Australia: Carving up costs in patent litigation when there is no clear winner

Last Updated: 14 December 2016
Article by Lucy Hartland
Services: Intellectual Property & Technology
Industry Focus: Life Sciences & Healthcare

What you need to know

  • A recent decision of the Full Court of the Federal Court of Australia demonstrates the way costs may be apportioned using an 'issue based' approach where the parties have each enjoyed a degree of success.
  • The decision indicates that it is not only the number of issues on which a party has succeeded, but also the amount of time spent on those issues and their overall significance to the matter as a whole, that will come into play when costs are apportioned.
  • With the potential for costs to be awarded in this manner, we may see future patent litigants giving greater consideration to the issues they press or concede, and placing less emphasis on 'peripheral' issues that are not key issues in a dispute.

Apportioning costs in any litigation can be difficult, but particularly so in patent litigation proceedings where there are often multiple issues being tested on both the validity and infringement of the patent in suit. Where more than one patent is involved in proceedings, those issues can multiply.

The question is: how should costs be divided when there is no clear 'winner' and each party has been successful on one or more issues?

This was the question considered in Actavis Pty Ltd v Orion Corporation (No 2) [2016] FCAFC 159, a recent costs decision in the Full Court of the Federal Court of Australia. The decision exemplifies the apportionment of costs using an 'issue based' approach in a case where the appellants and respondents each had some measure of success in the both the trial and appeal proceedings.

The parties' successes

In the appeal against the decision of the trial judge on the substantive issues in the case1, the appellants were successful in their appeal against findings that they had infringed two of the claims of the patent in suit, and were also successful in their appeal against the finding that Novartis Australia had standing to sue for infringement as an exclusive sub-licensee of the patent (via Novartis as exclusive licensee).

The respondents succeeded in resisting the appellant's on the validity of the patent (on the grounds of lack of fair basis, lack of clarity and definition), and the issue of Novartis' standing as the exclusive licensee.

The parties agreed that an 'issue based' approach to determining costs should be adopted.

Costs of the appeal

Bearing in mind their respective wins, the appellants argued that they should pay 60% of the respondents' costs of the appeal while the respondents argued that this amount should be 80%.

The Full Court made an award of 80%, accepting the respondents' arguments that:

  • they had succeeded on the major issue in the appeal, being the construction of the patent specification (with its consequent impact on the fair basis ground)
  • the respondents had conceded the issue of standing so far as Novartis Australia was concerned
  • although the appellants were successful on the issue of infringement, that issue did not take up much time spent on the appeal

Date from which costs could be recouped on issue of standing as exclusive licensee

The Full Court next considered the costs associated with the question of standing of each of Novartis and Novartis Australia to sue for infringement. Novartis was found to have standing only from 7 March 2014 (the date of the exclusive licence). The relevant date for Novartis Australia (if it had been found to have standing) would have been 11 March 2014, being the date of the exclusive sub-licence. On that basis, the Full Court made orders for the payment of the appellants' costs thrown away2 as a result of the joinder of Novartis up until 7 March 2014, and as a result of the joinder of Novartis Australia (both before and after 11 March 2014).

Other costs in first instance decision

The Full Court then considered the effect of its finding that the appellants did not infringe two of the claims of the patent in suit, against a background in which the finding that the appellants had infringed four further claims was undisturbed and the appellants' validity attacks were unsuccessful.

The trial judge had ordered the appellants to pay two thirds of the costs of the claim and cross-claim. The appellants argued that this should be reduced to 50% in light of their success on appeal, while the respondents argued for a figure of 60%. The Full Court made an order consistent with the respondents' position, on the basis that the respondents had overall been successful in vindicating their rights and in defending the appellants' attacks on the validity of the patent.

Key takeaways

Where determining an overall 'winner' or 'loser' in patent litigation is difficult, we can expect to see more costs decisions of this type, in which the outcomes with respect to issues are examined in detail. We could also see similar types of decisions in other complex litigation matters.

As this case demonstrates, in an issues based approach to the award of costs, it is not only the number of issues a party has succeeded on, but also the amount of time spent on those issues and the overall significance of the issues to the matter as a whole that are relevant to determining the award of costs. This has clear implications for the conduct of patent litigation in terms of the grounds that are pursued and the way in which those grounds are pressed, including whether appropriate concessions are made. It is possible that this approach may lead to a greater focus on the key issues in dispute rather than on more peripheral 'backup' issues, but this is a matter that remains to be seen.


1 Actavis Pty Ltd v Orion Corporation [2016] FCAFC 121

2 Costs thrown away generally refer to costs incurred by one party and wasted as a result of the other party's action

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this article. Authors listed may not be admitted in all states and territories

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Lucy Hartland
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.