Australia’s Four Laws of Inventive Step

As I reported in a recent article, the Australian Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came full effect on Monday, 15 April 2013.  Among the many reforms introduced by the Raising the Bar Act was a change to the procedure for assessing inventive step, which raises standards to bring Australia’s laws more into line with major trading partners such as the US and Europe.

Of course, it would be unjust to make the changes retrospective – there could be many patents previously granted, and applications previously filed, which would have been rendered invalid overnight.  So the new laws apply only to those applications and patents in which a request for examination is filed on or after 15 April 2013. 

My previous article on this topic included some astonishing statistics on the number of new applications filed in the weeks leading up to commencement of the Raising the Bar reforms.  I have since heard that in the first two weeks of April, around 16,000 requests for examination were filed.  To put this in perspective, in 2012 IP Australia granted a total of 17,724 patents, so those two weeks’ of requests alone added the better part of a year’s worth of examination work to the pipeline.

If you have only a casual interest in Australian patent law, or you have not been following the subject for very long, you might think that there are now two different standards of inventive step to keep in mind when considering the validity of Australian patents and applications.  However, you would be wrong.  In fact, right now there are live Australian applications and patents variously subject to no fewer than four different standards of inventive step.

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Tags: Australia, Law reform, Obviousness, Raising the Bar

IP Australia Delivers Mixed Report Card on Australian IP

Last month IP Australia launched the Australian Intellectual Property Report 2013.

This report contains an attractively-packaged compilation of data and information about the IP system in Australia, and how the country measures up internationally. 

While the report includes information on patents, registered designs, trade marks and plant breeder’s rights, naturally my primary interest is in the statistics on Australia’s performance in relation to patents and technology innovation.

And what IP Australia’s report has to tell us about this is not exactly discouraging, but will hardly set the world on fire.  ‘Revelations’ in the report include:

1. Australians are filing more patent applications than ever before, both locally and overseas;
2. however, increasing patenting activity is not leading to any significant change in Australia’s ‘IP balance of trade’;
3. foreign nationals file the vast majority of Australian standard patent applications, and receive most of the patents granted here; and
4. it appears that the big challenge for Australian companies lies in capturing and extracting value from intangible assets, currently languishing at only 4% of tangible asset value (compared with 91% in the US).

IP Australia promises that this will be the first in an ongoing series of reports and updates, and it is well worth a read..

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Tags: Australia, Innovation, Innovation policy, Patent Office, Public policy, Public research

“Worthwhile to Try” is Not Obvious Enough in Australia

Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2) [2013] FCA 279 (4 April 2013)

The Federal Court has again confirmed that, contrary to the impression you might obtain from reading IP Australia’s Patent Examiners Manual, ‘obvious’ or ‘worthwhile’ to try does not form part of the test for inventive step under Australian patent law.

I wrote recently about another aspect of the judgment in Bayer v Generic Health, namely the alleged inconsistency of the testimony of an expert who also provided evidence in a dispute more than a decade ago, between generic manufacturer Alphapharm Pty Ltd and originating pharmaceutical manufacturer Aktiebolaget Hässle.  Coincidentally, the High Court’s decision in Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 is also the source of the current Australian law in relation to ‘obvious’ or ‘worthwhile’ to try (at paragraphs [66]-[76]).

IP Australia changed its ‘practice’ in relation to this aspect of examination of patent applications back in August 2010.  At the time, I questioned this change, noting that ‘the High Court majority drew a distinction between “matters of routine” (discussed at paragraphs [50]-[53]) and “obvious or worthwhile to try” (discussed at paragraphs [66]-[76]).  I also observed that the previous guidance for examiners – which adopted a quite different interpretation of the Hässle case – was still available for comparison in the Internet Archive (a.k.a. ‘Wayback Machine’).  Unfortunately, this is no longer the case, because IP Australia, in its wisdom, has decided that earlier versions of its practices should not be available, for posterity or any other purpose, and has added all of the relevant subdirectories of its web site to its robots.txt file.

It is timely to revisit this issue now, with the Raising the Bar reforms just having come fully into effect, because as a subsequent Official Notice revealed, the change in examination practice was one of the first steps to be implemented in IP Australia’s reform agenda.  Apparently, IP Australia accepted ‘stakeholder feedback’ that ‘“obvious to try with a reasonable expectation of success” … has support in the High Court decision in Aktiebolaget Hässle v Alphapharm Pty Ltd’.

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Tags: Australia, Obviousness, Patent Office, Pharmaceuticals

EFF Off the Mark With Latest ‘Abuse’ Allegations

The Electronic Frontier Foundation’s (EFF) Daniel Nazer and Julie Samuels have a tragic tale to tell, which they hope will stir the souls of the online community to action.

In a nutshell, the narrative goes something like this…

Once upon a time, a few innovative, dedicated entrepreneurs started a Little Red Riding Company called Ditto Technologies, Inc, based on the great idea of letting people try on eyeglasses in a virtual environment by using webcam images to build a 3D model of their heads and faces.  Within two years, their hard work in building an appealing product was starting to pay off.  Ditto had received funding to build its business, employ new staff, and continue to improve its product.

But then along came a Big Bad Wolf Company, called 1-800 CONTACTS.  Although the Wolf was already in the business of selling prescription eyewear (i.e. contact lenses) online, it had no product that competed directly with Ditto.  Yet the Wolf had purchased a patent from a ‘defunct company’ which (it alleged) covers Ditto’s virtual try-on service, and was now suing California-based Ditto in the distant Land of Utah.

The cost of litigation (and the possibility of losing) threatens Ditto’s very existence, unless an army of diligent Woodcutters can be rallied to find prior art capable of invalidating the Wolf’s patents!

Poor little Ditto.  But is it possible that there is another side of the story?  One in which the Big Bad Wolf is just misunderstood, and the Little Red Riding Company might be, to some extent, a victim of its own (and its investors’) mistakes?

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Tags: Computer programs, Infringement, Innovation, Innovation policy, Law reform, Patentable subject matter, Patents and society, Public policy, Trolls

The Perils of ‘Professional’ Experts

Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2) [2013] FCA 279 (4 April 2013)

Dr James Rowe has had over 30 years’ experience in the pharmaceutical industry.  He obtained a Bachelor of Pharmacy degree in 1966, a Masters of Science in 1976, and a PhD in Pharmaceutics in 1980.  He is also somewhat familiar with the inside of a courtroom.  In 1998 and 1999 he gave evidence on behalf of generic manufacturer Alphapharm Pty Ltd, in a dispute with originating pharmaceutical manufacturer Aktiebolaget Hässle (a member of the Astra group, now AstraZeneca) over a patent covering the compound omeprazole, better known as heartburn drug Prilosec (or, in some markets, Losec).

The omeprazole case went on to become a leading authority on the law of inventive step in Australia, after it was successfully appealed by Astra to the High Court of Australia (Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59).

This year Dr Rowe has again appeared in court on behalf of generic manufacturers – Generic Health Pty Ltd and Lupin Australia Pty Ltd – where it seems his past has come back to haunt him.  In the decision in Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2), issued earlier this month, Justice Jagot concluded that Dr Rowe’s evidence was inconsistent with the evidence he had given in his 1998 affidavits in the omeprazole case, and that this tended ‘to undermine the weight which would otherwise be given to [his] evidence’. 

There is a lesson in this for all litigants when selecting expert witnesses.  It is natural that the opinions of a skilled professional might change over time, not least because new knowledge and experience may bring to light information that was not previously available.  However, in this case the priority date of the Bayer patent was 31 August 1999, i.e. the critical date for assessing the claimed invention was contemporary with the time at which Dr Rowe gave evidence in the omeprazole case.  And even though the omeprazole patent had a priority date in 1986, it seems to me that it should have been reasonably foreseeable that Dr Rowe’s earlier evidence would be used against him.

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Tags: Australia, Evidence, Obviousness, Pharmaceuticals