IP Update March 2014 Issue 23 by Davies Collison Cave Patent, IP Law & Trade Mark Attorneys

Update March 2014 â&#x20AC;&#x201C; Issue 23 davies.com.au

The High Court confirms methods of medical treatment are patentable in Australia Facebook successful in first URS domain name determination Tivo succeeds in contempt proceeding against Vivo

March 2014

Type #

CONTENTS

Insight

CASE STUDIES

PRACTICE UPDATES

Tivo successful in contempt proceeding against Vivo for breach of court orders

16 Therapeutic Goods Amendment (2013 Measures No.1) Bill 2013

TiVo Inc v Vivo International Corporation Pty Ltd [2013] FCA 1340

19 US software patents Supreme Court will decide

Chemist Warehouse web pages fall foul of TGAâ&#x20AC;&#x2122;S advertising laws

10 Facebook successfully suspends facebok.pw domain name in first URS determination 14 The High Court confirms methods of medical treatment are patentable inventions in Australia Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd & Ors [2013] HCA 50

20 Global patent prosecution highway: a strategy for securing early patent grant 22 Australian agvet law reforms to commence on 1 July 2014

24 DCC Out & About 26 DCC News

IP Update

INSIGHT

THE IP/INNOVATION OLYMPICS Australia is not renowned for ice and snow, so a ranking of 24th in the 2014 Winter Olympics medals tally is an appropriate performance. But can the same be said about its performance in the IP/innovation stakes? The 2013 Global Innovation Index produced by Cornell University, INSEAD and WIPO ranks Australia 19th in the world. Its performance over the past 5 years has been consistent – no higher than 18th, no lower than 23rd. Judged against comparable countries, this is not a record of which to be proud. In each of the past five years Australia has trailed the UK, the US and Canada on the innovation rankings table. More strikingly, it is a laggard amongst the South East Asia and Oceania (SEAO) countries, with Hong Kong, Korea, Singapore and New Zealand always featuring higher. Of the SEAO countries, Singapore and Hong Kong are standouts – consistently in the top 10, and usually in the top 5. Among the things they have in common is an aspiration to be an “IP hub”. Singapore was first out of the blocks in April last year, with its IP Hub Master Plan. Under this 10-year vision, the country will become a centre for IP transactions and management, quality IP filings, and IP dispute resolution. Hot on its heels, Hong Kong released a strategic framework for a regional IP trading hub last November.

Common to both the IP hub plans are commitments to developing local capacity for patent examination and related professional services. The plans recognise that an innovation-driven economy requires firstrate expertise in patent preparation, prosecution and examination. While Australia can lay claim to possessing this expertise, it can’t take it for granted. Its patent office and its patent profession will need to develop and evolve just to keep pace with other countries. Also central to the IP hub plans is efficient resolution of IP disputes. As part of its aspiration to be a forum of choice, Singapore gives as much emphasis to alternative dispute resolution (ADR) as it does to the court system. Its proposals for enhancing IP ADR include, in addition to greater arbitration and mediation of disputes, the establishment of an expert adjudication service facilitated by its patent and trade mark office. There is a lesson here for Australia. The world-class IP system required by an innovation-driven economy must have excellent means for resolving IP disputes – including, in particular, mechanisms outside of the court system. Australia’s Advisory Council on Intellectual Property (ACIP) proposed a number of ADR mechanisms in its 2010 report on post-grant patent enforcement strategies. The government’s response to ACIP’s report was lukewarm, and its action on the proposals has been glacial. Glacial action on IP policy will ensure Australia maintains its Winter Olympics-level ranking for the innovation system. To attain a Summer Olympics-level top-ten standing, a more feverish commitment to IP reform is required.

Leon Allen, Managing Partner

March 2014

Case Study 1

TIVO SUCCESSFUL IN CONTEMPT PROCEEDING AGAINST VIVO FOR BREACH OF COURT ORDERS

TiVo Inc v Vivo International Corporation Pty Ltd [2013] FCA 1340

On 12 December 2013, the Federal Court upheld allegations of contempt made by TiVo Inc and TiVo Brands, LLC (collectively, TiVo) against Vivo International Corporation Pty Ltd, its then director, Fabio Grassia, and two of its related companies, Red 88 Pty Ltd and Viano Corporation Pty Ltd. The contempt proceeding arose from allegations made by TiVo that Vivo had failed to comply with orders arising from earlier findings of trade mark infringement. As part of those orders, the Court had issued an injunction restraining Vivo from using its “Vivo” mark. Vivo had also consented to an order cancelling two domain name registrations which incorporated the Vivo mark.

AZULE: HTTP://WWW.FLICKR.COM/PHOTOS/AZULE/5339540360/

IP Update

Justice Pagone held that “confusion, other obligations and forgetfulness” were not sufficient excuses for noncompliance with an existing order and that “carelessness, neglect and dereliction of duty will not be a sufficient answer to a charge of contempt”.

TIVO’S ALLEGATIONS OF CONTEMPT TiVo alleged that Vivo had failed to cancel the domain names as required by the consent orders and that Mr Grassia and Red 88 were complicit in that failure. TiVo also alleged that Vivo had breached the injunction by including Vivo product manuals relating to Vivo branded televisions on the website www.vianotv.com operated by Viano, and that Mr Grassia, Viano and Red 88 were complicit in that breach. VIVO FAILED TO CANCEL DOMAIN NAMES Vivo submitted that, to be in contempt, its breach of the Court’s order had to be wilful and contumacious in the sense of a “deliberate defiance of a court order”.1 Vivo argued that TiVo had not established beyond reasonable doubt that the failure was wilful and contumacious because Mr Grassia genuinely forgot to cancel the domain names by the due date. Justice Pagone held that “confusion, other obligations and forgetfulness” were not sufficient excuses for noncompliance with an existing order2 and that “carelessness, neglect and dereliction of duty will not be a sufficient answer to a charge of contempt”.3 Accordingly, his Honour held that Vivo was guilty of contempt for failing to cancel the domain names by the due date. For the same reasons, his Honour found that

Mr Grassia was guilty of contempt, even though he was not personally bound by the consent orders.4 DISPLAY OF VIVO PRODUCT MANUALS ON THE VIANO WEBSITE His Honour also held that all allegations of contempt in relation to the display of the Vivo product manuals on Viano’s website were made out. Justice Pagone found that Mr Grassia, who was at the relevant time the director of Vivo, had authorised the placing of Vivo product manuals on the website. The charges against Red 88 (as the registrant of the www.vianotv.com website) and Viano (as the operator of the website) were also made out. Mr Grassia was also a director of both companies at the relevant time.

1 2 3 4

Justice Pagone made declarations that the relevant allegations of contempt had been made out. His Honour also awarded indemnity costs to TiVo. In doing so, his Honour noted the respondents’ “inexcusable dereliction” of their obligations under the Federal Court of Australia Act 1976 (Cth) by failing to respond to a request by TiVo’s lawyers to cancel the domain names and remove the Vivo product manuals and to notify them once the respondents had done so. Davies Collison Cave Law acted for TiVo in this proceeding.

^ TiVo Inc v Vivo International Corporation Pty Ltd [2013] FCA 1340 [8]. ^ Ibid [20]. ^ Ibid. ^ See discussion of liability of third parties at [25].

John Hannebery, Partner Timothy Creek, Associate Jessica Sapountsis, Lawyer

March 2014

Case Study 2

CHEMIST WAREHOUSE WEB PAGES FALL FOUL OF TGA’S ADVERTISING LAWS

The Therapeutic Products Advertising Complaints Resolution Panel has requested that Chemist Warehouse formally retract “health information” web pages that were found to contravene Australia’s Therapeutic Goods Advertising Code. This article outlines the panel’s findings, examines the measures that can be taken by the Department of Health to enforce those findings and outlines the avenues available for challenging decisions made in respect of advertisements for therapeutic goods in Australia.

THE “HEALTH INFORMATION” ADVERTISING COMPLAINT AGAINST CHEMIST WAREHOUSE An anonymous complaint 1 was lodged with the Therapeutic Products Advertising Complaints Resolution Panel (Panel) alleging that a number of pages on Chemist Warehouse’s website were required to comply with the Therapeutic Goods Advertising Code (Code) and did not do so. The web pages complained of purported to provide information and general advice in relation to various health conditions including breast cancer, diabetes, stroke and hepatitis and included central sections headed “pharmacist’s advice” and “vitamins/minerals/ herbals”. Each of the pages were also flanked by one or more advertisements for or links to branded vitamin products that Chemist Warehouse was offering for sale.

CHOCOLATE GEEK: HTTP://WWW.FLICKR.COM/PHOTOS/VIPULMATHUR/8289931301/

IP Update

Chemist Warehouse argued that the web pages complained of were analogous to a newspaper that contained news articles as well as advertisements on the same page…

An example of the web pages complained about is set out below 2

WERE CHEMIST WAREHOUSE’S WEB PAGES “ADVERTISEMENTS” THAT WERE COVERED BY THE TGA’S ADVERTISING CODE? Chemist Warehouse argued that the web pages complained of were analogous to a newspaper that contained news articles as well as advertisements on the same page and that each web page was not, as the complainant argued, an “advertisement” to which the Code applied.3 The Panel: a) explained that an “advertisement” was defined in the Code (and the Therapeutic Goods Act 1989 (Cth) (TG Act)) to include “any statement, pictorial representation or design, however made, that is intended, whether directly or indirectly, to promote the use or supply of [therapeutic] goods”; b) considered that Chemist Warehouse’s web pages fell squarely within that broad definition because: “a reasonable consumer, in looking at the whole page, would associate the content of the central section, particularly in light of the sub-section headed “vitamins/herbals/minerals”, with the advertisements on each side”; and c) concluded that the Code applied to Chemist Warehouse’s web pages.

March 2014

The Panel went on to find that the advertisements did not comply with the Code in a number of respects.

The Panel went on to find that the advertisements did not comply with the Code in a number of respects, including because they: a) contained representations that were expressly prohibited by the Code, including representations related to the treatment, cure or prevention of cancer and mental illness and representations relating to other serious forms of diseases and conditions; 4 b) were likely to lead consumers into inappropriately treating potentially serious diseases; 5 and c) inappropriately represented that they were endorsed by healthcare professionals (especially in light of the section on the web pages headed “Pharmacist’s Advice”). 6 SANCTIONS AGAINST CHEMIST WAREHOUSE Having found that the complaint was justified in the circumstances, the Panel relevantly asked Chemist Warehouse to withdraw the advertisements and publish a retraction in place of those advertisements on its website. Chemist Warehouse has not yet published the retraction and is reportedly 7 refusing to do so. THE TGA’S ENFORCEMENT POWERS Whilst the Panel may only “request” that certain steps be taken to address non-compliant

therapeutic advertising, 8 it is permitted to make enforcement recommendations to the Secretary of the Department of Health and may, where appropriate, refer the matter to other regulatory bodies 9 (such as the Australian Competition and Consumer Commission, in the case of false or misleading therapeutic advertisements). 10

REVIEW OF TGA ADVERTISING DECISIONS

Regulation 9 of the Therapeutic Goods Regulations 1990 (Cth) (TG Regulations) gives the Secretary power to make orders that an advertiser (amongst other things) withdraw a non-complaint advertisement and / or publish a retraction. Any orders made by the Secretary are also published on the TGA’s website, thereby attracting adverse publicity for the advertiser.

b) seek judicial review of the decision by the Federal Court of Australia under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (which would be confined to an assessment of the legality of the Secretary’s decision (i.e. whether the Secretary made the decision in accordance with law and followed the correct procedure)).

Whilst the current regulatory framework does not expressly provide for sanctions against advertisers who fail to comply with the Secretary’s orders 11, the Secretary does have power to issue infringement notices requiring an advertiser to pay a fine and, in extreme cases, an uncooperative advertiser could possibly be prosecuted under section 42DM of the TG Act, which makes it a criminal offence for a person to publish advertising that does not comply with the Code.

An application may also be made to the Administrative Appeals Tribunal for review of a decision made by the Minister following an application referred to in (a) above.

It remains to be seen if the Panel will make recommendations to the Secretary, the ACCC or some other regulatory body in this case.

A person whose interests are affected by a regulation 9 order made by the Secretary may: a) apply to the Minister of Health for a review of the Secretary’s decision “on the merits”12; and / or

Ian Pascarl, Partner Aaron Yates, Lawyer

IP Update

REMINDERS FOR ADVERTISERS OF THERAPEUTIC GOODS -- T here is a comprehensive regulatory framework for therapeutic product advertising in Australia, which includes the TG Act and its associated regulations, the Code and the Australian Consumer Law. -- I t is a criminal offence to publish advertising that does not comply with the Code and the consequences of publishing non-compliant advertising can be serious. -- A person whose interests are affected by an adverse decision made by the Secretary in relation to advertisements for therapeutic goods may explore a number of avenues of appeal or review.

1 2 3

Complaint 2013-07-003 Chemist Warehouse Website Reproduced from the Panel’s findings in Complaint 2013-07-003 Chemist Warehouse Website Therapeutic Goods Act 1989 (Cth), s. 42DM: Most “advertisements” for therapeutic goods (including those directed to consumers (as opposed to health professionals) must comply with the Therapeutic Goods Advertising Code. 4 Sections 5(1) and 5(2) of the Code 5 Section 4 (2) (b) of the Code 6 Section 4 (6) (b) of the Code 7 http://www.smh.com.au/business/retail/chemist-warehouse-to-ignore-order-for-ad-retraction-20140120314sb.html http://www.smh.com.au/business/retail/chemist-warehouse-to-ignore-order-for-ad-retraction-20140120314sb.html 8 See regulations 42ZCAI (1) and (2) of the Therapeutic Goods Regulations 1990 (Cth) 9 Regulation 42ZCAGA of the Therapeutic Goods Regulations 1990 (Cth) 10 See, for example: http://www.accc.gov.au/media-release/accc-tackles-homeopathy-plus-whooping-coughclaims http://www.accc.gov.au/media-release/accc-tackles-homeopathy-plus-whooping-cough-claims 11 Australian Government, Department of Health, Consultation Regulation Impact Statement, Regulating the advertising of therapeutic goods to the general public, May 2013. 12 Regulation 48 of the Therapeutic Goods Regulations 1990 (Cth) EPSOS.DE: HTTP://WWW.FLICKR.COM/PHOTOS/EPSOS/8116279888/

March 2014

Case Study 3

FACEBOOK SUCCESSFULLY SUSPENDS FACEBOK.PW DOMAIN NAME IN FIRST URS DETERMINATION

We have previously reported that a new Uniform Rapid Suspension System (URS) was proposed to assist brand owners police their trade marks in the wake of the new generic top level domains (gTLD). The URS has since been implemented and Facebook was recently successful in the first determination to be made under the URS, resulting in the suspension of the domain name <facebok.pw>. With the determination issued in just over one month after submitting the complaint, the URS is a quick and efficient avenue for brand owners to address cyber squatting and infringements in the new gTLDs.

THOS003: HTTP://WWW.FLICKR.COM/PHOTOS/THOS003/5986220278/

IP Update

The URS is designed to provide a fast and cost effective avenue to stop clear-cut infringing domain names from operating.

WHAT IS THE UNIFORM RAPID SUSPENSION SYSTEM (URS)?

ability to seek recourse via appeal, the UDRP or the courts.

The URS is designed to provide a fast and cost effective avenue to stop clear-cut infringing domain names from operating. It is administered by approved providers and is designed to complement rather than replace the existing Uniform Domain-Name DisputeResolution Policy (UDRP).

WHY DID FACEBOOK WIN?

Notably, a complaint under the URS can only be made if the domain name is registered in a new gTLD. WHAT MUST BE PROVED IN A UNIFORM RAPID SUSPENSION SYSTEM (URS) CLAIM? In order to succeed under an URS claim, the Complainant must prove with clear and convincing evidence that: 1. the domain name is identical or confusingly similar to a trade mark in which the Complainant has rights; 2. the Respondent has no legitimate interest in respect of the domain name; and

In Facebook’s case, the decision maker determined that: -- the only difference between the domain name <facebok. pw> and the FACEBOOK mark is the absence of one letter “o”, therefore, the domain name is confusingly similar to the FACEBOOK mark -- the top level domain is irrelevant in assessing identity or confusing similarity -- there was no evidence that the Respondent had rights or legitimate interests in the domain name -- the domain name was registered and is being used in bad faith because: −− it was registered some nine years after the FACEBOOK marks were first used and gained fame

3. the domain was registered and is being used in bad faith.

−− there was evidence of a pattern of illegitimate use of trade marks in domain names by the Respondent

If there are any genuine contestable issues relating to any of the above, then the claim will fail as there must be clear and convincing evidence. However, this will not impact on the trade mark owner’s

−− the domain name was used to attract users to its website containing links which appeared to generate click-through fees for the Respondent’s commercial gain

The facebok.pw domain name is now suspended. HOW LONG DOES THE UNIFORM RAPID SUSPENSION SYSTEM (URS) PROCESS TAKE? Determinations can be issued in approximately one month from the date the complaint is filed. For example, Facebook submitted its complaint on 21 August 2013 and a determination issued on 27 September 2013. In this time, the Complaint underwent a formalities check, the domain at issue was “locked” so that it could not be transferred or deleted, Notice was provided to the Respondent that it has 14 days to file a Response, and a determination issued after the 14 day Response period ended. WHAT REMEDIES ARE AVAILABLE TO TRADE MARK OWNERS UNDER THE UNIFORM RAPID SUSPENSION SYSTEM (URS)? The only remedy available under the URS is suspension of the domain name until the end of the registration period. Unlike remedies available under the UDRP, the domain cannot be cancelled or transferred to the trade mark owner. Trade mark owners may therefore need to keep a careful eye on when suspended registrations lapse, otherwise, another entity may register it.

March 2014

Appeals are heard afresh based on the existing record with a limited right to introduce new evidence.

EXTENSIONS WHERE NO RESPONSE IS FILED Trade mark owners should note that while the URS is designed to be efficient, in cases such as Facebookâ&#x20AC;&#x2122;s where the Registrant fails to file a Response, the process does not necessarily end when the determination is made. If the Respondent does not file a Response in the initial 14 day Response period, the Respondent can request an extension of up to 7 days even if a determination is already made so long as the request is made within 30 days from the date of the determination. Additionally, the Respondent can also request the matter to be reviewed afresh by filing a Response within 6 months from the date the determination is made. This 6 month period is extendable by a further 6 months upon request. Once the Response is filed, the matter will be decided as if it was filed on time.

HOW ARE UNIFORM RAPID SUSPENSION SYSTEM (URS) DETERMINATIONS APPEALED? Unlike the UDRP, it is possible to appeal a URS decision to an Appeal Panel of a URS Provider within 14 days of a determination. Appeals are heard afresh based on the existing record with a limited right to introduce new evidence.

UNIFORM RAPID SUSPENSION SYSTEM (URS) OR THE UNIFORM DOMAIN-NAME DISPUTERESOLUTION POLICY (UDRP)? Which dispute resolution procedure trade mark owners adopt will depend on individual circumstances, their goals and their broader brand protection strategy. The table below sets out just some of the differences:

DIFFERENCES BETWEEN URS AND UDRP URS

UDRP

COST PER COMPLAINT

US$300-$500

US$1,300-$5,000

APPROXIMATE TARGET TIME FOR DETERMINATION TO BE MADE AFTER FILING COMPLAINT

1 month*

2-3 months*

REMEDIES

Suspension

Cancellation or transfer

NUMBER OF DECISION MAKERS

1 or 3

ADMINISTRATIVE APPEAL

Yes

* subject to extensions requested by parties and workload of Providers

Michael Wolnizer, Partner Madeleine Chan, Trade Mark Lawyer

IP Update

LESSONS FOR TRADE MARK OWNERS Trade mark owners now have another avenue under the URS to stop unauthorised use of their trade marks in a domain name in a fairly cost effective and efficient manner. However, trade mark owners need to weigh up the potential gains in cost and time with a more limited range of remedies available and potential for delay.

LAUREN MANNING: HTTP://WWW.FLICKR.COM/PHOTOS/LAURENMANNING/2319040610/

March 2014

Case Study 4

THE HIGH COURT CONFIRMS METHODS OF MEDICAL TREATMENT ARE PATENTABLE INVENTIONS IN AUSTRALIA Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd & Ors [2013] HCA 50

In a judgment handed down on 4 December 2013, the High Court, by majority (4:1), has held that methods of medical treatment of the human body can be patentable inventions within the meaning of section 18(1) of the Patents Act 1990 (Cth). This is the first time in which the High Court has had to consider this issue. This issue came before the High Court for consideration after Apotex sought and was granted special leave to appeal from a decision of the Full Federal Court concerning a method patent owned by Sanofi-Aventis for the use of leflunomide to treat the skin condition, psoriasis.

HISTORY OF THE PROCEEDING In 2008, Sanofi commenced Federal Court proceedings against Apotex claiming that Apotex’s proposed supply of leflunomide to treat psoriatic arthritis (PsA) would infringe its patent. Sanofi’s patent covers the use of leflunomide to treat psoriasis. (Sanofi previously held a patent for the compound, leflunomide and its use to treat arthritis, but that had since expired.) Given that almost every person with PsA has or will develop psoriasis, it was asserted that use of Apotex’s leflunomide product to treat PsA would inevitably treat psoriasis. Apotex cross-claimed seeking revocation of Sanofi’s patent on a number of grounds, including that a method of medical treatment of the human body is not a patentable invention under section 18(1) of the Patents Act 1990 (Cth)1. In 2011, the Federal Court dismissed Apotex’s cross-claim and found that Apotex had threatened to infringe Sanofi’s patent. On appeal to the Full Federal Court in July 2012, the Full Court upheld the trial judge’s decision. Apotex subsequently applied for special leave from the High Court to appeal from the decision of the Full Federal Court, which was granted in December 20122.

PHALINN: HTTP://WWW.FLICKR.COM/PHOTOS/PHALINN/8116080125/

IP Update

This decision is signifcant in that it provides certainty that methods of medical treatment are patentable inventions in Australia.

ISSUES BEFORE THE HIGH COURT The key issues for consideration by the High Court (comprising French CJ, Hayne, Crennan, Kiefel and Gageler JJ) were: 1. Whether Sanofi’s patent was valid, which required the High Court to determine whether methods of medical treatment are patentable subject matter; and 2. If Sanofi’s patent was valid, whether Apotex’s leflunomide product infringed the patent. PATENTABILITY OF METHODS OF MEDICAL TREATMENT

On that basis, the High Court did not consider Apotex’s product information document instructed consumers to use its leflunomide product for psoriasis. Nor did it consider that Apotex had any reason to believe that consumers would use its leflunomide product in accordance with Sanofi’s patent, contrary to the approved indications in Apotex’s product information document. FINAL NOTE This decision is significant in that it provides certainty that methods of medical treatment are patentable inventions in Australia.

The majority of the High Court (Hayne J dissenting) upheld the previous findings of the Federal Court and found that a method or process for medical treatment of the human body that has some useful application and economic utility can be a “manner of manufacture” and hence a patentable invention within the meaning of s 18(1) of the Patents Act 1990. INFRINGEMENT OF SANOFI’S PATENT Despite the majority of the High Court finding that Sanofi’s patent was valid, it nevertheless found that Apotex’s leflunomide product did not infringe the patent. This was because: -- t he product information document for Apotex’s leflunomide product expressly stated that the product was “not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease”; and

1 2

Patents Act 1990 (Cth) http://www.austlii.edu.au/ au/legis/cth/consol_act/pa1990109/ http://www.davies.com.au/pub/detail/694/ is-a-method-of-treatment-of-the-human-body-apatentable-invention

-- t he product’s listing on the Australian Register of Therapeutic Goods (ARTG) excluded the indication “psoriasis”.

Richard Jarvis, Consultant Cara Gerace, Lawyer

March 2014

Practice Update 1

AUSTRALIAN GOVERNMENT SEEKS TO BOLSTER POWERS UNDER THERAPUTIC GOODS LEGISLATION

THERAPEUTIC GOODS AMENDMENT (2013 MEASURES NO.1) BILL 2013 In December 2013, the Minister for Health introduced the Therapeutic Goods Amendment (2013 Measures No.1) Bill 2013 (the Bill) into Parliament. The bill was listed for debate in Parliament on 11 February 2014. If it is passed in its present form, the key changes to the Therapeutic Goods Act 1989 (Cth) (the Act) will be: -- the introduction of new criminal offences and civil penalties; -- the granting of increased power to the Secretary to cancel or suspend a registration or listing; -- the granting of power to the Minister to exempt certain goods from the operation of the Act; -- changes to publication requirements for regulatory decisions. NEW CRIMINAL OFFENCES AND CIVIL PENALTIES REQUESTS TO VARY THE REGISTER

Section 9D of the Act permits a person to request the Secretary vary the information on the Australian Register of Therapeutic Goods (the Register). This information can relate to a variety of matters, including safety issues such as adding a warning or precaution to a product information sheet or

relate to the provision of pre-clinical or bioequivalence data relevant to the safety, efficacy or quality of the good. The Bill creates criminal offences and civil penalties for supplying false or misleading information in such a request. The Bill has tiered levels of criminal liability each of which must be proved to the criminal standard of beyond reasonable doubt: -- where the statement provided is false or misleading in a material particular and has or will result in harm or injury to a person the court can impose a maximum penalty of 5 years imprisonment or a fine of $AUD680 000 (4000 penalty units) or both. This offence requires fault; -- where the statement provided is false or misleading in a material particular and the use of the goods would be likely to result in harm or injury to a person, the offence is one of strict liability and a penalty of up to $AUD 340 000 (2000 penalty units) can be imposed. This offence has a lower penalty and no custodial sentence to balance the fact that there is no fault element; -- where the statement is false or misleading in a material particular but does not cause damage the court can impose a maximum penalty of 12 months imprisonment or a fine of $AUD170 000 (1000 penalty units) fine or both.

Additionally, the Bill introduces a maximum civil penalty of $AUD850,000 (5000 penalty units) for individuals and $AUD8500,000 (50 000 penalty units) for a body corporate for making a statement that is false or misleading in a material particular in connection with a request under section 9D. This must be proved to the civil standard of the balance of probabilities. INFORMATION REQUESTED BY THE SECRETARY

Section 31 of the Act provides the Secretary with the power to request a wide range of information from persons who are applicants for registration or have registered therapeutic goods. This includes information about the formulation, composition, quality, presentation, safety, efficacy and history of the goods. Currently, criminal liability applies under section 31 to a sponsor of a section 26A good (complementary medicine) who provides false or misleading information in response to a section 31 notice. Section 31AAA contains the civil penalty provision for the same conduct. The Bill expands these liabilities to any person issued with a section 31 notice. Accordingly it is critical to provide up to date and accurate information in all dealings with the Therapeutic Goods Administration (TGA) and the Secretary.

IP Update

For registered goods, the ‘not acceptable’ standard is a higher one and encompasses a range of factors that go beyond the definition of unacceptable.

SECRETARY’S POWERS TO CANCEL A REGISTRATION OR LISTING ADVERTISING

The Bill spells out the responsibility of sponsors to comply with the Therapeutic Goods Advertising Code (the Code). Currently, compliance with the advertising requirements in Part 5.1 of the Act and under the Regulations is a condition of inclusion on the Register and non-compliance can result in removal of the good from the Register. Although Part 5.1 of the Act makes reference to the Code, the Bill clarifies that compliance requires conformity with the Code and amends section 30(2) of the Act to make it clear that non compliance with the Code is a ground for cancelling registrations or listings of medicines. FAILURE TO RESPOND TO A SECTION 31 NOTICE

The Bill gives the Secretary power to cancel a registration or listing if a person fails to comply with a section 31 notice to provide information or documents within 14 days of the end of the notice period. For example, the Secretary may cancel a registration or listing 14 days after the expiration of the 28 day notice period. PRESENTATION

Registered goods are assessed by the TGA for quality, safety and efficacy. All prescription medications

and most over the counter medicines are registered goods. Listed goods are assessed by the TGA for quality and safety but not for efficacy. Most complementary medicines and some over the counter medicines are listed. If the presentation of the registered good is not acceptable, or the presentation of a listed good is unacceptable, the Secretary will have the power to cancel the registration or listing. The way goods are presented for supply includes matters relating to the name, labelling and packaging and any advertising or other informational material associated with the goods. Subsection 3(5) of the Act provides that presentation will be unacceptable if it is capable of being misleading or confusing as to the content or proper use or identification of the goods. This includes: -- if it states or suggests that the goods have ingredients, components or characteristics that they do not have; or -- if the name applied to the goods is the same as the name applied to other therapeutic goods which contain additional or different therapeutically active ingredients; or -- if the label of the goods does not declare the presence of a therapeutically active ingredient; or

-- if the label of the goods does not contain an advisory statement when it is required to do so; or -- if the form of the presentation may lead to unsafe use of the goods. For registered goods, the ‘not acceptable’ standard is a higher one and encompasses a range of factors that go beyond the definition of unacceptable. The explanatory memorandum to the Bill indicates that this may include matters such as the content of consumer medicine information for the goods. EXEMPTING CERTAIN GOODS FROM THE ACT The Act has a broad definition of therapeutic goods being ‘goods that are represented in any way to be, or that are, whether because of the way in which they are presented or for any other reason, likely to be taken to be for therapeutic use.’ Therapeutic use relevantly includes use in or in connection with: a) preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury in persons; or b) influencing, inhibiting or modifying a physiological process in persons.

The Bill introduces section 7AA, which empowers the Minister to deem specific goods excluded for the purposes of the Act and to deem goods, when used, advertised or presented for supply in a certain way specified in the determination excluded from the Act. Currently the Minister is only able to exempt goods from discrete parts of the Act. This new section addresses the concern that the breadth of the definition of ‘therapeutic goods’ captures clothing, jewellery and bedding which make therapeutic claims but for which public health is not an issue, such as ‘power band’ bracelets and mattresses which contain bacteria designed to reduce the effects of dust mites. The view in the explanatory memorandum to the Bill is that any issues concerning these products are better dealt with under consumer protection legislation. In making a determination under section 7AA the Minister must have regard to: a) whether it is likely that the specified goods, if not regulated under this Act, might harm the health of members of the public; b) whether it is appropriate in all the circumstances to apply the national system of controls relating to the quality, safety, efficacy and performance of therapeutic goods established by this Act to regulate the specified goods;

March 2014

c) whether the kinds of risks from the specified goods to which members of the public might be exposed could be more appropriately dealt with under another regulatory regime. These factors should ensure that section 7AA is not used as a means for genuine therapeutic goods to avoid the scope of the Act. CHANGES TO PUBLICATION REQUIREMENTS The Bill requires the Secretary to publish a notice setting out the particulars of any cancellation made under section 30 of the Act of any registered or listed goods. At present, the Secretary must publish information on regulatory decisions in the government Gazette. The Bill gives the Secretary the option to publish this information either in the government Gazette or on the TGA website (www.tga.gov.au). There are some particulars such as emergency exemptions which must still be published in the Gazette.

OTHER CHANGES The Bill also contains amendments which: -- give power to the Secretary to remove products from the Register that are not or are no longer a therapeutic good, as distinct from the Secretary’s current powers to cancel products from the Register; -- clarify the Secretary’s current power to approve product information for medicines accepted for registration; -- modify the definition of kit to include any unit with one therapeutic good or more; and -- support the transition process for the reclassification of hip, knee and shoulder implants.

Ian Pascarl, Partner

IP Update

Practice Update 2

US SOFTWARE PATENTS â&#x20AC;&#x201C; SUPREME COURT WILL DECIDE

The US Supreme Court has agreed to hear a new case on software patents: Alice Corporation Pty. Ltd. v. CLS Bank International. The US Supreme Court will review a divided and inconclusive decision from the Court of Appeals for the Federal Circuit on whether a patent based on software is directed to patent-eligible subject matter under US law. The patent, owned by Alice Corporation, relates to a data processing system for mitigating the risk of foreign exchange (FX) settlement. CLS Bank is alleged to operate systems for doing this, and is attempting to have the patent invalidated. The market is financially enormous: foreign exchange settlements submitted to CLS in October 2013 averaged about US$5 trillion per day. The US Supreme Court has recently dramatically changed the rules for patenting genes (in Association for Molecular Pathology v Myriad Genetics) and for personalised medicine (in Mayo Collaborative Services et al. v Prometheus Laboratories), and may be about to do the same for software. Comments made by the Supreme Court may be relevant in Australia if they are considered by local courts or the Australian Patent Office, although the legal basis for software patents in Australia is very different from the USA.

RANDY PERTIET: HTTP://WWW.FLICKR.COM/PHOTOS/34652102@N04/5393506662/

David Webber, Partner Sam Mickan, Associate

March 2014

Practice Update 3

GLOBAL PATENT PROSECUTION HIGHWAY: A STRATEGY FOR SECURING EARLY PATENT GRANT

An agreement signed by Australia and 12 other countries will provide applicants with an opportunity to request accelerated examination and secure early patent grant in the participating states. EXPANSION OF THE PATENT PROSECUTION HIGHWAY (PPH) PILOT PROGRAM Since 2008, the Australian Patent Office and the United States Patent and Trademark Office have participated in a bilateral pilot program that provides a mechanism for accelerating patent examination. Under the Patent Prosecution Highway (PPH) pilot program, an applicant receiving a ruling from either one of the participating national patent offices that at least one claim is allowable, could request that the other participating office fast track the examination of the corresponding application. The PPH pilot was subsequently expanded to include applications filed under the Patent Cooperation Treaty (PCT), where an applicant could request accelerated examination of a PCT-derived national application on the basis of the international search or examination report, where at least one claim was considered allowable.

FEATURES OF NEW GLOBAL PATENT PROSECUTION HIGHWAY PILOT PROGRAM From 6th January 2014, the existing PPH pilot program was replaced by the Global Patent Prosecution Highway (GPPH) pilot program. The participating countries are: −− Australia −− Canada −− Denmark −− Finland −− Iceland −− Japan −− Republic of Korea −− Norway −− Portugal −− Russia −− Spain −− United Kingdom −− United States of America Under the GPPH pilot program, an applicant receiving a ruling from any one of the participating patent offices that at least one claim is allowable, can request that one or more of the other participating patent offices fast track examination of a corresponding application in another GPPH country. This includes rulings issued in a participating country’s capacity as an international searching and examination authority under the PCT. USE OF GLOBAL PATENT PROSECUTION HIGHWAY PROGRAM TO GAIN RAPID PATENT GRANT OUTSIDE AUSTRALIA For those wishing to take advantage of the GPPH pilot program in GPPH countries other than Australia, consideration should be given to the early filing of a request for expedited examination of the

IP Update

corresponding Australian application, along with an amendment (if necessary) to ensure the Australian application includes at least one claim of the scope desired to be pursued in other GPPH jurisdictions. In requesting expedited examination to initiate the process in Australia it is currently only necessary to provide a general statement justifying the need for early examination. Stating that there are â&#x20AC;&#x153;commercial reasonsâ&#x20AC;? for doing so will usually suffice. Under current practice, a first examination report should issue within 1 to 3 months of the date of the request. If the examination report indicates that at least one claim is allowable, then this can form the basis of a request for accelerated GPPH examination of a corresponding application in any of the other GPPH states. USE OF GLOBAL PATENT PROSECUTION HIGHWAY PROGRAM TO GAIN RAPID PATENT GRANT IN AUSTRALIA For those wishing to take advantage of the GPPH pilot program in Australia based upon prosecution in another GPPH country the following criteria must be met: 1. the Australian application must be associated (such as by being derived from a common PCT application or common priority claim) to the application in another GPPH country that includes an allowable claim or claims;

LASSENNPS - HTTP://WWW.FLICKR.COM/PHOTOS/LASSENNPS/12139248606/

ADVANTAGES OF THE GLOBAL PATENT PROSECUTION HIGHWAY SYSTEM The GPPH pilot program should be considered as part of a global filing strategy, particularly where commercial imperatives exist for securing early patent grant. It also provides applicants with an opportunity to streamline examination and thereby minimize the costs otherwise associated with protracted patent prosecution. An Australian application can form an important part of this global filing strategy by providing an early examination report that will form the basis of accelerated examination under the GPPH. Please contact Mark Roberts or Alex Tzanidis if you would like any further information about the GPPH pilot program.

2. examination of the Australian application must have been requested, but a first examination report must not have been issued; and 3. the claims of the Australian application must be similar, the same or narrower in scope to at least one claim found to be allowable in the other GPPH country.

Mark Roberts, Partner Alex Tzanidis, Senior Associate

March 2014

Practice Update 4

AUSTRALIAN AGVET LAW REFORMS TO COMMENCE ON 1 JULY 2014

LEGISLATIVE AMENDMENTS TO REGISTRATION AND REGULATORY PROCESSES FOR AGRICULTURAL AND VETERINARY CHEMICALS The Agricultural and Veterinary Chemicals Legislation Amendment Act 2013 (Cth) will come into force on 1 July 2014. The legislation will update and amend registration and regulatory processes relating to agricultural and veterinary (“agvet”) chemicals, such as domestic insect sprays and repellents, home garden plant treatments for diseases, pesticides and medicines for animals. In particular, changes will be made to the approval, registration, chemical review and compliance process for agvet chemicals under acts such as the Agricultural and Veterinary Chemicals Code Act 1994. According to the regulatory body for agvet chemical products – the Australian Pesticides and Veterinary Medicines Authority (APVMA) – the new legislation will amend the suite of legislation that relates to the powers and functions of the APVMA in regulating agvet chemicals and is designed to improve the efficiency and effectiveness of current arrangements. Once the changes are implemented, the current and new arrangements will run concurrently for a 12 month transitional period up until 30 June 2015.

DRAFT REGULATORY GUIDELINES WILL ASSIST IN UNDERSTANDING THE NEW AGVET LEGISLATION As part of the process, regulatory guidelines are being prepared by the APVMA to assist in understanding the legislative changes. The new guidelines will replace the existing Manual of Requirements and Guidelines (MORAG) and will set out information regarding preapplication requirements, the application process, information guidelines and standards, monitoring and reporting of agvet chemicals such as pesticides and various veterinary medicines. MORAG will be phased out from 1 July 2014.

PUBLIC CONSULTATION ON THE APVMA REGULATORY GUIDELINES The draft regulatory guidelines were published on a new subsite of the APVMA website on 29 January 2014 and a formal consultation process also began on that date. Written submissions regarding the comprehensiveness, readability, usability and any errors of the draft regulatory guidelines are invited from interested stake holders up until 31 March 2014. After consultation closes, final guidelines will be published and made available at the end of April 2014. The new guidelines will then be published, and a new APVMA website launched, in July 2014. For more information on the Australian agvet law reforms contact Richard Jarvis.

Richard Jarvis, Consultant Miriam Zanker, Senior Associate Jessica Sapountsis, Lawyer

IP Update

ALTERNATIVE HEAT: HTTP://WWW.FLICKR.COM/PHOTOS/ALTERNATIVE_HEAT/6238039198

March 2014

DCC OUT AND ABOUT

ICT AND ELECTRICAL ENGINEERING

TASMANIA

ANZ INNOVYZ START ACCELERATOR PROGRAM

BRAND TASMANIA

Davies Collison Cave is proud to be a partner in the ANZ Innovyz START accelerator program in 2014.

In February DCC combined with Brand Tasmania to present a half day Master Class on Building and Protecting your Brand.

ANZ Innovyz START is a curriculum based, mentor driven, intensive, 13-week business accelerator program.Â The ANZ Innovyz START accelerator program is headquartered in Adelaide, Australia with an extension in Sydney. It accepts applications from both Australian and international companies. ANZ Innovyz START selects ten start up IT companies, to co-locate in the accelerator in Adelaide or Sydney for the entire 13 weeks of the program. With guidance from experienced business leaders as mentors, the teams work full-time learning to grow their companies while in the accelerator. The launch of the ANZ Innovyz START was held in February in Adelaide and DCC looks forward to working with the applicants in the coming months.

This master class looked at streamlining production and delivery processes as well as how to protect your IP. LEGALWISE

Legalwise Seminars held their popular 10 Points in One Day program for the first time in Hobart, Tasmania. Expert speakers delivered legal updates across most practice areas including in the core areas of practice management and business skills, professional skills and practical legal ethics. Michael Wolnizer, Partner from DCC presented during the day on Intellectual Property in Commercial Transactions.

IP Update

ITECHLAW CONFERENCE

LIFE SCIENCES

Davies Collison Cave was proud to sponsor The AsiaPacific ITechLaw Conference held in Melbourne in February.

BIOMELBOURNE NETWORKâ&#x20AC;&#x2122;S DEVICES & DIAGNOSTICS LAB

ITechLaw conferences are held around the world and provide delegates with the opportunity to explore the often complex intersection between cutting edge technology and the related legal framework. Sam Mickan, Associate at Davies Collison Cave, moderated the Intellectual Property session on 28 Feb 2014.

You may have also seen David Webber, partner of Davies Collison Cave, who is on the local ITechLaw planning committee

Fellow partner Nik Ramchand also attended the conference.

Davies Collison Cave supported the BioMelbourne Networkâ&#x20AC;&#x2122;s Devices & Diagnostics Lab that took place on 20 February 2014. The Lab provided a forum to discuss the challenges, issues and opportunities that have arisen with the development of new medical device innovations and digital health solutions. Attendees heard from a variety of exceptional speakers across a wide range of areas that each represent a part of the larger digital healthcare environment. Mark Roberts, Richard Brown, partners of DCC and Madeleine Chan, Lawyer from the Trade Mark team attended on behalf of the firm.

March 2014

DCC NEWS

DCC CLIENT ‘KEECH’ VOTED IN BRW TOP 50 MOST INNOVATIVE COMPANIES Davies Collison Cave congratulates Keech Australia for being voted number 7 in the top 50 ‘Most Innovative Companies’ by the prestigious Business Review Weekly (BRW) for 2013. Keech has been a long standing client of Davies Collison Cave. Keech has been designing and manufacturing steel castings used in mining, excavation, construction, agriculture, rail transport and defence for over 80 years. WORLD TRADE MARK REVIEW 1000 2014 GOLD TIER RANKING The World Trade Mark Review 1000 (WTR1000 2014) has again ranked Davies Collison Cave as a ‘Gold tier firm in Australia’ for trade mark enforcement and litigation, and ranked the firm in the top tier of ‘highly recommended’ for trade mark prosecution and strategy. WTR 1000 described the firm as follows: “Davies Collison Cave boasts some of the finest trade mark prosecution and portfolio development capabilities in the country, and also acquits itself with distinction on the contentious side. It has the highest number of individuals ranked in the WTR1000 of any Australian firm.” DCC is proud to have eight members of the Trade Mark practice acknowledged as world leading Trade Mark professionals. DCC members mentioned below:

Michael Wolnizer Marion Heathcote John Hannebery

Nick Holmes

Adam Sears

Trevor Stevens

Fiona Brittain

Ian Drew

March 2014

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