Justice Peter Heerey of the Federal Court of Australia has made orders to implement the judgment he handed down on May 17th of this year in favor of Welcome Real-time against Catuity Inc. in the smart card loyalty system patent infringement case.
The court ordered Catuity to provide Welcome with an affidavit by September 17th setting out an estimate of sums received arising from making or selling, or offering to make or sell, point of sale terminals, chip cards or software for use in the Catuity system. Welcome then has the option to pursue either a damages claim or an account of Catuity’s profits arising from the infringements. If Welcome elects to pursue a damages claim, it has foreshadowed to Catuity that it will seek significant damages in respect of harm suffered by Welcome outside Australia as a foreseeable consequence of the promotion of the Catuity system from within Australia.
The court has further ordered that Catuity pay Welcome’s legal costs to date in this action. The court found that payment of such costs should not be delayed pending an eventual appeal, as there was a substantial hearing of the infringement and invalidity issues at the trial and “important substantive rights were established.
The court also ordered wide injunctions preventing Catuity from infringing Welcome’s patent in any way by whatever means. Welcome acknowledged that immediate implementation of the injunctions for the CIT/Transcard system could inconvenience Australian merchants and customers using that specific system and therefore agreed to Catuity winding down that system over a period of 3 months; however, no such delay was ordered for the operation of the injunctions against the Catuity system.
Finally, Catuity has also been ordered to hand over to its solicitors by September 17th, for safekeeping and destruction, all CIT/Transcard and Catuity devices in its possession in Australia as of today.
Catuity’s operations in Australia have related to the development and testing of the Catuity system which has been promoted in Australia and elsewhere. Given the injunction prohibiting infringement of the patent, Catuity must take action to ensure that the manufacture, installation, operation (including testing), and promotion of the system do not offend these orders.
Welcome Real-time commenced legal action in the Federal Court of Australia last year against the U.S. Company, Catuity Inc. and its Australian subsidiaries, Chip Application Technologies and CIT Cards (Australia). In his judgment issued May 17th, Justice Heerey found that Welcome’s patent had been infringed by the U.S. and Australian companies. Welcome’s patented technology covers the operation of customer loyalty and incentive schemes using customer cards with integrated circuits, commonly called smart cards.”
Catuity Comments On Welcome Real Time Lawsuit Judgment
Catuity, Inc. issued the following statement in connection with the Welcome Real Time lawsuit judgment issued in Australia:
“Justice Heerey of the Federal Court of Australia yesterday issued orders in relation to the Australian patent infringement action commenced by Welcome Real Time (WRT) against Catuity.
“In essence, the judge adopted a simple and straightforward approach and ordered Catuity not to infringe the WRT Australian patent in Australia. Catuity did not seek a stay of the Orders because the Orders were substantially those proposed by Catuity.
“The judge stated clearly that ‘the product, the use of which would infringe the patent, must be a product which infringes all the essential integers of the patent.’ Prior to these orders being issued, Catuity made changes to its product and therefore the Catuity product no longer infringes the patent. These changes have had no detrimental effect on either the performance or functionality of the system.
“Catuity can now continue to develop, market and sell its product in Australia and elsewhere.
“Since it is impractical to change the existing Transcard operations in Western Sydney, we have agreed with the major customers that the previously planned closure of Transcard will occur as soon as possible.”
Catuity, Inc. (www.catuity.com ) is a leading provider of loyalty software systems. The Catuity software includes an integrated suite of applications that provide loyalty, ticketing, access control and membership. The Catuity Loyalty System is ubiquitous in that it can operate on any device, any card program and with any payment process, including stored value, smart cards and wireless applications. Catuity unites the brick-and-mortar retailer with the Internet to enable cross-sell capabilities with consistent brand imaging across all channels. The Catuity loyalty system is currently the only loyalty software approved by Visa USA for use by its member banks that issue smart cards with loyalty applicationsDetails