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. 

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