circumstances in which a person is taken to represent that an article is patented or is the subject of an application for a patent in Australia. These include using words such as “patent”, “patented”, “provisional patent”, “patent applied for” and “patent pending”. The Act currently allows for a penalty of $1260 for false patent marking.
There is just one decision to date that deals with false patent marking in Australia. That is Elconnex Pty Ltd v Gerard Industries (1991) 32 FCR 491. The Court found that use of the words “pat pend” in connection with a product that was never the subject of a patent application was “misleading or deceptive conduct” under section 52 of the Trade Practices Act 1974, which has now effectively been replaced by section 18 of Shedule 2 – The Australian Consumer Law (the “ACL”) – of The Competition and Consumer Act 2010. The ACL provides for pecuniary penalties that could be significantly more that than the penalty referred to above.