20 December 2015

I Don’t Care How ‘Efficient’ It Is, It’s Still Infringement!

Lipstick on a pigOn 23 October 2015, New York Times op-ed columnist Joe Nocera published a piece entitled The Patent Troll Smokescreen, in which he wrote that ‘according to Robert Taylor, a patent lawyer who has represented the National Venture Capital Association, a new phrase has emerged in Silicon Valley: “efficient infringing.”’

In fact, as we shall see, the term ‘efficient infringing’ is not new – it first emerged in 1998 – and, furthermore, there have been ‘efficient infringers’ outside the realm of patents for much longer than this.  Indeed, I personally know people who have indulged in a little efficient infringements, and maybe you do too.

As one everyday example of efficient infringing, consider an office-worker in an area with limited free on-street parking, restricted to a maximum stay of one hour.  If the local paid parking garage charges $12 per day, and the fine for exceeding the maximum on-street parking time is $120, it does not take an Einstein to work out that it is cheaper overall to park on the street every day if the average frequency with which parking inspectors patrol the area is less than once every 10 business days.  That is efficient infringement!  There are, no doubt, other areas of everyday experience in which a similar analysis can be applied, e.g. payment of fares on public transport.

In some cases – such as the trouble-plagued electronic transport ticketing system in Victoria, Australia – well-advised efficient infringers may be able to tip the scales further in their favour by challenging the validity of their fines.

Of course, for most people this economic rationale cannot be taken too far.  For example, stealing your groceries rather than paying for them might well pay off in the long term from a purely financial perspective, but is liable to land you with a criminal record and possible jail-time.  Efficient infringement, as an economic strategy, is effective only when the worst consequences of getting caught can themselves be expressed in purely economic terms.

Efficient patent infringement is just the same.  As described by Nocera:

That’s the relatively new practice of using a technology that infringes on someone’s patent, while ignoring the patent holder entirely. And when the patent holder discovers the infringement and seeks recompense, the infringer responds by challenging the patent’s validity.

I object less to the practice of so-called ‘efficient’ patent infringement, at least in some of its more benign forms, than I do to the terminology itself, and the way it is being used by some very powerful organisations.  And here is why.

13 December 2015

Australian Appeals Court Kills Another Patent on a Computer-Implemented Invention

Sad On 11 December 2015, a Full Bench of the Federal Court of Australia handed down a unanimous judgment in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, overturning the decision of the primary judge and finding a computer-implemented method (which the court characterised as a ‘business method’ or ‘scheme’) to be unpatentable subject matter under Australia’s ‘manner of manufacture’ standard.

Regular readers of this blog will know that I have been involved in this matter from the outset.  I drafted the original patent specification on behalf of Watermark client RPL Central Pty Ltd.  I represented the client in guiding it through examination, resulting in its approval and certification by IP Australia.  I again represented the client in opposition proceedings, in which we successfully defended against allegations that the invention lacked novelty (raised by the opponent), but went down on the basis that the claimed invention was not a patent-eligible ‘manner of manufacture’ (raised not by the opponent, but by the Commissioner’s Delegate, i.e. the Hearing Officer in the opposition).  I have continued as an advisor in the Federal Court appeals, first through the ‘high’ of success before a single judge, and now the ‘low’ of this decision of the Full Court.

It will therefore come as no great surprise that I am disappointed by this decision.  I am disappointed for our client, for whom this has been a roller-coaster ride (which may not be over yet).  I am disappointed for other operators of small, innovative technology businesses, because I genuinely believe that the kinds of innovation represented by the patent in this case ought to be protectable under our patent laws.  I am disappointed on behalf of patent applicants and their advisors, who will find this decision to be quite unhelpful in clarifying where the boundary lies between what is patentable and what is not in the realm of computer-implemented inventions.  And, of course, I am disappointed for myself, because obviously I would have preferred to win!

These are all personal observations, which have nothing to do with the merits of the judgment.  As is my normal practice in cases where I and/or Watermark are directly involved, I shall refrain, for the present, from revealing my own views on the judgment, and stick to the facts of what has been decided. 

06 December 2015

Patents and the Trans-Pacific Partnership Agreement, Part 2

Peaceful OceanIn addition to provisions relating to the scope of available patent rights and general procedures, which I wrote about in the first part of this series, the Trans-Pacific Partnership (TPP) Agreement prescribes certain minimum standards for terms of protection – including extensions or adjustments to patent term in certain circumstances.  These provisions apply particularly to regulated products, including  pharmaceuticals and biologics (a.k.a biopharmaceuticals).

In this article I will look at three specific aspects of the TPP:
  1. the obligation to provide for adjustment of the patent term to compensate for ‘unreasonable delays’ in the grant of a patent, about which I expect Australia to do nothing;
  2. the obligation to provide for extensions of the term of patents relating to pharmaceutical products as compensation for time lost in obtaining regulatory approval, about which I do not believe Australia needs to do anything; and
  3. the obligation to provide an effective period of at least eight years of data exclusivity, and/or other protection for biologics, in respect of which I think Australia has a real problem following the High Court’s decision in D'Arcy v Myriad Genetics Inc [2015] HCA 35.
To make matters more interesting, on 3 December 2015, the US Industry Trade Advisory Committee on Intellectual Property Rights (ITAC-15) released its report on the IP provisions in the TPP [PDF, 198kB].  The report has been prepared pursuant to a statutory requirement that ‘advisory committees provide the President, the U.S. Trade Representative, and Congress with reports not later than 30 days after the President notifies Congress of his intent to enter into an agreement.’  The Committee is generally positive about the patent-related provisions, however it is not without its criticisms and concerns about those relating to pharmaceutical term extensions and biologics.

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