16 February 2013

Australian Federal Court Declares Isolated Human Genes Patentable

Cancer Voices Australia v Myriad Genetics Inc [2013] FCA 65 (15 February 2013)

LaboratoryIn a landmark decision, a judge of the Federal Court of Australia has upheld a patent granted to Myriad Genetics Inc, confirming that claims directed to isolated genetic materials – such as DNA or RNA sequences – are in principle patent-eligible.

As I reported at the time, the hearing in this case took place almost exactly a year ago, making the judgment one of the most long-awaited in recent memory, certainly within the patent field.  The issue of ‘gene patents’ has been hotly contested in Australia in recent times, with opponents successfully attracting substantial media attention, and introducing proposed legislation to the Australian Parliament (which was subsequently rejected by a Senate inquiry).  A further draft bill, again seeking to amend the Patents Act 1990 to expressly exclude genetic materials from patentability, is still drifting somewhere around the corridors of Parliament House.  We might expect that this bill will re-emerge in the near future, following the current failure to ban gene patents through the courts.

The Federal Court application seeking revocation of three claims of the Myriad patent (‘the disputed claims’) directed to isolated genetic materials was originally filed back in June 2010 (when this blog was in its infancy).  The isolated genes in question are known as BRCA1, which have been found to exhibit certain mutations in women having an enhanced risk of developing breast and ovarian cancer.  They are therefore useful in identifying individuals having an increased cancer risk, and can play a role in early detection and treatment of cancers.

The applicants for revocation were the non-profit advocacy group Cancer Voices Australia, and Queensland breast cancer survivor Ms Yvonne D’Arcy (‘the Cancer Voices parties’).

The Federal Court has completely rejected the application for revocation of the disputed claims, finding all three to be eligible for patent protection under the Australian ‘manner of manufacture’ patentability test.

14 February 2013

Research Affiliates Loses Appeal Against Business Method Rejection

Research Affiliates, LLC v Commissioner of Patents [2013] FCA 71 (13 February 2013)

Computerised InvestmentsA judge of the Federal Court of Australia has dismissed the appeal by Research Affiliates, LLC (‘RA’) against two decisions of the Australian Patent Office rejecting two patent applications relating to the construction and use of passive portfolios and indexes for securities trading.  The rejections were made on the basis that the claims of the applications were not directed to a ‘manner of manufacture’ – the test under the Australian law for whether a claimed invention comprises patent-eligible subject matter.

The RA method generates an index representing the relative value of a notional portfolio of stocks, similar to (for example) the Australian ‘ASX 100’, the US ‘Dow Jones’ and ‘S&P 500’, the UK ‘FTSE 100’, the Japanese ‘Nikkei 225’ and the Hong Kong ‘Hang Seng’.  Such an index is not merely the final numeric value which is normally published in financial reports.  It comprises a specific listing of stocks, along with a weighting value of each stock.  The index value is normally recomputed by adding all of the current stock values multiplied by their respective weighting values.

Conventional indexes are based on weighting the investments according to one of market capitalization weighting (i.e. in proportion to total company value – most of the well-known indexes are of this type), equal weighting (self-explanatory – examples are the Value Line index and the S&P 500 Equal Weighted Stock Index) or share price weighting (i.e. in proportion to the price of individual shares – for example the Dow Jones Industrial Average).  RA’s claimed contribution is to use measures of company size other than market capitalisation, or the other common weighting methods, to determine the proportions of shares to hold in a notional portfolio made up of a selected set of stocks.

There seems to be no doubt about the economic value of RA’s contribution.  The Federal Court decision reveals that RA has created an index of Australian stocks using its method, called the ‘Colonial eRAFI Large Index’, which it licenses for a ‘significant’ fee to fund managers, including Colonial First State Investments Limited.

06 February 2013

Junk Patents Dumped on Australia as Chinese Subsidies Rorted

Red EnvelopeA Chinese government scheme providing financial incentives for small and medium sized enterprises, public institutions or scientific research institutions appears to be resulting in abuse of the Australian patent system, and the 'dumping' of numerous low-quality innovation patents on the Australian Register.

These ‘junk’ patents are not being examined or certified.  They therefore represent no more than potential enforceable rights.  Even so, they generate costs to companies operating legitimately in Australia, which may need to obtain advice on the likely scope and validity of these patents in order to avoid possible infringement.  In extreme cases, the existence of junk patents could result in an Australian business choosing not to take the risk of bringing a new product to market, even though the Chinese owner of a patent is not itself offering any products or services in this country.

The new Chinese patent filings, which increased significantly in number after introduction of the Chinese government ‘Measures for the Administration of Special Funds for Subsidizing Foreign Patent Applications’ in April last year, appear mainly to be handled by Australian ‘agents’ who are neither Australian, nor persons authorised under the Australian Patents Act 1990 to apply for or obtain patents on behalf of other parties.

A number of these agents have been operating in Australia for some time, although with the commencement of the Chinese subsidy scheme, business looks to be booming!  One particularly enterprising operator appears to have established two credible-looking business fronts, and has commenced development of a new, and highly professional-looking, web site for one of those businesses.

This phenomenon is already resulting in distortions of Australian patent filing and grant statistics.  I recently reported on the top Australian patent recipients of 2012, and noted that, for the first time, a Chinese company appeared in the top 10.  It turns out that every one of the 97 patents granted to Hengdian Group Linix Motor Co last year is an innovation patent filed by a single dubious agency.

04 February 2013

Patent Reform Update: News, Rumours and Speculation

ShhAs reported here two weeks ago, IP Australia recently published an update on its ongoing law reform process.  With less than three months now to go until commencement of the Raising the Bar IP law reforms on 15 April 2013, time is running out for IP Australia to finalise the updates to the regulations, the changes to its own practices, the corresponding contents of the examination practice manual, and everything else that needs to be in-place by the time the new laws come into effect.

All-in-all, it does appear that we have something of a sprint to the post ahead of us.  It seems quite likely that users of the Australian IP registration system (and their agents) will be receiving new information right up to the date of commencement, and possibly beyond, as IP Australia beds down a host of new practices and procedures. 

Additionally, the coming reforms are having predictable effects on the behaviour of patent applicants, while IP Australia continues to be involved in other review and reform processes, such as the Trans Tasman Single Economic Market (SEM) program between the governments of Australia and New Zealand.  With regard to this latter process, we were promised back in July 2011 that a trans-Tasman patent implementation plan would ‘deliver a single application process for both countries by early 2013, and a single patent examination by June 2014.’  As I am sure most readers are aware, it is now early 2013, and there does not appear to be any sign of a single Australia/New Zealand patent application as yet!

Nonetheless, over the past couple of weeks there have been further developments on a number of aspects of the reforms which have come to my attention one way or another.  Some of this information is ‘official’, while some would be best characterised as ‘rumour’ (though I have reasonable confidence in the reliability of the sources).

02 February 2013

Aspiring Attorneys Stand on the Threshold of a Brave New World

Tightrope WalkerThis coming Monday, 4 February 2013, I am giving a three hour lecture on US patent law and practice to a group of Monash University students, many of whom will no doubt be attending the Patent Practice course as part of their requirements to one day become registered Australian Patent Attorneys.

As I have prepared for the lecture, and the number of PowerPoint slides has crept up towards 100 (that’s one every two minutes, folks – strap yourselves in for the ride), I have been contemplating just what it might mean to qualify as a patent attorney in 2013.  This has been lately on my mind for other reasons also, since I have been approached by a number of people seeking advice on how to steer their career paths into this profession.

Profession Faces Challenges

The fact is that there has probably never been a more challenging time to pursue a career as a patent attorney in Australia.  (I imagine that this may well be true elsewhere, as well, although I would not know for sure.)  The ‘traditional’ patent attorney business model is under unprecedented pressure from low-cost specialist operations such as foreign filing and annuity service providers.  The downturn in the global economy will continue to impact patent filing and prosecution work for years to come.  Ironically, the increasing importance and profile of intellectual property – which one might expect to benefit patent attorneys – is what is driving clients to seek more cost-effective services, and to be far more canny in managing their IP portfolios to a budget.


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