Key Logic Pty Ltd v Sun-Wizard Holding Pty Ltd (No 2) [2022] FCA 81
Summary
These proceedings were concerned with the disposition of the costs in relation to the principal proceedings (Key Logic Pty Ltd v Sun-Wizard Holding Pty Ltd [2021] FCA 208). While the successful applicant was awarded both the costs of the principal proceedings and its costs of the proceedings before the Registrar of Designs, the Court noted that it does not necessary follow that a successful applicant in a hearing de novo will be awarded its costs of the proceeding before the Registrar’s Delegate. A particular feature of a case, such as additional evidence before the Court that was not before the Registrar, might “set it apart” from such an approach.
Detail
These proceedings were concerned with the disposition of the costs in relation to the principal proceeding (Key Logic Pty Ltd v Sun-Wizard Holding Pty Ltd [2021] FCA 208). The principal proceeding, a de novo hearing, involved an appeal from the decision of the Registrar of Designs. The key question in the principal proceeding before Justice Greenwood were whether the design was new and distinctive as against the prior art base and whether two emails sent in 2010, before the filing of the design application, formed part of the prior art or was confidential. In concluding that the design was new and distinctive, and that the two 2010 emails were confidential and so did not form part of the prior art base, Justice Greenwood overturned an earlier decision by the Registrar of Designs.
In Key Logic (No 2) the Court was required to consider the disposition of two classes of costs, namely, the cost of the principal proceeding in the Federal Court, and the costs of the proceeding before the Registrar.
In relation to the costs of the principal proceedings, the Court made orders that Sun-Wizard pay Key Logic’s costs by way of a lump sum order.
In relation to the second class of costs, the Court noted that s.43 of the Federal Court of Australia Act 1976 (Cth) did not confer power on the Court to make an order as to the costs of the proceeding before the Registrar’s Delegate. However, s.88 of the Designs Act 2003 (Cth) (s.88(d)) was sufficiently broad to confer a general power to make an order as to the costs of the proceeding before the Registrar’s Delegate.
However, the Court noted that it does not necessary follow that, because an Applicant has successfully appealed a decision of the Registrar’s Delegate (and obtained an order reversing, by setting aside the decision), that the Delegate’s decision ought to be varied so as to award the successful applicant in the Court proceedings the cost of the proceeding before the Registrar’s Delegate. The Court noted that the appeal proceeding is a hearing de novo and the scope of the evidence on the facts is likely to be more extensive (as it was in this case) than the material put on before the Delegate. The Court noted (at [10]): “it is important to remember that the conduct of the de novo appeal proceeding is not a process by which the Court investigates contended error on the part of the Registrar’s Delegate. The proceeding is a true de novo proceeding in the Court’s original jurisdiction with all issues of fact and law determined afresh”.
The Court noted the decision by Justice Jessup in UCP Gen Pharma AG v Mesoblast, Inc (No 2) [2012] FCA 500 (a case originally before the Registrar of Trade Marks) in which Justice Jessup observed that awarding of costs in relation to the proceeding before the Registrar would normally be “adjusted” so as to reflect the outcome of a successful appeal before the Court, but that a particular feature of a case might “set it apart” from such an approach. In UCP Gen Pharma, a significant body of fact was before the Court that was not before the Registrar’s Delegate, most of which arose after the date of the Delegate’s decision. On that basis, Justice Jessup dismissed an application by the successful appellant for an order that it be awarded the costs of the proceeding before the Delegate.
In contrast, in Key Logic (No 2) Justice Greenwood noted that although additional material was put on for the purposes of the Court proceeding, the material included the declarations before the Delegate, supplemented by affidavits, including affidavits from persons who had filed declarations central to the Registrar’s decision. However, Justice Greenwood made various findings about the evidence of certain witnesses and noted that these findings were an important basis upon which the appellant was successful. His Honour noted that although these findings emerged out of the conduct of the proceeding before the Court, the findings were engaging the declarations critical to the application before the Delegate, suggesting that the initial application the subject of the Delegate’s decision was unmeritorious and ought not have been made. On this basis, Justice Greenwood was satisfied that the additional evidence before the Court was not a differentiating circumstance which ought to deprive the successful appellant of the benefit of an order for costs of the proceeding before the Delegate.
The case is a useful reminder that where a party is successful in a de novo hearing from a decision of the Registrar (be it the Registrar of Designs or Registrar of Trade Marks) it is not necessarily the case that the successful party will automatically obtain an order that the respondent pay its costs of the proceedings before the Registrar.