17 April 2016

CRISPR Patent Dispute – Is It Just Too Big to Settle?

Big moneyThe proceedings at the US Patent and Trademark Office (USPTO) Patent Trial and Appeal Board (PTAB), to determine who is entitled to foundational patent rights relating to CRISPR/Cas9 ‘gene editing’ technology, have been steadily progressing since my last update back in January.  As a reminder, the parties vying for ownership of these rights are a group led by Berkeley Professor of Chemistry Jennifer Doudna and her collaborator Emmanuelle Charpentier, and a group led by Feng Zhang at the Broad Institute, Inc and MIT.  Although a little reductive, it is convenient for me to refer to these two groups as ‘team Doudna’ and ‘team Zhang’ respectively. 

In a very recent development, on 11 April 2016, the ‘senior party’ in the proceedings (team Doudna) filed a notice stating that ‘in accordance with Standing Order ¶ 126, Senior Party hereby notifies the Board that the parties have discussed settlement, and have made a good faith effort to settle the interference, but no agreement has been reached at this time.’  It was necessary for the notice to be filed on or before this date, because the PTAB encourages parties to settle priority disputes between themselves where possible, and the referenced paragraph of the Standing Order in fact makes it compulsory for settlement discussions to be initiated by the ‘last named party’ (which, again, happens to be team Doudna in this case) within three months of an interference being declared.  The CRISPR interference was declared on 11 January 2016.

Interestingly, however, when the PTAB judges raised the matter of settlement discussions during a telephone conference on 10 March 2016, counsel for team Zhang stated that ‘we have not had that opportunity one way or the other to discuss settlement’ while counsel for team Doudna confirmed his understanding that ‘there has not been any formal discussions between the parties’.

So up until two months after the interference was officially declared there had been no discussions about a possible settlement.  Then, during the final month of the period for commencing mandatory discussions, suddenly ‘a good faith effort’ was made to settle the dispute, but no agreement was reached.  Pardon my cynicism, but if you believe that the timing of these events reflects a genuine effort at settlement, then perhaps I can interest you in the purchase of a nice bridge!  On the contrary, it seems pretty clear that at least team Doudna (whose obligation it was to initiate mandatory settlement discussions, and file the notice) has no desire to settle the interference.  In fact, it is quite likely that neither party has any real interest in settlement.

Although I have previously expressed the opinion that a settlement agreement may provide a better outcome for all concerned, I no longer believe that this is a viable option.  I now think it likely that the technology is just too valuable for either party to give ground, particularly at this early stage.  In all likelihood, these interference proceedings are going to run their full course.  Yes, they will be incredibly expensive, but the cost is just a drop in the ocean compared to what is at stake in the main game of commercialising CRISPR/Cas9 technology.

10 April 2016

Appeal ‘Incompetent’ – Is This A Problem With Patent Opposition in Australia?

Question mark sitterThe Australian Patents Act 1990 provides for a pre-grant opposition process.  Specifically, once an application has passed examination, and is accepted, there is a three-month period during which anybody may file an objection, i.e. ‘opposition’, to the grant of a patent.  This allows third parties, such as competitors of the patent applicant, to raise prior art and/or new arguments or grounds for rejection, that may not have been readily available to the examiner.  Opposition provides an additional mechanism for preventing invalid patents from being granted.

Opposition proceedings can be quite involved, although they are generally much simpler and cheaper than court action.  The objecting party, i.e. the ‘opponent’, is required to file a Statement of Grounds and Particulars, outlining the basis for the opposition, so that the applicant can understand, at an early stage, the case it will be required to answer.  Subsequently the opponent must file its evidence in support of the opposition, which may include prior art documents or other information, and/or written testimony of expert witnesses that is relevant to the validity of the accepted patent claims.  The applicant then has an opportunity to file its own answering evidence, and finally the opponent may file further evidence, strictly limited to addressing new issues raised in the applicant’s evidence.

The opposition then typically proceeds to a hearing before an officer at the Australian Patent Office, following which a written decision is issued.  There are a few possible outcomes from an opposition.  At the two extremes, the opposition may be dismissed (i.e. the opponent’s case is found to fail completely) or may be upheld (i.e. all of the opposed claims may be found irredeemably invalid).  However, many cases fall somewhere between these two extremes, with an opposition being only partly successful, and/or the Hearing Officer finding that successful grounds of opposition might nonetheless be overcome by some form of amendment to the patent specification and claims.

An example of this last type of outcome is the subject of a recent decision of the Federal Court of Australia in Merck Sharpe & Dohme (Australia) Pty Ltd v Genentech Inc [2016] FCA 324, which highlights a potential pitfall of the pre-grant opposition process in Australia.  In particular, there are cases in which amendments may be legitimately made that result in claims that are nonetheless potentially invalid, but which cannot be effectively challenged prior to the patent being granted.

04 April 2016

How to Patent Your Invention in Australia and the US

Australia-USAFor many of the Australian clients I work with, the most important markets are Australia (i.e. the ‘home’ market) and the US (because of its size and relative accessibility).  This means that when it comes to protecting their innovative technologies, obtaining patents in these two countries is at the top of these clients’ lists of priorities.  I am therefore often asked how best to achieve this objective, how much it will cost, and how long it will take.

The typical ‘lawyer’ answer is, of course, ‘it depends’!  Do you want patents only in Australia and the US, or are there other countries of interest?  When and why do you require these patents?  Do you want to obtain patents as quickly as possible, or are there strategic advantages in drawing out the pendency (and finalisation of the scope of rights) for as long as possible?  What is your budget for the patenting program, both in the short term and over the coming years?

Assuming that you are able to answer these questions, it should be possible to develop a strategy that meets all of your requirements.  In this article I will go into further detail of one fairly typical and effective approach, along with some of the relevant considerations and potential variations.

27 March 2016

Upaid v Telstra – Here’s How We Deal With NPEs in Australia!

WoundedUpaid Systems Ltd is a ‘non-practising entity’ (NPE) – sometimes referred to as a ‘patent troll’ – which sued Australia’s largest telecommunications carrier, Telstra Corporation Ltd, back in August 2013 for the alleged infringement of two Australian patents relating to making online purchases of goods and/or services from mobile devices.  More specifically, Upaid alleges that various subscription operations performed in relation to Telstra’s MOG online music streaming service (formerly Bigpond Music) infringe its patents when conducted using a mobile device.

Some two-and-a-half years later, Justice Yates in the Federal Court of Australia has issued an interlocutory, i.e. provisional, decision comprising more than 500 paragraphs (Upaid Systems Ltd v Telstra Corporation Limited (No 3) [2016] FCA 227) in which Upaid’s various allegations of infringement are largely described in unflattering terms along a spectrum from ‘untenable’ to ‘confusing and embarrassing’!

Furthermore, even where the court has determined that Upaid may have some prospect of overcoming Telstra’s objections, it has found that Upaid’s corresponding case, even after all this time, still does not correctly or adequately identify details of Telstra’s alleged infringements.

It is not that Upaid has not been given ample opportunity to develop its case.  It has had multiple opportunities to address deficiencies identified by Telstra.  It has been granted access to internal documentation of how Telstra’s relevant operational and billing systems work.  It has even been given the opportunity to question Telstra employees on these factual matters.  Yet still the NPE is struggling even to outline an arguable case for infringement.

While the court has not yet completely killed-off Upaid’s case, in my view it certainly seems likely to have been mortally wounded.  While there remains a possibility of appeal (the time for either party to apply for leave has been extended until 12 April 2016), the recent judgment leaves Upaid with very little scope to make out a case with any reasonable prospects of success.  The court has all but struck out Upaid’s entire case in relation to one of the two Upaid patents at issue, and has offered only a limited opportunity for Upaid to try to rectify the deficiencies in its case in relation to the other.

20 March 2016

New Patent Office Guidelines for Computer-Implemented Inventions: Would the CSIRO Wi-Fi Invention be Patentable?

PC BoardOn 1 February 2016, IP Australia updated the Australian Patent Office Manual of Practice and Procedure to clarify (their word, not mine) ‘examination practice regarding patentable subject matter in view of the Full Federal Court decision Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177.’

Had the Full Court been clearer, perhaps IP Australia would have been in a better position to establish some form of coherent and objective approach to examination.  As it is, however, the ‘guidance’, which is principally to be found in Section 2.9.2.7 of the Manual, is little more than a laundry list of ‘principles’ to be considered when examining computer-implemented subject matter.  I do not think that this is very helpful, either for applicants and their representatives, or for the patent examiners who are supposed to follow the published practice.

The guidelines open with:

Under Australian law, there are no specific exclusions for software or methods that are implemented as computer software or a related product. However, they are only patentable if what is claimed “as a matter of substance” meets the requirements for a manner of manufacture and in particular is not a mere scheme, abstract idea or mere information.

This is an accurate statement of the approach taken by the courts in both the Research Affiliates (Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150) and RPL Central cases.  In neither case, however, did the court provide clear guidance as to how to determine, in any given case, the ‘substance’ of the invention.  This is extremely problematic, and can result in essentially arbitrary and subjective decision-making.  As the first point in the laundry list of principles correctly states:

Each case must be considered on its merits.

The next point goes on to explain – again, quite reasonably – that an ineligible invention cannot be made eligible for a patent merely because some clever patent attorney might have dressed up the claims to look superficially like the invention is not a mere scheme, or some other class of excluded subject matter:

In considering whether the substance of the claimed invention is a scheme, abstract idea or mere information, it is necessary to go beyond the form of words used. The alleged invention is to be understood in the context of the specification as a whole and the relevant common general knowledge.  For example, the substance of an alleged invention may be a scheme even if the claims literally define a physical product, e.g. a system or computer when programmed to carry out a scheme.

From here, however, the guidance becomes decidedly more difficult to apply consistently and objectively.

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