28 February 2012

Major Australian Patent Reform Passes in Senate

Image credit: Opensource.com on FlikrDuring the evening of Monday, 28 February 2012 the Australian Senate debated, and passed without amendment, the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011.

The passage of this Bill represents the most significant single set of reforms to Australian IP legislation since the passage of new Patents, Trade Marks, and Plant Breeder's Rights acts during the first half of the 1990's.

The Bill was introduced into the Senate in June 2011 (see Australian Patent Reform – Wrap-Up).

REFORMS

The amending Bill includes six 'Schedules', each of which addresses a different aspect of IP law reform.

26 February 2012

The Fraught Issue of FRAND III: Antitrust and the Future of FRAND

Trust No One... In Part I of this series, we introduced a few background concepts, namely: FRAND licensing; royalty stacking; and patent pooling. In Part II we focussed on the recent political manoeuvrings of various interested parties, in particular Google, Apple and Microsoft. In this final part, we look at the tension between patents, FRAND licensing agreements and competition law, and what this might mean for the future of FRAND and the current disputes.

On 31 January 2012, the European Commission (EC) announced that it has opened a formal antitrust investigation into whether Samsung’s use of its standards-essential patents constitutes illegal anticompetitive behaviour.  It had been conducting a ‘preliminary investigation’ for some months, as part of which the EC had requested that both Samsung and Apple provide information regarding ‘the enforcement of “standards-essential” patents in the mobile telephony sector’.  Samsung’s response at the time was that it had ‘at all times remained committed to fair, reasonable and non-discriminatory (FRAND) licensing terms’ for its wireless standards-related patents,” and was cooperating fully with the EC.

Since then, both Apple and Microsoft have filed official complaints about similar behaviour by Motorola Mobility (with Microsoft’s complaint also naming Google).

The main competition concern appears to be over holders of standards-essential patents seeking injunctions based on those patents, which they have pledged to make available on FRAND terms.  As discussed in our previous article in this series, we cannot see why a patentee should not be entitled to an injunction in appropriate circumstances, such as when another party has refused to take a license on identical terms to other licensees.  However, Europe’s competition regulator, and companies that do not have large portfolios of standards-essential patents, may well see things differently.

In this final article in our series on FRAND we look at the antitrust complaints, the effect these may have on the balance of power in the ongoing disputes, and what this may mean for future developments.

22 February 2012

As Myriad Gene Trial Starts, Are Cancer Advocates Being Misled?

Judging DNAOn Monday 20 February 2012, ‘landmark’ legal action over the patenting of human genetic material got underway before Justice Nicholas in the Federal Court in Sydney.  Hearings are expected to last at least a week, which is quite remarkable for a case which rests entirely upon a single provision of the Australian patent law.  Much of the time will be taken up with scientific testimony from experts called by both sides of the dispute.

We have written before about this case, which will determine whether isolated genetic material is patentable subject matter (i.e. a ‘manner of manufacture’) under Australian law.  (See Myriad Gene Patent Challenged in Australia, More on Australian Gene Patent Challenge, Review: Four Corners – "Body Corporate").

The court application challenging various claim in a patent held by Myriad Genetics, Inc and two co-developers, which is exclusively licensed in Australia to Genetic Technologies Limited, has been brought on a pro bono basis by Maurice Blackburn lawyers on behalf of patient advocacy group Cancer Voices Australia, and breast cancer survivor Yvonne D'Arcy. 

While Maurice Blackburn is better known for its work on compensation claims, it is supported in the patent action by experiences IP barrister David Catterns QC and Professor Peter Cashman of Sydney University.  We understand that Dr Luigi Palombi, who was the principal author of the Patent Amendment (Human Genes and Biological Materials) Bill 2010, which sought to outlaw the patenting of human genes, is also involved.

The patent – which is Australian patent no. 686004 – includes claims directed to isolated genes known as BRCA1, which have been found to exhibit certain mutations in women having an enhanced risk of developing breast and ovarian cancer.  The patent also includes claims directed to a method for diagnosing a predisposition to these cancers based upon testing the BRCA1 gene for the identified mutations.

Our understanding is that only the claims directed to the isolated genes are being challenged.  However, this does not seem entirely consistent with some statements reportedly made this week by Cancer Voices Australia and Ms D’Arcy.  We are therefore caused to wonder whether these advocates have a sound appreciation of exactly what is at stake in the case.

19 February 2012

Attacking Australian Patents – Re-examination & Revocation

Patent Revoked! As many readers will be aware, Australia has a pre-grant opposition procedure which can be used to challenge a decision of the Australian Patent Office to issue a patent.  Opposition proceedings are conducted before the Patent Office, and are initiated by the opponent filing a Notice of Opposition.

There is, however, only a limited time period within which to oppose an application once it has passed examination.  Specifically, details of the accepted application are published in the Australian Official Journal of Patents, and the official publication date (which is also listed in the AusPat database record for the application) commences a three-month opposition period.

Once the opposition period has expired, it is generally no longer possible to oppose the application.  In exceptional circumstances, an extension of time to lodge a Notice of Opposition may be available, however once the patent has actually issued there is no longer any possibility of opposing, because the grant of a patent is not reversible.

So what can be done about granted patents which are of doubtful validity, and which may be of concern to another party operating within the Australian market?  There are two options available in this situation:
  1. requesting re-examination by the Patent Office; and/or
  2. commencing revocation proceedings in the Federal Court of Australia.
The procedures, pros and cons of each are discussed in this article.

16 February 2012

Bass at the End of the Line, as High Court Denies Stunning Appeal

Richard Bass Pty Ltd & Anor v Seafood Innovations Pty Ltd [2012] HCATrans 24 (10 February 2012)

HookLineSinkerIn a special leave hearing last Friday, before Chief Justice French and Justice Bell in the High Court of Australia, lawyers for Richard Bass Pty Ltd sought unsuccessfully to persuade the court to hear an appeal from a decision of the Full Federal Court handed down last July.

BACKGROUND

Regular readers of this blog may recall the previous episodes in this saga, which we first reported following the first instance decision of Justice Spender in Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2010] FCA 723 (see Innovation Patents Flop Like Stunned Mullet).

Seafood Innovations Pty Ltd is the owner of two innovation patents, nos. 2006100980 and 2008100126, which have the same descriptions but different claims, relating to to a fish stunning apparatus including a fish stunning device, a fish guide and/or a fish delivery table.

Seafood Innovations alleged that Bass infringed both patents, and that both were valid.  Bass accepted that the earlier innovation patent was valid, but argued that it was not infringed, and accepted that the second patent would be infringed if valid, but argued that it was not.

Justice Spender found in favour of Bass, agreeing that the earlier patent was not infringed, because the Bass stunning device operated according to a different principle from the claimed Seafood Innovations invention, and further that the later patent was invalid because the claims did not ‘define the invention’.

On appeal before the Full Federal Court in Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2011] FCAFC 83, the court reversed Justice Spender (see Fishy Business — Bass Baked by ‘Stunning’ Appeal).  The appeals court found that the primary judge had adopted an incorrect approach to assessing infringement, by comparing the principles of operation of the two devices, rather than focussing on the elements of the claims, and whether or not these were present (with or without additional elements) in the accused device.  It also found the claims of the second innovation patent to be valid, that the primary judge had incorrectly interpreted the claims in light of those in the first patent, and that a claim need not include ‘instructions’ for use of the invention as the judge had seemingly required.

14 February 2012

The Fraught Issue of FRAND II: the Politics of FRAND

your-way-my-wayIn Part I of this series, we introduced a few background concepts, namely: FRAND licensing; royalty stacking; and patent pooling. In this article we will focus more closely on the recent political manoeuvrings of various interested parties.  Part III looks at antitrust issues and how the current disputes over standards-essential patents might be resolved. 


In particular, recent actions by Apple, Microsoft, Google and the European Commission are of interest:
  1. the reported ‘leaking’ of a letter from Apple to the European Telecommunications Standards Institute (ETSI), dated 11 November 2011, complaining about ‘a lack of consistent adherence to FRAND principles’;
  2. Microsoft issuing a statement promising to make ‘essential patents’ available to competitors at fair and reasonable licensing rates, and promising not to seek injunctions or exclusion orders against unlicensed companies making products that infringe these patents;
  3. reports that Google was informing standards setting organizations that Motorola Mobility's standards-essential patents will continue to be available on FRAND terms after its acquisition of the company, followed closely by a ‘leak’ of Google’s actual letter to the IEEE standards body; and
  4. the decision of the European Commission (EC) to open a formal antitrust investigation into whether Samsung’s use of its standards-essential patents constitutes illegal anticompetitive behaviour.
Notably, all of the companies identified above – not to mention the EC – are large, powerful and well-heeled.  They do not need to make promises or issue complaints, or launch investigations, in order to resolve their differences.  If they wished to do so, they could settle everything amongst themselves behind closed doors. 

Failing this, all of the companies involved are perfectly capable of funding the litigation necessary to have the courts decide their disputes for them.  And we should not forget that this is the role of the court in civil litigation – to reach decisions, based on the law, about disputed matters coming before it, and to make orders as to how the parties are to settle their differences.  In short, parties go to court to get an adjudication because they could not – or would not – sort their issues out for themselves.

12 February 2012

The Fraught Issue of FRAND I: A FRAND Primer

FraughtThis is the first of a three part series of articles.  Part II looks at recent political manoeuvrings of various interested parties, in particular Google, Apple and Microsoft.  Part III covers antitrust issues and how the current disputes over standards-essential patents might be resolved.

Readers who have been following the various mobile device patent disputes over the last few weeks will almost certainly have encountered the term FRAND (‘Fair, Reasonable and Non-Discriminatory’) in relation to patent licensing, and the rights of patent-holders – such as Samsung and Motorola – to sue competitors – such as Apple – for injunctions barring sales of competing products.

However, those not involved in patent licensing might never have heard of FRAND until recently.  A few time-limited Google searches for the term ‘FRAND licensing’ reveals 345,000 results for the past year, with 160,000 for the past month.  Going back, however, there are 104,000 results for the previous 12 months, and only 74,000 for the 12 months prior to that.  Additionally, while the older results are largely legal texts, academic commentary and policy documents, recent results come primarily from the media, including traditional mainstream outlets, as well as online sources such as industry, trade and technology news sites and blogs.

Thanks to some highly-publicised actions by some high-profile entities, FRAND is now pretty much mainstream, at least within the technology media.

The tenor of much recent online commentary is to the effect that the use of FRAND, or ‘standards essential’, patents as weapons in the patent ‘wars’ is at least unethical, probably unconscionable, and possibly illegal.

But before you pick sides in the debate over FRAND, we think there are a few matters you need to mull over, which are not getting the airing they deserve.  And the first, and most important, of these is that most of the current fuss over FRAND is political, not legal, and its media profile is largely the result of carefully-executed PR work by the main players, including Apple, Google, Microsoft, and even the European Commission.

09 February 2012

Apple’s Strategic Plans for Australian Litigation

Weapons stockpileLast Friday, 3 February 2012, Apple and Samsung returned to Justice Annabelle Bennett’s Federal Courtroom in Sydney to resume hostilities for the new year.

While the main purpose of the most recent hearing was to set a timetable for a full trial on both parties various claims against the other, Apple has taken the opportunity to add new allegations of infringement to its case against Samsung, bringing the total number of patents asserted by the company in the Australian litigation to 22.

Computerworld’s Chloe Herrick has reported that Samsung’s legal team insisted at a second court appearance on Wednesday, 8 February 2012, that they would require most of this year to prepare their case, pointing out that there has probably never been a larger patent infringement case in Australia, and that at least 10 of the patents now asserted by Apple have not been raised by the company in any other country. 

Justice Bennett has set down a further date for timetabling of Apple’s case against Samsung on 9 March 2012.

Meanwhile, it appears that a schedule for Samsung’s countersuit against Apple – a case involving the assertion of patents essential to the implementation of 3G mobile communications standards – is closer to finalisation, with an initial part of the trial likely to be held in July, and the remainder of the case to be heard in September.

APPLE’S AUSTRALIAN ASSAULT

As Samsung’s lawyers have argued, the scale of Apple’s patent infringement claims is unprecedented in Australia.  A case involving the alleged infringement, and challenges to the validity, of 22 patents is a massive exercise for both parties, and for the court.

With the benefit of hindsight, however, it is clear that Apple has been building up its Australian patent arsenal for a number of years.  It might therefore have been possible to anticipate that Apple would pick this country as one of its chosen venues for an assault on Android and – as it turns out – Samsung, should anyone have been looking for the signs.

05 February 2012

Apple vs Android – IP Supremacy and the Mobile Market

IAM Cover - Issue 52, March/April 2012The following is a heavily-edited extract from an article I wrote for IAM Magazine.  The original, entitled ‘Apple vs Android – The Struggle for IP Supremacy in the Mobile Market’ is the cover story of the current issue (no. 52, March/April 2012).

The full version is around three times as long, covering many aspects of the story – such as the history between Apple and Microsoft, and between Apple and Samsung – in much greater detail.  It also includes images and further discussion of patent themescape maps similar to those presented in Patentology’s most popular ever article, How Apple Punches Above Its Weight in Smartphone Disputes.

IAM Magazine is a subscription product, however a free trial is available upon registration.  There is also much on the website that can be accessed permanently once you have registered.  It is a great resource, and highly recommended!
 
Steve Jobs had already become a multi-millionaire by the age of 25, when Apple Computer, Inc (as it then was) went public in December 1980 on the back of having effectively launched the personal computer revolution with the Apple II. In January 1983, Apple launched the Lisa – featuring a graphical user interface (GUI) based on a ‘desktop’ metaphor – and though this machine would have limited commercial success, due to its high price-tag, Jobs was already leading the team at Apple which was working on something called the ‘Macintosh project’. Of course, the resulting product would go on, once again, to revolutionise the way humans interacted with computers.

Jobs was a child of the cold war, who grew up in the sixties and seventies and was strongly influenced by Zen Buddhism (he went on a spiritual journey to India in 1974). But he had, by all accounts, a complex personality, and he would probably have seen no irony or contradiction in his angry pronouncement to his biographer, Walter Isaacson, in 2010 that he was willing to ‘go thermonuclear war’ on Google’s Android operating system, and ‘to spend every penny of Apple’s $40 billion in the bank’, if necessary.

Opening Moves

Apple’s first-strike against Android was a complaint, filed in March 2010 in the US District Court for the District of Delaware and the US International Trade Commission (ITC), alleging infringement of 20 Apple patents – relating to the iPhone’s user interface, underlying architecture and hardware – by Taiwanese smart phone manufacturer HTC Corporation.

Since then, the face-off between Apple and its best-performing Android-based competitors has escalated. By December 2010 a further dispute with Motorola Mobility, Inc had coalesced into litigation over infringement and validity of 24 Apple patents, and 18 Motorola patents, across the ITC and the US District Courts of Delaware, the Western District of Wisconsin and the Southern District of Florida.

Microsoft Once Again Heads Australian Patent Recipient List

Australian Patents Granted, 1992-2011

The chart to the left shows the total numbers of patents granted in Australia on an annual basis between 1992 and 2011. While there have always been fluctuations over time, the number of patents granted in the past two years has reached unprecedentedly high levels.
As we did around this time last year, we have once again taken advantage of our helpful colleagues in the Information Services Department at Watermark Intellectual Asset Management to obtain statistics on patents granted in Australia during the 2011 calendar year.  And again, it is interesting to compare the results with the corresponding data for US patents issued during the year, as compiled by patent research company IFI CLAIMS Patent Services.

First and second places in Australia once again went to Microsoft and LG Electronics, although the total number of patents granted to both companies fell by nearly 40%.  Pharmaceuticals and healthcare company Novartis gained two spots to come in at number three, only one patent behind LG!

However, both Microsoft and LG bucked the overall trend in Australia, with the total number of patents granted moving to 19471, up from 15877 (+22.6%) in 2010.  This makes 2011 the fifth consecutive year of growth in patent grants.  The increase over 2010 is the largest year-on-year gain since 1998.  By contrast, the US Patent and Trademark Office (USPTO) issued only 2% more patents in 2011 than in 2010.

01 February 2012

Watermark Intellectual Asset Management Gets Social

@WatermarkIAMRegular readers will know that I do not generally use the Patentology blog for direct promotion of commercial interests.  There are details of where I can be found in my professional capacity on the ‘about’ page, and a relatively unobtrusive logo/link at the top of the sidebar, which recognises the considerable support and license I have been given by my employers in developing this blog.  Whatever goodwill I have managed to build up, some of it unquestionably belongs to them.

But I am a bit excited today about Watermark’s latest foray into social media, with the activation of an account on Twitter, @WatermarkIAM.  I think the profile page looks great, making good use of some of the terrific graphics created for Watermark when the firm freshened up its image and approach in 2010.  People following Watermark on Twitter will be able to keep up not only with what is happening with the firm, but also intellectual property and intellectual asset management news and opinions from Australia and around the world which catch Watermark’s attention as being worthy of sharing.