Proposed Code of Conduct for Trans-Tasman Attorneys Risks Unintended Adverse Consequences for Firms and Clients

Following publication of a consultation paper in April 2017, the Trans-Tasman IP Attorneys Board (TTIPAB) – the regulatory body formerly known as the Professional Standards Board for Patent and Trade Marks Attorneys – has now released a Draft Code of Conduct 2018 (‘draft Code’), Draft Guidelines to the Code of Conduct 2018, and Explanatory Notes for public consultation.  The draft Code and other documents, including the original consultation paper, and non-confidential submission received in response, can be found on the TTIPAB web site.

In many respects, the draft Code is an update and improvement on the existing Code of Conduct for Patent and Trade Marks Attorneys 2013, that codifies what most in the IP professions would regard as good ethical and business practice, and plain ‘common sense’.  For example, the draft Code confirms, in a new section 19(1), that ‘a registered attorney is a fiduciary in respect of the registered attorney’s dealings with a current client, and owes a duty of loyalty to a current client’, which is the basis upon which most attorneys have conventionally operated anyway.  Additionally, it draws on comparable international regulations, and in particular the UK Rules of Conduct for Patent Attorneys, Trade Mark Attorneys and Other Regulated Persons, to ensure that the standards applicable to patent and trade marks attorneys in Australia and New Zealand are on-par with the expectations of corresponding professionals in other jurisdictions.

Unsurprisingly, given recent developments in the Australian profession, the main area in which the draft Code includes provisions that are specific to local circumstances is that of firm ownership.  In particular, the draft Code seeks to specifically regulate the way in which Trans-Tasman (i.e. Australian/NZ) attorneys communicate their legal and ownership structures to clients.  In the specific case that an attorney firm is a member of what the draft Code calls an ‘ownership group’ – i.e. two or more firms, often operating independently at least in relation to the provision of attorney services, and having a common owner – the draft Code proposes further obligations to obtain written consent of clients when separate firms within the group act on opposing sides in certain contentious matter.

While the draft Code represents an improvement upon the current Code in many respects, the provisions relating to business structures and ownership groups are unprecedented, and very much influenced by the recent developments in the IP professions in Australia.  As such, I am concerned that they are unduly prescriptive, and have the potential to create unintended (although certainly not unforeseeable) consequences.  In particular, draft provisions relating to client communications are likely to place unduly onerous obligations not only upon Australian and NZ attorneys, but also upon the foreign attorneys with whom they work, and those attorneys’ clients, around the world. 

Furthermore, draft provisions relating to independence of firms within an ownership group may actually have the unintended effect of encouraging firms to form alternative structures.  This could involve mergers of firms, leading to an actual reduction in competition and choice in the marketplace for IP services, or it could involve the development of new structures that have perhaps yet to be imagined.

It is my opinion that a Code of Conduct for attorneys should focus on the fundamentals.  If appropriate ethical obligations are in place, that apply to individual registered attorneys, attorneys who are partners/directors of firms, and incorporated attorneys, then desirable behaviours can be expected – and undesirable behaviours can be addressed through disciplinary proceedings – regardless of legal and ownership structures.  It is not the role of the Code of Conduct to regulate how attorneys go about the day-to-day operations of their businesses, so long as the interests of clients are adequately protected.

As I will explain in this article, I therefore consider that the draft Code is, in some respects, unduly prescriptive.  I anticipate that firms operating within ownership groups will share this view.  However, even independent attorneys should be concerned that the draft Code, if brought into force, would oblige them to communicate information regarding their legal and ownership structure to all clients – domestic and foreign – for whom they act.

Written submissions in response to the draft Code are due by 28 September 2017, and should be sent via email to MDB-TTIPABCodeofConduct@ipaustralia.gov.au.

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Tags: Android, Australia, New Zealand, Patent attorney profession, Reviews

Can I – and Should I – Patent My Smartphone App?

One of the most common types of enquiry we receive in our day-to-day practice is about patenting of smartphone (i.e. iOS or Android) apps.  Indeed, if we had a dollar for every prospective new client who had rung up or emailed to ask how to protect their ‘million dollar app’ idea, we would have… well… probably more money than we have made from actually preparing and filing patent applications based on these enquiries!  Because most of them end up going nowhere, once we have had a conversation about the pros and cons of patenting.

This post will explain why.  And it is not because smartphone apps cannot be patented – many of them most probably can be.  However, for most inventors the appropriate question is not ‘can I patent my smartphone app?’ but ‘should I patent my smartphone app?’  This second question is difficult to answer without having a solid business plan, which is something that has rarely been considered by people calling a patent attorney because a friend or relative told them: ‘that is a great idea, you should patent it!’

These days, the Apple iTunes App Store and Google Play (the Android equivalent) are incredibly competitive marketplaces.  According to recent data from app analytics specialists Flurry, there are over 600,000 apps now available from each of these markets.  Wikipedia entries for the two stores place these figures for September 2012 at 700,000 apps in the Apple App Store and 675,000 apps on Google Play.  Whichever figures are most accurate, this is an awfully large number of apps!

If you are going to make any money in these markets – whether by app sales, through in-app revenue and/or via advertising – you are going to have to get noticed first.  And clearly there is much more to this than just having a great idea.  (In fact, this may be the least important element, unless you are the sort of person who thinks that flinging kamikaze birds at green pigs with a slingshot is a ‘great’ idea!)

Ask not, therefore, whether your app idea can be patented.  Ask instead whether it is worth patenting.  This is as much a business question as an IP issue, and for many – perhaps the majority – of app inventors, the answer may well be ‘no’.

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Tags: Android, Computer programs, Intellectual Asset Management, iOS, Strategy

UK Decision in HTC v Apple Will Not Influence Cases in Australia

On 4 July 2012, the England and Wales High Court (Patents Court) delivered a judgement in HTC Europe Co Ltd v Apple Inc [2012] EWHC 1789 (Pat), finding that five HTC devices – all running Android 2.3 (Gingerbread) – do not infringe any valid claims of four Apple patents.

This decision is the ultimate outcome of an an action brought by HTC, seeking revocation of three Apple patents.  In response, Apple counterclaimed for infringement of the three patents, and added a fourth – which HTC duly alleged was also invalid.

Overall, the court made the following findings:

1. HTC’s Gingerbread devices do not infringe any claims of European Patent no. EP2098948, entitled ‘touch event model’;
2. claims 1 and 2 of the ‘touch event model’ patent are invalid – claim 1 for obviousness, and both claims for being directed to unpatentable subject matter under the European ‘computer programs’ exclusion;
3. the Gingerbread devices infringe claims 1, 6 and 18 of European Patent no. EP1964022, entitled ‘unlocking a device by performing gestures on an unlock image’ (a.k.a. ‘slide-to-unlock’);
4. however, the claims of the ‘slide-to-unlock’ patent are invalid in view of various items of prior art, most dramatically the Swedish Neonode N1, originally launched in July 2004, in view of which the court found all Apple’s claims to be obvious (you can watch the N1 in action in this YouTube video – the ‘unlock’ feature is demonstrated at around 4:14);
5. European Patent no. EP2059868, entitled ‘portable electronic device for photo management’, was found to be valid, but not infringed by the HTC Gingerbread devices; and
6. European Patent no. EP1168859, entitled ‘portable radio communication apparatus using different alphabets’, was found wholly invalid for obviousness, though had it been valid the Gingerbread devices would have infringed.

A number of these European/UK patents have Australian counterparts, some of which have been asserted by Apple in its ongoing litigation against Samsung.

Florian Mueller, in a posting on his FOSS Patents blog, has suggested that the UK ruling ‘will have some relevance … in Australia’.  We disagree.  There is no reason whatsoever to think that the Australian courts will be influenced in any way by the outcome of a case involving a different party, different accused products, and which was decided under different laws.  If anything, quite the opposite is true – an Australian court may well be obliged to reject any attempt by either party to point to this UK decision as having some level of persuasive value.

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Tags: Android, Apple-v-Samsung, Australia, Innovation patent, Obviousness, UK

Apple Not ‘The Developer for the World’ Says Hypocritical Cook

As presented in Walter Isaacson’s biography, it seems that Steve Jobs did not require a rational justification to ‘go thermonuclear war’ against Google and Android.  As we wrote back in October last year, Jobs was willing to ‘spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong.’  To him, the battle over smartphone technology was not about business or money.  Isaacson reports Jobs telling former Google CEO Eric Schmidt, ‘I don't want your money. If you offer me $5 billion, I won't want it. I've got plenty of money. I want you to stop using our ideas in Android, that's all I want.’

Jobs had built Apple into the world’s biggest tech company, and so he could really do no wrong in the eye’s of Apple shareholders and aficionados.  But the fact is that starting a global thermonuclear war, or spending every cent of the company’s money in pursuit of a principle, is not good business.  That path leads ultimately to shareholder revolt!

Jobs’ successor, Tim Cook, has therefore inherited a potential ticking time-bomb.  Apple had some early wins in the patent disputes which it started, but as the various court proceedings drag out over months – and those months will become years, unless there is a settlement – the company is finding itself increasingly mired in suits, countersuits, side issues and appeals.

It should therefore some as no surprise that Cook is trying to recast the battle as one which has a rational business foundation, and in which Apple is on the side of goodness and light.  The cost and distraction of all these law suits must now be justified to observers and shareholders as something more than the result of one person’s outrage.

So, when questioned about the ongoing IP disputes, Cook has taken to responding that, while he would prefer to settle, Apple will not be the world’s developer.  At Apple’s quarterly conference call on 24 April 2012 (as reported by CNET) Cook said ‘I would highly prefer to settle than to battle.  But it’s important that Apple not become the developer for the world. We need people to invent their own stuff.’

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Tags: Android, Apple-v-Samsung, FRAND, Smartphone wars

Jobs Biography Reveals Irrational Android ‘Thermonuclear’ Reaction

In the lead-up to today’s accelerated launch of Walter Isaacson’s authorised biography of Steve Jobs, much of the publicity has centred on Jobs’ self-professed animosity towards Google generally, and Android in particular.

Of course, some of the most inflammatory material has been provided to the media to generate publicity for the book.  For example, as reported in the Daily Mail (Steve Jobs vowed to use his ‘last dying breath’ destroying iPhone rival Android in a ‘thermonuclear war’), Jobs swore ‘I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this.’  He also vowed to ‘spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong.’ 

For Jobs, it seems, the battle over smartphone technology was not about money, as he reportedly told former Google CEO Eric Schmidt, ‘I don't want your money. If you offer me $5 billion, I won't want it. I've got plenty of money. I want you to stop using our ideas in Android, that's all I want.’

Now that we have been able to obtain a copy of the book (ironically via Amazon for our Kindle, or Kindle reader on Windows or Android), we can confirm that all this is indeed covered in Isaacson’s biography.  Indeed, the book contains a great deal more regarding Jobs’ grievances against Google (‘outside of Search, Google’s products – Android, Google Docs – are shit’), Adobe (‘I put Adobe on the map, and they screwed me’), Microsoft (‘Bill [Gates] is basically unimaginative and has never invented anything….  He just shamelessly ripped off other people’s ideas’) and Dell (email to Michael Dell: ‘CEOs are supposed to have class.  I can see that isn’t an opinion you hold.’)

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Tags: Android, Book review, Smartphone wars

Google Joins the ‘Hardware Club’ While Microsoft Whines

If you have an interest in this blog, then you most likely already know that Google has announced its intention to buy Motorola Mobility, the handset division recently spun-off by Motorola, for a cool US$12.5bn.

There is no shortage of commentary already on the web, regarding whether or not this is a reasonable price for Google to pay, or whether the purchase is really just about boosting Google’s patent portfolio after missing out on acquiring patents from either Novell or Nortel.

Regardless of what others may be saying, we consider that Google has struck a pretty good deal, despite the fact that the price it is paying represents a 63% premium on the closing price of Motorola Mobility shares last Friday.  Firstly, this is a purchase that it can easily afford, considering that various reports place its cash reserves (prior to this deal) at around US$36bn.  The relatively high premium may simply mean that the market had undervalued Motorola Mobility.  More likely, however, the value-add to Google of acquiring the company is far greater than the price it has paid.

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Tags: Acquisitions, Android, Google, News, Smartphone wars

Apple v Samsung: Google Says It’s All About Android

As the ‘patent war’ over smart phone and tablet devices continues, Google Senior Vice President and Chief Legal Officer David Drummond has publicly alleged that legal actions by ‘Microsoft, Oracle, Apple and other companies’ against Barnes & Noble, HTC, Motorola and Samsung are really all about Android.

In a posting on the Official Google Blog, Drummond states:

…Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.

So what is Drummond trying to say here?  That it is all a big conspiracy, and poor little Google is the target?  That companies with technologies which compete with Android have formed an evil cartel to squash competition?  This all seems a bit rich, and Google’s claims that this is really about their technology, and the incumbents’ fear and loathing of the upstart, smack somewhat of the new kid on the block crying out for attention.

In other words, all this whining is neither very attractive, nor particularly mature.

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Tags: Android, Apple-v-Samsung, Australia, Computer programs, Google, Infringement, Licensing, Litigation, Smartphone wars