20 December 2015

I Don’t Care How ‘Efficient’ It Is, It’s Still Infringement!

Lipstick on a pigOn 23 October 2015, New York Times op-ed columnist Joe Nocera published a piece entitled The Patent Troll Smokescreen, in which he wrote that ‘according to Robert Taylor, a patent lawyer who has represented the National Venture Capital Association, a new phrase has emerged in Silicon Valley: “efficient infringing.”’

In fact, as we shall see, the term ‘efficient infringing’ is not new – it first emerged in 1998 – and, furthermore, there have been ‘efficient infringers’ outside the realm of patents for much longer than this.  Indeed, I personally know people who have indulged in a little efficient infringements, and maybe you do too.

As one everyday example of efficient infringing, consider an office-worker in an area with limited free on-street parking, restricted to a maximum stay of one hour.  If the local paid parking garage charges $12 per day, and the fine for exceeding the maximum on-street parking time is $120, it does not take an Einstein to work out that it is cheaper overall to park on the street every day if the average frequency with which parking inspectors patrol the area is less than once every 10 business days.  That is efficient infringement!  There are, no doubt, other areas of everyday experience in which a similar analysis can be applied, e.g. payment of fares on public transport.

In some cases – such as the trouble-plagued electronic transport ticketing system in Victoria, Australia – well-advised efficient infringers may be able to tip the scales further in their favour by challenging the validity of their fines.

Of course, for most people this economic rationale cannot be taken too far.  For example, stealing your groceries rather than paying for them might well pay off in the long term from a purely financial perspective, but is liable to land you with a criminal record and possible jail-time.  Efficient infringement, as an economic strategy, is effective only when the worst consequences of getting caught can themselves be expressed in purely economic terms.

Efficient patent infringement is just the same.  As described by Nocera:

That’s the relatively new practice of using a technology that infringes on someone’s patent, while ignoring the patent holder entirely. And when the patent holder discovers the infringement and seeks recompense, the infringer responds by challenging the patent’s validity.

I object less to the practice of so-called ‘efficient’ patent infringement, at least in some of its more benign forms, than I do to the terminology itself, and the way it is being used by some very powerful organisations.  And here is why.

13 December 2015

Australian Appeals Court Kills Another Patent on a Computer-Implemented Invention

Sad On 11 December 2015, a Full Bench of the Federal Court of Australia handed down a unanimous judgment in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, overturning the decision of the primary judge and finding a computer-implemented method (which the court characterised as a ‘business method’ or ‘scheme’) to be unpatentable subject matter under Australia’s ‘manner of manufacture’ standard.

Regular readers of this blog will know that I have been involved in this matter from the outset.  I drafted the original patent specification on behalf of Watermark client RPL Central Pty Ltd.  I represented the client in guiding it through examination, resulting in its approval and certification by IP Australia.  I again represented the client in opposition proceedings, in which we successfully defended against allegations that the invention lacked novelty (raised by the opponent), but went down on the basis that the claimed invention was not a patent-eligible ‘manner of manufacture’ (raised not by the opponent, but by the Commissioner’s Delegate, i.e. the Hearing Officer in the opposition).  I have continued as an advisor in the Federal Court appeals, first through the ‘high’ of success before a single judge, and now the ‘low’ of this decision of the Full Court.

It will therefore come as no great surprise that I am disappointed by this decision.  I am disappointed for our client, for whom this has been a roller-coaster ride (which may not be over yet).  I am disappointed for other operators of small, innovative technology businesses, because I genuinely believe that the kinds of innovation represented by the patent in this case ought to be protectable under our patent laws.  I am disappointed on behalf of patent applicants and their advisors, who will find this decision to be quite unhelpful in clarifying where the boundary lies between what is patentable and what is not in the realm of computer-implemented inventions.  And, of course, I am disappointed for myself, because obviously I would have preferred to win!

These are all personal observations, which have nothing to do with the merits of the judgment.  As is my normal practice in cases where I and/or Watermark are directly involved, I shall refrain, for the present, from revealing my own views on the judgment, and stick to the facts of what has been decided. 

06 December 2015

Patents and the Trans-Pacific Partnership Agreement, Part 2

Peaceful OceanIn addition to provisions relating to the scope of available patent rights and general procedures, which I wrote about in the first part of this series, the Trans-Pacific Partnership (TPP) Agreement prescribes certain minimum standards for terms of protection – including extensions or adjustments to patent term in certain circumstances.  These provisions apply particularly to regulated products, including  pharmaceuticals and biologics (a.k.a biopharmaceuticals).

In this article I will look at three specific aspects of the TPP:
  1. the obligation to provide for adjustment of the patent term to compensate for ‘unreasonable delays’ in the grant of a patent, about which I expect Australia to do nothing;
  2. the obligation to provide for extensions of the term of patents relating to pharmaceutical products as compensation for time lost in obtaining regulatory approval, about which I do not believe Australia needs to do anything; and
  3. the obligation to provide an effective period of at least eight years of data exclusivity, and/or other protection for biologics, in respect of which I think Australia has a real problem following the High Court’s decision in D'Arcy v Myriad Genetics Inc [2015] HCA 35.
To make matters more interesting, on 3 December 2015, the US Industry Trade Advisory Committee on Intellectual Property Rights (ITAC-15) released its report on the IP provisions in the TPP [PDF, 198kB].  The report has been prepared pursuant to a statutory requirement that ‘advisory committees provide the President, the U.S. Trade Representative, and Congress with reports not later than 30 days after the President notifies Congress of his intent to enter into an agreement.’  The Committee is generally positive about the patent-related provisions, however it is not without its criticisms and concerns about those relating to pharmaceutical term extensions and biologics.

29 November 2015

Patents and the Trans-Pacific Partnership Agreement, Part 1

Pacific OceanNegotiations in relation to the controversial multi-national free trade agreement known as the Trans-Pacific Partnership (TPP) were concluded on 6 October 2015.  The full text of the Agreement has since been published by the participating countries, including on the web site of the Australian Department of Foreign Affairs and Trade (DFAT).

The parties to the TPP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the United States and Vietnam.  DFAT describes the TPP as ‘a regional free trade agreement of unprecedented scope and ambition’ (which, I suspect, nobody would dispute) which has ‘great potential to drive job-creating growth across the Australian economy’ (which would seem to be a more politically-motivated and contentious claim, though time will tell).

The full text of the TPP comprises some 6000 pages (or so I have read – not that I have made any attempt to count them all myself).  Its 30 chapters cover a huge range of trade-related matters, including market access and tariffs, customs administration, sanitary measures, competition policy, labour and the environment, as well as a number of specific areas of technology and commerce, such as telecommunications, electronic commerce and financial services.

It seems fair to say, however, that the provisions of the TPP that have received the most attention – little of it positive – are those relating to so-called investor-state dispute settlement (in Chapter 9 on ‘Investment’), and on Intellectual Property in Chapter 18.  Indeed, draft texts of IP chapter were repeatedly leaked and published by Wikileaks during the years of negotiation of the TPP, with the copyright provisions generally receiving the most attention and criticism.

In this two-part article, however, I am going to focus on what the TPP says about patents, and what this may mean for participating countries, including Australia.  In Part 1, I will cover most of the provisions relating to the scope of available patent rights, and general procedures, while Part 2 will look at provisions relating specifically to pharmaceuticals and biologics, and at extensions and adjustments of patent term.

21 November 2015

Patented ‘Frankenfish’ Finally Granted FDA Approval

Salmon SushiOn 19 November 2015, the US Food and Drug Administration (FDA) approved, for the first time, a genetically engineered food animal.  Of course, there have previously been many genetically engineered food plants approved for production and consumption, such as Monsanto’s ‘Roundup Ready’ crops.  And animals have been genetically engineered and commercialised for other purposes, such as the Harvard OncoMouse for use in cancer research.

The animal in question is a fish.  More precisely, it is a genetically engineered salmon, developed by a company called AquaBounty Technologies under the brand name AquAdvantage.  AquaBounty claims that its salmon grow to full size in half the time of ‘regular’ salmon (18 months, as opposed to three years), are larger, require 25% less feed, and grow at a 1:1 ratio of feed mass to body weight. 

Of course, the positive spin on this is that farming AquAdvantage fish is more sustainable than other forms of salmon production.  However, the primary beneficiaries, at least initially, would be the producers who are able to grow and bring to market more fish in less time at lower cost.  If, that is, they can convince the consuming public to buy a product that has been emotively labelled ‘frankenfish’ by its detractors.

08 November 2015

The ‘Exhausting’ Topic of International Patent Rights

International TravelImagine that you are travelling overseas, and you see a product on sale for a much lower price than in your home country.  It is a genuine article – not a cheap knock-off – but the market in the country you are visiting simply will not bear the same cost as in your affluent home nation.  The manufacturer can maintain this price disparity because the product is patented in every country in which it is sold.

So, if you buy the lower-priced product, should you be allowed legally to take it home, or should the manufacturer be able to use its patent rights in your home country to block you from bringing it in, or to require you to pay an additional royalty for the privilege of doing so?  Probably you would feel that, having bought the product legally, you should be entitled to do whatever you wish with it, and that the manufacturer should have no further say in the matter.

Now imagine that you are not just a consumer, but that you own a retail store.  You realise that you could buy 1000 of the product at the lower price, import it back into your home country, and then sell it at a profit of $100 per unit while still undercutting the recommended retail price of the same product being sold into your local market by the manufacturer.  Should the manufacturer be able to use its patent rights to prevent you from engaging in this sharp business practice, or are you merely using your initiative to legitimately enhance competition back home?

Finally, suppose that the product in question is a drug used in the treatment of HIV/AIDS, which is a significant public health issue in poorer regions of the country in which you are travelling.  Do you think that makes any difference?

The above scenarios all address the issue of international patent exhaustion, i.e. whether or not the sale of a product patented in one country automatically nullifies (i.e. ‘exhausts’) the patentee’s rights in all other countries in which it holds equivalent patents.  Unless you are already familiar with this area of the law, you might be surprised to learn that the answer is generally ‘no’.  A patent-owner can, in principle, enforce its rights – via an injunction, or requirement to pay a royalty – every time one of its products is transferred to a new jurisdiction in which it holds a relevant patent.  This is different from the ‘rule’ that applies within a single jurisdiction, where the first sale of a product generally relieves the patentee of further rights.

Should there be a similar ‘rule’ of international exhaustion?  I think not – or, at least, not yet.  But it is a question that is currently up for consideration by a US appeals court.

01 November 2015

Can What You Say In Patent Examination Be Held Against You in Court?

Ore wagonsImagine that you have applied for a patent on an improved iron ore wagon.  During examination, you wanted to distinguish your invention from pre-existing ore wagons.  You therefore explained that your wagon has ‘an internal ridge’ that reinforces the side wall, and is ‘integrally formed within the side wall’, and you amended your claim to include this ‘integrally formed’ language.

Flash forward to a few years later, and you are in court arguing that one of your competitor’s iron ore wagons infringes your patent.  However, the competitor’s product has an internal ridge that is initially made separately from the side wall, and subsequently attached, e.g. by welding or riveting.  The court therefore has to decide whether this structure falls within the scope of the terminology ‘integrally formed within the side wall’.

This is, in a nutshell, the question that recently came before Justice Nicholas in the Federal Court of Australia (Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2015] FCA 1100).  Interestingly, it raises four separate issues:
  1. whether the term ‘integrally formed’, in and of itself, excludes the two-step constructions;
  2. whether the amendment of the claims to include the ‘integrally formed’ language during examination informs interpretation of the term;
  3. whether the applicant’s accompanying explanation of the advantages of the claimed structure should be taken into account when interpreting ‘integrally formed’; and
  4. whether the patentee is now barred (or, in legal parlance ‘estopped’) from making a different argument in court to the one it made during examination.
To put it another way: to what extent can what the applicant did and said during examination of the application be held against it in a court of law?

The short answer is ‘somewhat’, but to nowhere near the extent it would be in some other jurisdictions, and in particular the United States.  And – spoiler alert – no, ‘integrally formed’ does not include something made in two parts and then joined together!

18 October 2015

Proposed Australian Examination Practice Gives Narrow Interpretation to High Court’s Myriad Ruling

NarrowsIP Australia has opened a consultation on proposed changes in examination practice in light of the High Court’s ruling in D'Arcy v Myriad Genetics Inc [2015] HCA 35.  Although many people had feared (or hoped, depending upon their particular predilections) that the Australian Patent Office would follow the lead of the USPTO, and take a broad view of the High Court’s judgment, it is clear from the proposed examination practice that this will not be the case.

Indeed, it would be difficult for IP Australia to take any narrower view of the implications of the Myriad decision than the one it is proposing (except, perhaps, in relation to cDNA).  The Patent Office accepts that the High Court’s judgment establishes that ‘a claim to an isolated nucleic acid that merely represents information coding for a polypeptide is not patent eligible’, and has therefore concluded that the following are not patent-eligible:
  1. naturally occurring human and non-human nucleic acid sequences encoding polypeptides or functional fragments thereof - either isolated or synthesised;
  2. cDNA; and
  3. naturally occurring human and non-human coding RNA - either isolated or synthesised.
However, the Patent Office proposes that it will continue to treat claims directed to pretty much everything else, not addressed directly by the High Court’s decision, as patent-eligible.  This includes other forms of isolated, naturally-occurring DNA such as regulatory DNA and non-coding DNA.

This is in stark contrast to the USPTO’s response to the corresponding decision of the US Supreme Court in Association for Molecular Pathology v. Myriad Genetics, Inc, which the US Office treated as affecting the patent-eligibility of all claims directed or relating to natural products.  Initial guidance from the USPTO suggested that this would even include new and useful combinations of natural substances (using gunpowder as an example).  Updated guidance issued in December 2014 improved the situation somewhat, by clarifying the process by which claims ‘directed to’ excluded subject matter should not be subject to rejection if they recite additional elements that amount to ‘significantly more’ than the exclusion.  Even so, it remains clear that a claim which recites ‘nothing more’ than an isolated natural product generally cannot be patented at the USPTO, whereas many such claims will continue to pass muster under the proposed Australian practice.

09 October 2015

Australian High Court Nukes Biotech Industry from Orbit: “It’s the Only Way to be Sure”

Nuclear explosionThe High Court of Australia has followed the US Supreme Court in unanimously declaring that naturally-occurring DNA sequences – even when extracted from the cell nucleus and isolated by human intervention – cannot, in themselves, be validly the subject of patent protection.  In particular, all seven High Court judges found that claims 1-3 of Myriad Genetics’ Australian patent no. 686004, each of which is directed to isolated nucleic acid molecules corresponding with the BRCA mutation associated with increased breast cancer risk, are invalid because they do not define a patent-eligible ‘manner of manufacture’ under Australian law: D'Arcy v Myriad Genetics Inc [2015] HCA 35.

In arriving at this ruling, the High Court has reversed the decisions of six Federal Court judges – one at first instance (Cancer Voices Australia v Myriad Genetics Inc [2013] FCA 65), and five more on appeal to a full bench of the Federal Court (D’Arcy v Myriad Genetics Inc [2014] FCAFC 115) – all of whom found that nucleic acids, once extracted from a cell and isolated from a complete DNA molecule, are artificially-created products that are chemically, structurally and functionally different from their natural counterparts, and thus patent-eligible.

Furthermore, in reversing last year’s decision of the Full Federal Court, the High Court has (retroactively) made a liar of Australia’s Trade Minister, Andrew Robb.  For months, Mr Robb has been telling anyone who will listen that Australia does not need to extend ‘data exclusivity’ for biologic drugs, because this country provides more extensive patent protection for biological materials than some others.  This line has been followed primarily for the benefit of the US negotiators of the Trans-Pacific Partnership Agreement (TPP), who initially wanted the agreement to mandate a minimum 12 years’ data exclusivity. 

As recently as 6 October 2015, following finalisation of the TPP after seven years of negotiations, Mr Robb was talking up Australia’s patent system as a key factor in reaching agreement on the contentious issue of data exclusivity for biologics.  Yet, the very next day, the High Court dropped its nuclear bombshell on that argument, by not only replicating the action of the US Supreme Court in declaring isolated naturally-occurring DNA to be unpatentable, but going further in extending this to synthesised biologics – including cDNA – that essentially embody the same ‘information’ existing in the naturally-occurring biological molecule.

Just to be clear, nobody – not even Myriad Genetics – cares that three Australian patent claims directed to the isolated DNA comprising the BRCA mutations have specifically been declared invalid.  Quite aside from anything else, the patent has expired, having reached the end of its 20-year term on 11 August 2015.  There are also probably very few people who would be greatly concerned that isolated naturally-occurring DNA sequences are not patentable in Australia.  It is now widely regarded that the completion of the human genome project, along with the relative ease, speed and low-cost of gene sequencing nowadays, has largely rendered such claims unpatentable for lack of novelty or inventive step anyway.

The larger concern with the Australian High Court’s decision for the entire biotechnology industry is likely to be its focus on the information content of the naturally-occurring DNA as ‘an essential element of the invention as claimed’.  This reasoning will create significant uncertainty as to the circumstances under which any product – whether wholly, or partially, synthesised, and including cDNA – which essentially exists to provide a ‘medium’ for naturally-occurring information, may continue to be regarded as patent-eligible in Australia.

05 October 2015

‘Free Software’ Advocates Aside, Submissions to IP Australia Overwhelmingly Support Innovation Patent System

SupportAs I have previously reported, IP Australia has been conducting a consultation process on the posthumous recommendation by the Advisory Council on Intellectual Property (ACIP) that the Australian government consider abolishing the innovation patent system. 

The due date for public feedback on this proposal was 28 September 2015.  The submissions have now been published and, with the exception of a fairly obviously coordinated campaign by a handful of ‘free software’ advocates, a clear majority of stakeholders – including IP lawyers, patent attorneys, inventors, small-to-medium enterprises, and industry groups – have come out in favour of retaining the innovation patent system. 

Most, however, would also support a range of proposed reforms to the system, including raising the ‘innovative step’ standard, introducing a mandatory deadline for requesting substantive examination, and restricting the use of the name ‘patent’ to those rights that have actually been examined and certified.

13 September 2015

Australian Patent Office Rejects ‘Free Energy’ Application for Lack of Utility

PerpetualBack in April I published an article about patenting perpetual motion and free energy machines.  One of the points I made in that article was that prior to the passage of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 it was actually possible to obtain a patent in Australia for such a device, even though it could not work because it would violate fundamental laws of physics.
As I explained, the Raising the Bar reforms made it possible, for the first time, for Australian patent examiners to object to the grant of a patent on the basis that the claimed invention is not useful.  At that stage, however, I was unable to identify any case of a ‘perpetual motion’ application to which such an objection had been raised.

On 31 August 2015, however, an examination report was issued in relation to Australian patent application no. 2011201103, which is entitled ‘Perpetual Productive Motion Device’.  Among other matters raised in the report, the examiner has objected that ‘the claimed invention does not achieve the use promised by the patentee in the specification, and have a credible use.’  This may be the first time that this type of objection has been raised in Australia against a ‘perpetual motion’ or ‘free energy’ apparatus.

06 September 2015

The ‘Skilled Person’ is a ‘Pale Shadow’ and a ‘Tool’ – Australian High Court Rules on Obviousness

ShadowmanLast week I predicted that the High Court would affirm the finding of five judges of the Federal Court of Australia that AstraZenenca’s patents covering low-dosage forms of the cholesterol-lowering drug marketed as CRESTOR (having the active ingredient rosuvastatin) are invalid on grounds of obviousness.

In the much-anticipated decision in AstraZeneca AB v Apotex Pty Ltd (et al) [2015] HCA 30, five judges of the High Court, in four distinct concurring opinions, have unanimously fulfilled that prediction.  In doing so, they have successfully disappointed anybody who was hoping for some interesting developments in the law of obviousness in Australia, and gladdened the hearts of those who value certainty and stability in the law, notwithstanding that there may be opportunities for improvement.

There were two issues before the High Court.  Firstly there was what I have previously called the ‘selection’ question.  The law applicable to the rosuvastatin patents permits the use of a single prior art document as the basis for assessing obviousness, and has nothing to say about the process by which that document is identified, other than that it must be information that would be ‘ascertained, understood and regarded as relevant’.  The High Court has confirmed that the fact that a selected document might be just one of many that would meet this requirement, and that all of the others would result in the skilled person heading off down a different path, does not expressly enter into the inquiry.  As a result, the Federal Court panel was correct in finding the rosuvastatin low-dose patents invalid for obviousness.

Secondly, there was the ‘starting point’ question, which addresses whether the perspective from which the contribution of the invention should be viewed is that of the inventor, as stated in the patent specification, or some other perspective determined on the basis of evidence and/or the prior art.  This was potentially the more interesting and controversial issue, because there have (arguably) been inconsistent findings on this question at the Federal Court level.  The High Court dodged the issue, by finding it unnecessary to address the ‘starting point’ question in view of its finding on the first question.  As a result, the decision of the Federal Court panel, that the starting point is determined objectively, and not from the subjective position of the inventor, remains undisturbed.

In an effort, perhaps, to keep things interesting, Chief Justice French provided some additional characterisation of the ‘person skilled in the relevant art’.  While it is not news that this is not a real person, but rather a hypothetical construct created for the purposes of patent law, we can now add to the list of dehumanising qualities that he or she is but a ‘pale shadow of a real person’ and a ‘tool of analysis’!

30 August 2015

Australian High Court to Rule on Obviousness

Scales of JusticeAt 10.15am this coming Wednesday (2 September 2015) the Australian High Court will hand down its decision in the appeal by AstraZeneca AB against last year’s ruling, by a a special five-judge panel of the Federal Court of Australia, that its two patents relating to the cholesterol-lowering drug marketed as CRESTOR (having the active ingredient rosuvastatin) are invalid.

The decision will be significant in clarifying the law relating to obviousness in Australia.  There are potentially two questions at stake in this regard:
  1. What is the appropriate ‘starting point’ for assessing whether or not a claimed invention is obvious?
  2. Does the Australian law limit or prohibit ‘selection’ of a favourable prior art document from a potentially large field of candidates as a basis for finding an invention obvious?
We will soon know what the High Court thinks on these two questions.  This article provides a background on the issues before the court, and some of the arguments that it has been weighing up in coming to its decision.

23 August 2015

Australia’s Productivity Commission to Examine ‘IP Arrangements’, but Hands Will Be Tied on Patents

BeesThe Australian Government has directed its Productivity Commission to undertake a 12 month public enquiry into the intellectual property system, including its effect ‘on investment, competition, trade, innovation and consumer welfare.’

The enquiry has been established in response to Recommendation 6 of the Competition Policy Review (a.k.a. the ‘Harper Review’) which issued its final report on 31 March this year.  The Harper Review’s recommendation stated, in relevant part, that:

The Australian Government should task the Productivity Commission to undertake an overarching review of intellectual property. …

The review should focus on: competition policy issues in intellectual property arising from new developments in technology and markets; and the principles underpinning the inclusion of intellectual property provisions in international trade agreements.

The Terms of Reference for the Productivity Commission Review into Intellectual Property Arrangements require the Commission to:
  1. examine the effect of the scope and duration of protection afforded by Australia's intellectual property system on
    1. research and innovation, including freedom to build on existing innovation
    2. access to and cost of goods and services
    3. competition, trade and investment;
  2. recommend changes to the current system that would improve the overall wellbeing of Australian society, which take account of Australia's international trade obligations.
The review will look at all aspects of Australia’s intellectual property system, including patent, trade mark, registered design and copyright laws and regulations.  I anticipate that copyright, in particular, will receive close scrutiny.  There are a number of aspects of Australian copyright law – including the treatment of unpublished and ‘orphan’ works, as well as issues relating to technology-neutrality – where substantive reforms may be both desirable and feasible.

Of course, my primary interest is in the patent system.  And here, in particular, the Productivity Commission will find that its hands are largely tied by Australia’s commitments under long-standing international agreements.  Options such as targeting local innovators for preferential treatment,  reducing the term of patents, limiting the scope of patentable subject matter and restricting the rights of patent-holders are all substantially off-the-table as a result of Australia’s existing international obligations.  In any case, none of these things would solve the real problem, which is the lack of an effective innovation ecosystem in Australia which can support the development of new home-grown technologies, and assist Australian innovators to take them to the world.

17 August 2015

Five Easy Ways to Fix the Innovation Patent System

FiveAs I reported last week, IP Australia has opened a consultation on the belated recommendation by the now-defunct Australian Advisory Council on Intellectual Property (ACIP) that the government consider abolishing the innovation patent system.

The consultation, and ACIP’s recommendation, arise as a result of IP Australia’s report entitled The Economic Impact of Innovation Patents, which concluded that the innovation patent system is failing to achieve its original objective of encouraging innovation by Australian inventors and small-to-medium enterprises (SMEs).

Specifically, IP Australia is seeking ‘feedback’ on:
  1. the ACIP recommendation that the innovation patent system be abolished; and 
  2. any alternative suggestions to encourage innovation among SMEs.
I believe that the concept behind the innovation patent – providing a second-tier patent right that is easier and more cost-effective for individuals and SMEs to obtain, but which has a shorter term of protection than a standard patent – is a good one, although it has become clear that the execution of that concept has left much to be desired.  However, the fact that the system is imperfect is no reason to abandon it without some attempt at revision.

With this in mind, I would like to present five simple proposals to address many of the concerns that have arisen in relation to innovation patents.  Readers familiar with recent Australian politics will be aware that nothing gets done in this country unless it can be encapsulated in a three-word slogan.  I have therefore reduced each of my proposals to a simple three-word headline:
  1. Raise the Step;
  2. Limit the Damages;
  3. Reduce the Term;
  4. Stop the Injunctions; and
  5. Force the Examination.
Further explanation of each of these proposals, and the potential benefits, are set out in the remainder of this article.

09 August 2015

IP Australia Has the Innovation Patent In Its Sights, Again!

CrosshairIP Australia has initiated a consultation on the recommendation of the Advisory Council on Intellectual Property (ACIP), in its one-page statement issued in May 2015, that Australia’s second-tier ‘innovation patent’ system be abolished.  While the terms of the consultation naturally do not say it in so many words, it seems to me that IP Australia is gunning for the innovation patent, and would like to see ACIP’s latest recommendation implemented by the government.  The consultation paper is available from IP Australia’s web site, and submissions are requested by 28 September 2015.

ACIP had previously reported on a three-year review of the innovation patent system back in June 2014.  Its report that was largely inconclusive, and made no recommendation supporting either the retention or abolition of the innovation patent system.  However, as I explained in an earlier article, immediately following publication of an IP Australia report on The Economic Impact of Innovation Patents ACIP (or somebody purporting to speak for ACIP – see later) was miraculously struck by certainty, and issued its short-but-sweet revised recommendation that the Australian government should consider abolishing the innovation patent.

The IP Australia report resulted from analysis of the Intellectual Property Government Open Data (‘IPGOD’) dataset that has been compiled and made available to the public, free of charge.  The IPGOD (which presumably resides in IP Heaven, assuming such a place exists) contains over 100 years of data on IP rights applied for in Australia.  It includes information on all aspects of the application process, augmented by a unique set of identifiers enabling IP rights to be linked to individual firms and firm-level business information.  The analysis was conducted under the auspices of IP Australia’s Office of the Chief Economist, as part of its ongoing studies of the Economics of IP, and the report concludes that ‘the innovation patent is not fulfilling its policy goal of providing an incentive for Australian SMEs to innovate’.

02 August 2015

Turf Wars! Why Owning a ‘Plant Patent’ Does Not Grant Control of the Variety Name

Sir Walter Turf‘Sir Walter’ is a variety of buffalo grass that has proven to be extremely popular in Australia.  It was developed in around 1996 and is described as ‘a grass that was more resilient to disease, pests and fungus than other grasses.  It was drought resistant, thrived in shade and sun and stayed green and lush throughout the year.’

The Sir Walter variety is protected by Plant Breeder’s Rights (PBR’s), granted under the Plant Breeder’s Rights Act 1994 (the PBR Act).  Australian PBR’s perform a similar function in Australia to Plant Patents in the US.  Generally speaking, PBR’s are rights granted to the breeder of a new variety of plant that provide exclusive control over propagating materials, such as seeds, cuttings, divisions, tissue culture, and so forth, for up to 20 years (25 years in the case of trees and vines).

Protection for the Sir Walter variety under the PBR Act will expire on 27 March 2018.  Until this date, Buchanan Turf Supplies Pty Ltd (the company that owns the PBR) essentially controls all production and sale of Sir Walter turf in Australia.  After that date, other traders will be free to cultivate, reproduce and sell the Sir Walter variety in competition with Buchanan Turf Supplies.

Over the time it has had exclusive rights to the Sir Walter variety, Buchanan Turf Supplies has marketed it strongly.  It owns the Internet domain ‘sirwalter.com.au’, and had advertised through just about every applicable medium, including television, radio, print, fixed and mobile signage, and point-of-sale (i.e. nurseries).  All of this promotion has prominently featured the Sir Walter name, and educated the public as to the benefits of the variety.  Recently, Buchanan Turf Supplies has sought to register the name SIR WALTER as a trade mark.

There is just one (big) problem with this.  When used in relation to grass, ‘Sir Walter’ is not a trade mark, it is a variety name.  And while ‘a rose by any other name would smell as sweet’, we would have some difficulty conducting a conversation about the fragrance of the rose if we were unable to agree on a common name to signify the flower in question.  Which is why – as Buchanan Turf Supplies is finding out the hard way in Federal Court – you cannot ‘own’ a variety name, even if you were the one to coin it, and have effectively had control over its use for the better part of 20 years: Buchanan Turf Supplies Pty Ltd v Registrar of Trade Marks [2015] FCA 756.

A better strategy is to have two different names: one for marketing purposes; and another for the common name of the variety.

26 July 2015

Judge in Australian ‘Software Patent’ Cases Has No Issue With Gaming Claims

Pace Kitty Slot MachineAustralian Federal Court Justice John Nicholas has issued a decision in which he declares himself ‘satisfied’ that claims directed to the awarding of prizes by casino gaming machines satisfy the ‘manner of manufacture’ requirement for patent-eligibility in Australia (Aristocrat Technologies Australia Pty Limited v Konami Australia Pty Limited [2015] FCA 735).

Justice Nicholas is one of three judges – the other two being Justices Bennett and Kenny – responsible for deciding the appeals in the Research Affiliates and RPL Central ‘software patent’ cases.  The Research Affiliates appeal has already been decided, with the court determining unanimously that a computer-implemented scheme for generating a financial index is not patent-eligible in Australia (see Australia’s ‘Alice’: Appeals Court Denies Business Method Patent).  The RPL Central appeal was heard on 7 May 2015, and a decision is keenly awaited (see ‘Software Patents’ Back Under the Appeals Court Microscope).

As regular readers will already be aware, I am involved in the RPL Central case, and was present at the hearing in May.  It appeared to me that, of the three judges, Justice Nicholas was the most sceptical of the patent-eligibility of the claims in that case.  Having spoken to others who were also present, I do not believe I am alone in this view.  I am therefore a little surprised at how uncritical the judge has been of the claims in the Aristocrat case.  The Full Court in Research Affiliates referred positively the US Supreme Court’s decision in Alice Corporation v CLS Bank, and yet I do not think that Aristocrat’s claims would be considered patent-eligible in the US under the Alice standard.

Perhaps Justice Nicholas is not as sceptical of ‘software patent’ claims as his apparent criticisms during the RPL Central hearing might suggest?

11 July 2015

CRISPR – Will This Be the Last Great US Patent Interference?

Duelling PistolsOn 9 November 2014, Berkeley Professor of Chemistry Jennifer Doudna and her collaborator Emmanuelle Charpentier, currently at the Helmholtz Center for Infection Research in Germany, attended an awards ceremony at NASA’s Ames Research Center in Mountain View, California.

Not only did Doudna and Charpentier – dressed to the nines, and looking more like glamour queens than the usual white-coated scientist stereotype – mingle with celebrities including Benedict Cumberbatch, Cameron Diaz and Jon Hamm, while enjoying a live performance by Christina Aguilera, they also received the 2015 Breakthrough Prize in the life sciences category.  The award, which was sponsored by Facebook’s Mark Zuckerberg and other tech billionaires, included prize money of US$3 million apiece.

To put that in perspective, had the two scientists received a Nobel Prize last year, they would have shared 8,000,000 Swedish Kronor, or about US$1 million, between them.  Of course, it is not all – or even mostly – about the money, and the prestige attached to a Nobel prize is undoubtedly greater.  And it seems to be odds-on that the discovery for which Doudna and Charpentier received the 2015 Breakthrough Prize – and which has been called ‘the biggest biotech discovery of the century’ – will one day be the subject of a Nobel Prize as well.

All of this fuss is about a technology called CRISPR/Cas9, which is essentially a DNA ‘editing’ tool that Doudna and Charpentier developed in (around) 2012, as a result of their research into a system used by bacteria to defend themselves against viruses.  Doudna has described the CRISPR/Cas9 (which stands for Clustered Regularly Interspaced Short Palindromic Repeats/CRISPR associated protein 9) tool as a ‘molecular scalpel for genomes’.  She and Charpentier demonstrated how it is possible to synthesise molecules, consisting of an engineered RNA and a ‘cutting’ protein, that can precisely target a short gene sequence within a genome, and slice the DNA open at that exact point.

Bacterial cells – in which the mechanism was first discovered – are simpler than the cells of higher organisms (known as ‘eukaryotic cells’).  However, in January 2013, Doudna and Charpentier took the next step, successfully cutting out and replacing a selected section of DNA in human cells.  In the same month, a team led by Feng Zhang at the Broad Institute, Inc and MIT reported similar success using CRISPR to edit human genes.

Which brings me to the main topic of this post.  Because, while Doudna and Charpentier have been collecting the public accolades, rubbing shoulders with the rich and famous, and banking the – doubtless well-deserved – proceeds of their success, it is Zhang who has been awarded the first patent on the basic CRISPR technology – US Patent No. 8,697,359, ‘CRISPR-Cas systems and methods for altering expression of gene products’, issued on 15 April 2015.  And that could ultimately be worth much more than $3 million!

This is now shaping up as a major battle over who will own the most basic, and potentially valuable, patent rights in relation to the CRISPR technology, and possibly the last great priority dispute of the ‘first-to-invent’ era of US patent law.

05 July 2015

Patenting Swiss-Style, In Australia and the UK

Swiss FlagLast week I wrote about the ways in which medical treatments – including pharmaceutical compounds and therapeutic methods – are protected using a variety of different forms of patent claim.  One of these is the so-called ‘Swiss-style’, ‘Swiss-type’, or simply ‘Swiss’ claim, which takes the form ‘[compound] for use in the manufacture of a medicament for treatment of [new condition].’  I explained that Swiss-type claims are treated as if they cover any and every method of making a medicament of any kind that includes the compound as an active ingredient, and with the intention of it being used to treat the new condition.

By sheer coincidence, on 29 June 2015 Justice Yates, in the Federal Court of Australia, handed down a ruling in Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634, in which he has a great deal to say about Swiss-type claims.  Furthermore, the previous week the England and Wales Court of Appeal issued a decision in Actavis UK Ltd & Ors v Eli Lilly & Company [2015] EWCA Civ 555, which also involved Swiss-type claims.

It is interesting to compare the two decisions, particularly because, in my view, the UK court managed to completely undermine the European prohibition on patents for methods of medical treatment and must surely, therefore, be wrong!

28 June 2015

Patenting Medical Treatments – An Overview

PharmaceuticalsHealthcare is one of the most economically-important areas in which patents are granted.  In no small part, this is due to the great expense and risk involved in discovering, developing, trialling, gaining regulatory approval for, and ultimately commercialising new drugs and other forms of therapy. 

For better or worse, governments in the developed world have largely abdicated responsibility for research and development in this area, in favour of allowing private enterprise to bear the cost and risks.

In exchange, the patent system fulfils the role of ensuring that the companies taking on these risks are able to gain a commensurate economic benefit if, and when, their efforts pay off.  In fact, special treatment is provided in the patent laws of various countries for therapeutic inventions in particular, to ensure that the rewards outweigh the risks, including:
  1. granting broad protection for new chemical compounds that have been shown to have at least one therapeutic use;
  2. granting protection for known chemical compounds when they are first discovered to have at least one therapeutic use;
  3. permitting further periods of more-limited protection for known chemical compounds when shown to be useful for a second, previously unknown, therapeutic purposes; and
  4. extended terms of patent protection to compensate for time required to obtain regulatory approval to actually commence marketing of a therapeutic product (I have written about extensions of patent term on many previous occasions, and will not be covering them again here).
One aspect in which there is far less international uniformity is whether or not patents should be available for methods of treatment and/or diagnosis that are practised on the human body.  Indeed, in most countries medical treatment methods are considered unpatentable on policy grounds. 

As has been recently confirmed by the High Court, however, methods of medical treatment are patentable in Australia.  Such methods have also long been considered patentable in the US, although there has recently been concern that the decision of the Supreme Court in Mayo Collaborative Services v Prometheus Laboratories, Inc has imposed significant limitations on the types of treatment methods that can be patented.

The purpose of this article is not to get into the details, but rather to provide an overview of how patent laws protect (or not) medical treatments for readers who may be unfamiliar with this topic.

21 June 2015

Patentability of Genes May Turn on Claim Construction

DNAA Full Bench of all seven judges of the High Court of Australia heard oral arguments in the appeal by Yvonne D’Arcy in the Myriad Genetics BRCA gene patent case starting on Tuesday 16 June 2015, and continuing through the morning of Wednesday 17 June 2015.  Transcripts of the first day and the second day of the proceedings are available.

As a preliminary matter, the High Court determined on Monday 15 June 2015 that it would not allow the application by the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) to intervene in the case as amicus curiae.  I wrote previously about IPTA’s application, and subsequently about the opposition by the Commonwealth, and I am not at all surprised that the High Court turned IPTA down.

Based on the transcripts, it appears that there are up to four key issues that may determine the outcome of the appeal, i.e. whether or not Myriad’s claims to the isolated BRCA genes (and, by extension, all other patent claims directed to naturally-occurring genes that have been isolated from their natural environment) are proper subject matter for a patent under Australia’s ‘manner of manufacture’ test for patent-eligibility.

Those four issues are:
  1. the proper construction (i.e. interpretation) of Myriad’s claims – more particularly whether they are, in substance, directed to a molecule or to ‘information’;
  2. whether or not the test for ‘manner of manufacture’ requires a nexus between what is ‘artificial’ in an invention, and its economic value (and, if so, whether such a nexus exists in the case of isolated genes);
  3. the desirability of consistency with the laws of Australia’s major trading partners and, if this is desirable, which of these other countries we should follow; and
  4. the significance of the Australian Parliament’s repeated decisions not to introduce an express exclusion from patentability for ‘products of nature’ when the opportunity has arisen.
Reading the transcripts, it is not at all clear to me which way the seven judges (individually, or as a group) are likely to rule in this case.  While they certainly interrogated David Shavin QC (Queen’s Counsel appearing for Myriad) far more vigorously than David Catterns QC (Queen’s Counsel appearing for Ms D’Arcy), my impression is that Mr Shavin had answers for all of the judges’ questions and that, on balance, Myriad’s case is more consistent with the Australian authorities on patent-eligibility.  At the same time, however, it appears that at least some of the judges are disposed to rule against the patentability of isolated genes.

15 June 2015

ACIP Says ‘Abolish Innovation Patents’ Based on IP Australia Report

Knifing by moonlightOn 25 May 2015, IP Australia published a report entitled The Economic Impact of Innovation Patents.  The innovation patent is Australia’s second-tier patent right, characterised by a shorter term (eight years), a lower threshold of innovation (‘innovative step’ rather than ‘inventive step’), and lower cost (largely because substantive examination of an innovation patent is optional, unless enforcement is required) than a regular ‘standard’ patent.

The new report is the result of analysis conducted under the auspices of IP Australia’s Office of the Chief Economist, as part of its ongoing studies of the Economics of IP, and concludes that ‘the innovation patent is not fulfilling its policy goal of providing an incentive for Australian SMEs to innovate’.

And while the IP Australia report does not quite go so far as to explicitly recommend abolition of the innovation patent system (merely pointing out that some other countries have abolished their second tier patent rights on the basis of similar considerations), the Australian Government’s Advisory Council on Intellectual Property (ACIP) has been very quick to come out against the innovation patent in response, stating that it has failed to achieve its policy objectives, and that the Government should consider its abolition.

There is, in fact, a great deal of interesting and thought-provoking analysis and information in the IP Australia report.  Whether the facts actually support all of the inferences and conclusions set out in the report is another matter.  It is an even greater leap to conclude that the innovation patent system should be abolished.

In my opinion, the facts laid out in the report need to be considered from the perspective of a range of different stakeholders in Australia’s patent system.  ACIP’s new recommendation appears to have been reached on purely economic grounds, taking the many inferences and conclusory statements in the report at face value.  I believe that the facts support more than one possible set of conclusions, and that abolishing the innovation patent system rather than considering some sensible reforms could well be a case of throwing out the baby with the bathwater.

08 June 2015

Help the Homeless by Sending a Patent Attorney Out to Sleep Rough!

Would you like to see one of the leaders of the Australian patent attorney profession sleeping rough on one of the coldest nights of the year?
2015 CEO Sleepout
I hope you would, which is why I am asking Patentology readers to sponsor the efforts of Karen Sinclair, Principal and Chairman (her preferred title) of Watermark, in the upcoming Vinnies CEO Sleepout on Thursday 18 June 2015.

Funds raised through the Vinnies CEO Sleepout will go towards helping the more than 100,000 Australian men, women and children who are experiencing homelessness to find the warmth, safety and dignity that they desperately deserve.

Vinnies support people experiencing homelessness through a range of support services including crisis accommodation, domestic violence support, access to budget counselling, lifeskills courses and legal advice, as well as assisting in planning for change and their return to independent living.

It only takes a moment to make a difference and help contribute to breaking the cycle of homelessness.

Jason’s Story

I would like to share Jason’s story with you.

Jason had a troubled childhood, growing up with an abusive alcoholic father Jason was constantly walking on egg shells. He isolated himself from others, scared of what they might see.

07 June 2015

Myriad Hearing Date Set, Commonwealth Opposes IPTA Intervention

High Court of Australia from lakeOral arguments in the High Court appeal by Yvonne D’Arcy in the Myriad Genetics BRCA gene patent case will be heard in Canberra on Tuesday, 16 June 2015.

In the latest development in the case, on 26 May 2015, the Solicitor General of the Commonwealth of Australia filed an application to intervene in the Myriad proceedings.  The Commonwealth intervention will be triggered in the event that the High Court grants the request by the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) (which I wrote about back in May) to intervene in the High Court proceedings as amicus curiae.

IPTA is seeking to raise a constitutional question, namely whether the concept of ‘invention’ within the Patents Act 1990 should be interpreted as extending to the full limit of the power granted to the Commonwealth to make laws ‘with respect to … patents of inventions’ under section 51(xviii) of the Commonwealth of Australia Constitution Act (the Constitution), in the absence of any express contrary intention.

As an Australian taxpayer, I find this development intensely irritating, and my annoyance is not directed at the Government, but at IPTA.  In effect, the Australian people are now footing the bill for Commonwealth intervention in High Court proceedings between two private parties as a direct result of IPTA’s decision to introduce a constitutional issue into the case.  With interpretation of the Constitution potentially at stake, the Government has not really had any choice in the matter.

The Commonwealth is opposing IPTA’s application to intervene.  However, in the event that the High Court grants the application, the Commonwealth will make submissions urging the Court to reject IPTA’s interpretation of the scope of the constitutional power to make laws with respect to patents.

06 June 2015

Five Years of Patentology, or, How I Learned to Love Marketing!

Fifth Birthday CakeToday is Patentology’s fifth anniversary.  It was on 6 June 2010 that I published the very first post on this blog.  It is fair to say that I had very little idea of what I was doing, or just how big a part of my professional and personal life blogging would become.  It simply seemed like a good idea at the time.

I may not have had much of an inkling about the ‘what’ or the ‘how big’, but at least I had some idea of why I was starting my own blog.  Put simply, it was because I hated marketing.  And when I say ‘marketing’, I mean the kind of things in which lawyers, patent attorneys, accountants and other professional service providers have traditionally engaged – activities such as attending ‘networking’ events, ‘researching’ prospective clients, hitting up existing clients for referrals or additional business, handling random enquiries in the vague hope that one of them will be the ‘next big thing’, and (most horrifying of all) cold-calling prospects.

In short, I just could not abide all of that ‘selling’ stuff.  So much do I despise it still, that I cannot help putting almost all of its key terminology in scare quotes.  I know that this is not how everybody feels.  We all know a few magically silver-tongued people who can small-talk like it is an Olympic sport, who love nothing more than getting out and pressing the flesh, and who seem shameless in asking for business, and fearless of the rejection that so often ensues. 

I suspect, however, that most of those people naturally gravitate to sales.  From experience, I would suggest that not too many are completing technical undergraduate degrees, going on to work in research labs, earning PhDs, doing a bit of technical R&D and commercialisation, and ultimately going on to yet more study in order to obtain a specialist law qualification and become a patent attorney.  The type of personality that is drawn to these kinds of experiences – my type of personality – is far more likely to enjoy an evening at home with a good book or a DVD than schmoozing the crowds at a conference dinner.  I have never taken a formal Myers Briggs personality assessment, but my guess is that it would tell me that I am INTJ.  (Whatever that is worth.  I am sceptical of such tools – which is just so typical of an INTJ personality!)

It is hard not to hate something you are not good at, and which goes against your very character and self-image.  So, if I could not bring myself to go to ‘marketing’, I would have a go at getting ‘marketing’ to come to me.  My strengths (as I see myself) are intelligence, knowledge/expertise, creativity and communication.  I love to share knowledge and to exchange ideas – it is small-talk and social conversation that I am not so great at.

In short, I started a blog.

31 May 2015

What To Do If You’re Unhappy With An Australian Patent Attorney

Shouting manWhat do you do if you have a complaint about your Australian patent attorney?

The first thing to be aware of is that most Australian patent attorneys are not lawyers.  Furthermore, even if your patent attorney is one of the few who is also qualified as a lawyer, they may not be acting in that capacity when assisting you with your patent matters.  They are therefore unlikely to be subject to the disciplinary regime that applies to lawyers.  You will not advance your cause by threatening to make a complaint to the relevant regulatory body for lawyers in the state in which your attorney is practising!

The body charged with handling formal complaints against Australian Patent and Trade Marks Attorneys under the Australian Patents Regulations 1991, is the Professional Standards Board for Patent and Trade Marks Attorneys (PSB).  The PSB has the power to investigate complaints (and to compel the attorney to cooperate with the investigation), and to refer a complaint to the Patent and Trade Marks Attorneys Disciplinary Tribunal for adjudication. 

The PSB (which ought to know, since it receives a number of complaints each year) indicates that most disputes between patent attorneys and their clients fall into two categories:
  1. disputes where there is evidence that the attorney has acted inappropriately; and
  2. disputes where the client has not achieved their objectives, or there is a dispute over costs, unpaid bills or other aspects of the relationship.
If your issue falls into the first category, then you may well need to take your complaint to the PSB.  Indeed, if your attorney has engaged in ‘unsatisfactory professional conduct’ or ‘professional misconduct’ (see below), and refuses to acknowledge or address your concerns in any meaningful way, then I would encourage you to contact the PSB.  Attorneys who genuinely lack an understanding and appreciation of their professional obligations to their clients and the community at large are liable to bring the profession as a whole into disrepute.  I therefore support such cases being dealt with via the formal disciplinary mechanisms provided under the Patents Act 1990 and the Regulations.

However, the majority of Australian patent attorneys are diligent, ethical and professional.  While we are also human, and therefore not immune from the occasional lapse, for the most part we care about our clients, and want our professional relationships to be effective and mutually beneficial.  So, in most cases, the PSB should not be the first port of call for a disgruntled client.

That being said, much of this article is about what you need to know, what you can expect, and what you can realistically hope to achieve, before taking a complaint to the PSB.

24 May 2015

On Extensions of Patent Term and Genetic Technologies

Recombinant formation of plasmidsTwo recent decisions issued by the Australian Patent Office address the requirements for extending the term of a patent encompassing a pharmaceutical substance ‘when produced by a process that involves the use of recombinant DNA technology’: ImmunoGen, Inc. [2014] APO 88 and Novartis Vaccines and Diagnostics S.r.l. [2015] APO 2.

What is interesting about both these cases is that, while recombinant DNA techniques are employed in manufacturing the pharmaceutical products, neither patent directly claims a new product resulting from the use recombinant DNA technology.  In both cases, the patent claims are principally directed to processes for making the products, and extensions of term have nonetheless been granted. 

The decisions relate to the anti-cancer drug KADCYLA, and the meningitis vaccine BEXSERO, both of which will now enjoy an extended term of patent protection in Australia.

17 May 2015

Can the High Court Fix Australia’s Obviousness Problem?

StepsAustralia has an obvious problem with obviousness.  For over three decades, we have been out-of-step on inventive step.  The law of obviousness under the Patents Act 1952 was originally messed up by the High Court in the ‘3M Case’ (Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9).  There have since been three legislative attempts to fix it – with the original enactment of the Patents Act 1990, with the changes in the Patents Amendment Act 2001, and most recently with the passage of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.

I have written previously about Australia’s Four Laws of Inventive Step, and I once called the 3M Casepossibly the second worst ever patent judgment by the High Court of Australia’.  I was wrong.  In terms of its lasting negative impact on Australian patent law, 3M is clearly Number One.  The judgment I called the worst, Philips v Mirabella [1995] HCA 15 – for all its intrinsic awfulness – has been effectively quarantined, and for the most part no longer causes us too much trouble.  3M, however, lives on in the continuing failure of all attempts at legislative correction to produce laws consistent with the approach taken in the rest of the developed world.

In the latest chapter of this ongoing saga, on the 13th and 14th of May the Australian High Court heard oral arguments in the appeal by pharmaceutical company AstraZeneca AB against last year’s ruling of an expanded five-judge Full Bench of the Federal Court of Australia that its two patents relating to the cholesterol-lowering drug marketed as CRESTOR (active ingredient rosuvastatin) are invalid.  (I previously wrote about that decision in What is the Starting Point for Inventive Step?)

For truly dedicated watchers of Australian patent law, transcripts of day 1 and day 2 of the hearing are available.  Alternatively, the High Court web site hosts audio-visual recordings of the proceedings – each of day 1 and day 2 being in excess of four hours of not-always-riveting television.

It is clear from the arguments presented to the Court that Australia’s troubles with obviousness are not over.  And while the High Court now has an opportunity to make things a little better (or, at least, to avoid making them any worse again), ultimately I think that the only real solution will be to scrap our existing prescriptive approach to inventive step in favour of the kind of open enquiry into obviousness that is available under the laws of other developed nations.

10 May 2015

‘Software Patents’ Back Under the Appeals Court Microscope

Artificial IntelligenceOn Thursday, 7 May 2015, a full bench of the Federal Court of Australia, comprising Justices Bennett, Kenny and Nicholas, heard the appeal of the earlier single-judge decision in RPL Central Pty Ltd v Commissioner of Patents [2013] FCA 871.  The case relates to Australian innovation patent no. 2009100601, which covers a computer-implemented invention (i.e. a so-called ‘software patent’) in which a computer system is used to centralise and automate mechanisms for prospective students to provide evidence of their prior education and experience for the purpose of potentially receiving course credit under a ‘recognition of prior learning’ (RPL) procedure.

Specifically, the case addresses the question of whether the computer-implemented evidence-gathering method and system is eligible for patent protection under the ‘manner of manufacture’ test for subject matter in Australia.

As always when I write about this case, I need to point out that I am not an impartial observer, and that I have to be reasonably circumspect in what I say about the matter.  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 have been running the Federal Court appeals on behalf of RPL Central.

However, my involvement does mean that I was in court for the hearing, and I am therefore in a position to provide a brief report on the proceedings.  For the most part, the parties were in furious agreement on the relevant legal principles, with the differences lying primarily in the way each side contended that these should be applied to the RPL Central invention.

03 May 2015

Patent Attorneys Invoke Constitution in Myriad Gene Case

Australian ConstitutionThe Institute of Patent and Trade Mark Attorneys of Australia (IPTA) has applied to intervene as amicus curiae (i.e. ‘a friend of the court’) in the High Court appeal by Yvonne D’Arcy in the Myriad Genetics BRCA gene patent case.  In doing so, IPTA is seeking to raise a Constitutional matter, namely ‘whether the concept of “patents of inventions” in section 51(xviii) of the Commonwealth of Australia Constitution Act (the Constitution) encompasses isolated genetic material and other materials isolated from nature.’

The publicly-available documents filed in the appeal, including IPTA’s written submissions in support of its application for leave to intervene, can be viewed on the High Court’s page for the case, no. S28/2015.

It probably goes without saying that IPTA’s overriding objective is to ensure that the High Court does not overturn the decision of the five-judge panel of the Federal Court of Australia which found unanimously that Myriad’s claims directed to the isolated BRCA genes were patentable.

Historically, the High Court of Australia has been reluctant to entertain amici curiae in civil disputes between private parties.  The Constitutional matter being raised by IPTA is one which has not arisen in arguments before the lower courts, and appears to be unnecessary in order to decide the specific question of whether or not Myriad’s claims directed to isolated BRCA genes are patentable.  Furthermore, in my opinion IPTA’s argument is misconceived, although I am obviously not an expert on constitutional law, so there could be something I am missing. 

Overall, I think it unlikely that the court will allow IPTA’s application, but it could make things more interesting if I am wrong!

28 April 2015

Australian Government Seeks $60M Damages Over Invalid Patent

Gold BarsA court ruling has revealed that the Commonwealth of Australia (i.e. the Federal Government) is seeking to recover $60 million it considers has been ‘overpaid’ for the anti-clotting drug marketed by Sanofi (formerly Sanofi-Aventis) and Bristol-Meyers Squibb under the brand name PLAVIX: Commonwealth of Australia v Sanofi-Aventis [2015] FCA 384.

Sanofi was the owner of Australian Patent No. 597784, which includes claims directed to the compound having the international non-proprietary name clopidogrel.  As noted above, clopidogrel has anti-clotting activity, and is prescribed primarily to prevent heart attack and stroke in high-risk patients, such as those who have a history of these conditions.  The brand-name drug PLAVIX was immensely profitable – according to Wikipedia, it was the second best-selling drug in the world, grossing over US$9 billion in global sales in 2010.  (And, since this is the Internet, Wikipedia also reveals that clopidogrel may have beneficial uses in cats.)

In 2007, generic pharmaceutical manufacturer Apotex Pty Ltd, wanting to introduce its own clopidogrel product to the Australian market, commenced proceedings against Sanofi in the Federal Court of Australia seeking revocation of its patent.  Sanofi, in turn, accused Apotex of threatening infringement.

For the duration of the resulting proceedings, injunctions imposed by the court, along with undertakings that Apotex provided, prevented it from introducing a generic product, leaving patients, and the Australian Government, with no alternative to the premium-priced brand-name product PLAVIX.  Eventually, Sanofi’s patent was found to be invalid, implying that a cheaper generic version of the drug could have been made available all along. 

The notional difference in price between the brand-name product and a hypothetical generic alternative is the basis for the Government’s claim for $60 million in damages.

26 April 2015

How International Treaties Help Inventors With Patent Strategy

GlobeThere is no such thing as a ‘world patent’.  As matters currently stand – and as I expect them to remain beyond the term of my natural life – there is no country on Earth that is willing to completely forego the right to determine what qualifies for a patent monopoly within its borders, or the right to collect ongoing fees to maintain this privilege.

So, anybody wishing to obtain patent protection in multiple markets will necessarily need to pursue some form of application in each corresponding jurisdiction.  With every country having its own patent laws (and this is true even in places, such as Europe, where some form of regional process is available), obtaining all of these patents can certainly become a complex, time-consuming, and expensive procedure.

Fortunately, however, over the years a majority of countries have got together to establish some basic standards, agreements and conventions that provide at least some certainty and simplification for inventors and companies seeking protection for their inventions in multiple jurisdictions.  In this article I want to talk briefly about the three I regard as being the most significant:
  1. the Paris Convention for the Protection of Industrial Property, which ensures that all members will recognise the priority of an application filed in another member country for at least 12 months;
  2. the Patent Cooperation Treaty (PCT), which creates a central mechanism for filing an ‘international application’ that can delay the costs and complexity of individual national/regional filings for at least 18 months longer than would otherwise be possible; and
  3. the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which sets minimum standards for patentability, guarantees non-discriminatory treatment of applicants and applications, and sets limits on the scope of national laws to exclude specific subject matter from patent-eligibility.
Knowing a little about these three international agreements is a good start on developing an international patenting strategy, although I would always recommend that you ultimately seek the assistance of somebody who works within these systems all the time, and is familiar with their many detailed benefits, and pitfalls.

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The Patentology Blog by Dr Mark A Summerfield is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Australia License.