Patent Infringement Remedies in Australia

A granted patent confers a powerful statutory right: the exclusive ability to exploit an invention and to exclude others from doing so. When that exclusivity is infringed, the impact is not merely legal but commercial, threatening market share, pricing power, investment returns, and long-term competitive positioning. Australian patent law responds to infringement with a structured and robust suite of remedies designed both to restrain unlawful conduct and to compensate patentees for the harm suffered.

The remedies available are not automatic. They are discretionary, evidence-driven, and shaped by both legal principle and equitable considerations, making strategic deployment essential.

Separating Liability from Quantum

Patent infringement proceedings in Australia are typically managed in a two-stage process, a practice known as bifurcation. The court first hears and determines the question of liability, that is, whether the patent is valid and has been infringed by the defendant. Only after liability has been established, the court proceed to the second stage, i.e., determining the quantum of relief owed to the patentee.

This approach reflects judicial recognition that questions of infringement and validity are conceptually and evidentially distinct from questions of financial relief. Liability turns on claim construction, technical evidence, and statutory compliance; quantum involves forensic accounting, causation, and economic analysis.

Bifurcation promotes procedural efficiency. A finding of liability often fundamentally alters the parties’ litigation positions, frequently prompting settlement before the costly and complex quantum phase. It also avoids unnecessary expenditure where infringement or validity is not established.

Injunctions

Nature and Legal Basis

The most immediate and critical remedy for a patentee is an injunction. An injunction is an equitable order that legally compels the infringer to cease their infringing activities. Under Section 122 of the Patents Act 1990 (Cth), the court can grant an injunction to prevent ongoing and future infringement of a proprietary right.

Typically, a successful patentee is granted a permanent injunction, reflecting the principle that ongoing infringement of a proprietary right should not be permitted. Such an injunction typically remains in force for the remainder of the patent. This order provides long-term certainty and market protection.

Form of Injunction

Courts have flexibility in framing the injunctive relief. An injunction may be “general in form” injunction, broadly restraining the party from infringing the patent, or a more specific “conduct-based” injunction, which prohibits the precise infringing acts that were proven at trial.

The choice has significant commercial consequences, particularly where product redesigns or alternative implementations are contemplated.

Equitable Discretion

As an equitable remedy, an injunction is not granted as of right in every case. Courts retain discretion, and in exceptional circumstances, such as where an injunction would cause disproportionate harm to third parties or implicate public interest considerations (for example, public health), alternative relief may be considered. Such cases remain rare, and the starting point remains injunctive restraint.

Monetary Remedies: Election Between Damages and Account of Profits

Once infringement is established, the Patents Act 1990 (Cth) requires the patentee to elect between damages and an account of profits. This election is exclusive; both remedies cannot be pursued concurrently. The decision is strategically significant and must be informed by detailed financial and commercial analysis.

Following a liability finding, courts routinely permit targeted discovery of the infringer’s financial records to enable an informed election.

Damages: Compensation for loss

Damages aim to place the patentee in the position it would have occupied had the infringement not occurred. The assessment is compensatory, not punitive. Common bases for damages include:

Lost Sales and Lost Profits

Where the patentee and infringer compete in the same market, damages may reflect profits lost on sales diverted to the infringer. Establishing this requires proof of:

• Demand substitution
• Causation
• Capacity to supply

Courts scrutinise this evidence carefully, often with expert economic input.

Reasonable License Fee

Where direct competition or lost sales cannot be proven, damages may be assessed by reference to a hypothetical license negotiation between a willing licensor and willing licensee. The court reconstructs the commercial terms that would reasonably have been agreed at the time infringement commenced.

The “User Principle”

In some cases, it may be difficult to prove a direct financial loss or establish a clear license fee. The “user principle” allows for the recovery of a reasonable sum for the infringer’s unauthorized use of the patentee’s intellectual property, regardless of whether the patentee suffered a quantifiable loss. The focus is on the value of the benefit the infringer gained by using the invention without permission.

Account of Profits

An account of profits shifts the focus from the patentee’s loss to the infringer’s gain. This equitable remedy requires the infringer to surrender all profits they earned as a direct result of their infringing conduct. This can be a particularly potent remedy if the infringer operated with high-profit margins or was more successful in the market than you were.

The calculation involves identifying revenue derived from infringing sales; and subtracting the infringer’s legitimate costs (such as manufacturing and marketing) directly attributable to the infringing product from the revenue generated by its sales. This process is complex, especially when the patented invention forms only part of a larger product. In such cases, the profits may need to be apportioned to reflect the value contributed by the patented feature versus the non-infringing elements. his exercise is often contested and evidentially complex.

Additional Damages for Infringement

Section 122 (1A) of the Patents Act 1990 (Cth) empowers the court to award additional damages in cases of flagrant infringement. This is a punitive measure designed to penalize and deter willful or flagrant infringement. These damages are awarded on top of any compensatory damages and are not limited by the actual loss suffered.

The court will consider several factors when deciding whether to award additional damages, including-

• The recklessness and deliberateness of the infringement.
• The need to deter similar conduct by others.
• The infringer’s conduct after being notified of the infringement.
• Any benefit the infringer accrued from their wrongful acts.

Additional damages are not awarded lightly. An award of additional damages is typically reserved for cases where an infringer acted in conscious disregard of the patentee’s rights. Conversely, if an infringer held a reasonably arguable (though ultimately unsuccessful) belief that the patent was invalid or not infringed, a court is less likely to award additional damages.

Other Enforcement Mechanisms and Interim Relief

Beyond the primary remedies, Australian courts offer a range of other orders to protect a patentee’s rights, by preserving evidence, protecting assets, and ensuring effective enforcement, throughout the litigation process.

Anton Piller Orders

If there is a real danger that an infringer might destroy crucial evidence, Courts may grant search orders (Anton Piller orders) on an urgent, ex parte basis (without notifying the other side). This allows the patentee’s representative team, supervised by an independent solicitor, to enter the infringer’s premises to search for, copy, and secure evidence of infringement.

Mareva Injunctions (Freezing Orders) 

Where there is a risk that an infringer may dissipate or move their assets to avoid paying a future judgment, Courts may grant a Mareva injunction i.e., a freezing order to freeze those assets pending the outcome of the case.

Ancillary Relief

Following a successful judgment, Courts may orders for the delivery up or destruction of any remaining infringing articles, ensuring they are permanently removed from the marketplace.

Certificate of Validity

Under Section 19 of the Patents Act 1990 (Cth), if the validity of a patent was challenged and upheld by the court, a Certificate of Validity may be issued. This can have cost consequences in future proceedings involving the same patent.

Relief from Unjustified Threats

Australian Patent law also protects businesses from being improperly targeted with baseless accusations of patent infringement. Under Section 128 of the Patents Act 1990 (Cth), if a person or company is threatened with infringement proceedings without proper justification, they can apply to the court for relief. The court can issue a declaration that the threats are unjustifiable, grant an injunction to stop them, and award damages for any harm caused by the threats. The onus then shifts to the person who made the threats to prove that the activity in question does, in fact, infringe a valid patent claim.

Navigating the Costs of Litigation

In Australia, the court has discretion over legal costs, but the general rule is that “costs follow the event,” meaning the unsuccessful party is ordered to pay a portion of the successful party’s legal fees. This recovery is typically on a “party and party” basis, which usually amounts to around 60-70% of actual costs incurred.

Strategic tools like Offers of Compromise and Calderbank offers may expose a rejecting party to indemnity costs. Courts may also order security for costs where there is concern about a party’s ability to satisfy an adverse costs order.

Why work with us?

Patent infringement remedies in Australia are powerful, multi-faceted, and strategically significant. Injunctive relief, compensatory and equitable monetary remedies, additional damages, and interim measures together form a sophisticated enforcement framework. The effectiveness of these remedies depends not only on legal entitlement but on careful sequencing, evidentiary preparation, and strategic election.

If you believe your patent rights have been infringed, contact us to discuss a tailored strategy for enforcing your intellectual property.