Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited (No 3) [2022] FCA 1373

Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited (No 3) [2022] FCA 1373

Apportionment of profits was required because the substance of the invention was a random prize awarding feature with the proportional trigger, not the whole EGM; only 35% of net profits (after proper deductions) from infringing sales was fairly attributable to the patented invention; damages for free 'no charge conversions' should be awarded at $1,000 per unit (based on comparable licences rather than the higher Konami licence rate); overheads were deductible due to opportunity cost; tax should be addressed by a discount; and no additional damages were warranted.

Jurisdiction
Australia
Judgment Date
18 November 2022
Procedural Posture
Intellectual Property Patents / Remedy/quantum Determination (account of Profits and Damages After Findings of Infringement)
Outcome
The Court orders the parties' experts to confer to quantify profits and damages in accordance with the reasons for judgment; profits are to be apportioned at 35% after allowable deductions (including opportunity cost overheads), damages for NCCs are to be at $1,000 per unit excluding 'like for like' conversions, tax...
Legal Topics
['patents' 'account of Profits' 'damages' 'apportionment' 'overheads' 'royalty Rate' 'opportunity Costs']
['intellectual Property Law'] ['patents' 'account of Profits' 'damages' 'apportionment' 'overheads' 'royalty Rate' 'opportunity Costs']

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Procedural Posture

Intellectual Property Patents / Remedy/quantum Determination (account of Profits and Damages After Findings of Infringement)

Legal Issues

  1. 1 ['Whether and to what extent profits should be apportioned in a patent infringement account' 'How to properly characterise the substance of the invention for apportionment of profits' 'Appropriate treatment of costs, including overheads and taxation, in account of profits' "Correct assessment of damages for 'no charge conversions' under the user principle" 'Whether additional damages should be awarded under Patents Act s 122(1A)']

Ratio Decidendi

Apportionment of profits was required because the substance of the invention was a random prize awarding feature with the proportional trigger, not the whole EGM; only 35% of net profits (after proper deductions) from infringing sales was fairly attributable to the patented invention; damages for free 'no charge conversions' should be awarded at $1,000 per unit (based on comparable licences rather than the higher Konami licence rate); overheads were deductible due to opportunity cost; tax should be addressed by a discount; and no additional damages were warranted.

Court Disposition

The Court orders the parties' experts to confer to quantify profits and damages in accordance with the reasons for judgment; profits are to be apportioned at 35% after allowable deductions (including opportunity cost overheads), damages for NCCs are to be at $1,000 per unit excluding 'like for like' conversions, tax...

Orders

  • ["Parties' external legal representatives and accounting experts to confer to calculate profits, damages, and interest as outlined in the reasons for judgment." "Notification to the judge's Associate if there is disagreement regarding calculations, costs, or clarification is required." 'Publication of the Reasons to...