Strategic options
If you proceed with court action to enforce your IP rights, there is a range of strategic options you and the defendant may take in the litigation process.
Security for costs
The alleged infringer may apply for what is known as 'security for costs' against you, to ensure their legal costs are paid if they successfully defend the action.
You may be compelled to provide an amount as security, often in the form of a bank guarantee, to cover the alleged infringer's recoverable costs in defending the action.
The infringer must persuade the court that the owner has insufficient funds to meet a costs award, or if the owner resides outside Australia.
The court will decide whether it thinks the sum is sufficient. Typically, the owner will not be entitled to proceed with the litigation unless and until the security, if ordered by the court, is provided.
No similar right exists for an owner to obtain security for costs from an alleged infringer.
Offer of payment
An offer of compromise or offer of payment may be made by the alleged infringer.
This offer may limit the amount of costs the alleged infringer may have to pay, or provide you as the IP rights owner with an avenue through which to recover full costs at the end of the trial.
Either party can, at any stage, make an offer to settle the claim.
If the infringer's offer is rejected
If the infringer makes the offer and it is rejected, and the owner of the IP rights gets a judgement for that amount or less, the court may order the owner to pay the infringer's costs from the date of the offer.
These costs are assessed by the court as being reasonable to recover from the other party and are usually significantly less than the actual costs incurred.
It is not unusual for these costs to be up to 50 per cent less than actual costs incurred. This means that even if you are successful, you could be significantly out of pocket after the conclusion of litigation.
If the owner's offer is rejected
If you make an offer and it is rejected, and you eventually obtain a judgement for that amount or more, the court may require the infringer to pay your full costs from the date of the offer. This is in addition to costs to which you would ordinarily be entitled.
Notice to admit facts
A notice to admit facts is a procedure where parties may limit the hearing to clearly defined issues.
A failure to admit facts that are genuinely not in dispute may increase the costs for either party involved in the court action.
If you are served a notice to admit facts, and you do not admit the specific fact, and that fact is subsequently proven at trial, then you will bear the cost of proving that fact, irrespective of whether the party who made the request achieves overall success in the case.
Last Updated: 13/12/2012
