29 August 2011

Breaking News – Apple and Samsung Back in Australian Court

Apple and Samsung were back in the Federal Court of Australia in Sydney this morning, to continue their ‘discussions’ over the fate of Samsung’s iPad-challenging Galaxy Tab 10.1.

The purpose of today’s ‘directions hearing’ was to set the timetable for the next stages of Apple’s patent infringement suit against Samsung, which commenced at the beginning of August, and resulted in a delay in the launch of the Galaxy Tab 10.1, originally intended for 11 August 2011 (see It’s Apple vs Samsung Down-Under as Smartphone War Escalates).

As we predicted, it is being reported in the Fairfax press today that Samsung has indeed already complied with its undertaking to provide Apple with three samples of its proposed Australian product.  However, while Samsung had apparently been planning a new launch date of 12 September 2011, it seems that this may now be further delayed to permit a more substantive hearing to take place in relation to Apple’s request for an injunction, sometime in late September.

28 August 2011

Gene Patent Bill Update – Senate Inquiry Extended… Again

As some readers will recall, the Australian Senate Legal and Constitutional Committee, which is currently conducting the inquiry on the Patent Amendment (Human Genes and Biological Materials) Bill 2010, was originally due to report by 16 June 2011.

Having received over 100 written submissions, and conducted two days of public hearings, the Senate granted the Committee an extension of time for reporting, until 25 August 2011 (see Update on the Australian Senate Gene Patent Inquiry).

Now, in the most recent development, on 23 August 2011 the Senate granted the Committee a further extension of time, until 21 September 2011.

Rumour has it (and we would love to hear from anyone with any additional ‘inside information’) that the reason for this latest delay is, quite simply, because the Committee is hopelessly divided over the Bill, and is unable to reach a sufficient consensus to make any recommendation.

Dutch Courts Will Issue ‘Pan-European’ Injunctions: We Were Wrong!

Last Thursday we stated that reports of a cross-border injunction issued by a Dutch court were incorrect, because the European Court of Justice (ECJ) has previously ruled that national courts do not have the power to issue such injunctions in patent matters.

We could follow the lead of the mainstream media, and call this post a ‘clarification’.  But we will not.  Instead, we will call a spade a spade, and admit the simple truth – we were wrong.

Quite aside from anything else, the truth is far more interesting, and only serves to reinforce the main point of our previous article – the Netherlands is a really good place to validate a European patent relating to products that are imported to, or exported from, continental Europe.

25 August 2011

Why Apple Has Patents In The Netherlands & Maybe You Should Too

There is something we need to say right up front in this post, before taking a few steps back to explain in more detail.  Contrary to what you may have read in many places elsewhere, Apple has not obtained an injunction from a Dutch court which is effective (formally or otherwise) across all of Europe.  The injunction, based upon a patent in-force in the Netherlands, and deriving originally from a European patent application, is effective only in the Netherlands.  However, as we shall see, this does not mean that the injunction is necessarily of little significance.

For those who have not been following the story, in the past day or so, Apple has had a mixed result in a court in The Hague in its ongoing battles with Samsung.

On the positive side (for Apple, not so much for Samsung) the Dutch court made a preliminary finding that Samsung’s Galaxy S, Galaxy S II and Ace smartphones infringe an Apple patent relating to a particular ‘photo gallery’ function, and issued a corresponding injunction barring Samsung from dealing with these accused products in the Netherlands.

In many ways, however, the decision might be viewed as a setback for Apple, which was unsuccessful in the following respects:
  1. the court did not find any infringement by Samsung’s Galaxy Tab 10.1, or other tablet devices;
  2. the court also expressed an opinion that Apple’s ‘swipe-to-unlock’ patent was most likely invalid on grounds of obviousness, and therefore refused to make a preliminary finding of infringement against Samsung; and
  3. the injunction does not, in any event, go into effect until 13 October 2011, which provides Samsung with plenty of time to modify its products to remove the offending feature.

24 August 2011

Did Stanley Kubrick Invent the iPad2?

The short answer to the question in the subject line is ‘no’.  Neither the director Stanley Kubrick, nor writer Arthur C. Clarke, can be credited with having invented the iPad2 in their depiction of tablet-style devices in the film 2001: A Space Odyssey.

However, they may have designed its external appearance, and this may be enough to prevent Apple from enforcing its alleged intellectual property rights in relation to the physical appearance of its latest tablet.

As is being widely reported today (e.g. in the Fairfax press here in Australia, and on the FOSS Patents blog), Samsung has offered a still image, and a YouTube clip, from Kubrick’s film in its defence of a US ‘patent’ lawsuit brought against it by Apple.  There has been some confusion, however, due to the fact that in the US there are three kinds of ‘patents’.  The familiar ‘utility patent’ protects functional inventions, while the ‘design patent’ protects physical appearance.  The third type of patent is a ‘plant patent’ which protects new plant breeds.

Here in Australia, as in many other countries, we avoid this confusion by calling our equivalent to the ‘design patent’ simply a ‘registered design’.

23 August 2011

Australian Patent Office Shoots Down Another ‘Business Method’

Network Solutions, LLC [2011] APO 65 (19 August 2011)

Hearing in relation to examiner's rejection of a patent application - whether the claimed invention a manner of manufacture – whether claims directed to ‘a medium storing instructions adapted to be executed by a processor’ a manner of manufacture

The truly astonishing thing about this most recent decision by Hearing Officer Phil Spann is not that the claimed method was found not to be patent ineligible – this outcome is not at all surprising considering the subject matter, and the recent direction taken in a number of Patent Office decisions.  The real surprise is that the decision, issued on 19 August 2011, quotes extensively from the US Court of Appeals for the Federal Circuit (CAFC) decision in CyberSource Corporation v Retail Decisions, Inc (Fed. Cir. 2011, No. 2009-1358), which was itself only issued on 16 August 2011 (already 17 August in Australia), and reported on this blog on 18 August 2011 (see ‘Computer Readable Medium’ Claims – Substance Trumps Form).

The message could not be more clear, in case anybody has missed it so far.  The Patent Office has so-called ‘business method’ patents in its sights, and has no compunction in using whatever ammunition it may be able to find to shoot down ‘wayward’ claims.  Never mind that a decision was issued in another jurisdiction with a markedly different patent statute – the Federal Court of Australia has indicated approval of certain US decisions previously, so logically this approval can be extended to all US decisions.  And never mind that the foreign decision in question was issued weeks after the applicant’s submissions were received in Australia – there is always a right of reply by way of appeal to the Federal Court, assuming the applicant has a lazy few tens of thousands of dollars tucked away for the purpose.

Now, we are not saying that this decision is necessarily wrong.  But what we are saying is that the law regarding patent-eligibility in Australia is what the Australian legislature, and the prescribed Australian courts, determine it to be.  It is not what the US courts decide.  Nor is it some creeping incremental advance on prior Patent Office decisions, which move the principles being applied ever further from the true sources of the law – the Australian parliament, and the Australian courts.

22 August 2011

Tim Knight Talks to Mark Lemley About Patent Law

Mark Lemley
Professor Mark Lemley is the William H. Neukom Professor of Law at Stanford Law School, where he teaches intellectual property, computer and Internet law, patent law, and antitrust.  He is also the author of seven books, and 119 articles on his subjects of interest.

As if all this were not enough, Prof Lemley remains a practicing lawyer.  He has worked with Brown & Bain and Fish & Richardson in Silicon Valley, and with Keker & Van Nest in Sa Francisco.  He is a founding partner of Durie Tangri LLP, where he litigates and counsels clients in all areas of intellectual property, antitrust, and Internet law.  He has argued numerous court cases, including six Federal appellate cases.  Clients he has represented include Comcast, Genentech, Google, Grokster, Hummer Winblad, Impax, Intel, NetFlix, Palm and TiVo.

Yet, despite all of this practical experience, Lemley appears to be a controversial figure.  When his name comes up on certain popular blogs covering US patent law, it is not uncommonly met with abuse and derision by various commenters.  This perhaps says more about those making the comments than it does about Lemley, yet it is difficult to understand why he is widely-viewed as being ‘anti-patent’.  Certainly his academic papers address policy matters, rather than issues of day-to-day practice, and his proposals for reform are sometimes contentious and might be interpreted as ‘weakening’ the protection provided by the US patent system.  However, he writings do not appear to be generally anti-patent per se.  And when the strong protections provided under the system are being employed by patent trolls, leading to widespread loss of public confidence in, and support for, the system, maybe this is a discussion that needs to take place.

18 August 2011

‘Computer Readable Medium’ Claims – Substance Trumps Form

A recent decision of the US Court of Appeals for the Federal Circuit (CAFC) demonstrates a substantial harmony amongst the laws of jurisdictions including the US, Europe (and the UK) and Australia, regarding the determination of patent-eligibility of claims directed to computer program products (such as recorded CD-ROMs, DVDs, magnetic discs, or similar).

Specifically, in all of these jurisdictions, it is the substance of the ‘underlying invention’ which must be considered, and not the specific form (e.g. method, system, apparatus, software product) in which it is claimed.

Just last week, we reported on the recent decision of the Australian Patent Office in Discovery Holdings Limited [2011] APO 56 (see Computer-Implementation No Insurance Against Rejection).  In that case, the invention was, in essence, an insurance plan, which is not patent-eligible subject matter under the ‘manner of manufacture’ test.  The application also included ‘system’ claims, directed to a physical hardware arrangement comprising a suitably-programmed processor coupled to a memory device, and configured to implement the insurance plan.  Despite the fact that a physical apparatus is, on the face of it, patent-eligible (if also novel and inventive), the Hearing Officer applied a test by which the ‘substance’ of the invention (i.e. the insurance scheme) took priority over the form in which it was claimed.

A very similar approach has been taken by the CAFC in CyberSource Corporation v Retail Decisions, Inc (Fed. Cir. 2011, No. 2009-1358).  Here, the invention in the patent assigned to CyberSource was in essence a method of detecting fraud in online credit card transactions by analysing patterns of transactions involving particular cards against network addresses (such as an IP address) from which the transactions originate.  The court found that the method, as claimed, was ineligible for patent protection under 35 USC § 101 because it was so broad and trivial that it could be performed purely by mental steps.  Indeed, CyberSource’s CEO admitted that ‘before CyberSource created a computer implemented fraud detection system, “[w]e could see just by looking that more than half of our orders were fraudulent.”’

17 August 2011

‘Tab Wars’ Update – German Court Winds Back Samsung Injunction

In our earlier article, ‘Tab Wars’ Update – Apple Claims a Win in Europe, we wrote that we were:

…a little sceptical of the Bloomberg report, in part because it is unclear to us that a German court necessarily has the power to issue – or to enforce – an injunction covering the entire EU, although this may depend upon the basis for the injunction.

Now it seems that the Dusseldorf District Court has itself had second thoughts about this issue.

The FOSS Patents blog is now reporting that the District Court has temporarily suspended enforcement of the injunction barring distribution of Samsung’s Galaxy Tab 10.1 in all countries of the EU, with the exception of Germany.  This suspension is a result of concerns that the German court may lack the necessary jurisdiction to issue an injunction that is enforceable against a Korean company in countries other than German.

The injunction remains in force in Germany, because the court is confident of its jurisdiction over activities that take place within Germany, and/or which involve a German resident company (i.e. Samsung’s German subsidiary).

Nothing should be read into the fact that this suspension is temporary.  The preliminary injunction is itself temporary, pending a further hearing of Apple’s claims (at which, this time, Samsung will be represented) set down for 25 August 2011.

Google and Motorola – Patentology On the Radio

Independent current affairs program The Wire, which goes out daily on a number of community radio stations around Australia, today broadcast a piece on Google’s acquisition of Motorola Mobility (see Google Joins the ‘Hardware Club’ While Microsoft Whines).

We were contacted by producer/journalist Farah Ahmed for comment, and were very pleased to contribute to the story, which can be downloaded here: ‘Google acquires Motorola Mobility’ at The Wire (MP3, 4 minutes, 1.6MB).

Overall, it is a very good piece. which manages to cover quite a lot of ground and to achieve a fair balance of perspectives, especially considering the time constraint.

The story opens with a quotation from the recent blog post by Google’s Chief Legal Officer David Drummond, which we reported in Apple v Samsung: Google Says It’s All About Android, specifically his statement that ‘Microsoft and Apple have always been at each other’s throats, so when they get into bed together you have to start wondering what's going on.’

16 August 2011

Google Joins the ‘Hardware Club’ While Microsoft Whines

If you have an interest in this blog, then you most likely already know that Google has announced its intention to buy Motorola Mobility, the handset division recently spun-off by Motorola, for a cool US$12.5bn.

There is no shortage of commentary already on the web, regarding whether or not this is a reasonable price for Google to pay, or whether the purchase is really just about boosting Google’s patent portfolio after missing out on acquiring patents from either Novell or Nortel.

Regardless of what others may be saying, we consider that Google has struck a pretty good deal, despite the fact that the price it is paying represents a 63% premium on the closing price of Motorola Mobility shares last Friday.  Firstly, this is a purchase that it can easily afford, considering that various reports place its cash reserves (prior to this deal) at around US$36bn.  The relatively high premium may simply mean that the market had undervalued Motorola Mobility.  More likely, however, the value-add to Google of acquiring the company is far greater than the price it has paid.

14 August 2011

IPONZ Issues ‘Explanatory Note’ on Computer Program Guidelines

The term ‘explanatory note’ suggests something in the nature of a brief clarification.  Thus an ‘explanatory note’ that is 50% longer than the original document which it purports to explain would appear to defy conventional interpretation.  However, this is precisely what has occurred in the response by the Intellectual Property Office of New Zealand (IPONZ) to comments received on its Draft Guidelines for the Examination of Patent Applications Involving Computer Programs.  A smaller font, and narrower margins, have been used to keep the page count down, but on a count of either paragraphs or words, the ‘note’ is half as long again as the original draft guidelines.

To make matters worse, the Explanatory Note: Patentability of Inventions Involving Computer Programs does little to clarify the original guidance, and fails to address the majority of concerns raised in the submissions received in response to the draft guidelines.

If any further evidence were required that something has gone very sadly awry in the process of updating New Zealand’s patent laws, this is surely it!

13 August 2011

Computer-Implementation No Insurance Against Rejection

Discovery Holdings Limited [2011] APO 56 (9 August 2011)

Hearing in relation to examiner's rejection of a patent application - whether the claimed invention a manner of manufacture - whether the claimed invention involves an inventive step

In this Patent Office decision, claims directed to a computer-implemented method and system for managing a life insurance plan were considered by Hearing Officer Ed Knock.  At issue was whether the claims were directed to patent-eligible subject matter (i.e. were for a ‘manner of manufacture’), and additionally whether they involved an inventive step.

The Hearing Officer found against the claims on both counts, rejecting the application outright and declaring that there was nothing disclosed in the specification that would be capable of meeting the requirements for patentability.

The claims of application no. 2007257547 relate to a life insurance product which differs from pre-existing products in that in addition to covering the insured party for the usual events of disability, dread disease and death, it also offers a payout in the case of certain events attending the parents of the insured party.  Such a policy is intended to assist the insured in case of financial burden imposed as a result of the effects of aging upon their parents.

To our mind, this is actually quite an innovative concept.  Contrary to the findings of the Hearing Officer, in considering inventive step, the idea that a single policy primarily insuring the life of a person might also offer a payout in case of events occurring to another person, not directly a party to the policy, seems highly unusual.  Interestingly, in our own practice we received an enquiry from someone (not the applicant in this case, which is based in South Africa) with a very similar idea.  Our advice was that while it sounded like a great product, we did not consider that it would be patentable under the ‘manner of manufacture’ test for eligibility in Australia.

We therefore agree with the decision of the Hearing Officer on manner of manufacture.  However, while it is of no consequence in view of the claims’ failure to meet this threshold requirement, we do not consider that he provided a sufficient case for a finding of lack of inventive step.

10 August 2011

‘Tab Wars’ Update – Apple Claims a Win in Europe

Bloomberg is reporting today that a district court in Dusseldorf, Germany, has granted an injunction preventing Samsung from distributing the Galaxy Tab 10.1 throughout the European Union (EU), except for the Netherlands.

The information appears to have come originally from the Deutsche Presse-Agentur news service, which cited – according to Bloomberg – ‘unidentified people involved in the court negotiations’.  Other outlets are also reporting the story, citing the same original source.

However, Bloomberg also claims that an Apple spokeswoman, Kristin Huguet, confirmed the report ‘in a phone interview’.   It is not clear with whom this interview was conducted, or whether it has been reported in greater detail elsewhere.

07 August 2011

That Dilbert Strip – What It Tells Us About the ‘Smartphone Wars’

It is all over the internet, and it’s funny, so it might as well be here, too – Scott Adams’ take on the current fad amongst tech companies for suing one another for patent infringement.


Of course, it spoils the joke to analyse something like this too deeply, but we cannot help but comment on the fact that when something as uninteresting to the general public as patent law makes an appearance in the ‘funny pages’ of newspapers worldwide, something unusual is going on.

However, contrary to much of what you might read on the web these days – including contributions from the likes of Google – the problem with the patent system is not that it is hopelessly broken. It clearly is not, although like most things in the real world, it is far from perfect.

Same Blog, New Look!

Funny how things do not always work out the way you imagine…

When we started this blog just over a year ago, our vague idea was to write thoughts and commentary on patent law, practice and related issues such as innovation, research, government policy, and so forth. 

It was – and remains – a core objective of the Patentology blog to maintain an emphasis on Australia and New Zealand.  This does not mean that articles are limited to happenings in these countries, because obviously events elsewhere can have an impact on local inventors, innovators, businesses and patent professionals.  But the last thing the world needs is another blog (or ‘blawg’) dissecting every decision of the US Court of Appeals for the Federal Circuit!

With this fairly narrow brief – two countries with a combined population of under 30 million, and not aiming to cover IP issues beyond patents – we imagined that it would be fairly easy to keep up-to-date with relevant events.  In fact, we thought that there would be plenty of time and space for articles containing our general musings on the history and philosophy of patent laws and innovation policy.  And that is why we chose a design for the blog which, we hoped, would evoke a sense of the long history of the international patent system, from 1474 when the world’s first formal patent statute was enacted in Venice, through the UK Statute of Monopolies in 1623 (which still provides the touchstone of patentability in Australia and New Zealand), the first US patent act of 1790, and so on up until the present day.

Oh, how wrong we were!

04 August 2011

Apple v Samsung: Google Says It’s All About Android

As the ‘patent war’ over smart phone and tablet devices continues, Google Senior Vice President and Chief Legal Officer David Drummond has publicly alleged that legal actions by ‘Microsoft, Oracle, Apple and other companies’ against Barnes & Noble, HTC, Motorola and Samsung are really all about Android.

In a posting on the Official Google Blog, Drummond states:

…Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.

So what is Drummond trying to say here?  That it is all a big conspiracy, and poor little Google is the target?  That companies with technologies which compete with Android have formed an evil cartel to squash competition?  This all seems a bit rich, and Google’s claims that this is really about their technology, and the incumbents’ fear and loathing of the upstart, smack somewhat of the new kid on the block crying out for attention.

In other words, all this whining is neither very attractive, nor particularly mature.

02 August 2011

It’s Apple vs Samsung Down-Under as Smartphone War Escalates

As has been reported by various media outlets, Justice Bennett in the Federal Court of Australia has heard claims by Apple, Inc that Samsung should be prevented from offering its Galaxy Tab 10.1 tablet (which is based on the Android operating system) to customers in Australia.  (See, e.g., articles at the Sydney Morning Herald, and itnews.com.au.)

An interlocutory injunction was sought by Apple, to put a stop to Samsung’s plans to launch the Galaxy Tab 10.1 in Australia on 11 August 2011.  Apple’s claim is based primarily on allegations that the Samsung tablet infringes Apple’s Australian standard patent nos. 2008201540, 2005246219, 2007283771, 2009200366 and 2007286532, along with innovation patent nos. 2008100283, 2008100372, 2009100820, 2008100419 and 2008101171.  The patents relate to various touch-screen user interface features.

In the event, there was no need for the court to issue an injunction.  Instead, Samsung made the following undertakings – noted in the court’s orders, available from the Commonwealth Courts Portal – after discussions between the legal teams representing the parties:
  1. without admission of liability, Samsung will not, without permission from Apple, ‘import, promote, offer to supply, supply, offer for sale or sell in Australia the Galaxy Tab 10.1 device’;
  2. Samsung will, under appropriate confidentiality agreements, provide Apple’s solicitors with three samples of the version of the Galaxy Tab 10.1 device intended for launch in Australia, at least seven days prior to the date of intended distribution to sales channels, for the purpose of review and analysis;
  3. again without any admission of liability, Samsung will not, until the seven day review period has expired, do any of the following:
        (a) advertise;
        (b) seek expressions of interest from consumers in relation to;
        (c) sell;
        (d) authorise or facilitate the advertisement by third parties of; or
        (e) otherwise supply to consumers,
    the Galaxy Tab 10.1 device.

Australian Federal Court ‘Evergreens’ ARAVA for Sanofi-Aventis

Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 3) [2011] FCA 846 (29 July 2011)

Claim construction – scope and construction of second medical use claims – ‘objective purpose’ of administration of therapy – actual effect of administration

Novelty – application and limitations of the ‘reverse infringement test’

Infringement – infringement by supply of products

In a decision issued by Justice Jagot in the Federal Court of Australia, Sanofi-Aventis has been handed what seems to amount to an effective 10-year extension on its patent monopoly for the pharmaceutical compound leflunomide, which it markets in Australia under the names ARAVA and ARABLOC.

Briefly, Sanofi-Aventis had an Australian patent on the compound, which expired in 2004.  This, of course, enabled it to prevent the supply of leflunomide for any purpose during the life of the compound patent.  The approved purposes for which the drug is registered for use relate to the treatment of rheumatoid and psoriatic arthritis.

But Sanofi-Aventis also has a patent covering a subsequent medical use of the drug, not envisaged in the original patent, namely in the treatment of the skin condition psoriasis.  Until 2014, when this further patent expires, Sanofi-Aventis therefore has a monopoly on the use of leflunomide for the treatment of psoriasis.  However, the drug is not currently approved in Australia for this purpose.

Based on the above description of the present circumstances, you might think that a generic manufacturer, such as Apotex, would now have the right to market a competing leflunomide product for the purposes covered by the existing approvals, i.e. treatment of rheumatoid and psoriatic arthritis.

According to the Federal Court, however, you would be wrong.  Justice Jagot has found – generously (to Sanofi-Aventis) – that Apotex’s proposed supply of a generic leflunomide product for the treatment of arthritis would infringe the psoriasis treatment patent, and that Sanofi-Aventis is thus entitled to an injunction preventing such supply.

It is difficult to see how this decision does not effectively ‘evergreen’ the compound patent, making the supply of leflunomide for any therapeutic purpose that might incidentally treat psoriasis an infringement of the Sanofi-Aventis patent, for an additional ten years (until 2014).

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