21 April 2017

Regulatory Board Recognises Validity of Publicly-Listed Patent Attorney Structures

TickThe Trans-Tasman IP Attorneys Board (TTIPAB) – the regulatory body formerly known as the Professional Standards Board for Patent and Trade Marks Attorneys – has released a consultation paper as part of its review of the Code of Conduct for Patent and Trade Marks Attorneys 2013 (‘Code’).  This review was mandated under the arrangement between the Australian and New Zealand governments to merge the registration and disciplinary regimes for attorneys in the two countries, which came into effect on 24 February 2017.  Any amendments to the Code that may be necessary or appropriate in response to the creation of the Trans-Tasman attorney regime must be made within 12 months of its commencement, i.e. by 23 February 2018.

In addition, as I mentioned in an earlier article regarding the consolidation of a number of Australian IP attorney and legal firms into publicly-listed groups, the TTIPAB commissioned Professor Andrew Christie of the University of Melbourne to examine these structural changes in the profession and advise on whether any further regulatory amendments are required in light of these developments.  Professor Christie has delivered his report, and the TTIPAB has consolidated his findings, and its corresponding proposed revisions to the Code, into the present consultation paper.

Broadly speaking, and consistently with my expectations, no actual issues have been identified with the current ‘listed group scenario’ (as the consultation paper calls it).  While these types of arrangements have the potential create conflict-of-interest situations that cannot arise with traditional independent firm structures, the existing listed holding companies, IPH Limited (ASX:IPH), Xenith IP Group Limited (ASX:XIP) and QANTM IP Limited (ASX:QIP), have all recognised the issues, obtained relevant legal advice, and have implemented a range of measures to manage the associated risks.  The TTIPAB appears generally satisfied with these measures.  The consultation paper states, in particular, that:

The Board recognises that the listed group scenario is a valid legal structure when considered from the perspective of corporations law. The Board also recognises that an equivalent scenario in which the holding company is a private company would also be a valid legal structure. The Board is of the view that attorneys should be free to adopt whatever valid legal structure best suits their commercial interests. Accordingly, the Board does not propose to prohibit or restrict the ability of attorneys to deliver their services through the operation of groups of incorporated attorney firms owned by a holding company, whether that holding company be a publicly listed company or a private company.

17 April 2017

University of California Unsurprisingly Appeals Decision to Terminate CRISPR Patent Interference

Gavel FigureIn February, I reported the decision of the US Patent and Trademarks Office (USPTO) Patent Trial and Appeal Board (PTAB) in the patent interference proceedings initiated by the University of California (‘UC’) against the Broad Institute of MIT and Harvard (‘Broad’) in relation to CRISPR/Cas9 gene editing technology.  That decision was that there is ‘no interference in fact’, meaning that Broad’s development of the CRISPR/Cas9 system for use in eukaryotic cells (i.e. complex cells with, among other characteristics, distinct nuclei) was a non-obvious advance over UC’s development of the system for use in simpler prokaryotic cells (specifically, bacteria), and that there is thus scope for both parties to hold distinct patents.  At the time, I noted that the PTAB decision was subject to a possible appeal to a US Federal Court – most likely the specialised Court of Appeals for the Federal Circuit (CAFC) – and predicted that UC would file an appeal, in view of the substantial commercial interests at stake.

I am therefore not at all surprised to now be reporting that UC has indeed appealed to the CAFC.  In a press release announcing the appeal, UC has confirmed that it ‘seeks to have the PTAB reinstate the interference’, and quotes Edward Penhoet, a ‘special adviser on CRISPR to the UC president and UC Berkeley chancellor’ as saying that:

Ultimately, we expect to establish definitively that the team led by Jennifer Doudna and Emmanuelle Charpentier was the first to engineer CRISPR-Cas9 for use in all types of environments, including in non-cellular settings and within plant, animal and even human cells

Broad has responded with its own media statement saying, in relation to the appeal, that:

Given that the facts have not changed, we expect the outcome will once again be the same.
We are confident the Federal Circuit will affirm the PTAB decision and recognize the contribution of the Broad, MIT and Harvard in developing this transformative technology.

New USPTO Data Set Reveals Recent Trends in Software and Business Method Patent Grants and Filings

New DataThe US Patent and Trademarks Office (USPTO) has released a new public patent data service, which it calls the Patent Examination Data System (PEDS).  PEDS is intended to replace the PAIR Bulk Data (PBD) service, and has a very similar interface for filtering, viewing and downloading bulk US patent data, as well as an application programming interface (API) for live access.  Although PEDS is still under development, is missing some data fields that are present in PBD, and currently provides fewer filtering options than PBD, it is already ahead in a number of important respects. 

Firstly, where I have previously noted that the PBD set was incomplete in relation to patents granted in 2016, this problem seems to have been resolved in PEDS.  Secondly, PEDS includes the ‘transaction history’ for each application in the data set.  Readers familiar with the USPTO’s Patent Application Information Retrieval (PAIR) online system will be aware that the PAIR interface includes a ‘Transaction History’ tab that displays a list of all actions and events that have taken place on the file, along with their corresponding dates.  This information is now included in PEDS.  The USPTO has indicated that, in future, PEDS may include enhancements to search additional fields, additional data from tabs in Public PAIR, and the Image File Wrapper (IFW).

The availability of this new, and more complete, data set has enabled me to revisit the analysis of software and business method patents that I reported back in January, with the benefit of more than a year of additional data.  As a result, I have been able to observe how the trends in patent grants have progressed since the end of 2015.  In short, there has been no further change.  The rate of grant of patents assigned to software Art Units within the USPTO continues to track – and even slightly exceed – the overall rate of grants across all technologies, while business method patent grants remain in the doldrums, flat-lining at the rate to which they fell shortly after the US Supreme Court’s Alice decision in June 2014.

The additional data has also enabled me to look at trends in filing behaviour, which may be indicative of how applicants have responded to Alice and the USPTO’s subsequent changes in examination practice and guidance as applied to software and business method patent applications.  Interestingly, this data indicates that the rate of applicants filing for patents in relation to ‘business method’ inventions has been in steady decline since June 2014, but that there has been an equally steady increase in the rate of filing of applications for software inventions.

16 April 2017

IP Australia Updates Website with Better Advice for Patent Applicants

Browsing with tabletBack in February, I presented an analysis of Australian patent application data showing that self-represented applicants tend to achieve extremely poor outcomes relative to those who seek professional advice and assistance.  In doing so, I pointed out that IP Australia’s web site provided only the most minimal encouragement for prospective applicants to engage a patent attorney before proceeding.  As I reported further in March, this did not pass unnoticed at IP Australia, which was quick to point out that they have a downloadable PDF document (A guide to applying for your patent, 3.89MB) which includes a number of stronger statements about the benefits of obtaining professional assistance.  However, this document was not easy to find, since it was not linked from any of the primary informational/educational content on the site.

Via a tweet at the time, IP Australia promised that they would look into the issue, and see where it might be possible to make improvements.



I am really pleased to report that IP Australia have been true to their word, and the following pages on their web site now include recommendations for prospective applicants to seek professional assistance and/or links to the downloadable patent application guide:
  1. Patent basics
  2. Types of patents
  3. What can be patented
  4. Decide if you have a standard patent
  5. Apply for a standard patent
  6. What to include in your application
  7. Decide if you have an innovation patent

Professional Advice is More Than Application Assistance

If you are an innovator, the benefits of speaking with a professional adviser, such as a patent attorney, before charging straight for the patent office go far beyond just making sure that you have invented something patentable, and that you file a quality application with good prospects of protecting the invention, although it is these aspects which which IP Australia is naturally most concerned.  A patent attorney should also be informed of your specific commercial objectives and can advise on the most suitable overall filing strategy.

10 April 2017

‘Clustering’ Australia’s Patent Applicants

Clusters - BrisbaneI recently generated an interactive map of Australia’s most innovative postcodes, using recent Australian patent application and maintenance data.  While it is, of course, interesting to know whether one lives or works in a particularly innovative part of the country, the exercise of classifying activity by postcode is inherently artificial, in that it presupposes there is something ‘meaningful’ about the region covered by each particular postcode.  There is, however, no reason to suppose that this is the case.  There is nothing about the boundaries between adjacent postcodes, which are set by postal authorities for their own administrative purposes, that would necessarily lead to them being well-suited to the task of locating innovative activity.

A somewhat less arbitrary regional structure (from a socio-economic perspective) is defined by the Australian Bureau of Statistics (ABS), in the form of a hierarchy of ‘statistical areas’ (SAs).  In conjunction with its Australian Geography of Innovative Entrepreneurship (2015) research paper, the Department of Industry, Innovation and Science produced its own interactive Innovation Map using the ABS SA3 definitions as the basic regional unit.  Generally speaking, SA3s are regions with populations between 30,000 and 130,000 persons and reflecting regional identity in terms of geographic and socio-economic characteristics.  This results in aggregation of data over wider areas than individual postcodes.  In Sydney, for example, it results in the greatest number of patent filings being attributed to the Sydney Inner City SA3 region.  It is not possible, at this level, to observe the particular concentration of activity occurring around Macquarie University in the North of Sydney noted in my postcode-based analysis, since this is ‘diluted’ by lower activity in other parts of the encompassing Ryde-Hunters Hill SA3 region.
National Innovation Map 2015 - Sydney
The answer you receive thus depends upon the question you ask, e.g. how many patent applicants are located within a particular postcode, or within a particular SA3 region?  In both of these cases, a set of geographic areas is imposed before even commencing the analysis, and the results are constrained by this choice.  In the real world, however, innovation does not begin or end at some artificial boundary set by a postal officer or statistician.  So how can we analyse the distribution of patent applicants objectively and without applying predetermined geographic constraints?

One approach to this problem is a technique known as cluster analysis, or clustering.  The idea behind clustering is to apply an algorithm to automatically group elements in a data set according to a measure of similarity, such as geographic proximity.  It can be regarded as a form of machine learning in which the algorithm is designed to ‘discover’ patterns in the data without explicit direction from a human operator. 

In this article, I present some results of applying one of the most commonly-used clustering algorithms, k-means, to an Australian patent application data set to analyse national and local distributions of patent applicants.  This kind of analysis could be used, for example, to identify regions in which it could be most productive to invest in support for innovative industries, or to set up a business providing services to innovative companies, such as R&D tax advice or IP services.

04 April 2017

Justice Stephen Burley Pulls Excess Teeth from Australia’s Innovation Patent

ToothThe innovation patent is Australia’s ‘second tier’ patent right.  It is granted without substantive examination (but must be examined and certified before it can be enforced), has a maximum term of only eight years, and requires a lower level of inventiveness than a standard patent in order to be valid.  Despite this, however, a certified innovation patent gives its owner all of the same rights and remedies against infringers – including injunctions and financial compensation – as a standard patent.  And in one respect innovation patents have appeared, since September 2011, to offer a distinct advantage over standard patents in that damages have been held to accrue not just back to the date of certification, or the date of grant, but all the way back to the original effective filing date.  In the case of divisional applications, this could be many years before the actual filing and grant dates of the innovation patent.  (For more information, see Britax Childcare Pty Ltd v Infa-Secure Pty Ltd [No 3] [2012] FCA 1019, and my earlier article Innovation Patents Reach Back in Time for Infringement.)

Innovation patents are currently under attack from a number of quarters, and it is no secret that a number of authorities would like to see the system abolished altogether.  I have repeatedly argued, however, that the main criticisms of the system could be dealt with through some judicious modifications to strike a better balance between reduced patentability standards, patent term, rights of patentees, and rights of competitors and the wider public.  (See, for example, IP Australia Has the Innovation Patent In Its Sights, Again!, Five Easy Ways to Fix the Innovation Patent System, The Productivity Commission on Patents – It’s All About ‘Value’ and ‘Quality’, and Users and Abusers of the Australian Innovation Patent System.)

The strategic use of divisional innovation patents to ‘tailor’ claims targeting a competitor’s activity, and then claim compensation back to the original filing date of the parent application, was highlighted by the Australian Government’s Productivity Commission in its final report on its Inquiry into Australia’s Intellectual Property Arrangements.  In a chapter concluding with a recommendation that the innovation patent system be abolished, it presented the following diagram illustrating the discrepancy between the period during which divisional innovation patent claims are public (i.e. when infringers may be on-notice of liability) and the period over which compensation can be claimed (Figure 8.4, p 255).
PC IP Arrangements Report Figure 8.4
However, in a decision issued on 3 April 2017 and authored by Justice Stephen Burley (with whom Justices Nicholas and Jagot expressly concurred, rather than simply issuing a joint judgment), a Full Bench of the Federal Court of Australia has overruled Britax: Coretell Pty Ltd v Australian Mud Company Pty Ltd [2017] FCAFC 54. 

Accordingly, as the law now stands compensation for infringement of a divisional innovation patent cannot be claimed back to the original date of the parent application.  The correct position, according to the Full Court, is that compensation for infringement of an innovation patent (divisional or otherwise) is available only from the date of grant – which is also the date of publication – of the innovation patent.

02 April 2017

Where Are Australia’s Most Innovative Postcodes?

Macquarie University AreaAccording to IP Australia data covering live patents and applications, and recently-filed provisional applications, as at the end of 2015, the most innovative postcodes in Australia, across all fields of technology, are those taking in Macquarie University and surrounds in the North of Sydney.  Postcodes 1710 (Epping, NSW) and 2612 (represented by the nearby Blenheim Road post office) collectively accounted for nearly 1200 patents and pending applications, and 200 provisional applications filed by Australian applicants within the preceding three years.  This represents around 17% and 5%, respectively, of all such patents and applications owned by Australian applicants at that time.

Other hotspots are the regions around the CBDs of the New South Wales, Queensland and Victorian state capitals Sydney, Brisbane and Melbourne.  Also featuring strongly in the top 50 postcodes for patent filing are major university precincts in and around the University of Sydney, Monash University and the University of Melbourne.

In addition to the major cities, where it is unsurprising to find significant concentrations of innovative activities and industries, there are also a number of notable regional centres of innovation.  These include the NSW Central Coast, north of Sydney, particularly around Somersby (postcode 2250), west of Sydney around Long Point (postcode 2867), and Aitkenvale in the suburbs of Townsville in North Queensland (postcode 4814).

More generally, a map of Australian patent filing and ownership by postcode leads to a similar conclusion to the one I reached in my recent analysis of the origins of biotechnology patent applications – innovation is a collective activity that tends to occur in geographic clusters.  By exploring the interactive map below, you will be able to identify the various localities on national, state, regional, urban and suburban scale within which much of Australia’s innovative activity takes place.

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