‘Shades of Gray’ Moves Up to the Federal Court

Last November we wrote about a dispute between Robert Alexander and the Royal Children’s Hospital (RCH) over ownership of an invention – and corresponding patent application – relating to improvements in a medium used to inoculate and grow viruses (see Shades of Gray as Dispute Over Invention Ownership Goes Viral).

At the relevant times, Dr Alexander was Head of Virology at RCH where his primary role was to maintain the Virology/Tissue Culture and Molecular Diagnostics service, which conducts viral diagnostic work on upwards of 10,000 clinical samples at the hospital each year.  The dispute played out before the Australian Patent Office, where a Hearing Officer found that it was one of Dr Alexander’s duties to improve the viral diagnostic techniques used at the hospital, so as to enable RCH to better diagnose viral diseases.  She also found that the ‘growth medium’ invention was made in the course of those duties, and thus belonged to his employer, RCH.

We wrote at the time that:

The decision is subject to appeal to the Federal Court. While this is an expensive option, if the RCH’s example of over 10,000 clinical samples per year is typical, there is potential for the invention of the ‘051 application to be quite valuable, and so an appeal by Dr Alexander may not be out of the question.

We can now confirm that Dr Alexander has indeed appealed to the Federal Court of Australia.

The appeal was filed in the Melbourne Registry on 1 December 2011, and was initially listed before Justice Jessup on 21 December 2011.  A directions hearing is currently set down for 10 February 2012.  The case is file no. VID1352/2011.

IP Australia and US Courts Grapple with Computer-Implementation

Sheng-Ping Fang [2011] APO 102 (20 December 2011)
Dealertrack, Inc. v. Huber No. 09-1566 (Fed. Cir. 20 January 2012).

Patentable subject matter – manner of manufacture – abstract ideas – whether computer-implementation sufficient to establish patent-eligibility

No matter what jurisdiction you are looking at, there are some things which are just not patentable.  In some cases, such as the countries of the European Patent Convention, the subject matter that is not eligible for patentability is expressly codified.  In others – such as Australia, New Zealand, the US and Canada – there is no definitive legislative list of ineligible subject matter, although over time the courts have identified those things for which patents cannot be granted, regardless of novelty or inventiveness.

In all of the jurisdictions in which patent-eligibility has been left to the courts, there is broad agreement on the unpatentability of certain subject matter that is regarded as the pre-existing legacy belonging to all, which cannot be monopolised by any one entity. 

The US Supreme Court has established three exceptions to the broad principle that all machines, processes, manufactures and compositions of matter are patentable under 35 USC §101 – laws of nature, physical phenomena and abstract ideas. 

In Australia, it is settled law that the ‘manner of manufacture’ test for patent-eligibility excludes laws of nature, mere discoveries, ideas, scientific theories, schemes and plans.  Mathematical formulae and algorithms are also excluded, to the extent that claims are not meaningfully limited to their use as part of a patentable practical application.

It can therefore be seen that, while the precise terms used differ in the two countries, there is a broad similarity between the fields of excluded subject matter in Australia and the US.

However, decision-makers in courts and Patent Offices of both countries continue to grapple with the extent to which so-called ‘business methods’ should be patent-eligible.  In particular, two recent decisions – one from the Australian Patent Office, and another from the US Court of Appeals for the Federal Circuit (CAFC) – illustrate the lack of any clear direction on one particular question:

If a patent application discloses a method or process which, in itself, falls outside the scope of patent-eligible subject matter, can it be rendered patentable by virtue of machine-implementation, i.e. in the form of a programmed computer?

Evergreening by Business Method? Patent Office Says ‘No’!

Celgene Corporation [2012] APO 12 (17 January 2012)

Manner of Manufacture – whether a method of dispensing a drug with a ‘prescription approval’ step is patent-eligible – novelty – whether use of a ‘prescription approval code’ makes method new

We wrote back in June last year about Celgene Corporation’s unsuccessful application for an extension of term of a patent for the drug REVLIMID the active ingredient of which is lenalidomide, a close relative to thalidomide which is well-known as a ‘teratogen’, i.e. it causes horrific birth defects when used during pregnancy.  (See Celgene Denied Term Extension on REVLIMID Patent.)  That application failed because although a new indication for REVLIMID – for treatment of the class of genetic blood disorders disorders known as myelodysplastic syndromes (MDS) – has recently been added to the Australian Register of Therapeutic Goods (ARTG), an extension of term can only be based on the original registration date of a product, and not upon a later date of amendment to the ARTG.

Celgene has since been pursuing certification of an innovation patent directed to unusual subject matter for a pharmaceutical company – a business method.  To be more specific, Celgene’s Australian innovation patent no. 2011100687 relates to a method of dispensing thalidomide to a patient. 

As explained below, Celgene has thus far been unsuccessful.  But its efforts nonetheless raise the question of why a pharmaceutical company should be pursuing a business method patent of this type.  The specification notes that ‘the Australian Therapeutic Goods Administration (TGA) has approved an application by Celgene Pty Limited to market thalidomide for the treatment of erythema nodosum leprosum (ENL) and multiple myeloma in specified circumstances’, and that it is expected that it will be useful in the treatment of other conditions.  ‘However,’ the specification continues, ‘due to the severe teratogenic risk of thalidomide, methods are needed to control the distribution of this drug so as to preclude administration to foetuses.’

We are therefore inclined to speculate that Celgene predicts growth in the prescription of thalidomide, and has come up with a creative ‘evergreening’-type strategy to benefit from this, irrespective of whether there are any patent rights relating to the treatments themselves, by securing a monopoly over a process for prescribing and dispensing the drug which reduces the risk of harm to patients and foetuses.  If the process were to be mandated by the government, Celgene would stand to benefit from every prescription of thalidomide, either by operating the scheme itself, or by collecting patent license fees from a third-party operator.

Australian Attorneys Receive Professional Development Report Card

Clients of Australian patent and trade marks attorneys will no doubt be very pleased to know that we are subject to a regime of continuing professional education (CPE), as a condition of annual registration renewal.

This means that registered attorneys are required to undertake a minimum number of hours of professional development each year.  For those of us registered as both patent and trade marks attorneys the minimum is 15 hours, of which at least five must relate to patents, and at least five to trade marks.  Attorneys registered in only one discipline are required to undertake a minimum of ten hours of CPE activity relating to their practice.

This means that when you engage the services of a registered Australian attorney you can be confident that they are at least minimally up-to-date on developments in their area of practice.  We would hope, however, that most practitioners are exceeding the minimum requirements.

The CPE regime has been in place since 1 July 2008, which makes the patent profession a relative newcomer to formal continuing education requirements.  The system is designed to be generally self-regulating, with a degree of enforcement in the form of annual audits of a randomly-selected sample of attorneys seeking re-registration each year.  After an initial grace period, to allow attorneys to adjust to the new regime, the first audit was conducted in the latter half of 2011, based on a selection of 50 attorneys from a range of backgrounds.

Interwebs, Save Your Anger for Kim Dotcom

For the second week running, I find myself feeling compelled to stray from the core subject matter of this blog to express a personal view outside my area of professional expertise.

It seems likely that anyone who is interested in intellectual property and the internet would be familiar with the events which took place last Thursday just outside Auckland, New Zealand, involving a dramatic raid on ‘Dotcom Mansion’ (pictured), the arrest of Megaupload founder Kim Dotcom (nee Schmitz), and the seizure of various allegedly ill-gotten gains, including guns, millions of dollars in cash, and luxury cars worth around US$5 million.  If not, there is plenty of coverage to help you get up to speed, such as New Zealand Arrests Over Megaupload Shutdown and Kim Dotcom: Megaupload Founder Arrested In New Zealand from the Huffington Post.

Predictably, there has been a huge outcry from opponents of internet censorship, blaming everyone from the Hollywood movie studios, to an overzealous US Department of Justice, the US government, the FBI, the New Zealand authorities, and anyone else with a vested interest in not having their copyright works ripped off and distributed for free throughout the internet.

But if all of this ends badly for freedom on the internet – and it is entirely possible that, one way or another, it will – in my opinion the blame should be laid squarely at the feet of those actually responsible for the current situation, i.e. Kim Dotcom and his fellow principals at Megaupload.

Australian Patent Attorneys Accused of ‘Crippling’ Entrepreneurs

An article appeared this week on the news and information website startupsmart.com.au under the by-line of Michelle Hammond, entitled ‘Patent attorneys under fire over “crippling” fees’.

The article opens with the allegation that:

Australia’s patent attorneys have come under attack for charging too much for patent filing, with claims that some attorneys charge as much as $150,000 to file patents overseas.

Before we turn to the substantive issues raised by the article, we note that this opening raises (at least) the questions of who has launched this ‘attack’, which attorneys are charging ‘as much as $150,000’, and what exactly are these fees covering?

The answer to the first question is pretty clear from the remainder of the article, which shows all the hallmarks of modern media release ‘journalism’.  The source of this particular story is the foreign filing service provider inovia, which is just one of a number of such companies that have emerged in recent times to compete directly with ‘traditional’ patent attorneys in the specific area of filing foreign patent applications, and particularly handling PCT national phase entry, European patent validation and patent translations.

The answers to the second and third questions are far less clear, and the StartupSmart article really serves only to muddy the waters further with claims that are in dire need of some sanity-checking.

In this article, we will look at the differences between the filing services provided by patent attorney firms, and those of companies like inovia.  We will also address some of the other assertions in the StartupSmart article.  And, despite our obvious potential for self-interest in these matters, we will endeavour to do so in a reasonably fair and balanced manner!

‘Grace Periods’ – Consequences of Disclosure Before Filing

As most readers will be aware, one of the cardinal rules of the patent system is that you should not tell anybody about your invention before you have an appropriate patent application filed.  An invention must be novel and involve an inventive step at the date of first filing.  These requirements are tested against the ‘prior art’, which is generally all information made available to the public, by anyone, at any earlier time.  There is no general, internationally-recognised, exception to this rule just because a prior disclosure has been made by an inventor or applicant.

However, there are a number of countries in which the patent law provides for a ‘grace period’.  For the purposes of this discussion, we define this term as follows:

grace period:- a period of time, prior to the filing of a patent application, during which any disclosures, intentional or unintentional, deriving from the inventor or a subsequent owner of the invention, are unconditionally excused from consideration as prior art against the application.

Our requirement that such disclosures be excused without condition (other than as to timing) is important.  We sometimes see discussions of ‘grace periods’ which include references to provisions relating to unauthorised disclosures, or disclosures at recognised ‘international exhibitions’ or before ‘learned societies’.  The laws of many countries – including many notoriously grace-period-free European nations – contain such provisions.  We do not consider that there is much ‘grace’ in provisions that apply only in narrowly restricted circumstances.

UK Court Allows Extradition of Alleged Copyright Criminal

This is one of the rare postings in which I slip a little off-topic (and into the first person) to write about something which is outside my area of legal expertise, but nonetheless of particular personal interest.

You may have been following the news – or, at least, trying to, considering the poor quality of some of the coverage – about 23 year-old UK citizen Richard O’Dwyer, who is studying ‘games software development and interactive media’ at Sheffield Hallam University.  He is also accused – with others – of operating a website, firstly from TVShack.net, and subsequently from TVShack.cc, which aggregated links to third party websites from which copyrighted first-run and other movies and television programs could be downloaded or streamed.  It is not alleged that TVShack actually hosted any pirated content itself, however O’Dwyer appears to have admitted to earning approximately £15,000 per month from advertising on the site.

TVShack.net was one of the sites closed down when US Immigration and Customs officials ‘seized’ the offending domain names in June 2010 (the US Attorney’s media release is still available, in PDF format).  If you attempt to access the site now, you will first be presented with the notice that heads this article, and then be redirected to this guilt-inducing YouTube video explaining the human consequences of piracy.  The US authorities have since been tenaciously pursuing those said to be behind the seized domains.  O’Dwyer has become the most high-profile target in recent days, as a result of an application by the US government for him to be extradited from the UK to face charges of copyright infringement in the United States.  If he is extradited, and ultimately found guilty, he faces a sentence of up to ten years in a US Federal penitentiary, of which he would necessarily serve at least 85% under US ‘non-parole’ laws.

And things are not looking good for O’Dwyer, with District Judge Purdy in the Westminster Magistrates’ Court, issuing a ruling on 13 January 2012 finding no barrier to grant of the US Request for extradition.  (Decision: The Government of the United States of America v Richard O’Dwyer – PDF).

Canadian Patent Office Concedes, Allows Amazon ‘1-Click’ Claims

After a mere 13 years, it appears that Amazon.com, Inc is finally to receive a Canadian patent on its famous ‘1-click’ ordering system.  Although a formal notification of patent grant has yet to issue, various observers have noted status changes in Canadian application no. 2246933 in late December, indicating that the Canadian Intellectual Property Office (CIPO) has conceded defeat in its efforts to declare the Amazon claims ineligible for patenting (see, e.g., this report from Canadian intellectual property lawyer Barry Sookman).

In particular, the records show that on 22 December 2011 the status of the rejected Amazon application as ‘dead’ was reversed, and on 28 December 2011 a ‘final’ fee payment was made, which is only required once the application is found allowable.

Don’t Let the Bed Bugs Bite (or ‘A Fool for a Client’)

Abrahams v Biggs [2011] FCA 1475 (23 December 2011)

Confidential Information – disclosure of information regarding potential improvements to invention – whether use of information by recipient is a breach of confidence – whether ‘information’ or merely ‘idea’ – whether identified with sufficient specificity – whether information had necessary quality of confidence – whether circumstances of imparting information imported obligation of confidence

If there were ever a case to prove the hoary old chestnut that the person who acts as their own lawyer has a fool for a client, then this is it.  Especially when they do so in a higher court, such as the Federal Court of Australia.

But we will return to the issue of self-representation towards the end of the article.  Our interest in the case of Abrahams v Biggs, decided by Justice Jessup just before the holidays, lies not so much in the conduct of the parties before the Federal Court, but rather in the aspect of the dispute relating to an alleged breach of confidence.  The case involves invention (and, peripherally, patent applications), and serves as a useful reminder that inventors need to be careful of what they disclose, to whom, and the circumstances in which they make disclosures, especially when potentially valuable ideas are involved.

And to add to the interest, the applicant in the proceedings, Tony Abrahams, was a winner in the episode of the ABC television program The New Inventors which aired on 20 May 2009.

‘Tis the Season of Renewal, And ‘Top 10’ Lists!

Happy 2012 to all Patentology Readers!

If this is your first time back since before the holidays, you will be noticing a few changes as you read this.  In response to reader demands (you know who you are) we have refreshed the blog to give it a slightly tidier and more modern look.  No doubt there is more that could be done, but for now we are subject to the limitations of time, as well as our graphic design and coding skills!

STAYING IN TOUCH

There have been a few changes behind the scenes as well.  The most visible outcome of these is a new email address – we can now be reached at mail@patentology.com.au.  The old address still works, and all email ends up at the same place, however we encourage use of the new address, in case we ever do move to a new underlying email provider.

The email button in the sidebar uses the new address, and you are also welcome to submit comments, questions or information anonymously via the ‘Ask Patentology’ link, which is always available in the menu bar above.

You can also follow us on Twitter, where we are becoming increasingly active in tweeting information and engaging in discussions, in addition to posting links to new articles.  And you can subscribe to our RSS feed.

Finally, we remind all readers that each week we send out an email newsletter reviewing the articles posted in the previous week.  We have created a page with more information about this newsletter, including an example so you can see what you would be signing up for!  Currently there are 230 subscribers – why not join them (if you have not done so already)?  Newsletters will recommence for the year on 9 January 2012.

Access to all of these services is always available in the ‘stay in touch’ box at the top of the sidebar.

WHAT YOU READ IN 2011

Top 10 (or 5, or 20, or whatever) lists are always popular at this time of year.  So, clichéd though it may be, the following is a list of the most-read Patentology articles of 2011.  These may bring back memories of the year past, but just remember that nostalgia is not what it used to be!