30 June 2021

How Effective is Australia’s 12 Month Acceptance Deadline in Limiting Examination Delays?

AccelerateOne of the objectives of the Raising the Bar IP law reforms – most of which commenced on 15 April 2013 – was to reduce delays in the resolution of patent (and trade mark) applications.  The perceived problem with such delays was not that applicants were unhappy with the speed of processing of their applications (in fact, most choose to defer examination and acceptance of their patent applications), but rather that delays create uncertainty about whether a patent will be granted, and what scope the granted claims might have.  As noted in the Explanatory Memorandum to the Raising the Bar Bill, ‘[d]elay may suit the party, but it is not in the interests of the public, or the party’s competitors.’

There were four main features of the reforms that were expected to reduce delays and uncertainty:

  1. reduction, from six months to two months, of the period within which an applicant is required to request examination, once directed to do so by the patent office;
  2. reduction of the maximum period available for an applicant to obtain acceptance of a patent application, following issue of an initial examination report, from 21 months down to 12 months;
  3. ‘tightening’ of the rules around when divisional applications can be validly filed, to reduce opportunities for what the Explanatory Memorandum describes as ‘abusive uses’; and
  4. refinement of opposition proceedings, mostly in the form of more stringent criteria for obtaining extensions of time.

The reforms to opposition proceedings had an almost immediate impact, since they applied to all new oppositions filed on or after 15 April 2013, as well as (to a more limited degree) oppositions that were already in progress.  However, since over 99.5% of all accepted applications are not opposed, the reduction in opposition duration is irrelevant to the overwhelming majority of cases. 

It has taken longer to reach the point at which there is sufficient data to evaluate the effect of the change to the examination period, since this only applied to applications for which a request for examination was filed on or after 15 April 2013.  Many of these applications remained in the system for years.  Indeed, the last patent to be granted under the pre-Raising the Bar regime – without being additionally delayed by opposition proceedings – was no. 2010311063, which was derived from a PCT application that entered the national phase in Australia on 17 May 2012.  Examination was requested on 9 April 2013, and a first report issued on 7 August 2018 (after the application inadvertently lapsed and was restored).  The application was eventually accepted on 17 February 2020, and the patent granted on 18 June 2020.

I have now analysed nearly two decades worth of Australian patent examination data, spanning the period before and after commencement of the Raising the Bar reforms.  Further details and charts are below, but in summary I have found that:

  1. reduction of the maximum examination period by nine months (from 21 to 12 months) has resulted in a drop of only a little over three months in the median period between initial examination and acceptance of successful applications;
  2. the reforms have not, however, resulted in any lasting improvement in the pendency of the most ‘stubborn’ applications, which are only accepted following one or more divisional applications being filed for the purposes of continuing examination (for want of any better term, I call these ‘continuation divisionals’);
  3. as a result, the ‘top’ 2% of cases are still pending for 900 days or more between an initial examination report being issued and an application finally being accepted;
  4. perversely, following an initial temporary drop in the number of continuation divisionals, the reforms actually seem to have resulted in an increase in the proportion of divisional applications that are filed for the primary purpose of continuing examination;
  5. on the other hand, however, the major use (i.e. over 60%) of divisional applications remains their primary purpose of pursuing alternative claims following acceptance of claims in a parent application.

Overall, reducing the examination period has had a relatively minimal effect on total pendency of patent applications – a reduction in the time prior to examination, i.e. between filing and a first examination report being issued, has been much more significant.  However, it appears to have had the unintended consequence of increasing the use of divisional applications to continue examination.

22 June 2021

Sequenom Down-Under – Appeals Court Finds Non-Invasive Foetal DNA Test Patent-Eligible in Australia

Double helixIn 18 June 2021, a Full bench of the Federal Court of Australia (Middleton, Nicholas, and Burley JJ) unanimously upheld a decision of a single judge of the court (Beach J), finding that a method of detecting cell-free foetal DNA (cffDNA) in maternal blood serum comprises patent-eligible subject matter (i.e. a ‘manner of manufacture’) under Australian law: Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101.  The patent at issue is Australian patent no. 727,919, covering an invention originally developed by Oxford University researchers, and subsequently transferred to Sequenom Inc.  The patent expired in March 2018, however a live dispute remains because Ariosa Diagnostics licensed its ‘Harmony Test’ – which Sequenom says (and the Full Court has agreed) infringes the patent – for use in Australia since at least September 2015.

To my mind, the result in this case is neither particularly surprising nor contentious.  The patent claims are directed to a method of detecting cffDNA.  While the method is underpinned by the naturally occurring fact – not known until its discovery by the inventors prior to March 1997 – that cffDNA is present in maternal blood serum, a useful method of detecting a previously unknown natural phenomenon, having a practical application, has long been considered patentable.  Ariosa’s arguments that Sequenom’s claims were in substance directed to the ‘mere’ discovery itself, resulted only in the production of ‘information’, and therefore unpatentable, were unsuccessful.  And while the broad scope of the main claim in this case might raise other issues, such as obviousness or sufficiency of description, these matters have also been addressed at first instance and/or on appeal, and are separate from the question of subject matter eligibility. 

Nonetheless, this case will generate some interest, if only because the result in Australia is opposed to the outcome of equivalent litigation between Sequenom and Ariosa involving a corresponding patent in the United States.  In that case, a narrower claim than in Australia was found to be directed to an unpatentable natural phenomenon.  The result was controversial, not least because a number of judges on the US Court of Appeals for the Federal Circuit (CAFC) – including Judge Linn on the original panel (Ariosa Diagnostics, Inc.v. Sequenom, Inc. (Fed. Cir. 2015)) and Judges Lourie and Dyk in a decision refusing en banc rehearing – indicated that they felt bound by the Supreme Court precedents, but did not agree with the outcome.  There was therefore great disappointment when the US Supreme Court declined to hear an appeal.

The outcome of the Australian appeal is not all bad news for Ariosa, however, with the finding of the primary judge on infringement being partially reversed.  In particular, there were periods during which the Harmony Test was not carried out in Australia, but instead samples were sent to the US for testing by Ariosa, which the primary judge found also to be infringing actions.  The Full Court has disagreed, finding that ‘importing’ the information resulting from the tests into Australia did not comprise a relevant ‘exploitation’ of the claimed method, as it might have done were the product of the method a physical article.

04 June 2021

Is Corporatision Creating a ‘Brain Drain’ in the Australasian Patent Attorney Profession, or is it Just Slick Marketing?

Brain drainAn article appeared on the Lexology legal news service in the past week that riled me a little – not least because it mentions my name and (in my view) misrepresents something that I wrote a few months ago.  For those who may be unfamiliar with Lexology, it is a service that aggregates content from legal and attorney firms, and other service providers, creating a searchable archive and delivering tailored email bulletins to subscribers.  It is free to subscribe and read, but the firms that provide all the content pay handsomely for the privilege of being aggregated and distributed.  In other words, it is not so much a ‘news’ service for readers as it is a marketing service for the contributing firms.  Most of the content is originally published on the firms’ web sites, from which it is automatically picked up (‘ingested’) by Lexology. 

While many of the articles appearing on the Lexology site are useful and informative – e.g. reports of the latest legal developments in various jurisdictions served by the contributing firms – some are pure marketing.  The piece that has so irked me falls, in my opinion, into the latter category.

The article in question is entitled ‘The brain drain: why are senior patent attorneys leaving?’  Authorship is attributed to James & Wells partners Ceri Wells and Adam Luxton.  Wells is one of the firm’s founders, while Luxton recently joined the firm having previously worked for Spruson & Ferguson – a firm owned by listed holding company IPH Limited (ASX:IPH).  Lexology picked the article up from James & Wells’ website, although that was not its first outing – it was originally published as a sponsored article in Australasian Lawyer [PDF 1.04MB]

Never let it be said, then, that James & Wells has not extracted maximum value from the piece, which bears all the hallmarks of having been written not by Wells and Luxton themselves, but rather by a marketing professional.  It takes the classic public relations form of ostensibly objective reporting, interspersed with quoted and paraphrased comments from Wells and Luxton in support of the article’s main theses, which are that:

  1. there has been an ‘exodus of senior patent attorneys from formerly private firms’ because of ‘corporatisation’, and the acquisition and merger strategies of the listed holding companies IPH Limited and QANTM IP Limited (ASX:QIP);
  2. as a result, those firms are losing the benefit of these senior practitioners’ experience, and they are ‘being replaced by younger people with a lot less experience’ who are ‘missing out on the mentorship they need at that point in their career’;
  3. this may lead to junior attorneys feeling ‘overworked and stressed’;
  4. practitioners in ‘corporatised’ firms may lack the autonomy and discretion to keep clients ‘at the forefront’ and to build strong relationships ‘based on trust and respect’; and
  5. established firms now owned within corporate groups are no longer able to guarantee clients that ‘whoever you engaged in that organisation would be able to deliver’.

Overall, the tenor of the article is simply that ‘corporatised firms = bad’ whereas ‘traditional privately held, partnership type models (like James & Wells) = good’.  Perhaps it feels plausible that this might be so, and doubtless there are people around who will attest, anecdotally, to some experience that supports the argument.

I am just not persuaded that it is true, or that having firms going around claiming that it is are doing the Australasian profession any favours.

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