Time to Abandon Concerns About the ‘Scintilla of Invention’ and Focus on What Really Matters

Inventive step is hard.  It really is.  I have worked with and around patents for nearly 20 years, the majority as a practising patent attorney.  I have been an inventor, I have studied, practised and taught patent law, and I have thought and written about patents and patent law for many years.  And I still think that inventive step is genuinely hard.  If anyone tells you otherwise they are either a liar or a fool.

Just stop and think for a moment about the job that the law of inventive step (or obviousness, nonobviousness – whatever your preferred formulation, the problem is substantially the same) is required to achieve.  Firstly, it is supposed to be technology-neutral, since inventions can be made using electronics, software, chemicals, biological molecules, natural and man-made materials, mechanical components, and more, individually and in combination, across all industries.  A better mousetrap, an improved mechanical lock, a new cancer medication, a stronger cryptographic security system and an advanced process for genetic manipulation must all be assessable under the one law to determine whether they are ‘inventive’ or ‘obvious’.

Secondly, the law of inventive step is expected to be objective.  Ideally, the answer to the question ‘is it obvious?’ is independent of the decision-maker and free from any subjective or value-based judgment.

Thirdly, inventive step is expected to satisfy policy objectives.  Whether it is the US Constitutional purpose of ‘promot[ing] the progress of ... the useful arts’, or the (generally less-explicitly stated) economic rationale in Australia and other jurisdictions, inventive step is the ultimate gatekeeper of the patent system.  After it has been established that an alleged invention lies in a field of patent-eligible subject matter, and is novel (i.e. not already known in the same form) determining whether it constitutes a sufficient advance to be worthy of a state-sanctioned exclusive property right is wholly the work of the law of inventive step.

This is important work.  If the bar to be cleared by the inventor is set too low, then we may make the mistake of granting patents on trivial developments that are not worthy of protection, thereby preventing others from making use of technology that should be freely available.  Conversely, if the bar is set too high we may fail to provide the necessary incentives for inventors, investors and industries to take risks in bringing new or improved products and services to market, building businesses, creating employment, and generating new economic activity and productivity improvements through technology.

And because it is so hard to satisfy all of these complex and challenging requirements, the law of inventive step has become very complex over the years, through the combined efforts of courts and legislators.  One particular creation of the courts that has received much critical attention over the years is the notion that all that is needed to support the grant of a valid patent is a ‘scintilla of invention’.  This sounds like it sets the bar pretty low.  However, although the Australian courts seem determined to hang on to the ‘scintilla’, my view is that under the current law it actually has no bearing on what is required to establish an inventive step.

In a sense, then, the persistence of the anachronistic ‘scintilla of invention’ in the case law should be (mostly) harmless.  However, so long as it continues to be cited by the courts, and raised by critics of the patent system as a significant issue, it is a distraction that gives rise to the risk that we will fail to recognise and address the real problems plaguing the law of inventive step in Australia. 

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Tags: Australia, Innovation policy, Law reform, Obviousness, Patent law

The Productivity Commission on Patents – It’s All About ‘Value’ and ‘Quality’

The final report of the Australian Productivity Commission (PC) on its Inquiry into Australia’s Intellectual Property Arrangements (‘IP Report’) has now been released.  It is quite a tome, coming in at over 750 pages!  I wrote on previous occasions about the recommendation in Chapter 8 of the earlier draft report that computer software be excluded from patentability, and about appearing before the Commission to make submissions opposing this recommendation.

In view of this, the first point I want to note about the IP Report is that the PC heard what I, and a number of other contributors, had to say on this subject.  The draft Chapter 8 has been completely reworked in the final Chapter 9, and the proposed recommendation has been discarded.  In its place. the Commission proposes the more cautious course of action to allow the full impact of recent court decisions and other changes in the law to be assessed, and additional data gathered, to inform future studies and policy-making with regard to the role of patents in relation to computer-implemented innovations.

Other conclusions and recommendations of the IP Report relating to patents include:

1. the addition of an ‘objects clause’ to the Patents Act 1990 (Chapter 7);
2. a further raising of the inventive step standard, to equal or above the highest level in the world today (which, it is suggested, is that of the European patent system) (Chapter 7);
3. requiring inventiveness to be reflected in ‘technical features’ of an invention and not, for example, in features ‘that seem trivial or aesthetic in nature, and thus are likely to do little to advance human knowledge or create knowledge spillovers’ (Chapter 7);
4. raising and restructuring selected fees to discourage maintenance of ‘low-value’ patents (Chapter 7);
5. abolishing the innovation patent (Chapter 8); and
6. reforming the regime for granting extensions of patent term for pharmaceutical products (Chapter 10).

Chapter 10, dealing specifically with pharmaceuticals, is quite lengthy, and covers a range of issue that are not purely patent-related, such as data protection for biologics (there is no case, the Report concludes, for any extension to existing periods of protection) and ‘pay-for-delay’ arrangements (where it is recommended that the Government introduce a formal system for transparent reporting of settlement agreements between originating and generic manufacturers).

All of these recommendations, it should be noted, will ‘weaken’ the patent system, when viewed from the perspective of patent owners.  That is, they will make patents more difficult and costly to obtain, enforce and maintain.  Conversely, the PC would regard such reforms as ‘strengthening’ the patent system, in terms of its wider social and economic ‘value’.

I expect that some practitioners and users of the patent system (i.e. attorneys, inventors and applicants) will be bemused by many of the IP Report’s conclusions and recommendations, and perhaps attribute them to the rarefied approaches that we have come to expect from economists.  If so, then to some extent, at least, they may be correct.  But that is no reason to avoid trying to understand where the PC is coming from.

And where the PC is coming from is its perspective on ‘value’ and ‘quality’.  But that may not be ‘value’ and ‘quality’ as you know them.  When an economist uses these words, they usually mean something quite different from what a patent owner or patent attorney would probably understand them to mean, as I shall explain.

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Tags: Australia, Innovation policy, Law reform, Patent law, Public policy, Reviews

CRISPR Patent Interference Hearing – How to Define an ‘Invention’ and Why It Matters

On 6 December 2016, and for the first time since the University of California (‘UC’) first sought to provoke interference proceedings over CRISPR/Cas9 gene editing technology in April 2015, the parties in dispute over just who has the rightful claim to inventorship appeared at an oral hearing before three judges of the US Patent and Trademark Office (USPTO) Patent Trial and Appeal Board (PTAB).  Remarkably, considering the complexity of the scientific, technical and legal issues involved, UC and opposing claimant the Broad Institute of MIT and Harvard (‘Broad’) each had just 20 minutes to present its arguments, plus an optional five minutes for rebuttal of the other side’s submissions.  According to a journalist present at the hearing, it was all over in 45 minutes total.

It is important to understand, however, that while the judges’ decision here (which is expected within about two-to-three months) could put an end to the interference proceedings at the PTAB, the hearing was not actually about the ultimate question of who was first to invent the CRISPR technology at issue.  It was more about what each party may, or may not, have actually ‘invented’, and whether there is even any interference to be decided.

For any readers coming across this story for the first time, you could go back and read all of my articles on the topic (and the many good sources of information linked therein).  However, the key points may be briefly summarised as follows:

1. UC Berkeley Professor of Chemistry Jennifer Doudna and her collaborator Emmanuelle Charpentier were the lead researchers on a team that, in around 2012, developed CRISPR/Cas9 – a biotechnology system consisting of an engineered RNA and a ‘cutting’ protein that can be used for highly-targeted gene editing;
2. a US patent application is pending (serial no. 13/842,859), which is based on the UC team’s work and a series of filings beginning in May 2012;
3. the UC team’s original work related to the discovery of the CRISPR system in relatively simple bacterial cells (examples of ‘prokaryotes’, or simple cells without distinct nuclei), but in January 2013 they were successful in applying the technology to human cells (examples of ‘eukaryotes’, or more complex cells with, among other characteristics, distinct nuclei);
4. roughly in parallel, a team led by Feng Zhang at the Broad reported similar success using CRISPR to edit human genes;
5. a number of US patent applications were filed, beginning in December 2012, based upon the Broad team’s work (i.e. more than six months later than Doudna’s earliest filing);
6. the Broad requested prioritised examination under the USPTO’s Track One program and, as a result, was 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.

The UC applications, and the earliest Broad applications, were filed under the ‘old’ US system, according to which the applicant entitled to receive a patent is the first one to invent the claimed subject matter.  This differs from the ‘first-to-file’ priority system that has long existed throughout the rest of the world, and in the US since 16 March 2013.  Under the first-to-invent system, the administrative procedure used to determine who should receive a patent when there are competing claims is called an ‘interference’.

Therefore, the UC parties suggested that the USPTO should institute interference proceedings, in order to determine who is really entitled to own the patent rights to the CRISPR/Cas9 technology, which it did on 11 January 2016.  However, the purpose of the recent hearing was not to determine who was the first inventor, but rather to decide exactly what is the invention at issue, and whether the interference should proceed any further at all.

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Tags: Biotechnology, CRISPR, Genetic technology, Interference, US

Proposed IP Laws Amendments 2017: IP Australia Exposes Its Drafts

IP Australia has published ‘exposure drafts’ of proposed new legislation and regulations, identified as the Intellectual Property Laws Amendment Bill 2017 and the Intellectual Property Laws Amendment Regulation 2017.  Written submissions with final comments on the exposure drafts are invited by 22 January 2017.  Late submissions will not be accepted!

Amendments are being proposed to the legislation covering all of the registered IP rights, i.e. the Patents Act 1990, the Trade Marks Act 1995, the Designs Act 2003, and the Plant Breeder’s Rights Act 1994 (a.k.a. the PBR Act), as well as associated regulations and related IP legislation in the Olympic Insignia Protection Act 1987 and the Copyright Act 1968. The main objectives of the amendments are to align procedures and terminology, as far as possible, among the different laws, and to streamline certain cumbersome, inefficient and/or outdated processes.  Draft Explanatory Memoranda (EM) have also been published, explaining the proposed amendments in detail.

Although many people (myself included) will doubtless have forgotten by now, IP Australia conducted a consultation on a number of proposals now reflected in this draft legislation back in early 2015.  Only 15 non-confidential submissions were received (it is not clear whether any confidential submissions were made, although the nature of the proposals was such that confidentiality is unlikely to have been a major issue for most people).

While the proposed changes are largely technical or administrative in nature, and it is therefore unsurprising that interest levels were low, there are nonetheless some fairly significant amendments in the draft legislation.  These include a major revamp of the general extension of time provisions in the Patents Act, changes to re-examination and third party examination processes, the replacement of a licensing regime with a new infringement defence to cover ‘intervening rights’ arising when a patent or application is restored, the introduction of enhanced damages for flagrant examples of unjustified threats of patent infringement action, and provision for computerised decision-making.

More excitingly, it may soon be possible to submit colour drawings with patent applications!

If you have read this far without switching off, then this is stuff you probably need to know about, and maybe even make a submission.  In all, the draft amendment bill includes 596 items, while the draft amendment regulation includes 481 items.  Obviously I am not going to try to cover all of these in detail (that is the purpose of the EMs, after all).  My aim is to provide a reasonably concise summary of the major proposals as they specifically relate to patents, in the hope that this may be of assistance to readers with interests in this specific area.

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Tags: Australia, Law reform, Legislation, Patent Office

Appeals Court Throws NPE Upaid a Lifeline in Patent Claims Against Telstra

Back in March this year I wrote about an interlocutory (i.e. provisional, or interim) decision of Justice Yates in the Federal Court of Australia, in which he described claims of patent infringement made by Upaid Systems Ltd against Australia’s largest telecommunications carrier, Telstra Corporation Ltd, as being everything from ‘untenable’ to ‘confusing and embarrassing’.  (As a quick recap, Upaid is a ‘non-practising entity’ (NPE) – or, less flatteringly, a ‘patent troll’ – which sued Telstra back in August 2013 for the alleged infringement of two Australian patents relating to making online purchases of goods and/or services from mobile devices.)

Specifically, Justice Yates found, in relation to Australian patent no. 2008203853, that Upaid failed to particularise, or argue, any tenable case for infringement at any time, while in relation to Australian patent no. 770646, it had failed to particularise a tenable case for infringement, but that its submissions at the hearing departed from the particulars in ways that left unclear whether or not it might be in a position to present an arguable case.  His Honour thus proposed to strike out Upaid’s case on infringement of claim 1 of the ‘853 patent, but generously offered it a further opportunity to amend its particulars of infringement in relation to the ‘646 patent.

Had the court proceeded with these orders, it would, in all likelihood, have eviscerated Upaid’s case against Telstra.  In reporting an earlier ruling in this dispute, I suggested that the reason for Upaid’s extremely poor performance may be that, as an NPE, not itself mired in the business and technology of providing services competing with Telstra’s, it may well have a reduced understanding of the technical operations of a major national telecommunications carrier, and may therefore be reliant upon inference and observation of end results as a basis for its allegations.

Unwilling, it seems, to accept almost certain defeat, Upaid applied for leave to appeal to a Full Bench of three judges of the Federal Court.  The matter was heard before Justices Perram, Jagot and Beach on 14 and 15 November 2016, and judgment handed down on 22 November 2016: Upaid Systems Ltd v Telstra Corporation Limited [2016] FCAFC 158.

The Full Court has delivered a glimmer of hope to Upaid, partially granting leave to appeal, and allowing the appeal in relation to the primary judge’s order in relation to the ‘853 patent.  Instead, the court has ordered that Telstra’s application for summary dismissal of Upaid’s infringement claims against it be dismissed, and that Upaid be given an opportunity to file and serve further and better particulars of its infringement case in relation to the ‘853 patent (albeit that the scope of this opportunity remains to be determined by Justice Yates).

This ruling is undoubtedly a lifeline to Upaid, for which all hope had appeared to be lost.  Indeed, it now seems quite likely that the case will proceed to a full trial, unless it is settled in the meantime.

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Tags: Australia, Infringement, Litigation, NPEs, Summary judgment, Trolls

A Quarter of Australia’s Patent Attorneys to be ‘Publicly Owned’ By February 2017

Publicly-listed company Xenith IP Group Limited (ASX:XIP) announced on 25 November 2016 that it has ‘entered into a binding agreement to acquire Griffith Hack, one of Australia's leading specialist IP firms.’  The acquisition, for an upfront consideration of A$152 million, is scheduled to be completed on 1 February 2017.

Regular readers of this blog will be aware that this is just the latest in a series of public listings, acquisitions and consolidation in the Australian market for IP services.  As I have written previously, this brave experiment in capital-raising is the result of increasingly challenging market conditions.  Public listing can provide firms with the capital they need to make the significant investments necessary to achieve efficiency and productivity gains through deployment and use of new IT infrastructure, and to address the limited growth in demand for traditional IP services through acquisitions and /or diversification, e.g. into a range of new services or into other markets, such as south-east Asian countries.

Upon completion of the acquisition of Griffith Hack, and assuming no staff movements in the meantime (far from a certainty, it must be said), an astonishing 305 of Australia’s 1187 registered patent and/or trade marks attorneys will be employed by firms held by the three publicly listed companies Xenith IP, IPH Limited (ASX:IPH) and QANTM IP Limited (ASX:QIP).  That is 25.7% of members of Australian-based registered attorneys!

I would also note that one other characteristic of the changes sweeping the attorney professions in Australia has been generally poor communication with many affected stakeholders (i.e. employees).  In the case of the Griffith Hack acquisition, rumours that something was afoot have been circulating for some time.  The Griffith Hack staff with whom I happen to have spoken in recent weeks have generally known no more or less than the rest of us about what has been going on.  I learned of the acquisition plans not from Xenith’s ASX announcement, but via the Australian Financial Review’s Street Talk column (paywalled, sorry) on the preceding day.  I expect that this is also how many at Griffith Hack also initially heard the news.  It was only the next morning that a trading halt was called, and the official announcement published.

While I appreciate the need for confidentiality around price-sensitive announcements in relation to public companies, I do not imagine that too many people would attempt to deny that a stock market scuttlebutt column is a terrible way for employees to learn the details of the acquisition of their employer.  While some of the partners and principals of the firms involved so far appear to be in denial about the impact on staff, the murmurs I have been hearing around the traps indicate a fair degree of disgruntlement among employees – particularly those who perhaps envisioned being on a path to equity ownership themselves, and have now seen that future evaporate.

Oh, wonder!
How many goodly creatures are there here!
How beauteous mankind is! O brave new world,
That has such people in ’t!
          - The Tempest, Act 5, Scene 1

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Tags: Australia, Patent attorney profession

Patent Offices in Crisis? Application Pendency Alone Does Not Tell the Full Story

An article posted on 24 October2016 on the IP Watchdog blog caught my attention.  It is by Mark Schultz and Kevin Madigan who have recently authored a report for the Center for the Protection of Intellectual Property (CPIP), The Long Wait for Innovation: The Global Patent Pendency Problem [PDF, 1MB].  Their thesis – and it is a sound one – is that the growth in numbers of patent applications throughout the world over the past decade or so is stressing the resources of many patent offices, and is resulting in a growing backlog which is resulting, in turn, in excessive pendency (i.e. the delay between filing an application and a patent actually being granted).  This, say Schultz and Madigan, is a problem, because in some countries patents are taking so long to issue that, by the time they do, they may be of little value to their owners.

The Long Wait looks, in particular, at the pendency of patents granted by a representative sample of 11 offices, between 2008 and 2015.  The results place South Korea, China, Australia, USA and Japan in a ‘low pendency’ group (application to grant in under four years).  Egypt, the European Patent Office (EPO), Argentina and India fall into a ‘medium pendency’ group (between four and eight years).  Bringing up the rear, in a ‘high pendency group’ (eight to 12 years) are Brazil and Thailand.

Schultz and Madigan’s conclusion that patent offices with longer pendency are struggling, while those with the lowest pendency are doing fine, is broadly valid.  However, there are a couple of limitations to their approach, as a result of which they miss some subtle – and not-so-subtle – points regarding the performance of a number of the patent offices in their study.

First, using pendency as a measure of performance is inherently backward-looking. For the offices in the ‘high pendency’ group, in particular, the applications in question were filed, on average, a decade prior to the year in which they were granted.  But what does this mean for applications filed since 2005?  Can they expect a similar, shorter, or longer pendency?

Second, the assumption underlying the methodology – that pendency is primarily a result of patent office delays resulting from an existing backlog of applications – is not entirely valid in relation to a number of the patent offices considered.  Applicant behaviour and specific legal and regulatory provisions are also significant factors in some jurisdictions.  Indeed, in Australia and Japan in particular the impact of changes in laws and/or regulations are clearly visible in the results, and dominate over patent office examination delays.

By looking at filing and grant behaviour in the 11 offices selected by Schultz and Madigan, in conjunction with their pendency data, it is possible to obtain further insights.  For example:

1. the Brazilian and Thai patent offices are in very serious crisis (the term ‘basket case’ would not be inappropriate) – in the absence of major intervention the pendency of applications in these offices will continue to grow (and the apparent reduction in pendency in Thailand between 2012 and 2014 appears to be an anomaly);
2. although the EPO falls into the ‘medium pendency’ group, it appears to have its workload under control, and is at low risk (along with Australia, the USA, Korea and Japan) of developing a growing backlog;
3. within the ‘medium pendency’ group, the Indian Patent Office appears to be at greatest risk of joining Brazil and Thailand in the ‘high pendency’ group, with every indication that the growth in pendency observed in Schultz and Madigan’s study will not just continue but, without action, accelerate; and
4. China, despite falling in the ‘low pendency’ group is, on other measures, on par with Argentina, and may be starting to develop a growing backlog of applications.

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Tags: Backlog, Examination, Patent analytics, Patent Office

Public Listings – Australian IP Firms’ Bold Experiment

The Australian IP professions – registered patent and trade marks attorneys and specialist IP lawyers – are currently engaged in what might well be regarded as a brave and daring experiment. Prior to 15 April 2013 the regulatory regime in Australia did not even permit patent attorneys to incorporate. Now, less than four years later, not only have many firms chosen to take up the option of incorporation, but Australia now has not one, but three, publicly-listed companies each holding multiple operating IP firms.

In developments to date:

1. in November 2014, the firm of Spruson & Ferguson went public on the Australian Securities Exchange (ASX) via the listed entity IPH Limited (ASX:IPH), which has since acquired Fisher Adams Kelly Callinans (itself the result of a merger between Fisher Adams Kelly and Callinans), Pizzeys, and Cullens;
2. in November 2015, Shelston IP went public through the vehicle of Xenith IP Group Limited (ASX:XIP), which recently completed the acquisition of my former employer Watermark; and
3. in August 2016, Davies Collison Cave and FPA Patent Attorneys (formerly Freehills Patent Attorneys) jointly went public under the holding company QANTM IP Limited (ASX:QIP).

Most recently, on 26 October 2016 IPH announced [PDF. 298kB] that it has reached an agreement to acquire Ella Cheong (Hong Kong) Limited and its subsidiary Ella Cheong Intellectual Property Agency (Beijing) Company Limited for approximately A$27 million.

At this stage you are probably wondering whether there is something in the water in Australia!  However, there is method to this apparent madness.

The fact is that firms offering IP services in Australia are currently facing significant structural challenges.  Many transactions that were once the ‘bread and butter’ of the profession, such as payment of renewal/maintenance fees, preparation of translations of patent specifications, and filing of national applications under the Patent Cooperation Treaty (PCT) or Paris Convention, have been increasingly computerised and centralised by specialist service providers which have been able to achieve significant economies of scale.  Combined with increasing competition in the Australian market, in the face of very modest growth in demand (around four per cent) the choice for many firms is between innovation and stagnation.

Public listing can provide firms with the capital they need to make the significant investments necessary to achieve efficiency and productivity gains through deployment and use of new IT infrastructure, and to address the limited growth in demand for traditional IP services through acquisitions and /or diversification, e.g. into a range of new services or into other markets, such as south-east Asian countries.

However, this daring strategy does not come without challenges of its own.  The Australian model of public ownership has thus far produced three public companies each holding two or more firms that continue to do business as completely separate, and competing, operating entities.  This creates potential concerns about the ethical positions of these firms and their employed attorneys, including whether there may be conflicts between their duties to client and to shareholders, and/or between the clients of different firms within the same operating group.

These challenges are not, and have not been, insurmountable.  Whether the solutions are being effectively communicated to the market is a separate question.

You can read my detailed analysis of the reasons for consolidation and public listing of firms in Australia, the ethical issues that have arisen, and the ways in which these issues are being managed, in a recent article I wrote for the IP Watchdog blog: Will Australia’s Listed Firms Save the IP Profession from Stagnation?

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Tags: Australia, Patent attorney profession

If the Patent Office is Correct, Google’s Seminal ‘PageRank’ Invention Would Be Unpatentable in Australia

On 4 September 1998 a company was founded in order to commercialise some ideas that were being developed by two PhD students at Stanford University.  The most important of those original ideas had resulted in the filing of a US provisional patent application on 10 January 1997, in the name of one of those two PhD students.  This was followed by a non-provisional application, filed on 9 January 1998, which went on to become US patent no. 6,285,999.  Ownership of the patent remained with Stanford, which licensed it exclusively to the students’ company in exchange for 1.8 million shares. 

In 2005, those shares were sold for US$336 million.

Today, a few hundred million dollars is small change to those former PhD students, and the company that they founded.  The inventor on the original patent application was Lawrence (‘Larry’) Page, and his fellow student/founder was Sergei Brin.  The invention was a computer-implemented method for determining the ‘importance’ of web pages, for ranking purposes, which became known as PageRank (a play on the inventor’s name, and the purpose of the invention).  And the little company they started was, of course, Google, Inc.

While the original PageRank application has spawned a number of further US patents, it was never filed anywhere else in the world.  There was therefore never any possibility of an Australian patent being granted.  It is nonetheless concerning that, if a recent decision by a Delegate of the Commissioner of Patents, Amadeus S.A.S [2016] APO 71, is correct, the invention that helped launch one of the biggest companies the world has ever seen would be ineligible for patenting in Australia.

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Tags: Australia, Computer programs, Patentable subject matter

How a Little More Empathy, And a Little Less Ideology, Would Not Go Astray at Techrights

Last week I wrote about quitting my job.  To say that I have been dumbfounded by the response would be an understatement. The article has been shared hundreds of times on LinkedIn, where it has also generated dozens of comments in addition to those contributed below the post itself.  I have received private messages, via phone, email, LinkedIn and Twitter, from all over the world.  I have endeavoured to respond to each and every one, even if it is only with a ‘thank you’, or a click of the ‘like’ icon, but the truth is that I have lost track.

So, firstly, a public ‘thank you’ to everyone, for your support, encouragement and thoughtful responses.

There is, however, one message that I have been receiving over and over again from IP lawyers and patent attorneys – particularly, but not exclusively, those working in the Australian profession – which is that my comments on the stresses of the job, the yoke of billable hours, the deadlines, the weight of bearing responsibility for protecting and preserving clients’ rights, and so forth, have resonated far and wide. As one correspondent wrote to me, I have (apparently) ‘generated quite a stir in the profession.’

If this is right, and if it is at all indicative of conditions across the profession, then I have only one reaction: WTF, people?!  Can it really be the case that dozens – if not hundreds – of people around Australia, and possibly thousands – if not tens of thousands – worldwide, are all suffering in silence in a job that breeds stress, anxiety and depression, largely through mechanisms that they themselves choose to perpetuate?  You would think that this might be something we would talk about, but apparently quite the opposite is the case.  More than one message I have received commented on the ongoing loss of collegiality in the profession as one cause of stress and disillusionment.  Sadly, having witnessed examples of aggressive professional behaviour first-hand, I can well believe this to be true.

Assuming this problem is real, I am not equipped to solve it, nor do I intend to try.  But before moving on to the topic adverted in the title of this article, there are just two things I want to say to all of the people who wrote to me about this issue, and the many more whom, I assume, have remained silent:

1. please try to support and take care of each other – you are all in the same boat; and
2. to anybody who needs help, please do not be afraid to seek it out, whether that be by talking to trusted colleagues, friends, family, or contacting any of the organisations that exist for this purpose (e.g., in Australia, beyondblue or Lifeline) – there is no shame in doing something that may make you happier and more productive, and possibly even save your relationships or your life.

OK, so having highlighted the need for some empathy and goodwill I can now move on to the main topic of this article – a person who apparently suffers from a deficit of both, Dr Roy Schestowitz.   Dr Schestowitz is a publisher, editor and author at the site techrights.org, where last week he chose to grossly misrepresent me and my article about my reasons for resigning in order serve his particularly strident form of anti-software-patent propaganda. 

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Tags: Computer programs, Patent attorney profession, Personal, Public policy

So I Quit My Job. Here’s Why.

I quit my job at Watermark.  As of Friday, 7 October 2016, I will no longer be working as a patent attorney, at least for the immediately foreseeable future.  I have no new job to go to, and I genuinely have no idea what I am going to do next.  The first step will be to take a break, maybe do a little networking, and think about where I would like to go with my career. 

The decision to take this leap into the unknown has been surprisingly thrilling and liberating.  People keep telling me that I look like a weight has been lifted from my shoulders!  I recognise now that the main things that had been holding me back for some time were, firstly, concern for the clients I have worked with over many years (unquestionably a good reason) and, secondly, fear, particularly of the possible financial consequences (which I have come to realise was a pretty bad reason – indeed, little more than a poor excuse).

I have endeavoured to inform clients personally of my decision, and to assure them all that they remain in good hands with Watermark.  I joined Watermark when I entered the profession, and I stayed for nearly 14 years, which is far and away the longest I have worked for any one employer.  If I became good at my job, much of the credit must go to the many experienced, talented and supportive colleagues I worked with over the years.  That team is still there, and will continue to be there, for all of the firm’s clients, even as individual staff members come and go.

However, if you are a client who, for whatever reason, I have not contacted, and this is how you are finding out – I sincerely apologise!  It has just not been possible to contact personally every client I have worked with over the years and there will, inevitably, be some who will only discover that I am gone the next time (should there be one) they try to get in touch.

I am not off to work for another firm of patent and trade marks attorneys, nor do I have any plans to set up my own patent attorney practice.  For most practical purposes, therefore, I am ceasing work as a patent attorney, at least insofar as the title is conventionally applied to a provider of patent application drafting, filing, prosecution, challenging (e.g. opposition), validity, infringement and related services.  This is not to say that I will not maintain my Australian registration, or that I will never again engage in any of these tasks.  But... who knows?

So, why have I made this decision?

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Tags: Patent attorney profession, Patentology admin, Personal

Does Australia Have a (US-Style) Two-Step Test for Patent-Eligibility?

In its Mayo/Myriad/Alice series of cases, the US Supreme Court has established a two-step test in order to determine whether a claimed invention defines patent-eligible subject matter or not.  In the first step, the claims are examined to determine whether they are ‘directed to’ a patent-ineligible concept, i.e. an abstract idea, law of nature or natural phenomenon.  If not, then the subject matter of the invention is eligible for patenting.  Otherwise, the analysis proceeds to step two, in which the claims are further analysed to determine whether or not they comprise some additional element, or combination of elements, that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’

In contentious cases the focus has generally fallen upon the second step of the analysis.  This is not surprising, considering that the reason these cases are contentious in the first place is because they are typically those in which the claims appear on their face to encompass ineligible subject matter, e.g. abstract ideas in the case of computer-implemented inventions such as in Alice, or natural phenomena such as the isolated DNA in Myriad or the presence of metabolites in blood samples in Mayo.  It might be said in such cases that ‘the vibe’ of the claim is that it looks like it might be ineligible, and that it is therefore necessary to proceed to step two in order to determine whether or not this initial impression is correct.

However, two recent decisions of the US Court of Appeals for the Federal Circuit (CAFC) confirm that the first step of the Mayo/Myriad/Alice framework is not merely a formality, but must be given proper consideration.  Enfish, LLC v. Microsoft Corp. (Fed. Cir. 2016) [PDF, 605kB] concerned software-implemented methods and systems operating on a new and more efficient database format.  The court found at the first step of the Alice analysis that the claims were not directed to an abstract idea, on the basis that ‘[s]oftware can make non-abstract improvements to computer technology just as hardware improvements can’ and that it is ‘relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea’.  In McRO, Inc. v. Bandai Namco Games America Inc. (Fed. Cir. 2016) [PDF, 341kB] the court found that claims directed to generating automated lip-synchronization and associated facial expressions for 3D animated characters (e.g. in video games) were, similarly, not abstract, and patent-eligible at the first step of the test.

It should not come as any great surprise that the first step of the Alice framework actually has some teeth.  The test is supposed to apply to patent claims in all fields of technology, and clearly there are very many patents and applications that relate to wholly uncontentious subject matter for which patent-eligibility is barely a consideration.  In all such cases, the claims are effectively passing at the first step of the test.  The surprise, for many, is that the CAFC has finally started to recognise and apply this reality in relation to computer-implemented inventions.

This raises the question of whether there is an analogous process that takes place in Australia.  As a practical matter, I believe that there is, however it has not been explicitly set out by the courts, and it remains an unacknowledged aspect of examining patent claims for eligibility.  This is unfortunate, because the existence of an implicit step in the eligibility analysis is an obstacle to consistency and objectivity in the assessment of patent claims.

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Tags: Australia, Business processes, Computer programs, Genetic technology, Patentable subject matter, US

Recombinant DNA Technology and Extensions of Patent Term – ‘Swiss-Style’ Claims Continue to Confuse

A recent decision by the Administrative Appeals Tribunal of Australia has addressed the question of whether a patent directed to a second or subsequent medical use of a known pharmaceutical substance can be eligible for an extension of term, in the particular case that the substance is produced using recombinant DNA technology: AbbVie Biotechnology Ltd Commissioner of Patents [2016] AATA 682 (‘AATA decision’).  In deciding that so-called ‘Swiss-style claims’ can support an extension of term (assuming that all other requirements are satisfied), the AATA has reversed the finding of a Delegate of the Commissioner of Patents that such patents are not eligible for term extensions: AbbVie Biotechnology Ltd [2015] APO 45.  (Never fear if you are unfamiliar with the meaning of the terms ‘recombinant DNA technology’ and/or ‘Swiss-style claims’ – I explain further below.)

In Australia, the normal maximum term of a patent, i.e. 20 years from its original filing date, can be extended by up to five years in the case of certain pharmaceutical products, to compensate for the time that is typically required to complete trials and obtain the regulatory approvals necessary to actually commence marketing of a commercial drug.  For an original medical use of a substance, the availability and duration of any extension of term depends upon when a product including the substance is first listed on the Australian Register of Therapeutic Goods (ARTG).  Generally, extensions are available only for patents covering the pharmaceutical substances themselves – patents on methods of making or using the substances are not extendible.  The one exception to this rule relates to the use of recombinant DNA technology in the production of a pharmaceutical substance.

AbbVie Biotechnology Ltd (‘AbbVie’) owns a number of Australian patents relating to a pharmaceutical substance known as adalimumab, which is produced by a process of recombinant DNA technology.  This drug is marketed under the name HUMIRA, and is supplied in the form of an injectable solution for the treatment of a number of diseases.  It was originally approved, and listed on the ARTG on 10 December 2003, for treatment of rheumatoid arthritis.  It was subsequently demonstrated to be effective for the treatment of rheumatoid spondylitis, Crohn’s disease and ulcerative colitis, and these additional indications were added to the ARTG on 10 August 2006, 29 June 2007 and 23 July 2013 respectively.  AbbVie has patents covering these further medical uses of HUMIRA, each of which includes ‘Swiss-style’ claims.

AbbVie applied to the Australian Patent Office to extend the terms of its three further medical use patents.  The Delegate determined that they were not eligible for extensions of term, even if the extension applications had been filed in time (which he found they were not, because the applications should have been based upon the original 2003 listing on the ARTG, not the 2006, 2007 and 213 listings).  On appeal, the AATA reversed the first aspect of the Delegate’s findings, deciding (wrongly, in my view) that Swiss-style claims can form the basis for an extension of patent term.

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Tags: Australia, Extension of patent term, Genetic technology, Pharmaceuticals, Public policy

The Limitations of Patents in a Globalised Economy

Advances in information technology, transport and communications, along with the implementation of multinational trade agreements, have resulted in a great acceleration in cross-border movement of goods, services, technologies and capital over the past few decades.  Patents, on the other hand, continue to exist as rights having only national scope.  Even within the European Union, which has established a highly-integrated single internal market, and where the European Patent Organisation provides a mechanism for central examination and grant of European patents, ongoing maintenance and enforcement of granted rights remains a matter for the national patent offices and courts.  (This will change once the Unitary Patent and Unified Patent Court come into effect, however since the ‘Brexit’ vote the timetable for their implementation is uncertain.)

The potential difficulties with the limited national scope of patents are illustrated by a recent Australian Federal Court decision, Load and Move Pty Ltd v Container Rotation Systems Pty Ltd [2016] FCA 843. 

In broad terms, Load and Move is an Australian company that owns Australian patents, and which found itself in competition with other Australian companies (including Container Rotation Systems) to supply products to overseas customers (specifically, in Eritrea) that Load and Move believed may be covered by its patents.  Container Rotation Systems (CRS) promotes and sells its products via its website, www.containerrotationsystems.com, which can, of course, be accessed from anywhere in the world with an internet connection.

The potentially infringing products, as it turns out, are manufactured at the same Chinese factory that makes the products for Load and Move.  Profits from the supply of the products no doubt accrue to the Australian competitors, however the products themselves are shipped directly from China to Eritrea, and thus never enter or leave Australian territory.

In these circumstances, it is understandable that Load and Move might feel, at least on some moral level, that its rights are being infringed, and that there ought to be something it could do to prevent competitors operating out of its own home market of Australia from ‘stealing’ business through the expedient of conducting all material (though not operational or financial) activities overseas.

However, ‘feeling’ wronged, and actually being legally wronged, may be two entirely different things.  In this case, the court found that it was not ‘objectively reasonable’ for Load and Move to believe that it had any right to relief in respect of the activities of CRS and other competitors in directing the overseas manufacture and supply, notwithstanding that they were operating out of Australia.

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Tags: Australia, Discovery, Infringement

Can an Early-Stage Embryo Without a Father Be Considered ‘Human’?

Under subsection 18(2) of the Australian Patents Act 1990, ‘human beings, and the biological processes for their generation, are not patentable inventions’.  An account of the legislative history of this exclusion may be found in the Patent Office decision Fertilitescentrum AB and Luminis Pty Ltd [2004] APO 19 at [13]-[25], which demonstrates that it was essentially the result of a political compromise between a push to exclude all genetic material and life forms from patentability, and the status quo of having no express exclusions in the Act. 

The government of the day rejected a broad exclusion on the basis that ‘it is impossible to foresee what inventions there will be in the future’ and that ‘a Patents Act which is not flexible enough to deal with the unforeseen would not serve the inventors, the public or the Government.’ 

Included with ‘the unforeseen’, however, are scientific developments that challenge the very category of ‘human’.  A Delegate of the Commissioner of Patents has recently had to deal with the question of whether the creation of a blastocyst via parthenogenetic activation of a human oocyte falls within the exclusion of subsection 18(2): International Stem Cell Corporation [2016] APO 52

No need to worry if you did not understand that last sentence.  I have done the background reading, and here is what it means in plain English.  What the inventors at International Stem Cell Corporation (ISSCO) did was to:

1. extract an immature human egg cell (an ‘oocyte’) from the ovary;
2. employ a technique to artificially activate the oocyte without requiring fertilisation (a process known as ‘parthenogenesis’); and
3. allow the activated oocyte to develop to an early stage of cell division called a ‘blastocyst’.

The point of all this is to enable the production of human stem cells matched to the woman from whom the oocyte was taken.  Therapies based on the use of stem cells are considered extremely promising for the treatment of various forms of degenerative disease, diabetes, heart disease and numerous other conditions. 

As ISSCO stated in its 2007 press release announcing the breakthrough, ‘parthenogenetic stem cell lines that are genetically related to the recipient may overcome rejection problems and thus may have the potential to give significant therapeutic benefit to patients.’  Furthermore, ‘parthenogenetically-derived stem cells provide an alternative to embryonic stem cells derived from fertilized embryos or from somatic cell nuclear transfer (SCNT) technology.’  These latter techniques are highly controversial, because they involve the use of potentially viable human embryos.

What, then, is the status of a parthenogenetic blastocyst?  If it qualifies as ‘human’, then it, and the processes by which it is created, fall within subsection 18(2), and are therefore unpatentable in Australia.  Fortunately for ISSCO, and for the many patients who may ultimately benefit from continued substantial investment in these types of biotechnology, the Australian Delegate found that this is not the case.

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Tags: Australia, Biotechnology, Europe, Patentable subject matter

After US Loss, Sequenom Takes Its Patent Battle With Ariosa Down-Under

One of the many benefits of genetic testing is the ability to carry out prenatal diagnosis of genetic disorders, most notably including (but certainly not limited to) Downs Syndrome.  This can be particularly valuable when one or both parents are known to be carriers of a genetic mutation such that the baby may be at significant risk of developing a serious condition or abnormality.  The conventional method of obtaining foetal DNA in order to conduct such tests is via amniocentesis, which is an invasive procedure in which a small amount of amniotic fluid is sampled from the amniotic sac surrounding the developing foetus using a needle.  Unfortunately, amniocentesis presents a risk to both foetus and mother.

A test that would enable screening of foetal DNA in a noninvasive manner would therefore be an important breakthrough.  Fortunately, just such a breakthrough was made in 1997 at Oxford University, when researchers Stephen Wainscoat and Dennis Lo discovered the presence of cell-free foetal DNA (cffDNA) in maternal blood serum, and developed techniques to isolate this DNA for testing.  Their discovery led to the grant of patents in a number of countries, including US patent no. 6,258,540 and Australian patent no. 727,919.  Oxford University, through its commercialisation arm Isis Innovation (now renamed as Oxford Innovation, for sadly obvious reasons), licensed the technology exclusively to US company Sequenom, Inc.

Last year, the US Court of Appeals for the Federal Circuit (CAFC) found the US patent to be invalid on the basis that the claimed invention was essentially the discovery of the pre-existing, but hitherto unknown, natural phenomenon of cffDNA being present in maternal blood: Ariosa Diagnostics, Inc.v. Sequenom, Inc. (Fed. Cir. 2015).  The claims were therefore considered to be directed to ineligible subject matter under the standards established by the US Supreme Court in its Myriad and Mayo decisions.  The CAFC subsequently declined to rehear the case en banc.  However a number of the Federal Circuit judges, including Judge Linn on the original panel, and Judges Lourie and Dyk in the decision refusing en banc rehearing, indicated that they felt bound by the Supreme Court precedents, but did not agree with the result in this case.  Judge Newman went further, stating her view that the case had been wrongly decided, and was distinguishable from the facts in Myriad and Mayo.

Many observers therefore felt that the Sequenom case was ripe for review by the Supreme Court, which would then have an opportunity to further develop and clarify its Myriad and Mayo guidance.  However, on 27 June 2016 the Supreme Court denied Sequenom’s petition, sealing the US patent’s demise once and for all.

However, in the meantime (on 7 June 2016) Sequenom has commenced proceedings in the Federal Court of Australia, also against Ariosa Diagnostics, Inc, for infringement of the equivalent Australian patent.  This raises the question of whether the invention that was found ineligible for patent protection in the US may nonetheless be upheld under Australian law.  This will be the second time in recent history (the other being the Myriad BRCA breast cancer gene case) that subject-matter eligibility has been considered for corresponding patents in the US and Australia.

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Tags: Australia, Biotechnology, Diagnostic methods, Litigation, Patentable subject matter, US

Another Australian Patentee Bitten By ‘Unjustified Threats’ Provisions

Under section 128 of the Australian Patents Act 1990, a person or company that feels they have been unjustifiably threatened with patent infringement proceedings can take legal action seeking an injunction to prevent the threats from continuing, and the recovery of any damages sustained as a result of the threats.  The law particularly contemplates circumstances in which a patent holder seeks to inhibit competition by making vague or dubious claims, such as ‘by means of circulars, advertisements or otherwise’ as well as by more conventional means, such as cease-and-desist letters.
 
I am not a fan of the current unjustified threats provisions, at least not as they have been repeatedly interpreted by the Australian courts.  They can be successfully invoked in any case in which it ultimately turns out that a patent is invalid or not infringed, regardless of how objectively reasonable the patentee’s original belief may have been.  The law therefore does not particularly target bad actors such as ‘patent trolls’.  There is a very limited ‘safe harbour’ in section 131, according to which ‘the mere notification of the existence of a patent, or an application for a patent, does not constitute a threat of proceedings for the purposes of section 128.’
 
As a result, the unjustified threats provisions provide an accused infringer with an effective trigger for invoking full-blown, time-consuming and expensive proceedings in the Federal Court of Australia on infringement and validity of a patent at the merest hint of an allegation of infringement by the patentee.
 
A recent judgment in CQMS Pty Ltd v Bradken Resources Pty Limited [2016] FCA 847 reconfirms the position that any allegation of infringement which eventually turns out to have been incorrect (no matter how reasonably and sincerely believed) will be treated as an unjustified threat under the Australian law.  The case particularly highlights the difficulties inherent in drafting initial letters to potential infringers without risking exposure to subsequent proceedings for making unjustified threats. 
 
Patent attorneys and IP lawyers, who are commonly called upon to prepare such letters, should therefore take particular note, as should patentees who might otherwise feel inclined to make initial allegations without obtaining appropriate legal advice.

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Tags: Australia, Law reform, UK, Unjustified threats

Patent Litigation Insurance – What Is It, and Should You Have It?

The basic principle of insurance is simple.  You are at risk of some adverse event which probably – hopefully – will not happen.  But if it does happen, the consequences could be devastating.  So, to mitigate this risk you pay an insurer a known recurring amount (the premium) in exchange for a guarantee of compensation to help cover you in the event that the adverse event occurs. 

In your personal life you may have health insurance, life insurance, income protection insurance, vehicle insurance, and home and contents insurance.  The premiums for these types of insurance are typically on the order of a few hundred to a couple of thousand dollars per year, and they provide protection against events that, if they were to occur, might cost you tens or hundreds of thousands of dollars, or even more.

If you run a business, you may well have professional and/or product liability insurance, property insurance, worker’s compensation insurance, vehicle insurance, and business interruption insurance, among others.  Again, for a moderate and, importantly, known and predictable annual premium, you are hopefully protected against events beyond your control that might otherwise, in the worst case, put you out of business altogether.

But what about patent litigation insurance?  Have you ever heard of it?  Do you need it?  What does it do, and how much does it cost?

There are, in fact, two types of patent litigation insurance, neither of which is very widely available or, as I shall explain, particularly cost-effective for most businesses.  Patent enforcement insurance is intended for patent owners, and assists in covering legal costs in the event that it becomes necessary to take action against an infringer.  Patent infringement liability insurance may be relevant to any manufacturer, seller or user of goods and services that may result in an accusation of infringement of a patent owner’s rights, and assists in covering the costs of defending an infringement claim and/or the costs of compensating the patent owner if infringement is established.

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Tags: Insurance, Patent litigation, Public policy

Australian Patent Office Clarifies the ‘Rules of the Game’ for Computer-Implemented Inventions

The Australian Patent Office has recently issued two decisions resulting from applicants requesting to be heard following examination objections that their respective inventions did not constitute patent-eligible subject matter, i.e. a ‘manner of manufacture’ under the Australian patent law.  Both decisions relate to electronic gaming machines (commonly known as ‘poker machines’ or ‘slot machines’), and both involve the question of whether particular computer-implemented features of such machines are patentable.  They differ, however, in the outcome.
 
In Konami Gaming, Inc. [2016] APO 46, which was decided on 12 July 2016, Hearing Officer M G Kraefft found that claims directed, in substance, to new game-play and payout rules implemented on ‘standard’ gaming machines were not directed to patent-eligible subject matter.
 
By contrast, in Aristocrat Technologies Australia Pty Limited [2016] APO 49, which was decided on 22 July 2016, Hearing Officer S D Barker found that claims directed, in substance, to an improvement in a user interface were directed to patent-eligible subject matter, notwithstanding that this also required only ‘generic computer implementation’ on an otherwise conventional gaming machine.
 
If you are confused by this, never fear – you are not alone!  These are difficult cases at the very frontiers of patent-eligibility under the law as it stands following the Full Federal Court judgments in Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 and Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, along with the High Court judgment in D'Arcy v Myriad Genetics Inc [2015] HCA 35.  For what it is worth, however, I think that both Patent Office decisions are in accordance with the Full Court and High Court rulings, as well as traditional principles of patent-eligibility, and that they therefore provide useful guidance as to the treatment of different types of computer-implemented subject matter in Australia.

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Tags: Australia, Computer programs, Patentable subject matter

Be a USPTO Patent ‘Examiner Ninja’

If you have any involvement or interest in the prosecution of US patent applications – particularly in the contested fields of computer-implemented inventions or biotechnology – you will probably be aware that disturbing things are afoot at the US Patent and Trademark Office (USPTO).  Specifically, in the wake of the US Supreme Court’s decisions in the Alice, Mayo and Myriad cases, patent allowance rates have plummeted in examination sections devoted to subject matter that could be regarded as relating to computer-implemented ‘business’ processes, diagnostic methods, and genetic technologies.

In this hostile environment, applicants and their advisers need every tool they can get their hands on to understand what they are up against, and to create the best possible strategies for staying out of – or, if necessary, getting out of – trouble.  And, as in many other fields of endeavour, so-called ‘big data’ is being touted as a possible solution. 

In particular, the contents of the USPTO’s Patent Application Information Retrieval (PAIR) database, which records all information about every patent application making its way through the office procedures, are increasingly accessible to anyone wants to use that data, whether for commercial or non-commercial purposes.  PAIR Bulk Data is now available directly from the USPTO, and includes the information included in the bibliographic (‘application data’), published document and patent term extension data tabs in Public PAIR dating back to 1981.  Additional examination information for many recent applications is available in the USPTO’s Patent Examination Research Dataset (PatEx).  Up until 2015, Google maintained bulk-downloadable USPTO PAIR data sets.

All of this information can be used to obtain and analyse a variety of statistics.  For example, if you are dealing with a ‘difficult’ examiner it is possible to find out whether it is just your case that is problematic, or if the examiner has a history of rejecting a majority of applications he or she has reviewed.  The data might also tell you whether the examiner is more likely to allow an application following an interview and/or whether filing a Notice of Appeal may lead to a more favourable outcome.

Of course, all of the sources I have listed above supply ‘raw’ data, in such exciting formats as CSV, XML and JSON, which is of limited use unless you have the time, and the technical skills, to convert it into a form that is more suitable for analysis.  Fortunately, there are people out there who are already doing this for us all.  Commercial offerings include LexisNexis PatentAdvisor and Juristat, while free services are provided by Examiner Watchdog and Examiner Ninja.  So I am going to provide a quick review of these services, and what they can do for you.

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Tags: Examination, Patent analytics, Patent Office, US

A Single Trans-Tasman Patent Application and Examination Process? NZ Committee Says ‘No’!

A joint Australia-New Zealand proposal for a unified patent application and examination process – once hailed by both governments as a boon for local innovators and a ‘world first’ in patent cooperation – appears likely to be dead-in-the-water, following a scathing report issued last week by the New Zealand Parliament’s Commerce Committee.

The idea behind the proposed single application process (SAP), and single examination process (SEP), was simple – to allow applicants wanting to obtain patents in both Australia and New Zealand to file one common application which would be subject to search and examination by an examiner either at IP Australia or at the Intellectual Property Office of New Zealand (IPONZ).  It was not proposed that the patent laws in the two countries would be merged, but rather that examiners would be trained to apply the laws of both countries, resulting in two separate patents being granted.

Despite various hold-ups (see below for more details), it had appeared that the New Zealand government remained keen on the SAP/SEP proposals, with implementing legislation being included in the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill, which was introduced into parliament on 3 November 2015.  However, this aspect of the legislation has been roundly rejected by the Commerce Committee, which is comprised of members from both sides of politics. 

The majority of the Committee (including members from the governing National Party) concluded that the purported benefits of the SAP and SEP mechanisms either do not exist, or are outweighed by the costs.  The opposition Labour Party Committee members have gone further still, in a separate ‘minority view’, calling the legislation ‘badly drafted’, and a waste of taxpayers’ money, while describing themselves as ‘bemused at the dexterity required by the Government to justify a complete reversal of its original position.’

The New Zealand Parliament is not bound to accept the Commerce Committee’s recommendation that the SAP and SEP provisions be deleted from the legislation when it comes up for further debate.  However, it looks very much as if any remaining supporters of the initiative will find themselves in the minority when the time arrives for a vote to be taken.

At the same time, however, the Commerce Committee has not recommended any substantive changes to provisions intended to introduce a joint Australia-New Zealand regulatory regime for patent attorneys, which will make New Zealand attorneys subject to essentially the same regulations and disciplinary proceedings as already apply to Australian attorneys.

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Tags: Australia, Examination, New Zealand, News, Politics

An Audience with the Productivity Commission on the Patenting of Computer-Implemented Inventions

On Friday 24 June 2016 I attended a public hearing in Melbourne, conducted by the Productivity Commission in relation to its draft report in its review of ‘Intellectual Property Arrangements’.  I had made a written submission on the draft report, and the purpose of the Commission’s public hearings was to ‘provide participants with the opportunity to elaborate on their submissions, respond to submissions of others, and to discuss issues with Commissioners.’

The focus of my written submission, and the topic of my discussion with the Commissioners, was the chapter of the draft report dealing with ‘Business Methods and Software.’  The single draft recommendation to arise out of that chapter is that ‘the Australian Government should amend section 18 of the Patents Act 1990 (Cth) to explicitly exclude business methods and software from being patentable subject matter.’  I disagree strongly with that recommendation!

My full written submission is available from the Productivity Commission’s web pages relating to the IP review.  (A copy can be downloaded directly – PDF, 120kB.)  Full transcripts of the hearings, which were conducted in Brisbane, Sydney, Canberra and Melbourne, are also now available.

The following is an edited transcript of my appearance.  The Commissioners are Mr Jonathan Coppel (‘JC’) and Ms Karen Chester (‘KC’).  I have cut the length of the transcript by about half, and added some headings to flag the particular topics being discussed.  Other than that I have employed the usual conventions of ellipsis (...) to mark where text has been deleted, and square brackets to indicate paraphrasing.  Comments replacing longer passages are in square brackets and italics.  I have also corrected punctuation, mistranscriptions and typographical errors without providing specific indications (the convention, of course, would be to leave them in place and pepper the text with [sic], which is ugly and distracting).

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Tags: Australia, Computer programs, Innovation policy, Patentable subject matter, Public policy, Reviews

Federal Appeals Court Considers ‘Omnibus Claims’

The word ‘omnibus’ derives from the Latin ‘omnis’, meaning ‘all’.  More particularly, the Latin ‘omnibus’ is the plural dative or ablative case of the noun (grammar nerds are getting excited right now), and may therefore be translated as ‘to, for, by, with or from everybody or everything’.  Appropriately, therefore, omnibus is the origin of the same English word referring to a collected edition of multiple works, such as novels.  And our modern word ‘bus’, describing a form of mass transit, is itself a contraction of the word ‘omnibus’, which was used back in the days when such things were still drawn by horses.

To put it bluntly, then, ‘omnibus’ is an old-fashioned word for a variety of old-fashioned things.

One of those things is a type of patent claim, intended to cover all forms of an invention disclosed in a patent application.  The exact form of an omnibus claim varies, but typically goes something like ‘a splendiferous widget substantially as described herein with reference to the accompanying drawings.’  You can see how the patentee of such a claim is trying to hedge her bets, by including the word ‘substantially’.  What even does that mean?  How ‘substantial’ is substantial enough?  How is someone to know whether or not they are infringing such a claim, assuming that they have not copied one of the described embodiments exactly?

It is for precisely this reason that omnibus claims have fallen out of fashion and favour over time.  In most jurisdictions they are no longer permitted (if they ever were), on the grounds that their scope is unclear.  In Australia, they have been banned in new applications as of 15 April 2013 by the Raising the Bar reforms, which added section 40(3A) to the Patents Act 1990, prescribing that a claim ‘must not rely on references to descriptions or drawings unless absolutely necessary to define the invention.’

However, patents and applications that were subject to examination under the former provisions may still validly contain omnibus claims, and so they will continue to be relevant in Australia until at least 2033.  It is therefore significant that a Full Bench of the Federal Court of Australia has recently had a rare opportunity to consider the scope of omnibus claims: GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Ltd [2016] FCAFC 90 (‘GSK’).

The court’s decision confirms that, in the majority of cases involving consistently-drafted patent specifications, an omnibus claim should be interpreted to have relatively narrow scope, being restricted by the essential features of the invention as described and defined elsewhere in the specification.

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Tags: Australia, Claim construction, Omnibus claims

What Will ‘Brexit’ Mean for European Patents?

On Thursday 23 June 2016, around 72% of eligible UK voters turned out and decided, by a narrow margin of 52%-48%, to leave the European Union (EU).

This outcome has left the nation deeply divided, along numerous lines.  First, there is a division between England and Wales, which voted to leave, and Scotland and Northern Ireland, which voted to stay.  Then there is a socioeconomic division between the most affluent and highly educated, who are dominant in the South East and who favoured remaining in the EU, and those who feel disenfranchised by the existing system and voted for the UK to reassert its sovereignty. 

I am most concerned, however, about the generational divide.  Pre-election surveys indicated that 57% of Britons aged between 18 and 34 who intended to vote supported remaining in the EU, while that proportion rose to around 75% in voters under the age of 25.  As one 27 year-old reportedly commented, ‘we're the ones who've got to live with it for a long time, but a group of pensioners have managed to make a decision for us.’

Although I would prefer that the UK stay in the EU, I must say that I have some sympathy for those people who feel that Britain has allowed itself to become too subservient to an ‘undemocratic’ pan-European government, if the immediate reaction of the European Commission president, Jean-Claude Juncker is anything to judge by.  Juncker has said that he wants to ‘get started immediately’ on the process of separation which, he says, is ‘not an amicable divorce’.  These are more the words of a petulant child than a committed democrat, who should realise that such a close outcome is hardly a resounding endorsement of the ‘Brexit’ by the British people, and that neither that fractured nation, nor the world at large, will be well-served by rushing into what is likely to be a messy, painful and disruptive process.  There are actual, real people, as well as companies and entire nations, who are shocked, uncertain and in need of reassurance and guidance as to what an EU without the UK ‘means’.  So if this is what passes for ‘leadership’ in the EU, then maybe Britain is better off ‘out’!

But enough of the general socio-political commentary – you came here to read about patents!  So what does all this mean for patents in Europe?  There are actually two separate answers to this question. 

Importantly, for existing patentees of, and applicants for, European patents the first answer is ‘pretty much nothing’, where we are talking about the established European patent system. 

However, the second answer is ‘possibly quite a lot’, where we are talking about the nascent ‘Unitary European Patent’.

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Tags: EU patent, Europe, Treaties

Attorneys Should Keep Clients Informed – The One Lesson From a Very Odd Disciplinary Proceeding

The Patent and Trade Marks Attorneys Disciplinary Tribunal has issued a decision finding a senior member of the Australian patent attorney profession guilty of ‘unsatisfactory professional conduct’ for failing to inform two clients in a timely manner of problems with patent applications in the United States and India.  Indeed, the attorney in question effectively pleaded guilty to the charges brought against him in this regard.  He was, however, found not to be guilty of more serious charges of ‘professional misconduct’ in relation to the same matters.  (For an explanation of the difference between the two charges, see my earlier article What To Do If You’re Unhappy With An Australian Patent Attorney.)

A copy of the Tribunal’s decision can be found on the website of the Professional Standards Board for Patent and Trade Marks Attorneys, or downloaded directly via this link [PDF, 322kB].  The name of the attorney in question is, of course, revealed in the decision.  However, for reasons that should become apparent, I will not be naming him in this article.  To quote from the Tribunal’s decision, he ‘has in my view already been through enough’ and it would be inappropriate in light of that finding to expose him to potential further embarrassment, along with the additional damage to reputation that may result from having negative information reflected disproportionately in internet search results.

I have, in fact, given very careful thought to whether I should comment of the Tribunal’s decision at all.  In deciding to do so, I have taken into account the fact that disciplinary decisions in relation to the conduct of Australian patent and trade marks are very rare (there have been only seven since the Tribunal was created), and each is therefore significant in what it may teach attorneys and their clients about expected standards of conduct.

In this case, the lesson is a simple one: when things go wrong – and things most definitely do go wrong, from time-to-time – attorneys need to think about how they communicate with their clients, and about keeping them informed of what is happening in relation to their IP rights, even if that may mean delivering potentially alarming news!

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Tags: Australia, Patent attorney profession, Professional conduct