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Stewart v Franmara Inc

(CIV 2011-404-02584, 19th July 2012)

In an earlier interim judgement the same Judge found in the plaintiff’s favour for breach of a confidentiality agreement and infringement of its New Zealand patent. The New Zealand plaintiff designed a champagne bottle opener and obtained patents for it in New Zealand and the United States of America. The defendant US company showed an interest in obtaining a licence and signed a confidentiality agreement, However the plaintiff declined and made other distribution arrangements.

When the defendant nonetheless began selling an equivalent bottle opener, the plaintiff brought proceedings alleging breach of the confidentiality agreement, infringement of the NZ and US patents, and breach of the Business and Professions Code of California. On the evidence the Judge readily found in favour of the plaintiff for the first two actions, but withheld judgement on the last two actions until further submissions were received regarding the Court’s jurisdiction to rule thereon.
In this subsequent judgement the Judge held that a New Zealand court can have jurisdiction regarding infringement of a US patent. The Judge noted that where, as occurred here, the validity of the causes of action were not challenged, there has been a trend in other jurisdictions to enforce foreign intellectual property rights. The Judge noted though that judgement on infringement of the US patent may have been declined if the defendant had taken some steps in the proceeding and raised the issue of validity of the US patent.

While wilful infringement had earlier been found for the NZ patent, the Judge declined to assess damages with respect the US patent on the basis of wilful infringement under the US Patents Act, which allows triple damages. Rather, the quantification of damages had to be assessed by NZ law.

The Judge, however, declined to find any breach of the Business and Professions Code of California as there was no established basis on which it could do so.