Is It Time to Talk (Again) About Reforming Australia’s ‘Best Method’ Requirement?

The recent Full Federal Court decision in Zoetis Services LLC v Boehringer Ingelheim Animal Health USA Inc [2024] FCAFC 145 has highlighted fundamental flaws in the Australian patent law’s ‘best method’ requirement.  While the court's application of existing principles appears sound, the resulting analysis reveals that the requirement is not only arbitrary in its operation, but potentially counterproductive to innovation.

The Australian Patents Act 1990 sets out requirements for patent specifications in section 40.  These include that the specification must: disclose the invention in a manner clear enough and complete enough for the invention to be performed by a person skilled in the relevant art (the enablement requirement);  disclose the best method known to the applicant of performing the invention (the best method requirement);  and that the claims must be supported by matter disclosed in the specification (the support requirement).  While failure to satisfy enablement or support might affect only certain claims, failure to disclose the best method is fatal to the entire patent.  It is, in effect, a ‘nuclear’ ground of invalidity that cannot be remedied by amendment or partial revocation.

The Zoetis case concerned three patent applications for pig vaccines that were found invalid for failing to disclose the best method of performing the inventions.  While the applications disclosed ranges of antigen concentrations that would work, they did not reveal the specific concentrations used in Zoetis's successful experimental vaccines.  The court’s analysis of why this was fatal to the applications exposes deep problems with the requirement itself.

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Tags: Australia, Best method/mode, Public policy

Hindsight by Stealth? Pre-RtB ‘Ascertainment’ After Sandoz v Bayer

A recent Full Court decision suggests that demonstrating prior art could be ‘reasonably expected to be ascertained’ under the pre-Raising the Bar (RtB) law may be considerably easier than previously thought.  But has the pendulum swung too far?  In relaxing the evidentiary requirements for establishing that prior art information would have been found by the skilled person, the Full Court may have undermined a safeguard against hindsight analysis that was inherent in the prior law.

In Sandoz AG v Bayer Intellectual Property GmbH [2024] FCAFC 135, the Full Court has taken a markedly different approach to prior art ‘ascertainment’ than the primary judge (Rofe J in Sandoz AG v Bayer Intellectual Property GmbH [2023] FCA 1321).  While acknowledging that whether prior art ‘could be reasonably expected to have been ascertained’ is a question of fact, the Court has effectively lowered the bar for the evidence required to establish this factual foundation.  This raises a question of whether the practical difference between the old and new law is as great as previously assumed.

The primary judge took what might be called a ‘real world’ approach to ascertainment.  Her Honour wanted to see evidence of the complete search process that would have been undertaken by the skilled person, without knowledge of the target document.  This included evidence of searches across multiple databases using various relevant search terms, and – critically – how the skilled person would have identified the relevant document from among all the search results that would have been generated.

The Full Court rejected this approach as too demanding.  Instead, the Court held that once it is established that a document would have been found in a relevant database search, it is not to the point that additional searches might have been performed or that other documents might also have been found.

This might seem like a practical approach – after all, if a document exists in a database that would have been searched, using search terms that would have been used, isn't that enough to show it could have been found?  But this reasoning potentially introduces precisely the kind of hindsight analysis that the ‘ascertainment’ requirement was – arguably – meant to guard against.

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Tags: Australia, Obviousness, Prior art, Raising the Bar

Full Court Delivers Hot N Cold Comfort in Katy Perry Trade Mark Battle

While this blog normally focuses on patent matters, occasionally a case comes along that warrants stepping outside my usual lane.  The Full Court of the Federal Court’s decision in Killer Queen LLC v Taylor [2024] FCAFC 149, delivered last week, is one such case.  After all, it’s not every day that an Australian small business owner finds herself locked in a trade mark dispute with an international pop superstar over their shared name.

The case is a sobering reminder that sometimes you can wake up to find that your own name has effectively been monopolised by someone more famous – even if you got there first. It's enough to make you want to Roar in frustration!

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Tags: Australia, Trademarks

Here We Go Again? Aristocrat Eyes High Court After Grant of Leave to Appeal

A single judge of the Federal Court of Australia, Justice O’Bryan, has granted Aristocrat Technologies Australia Pty Ltd (‘Aristocrat’) leave to appeal a decision issued back in March this year.  In that decision, Justice Burley found that all remaining claims in a group of innovation patents relating to computer-implemented electronic gaming machine (EGM) technology did not define patent-eligible subject matter.  The grant of leave opens up an opportunity for Aristocrat to ask the High Court of Australia to untangle the mess that it created back in 2022 when a six-judge panel split 3:3 on whether or not to allow an earlier appeal against a decision of the Full Federal Court relating to the primary claims of the same innovation patents.

The case has a complicated history.  For anybody who may just be joining us, or who requires a recap, here is the story so far in a nutshell.

1. Way back in 2018, a Delegate of the Commissioner of Patents revoked four innovation patents relating to the implementation of a ‘feature game’ in an EGM (i.e. a secondary, or bonus, game triggered by the occurrence of a defined event in the ‘base’ game of spinning reels) on the basis that the patents did not claim a patent-eligible ‘manner of manufacture’ under Australian law: Aristocrat Technologies Australia Pty Limited [2018] APO 45.
2. Aristocrat appealed to the Federal Court where, at first instance, Justice Burley determined that the claims were, in fact, directed to ‘a mechanism of a particular construction, the operation of which involves a combination of physical parts and software to produce a particular outcome in the form of an EGM that functions in a particular way’, and that this was patentable subject matter in Australia: Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778.  (For more, see Federal Court Finds Computer-Implemented Gaming Machine Patent-Eligible in Australia.)  Importantly, this decision was based on consideration of a single claim that the parties agreed was representative of the primary claims in all four innovation patents.  The dependent claims of the patents were not considered at all in the judgement.
3. The Commissioner of Patents was granted leave to appeal to the Full Federal Court, where all three judges on the panel agreed that the decision of Justice Burley should be overturned, and the matter remitted back for consideration of any residual issues relating to the dependent claims.  However, a plurality of two judges (Middleton and Perram JJ) based their decision on a new two step test – first asking whether the claims are for a ‘computer-implemented invention’ and then whether that invention can ‘broadly be described as an advance in computer technology’ – while the third judge (Nicholas J) instead took a more conventional path, observing that the substance of the claimed invention lay in the mere computer implementation of an unpatentable ‘scheme or set of rules for the playing of a game’: Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202.  (For more, see Patent-Eligibility of Computer-Implemented Inventions – Appeals Court Says an ‘Advance in Computer Technology’ is Required.)
4. The High Court granted Aristocrat special leave to appeal.  Unfortunately, on the days of the hearing one judge was absent due to illness and – for whatever reason – the Court decided to proceed with a panel of six judges (which, astute observers will note, is an even number).  The panel split 3:3, meaning that, under section 23(2)(a) of the Judiciary Act 1903, ‘the decision appealed from shall be affirmed’.  This left the judgment of the Full Federal Court intact, notwithstanding that three judges of the High Court (Gordon, Edelman and Steward JJ) would have reversed it, and the remaining three (Kiefel CJ, Gageler and Keane JJ) would have upheld it on different grounds.  All six judges of the High Court explicitly or implicitly disapproved the novel two step test of patentability proposed by the plurality in the Full Federal Court: Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29.  (For more, see High Court’s Failure Exposes the Festering Eligibility Sore in Australia’s Patent Laws.)
5. In accordance with the orders of the Full Court, the case was remitted back to Justice Burley for consideration of the ‘residual issues’.  In the resulting judgment, his honour determined that the effect of section 23(2)(a) of the Judiciary Act is plainly that the Full Court decision is ‘affirmed’, that he was bound, as a single judge of the court, by that decision, and that he should not therefore have any regard to the reasoning of the High Court in reaching his decision.  As a result, Burley J found all of the remaining claims to be unpatentable under the plurality’s two step test: Aristocrat Technologies Australia Pty Limited v Commissioner of Patents (No 3) [2024] FCA 212.

Aristocrat sought leave to appeal this further decision of Burley J.  Section 25(2) of the Federal Court of Australia Act 1976 stipulates that applications for leave to appeal must be heard and determined by a single judge unless a judge directs that the application be heard and determined by a Full Court – which happens quite often in cases such as this, including in Aristocrat’s appeal from Justice Burley’s original decision.  On this occasion, however, Aristocrat expressly sought that the application for leave be determined by a single judge, separately and before the hearing of any appeal.  This preserves its option to have the appeal removed directly to the High Court under s 40(2) of the Judiciary Act.

With leave having now been granted by O’Bryan J in Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2024] FCA 987, it seems reasonable to assume that Aristocrat will now apply to have the High Court take up the case directly.  But for those who may be hoping that this is a short-cut to having the Court resolve the impasse it reached in 2022, I regret that matters may not be quite so simple.

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Tags: Appeal, Australia, Computer programs, Games, Patentable subject matter

Have Australia’s ‘Raising the Bar’ Law Reforms Suppressed Patent Oppositions?

Australia has a pre-grant patent opposition system.  That is to say, once an application has passed examination and been accepted for potential grant as a patent, there is a period (of three months) during which anybody may oppose the grant.  The subsequent opposition proceedings – if they run their full course – consist of a series of evidentiary stages, legal submissions, and an oral hearing, following which the hearing officer (a delegate of the Commissioner of Patents) issues a written decision on the outcome of the opposition.  In the final reckoning, the patent application may emerge unscathed, it may be refused, or it may end up being granted subject to narrowing amendments. 

The patent opposition system recognises that the examination process is imperfect.  Examiners have limited time, resources and technical expertise.  Therefore, they may not always find the closest and most relevant prior art, or spot every technical and legal issue that might be identified by a motivated competitor to the patent applicant, equipped with a team of technical and legal experts.  Furthermore, opposed applications are presumably those that are of greatest concern to competitors, enabling the system to weed out invalid claims that have the greatest potential to unfairly stifle competition.

In the years prior to 2016, the number of oppositions filed each year was fairly consistently between 100 and 120.  In recent years, however, it has commonly been between 40 and 60.  In other words, there are now only about half the number of patent oppositions being filed than was the case just a decade ago.  So, if oppositions play an important role in the Australian patent system – and the policy rationale for having them asserts that they do – is it possible that they are now less effective than they once were?  And, if so, then why?

In this article, I will present data on all patent oppositions filed between 2008 and 2023.  I will demonstrate that the decline in patent oppositions appears to be associated with the commencement of the Raising the Bar (‘RtB’) IP law reforms in 2013.  Among other things, the RtB reforms introduced more stringent standards of patentability, particularly in relation to inventive step and the level of disclosure required to support broader patent claims.  The reforms also changed the standard of proof to be applied during examination and opposition proceedings.  I will show that in the post-RtB era, opposition proceedings have more frequently progressed through to a final decision, and that opponents have had somewhat greater success in completely eliminating opposed applications.  However, the overwhelming majority of opposed applications still result in granted patent rights, and in nearly half of all cases the opponent has been wholly unsuccessful and the patent has been granted with the originally accepted claims.

While the data cannot directly reveal the reasons for the significant reduction in opposition filings, I tentatively argue that the change in the standard of proof applied in patent oppositions may have had the unintended consequence of suppressing patent oppositions, and reducing the effectiveness of the opposition system.

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Tags: Australia, IP RAPID, IPGOD, Law reform, Opposition, Raising the Bar