Court proceedings

Understanding what is required in formal court proceedings can help you decide if it is the right option.

There are a range of strategic actions you and the defendant can take in the litigation process.

Who can sue

Usually the owner of the intellectual property (IP) right will be the one to bring an infringement action. However in some cases an exclusive licensee or authorised user will hold the right to sue.

Seeking legal aid may help you determine whether you are entitled to bring infringement action and whether other parties should be joined in the action.

Before starting court proceedings

So you've decided to go to court? You may want to consider the following.

Set clear goals

You should decide whether the proceedings are intended to obtain financial compensation for infringement, an order to restrain further infringement, or both.

Decide who you intend to sue

More than one person is often liable for IP infringements. For example, a company that infringes copyright in photography, and the directors who control the company, may all be liable for the same infringement.

In many cases it is important to sue the individuals involved. This prevents them leaving one company and forming a new company to carry out further infringements.

Consider publicity impacts

Legal proceedings can have both positive and negative effects. Evidence and documents used in court become publicly available and lose any conditions associated with confidentiality unless they are covered by a confidentiality order.

Review all relevant documents

Contracts, licences and correspondence could all have relevance to the court case.

For example, some contracts may require the parties to participate in alternative forms of dispute resolution before going to court. Others require that before you can take any legal action you must notify the alleged infringer that they have defaulted on their contract.

Preparing for trial

When litigation starts, irrespective of whether an injunction has been sought or granted, the court will usually set a timetable for the completion of steps required to prepare the case for trial.

Statement of claim

This is the document that officially starts proceedings. Drafted by you or your lawyer, it must clearly articulate the complaint, set out the facts supporting the allegation and establish the remedies being sought.

For example a copyright claim would include why you are the owner of the right. This could be a case of proving authorship or demonstrating how you acquired ownership.

The claim should also clearly set out how, where and when the defendant has infringed the copyright.

This ensures that the defendants are fully aware of the precise nature and extent of the claim made against them so they can prepare a defence.

Defence

The alleged infringer will now file a defence document replying to each of the allegations made in the statement of claim. The defence document will either admit the allegation is correct, not admit it is correct or deny it.

There is a subtle difference between 'not admitting' and 'denying' an allegation.

By not admitting a fact, the defendant is simply requiring the plaintiff to prove that it occurred. In this case, the defendant usually won’t seek to introduce evidence to actively disprove the fact.

In the case of denial a defendant will typically provide evidence to show that the alleged fact is untrue.

The defence document establishes which facts raised in the statement of claim are in dispute. It is these allegations that will be ruled on by the court.

Relevant documents

Both parties must inform each other of any relevant documents they possess or have access to.

These documents must legally be disclosed even if they assist the other party in its claim against you.

All relevant documents must be retained until the hearing is over.

Affidavits

Affidavits are written statements of evidence sworn on oath and signed by the person who makes them. They detail everything that person knows about the complaint.

Affidavits are usually drafted by, or in consultation with, a lawyer to ensure all relevant evidence is obtained and all issues addressed.

Preparing affidavits may involve tracking down former employees or business partners.

Further strategies

Offer for settlement

Either party can make an offer to settle the claim at any stage. Offers can be monetary or another form of compromise.

If the alleged infringer’s offer is rejected and the owner of the IP rights gets a judgement equal to or less than that offer, the court may order the owner to pay the alleged infringer's legal costs from the date of the offer.

If the owner makes an offer to settle that is rejected by the alleged infringer and the court delivers a judgement equal to or more than the offer, the court may require the alleged infringer to pay the owner’s legal costs from the date of the offer. This is in addition to costs the owner is ordinarily entitled to.

Security for costs

The alleged infringer may apply for a security for costs against the owner. This helps them ensure their legal costs can be recovered if they successfully defend the action. They may compel the owner to provide an amount as security, often in the form of a bank guarantee.

The court will decide whether it thinks the sum is sufficient. Typically if a security of costs is ordered by the court, the owner will not be entitled to proceed with litigation until it is provided.

The alleged infringer might attempt to avoid court proceedings by persuading the court that the owner has insufficient funds to meet a costs award, or that the owner resides outside Australia.

No similar right exists for an owner to obtain security for costs from an alleged infringer.

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: 
4 March 2016