Alternative Dispute Resolution for Patent Disputes in Australia

Receiving a letter of demand, cease-and-desist notice, or a statement of claim alleging patent infringement is a serious legal event with potentially far-reaching commercial consequences. Under Australian patent law, such allegations may expose a business to interlocutory and final injunctive relief, damages assessed under Section 122 of the Patents Act 1990 (Cth), or an account of profits, as well as significant legal costs if proceedings are commenced in the Federal Court of Australia.

However, an allegation of patent infringement is not determinative of liability. The Australian patent enforcement regime is deliberately balanced. A patentee bears the onus of proving infringement of at least one valid claim, and respondents are afforded multiple statutory, evidentiary, and procedural avenues to resist liability. In many cases, the most effective defence strategy is not limited to denial of infringement but involves a direct and sustained challenge to the validity of the asserted patent.

Responding to an Allegation of Infringement

The period immediately following receipt of an infringement allegation is procedurally and strategically critical. Failure to respond appropriately may expose a respondent to adverse inferences, escalation of relief sought, or loss of strategic advantage. Ignoring the allegation is not an option.

An effective response begins with a structured analysis undertaken along two parallel lines.

First, the patent itself must be examined with precision. This involves identifying the specific claims relied upon, construing those claims in accordance with Australian principles of claim construction, and analyzing their relationship with the specification as a whole. In Australia, infringement is assessed by construing the claims through the eyes of the notional skilled addressee, informed by the common general knowledge as at the priority date, and then comparing the construed claims with the allegedly infringing act. This is a legal exercise informed by technical context, not a purely technical comparison.

Second, the allegedly infringing conduct must be analyzed in detail. This includes identifying the technical features, operational steps, and commercial deployment of the relevant product, process, system, or method. Evidence preservation at this stage is critical, particularly where expert evidence may later be required.

This dual analysis informs all subsequent strategic decisions, including whether to deny infringement, seek commercial resolution, modify the relevant technology, pursue declaratory relief, or prepare for litigation.

Establishing Non-Infringement and Statutory Defences

Non-Infringement

One of the primary defenses against an infringement allegation is to demonstrate that the alleged actions do not, in fact, fall within the scope of the patent’s claims. This is known as a non-infringement defense. This can be argued on the basis that the product or process is missing at least one essential feature of the patented invention as defined by the claims. The Australian Patents Act 1990 (Cth) requires the patentee to establish that every essential feature of an asserted claim is identical to the respondent’s product or invention. If even one essential feature is absent, case of infringement cannot be made out.

Non-infringement arguments are claim-specific and evidence-driven. They often turn on issues of claim construction, functional equivalence, sequencing of steps, or the technical meaning of claim language when read in context.

Statutory Exemptions

Even where conduct would otherwise fall within the scope of a claim, the Patents Act 1990 (Cth) provides express statutory exemptions that operate as complete defences to infringement.

Prior Use Defence

Section 119 of the Patents Act 1990 (Cth) provides a defence where, immediately before the patent’s priority date, the respondent was exploiting the invention in Australia or had taken definite steps to do so. Mere preparatory activity is insufficient; the steps must be objectively directed toward exploitation.

This defense is personal to the prior user and does not invalidate the patent. The evidentiary burden is significant and typically requires contemporaneous documents, commercial records, and witness evidence.

Experimental Use

Section 119C of the Patents Act 1990 (Cth) explicitly states that an act done for experimental purposes relating to the subject matter of the invention does not constitute infringement. This include activities aimed at improving or modifying the invention, determining the properties of the invention, or testing to see whether a particular act would infringe.

Australian courts interpret this exemption purposively but cautiously. The distinction between legitimate experimentation and commercial exploitation is fact-sensitive and must be carefully assessed.

Regulatory Approval Exemptions

For the pharmaceutical and therapeutic goods sectors, Sections 119A and 119B of the Patents Act 1990 (Cth) provide a crucial “Bolar-style” exemption. This allows for the use of a patented invention for the sole purpose of generating data and information required to obtain regulatory approval, either in Australia from the Therapeutic Goods Administration or from a similar body overseas. This enables generic manufacturers to prepare for market entry without delay once a patent expires.

Other Statutory Protections

Section 118 of the Patents Act 1990 (Cth) provides an exemption for the use of patented inventions on foreign vessels, aircraft, or vehicles that are only temporarily in Australia.

Further, Section 123 of the Patents Act 1990 (Cth) may limit the remedies available to a patentee which limits remedies in cases of innocent infringement where lack of knowledge of the patent is established.

These exemptions do not operate automatically and must be properly pleaded and supported by evidence.

Challenging Patent’s Validity Through Revocation

In Australian patent litigation, infringement and validity are closely linked. A patent that is revoked is treated as having never conferred enforceable rights, and infringement proceedings necessarily fail.

A respondent may seek revocation by cross-claim under Section 138 of the Patents Act 1990 (Cth). The burden of establishing invalidity rests on the party seeking revocation, on the balance of probabilities.

Common Grounds of Revocation

Lack of Novelty

If an earlier document or product made before the priority date of the patent application discloses all the essential features of the patented invention, it is clear that the invention was not new at the time the patent application was filed and the patent is invalid.

Lack of an Inventive Step

A patent is invalid if the invention, having regard to the common general knowledge and relevant prior art, would have been obvious to a person with ordinary skills in the art. This ground is frequently based on opinion of expert witnesses, to show that the claimed invention was merely a straightforward development from what was already known.

Insufficiency of Disclosure

Section 40 of the Patents Act 1990 (Cth) requires that a specification of a patent must describe the invention in a manner that is clear and complete enough for a skilled person to perform the invention across the full scope of the claims without undue experimentation. If the patent specification is ambiguous or fails to provide essential information, the patent can be revoked.

Not a Manner of Manufacture (Ineligible Subject Matter)

The invention must be of a type that is legally patentable. For example, mere discoveries, scientific theories, or business schemes are generally not considered patentable subject matter in Australia.

Secret Use

Commercial exploitation of the invention in secret before filing the patent application, other than permitted exceptions, may invalidate the patent.

Successful revocation by cross-claim removes the patent from the Register, eliminating both current and future enforcement risk. A successful revocation action not only resolves the immediate infringement threat but also clears the path for businesses to operate freely in the future without fear of further litigation from that patent.

Proactive Measures and Unjustified Threats

Declarations of Non-Infringement

Sometimes a business may operate under the shadow of a patent without a direct allegation being made. The patentee may be making vague assertions or creating market uncertainty. In such situations, waiting to be sued is not the only option. Section 125 of the Patents Act 1990 (Cth) permits a person to seek a declaration that an act does not infringe a patent, provided the statutory preconditions are met. This mechanism can be used proactively to obtain legal certainty where commercial activities are being constrained by unresolved allegations. This requires the business  to first approach the patentee with full particulars of their acts and ask for a written admission of non-infringement.

Unjustified Threats

Patentees are not permitted to use their rights to make baseless threats against their competitors. Section 128 of the Patents Act 1990 (Cth) provides a cause of action against a person making unjustified threats of infringement proceedings for example, through advertisements, circulars, or direct communication. Remedies include declarations, injunctions, and damages. The patentee may defend such a claim only by proving that the act in question does indeed infringe a valid patent claim.

Why work with us?

Facing a patent infringement claim is a complex, high-stakes process that demands specialist expertise. Our role is to serve as your dedicated legal and strategic partner from the moment an allegation arises. We provide a comprehensive service that includes a rigorous analysis of the patent and your technology, the formulation of a multi-faceted defense strategy, the commissioning of expert evidence, and powerful representation in negotiations and court proceedings. By combining a deep understanding of Australian patent law with a sharp commercial focus, we empower our clients to not only defend against allegations but to emerge from the dispute in a stronger commercial position. An infringement claim is a serious business challenge, but with our expert guidance, it is one that you can meet with confidence.

If you have received an infringement allegation or are operating under the risk of one, specialist legal advice should be sought at the earliest opportunity. Contact us today for a free consultation.