High Court Postpones Calidad Epson Appeal in Australia

High Court Postpones Calidad Epson Appeal in Australia

The High Court of Australia, the country’s highest court, was supposed to consider an appeal by aftermarket cartridge supplier Calidad on May 26 and 27, 2020.

However, the High Court was shut down mid-March and is not due to sit again until after June. At that time it will allocate a new date for the ongoing matter between Calidad and OEM Seiko-Epson.

The High Court, Australia’s final appeal court, rejects more cases than it can hear, particularly patent cases. However, this case has proven to be an exception as special leave was granted in late 2019.

In so doing, the High Court has sent a clear message that it considers it appropriate to provide clear guidance around exhaustion of patent rights and the right of repair.

The agreement by the High Court of Australia to entertain the case has captured the attention of industry and government leaders alike. If Calidad should be successful, it will set a precedent across the country in many other industries too. A full history of this case, provided by the High Court in January 2020, is provided at the end of this article.

According to Lexology. a review of the transcript of the special leave application provides insight as to the possible outcomes of the appeal. “It is open to the court to decide that the US Supreme Court in its Lexmark decision is the correct position in Australian law.

In September 2017, a small cartridge remanufactured, Impression Products in West Virginia, USA won’t its right to repair, remanufactured and resell used Lexmark printer cartridges in a case that went through to the Supreme Court, the highest appellant court in the USA. This Impression Products vs Lexmark International Inc. case is considered a near-identical dispute in which Impression Products purchased used Lexmark cartridges, refilled and repackaged them. The US Supreme Court found the sale of these refilled cartridges did not infringe Lexmark’s patents as the rights were exhausted at the first sale.

Authors, Paul Whenman and Sarah Glasson state, “Importantly, we think it is an opportunity for the High Court [of Australia] to recognise the importance of waste reduction and product design that permits product reuse. The Seiko Epson cartridges, prior to the Ninestar modifications, were not designed for reuse. In fact, nowhere in patent 2009233643 is there anything to suggest how the cartridges could be reused.”

They added, “At this time, the High Court has a pivotal role to play in ensuring the patent system is in harmony with this societal objective.”

Whenman and Glasson muse that the issue is like the famous Monty Python “Dead Parrot Sketch”.

John Cleese (pictured) complains to the petshop owner he was sold a dead Norwegian Blue parrot.

It is obvious that the shop owner cannot reanimate the parrot.

The absurdity of this sketch is a parody of reanimating a dead inkjet printer cartridge, something that may well be in the power of the High Court of Australia.

Related:

• November 18, 2019:  High Court Agrees to Hear Calidad Appeal
• August 1, 2019: Epson Wins Against Aftermarket Calidad in Australia
• December 22, 2017: Will Epson and Calidad Go Back to Court in Australia?
• December 11, 2017:  MinterEllison defends Calidad against claims by Epson
• November 23, 2017:  Industry Recognises Impression Products Supreme Court Win
• September 8, 2017: This Week Today: Impression Products Wins Against Lexmark

Appellants Chronology:

THE HIGH COURT OF AUSTRALIA SYDNEY REGISTRY No. S329 of 2019
CALIDAD PTY LTD ACN 002 758 312 First Appellant CALIDAD HOLDINGS PTY LTD ACN 002 105 562 Second Appellant CALIDAD DISTRIBUTORS PTY LTD ACN 060 504 234 Third Appellant BUSHTA TRUST REG Fourth Appellant and SEIKO EPSON CORPORATION First Respondent EPSON AUSTRALIA PTY LTD ACN 002 625 783 Second Respondent

Part I:
I certify that this chronology is in a form suitable for publication on the internet.

Part II:

7/3/2013:  Australian Patent No 2009233643 (643 Patent) for a Printing material container and board granted.

October 2013:  Seiko Epson Corporation and Epson Australia Pty Ltd (together, Seiko), and Calidad Pty Ltd, Calidad Holdings Pty Ltd, and Calidad Distributors Pty Ltd entered into the Settlement Deed.

17/08/2015:  Seiko sent a cease and desist letter to Calidad Pty Ltd, Calidad Holdings Pty Ltd, Calidad Distributors Pty Ltd, and Bushta Trust Reg (together, Calidad) alleging infringement of the 643 Patent, trademark infringement, breach of the Settlement Deed, misleading or deceptive conduct and breach of the Business Names Registration Act 2011 (Cth).

20/08/2015:  Australian Patent No 2013219239 (239 Patent) for a Printing material container granted.

1/09/2015: Seiko commences proceedings in the Federal Court of Australia, including (relevantly) for infringement of the 643 Patent.

24/09/2015: Seiko filed their Amended Originating Application and Further Amended Statement of Claim to include infringement of the 239 Patent.

April 2016: Cartridges in categories 1, 2, 3, and A begin to be sold.

April 2016: Calidad ceases selling cartridges in categories 4, 5, 6, 7, and B.

29/11/2017: Reasons for judgment of the Federal Court of Australia comprising Burley J, reported as Seiko Epson Corporation v Calidad Pty Ltd (2017) 133 IPR 1; [2017] FCA 1403:
• cartridges in categories 1, 2, 3, and A did not infringe claim 1 of the patents; and
• cartridges in categories 4, 5, 6, 7, and B did infringe claim 1 of the patents.

16/02/2018:  Reasons for judgment of the Federal Court of Australia comprising Burley J, reported as Seiko Epson Corporation v Calidad Pty Ltd [2018] FCA 104 (f01m of declaratory relief and costs).

16/02/2018:  Orders of Burley J.

9/03/2018:  Calidad filed a Notice of Appeal from those parts of the judgment of the Federal Court of Australia given on 29 November 2017 that found that cartridges in categories 4, 5, 6, 7, and B infringed claim 1 of the 643 Patent and 239 Patent.

3/04/2018:  Seiko filed a Notice of Cross-Appeal from those parts of the judgment of the Federal Court of Australia given on 29 November 2017 that found that cartridges in categories 1, 2, 3 and A did not infringe claim 1 of the 643 Patent and 239 Patent.

3/04/2018:  Seiko filed their Notice of Contention.

24/04/2018:  Calidad filed their Notice of Contention in the Cross-Appeal.

5/07/2018:  Reasons for judgment of the Full Court of the Federal Court of Australia comprising Greenwood, Jagot, and Yates JJ, reported as Calidad Pty Ltd v Seiko Epson Corporation (2019) 370 ALR 563; (2019) 142 IPR 381; [2019] FCAFC 115 (FCJl):
• upheld cross-appeal; and
• overturned findings that cartridges in categories 1, 2 3, and A did not infringe claim 1 of the patents.

5/07/2018: Orders of the Full Court of the Federal Court of Australia comprising Greenwood, Jagot, and Yates JJ dismissing Calidad’s appeal and allowing Seiko’s cross-appeal.

27/09/2018: Reasons for judgment of the Full Court of the Federal Court of Australia comprising Greenwood, Jagot, and Yates JJ, reported as Calidad Pty Ltd v Seiko Epson Corporation (No 2) [2019] FCAFC 168 (declaration of infringement and form of injunction).

29/10/2019: Order of the Full Court of the Federal Court of Australia comprising Greenwood, Jagot, and Yates JJ (declaration of infringement and form of injunction).

2/08/2019: Calidad filed their Application for Special Leave to Appeal to the High Court of Australia from the whole of the judgment of the Full Court of the Federal Court of Australia given on 5 July 2019.

15/11/2019: Calidad was granted leave to amend their application for Special Leave to Appeal to include orders 1 to 4 made by the Full Court of the Federal Court on 29 October 2019 and was granted special leave to appeal from the whole of the judgment of the Full Court of the Federal Court of Australia given on 5 July 2019, together with orders 1 to 4 made by the Full Court of the Federal Court of Australia on 29 October 2019.

20/11/2019: Calidad filed their Amended Application for Special Leave to Appeal to the High Court of Australia from the whole of the judgment of the Full Court of the Federal Court of Australia given on 5 July 2019, together with orders 1 to 4 made by the Full Court of the Federal Court of Australia on 29 October 2019.

29/11/2019: Calidad filed their Notice of Appeal to the High Court.