In a recent decision, O’Bryan J held that Vehicle Management Systems (VMS) was not prevented from seeking revocation of Orikan’s patent, even though VMS could have raised those invalidity arguments in earlier opposition proceedings but chose not to.
The case sits against the backdrop of the Raising the Bar amendments, which changed the standard applied in patent examination and opposition. Since then, there has been ongoing debate about whether an unsuccessful opponent should later be estopped from pursuing revocation on the same grounds.
Here, the Court found that VMS could have raised the arguments earlier, but it was not unreasonable not to do so. Key to that conclusion was the distinction between:
- opposition proceedings, where a party elects which grounds to pursue; and
- revocation proceedings, where a party is responding to an infringement claim and is effectively compelled to litigate.
O’Bryan J also found there was no sufficient risk of inconsistent judgments and rejected the alternative argument that VMS’s conduct amounted to an abuse of process.
The decision is a useful reminder that whether estoppel applies in patent disputes will rely heavily on the specific facts and procedural context, rather than any broad rule. It also highlights the Court’s willingness to recognise that parties are not expected to raise every conceivable issue at the opposition stage, particularly where doing so would add cost and complexity.
Background
Orikan, as assignee of Australian Patent No. 2013213708 (the Vehicle Detection Patent), brought infringement proceedings against VMS. VMS denied infringement and cross-claimed for revocation of the patent.
The dispute sits within a long-running commercial and legal history between VMS and SARB-related entities concerning competing systems for detecting vehicles that have overstayed in parking areas. There had been earlier litigation between the parties involving related patents, including an innovation patent proceeding and a later opposition to the patent now in suit.
Importantly, VMS had opposed the grant of the patent in 2016, but that opposition failed both before the Patent Office and in the Federal Court. However, the grounds now relied on by VMS in the revocation cross-claim — including lack of novelty, secret use and failure to disclose the best method — were not pursued in that earlier opposition proceeding, even though they could have been.
Orikan therefore sought to stay VMS’s revocation cross-claim on two bases:
- Anshun estoppel, and
- abuse of process.
The Legal Issue
The heart of the dispute was not whether VMS could have raised these issues earlier. That was accepted. The real question was whether it was unreasonable for VMS not to have done so in the opposition proceeding.
As O’Bryan J explained, Anshun estoppel may prevent a party from raising an argument in later proceedings where the issue was so closely connected with the earlier proceeding that it would have been unreasonable not to have raised it then. That is a demanding standard. It is not enough that an issue could have been raised earlier — in all the circumstances, it must be one that should have been raised.
The Court emphasised that this requirement of “unreasonableness” is a severe test, not to be applied lightly.
Why the Estoppel Argument Failed
Although VMS could have run the relevant invalidity arguments during the opposition, the Court found that it was not unreasonable for it not to do so.
A number of considerations informed that conclusion.
No Meaningful Risk of Conflicting Judgments
One of the strongest cases for Anshun estoppel is where allowing the later claim to proceed would create a real risk of inconsistent judgments. While O’Bryan J accepted that a later finding of invalidity would sit uneasily alongside the earlier failed opposition, the grounds relied on were different. Any finding in the revocation proceeding would therefore be based on a different foundation from the earlier opposition result. For example, the ground of “best method” had not been pursued during the 2016 opposition.
Opposition and Revocation Proceedings are Fundamentally Different
This was one of the most important aspects of the judgment. The Court drew a clear distinction between:
- an opposition proceeding, where a party makes an election to challenge validity on chosen grounds; and
- a revocation proceeding brought in response to an infringement suit, where the defendant is effectively compelled to come to court and defend itself.
That procedural difference mattered. VMS had chosen to oppose the patent on limited grounds in the earlier proceeding. In the later case, however, VMS was defending itself against an infringement action and seeking revocation in that context. O’Bryan J indicated that the position may well have been different had VMS initiated the later proceeding itself rather than being drawn into it as a respondent.
This distinction between an elective challenge and a defensive one appears to have been central to the outcome.
Litigation Efficiency Did Not Require Every Conceivable Ground to be Raised Earlier
The Court also gave weight to the practical reality of litigation. Encouraging parties to raise every possible issue in every earlier proceeding, regardless of cost, time and complexity, would run counter to the overarching purpose of civil litigation under section 37M of the Federal Court of Australia Act.
O’Bryan J accepted that confining the opposition to selected grounds was not something for which VMS should be criticised. On the contrary, narrowing the issues in dispute may be entirely consistent with efficient case management and the intended role of opposition proceedings as a relatively swift and economical mechanism for resolving patent disputes.
That reasoning is notable. It suggests the Court is reluctant to impose a framework that would pressure parties to overload oppositions with every arguable ground merely to preserve future options.
Abuse of Process Failed for the Same Reasons
Orikan’s alternative abuse of process argument also failed. The broader and more flexible doctrine of abuse of process was not made out because the same factors, particularly the procedural context and absence of unfair oppression pointed away from intervention.
Why the Decision Matters
This is an important decision for patent litigants because it addresses a practical and strategic issue that arises frequently in contested patent matters: how much must a party put forward at the opposition stage, and what are the consequences if it does not?
Before Raising the Bar, it was well understood that a failed opposition did not necessarily prevent later revocation proceedings, in part because the standard of proof differed. After those reforms aligned the standard more closely with revocation, there has been ongoing uncertainty about whether the estoppel position should also shift.
This judgment suggests that the answer is not to apply a broad rule. The Court instead favoured a fact-specific approach, focused on the nature of the earlier and later proceedings, the reasons certain issues were not raised, and whether the omission was truly unreasonable in context.
That has practical significance for both patentees and challengers.
For challengers, the decision offers some reassurance that not pursuing every possible invalidity ground in opposition will not automatically bar those grounds being deployed later in revocation proceedings.
For patentees, the case is a reminder that success in opposition is important, but it does not necessarily shut down future validity attacks, particularly where the later challenge emerges in a different procedural posture.
Key Takeaways
- No automatic estoppel: A party that did not run all possible invalidity arguments in opposition proceedings is not automatically barred from raising them later in revocation proceedings.
- Context matters: The Court focused on the procedural setting and facts of the case, rather than adopting a broad rule.
- Opposition vs revocation are different: It mattered that opposition is an elective process, whereas revocation in response to infringement is defensive and effectively compelled.
- Unreasonableness remains a high bar: For Anshun estoppel to apply, it is not enough that an argument could have been raised earlier — it must have been unreasonable not to have done so.
- No abuse of process on these facts: The same considerations that defeated the estoppel argument also undermined the abuse of process claim.
- Practical significance: The decision suggests that parties are not expected to run every conceivable ground at opposition stage if doing so would unnecessarily increase cost and complexity.
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