IP Update - Issue 2 (December 2008) by Davies Collison Cave Patent, IP Law & Trade Mark Attorneys

Melbourne 03 9254 2777 Sydney 02 9293 1000 Brisbane 07 3368 2255 Newcastle 02 6248 8063 Canberra 02 4960 8366 www.davies.com.au

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IP update

December 08 Issue

Davies Collison Cave

Australia's Leading Intellectual Property Firm.

IN THIS ISSUE

Awards | Office News Conferences | Case studies

Davies Collison Cave

Foreword As the year draws to a close, we would like to take this opportunity to thank our clients and staff for another successful year. We have been fortunate in receiving not one but three awards this year: Managing Intellectual Property Australian IP Firm of the Year; the Australasian Legal Business Award for IP Specialist Law Firm of the Year and the WORLDleaders: International IP Award for ASIA PACIFIC â&#x20AC;&#x201C; Excellence in Trademark Practice/Litigation award. It is also a year in which we have seen five staff join our partnership: Ian Pascarl; Alistair Smith; Joy Atacador; Kathryn Morris; and Chris Carter. The firm continues to expand, recruiting staff at all levels within the firm and also in each of the firm's offices in Melbourne, Sydney and Brisbane. Another major milestone for the firm was signing a further five year sponsorship of the Chair of Intellectual Property with the Law School at the University of Melbourne. This is significant commitment of the firm demonstrates our ongoing dedication to providing education both nationally and internationally on IP issues. On behalf of Davies Collison Cave we wish all our clients Seasons Greetings, Peace and Happiness in the New Year.

Table of contents 3

Our Awards

4-6

Melbourne, Sydney and Brisbane Offices

Innovic The Next Big Thing Award

Conferences/Events Attended

Case Studies

Partners of Davies Collison Cave and Davies Collison Cave Solicitors Left to right Chris Carter, Geoff Pryor, Adam Sears, Alan Clark, Terry Corbett*, Brett Lewis, Alan Duncan*, John Hannebery, Keith Leslie, John Slattery, Leon Allen, Peter Huntsman, Christine Lowe, Marion Heathcote, Raymond Hind, Bill Pickering, Michael Caine, Rodney De Boos, David Webber, Kathryn Morris, Michael Wolnizer,

Alistair Smith, Joy Atacador, Chris Jordan, Ian Pascarl, Tania Obranovich, Julian Curwen, Darron Saltzman, Richard Jarvis, John Hughes, Anthony Cowle. Not present Damon Henshaw, Mark Roberts, Gavin Recchia, Trevor Stevens, Victor Argaet, Anthony Smeeton. * Retired from Partnership.

protecting the future of ideas... and ideas of the future.

The Trouble With Enantiomers Apotex Pty Ltd v Sanofi-Aventis [2008] FCA 1194

If You Are a Mother (Or Even if you Are Not), You Will Have Heard of the Brand Huggies. Kimberly-Clarke WorldWide, Inc v Goulimis [2008] FCA 1415

What Constitutes an Innovative Step? Delnorth Pty Ltd v. Dura-Post (Aust) Pty Ltd [2008] FCA 1225

Court Influenced by the Operation of the PBS in Granting Interlocutory Injunction Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498

Another Reason to Avoid Reliance on the Grace Period for Filing Patent Applications: Subsequent Divisional Application Mont Adventure Equipment Pty Ltd v Phoenix Leisure Group Pty Ltd [2008] FCA 1476

Promising Developments For Trade Mark Owners Commonwealth Director of Public Prosecutions Reference No. 1 of 2008 [2008] VSCA 214 and other developments

The Importance of Having Agreements in Writing JLCS Pty Ltd v Squires Loft City Steakhouse [2008] FCA 867

Criticality Of Construction Affirmed Nufarm Ltd v Jurox Pty Ltd [2008] FCAFC 180 (11 November 2008)

PCT Wheel now available

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Dec 08

Our Awards WORLDleaders: The Global IP Awards 2008

A Unique Set of Qualifications:

Marion Heathcote and Michael Wolnizer attended the WORLDleaders: International IP Awards 2008 ceremony in London on 19 November to receive the ASIA PACIFIC – Excellence in Trademark Practice/Litigation in Private Practice award on behalf of the firm. The awards dinner and presentation took place at Madame Tussauds.

A SeniorAssociate with our Melbourne Office, Sylvan Browne has recently passed the examination for registration to practice as a Patent Agent before the United States Patent and Trademark Office. Sylvan has been registered to practice as an Australian Patent Attorney for about eight years and practiced in Canada for four years, where he represented clients as a Patent Agent before the Canadian Intellectual Property Office. Sylvan is also registered to practice as a New Zealand Patent Attorney.

Trademark World, Patent World and Copyright World are world leading titles for intellectual property specialists and together they have been serving the IP community for over sixty years. A natural extension to this service is to acknowledge the excellence that exists on a daily basis in the fields of trademarks, patents and copyright, in the form of dedicated IP awards. The WORLDleaders International IP Awards 2008 recognised excellence in five categories across four world regions. The five categories were individually awarded for each separate region. We are delighted to receive this award and we thank our staff for their hard work and our clients and peers for their support.

Together with degrees in law and electrical engineering, Sylvan's US, Australian, Canadian and New Zealand patent qualifications are a unique set.

Rodney De Boos Certified Licensing Professional™ Rodney De Boos received the Certified Licensing Professional™ (CLP) credential. The CLP™ designation distinguishes licensing professionals who have demonstrated their experience and proficiency in licensing and the commercialisation of intellectual property. It is built on internationally applicable standards of practice, knowledge and ethics to differentiate licensing professionals who have taken the steps necessary to become certified. After extensive industry research, the CLP™ certification was created as an initiative of the Licensing Executives Society (USA and Canada), Inc., to recognise licensing professionals who are committed to professional development and the attainment of the skills and knowledge necessary to perform their jobs at the highest level of quality. One of Rodney's main areas of practice is the commercial exploitation of intellectual property rights. He is a former President of the Licensing Executives Society International and was awarded the LESI International Gold Medal in 2006.

Sylvan Browne Senior Associate

Rodney De Boos Partner

Above Partners Michael Wolnizer and Marion Heathcote accept the ASIA PACIFIC Excellence in Trademark Practice/Litigation Award Below Marion Heathcote and Adrian Finighan, international anchor and correspondent based at CNN's European headquarters in London.

DCC Melbourne Cool Company Awards Davies Collison Cave has been the proud sponsor of the Cool Company Awards for the last three years. The awards attract over 600 applicants all eager to win the Coolest Company Award. The panel of nine judges had the unenviable task of narrowing down the field to select the Top Fifty (and later the 24 Category Finalists). In addition to the coveted prize of the Coolest Company award, there are a further ten award categories including The Big Kahuna Award, X-Factor Award, Micro Business Award, Commercial Creativity Award, Online Business Award, Global Growth Award and The Innovation Award. The winner of the Coolest Company Award went to Aspen Medical. Aspen Medical is a 100 percent Australian owned company that delivers scalable healthcare solutions to clients in remote places. Aspen can provide people, facilities, equipment, consumables, pharmacy products, procedures or any combination of these services in areas where medical services are either at a premium or non-existant. The winners take home a genuine 5"11' surfboard, undoubtedly Australia's Biggest Award in Business! Davies Collison Cave takes this opportunity to congratulate all the entrants and winners showcased at the Cool Company Awards 2008.

Cool Company Alumni Celebration To celebrate the Cool Company Awards 3rd year running, Davies Collison Cave held a series of Alumni Celebrations in Melbourne, Sydney and Brisbane. The Alumni celebrations were attended by over 80 Alumni. The event included live interviews hosted by James Tuckerman editor of Anthill magazine and Aspen Medical winner of The Big Kahuna and Martin Hoskings from RedBubble. In the three year history of the Cool Company Awards, RedBubble is the first company to win two separate categories â&#x20AC;&#x201C; Online and X-Factor - and it came within a whisker of snatching the overall honours. All the interviews are podcast on the Anthill and Davies Collison Cave websites. The night was filled with laughter, games and giveaways. Of course no event would be complete without a short but colourful overview of IP provided by Julian Curwen of Davies Collison Cave. We sincerely hope the Alumni enjoyed the festivities and we look forward to next year's event.

Australian Nanotechnology Alliance/Future Materials Seminar Davies Collison Cave recently hosted the Australian Nanotechnology Alliance/Future Materials seminar. The guest speaker was Professor Max Lu, FTSE Federal Fellow, ARC Centre for Excellence for Functional Nanomaterials, University of Queensland. Professor Lu's topic "Nanomaterials: enabling innovations to plug into the Sun" attracted a large audience. The talk highlighted the latest developments in functional nanomaterials for clean energy applications. Such materials as titania and associated semiconducting materials are photoactive and photocatalytic materials promising for cheap and efficient solar cells, hydrogen production from water splitting and solar detoxification of water and air. Latest advances in hybrid hydrogen storage materials and ionic conductive membranes would also enable rapid commercialization of hydrogen fuel cell vehicles. Joining Professor Lu was Rodney De Boos, Davies Collison Cave Solicitors. Rodney outlined some strategies for the commercialisation of nanotechnologies and the types of legal arrangements which implement those strategies.

Professor Max Lu, FTSE Federal Fellow, ARC Centre for Excellence for Functional Nanomaterials, University of Queensland

Left T to B < Julian Curwen, James Tuckerman, Joy Atacador Guests at the launch Andrew Walker (Aspen Medical) and Martin Hosking (RedBubble) << Far left T to B From left: Redbubble's Peter Styles and Paul Vanzella Aspen Medical Co-Founder Glenn Keys and Darth Vadar

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DCC Sydney Engineering Excellence Awards

NSW Pitch08

Anthony Cowle, was pleased to present the Davies Collison Cave Award for Innovations and Inventions to “The Freedom Chair” by Lu Papi & Associates at the recent Engineering Excellence Awards. Davies Collison Cave has a long standing relationship with Engineers Australia and has been involved with the Engineering Excellence Awards for many years. The Black Tie event held at the Westin Sydney, Grand Ballroom was attended by some 600 guests. The Guest of Honour this year was General Peter Cosgrove AC and the Master of Ceremonies was Scott Williams.

Pitch08 was an educational event targeting innovative small to medium businesses “pitching” their business opportunity to the investment community at a public event. Chris Carter, provided entrants with IP advice. The final pitch was held at Sydney's Powerhouse Museum with some 300 people in attendance.

The Award winner “The Freedom Chair” has been designed to meet the end user's needs. Currently no wheelchair exits that can be used as an everyday chair, a commode chair, a shower chair, and a travelling chair, “the Freedom Chair” has been designed to meet all these needs whilst also incorporating simplicity of manufacture, assembly by disabled people and ultimately to be sold at a reasonable price. Two entrants received the Highly Commended Award: RedMed Ltd for the Double-Ended Blower Integrated for Advanced Respiratory Therapies and Five Y's Pty Ltd for the Zipform. Davies Collison Cave takes this opportunity to congratulate all the entrants and winners showcased at the NSW Engineers Australia Engineering Excellence Awards 2008.

Davies Collison Cave has a long standing relationship with Engineers Australia and has been involved with the Engineering Excellence Awards for many years. Below Left L to R Excellence Award winner Lu Papi & Associates represented by Susi Papi and her daughter Flavia with Anthony Cowle of Davies Collison Cave Highly Commended winner ResMed – re presented by Barton Kenyon with Anthony Cowle of Davies Collison Cave Highly Commended winner Five Y's Pty Ltd – represented by Sander Kroes with Anthony Cowle of Davies Collison Cave

Co-hosted by NSW Department of State of Regional Development (DSRD) and the Australian Small Scale Offerings Board, the NSW Pitch ’08 challenge saw SMS Poll Pty Ltd take out the grand prize for their pitch,

Chris Carter, Partner, Davies Collison Cave

followed by Evolution Tankers Pty Ltd and The Invisible Clothesline Pty Ltd, in second and third places respectively. SMS Poll Pty Ltd is used by educators, public speakers and event planners to gather in-the-moment data. SMS Poll is an innovative mobile voting and live audience polling application that rivals sophisticated Audience Response Systems at one-tenth of the price. Second prize winner, Evolution Tankers Pty Ltd has developed a new manufacturing technology for the production of a lightweight carbon fiber tanker for bulk liquid transport, called the OMNI Tanker. Third prize winner, The Invisible Clothes Line Pty Ltd, is a new and unique globally patented clothesline design, with many benefits and advantages over existing clothes drying products. Each winner has received access to the Pitch ‘08 development pathway to fast-track the growth of their business and offer them a competitive edge in the marketplace.

Above L to R Wayne Leighton, The Invisible Clothesline Pty Ltd Daniel Rodgers, Evolution Tankers Pty Ltd

Anil Sabharwal, SMS Poll Pty Ltd Chris Carter, Partner, Davies Collison Cave

DCC Brisbane Text for Engineering Excellence Awards Brisbane

Entrepreneurs Workshop – Insights into commercialisation

Davies Collison Cave is a sponsor of the Queensland Division of Engineers Australia. In October the Division held their Engineering Excellence Awards Dinner, which was attended by over 900 guests and was held at the Brisbane Convention and Exhibition Centre, South Bank, Brisbane. Her Excellency the Governor of Queensland Ms Penelope Wensley QO was the guest of honour and delivered the Welcome Address. Alistair Smith of Davies Collison Cave presented the Excellence Award for the category of Control Systems and Small Business Ventures. The Excellence Awards winner for this category was RoadEAR, Road Surface Noise Measurement Rig entered by: ASK Consulting Engineers.

Organised by Davies Collison Cave, the Entrepreneurs Workshop hosted by Engineers Australia innovation subcommittee on 3rd September 2008 at the Hawken Auditorium, was aimed at providing entrepreneurs with insights into the process of commercialisation.

Davies Collison Cave was represented at the Dinner by Alistair Smith, Simon Reynolds and Maryam Khajeh

The event was oversubscribed, and the high attendance highlights that there is significant interest in entrepreneurship amongst the engineering profession. Attendees were not disappointed, and learned some valuable lessons, as well as being inspired by the experiences of the speakers, including Paul Higgins, Managing Director of Excel Technology Group; Alistair Smith, Davies Collison Cave; Norm Mathers, Managing Director of Mathers Hydraulics; and Rick McElhinney, Managing Director of Mechpart Pty Ltd, all of whom were able to draw on a wealth of experience on the commercialisation sector. Paul spoke about how attending a commercialisation course at MIT, had helped reinforce many of the lessons he had learnt through successfully commercialising his own inventions. Paul also discussed the importance of protecting ideas, and the need to focus on the commercial story when seeking investment.

Alistair Smith presenting the award to Gillian Adams, Director, ASK Consulting Engineers.

With reference to his experiences in protecting intellectual property for a number of start-up companies, Alistair discussed some of the forms of intellectual property protection available when commercialising technology, including patents, trade marks and registered designs, and how these would apply to an example product. Alistair also described the mechanisms for obtaining protection, highlighting the importance of filing for patent and design applications prior to disclosure of

the technology to third parties. With reference to a number of Mathers Hydraulics’ products, Norm discussed the approach used to allow their development. Of particular importance was ensuring that an appropriate team of people were available to provide the necessary support during the commercialisation process. In many instances, the team included external advisors, allowing Mathers Hydraulics to focus on their core capabilities of developing engineering solutions. Rick’s years of experience in running and investing in both start-up and listed companies, allowed Rick to provide advice relating to both investing and seeking investment. A significant point often overlooked by entrepreneurs is that investors have a wealth of knowledge about requirements for commercialising technology in different industry sectors, and it is therefore important for entrepreneurs to network with investors and seek their guidance, not only their funds. Rick also reinforced Paul’s view that it is important to focus on the business proposition when pitching to investors, as if an attractive business proposition cannot be found, it will be difficult to obtain investment. It is evident from these talks that commercialising technology can be challenging and rewarding. For those wanting to be an entrepreneur, it is important to learn from the experiences of others and seek appropriate advice, to help maximise the chance of successful commercialisation.

For those wanting to be an entrepreneur, it is important to learn from the experiences of others and seek appropriate advice, to help maximise the chance of successful commercialisation.

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Davies Collison Cave is proud to be a platinum sponsor of the Next Big Thing Award for 2009. INNOVIC’s prestigious Next Big Thing Award 2009 was launched in the Davies Collison Cave Boardroom with over 100 guests in attendance and for the first time the awards are going global due to demand from Asian Pacific innovators and small businesses. Joss Evans, CEO, said: “International innovators are keen to capitalise on the reputation of the Next Big Thing Award which is about finding, showcasing and rewarding good new ideas. The Next Big Thing Award also provides over $60,000 in cash and prizes. Past winners and finalists have gone onto reap enormous success in Australia and globally, including establishing over 20 franchise operations, obtaining $7.6 million in finance, exporting to over 42 countries and generating sales of over A$119 million a year.” The 2009 winners will join the ranks of other highly creative winners including E-Crete, a cementless-concrete made from waste produced by power stations; the robotic Shadow Caddy which follows the golfer around using radio frequency and computer processors and the Snapit, a colourful, reuseable, handheld device that safely opens glass ampoules. “These are ingenious innovations developed by

people who are creating the new technologies and businesses of the future”, says Joss Evans. As well as the international award this year, there will be awards for Innovation Excellence, Green Innovation and a Social/Community Benefit Award. In 2009, sponsors include Davies, Collison Cave, Rouse & Co, MYOB, AusIndustry, IP Australia, MYOB, APC, La Salle Matrix Thinking, KMPG, Austrade, Knowledge Commercialisation Australasia, the Australian Innovation Festival, CVP Film & Television, Courtney Colour, Rankin Design, the Australian Anthill and the Melbourne Museum. The Next Big Thing Award is also supported under the Victorian Government’s VicStart commercialisation program. The Melbourne Museum will host a special Exhibition of the successful finalists’ innovations from 30 May to 12 July 2009. The public will be able to nominate the People’s Choice winner that will be announced, along with the other winners on 2 July 2009. Applications for the 2009 Next Big Thing Award close on 16 March 2009. Application forms and further details are available at www.nextbigthingaward.com or by calling INNOVIC on (03) 9650 4733.

Conferences What’s in a Name: epsm abec 2008 Plant Variety Names Innovations in Patient Care and Trade Marks in The Engineering and Physical Sciences Horticulture’ Conference in Medicine and the Australian Biomedical Engineering Christine Lowe a partner of Davies Collison Cave recently presented a paper on “The role of trademarks in branding for horticulture” at the ‘What’s in a Name: Plant Variety Names and Trade Marks in Horticulture’ Conference held in Melbourne. The conference organised by the Australian Centre for Intellectual Property in Agriculture (ACIPA) was a great success with many of the industry's leading horticultural organisations represented.

2008 Conference was held in Christchurch New Zealand. The event attended by over 200 delegates and an array of international speakers was well received. Alistair Smith a partner of Davies Collison Cave chaired the workshop on Health Innovation & Commercialisation. The firm was also represented at the conference by Damon Henshaw and John Stonier.

Alistair Smith Partner

Damon Henshaw Partner

Christine Lowe Partner

Image: Stockxchange, Sam Veres, Collagen fiber bundles imaged using spectrally refracted light.

Australian Biomedical Engineering 2008 Conference was held in Christchurch New Zealand. The event, attended by over 200 delegates and an array of international speakers, was well received.

Australian National Fabrication Facility (ANFF) The Minister for Innovation, Industry, Science and Research, Senator the Hon. Kim Carr, officially opened the Australian National Fabrication Facility (ANFF) at a ceremony in The Shine Dome, Canberra on 17 October. The Australian National Fabrication Facility (ANFF) was established under the Australian Government's National Collaborative Research Infrastructure Strategy. ANFF links university-based nodes to provide publicly funded and industry researchers with access to state-of-the-art nano fabrication facilities at 15 different institutions across Australia. The capability provided enables users to process hard materials (metals,

semiconductors, composites and ceramics) and soft materials (polymers and polymerbiological moieties) and transform these into structures that have application in sensors, medical devices, nanophotonics and nanoelectronics. Following the opening the first ANFF staff workshop was held, enabling members from the participating institutions to meet with Node Directors and Facility Managers to share best practice in the operation of the world-class-multi-user facilities. The workshop lunch was sponsored by Davies Collison Cave and attended by Julian Curwen, Richard Brown, and Edith Hamilton.

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Nanotechnology, Science and Public Perspectives Conference Mark Roberts, of Davies Collison Cave, was a guest speaker at the Nanotechnology: Science, Policy and Public Perspectives One Day Symposium hosted by Monash University and attended by 100 invited guests. Mark was invited to speak at the workshop on "The Intellectual Property Landscape" focusing on where nanotechnology is heading within the IP landscape. The Keynote Address: â&#x20AC;&#x153;Nanotechnology risks, ethics and lawâ&#x20AC;? was delivered by Professor Michael Mehta, Principal, Richardson College for the Environment, University of Winnipeg.

Mark Roberts Partner

ANFF links university-based nodes to provide publicly funded and industry researchers with access to state-of-the-art nano fabrication facilities at 15 different institutions across Australia. Above L-R Rosie Hicks, CEO, Australian National Fabrication Facility Ltd Prof. Leigh Peterson, RMIT, Victorian Node Richard Brown, Senior Associate, Davies Collison Cave

Prof. Andrew Dzurak, Node Director, NSW Node Julian Curwen, Partner, Davies Collison Cave Edith Hamilton, Trainee Attorney, Davies Collison Cave

Image: Stockxchange, Rodolfo Clix

Case study 1 The Trouble With Enantiomers Apotex Pty Ltd v Sanofi-Aventis [2008] FCA 1194

Synopsis The patentability of the individual enantiomers which make up a racemic mixture has again been the subject of consideration by the Australian Federal Court. Whilst the Court has recently affirmed that individual enantiomers can in principle be patentable in view of a prior disclosure of the racemate, here the Court has found that mere prior disclosure of something which would infringe the patentee's claim, as opposed to the more burdensome requirement of an enabling disclosure, is sufficient to deprive the claim of novelty, unless that clam is for a selection.

FACTS OF THE CASE French Patent Application No 253047 was filed in 1982 by Sanofi Aventis (Sanofi) and disclosed new thieno (3,2-c) pyridine compounds having inhibiting action on blood-platelet aggregation and antithrombotic activity. The compounds contained a chiral centre (asymmetric carbon) and thus afford 2 possible enantiomeric forms, or isomers, which may be designated as the (+)- and (-)enantiomers, depending on the direction in which they rotate plane polarised light. The application, later granted as a patent (the French patent), described the compounds having an asymmetrical carbon and referred to "each enantiomer and their mixture". Example 1 illustrated the specific compound methyl a-5-(4,5,6,7-tetrahydro (3,2-c) thieno pyridyl) (2-chlorophenyl)-acetate (PCR 4099), which was synthesised as a racemate (a mixture of equal parts of each enantiomer resulting in no net rotation of plane polarised light). Subsequent testing of PCR 4099 indicated adverse side effects and attempts to separate and test the individual enantiomers were undertaken. It was found that the (-)-, or levorotatory-, enantiomer was inactive and that the (+)-, or dextrorotatory-, enantiomer was at least as active as the racemate. Furthermore, toxicology testing indicated that the inactive (-)-enantiomer was more than twice as toxic as the (+)enantiomer.

Apotex Pty Ltd (Apotex) sought revocation of the patent under the provisions of the 1952 Act asserting, inter alia, lack of novelty, and inventive step.

The (+)-enantiomer, known as Clopidogrel, was launched in Australia in 1998 as its bisulphate salt under the name Plavix.. It is the subject of Australian Patent No 597784 (the patent), in the name of Sanofi, which was filed in 1988 under the provisions of the Australian Patents Act 1952, (the 1952 Act). The 20 year term expired on 4 February 2008. Under the provisions of Chapter 6 Part 3 of the Australian Patents Act 1990, the term was extended by 5 years, to 2013.

In the case of the French patent, the inhibiting action on platelet aggregation and anti-thrombotic activity was asserted for all compounds of the class claimed, i.e. the racemates and each enantiomer thereof. Acknowledging that this may well have been covetous claiming, particularly in the light of the later finding that the (-)-enantiomer of PCR 4099 was in fact inactive, His Honour was of the view that the claims were nevertheless intended to assert a monopoly over not just the racemate but each individual enantiomer. Accordingly, claim 1

THE DECISION Novelty Justice Gyles considered the French patent and the corresponding Canadian, Australian and US patents, each of which made express reference to the two enantiomers or their mixture. Despite the absence of any suggestion that either enantiomer had in fact been obtained or tested, or even a description of a method of resolving the enantiomers, His Honour concluded that the individual enantiomers were within the compounds disclosed. Sanofi contended however, that mere disclosure was insufficient for anticipation, and that the disclosure required by the earlier published patents must be enabling. His Honour reviewed the authorities, and whilst acknowledging that this is reasonable for the anticipation of a process or method claim, it has little relevance to anticipation of a product claim or a claim for a chemical compound by formula. His Honour took the view that in order to deprive the claim of the necessary novelty a publication need only contain a clear description of, or clear instruction to do or make something that would infringe the patentee's claim.

of the patent, directed to the (+)-enantiomer per se and its pharmaceutically acceptable salts in general, was held to be anticipated by the French patent (and corresponding Australian, Canadian and US patents). This finding was distinguished from the recent judgment of Justice Lindgren in Alphapharm Pty Ltd v Lundbeck A/S [2008] FCA 559 (Alphapharm), reported in our e.mag of September 2008, who found for the novelty of a (+)-enantiomer in view of the prior disclosure of a racemate. In that case, the prior art contained no implied or express reference or claim to the existence of the individual enantiomers separate to their existence in a racemate. His Honour acknowledged where there might be an exception to his finding of anticipation on the basis of mere disclosure: that being where the patent was for a selection. Notwithstanding that PCR 4099 and its enantiomers were expressly disclosed in the prior art, His Honour did acknowledge that a selection may nevertheless be from a small class, in this case the (+)- and (-)enantiomers of PCR 4099. His Honour then proceeded to determine whether the (+)enantiomer satisfied the well-established requirements for selection: - there must be some substantial advantage secured by the selected members; - the whole of the selection must possess the advantage; - the selection must be in respect of a special character peculiar to the group; and - the advantage must be clearly disclosed in the specification.

The first, second and fourth criteria were readily found to be satisfied. However, His

Honour concluded that the selection was not in respect of a special character peculiar to the selection, noting that the advantages of the (+)-enantiomer were not different in kind from those described for the compounds disclosed and claimed in the French patent, that is to say, low toxicity, excellent tolerance and inhibition properties on blood-platelet aggregation and anti-thrombotic activity. Notwithstanding the finding against claim 1, claim 3, directed specifically to the hydrogen sulphate salt of the (+)-enantiomer and claim 6, directed to a process for the preparation of the (+)- enantiomer, required separate consideration. His Honour concluded that although the prior patents referred to addition salts with pharmaceutically acceptable mineral or organic acids, there was no clear or specific disclosure of the hydrogen sulphate salt, and the attack on the novelty of claim 3 failed. Similarly, as noted above, the prior patents afforded no description of how the (+)enantiomer could be prepared. Accordingly, claim 6 was also held to be novel. Inventive Step The provisions under the 1952 Act regarding inventive step limited consideration to what was known or used in Australia on or before the priority date, i.e. the common general knowledge. Apotex did not attempt to assert that clopidogrel was part of the common general knowledge, or that the skilled person would have arrived at the (+)-enantiomer on the basis of his or her common general knowledge prior to the priority date of the patent. Instead Apotex relied on the description of inventive step in the specification, being the step from racemic PCR 4099, described in the French patent, to the (+)-enantiomer. Taking the starting point for the step as the racemic PCR 4099, His Honour considered that the inventive step was ascertaining that only the (+)-enantiomer exhibited platelet aggregation inhibiting activity, the (-)-enantiomer being inactive and less well tolerated. However, His Honour accepted that it was common general knowledge at the priority date that one of the two enantiomers might contain all the activity and concluded that the discovery

that the (+)-enantiomer was responsible for the activity was not so unexpected as to amount to an inventive step. Claims 2-5 of the patent were directed to specific salts of the (+)-enantiomer: hydrogen sulphate, taurocholate, hydrobromide and hydrogen chloride. His Honour noted that the conversion of the (+)-enantiomer to the specific salts was not suggested to have any difficulties, being described as achieved in a standard manner by standard methods and it was observed that if the (+)-enantiomer was common general knowledge, each of the salts would be obvious. However, the inventive step rested not on the method for obtaining the salts but on the properties of the salts themselves, which were held to be novel, without any special consideration to selection patents. Accordingly, the attack of lack of inventive step on the claims to the specific salts failed. His Honour also held that the method claims, directed to a process for obtaining the (+)enantiomer, were merely classic processes being applied to a known compound, and accordingly found them obvious. Apotex also alleged that the patent was obtained on a false suggestion or representation, particularly with regard to the term "unexpected" as used in relation to the finding that the (+)-enantiomer alone was responsible for the activity. His Honour refused to find so, noting that in any event, even if they were false, there was no indication that these statements materially led to grant of the patent. Indeed, His Honour dismissed the term as likely to be a patent attorney's "puff" rather than a serious statement of fact! Apotex has appealed the decision. COMMENTARY It is clear that whilst individual enantiomers are not inherently unpatentable in light of a prior disclosure of the racemate, each case must be judged on the relevant facts. Here, prior disclosure of a specific racemic compound and general reference to the enantiomers was considered sufficient to anticipate a subsequent claim to the (+)enantiomer of that compound, notwithstanding the absence of any specific teaching or suggestion as to resolution of the racemate or any indication as to which

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enantiomer possessed the desired biological activity. Whilst the French patent did not explicitly disclose any method for preparing the individual enantiomers, evidence presented by the expert witnesses clearly established that a range of techniques for obtaining enantiomers from a racemate was well known in the art prior to the earliest priority date, including diasteriomeric salt formation as claimed in claim 6 of the patent. On that basis, it could be argued that, notwithstanding the absence of explicit teachings, the disclosure of the French patent was nevertheless enabled by virtue of the skilled addressee's common general knowledge, in light of which any specification must be construed. Taken to an extreme, however, the Court's conclusion that mere prior disclosure of a chemical compound is sufficient for anticipation may conceivably lead to a situation where a "fantasy" disclosure may deprive new (in the sense of newly discovered or prepared for the first time) compounds from subsequent patent protection. Author: Paula de Bruyn, Senior Associate

Case study 2 If You Are A Mother (or Even If You Are Not), You Will Have Heard of The Brand Huggies. Kimberly-Clarke WorldWide, Inc v Goulimis [2008] FCA 1415 Synopsis In deciding whether or not trade marks are confusingly similar, the primary issue will very often be whether or not the respective goods and/or services are sufficiently related to give rise to confusion. Also, in trade mark opposition proceedings, the Trade Marks Office and the Courts are increasingly willing to make decisions relating to the absence of an applicant's intention to use a trade mark based on inferences rather than hard evidence that an applicant does not have the requisite intention to use a trade mark. Both these issues were considered in a recent Federal Court decision involving the well-known trade mark HUGGIES.

FACTS OF THE CASE The applicant (Goulimis) applied for registration of the trade mark “HUGGIE" MUMMY in relation to “direct selling of baby-toddler’s toys, videos, CD’s, books, games and accessories”. That application was unsuccessfully opposed by KimberlyClark and Kimberly-Clarke subsequently appealed the decision to the Federal Court. Kimberly-Clarke relied upon several earlier trade mark registrations for trade marks comprising HUGGIES and HUGGIES derivative marks (HUGGIES PULL-UPS, HUGGIES SUPREME, HUGGIES PULL-UPS DRY NITES, HUGGIES LITTLE SWIMMERS, HUGGIES DRY COMFORT) for a wide range of goods. Use of the trade mark HUGGIES by Kimberly-Clarke commenced in Australia in 1987 in relation to disposable nappies. That use of the trade mark was subsequently expanded to include varieties of absorbent underpants, toilet training pants, pyjamas and swimwear for babies and toddlers as well as changing pads, baby wipes, bath washes, powders and lotions. Since 1998 some HUGGIES products included a redemption scheme under which customers could redeem barcodes to obtain children’s toys, games, CD’s, videos, play tents, fun cars, musical mats and art desks. Such items bear the HUGGIES trade mark. In addition, since 2000 items such as colour mobiles, character and learning cards and

door plaques have been included as part of the packaging of the HUGGIES products. The HUGGIES products are distributed through supermarkets, pharmacies, variety and discount stores, convenience stores, service stations, baby specialty stores and other specialty stores. To substantiate its case Kimberly-Clarke relied upon market research showing extraordinarily high spontaneous brand awareness and market penetration amongst mothers. Kimberly-Clarke also provided evidence to show that HUGGIES products were ubiquitous and pre-eminent in the baby and toddler market. The evidence of a marketing consultant suggested that the meaning of the term “direct selling” had become uncertain over time but had broadened as a result of marketing in electronic media. On that basis the marketing consultant considered that parents of babies and toddlers would be likely to associate the services of GOULIMIS under the trade mark "HUGGIES" MUMMY with goods and services provided by Kimberly-Clarke. Kimberly-Clarke’s solicitor served a subpoena on the applicant requiring production of documents relating to any use of the HUGGIE MUMMY trade mark in Australia or intention to use or authorise the use of the mark. The applicant produced only a Certificate of Registration of Business name for HUGGIE MUMMY stating that the business was trading. There was also evidence from a private investigator outlining a telephone discussion with the applicant stating that she hadn’t

started any business under the trade mark as yet and she was a long way off doing so. THE DECISION a) Deceptive Similarity: HUGGIES versus "HUGGIE" MUMMY In deciding the issue of deceptive similarity Justice Jagot first considered whether the respective goods and services were closely related. In this context Justice Jagot discussed the meaning of “direct selling” indicating that it included Internet sales, market sales, sales from a branded shop or from a factory outlet. While the methods of sale under the scope of “direct selling” are more restrictive than the retail channels used by Kimberly-Clarke, there was substantial overlap with such trade channels, particularly in terms of location and marketing. According to the judge the term “accessories” in the applicant's specification of goods would include the opportunities for the applicant to engage in direct selling of the whole of Kimberly-Clarke's product range. The Judge noted that some of KimberlyClarke's goods under the trade mark HUGGIES included branded toys and games as part of the packaging and that Kimberly-Clarke also distributed baby and toddler related toys, games, CD’s

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“The market research showing the notoriety of the opponent’s marks supports the conclusion of deceptive similarity despite the fact that there is no evidence of actual confusion.” and videos as part of its redemption scheme. The judge expressed the view that the consumers for these goods are identical and that the uses to which the goods are put will be the same (caring for, entertaining and educating babies and toddlers). On this basis, the judge concluded that the applicant’s services and the goods of Kimberly-Clarke are closely related. Turning to the comparison of the trade marks, the judge accepted that the essential feature of the applicant’s trade mark is “HUGGIE”, which is a made up word. The inverted commas around the word give it emphasis, as does the artificial “IE” ending. Baby and toddler accessories are consumer goods sold on a low value, high volume basis and are likely to be purchased quickly, on a recurrent basis, without much thought. The singular form in the opposed mark is a weak point of distinction when the nature of the services and goods in question is considered. The judge concluded that there is a real likelihood that some people will wonder whether the applicant’s direct selling of the nominated goods, had, as its source, Kimberly-Clarke. On this basis, KimberlyClarke succeeded in establishing that the applicant's trade mark was confusingly similar to the trade marks registered by Kimberly-Clarke.

b) Likelihood of Confusion based on Prior Reputation The judge accepted that KimberlyClarke's trade marks, in particular the trade mark HUGGIES, was very well known throughout Australia. That being so, the judge went on to conclude that use of the trade mark "HUGGIE" MUMMY by the applicant would be likely to cause confusion by reason of that prior existing registration and this further ground of opposition therefore succeeded. c) Use Contrary to Law The Judge also accepted the opponent’s objection that use of the mark would be contrary to law on the basis that Use of the mark would be likely to mislead and deceive consumers and that use of the applicant's trade mark would infringe Kimberly-Clarke's trade mark registrations. d) Lack of Intention to Use the Mark The applicant's only evidence to substantiate a claimed intention to use the trade mark "HUGGIE" MUMMY wasthe production of a Business Name registration Certificate. Weighed against the evidence of an investigator that there was no evidence of any use of the trade mark "HUGGIE" MUMMY by the applicant, the judge accepted that the evidence demonstrated a prima facie case of the applicant’s lack of intention to use the mark (a real and definite intention even if not immediate or within a limited time and not a mere general intention of expanding a business at some future time) and this ground of opposition likewise succeeded.

CONCLUSION The Court ordered that the opposition to the application was successful and the applicant was ordered to pay Kimberly-Clarke’s costs of the appeal and the proceedings before the Trade Marks Office.

Author: Fiona Brittain, Associate

Case study 3 What Constitutes An Innovative Step Delnorth Pty Ltd v. Dura-Post (Aust) Pty Ltd [2008] FCA 1225 Synopsis Innovation patents have been available in Australia for some years. A substantive test for patentability of an innovation patent is that the invention claimed involves an innovative step as distinct from the inventive step requirement of a standard patent. There is no direct equivalent of an innovation patent in overseas jurisdictions and the recent decision of Gyles J in Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225 is the first decision to be handed down by the Australian Courts in which detailed consideration has been given to innovative step in assessing the validity of a number of related innovation patents. Although the approach taken by the Court when determining the presence of innovative step was quite straightforward and unsurprising, nevertheless it does provide a better understanding as to the application of the test.

FACTS OF THE CASE

THE DECISION

The case involved three innovation patents of Delnorth Pty Ltd ("Delnorth"), 2005100978 (Patent 1), 2006100297 (Patent 2) and 2006100696 (Patent 3). All three patents were related (each was originally filed as a divisional application from the same standard patent application) and concerned a roadside post made of spring steel so as to bend elastically through 90° upon impact by a vehicle. The three patents claim different aspects of the spring steel post. Patent 1 in its broadest claim defined the post as having an arcuate section and a marker hole to provide a depth indication for mounting of the post in the ground; Patent 2 in its broadest claim merely defined the post as being of spring steel and bendable through 90°; and Patent 3 in its broadest claim defined the spring steel post as having a surface coating. Delnorth issued proceedings against Dura-Post (Aust) Pty Ltd ("Dura-Post") for infringement of its three patents and Dura-Post cross-claimed for revocation of the patent inter alia as lacking novelty and innovative step.

In giving consideration to the application of the innovative step test Gyles J says [at 52]: “There is no need to search for some particular advance in the art to be described as an innovative step which g o v e rns the consideration of each claim. The first step is to compare the invention as claimed in each claim with the prior art base and determine the difference or differences. The next step is to look at those differences through the eyes of a person skilled in the relevant art in the light of common general knowledge as it existed in Australia before the priority date of the relevant claim and ask whether the invention as claimed only varies from the kinds of information set out in s 7(5) in ways that make no substantial contribution to the working of the invention.”

His Honour notes that the phrase "no substantial contribution to the working of the invention" involves quite a different kind of judgement to that involved in determining whether there is an inventive step (the obviousness test which comes into consideration in standard patents). The question of what is meant by "substantial" is considered and his Honour notes that in some situations it may mean "great" or "weighty" and in other situations it may mean "more than insubstantial" or "of substance". His Honour then goes on to say [at 61]: "In my view the provenance of the phrase "make no substantial contribution to the working of the invention" indicates that "substantial" in this context means "real" or "of substance" as contrasted with distinctions without a real difference."

In then considering the claims of the patents against the prior art base, which in this case consisted of prior patents and a number of prior uses cited by Dura-Post, His Honour

firstly considered the content of the common general knowledge. Although the judgement does not detail what was found to be the common general knowledge it does indicate what was not common general knowledge and he states [at 62]: "I can find, however, that use of sheet spring steel was not known for use in connection with roadside posts or analogous uses and that none of the cited patents was part of common general knowledge in Australia at the time."

The analysis of innovative step is then made in relation to a number of different prior art citations and is instructive as it provides a clear indication as to the practical application of the test. In relation to a prior post known as SupaFlex, evidently a flexible roadside post of PVC, His Honour says [at 63]: "Does the claimed roadside post involve an innovative step over the use (etc) of the SupaFlex plastic guide post? In my opinion, the answer to that question must be "yes". Each of the claims involves construction by sheet spring steel. The SupaFlex post is plastic. The materials are quite different, although, no doubt, they each have the same objective. As I have endeavoured to explain, the question is not whether flexible sheet steel is better than flexible PVC – it is certainly different. It cannot be seriously argued that the material sheet spring steel does not make a substantial contribution to the working of the roadside post claimed in each claim."

It is to be noted that while His Honour found the broadest claims of the three patents as having innovative step over that particular reference, he found certain of the broader claims of Patents 2 and 3 as lacking

innovative step over others of the references. For example in relation to Patent 3 which claimed broadly the spring steel post with a surface coating, His Honour found [at 83] that the surface coating which was the differentiation between claim 1 of that patent and a prior reference did not involve an innovative step, noting that while he did not suggest it had no functional purpose, rather its contribution is not significant enough.

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instance, in the writer's view serious doubt arises as to whether the marker hole really does make the required contribution. But in this regard, the difficulty of the assessment particularly in rather borderline cases is really no different to similar determinations which arise, say, when assessing inventive step of a standard patent. Author: Raymond Hind, Partner

COMMENTARY What is interesting in this decision, however, is His Honour's approach to the common general knowledge. While as noted above he found that sheet spring steel for use in connection with roadside posts or analogous uses was not in itself part of the common general knowledge, nevertheless His Honour did not comment on the common general knowledge which must surely exist in relation to the general properties of spring steel and which would be well known to engineering designers in all areas of technology. Be that as it may, even if such knowledge had been brought into consideration it likely would not have effected the outcome of this case as claim 1 of Patent 1 which included the features of the arcuate transverse crosssection and marker hole would still have innovative step as both of those features considered independently [at 70] were found to make a substantial contribution. While this decision does assist in understanding as to how innovative step is to be determined, nevertheless significant issues remain as to the manner in which common general knowledge is to be considered. While the meaning given to "substantial contribution" seems entirely appropriate, nevertheless the practical assessment as to substantiality within this context is not always straightforward and may represent a difficult judgement call; for

While this decision does assist in understanding as to how innovative step is to be determined, nevertheless significant issues remain as to the manner in which common general knowledge is to be considered.

Case study 4 Court Influenced by the Operation of the PBS in Granting Interlocutory Injunction Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498 Synopsis Eli Lilly & Company and Eli Lilly Australia Pty Ltd (together "Eli Lilly") supply a medication called "Gemzar". At present Gemzar is the only pharmaceutical product listed on the Pharmaceutical Benefits Scheme ("PBS") in which the active ingredient is gemcitabine hydrochloride. Eli Lilly has patents covering this compound and the process by which it is made. Interpharma Pty Ltd ("Interpharma") applied for a listing of a generic product with the same active ingredient on the PBS and threatened to commence marketing of its product. Eli Lilly alleged Interpharma's conduct would infringe its patents and sought interlocutory injunctions restraining Interpharma from marketing its product and requiring Interpharma to withdraw the application for its product to be included on the PBS. Jessup J's decision to grant the injunctions sought was influenced by evidence that recent changes in the operation of the PBS mean that the introduction of a generic product would result in a significant reduction in the price of Gemzar and was likely to have other effects that were both "unpredictable and irreversible". Accordingly, Jessup J held that Eli Lilly was likely to suffer irreparable harm, for which damages would not be adequate compensation, unless an injunction was granted.

FACTS OF THE CASE Eli Lilly & Company is the proprietor of the following patents, which are licensed to Eli Lilly Australia Pty Ltd: •

Australian Patent No. 565856, entitled "difluoro nucleoside antivirals" for a pharmaceutical compound, which expires on 7 March 2009 (the "compound patent").

•

Australian Patent No. 659009, entitled "stereoselective glycosylation process" for a manufacturing process, which expires on 18 June 2013 (the "process patent").

These patents relate to a product called Gemzar, which is used to treat five of the major types of cancer and has been sold in Australia since 1995. Gemzar is registered on the Australian Register of Therapeutic Goods ("ARTG") and listed on the PBS. As stated above, Gemzar is the only pharmaceutical product listed on the PBS at present which has gemcitabine hydrochloride as its active ingredient. Interpharma threatened to commence marketing a pharmaceutical product called “EBEGEMCIT” which has the same active ingredient. EBEGEMCIT was registered on the ARTG, but had not been sold in Australia. Interpharma applied for it to be listed on the PBS. If listing was achieved, EBEGEMCIT would be in a position to compete directly with Gemzar.

Eli Lilly sought interlocutory injunctions to restrain Interpharma from marketing EBEGEMCIT in Australia and requiring the application for the inclusion of EBEGEMCIT on the PBS to be withdrawn. Eli Lilly alleged that EBEGEMCIT infringed the compound patent and that the process used in its production infringed the process patent. Interpharma denied infringement and argued that neither patent was valid. THE DECISION Approach to be taken on an application for an interlocutory injunction It was agreed that the questions which arise in an application for an interlocutory injunction are:

whilst Interpharma's argument was of "some apparent force" it was not so self-evidently likely to succeed as to compel the conclusion that Eli Lilly did not have a serious question to be tried. Interpharma also contended that the compound patent was invalid because it was not useful. Although Jessup J considered that Interpharma’s case in this respect had prospects of "apparent strength" and was likely to present real difficulties for Eli Lilly at trial, his Honour was not persuaded that Interpharma’s case on inutility was so strong as to alter his view that Eli Lilly had a prima facie case of infringement. PROCESS PATENT

Jessup J went on to find there was a prima facie case for infringement of the process patent. Interpharma relied on expert evidence to argue that the patent was invalid for want of inventive step. Eli Lilly criticised this evidence because the experts had been given the patents before being asked to express their opinions. Jessup J held that invalidity was for Interpharma to prove and that the material upon which it relied manifestly left "considerable scope for argument". Accordingly, he maintained his finding that Eli Lilly had established a prima facie case of infringement.

Whether there is a serious question to be tried

ADEQUACY OF DAMAGES

COMPOUND PATENT

In order to deal with the subject of the adequacy of damages as a remedy Jessup J held that it was necessary to consider how the PBS works. His Honour accepted evidence that the introduction of a therapeutically equivalent product such as EBEGEMCIT onto the PBS would lead to an

(a) whether there was a serious question to be tried, or whether Eli Lilly had made out a prima facie case in the sense that, if the evidence remained the same, there was a probability that at trial they would be entitled to relief; (b) whether Eli Lilly would suffer irreparable harm, for which damages would not be adequate compensation, unless an injunction was granted; and

Interpharma's argument that its product did not infringe the compound patent was based on the indifference of the claims in the patent with respect to stereochemistry. Jessup J held that this argument required construction of the patent which was best left to the trial judge. However, on a provisional level, his Honour found that

immediate reduction of 12.5% in the price received for Gemzar, and annual reductions of 2% in that price for 3 years. Jessup J held that if these were the only impacts of the entry of EBEGEMCIT into the market, it would be difficult to conclude that Eli Lillyâ&#x20AC;&#x2122;s losses could not ultimately be calculated and compensated in damages. However, Eli Lilly submitted that the situation was more complex, particularly because the entry of EBEGEMCIT onto the market was likely to result in other manufacturers of generic alternatives to Gemzar deciding to enter the market and this would make it more difficult to quantify the extent of their damages. Jessup J found that the real problem was whether it would ever be possible to restore Eli Lilly to its present position if they succeeded at trial, but did not secure interlocutory relief. His Honour held that it was not certain whether the Government would recognise an entitlement to the restoration of the price reductions which would have been implemented by then if an interlocutory injunction was not granted. Further, it was possible that the period during which there was competition may lead to substantial changes in prescribing practices of medical practitioners. Thus, Jessup J recognised that the commercial advantage of being the only supplier of a gemcitabine product in the field was "likely to be both subtle and powerful". Jessup J adopted the approach taken by Gyles J in GenRx Pty Ltd v Sanofi-Aventis (2007) 73 IPR 502 (the "GenRx case"), where it was held that a disturbance of the status quo was not justified because the way in which the PBS now operates means that a new entrant in the field was likely to have an effect which may be "both unpredictable and irreversible" and to result in an interference in trade patterns of the patentee "that may not be measurable or detectable in money terms". Accordingly, his Honour concluded that damages were not likely to be an adequate remedy if Interpharma was found to have infringed the process patent. However, Jessup J found that damages were much more likely to be an adequate remedy if Interpharma was found to have infringed the compound patent because it was due to expire in March 2009, well before any trial could take place.

BALANCE OF CONVENIENCE Eli Lilly contended that the balance of convenience favoured interlocutory relief being granted because it would preserve the status quo. Jessup J considered that the Eli Lilly had at least a valid starting point in their reliance upon the status quo, particularly since Interpharma did not appear to be able to say that its position would be worsened if the injunctions were granted. Eli Lilly submitted that Interpharma had got itself into its present situation with "its eyes wide open" because it had undertaken all its commercial preparations in the knowledge of one or both of the patents, or at least had been less than assiduous in its inquiries as to whether the marketing of its product might have constituted an infringement. Jessup J found that Interpharma had no ready answer to these criticisms and its preparatory actions had significantly compromised its attempt to resist an injunction. Eli Lilly also submitted that they had a very strong case on the merits. However, Jessup J was not persuaded that either side had a self-evidently stronger case at the level of infringement of either patent. At the level of validity, his Honour found that Interpharma had a case of "apparent strength" with respect to its point on utility of the compound patent. Conversely, Jessup J did not consider that Interpharma had established anything more than "a fairly arguable case" in its challenge to the validity of the process patent. CONCLUSION In relation to the compound patent, Jessup J refused to grant interlocutory relief. His Honour considered it significant that the patent was due to expire on 7 March 2009 and therefore if an injunction was not granted the maximum period during which Interpharma might be infringing the patent was only a few months. Jessup J was of the view that calculation of the damages suffered by Eli Lilly over that period was unlikely to present any real difficulties. His Honour also considered the "apparent strength" of the Interpharmaâ&#x20AC;&#x2122;s case on validity and, on balance, was not persuaded to grant the interlocutory injunction sought in respect of the compound patent. In contrast, Jessup J granted interlocutory relief for infringement of the process patent. The process patent was still within term by some years. Jessup J considered that if an

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injunction was refused, but the Eli Lilly succeeded at trial there was likely to be considerable difficulty restoring them to the position of advantage that they presently occupied. His Honour held that had Interpharma shown a "conscientious concern" to discover whether its plans to market a gemcitabine product might be compromised by a registered Australian patent it would have encountered the process patent. Further, Eli Lilly had the advantage of the status quo and his Honour provisionally considered that it may have the better of the argument on the question of infringement. Accordingly, Jessup Jâ&#x20AC;&#x2122;s view was that Eli Lilly had shown enough to entitle them to an interlocutory injunction with respect to the process patent. IMPLICATIONS When considering whether damages would be adequate compensation if an injunction was not granted Jessup J followed the approach taken in the GenRx case, where it was held that the operation of the PBS meant that allowing a generic product to be listed would lead not only to price reductions in the patented product but also to other unpredictable and potentially irreversible effects, such that a disturbance of the status quo was not justified. It is therefore likely that the Federal Court will have greater regard in the future to the way in which the PBS now operates when a generic product is introduced onto the list for the first time. This should prove useful to a patentee seeking an interlocutory injunction against a company planning to list and market a generic product, as it will make it more difficult for a generic company to resist such an application on the basis that damages would be an adequate remedy. Author: Claire Ramsay, Solicitor

Case study 5 Another Reason to Avoid Reliance on the Grace Period for Filing Patent Applications: Subsequent Divisional Applications Mont Adventure Equipment Pty Ltd v Phoenix Leisure Group Pty Ltd [2008] FCA 1476

Synopsis In April 2002, the Government introduced a 12-month grace period for patent applications as part of its Backing Australia's Ability innovation action plan. The effect and limits of this grace period has rarely been the subject of judicial consideration. However, in this decision Stone J considers the applicability of the grace period provisions to divisional patent applications, highlighting an important limit on their usefulness.

Travel packs and timing

FACTS OF THE CASE In around October 2004, Mont Adventure started offering for sale "Astro 65" and "Astro 80" model travel packs. On 13 May 2005, Mont Adventure filed a complete standard patent application claiming features of the travel packs. Mont Adventure relied on the grace period provisions of the Patents Act 1990 (Cth) (the Act) to maintain the potential validity of a standard patent granted to it on the application in light of its previous offering for sale of the Astro 65 and Astro 80 travel packs. On 22 November 2006, Mont Adventure filed an application for an innovation patent as a divisional application from its previously filed standard patent application. As a divisional application, the innovation patent application is entitled to share the priority date of the parent standard patent application. The effect of this is that the priority date for both the standard patent application (parent) and the innovation patent application (divisional) was 13 May 2005 (the filing date of the standard patent application), as shown below. Mont Adventure brought proceedings against Phoenix Leisure Group Pty Ltd (Phoenix) for infringement of its innovation

patent. In response, Phoenix sought the revocation of the innovation patent, arguing, amongst other things, that the claimed invention was not novel and did not involve an innovative step, due to on Mont Adventure's prior offering for sale of the Astro 65 and Astro 80 travel packs. THE DECSION Grace period provisions Section 24 of the Act provides, amongst other things, that when deciding whether an invention is novel or involves an innovative step, prior publication or use of the invention by the nominated person must be disregarded if: (a) the prior publication or use is in the "prescribed circumstances"; and (b) "a patent application for the invention is made within the prescribed period." Regulation 2.2(1A) defines a "prescribed circumstance" as being "the circumstance that there was a publication or use of the invention within 12 months before the filing date of the complete application". Regulation 2.3(1A) defines the "prescribed period" as "the period of 12 months after the information was first made publicly available". In the case of divisional applications, the filing date of the divisional application is taken to be the filing date of the parent application, by virtue of regulation 2.3(4).

Prescribed circumstance Justice Stone of the Federal Court of Australia was asked to consider, as a preliminary question, whether "the filing date of the complete application" (in the definition of "prescribed circumstance") was the filing date of the parent (standard) patent application, or the divisional (innovation) patent application. Her Honour considered that section 24 relates to whether an invention is novel and involves and inventive or innovative step, and that accordingly a reference to a "complete application" is likely to be a reference to the application the validity of which is in question, that is, the divisional application. In addition, if the reference to "a filing date of a complete application" was a reference to the filing date of the parent application, there would be no need for deeming regulations such as regulation 2.3(4) (which deems the filing date of the divisional application to be the filing date of the parent application). Accordingly, Her Honour decided that the "filing date of the complete application" was the filing date of the divisional application.

Mont Adventure's divisional innovation patent application was filed within the prescribed period, because: (a) the filing date for the divisional application is taken to be the filing date of the parent application (regulation 2.3(4)); and (b) the filing date of the parent application (13 May 2005) was within 12 months after the information was first made publicly available (October 2004). However, the offering for sale of the travel packs in October 2004 could not be disregarded when considering the novelty or innovative step claimed in the divisional innovation patent, because this prior use was not within 12 months before the filing date of the divisional application (on 22 November 2006). This situation is illustrated below.

COMMENTARY The decision highlights some of the quirks of the provisions implementing the grace period. For example, the rationale for having both a "prescribed period" and "prescribed circumstance" is unclear, particularly where the limiting factor will be the "prescribed circumstance", which will always have a commencement date the same as, or later than, the "prescribed period". This is particularly confusing in light of regulation 2.3(4), which specifically addresses divisional applications in the context of the "prescribed period", which has been rendered largely irrelevant by this decision. Regulation 2.2(1A) is also curiously drafted, as on its face it appears to require any publication or use in the 12 months before the filing date, and does not appear to define the disclosures that may be disregarded when assessing novelty and innovative step.

â&#x20AC;&#x153;Phoenix sought the revocation of the innovation patent, arguing, amongst other things, that the claimed invention was not novel and did not involve an innovative step...â&#x20AC;?

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The decision is currently under appeal to the Full Court of the Federal Court of Australia, and until the nature and effect of the grace period provisions is clarified by the Full Federal Court, care should be taken to file all patent applications (including divisional applications) that could be invalidated by a disclosure, within 12 months of that disclosure, as any subsequently filed divisional applications may be invalid. Author: Nik Ramchand, Senior Associate

Case study 6 Promising Developments for Trade Mark Owners Commonwealth Director of Public Prosecutions Reference No. 1 of 2008 [2008] VSCA 214 and other developments Synopsis A recent decision handed down by the Court of Appeal of the Supreme Court of Victoria is a promising development for trade mark owners. The decision clarifies what an accused must "know" to be guilty of an offence under the criminal provisions of the Trade Marks Act 1995 (Cth) ("TMA"). Specifically, the Court held that offences under the criminal provisions of the TMA do not require proof that the accused knew his conduct was unlawful or wrong in the criminal sense. IP Australia is also currently seeking submissions on a number of changes to the TMA which it is considering recommending to the Government. These changes include increasing the penalties for offences under the criminal offences provisions of the TMA and introducing the remedy of additional damages for civil infringement actions. The Court's decision and the changes proposed by IP Australia (if implemented) should make it simpler to prosecute offenders under the TMA's criminal provisions and further deter trade mark counterfeiters. The effectiveness of the criminal provisions in the TMA is often the subject of debate. Unless there is some serious public interest at stake or commercial-scale quantities of goods involved, it can be difficult to secure the assistance of enforcement agencies and the Director of Public Prosecutions ("DPP") to prosecute individuals and corporations under these provisions. The criminal provisions also have a higher burden of proof than civil trade mark infringement provisions, requiring proof beyond reasonable doubt rather than on a balance of probabilities. It is therefore not surprising that the number of trade mark offence prosecutions by the DPP per year in the past 8 years has ranged from 4 to 16 cases with "no clearly increasing trend apparent".

FACTS OF THE CASE Under section 148 of the TMA, a person is guilty of an offence if the person intentionally sells or exposes goods for sale, has goods in his or her possession or imports goods into Australia for the purposes of trade or manufacture, knowing that, or reckless of whether or not: â&#x20AC;˘

a falsified registered trade mark is applied to them or in relation to them; or

â&#x20AC;˘

a falsified trade mark has been unlawfully removed from them; or

â&#x20AC;˘

a registered trade mark is falsely applied to them or in relation to them.

In this case, the accused was tried in the County Court for contravening: 1. sub-sections 148(b) and (g), which makes it an offence to intentionally expose goods for sale knowing that, or reckless

of whether or not, a registered trade mark was falsely applied to them or in relation to them; and 2. sub-sections 148(d) and (g), which makes it an offence to intentionally import goods into Australia for the purposes of trade or manufacture, knowing that, or reckless of whether or not, a registered trade mark was falsely applied to or in relation to the goods. The goods in question which included counterfeit batteries and luxury handbags, were in a number of shipping containers seized by Australian Customs Services. In his charge to the jury the Judge directed inter alia that to establish the offence under section 148(g), the DPP would need to prove, beyond reasonable doubt, that the accused knew that the registered trade mark was falsely applied to or in relation to the goods in the sense that the accused should know that the false application of the trade mark was "unlawful in a criminal sense" and know that the false application was "a criminal offence." The jury found that the accused was not guilty on each count.

The Commonwealth DPP sought the Court of Appeal's opinion on: A. What are the elements of an offence against ss 148(b), (g) and s 148(d), (g)? B. Do those elements include, as ruled by the trial judge, that the accused had knowledge, awareness or a belief that the conduct was unlawful in a criminal sense or wrong according to the standards of ordinary men? THE DECISION A trade mark is falsely applied if its application is unauthorised. A trade mark is falsely applied to goods if it is applied "without the permission of the registered owner of the trade mark or of an authorised user, and without the application being required or authorised by the Act, a direction of the Registrar or of a Court". The DPP contended that proof that the accused knew that the trade mark was falsely

applied requires the prosecution to establish that the accused knew that, or was reckless of whether or not, a trade mark was applied to the goods without authorisation. Proof of knowledge of that fact is sufficient. There is no requirement to prove that the accused appreciated that his conduct was unlawful or wrong. The Court accepted this submission. It follows that proof that the accused knew of the false application of the trade mark does not require proof that he or she knew that the false application was an unlawful act. What is required for proof of section 148(g) is knowledge of the facts constituting the false application of a trade mark and no more. IP AUSTRALIA'S OPTION PAPER Interestingly, this case coincides with the release of the IP Australia’s Review of Penalties and Additional Damages – Trade Marks Act 1995 – Option Paper (November 2008). IP Australia is currently seeking submissions on a number of options which it is considering recommending to the Government. Those options include:

•

The introduction in the TMA of summary offences with lower fault requirements. IP Australia considers that this option should be adopted primarily to offer law enforcement agencies more flexibility to help deter trade mark counterfeiting activity. Adopting this option would also increase consistency with offences in the Copyright Act 1968 (Cth) .

•

The maximum penalties for indictable offences in the TMA should be increased from a maximum of 2 years imprisonment and 500 penalty units to a maximum of 5 years imprisonment and 550 penalty units. Adopting this option would ensure greater consistency between the TMA and Copyright Act and is in line with international levels.

•

The introduction of a remedy of additional damages to allow for a punitive response, where necessary, in civil actions. Adopting this approach would also increase consistency with other IP legislation.

Submissions close on 27 February, 2009.

D C C

Q U A R T E R L Y

Dec 08

COMMENTARY •

It is sufficient for the purposes of section 148 of the TMA to prove that the accused knew that the trade mark was applied without authorisation. The accused does not need to know that the false application was unlawful in a criminal sense.

•

The Court's decision and the options recommended in IP Australia's recent Option Paper, if implemented, will ideally result in more prosecutions under the criminal provisions of the TMA and will further deter counterfeiters.

•

The introduction of the remedy of additional damages into the TMA is also likely to act as a deterrent to counterfeiters in civil actions for trade mark infringement.

Author: Elizabeth Godfrey, Senior Associate

the Court held that offences under the criminal provisions of the TMA do not require proof that the accused knew his conduct was unlawful or wrong in the criminal sense.

Case study 7 Trade Mark Rights And The Importance Of Having Written Agreements JLCS Pty Ltd v Squires Loft City Steakhouse [2008] FCA 867

Synopsis This case illustrates what can happen when a dispute arises between family members in relation to trade mark rights and the parties do not have a written agreement governing the rights to use the trade mark. Trade Marks owners should take steps to secure their rights by registration under the Trade Marks Act and should also take steps to ensure that any agreements in relation to the use of trade marks are reflected in writing.

FACTS OF THE CASE The facts of this case centre around a family restaurant business. Lionel Miller and Joel Distiller were the joint owners of a restaurant in South Yarra which operated under the name SQUIRES LOFT. Lionel and Joel with family members Harold and Saul Miller (Lionel's father and brother) established another restaurant under the name SQUIRES LOFT at Goldie Place in the central business district of Melbourne. It was agreed that Harold and Saul would operate the Goldie Place restaurant under that name. The terms of that agreement were not put in writing and a divergence of views arose in relation to what had been agreed by the parties. Harold and Saul operated the Goldie Place restaurant for a period of time under the impression that they were joint owners of the trade mark SQUIRES LOFT. A dispute arose when Lionel and Joel sought to grant a licence to a third party to use the name SQUIRES LOFT for another restaurant which was located near Harold and Saul's Goldie Place restaurant in central Melbourne. The dispute initially came before the Australian Federal Court with Harold and Saul claiming that they jointly owned the trade mark SQUIRES LOFT with Lionel and Joel. In the absence of written agreements between the parties regarding any rights to the trade mark the Court decided that Harold and Saul were not joint owners but that Lionel and Joel had granted a licence to them to use the trade mark SQUIRES LOFT for their Goldie Place restaurant.

Lionel and Joel subsequently brought an action claiming that the licence had come to an end when Harold and Saul transferred their interests in a trust company which owned the Goldie Place restaurant to various third parties and that Harold and Saul no longer owned the restaurant. THE DECISION The Court upheld the earlier decision and made the following rulings: •

The owners of the trade mark SQUIRES LOFT are Lionel and Joel.

•

A licence to operate the Goldie Place restaurant under the trade mark SQUIRES LOFT had been granted by Lionel and Joel to Harold and Saul (the licence being inferred from the conduct of Lionel and Joel).

•

The licence was not dependant on Harold and Saul's ownership of the Goldie Place restaurant through their trust company. The licence had been granted to Harold and Saul personally. It did not matter that the Goldie Place restaurant was no longer owned by them. Harold and Saul were still running the restaurant and the licence would run for as long as they continued to do so.

•

Implied in the licence was a condition that the goodwill in the Goldie Place restaurant operated by Harold and Saul should not be adversely affected. Lionel and Joel's intention to grant a licence to a third party to use the trade mark SQUIRES LOFT for another restaurant within close proximity to the Goldie Place restaurant would adversely affect the goodwill in the restaurant and deny Harold and Saul the benefit of the licence.

COMMENTARY The dispute over the ownership of the trade mark SQUIRES LOFT could have been avoided if Lionel and Joel had registered the trade mark SQUIRES LOFT at the time that they first began using those words as a trade mark for their restaurant. Moreover if there had been a written agreement the parties would have already clarified the terms of the arrangements between them. Author: Chris Lee, Trade Mark Attorney

D C C

Q U A R T E R L Y

Dec 08

Case study 8 Criticality of Construction Affirmed Nufarm Ltd v Jurox Pty Ltd [2008] FCAFC 180 (11 November 2008)

Synopsis The Full Federal Court has recently affirmed the primary judge’s decision in the Nufarm case (Nufarm Ltd v Jurox Pty Ltd [2008] FCA 178), as reported in our emag dated 1 October 2008, and held that Jurox’s four way oral sheep anthelmintic ‘Q-Drench’ does not infringe Nufarm’s Australian Innovation Patent No. 2003101020 (“the patent”) which discloses an oral drench formulation for controlling intestinal parasites, primarily in sheep.

FACTS OF THE CASE At first instance The primary issue considered at first instance was whether or not Q-Drench was an ‘emulsion’ comprising of an ‘organic liquid phase’ and an ‘aqueous phase’ as claimed in the patent or was capable of being ‘shaken or agitated into the form of an emulsion’ as required by the claims of the patent. In light of conflicting expert evidence the primary judge, Middleton J, turned to the body of the specification, in particular to the examples, to determine how the skilled addressee would interpret the scope of the terms and hence the scope of the claims. Middleton J focussed his discussion on examples 1 to 4 which, as agreed by both parties, described micellar formulations similar to Q-Drench and held that these examples were only included to describe the path of discovery of the invention and did not embody the invention itself. Accordingly, it was found that whilst Q-Drench was a formulation within those examples it did not infringe the patent. THE DECISION In the appeal to the Full Federal Court Nufarm alleged that whilst the primary judge found the basis of the invention was the use of a dual personality carrier system his Honour failed to take this into account in his construction of the claims. Specifically, Nufarm asserted that the word ‘emulsion’ as

used in the claims should be read as including macroemulsions, microemulsions and micellar solutions, including ‘swollen micellar solutions’ of which Q-Drench was one. Furthermore, Nufarm alleged that His Honour erred in his conclusion that because examples 1 to 4 were described as ‘completely aqueous formulations’ a skilled addressee would have understood there to be a ‘fundamental transition’ in the nature of the formulations after example 4. In this regard, Nufarm contended that even though the specification noted that work stopped on the formulations of examples 1 to 4, the cessation was only as a result of poor longterm stability and the formulations were still representative of the invention, and therefore a skilled addressee would not have understood that the patentee had abandoned or disclaimed micellar solutions or macroemulsions. Accordingly, Nufarm insisted that there was no reason to exclude examples 1 to 4 from the scope of the claimed monopoly. Whilst Nufarm placed much emphasis in the appeal on the categorisation of the formulations of the examples into micelles, swollen micelles, microemulsions and macroemulsions, the Court stressed that this did not define the primary judge’s decision. Rather, the Court contended that central to the appeal was what Middleton J did and did not decide. It was held that at first instance His Honour’s decision was not to choose between the conflicting expert opinions in the abstract but to decide whether the Q-Drench micellar system came

within the scope of an emulsion in a sense used in the claims of the patent based upon the construction of the specification. The Full Federal Court concurred with the primary judge’s analysis based upon the construction of the specification, and held that the patent was not infringed because, when viewed in light of the expert evidence, the construction of claims demonstrated that examples 1 to 4, and therefore Q-Drench, lacked the essential elements of the claims. COMMENTARY The decision reaffirms that where a term is ambiguous, the Court will look carefully at the body of the specification to determine the context in which the term is used. It is therefore a timely reminder to ensure that any technical terms used in the claims that are not readily understood to a skilled person should be clearly defined in the body of the specification, and that when examples are used they should either support the claims or be clearly defined as comparative examples. Author: Joanna Jones, Trainee Patent Attorney

but to decide whether the Q-Drench micellar system came within the scope of an emulsion

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