The following is excerpted from a December 3, 2009 article by Grant Fisher and Kellech Smith titled, "Indemnity costs awarded in unjustified threats of a patent infringement proceeding" from IP @ Blake Dawson:
The Federal Court of Australia recently determined that indemnity costs were payable by an exclusive licensee, who had been found to have made unjustified threats of patent infringement, in circumstances where a settlement offer had been made during the course of the litigation.
The Court’s judgment provides guidance on the making and acceptance of settlement offers, and in particular offers of compromise under the Federal Court Rules.
On 16 March 2009, in Uniline Australia Ltd v SBriggs Pty Ltd  FCA 222 the Federal Court of Australia found SBriggs had made unjustified threats of patent infringement against Uniline.
Uniline had commenced the proceeding, seeking a declaration, injunction and damages for unjustified threats under section 128 of the Patents Act 1990 (Cth), after it received two letters of demand alleging it had infringed claim 13 of Australian Patent No. 706458. SBriggs cross-claimed for relief for patent infringement and Uniline filed a further cross-claim seeking the revocation of the patent.
Uniline relied on Order 23, rule 11(4) of the Federal Court Rules to assert that, as the applicant in the unjustified threats proceeding, it was entitled to an order for costs on a party and party basis...
Read the full article here.