Attorneys Slam Australian Pharmaceutical Patents Review

In a submission to the Governments Pharmaceutical Patents Review [PDF], the peak body representing Australian registered patent attorneys, the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) has accused the Terms of Reference for the review, and the composition of the review panel, of being biased towards the interests of generic drug manufacturers.  IPTA has also criticised the timing of the review and the short period provided for public submissions, and alleged that the overall conduct of the review sends a ‘negative message to the research-based pharmaceutical industry’.

IPTA’s complaints have been fully supported by a submission [PDF] made on behalf of the Australian Federation of Intellectual Property Attorneys (FICPI Australia).

I have written about this latest review of the patent system on two previous occasions – firstly when it was initially announced, and then again when the ‘Background and Suggested Issues Paper’ was released.  I expressed similar concerns to those of IPTA regarding the limited two-month period for public submissions, particularly considering that this spanned Christmas and the New Year, when many Australians take annual holidays and some companies – and all Australian universities – have official ‘close-down’ periods.

I was also concerned about the impact of yet another review, when it seems that the Australian patent system has been under incessant review and reform for a number of years, and particularly considering that the broad Terms of Reference for the Pharmaceutical Patents Review overlap with other recent and ongoing enquiries relating to patentable subject matter, the use of innovation patents, gene patenting, and compulsory licensing.  One might form the impression that somebody is determined to keep reviewing the system from different angles until they eventually get the answers they want, whatever those might be!

4 Tips for the Coming Australian Patent Law Reforms

Regular readers of this blog will be aware that it was almost a year ago now that the Intellectual Property Amendment (Raising the Bar) Act 2012 was signed into law.  All Patentology articles relating to the patent law reforms in the Act are marked with the tag ‘Raising the bar’.

The majority of changes in the law – which will generally raise standards so that patents will be harder to obtain and defend than is currently the case – come into effect on Monday, 15 April 2013.  As a result, Friday, 12 April 2013 will be the final day on which to act if you have an application which you wish to be examined and granted under the existing law.

Here, therefore, are four things you may wish to consider in the final weeks leading up to the big changes.

Myriad Revisited – Morality and the Patent Law

Last week’s decision by Justice Nicholas, in the Federal Court of Australia, regarding a patent covering the BRCA1 ‘breast cancer gene’, raises important questions about our patent laws, but has been much misunderstood, and misreported in the media.

Even sources which one might expect to provide a more informed and balanced view of the case, such as this article at The Conversation, have contributed to the general level of confusion and misinformation.  For example, the article quotes Cancer Council CEO, Professor Ian Olver, stating that ‘[d]iscovering and isolating genetic materials is not inventive, yet the current law gives licence to biotechnology companies to claim ownership of naturally occurring substances.’  However, the court was not asked to address the question of whether the processes of discovery and isolation were inventive.

Professor Dianne Nicol of the University of Tasmania is quoted as saying that Justice Nicholas ‘has given a broad reading of the “invention” requirement in Australian law (referred to as manner of manufacture).’  While the Professor’s desire to simplify the legal language of the Patents Act 1990 is understandable, this statement does little to help clarify what the case was actually about – which was not ‘invention’, in the everyday sense of the word, but more correctly the appropriateness of isolated genes as subject matter for a potential invention, independently of any assessment of inventiveness. 

Had the case been about the wheel, rather than an isolated gene, the question for the court would not have been whether a particular wheel, or even wheels in general, are patentably new and inventive.  Rather, the question would have been whether, as a general proposition, a wheel is the kind of thing for which a patent might be granted if it is also shown to be new and inventive.  And it is no answer to this analogy to say that genes are different in that they are naturally occurring, while wheels are not.  The end result of isolating a gene is no more ‘natural’ than the end result of cutting away all of the wood from a tree that is ‘not wheel’ in order to leave behind a wooden wheel!  Both processes result in a product that simply does not arise in the absence of human intervention, skill and effort.

Patents, Invention, Employment and Slavery

Do you know who ‘owns’ your inventions?

I read a fascinating story last week, entitled ‘How the Patent Office Helped to End Slavery’.  It has all the elements a good story needs – celebrity (Jefferson Davis, the future Confederate president), adversity (the denial of the rights of a slave, Benjamin Montgomery), conflict (the Union versus the Confederate patent offices), and the triumph of good over evil (emancipation, and victory of the Union patent laws).

In a nutshell, the question arose as to who ‘owned’ inventions made by slaves, and was thus entitled to ownership of any resulting patent.  It will come as no surprise to learn that slave-owners, such as Jefferson Davis’ brother Joseph, considered that they were entitled to the fruits of the ingenuity of their human chattels. 

However, the US Commissioner of Patents, Joseph Holt, disagreed.  In 1857 he ruled, essentially, that since slaves had no legal rights, they could not possess rights as inventors, and therefore they had no recognisable intellectual property that could be transferred to their owners.  Since neither Jefferson nor Joseph Davis was the first and true inventor of the improved riverboat propeller invented by Joseph’s slave Benjamin Montgomery, and nor could they be the legitimate assignees of any purported ‘rights’ to the invention (since no such rights ever existed), the USPTO simply refused to grant patents to either one of the brothers, or indeed to any other slaveholders who sought to claim ownership of inventions devised by their slaves.

Although the Confederate enacted its own patent law which secured ownership by slaveholders of inventions developed by their slaves, it appears that no such patents were ever granted (and if they had been granted, they would not have been in force for very long).

While ownership of inventions by slave owners is no longer an issue in developed nations, the right of one party to claim ownership of an invention made by another, remains very much a live issue.  We are fortunate that, nowadays, all free women and men are entitled, the the first instance, to ownership of the products of their own ingenuity, should they choose to capitalise on that right.  However, it remains the case that many inventions for which patent rights are sought are made by employees in the course of employment, and are claimed as the property of their employers.

Australian Federal Court Declares Isolated Human Genes Patentable

Cancer Voices Australia v Myriad Genetics Inc [2013] FCA 65 (15 February 2013)

In a landmark decision, a judge of the Federal Court of Australia has upheld a patent granted to Myriad Genetics Inc, confirming that claims directed to isolated genetic materials – such as DNA or RNA sequences – are in principle patent-eligible.

As I reported at the time, the hearing in this case took place almost exactly a year ago, making the judgment one of the most long-awaited in recent memory, certainly within the patent field.  The issue of ‘gene patents’ has been hotly contested in Australia in recent times, with opponents successfully attracting substantial media attention, and introducing proposed legislation to the Australian Parliament (which was subsequently rejected by a Senate inquiry).  A further draft bill, again seeking to amend the Patents Act 1990 to expressly exclude genetic materials from patentability, is still drifting somewhere around the corridors of Parliament House.  We might expect that this bill will re-emerge in the near future, following the current failure to ban gene patents through the courts.

The Federal Court application seeking revocation of three claims of the Myriad patent (‘the disputed claims’) directed to isolated genetic materials was originally filed back in June 2010 (when this blog was in its infancy).  The isolated genes in question are known as BRCA1, which have been found to exhibit certain mutations in women having an enhanced risk of developing breast and ovarian cancer.  They are therefore useful in identifying individuals having an increased cancer risk, and can play a role in early detection and treatment of cancers.

The applicants for revocation were the non-profit advocacy group Cancer Voices Australia, and Queensland breast cancer survivor Ms Yvonne D’Arcy (‘the Cancer Voices parties’).

The Federal Court has completely rejected the application for revocation of the disputed claims, finding all three to be eligible for patent protection under the Australian ‘manner of manufacture’ patentability test.

Research Affiliates Loses Appeal Against Business Method Rejection

Research Affiliates, LLC v Commissioner of Patents [2013] FCA 71 (13 February 2013)

A judge of the Federal Court of Australia has dismissed the appeal by Research Affiliates, LLC (‘RA’) against two decisions of the Australian Patent Office rejecting two patent applications relating to the construction and use of passive portfolios and indexes for securities trading.  The rejections were made on the basis that the claims of the applications were not directed to a ‘manner of manufacture’ – the test under the Australian law for whether a claimed invention comprises patent-eligible subject matter.

The RA method generates an index representing the relative value of a notional portfolio of stocks, similar to (for example) the Australian ‘ASX 100’, the US ‘Dow Jones’ and ‘S&P 500’, the UK ‘FTSE 100’, the Japanese ‘Nikkei 225’ and the Hong Kong ‘Hang Seng’.  Such an index is not merely the final numeric value which is normally published in financial reports.  It comprises a specific listing of stocks, along with a weighting value of each stock.  The index value is normally recomputed by adding all of the current stock values multiplied by their respective weighting values.

Conventional indexes are based on weighting the investments according to one of market capitalization weighting (i.e. in proportion to total company value – most of the well-known indexes are of this type), equal weighting (self-explanatory – examples are the Value Line index and the S&P 500 Equal Weighted Stock Index) or share price weighting (i.e. in proportion to the price of individual shares – for example the Dow Jones Industrial Average).  RA’s claimed contribution is to use measures of company size other than market capitalisation, or the other common weighting methods, to determine the proportions of shares to hold in a notional portfolio made up of a selected set of stocks.

There seems to be no doubt about the economic value of RA’s contribution.  The Federal Court decision reveals that RA has created an index of Australian stocks using its method, called the ‘Colonial eRAFI Large Index’, which it licenses for a ‘significant’ fee to fund managers, including Colonial First State Investments Limited.

Junk Patents Dumped on Australia as Chinese Subsidies Rorted

A Chinese government scheme providing financial incentives for small and medium sized enterprises, public institutions or scientific research institutions appears to be resulting in abuse of the Australian patent system, and the 'dumping' of numerous low-quality innovation patents on the Australian Register.

These ‘junk’ patents are not being examined or certified.  They therefore represent no more than potential enforceable rights.  Even so, they generate costs to companies operating legitimately in Australia, which may need to obtain advice on the likely scope and validity of these patents in order to avoid possible infringement.  In extreme cases, the existence of junk patents could result in an Australian business choosing not to take the risk of bringing a new product to market, even though the Chinese owner of a patent is not itself offering any products or services in this country.

The new Chinese patent filings, which increased significantly in number after introduction of the Chinese government ‘Measures for the Administration of Special Funds for Subsidizing Foreign Patent Applications’ in April last year, appear mainly to be handled by Australian ‘agents’ who are neither Australian, nor persons authorised under the Australian Patents Act 1990 to apply for or obtain patents on behalf of other parties.

A number of these agents have been operating in Australia for some time, although with the commencement of the Chinese subsidy scheme, business looks to be booming!  One particularly enterprising operator appears to have established two credible-looking business fronts, and has commenced development of a new, and highly professional-looking, web site for one of those businesses.

This phenomenon is already resulting in distortions of Australian patent filing and grant statistics.  I recently reported on the top Australian patent recipients of 2012, and noted that, for the first time, a Chinese company appeared in the top 10.  It turns out that every one of the 97 patents granted to Hengdian Group Linix Motor Co last year is an innovation patent filed by a single dubious agency.

Patent Reform Update: News, Rumours and Speculation

As reported here two weeks ago, IP Australia recently published an update on its ongoing law reform process.  With less than three months now to go until commencement of the Raising the Bar IP law reforms on 15 April 2013, time is running out for IP Australia to finalise the updates to the regulations, the changes to its own practices, the corresponding contents of the examination practice manual, and everything else that needs to be in-place by the time the new laws come into effect.

All-in-all, it does appear that we have something of a sprint to the post ahead of us.  It seems quite likely that users of the Australian IP registration system (and their agents) will be receiving new information right up to the date of commencement, and possibly beyond, as IP Australia beds down a host of new practices and procedures. 

Additionally, the coming reforms are having predictable effects on the behaviour of patent applicants, while IP Australia continues to be involved in other review and reform processes, such as the Trans Tasman Single Economic Market (SEM) program between the governments of Australia and New Zealand.  With regard to this latter process, we were promised back in July 2011 that a trans-Tasman patent implementation plan would ‘deliver a single application process for both countries by early 2013, and a single patent examination by June 2014.’  As I am sure most readers are aware, it is now early 2013, and there does not appear to be any sign of a single Australia/New Zealand patent application as yet!

Nonetheless, over the past couple of weeks there have been further developments on a number of aspects of the reforms which have come to my attention one way or another.  Some of this information is ‘official’, while some would be best characterised as ‘rumour’ (though I have reasonable confidence in the reliability of the sources).

Aspiring Attorneys Stand on the Threshold of a Brave New World

This coming Monday, 4 February 2013, I am giving a three hour lecture on US patent law and practice to a group of Monash University students, many of whom will no doubt be attending the Patent Practice course as part of their requirements to one day become registered Australian Patent Attorneys.

As I have prepared for the lecture, and the number of PowerPoint slides has crept up towards 100 (that’s one every two minutes, folks – strap yourselves in for the ride), I have been contemplating just what it might mean to qualify as a patent attorney in 2013.  This has been lately on my mind for other reasons also, since I have been approached by a number of people seeking advice on how to steer their career paths into this profession.

Profession Faces Challenges

The fact is that there has probably never been a more challenging time to pursue a career as a patent attorney in Australia.  (I imagine that this may well be true elsewhere, as well, although I would not know for sure.)  The ‘traditional’ patent attorney business model is under unprecedented pressure from low-cost specialist operations such as foreign filing and annuity service providers.  The downturn in the global economy will continue to impact patent filing and prosecution work for years to come.  Ironically, the increasing importance and profile of intellectual property – which one might expect to benefit patent attorneys – is what is driving clients to seek more cost-effective services, and to be far more canny in managing their IP portfolios to a budget.