On 1 August 2011 Justice Bennett handed down her decision in Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2)  FCA 848, a case in which “additional” (or punitive) damages were considered for the first time in the context of patents in Australia.
Until 2006, when additional damages were introduced into the Australian Patents Act 1990, damages available to a successful patentee were limited either to an assessment of actual damage caused to the patentee, or to an assessment of the “extra” profit derived by the infringer from their infringing activity. As a sub-class of the first type (i.e. as one method of assessing the “actual damage” suffered), an award based on a “reasonable royalty” calculation could be made. A reasonable royalty is based on a theoretical consideration of what royalty rate might have been negotiated between reasonable parties had the infringer approached the patentee instead of carrying out their infringing acts, and had the patentee been a willing licensor. In practice, reasonable royalties are rarely determined in court as the calculations can become more complex than the patent trial itself. Usually, if infringement is found the outcome is an injunction (i.e. an interdict) and a negotiated settlement between the parties.