Ajinomoto Co Inc v NutraSweet Australia Pty Ltd (No 2) [2008] FCAFC 55 (8 April 2008)

Last Updated: 15 April 2008

FEDERAL COURT OF AUSTRALIA

Ajinomoto Co Inc v NutraSweet Australia Pty Ltd (No 2) [2008] FCAFC 55

AJINOMOTO CO INC v NUTRASWEET AUSTRALIA PTY LTD (ACN 090 591 174)
VID 731 OF 2007

BLACK CJ, SUNDBERG AND WEINBERG JJ
8 APRIL 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 731 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	AJINOMOTO CO INC Appellant
AND:	NUTRASWEET AUSTRALIA PTY LTD (ACN 090 591 174) Respondent

JUDGES:	BLACK CJ, SUNDBERG AND WEINBERG JJ
DATE OF ORDER:	8 APRIL 2008
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The appellant pay the respondent’s costs of the appeal.

2. The respondent pay any costs incurred by the appellant that were thrown away as a consequence of the respondent’s abandonment of the lack of novelty ground in its notice of contention.











Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 731 OF 2007

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	AJINOMOTO CO INC Appellant
AND:	NUTRASWEET AUSTRALIA PTY LTD (ACN 090 591 174) Respondent

JUDGES:	BLACK CJ, SUNDBERG AND WEINBERG JJ
DATE:	8 APRIL 2008
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1 At the conclusion of its reasons published on 17 March 2008 the Full Court said that given that a "good part of the argument was taken up by the construction point, on which Ajinomoto was successful", the parties should file submissions on the question of costs. Those submissions have been filed, and these reasons deal with that question.

2 Ajinomoto points out that although NutraSweet was successful overall in the appeal, Ajinomoto was successful on the construction point. It says that a large proportion of the reasons for judgment relates to the construction of s 7(3) of the Patents Act 1990 (Cth), and that "a reduction of between 50% to 70% would be appropriate". We understand this to mean that Ajinomoto should have to pay only between 30% and 50% of NutraSweet’s costs. It relies on JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (No 2) [2007] FCAFC 6 (JMVB) which it says is similar to the present case. That was an appeal by the patentee against an order that the patent be revoked. On the appeal the patentee was successful on all questions concerning the invention of the patent, including obviousness (which involved a consideration of s 7(3)). However the appeal was dismissed on the ground of the patentee’s lack of entitlement to the invention of the patent. To reflect the parties’ respective degrees of success, the Full Court ordered the appellant to pay 70% of the respondent’s costs of the appeal.

3 Each case must depend on its own particular circumstances. In our view there should be no reduction in the costs recoverable by NutraSweet on account of the time spent on the construction point. As the Court’s reasons make clear, nothing turned on the construction of s 7(3). It should have been apparent to Ajinomoto that even on the preferred construction it would be unsuccessful. After examining the evidence about the art of blending known sweeteners (see [128] to [138]), the Court said at [139]-[140]:

... the evidence as set out above demonstrates that known intense sweeteners have been blended in Australia for many years. In particular, for some time before the priority date known sweeteners had been blended for the purposes of diet soft drinks. The difficulty with Ajinomoto’s submission that there was no ‘work in the relevant art in [Australia]’ is that the Ajinomoto patent is not concerned with the discovery or invention of a new sweetener compound or molecule. Rather, it is concerned with the blending of known sweeteners, or, as the patent itself describes the invention, with ‘a sweetener composition’. Once the art relevant to the Ajinomoto patent is identified as being the art of blending known sweeteners, it becomes clear that there was in fact ‘work in the relevant art in [Australia]’ as at the priority date.

4 Thus, despite the Court adopting Ajinomoto’s construction of s 7(3), Ajinomoto failed to show that the patent satisfied inventive step, since blending was known in Australia at the priority date of the patent. JVMB is distinguishable. There the patentee was successful regarding inventive step. Here, Ajinomoto was not. The s 7(3) point was but an integer of an unsuccessful attempt to establish inventive step.

5 The NutraSweet’s notice of contention sought to uphold the primary judge’s decision on additional invalidity grounds upon which NutraSweet was unsuccessful at trial (lack of novelty and inutility) and also on the manner of manufacture ground with which the primary judge did not deal.

6 In NutraSweet’s written submissions filed on 24 October 2007, four days before the appeal was heard, it gave notice that the ground of lack of novelty was no longer pressed. Ajinomoto says it had done extensive work on novelty in preparation for the appeal hearing, and should have its costs of the abandoned novelty ground up to 24 October 2007. We think the appropriate order is that any costs of Ajinomoto thrown away as a consequence of the abandonment should be paid by NutraSweet.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and Justices Sundberg and Weinberg.

Associate:

Dated: 8 April 2008

Counsel for the Appellant:	BJ Hess SC and LJ Duncan
Solicitor for the Appellant:	Griffith Hack
Counsel for the Respondent:	BN Caine SC and HMJ Rofe
Solicitor for the Respondent:	Allens Arthur Robinson

Date of written submissions:	31 March 2008
Date of Judgment:	8 April 2008