Australia’s ‘Alice’: Appeals Court Denies Business Method Patent

In a unanimous decision, a Full Bench of the Federal Court of Australia has ruled that the ‘substance’ of an invention trumps the form in which it is claimed, dismissing Research Affiliates’ appeal against a decision of a single judge of the court, which found its invention, relating to the construction and use of passive portfolios and indexes for securities trading, ineligible for patent protection: Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150.

The decision canvasses many of the same issues tackled by the US Supreme Court in its recent Alice Corporation v CLS Bank ruling.

In essence, the Australian court addressed the question of whether an invention that would otherwise be ineligible for patent protection – in this case, a scheme for generating a financial index which can be used, for example, to measure the rise and fall in value of an investment portfolio – becomes patentable when implemented in software.  This has been an open question in Australia since the court’s 2006 decision in Grant v Commissioner of Patents [2006] FCAFC 120, in which it found that an asset protection method was ineligible for patenting.  In that case, however, the court was not required to consider whether the outcome may have been different had all or part of the method been performed using a computer.

In the Grant case the court stated that, for a claimed invention to be patent-eligible, a ‘physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required’.  Where a computer is involved there is always, of necessity, some physical effect or change of state, at least within the electronics of the machine.  The question that the court has not previously addressed is whether or not this is sufficient to confer patent-eligibility? 

In Research Affiliates, the court has answered this question in the negative, finding that describing a scheme – no matter how ingenious it may be – that is not itself eligible for patenting, and merely giving directions to implement it on a standard computer is not sufficiently transformative.

However, while – subject to any appeal to the High Court – this decision would seem to spell an end to ‘do it on a computer’ patent claims in Australia, the Full Court has been cautious (certainly more so that the US Supreme Court in its recent Alice v CLS Bank decision) to ensure that most computer-implemented inventions remain patent-eligible in Australia.

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Tags: Appeal, Australia, Business processes, Computer programs, Patentable subject matter

High Court Majority Upholds LEXAPRO Patent Time Extension

On 5 November 2014, the High Court of Australia handed down its decision confirming (by a three-to-two majority) that it is possible to obtain an extension of time within which to apply for an extension of the term of a patent relating to a pharmaceutical substance, so long as the extension application is filed prior to expiry of the patent: Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42.

This decision is an important milestone in a long-running saga relating to the antidepressant drug escitalopram, originally marketed in Australia as LEXAPRO, and covered (at least until 13 June 2009) by Australian patent no. 623,144.  The patent is owned by H Lundbeck A/S, which had applied to extend the term of the patent to 9 December 2012, as compensation for delays in obtaining regulatory approval to market LEXAPRO in Australia.  But, for reasons that I explained in an earlier article on the case, Lundbeck required an extension of time to allow its application for an extension of term to be considered, because it was filed about ten years too late!

The issue before the High Court was whether, under the relevant provisions of the Patents Act 1990 and the Patents Regulations 1991, the Commissioner of Patents has the power to extend the time for filing an application for an extension of term in any circumstances.  The Court’s answer to this is, in essence, ‘yes’ – if the application to extend the term of the patent, and the associated request for an extension of time, are filed prior to the patent’s expiry.

This does not, however, bring an end to the matter.  There is a separate question of whether it was appropriate, in the particular circumstances of this case, for the extension of term to be granted, which is still making its way through the appeals process.  Hot on the heels of the High Court’s ruling, a single judge of the Federal Court of Australia has handed the latest round in this part of the dispute to Lundbeck, dismissing an appeal from the Commissioner’s decision to allow the extension:

Alphapharm Pty Ltd v H Lundbeck A/S [2014] FCA 1185.

A great deal of money is at stake in all of this.  A number of generic pharmaceutical companies released their own escitalopram products following the original expiry date of the Lundbeck patent (a risky strategy, given that they were certainly aware of Lundbeck’s extension application by that time).  The patent itself has already been found valid and infringed by a Full Bench of the Federal Court of Australia (in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70), and all avenues of appeal from that decision have been exhausted.  Thus if the term extension is ultimately upheld (as it has been at every turn so far), damages will be due to Lundbeck for infringement of the patent between 13 June 2009 and 9 December 2012.

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Tags: Appeal, Australia, Extension of patent term, Extensions of time, Pharmaceuticals

WIPO Director General Under Official Investigation for Misconduct

World Intellectual Property Review (WIPR) reported last week that the World Intellectual Property Organisation (WIPO) is now under formal investigation over allegations dating back to 2008 that Director General, Francis Gurry, ‘ordered a series of burglaries of workers’ offices in order to obtain samples of their DNA.’

I have written about these allegations on two previous occasions.  The first was back in December 2013, in response to articles written by Gene Quinn, on his estimable IP Watchdog blog (which is currently celebrating an incredible – in Internet terms – 15 years of continuous operation).  The second was in April of this year, following revelations that then Deputy Director General James Pooley had filed a ‘Report of Misconduct’ with WIPO, and with the US Mission in Geneva. 

On both occasions I expressed my suspicion that the resurfacing of the accusations against Gurry was at least partly motivated by US anger at WIPO’s involvement, under his direction, in UN assistance programs to North Korea and Iran, and building of closer ties with China and Russia.  At the time, Gurry was seeking reappointment as Director General for a second six-year term.  His reappointment was confirmed by the General Assembly on 8 May 2014.

Not that this was the first time Gurry had been the target of an effort to undermine his candidacy for the top job at WIPO.  His first term began controversially, with Brazil threatening at one stage to challenge his election on the basis that it was not legitimate.  What was allegedly behind this challenge was a concern that Gurry would be too ‘pro-developed-world’ – a fear that turned out to be unfounded – though the fact that it was Brazil’s own candidate who lost out by a single vote was no doubt a factor!  Ironically, it is Gurry’s pro-developing-world agenda that appears to have made him so unpopular with US politicians.

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Tags: International treaties, News, Politics, WIPO

A Short Sabbatical…

This is just a quick post to let all of my regular readers know that I will be taking a short break from blogging.  I have a lot going on at the moment, and have therefore decided to free myself from the imperative to write regularly in order to make time for other things.

Most likely I will be back in a couple of weeks – unless I am dragged back sooner by some important event, such as the long-awaited decision in the Research Affiliates appeal (although I am not holding my breath for that one).

I expect I shall still be on Twitter from time to time, so while there is nothing happening here, feel free to follow @patentology (if you are not already doing so).

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Tags: Patentology admin

Patent Oppositions and Amendments: Law Reform Fixes Flaws

Garford Pty Ltd v Dywidag-Systems International Pty Ltd [2014] FCA 1039 (18 September 2014)

As many readers will be aware, Australia’s patent laws include a pre-grant opposition system – once an application has been evaluated by an examiner, and approved for grant, an opportunity exists for third parties to step in and challenge that decision.

The purpose of such opposition proceedings (from a policy perspective, at least) is to reduce the probability of invalid patent claims being granted.  Even if prior art searching and examination were perfect, participants in the specific technology area to which an invention relates will always have access to additional information, not readily accessible to a patent examiner, that may be pertinent to the patentability of the invention.

The system thus recognises that the examination process is necessarily imperfect in practice, particularly given that examination resources are finite.

Furthermore, if either party to an opposition (i.e. the applicant or the opponent) is dissatisfied with a Patent Office decision in an opposition, there is an avenue for appeal to the Federal Court of Australia.  Prior to commencement of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 on 15 April 2013, however, there was a problem with the available procedure for appealing a decision in a partially-successful opposition.

Specifically, the Federal Court on appeal was confined to considering the very same subject matter that had been reviewed by the Patent Office in the original opposition proceedings.  Thus, if the opposition had been partially successful, in the sense that the opponent had established that at least some of the accepted claims were invalid, but the patent applicant was given the opportunity to propose amendments to address the successful grounds of opposition, the court could not take into account those proposed amendments.

This was unhelpful to both the patent applicant and the opponent.  From the applicant’s point of view, it would be best that the proceedings before the court be based upon a set of claims that it considers to be defensible.  From the opponent’s perspective, an appeal that may simply have the same outcome as the Patent Office decision, with the applicant still having an opportunity to amend, is potentially a complete waste of time and money.

A judge of the Federal Court has now confirmed that a ‘fix’ for this problem, implemented in the Raising the Bar Act, has been effective.

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Tags: Amendments, Appeal, Australia, Law reform, Opposition