31 December 2014

2014 in Review, and How My Predictions Panned Out

Looking backAnother year over and (although I know everyone says it) this one really has just flown by!

On 1 January 2014 I posted a review of 2013, and a look ahead to what was then the upcoming year.  In doing so, I made a number of predictions, so it is now interesting to look back and see how I went, as well as reviewing the major events of 2014 that I may not have foreseen.

Overall, I think that I did pretty well, considering how unpredictable courts, governments and litigants can sometimes be!  The biggest disappointment for me in 2014 was the Research Affiliates case – not so much because Research Affiliates was unsuccessful, which was always a reasonably probable outcome, but because the judgment itself took so long, and still failed to provide much meaningful clarification of the law relating to patent-eligibility of software and business methods.  Unfortunately, there will be no further appeal, and no prospect of the High Court reviewing the work of the Full Federal Court.

Read on for a full rundown of how my predictions for 2014 panned out.

Gene Patents

On gene patents I predicted that ‘the five-judge panel of the Australian Federal Court will issue its decision in the Myriad BRCA case’, which it did.

I also said that I expected this to happen happen in the first half of the year, which it did not.  In the end, the court took over a year to come to its decision, which finally issued on 5 September 2014.

I correctly predicted that the court would ‘uphold the decision of the primary judge, finding Myriad’s claims to isolated DNA to be patent-eligible’.  I had thought that the judgment might be by majority, however the judges surprised me a little by issuing a strong unanimous decision.

Finally, I predicted that the losing party would apply for special leave to appeal to the High Court of Australia.  Sure enough, Yvonne D’Arcy has filed a special leave application, which the Court will likely consider in the first half of 2015.

Computer-Implemented Inventions and Business Methods

In relation to software and business method patents, I expected the three-judge panel of the Australian Federal Court to issue its decision in the Research Affiliates appeal during the first few months of 2014.  Again, the court thwarted my prediction by taking nearly a year to deliver a disappointing judgment that I subsequently described as shambolic.

I really expected that Research Affiliates would apply for special leave to appeal the decision to the High Court, particularly considering the unsatisfactory nature of some aspects of the Full Federal Court’s reasoning.  Its decision not to seek leave was therefore disappointing, from the point of view of clarifying the Australian position on computer-implemented inventions, but no doubt was made for sound business reasons.

Apple v Samsung

At the start of the year, I noted that in 2014 we should finally see the first substantive judgment in the Australian Apple/Samsung litigation that had been running since July 2011.  And it is almost certain that we would have, had peace not spontaneously broken out in August.  I heard rumours that Justice Annabelle Bennett had already produced 1400 pages of judgment by the time the truce was called.  Whatever else might have been achieved by this end to hostilities, we were all saved an awful lot of reading!

I did not, however, fail completely in my predictions, because I also said that ‘a bigger question is whether 2014 will finally be the year in which Apple and Samsung bury the hatchet and reach some form of workable global settlement of their disputes.’  I had thought from the outset that some form of worldwide settlement would the most likely outcome, considering that a resolution only in Australia would be of merely symbolic significance in the overall scheme of things.  The real surprise was how long it took!

The Troll Phenomenon

There are currently two cases in the Australian Federal Court brought by patent holders that some consider to be ‘patent trolls’: Vringo Infrastructure Inc has sued the local subsidiary of Chinese telecommunications equipment maker ZTE, while Upaid Systems Ltd has sued Australia’s largest telecommunications service provider, Telstra.

My predictions for these two cases were dull but accurate – that both would continue to progress slowly through the Federal Court process.  There have been two further decisions in the ZTE case, and one in the Upaid case, all relating to procedural matters regarding the gathering of pre-hearing evidence and information.  A substantive trial has yet to take place in either case.

I also predicted further legislative change in the US, in the form of a Senate version of Congressman Goodlatte’s proposed Innovation Act, intended to further curb the activities of patent trolls.  A version of the legislation, called the Patent Transparency and Improvement Act, was before the Senate, but was shelved in May in the face of objections from a number of stakeholders, including the biopharmaceutical industry and universities.  Indeed, it turned out that 2014 was the year the US lost its appetite for congressional reform to the patent laws, perhaps not least because the Supreme Court appears to be doing a comprehensive job all by itself, and many people are growing weary of too much change, too quickly.

Further Reform in Australia

As far as reviews and reforms of the Australian IP system are concerned, my predictions were largely spot-on:
  1. I expected that the Advisory Council on Intellectual Property (ACIP) would release its final report on its Review of the Innovation Patent System, which it did on 16 June 2014;
  2. I suspected that the report of the Pharmaceutical Patents Review Panel, initiated by the previous government, may be set aside by the current government, which in fact is what has happened; and
  3. I anticipated the reintroduction of the less-contentious parts (i.e. the ones without the ‘Crown Use’ compulsory licensing reforms) of the Intellectual Property Laws Amendment Bill 2013, which also occurred as predicted – and the Intellectual Property Laws Amendment Bill 2014 has now passed the lower house and moved on for consideration in the new year by the Senate (despite attempts by the Greens to reintroduce Crown Use reforms).

Conclusion – Other Developments In 2014

While the developments associated with my predictions for 2014 were among the most significant from an Australian perspective, there were of course many other notable developments in relation to patent law and practice throughout the year.

Almost certainly the most important event in relation to patents globally in 2014 was the US Supreme Court decision in Alice Corporation v CLS Bank International.  It is top of IAM Magazine’s list of the most significant US patent stories of the year, and has been unanimously nominated as the biggest IP moment of the year by the luminaries contributing to IP Watchdog’s reflections on what mattered in 2014.  I have nothing to add to any of that!

Other developments of particular interest in this part of the world in 2014 included:
  1. apparent government interest in the introduction of a ‘patent box’ tax incentive system in Australia in the early part of the year, followed by an about-face in the later part of the year – though the issue is not yet dead, considering the level of support by a number of influential lobby groups;
  2. continuing controversy, unrest and, finally, an official investigation, within the World Intellectual Property Organization (WIPO) over the involvement of (Australian) Director General Francis Gurry in alleged misconduct dating back to 2008 (as well as his oversight of WIPO programs benefitting North Korea, China and Russia);
  3. the tough realisation for the Australian patent profession that the days of relatively easy extensions of time to prepare and file evidence in oppositions are truly a thing of the past;
  4. Tesla Motors’ decision to ‘open source’ its patent portfolio, which was a sufficiently innovative strategy to generate media interest throughout the world (including Melbourne public radio);
  5. the decision of a five-judge panel of the Federal Court of Australia in AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99, which confirmed that the starting point for assessing whether or not a claim involves an inventive step is limited to the prior art and common general knowledge available to the skilled worker at the relevant time, and not the particular starting point of the inventor as reflected in the patent specification;
  6. the commencement of the New Zealand Patents Act 2013 on 13 September 2014; and
  7. ongoing ructions within the European Patent Organization, which affect applicants for European patents wherever they may be in the world.
When I started this blog in June 2010, I really did not expect that there would be so much to write about.  In fact, there is far more happening in the world of patents in Australia – let alone internationally – than I can keep up with, and I always have more ideas for articles than time to research and write them.  The past year has again been highly eventful, and the coming year will no doubt continue to keep everyone who is interested in patents very busy.  But that is a subject for a separate article…


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