The Effectiveness of ‘Virtual Marking’ of Patented Products in Australia

In many jurisdictions there are advantages to marking patented products to indicate that they are, in fact, patented.  However, the benefits of marking – or the disadvantages of not doing so – can very greatly from country-to-country.  In the United States, for example, the marking statute (35 USC § 287) provides that in the absence of marking, the patentee bears the burden of proving the date upon which an infringer was made aware of the existence of a patent in order to recover any damages for past infringement.

The provisions in the Australian patent law relating to marking are, fortunately, less onerous.  Indeed, in Australia the patentee has an advantage, in the case that products are not marked as being patented, and it is the infringer that must satisfy the court that it lacked relevant awareness of the existence of a patent.

Even so, there are clear benefits in marking products as patented in Australia.

However, marking can create problems of its own.  For example, if a product is patented in multiple countries, and/or is protected by multiple patents, is it practical to mark it with the relevant details of every one of those patents?  What are the rules for marking products while an application is pending, i.e. before a patent is actually granted?  Are there penalties where products continue to be marked after the patent has expired?  These may not be trivial matters, because changing the marking on products themselves – or even only upon the packaging – may involve substantial costs and administrative overheads.

And what about patented methods, e.g. services or manufacturing processes – should these be ‘marked’ in some way?

A solution to many of these problems is so-called ‘virtual marking’, which refers to making patent information available via the Internet and marking the product with the corresponding address.  Such information can, of course, easily be updated without requiring any changes to products, packaging, or other materials.  Express provision was made for virtual marking in the US in the America Invents Act of 2011 (legislation better known for converting the United States from a ‘first-to-invent’ priority system to ‘first-inventor-to-file’).  By way of example, TiVo maintains its patent information at www.tivo.com/legal/patents, and marks its products accordingly.

But what about Australia?  Is virtual marking an effective and useful option here?  I think so, and I will explain why.

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Tags: Australia, Infringement, Marking

Utility Futility? Usefulness of Inventions and ‘Fatal’ Promises Made in Patent Specifications

The Australian Patents Act 1990 requires, in section 18(1)(c) and 18(1A)(c), that an invention must be ‘useful’ in order to be patentable.  This is also commonly known as the requirement for ‘utility’.  Failure to meet this requirement, i.e. inutility, is therefore a ground upon which a patent application may be rejected, or a patent revoked.

A number of ‘rules’ have been developed by the courts over the years for assessing utility.  These were succinctly summarised by Justice Beach in Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd [2014] FCA 1366 (a decision that was upheld on appeal) in the form of three questions:

1. What has the patentee promised for the invention as described in the relevant claim?
2. Is the promise useful?
3. Has that promise been met?

Furthermore, it has been held that ‘everything that is within the scope of a claim must be useful, otherwise the claim will fail for inutility’ (H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70 at [81]).

One aspect of the utility requirement that has perhaps been less consistently addressed is whether, if a patent applicant makes multiple promises for an invention, it is necessary that all of those promises be met by every claim.  For example, suppose a patent is directed to bionic implants promises to create a human cyborg that is better, stronger and faster than the original.  Is a claim for a bionic eye invalid because it only achieves one of these three objectives?

In practice, it is not uncommon for patent specifications – particularly those drafted primarily with the US in mind – to include multiple ‘object’ statements, without a necessary expectation that each and every claim satisfies each and every stated object.  It is a common practice of Australian patent attorneys to amend such statements in order to moderate the promises being made such that, for example, no more than some substantive progress towards achieving at least one of the desired benefits is asserted.

It should, in fact, be the standard practice of all Australian patent attorneys to do this, as a recent Federal Court judgment demonstrates.  In Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588, Justice Jessup found all claims of an opposed patent application to be invalid for lack of utility because none would deliver each and every one of six advantages listed in the specification, notwithstanding that a number of the claims would deliver one or more of those stated advantages.

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Tags: Australia, Patent specifications, Utility/usefulness

Are Patent Attorneys Really to Blame for Overly Broad Claims?

Last week Eric Sutton, who is Senior Patent Counsel at Oracle Corporation, published an open letter to the patent attorney profession on the IP Watchdog blog.  In short, he accused us – and particularly those of us who practise in the ‘software-related arts’ – of filing too many ‘extremely short’ and ‘overly broad’ patent claims.  We should stop doing this, he says, because not only is it bad form, it is costly for our clients, who end up spending more (by perhaps US$10,000) during the examination process and, in the US at least, increasing risk due to prosecution history estoppel.

Apparently Sutton’s superior knowledge of the prior art has placed him in a position to challenge many patent attorneys over the past couple of years, enabling him to inform those attorneys that – in his words – ‘you’re wrong, fix it’ when they have sought to defend their short, broad claims.  In his concluding paragraphs, Sutton calls on his own experience at Oracle to suggest that a particular source of this problem is laziness on the part of the patent attorneys.  ‘Laziness is bad,’ he says, ‘and I am calling you [i.e., the ‘Dear Patent Attorney’ addressed by the article] out on it.’

While Sutton’s piece strikes me as stunningly arrogant in its tone, this is perhaps excusable considering that he works for Oracle – a company that received over 600 US patents last year.  Although he is at pains to point out that the opinions expressed are his own, ‘and do not necessarily represent those of Oracle Corporation, its subsidiaries or affiliates’, there is no question that he is well-placed to know what he is talking about.  And there is no disputing the facts established by his analysis of the thousands of patents/applications of two large (but anonymous) software-related product/service companies:

1. many applications in the data set were filed with remarkably short independent claims;
2. examination (‘prosecution’) of patent applications generally (and not just those with ‘extremely short’ claims) results in amendments that lengthen the independent claims; and
3. on average, applications filed with shorter independent claims are subject to lengthier and more costly prosecution, and to more extensive claim-lengthening amendments.

I am sure that we can generally agree that it is less than ideal to file patent claims that are so broad they have virtually no prospect of allowance without significant narrowing amendment.  But is erring on the side of breadth in the independent claims at filing really such terrible strategy?  And does the ‘blame’ for this lie so squarely with ‘lazy’ patent attorneys?

Based on my own experience, I would suggest that the answer to both of these questions could well be ‘no’.  More data is needed if we are going to understand what is truly going on here.  I doubt very much that it is as clear-cut as Sutton proposes.

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Tags: Computer programs, Patent drafting, Patent filing, Strategy

Patentable Subject Matter Continues to Confound in the US Despite Hopeful Signs

The past couple of weeks have brought some slightly brighter news for innovators in life sciences and software fields seeking patent protection in the United States.  First, the US Patent and Trademark Office (USPTO) issued an update to its Interim Guidance on Subject Matter Eligibility which provides some much needed clarification on what is expected from examiners, as well as additional examples which will give new hope to applicants with inventions relating to diagnostic methods.  Second, the US Court of Appeals for the Federal Circuit (CAFC) issued a rare decision (Enfish LLC v Microsoft Corporation, appeal no. 15-1244 [PDF, 604kB]) finding that a computer-implemented invention is not ‘abstract’, and is therefore patent-eligible.

The USPTO’s updated guidelines require examiners to provide more detail in their rejections, to provide distinct rejections for every claim, and to provide more reasoning when maintaining rejections in the fact of applicant arguments.  They also prohibit examiners from expanding the scope of unpatentable subject matter beyond the specific examples provided by court rulings.  These clarifications will hopefully create greater certainty and consistency in the approach taken by examiners across all fields in which subject matter eligibility is commonly at issue.

The new life sciences eligibility examples will also be welcomed, especially by applicants with inventions in the field of diagnostics.  At the same time, however, at least one of those examples also serves to highlight just how absurd the approach to subject matter eligibility has become in this area, thanks in large part to the US Supreme Court tying itself in knots trying to establish a consistent approach, while at the same time avoiding setting down any hard and fast rules about identifying excluded subject matter within the established categories of ‘abstract ideas’, ‘laws of nature’ and ‘mental steps’.

Interestingly, the USPTO’s ‘diagnostic’ example, and the patent-eligible computer-implemented invention in Enfish have something in common – both demonstrate that the most effective way to avoid a finding of ineligibility is to bypass the eligibility analysis altogether, by ensuring that the patent claims are not ‘directed to’ (i.e. ‘recite or describe’) any recognised judicial exception, such as a law of nature or abstract idea.

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Tags: Biotechnology, Computer programs, Patentable subject matter, US

A Conversation With IP Australia’s Chief Economist, Part I

I have written previously about what I have called the growth profession of ‘IP Economist’, including the trend in recent years for IP administration authorities to develop an in-house capacity for economic analysis.  IP Australia is no exception in this regard, having established its own Office of the Chief Economist back in 2012.

Among a number of projects, including production of the annual Australian Intellectual Property Report, the Office of the Chief Economist has developed the IP Government Open Data resource (a.k.a. the IPGOD) which was used to assess the Economic Impact of Innovation Patents.  That study, in particular, is having a significant policy impact, with both the (now defunct) Advisory Council on Intellectual Property (ACIP) and the Productivity Commission subsequently recommending that the innovation patent system be abolished (see ACIP Says ‘Abolish Innovation Patents’ Based on IP Australia Report and Australian Productivity Commission Releases Draft Report on Intellectual Property Arrangements).

In this context, I was very interested to have the opportunity a short while ago to sit down and have an on-the-record conversation with the Chief Economist himself, Dr Benjamin Mitra-Kahn.  He and I approach the IP system from quite different perspectives – whereas I work at the ‘coal face’ (as it were), largely focussed on what my clients hope to achieve through their engagement with the system, Ben’s interest is in obtaining and analysing the data that will enable his team (and the rest of us) to better understand the IP system as a whole, and the role it plays in the economy.

I immediately liked Ben and enjoyed our discussion immensely.  Over the next few weeks I will be bringing it to you in instalments, and I hope you will find it as interesting as I did.  In this first part, we talk about how Ben got into the economics of IP, the process of bringing together the annual IP Reports, and a bit about the role of economics in shaping IP policy. 

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Tags: Benjamin Mitra-Kahn, Economics, Innovation policy, Interview, Patent Office