24 December 2013

Australia – No Country for Troll’d Men (or Women)?

Upaid Systems Ltd v Telstra Corporation Limited [2013] FCA 1441 (23 December 2013)

Credit CardUpaid Systems Ltd, a company which some regard as a patent troll, has stumbled at the first hurdle in its infringement case against Telstra (which I first reported back in August).  Specifically, a judge of the Federal Court of Australia has found that Upaid has failed to meet its obligations to provide an adequate statement of its case, i.e. to identify, with sufficient particularity, at least one instance of each type of infringement alleged to have been committed by Telstra.

The court has given Upaid until 28 February 2014 to file amended documents, stating its allegations in sufficient detail.

I have said before that I do not consider Australia to be a fertile hunting ground for patent trolls, because the patent litigation system in this country lacks a number of the characteristics that make the trolls’ enforcement-based business models so effective in the US.  And while Upaid may not qualify as a classic ‘troll’, the court’s finding that it has failed to plead its case adequately highlights some of the challenges that a true patent troll would face in Australia.

Two things are particularly notable about the court’s decision:
  1. Upaid’s particulars were found to be inadequate despite what appears to have been a reasonable effort to describe specific examples of alleged infringement by Telstra, confirming that the court was not willing to ‘bend’ or relax the rules simply because the task of particularising the infringement case might be regarded as difficult; and
  2. as a result of its failure, Upaid has been ordered to pay Telstra’s costs (i.e. necessary expenses and reasonable attorney fees) of its application to compel Upaid to provide an adequate statement of its case.
As a result, four months after commencing proceedings Upaid has yet to make any real progress in its infringement case against Telstra.  On the contrary, by the time it has paid its own legal bills, and the costs ordered in favour of Telstra, Upaid will certainly be out-of-pocket to the tune of at least some tens of thousands of dollars, and possibly more, just for dealing with this preliminary aspect of the case.  A true patent troll, hoping for a quick win in the form of a settlement at a cost below that of proceeding to trial, would have to be considering cutting its losses at this point.

Making this decision even more interesting – and the case worthy of watching from an international perspective – is that the two notable features listed above, i.e. a high standard for pleading a case of infringement, and fee-shifting, are both key elements of the Goodlatte Innovation Act 2013 which was recently passed by the US House of Representatives.

This case suggests that raising the requirements for pleading an infringement case can have a significant impact on the ability of patent trolls – and perhaps on inadequately-prepared non-practising entities (NPEs) in general – to bring unreasonable and disruptive lawsuits.

22 December 2013

Is Indonesia Calling in Old Patent Maintenance Debts?

IndonesiaI have become aware that some (former) applicants for Indonesian patents have recently received letters from the Directorate General of Intellectual Property Rights in Indonesia requesting payment of annual maintenance fees relating to abandoned patents dating back to the 1990’s.

Thanks to the efforts of the World Intellectual Property Organization (WIPO), various national patent offices, attorneys and agents, and even the occasional blogger, many patent applicants are now conscious of the ‘registration’ and ‘maintenance’ scams being perpetrated by unscrupulous operators. Unsurprisingly, therefore, a number of recipients of letters purporting to come from the Indonesian authorities have responded with suspicion, and referred the correspondence to their patent attorneys for verification.

In this case, it appears that the letters are genuine. It looks like the Indonesian IP Office really is requesting payment of thousands of dollars in overdue maintenance fees on patents which were abandoned perhaps a decade or more ago!

An example of such a letter (with names and numbers redacted to protect the identity of the applicant and attorney in question) is included below.  But first, a little background.

14 December 2013

Patricia Kelly Named as New Director General of IP Australia

Patricia KellyNearly a month after the relatively quiet departure of Philip Noonan from the post of Director General at IP Australia, his replacement has stepped into the role with comparably little fanfare.

This week IP Australia has announced that from 9 December 2013, the new Director General is Ms Patricia Kelly PSM.  Ms Kelly brings a wealth of relevant experience to the role.  Her public sector career spans over thirty years, including periods with the Department of Social Security and the Department of Prime Minister and Cabinet, and since 1995, the Department of Industry and its various predecessors.

Ms Kelly’s credentials in science, research, innovation and industry are impeccable.  From 2004 to 2013 she served on the Co-operative Research Centres (CRC) Committee.  From 2006 to 2013 she chaired the Audit Committee of the department known variously through this period as the Department of Industry, Tourism and Resources, the Department of Innovation, Industry, Science and Research, and the Department of Industry, Innovation, Science, Research and Tertiary Education.  Of course, IP Australia is itself situated within this department.

08 December 2013

The Gurry Controversy – WIPO Is Not an Arm of the US Government!

Francis Gurry (Source - Wikimedia Commons)I am a fan of Gene Quinn’s IP Watchdog blog (which, incidentally, you can vote for in this year’s ABA Blawg 100 listings, where it has been named in the ‘Hall of Fame’).  One of the things I appreciate about Gene’s approach to blogging is that he is not afraid to speak his mind, particularly on controversial issues.  And while I often agree with what he has to say, sometimes I do not.  This is one of those occasions.

In two recent IP Watchdog articles, Gene has gone on the attack against World Intellectual Property Organization (WIPO) Director General Francis Gurry (see DNA Scandal Raises Pressure on WIPO Director General and WIPO Watch: Is there a conspiracy against Francis Gurry?)  Now, Gurry is an Australian, but it is not my intention here to engage in some kind of US versus Australia slanging match.  I am more interested in the issues that have motivated such strong views on IP Watchdog, independently of Francis Gurry’s nationality.

The recent articles have been occasioned by the fact that Gurry’s current term as Director General expires in 2014.  Along with three other candidates – Mr Geoffrey Onyeama (Nigeria), Mr Jüri Seilenthal (Estonia), and Mr Alfredo Suescum (Panama) – he has renominated to continue in the role for a further six years.  There are, however, some people – principally, as far as I can determine, in the US – who do not consider Gurry to be a suitable candidate.

What Did Francis Gurry (Allegedly) Do?

There are three allegations that are being levelled against Gurry:
  1. that he ‘secretly’ ran a program to ship ‘high-end computers’ and other electronic equipment to North Korea and Iran;
  2. that he made ‘secret agreements’ to open satellite offices of WIPO in Russia and China; and
  3. that he was involved in a ‘scheme to illegally acquire DNA samples of WIPO employees’ as part of an investigation by Swiss authorities into anonymous letters he had received prior to his election as Director General.

04 December 2013

High Court Rules Methods of Medical Treatment Patent-Eligible

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50 (4 December 2013)

High Court of AustraliaA panel of five judges of the High Court has decided, by a majority of 4-1, that methods of treating the human body by the administration of a therapeutic drug constitute patent-eligible subject matter in Australia.  More particularly, the court ruled in favour of claims directed to a subsequent therapeutic use, i.e. a method of administering a known compound (in this case, leflunomide) for treatment of a condition (psoriasis) for which its efficacy was not previously known.

This is a significant decision.  There have been just a handful of cases over the years in which the issue of patentable subject matter (i.e. ‘manner of manufacture’ under the Australian law) has been considered in cases that the High Court would regard as influential.  In a number of these, the courts expressed doubts as to the eligibility of methods for treating ailments of human subjects for patent protection, but in none of the cases was it actually required to decide the question. 

For a period up until 1992 there was a presumption that methods of ‘medical treatment of human disease, malfunction, disability or incapacity of the human body or of any part of it’ were excluded from patentability, based upon these doubts.  However, that changed in 1992 when a Federal Court judge upheld claims directed to a method for treatment of sleep apnoea – a decision which was affirmed on appeal to a full bench of the court.  Again in 2000 a Full Court of the Federal Court of Australia reached the same conclusion.  While the question of patent-eligibility of treatment methods has generally been considered settled since these Full Court decisions, in the absence of a High Court ruling, some uncertainty necessarily remained.

That uncertainty has now been eliminated, at least in relation to treatments involving the administration of therapeutic drugs.  It appears that the High Court has, however, left open the question of whether the activities or procedures of doctors (and other medical staff) when physically treating patients (i.e. surgical methods and the like) are eligible for patent protection.

01 December 2013

Raising the Bar on Australian Patent Drafting Standards

The Secret of SuccessAs 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.

The most recent update to the patents commentary includes coverage of the reforms introduced in the Raising the Bar Act which are directed principally to the quality and scope of patent specifications.  This article discusses some of these reforms, and the corresponding updates to the CCH commentary.


The Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) introduced numerous reforms to the Patents Act 1990 (Cth), many of which have been designed to lift the standards required for a valid patent to levels comparable with Australia’s major trading partners, such as the US and countries of the European Union.

The impact of some of the reforms is largely beyond the control of patent applicants and their professional advisors.  For example, the introduction of a more stringent test for inventive step means that any existing prior art may have a greater narrowing effect than it would have under the former law.  While skilled drafting of the original patent specification will, as always, maximise the options open to the applicant when unforeseen prior art arises, there is no drafting technique that will enable an applicant to claim a scope of protection for an invention that is simply no longer available under the raised inventive step standard.

There are other reforms, however, that are directed principally to the quality of the specification, and to ensuring that the scope of the patent monopoly claimed by the applicant is justified by the extent of the disclosure provided in the specification.  The skill of the draftsperson certainly plays a role in ensuring that the applicant is able validly to claim the full extent of patent protection to which they are entitled.  Conversely, if a patent specification is inadequate then the applicant may be prevented from claiming a broad scope of protection, even in the absence of pertinent prior art.

Fortunately, most Australian patent attorneys are accustomed to drafting specifications to the standards required by the major foreign jurisdictions.  Now, however, those same standards must be applied even when preparing patent specifications that will be filed only in Australia.

Patent Office Enforces Tough New Evidence Extension Rules

Julie-Anne McCarthy and Bradley McCarthy v TRED Design Pty Ltd [2013] APO 57 (11 November 2013)

Time UpIn the first published decision of the Australian Patent Office relating to the new Raising the Bar regulations on extensions of time during opposition proceedings, an opponent has been denied an extension to file evidence in support of its opposition.  The decision confirms that the Office will be taking a hard line on applications for extensions.

In its June 2009 consultation paper, Resolving Patent Opposition Proceedings Faster [PDF, 198kB], IP Australia identified delays in opposition proceedings – with oppositions often running for between three and eight years – as one of the issues to be tackled under the Raising the Bar reforms.  Long delays were most commonly due to evidential time-frames, as a result of the Patent Office having only limited powers to refuse requests for extensions of time.

This changed when the Raising the Bar reforms, and in particular the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013, came into effect on 15 April 2013.  New Regulation 5.9 established a more rigorous test under which, unless exceptional circumstances apply, parties preparing evidence in the course of opposition proceedings must act promptly and diligently at all times, and make all reasonable efforts to comply with relevant time periods. 

23 November 2013

Australian Appeals Court Hears ‘Business Method’ Patent Case

Yes, this is literally a 'stock photo'!Last Monday, 18 November 2013, I attended the Full Federal Court hearing of Research Affiliates’ appeal against the decision of a single judge of the court earlier this year to uphold the Australian Patent Office’s rejection of its patent applications relating to the construction and use of passive portfolios and indexes for securities trading.

The parties to the hearing were (of course) Research Affiliates, LLC and the Commissioner of Patents.  The three judges on the Full Bench were Justices Bennett (best known for presiding over the Australia Apple v Samsung litigation), Kenny and Nicholas.

The sole issue in the appeal is whether or not Research Affiliates’ patent claims, directed variously to computer-implemented methods and computer systems for ‘generating an index’, define patent-eligible subject matter (i.e. a ‘manner of manufacture’ under Australian law).  It has not been contended by the Commissioner of Patents that the claims lack novelty or an inventive step, or that the patent specification is deficient in any other way.

The patent-eligibility of so-called ‘business methods’ – including, but not limited to, processes implemented with the aid of computer software – is a contentious issue in many jurisdictions, including Australia.  There is arguably an emerging consensus that methods of organising human affairs which involve only the manipulation of legal or financial instruments, without technological assistance, are not generally eligible for patent protection, even in those countries with a liberal approach to patentable subject matter.  However, when technical means are employed, typically in the form of a programmed computer, in the implementation of an otherwise unpatentable process, the position remains unresolved. 

The Full Court will need to tackle this issue head-on in the Research Affiliates case.

18 November 2013

What’s Up Down Under With Apple and Samsung?

Smart devicesLast week, the Federal Court of Australia quietly published a further interim judgment in the ongoing litigation between Apple and Samsung.  Samsung Electronics Co. Limited v Apple Inc. [2013] FCA 1142 was officially decided in 4 November 2013, however publication was delayed to give the parties an opportunity to review the judgment and request that any confidential information be redacted. 

The new judgment is, I am afraid, not very exciting reading, particularly for the lay-person.  It is a decision on the rather dry subject of whether or not Samsung should be allowed to submit further evidence relating to ongoing negotiations conducted with Apple since the commencement of the litigation.  Any content in the judgment which would have made for interesting reading – such as, for example, the terms of proposed licensing arrangements between Apple and Samsung – has been blacked out.

The answer that the court gave to Samsung, incidentally, is ‘no’.  Samsung has already filed an application for leave to appeal the decision, and a hearing on this application will take place on 21 November 2013.

However, this seems as good an opportunity as any to review the history of the Australian Apple/Samsung litigation, and provide an update on its current status. 

As matters stand right now, it does not seem likely that any judgments will be handed down on substantive issues, such as whether Samsung or Apple infringe any of each other’s patents, or whether those patents are valid, until at least the first half of 2014.  In one of the ongoing matters (to which the latest interim decision relates) there are hearing dates set down for a further 41 days, extending into April next year.  Any judgments that are issued will almost certainly be appealed by at least one of the parties, meaning that any final determination in any of the cases is unlikely until at least the second half of 2014, and possibly not until 2015.

It is worth bearing in mind that all of these cases relate to products which are already superseded.  Indeed, some of the allegedly infringing products – such as Samsung’s original Galaxy Tab 10.1, and Apple’s iPhone 3GS – are now two or more generations old.  And, contrary to what you may read in some sections of the media, no ruling in these cases will extend to newer products merely because they appear to include similar features.  A patentee always bears the burden of proving that infringement is occurring.  A court will not ‘infer’ infringement based on a different product, no matter how similar the two may appear.

Which leaves me wondering still, as I have done before, what exactly is the purpose of all this litigation – in Australia and elsewhere – and why do Apple and Samsung seem unable to reach any kind of workable settlement?

16 November 2013

Global Patent Prosecution Highway Pilot to Commence in 2014

HighwayOn 1 November 2013 IP Australia, along with the patent offices of twelve other countries, announced the commencement of a Global Patent Prosecution Highway (GPPH) pilot.  This program will simplify the process for accelerating examination in any of the 13 participating offices based upon a favourable examination outcome in any other one of the offices.

The GPPH will commence operation on 6 January 2014.

The Patent Prosecution Highway (PPH) pilot program was originally established to enable an applicant whose claims were found to be allowable by the first patent office in which an application was filed – the ‘Office of First Filing’ (OFF) – to have examination of a corresponding application accelerated in the ‘Office of Second Filing’ (OSF).  In exchange for examining the application out-of-turn, the OSF has access to the results of search and examination in the OFF.

In effect, the PPH was conceived as a mechanism to encourage work sharing among patent offices with sufficient faith in the quality of one another’s work.  Thirty patent offices now participate, to varying degrees, in a range of bilateral PPH arrangements.  Of these, IP Australia is one of the less-involved authorities, having ongoing PPH agreements only with the USPTO.  However, that will change dramatically once the GPPH pilot is underway, giving Australian applicants access to accelerated examination in the US, Japan, Norway, Portugal, Spain, Russia, Finland, Denmark, Canada, the UK, Korea and the Nordic Patent Institute.

10 November 2013

Lost In Transition – Opposition, Appeal and Amendment

Suntory Holdings Ltd v Commissioner of Patents [2013] FCA 999 (2 October 2013)

Thumbs UpThe Federal Court of Australia has, for the first time, considered the effect of reforms to the mechanisms for amending a patent application during appeals from decisions of the Commissioner of Patents which where introduced earlier this year by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.  Unfortunately for patent applicant Suntory Holdings Ltd, the changes in the law mean that its previous efforts to amend its application through the Patent Office have been in vain, and it will now have to start again by applying to the court.

Ironically, the reforms were intended to ensure that application to amend in the course of an appeal could be handled more efficiently.  This should be the case in the future, however Suntory has fallen victim to bad timing, and been caught out by the transitional provisions of the Raising the Bar Act.

The same transitional provisions bit Euroceltique S.A. earlier this year, although in that case the patent applicant did not elect to appeal the Commissioner’s decision to the Federal Court.

I have to say, though, that it is not entirely clear to me what Suntory was hoping to achieve by the requested amendments.  It is even less clear why it appealed the Commissioner’s refusal of its application to amend.  I am not complaining, however, since early judicial consideration of the Raising the Bar reforms is helpful to all of us in confirming that they operate as intended!

05 November 2013

It’s ‘Business as Usual’ on Software Claims at IP Australia

Keep Calm and Carry OnAnybody who thought that the success of RPL Central in its appeal against revocation of its innovation patent by IP Australia would change current Patent Office practice will, I am afraid, be sorely disappointed.

As most readers will be aware, there have been two decisions by the Federal Court of Australia this year in relation to the patent-eligibility of computer-implemented inventions, both resulting from appeals against rejection by the Commissioner of Patents.  The first related to two rejected patent applications by Research Affiliates, LLC, in which the rejection was upheld by Justice Emmett.  The second, as noted above, was the successful RPL Central appeal decided by Justice Middleton.

Research Affiliates is seeking to appeal its loss to a Full Bench of the Federal Court, while the Commissioner has applied for leave to appeal her loss in the RPL Central case.

This leaves applicants – and the Patent Office – in a difficult position.  The two Federal Court decisions are equally binding on patent examiners.  And, although appeals are pending in both cases, they nonetheless currently reflect the state of the law in Australia.  Arguably, the correct approach in this situation would be to determine, on a case-by-case basis, whether claims under consideration are ‘more like’ those in the Research Affiliates applications, or those in the RPL Central patent, and either reject or accept accordingly.

I have found, however, through recent experience, that this is not what is happening.  In practice, IP Australia’s current approach is to continue rejecting applications on the basis of the Research Affiliates decision, effectively ignoring the authority of RPL Central.

02 November 2013

The Days of Fax and Mail are Numbered at IP Australia

No faxesIn an announcement published on 31 October 2013, IP Australia has indicated that within a few months it will no longer be accepting communications via email, fax, or via hard copy to the current Australia Post Lodgement Points.  Nor will it be accepting over-the-phone payments.

Specifically, the ‘assist’ email (i.e. ‘assist@ipaustralia.gov.au’) and phone payment service will cease in around February 2014, while fax and Australia Post Lodgement Points will no longer be available after a date in around June 2014.

IP Australia considers that these services and communications channels will no longer be required once the eServices platform is fully operational – which is currently scheduled to be by the end of this year.  Additionally, IP Australia is promising that it is ‘implementing a number of supporting infrastructure changes which will support continued access to the eServices platform even during planned maintenance and unscheduled outages.’

31 October 2013

Congressman Goodlatte Versus the Patent Trolls

There's Nothing Like a Good Latte!I have previously expressed the opinion here that the patent troll problem is primarily one of litigation abuse, rather than patent abuse (see, e.g., earlier articles on why trolls are largely a US phenomenon, and why the Australian system is less conducive to their nefarious business models).  Previous US attempts to curb troll activity, such as the proposed Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act of 2013 [PDF, 248kB], and its predecessor of 2012, have generally made the mistake of focussing on the technology to which the patent applies and/or the nature of the patent holder.

But a troll is defined by its actions, not by its corporate identity, the history of its patents, or the technology to which those patents apply.

Republican Congressman Bob Goodlatte apparently gets it.  On 23 October 2013 he introduced the proposed Innovation Act 2013, which he describes as a patent litigation reform bill.  The bill is technology-neutral and, as the Congressman’s media release explains:

…targets abusive patent litigation behavior and not specific entities with the goal of preventing individuals from taking advantage of gaps in the system to engage in litigation extortion.  It does not attempt to eliminate valid patent litigation.

In the past week I have read numerous responses to the Goodlatte bill.  A few have been relatively neutral, and simply set out the various provisions of the bill.  Others raise a number of the issues which have previously caused me to express some scepticism as to whether the US would be willing to take the action necessary to rein in patent trolls.  Over at the IAM Magazine Blog, Joff Wild rightly points out that the bill is not specifically ‘anti-troll’, but will affect the risks and obligations faced by patent plaintiffs generally.  Andrew Williams, writing on the PatentDocs blog, describes the proposed legislation as a ‘blunt instrument that will impact all patent infringement actions’.  The Innovation Alliance, which largely represents smaller innovators and patent owners, has also been critical of the bill

None of this surprises me.  I have previously expressed my opinion that there is no way to curb trolls without impacting the rights of patent-holders more generally.  The goal must be to strike the right balance, not to try (and fail) to be all things to all people.

27 October 2013

NZ Government ‘Approves’ Single Trans-Tasman Patent Applications

TeamworkAccording to a media release issued on 23 October 2013, the New Zealand Government has approved the implementation of a single application process (SAP) and single examination process (SEP) for New Zealand and Australian patent applications.

Regular readers of this blog will be aware that this has been in the works for quite a while, as part of the ‘Single Economic Market’ (SEM) initiative between Australia and New Zealand.

An announcement from the Australian Government in July 2011 indicated that an SAP would commence in early 2013, with the full SEP implemented by June 2014.  Clearly, therefore, the plan is already a long way behind schedule, primarily because the initial work sharing arrangements between IP Australia and the Intellectual Property Office of New Zealand (IPONZ) were originally contingent on passage of the new NZ Patents Act, which was delayed far longer than expected.  A work sharing pilot eventually commenced in September 2012, with IP Australia reporting that ‘underlying knowledge and skills used by examiners of both offices are very similar’.

According to a current timetable revealed in NZ Government Cabinet documents, full implementation of the SEP will not occur until at least 2017.

25 October 2013

IP Australia Head, Philip Noonan, to Move On

Philip NoonanI have it on good authority (two independent sources, just like a proper journalist) that the Director General of IP Australia, Mr Philip Noonan, has made the decision to leave his post at the authority, possibly as soon as 13 November 2013.

Philip Noonan has been with IP Australia for nearly six years, having joined as Director General – replacing Dr Ian Heath – in January 2008.  According to his LinkedIn profile, he has Bachelor degrees in both law and science, which are ideal qualifications for patent law.  He is admitted to practice as a solicitor and barrister in Victoria, although I am unaware that he has ever done so.  Instead, he has pursued a career in public service.

From 1982 to 1998, Mr Noonan worked for the Attorney General’s Department, firstly as a Senior Legal Officer working in legal policy, and later as the Head of the Consumer Affairs Division.  At this point, there is a gap in his profile which I have been unable to fill with the assistance of Google, however for the three years immediately prior to his appointment at IP Australia he headed the Tourism Division in the Department of Resources, Energy and Tourism.

A lot has been achieved at IP Australia in the past six years, so it is perhaps unsurprising that Mr Noonan would feel that his work there is done, and that it is time for a change and to let someone else take over!

23 October 2013

Samsung’s European Proposal – Fair, Foul or Foolhardy?

EU LogoIt has been widely reported in the past few days that Samsung has made a proposal to the European Commission (EC) in the hope of avoiding a fine of up to $18.3 billion, following an EC investigation into the Korean company’s use of its standard-essential patents (SEPs) in ongoing litigation, particularly against Apple.

The EC opened the proceedings in January of 2012, based on Samsung’s applications for injunctive relief in various European countries against ‘competing mobile device makers’ (i.e. Apple).  While Apple has principally asserted non-standards-related patents, Samsung’s defensive strategy has been based substantially on alleged infringements of patents which it has declared as being essential to implement global mobile telephony standards.  The EC was concerned, in particular, that Samsung may have failed to honour its commitment to license any SEPs on fair, reasonable and non-discriminatory (FRAND) terms, and that such behaviour might amount to abuse of a dominant position.

Samsung is right to be concerned about the consequences of an adverse finding by the EC, which can levy fines of up to 10% of a company’s global turnover during the year preceding an investigation.  In 2004, for example, Microsoft was fined €497 million (US$794 million) over licensing, interoperability and software bundling practices.  In 2008, Microsoft was ordered to pay an additional €899 million (US$1.44 billion) for failure to comply with the 2004 decision.  And in 2009, the EC fined Intel €1.06 billion ($1.45 billion) for anti-competitive behaviour.  Samsung’s global turnover during 2011 was over $180 billion!

Samsung’s proposal has been published by the EC, which is seeking comments from ‘interested parties’.  The proposed commitment is simple enough.  As summarised in the EC press release:

Samsung has proposed to commit for a period of five years not to seek any injunctions on the basis of any of its SEPs, present and future, that relate to technologies implemented in smartphones and tablets ("Mobile SEPs") against any company that agrees to a particular licensing framework.

The licensing framework consists of: (i) a negotiation period of up to 12 months and (ii) if no agreement is reached, a third party determination of FRAND terms by either a court or an arbitrator, as agreed by the parties. If the parties cannot agree on either submitting to court or arbitration, the parties will have to submit to arbitration.

Personally, I think that this is a pretty fair compromise.  Certainly it lies somewhere between the two more extreme views expressed by IAM Magazine (that denying Samsung the ability to obtain injunctions will actually harm, rather than benefit, consumers) and by FOSS Patents’ Florian Müller (that ‘Samsung's proposals would make things worse, not better, and they would increase, not decrease, legal uncertainty’).  I do not agree with either of these positions.

19 October 2013

EPO Reverses Controversial Divisional Filing Restrictions

M132/0644The European Patent Office (EPO) has announced that, effective from 1 April 2014, the regulations relating to the filing of divisional patent applications in Europe will be amended to reverse the controversial restrictions in place since 2010, under which divisional applications can only be filed within 24 months of the earliest office action or within 24 months of a new lack of unity objection (i.e. that the claims in the application cover multiple inventions) being raised.

From 1 April 2014, it will once again be possible to file a divisional application at the EPO based on any pending application, i.e. which has not been granted or finally refused.

It will also again be possible to file ‘chains’ of divisional applications (i.e. divisionals of divisionals) regardless of the status of the original application.  However, the EPO Administrative Council has indicated that there will be additional fees for second and subsequent generations of divisional applications, and that these fees will escalate with each generation until some cap is reached.  The amount of the additional fees, and the level of the cap, are yet to be determined.

This reversal is not entirely unexpected, but appears to have (pleasantly) surprised many people in the patent professions.  The EPO conducted a consultation on the 24 month time limit earlier this year, and I understand that the issue has also been under discussion through the Standing Advisory Committee before the EPO (SACEPO).  However, it does not seem that many people expected such a complete reversal from the EPO.

Sponsor a Patent Attorney and Help Kids in Need

Port Phillip BayTomorrow (i.e. Sunday 20 October 2013) I am going for a bike ride.  That is not news in itself, since it is something I do most weekends.  However, tomorrow’s ride is a bit longer than usual – 250 km (that is about 155 miles in non-metric units, or nearly 1250 furlongs for those gearing up for the Spring Racing Carnival here in Melbourne).

The ride is around the local body of water, Port Phillip Bay.  The route I am taking is the really long one marked in magenta on the map to the right.  For readers unfamiliar with the geography around Melbourne, Port Phillip Bay is just like Sydney Harbour… only without the Opera House.  Or the bridge.  Or the picturesque views.  But it is about 35 times bigger than Sydney Harbour, with 260 km of coastline, which pretty much makes it perfect if your goal is to ride in a 250 km circle in one day.

The major sponsor is the health insurer Bupa, and the name of the event imaginatively combines the sponsor’s name with a fairly literal description – Bupa Around the Bay.  It used to be called ‘Around the Bay in a Day’ and, since there are now many courses, most of which do not go all the way around, I expect that one day it will simply be called the ‘Bupa Bay Ride’.

For those of you who may be concerned about my sanity, you need not fear.  I have done (and survived) this for the past four years, so I am definitely crazy!  You may also be relieved (as I am) to know that there is a break in the middle for lunch, and to catch a ferry across the mouth of the Bay, from Queenscliff on the western shore to Sorrento on the eastern side.  All going well, I will head off from Melbourne at 5.30am, reach Queenscliff before 11am, be on my way from Sorrento shortly after noon, and arrive at the finish before 4.30pm.

Now, here is the important bit: you can sponsor me to put myself through this arduous ordeal.  Better yet, if you are reading this after the event, but before 31 October 2013, you can sponsor me for already having put myself through the ordeal, confident in the knowledge that I did not back out at the last minute and renege on my side of the bargain.

Money raised by riders in the event goes to The Smith Family, which is a children's charity helping disadvantaged Australian children to get the most out of their education, so they can create better futures for themselves.  If this is not enough to persuade you of the worthiness of the cause, read on for the extended ‘hard sell’ version.

13 October 2013

Commissioner Of Patents Applies to Appeal RPL Central Decision

Symbols of JusticeOn 30 August 2013, Justice Middleton in the Federal Court of Australia upheld the appeal by RPL Central Pty Ltd against the decision of the Commissioner of Patents to revoke an innovation patent relating to an automated information and evidence gathering system.  The Commissioner had determined that the patent was invalid on the ground that it did not relate to a patent-eligible ‘manner of manufacture’.

On 25 September 2013, the Commissioner filed an application with the Federal Court for leave to appeal Justice Middleton’s decision (the case is number VID1023/2013 in the Victorian Registry of the court).

As I have pointed out on previous occasions when reporting on this case, I am not an impartial observer, nor am I at liberty to reveal all that I know about the status of the matter, or to express all of my true thoughts and opinions.  RPL Central Pty Ltd is a client of my employer, Watermark Intellectual Asset Management.  I drafted the patent specification which is under scrutiny in the case.  My colleagues within Watermark’s IP Law firm ran – and continue to run – the Federal Court appeal.

The World of Science and Innovation is No Place for Discrimination

One WorldThis is, nominally, a blog about patents.  But I like to think that it is a bit more than that – I endeavour, when I can, to write about the role of patent law, practice and policy in a broader social context.  I believe strongly in the importance of discovery and innovation to the prosperity and improvement of individuals, communities, nations and humanity at large, and therefore that the ways in which we encourage and foster these activities are also vitally important.

The universe is full of mysteries, and the world of problems in need of solutions.  OK, so some of those problems – such as how to signal to the user of a touchscreen device that they have reached the end of a scrollable page – are of a decidedly ‘first world’ nature (though they are nonetheless important to the prosperity of innovative companies).  However there are other challenges – such as how best to bring the benefits of pharmaceutical innovations to populations in the developing world – which genuinely test the limits of our resolve to apply human ingenuity for the benefit of all.

It is, I believe, self-evident that the more people we have involved in the entire process of innovation – in basic research, in development, in commercialisation, in policy-making, and so forth – the more progress will be made.  It is, therefore, utterly unacceptable for anybody to be excluded from the endeavour, or discriminated against, on the basis of gender, skin colour, age, sexuality, or any other irrelevant consideration.  This is, of course, equally true in all fields of human endeavour, but I think we are entitled to expect that those built on a rational scientific foundation, and populated substantially by the privileged and highly-educated, should be leading the way in this regard.

Which is why I count myself among the large number of people who have been rightly outraged by the treatment of Scientific American blogger DNLee in recent days.  Indeed, she experienced two successive acts of discrimination: firstly by some low-life blog editor at Biology-Online.org, who called her a ‘whore’ because she had the temerity to say ‘no’ to providing them with free content; and then again by Scientific American itself, which removed her post reporting on the incident on the spurious basis that Scientific American ‘is a publication for discovering science’ and that ‘the post was not appropriate for this area’.

06 October 2013

NZ’s PowerbyProxi Sits on a Potential SEP Goldmine

ZapA $4 million investment by Samsung Ventures Investment Corporation in New Zealand company PowerbyProxi Limited has received wide coverage over the past week (see, e.g., the IAM Magazine blog, scoop.co.nz, gigaom.com and AllThingsD, among many others).

On the face of it this is a good news story for the NZ start-up company, which was founded in 2007 based, in part, on intellectual property originally developed at the University of Auckland.  PowerbyProxi claims to have developed the world’s most advanced and safest wireless power system, and the first commercial wireless recharging system capable of 3D power transfer, regardless of how a device (such as a smartphone) is oriented within the recharging unit.  It also claims to own a portfolio of 126 granted patents worldwide, along with numerous further pending applications.

There are two components to the Samsung deal.  Samsung Electro-Mechanics has entered into a strategic partnership with PowerbyProxi, under which it will license the NZ company’s consumer electronics and home appliance wireless power IP and technology.  The other component is the $4 million in strategic funding from Samsung Ventures Investment Corporation, which will also see Samsung Ventures America senior investment manager Michael Pachos joining the PowerbyProxi board, suggesting that the deal gives Samsung a substantial equity interest in the company.

15 September 2013

Whither — or Wither — the Innovation Patent?

InnovationLast month the Australian Government’s Advisory Council on Intellectual Property (ACIP) released an ‘Options Paper’ in its ongoing review of the innovation patent system.  The options presented in the paper are threefold: do nothing; modify the innovation patent system in some as-yet unspecified way; or abolish the innovation patent system entirely.  I think that pretty much covers the full gamut of possibilities, and ACIP is now going back to the public seeking further input.

I have written about this review before, most recently in relation to IP Australia’s ‘Raising the Step’ proposal, in September 2012, to completely eliminate the distinction in inventive threshold between standard patents and innovation patents, such that an ‘invention’ and an ‘innovation’ would be required to meet exactly the same inventive step threshold.  As I wrote at the time, IP Australia’s publication of its consultation paper – which arrived complete with drafting instructions for the proposed amendments to the Patents Act 1990 – appeared to completely pre-empt ACIP’s review.

Submissions were due by 25 October 2012, in response to IP Australia’s consultation.  I made a submission, although it appears to have gone astray, since my name is not included among the list of submissions on page 46 of the ACIP Options Paper.  While I expected that the submissions would be published, and some further proposals or conclusions put forward by IP Australia, on the contrary the consultation seemed to disappear without trace.  In fact, ACIP’s Options Paper reveals that the submissions to IP Australia were passed on for consideration in the course of its ongoing review.

07 September 2013

IP Australia Confirms Impact of Reform on Patent Examination

FilesIn a news update sent out by email on 6 September 2013, IP Australia has confirmed what many of us already knew to be the case – that the rush of patent applications and examination requests in the lead-up to the commencement of the Raising the Bar reforms on 15 April 2013 has led to a significant blow-out in the examination backlog.

I presented figures back in April, shortly after the new laws came into effect, showing that in the final month under the former provisions over 6000 applications were filed (more than three times the long-term average filing rate), with half of those being filed in the week leading up to commencement. 

My Watermark colleague Geordie Oldfield subsequently published examination request numbers on the firm’s Intellectual Asset Management blog revealing an almost 40-fold increase in the rate of voluntary examination requests over the months prior to 15 April 2013.  In the final month, a total of nearly 22,000 examination requests were filed (around 1,700 in response to Patent Office directions, and over 20,000 voluntary requests).  This compares with a long-term average rate of under 1000 examination requests filed per month.

Additional 7-Month Examination Delay Expected

IP Australia has a Customer Service Charter, in which it sets out its commitments with regard to timeframes for completing various actions.  Currently, the Charter commits the Patent Office to issue a first examination report within 12 months of the date of filing of a request for examination.

IP Australia’s email update acknowledges the surge in examination requests, and goes on to explain that:

The main impact of this surge will be an increase in the pendency of first reports in coming years. Pendency is expected to increase in the December 2013 quarter, and is likely to exceed the 12 month customer service charter commitment by the end of April 2014. Based on projections, this could average up to 19 months at its peak during 2014, before returning to the 12 month commitment in early 2015.

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.

28 July 2013

‘Offended’ by Patents? Make Your Feelings Known!

ExpletiveIP Australia is seeking views on further proposed amendments to the Australian Patents Act 1990, which arise out of three enquiries into gene patents and the scope of patentable subject matter in Australia.

A consultation paper, entitled Patentable Subject Matter: Consultation on an Object Clause and an Exclusion from Patentability [PDF, 159kB], was released on 26 July 2013, and IP Australia is inviting written submissions by 27 September 2013.  While interested parties may no doubt comment on the proposals in any way they see fit, IP Australia is particularly requesting responses to three specific questions set out in the consultation paper.

The two amendments proposed in the consultation paper are to:
  1. add an ‘objects’ clause, to assist in the interpretation of the Patents Act; and
  2. introduce a new exclusion from patentability for ‘an invention the commercial exploitation of which would be wholly offensive to the ordinary reasonable and fully informed member of the Australian public’.
Both of these amendments were recommended in the report of the Advisory Council of Intellectual Property (ACIP) on its review of Patentable Subject Matter  (‘PSM Report’), published in February 2011.  The first was also proposed by the Senate Community Affairs Committee Inquiry into Gene Patents (‘SGP Report’), while a version of the second was recommended in the Australian Law Reform Commission’s report Genes and Ingenuity: Gene Patenting and Human Health (ALRC Report 99)

The Australian Government responded to all three of these reports [PDF, 145kB] in November 2011.  As I wrote at the time, the government response could have been summarised as ‘not much left to do’, with IP Australia’s efforts in progressing the Raising the Bar patent reforms, and improving its own online systems, having addressed the vast majority of recommendations in the three reports.  I identified only three substantive recommendations accepted by the government, and not yet implemented, including the two subject of the current consultation.  The third accepted recommendation, which is to modernise the language used in the Patents Act to clarify the ‘manner of manufacture’ patentability test, appears to have been dropped into the ‘too hard’ basket for now.

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