31 August 2013

At Last – ‘Software Patent’ Appeal Upheld in Australian Court

RPL Central Pty Ltd v Commissioner of Patents [2013] FCA 871 (30 August 2013)

Champagne uncorkingAppeal – from opposition decision of the Commissioner of Patents – patentable subject matter – whether computer-implemented information system and process a ‘manner of manufacture’

Justice Middleton, in the Federal Court of Australia, has found the claims of an innovation patent relating to an automated information and evidence gathering system to relate to a patent-eligible ‘manner of manufacture’.

I usually put any disclaimers or disclosures of interest at the bottom of a post, but on this occasion I am putting them right up-front (although for some readers, at least, this will not be news).

RPL Central Pty Ltd is a client of my employer, Watermark Intellectual Asset Management.  I drafted the patent specification which is analysed by Justice Middleton in forensic detail in RPL Central Pty Ltd v Commissioner of Patents.  My colleagues within Watermark’s IP Law firm ran the Federal Court appeal against the Patent Office decision finding all of the patent claims to be invalid on subject-matter grounds (i.e. not for a ‘manner of manufacture’ under the Australian law).  I was involved throughout the process, even joining the lawyers in court last December.

I am therefore, not even remotely, an unbiased observer in this case, and I am openly delighted – for myself, my colleagues, Counsel who acted in the matter, and our client – that Justice Middleton upheld the appeal.  I am also relieved that my work has (so far) survived the scrutiny to which it has been subjected.  I have to say, also, that it is a somewhat surreal feeling to see words and drawings that I produced now reproduced in a Federal Court judgment.  In the overall scheme of things, so few patents actually become the subject of court proceedings that many practitioners may go their entire careers without this happening to them.  Most, I dare say, would be glad of this!

29 August 2013

New Zealand Finally Gets a Modern Patent Law (With Software)

FireworksOn 28 August 2013, the New Zealand Parliament finally passed the bill which will henceforth be known as the Patents Act 2013.

This is actually a fairly momentous event – and not principally because of the supposed ‘software patent exclusion’ (which I discuss further below).  It is mostly significant because it means that New Zealand will finally have patents legislation which is in line with most of the world’s developed nations, rather than a law dating back to just a few years after the Second World War.

The current patent law in New Zealand is set out in the Patents Act 1953, i.e. a 60-year-old piece of legislation, which was itself based on the 1949 UK Act.  Australia also had laws based on the old UK Act, in the Patents Act 1952, which was replaced over 20 years ago by the current legislation, the Patents Act 1990.

So when the existing New Zealand patent laws came into effect, the exciting new inventions of the day included the transistor (1947), Velcro (1948), super glue (1951) and the black box flight recorder (1953).  While the world has moved on somewhat since then, the New Zealand patent laws have not!

28 August 2013

A Conversation with the Commissioner of Patents (Part 3)

CommunicatingIn the first of this series of articles documenting my recent conversation with the Australian Commissioner of Patents, and Deputy Director General of IP Australia, Fatima Beattie, we learned a bit about her about her background as a chemical engineer working with steel, about how she came to the role of Commissioner, and about what the job involves on a day-to-day basis. 

In the second part of the interview, we spoke about the law reform process – what has already been achieved through the Raising the Bar amendments, the further reforms which are currently ongoing, and the opportunities for future reform.

In this third, and final, part of the discussion we speak about the patent-eligibility of contentious subject matter such as computer-implemented inventions, business processes, and genetic materials, as well as the challenges facing the patent system over the coming years.

24 August 2013

Upaid – Another Candidate for a Down-Under Troll?

Upaid v TelstraUpaid Systems Ltd, a company incorporated in the British Virgin Islands, has sued Australia's largest telecommunications carrier, Telstra, for infringement of two patents relating to making online purchases from mobile devices.

To my knowledge, the law suit filed on 21 August 2013 was first reported in the Australian Financial Review by technology journalist James Hutchinson (@j_hutch), who avoided the term ‘troll’.  Others, however (e.g. at ZDNet and iTWire have shown less restraint.

So, is Upaid a patent troll?

I have expressed the opinion previously that the classic patent troll business model is a form of litigation abuse which is not viable within the Australian system.  I also firmly believe that it is not productive to define ‘patent troll’ so as to broadly encompass all so-called ‘non-practising entities’ (NPEs).  Just because a company does not actually make and sell products embodying its patented inventions should not preclude it from nonetheless monetising them through licensing to others who do. 

To insist upon this is akin to requiring songwriters either to sing their own songs, or to give them away freely for others to record and profit from.  Just as you do not need to have a pleasant singing voice to write a good song, you do not need to have the capability to successfully commercialise your ideas in order to come up with good inventions.

Upaid actually developed the inventions covered by the patents on which it is suing Telstra back in the late 1990's and early 2000's, but failed to bring any product of its own to market.  Only then did it turn to an alternative business model based on licensing and enforcement of its patents.  So in this sense, at least, Upaid is certainly not the worst kind of troll, which is an entity that acquires dubious patents from others (often at fire-sale prices) and then uses them to extort payments from operating companies under threat of expensive litigation, regardless of the strength or applicability of the patents.

But, even so, is Upaid any kind of troll?  And if so, what are its prospects of making money in Australia?

20 August 2013

A Conversation with the Commissioner of Patents (Part 2)

Q and AIn the first part of my conversation with Fatima Beattie, the Commissioner of Patents and Deputy Director General of IP Australia, we talked about her background and her role at IP Australia.

In this second part, the conversation moves on to patent reform.  In particular, we discussed the process which led to the greatest reform of the Australian patent laws since the current Patents Act came into force in 1991 – the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 – and about why the Commissioner sees those reforms as significant for Australia.

We also spoke about the ongoing and future consultations and reform proposals, including the creation of a single patent filing and examination processes for Australia and New Zealand, the implementation of a single regulatory regime for Australian and New Zealand patent attorneys, changes to Crown use and compulsory licensing provisions under the Australian Patents Act 1990, proposals relating to the definition of patentable subject matter, and ongoing reviews of the designs system and innovation patents.

19 August 2013

Election Stalls Further Patent Law Reform in Australia

Ballot BoxOn 4 August 2013, Australia’s Prime Minister, @KRuddMP (a.k.a. Kevin Rudd) announced that the country would go to the polls to elect a new Federal Government on 7 September 2013.  When that happened, the current government went into ‘caretaker mode’ (meaning that it cannot make any significant decisions without consulting the opposition), and all existing parliamentary business was suspended.

One consequence of this is that all legislation which has been introduced, but not yet passed in both houses of parliament, has lapsed, and will need to start the process all over again in the next parliament.  This is particularly unfortunate news for the Intellectual Property Laws Amendment Bill 2013, which was introduced in the House of Representatives on 30 May 2013, passed without amendment on 25 June 2013, and moved rapidly to the Senate, where it received its first and second readings (again without amendment) on 28 June 2013.  I can only suppose that had the Senate sat for even one more day before the election was called, the Bill would have passed.

The Bill was a bit of a grab-bag of both substantial and trivial amendments to the Patents Act 1990, along with a few minor amendments to the Trade Marks Act 1995, the Designs Act 2003, and the Plant Breeders Rights Act 1994.  The amendments affecting the Patents Act included:
  1. amendments to the Crown use provisions of the Act, to implement recommendations made in the Productivity Commission Inquiry Report into Compulsory Licensing of Patents;
  2. introduction of new compulsory licensing provisions, implementing Australia’s obligations under the TRIPS Protocol to enable pharmaceutical manufacturers to apply to the Federal Court for a compulsory licence to manufacture generic versions of patented medicines to export to developing countries, based on draft legislation which was released for consultation in August 2012;
  3. new provisions required for the implementation of a single patent application and examination process for Australia and New Zealand;
  4. amendments to enable the implementation of a single regulatory regime for patent and trade marks attorneys in Australia and New Zealand; and
  5. some further minor amendments to repeal unnecessary document retention provisions, and correct some oversights in the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.
To complicate matters further, the first two of these reforms (i.e. Crown use and the TRIPS compulsory licensing implementation) did not receive bipartisan support in the House of Representatives, being described by the opposition Member for Indi, Mrs Sophie Mirabella, as being ‘fine’ in basic intent, but poorly conceived and drafted, and ‘simply not ready for introduction into the parliament’.

17 August 2013

Raising the Bar and Sharing the Onus

BalanceAs regular readers will be aware, for the past few months I have been working with CCH Australia to assist in updating the patents commentary in its Australian Industrial and Intellectual Property ‘loose-leaf’ service (which is also available as an online service).  Among other content, this service provides full text legislation and detailed commentary on copyright, designs, patents and trade marks.

This project is progressing well, with many of the reforms introduced by the Raising the Bar Act now incorporated into the commentary, along with a range of further revisions bringing other aspects of the commentary up-to-date, such as the recent approach of the courts to the tests for ‘manner of manufacture’ and novelty.  The commentary now also includes a comprehensive guide to the different criteria for assessing inventive step which apply to patents now in force, which depend upon when the application was originally filed and/or examined.

One of the topics covered in the most recent update to the patents commentary is the across-the-board application of the ‘balance of probabilities’ test in decision-making by the Commissioner of Patents, which was introduced by the Raising the Bar reforms.  Before 15 April 2013, patent applicants had long enjoyed the ‘benefit of the doubt’ in relation to many aspects of the review of applications conducted by the Patent Office of IP Australia.

For example, the questions of whether a patent application related to eligible subject matter, under the ‘manner of manufacture’ test, whether the invention was useful, and whether the claims were clear, concise and ‘fairly based’ on the description in the patent specification, were all to be decided in favour of the applicant in the event of any doubt. Prior to 2002, the same benefit also applied to the crucial decision as to whether a claimed invention was new, and involved an inventive step.

The applicant enjoyed a similar position during contested opposition proceedings, with the Patent Office being obliged to allow an opposed application to proceed to grant unless it were practically certain that the resulting patent would be invalid. This significant onus of proof upon the opponent also applied in the case of an appeal of an opposition decision to the Federal Court.

15 August 2013

A Conversation with the Commissioner of Patents (Part 1)

Fatima Beattie, Commissioner of PatentsI was recently privileged to sit down and have a conversation on-the-record with the Australian Commissioner of Patents, and Deputy Director General of IP Australia, Fatima Beattie.  To my knowledge, this is the first time she has agreed to such an arrangement, so I am very grateful for the opportunity.

Our conversation was recorded and transcribed and – being quite lengthy – will be reproduced in a series of posts here at Patentology.  Both the Commissioner and myself took the opportunity to edit the transcript slightly before publication (largely, speaking for myself at least, to appear somewhat more coherent than may have been the case on the day), however I can assure readers that the final transcript is a faithful reproduction of the discussion.

For those who have not met her (as I had not) I can confirm that the Commissioner is, unsurprisingly, an intelligent and articulate woman, with a keen interest in the patent system, and its role in fostering innovation and economic development.  She is also – and I point this out as a statement of fact, not as any criticism – a public servant who is answerable to the government of the day.  It is also worth pointing out, for those international readers who may have missed the Daily Show’s coverage of the Australian election campaign, that we are effectively between governments right now, and the Commissioner does not actually know to whom she will be answerable in a month’s time!

14 August 2013

Where Can You Not Get a Patent Via the PCT?

PCT-148On 3 August 2013 Saudi Arabia became bound by the provisions of the Patent Cooperation Treaty (PCT), while the Islamic Republic of Iran will become bound on 4 October 2013.  Any international patent application filed on or after that date will therefore entitle the applicant ultimately to proceed in any of 148 contracting states.

So many countries are now bound by the PCT that it is almost easier to think in terms of which countries are not members of the international application system than to keep track of those which are.  If you want to file a patent application, and to keep your options open for as long as possible (typically until at least 30 months after your initial priority filing date), then a PCT application is definitely the way to go about it.  However, you do need to think about whether there are any countries which may be important to you, but which are not PCT members.

So which countries are not PCT contracting states?  And how many of them might you really care about?

This article attempts to answer these questions, although of course some disclaimers are necessary.  While I have made every effort to verify details from multiple sources, for some countries reliable, up-to-date information is not easy to come by.  To the extent that the information here is accurate, I can vouch for it only at the current time, i.e. 14 August 2013.  In other words, despite all due care, I take no responsibility for the consequences of relying on this information, and recommend that you always seek professional advice appropriate to your specific circumstances.

09 August 2013

Are ITC Exclusion Orders a Pre-Globalisation Anachronism?

US ITCEarlier this week I spoke to reporter Yun-Hee Kim via Skype, for the WSJ Live Asia Today program, about the decision of the Obama Administration to veto the US International Trade Commission (ITC) exclusion order issued against a number of older Apple devices.  The products in question had earlier been found to infringe a Samsung patent which is essential to implementation of the 3G international wireless communications standards.

I have embedded the video report at the end of this article, or you can view it on the WSJ Live web site.

In issuing an exclusion order, the ITC had done nothing particularly unusual.  As I will explain further below, it does not really have any other powers it can exercise against infringers.  Furthermore, it is part of the standard process that all proposed orders made by the ITC are subject to review, and possible veto, by the President of the United States within a period of 60 days.

To my mind, there are three aspects of this case that have contributed to the exceptional level of interest it has generated.  Together, they suggest that it might be time to reconsider the role of the ITC in ‘protecting’ the US market from imports of patent-infringing products, which increasingly looks like a relic from a simpler time in which companies, and industries, were either ‘domestic’ or ‘foreign’, rather than global.

04 August 2013

Talking About Trolls – Continuing the Conversation

Speech bubblesLast week I participated in a story broadcast by ABC Radio National’s Law Report program entitled ‘Feeding the Patent Trolls’.  You can listen to the report, which is about 20 minutes in length, and/or read the transcript on the programme’s web site (if you do not wish to be tied to Windows Media Player or RealAudio, choose the ‘download’ option for a straight MP3 file).

The jumping-off point for the story is the recent commencement of patent infringement litigation by Vringo, in the Federal Court of Australia, against Chinese telecommunications equipment manufacturer ZTE.  I have written about this case previously, end explained why I do not think that Vringo satisfies the criteria to be called a true ‘patent troll’. 

On one level, the ‘Feeding the Patent Trolls’ report seeks an answer to the question of whether patent trolls are coming to Australia.  I have made my own views on this pretty clear – I do not believe that the Australian system will sustain a business model predicated on ‘shaking down’ practising entities using the threat of litigation based on patents of dubious scope or validity.  In other words, there is no reason for trolls to target Australia when there are such lucrative opportunities in the US.

However, other types of non-practising entities (NPEs) – including ‘privateer’ licensing companies, which is now Vringo’s business – can expect to obtain the same benefits from litigation in Australia as any other patent owner.

The other guest on the Law Report programme, expressing a view somewhat different from my own, was Kim Heitman, who is General Counsel at the University of Western Australia (UWA), and current President of the Society of University Lawyers.  I think it fair to say that Kim would draw the line between ‘legitimate’ and ‘trollish’ activities somewhat closer to the ‘practising entity’ end of the spectrum that I would.

A few of Kim’s statements in the report bothered me, although having had a 40-minute interview reduced to a few excerpts myself it did seem likely that at least some of what he was saying may have been isolated from its original context.  I therefore emailed Kim to ask him a few questions about his comments, and he was kind enough to reply to me in some detail.  What follows is thus a form of continuation of the conversation started by the Radio National report.