“Worthwhile to Try” is Not Obvious Enough in Australia

Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2) [2013] FCA 279 (4 April 2013)

The Federal Court has again confirmed that, contrary to the impression you might obtain from reading IP Australia’s Patent Examiners Manual, ‘obvious’ or ‘worthwhile’ to try does not form part of the test for inventive step under Australian patent law.

I wrote recently about another aspect of the judgment in Bayer v Generic Health, namely the alleged inconsistency of the testimony of an expert who also provided evidence in a dispute more than a decade ago, between generic manufacturer Alphapharm Pty Ltd and originating pharmaceutical manufacturer Aktiebolaget Hässle.  Coincidentally, the High Court’s decision in Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 is also the source of the current Australian law in relation to ‘obvious’ or ‘worthwhile’ to try (at paragraphs [66]-[76]).

IP Australia changed its ‘practice’ in relation to this aspect of examination of patent applications back in August 2010.  At the time, I questioned this change, noting that ‘the High Court majority drew a distinction between “matters of routine” (discussed at paragraphs [50]-[53]) and “obvious or worthwhile to try” (discussed at paragraphs [66]-[76]).  I also observed that the previous guidance for examiners – which adopted a quite different interpretation of the Hässle case – was still available for comparison in the Internet Archive (a.k.a. ‘Wayback Machine’).  Unfortunately, this is no longer the case, because IP Australia, in its wisdom, has decided that earlier versions of its practices should not be available, for posterity or any other purpose, and has added all of the relevant subdirectories of its web site to its robots.txt file.

It is timely to revisit this issue now, with the Raising the Bar reforms just having come fully into effect, because as a subsequent Official Notice revealed, the change in examination practice was one of the first steps to be implemented in IP Australia’s reform agenda.  Apparently, IP Australia accepted ‘stakeholder feedback’ that ‘“obvious to try with a reasonable expectation of success” … has support in the High Court decision in Aktiebolaget Hässle v Alphapharm Pty Ltd’.

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Tags: Australia, Obviousness, Patent Office, Pharmaceuticals

EFF Off the Mark With Latest ‘Abuse’ Allegations

The Electronic Frontier Foundation’s (EFF) Daniel Nazer and Julie Samuels have a tragic tale to tell, which they hope will stir the souls of the online community to action.

In a nutshell, the narrative goes something like this…

Once upon a time, a few innovative, dedicated entrepreneurs started a Little Red Riding Company called Ditto Technologies, Inc, based on the great idea of letting people try on eyeglasses in a virtual environment by using webcam images to build a 3D model of their heads and faces.  Within two years, their hard work in building an appealing product was starting to pay off.  Ditto had received funding to build its business, employ new staff, and continue to improve its product.

But then along came a Big Bad Wolf Company, called 1-800 CONTACTS.  Although the Wolf was already in the business of selling prescription eyewear (i.e. contact lenses) online, it had no product that competed directly with Ditto.  Yet the Wolf had purchased a patent from a ‘defunct company’ which (it alleged) covers Ditto’s virtual try-on service, and was now suing California-based Ditto in the distant Land of Utah.

The cost of litigation (and the possibility of losing) threatens Ditto’s very existence, unless an army of diligent Woodcutters can be rallied to find prior art capable of invalidating the Wolf’s patents!

Poor little Ditto.  But is it possible that there is another side of the story?  One in which the Big Bad Wolf is just misunderstood, and the Little Red Riding Company might be, to some extent, a victim of its own (and its investors’) mistakes?

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Tags: Computer programs, Infringement, Innovation, Innovation policy, Law reform, Patentable subject matter, Patents and society, Public policy, Trolls

The Perils of ‘Professional’ Experts

Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2) [2013] FCA 279 (4 April 2013)

Dr James Rowe has had over 30 years’ experience in the pharmaceutical industry.  He obtained a Bachelor of Pharmacy degree in 1966, a Masters of Science in 1976, and a PhD in Pharmaceutics in 1980.  He is also somewhat familiar with the inside of a courtroom.  In 1998 and 1999 he gave evidence on behalf of generic manufacturer Alphapharm Pty Ltd, in a dispute with originating pharmaceutical manufacturer Aktiebolaget Hässle (a member of the Astra group, now AstraZeneca) over a patent covering the compound omeprazole, better known as heartburn drug Prilosec (or, in some markets, Losec).

The omeprazole case went on to become a leading authority on the law of inventive step in Australia, after it was successfully appealed by Astra to the High Court of Australia (Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59).

This year Dr Rowe has again appeared in court on behalf of generic manufacturers – Generic Health Pty Ltd and Lupin Australia Pty Ltd – where it seems his past has come back to haunt him.  In the decision in Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2), issued earlier this month, Justice Jagot concluded that Dr Rowe’s evidence was inconsistent with the evidence he had given in his 1998 affidavits in the omeprazole case, and that this tended ‘to undermine the weight which would otherwise be given to [his] evidence’. 

There is a lesson in this for all litigants when selecting expert witnesses.  It is natural that the opinions of a skilled professional might change over time, not least because new knowledge and experience may bring to light information that was not previously available.  However, in this case the priority date of the Bayer patent was 31 August 1999, i.e. the critical date for assessing the claimed invention was contemporary with the time at which Dr Rowe gave evidence in the omeprazole case.  And even though the omeprazole patent had a priority date in 1986, it seems to me that it should have been reasonably foreseeable that Dr Rowe’s earlier evidence would be used against him.

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Tags: Australia, Evidence, Obviousness, Pharmaceuticals

Research Affiliates Will Have Its Day Before the Full Court

Last month, I reported on the application by Research Affiliates, LLC (‘RA’) for leave to appeal the decision of the Federal Court of Australia upholding the Patent Office’s rejection of its patent application directed to the computer-aided construction and use of passive portfolios and indexes for securities trading.

On 12 March 2013, RA appeared before Justice Flick to argue its case for the appeal to be heard by a Full Bench (three judges) of the Federal Court.  A decision was handed down on 12 April 2013 (Research Affiliates LLC v Commissioner of Patents [2013] FCA 329), according to which RA has been granted the opportunity to appear before the Full Court.  And while it has not yet actually been decided that the court will hear the appeal, that now appears to be the most likely outcome.

Justice Flick could have heard RA’s full arguments in favour of allowing it to appeal the initial decision, and then made orders that the appeal should either proceed, or be denied.  In the event, however, RA’s application for leave to appeal has yet to be decided.  That question has itself been passed to a Full Bench of the Federal Court, which will have the option of hearing the application for leave either separately from, or concurrently with, the substantive arguments on appeal.

Keen followers of Australian patent litigation may recall that this same approach was taken in the case of Samsung’s application for leave to appeal the decision of Justice Bennett awarding Apple a preliminary injunction blocking sale of the Galaxy Tab 10.1 in Australia.  On that occasion, the court elected to hear the application for leave, and the substantive case, concurrently, resulting in a judgment which both granted leave and overturned the original decision.

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Tags: Appeal, Australia, Business processes, Computer programs, Patent Office, Patentable subject matter

‘Raising the Bar’ Raises Patent Filings

As many readers will be aware, the Australian Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came full effect on Monday, 15 April 2013.  A concise summary of the reforms, and a number of ‘fact sheets’, are available from the IP Australia web site.

As I wrote back in March last year, among other reforms, the new laws substantively raise patentability standards.  Significant changes include:

1. enhanced disclosure requirements in the patent specification; 
2. enhanced disclosure requirements in a priority document in order to obtain the benefit of an earlier filing; 
3. replacement of the old ‘fair basis’ standard with a European-style ‘support’ standard;
4. a new ‘utility’ standard; 
5. removal of the geographical limitation on the ‘common general knowledge’ forming the background for inventive step and innovative step assessment; and
6. removal of the requirement that prior art documents be ‘ascertained, understood and regarded as relevant’ by a person skilled in the art before they can be considered in an inventive step assessment.

All of this means that some claims which would have been patentable prior to 15 April 2013 might no longer be patentable under the new laws.

Under the savings and transitional provisions of the Raising the Bar Act, the former law continues to apply to any application and patent:

1. which was filed prior to 15 April 2013; and
2. for which a request for examination was made prior to 15 April 2013.

I predicted back in November last year that these transitional provisions would have a significant effect on applicant behaviour.  It is now possible to gain some insight into just how great that effect has been.  And it is pretty huge!

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Tags: Australia, Examination, Law reform, Patent law, Patent Office, Raising the Bar, Statistics

Pharma Patents Review Proposes Reduced Term Extensions

On 2 April 2013, the Australian Government’s Pharmaceutical Patents Review published its draft report.  I last wrote about the review when the panel released its Issues Paper last November.  The draft report is some 250 pages long, including appendices, and I do not intend to attempt a full review here!  Interested parties are encouraged to read the complete draft, bearing in mind that the period for providing written responses is extremely short, expiring on 30 April 2013.

The draft report includes 15 draft findings, many of which (if implemented) would not result in substantive changes to the provisions of Australian patent law.  For example, there are recommendations as to how the Government should conduct itself in future international trade negotiations, for future reviews of the performance of the patent system to be undertaken, and for changes in the way the regulatory approval process, the Australian Register of Therapeutic Goods and the Pharmaceutical Benefits Scheme are managed and documented.

Here, I wish to focus on just one area of the draft report, namely its two alternative proposals for a reduction in the extension of term available to pharmaceutical patents as compensation for the effective loss of benefit due to delays in obtaining regulatory approval.  It appears to me that, perhaps as a result of the very short timeframes provided to the review panel, these proposals have not been adequately thought-through. 

Arguments for a reduced extension of term are bolstered by a dizzying array of tables, calculations and charts, which in my view serve only to obscure the basic policy question underlying the provision of an extension of term on pharmaceutical patents – for how long, in any given case, is Australia prepared to pay a premium for a patented drug before the introduction of generic competition?  Currently, the answer to that question is ‘for up to 15 years’.  Reducing this period would obviously save money – which is the primary argument presented in the draft report.

However, it is a basic fact of modern life that we must pay for the things we want, and that (by and large) we get what we pay for.  Yet there is a notable absence in the draft report of any evidence that a shorter term would provide a better ‘balance’ between the interests of the originating drug companies and those of the Australian community.

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Tags: Australia, Extension of patent term, Law reform, Pharmaceuticals

Australian Training for Overseas Patent Examiners

If you are an Australian taxpayer reading this article, you can give yourself a pat on the back and feel a warm glow of satisfaction – your tax dollars are helping to enhance the skills of patent examiners in Indonesia, Malaysia, Philippines, Kenya and the African Regional Intellectual Property Office (ARIPO)!

On Monday, 8 April 2013, IP Australia announced the launch of its Regional Patent Examination Training program (RPET).  The program is conducted largely online, via an e-learning platform developed by IP Australia, and involves one-on-one training and support for overseas examiners, provided by experienced Australian examiners.

The IP Australia announcement indicates that RPET is a ‘significant activity’ of the ASEAN-Australia-New Zealand Free Trade Agreement Economic Cooperation Work Program (AANZFTA ECWP).  Australian Government funding for this program is provided via AusAID.

‘Upon completion of the program,’ says IP Australia, the participating overseas examiners ‘will be able to consistently examine to the standards expected of their Australian counterparts.’

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Tags: Australia, Developing world, Examination, Government programs, Innovation policy, International treaties, Patent law

Take THAT, New Zealand Patent Attorneys!

Last week, IP Australia announced that ‘in March 2013 Australia and New Zealand signed a bilateral arrangement for the trans-Tasman regime of patent attorneys.’

Perhaps I have just not been paying enough attention, but this announcement took me completely by surprise.  Of course, I was aware that there has been an ongoing project for some time to create a closer ‘Single Economic Market’ (SEM) across Australia and New Zealand, and I have written in the past about some of the proposals pertaining to the two countries’ IP systems, such as the implementation of a single integrated application and examination process, and a unified regulatory regime for patent and trade marks attorneys.

However, I was not aware of any specific progress on the patent attorney regulatory regime.  Until this announcement, the most recent update on progress in the SEM initiatives was back in January, when IP Australia indicated that further development of the single application/examination process was dependent upon passage of the NZ Patents Bill 2008, in order to ‘more closely align the patents laws of New Zealand and Australia.’

What I found surprising was not merely that an agreement [PDF, 92 kB] has been drafted and signed by the Australian and New Zealand governments, but that New Zealand has completely capitulated to the Australian regulatory regime, in the form it will take following commencement of the Raising the Bar reforms on 15 April 2013.  This is despite the fact that New Zealand practitioners responded to a discussion paper on the proposal back in 2011 with almost universal (and quite understandable) opposition to the idea of a common regulatory regime based on the Australian system.

New Zealand patent attorney Matt Adams has written on his PatentBuff blog, with some justification, that this move could result in further contraction of the (already small) cohort of registered patent attorneys in New Zealand.

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Tags: Australia, New Zealand, Patent attorney profession, Regulations