It is well understood that a patentee cannot receive both damages and an account of profits for the same act of infringement of its patent. A choice must be made. However, as happened in the recent decision of Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 5) [2024] FCA 58, a patentee can in the same proceeding claim pecuniary relief on each basis in respect of different infringing conduct.
Australian Mud Company was the patentee and Reflex Instruments Asia Pacific the exclusive licensee of the relevant patent. Reflex manufactured and supplied core sample orientation tools which were the embodiment of the invention described in the patent. Reflex supplied the patented tools globally and domestically by way of hiring rather than by sale.
The court had previously found that Globaltech had infringed the patent by the manufacture and supply of its own core sample orientation tools. Globaltech manufactured these tools and sold them to another entity, Boart Longyear Australia (BLYA). Globaltech sold them to BLYA at cost price. BLYA rented 412 infringing tools to customers in Australia. It rented a further 763 tools out to customers outside Australia. Globaltech received royalty payments with respect to the tools hired out by BLYA.
Reflex sought pecuniary relief on the following bases:
- damages with respect to the tools supplied by Globaltech that had been used in Australia, and
- an account of profits with respect to the tools supplied by Globaltech that had then been exported from Australia.
In respect of the damages claim, Reflex asserted that it had lost the opportunity to hire out the tools to the customers in Australia and its damage was the loss of the hiring revenue. Under the account of profits claim it sought an amount representing the royalty payments that had been received by Globaltech.
Globaltech argued that a split election could never be valid in any circumstances. In the alternative, it argued that such a split could not be valid where there was no distinguishing feature between the supplies for which damages had been claimed and the supplies for which an account of profits was claimed. Here there was no distinguishing feature with respect to the tools supplied by Globaltech.
The court rejected the proposition that there can never be a valid split of the election or that there needed to exist a distinguishing feature to support the split. Rather, the court noted that each infringement is a separate cause of action in respect of which the patentee has a right of election. Further there was no authority or clear general principle supporting the refusal of a split election.
Reflex’s election to seek relief for one part of the infringing conduct on a damages basis and the other part on an account of profits basis was allowed.
