Patent Attorney Privilege in Australia

I want to be clear from the outset that this article is not about the social and/or financial advantages that are no doubt enjoyed by some members of the patent attorney profession!  The ‘privilege’ I wish to discuss is the legal professional privilege which protects communications between legal professionals and their clients, along with related records and documents, from compulsory disclosure by order of a court, or under a provision of statutory law.

While most (outside the legal profession, at least) would regard patent attorneys as legal professionals, the fact is that we are not lawyers.  For the most part this does not create any problems, and in fact can be handy when we want to avoid bearing the brunt of lawyer jokes at parties.  (‘What does a lawyer get when you give him Viagra?’  ‘Taller!’)

However, not being lawyers means that communications between patent attorneys and their clients do not automatically have the benefit of any privilege that would attach to the same communication if it were to occur between lawyer and client.  Citing authorities dating back as far as the 1880s, a Federal Court judge stated in 1993 that ‘[t]here was no such privilege [in respect of patent attorney-client communications] at common law. Indeed, communications between a client and his solicitor who was also the client's patent attorney were not privileged if the solicitor received them in his capacity as a patent attorney…’ (Wundowie Foundry Pty Ltd and Clarewood Pty Ltd v Milson Foundry Ltd and David Wallace [1993] FCA 422).

This is clearly a problem.  Patent attorneys regularly communicate with their clients, and provide advice, in relation to matters that could be highly prejudicial in the event of litigation including, but not limited to, validity and infringement of patents.  In the absence of an effective attorney-client privilege, clients might be discouraged from providing their attorneys with information necessary for them to provide full and considered advice, and attorneys in turn might decline to provide advice that may be adverse to the client in the event of litigation.

The solution to this problem is the provision of a statutory attorney-client privilege in section 200 of the Patents Act 1990.  The scope of this privilege was extended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, effective from 15 April 2013.  However, caution is required in relation to certain communications and documents made before this date, which may remain subject to more limited protection from disclosure.

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Tags: Australia, Patent attorney profession, Privileged communications

Australia Scores Highly In Biased IP Index

Last week, the US Chamber of Commerce’s Global Intellectual Property Center (GIPC) released the second edition of its International IP Index, which it called Charting the Course.

Australia scored pretty well, coming in fifth out of the 25 countries covered by the index, behind only the US, UK, France and Singapore.  However, on closer inspection this is probably not something of which we should be especially proud.  While the GIPC index is touted as a measure of how well each country safeguards IP to ‘propel the creation of jobs, protection of public safety, access to future innovations, and stimulate competition in the global economy’, it might better be described as a measure of how cravenly each country kowtows to the interests of the US enterprises represented by the Chamber of Commerce.

For example, a country can gain points for entering into a free trade agreement, such as the Australia-US FTA, or by providing an extension of term for pharmaceutical patents as compensation for the time taken to obtain regulatory approval.  However, countries were scored down for such infractions as failing to provide ‘adequate’ criminal penalties for IP infringement.

However, Australia’s greatest crime against the GIPC criteria was the introduction of legislation mandating ‘plain-packaging’ (actually, restricted branding, since the packs are far from plain) of tobacco products.  Apparently, this one limitation on trade mark use in Australia sends ‘a chilling message to brand owners interested in selling in the Australian market’, and resulted in a loss of a whole point in the index, which would have placed Australia above Singapore, in fourth place!

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Tags: Australia, Innovation policy, Patents and society, Public policy

Calling All Pharma and Biotech Attorneys: Survey on Filing Strategy

Are you a patent attorney working in the life sciences sector?  Would you be interested in new research insights into international patent filing strategies for biotechnology and pharmaceutical companies?  And – most importantly – would you be willing to spare just 15 minutes to complete a short survey to assist researchers at the Thomas Jefferson School of Law to obtain those research insights?  If so, please read on…

I was contacted this week by Richard Schurman, who is one member of a team led by TJSL Adjunct Professor Randy Berholtz engaged in a year-long IP Honours Research Project with the goal of assisting bio-pharmaceutical companies and patent practitioners in deciding which countries to file for patent protection.  (Richard is second from the left in the above photo.  The other pictured are, from left to right, co-researchers Derek Midkiff, Sumant Pathak, Katherine MacFarlane and Vince Davies.)

According to a TJSL media release:

The goal of the honours research project is to provide life science companies and patent practitioners with a comprehensive guide regarding the countries where biopharma patents are filed, the countries where life science companies and patent practitioners should file for patent protection, and the factors that life science companies and patent practitioners should take into consideration when strategizing for international patent protection.

The project includes a survey of practitioners, for which each member of the team has taken on a different region of the world.  Richard is responsible for the Asia-Pacific region, which of course includes Australia and New Zealand.

I've heard enough. Take me to the survey now!

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Tags: Australia, Biotechnology, New Zealand, Patent attorney profession, Pharmaceuticals

Australian Government Looking Into the ‘Patent Box’

Australia’s assistant treasurer, Arthur Sinodinos, has confirmed that the government will be looking into the possibility of introducing so-called ‘patent box’ tax breaks.

I have written about patent box schemes before (incidentally, the name comes from the box provided on tax forms for companies to claim the benefit).  Such programs, which provide reduced tax rates (typically between 5% and 15%) on income attributable to patented IP, have been introduced in a number of countries, including the UK, the Netherlands, Belgium, France, Ireland, Spain, Luxembourg, Switzerland and China.

In the United States the Manufacturing Innovation in America Act of 2013 (HR 2605), which would provide for a patent box tax reduction, was introduced in the House of Representatives on 28 June 2013, and is currently before a congressional committee.  (I note, however, that GovTrack.us gives the legislation only a 1% chance of getting past committee, and a 0% chance of being enacted!)

Potential patent box rules will be proposed by AusBiotech and the Export Council of Australia, and will considered as part of a planned government review of research and development later this year.

I am pleased to see that a review that includes consideration of a patent box scheme will be going ahead, and I am hopeful that it will report favourably on the proposal.  I am in favour of a patent box tax reduction in Australia for two reasons:

1. I believe that it provides the right incentive for commercial innovation, by rewarding not only investment in R&D (as existing grant and tax relief programs do), but more specifically R&D which results in protectable intellectual property which is then actually protected and successfully commercialised; and
2. with a number of other developed economies providing patent box tax incentives, Australia places itself at a competitive disadvantage as a location for conducting research, development and manufacturing if it does not do likewise.

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Tags: Government programs, Innovation policy, Public policy, Tax incentives

Recording Security Interests in Australian Patents and Other IP

If you own a patent, or some other valuable intellectual asset, you might want to use it as security to obtain a loan, or other financial support, for your business.  Conversely, if you have funds that you are thinking of investing in a business that owns relevant IP, you may wish to secure an interest in the IP so that you can take ownership if the investee defaults on its obligations.

These types of arrangements are perfectly legitimate.  Registered intellectual property rights, such as patents, trade marks and registered designs, are like any other property in that they can be used as collateral, mortgaged, and otherwise dealt with as securities.

It is preferable that any such security interests be officially and publicly recorded.  There are a number of reasons for this.  For one thing, if somebody is considering buying or licensing a patent, they ought to be able to find out whether any third party holds an interest in it (in the same way that, when buying a second had car, you need to find out whether it is still under finance).  Furthermore, when something goes wrong, such as the rights-holder declaring bankruptcy, there should be some simple way for a party with an interest in the assets to establish its priority.  This is particularly important in more complex cases, in which a number of investors and creditors may have competing claims.

But how, and where, should you record any interests in Australian patents or other registered IP rights?

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Tags: Australia, Licensing, Security interests