Update December 2012 – Issue 18 davies.com.au
TiVo decision upheld on appeal Paul’s Retail v Lonsdale Australia: parallel importer’s appeal fails IP law reforms in Australia and New Zealand
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Contents
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Insight
Case Studies 4
After waiting 25 years, Winnebago is allowed to enforce its trade mark rights in Australia Winnebago Industries, Inc v Knott Investments Pty Ltd (No 2) [2012] FCA 785
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Aural similarity sufficient to find “Vivo” deceptively similar to “Tivo” Vivo International Corporation Pty Ltd v TiVo Inc. [2012] FCAFC 159
10 Federal Court finds no patent infringement by RMD Industries Centor Australia Pty Ltd v RMD Industries Pty Ltd [2012] FCA 1135
CUTLERY by JENNY DOWNING: CC-BY 2.0 www.flickr.com/photos/jenny-pics/4166220739
12 Merck granted interlocutory relief to stop the alleged infringement of “Nasonex” patent Merck Sharp & Dohme Corp v Apotex Pty Ltd [2012] FCA 928
16 Hospira ordered to withdraw PBS application pending determination of Novartis’ patent infringement claims Novartis AG v Hospira Pty Limited [2012] FCA 1055 Novartis AG v Hospira Pty Limited (No 2) [2012] FCA 1113
20 High Court denies Optus leave to appeal TV Now copyright decision Singtel Optus Pty Ltd v Australian Rugby Football League Limited [2012] HCATrans 214
22 Parallel importers fail again before Full Court of Federal Court Paul’s Retail Pty Ltd v Lonsdale Australia Limited [2012] FCAFC 130
Practice Updates 24 Raising the Bar regulations published for public consultation 26 Summary of the key issues with the draft Trade Mark Regulations for the Raising the Bar Act 29 Madrid Protocol and other important changes to New Zealand trade mark law from 10 December 2012 30 Pharmaceutical trade marks containing INN stems receive automatic objection in Australia 32 DCC News 33 DCC Out & About 34 Articles on davies.com.au
IP Update
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Insight
The waves of IP reform keep rolling in. Following a recent decision by the Parliamentary Secretary for Industry and Innovation, pharmaceutical patents join innovation patents and compulsory patent licences as IP matter currently under government review. Meanwhile, the impact of the ‘Raising the Bar’ legislative amendments continues, with the release of proposed changes to the patent and trade mark Regulations (see pages 24 and 26).
Nationally, members of the firm have held the Presidencies of the Institute of Patent and Trade Mark Attorneys of Australia, FICPI Australia and LES ANZ, and have been influential in law reform through chairing the Advisory Council on Intellectual Property and the IP Committee of the Law Council of Australia. DCC partners currently serve on the Councils of IPTA and FICPI Australia and the Professional Standards Board for Patent and Trade Marks Attorneys.
It may be of comfort to clients feeling reform fatigue to know that the attorney profession, and this firm in particular, is committed to optimising Australia’s IP laws and practices. In addition to assisting clients make submissions to government, we work through professional associations and advisory bodies to provide direct input into the policy-making and law reform process.
In this edition of IP Update we discuss two Federal Court decisions granting interlocutory injunctions preventing market entry of competing pharmaceutical products (pages 12 and 16), and a decision explaining the role of expert evidence in the construction of patent claims (page 10).
Davies Collison Cave has a long, and very strong, tradition of service through IP professional associations, both nationally and internationally. Notable among the leading international roles held by its personnel over time are the Presidencies of AIPPI, FICPI and LES.
Leon Allen, Managing Partner
Two recent decisions of the Full Court of the Federal Court concern trade marks: one on when aural similarity amounts to deceptive similarity (page 8,) and the other on when parallel importation constitutes trade mark infringement (page 22). We also consider a case where an “extraordinary” 25-year delay in bringing action did not preclude relief for passing off (page 4). I hope your year has been extraordinary, in a positive sense. Season’s greetings, and best wishes for the coming year.
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Case Study 1
After waiting 25 years, Winnebago is allowed to enforce its trade mark rights in Australia Winnebago Industries, Inc v Knott Investments Pty Ltd (No 2) [2012] FCA 785
Back in 1985, Winnebago Industries, Inc became aware that Knott Investments Pty Ltd was using its “Winnebago” trade mark in Australia for recreational vehicles (RVs). 25 years later, Winnebago sued Knott and its dealers for passing off, breaches of the Trade Practices Act and Australian Consumer Law and copyright infringement. Winnebago also sought cancellation of Knott’s trade mark registration for the Winnebago name.
Justice Foster of the Federal Court found that Winnebago had a sufficient “spill over” reputation in Australia at the time the conduct began (in 1982) to establish passing off and breaches of the TPA/ACL. Knott was found to have intentionally adopted the Winnebago name to trade on that reputation. His Honour rejected the Respondents’ defence that Winnebago had consented to the use of the marks, or that it should be estopped, or denied relief on the ground of delay. His Honour also ordered the cancellation of Knott’s trade mark registration. However his Honour found that there was insufficient evidence as to the creation of the Winnebago mark to sustain the copyright claim. Knott and its dealers have appealed Foster J’s decision. The appeal will be heard by the Full Federal Court on 26 March 2013. The use of the Winnebago mark Winnebago first sold RVs using the name “Winnebago” in the US in the early 1960s, and expanded its operations to the UK, Europe and Canada. In 1963, the director of Knott (Bruce Binns) saw Winnebago RVs overseas and in the late 1970s, Knott began using the Winnebago marks on its RVs in Australia. Winnebago became aware of Knott’s conduct in 1985. In 1991, Winnebago demanded that Knott stop using the Winnebago marks in Australia. In 1992, the parties
Horia Varlan: CC-BY 2.0 www.flickr.com/photos/horiavarlan/4269047574
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… the most telling evidence [was] that of Binns himself who … had “intentionally hijacked” the Winnebago marks …
executed a Settlement Agreement which provided, amongst other things, that Knott would not use the Winnebago marks outside Australia. Key findings of the case The time to assess whether Knott’s conduct was misleading
Justice Foster held that Knott’s conduct should be assessed at the time it commenced. His Honour rejected Winnebago’s argument that the relevant time was the date the proceedings commenced or the date of the trial. Winnebago’s reputation in Australia
There was no dispute that Winnebago had established a significant reputation in the Winnebago brand overseas since the 1960s. Justice Foster referred to the Full Court decision in ConAgra Inc v McCain Foods and accepted Winnebago’s submission that by June 1982, it had a “spillover” reputation amongst a substantial number of persons who would be potential customers if Winnebago’s goods or services were marketed in Australia. His Honour found that Australians travelling overseas, and overseas visitors to Australia, had created an awareness of the Winnebago brand. Justice Foster found the most telling evidence to be that of Binns himself who, his Honour found, had “intentionally hijacked” the Winnebago marks to trade off its reputation.
Passing off and breaches of the Trade Practices Act and Australian Consumer Law
His Honour held that a substantial number of potential customers looking to buy or rent RVs in Australia were aware of Winnebago in 1982 and were likely to be deceived into believing that Knott’s business was connected with Winnebago. The Respondents had therefore engaged in passing off, and misleading and deceptive conduct and the making of false representations under the TPA (for conduct up to 1 January 2011) and ACL (for conduct thereafter). No consent or representation by Winnebago that Knott could use the Winnebago name in Australia
Binns gave evidence that in 1991, a Winnebago representative at a trade fair told him that Knott could use the Winnebago marks in Australia. Knott relied on that conversation and the Settlement Agreement to submit that Winnebago had consented to Knott using the Winnebago in Australia, and that Winnebago should be estopped from bringing its claims. Justice Foster found that Binns had “invented” the conversation. His Honour held that the Settlement Agreement, properly understood, did not make any representation that Knott was permitted to use the Winnebago marks in Australia. The Settlement Agreement simply left matters as they stood in Australia, until such time as Winnebago
might wish to exercise its rights in respect of the Winnebago marks. Delay not sufficient to deny Winnebago relief
The Respondents argued that Winnebago had stood back with full awareness and allowed Knott to develop its business using the Winnebago marks. They submitted that the Court should refuse relief under the TPA and ACL and for passing off. Winnebago relied on World Series Cricket Pty Ltd v Parish1 as authority for the proposition that mere delay would rarely disentitle an applicant from relief for the statutory causes of action. Justice Foster recognised that there had been “extraordinary delay” on the part of Winnebago in taking action. However his Honour found that Winnebago had taken some steps to protect its position through the Settlement Agreement. Further, Binns and Knott had taken a “calculated risk” to gain as much revenue and advantage as possible from using the Winnebago marks, knowing that they might need to rebrand if Winnebago decided to enter the Australian market. His Honour held that in the “very special circumstances” of this case, the delay did not provide any proper basis for refusing relief.
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Based on the findings as to Winnebago’s reputation in Australia, his Honour ordered the cancellation of Knott’s trade mark registration.
Insufficient evidence of copyright in the Winnebago mark
Remedies awarded to Winnebago
Justice Foster found there was insufficient evidence as to the creation of the Winnebago logo to prove its originality for the purposes of copyright subsistence. His Honour also held that there was insufficient originality in the name Winnebago (being the name of a US county) to justify copyright protection.
On 6 September 2012, his Honour made orders to give effect to his reasons for judgment. The orders included the following suspended orders which will take effect after 3 September 2013:
Cancellation of Knott’s registered mark
Section 88(2) of the Trade Marks Act 1995 (Cth) sets out the grounds on which the Court can order the cancellation of a trade mark registration, including that the use of the mark is likely to deceive or cause confusion based on the circumstances existing at the time when the application for rectification was made. Based on the findings as to Winnebago’s reputation in Australia, his Honour ordered the cancellation of Knott’s trade mark registration. Knott’s dealers also liable
Justice Foster found that the other Respondents, being Knott’s dealers, had also committed the tort of passing off and contraventions of the TPA and ACL. Knott was held to be an accessory to the contravening conduct of its dealers.
-- that Knott and the dealers be permanently restrained from using the Winnebago marks or any substantially identical or deceptively similar marks; -- that Knott’s trade mark registration be cancelled; and -- that Knott and the dealers cancel all business, corporate and domain names containing the Winnebago name or any substantially identical or deceptively similar name. His Honour also made orders with immediate effect for Knott and the dealers to publish a prominent notice online, at their dealerships and in their promotional material, stating that their RVs are not made by or associated with Winnebago. The proceeding had been bifurcated and his Honour ordered an inquiry into the quantum of any pecuniary relief.
Finally, Knott and the dealers were given leave to appeal, on condition that: -- the Notice of Appeal be filed within 14 days; -- they apply to the Court for the expedited hearing of the appeal during or before the FebruaryMarch 2013 Full Court sittings; -- they prosecute any appeal with due diligence. Appeal to the Full Federal Court On 19 September 2012, Knott and its dealers filed a Notice of Appeal to Foster J’s decision. The appeal has been listed for hearing before the Full Court (Keane CJ, Cowdroy and Jagot JJ) on 26 March 2013.
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(1977) 16 ALR 181 (2003) 61 IPR 98
Ian Pascarl, Partner Penny Smith, Associate
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Lessons for trade mark owners Justice Foster’s decision confirms that mere delay is generally not sufficient to bar relief, and something more is usually required, such as a positive representation that the applicant consents to the infringing activity. This case demonstrates the importance of putting alleged infringers on notice of the trade mark owner’s claims, and, if proceedings are not issued shortly thereafter, making it clear that the owner does not consent to the infringing conduct and reserves all right to take action at some later time.
This case is significant for the length of the delay, during which the respondent incurred a considerable sum (more than $6 million) in advertising its products under the infringing mark. In other cases involving delay, such as Mobileworld Communications Pty Ltd v Q&Q Global Enterprise2 where the owner of the “Crazy John’s” mark took 6.5 years to take action against the user of the “Crazy Ron’s” mark, the Court has been willing to order the payment of some sum (in that case $50,000) as some reparation for the delay.
MARCIN WICHARY: CC-BY 2.0 www.flickr.com/photos/mwichary/2824026832
In this decision Foster J emphasised the “special circumstances” of the case, perhaps to indicate (particularly to overseas parties) that they will not necessarily be granted relief on their claims if they sit back and allow the infringing use of their marks to continue until such time as they wish to enter the Australian market. Each case will depend on its facts, and the evidence as to the alleged infringer’s adoption of the mark and the circumstances in which it continued to use the mark, will be critical.
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Case Study 2
AURAL SIMILARITY SUFFICIENT TO FIND “VIVO” DECEPTIVELY SIMILAR TO “TIVO”
Vivo International Corporation Pty Ltd v TiVo Inc. [2012] FCAFC 159
The trial decision: TIVO v VIVO
On 14 November 2012, the Full Federal Court unanimously dismissed Vivo’s appeal from a finding by Justice Dodds-Streeton that its VIVO mark was deceptively similar to TiVo’s TIVO mark. In a split decision, Chief Justice Keane and Justices Nicholas and Dowsett found that, on an aural comparison, the VIVO mark was phonetically similar to the TIVO mark notwithstanding the different first consonants, such that it might be confused with TIVO. The Court therefore upheld the trial Judge’s decision to revoke the VIVO registration and her Honour’s finding that use of the VIVO mark would infringe the prior TIVO registration.
At trial, the primary Judge found that VIVO was deceptively similar to TIVO, taking into account: -- the aural similarity between the marks, despite the lack of visual similarity. In this regard, the trial Judge relied on evidence from retailers that, in 80% of the cases, customers would purchase televisions and DVRs (goods covered by both the TIVO and VIVO registrations) by reference to the marks aurally; -- her finding that Vivo’s managing director, Mr Fabio Grassia, dishonestly adopted the VIVO mark with a view to seeking to trade off TiVo’s reputation in the TIVO mark; and -- evidence of actual confusion of retail sales staff. Issues on appeal The Full Court was asked by Vivo to consider whether the trial Judge erred in finding that the two marks were deceptively similar: a) by comparing only the aural similarity between the –IVO components of the two marks and not the marks as a whole, and by not considering the evidence of a phonetician on this issue;
MJTMAIL: CC-BY 2.0 www.flickr.com/photos/mjtmail/7141828279
IP Update
In the Chief Justice’s view … if retailers are confused, there is a reasonable probability that consumers will be confused.
b) as a result of her Honour’s finding of actual dishonesty on the part of Mr Grassia in his adoption of the VIVO mark, when TiVo did not rely on Mr Grassia’s evidence to establish positive dishonesty; and c) by giving weight to the uncontested evidence of confusion of retailers, when (in Vivo’s submission) that evidence was unreliable and contradicted more reliable evidence. Full Court’s decision In two separate judgments, the Full Court concluded that the VIVO mark was deceptively similar to the TIVO mark on a fresh analysis of that issue. All three Judges were of the view that the trial Judge had erred in concluding that Mr Grassia had dishonestly adopted the VIVO mark and, consequently, had erred in applying a well-settled presumption that if a mark is adopted for the purpose of appropriating part of the trade or reputation of a rival, that it is presumed to be likely to mislead or deceive consumers and therefore to be deceptively similar. Having found the trial Judge to be in error, the Court then considered the question of deceptive similarity afresh.
In the Chief Justice’s view, the uncontested evidence of actual confusion (which his Honour accepted was honestly given) was of great weight, which led him to infer that if retailers are confused, there is a reasonable probability that consumers will be confused. His Honour rejected Vivo’s submission that the trial Judge improperly compared only the marks aurally and ignored the evidence of the phonetician, referring to numerous passages where her Honour had considered that evidence and concluded that, while it established the marks were phonetically different, nevertheless similar sounds characterised their pronunciation. Justice Nicholas (with whom Justice Dowsett agreed) concluded the phonetician’s evidence was important evidence on the question of aural similarity, but found that it failed to take into account the effects of imperfect recollection of the marks on consumers. His Honour disregarded the uncontested evidence of actual confusion as “improbable”, concluding that it was unlikely that sales staff would believe that goods branded with the two marks were from the same source. Even absent that evidence, his Honour still concluded that the two marks “exhibit[ed] a strong phonetic
similarity such that consumers of ordinary intelligence who had an imperfect recollection of one or other of the marks might not appreciate that the brand name referred to in the course of discussions taking place prior to sale was different to that which the consumer had previously seen or heard”. Davies Collison Cave Law acted for TiVo in the proceeding.
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[2012] FCAFC 159. [2012] FCA 252.
John Hannebery, Partner Timothy Creek, Associate
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Case Study 3
Federal Court finds no patent infringement by RMD Industries
Centor Australia Pty Ltd v RMD Industries Pty Ltd [2012] FCA 1135
On 19 October 2012, Justice Dowsett of the Federal Court handed down his decision finding that RMD did not infringe Centor’s patent entitled “Floating Pivot Mount for a Folding Panel”. The patent is directed to the mounting of folding doors and windows. In particular, the claimed invention involves the door or window panel being adjustably mounted to the frame to compensate for shifts that may occur over time, resulting in the misalignment of the frame and folding door/window panel. Justice Dowsett found that on the proper construction of the patent claims in issue, the claims required the panel assembly to be moveable or capable of adjustment whilst the panels were mounted. The RMD products did not infringe because the RMD pivot mount could only be adjusted manually following the partial dismantling of the assembly.
The alleged infringement by RMD Industries Centor alleged that by selling particular items of window hardware, RMD infringed claims 1 and 2 of the patent. Claim 1 is for a folding panel assembly including “a pivot mount for adjustably mounting an end panel of the hinged panels to the jamb”. One of the required features of the claimed pivot mount is that it has an arm that is “moveable axially” within a bore to “accommodate movement” parallel to the door or window opening. Claim 2 is dependent on claim 1 but requires the additional feature that there is “biasing means within the bore for biasing the arm axially to a rest position”. The relevant RMD product was a pivot mount which included an arm that was screwed into a bore. RMD argued that its product did not infringe because the arm could not be moved unless the pivot mount assembly was partially dismantled to allow manual adjustment of the screw in the bore. The product therefore did not provide for the automatic adjustment of the panel which was required by the claims.
Abstract Technology by WONDERLANE: CC-BY 2.0 www.flickr.com/photos/wonderlane/2386194741
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Each of the experts was appropriately qualified … but their evidence was of little assistance.
Lesson for patent owners Patent construction – claims 1 and 2 Centor and RMD each relied on expert evidence relating to the proper construction of the claims. Justice Dowsett found that each of the experts was appropriately qualified to give evidence as an expert, but their evidence was of little assistance because the witnesses merely expressed an opinion about the meaning of plain English words. His Honour noted that their evidence simply explained the context in which the patent should be read. In his Honour’s view, the words “adjustably mounting” and “moveable” in claim 1 require that the panel assembly is capable of adjustment whilst it is mounted. That is, the arm needs to be moveable whilst the panel is in place. Because adjustment in the RMD products was made by partially dismantling the panel assembly and manually adjusting the screw, there was no infringement of claim 1. His Honour noted that his conclusion was reinforced by reference to the body of the specification which referred to the object of the invention being to overcome the inconvenience of property owners having to manually adjust the known pivot mounts.
In relation to claim 2, his Honour also found that RMD did not infringe because “biasing means” again required the arm to be moveable in the bore, unlike the manually adjustable screw threaded mechanism in the RMD product. Costs of proceeding to be ordered After dismissing Centor’s application, Justice Dowsett stated that he would make orders dealing with the costs of the proceeding after receiving submissions from the parties. Davies Collison Cave Law acted for RMD in the proceeding.
Construction of patent claims is a question of law and therefore a matter for the Court, not an expert. In this case, Justice Dowsett found that the words in the claims were to be interpreted according to their plain English meaning and his Honour was not assisted by the expert evidence as to the meaning of particular words. However, when approaching the task of construction, his Honour nevertheless found the expert evidence of use in “explaining the context in which the patent should be read”. For the purposes of construing patent claims, expert evidence can be used to assist the Court to place itself in the position of the hypothetical person skilled in the art with the common general knowledge at the priority date.
John Hannebery, Partner Penny Smith, Associate
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Case Study 4
Merck granted interlocutory relief to stop the alleged infringement of “Nasonex” patent
Merck Sharp & Dohme Corp v Apotex Pty Ltd [2012] FCA 928
Justice Jagot of the Federal Court has granted an interlocutory injunction prohibiting the promotion and sale of Apotex’s generic versions of Merck’s anti-allergenic nasal spray, Nasonex. In granting the injunction, Justice Jagot found that Merck had a prima facie case of infringement notwithstanding Apotex’s case on patent invalidity. Her Honour accepted as persuasive the “irreparable harm” evidence adduced by Merck, and considered that the “balance of convenience” favoured the granting of the injunction. The decision provides useful guidance as to the evidence required to support an application for interlocutory relief to prevent generics from entering the Australian market during the patent term.
Merck’s “Nasonex” patent Merck is the owner of an Australian standard patent relating to the once-daily intra-nasal use of an anti-allergen nasal spray comprising the active pharmaceutical ingredient, mometasone furoate (MF). The patent covers Merck’s inhaled corticosteroid product marketed and sold under the name “Nasonex”. Apotex’s alleged infringement of Merck’s patent In June this year, Apotex secured Australian Therapeutic Goods Administration registration of 5 generic versions of Nasonex. Shortly thereafter, Apotex commenced marketing the products with a view to supplying them in Australia from early September 2012. After learning of Apotex’s activities, Merck issued patent infringement proceedings in the Federal Court of Australia in July 2012 seeking, amongst other things, a preliminary injunction to prevent Apotex from offering to sell and selling its generic MF sprays in Australia.
Nasal Spray by ROBIN24: CC-by 2.0 www.flickr.com/photos/robin24/5222119114
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… Justice Jagot was persuaded that damages would be an inadequate remedy for Merck …
The 3 things Merck had to establish to obtain interlocutory relief were: 1. there was a serious question to be tried: In patent infringement proceedings, this requires an assessment of the relative strengths of the applicant’s infringement case on the one hand, and the alleged infringer’s invalidity case on the other; 2. damages would not adequately compensate it if an injunction was not granted and it was ultimately successful at trial; and 3. the balance of convenience favoured the grant of interlocutory relief. That is, Merck would suffer more if the injunction was refused, than Apotex would suffer if the injunction was granted. 1. Was there a serious question to be tried? Apotex argued that Merck did not have a prima facie case of infringement because the claimed invention was obvious. Whilst accepting that Apotex was able to point to “real arguments against validity”1, Justice Jagot was not persuaded that Apotex’s case on obviousness was sufficiently strong to deny the existence of Merck’s prima facie case of infringement. In reaching this conclusion, Justice Jagot pointed
to a number of issues and possible weaknesses in Apotex’s invalidity case, including: -- whether Apotex’s expert had properly identified the “problem” said to be solved by the invention claimed in the patent, or whether the expert had improperly “assumed away” part of the invention; -- the reliability of the evidence from Apotex’s expert as to the common general knowledge relating to MF at the priority date; and -- whether the prior art documents provided clear directions in respect of the use of MF to treat allergic rhinitis without substantial side effects. 2. Would damages adequately compensate Merck? Merck adduced evidence from its director of sales and marketing in Australia to establish that its loss could not adequately be compensated for in damages if an injunction was refused and it was ultimately successful at trial. Nasonex is not listed on the PBS and Merck therefore could not rely on the “Pharmaceutical Benefits Scheme (PBS) argument”2 that has been highly persuasive in a number of recent interlocutory injunction applications in pharmaceutical
patent cases3. That is, Merck could not argue that it would suffer irreparable harm because the entry of a generic would trigger a mandatory and irreversible price reduction under the PBS. Nonetheless, Justice Jagot was persuaded that damages would be an inadequate remedy for Merck based on its evidence as to the following factors: -- Merck’s orders for Nasonex had decreased by 39% as a result of Apotex’s marketing and proposed supply of the Apotex products; -- If Apotex entered the market, Merck could not proceed with its planned price increase for Nasonex and it would be forced to reduce the price of Nasonex below the current level; -- Merck would not be able to raise its prices back to the current level if Apotex was ultimately restrained at trial because to do so would involve a loss of goodwill and a potential negative impact on Merck’s corporate reputation;4
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-- If Apotex was not restrained, Nasonex would become a significantly less profitable product and Merck would be forced to make a number of its experienced Nasonex marketing and sales employees redundant. If Merck was ultimately successful at trial, it would then need to hire and train new marketing and sales staff; and -- The market for these nasal sprays is complex, and it could not be assumed that every sale made by Apotex would have been a sale made by Merck. As such, it would be a very complicated accounting exercise to calculate Merck’s loss caused by a refusal to grant an injunction.
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-- Apotex’s entry into the market would cause significant and most likely irreversible change to the intra-nasal corticosteroid spray market. Interlocutory relief granted to Merck In these circumstances, Justice Jagot considered that Apotex should be enjoined from infringing the Nasonex patent (including by supplying, selling or offering to sell its generic MF sprays) until the final determination of the proceeding.
Based on these factors her Honour held that Merck would suffer irreparable harm if an interlocutory injunction was not granted. The factors outweighed Apotex’s arguments, including that an injunction would cause it to lose the valuable “first mover advantage”.5 3. Did the balance of convenience favour the grant of interlocutory relief? Justice Jagot was also of the view that the balance of convenience favoured the grant of an interlocutory injunction based on the following factors:
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-- Apotex had no established position in the market, whereas Merck had a substantial existing market; -- Apotex sought to enter the market knowing of Merck’s patent rights;
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[2012] FCA 928 at [19] Discussed in: Pharma patent litigation in Australia: good news for originators published on www.davies.com.au See example: AstraZeneca successfully protects Crestor patents against generic attack in the Australian Pharmaceutical market published on www.davies.com.au [2012] FCA 928 at [22] [2012] FCA 928 at [24]
-- The “Nasonex” patent is long standing and has not been the subject of challenge by way of reexamination or revocation; and
Ian Pascarl, Partner Penny Smith, Associate Aaron Yates, Lawyer
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Lessons for pharmaceutical companies seeking interlocutory (preliminary) relief in Australia There have been a number of recent cases in which the Federal Court has granted an interlocutory injunction to an originator pharmaceutical company who can rely on the “PBS argument� to show irreversible damage if an injunction is not granted (see for example the case study on the following page). Justice Jagot’s decision suggests that interlocutory relief may also be granted to originators who are unable to rely upon the PBS argument, in circumstances where: -- The originator has a strong prima facie case of patent infringement and can file rational and persuasive evidence to cast doubt on the allegations of invalidity; -- The originator is able to adduce substantial probative evidence of the irreversible damage it has and/or will suffer as a result of the entry of generics in the market, including the difficulty in quantifying its loss; and -- The injunction will preserve the status quo and avoid significant and most likely irreparable upheaval in the existing market.
Pollen By Bitsorf: CC-by 2.0 www.flickr.com/photos/bitsorf/5057240417/
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Case Study 5
Hospira ordered to withdraw PBS application pending determination of Novartis’ patent infringement claims Novartis AG v Hospira Pty Limited [2012] FCA 1055 Novartis AG v Hospira Pty Limited (No 2) [2012] FCA 1113
The Federal Court recently made orders restraining Hospira from promoting, supplying and obtaining PBS listing of products containing zoledronic acid until its final determination of Novartis’ allegations of patent infringement and Hospira’s cross-claims for invalidity. Interestingly, for the purposes of the interlocutory dispute, Hospira conceded that Novartis had a prima facie case of patent infringement, but contended that the strength of its own case of invalidity was such that Novartis’ likelihood of success did not justify the grant of an interlocutory injunction. Justice Yates did not accept Hospira’s contentions, ultimately finding that the overall balance of convenience and justice favoured the grant of interlocutory relief. Justice Yates’ decision serves as yet another illustration of the difficulties pharmaceutical companies have in entering a market in which a competing product has patent protection and is listed under the PBS.
Novartis’ “zoledronic acid” patents and commercial embodiments Novartis AG is the owner of two Australian patents which relevantly include claims to methods of treating various malignancy related bone disorders1 and osteoporosis2 involving the use of zoledronic acid (a third generation bisphosphonate which inhibits bone resorption) (together, the method of treatment claims). Novartis Pharmaceuticals Australia Pty Limited is the exclusive licensee of each of the patents, and exploits them by marketing and supplying ZOMETA® (a concentrated injection vial indicated for the treatment of malignancy related bone conditions) and ACLASTA® (a intravenous infusion solution indicated for osteoporosis and other related conditions) in Australia. Both products are listed under the Australian Pharmaceutical Benefits Scheme (PBS). Hospira’s threatened infringement of the patents In February 2012, Hospira Pty Limited informed Novartis that it intended to launch two oncology products and an osteoporosis product containing zoledronic acid after 20 November 2012. In connection with its proposed launch, Hospira had
PETER SHEIK: CC-by 2.0 www.flickr.com/photos/flexsleuthor/2919256370
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Novartis sought interlocutory orders to force Hospira to withdraw its PBS application and to restrain it from taking any further steps to launch products containing zoledronic acid in Australia …
secured registration on the Australian Register of Therapeutic Goods (ARTG) and applied for, but not yet obtained, PBS listing for one of the oncology products, and had applied to register the other two zoledronic acid products on the ARTG. Novartis sought interlocutory orders to force Hospira to withdraw its PBS application and to restrain it from taking any further steps to launch products containing zoledronic acid in Australia, arguing that Hospira’s conduct constituted threatened infringement of the method of treatment claims of its osteoporosis and bone disorder patents. General legal principles governing the grant of interlocutory injunctive relief Justice Yates confirmed that to succeed on its application for interlocutory relief, Novartis was required to establish: -- a prima facie case, serious issue to be tried, or triable issue; and -- that the balance of convenience favoured the grant of an injunction in the sense that it would do more harm to Novartis not to have the injunction than it would do to Hospira to be enjoined.
Hospira concedes that Novartis has prima facie case of infringement Hospira did not dispute that Novartis had a prima facie case of threatened contributory infringement pursuant to section 117 of the Patents Act for the purposes of Novartis’ application for interlocutory relief. Justice Yates observed that Hospira’s “concession was justified and appropriate”3 in the circumstances. The balance of convenience: Hospira’s case on invalidity Whilst conceding that Novartis had a prima facie case, Hospira contended that the strength of its own case of invalidity was such that there was not a sufficient likelihood of success to justify the grant of injunctive relief in the circumstances. In support of its invalidity case, Hospira argued that the method of treatment claims were not new or inventive. Was the invention claimed in the method of treatment claims new? Central to Hospira’s attack on the bone disorder patent’s lack of novelty was its argument that the relevant claims of the patent were not “fairly based” on the matter disclosed in a UK patent application from which the bone disorder patent claimed priority. Justice
Yates accepted that if Hospira’s argument was successful, the priority date of the bone disorder patent would be deferred to a date after the publication of the ZOMETA® Product Information sheet—a prior art document which arguably disclosed all of the features of the asserted claims of the bone disorder patent. Whilst Justice Yates refrained from expressing a concluded opinion on the issue, his Honour was satisfied that there “is a strongly arguable case”4 that the priority document contained a real and reasonably clear disclosure of the invention, such that the bone disorder patent could legitimately claim priority from the document, with the effect that the ZOMETA® Product Information sheet would not be relevant for novelty purposes. Justice Yates was also not persuaded that, on the evidence before him, other prior art publications relied upon by Hospira anticipated the method of treatment claims in issue. Was the invention claimed in the method of treatment claims “inventive”? Whilst his Honour acknowledged that the present state of the evidence in relation to the question of inventive step “clearly disclose[d] a substantial legal and factual dispute between the parties which is inconclusive”5, his Honour was not persuaded that Hospira’s
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December 2012
Novartis argued Hospira sought to launch its products with its “eyes wide open” as the consequences.
inventive step arguments meant that Novartis’ prima facie case of infringement was weak.6 The balance of convenience: other relevant considerations Novartis argued that other considerations that should be weighed in its favour on the balance of convenience included: -- ZOMETA® and ACLASTA® had an established position in the Australian market, whereas Hospira’s oncology and osteoporosis products had not yet been launched; -- Hospira sought to launch its products with its “eyes wide open” as to the consequences (i.e. it knew of Novartis’ patent rights); -- Novartis would suffer significant, unquantifiable and irreversible damage if Hospira entered the market, as, amongst other things, the entry would: −− trigger a compulsory statutory and likely irreversible 16% reduction to the price of ZOMETA® and ACLASTA® and the operation of the PBS’s mandatory price disclosure regime; and −− force Novartis to further reduce the price of ZOMETA® and ACLASTA® in order to compete with the Hospira products. Any such reductions
could reduce Novartis’ brand equity and would have to be disclosed to the PBS under its compulsory price disclosure regime, which could cause the PBS to irreversibly set the reimbursement price at an even lower level. Justice Yates was of the view that these considerations outweighed those proffered by Hospira (including the loss of its “first mover advantage” and the apparent difficulties that would be experienced in connection with calculating its loss of sales), and was accordingly satisfied that “overall, the balance of convenience and justice weighed in favour of the granting of interlocutory injunctive relief”.7 Interlocutory orders made against Hospira On 12 October, Justice Yates gave effect to the above findings by making orders, which, amongst other things, prevent Hospira from taking steps to obtain listing under the PBS of any pharmaceutical products containing zoledronic acid as an active ingredient.
should it be found at the final hearing that Novartis was not entitled to final injunctive relief. In rejecting the proposal, Justice Yates explained that such an order would expose Novartis “to the risk of an irreversible statutory price reduction” for its own PBS listed products, which was precisely what Novartis had sought to avoid by prosecuting its application for interlocutory relief.8
1
2
3 4 5 6 7 8 9
Australian Patent No. 2001261283 entitled “Use of Zolendronate [sic] for the manufacture of a medicament for the treatment of bone metabolism diseases” (the bone disorder patent) Australian Patent No. 2001274109 entitled “Method of administering bisphosphonates” (the osteoporosis patent) [2012] FCA 1055 at [37] [2012] FCA 1055 at [66] [2012] FCA 1055 at [88] [2012] FCA 1055 at [91] [2012] FCA 1055 at [140] [2012] FCA 1113 at [6] See also: http://www.davies.com.au/pub/ detail/628/merck-granted-interlocutory-reliefto-stop-the-alleged-infringement-of-nasonexpatent
Notably, Hospira asked Justice Yates to make an order that would allow it to file applications for PBS listing but requiring it to withdraw it, if need be, in time to prevent the actual listing, so that it could have the benefit of a pending application Ian Pascarl, Partner Aaron Yates, Lawyer
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Lessons for pharmaceutical patent litigants Justice Yates’ decision illustrates the difficulties generic pharmaceutical companies face in entering a market in which a competing product has patent protection and is listed under the PBS.9 Indeed, a number of cases over the last 12 months have resulted in Australian courts holding that the likely irreversible and unquantifiable damage to the value of a PBS listed product upon the listing of a bioequivalent drug warrants steps being taken to prevent such loss until patent infringement and invalidity claims are finally heard and determined. Sponsors seeking to launch generic or biosimilar versions of PBS listed patent-protected drugs should consider trying to “clear the way� (by, for example, seeking revocation of relevant patents) prior to taking any steps which would accord the pharmaceutical patentee with a clear and imminent threat of patent infringement, entitling it to seek interlocutory injunctive relief.
DNA LAB by SNRE: vwww.flickr.com/photos/snre/6946913471/
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December 2012
Case Study 6
High Court denies Optus leave to appeal TV Now copyright decision Singtel Optus Pty Ltd v Australian Rugby Football League Limited [2012] HCATrans 214
In September, the High Court consisting of Justices Gummow, Bell and Hayne refused to grant Optus special leave to appeal the decision of the Full Federal Court of Australia in the Optus TV Now case.1 The High Court found that there was insufficient prospect of success in overturning the Full Federal Court’s decision, and that further consideration of the particular facts of the case would fail to provide any guidance (outside of the specific facts of the Optus TV Now case) as to the general application and scope of section 111 of the Copyright Act 1968.
Television Face BY MARTIN HOWARD: CC-by 2.0 www.flickr.com/photos/martinhoward/3063708655
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The High Court’s decision to refuse to grant Optus special leave marks the end of the Optus TV Now case …
“Time-shifting” exception to copyright infringement
Australian Law Reform Commission copyright review
Section 111 provides an exception to copyright infringement and applies where a person makes a recording of a broadcast for their “private and domestic use” by watching it at a time more convenient than when the broadcast is aired (this is also known as “time-shifting”).
The Full Federal Court’s decision indicates cloud computing service providers could be held liable for copyright infringement in storing and streaming data originally uploaded by their customers under the current legislation. This is one area that is specifically being addressed by the Australian Law Reform Commission (ALRC) in their upcoming review of the adequacy of the current Copyright Act in the digital environment. The first issues paper was released on 20 August and invites submissions on whether the current Copyright Act is impeding the development of cloud computing technology in Australia, and whether the Act should be amended to create exceptions for cloud computing services.
History of the Optus TV Now case The High Court’s decision to refuse to grant Optus special leave marks the end of the Optus TV Now case which was first heard by Justice Rares of the Federal Court in February this year. In April, the Full Federal Court overturned Justice Rares’ decision and found in favour of the National Rugby League (NRL), Australian Football League (AFL) and Telstra (the rights holders) when it held that Optus was at least partly responsible for making the recordings through its TV Now service, and that the section 111 exception did not apply to it.
We will keep you updated on any changes to the Australian Copyright Act, or developments, as a result of the ALRC review.
1
National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd [2012] FCAFC 5
Chris Jordan, Partner Cara Gerace, Lawyer
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December 2012
Case Study 7
Parallel importers fail again before Full Court of Federal Court
Paul’s Retail Pty Ltd v Lonsdale Australia Limited [2012] FCAFC 130
The decision of the Full Court of the Federal Court in Paul’s Retail v Lonsdale Australia is the most recent in a line of Australian cases in which an importer of goods purporting to be ‘genuine’ goods has been found guilty of trade mark infringement.
The facts of the case are somewhat complex. In essence, the situation was that an English company, Lonsdale Sports Limited - the owner of an international portfolio of LONSDALE trade marks for clothing - licensed in 2009 a German company, Punch GmbH, to promote, distribute and sell products bearing the LONSDALE marks in “the Territory” (essentially Europe), and to manufacture the products in or outside “the Territory”. In August 2011 Punch entered into a sales agreement with a Cyprus company, Unicell Limited, to sell to Unicell products marked with the LONSDALE marks on an “exWarehouse China” basis. Cyprus was within “the Territory” and Punch paid royalties to Lonsdale on its sales to Unicell. At some time between August 2011 and December 2011, goods bearing the LONSDALE marks were sold by Unicell to an American company, TMS LLC, which in turn onsold them to the appellant, Paul’s Retail Pty Ltd. Previously, Paul’s Retail had acquired LONSDALE-branded products from Lonsdale’s then Australian licensee, VAG Pty Ltd. In June 2011 Lonsdale assigned its Australian trade marks to the respondent, Lonsdale Australia. Lonsdale Australia is a sister company to Lonsdale; each are ultimately owned by Sports Direct International plc. Punch is not a member of the same group.
Des Ryan, Consultant EPSOS.DE: CC-by 2.0 www.flickr.com/photos/epsos/4444576795
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The court rejected the argument that the sale of the product by Paul’s Retail did not constitute a use of the marks by it in Australia …
Lonsdale Australia, as the owner of the Australian LONSDALE registrations, brought action for infringement against Paul’s Retail. Paul’s Retail sought unsuccessfully to rely, among other things, on the provisions of section 123 of the Trade Marks Act. Section 123 provides that it is not infringement if “the trade mark has been applied..., by or with the consent of, the registered owner of the mark”. The court found for Lonsdale Australia on the basis, among other things, that it, as the register owner of the Australian registrations, played no part in the application of the marks by Punch. Paul’s Retail argued on appeal that: -- the relevant question was whether the physical application of the marks was with the consent of Lonsdale, the owner of the Australian registrations, at the time of the licence to Punch; -- the consent of Lonsdale should be equated to consent by Lonsdale Australia on the basis of the principles applied by the English Court of Appeal in Revlon Inc v Cripps & Lee Ltd ([1980] FSR 85); -- as well as section 123, it was entitled to rely on the principle of exhaustion in Champagne Heidsieck et Cie v Buxton ([1930] 1 Ch 330); -- the use of the marks in Australia on genuine goods was not use by Paul’s Retail for the purposes of infringement.
The Full Court, in effect, short-circuited these arguments and held that the use of the mark could not be with the consent of Lonsdale because it was outside the scope of the Punch licence, which was to sell the trade marked products only within “the Territory”. Adopting a strict contract analysis, it held that, under the sale agreement between Punch and Unicell, the sale of the Paul’s goods to Unicell was concluded in China and, therefore, contrary to the terms of its licence, Punch had sold the products outside “the Territory”. The application of the marks by Punch for the purpose of the sale to Unicell was not therefore an application to which Lonsdale had consented and was not protected by section 123. The court rejected the argument that the sale of the product by Paul’s Retail did not constitute a use of the marks by it in Australia and upheld the decision of the primary judge. Although, in the light of its decision on the effect of the Punch licence, it was unnecessary to deal with the other issues raised in the appeal, the Full Court noted that words of section 123 should not be narrowly construed “as if they necessarily exclude any limit or condition on the grant of the right to apply a mark to goods”. With regard to the argument based on the Champagne Heidsieck principle, the court also held that, “to the extent that the appellants failed to make
a case in accordance with section 123 of the act, there is no other principle available to fill the gap in their case”. It did not consider the Revlon argument. Paul’s Retail did not seek leave to appeal the decision to the High Court. The prospects of success in seeking leave would not have been bright since, two days prior to the Full Court’s decision, the High Court refused leave in a similar case, Paul’s Retail Pty Ltd v Sporte Leisure Pty Ltd ([2012] HCA Trans 820), stating that, “in our view, the construction placed on section 123 by the Full Court of the Federal Court was not attended by doubt”. The decision will no doubt be welcomed by trade mark owners who wish to confine their Australian sales to authorised distributors, but it severely limits the extent to which the consumer interest in competition can be advanced by allowing parallel imports. In future, prospective importers will need to be satisfied not only that the goods are genuine or licensed goods, but also whether their importation to Australia is within the scope of the territorial or other conditions imposed by the licensor. In many cases, as here, that will be very difficult to determine. This article was originally published in the World Trade Mark Review Daily and has been republished with permission.
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December 2012
Practice Update 1a
Raising the Bar regulations published for public consultation
IP Australia has now released for public comment draft amendments to Australia’s intellectual property law regulations. These amendments were necessitated by the Intellectual Property Laws Amendment (“Raising the bar”) Act 2012 which will take full effect from 15 April 2013.
The draft regulations were published in two stages to maximise the time for public comment, with regulations relating to Schedules 1, 4 and 5 of the Raising the bar Act being released on 21 September and draft regulations made under Schedules 3 and 6 released on 11 October 2012. No regulations are required for Schedule 2 which has already come into effect. The six schedules of the Raising the Bar Act are as follows: Schedule 1 – Raising the quality of granted patents. Schedule 2 – Free access to patented inventions for regulatory approvals and research. Schedule 3 – Reducing delays in resolution of patent and trade mark applications. Schedule 4 – Improving mechanisms for trade mark and copyright enforcement. Schedule 5 – Assisting in the operations of the IP profession. Schedule 6 – Simplifying the IP system.
The regulations published in relation to Schedules 3, 4 and 5 do not appear to include any surprises, with the various regulations relating to oppositions, customs seizure of goods subject to copyright or trade mark rights, and the incorporation of patent attorney firms being largely as foreshadowed in the Explanatory Memorandum accompanying the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011. The same can be said for the amended regulations proposed under Schedule 1, with the exception of the provisions relating to priority entitlement for patents. Under Section 43(2) of the Patents Act 1990, as amended by the Raising the Bar Act, a claim can derive a priority date from an earlier application which “discloses the invention in the claim in a manner that is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art”. Accordingly, for applications and patents subject to the provisions of the Raising the Bar Act, priority will only be acknowledged if the relevant priority document provides an enabling disclosure of the claimed invention. Also, under the Raising the Bar Act, the requirement for a claim to be “fairly based” on a disclosure was replaced with a new requirement that a claim must be “supported by matter disclosed”.
IP Update
Regulation 3.12 currently stipulates that a claim must be “fairly based on matter disclosed in one or more priority documents” for priority entitlement to be recognised, and for this reason it was anticipated that the new regulations would require a claim to be “supported by” the disclosure in the priority document. However, the new regulations relating to the calculation of priority dates do not require a claim to be supported by the disclosure of the priority application. Instead, the new regulations simply mirror the requirement of new Section 43(2); that the priority document must disclose the invention “in a manner that is clear enough, and complete enough, for the invention to be performed by a person skilled in the relevant art”. Accordingly, the test for a priority entitlement is an enablement test, not a support/fair basis test. Schedule 6 introduces amendments to the regulations which were also foreshadowed in the Explanatory Memorandum, although there appears to be a significant error in the start date for the new 12 month grace period for secret commercial use. We expect this will be corrected before the regulations are finalised. As expected, the period for requesting examination following issuance of a Direction to do so from the Commissioner has been reduced
PAPER AND PEN By ORIN ZEBEST: cc-BY 2.0 www.flickr.com/photos/orinrobertjohn/1574578786
from 6 to 2 months, and the period for acceptance following issuance of a first examination report has been reduced from 21 months to 12 months. There appears to be an oversight in relation to the examination deadline for applications upon which a 9 month examination deferment has been requested prior to 15 April 2013, although this is expected to be addressed before finalisation of the regulations. Finally, it appears that the requirement to file a Notice of Entitlement prior to acceptance has been replaced with a requirement to provide entitlement details at filing, or within two months of being directed to provide entitlement information after filing. The deadline for providing comments on the draft regulations, which are available on IP Australia’s website, was 21 November 2012.
Michael Caine, Partner
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December 2012
Practice Update 1b
Summary of the key issues with the draft Trade Mark Regulations for the Raising the Bar Act
The Intellectual Property Laws Amendment “Raising the Bar” Act 2011 (“the Amendment Act”) received Royal Assent on 15 April 2012, and the provisions dealing with trade marks will come into effect on 15 April 2013. The Amending Act introduces significant changes to Australian opposition case management and these changes were summarised in previous article. However much of the detail of the new regime was to be set out in the Trade Mark Regulations, a draft of which was published on 11 October 2012. The deadline for comment on the draft Regulations expired on 21 November 2012.
Unfortunately, the Regulations have not provided all the detail which practitioners were expecting. Moreover, there appear to be some errors and some unintended consequences arising from the draft Regulations. It is envisaged that IP Australia will publish the final form of the recommendations in February 2013. In the meantime, we summarise some key issues below: The key issues with the draft Trade Mark Regulations “Giving of Documents” by the Registrar
The various deadlines in opposition proceedings are to be determined from the date on which a document is “given” to a party. A document is taken to have been given on the day on which the document is dated by the Registrar and when the Registrar: i) makes the document available to the person in electronic form; and ii) notifies the person that the document is available. However, there is no explanation as to how the document is “given” if a party does not have email or access to the internet. The requirement for parties to serve documents and evidence on the other party is removed. The burden for notifying the other party that
documents and evidence have been filed is now placed on the Registrar. In addition, the Registrar may issue a direction concerning how many copies of a document or evidence must be filed and the form of that material. Notice of Opposition
Rather than filing a Notice of Opposition (NoO), an opponent is now only required to file a Notice of Intention to Oppose (“NIO”) in “approved form”. To date, no approved form has been provided and it is therefore unclear what level of detail will be required. The timeframe for lodgement of a NIO is 2 months from the date of advertisement of acceptance. Statement of Grounds and Particulars
Within 1 month of filing the NIO, the opponent will be required to file a Statement of Grounds and Particulars (SGP) which sets out the grounds of opposition and the material facts which particularise each of those grounds. If the SGP is not filed then the opposition is dismissed. If the Registrar decides that the SGP is inadequate, she may direct that the opponent rectify the inadequacy by filing more information or dismiss the opposition. There is considerable uncertainty concerning how detailed an SGP must be and whether an applicant has any ability to object to and/or query
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Paper 002 By OLD ROLLEI: CC-BY 2.0 www.flickr.com/photos/oldweston/3341886397
the adequacy of the SGP. Furthermore, there does not appear to be any provision for a time limit for the Registrar’s deliberations in these matters. Extension for Filing Notice of Intention to Oppose or Statement of Grounds and Particulars
An extension of time may be granted only on the basis of: i) an error or omission; and/or
likely that this stage of the opposition will not have the desired effect of weeding out speculative or bad faith applications and this action seems destined to simply become a procedural “tick-a-box” step in the process.
ii) circumstances beyond the control of the person.
Amendment to Statement Grounds and Particulars
The Registrar is provided with discretion to decide the length of the extended period having regard to what is “reasonable in the circumstances”. An example is provided in the Regulations, that the Registrar may extend the deadline for a week if it transpired that an applicant could not attend to a deadline because he/she was sick for a week.
It is proposed that an amendment to the SGP may only be made to amend or add a new ground of opposition “if the Registrar is satisfied that the amendment or addition relates to information which the opponent could not reasonably have been aware of at the time of filing the statement”. This test will be difficult to apply in practice and it is likely to become fertile ground for dispute. It is not apparent why the Registrar would not allow the general amendment provision in Section 66 to apply in this context. Under Section 66 a document may be amended if it is “fair and reasonable in all the circumstances of the case to do so”. This would have reflected a sensible and pragmatic approach to any amendments that may be required.
A NoO is not considered filed until both the NIO and the SGP have been filed. Notice of Intention to Defend
An applicant must file a Notice of Intention to Defend (NID) within 1 month from the day on which the applicant is “given” a copy of the SGP. Once again no approved form or guidance has been provided as to how much detail will be required. Most importantly, the Regulations do not provide for an official fee. Regrettably, it therefore seems
Extensions for Filing Evidence
Parties will have a period of 3 months to file evidence in support and evidence in answer and 2 months to file evidence in reply. The Registrar may extend these periods only if the Registrar is satisfied that the party: i) Has made all reasonable efforts to comply with the relevant filing requirements; and ii) Despite acting promptly and diligently at all times to ensure the filing of the evidence within the period, is unable to do so; or iii) There are exceptional circumstances that justify the extension. This is a very onerous test and one which the Registrar may have difficulty adjudicating on. Moreover, the examples of what may constitute “exceptional circumstances” in Regulation 5.16(4) are very restrictive and not helpful in understanding how this provision will operate. Further Evidence
The further evidence provisions have been repealed and the Explanatory Memorandum explains that the Registrar may consider any information in an opposition
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under the broad power in current Regulation 21.19 which allows the Registrar to inform herself of any information available to the Registrar. This is a worrying development as it may lead to the submission of material which is not in declaratory form and at any stage of the proceedings without the current requirement that there be good explanation why the evidence was not filed earlier. Cooling Off Periods
Cooling off may only be requested once the NoO has been filed (therefore after the NIO and the SGP have been filed). However, the parties can only request a single cooling off period of 6 months and only one extension of a like term. Moreover, cooling off may only be requested once. It is not clear why these provisions are so restrictive and clearly, in some cases involving multi-jurisdictional disputes, a period of 12 months will be inadequate. Non-Use actions
In the interests of all substantive opposition proceedings before the Registrar being conducted in a similar manner, the above provisions concerning NIO, SGP and NID will apply to non-use proceedings. In many respects this is unfortunate as the current proceedings are much more streamlined, easier to understand, and inexpensive. There also appears to be an error in draft Regulation 9.15(5) which requires an applicant for removal to file evidence in answer even if the registered owner has not filed any evidence in support of its opposition to the removal application. The position should be that if no evidence in support is filed then the non-use action is successful.
December 2012
Hearings
The Registrar will now have the discretion to direct whether to hear a matter orally or decide the matter based on written submissions alone. Presently the parties have a right to a hearing if they agree to pay the hearing fee. It seems that the parties may be prejudiced by a potential inability to present their case at an in person hearing and moreover, there is no indication of the factors which the Registrar will take into account in exercising this discretion. Transitional Provisions
For any cases which are accepted and opposed prior to 15 April 2013, the existing Regulations will apply. However, any extensions of time will be subject to the tougher rules in the draft Regulations and the Registrar will adhere to the “file – and – give” regime for documents filed after 15 April 2013. If an application is accepted prior to 15 April 2013 but opposed after this date then the opposition period will be 3 months but thereafter, the new Regulations will apply. In circumstances where an opposition has commenced prior to 15 April 2013 and a deadline for filing evidence began prior to this date, then the current Regulations will apply for the first extension of time sought by a party after 15 April 2013. Thereafter, the new Regulations will apply.
Concluding observations of the draft trade mark regulations for the Raising the Bar Act
It is difficult to assess the full impact of the draft Regulations until the approved forms are provided and we have more information concerning the level of detail required for an SGP and the circumstances in which the Registrar will allow amendments and extensions. Greater guidance should be provided early next year. In the meantime, it is interesting to note that the stated objectives of the Amending Act were to: 1) Resolve opposition proceedings faster; 2) Have a trade mark opposition process which was as simple and straight forward as possible; and 3) To make opposition proceedings inexpensive. No doubt, opposition proceedings under the new regime will be resolved quicker. However, the revised procedures will be less simple and less straight forward than the current regime. Moreover, owing to the number of additional steps in the process, it is likely that opposition proceedings will be more expensive under the new regime, particularly for opponents. It is also likely that the bulk of the costs will be incurred earlier in the proceedings.
Michael Wolnizer, Partner
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Practice Update 2
Madrid Protocol and other important changes to New Zealand trade mark law from 10 December 2012
A number of changes to New Zealand trade mark law will occur on 10 December 2012, once the Trade Marks Amendment Regulations 2012 and Trade Marks (International Registration) Regulations 2012 come into force. Many of these changes relate to New Zealand’s accession to the Madrid Protocol, enabling trade mark owners to use the International Registration system from 10 December 2012. The Regulations introduce other changes to New Zealand trade mark practice and proceedings, including: 1. Official fees – official fees will increase in relation to a broad range of trade mark services on 10 December, including a 50% increase in the official filing fee from NZ$100 to NZ$150 per class; 2. Case management facility – all correspondence relating to trade mark applications, oppositions and registrations can only be submitted to IPONZ using its online “Case Management Facility”. This is a requirement which concerns many practitioners, due to its exclusive reliance on an external IT system. There is however some relief, as the Regulations at least provide for the Commissioner to permit parties to submit information or documents by other means if the Commissioner “is satisfied that that person is unable to access
the case management facility because of any exceptional circumstances beyond the person’s control” (Reg. 8(3)) 3. Post-deadline extension – a trade mark applicant will be entitled to a single two month extension after a trade mark prosecution deadline has passed to take the action required to address the objections raised against registration of the trade mark, so long as the necessary action is taken within the “late” extension period (New Regulation 62A). Each applicant can only take this action once during the life of a trade mark application. 4. Adding a class – An applicant will have the life of a trade mark application within which to add an additional class to the application, for applications filed after 10 December 2012. Under the current law, a trade mark applicant only has one month from the date of filing a trade mark application to add an additional class. The regulation governing extensions of time in opposition proceedings remains unaltered. It requires that an extension of time may be granted only if there are “genuine and exceptional circumstances”. This has been construed narrowly, and it has been very difficult to obtain extensions of time in New Zealand opposition proceedings.
Many practitioners expected that this regulation would be relaxed to set a more reasonable approach to extensions of time in opposition proceedings. We are pleased to note that a second set of amendments to the regulations is in the pipeline and should be gazetted in the first quarter of 2013. It seems likely that these amendments will relax the opposition extension provisions, to permit the Commissioner to extend time in opposition proceedings by up to three months if he/she is satisfied that there are genuine and reasonable reasons to do so, with a further extension permitted only under genuine and exceptional circumstances. Davies Collison Cave has practiced directly in New Zealand for over ten years, and is in the top 10 trade mark filers in the country. Our team will be happy to answer any questions you may have on New Zealand trade mark law. Please contact your normal Davies Collison Cave representative with any questions. Lake Rotorura by Michael Button: CC-BY 2.0 www.flickr.com/photos/michaeljohnbutton/6611884997/
Nick Holmes, Partner
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December 2012
Practice Update 3
Pharmaceutical trade marks containing INN stems receive automatic objection in Australia
The Australian Trade Marks Office has adopted a practice of automatically objecting to trade mark applications for pharmaceuticals, veterinary preparations or pesticides in class 5 that contain an INN stem on the basis that such marks are considered likely to deceive or cause confusion.
What are INN stems? International Nonproprietary Names (INNs) identify pharmaceutical substances or active pharmaceutical ingredients. Each INN is a unique name that is globally recognized, public property and is approved by the World Health Organization (WHO). For example, in respect of PANADOL® paracetamol, paracetamol is the global INN for the pharmaceutical substance, while PANADOL is the brand name for the particular paracetamol product originating from the GlaxoSmithKline group of companies. The names of pharmacologically related substances share a common INN “stem” which assists medical practitioners, pharmacists and others to recognise that the substance belongs to a particular group of substances having similar pharmacological activity. Some stems are relatively inherently distinctive (eg. -gliflozin), whereas others are arguably not (eg. –ine). What is the basis for objection to trade marks containing INN stems? A trade mark application will receive an objection if, because of some connotation of or within the trade mark, the use of the trade mark in relation to the applied for
goods or services would be likely to deceive or cause confusion (section 43 of the Trade Marks Act 1995). Unless the following applies, the Trade Marks Office will, as a matter of practice, object under the section 43 ground to a trade mark in respect of pharmaceuticals, veterinary substances or pesticides which contains an INN stem: -- the INN stem is not contained within the mark in “a meaningful way”. This has a very narrow application. The Office considers INN stems are contained in a meaningful way unless they form part of an ordinary English word. For example, the stem –AST would be objectionable in an application for SIMIANAST but not in an application for FAST. The Office also gives the example that the presence of ‘aj’ in the term ‘Sansajabendorastine’ would not warrant objection given the length of the name and other competing references, but current experience suggests that slightly less extreme examples will warrant objection; and/or -- the goods covered by the specification are restricted to substances belonging to the pharmacological group pertaining to the INN stem.
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The Office considers that marks which do not comply with the above conditions will automatically be likely to give rise to deception or confusion. How to overcome the objection relating to use of an INN stem within a trade mark The Office will issue an adverse report stating that the objection may be overcome by agreeing to a condition of registration to limit the use of the mark to the relevant pharmacological group. The Office will suggest the following endorsement: “ It is a condition of registration that any use in respect of (relevant goods) will be in relation to such goods containing substances belonging to the pharmacological group designated by the International Non-Proprietary Name stem (stem).� To date, the Office is reluctant to consider surrounding circumstances which may rebut its assumption that the mark is likely to mislead or cause confusion, such as evidence of the widespread adoption of marketed product names incorporating the stem which belong to a variety of pharmacological groups.
a look inside By ZZZACK: CC-BY 2.0 www.flickr.com/photos/zack-attack/404014325
Lesson for pharmaceutical companies The current Office practice does not appear to recognise that some stems are not likely to be associated with a particular pharmacological group, for instance because the stem has not been used for several decades or because the relevant consumers are accustomed to seeing a high number of products on the market with trade marks containing the stem but which relate to a range of pharmacological groups.
In the meantime, trade mark owners in the pharmaceuticals, veterinary and pesticides field should consult the list of INN stems when clearing names and be wary of selecting names in Australia containing an INN stem unless the product is destined for the relevant pharmacological group. Davies Collison Cave is currently in discussions with the Trade Marks Office to try to encourage a change of practice.
In such cases, arguably there is no connotation and no real likelihood of deception or confusion occurring. Clearance in class 5 is already difficult for pharmaceutical companies and others seeking to clear global product names given the crowded state of the register. Unless the current practice can be successfully overturned, it will cause further headaches for companies trying to roll out global product names in class 5 to Australia.
Carly Mansell, Senior Associate
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December 2012
DCC News
Accolades
Condolences
For the third year running Davies Collison Cave has been recognised as the Australian Patent firm of the year in the 2012 Asia IP Awards run by Asia IP, the only intellectual property magazine focusing on Asia and the Pacific.
Stanley Loftus (Stan) Cave 1925–2012
Extensive polling took place with more than 5,000 inhouse counsel surveyed in Asia and around the world. The firms receiving the most votes in each country were awarded on the night. Through this process DCC were nominated as the top firm in Australia for Patent work and were shortlisted for the 2012 Australian Trademark Firm of the Year.
We are saddened to advise that Stan Cave passed away on Wednesday 10th October 2012. Stan, along with Jim Siely and Hector Cumming, was a principal of Arthur S. Cave & Co., patent attorneys, which was acquired by Davies & Collison in 1991. The combined practice was at that time renamed Davies Collison Cave. The Cave firm had a long history in Sydney, beginning as Fred Walsh & Co. in 1882. In 1937 the firm was acquired by Stan’s father, Arthur, at which time it was renamed as Arthur S Cave & Co. Stan commenced work with his father in 1946, and remained with DCC as a consultant, before retiring after working 50 years, at the end of 1996.
We are delighted to receive this award and would like to thank our clients and staff for their support. On the final night of the 2012 Asian Patent Attorney Association conference in Chiang Mai, Keith Leslie, partner of Davies Collison Cave was acknowledge by the APAA for his long and distinguished service to the organisation and awarded a ‘Distinguished Service Award’. Keith has been a Partner of the firm since 1972. Congratulations to Ian Pascarl, partner of Davies Collison Cave, for being ranked, for the second year running, as one of Australia’s leading IP individuals by The Legal 500 Asia Pacific 2013.
Office closure dates for the festive season Please note that both DCC and IP Australia will close for business from Tuesday 25 December 2012 to Tuesday 1 January 2013 inclusive.
IP Update
DCC Out & About
BRISBANE On Thursday 18th October Davies Collison Cave in Brisbane hosted an evening event to thank our Brisbane based clients for their support over the past 12 months. The event was held at The Euro, a Europeaninspired brasserie full of verve. The night kicked off with live music by Chris Palmer and continued on with ample taste sensations and fine wines shared amongst friends and colleagues. It was a great night. Thanks to all those who come along. AUSBIOTECH PRE DINNER DRINKS Over 100 delegates and DCC clients joined us for drinks and canapés at the docklands Alumbra bar prior to the National AusBiotech conference gala dinner. The event provided all our guests with the chance to unwind after a busy day at the conference and a chance to catch up with their colleagues and peers from all over Australia. We thoroughly enjoyed hosting this event and look forward to the conference next year in Brisbane. AWARDS Given that our business is lead by innovation we believe strongly in supporting upcoming innovation and over the last quarter we have supported and sponsored the Hunter Manufacturing Awards (HMA) and the Swinburne Venture Cup Innovation Award.
Dan Berger and Lena Balakrishnan from our Sydney office represented DCC at the Hunter Manufacturing Awards and were proud to award UltraBright Systems as the winner of Davies Collison Cave Innovation Award. Richard Brown, a partner based in our Melbourne office, represented the firm at the Swinburne Venture Cup and was very pleased to award UltraBright Systems with the Davies Collison Cave Innovation Award award.
Brisbane DCC Client function
SPORTING EVENTS Our keen cyclists of DCC took on the challenge of cycling ‘Around the Bay’ in a day. The 210 km round ride around Port Philip Bay, Victoria was taken on by David Webber, Ross Clark, Stephen Cogan, Hayden Barke and Sam Mickan.
DCC AusBiotech Drinks
INTELLECTUAL PROPERTY It has been a busy quarter with several of our partners presenting and attending the various IP congresses. Damon Henshaw and Will Hird represented DCC at the International Association for the Protection of Intellectual Property (AIPPI) World Intellectual Property Congress in Korea. Mark Roberts presented at the Charted Institute of Patent Attorneys (CIPA) congress in London and several of our partners attended the Asian Patent Attorney Association Annual Meeting in Chang Mai.
DCC AusBiotech Drinks
DCC Around the Bay in a day team
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December 2012
Articles on davies.com.au
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 is provided in the table. To read the entire article, please click on the title.
September Articles
October Articles
Raising the Bar regulations published for public consultation
Innovation patents – Raising The Step but is it a step too high?
Michael Caine
Ray Hind
Recent Google AdWords Cases in Australia: from googles to spectacles
Court of Appeal returns NZ trade mark oppositions to more conventional principles
Elizabeth Godfrey
Nick Holmes
Method of treatment claims to be construed with the “object or end view” in mind but Apotex still liable for contributory infringement
IP Australia announces a reduction in PCT Fees
Paula de Bruyn and Alex Tzanidis Australia releases draft Bill to allow compulsory licences of patented pharmaceutical products to alleviate health crises
Mark Roberts and Alex Tzanidis Australian Government announces a pharmaceutical patent review
Michael Caine
Rodney DeBoos
November articles
Big changes to US patent system now implemented
Damon Henshaw
Rob Finn Effect Of Mayo Vs Prometheus On Systems Medicine Patent Eligibility
John Hughes and Rachel Stevenson How can you legally refer to another trader’s trade mark?
Trevor Stevens and Lena Balakrishnan
Protecting Australian innovation: is China on the list?
Australian Trade Mark Application filed for “Superman Workout”– is it permissible?
Fiona Brittain
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December 2012
Type #
davies.com.au