30 September 2012

Innovation Patents Reach Back in Time for Infringement

Britax Childcare Pty Ltd v Infa-Secure Pty Ltd [No 3] [2012] FCA 1019 (18 September 2012)

Innovation patents – divisional applications – relevant dates for assessment of infringement – claim construction – omnibus claims

Time travelAccording to a recent decision of the Federal Court of Australia, innovation patents may, in some common circumstances, be infringed before they have even been filed!

In a third decision in the ongoing Britax v Infa-Secure saga (see earlier articles Federal Court Conducts Markman-Style Hearing in Hot Tub and Shocking – Judge Compels Experts Actually to Assist the Court!), Justice Middleton has considered the dates from which infringement of divisional innovation patents can be considered.  This is an important issue, because a patentee may be entitled to claim compensation for the commercial activities of an infringer going back to this date.

While it is well-established that the earliest possible date of infringement of a standard patent is the day on which it was published, Justice Middleton has found that an innovation patent may be infringed from its effective filing date.  In the case of an innovation patent which has been divided from a pending standard patent application, the relevant date is the date of filing of the original patent application, even though this may have occurred years earlier than the filing of the divisional innovation patent application itself.

For this early infringement date to apply, it does not appear to be relevant whether the claims of the innovation patent were present, or clearly foreshadowed, in the original patent specification.  According to Justice Middleton’s reasons, any valid innovation patent claims (i.e. novel claims which are adequately supported by the original disclosure, as well as satisfying the low ‘innovative step’ threshold) can potentially be enforced back to the original application date.

The court also considered the interpretation of so-called ‘omnibus claims’, i.e. claims which define an invention by reference to all or part of a specification, or by reference to examples or drawings that have been included in the specification in order to illustrate the invention.  The provisions of the Raising the Bar Act 2012, which will come into effect of 15 April 2013, will largely prohibit the use of such claims, although they will continue to exist legitimately for the lifetime of many existing patents and applications.

RIGHTS TO SUE ON A PATENT

Section 13, subsection (1), of the Patents Act 1990 provides that ‘subject to this Act, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention.’  This provision applies to both standard and innovation patents, although the respective terms are different.  Under section 67, a standard patent has a term of 20 years from the relevant original filing date, while section 68 provides a corresponding term of eight years for an innovation patent.
Standard patents
However, as pointed out by Justice Middleton (at [6]), section 57 of the Act places an important limitation of the extent of the patentee’s ability to sue for infringement:

Subsection 57(1) provides that where a complete specification relating to an application for a standard patent has become open to public inspection, but a patent has not yet been granted, prima facie the applicant has the same rights as they would have had “if a patent for the invention had been granted on the day when the specification became open to public inspection”. Nevertheless, the right to commence infringement proceedings in respect of acts carried out during this time does not arise unless (i) the standard patent is ultimately granted, and (ii) the acts in question would, if done after the grant of the patent, have constituted infringement of a claim of the specification: see s 57(3).

So a pending application can only be found to have been infringed:
  1. after a patent is actually granted;
  2. from the date on which the application and specification were published; and
  3. only to the extent that the claims at publication (which may have been subsequently amended) are also infringed by the acts of which the patentee complains.
This means that in the case of a standard patent, a person cannot infringe claims which do not (yet) form part of a published specification.  This makes some sense, because it seems unfair that someone could infringe rights for which there has been no public notice given.
Innovation patents
However, the situation is different for innovation patents, because the qualification in section 57 does not apply.  This means – and Justice Middleton found (at [12] and [22]) – that an innovation patent may be infringed at any time during its term, i.e. from the effective date of filing to expiry.

Some innovation patents are independently filed.  Such patents claim no earlier effective date than their own filing date, and they are granted (and published) within weeks of filing.  In these cases, it might make little difference whether infringement commences from the date of filing or the date of grant.  Nonetheless, there is a short period during which a person may infringe a patent which is not publicly available to be discovered and inspected.

Where an innovation patent is filed as a divisional of a pending standard patent application, its effective filing date (and the date from which its eight year term commences) is the date of filing of an earlier patent specification (often the parent) which discloses the invention claimed in the innovation patent.  This date could be a number of years earlier than the actual date on which the divisional filing is made, and the claims of the innovation patent could be quite different from any claims included, or foreshadowed, in the standard application.

Nonetheless, as Justice Middleton has confirmed (at [16] and [21]-[22]), the patentee of an innovation patent may sue for infringement of the patent occurring at any time during its term, including any period prior to the actual filing of a divisional innovation patent during which the parent application was pending, and whether or not the parent application was itself published.

However, an innovation patent can only be enforced after it has been examined and certified – which is an entirely optional process.  During examination the claims of the patent might be amended, for example in response to prior art raised by the examiner.  For this reason, Infa-Secure argued that the patentee should not be able to make a claim in respect of any infringement occurring prior to certification.  The court rejected that submission (at [16]).

INNOVATION PATENTS – A MORE EXTENSIVE RIGHT?

In some respects, therefore, the rights conferred by an innovation patent extend beyond those conferred by a standard patent.  In particular, an innovation patent may be infringed before it is published (and, in the case of a divisional application, before it is even filed).  Additionally, a published innovation patent may be infringed by acts that infringe the claims as ultimately certified, even if those acts would not infringe the claims of the innovation patent as eventually published.

The court saw no particular contradiction in this outcome:

The absence of an analogous provision in the Act to s 57 for innovation patents simply reflects the reality of the operation of the innovation patent system. … [T]he innovation patent system was introduced in 2001, when it replaced the previous petty patent system. It was intended that innovation patents would provide a relatively “inexpensive, quick and easy” way to protect inventions of a lower inventive standard than standard patents, or those with a short commercial life …. A major feature of this new system was the grant of such patents without first undergoing time-consuming and costly substantive examination. (At [13])

These submissions [that innovation patents confer greater rights] are not consistent with the express provisions of the Act and Regulations governing patent dates that are the subject of these reasons …. The Act and the Regulations together expressly provide for divisional patents (whether innovation or otherwise) to share the ‘date’ of their parent patent or parent patent application. I do not consider that this necessarily affords the divisional Innovation Patents in this proceeding “greater rights” than those of their parent patent application. Indeed, to some extent it may be said that the opposite is true for these divisional Innovation Patents: the fixed eight-year term of these patents started to run from an earlier date (namely, the date of the parent patent application) than might otherwise be the case for non-divisional innovation patents, and under the Act, there is no provision for obtaining an extension of the term of innovation patents.

OMNIBUS CLAIMS

An ‘omnibus claim’ typically defines a monopoly in terms of what is particularly described within the patent specification, e.g. ‘substantially as described herein with reference to the accompanying drawings.’

The purpose of omnibus claims was well-described by Lord Morton of Henryton of the House of Lords in Raleigh Cycle Co Ltd v H Miller and Co Ltd (1948) 65 RPC 141, at 157, as cited by Justice Middleton at [27]:

I think that the reason why such a claim has been inserted, in the present case and in countless other cases, is as follows. The patentee fears that his earlier claims may be held invalid, because they cover too wide an area or fail sufficiently and clearly to ascertain the scope of the monopoly claimed. He reasons as follows: “If I have made a patentable invention and have described the preferred embodiment of my invention clearly and accurately, and without any insufficiency in the directions given, I must surely be entitled to protection for that preferred embodiment, and that protection may fairly extend to cover anything which is substantially the same as the preferred embodiment.”

Omnibus claims are thus generally understood to be relatively narrow in scope, necessarily falling within the monopoly defined by the broadest claims in the patent or application.

Notwithstanding this common understanding, the correct interpretation of omnibus claims has rarely been considered in detail by the courts, and in this case the parties provided their respective experts with slightly different instructions as to how they should understand these claims.

The patentee, Britax, instructed its expert, Mr Hunter:

to interpret phrases such as “substantially as herein before described and illustrated” as meaning that the monopoly claimed by the Patent is not limited to an apparatus which corresponds in every detail with the apparatus described and shown in the drawings, but covers an apparatus which is in substance the same as the apparatus so described and shown… (At [38])

Infa-Secure, on the other hand, provided its expert, Mr Newman, with slightly more restrictive instructions:

when a claim states ‘substantially as hereinbefore described and illustrated in the accompanying drawings’ or refers to identified figures of the Patent, to interpret the features of the claim as described in the text of the Patent and limited to the specific form of the features described in the drawings. (At [39])

For his part, Justice Middleton felt that there was not, in practice, a great deal of difference between the two instructions, but that Britax’s were slightly preferable.  However, he provided a few observations of his own,  to assist the experts in the next stage of their work (i.e. assessing matters relating to infringement):

For the avoidance of doubt, it does not seem to me that every detail of a drawing (no matter how minute) must be replicated in an allegedly infringing product for infringement to be made out. This would not accord with the usual tests of patent claim infringement. As Infa’s Counsel correctly acknowledged, such an “identikit” approach is inappropriate. But at the same time, a patentee “who chooses to make a claim... substantially as described and illustrated” should not be “better off than one who puts his claim in words” …. The use of the word ‘substantially’ in an omnibus claim will not broaden the claim so as to cover replacement of an essential feature of the described invention with something different, so as to permit a finding of infringement …. Further, care must be taken so that the claim is not simply construed with reference to the alleged infringement …. (At [44], citations in original omitted.)

CONCLUSION

As we reported recently (in IP Australia Gazumps ACIP, and Revives the Petty Patent!), IP Australia already has the innovation patent in its sights.

This decision demonstrates that, in addition to other criticisms, the ability to file a divisional innovation patent from a pending standard patent application effectively turns all pending applications into ‘time bombs’ – bundles of potential enforceable rights, which do not need be expressly identified, and which may meet only a very low threshold of ‘inventiveness’, available to be unleashed at any time with retrospective effect.

In fact, this will come as no surprise to many Australian patent attorneys, although it is useful to have it confirmed by the Federal Court.  However, divisional innovation patents have been used in precisely this manner on a number of occasions.

Additionally, this decision provides a useful summary of the law relating to the interpretation of omnibus claims – just about in time for them to be abolished by the Raising the Bar Act 2012!  Although there will remain many granted patents which contain omnibus claims, issued before the new provisions commence, and which will be enforceable for years to come.

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