The threat of patent infringement proceedings can be employed by a patentee as a very effective deterrent against those whose conduct brings them into potential conflict with their patent rights. However, such threats “can potentially cause substantial harm” and as a result may be actionable by a recipient or another person harmed by them.
In a somewhat unusual case last week, UbiPark Pt Ltd v TMA Capital, the Federal Court granted an interlocutory injunction against a patentee making threats of infringement against a rival’s customers. The technology was related to automated car parking systems. Claims of unjustified threat are not unusual in patent infringement cases, but they are rarely the subject of interlocutory injunctions.
Whether a threat of patent infringement is unjustified usually turns on whether the relevant conduct is infringing. A threat will not be unjustified if the conduct is an infringement, however that issue will not be finally determined until trial.
In this case, the Court decided the interlocutory injunction application following well-established principles firstly considering whether the applicant for the injunction had a prima facie case (i.e., that the threat was unjustified), and secondly whether the balance of convenience favoured the granting of the injunction.
The Court held that the infringement issue (the prima facie case) turned on how the patent was to be construed, and that both parties’ arguments were plausible. As such, there was a prima facie case. On balance of convenience, the Court held that the patentee was entitled to notify people of its patent, that the proceedings were on foot, and that any injunction was to be narrow; limited to not threatening other customers. The Court held that the balance of convenience favoured the patentee not making more threats until it was determined whether the threats were unjustified (i.e., whether there was infringement).