IP Update - Issue 13 - (September 2011) by Davies Collison Cave Patent, IP Law & Trade Mark Attorneys

SEPTEMBER 2011 ISSUE

Davies Collison Cave

update

Australiaâ&#x20AC;&#x2122;s Leading Intellectual Property Firm

IN THIS ISSUE

Office News | Conferences | Case Studies | Practice Updates

INTELLECTUAL PROPERTY

Foreword

In this edition of the IP Update we provide information regarding important changes to patent prosecution procedures and reforms in the Australian federal court system. We also discuss a number of important intellectual property cases that have been handed down over the last couple of months, including VIP Plastic Packaging Pty Ltd v BMW Plastics Pty Ltd, a case in which DCCL was involved. In addition, we take a look at conferences and events that DCC has been involved with over the last few months, throughout Australia and internationally. We hope you enjoy the September edition of the IP Update, which continues to provide editorials on the latest cases to keep you abreast of Intellectual Property news in Australia.

Contents 3- 7

Staff Appointments

8-10 Office Updates 11 Conferences CASE STUDIES [12-37] 12

Overturned on Appeal: Full Federal Court Protects Reputation in the Get-Up of Bodum Coffee Plunger Bodum v DKSH Australia Pty Limited [2011] FCAFC 98

Federal Court Finds Inevitable Result not Enough to Inherently Anticipate Danisco A/S v Novozymes A/S (No 2) [2011] FCA 282

19 Adding a Computer will not Save Broad Method Claims Network Solutions LLC [2011] APO 65 21

Right to Inventorship Forfeited by Prior Disclosure Robert Dommett v Zebra Research Pty Ltd [2011] APO 53

Australian Patent Office Intervenes to Introduce New Ground During Opposition: Software Patent Found Invalid for not a Manner of Manufacture Myall Australia Pty Ltd and RPL Central Pty Ltd [2011] APO 48

Sanofiâ&#x20AC;&#x2122;s Psoriasis Patent Gives Apotex a Rash that it Cannot Scratch! â&#x20AC;&#x201C; Method of Treatment Claim Found Valid and Infringed Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No. 3) [2011] FCA 846

Claim Construction and Internal Requirements of Australian Patent Specifications: Full Federal Court Reiterates Principles Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2011] FCAFC 83

VIP Plastic Packaging Wins Federal Court Patent Infringement Case Against B.M.W. Plastics Pty Ltd VIP Plastic Packaging Pty Ltd v B.M.W. Plastics Pty Ltd [2011] FCA 660

PRACTICE UPDATES [38-46] 38

Patent Examination Integration for Australia and New Zealand on the Horizon

Intellectual Property Laws Amendment (Raising The Bar) Bill 2011 Introduced into the Senate

Patent Prosecution Highway - a Strategy for Securing Early Patent Grant in the US

New Procedures Encourage Parties to Explore Early Dispute Resolution in Australian Federal Courts

Articles on Davies.com.au

2011 Appointments

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ON THE 1ST OF JULY, THE FOLLOWING APPOINTMENTS WERE ANNOUNCED.

Ross Clark

Nick Holmes

Ross has experience in preparation and prosecution of patent applications in the diverse area of electrical engineering. He has a passion for spending time with clients to work through strategies to obtain maximum commercial advantage from the patent system. Ross also has a wealth of experience in preparation and prosecution of registered designs.

Nick practices in all aspects of trade mark law, providing advice on trade mark clearance, prosecution, opposition and enforcement in Australia and New Zealand. He also advises on and manages international trade mark programs for local and international clients.

B.Eng. (Comp.), Patent Attorney

Partners

Ross’ engineering degree included subjects such as digital design, electronics, microcontrollers, operating systems, and computer architecture. His degree also included subjects such as artificial intelligence, computer networks, and several programming languages. Although his formal training was specifically focused on computer engineering, Ross has 10 years of experience in working with inventions across all areas of electrical engineering. Ross has a keen interest in green technology and regularly attends industry seminars on the subject matter. He has a great deal of experience in preparation and prosecution of electro-mechanical inventions relating to green technology.

LL.B., LL.M., Lawyer and Trade Mark Attorney

In addition to his experience in all aspects of Australian trade mark law, Nick is a specialist in New Zealand trade mark law. He regularly advises and represents local and international clients regarding clearance, registration and protection of trade marks in New Zealand. Nick also advises on common law and statutory protection relating to trade marks, in Australia and New Zealand. Nick has published several articles on Australian and New Zealand trade mark law, including Acting Up, the implications of New Zealand’s new Trade Marks Act’, TradeMark World May 2003 and ‘A walk on the wild side’, TradeMark World April 2008. Nick has presented numerous seminars throughout Australia and overseas on a wide range of trade mark matters to local industry groups, foreign government and industry representatives, and other trade mark practitioners.

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We congratulate our new partners and staff on their promotion. Mathew Lucas

Justin Negler

Mat specialises in the preparation and prosecution of patent applications in the areas of general organic and inorganic chemistry spanning a multitude of different fields including the pharmaceutical sciences, mining and petrochemical industries as well as food technology and nanotechnology. He has experience in patent oppositions and providing patent related validity and infringement advice.

Justin is involved in the prosecution of patents and registered designs, the drafting of patent specifications and patent oppositions, as well as providing advice on validity and patent infringement, with over 10 years experience in the patent attorney profession. He completed Engineering and Science degrees at the University of Melbourne where he was awarded a Dean of Engineering Scholarship. In the Science faculty, he undertook computer science and a major in applied and industrial mathematics. Justin has been a guest lecturer on the topic of intellectual property to engineering students at RMIT University, Melbourne for several years, and in 2009 was a judge in the Engineers Australia Excellence Awards.

B.Sc. (Hons.), Ph.D., M.IP Law, Patent Attorney

Previously, Mat spent a year at the University of Illinois in Chicago, working on low-temperature radical initiators and aryl selenide radical induced polarity reversal catalysis. Mat was also involved in a joint project between the University of Adelaide and Flinders Medical Centre, in which he designed and prepared various heterocyclic compounds for the treatment of precancerous adenomas of the colon. During his Ph.D he prepared novel classes of selenium containing carbohydrates and explored the homolytic chemistry of some new tellurium functional groups. Mat has published in many areas including surfactant chemistry, mechanistic organic chemistry and free-radical methodology. Mat is part of Davies Collison Caveâ&#x20AC;&#x2122;s lifesciences practice group.

B.E. (Mech.)(Hons.), B.Sc., M.IP Law, Patent Attorney

Justinâ&#x20AC;&#x2122;s experience in the fields of automotive and marine engineering includes drafting and prosecution of patent applications in Australia and overseas for an extensive range of devices/processes, including a multi-speed automatic automotive transmission having adaptive control strategies, a double clutch transmission (DCT), an energy-efficient torque converter, conversions for providing wheelchair access to vehicles, vehicle stabilising and levelling systems, a hybrid marine drive and a braking system with improved pad wear characteristics.

He also has experience in obtaining, enforcing and advising on registered design rights in a range of areas including luggage, food packaging, adhesive containers and dispensers, swimwear, sport safety equipment, kitchen appliances, advertising trailers, vehicle body panels, electric vehicle components, light housings, plant pots, building brackets, underground water storage systems and tyre tread patterns.

Fiona Brittain

Peter Gretton

Fiona specialises in conducting trade mark clearance searches and the preparation and prosecution of trade mark applications, including in relation to petroleum goods and services, pharmaceuticals, clothing and footwear and building products.

In his role of Portfolio Manager, Peter delivers a range of intellectual property management services, principally to corporate clients. This involves implementing highly customised suites of services, particularly suited to clients’ requirements. These services include provision of advice in relation to branding options for new products and services, and in relation to the protection of new technology, highly-tailored competitor monitoring services, budget formulation and management reporting. Peter has also undertaken in-house secondments for several clients.

B.A., LL.B, Lawyer and Trade Mark Attorney

Senior Associates

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She represents clients in connection with trade mark oppositions and removal proceedings in the Australian Trade Marks Office and provides prompt and comprehensive advice in respect of infringement situations. Fiona is experienced in providing commercially focused legal advice to clients with large global trade mark portfolios. She enjoys the challenges associated with seeking trade mark protection for non-traditional marks, such as shapes and colours.

Dip.Elec.E., Grad.Dip. IP Law, Portfolio Manager

Previously, Peter worked for Telstra Corporation, where he gained extensive experience in the management of patents and other intellectual property, including its protection and exploitation. This allows him to bring a very client-oriented approach to his role. As Davies Collison Cave’s Tender Manager, Peter manages all of the firm’s major tenders and proposals. He also undertakes a range of business development activities, particularly in regional areas. This is a largely educational role, and he has conducted numerous seminars and workshops in regional centres, helping prospective clients to develop a better understanding of intellectual property principles.

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Susanne Hantos

Dr Nigel Lokan

Alex Tzanidis

Susanne is the Manager of the Patent Intelligence Services group. As part of her role, she specialises in conducting comprehensive searches of patent publications and scientific literature, as well as providing patent due diligence and competitive intelligence services including patent landscape portfolios. She advises on patentability (novelty), patent infringement, freedom to operate and patent validity issues. As a trained chemist, a librarian and a patent attorney, Susanne has considerable experience in searching and analysing a diverse range of innovation including pharmaceuticals, biopharmaceuticals, biotechnological advances, agrochemicals, veterinary products, medical devices, medical methods, cosmetics, household/industrial products, explosives, mineral recovery, speciality chemicals/ materials, petrochemicals, bioremediation, alternative energy, paints, concrete, plastics, purification devices or methods and food and beverage technology.

Nigel is an experienced patent attorney whose practice focuses on the drafting of patent applications, patent oppositions and prosecution of patent applications both locally and overseas. He also provides advice on patentability, patent infringement and validity and has been involved in a number of patent litigation matters before the Federal Court of Australia.

Alex specialises in the preparation and prosecution of patent applications in the areas of cell biology, immunology, cardiology, nephrology, angiology and molecular biology. He is experienced in conducting patent oppositions and advising on patent related litigation. He also provides advice on patentability, patent infringement and validity as well as conducting IP audits.

Nigel’s doctoral research involved the design and synthesis of complex carbocyclic frameworks for studying solvent-mediated electron transfer and energy transfer processes. He is a co-author of more then ten publications in peer review journals including the Journal of the American Chemical Society. A number of his publications have been cited extensively in the literature.

Alex’s PhD studies investigated the role of neurohormonal factors and inflammatory cytokines in the pathophysiology of experimental end stage renal failure. Upon completing his PhD, Alex accepted an invitation to pursue postdoctoral research in the area of cardiovascular disease at the Clinical Pharmacology Unit, Monash Medical School, Alfred Hospital. During this time, he collaborated extensively with research groups at BakerIDI and multinational pharmaceutical companies and has published his work internationally.

B.Sc.(Hons.), M.Sc., MLIS, MIP, Patent Attorney

On 23 May 2011 Susanne was awarded the prestigious PIUG (Patent Information User Group) Services Award in recognition of her dedication and commitment to PIUG and its members for her work on their certification initiative.

B.Sc. (Hons.) Ph.D. M.IP, Patent Attorney

Nigel’s primary area of practice is in the field of chemistry, however he also has experience in the areas of surface science, nanotechnology, chemical and process engineering and clean and sustainable technologies. Nigel works with a diverse range of clients including single inventors, start-up companies, SME’s, universities and multi-national corporations.

B.Sc.(Hons.) PhD., Patent and Trade Mark Attorney

Alex has experience in handling IP matters relating to many areas of biotechnology, and has assisted local clients, including research institutes, universities and corporate entities, with patent drafting and local/ overseas patent prosecution. He also has expertise in overseeing the prosecution of entire Australian and New Zealand patent portfolios for medium to large overseas biotechnology companies.

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Becky White

Sam Mickan

Becky specialises in patents for the life sciences and biotechnology industries. Before joining Davies Collison Cave in 2008, Becky worked for six years in a New Zealand patent attorney firm.

Sam’s practice includes the preparation, prosecution and opposition of patent applications in the fields of lasers and photonics, electrical/electronic engineering, signal and data processing, software/information and communications technology (ICT), mechanical devices and biomedical sensing.

B.A., B.Eng (Electrical) (Hons.), M.IP Law, Ph.D.

B.Sc., LL.B., Patent Attorney and Lawyer

Becky is involved in providing strategic advice to local clients to assist in managing their patent portfolio. She also drafts and prosecutes patent specifications, prepares freedom to operate reports, and undertakes due diligence analysis. She has worked on a number of patent oppositions and been involved in providing advice regarding a large patent litigation suit. Becky has experience in handling matters relating to food technology, biochemistry, molecular biology, genetics and immunology.

Associate

Sam has led research teams in Australia and the US, and has completed a Ph.D. in terahertz technology. Sam was a senior lecturer in the School of Electrical and Electronic Engineering at the University of Adelaide, where he still holds an adjunct appointment, and is an inventor on two US patents. He is the current author of a chapter on the processes for obtaining and maintaining a patent in Thomson Reuters’ “The Laws of Australia”. Sam’s research in terahertz technology included working on biomolecular diagnostic targets, writing signal and image processing programs, and building ultrafast laser systems, including optical and electronic components. His research was conducted at the University of Adelaide and Rensselaer Polytechnic Institute in New York. He has received a number of Australian Research Council Discovery grants for his research.

DCC Melbourne This series has been a great success in facilitating networking between members of Australia’s life science community.

BioMelbourne Network Initiatives Wednesday, 31 August 2011

DCC continued its support of BioMelbourne It was an illuminating talk and stimulated lively discussion amongst the 28 guests. Network initiatives by again hosting a The ensuing discussion highlighted the lunch in the CEO luncheon forum series on importance of a strategic approach to Wednesday, 31 August, 2011. This series pharmaceutical development in Australia. has been a great success in facilitating networking between members of Australia’s life science community. Dr Peter Smith, the CEO of Alchemia Pty Ltd, used his company’s experiences in developing the drug, Fondaprinux, including the registration process before the FDA and its commercialisation through a large pharmaceutical company, to outline the challenges which face industry in the pharmaceutical development path.

The importance of this series is evidenced by the recent sponsorship arrangement with Commonwealth Department of Innovation, Industry, Science and Research, and DCC was pleased to be the host sponsor for the lunch. Dr Mat Lucas, Dr John Hughes and Dr Alex Tzanidis from DCC were in attendance with Mat formally welcoming the guests and introducing Dr Smith.

L-R Dr Peter Smith, Dr Mat Lucas, Michelle Gallaher and Dr John Hughes.

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DCC Sydney

SEPTEMBER 2011

Australian Centre for Nanomedicine Visiting Professor Molly Stevens 24 August 2011

Davies Collison Cave was delighted to join with ACN to host a seminar with Visiting Professor Molly Stevens from Imperial College London. Prof Molly Stevens

Based at the University of New South Wales, The Australian Centre for NanoMedicine (ACN) brings together researchers in medicine, science and engineering to deliver therapeutic solutions to research problems in medicine. Davies Collison Cave was delighted to join with ACN to host a seminar with Visiting Professor Molly Stevens from Imperial College London. Molly Stevens is Professor of Biomedical Materials and Regenerative Medicine and the Research Director for Biomedical Material Sciences in the Institute of Bio-

medical Engineering at Imperial College. Around 60 guests from industry, academia and research came to hear a fascinating presentation by Professor Stevens, during which she shared her insights on current developments in regenerative medicine. Dr Gavin Recchia, a partner of Davies Collison Cave, welcomed Professor Stevens and presented her with a gift of appreciation. Also in attendance from the firm were Ramon Tozer, Anthony Cowle, Will Hird, Dan Berger, Joanna Jones and Nigel Lokan.

DCC Brisbane The Riverfire event includes a spectacular fireworks and laser show along the Brisbane River....

Riverfire Saturday 3 September 2011

On Saturday 3 September 2011 the Brisbane office hosted an event to coincide with the Brisbane Festival Riverfire event. The Riverfire event includes a spectacular fireworks and laser show along the Brisbane River, and the boardroom of our Brisbane office provided an excellent vantage point from which to enjoy the show. A number of the firmâ&#x20AC;&#x2122;s Brisbane based clients joined with DCC operators to enjoy wine and nibbles against the backdrop of the fireworks.

Above: L-R Wendy Free, Cate Challen and Don Kakuda Left: L-R Dean Moss, Victor Argaet and Michael Angliss.

Conferences

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Bio2011 International Conference 26 - 30 June 2011

Between 26 and 30 June 2011 partners of the firm Victor Argaet, Mark Roberts, Tania Obranovich, Gavin Recchia and Alistair Smith represented the firm at the annual meeting of the US Biotechnology Industry Association in Washington D.C. As expected during the height of summer the weather in Washington D.C. was very hot and humid, but this did not deter the DCC group from making the most of the opportunity to network and to meet with many of the firmâ&#x20AC;&#x2122;s important clients and associates in what is the most significant international gathering of the biotechnology industry that takes place each year.

Washington D.C. was very hot and humid, but this did not deter the DCC group from making the most of the opportunity to network and to meet with many of the firmâ&#x20AC;&#x2122;s important clients and associates in what is the most significant international gathering of the biotechnology industry

Case study 1 Overturned on Appeal: Full Federal Court Protects Reputation in the Get-up of Bodum Coffee Plunger Bodum v DKSH Australia Pty Limited [2011] FCAFC 98 On 5 August 2011, the majority of the Full Federal Court (Greenwood and Tracey JJ with Buchanan J dissenting) held that Bodum had acquired a distinctive secondary reputation in the shape and features of its Chambord coffee plunger, and that by failing to properly distinguish its look-alike product from the original, DKSH had engaged in misleading and deceptive conduct and passing off.

THE DECISION

FACTS OF THE CASE Peter Bodum A/S (Bodum), through distributors and then an Australian subsidiary, had sold its “Bodum Chambord” coffee plunger in Australia since 1973. The Bodum Chambord coffee plunger featured the mark “bodum®” etched on the product in a number of places, and the Bodum name and logo also appeared on the product box and instruction leaflet. The Bodum product had achieved substantial sales and been advertised widely. From July 2004, DKSH Australia Pty Limited (DKSH) imported and sold a coffee plunger which substantially adopted the shape and features of the “Bodum Chambord” coffee plunger. The DKSH coffee plunger had no relevant branding on the product but its packaging and instructions were marked with the name “Euroline”. There had been minimal advertising of the Euroline coffee plunger and its sales had been “dwarfed” by sales of the Bodum product. On 2 February 2010, the primary judge (Middleton J) dismissed Bodum’s claims that DKSH had engaged in passing off and misleading and deceptive conduct. The primary judge held that because Bodum had prominently and consistently marketed its product under the “Bodum” name, its reputation in the features of its coffee plunger was “distinctly tied” to the “Bodum” brand. The primary judge held that Bodum did not have a secondary reputation in the features or shape of its product. Therefore, where the Bodum brand was not used, consumers would

understand that they were looking at a rival product (such as the DKSH product). In this regard, the primary judge referred to Bodum as “a victim of its own success” adopting the phrase from Perram J in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 81 IPR 354. On 5 August 2011, the majority of the Full Federal Court overturned the decision of the primary judge. Justice Greenwood (with Tracey J agreeing) found that Bodum had established a substantial “secondary reputation” in the features of the Bodum Chambord coffee plunger. The majority held that the respondent’s use of the “Euroline” mark on the packaging only and not on the product itself was not sufficient to distinguish the Euroline product from the Bodum product, where the overall appearance of the Euroline product was for all practical purposes the same as the Bodum product.

Bodum’s reputation After undertaking a detailed review of Bodum’s “vast” advertising, Greenwood J disagreed with the primary judge and held that Bodum had established a “very significant secondary reputation” in the features of its product, independent of the Bodum trade mark. It was important that large and prominent images of the Bodum plunger had been used in advertising material, even though the Bodum mark or name was usually also present. His Honour found that the use of the Bodum name had reinforced the association between the manufacturer and its distinctive product but that did not diminish the secondary reputation of the product itself. Greenwood J noted that care should be taken in applying the notion that consumers are not likely to be misled where a trader has heavily promoted its distinctive product in conjunction with its trade mark.

Misleading or deceptive conduct and passing off Justice Greenwood stated that the real question in the proceeding was whether DKSH had done enough to differentiate its rival product from the Bodum product. To succeed in an action for misleading and deceptive conduct, Greenwood J stated that the Court must have regard to all the contextual circumstances and consider the effect of the conduct on reasonable or ordinary members of the class of prospective buyers (citing Parkdale Custom Built Furniture v Puxu (1982) 149 CLR 191per Gibbs CJ at 199, Mason J at 205; Campomar Sociedad Limitada v Nike International Limited (2000) 202 CLR 45 at [105]). The question is whether a not insignificant number within that class have been or are likely to be misled or deceived, whether in fact or by inference: Hansen Beverage Co. v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579.

up to try to trade off the plaintiff’s reputation, the Court is entitled to presume that the defendant’s product is “fitted for the purpose” and therefore likely to deceive or confuse (citing Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641). Ultimately, Greenwood J noted that these questions are matters of impression for the Court, taking into account all relevant contextual considerations.

Justice Greenwood considered the relevant principles and held that DKSH had engaged in misleading and deceptive conduct and passing off. His Honour found that the use of the unknown and descriptive brand name “Euroline” on the box only was not enough to inform consumers, who were drawn to the product by Bodum’s substantial secondary reputation in the features of its coffee plunger, that the product was not associated with Bodum. His Honour emphasised that the test was not applied to sophisticated consumers who might examine the By comparison, Greenwood J noted that product specifically for the Bodum name. passing off protects a trader’s goodwill. Justice Greenwood held that labelling the Passing off is made out where the plaintiff packaging was not sufficient to distinguish has established (i) a reputation attached the product, in circumstances where the to the goods or services, (ii) a misrepreproducts were often displayed outside sentation by the defendant that leads or the box. The conclusion of Greenwood is likely to lead the public to believe that the goods or services have an association, J was that if a consumer did not see the Euroline box, there was no indication from quality or endorsement that they do not have, and (iii) actual or likely damage to the DKSH on the product itself that it was not a Bodum product or a product from the plaintiff by reason of the misrepresentaBodum range. It was also relevant that the tion. Justice Greenwood noted that there DKSH and Bodum products were around is no requirement that there be an intenthe same price and 86% of sales for each tion to mislead, but where the defendant has deliberately copied the plaintiff’s getproduct occurred in separate locations.

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THIS FULL COURT DECISION IS NOTEWORTHY AS AN EXAMPLE OF WHEN THE COURT IS LIKELY TO RECOGNISE A REPUTATION IN THE GET-UP OF GOODS INDEPENDENT OF ANY PROPRIETARY RIGHTS, AND OF THE APPROACH TAKEN TO DETERMINE WHETHER THE RESPONDENT HAS DONE ENOUGH TO DISTINGUISH ITS RIVAL PRODUCTS FROM THOSE OF THE APPLICANT.

Justice Greenwood was not, however, willing to infer that in adopting the features of the Bodum Chambord coffee plunger and inadequately labelling its own product, DKSH had intended to mislead or deceive consumers. The matter was remitted to the primary judge to address the form of the orders having regard to the Full Court’s decision. Consequences As noted by Greenwood J, it is important to remember that Bodum did not contend that DKSH should be restrained from selling a coffee plunger which adopts the features of the Bodum coffee plunger. Each of the judges hearing the appeal affirmed that a trader is free to adopt the features of a rival product (in the absence of any infringement of a formal intellectual property right) so long as the trader does not falsely represent that its goods are those of another: Interlego AG v Croner Trading Pty Limited (1992) 39 FCR 348. The relief sought by Bodum was to restrain DKSH from selling a coffee plunger “without labelling or distinguishing [its product] adequately or at all”.

COMMENTARY In the last decade or so, there have been few successful claims of passing off and misleading and deceptive conduct based on reputation in a product’s “get-up” alone (that is, the product’s features or packaging separate from the trade mark used to market and sell the product). In some cases, the Court has held that no secondary reputation subsists in the

features of the product independent of the trader’s distinctive trade mark (for example in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 84 IPR 12 concerning Maltesers). In other cases, the Court has held that the respondent’s labelling of its products was sufficient to avoid false representations as to any association with the applicant’s product (see, for example, Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90 and Dr Martens Australia Pty Ltd v Rivers (Australia) Pty Ltd (1999) 95 FCR 136). This Full Court decision is noteworthy as an example of when the Court is likely to recognise a reputation in the get-up of goods independent of any proprietary rights, and of the approach taken to determine whether the respondent has done enough to distinguish its rival products from those of the applicant. In this case, it was central to the decision that the overall appearance of the DKSH product was “for all practical purposes” the same as the Bodum product and DKSH had failed to distinguish its product from the original in circumstances where a substantial reputation lay in the design features of the Bodum product alone, independent of the Bodum mark. However it is equally important to remember that these cases turn on their particular facts and are ultimately a matter of impression for the Court. Of course traders can have greater certainty in protecting the get-up of their products by obtaining formal intellectual property

rights such as by registering designs and shape trade marks. Authors: Darron Saltzman, Partner Penny Smith, Associate

Case study 2

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Federal Court Finds Inevitable Result not Enough to Inherently Anticipate Danisco A/S v Novozymes A/S (No 2) [2011] FCA 282 In a first instance decision the Federal Court recently considered what is required for a prior art document to inherently anticipate a later claim, finding that anticipation by inherent teaching requires not only the inevitable result later claimed but also a teaching or recognition of the desirability of the result. The Court’s analysis and findings potentially lead to the curious situation where performing a process described in the prior art may well constitute an infringement of a later patent.

FACTS OF THE CASE At issue was Australian Patent No 752215 (the Patent), to Danisco A/S (“Danisco”). The Patent related to processes for producing foodstuffs, particularly baked goods, by using an enzyme to generate, in situ, an emulsifier and a second functional ingredient from constituents present in the starting food material, such as fatty acid esters (which include triglycerides, phospholipids and glycolipids) and subsequently inactivating the enzyme during the baking process. Such a process is considered advantageous since it minimizes the number of additives in the final product; desirable not only from a cost view point but also from a consumer view point. Danisco asserted infringement by Novozymes A/S (“Novozymes”) by virtue of their promotion and supply of their product Lipopan Xtra, for production of baked goods. Novozymes counterclaimed for revocation, asserting, inter alia, that the claims were anticipated by inherent teachings in the prior art of the claimed outcome.

•

(i) providing a food material containing a fatty acid ester and a second constituent;

•

(ii) contacting the food material with an enzyme such that an emulsifier is generated by the enzyme from the fatty acid ester and a second functional ingredient is generated from the second constituent;

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(iii) inactivating or denaturing the enzyme to provide the foodstuff comprising the emulsifier, the fatty acid ester and the enzyme in an inactive form or a denatured form.

Claim 7 further specified: •

A process according to any one of the preceding claims wherein the foodstuff comprises at least the emulsifier and the second functional ingredient, and wherein the emulsifier and the second functional ingredient have been generated from the fatty acid ester and the second constituent of the food material by the enzyme.

It is useful to set out the particular claims of interest.

THE DECISION

Claim 1 provided:

Novelty

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In essence, Justice Bennett’s findings on anticipation turned on the construction of the term “functional ingredient” and whether the skilled person would recognise the presence and functional purpose

A process for preparing a foodstuff suitable for consumption comprising an emulsifier, the process comprising the steps of

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THE PATENT RELATED TO PROCESSES FOR PRODUCING FOODSTUFFS, PARTICULARLY BAKED GOODS, BY USING AN ENZYME TO GENERATE, IN SITU, AN EMULSIFIER AND A SECOND FUNCTIONAL INGREDIENT FROM CONSTITUENTS PRESENT IN THE STARTING FOOD MATERIAL

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of a product of the enzyme’s action in the prior art baking processes. In particular, Her Honour considered the meaning of the term “functional ingredient”, which included “emulsifier”, noting that the specification defined the term as a constituent that performs a specific function in the food stuff, and concluded that it is “the intention to provide a functional ingredient which performs a specific, desired function in the foodstuff.” Upon consideration of the prior art documents alleged by Novozymes to anticipate the claims, Her Honour found that although the use of an appropriate enzyme in the preparation of baked goods was described, and it was acknowledged that products which would be formed in the described baking process were relevant functional ingredients, these documents did not provide the skilled reader with the requisite clear disclosure of the presence and purpose of the emulsifier and second functional ingredients so formed. Her Honour did, however, acknowledge that even though the prior art did not explicitly disclose all the claimed features, anticipation could still be found if the publication contained a direction to use a process that inevitably resulted in something within the claim1. Novozymes relied on one particular example in the WO98/26057 (the Novo

patent) for baking bread, alleging that the directions to use the disclosed phospholipase of SEQ ID No 2 (which also had lipase activity) would result in the generation of both an emulsifier (from lecithin, a phospholipid) and a second functional ingredient (from triglycerides) in the dough. However, although it was not disputed that the Novo patent disclosed an enzyme with dual phospholipase/lipase activity, no evidence was led by Novozymes that the amount of enzyme used in the example would result in a non-de minimis amount of a second functional ingredient being generated and Justice Bennett refused to find that the skilled addressee would inevitably produce the subject matter of the claims of the Patent. Her Honour also made the point of distinguishing between the disclosure of the use of the enzyme and its properties, and the process and results claimed in the Patent. In particular, her Honour found that even if the Novo patent contained directions to use the enzyme which by reason of its inherent activity would result in the claimed process, this would not necessarily disclose to the public or the skilled reader the action of the enzyme on constituents of the foodstuff to generate an emulsifier and a second functional ingredient as per the claimed process. It was specifically noted that not only was such information not available from the disclosures of the

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Novo patent, no such information would be disclosed or become apparent by the use of the enzyme in baking as directed. In the sense of Hill v Evans2, it was not established that the skilled person would at once be able to perceive, understand and be able practically to apply the discovery without the necessity of making further experiments and gaining further information before the invention can be made useful. At [255] Her Honour stated: Where sufficient information is not present in a publicly available document and the party alleging the anticipation relies on the use of the information in that document, it must be shown that information equivalent to the claimed invention was publicly available prior to the priority date. Novozymes is relying on directions to use an enzyme in order to complete a disclosure of information that is of itself insufficient to anticipate the invention of the claims. It is not sufficient for the purposes of Novozymes’ claim of anticipation by reason of the inherent activity of the enzyme only to provide information that enables the use of an enzyme in baking that will “inherently” result in the claimed process where, at the end of that use, the public will be none the wiser as to the integers of the claims. Novozymes also relied on the “Gillette Defence” 3 in respect of Danisco’s initially alleged infringement by Novozymes’

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IT IS NOT SUFFICIENT FOR THE PURPOSE... OF ANTICIPATION BY REASON OF THE INHERENT ACTIVITY OF THE ENZYME ONLY TO PROVIDE INFORMATION THAT ENABLES THE USE... IN BAKING THAT WILL “INHERENTLY” RESULT IN THE CLAIMED PROCESS WHERE, AT THE END OF THAT USE, THE PUBLIC WILL BE NONE THE WISER AS TO THE INTEGERS OF THE CLAIMS.

product Lipopan F, the active ingredient of which is an enzyme with a sequence which appears in SEQ ID No 2, although Danisco later withdrew that claim. Novozymes argued that the skilled person using Lipopan F in baking would infringe the Patent and would be unable to practice the prior art. Her Honour rejected this approach, noting that although it is now known that Lipopan F has both lipase and phospholipase activity in the dosages presently recommended for use, that information was not available to the skilled addressee from the Novo patent. Her Honour did however acknowledge that this finding leads to a potential situation where a person who now follows the directions of the Novo Patent infringes the claims of the Patent, and that, when put broadly in this manner, this seemed a somewhat strange result. However, this was deemed to be a consequence of the grounds of invalidity available and the evidence adduced. Her Honour also found that Novozymes’ case imported a measure of hindsight knowledge of the Patent as the emphasis in the Novo patent was not on the use of an enzyme with both phospholipase and lipase activity in baking, or the desirability of using such. In any event, Her Honour found that even if following the instructions of the Novo patent would have inevitably resulted in and taught the claimed process, the disclosure could not have been completed

before the priority date of the Patent. This was because the Novo patent was published only 32 days before the priority date of the Patent, and although a sample of the microorganism from which enzyme of SEQ ID No 2 was obtained had been deposited in accordance with the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure, there were restrictions on its access and a person wishing to repeat the relevant example of the Novo patent would not have been able to do so before the priority date of the Patent. Infringement Her Honour found no difficulty in concluding infringement by supply under section 117, finding that Novozymes supplied to bakers their Lipopan Xtra product, which was capable of only one reasonable use, with inducements to use the product in a manner which would fall within the scope of the claims of the Patent.

COMMENTARY In reaching her conclusions, Justice Bennett has applied well established case law regarding anticipation, requiring that the prior art make the nature of the invention, either expressly or through the following of instructions, apparent to the skilled addressee. In a situation where the nature of the later claimed invention is apparent

to the skilled addressee once the prior art instructions have been followed, the generally accepted approach to inherent anticipation would still seem to hold sway, provided, of course, that the subsequently claimed invention is inevitably achieved. Yet, somewhat incongruously, in a situation where the nature of the subsequent invention cannot be gleaned or recognised by performing prior art instructions, without knowledge of the subsequent invention, a potential situation arises where a person could follow prior art teachings and yet infringe a later patent, begging the question: does the Gillette defence have any application in such a situation? Her Honour would appear to think not. The decision is currently under appeal. Author: Paula de Bruyn, Partner 1.

General Tire & Rubber Co v Firestone Tire & Rubber Co Ltd (1971) 1A IPR 121

Hill v Evans (1862) 1A IPR 1

Gillette Safety Razor Company v Anglo American Trading Co Ltd (1913) 30 RPC 465

Case study 3

DC C QU AR TE R LY | SEPTEMBER 2011

Adding a Computer will not Save Broad Method Claims Network Solutions LLC [2011] APO 65

The Australian Patent Office has followed the US CAFC decision in Cybersource Corporation v Retail Decisions, Inc. and rejected computer implemented method and storage medium claims on the basis that they were related to an unpatentable commercial or financial scheme.

The patent application was for a method of purchasing a domain name registration which involves certifying that a user had sufficient funds to meet an offer before the offer was sent to the registrant.

the mere specification of a “computer implemented method” did not mean that each and every step of the method must be carried out by a computer. He believed that the steps defined in the claims were in fact capable of implementation by means The claims under consideration were other than by computer. Nevertheless, as follows: despite this construction, the Deputy “1. A computer-implemented method Commissioner indicated that this was not for purchasing a domain name registra- critical to the outcome in the case. tion, comprising: The Applicant argued that processing data receiving from a user data indicative of to thereby send a message resulted in a an offer message indicating a domain transformation or physical phenomenon or name and an offer amount, wherein effect, as required under current Australian the domain name is registered to a law. Claim 16 was distinguished by the Apregistrant distinct from the user; plicant on the basis that it was directed to a physical medium and not a method. certifying that the user has access to funds that are at least sufficient to pay the offer amount;

The Deputy Commissioner found that the method claims did not involve an artificially created state of affairs in the generating certification data; and if the certification data indicates that the sense of a concrete, tangible, physical or offer amount has been successfully cer- observable effect, as required according tified, then processing the data relating to the Australian Federal Court’s decision in Grant v Commissioner of Patents [2006] to the offer message thereby to send FCAFC 120. In his view there was no to the registrant an offer to purchase the domain name registration from the judicial authority that provided a basis for finding that what would otherwise be conregistrant.” sidered a mere scheme or abstract plan “16. A medium storing instructions is patentable solely because it involves, adapted to be executed by a procesor results in a manipulation or change in, sor to perform a method according to a physical thing. A physical thing characany preceding claim.” terised only by “intellectual information” was said by the Deputy Commissioner In construing the claims, the Deputy Commissioner of Patents considered that to clearly remain non-patentable subject

matter. He referred to a clear distinction between business, commercial and financial schemes, schemes of operation and printed sheets and the like on the one hand, and, on the other hand, new and useful results achieved in the operation of a computer. He drew particular support from the recent decision of the United States Court of Appeals for the Federal Circuit (“CAFC”) in Cybersource, which rejected claims directed to a method of validating a credit card transaction over the internet by using a map of credit card numbers based on other transactions utilising an internet address. One of the rejected claims in the Cybersource decision read: “2. A computer readable medium containing program instructions for detecting fraud in a credit card transaction between a consumer and a merchant over the internet, wherein execution of the program instructions by one or more processors of a computer system causes the one or more processors to carry out the steps of: •

a) obtaining credit card information relating to the transactions from the consumer; and

•

b) verifying the credit card information based upon values of plurality of parameters, in combination with infor-

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mation that identifies the consumer, and that may provide an indication whether the credit card transaction is fraudulent,

HE DREW PARTICULAR SUPPORT FROM THE RECENT DECISION OF THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT (“CAFC”) IN CYBERSOURCE, WHICH REJECTED CLAIMS DIRECTED TO A METHOD OF VALIDATING A CREDIT CARD TRANSACTION OVER THE INTERNET BY USING A MAP OF CREDIT CARD NUMBERS BASED ON OTHER TRANSACTIONS UTILISING AN INTERNET ADDRESS.

performed without the use of a computer does not satisfy the machine prong of the machine or transformation test.

It appeared to be critical to the CAFC’s wherein each value among the plurality determination that the method could of parameters is weighted in the verifying be performed without the use of the step according to an importance, as decomputer. The CAFC referred to earlier termined by the merchant, of that value to decisions in SiRF Tech v International Trade the credit card transaction, so as to provide Commissioner and Research Corporation the merchant with a quantifiable indication Techs v Microsoft Corporation where, in of whether the credit card transaction is the first case, the methods at issue could fraudulent, not be performed without the use of a GPS receiver, and, in the second case, the wherein execution of the program instrucmethod could not, as a practical matter, be tions by one or more processors of a performed entirely in a human’s mind. computer system causes that one or more processors to carry out the further steps of; These earlier US decisions were also referred to by the Deputy Commissioner • [a] obtaining information about other of Patents when referring to Cybersource, transactions that have utilized an as well as old UK decisions handed down Internet address that is identified with before implementation of the European the credit card transaction; Patent Convention. He made it clear that • [b] constructing a map of credit card what he was looking for was the identificanumbers based upon the other trans- tion of a real substantive effect, “the new actions; and and improved result”, achieved in operation of the apparatus that distinguished • [c] utilizing the map of credit card the subject matter of the application from numbers to determine if the credit a mere idea or intellectual information card transaction is valid.” and resulted in a practical application of The CAFC rejected the claims on the basis the idea in a physical form. It is the effect that they were directed to an unpatentbrought about by the operation of the able mental process and did not meet the computer that appeared to be paramount. machine or transformation test. This was Until the Australian Federal Court provides because the claims were characterised by further guidance on the issue, the Australmere data gathering steps that could be performed without the use of a computer. ian Patent Office looks set to continue to reject claims that are too broadly drawn In particular, with regard to claim 2, the and characterised only by the operation of CAFC said that it looks to the underlying a business or financial scheme. invention for patent eligibility purposes and that claim 2 was not truly drawn to a Author: David Webber, Partner specific computer readable medium, but rather to an underlying method of credit card fraud detection. It said the incidental use of a computer to perform the mental process does not impose a sufficiently meaningful limit on the claim’s scope and that the computer readable medium limitation of claim 2 did not make an otherwise unpatentable method patent eligible. The CAFC made it clear that merely claiming a software implementation of a purely mental process that could otherwise be

Case study 4

DC C QU AR TE R LY | SEPTEMBER 2011

Right to Inventorship Forfeited by Prior Disclosure Robert Dommett v Zebra Research Pty Ltd [2011] APO 53

Sections 32 and 36 of the Patents Act 1990 provide an interested party with a means to dispute inventorship and entitlement details of record in respect of a patent application. In this case, Robert Dommett (“Dommett”) challenged the inventorship and entitlement details recorded in respect of a patent application under examination. Despite being successful in arguing that he should be named as the “inventor” of the subject matter disclosed in the application, due to a prior disclosure the Hearing Officer considered it inappropriate under the circumstances to make a determination under the provisions in favour of Dommett. The net result was that the inventorship and entitlement details of record remained unchanged.

FACTS OF THE CASE Australian Patent Application No. 2010201111 (“the application”) was filed on 22 March, 2010 by Zebra Research Pty Ltd (“Zebra”) claiming priority from Australian provisional application No.’s 2009903646 and 2009905141 filed respectively on 4 August and 20 October, 2009. The inventor of record is Katie Harris (“Ms Harris”), and, at the time of the hearing, the application was under examination. On 23 June, 2010 Dommett filed requests under sections 32 and 36 for a determination that he, and not Ms Harris, be named as the inventor, and for a declaration to have Zebra removed as the “eligible” or nominated person in respect of the application.

by providing an indication of the extent to which the online survey group is representative (or not) of the target population. This is said to be achieved by obtaining from an online survey group a data set, including demographic data. The collected data set from the survey group is then compared with a known corresponding data set (for example obtained from census data) of the target population to which the market research is directed. The comparison is then used to generate data indicative of the representativeness of the surveyed group relative to the target population. The claims as originally filed in the application were of similar scope to that of the broad inventive concept outlined above. The evidence

The Hearing Officer made a particular point of highlighting that evidence led by the applicant was “noticeably brief”. It essentially consisted of a declaration by Ms Harris who indicated that after several meetings with Dommett for the purpose A problem with gathering market research of seeking advice on geo-demographic using online survey groups was said to be profiling techniques, the invention to that the collected data can be skewed relawhich the application relates arose from tive to a corresponding data set of a target an “epiphany” she had that geo-demopopulation to which the market research is graphic profiling could find application in practice directed. in the context of online survey groups As apparently agreed by both Dommett used for market research purposes, the and Zebra, the broad underlying concept epiphany arising independent of any of of the invention addresses this problem her dealings with Dommett. The invention described in the application related to a system and method for undertaking market research, and more particularly for gathering market research from online survey groups.

The evidence led on behalf of Dommett provided numerous exhibits detailing meetings he had with Ms Harris and Simon Harris (“Mr Harris”) before the priority date of the application. These meetings spanned over several years and during this time Mr Harris became associated with Zebra. The evidence demonstrated, amongst other things, that in May 2009 Dommett provided to both Mr and Ms Harris a report which included examples of market research data demonstrating representativeness calculations between surveyed groups and target populations, as well as information concerning the application of such techniques for profiling online communities. Dommett’s submission Concerning the relevance of the various exhibits, it was argued on behalf of Dommett (at [46]): “… that the alleged “epiphany” which forms the basis of Ms Harris’ claim to inventorship could only have come from information conveyed to her by the requestor either directly or through the agency of Mr Harris.” And consequently that: “The requestor and not Ms Harris is the person responsible for the inventive concept.” Zebra’s submission It was not disputed on behalf of Zebra that Dommett had communicated the inventive

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A PROBLEM WITH GATHERING MARKET RESEARCH USING ONLINE SURVEY GROUPS WAS SAID TO BE THAT THE COLLECTED DATA CAN BE SKEWED RELATIVE TO A CORRESPONDING DATA SET OF A TARGET POPULATION TO WHICH THE MARKET RESEARCH IS IN PRACTICE DIRECTED

concept to Ms Harris before the earliest priority date of the application. Instead, it was argued on behalf of Zebra that: “an inventor of prior art does not have any entitlement to a third party’s patent application in respect of which that prior art is relevant and likewise that: a prior user of technology in Australia does not have any entitlement to a third party’s subsequent patent application that covers such technology. If a party decides to commercialise technology without first seeking patent protection, they should not be able to revive their ability to use the patent system simply because a third party subsequently seeks to patent similar technology.”

THE DECISION When considering the facts of the case, the Hearing Officer made reference to a three step approach for assessing entitlement based on the approach outlined

in the decision of the Full Court of the Federal Court of Australia in University of Western Australia v Gray [2009] FCAFC 116, namely to: 1. “Identify the ‘inventive concept’ of the invention as defined in the claims; 2. Determine inventorship including the person responsible for the inventive concept at the time of conception as distinct from its verification and reduction into practice; and 3. Determine how many contractual or fiduciary relationships give rise to proprietary rights in the invention.” The Hearing Officer further pointed out that a delegate of the Commissioner was faced with unusual circumstances similar to those of the present case in Mining Equipment (Minquip) Pty Ltd v Mining Suppliers Pty Ltd (1999) 45 IPR 566. In that case Minquip asserted that Mining Supplies had publicly disclosed all the material for which they were seeking entitlement before the priority date of the relevant applications. The delegate subsequently concluded: “It would be inappropriate to make any declaration under section 36(1)… for subject matter that the party seeking the declaration… had made publicly available.”

DC C QU AR TE R LY | SEPTEMBER 2011

And consequently that Mining Supplies:

COMMENTARY

“had forfeited any right to a patent for an invention in respect of [that subject matter] and was not entitled to the invention disclosed.”

This case is somewhat unusual in that the evidence led on behalf of Dommett to support the requests under sections 32 and 36 amounted to an admission that the inventive concept which was the subject of the application was publicly disclosed before the earliest priority date of the application. Furthermore, by not disputing this evidence Zebra in effect concurred. Despite internal patentability/entitlement tension created by the evidence, it would seem that both Dommett and Zebra considered there to be sufficient gain to warrant the challenge/defence.

On the evidence at hand the Hearing Officer was satisfied that the inventive concept of the present application was that as agreed to by both parties and as described above. At [47] the Hearing Officer supported the contention that Dommett, and not Ms Harris, is the person responsible for the inventive concept. It was also established that this inventive concept was disclosed by Dommett before the earliest priority date of the application. Important to the outcome of the decision, this disclosure was not considered to be in confidence and therefore amounted to a public disclosure. With guidance at least from the Minquip decision, the Hearing Officer subsequently concluded at [53] that despite Dommett being considered to be the “inventor” of the subject matter embodied in the application, “there is no matter for which I can make a finding of inventorship under section 32 or a declaration under section 36 in favour of the requestor”. Put in another way, due to Dommett’s prior public disclosure the Hearing Officer considered there to be no subject matter in which inventorship could subsist.

On first glance the outcome of the case may appear unjust to Dommett. However, it is important to highlight that by selfadmission the invention that Dommett sought to claim as his own was deemed prior art to the application. While an assessment of patentability (e.g. novelty and inventive step) does not typically form part of a consideration under sections 32 and 36, such self-admission could not simply be ignored. Under the circumstances, it would seem to follow that an inventor of prior art cannot have any entitlement to a third party’s patent application in respect of which that prior art is relevant. In considering the outcome of this case, one must also be reminded that in order for Zebra to successfully obtain accept-

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UNDER THE CIRCUMSTANCES, IT WOULD SEEM TO FOLLOW THAT AN INVENTOR OF PRIOR ART CANNOT HAVE ANY ENTITLEMENT TO A THIRD PARTY’S PATENT APPLICATION IN RESPECT OF WHICH THAT PRIOR ART IS RELEVANT.

ance of the application, they will not only need to establish that they are a person eligible to have the patent granted in its name, but also that the invention claimed is both novel and inventive in the light of the prior art. At least in the context of the claims in the application as originally filed, these requirements may prove difficult to fulfil in the light of the evidence led during this case. This case, although somewhat unusual in its outcome, serves as a reminder to those entering into collaborative projects to ensure that: (i) any discussions concerning potential intellectual property are conducted in confidence, and (ii) a patent application is filed before any public disclosure and commercial use of any resulting invention takes place. Had Dommett followed these general guidelines it is likely that the requests under sections 32 and 36 may well have been decided in his favour. As a post script to the case, it is interesting to note that on 13 July, 2011 (i.e. the day after the decision on the case was handed down), a request on behalf of Zebra was filed at the Patent Office withdrawing the application. In the request it was stated that: “… the decision to withdraw the application is made on commercial grounds unrelated to the delegate’s decision dated 12 July, 2011. That is, no inference should

be made that the delegate’s decision had caused this decision to withdraw.” Also of interest is that on March 25, 2010 Zebra was granted an innovation patent (AU2010100225) relating to the same subject matter of the application. The innovation patent also records Ms Harris as the inventor. This innovation patent was not subject to the present proceedings as requests under sections 32 and 36 can relate only to pending applications. Nevertheless, it is likely that issues raised in the present case would surface in the future if a request is made to have the innovation patent certified. Author: Ramon Tozer, Senior Associate

Case study 5

DC C QU AR TE R LY | SEPTEMBER 2011

Australian Patent Office Intervenes to Introduce New Ground During Opposition: Software Patent Found Invalid for lack of Manner of Manufacture Myall Australia Pty Ltd and RPL Central Pty Ltd [2011] APO 48 In the second of our two reports on software patent decisions, the Australian Patent Office (APO) has intervened in a patent opposition by requesting that the parties consider whether the invention related to patentable subject matter (i.e., was a â&#x20AC;&#x153;manner of manufactureâ&#x20AC;?), and then finding that it did not. This finding was determinative, as the other ground of opposition was not made out. The decision is another attack on broad computer-implemented method and system claims and has been appealed.

FACTS OF THE CASE The patentee, RPL Central Pty Ltd (“RPL Central”), is an Australian company that assists its customers in determining whether their existing skills and experience can be used to acquire recognised qualifications, e.g., from a registered training organisation (RTO) or a Technical and Further Education (TAFE) institution. The process is referred to as Recognition of Prior Learning (RPL). RPL Central applied for an Australian Innovation Patent (“the Innovation Patent”) in June 2009 for an invention relating to their business: gathering evidence relevant to an assessment of an individual’s competency relative to recognised qualification standards. The Innovation Patent was examined and subsequently certified in October 2009. The Innovation Patent as certified had five claims, including an independent method claim and an independent system claim. The system claim specified standard computing and communications technology for performing the method. The independent method claim in the certified Innovation Patent was as follows: 1. A method of gathering evidence relevant to an assessment of an individual’s competency relative to a recognised qualification standard, including the steps of: a computer retrieving via the internet from a remotely-located server a plurality of assessable criteria associated with the recognised qualification standard, said criteria including one or more elements of competency, each

of which is associated with one or more performance criteria; the computer processing the plurality of assessable criteria to generate automatically a corresponding plurality of questions relating to the competency of an individual to satisfy each of the elements of competency and performance criteria associated with the recognised qualification standard; an assessment server presenting the automatically-generated questions via the internet to a computer of an individual requiring assessment; and receiving from the individual via said individual’s computer a series of responses to the automaticallygenerated questions, the responses including evidence of the individual’s skills, knowledge and/or experience in relation to each of the elements of competency and performance criteria, wherein at least one said response includes the individual specifying one or more files stored on the individual’s computer, which are transferred to the assessment server. The Innovation Patent was opposed in March 2011 by Myall Australia Pty Ltd. Myall is also an Australian company who, trading as Jigsaw Publications, provide RPL services for students and registered training organisations. Initially, the only ground of opposition was that of novelty, i.e., that the invention was published or used in Australia before the priority date of the claims. However, the Patent Office Delegate (Dr. S. K. Aggarwal)

advised the parties that he wished to hear submissions in respect of a ground of lack of manner of manufacture. This ground had not been suggested by Myall, nor had it been raised during examination.

THE DECISION In considering the ground of lack of novelty, the Delegate applied the traditional tests, and found at least one feature in the certified claims that was not in the prior art disclosures. Accordingly, the claims were found to be novel, and the opposition failed on this ground. In considering the ground of lack of a manner of manufacture, the Delegate considered recent court decisions involving business method and software patents, including Welcome Real-Time SA v Catuity Inc, [2001] FCA 445 and Grant v Commissioner of Patents, [2006] FCAFC 120. In Catuity a method of tracking customer behaviour with a smart card was found to be patent eligible, whereas in Grant a method of asset protection including steps of ownership transfer was not. The Delegate summarised the manner of manufacture requirements post-Grant as follows: “It is clear from the above decisions that for an invention to be a manner of manufacture, it must give rise to an artificially created state of affairs in the sense of a concrete, tangible, physical or observable effect. Particularly, what is required is a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation.” The Delegate then considered a string of recent Patent Office decisions, starting

with Inventions Pathways Pty Ltd [2010] APO 10 in July 2010, that have found inventions relating to business methods and software to lack a manner of manufacture. This string of decisions includes Iowa Lottery [2010] APO 25, and Research Affiliates, LLC [2010] APO 31. These Patent Office decisions have relied on Grant to reject claims that only relate to abstract steps, but go further by discounting any computer technology— which would normally force a claim to be “concrete”—as not being “central to the purpose or operation of the claimed process or otherwise arising from the combination of steps of the method in a substantial way”. For example, the claim in Invention Pathways was found to be insufficiently “concrete” because it required only arrangement, gathering, storage and display of information by the computer. RPL Central argued that their invention was distinguished from the inventions in Grant, Invention Pathways, Iowa Lottery and Research Affiliates because these had “merely [related] to legal, financial or commercialisation advice, schemes, or arguments”, whereas “the claims of the opposed patent define a concrete application of information processing: retrieval of information from one source; processing of that information into an alternative form in which it is suitable for presentation to an RPL candidate; provision of [an] online

interface for presentation of the information to a user; and collection, transfer and storage of relevant information provided by the user.”

apply to a business scheme implemented in some part by computer and do not believe the patentability of such a method can arise solely from the fact that, in a general sense, it is implemented in or with the assistance of a computer or utilises some part a computer or other physical device in a incidental way.

This argument attempted to show, by reference to “concrete […] information processing”, that the certified claims fulfilled the manner of manufacture requirements post-Grant. The Delegate held, however, that the information processing in the claimed invention was insufficiently “substantial”. In this, he relied on Invention Pathways, in which the Deputy Commissioner of Patents had stated: In applying the decision in Grant I therefore consider that the “concrete effect or phenomenon or manifestation or transformation” referred to must be one that is significant both in that it is concrete but also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way. Consequently while the step of building a house involves a concrete physical effect it is peripheral to the method of acquiring a house and indeed could hardly be said to characterise the subject matter of the method such that it is considered an artificially created state of affairs. I consider the same to

DC C QU AR TE R LY | SEPTEMBER 2011

The Delegate held that the retrieval, storage, and processing of information in the claimed invention “appeared to have no physical effect other than that [which] would arise in a computer with standard software and a conventional use”. The Delegate stated “while the internet and the computer facilitate the operation of the claimed method by retrieving, generating and conveying information, they are not essential to the purpose of the claimed invention”. In particular, referring to claim 1, the Delegate decided that the step of “processing the plurality of assessable criteria to generate automatically a corresponding plurality of questions relating to the competency of an individual to satisfy each of the elements of competency and performance criteria associated with the recognised qualification standard” could be performed by simply concatenating a standard text string to the text of the assessable criteria, and that “there is no substantial effect or transformation in

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THIS DECISION IS ANOTHER IN A STRING OF PATENT OFFICE DECISIONS REJECTING BROAD COMPUTER-IMPLEMENTED METHOD AND SYSTEM CLAIMS FOR LACKING A MANNER OF MANUFACTURE BASED ON DISCOUNTING OF THE COMPUTERRELATED FEATURES FOR BEING INCIDENTAL.

generating the questions by concatenating text matters”. Later, the Delegate referred to this as a “mere cut and paste”, which he did not regard as a substantive transformation of data. The Delegate dismissed the independent system claim for “substantially defining a mere system variant for operating the method of claim 1”. Finally, the Delegate indicated that he believed that the claims could be amended to include a manner of manufacture if more specific details of the data processing were required in the claims, such as generation of the questions based on identification of particular keywords within the assessable criteria and additional contextual information associated with the qualifications. Accordingly, the patentee was allowed 60 days to propose suitable amendments.

COMMENTARY This decision is another in a string of Patent Office decisions rejecting broad computer-implemented method and system claims for lacking a manner of manufacture based on discounting of the computerrelated features for being incidental. The decision also rejected data transformation steps, such as the automatic generation of the questions, for being insufficiently “substantive”. The Delegate

may have found the transformation insufficient because it seemed to be too trivial (a “mere cut and paste”). Patent applicants with computer-implemented inventions should be careful to include as much relevant and unique technical detail as practicably possible in their patent specifications to address the increasing requirements for manner of manufacture set out by the Australian Patent Office. Patent opponents, on the other hand, may take every opportunity to argue that “concrete” subject matter in a claim is insubstantial or peripheral to the purpose of the invention. In this regard, however, we note that this decision may soon be clarified or overturned because RPL Central has appealed to the Federal Court. Authors: David Webber, Partner Sam Mickan, Associate,

Case study 6

DC C QU AR TE R LY | SEPTEMBER 2011

Sanofi’s Psoriasis Patent Gives Apotex a Rash that it cannot Scratch! – Method of Treatment Claim Found Valid and Infringed Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No. 3) [2011] FCA 846

In a decision which considers both patent and copyright issues, the Federal Court recently found in favour of the patentee/originator, distinguishing between the purpose of administration and the result achieved in order to clarify construction of a method of treatment claim. Whether copyright subsisted in a Product Information document was also considered.

Sanofi-Aventis Deutchland GmbH (‘Sanofi’) is the owner of Australian Patent No. 670491 (‘the Patent’) having a priority date of 31 March 1993 and an expiration date of 29 March 2014. The only claim appearing in the granted Patent reads (in part): “A method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis, which comprises administering to a recipient an effective amount of a pharmaceutical composition containing as an active ingredient a compound of the formula I or II …”. In relation to these proceedings the relevant compound of formula I is leflunomide. Leflunomide was the subject of an earlier filed Australian patent which expired in 2004. Sanofi Australia supplies leflunomide under the trade names “Arava” and “Arabloc”. Around July 2008 the respondent Apotex Pty Ltd (‘Apotex’) obtained registration of its generic version of leflunomide on the Australian Register of Therapeutic Goods. This was done in order to facilitate its intention to supply and offer to supply in Australia its generic leflunomide products for the treatment of psoriatic arthritis (PsA) and rheumatoid arthritis (RA). As part of this process Apotex submitted a Product Information (‘PI’) document. Sanofi asserted, inter alia, that this proposed conduct in relation to PsA threatened to infringe claim 1 of the Patent. Apotex cross-claimed, asserting that

the Patent was invalid and that the supply of leflunomide products for the treatment of PsA would not infringe because, if properly construed, the claimed method is for the treatment of skin diseases only and not joint diseases such as PsA or RA. Background Knowledge of Psoriasis, PsA and RA Expert evidence was provided regarding what was understood in the field as at the priority date (1993) and at present in relation to psoriasis, RA and PsA. It was agreed by all experts that psoriasis and PsA were considered to be distinct disorders in 1993 in terms of both aetiology and clinical presentation. At this time it was thought that psoriasis was a proliferative disease in which the genetic abnormality associated with psoriasis directly influenced the epidermal cellular turnover rate. In turn it was thought that this hyper-proliferation of epidermal cells was the cause of the inflammation observed in psoriasis. Accordingly, prior to 1993 it was not an aim of the treatment to specifically target the inflammatory cells in the treatment of psoriasis. On the contrary, it was thought that by treating the hyper-proliferation of skin cells, the inflammation would be resolved. It is now acknowledged that the genetic abnormality associated with psoriasis leads to the inflammatory reaction and this is responsible for the increased cell turnover.

While RA and PsA are also both inflammatory arthropathies they are distinct diseases and were known to be distinct as at 1993. It was acknowledged (now and 1993) that nearly all patients diagnosed with PsA who were not initially diagnosed with psoriasis would develop psoriasis sometime in the future. Accordingly, it is now recognised that if leflunomide is administered to a patient with PsA, that administration would also be expected to treat or prevent the patient’s psoriasis. There is no such relationship between psoriasis and RA. Construction of Claim 1 It was agued by Apotex that the claim should be construed based on the “objective purpose” of the administration of leflunomide. That is, one should construe the claim in terms of the purpose of the administration which is the treatment of psoriasis. Jagot J identified that much of the complexity associated with Apotex’s case was based on trying to resolve the correct construction by reference to the particular conduct Sanofi alleged to be the potential infringing activity. The restraint sought by Sanofi was not direct infringement but indirect infringement through the prospective supply of leflunomide for the treatment of PsA. The Court agreed with Sanofi’s submission that the conduct alleged to constitute infringement should not have any bearing on the proper construction of the claim. In this regard,

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Jagot J cited Sachtler GmbH & Co KG v RE Miller Pty Ltd¹ which stated: “infringement does not determine construction; construction determines infringement”, and ultimately dismissed Apotex’s construction, acknowledging that the claim itself said nothing about the purpose of administration of the compound. In contrast, Jagot J acknowledged that the method is described and defined by a particular result which is the prevention or treatment of psoriasis. As such, it was concluded that while psoriasis is an essential integer of the method claim its essentiality operates in relation to the result or effect and not, as argued by Apotex, in relation to the purpose of administration. Validity and Infringement The claimed invention was found to be valid. Apotex submitted that based on the “reverse infringement test”, should the Court decide the issue of construction in favour of Sanofi, it should also find that the claim lacks novelty over the prior use of leflunomide. More particularly, if the use of leflunomide to treat PsA after the priority date is deemed an infringement of the claim, then the same use, before the priority date, will inherently also treat psoriasis and this will anticipate the claim. In relation to the first part, Jagot J found that because all patients with PsA will at some point develop psoriasis (that is, psoriasis is a diagnostic criterion of PsA) treating a person for PsA will also treat or prevent the psoriasis and hence infringement would occur. Unfortunately for Apotex, however, the prior art relied upon only taught that leflunomide was effective in the treatment of RA and multiple sclerosis. While it was acknowledged that as at the priority date 2% of people with RA would also have psoriasis, unlike PsA, the evidence showed that the prevention or treatment of psoriasis would not be an inevitable result of the administration of leflunomide to person suffering from RA. Jagot J concluded that in this context the reverse infringement

test asks whether the alleged anticipation would infringe the patent. It is inherent in the test that there must be infringement for the test to yield a positive answer. Based on the information from Apotex’s PI document, and in particular the phrase; “Apo- Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease”, Jagot J found that the proposed activities of Apotex would infringe based on section 117 of the Patents Act. This provision states that the supplier of a product may infringe a patent if: (1) the use of the product by the person to whom it is supplied would infringe the patent, and (2), one or more certain other conditions regarding the use are fulfilled. The PI document fulfilled one of these conditions involving the supply of instructions which induces another to infringe. Another one of the conditions is mentioned in section 117(2)(b) which states: “if the product is not a staple commercial product--any use of the product, if the supplier had reason to believe that the person would put it to that use.” In relation to this condition Apotex argued that leflunomide was a staple commercial product. Jagot J considered that the “product” as referred to in section 117(2)(b) was not leflunomide per se, but the specific formulation Apo-Leflunomide with all of its excipients and particular dosage amounts. Citing the High Court decision in Northern Territory v Collins2 with approval, Jagot J stated that it cannot be said that Apo-Leflunomide is a product “that not only can be used in a variety of ways but also is traded for use in various ways”. It would appear from at least this section of the judgment, that the Court has made it quite difficult for generic suppliers to avoid the section 117(2) (b) criteria as any deviation in formulation parameters to accommodate the new use is likely to result in a finding that the product is not a commercial staple.

DC C QU AR TE R LY | SEPTEMBER 2011

TO BE “ORIGINAL” FOR THE PURPOSES OF COPYRIGHT LAW IN AUSTRALIA, THE WORK, AMONGST OTHER THINGS, MUST BE THE RESULT OF HUMAN INDEPENDENT INTELLECTUAL EFFORT DIRECTED TO THE EXPRESSION OF THE WORK IN ITS MATERIAL OR PUBLISHED FORM.

subsisting in the Arava PI as a literary work within the meaning of s. 10 of the Copyright Act 1968 (Cth).

What are Product Information Documents (PI)

In response, Apotex:

Generally, before a medicine can be lawfully marketed and supplied in Australia, it must be approved by the Therapeutic Goods Administration (“TGA”). As part of this regulatory process, companies wishing to introduce a new drug or a new generic version of a drug must submit a Product Information document (“PI”) to the TGA for approval. PIs are intended to assist doctors, pharmacists and other health professionals to more competently prescribe and dispense medicines by setting out objective information regarding the drug’s quality, safety and efficacy. Sanofi’s Product Information documents Consistent with this regulatory regime, Sanofi had obtained TGA approval for a series of PIs it had submitted for the purposes of securing approval for its leflunomide pharmaceutical product, “Arava” (the “Arava PI”). Apotex’s allegedly infringing conduct In or about July 2008, Apotex obtained registration of generic versions of leflunomide on the Australian Register of Therapeutic Goods (“ARTG”). Relevantly, in procuring ARTG registration, Apotex submitted PI, which it admitted, reproduced a substantial part of the Arava PI. Consequently, Sanofi alleged that Apotex had infringed the copyright

1. Challenged the originality and authorship of the Arava PI; and 2. Submitted that it had an implied license to copy the Arava PI for the purposes of obtaining TGA approval. Authorship Jagot J found that the Arava PI were brought into existence through the collaborative effort of members of Sanofi’s Arava Cross-Functional and Global Labelling teams, who were each “qualified persons” for the purposes of the Copyright Act. The work undertaken by each member of the team could not be separated. Accordingly, Jagot J found that the Arava PI were works of “joint authorship”, noting consistently with the Full Court’s findings in Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCAFC 149, 3 that “it is not the case that each and every author must be individually identified for there to be a work of joint authorship”.4 Originality Following the seminal decision of the High Court in Ice TV v Nine5, in order for copyright to subsist in a literary work, the work must be sufficiently “original”. To be “original” for the purposes of copyright law in Australia, the work, amongst other things, must be the result of human independent intellectual effort directed to the expression of the work in its material or published form.

Relying upon these principles, Apotex submitted that the Arava work was not sufficiently original as, the work involved in merely completing a template form provided by the TGA was “so trivial as not to make that work an original work”.6 Jagot J rejected these submissions, finding that the evidence clearly demonstrated that Sanofi’s employees had collectively imparted considerable skill, judgment and knowledge in the expression of the PI in a material form, including in the: •

selection of relevant material from a vast array of available information; and

•

interpretation, arrangement and presentation of the information “so as to best convey a balanced statement about the drug’s risks and benefits”.7

Accordingly, Jagot J found that copyright subsisted in the Arava PI as original literary works. Implied Licence Apotex submitted that it had an implied licence to copy the Arava PI for the purpose of obtaining regulatory approval arising out of customary practices within the pharmaceutical industry, as well as the conduct and acquiescence of Sanofi. Apotex relied upon, amongst other things, the public policy benefits it said flowed consistency between originator and generic PI, and the fact that Sanofi “ha[d] been aware of, participated in, benefited from and never complained about the practice of generic companies making close copies of originator PIs.”8

››

Jagot J dismissed Apotex’s contentions, finding that: •

•

the evidence was insufficient to establish “either the existence of an industry wide practice of copying, or anything more than apparent neutrality by participants in the industry as to the copyright implications of such copying”9; it was not necessary for drug companies seeking to register a generic version of a drug to copy originator PI in the interests of safety or otherwise; and

into the Copyright Act. Section 44BA, provides, amongst other things, that the copyright subsisting in TGA approved PI is not infringed by an act that is undertaken to register a medicine under the Therapeutic Goods Act 1989 (Cth).10 Jagot J explained that had the acts of infringement occurred on or after 28 May 2011, Apotex could have relied upon the protection provided by section 44BA. Authors: Mathew Lucas, Partner, Darron Saltzman, Partner Aaron Yates, Law Graduate

there was no mutuality as between originator and generic pharmaceutical companies, in the sense that generic companies rarely contributed original PI to the pool of approved PI.

For these reasons, Jagot J concluded that Apotex had infringed the copyright subsisting in the Arava PI without the license of Sanofi in contravention of section 36 of the Copyright Act. The Therapeutic Goods Legislation Amendment (Copyright) Act 2011 (Cth) (“TGLAC Act”) As noted by Jagot J, flowing from recent amendments to the Copyright Act, from 28 May 2011, generic pharmaceutical companies have been able to use originators’ PI that have been previously approved by the TGA, without infringing the copyright in the original PI. The scheme has been implemented by the TGLAC, which inserts a new section 44BA

Sachtler GmbH & Co KG v RE Miller Pty Ltd [2005] FCA 788

Northern Territory v Collins 235 CLR 619 [2008] HCA

For a discussion of this decision, please see our in brief article at http://www.davies.com.au/pub/ detail/404/copyright-does-not-subsist-in-thewhite-and-yellow-pages-full-federal-court

[2011] FCA 846 at [353]

[2009] HCA 14

[2011] FCA 846 at [327

[2011] FCA 846 at [349]

[2011] FCA 846 at [365]

[2011] FCA 846 at [376]

10.

For a more in depth explanation of these amendments, please see our recent “in brief” articles at: http://www.davies.com.au/pub/detail/409/ tga-pharmaceutical-product-information-set-tolose-copyright-protection-in-australia and http:// www.davies.com.au/pub/detail/449/tga-pharmaceutical-product-information-loses-copyrightprotection-in-australia

Case study 7

DC C QU AR TE R LY | SEPTEMBER 2011

Claim Construction and Internal Requirements of Australian Patent Specifications: Full Federal Court Reiterates Principles Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2011] FCAFC 83 In a recent decision concerning the infringement and validity of patents for fish-stunning apparatus, the Full Federal Court has provided guidance on the ambit of the expression “claims defining the invention”, which is a requirement of a patent specification set out in section 40(2) of the Australian Patents Act 1990. Furthermore, the decision applies and reinforces known claim construction principles, and also reinforces the approach identified by the High Court in determining whether or not a claim lacks fair basis.

FACTS OF THE CASE Seafood Innovations Pty Ltd is the owner of Australian Innovation Patent Nos. 2006100980 and 2008100126 (the first and second patents, respectively). Both patents relate generally to fish stunning apparatus of a type that is suitable for use in commercial fisheries. To this end, both patents have claims defining a fish stunning apparatus that includes:

the guide at the striker for stunning. Subsequently, the floor is moved to the second position, releasing the fish so as to continue through the guide to the exit. The claims of the second patent require that “the height of the striker is adjustable with respect to the fish guide”. This enables the striker to be brought down onto the head of the fish for stunning. Submissions and the Court’s decision at

•

a fish stunning device;

first instance

•

a fish guide; and

At first instance, Seafood Innovations

•

a trigger.

The patent claims in question For the purposes of this decision, the significant features of the claims relate to the fish guide. The claims of both patents define that the fish guide has an entrance and an exit, said fish guide guiding a fish below the striker [of the stunning device] so that the piston [of the striker] contacts said fish when the piston is in the extended position”. The claims of the first patent call for the fish guide to have “a floor [that is] pivotally movable between a first and a second position, the floor moving from the first position to the second position to allow a fish to pass unidirectionally from the entrance to the exit”. In practice, this enables the floor to be put in the first position to arrest the movement of the fish through

claimed that Bass had infringed both patents by their manufacture and sale of two fish killing apparatus. Bass denied infringement of the first patent, and admitted infringement of the second patent but claimed that it was invalid. The primary judge found that the first patent was not infringed, and that the second patent was invalid for failing to define the invention. In doing so, the primary judge considered the second patent failed to meet a requirement of section 40(2)(c) of the Patents Act 1990 that the claims define the invention. In this appeal, Seafood Innovations appealed both findings of the primary judge on infringement and invalidity, while Bass filed a Notice of Contention seeking to affirm that the second patent is also invalid for lack of fair basis.

THE FULL COURT’S FINDINGS ON APPEAL Infringement of the first patent Both parties conceded that the Bass apparatus took all the physical integers of at least some claims of the first patent. The matter at issue involved the construction of the function expression in these claims: “the floor [moves] from the first position to the second position to allow a fish to pass unidirectionally from the entrance to the exit” (emphasis added). Whether or not the Bass apparatus infringed the claim turned on the construction of the term “allow” within this expression. The primary judge observed that the Bass apparatus included movable cheek and top plates, that act together with a movable floor (a “chin plate”) to allow a fish to pass through the guide. The movement of the chin plate to the second (lower) position alone without retraction of the cheek and top plates still prevented a fish from passing through the guide; in other words, collective movement of all three plates was required to allow a fish to pass. In light of this performance of the Bass apparatus, the primary judge held the view that movement of the chin plate did not allow a fish to pass through the fish guide, and consequently that the Bass apparatus did not infringe the claims of the first patent.

››

On appeal both Justices Bennett and Greenwood held the view that the primary judge’s restrictive construction was incorrect. The reason given for this view was that the language of the claims does not support the position that for a fish stunning apparatus to fall within the scope of the claim, the movable floor must be the only component that permits and restricts the passage of fish through the guide. Placing such a restrictive interpretation on the claims was considered to be importing an impermissible gloss on the claims. Justice Dowsett concurred with Justice Bennett’s findings in their entirety. Do the claims of the second patent define the invention? It was accepted by Bass that both of their apparatus infringed the claims of the second patent. However, they contended that the claims did not “define the invention”, and therefore failed to meet one of the requirements of section 40(2)(c). The primary judge held the view that the claims of the second patent did not define the invention, because they did not disclose elements of the invention that were necessary to make the apparatus work. These elements were those features of the preferred embodiment that effectively held the fish for stunning and subsequently released the fish to exit the apparatus; that is, the movable floor of the guide.

Justice Bennett noted that the “monopoly is set out in the claims”, and that the fact that the claims of themselves did not provide adequate instructions to realise the invention did not result in the claims failing to define the invention. It appears that the primary judge took a view on the invention that was clouded by the preferred embodiment when assessing this ground of revocation, although Justice Bennett did not go so far as to draw this conclusion.

and that the second patent was not invalid on the grounds pursued by Bass. On the validity of the second patent, both Justices Dowsett and Greenwood concurred with Justice Bennett’s findings.

COMMENTARY

This decision applies and reinforces wellestablished principles in claim construction, and in the assessment of lack of fair basis. In addition, Justice Bennett’s It is interesting to observe that the primary comments put to rest the notion that the expression “defining the invention” in secjudge’s decision appears to suggest that tion 40(2) requires that the claims specify his view was based on the language of all the components needed to put the claim 1, and then extrapolated to all four invention into practice. Thus, the claims claims of the second patent. However, dependent claim 3 contains all the features are only required to define the monopoly of claim 1 of the first patent, without defin- provided to the patentee. ing that the floor allows the fish to pass Authors: Raymond Hind, Partner unidirectionally from the entrance to the Hayden Barke, Associate exit of the guide. Are the claims of the second patent fairly based? Bass contended that the “pivotally movable floor” was an essential integer of the invention and should have been included in the claims. Of course, Seafood Innovations took the opposite view and contended that “pivotally movable floor” was a feature of the preferred embodiment, and that there was no statement in the specification indicating that the feature was “essential”. Justice Bennett held that: •

the claims were consistent with the broadest consistory statement in the body of the specification; and

•

Bass’ analysis “seeks to isolate essential integers from the body of the specification in understanding the described invention”, which is contrary to the approach applied in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58.

It follows that Justice Bennett concluded that the second patent satisfied the requirements of sections 40(2)(c) and 40(3),

Case study 8

DC C QU AR TE R LY | SEPTEMBER 2011

VIP Plastic Packaging Wins Federal Court Patent Infringement Case Against B.M.W. Plastics Pty Ltd VIP Plastic Packaging Pty Ltd v B.M.W. Plastics Pty Ltd [2011] FCA 660

On 10 June 2011, Federal Court determined that B.M.W. Plastics Pty Ltd (“BMW Plastics”) infringed the principal claim of VIP Plastic Packaging Pty Ltd’s (“VIP”) Patent for a “variable dip length tube for a fluid transfer container”. Davies Collison Cave Law acted for VIP in the proceeding.

BACKGROUND This was the second and most important victory for VIP in its hard fought proceeding against BMW Plastics. In June 2009, Justice Kenny ruled in favour of VIP in its opposition to an application made by BMW Plastics seeking an order under section 97 (3) of the Patents Act 1990 (Cth) that the Commissioner of Patents be directed to re-examine the specification of VIP’s patent. We reported on that decision in our IP Update of September 2009. The VIP Patent VIP is the owner of an Australian Patent No. 2001235262 entitled “variable-length dip tube for a fluid transfer container” (“the Patent”), which was designed to overcome structural weaknesses of other conventional variable length plastic dip tubes. Specifically, the compressible and extensible sections of other dip tubes had the tendency to break under chemical and physical stresses, thereby blocking the efficient transfer of liquids. The invention overcomes these deficiencies through the implementation of a plastic tube system which consists of two component parts: •

A relatively rigid inner tube of predetermined length designed to inhibit the bending of the outer tube referred to below (“the inner tube”). The inner tube is designed to be connected to a valve or pump at the

opening of a liquid container (e.g. industrial chemical drums); and •

An outer, shorter, flexible tube which has an easily compressible and extensible bellows structure, and an opening designed to maximise the extraction of liquid from the bottom of a liquid container drum (“the outer tube”). The outer tube fits over the inner tube like a sleeve.

The issues VIP alleged that its competitor, BMW Plastics, had infringed claims 1, 2, 5, 6, 7, 9 and 10 of the Patent by manufacturing and selling dip tubes to its customers. BMW Plastics denied infringement, and, in response, cross claimed for revocation of the Patent on the basis that the Patent: •

was not novel;

•

lacked an inventive step;

•

was not a manner of new manufacture; and

•

did not clearly define the invention.

Central to the outcome of the dispute was the Court’s treatment of the “expert” evidence tendered by each party.

THE DECISION Expert evidence in Patent cases Australian patent law requires Courts to

consider and assess the validity and infringement of patents with close reference to the knowledge, understanding, and inventive approach of the Patent’s addressees, namely, non-inventive persons skilled in the art or field of the invention in suit. However, in order for the opinions of such persons to be admissible, the opinion must be: •

relevant, and;

•

prepared and tendered by an “expert”, that is, a person who has “specialised knowledge based on the person’s training, study or experience.”

VIP’s expert evidence VIP relied upon the evidence of the inventor of the Patent, Mr Mandile, and Mr McFadyen, a member of VIP’s design team who assisted Mr Mandile in the development of VIP’s invention. Whilst noting that persons involved in the development of an invention in suit must be treated with caution, Justice Kenny proceeded to accept VIP’s expert evidence on the basis that VIP’s experts could be properly described as persons skilled in the relevant art of manufacturing and using dip tubes, particularly in chemical transfer drums used in the agricultural and veterinary industries. In fact, Justice Kenny acknowledged that VIP’s experts were the

››

BMW PLASTICS RELIED SOLELY UPON THE EVIDENCE OF PROFESSOR FIELD, WHO WAS A MECHANICAL ENGINEER WHO HAD, AMONGST OTHER THINGS, PUBLISHED BOOKS AND PAPERS ON ENGINEERING DESIGN AND INNOVATION THEORY.

“only two witnesses at trial who worked in the art or science with which the invention as claimed in the Patent was concerned.” BMW Plastics’ expert evidence BMW Plastics relied solely upon the evidence of Professor Field, who was a mechanical engineer who had, amongst other things, published books and papers on engineering design and innovation theory. Flowing from the Court’s characterisation of the relevant “art” (see above), Justice Kenny rejected Professor Field’s opinion on the meaning of the Patent and the relevant prior art, and his opinions in relation to the issues of novelty and inventive step, explaining at [59] to [61]: “Professor Field is not in the class of skilled addressees. Indeed, in cross-examination, Professor Field readily conceded that he was not in the class of people that he himself had described as skilled in the art of dip tubes, and that Mr McFadyen and Mr Mandile were in this class. Professor Field simply did not fall within the class of people who could be regarded as “a skilled addressee and in a position to give expert evidence of assistance to the Court, or a person whose evidence, together with other evidence, creates the construct of the skilled addressee”: see Fina Research SA v Halliburton Energy Services Inc [2003] FCA 55 (“Fina”) at [3] (Moore J)…

…There was, however, a serious difficulty with Professor Field’s evidence in another respect: it was not just that he was not a skilled addressee but that he had no history of working in the fields of dip tubes or plastics, or some related field. Without this specialised knowledge, based on training, study or experience, Professor Field was not in a position to give relevant evidence to the court bearing on the meaning of the VIP Patent or a prior publication, the issue of novelty and the issue of obviousness.” Justice Kenny also criticised Professor Field’s evidence in a number of other respects: •

His evidence in relation to the general “industrial innovation process” was not relevant, as it was not directed to such processes within the dip-tube field ;

•

His evidence demonstrated a misunderstanding of relevant legal principles;

•

His evidence in relation to inventive step was impermissibly tainted by hindsight, as Professor Field received a sample of the allegedly infringing product which at least had a “close… arrangement to the VIP Dip Tube” prior to preparing his evidence in relation to inventive step; and

•

Professor Field improperly relied upon irrelevant notions of “common sense” to support his conclusions.

These admissibility findings largely defined and influenced Justice Kenny’s approach to the substantive issues in dispute (discussed immediately below), and were arguably determinative of the outcome in the case. Infringement Relying principally upon the evidence of Mr McFadyen, Justice Kenny found that BMW Plastics’ dip tube product infringed claim 1 and the other subsidiary claims of the Patent. Specifically, Justice Kenny rejected BMW Plastics’ contentions that: •

Its product did not have an outer tube with a lower end portion as required by the Patent: Justice Kenny held that the BMW Plastics product had a section of outer tube after the bellows which vertically separated the bottom of the inner tube’s bellows and the bottom of the drum into which the dip tube is inserted; and

•

The lower portion and bellows of BMW Plastics’ outer tube were not in a “loose clearance fit” with the inner tube, as required by the Patent: Justice Kenny rejected that the fit or distance between the bellows and lower portion of the outer tube and the inner tube had to be the same. All that was required was the effective loose but close relationship of the bellows of the outer tube and the inner

tube. On Justice Kenny’s analysis, this feature was clearly present in BMW Plastics’ product.

Justice Kenny also noted that there was no evidence that the Hancock Patent formed part of the prior art base for the purposes of the assessment of inventive step. In The validity of the Patent this respect, Justice Kenny appeared to As outlined above, in response to VIP’s accept the evidence of Mr. Simon Ware (a allegations of Patent infringement, BMW Patent attorney at Davies Collison Cave) Plastics sought to revoke the Patent on a to the effect that a search for prior art number of grounds. Relying once again on publications relevant to the subject matter Mr McFadyen’s evidence, Justice Kenny of the Patent would not have located the dismissed BMW Plastics’ cross claim, and Hancock Patent. confirmed the validity of the Patent. Other grounds of invalidity Novelty Justice Kenny also rejected the other BMW Plastics argued that the invention grounds of invalidity advanced by BMW claimed in the Patent lacked novelty in Plastics at trial, finding that the Patent light of the prior publication of a US Patent specification disclosed a “new manner of which related to drinking water dispensers manufacture”, and clearly defined the infor bottled water (“the Hancock Patent”). vention in a manner that enabled a skilled Justice Kenny rejected BMW Plastics’ addressee to perform the invention. contentions, finding that the Hancock Patent did not anticipate the VIP Patent’s COMMENTARY claims as: Justice Kenny’s decision highlights the • The relevant tube of the Hancock importance of identifying and selecting Patent consisted of three compoappropriate expert witnesses in contennent parts (as opposed to the two tious patent matters. Expert opinion is component tubes of the invention as fundamental to the Court’s assessment claimed in the VIP Patent); of patent infringement and validity, and undoubtedly has the potential to be • The arrangement of the tubes in the determinative of the outcome of patent invention as described in Hancock disputes. Accordingly, in general, expert Patent was different to the arrangeevidence in patent matters should be ment described in the VIP Patent; and prepared and tendered by persons with • The tube described in the Hancock relevant qualifications and experience in Patent was specifically designed the field of the invention in suit. Nonto operate in a vacuum or suction inventive persons skilled in the relevant system. art can provide the best evidence in this regard. It may also be appropriate to Lack of Inventive Step seek evidence from those involved in the Having regard to the rejection of BMW development of the invention itself, dePlastics’ evidence (outlined above), Justice spite the potential for such persons to be Kenny determined that BMW Plastics criticised as being improperly “inventive” failed to establish that the invention and partial. claimed in the Patent was obvious: Authors: John Hannebery, Partner [BMW Plastics] “failed to adduce any Aaron Yates, Law Graduate evidence that the hypothetical skilled addressee faced with the problem of buckling (which the VIP Patent identifies as the problem addressed) would have taken as a matter of routine whatever steps might have led from the prior art to the invention as claimed in any of the claims of the VIP Patent.”

DC C QU AR TE R LY | SEPTEMBER 2011

Practice Update 1 Patent Examination Integration for Australia and New Zealand on the Horizon On July 5, 2011 the Australian Government and the New Zealand Government jointly announced an implementation plan to streamline patent prosecution in Australia and New Zealand. The implementation plan, which is part of the Single Economic Market (SEM) established to streamline the Australian and New Zealand economic markets, aims to deliver a single application process covering both countries by early 2013, progressing to a single examination process by June 2014.

Currently, a work sharing model is being developed which will be the first stage of the implementation plan. This will not be implemented until new patent legislation in New Zealand comes into force, which is expected to be in early 2012. Details of the single application and single examination processes are yet to be announced but the clear intention is that applications filed in both Australia and New Zealand “will be examined by one examiner located in either country”. Both governments have said that doing so will eliminate “unnecessary duplication” in the examination process, noting that it is “not necessary” for the patent laws in each country to be identical. Davies Collison Cave in principle supports the streamlining of examination in both countries, as the two markets are closely aligned for so many of our clients. However, the patent laws of Australia and New Zealand differ significantly in many important aspects, even with the new patent legislation currently proposed for New Zealand, and it remains to be seen how these differences will be managed. We await with interest the details of the implementation plan. Please contact us if you have any questions on this topic. Author: Becky White, Senior Associate

Practice Update 2

DC C QU AR TE R LY | SEPTEMBER 2011

Intellectual Property Laws Amendment (Raising The Bar) Bill 2011 Introduced into the Senate On 22 June 2011 the much anticipated “Raising the Bar Bill” was introduced into the Senate. The stated aim of the Bill is to introduce a number of reforms to Australia’s IP system to support innovation by encouraging investment in research and technology in Australia. One of the primary methods by which the Bill seeks to do this is by raising the standards against which IP rights are assessed. The Bill also includes provisions to put into effect recommendations contained in various reports prepared for the government by the Advisory Council on Intellectual Property (ACIP), the Australian Law Reform Commission (ALRC) and the 2008 review of the National innovation system (Venturous Australia).

The amendments have been divided into six schedules. Schedule 1 is the most significant in that it substantially raises Australian patentability standards and the requirements for patent specifications. Schedule 2 introduces two patent infringement exemptions, one relating to experimental use and the other relating to regulatory activity. Schedule 3 restricts some of the flexibility currently allowed within the Patents Act by restricting the filing of divisional applications and amendments filed by applicants following an opposition decision. This schedule also introduces amendments to the trade mark opposition system. Schedule 4 provides for the incorporation of patent attorney firms and attorney/client privilege to the clients of foreign patent and trade mark attorneys. Schedule 5 relates to trade mark and copyright enforcement, while Schedule 6 introduces assorted changes to deal with some anomalies present in Australia’s current IP laws. While the Raising the Bar Bill includes amendments to the Patents Act 1990, Trade Marks Act 1995, Copyright Act 1968, Designs Act 2003 and Plant Breeders’ Rights Act 1994, the vast majority of the amendments relate to the Patents Act 1990. The final form of the Raising the Bar Bill does not differ markedly from the exposure draft of the Bill circulated for public comment earlier in the year. However, of

particular significance are the amendments While this is a very welcome change, after to the transitional provisions and the com- commencement of the new legislation it mencement date of the legislation. is likely to become necessary to check IP Australia’s database to ascertain the date According to the exposure draft the new of the examination request in order to depatentability standards and specificatermine the applicable law. This problem tion standards were to be applied to all could be partially alleviated if IP Australia patent applications for which an examinatakes steps to include the date of the extion report had not issued by the date amination request on published abridgeof commencement. The date of comments of accepted applications. mencement of the legislation was to be six months from the date the Act receives The Raising the Bar Bill has been schedRoyal assent, or an earlier date to be fixed uled for debate in the Senate for the by proclamation. The net result was that week of 16 August 2011. Accordingly, applicants who had filed patent applicathe earliest that the Bill could be passed tions prior to commencement of the new is September 2011, and, in view of the legislation would not be able to take any 12 month commencement period, the action to ensure that their applications earliest commencement date for the new were examined under the current more provisions is September 2012. This will lenient standards. These provisions have provide patent applicants with a considerbeen amended in the Raising the Bar Bill able period of time within which to request and the new provisions relating to patent- examination of their Australian applicaability and specification requirements will tions to ensure that they are considered now only apply to applications for which under the current more lenient provisions. examination has not been requested by Consideration could also be given to early commencement of the legislation. The national phase entry in Australia so that an commencement period has also been examination request can be filed before extended from 6 months to a fixed 12 commencement. month period from the date upon which The new provisions will be subject to regulathe Act receives Royal assent. This will tions which are yet to be published. It is anmean that patent applicants will have an ticipated that the regulations will be available extended period within which to request for review late this year or early 2012. examination of their applications to ensure A summary of the changes as they apply to that they are examined according to the current standards. patents is provided below:

SCHEDULE 1 – RAISING THE QUALITY OF GRANTED PATENTS

whether it would still be appropriate in considering inventive step to ask whether or not the reference is one that would have been found by a person skilled in the art, for example by • a diligent searcher. The explanatory memorandum does indicate a desire to change the law as expounded in Commissioner of Patents v Emperor Sports Pty Ltd [2006] FCAFC 26 (10 March 2006), where a published US patent specification describing removable tags for playing American football could not be used to support an inventive step objection against similar tags used for playing rugby league or Australian rules football. In that decision it was held that a rugby league or Australian rules coach could not be reasonably expected to ascertain a US patent document. The explanatory memorandum does include a warning against the impermissible use of hindsight, and accordingly it is hoped that an inventive step objection will not be sustainable in circumstances where the published reference could only be found with knowledge of the invention.

Inventive step: •

Under the current law inventive step is assessed against the background of the common general knowledge in the art as it exists in Australia. Section 7(2) has been amended to remove the territorial limitation such that inventive step will be assessed against the common general knowledge in the art in general. This amendment should assist opponents and third parties seeking to revoke granted patents since it will no longer be necessary to support a lack of inventive step argument with evidence from an Australian expert. Unfortunately the explanatory memorandum does not contain any guidance as to how the court, or other decision maker, should weigh up the evidence of experts when there is conflicting evidence from experts located in the same or different jurisdictions.

•

The prior art base against which inventive step is assessed has been expanded by the removal from section 7(3) of the requirement for a prior art reference for inventive step purposes to be “information that a skilled person…could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant…”. At first sight it would appear that this amendment could open the door for inventive step objections to be taken on the basis of prior art references that would never have been found by a person skilled in the art, for example a reference in a completely different technical field or a reference located in an obscure library. However, the explanatory memorandum explains that although the words “understood and regarded as relevant” have been deleted from this section, a normal assessment of inventive step would include consideration as to whether the reference would be understood and regarded as relevant by a person skilled in the art. The explanatory memorandum is silent in relation to

Utility: •

A new utility requirement is to be introduced which is based largely on utility guidelines developed by the United States Patent & Trademark Office (USPTO). The Bill seeks to introduce a new provision which will require a complete specification to disclose a “specific, substantial and credible use” for the invention. The use must be disclosed in such a manner that it is appreciated by a person skilled in the relevant art. This requirement for a specification to disclose a use for the invention is additional to the requirement of Section 18 for the invention itself to be useful, in the sense of meeting the promise of the invention as described in the specification.

Sufficiency: •

The level of disclosure required for a provisional application is to be increased to the extent that it almost requires the same level of disclosure required for a complete specification.

The only difference is that a provisional application need not disclose the best method of performance of the invention. The disclosure requirement for complete applications will be amended to conform substantially to the corresponding United Kingdom provision, and the explanatory memorandum makes it clear the new provision is intended to be interpreted in a similar manner to the corresponding United Kingdom provision. The provision states that the complete specification must “disclose the invention in a manner which is clear enough and complete enough for an invention to be performed by a person skilled in the relevant art”. Although the provision does not specifically state that the full scope of the claim must be enabled, the explanatory memorandum indicates that the subject matter of a claim should be enabled across its “whole width”. It remains to be seen how the new provision will be interpreted by Australian courts. The requirement to disclose the best method of performance of the invention has been retained.

Fair basis: •

The current requirement for a claim to be fairly based on matter disclosed in the specification is to be replaced with a support requirement. According to the explanatory memorandum, the support requirement is intended to encompass two requirements, one being that there must be basis in the description for each claim and the other being that the scope of the claims must not be broader than is justified by the extent of the description, drawings and contribution to the art. This second aspect of the support requirement appears to be intended to provide a means for rejecting unduly speculative claims.

•

The new support requirement will also apply in relation to the assessment of priority entitlement. In this regard for a claim to be entitled to a priority date based on a provisional application or other basic application the

subject matter of the claim must be supported by that application. This amendment substantially raises the level of disclosure required to support a priority claim in Australia.

that this will include Abstracts and parts of the specification that were missing at filing but added under provisions which allow the addition of missing parts, such as those provisions which exist in the Patent Co-operation Treaty (PCT).

Examination: •

•

A new system providing a search and opinion in cases where no other search reports are available will be introduced. It appears that the new search and opinion will be instigated at the discretion of the Commissioner; however it is unclear as to who will be responsible for paying for the search and opinion. This is expected to be clarified when the regulations are published. The examination process is to be extended to allow Examiners to consider and report on usefulness and prior use. In relation to the examination of usefulness, examiners will consider the new utility disclosure requirement as well as whether the claimed subject matter meets the promise of the invention. The “balance of probabilities” standard will be extended to all grounds examined, and will also apply to reexamination and opposition. These amendments are likely to increase the use of the re-examination and opposition systems as the likelihood of success should be substantially increased, especially in relation to lack of inventive step.

Amendments: •

SCHEDULE 2 – FREE ACCESS TO PATENTED INVENTIONS FOR REGULATORY APPROVALS AND RESEARCH

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•

improving or modifying the invention;

•

determining the validity of a patent or of a claim relating to the invention;

•

determining whether the patent for the invention would be, or has been, infringed by the doing of an act.

This amendment is expected to be well received by the Australian research community.

Regulatory exemption: •

A new provision is introduced which will allow a party to use a patented invention for purposes connected with obtaining an approval required by the law of the Commonwealth, or the State or Territory, or for purposes connected with obtaining a similar approval overseas. The provision specifically excludes pharmaceutical patents because the Patents Act 1990 already includes an exemption for acts solely related to obtain regulatory approval for pharmaceutical products. Unfortunately the new provision appears to suffer from the same problem which applies to the current pharmaceutical regulatory exemption. In this regard both provisions do not appear to restrict the exemption to patented inventions the use of which could not be reasonably avoided in carrying out the activity required for regulatory approval. Accordingly, both provisions appear to provide blanket exemptions for activities associated with obtaining the necessary regulatory approvals.

The amendment provisions will be modified to prevent applicants from adding subject matter to their applications, except when the amendment Experimental use exemption: is to correct an obvious mistake or • An experimental use exemption is to clerical error. This will bring Australia’s be introduced which will apply to acts amendment provisions into closer done for experimental purposes relatconformity with those of other major ing to the subject matter of the invenindustrialised countries. The assesstion. The provision indicates that ment as to whether subject matter has acts done for experimental purposes been added is made with reference include, but are not limited to: to the complete specification as filed • determining the properties of the as well as “other prescribed docuinvention; ments (if any)”. It is unclear at this • determining the scope of a claim stage which other documents might be prescribed, although it is expected relating to the invention;

SCHEDULE 3 – REDUCING DELAYS IN RESOLUTION OF PATENT AND TRADE MARK APPLICATIONS Deadline for filing divisional applications •

Under the current provisions it is possible to file a divisional application up until the date of grant of the patent, unless the divisional is in respect of subject matter falling outside the scope of the accepted claims of the parent. In that case the divisional application must be filed within three months of the date on which acceptance of the parent application is advertised in the Official Journal. It is also possible under the current law to convert any application into a divisional of an earlier filed application if that application could have been validly filed as a divisional application on its filing date. Under the Bill the deadline for filing divisional applications or for converting applications to divisional status will be prescribed in the regulations to be three months from the date of advertisement of acceptance of the parent. Accordingly it will no longer be possible to file divisional applications from applications which are under opposition, and there will be less opportunity to overcome novelty objections based on earlier filed applications by the same applicant by converting the later application to a divisional application of the earlier. Another consequence of this amendment is that it will no longer be possible to file a divisional innovation patent in respect of an

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opposed standard patent application in circumstances where it becomes clear during the opposition that the claimed invention does not possess an inventive step, but would possess an innovative step which would have qualified for innovation patent protection. Similar restrictions will be placed on filing divisionals of innovation patents.

this amendment. An applicant of an opposed application with a divisional application pending is now unlikely to request withdrawal of the opposed application, even if their main interest is in the divisional application. Accordingly the applicant will be forced to continue to defend the opposition on the parent application or to allow it to lapse through non-payment of continuation fees. It is unclear why there was a need to introduce this provision, since the Bill removes the ability for an applicant to file a divisional application from an opposed application. The restriction will apply to all withdrawal requests filed after commencement of the legislation.

Amendments directed by the Court •

The Federal Court will be given the authority to direct amendment of a patent application, and the ability for an applicant to progress an amendment of a patent application before the Patent Office after an opposition decision has issued will be removed if there has been an appeal of that opposition decision. Under the proposed transitional provisions the Patent Office will not be able to progress amendments of opposed applications under appeal where those amendments were filed prior to commencement of the legislation but not yet dealt with. While these provisions remove some of the uncertainty which currently surrounds the processing of amendments filed before the Patent Office following issuance of an opposition decision, the new provisions are likely to cause difficulties and extra expense for both applicants and opponents as amendments filed following an opposition decision will, in many cases, need to be dealt with in the Federal Court rather than before the Patent Office.

Withdrawal of an opposed application •

The new Bill will place restrictions on an applicant’s ability to withdraw an opposed application. In this regard it will only be possible to withdraw an opposed application with the consent of the Commissioner. Where there is a divisional application relating to the opposed application it is expected that the Commissioner’s consent will only be given if the applicant agrees to also withdraw the divisional application. It is unclear whether anything positive will be achieved by

Privilege •

Commissioner’s powers •

Criminal sanctions will be removed for non-compliance with a summons or a notice to produce a document or article, and will be replaced with noncriminal sanctions. Under the new provisions the Commissioner must be satisfied, on the balance of probabilities, that the witness or person required to produce the document or article has a substantial interest in the proceedings, and that the evidence, document or article is likely to be of substantial relevance to the matter before the Commissioner.

SCHEDULE 4 – ASSISTING THE OPERATIONS OF THE IP PROFESSION Incorporation of patent attorneys •

Under the new provisions it will be possible for a company to register as an “incorporated patent attorney” in circumstances where it has at least one patent attorney director and has met a number of other requirements. This provision will allow Australian patent attorney firms to incorporate. A number of offences have been introduced to deal with companies holding themselves out as, or carrying on the business of, patent attorneys who are not incorporated patent attorneys or an incorporated legal practice.

Both the Patents Act and the Trade Marks Act will be amended to extend the privilege afforded to clients of patent attorneys and trade marks attorneys. These amendments address shortcomings of the current privilege provisions which came to light following Justice Heery’s decision in Eli Lilly and Co & Another v Pfizer Ireland Pharmaceuticals & Another (No 2) (2004) 137 FCR 573. Under the new provisions privilege will extend to the clients of foreign patent and trade mark attorneys, as well as to communications with third parties in circumstances where privilege would have applied if the patent or trade mark attorney were a lawyer. This amendment is particularly welcomed by the Australian patent attorney profession which has been lobbying for change since the Eli Lilly v Pfizer decision.

SCHEDULE 5 – IMPROVING MECHANISMS FOR TRADE MARK AND COPYRIGHT ENFORCEMENT •

This Schedule does not include any amendments relating to the patent system.

SCHEDULE 6 – SIMPLIFYING THE IP SYSTEM Grace period •

Although the Patents Act 1990 includes a grace period for earlier disclosures by or on behalf of the applicant or patentee, or predecessor in title, it does not provide protection in respect of any prior secret (commercial) use of the invention, or in respect of earlier disclosures which fall outside the scope of the claim but, nonetheless, impact on inventive step. The Bill introduces a new 12 month grace period into section 9 to deal with secret use which would otherwise invalidate a claim. The existing grace period has also been clarified so that it now clearly applies to earlier disclosures that fall outside the scope of a claim under consideration, but which would otherwise render the

DC C QU AR TE R LY | SEPTEMBER 2011

claim obvious. The provisions have also been amended to clarify that a complete application (as opposed to a provisional application) is required to invoke the 12 month grace period. The new provisions will only apply in respect of prior disclosures or prior secret use occurring after the date of commencement of the legislation.

It also removes the “same country” an applicant to provide search results limitation which appears in Article to the Patent Office, the provisions 4C(4) so that an earlier withdrawn which introduced the requirement application can be automatically and which provided the sanction for disregarded in circumstances where non-compliance were retained in the the subsequent application is filed in a Act. These provisions have now been different country. The new provisions repealed. Accordingly, if a patent apcorrespond substantially in effect with plicant had failed to meet the search those of Canada. In this regard, it is result requirements when they were only applications filed more than 12 in force, there will now be no sanction Entitlement months before the Australian filing for non-compliance. • New section 22A is to be introduced date which can be disregarded. AcModified examination to ensure that a patent will not be cording to the transitional provisions considered invalid merely because • Modified examination based on a the new provisions will apply retroit was granted to the wrong person. corresponding patent granted in a spectively to existing patents. The transitional provisions clarify that recognised country will no longer be Disputes between applicants this new provision applies retrospecavailable under the new provisions. tively to existing patents. See also our • Section 32 is a provision which alModified examination can proceed if comments below under the heading lows the Commissioner to make already requested by commencement. “Rectification of the Register”. determinations for an application to Postponement of acceptance proceed in circumstances where a PCT applications • Under the current provisions it is dispute arises between any two or • The Patents Act 1990 is to be restruccommon for applicants requesting exmore interested parties in relation to tured so that PCT applications which amination of their applications to also the patent application. This provienter national phase in Australia are request postponement of acceptance. sion has been amended so that it will treated as complete applications This ensures that the applicant has an only operate where the dispute arises under the Act. This has allowed a opportunity to make any amendments between joint applicants. The proviwhole chapter dealing with the special to the application prior to acceptsion will allow the Commissioner to treatment of such national phase apance. Under the new provisions the make a determination as to how the plications to be repealed, along with Commissioner will have the discreapplication is to proceed, even if the a complex set of regulations dealing tion to refuse to allow an applicant to application has lapsed. with the treatment of national phase postpone acceptance. It is not clear Omnibus claims applications. from the provisions or the explanatory • Under current Australian law it is memorandum under what circumPriority possible to include omnibus claims stances the Commissioner would • Article 4C(4) of the Paris Convention directed towards embodiments of the not allow an applicant to postpone allows an applicant to reset the 12 invention as described with reference acceptance. It is also not clear how or month priority period by filing a reto the examples or drawings. Under when an applicant would be notified placement application. The 12 month the new provisions claims cannot rely as to whether such a request has been period is only reset if all of the requireon references to the description or allowed or refused. Depending on ments of Article 4C(4) are met. Under drawings “unless absolutely necessary how the Commissioner decides to apAustralian law as it currently exists, to define the invention”. Accordingly ply his discretion, applicants may have however, it was necessary for an appliit will no longer be possible to include difficulty ensuring that they have an cant to specifically request the Comomnibus claims after the commenceopportunity to amend the application missioner to disregard any withdrawn ment of the new legislation. Under prior to acceptance. or abandoned applications filed prior the transitional provisions it will be Revocation of acceptance to the claimed priority date. In most if possible to include omnibus claims in not all other countries the provisions • The Commissioner will be given a all applications for which an examiof Article 4C(4) operate automatically, broad power to revoke acceptance nation request is filed before comsuch that it is not necessary for an of applications, or to revoke certificamencement. applicant to specifically request earlier tion of innovation patents. While Search results applications be disregarded. The Bill this provision may be advantageous amends section 96 to remove the re• Although the regulations were when an application is accepted quirement for an applicant to request amended several years ago to efin error without consideration of a earlier applications be disregarded. fectively remove the requirement for previously filed amendment, there are

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many circumstances where applicants would not want acceptance of their applications revoked. According to the explanatory memorandum the discretionary power is intended to provide an inexpensive and straightforward process for the rectification of administrative errors in accepted applications. However, the provision does not appear to be limited to the rectification of “administrative” errors.

Rectification of the Register

Treaty texts

•

Sealing of patents •

The Patents Act 1990 will be amended to remove all reference to the sealing of a patent. Instead of sealing a patent, particulars of the patent will be entered into the Register. This amendment will bring the process for granting a patent into closer alignment with the process for registering a trade mark. It is understood that IP Australia will notify the grant of a patent by providing an extract of the Register or a paper (unsealed) certificate of grant. It will also be possible to obtain certified copies of extracts of the Register if evidence of grant is required.

Non-infringement declarations •

In line with the introduction of section 22A to ensure that a patent is not invalid merely because it was granted to the wrong person, a new provision is to be introduced to allow the Commissioner to rectify the Register to correct an error or omission in the Register, or to correct ownership of the patent. The Commissioner is not able to make these corrections if Court action is pending in relation to the patent. This provision will allow patentees to correct the ownership of their patents in circumstances where, at the time of grant, the named patentee who was not entitled to the patent. Under current law correction of this type of error generally involves surrender of the granted patent and application for a new patent in the correct name.

Sub-offices •

The Bill removes from the Patents Act 1990 the requirement for sub-offices of the Patent Office to be maintained in each State. This will allow IP Australia to close existing sub-offices when they believe appropriate e-business channels are in place.

The texts of the Budapest Treaty and the Patent Corporation Treaty are currently included in the regulations. These will be removed and the Patents Act will be amended to refer to online versions of these treaties.

Whole of contents •

Novelty objections can be based on disclosure appearing in an Australian application having a priority date earlier than the claim under consideration, but published later. For this information to be relevant to novelty it must have been present in the specification at the time the application was filed and at the time it was published. This provision will be amended to remove the requirement that the information be present at the time the application is published. Unfortunately there is no guarantee that the version of a specification laid open to public inspection by IP Australia is the specification as filed. In this regard, it is possible to delete subject matter from an application after filing but before publication. This could mean that an earlier application could contain relevant information which is not apparent from the published version of the specification. It is hoped that following commencement of the new legislation IP Australia will ensure that specifications are laid open to public inspection in the form in which they were filed.

The current provisions relating Copyright to non-infringement declarations will be amended to clarify that (i) • The Patent Act currently includes a a person seeking the declaration provision to exclude from copyright does not need to be a patentee, protection the reproduction in two and (ii) that the declaration must be dimensions of the whole or part of in respect of a granted patent. The a provisional or complete specificaAuthor: Michael Caine, Partner provisions will also be amended to tion that is open to public inspection. clarify that the declaration can relate This section is amended by the Bill to Michael Caine is a fellow and council member of the Institute of Patent and Trade Mark Attorneys of Australia to past, present or proposed conextend the infringement exemption (IPTA), where he is convenor of the Patents Legislation Committee, and member of the Patent Consultation duct. Under the current provisions to the communication of the docuGroup operated by IP Australia. Michael is involved in the person seeking the non-infringement to the public and translation of overseeing the preparation of submissions to IP Australia and other Government bodies in relation to Australian ment declaration must pay the legal the document. The exemption has patent law and costs of all parties “unless the court practice. He also also been extended to a “prescribed consults to IP otherwise orders”. Under the new document” although it is not clear Australia in his role as member of provisions the Court will be given what will constitute a prescribed docthe Patents Conthe discretion to award costs in the sultation Group. ument. According to the explanatory His IPTA activities usual manner. It is expected that the memorandum a prescribed document included the preparation and winning party will be entitled to their would include “the documents norfiling of submiscosts, unless the Court thinks fit to mally associated with the case file of a sions in respect of IP Australia’s order otherwise. An earlier proposal patent application”. Other published patent law reform proposals which to allow validity to be questioned materials, such as journal references, lead to the Intelduring re-examination proceedings books or other technical material are lectual Property Laws Amendment is not being pursued. to remain excluded by the exemption. (Raising the Bar) Bill 2011.

Practice Update 3

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Patent Prosecution Highway - a Strategy for Securing Early Patent Grant in the US On 15 July 2011 the US Patent and Trademark Office (USPTO) and the Australian Patent Office (IP Australia) expanded their bilateral Patent Prosecution Highway (PPH) program by relaxing the earlier priority requirements. Under the expanded PPH program applicants are now provided with an opportunity to secure early patent protection in the US where a co-pending Australian application has been examined and at least one claim found allowable.

By requesting expedited examination of their Australian application, which can be done from the time of filing up until the deadline for requesting examination, a first report can issue within 1 to 3 months. If the report indicates that at least one claim is allowable, early PPH examination of the US counterpart can be requested. When requesting early PPH examination, applicants must ensure that the claims are similar, the same or narrower in scope than at least one claim found to be allowable on the corresponding application. This opportunity to accelerate the prosecution of a US application to grant can represent a strategic advantage for many Applicants, particularly where there are commercial imperatives for securing an early grant. Accordingly, applicants not currently filing in Australia should reconsider their filing strategies to take advantage of this opportunity. The PPH also allows an Applicant to request accelerated examination in the other country based on a written opinion or an examination report issued by IP Australia or the USPTO in their capacity as an International Searching Authority or International Preliminary Examining Authority under the PCT. The expanded PPH program between the USPTO and IP Australia will run until 14 July 2012, when it will be reviewed for further expansion. Author: Alex Tzanidis, Senior Associate

Practice Update 4 New Procedures Encourage Parties to Explore Early Dispute Resolution in Australian Federal Courts As of 1 August 2011, most Federal Court and Federal Magistrates’ Court litigants are required to file a “genuine steps statement” certifying that they have taken genuine steps to resolve their dispute, before instituting proceedings in the Federal Court and the Federal Magistrates Court of Australia.

These changes to civil procedure in the Australian federal judicial system have come about as the result of the implementation of the Civil Dispute Resolution Act (Cth) (“CDRA”) and reforms to the Federal Court and Federal Magistrates Court Rules. The reforms seek to:

ties to try and resolve the issues in dispute in the proceedings, or, the reasons why no such steps were taken. These “genuine steps” may include:

What happens if a genuine steps statement is not filed?

A failure to file a genuine steps statement does not invalidate proceedings. However, • Sending a letter of demand which sets the failure can be taken into account by the out the details of the Applicant’s claim Federal Court in performing its functions (including all relevant information or or powers in civil proceedings, and may • encourage parties to explore alternadocuments) and the steps required to attract adverse legal cost consequences, tive dispute resolution prior to institutresolve the dispute; especially in circumstances where a party ing proceedings; and cannot demonstrate that it acted reason• Engaging in negotiation to identify ably prior to the institution of proceedings. • place the courts in a better position and resolve the issues in dispute; or to manage proceedings, by ensuring What do these changes mean for litigants? • Appointing a mediator or impartial that the courts are fully informed of third party to assist in resolution of Whilst it is already common for litigants the history of the dispute prior to trial. the dispute. and their lawyers to explore steps for An example of the intention behind of resolving their disputes prior to the instituthe requirement to file genuine steps If an Applicant has filed a genuine steps tion of legal proceedings in Australia, statement, a Respondent must file its own statements is provided in the CDRA the new procedures seek to ensure that genuine steps statement: Explanatory memorandum: the parties have explored other avenues • stating that the Respondent agrees “…if genuine steps have been taken for resolution prior to bringing an action with the Applicant’s genuine steps and have resulted in issues being identified in the Federal Court. The requirement statement; or and positions clarified, a court may be in a for a genuine steps statement complebetter position to decide that court ordered • detailing the aspects of the Appliments other recent reforms to the Federal mediation would impose unnecessary costs Court Act Federal Court Rules which are cant’s genuine steps statement with and delay. Early listing for hearing will be designed to assist parties to narrow the which the Respondent disagrees. the best and most cost efficient and just issues in dispute, reduce court backlogs outcome. Alternatively, if a court is not sat- Importantly, parties are not required to dis- and ultimately lead to faster and cheaper close the contents of “without prejudice” isfied with the steps already taken, further litigation. communications in a genuine steps statecase management directions may be apAuthors: Ian Pascarl, Partner propriate to ensure parties explore options ment (although they may need to disclose Aaron Yates, Law Graduate that these communications occurred). A for resolving or narrowing the dispute.” genuine steps statement is not a pleading, 1. A genuine steps statement is not required in What is a “genuine steps statement”? and, as such, will not prejudice a party’s a limited number of specified circumstances (including ex parte proceedings, proceedings case. Rather, as explained below, genuine A genuine steps statement must specify in the appellate jurisdiction of the Court, and proceedings involving a vexatious litigant). the steps that have been taken by the par- steps statements are largely used as a case management tool.

Articles on Davies.com.au

DC C QU AR TE R LY | SEPTEMBER 2011

IN ADDITION TO ARTICLES PUBLISHED IN OUR IP UPDATE, DAVIES COLLISON CAVE PARTNERS AND STAFF REGULARLY POST INTELLECTUAL PROPERTY UPDATES AND BULLETINS TO OUR WEBSITE. THESE ARTICLES REPORT ON RECENT CASES AND LEGAL DEVELOPMENTS IN A TIMELY MANNER. A LIST OF ARTICLES POSTED TO OUR WEBSITE SINCE OUR LAST IP UPDATE ARE NOTED BELOW. TO READ THE ENTIRE ARTICLE, PLEASE CLICK ON THE TITLE.

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19 Jul 2011

30 Jun 2011

21 Jun 2011

14 Jun 2011

Computer says “no”: Apple denied injunction against Amazon’s use of AppStore mark

Changes to the Australian Trade Marks Act 1995

Cartridge reseller ordered to destroy infringing printer compatibility charts if copyright appeal unsuccessful

Australian Government enhances alternative dispute resolution for patent disputes but rejects calls for a Patent Tribunal

Federal Court: trade mark licence restraints can be wider than Trade Marks Act deceptive similarity

12 Aug 2011 Apple successfully uses its patents against Android devices in Australia and Germany 10 Aug 2011 No constructive trust over copyright in photos and film created by trespassers 19 Jul 2011 Claim construction and internal requirements of patent specifications: Full Federal Court reiterates principles

19 Jul 2011 Trade mark owners beware: unsolicited documents resembling invoices 15 Jul 2011 Paris Convention traps for patentees: the hidden dangers of claiming priority from refiled applications 12 Jul 2011 Patent examination integration for Australia and New Zealand on the horizon 05 Jul 2011 Providing the best method of performing an invention in patent specifications: how much detail is required?

25 Jun 2011 Launch of .XXX domain names: how to protect your brands 24 Jun 2011 Primo beer mark refused registration in NZ; likely to “deceive or cause confusion” with Primo milk 21 Jun 2011 Plant Breeder’s Rights review: Federal Government accepts majority of ACIP’s recommendations

20 Jun 2011 Banning the patenting of biological materials in Australia: fact v fiction 19 Jun 2011 The New Australian Consumer Law

17 Jun 2011 A popular product doesn’t always mean a famous trade mark

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