‘My Software, My Choice’

[Note: This article has been translated into the Serbo-Croatian language by Anja Skrba from Webhostinggeeks.com.  My thanks to Anja for making the effort to share this information with the people of the Former Yugoslav Republics: Serbia, Montenegro, Croatia, Slovenia, Macedonia, Bosnia and Herzegovina. - MS]

Last week we reported the last minute backtrack by the New Zealand government, deleting a controversial provision in its new Patents Bill stating that ‘a computer program is not a patentable invention’, and replacing it with a controversial provision which still says that ‘a computer program is not an invention’, but only to the extent that it is ‘a computer program as such’.  (See NZ Government Backtracks – to Europe – on Software Patents.)

The basic idea behind this change is to import about 30 years of European and UK jurisprudence on what it means for something to be a computer program ‘as such’, in the expectation that this will allow – amongst other things – inventions implemented using embedded software systems to be patented.

Not unexpectedly, some people are unhappy with this ‘watering down’ of the proposed computer program exclusion.  In particular, a group calling itself No Software Patents in NZ has set up a site no.softwarepatents.org.nz with an online petition requesting that the ‘as such’ caveat be replaced with a clause specifying that the computer program exclusion ‘does not prevent an invention that makes use of an embedded computer program from being patentable.’

In our view, this would be a bad idea for at least two reasons.  Firstly, there is no agreed definition of an ‘embedded computer program’, leaving huge scope for uncertainty, and for any patent applicant whose application is rejected on this basis to go running to court armed with arguments and expert evidence in support of an assertion that their particular invention does (or perhaps merely ‘can’) relate to an embedded computer program.  And even if there were a clear definition today, it is unlikely – based on past experience – that it will survive the test of time.

Secondly, while the NZ debate appears to have become strangely fixated on embedded software controllers for home appliances such as washing machines, these are not the only types of software for which there is a clear benefit in allowing patent protection to be granted.

It has been our observation, over time, that those who are opposed to software patents have a very limited view of the role that software plays across a whole range of scientific and engineering applications.  Objections to patents on common web technologies, widespread operating system features, and components of extensively deployed consumer and developer applications such as word processors, web browsers and compilers, are actually quite understandable.  But the typical response to these objections – to call for the banning of all software patents, or all except for some narrowly-defined exceptions – makes no sense at all.

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Tags: Computer programs, New Zealand, Patentable subject matter

Merck Injunction Gets Up Apotex’s Nose

Merck Sharp & Dohme Corp v Apotex Pty Ltd [2012] FCA 928 (31 August 2012)

Interlocutory injunctions – prima facie case – balance of convenience – permanent impact of generic competition upon market for pharmaceutical products

The Federal Court of Australia (Justice Jagot) has issued a preliminary injunction barring generic pharmaceutical manufacturer from marketing and selling nasal sprays containing the corticosteroid mometasone furoate (MF) for the treatment of allergic rhinitis.  The injunction will remain in place pending a final hearing to determine the validity of Merck’s Australian Patent No. 691880, entitled ‘use of mometasone furoate for treating airway passage and lung diseases’. 

Merck sells its own MF-based product in Australia under the brand name NASONEX, which enjoyed sales worth $24.6 million in 2011.  Apotex had commenced marketing, and proposed to commence sales in September 2012 of generic versions APO-MOMETASONE NASAL SPRAY, APOTEX-MOMETASONE NASAL SPRAY, CHEMMART MOMETASONE NASAL SPRAY, GENRX MOMETASONE NASAL SPRAY and TERRY WHITE CHEMISTS MOMETASONE NASAL SPRAY.

Apotex did not deny that its proposed activities would infringe Merck’s patent, but argued that the patent is invalid, and that the claimed invention was obvious at the relevant priority date.  The court was not persuaded that Apotex’s case for invalidity was sufficiently strong to deny Merck’s establishment of a prima facie case of infringement.  Furthermore, the court found that the balance of convenience in this case favoured granting the preliminary injunction sought by Merck.

The injunction means that generic competitors to the NASONEX product will most likely be kept off the market in Australia until at least the second half of 2013.

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Tags: Australia, Interlocutory injunction, Obviousness, Pharmaceuticals

Should Compulsory Licensing Provisions be Abolished?

We wrote recently about the ‘issues paper’ which has been released by the Australian Government’s Productivity Commission in relation to its inquiry into the compulsory licensing provisions in the Patents Act 1990 (see Compulsory Licensing Inquiry – Issues Paper Released).

On 15 August 2012, senior representatives of the Licensing Executives Society (Australia and New Zealand) – a.k.a. LESANZ – met with members of the Productivity Commission, at the Commission’s invitation.  Following the meeting, LESANZ published a summary, and an invitation to members to provide input to a formal written submission (currently available here, on the LESANZ web site, dated 16 August 2012).  This publication includes the intriguing statement that LESANZ proposed to the Commission that:

…consideration be given to replacing the existing statutory provisions with a streamlined, potentially deregulated access regime which better reflects market forces in technology transfer.

It is interesting to take this notion of ‘deregulation’ to its logical conclusion – the complete abolition of all of the non-voluntary access provisions (compulsory licensing, Crown use and compulsory acquisition) in the current Patents Act.

The fact is that these provisions are rarely used.  They are complex and expensive to invoke.  In many ways they are anachronistic, having their origins in an earlier time when there were genuine concerns that patent monopolies might be used by unscrupulous proprietors to slow the rate of industrialisation within the realm.  Such fears turned out to be largely unfounded – actually providing an increasingly affluent society with desired products and services has generally proven to be more lucrative than holding it to ransom!

So do we really have anything to fear from the abolition of non-voluntary access provisions, or would we be better off removing this burden from the statute books?  And how would someone go about persuading the Productivity Commission to recommend such radical reform?

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Tags: Australia, Compulsory license, Economics, Innovation policy, Law reform

Apple v Samsung – Design Patents and ‘Damages’

In writing a few days ago about the $1.05 billion jury verdict in the US Apple v Samsung trial, we observed that there was a significant disparity between amounts awarded by the jury where it found design patent infringement and those awarded where only utility patent infringement was established.  (See Billion-Dollar Jury Verdict a Blow to Samsung – But How Bad Is It?)

We speculated that this may be due to the theory that consumers might be ‘tricked’ into buying Samsung devices which have been ‘slavishly copied’ from Apple products, resulting in greater loss of sales by Apple.

However, we have now learned that there is a very specific reason for the high awards for design patent infringement.  As explained in this article on the intellectualIP blog, written by Professor Thomas F. Cotter of the University of Minnesota Law School, there is a peculiar anomaly in the US law relating to the remedies available in cases of design patent infringement which justifies such high monetary compensation.

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Tags: Account of profits, Apple-v-Samsung, Damages, Designs, Infringement, US

NZ Government Backtracks – to Europe – on Software Patents

In New Zealand, the new Patents Bill is at last back on the parliamentary agenda, and looks to have very real prospects of being debated and passed in the coming months, following some further amendments by the government which will, amongst other things, moderate the proposed exclusion of computer programs from patentability.  If passed in its current form, the new Patents Act will contain a limited exclusion in essentially the same terms as the European Patent Convention, and its implementing national laws (including the UK Patents Act 1977).

This will be seen as a positive development by many stakeholders, who had previously argued that patent-eligibility provisions in New Zealand should be modelled on those of one of its major trading partners, e.g. Australia, the US or Europe/UK.

The last-minute computer program exclusion appeared to have become something of a stumbling block for further progress of the Bill, following widespread criticism, including by the Office of the United States Trade Representative (USTR), which stated in its annual report on ‘foreign trade barriers’ in April that the exclusion ‘departed from patent eligibility standards in other developed economies’.

Now, hopefully, the Bill will be able to move forward, and New Zealand will finally have a modern patent law for a modern world!

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Tags: Computer programs, Law reform, New Zealand, Patentable subject matter, Politics