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.

 Read full article ► 

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

Vale Innovation Patent – Australian Government Responds to Productivity Commission IP Report

The Australian Government has issued its response to the Productivity Commission’s final report on its Inquiry into Australia’s Intellectual Property Arrangements, indicating its support for a number of the Commission’s recommendations.  In the area of patents in particular, the Government intends to implement recommendations to further amend the law in relation to inventive step, introduce an ‘objects clause’ into the Patents Act 1990 and ‘phase out’ (i.e. abolish) Australia’s contentious second-tier right, the innovation patent.  It has also indicated its support for a proposal that ‘IP Australia should reform its patent filing processes to require applicants to identify the technical features of the invention in the set of claims’, although it is unclear at this stage exactly what form the implementation of the recommendation will take.

The Government has largely rejected recommendations of the Productivity Commission to set patent fees to promote broader intellectual property policy objectives (as opposed to the current objective of recovering the costs of running the Patent Office), and to restrict the availability of extensions of term for patents relating to pharmaceutical products.  It has, however, indicated support ‘in principle’ for the introduction of a system for transparent reporting and monitoring of settlements between originator and generic pharmaceutical companies to detect potential ‘pay for delay’ agreements, modelled on the US system.

As I will discuss further in this article, the demise of the innovation patent has been on the cards for some time, and is now all but inevitable.  Adding an objects clause to the Patents Act may be little more than window-dressing.  Much will depend on how it is worded (and the Productivity Commission’s proposal will not be popular), and then how much weight it is given by the courts (which might, I would suggest, be very little).  Further enhancing the inventive step standard, which the Productivity Commission has suggested should be based upon the European model, is not hugely controversial, in my opinion. 

As I shall endeavour to explain, however, if there is to be a fight over any of the proposed reforms it is most likely to be over the requirement to identify ‘technical features’ in patent claims.  In combination with raising the inventive step standard to the highest possible level, I believe that this recommendation reflects the Productivity Commission’s general antipathy to the idea that the patent system provides any net economic benefit to Australia, and its belief that patents should therefore be as difficult to obtain as is practicable.  But the potential consequences of a new, and unique, requirement for Australian patent claims could be far-reaching, and detrimental to Australian innovators.

 Read full article ► 

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

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.

 Read full article ► 

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

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).

 Read full article ► 

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

The Australian Productivity Commission’s Deeply Flawed Proposal to Abolish ‘Software Patents’

Draft Recommendation 8.1 of the Australian Productivity Commission’s (PC) draft report on Intellectual Property Arrangements 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.’

In my view there are two major flaws in the analysis that leads the PC to this recommendation.  Firstly, it conflates business methods and software into a common category, using the abbreviation ‘BM&S’ throughout its discussion.  Secondly, it is clear that the PC has very little idea about the vast scope of activity and technological advancement that takes place under the general banner of software development. 

As has been the case in many previous attempts to ‘reform’ the law in relation to patenting of computer-implemented inventions (including the farcical process that delayed introduction of the New Zealand Patents Act 2013 for years) the PC primarily views software through the lens of its own rather limited experience of mass market consumer software and online services, along with the rather narrow perspective provided by disproportionately vocal free and open source software (FOSS) advocates.

There is, however, so much more to software than this, and the PC’s draft recommendation of a blanket exclusion is, simply, a terrible and deeply flawed idea!

 Read full article ► 

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

Australian Productivity Commission Releases Draft Report on Intellectual Property Arrangements

On 18 August 2015 the Australian Government (through the then-Treasurer Joe Hockey) directed its Productivity Commission (PC) to undertake a 12 month public inquiry into Australia's intellectual property (IP) system.

The PC’s draft report was released on 29 April 2016.  and is open for further submissions and feedback up until Friday, 3 June 2016.  The PC then anticipates holding public hearings during June, most likely in Sydney, Melbourne and Canberra.  The final report to the Government (whomever that may be, given that an election is anticipated in the meantime) is due in August.

It seems safe to say that many of the PC’s draft recommendations will prove controversial.  Of course, being a review of the entire IP system it takes in copyright, trade marks, registered designs, plant breeder’s rights, and various related areas of public policy.  As usual, however, my focus here is to summarise the draft recommendations relating to the patent system in particular.  In future articles I will be discussing some of these proposals in more detail.

 Read full article ► 

Tags: Australia, Innovation policy, Public policy, Reviews

Australia’s Productivity Commission to Examine ‘IP Arrangements’, but Hands Will Be Tied on Patents

The Australian Government has directed its Productivity Commission to undertake a 12 month public enquiry into the intellectual property system, including its effect ‘on investment, competition, trade, innovation and consumer welfare.’

The enquiry has been established in response to Recommendation 6 of the Competition Policy Review (a.k.a. the ‘Harper Review’) which issued its final report on 31 March this year.  The Harper Review’s recommendation stated, in relevant part, that:

The Australian Government should task the Productivity Commission to undertake an overarching review of intellectual property. …

The review should focus on: competition policy issues in intellectual property arising from new developments in technology and markets; and the principles underpinning the inclusion of intellectual property provisions in international trade agreements.

The Terms of Reference for the Productivity Commission Review into Intellectual Property Arrangements require the Commission to:

1. examine the effect of the scope and duration of protection afforded by Australia's intellectual property system on
   1. research and innovation, including freedom to build on existing innovation
   2. access to and cost of goods and services
   3. competition, trade and investment;
2. recommend changes to the current system that would improve the overall wellbeing of Australian society, which take account of Australia's international trade obligations.

The review will look at all aspects of Australia’s intellectual property system, including patent, trade mark, registered design and copyright laws and regulations.  I anticipate that copyright, in particular, will receive close scrutiny.  There are a number of aspects of Australian copyright law – including the treatment of unpublished and ‘orphan’ works, as well as issues relating to technology-neutrality – where substantive reforms may be both desirable and feasible.

Of course, my primary interest is in the patent system.  And here, in particular, the Productivity Commission will find that its hands are largely tied by Australia’s commitments under long-standing international agreements.  Options such as targeting local innovators for preferential treatment,  reducing the term of patents, limiting the scope of patentable subject matter and restricting the rights of patent-holders are all substantially off-the-table as a result of Australia’s existing international obligations.  In any case, none of these things would solve the real problem, which is the lack of an effective innovation ecosystem in Australia which can support the development of new home-grown technologies, and assist Australian innovators to take them to the world.

 Read full article ► 

Tags: Australia, Economics, Patents and society, Public policy, Reviews

Have Your Say on Australian Innovation Policy!

The Australian Science and Innovation Forum (ASIF), with the support of the Australian Academy of Technological Sciences and Engineering, is conducting the Big Innovation Survey to inform a submission to the recently announced Senate Inquiry into Australia’s Innovation System.

Terms of Reference for the Senate Inquiry include: the need to attract new investment in innovation to secure high skill, high wage jobs and industries in Australia, as well as the role of public policy in nurturing a culture of innovation and a healthy innovation ecosystem; the Australian Government’s approach to innovation, especially with respect to the funding of education and research, the allocation of investment in industries, and the maintenance of capabilities across the economy; the importance of translating research output into social and economic benefits for Australians, and mechanisms by which it can be promoted; and current policies, funding and procedures of Australia’s publicly-funded research agencies, universities, and other actors in the innovation system.

ASIF is particularly seeking responses to the Big Innovation Survey from young professionals working in the innovation economy, including:

1. researchers in academia, Government agencies, and institutes;
2. scientists and engineers working in private industry;
3. science and technology entrepreneurs;
4. legal, financial and other professionals in the scientific and high-tech industry sectors (including patent attorneys); and
5. those aspiring to create a start-up company, or those who have already done so.

If you fall into any of the above categories and/or have an interest in contributing to the development of innovation policy in Australia, your participation in the 10-minute on-line survey will help to build a picture of both the frustrations and the successes of working in Australia’s innovation sector.  ASIF is particularly interested in your experiences at traditional institutional boundaries, and examples of best-practice, whether from Australia or overseas.  This is a chance to get voice heard and make your opinions on innovation count.

Submissions to the Senate Inquiry close on 31 July 2014.  ASIF therefore asks that you please respond by Friday 11 July 2014, to ensure your comments are included in the response to the Senate Inquiry.

Take the Big Innovation Survey Now!

Image Copyright (c) 123RF Stock Photos

 Read full article ► 

Tags: Australia, Innovation policy, Reviews

ACIP’s Unworkable Innovation Patent Recommendations

On 16 June 2014, the Australian Government’s Advisory Council on Intellectual Property (ACIP) released its final report following a review of Australia’s Innovation Patent System.  For any readers who do not know, the innovation patent provides a second tier protection for inventions, having a lower threshold for validity (a test of ‘innovative step’ rather than ‘inventive step’) and a shorter maximum term of protection (eight years rather than 20 years).

The report makes six recommendations, of which only three would have any substantive effect on the actual operation of the innovation patent system.  In my opinion, all three of these are unworkable, and would actually make the system worse, rather than better.  They are:

1. to replace the current test of innovative step with a ‘higher’ standard based on the High Court’s decision in the ‘3M case’ (Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9;
2. to require that innovation patent owners request examination/certification before the third anniversary of lodgement of their innovation patent; and
3. to exclude from protection by an innovation patent all ‘methods’, ‘processes’ and ‘systems’.

The three non-substantive recommendations are:

1. the non-recommendation of whether to abolish or retain the innovation patent system in its current form, due to a lack of adequate empirical evidence;
2. that a term other than ‘patent’ should be used to denote an uncertified (and thus unexamined and unenforceable) innovation… umm… thingy (ACIP suggests ‘application’, but this would leave us with no name for the period between filing and registration); and
3. that, subject to implementing the other recommendations, there be no change to the remedies available to a innovation patent owner in the event of infringement.

It perhaps matters little what the report says, or what recommendations it makes.  The present Australian government is wholly consumed by its conservative economic and social reform agenda, and most likely has no appetite for patent reform.  It has already attempted to bury one patents review commissioned by the previous government, and is therefore unlikely to take up the issues raised by ACIP’s report.

 Read full article ► 

Tags: Australia, Innovation patent, Law reform, Public policy, Reviews

Competition Law, Globalisation, Standards and Patent Pools

The Australian government is currently conducting a review of competition policy, which was announced on 4 December 2014.  The Terms of Reference describe it as ‘an independent “root and branch” review of Australia's competition laws and policy in recognition of the fact that the Australian economy has changed markedly since the last major review of competition policy in 1993’, and are broad in scope.

An ‘Issues Paper’ was released on 14 April 2014, which states that the ‘overarching objective of this Review is to identify competition-enhancing microeconomic reforms to drive ongoing productivity growth and improvements in the living standards of all Australians’, and which poses a number of questions for public comment.  Written submissions in response to the Issues Paper are due by 10 June 2014.

Under the heading ‘Intellectual Property’, the Issues Paper states:

The underlying rationale for governments to grant intellectual property (IP) rights (such as patents, trademarks and copyrights) is that creations and ideas, once known, may otherwise be copied at little cost, leading to under-investment in intellectual goods and services.  However, providing too much protection for IP can deter competition and limit choice for consumers.

It goes on to ask the questions:

Are there restrictions arising from IP laws that have an unduly adverse impact on competition? Can the objectives of these IP laws be achieved in a manner more conducive to competition?

I am not sure that I agree completely with the characterisation of, and rationale for, IP rights as expressed in the Issues Paper, but it is certainly true that there is an inherent tension between competition law and IP laws.  This is no more true than in the case of patents, the purpose of which is to provide an exclusive right to practice a commercially valuable invention for up to 20 years.

I would argue that, for the most part, patent law and competition law have coexisted in relative harmony in Australia.  I am concerned, however, that this harmonious relationship is under threat from the globalisation of technology – and particularly technology standards – along with the associated IP.   I refer particularly to patents protecting essential aspects of standards, such as those governing widespread consumer electronics and international wireless communications networks, and the global “patent pool” arrangements that have emerged to facilitate access to those patents.  However, similar concerns are likely to arise in relation to other emerging business models involving the aggregation and licensing of patent and other IP rights.

 Read full article ► 

Tags: Competition law, Law reform, Patent law, Public policy, Reviews

Review – WIPO Goes Troppo with New Services

The past week has seen the launch of not one, but two, new information services by the World Intellectual Property Organisation (whose imposing glass headquarters in Geneva is pictured).

First, on 20 September 2010, WIPO Lex was announced.

And then, because too much searchable IP information is never enough, WIPO announced the launch of IP Advantage.

Need to know more?  Then read on!

 Read full article ► 

Tags: News, Reviews, WIPO