Patents and the Trans-Pacific Partnership Agreement, Part 1

Negotiations 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.

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Tags: Conventions, International treaties, Trans-Pacific Partnership

Patented ‘Frankenfish’ Finally Granted FDA Approval

On 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.

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Tags: Genetic technology, Patentable subject matter

The ‘Exhausting’ Topic of International Patent Rights

Imagine 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.

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Tags: Exhaustion, Patent law, Patent litigation, US

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

Imagine 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!

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Tags: Claim construction, Estoppel, Examination