CPC Patents Technologies’ (CPC) appeal of the Federal Court’s decision in CPC Patent Technologies Pty Ltd v Apple Pty Limited [2025] FCA 489 was heard in the Federal Court earlier this week.
While the Full Court’s judgment is reserved, we’ll take a look at what happened below. CPC’s claim was funded by several litigation funders, which is unusual in Australia. This makes the Court’s approach to costs important.
CPC alleged that Apple infringed its ‘Remote entry system’ patents (the CPC Patents) by selling a range of Apple devices, including iPhones, iPads, MacBooks, Apple Watches, and Magic Keyboards (Apple Devices) with biometric security technology (Touch ID and Face ID).
Apple denied infringement and claimed the patents were invalid on several grounds.
What did the Court find?
In a decision handed down in mid-2025, Justice Burley dismissed the infringement claim and partially upheld Apple’s cross-claim for invalidity.
Infringement
The Court found that CPC had failed to establish that the Apple Devices incorporated any of the features of the asserted claims.
The Court’s findings hinged on the construction of the asserted claims of the CPC Patents across seven contested integers, but particularly the construction of the following:
- ‘Transmitter’ and ‘receiver’ sub‑systems: CPC argued that these could be identified by function. The Court disagreed. The words ‘transmitter’ and ‘receiver’ had real work to do. The transmitter and receiver had to be separately identifiable modules, each capable of transmission or reception. On the evidence, the integrated architecture of the Apple Devices did not contain separate sub‑systems.
- ‘Accessibility attribute’: CPC argued that a successful biometric match (face or finger matches) could be the ‘accessibility attribute’ that grants access. The Court held that was not enough. After a legitimate match, the claims of the patent required the system to output a further attribute that determines whether access is granted and on what conditions. Think ‘unlock‑with‑rules’, not just ‘you matched, you’re in.’
Validity
The Court noted that Apple’s cross claim ‘was, in large part, advanced defensively and so was dependent upon findings, contrary to its primary case, that its devices were found to fall within the scope of the asserted claims’. Because Apple’s devices did not fall within the asserted claims as construed by the Court, most of Apple’s defensive invalidity case fell away. But not all.
As to the balance of Apple’s invalidity case:
- Deferred priority date: The patents did not properly claim priority from the provisional application that did not provide a real and reasonably clear disclosure of the claimed inventions (‘external fair basis’).[1] In particular, the Court found that the provisional did not disclose an ‘accessibility attribute’. As a consequence of the deferred priority date, additional prior art documents were relevant to the novelty case.
- Novelty defeating disclosure for some claims: The Court found that a prior US patent anticipated the ‘accessibility attribute’.
The costs fight
It was then time for the Court to consider the appropriate orders on costs in the unique circumstances of funded patent litigation.
Splitting the bill
The Court ordered CPC to pay Apple’s costs of the failed infringement case, and for Apple to largely bear CPC’s costs of the cross claim (the latter subject to a discount). Apple argued that the Court should make a single, global costs order in circumstances where its validity case was ‘defensive’, advanced mainly on the footing that the asserted claims would be invalid if CPC’s claim constructions were upheld. The Court did not accept Apple’s submission and ordered that costs be assessed separately including because Apple’s invalidity case went beyond a contingent defence tied to CPC’s construction of the asserted claims. Rather it traversed multiple grounds including novelty, inventive step, manner of manufacture, and fair basis. Apple’s ‘defensive’ case was found to have only properly been put in closing.
Third party costs: funders on the hook
The Court considered whether CPC’s liability for Apple’s costs of its infringement case should be joint and several with the liability of various third-party funders.
Relevantly, the Court found that a funder was liable for costs even where it played no active role in the proceedings, advanced funds at a late stage (after closing submissions), and provided funding for an objective not directly tied to the outcome (i.e. to protect an investment in CPC’s parent company). The funder was held liable for costs because it had a commercial benefit in the outcome of the litigation (in the form of an entitlement to a percentage of any damages or settlement amount).
The appeal
CPC appealed the decision, challenging the Court’s construction of key integers and resulting non-infringement findings, as well as the Court’s partial upholding of Apple’s invalidity case.
The appeal was held on 2 and 3 March 2026, with judgment reserved.
Why do these decisions matter?
The decisions illustrate several key points:
- Purely functional claim constructions are not without risk. The Court did not accept that various structures / components described in the asserted claims could be construed in purely functional terms.
- Parties who run a wide‑ranging invalidity case should expect the Court to apportion costs by issue.
- Non‑party costs orders will be made against third party litigation funders even where they play no active role in the proceedings. Courts will look closely at the funding terms to determine if a party has a commercial interest in the outcome of the proceeding(s).
We look forward to the Full Court’s decision in one of the first funded patent claims.
[1] The CPC Patents are governed by the Patents Act 1990 (Cth) and Patents Regulations 1991 (Cth) as they stood before the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (RTB), so the pre‑RTB regime applies. Under s 43(2), read with reg 3.12, each claim’s entitlement to an earlier priority date turns on whether it is fairly based on matter disclosed in the relevant earlier document (for example, a provisional specification or a convention priority document). This is the external fair basis inquiry, which is conceptually distinct from internal fair basis under s 40(3). In each case the question is whether there is a real and reasonably clear disclosure of what is claimed.
