28 February 2016

Aussie Turns on Aussie as US Congress Shines Light on Allegations of Skulduggery at WIPO

Smoking GunOn Wednesday 24 February 2016 a number of US Congressional subcommittees held a joint hearing on ‘Establishing Accountability at the World Intellectual Property Organization: Illicit Technology Transfers, Whistleblowing, and Reform’.  Three witnesses appeared at the hearing: Mr James Pooley, who is a US citizen and the former Deputy Director for Innovation and Technology at the World Intellectual Property Organization (WIPO); Ms Miranda Brown, who holds dual Australian/British citizenship (as do I), and is the former Strategic Adviser to WIPO Director General (DG) Mr Francis Gurry (also an Australian); and Dr Matthew Parish, an international lawyer of US origin, now practising in Geneva, who appeared in his capacity as legal counsel to the sole union representing the interests of WIPO employees, the Staff Council.

The testimony of the three witnesses is incendiary and damning of Gurry, and makes for fascinating, if uneasy, reading. 

Pooley reprises his earlier allegations regarding Gurry’s ‘secret’ programs to ship ‘high-end computers and other electronic gear to North Korea and Iran’, his ‘secret’ plans to open WIPO satellite offices in China and Russia, and his intimidation of, and retaliation against, whistleblowers within WIPO.  Pooley also implicates Australian officials – most notably the then-Ambassador to the US, Kim Beazley – in blocking Congressional efforts to put forward a US candidate to challenge Gurry’s re-appointment to a second term as WIPO DG in 2013.

21 February 2016

‘It Is Found’ That Implying Experiments Have Been Conducted May Be Fatal to a Patent

EperimentA recent decision, in an appeal to a Full Bench of the Federal Court of Australia, provides a cautionary tale about how even the most seemingly innocuous language employed in a patent specification can ultimately bite the patentee on the backside!  (Morellini v Mizzi Family Holdings Pty Ltd [2016] FCAFC 13.)

In this case, the simple phrase ‘it is found…’ was interpreted by the court to imply that systematic experiments had been carried out in order to arrive at the stated findings.  There was, however, no evidence that anyone had ever conducted any relevant experiments.  The court was not swayed by the patentee’s argument that the ‘finding’ in question was ‘readily capable’ of interpretation as the inventor’s own personal experience and conclusions.  In a unanimous decision, the judges determined that the phrase constituted a false suggestion or misrepresentation which materially influenced the decision of the Commissioner of Patents to grant a patent which was, as a result, invalid.

The particular difficulty for the patentee in this case was that the statement at issue was relied upon to establish novelty, and the presence of an inventive step, over the prior art.  Clearly, a point of difference can be sufficient to support the grant of a patent, but only if that difference imparts some material and previously unrecognised advantage that the inventor can claim to have contributed to the art.  If (as the court seems to have concluded here) the inventor has chosen particular parameters, without taking any steps to verify their significance, a representation that there is some unprecedented new finding involved may be material to the decision to grant a patent, at least if the representation is relied upon as basis for a patentable distinction over the prior art.

There are lessons in this decision for all those involved in the preparation and filing of patent specifications, including the attorneys responsible for drafting them, and the clients responsible for reviewing drafts before they are finalised for filing.

14 February 2016

US Federal Circuit Maintains the Status Quo on International Patent Exhaustion (and Mentions Australia)

ExhaustedBack in November 2015 I wrote on the topic of ‘international patent exhaustion’ in anticipation of a decision by the US Court of Appeals for the Federal Circuit (CAFC) in the case of Lexmark v Impression Products.  In doing so, I expressed my hope that the court would uphold the existing position, established by its own precedent in Jazz Photo Corp. v. International Trade Commission 264 F.3d 1094 (Fed. Cir. 2001) that foreign sales do not exhaust US patent rights. 

The CAFC has now issued its decision in the case [PDF, 612kB] and has, by a 10-2 majority, affirmed Jazz Photo, maintaining the established position that US patent rights are not exhausted by a foreign sale.  In the absence of a valid defence (more on which later) it is therefore an infringement to import a patented product into the US even if it is a genuine product manufactured and sold by, or with the authority of, the patentee in a foreign country.  The minority would not have categorically overturned Jazz Photo, insofar as it holds that a foreign sale does not in all circumstances exhaust US patent rights.  In their view, a foreign sale should result in exhaustion unless an authorised seller explicitly reserves the US patent rights.

My primary reason for supporting the status quo is that I believe it is, on balance, beneficial for innovative companies to be able to use patent rights to maintain price disparities in different markets.  The fact is that those of us fortunate enough to live in developed nations have, on average, higher incomes, higher living standards, and a greater ability to fund innovation via the prices we pay for goods and services than people in developing nations. 

If patent rights in a country such as the US are exhausted by the sale of a product in, say, India or Kenya, the only effective option left open to patentees will be to charge similar prices globally.  Clearly, the more that new technologies (including innovations in food production and health care) can be made available at affordable prices to developing nations, the more rapidly they will be able to advance.  (Obviously, development is much more complex than this, but intellectual property laws are one piece in the overall puzzle, and it is desirable that they make a positive, rather than negative, contribution.)

07 February 2016

A ‘Heads-Up’ for Selected Patent Applicants: IP Australia Trialling Pre-Exam Notifications

ChangeFrom 25 January 2016 IP Australia has commenced a trial of a pre-examination notification process.  Under this process, which will initially be applied to 900 pending patent applications, a ‘Pre-Examination Processing Notice’ is sent out approximately two months before the application is referred to an examiner.  This provides the applicant with an opportunity to make any last-minute amendments to the application prior to the commencement of examination.

I think that this is a positive initiative by IP Australia that coud be of great benefit to (some) applicants and examiners alike.  The Australian system of examination differs from many others – such as the US, Europe, Japan and China – where a new response deadline (of typically between three and six months) is set each time an examination report is issued.  In Australia, an acceptance deadline is set, providing a single fixed period within which all objections to the grant of a patent must be overcome, regardless of how many rounds of review and response are require to reach this point.

The Raising the Bar law reforms, which commenced on 15 April 2013, reduced the time available for securing acceptance of an application to just 12 months (down from 21 months) from the date on which a first examination report is issued.  In some cases this is ample time.  In others it is less so.  Providing applicants with an opportunity to ‘hit the ground running’ by making any required amendments shortly prior to examination has the potential to reduce the number of rounds of substantive examination during the 12-month period, leading to earlier finalisation of applications.  This will also hopefully take some pressure off applicants, examiners and attorneys, none of whom enjoy finding themselves up against a final acceptance deadline!

Pre-exam notifications will not be beneficial for all applicants, however.  There will be cases in which they may slightly increase the cost of obtaining a patent in Australia without providing the applicant with any corresponding benefit.  Whether there is, nonetheless, a net benefit to applicants and the administration of the Australian patent system is something that IP Australia will hopefully be able to evaluate through the current trial.

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