IPRoo - Australian IP News

Infringement and Validity of Innovation Patents

noreply@blogger.com (Rob Roy Rankin) — Sat, 29 Nov 2008 10:56:00 +0000

Nufarm Limited v Jurox Pty Limited [2008] FCAFC 180
http://www.austlii.edu.au/au/cases/cth/FCAFC/2008/180.html

The Full Court has recently reviewed an appeal of an innovation patent. The case involved a drench against parasites that infect "sheep, cattle, goats and other domesticated herbivores."
In upholding the decision at first instance, the Full Court found in favour of respondent's construction. The following pars are instructive:
"86 Two matters were persuasive to the primary judge. One was that there were differing views amongst the experts as to the precise application of the terminology. The second was that, for the purpose of interpreting the claims and the scope of the claims, it was necessary to see how those matters were dealt with in the context of the specification.
87 The mere fact that the patentee described the examples as a progressive evolution of the optimal formulation, or as the steps taken in the course of the invention, does not of itself mean that the less than perfect examples were abandoned or excluded from the scope of the claims. A patentee may well wish to include within the claims a formulation representative of the invention even if it was not the optimal working of it. It is quite common for a patentee to use the examples to describe a range of formulations with greater or lesser degrees of activity or as representing different components of the formulation. It is necessary to see what work the examples do in the patent specification in any particular case. The patentee may use an example to describe a control or a non-working of the invention, better to explain the nature of the invention itself. In this case, the patentee used examples 1 to 4 as examples of a formulation which did not accord with the invention, better to explain, in an area of discourse where language was imprecise, the nature of the invention and the scope of the claims with greater clarity. That is, examples 1 to 4 do not reflect a less than optimal working of the claimed invention but formulations that do not come within it.
88 The claimed invention was not the concept of partitioning the two chemical environments. It was in the ability to achieve it to the requisite standard. Examples 1 to 4 failed to do so.
89 Having regard to the wealth of scientific evidence before his Honour as to which there was both agreement and disagreement, it cannot be said that his Honour's conclusions were unsupported by scientific opinion and characterisation. There was support for a characterisation of Q-Drench as a single phase micellar solution rather than as an emulsion. His Honour considered it unnecessary to decide between legitimately held expert opinions to determine whether examples 1 to 4 were excluded. It may be that another case of infringement would require such analysis, for example, where the allegedly infringing product did not fall within examples 1 to 4, but that is not this case."

Given that the innovation system commenced in 2001 in Australia, it can only be assumed that a greater percentage of such patents will begin to be litigated in the Federal Court. A recent example of validity analysis can be found in Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225 (13 August 2008) - see pars 51-55: http://www.austlii.edu.au/cgibin/sinodisp/au/cases/cth/FCA/2008/1225.html?query=%5edelnorth

Copyright Infringement Online

noreply@blogger.com (Rob Roy Rankin) — Mon, 24 Nov 2008 09:38:00 +0000

A number of film and television companies filed suit against Australian ISP iiNet in the Federal Court last week for allegedly allowing copyright infringement by its customers.

“This is a very important test case for the internet industry in Australia. It will test the effect of the safe harbour provisions that were introduced with the US free trade agreement, which provides immunity for ISPs in certain circumstances such as transmission, hosting, caching and referencing activities.” - Peter Coroneos, chief executive of the Internet Industry Association

IP Australia Patent Searching Update

noreply@blogger.com (Rob Roy Rankin) — Wed, 19 Nov 2008 11:13:00 +0000

Change to operation of Patsearch

From 22 November 2008 the data in Patsearch, IP Australia’s legacy patent search system, will be updated weekly with new data available each Monday. Previously this data was refreshed daily.

IP Australia introduced AusPat, the new search system for Australian patents, on 28 April, 2008. At that time users were advised to discontinue using Patsearch and to conduct their searches in AusPat.

Patsearch is expected to be decommissioned by the end of February 2009. The first step in that process is a move to a weekly refresh cycle of the data contained in Patsearch.

AusPat may be accessed online at this location: http://www.ipaustralia.gov.au/auspat

The IP Marketplace and Patent Reform – Implications for Patentees, VCs and the Economy.

noreply@blogger.com (Ben Roxborough) — Fri, 14 Nov 2008 21:12:00 +0000

With patent reform continuing to be debated in the US and Australia as covered in previous posts, there would seem a heightened emphasis on creating a system that can create a market place for innovation and, importantly, investment. Australia’s National Innovation System Report (venturousaustralia) is a good example. Recently, the following 4 points were identified by the US Federal Trade Commission calling for submissions on the “Evolving Intellectual Property Marketplace” with respect to patent reform in the United States:

“6. How will changes in patent law rendered by Supreme Court and Federal Circuit decisions of the past five years affect the value of patents? How will these changes affect the operation of the IP marketplace? How will they affect innovation and competition?
7. How does uncertainty regarding the validity and scope of patents affect the operation of the IP marketplace? Does the current system adequately fulfill the notice function of patents? How does uncertainty influence the operation of the IP marketplace? What are the sources of uncertainty that affect the value of patents and the operation of the IP marketplace? What could be done to address them?
8. How transparent is the current IP marketplace? Can it be made more transparent? Is that desirable?
9. During the past five years, what new learning has furthered the understanding of the patent system and the IP marketplace?”

On first blush, the questions suggest that the IP market is one that the US is looking to as a means of stimulating not only innovation, but financial markets through heighted valuation of patents. Placing a more concrete value on patents provides, in theory, a more solid vehicle for investment and securitization. Venture capitalists for instance could possibly make more informed decisions when a start-up knocks on the door with a patent in hand seeking funds. With the total asset value of patents worldwide estimated be in excess of one trillion dollars there would seem much room for growth and much needed research. The following article by David Edwards is a good starting point: Patent Backed Securitization.

Accordingly, in light of the recent questions created by the sub-prime crisis, there is a need for investment in other assets. Patents and the IP marketplace may well be the answer. As I suggested in a previous VC-IP post, intangible property could provide a substitute to traditional bricks and mortar that have been typically relied upon as a secure asset. Time will tell…

In the meanwhile, patent owners should see the current reform debates as an opportunity, rather than a drawback on the existing system.

Novelty – Direction, Recommendation, or Suggestion

noreply@blogger.com (Ben Roxborough) — Mon, 10 Nov 2008 23:47:00 +0000

Kinabalu Investments Pty Ltd v Barron & Rawson Pty Ltd [2008] FCAFC 178 http://www.austlii.edu.au/au/cases/cth/FCAFC/2008/178.html

The Full Court recently endorsed the requirement that a novelty defeating document must have a “direction, recommendation or suggestion” to clearly show the skilled addressee that the document anticipates an invention. The relevant passages of law in the judgment are at pars [25]-[27]:

“25 In Hill v Evans (1862) 4 De GF & J 288 at 300; 45 ER 1195 at 1199 (Hill v Evans) Lord Westbury LC said:

The question then is, what must be the nature of the antecedent statement? I apprehend that the principle is correctly thus expressed:- the antecedent statement must be such that a person of ordinary knowledge of the subject would at once perceive, understand, and be able practically to apply the discovery without the necessity of making further experiments and gaining further information before the invention can be made useful. If something remains to be ascertained which is necessary for the useful application of the discovery, that affords sufficient room for another valid patent.

26 In Flour Oxidizing Co Ltd v Carr & Co Ltd (1908) 25 RPC 428 at 457 Parker J said:

But where the question is solely a question of prior publication, it is not, in my opinion, enough to prove that an apparatus described in an earlier Specification could have been used to produce this or that result. It must also be shown that the Specification contains clear and unmistakable directions so to use it.

27 In Bristol-Myers Squibb Co v FH Faulding & Co Ltd (2000) 97 FCR 524 (Bristol-Myers) at 548, Black CJ and Lehane J, after referring to Hill v Evans and Flour Oxidizing (amongst other cases), said:

What all those authorities contemplate, in our view, is that a prior publication, if it is to destroy novelty, must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it.

See also Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 68 IPR 1 at [313]-[314] per French and Lindgren JJ.”

BILSKI’S RELEVANCE TO AUSTRALIA – ACIP REVIEW (Part II)

noreply@blogger.com (Ben Roxborough) — Mon, 03 Nov 2008 01:32:00 +0000

In light of Bilski, it will be interesting to see whether it shapes the Australian debate with respect to manner of manufacture – particularly the overlapping nature of the grounds of invalidity regarding inventive step and inventiveness. This conundrum is notably stated on page 36 of ACIP Issues Paper titled, Patentable Subject Matter (2008):

“From Lockwood v Doric it is not clear whether the threshold test articulated in Philips v Mirabella still stands. Some commentators have said that the decision has appropriately made it more difficult to revoke a patent on the grounds of non-inventiveness. The Philips v Mirabella decision meant there was effectively two tests for both novelty and inventiveness - one based only on the information in the specification and the other based on what is known from the prior art. Some argued that the threshold test was necessary because the tests based on the prior art are too narrow and difficult to sustain, and so do not eliminate all undeserving patents. The main argument against the test is that combining novelty and inventive step with the manner of manufacture test unnecessarily complicates understanding and administration of patent law. Also, it was in an applicant’s interest to disclose less about the prior art in their specification in order to reduce the likelihood of this information being used against them.”

The problem with the legislative history of Australian patent law is that is caught between the Patents Act 1952 and the Patents Act 1990 that incorporated definitions from the earlier act, whilst at the same time redefining the grounds of invalidity in s 18. For detailed discussion on the manner of manufacture test, do review the Issues Paper as it provides an excellent historical perspective of the relevant law. See:http://www.acip.gov.au/library/Patentable%20Subject%20Matter%20Issues%20Paper.pdf and a previous blog at http://www.iproo.net/2008/06/acip-review-of-patentable-subject.html

While legislative reform is touted with respect to the test for manner of manufacture, the problem outlined above (post-Doric), in the Issues Paper, will perhaps be best reconciled when the legislature addresses the nuances of prior art and common general knowledge. Such nuances, which I will address in future posts, simply do not exist in US law. This may be one reason why the Bilski decision was so clear in its reasoning as it was not hindered by tests examining ‘admissions on the face of the specification’, Gerber rebuttals and the issue of disclaimers. The following article written (albeit pre-Doric) may provide further insights: Admissions on the Face of the Specification - Practical Implications for Patent Drafting and Litigation, Intellectual Property Forum (March 2007).

Bilski and (Un)Patentable Inventions: Hedging the Bets (Part I)

noreply@blogger.com (Ben Roxborough) — Fri, 31 Oct 2008 04:38:00 +0000

In re Bilski: http://www.cafc.uscourts.gov/opinions/07-1130.pdf

Today the United States Court of Appeals for the Federal Circuit handed down the much awaited Bilski decision. The Court held against Bilski's method patent relating to hedging risks in the commodities market. At page 10, the Court said:

“A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”

Interestingly, the Court also noted the important distinction between patentable subject matter and tests relevant to novelty and obviousness. The following is illustrative:

“We discern two other important aspects of the Supreme Court's § 101 jurisprudence. First, the Court has held that whether a claimed process is novel or non-obvious is irrelevant to the § 101 analysis. Diehr, 450 U.S. at 188-91. Rather, such considerations are governed by 35 U.S.C. § 102 (novelty) and § 103 (non-obviousness). Diehr, 450 U.S. at 188-91. Although § 101 refers to "new and useful" processes, it is overall "a general statement of the type of subject matter that is eligible for patent protection 'subject to the conditions and requirements of this title.'" Diehr, 450 U.S. at 189 (quoting § 101). As the legislative history of § 101 indicates, Congress did not intend the "new and useful" language of § 101 to constitute an independent requirement of novelty or non-obviousness distinct from the more specific and detailed requirements of §§ 102 and 103, respectively. Diehr, 450 U.S. at 190-91.15 So here, it is irrelevant to the § 101 analysis whether Applicants' claimed process is novel or non-obvious. Second…”

Author’s Emphasis

The judgment is quite lengthy and whilst completing its review I will consider how it may be relevant to Australian law in upcoming posts, particularly in light of the recent ACIP Issues Paper on Patentable Subject Matter (July 2008) which was covered in a previous post: http://www.iproo.net/2008/06/acip-review-of-patentable-subject.html. In the meanwhile, the 132 pages of judgment should provide some light reading…enjoy!

Valuating IP: Reputation in Trade Marks and Section 60 Evidence?

noreply@blogger.com (Ben Roxborough) — Tue, 28 Oct 2008 19:30:00 +0000

Nylon Films Pty Ltd v Nylon Studios Pty Limited [2008] ATMO 81 (25 September 2008)
TMO Site last Updated: 23 October 2008
http://www.austlii.edu.au/au/cases/cth/ATMO/2008/81.html

In a recent decision of the Trade Mark Office, Delegate Murray found against an applicant’s trade mark titled, NYLON. The trade mark was found to contravene s 60 of the Act when compared with the common law trade mark, NYLON FILMS. In reasoning the section 60 ground, the Hearing Officer reiterated factors that go to establishing reputation. At pars [21]-[22], the Delegate said:

“The courts have recognised that, for the purposes of section 60, an opponent's reputation can have accrued from a variety of sources. Kenny J in McCormick & Co v Mary McCormick (2001) 51 IPR 102, at page 129, quoted with approval the following discussion, by Hearing Officer Iain Thompson, of how reputation can be developed:

[I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.

As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also the esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the `recognition' component of the trade mark's reputation. The credit, image and values projected by a trade mark attaches to the `esteem' component of the reputation as do the public events and other trader's marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, `contra deals' and so forth.

It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.[5]

In conclusion, I accept Ms Niehus’ claims to a significant reputation within the highly specialized, close-knit industry in which her television commercial production company operates in this country. I also accept her claims to having considerable first-hand experience of the deception and confusion caused to members of that industry by the applicant's use of its trade mark on its sound production services, in the face of that reputation. I find the opponent's ground of opposition under section 60 to be successful.”

In light of recent IP valuation blogs both here and elsewhere(see http://duncanbucknell.com/blog/457/Exploding-the-Intangible-Asset-Market-Cap-myth and http://www.iproo.net/2008/09/australias-national-innovation-review.html), the decision is a timely reminder of how IP can be valued and the type of evidence that is required to succeed under s 60 of the Act. With factors such as commercial success applying in other IP fields, such as patents, it will be interesting to take stock of future trends in how financial data and qualitative brand factors will be used by IP owners in litigation.

Information technology in Federal litigation - a review

noreply@blogger.com (Duncan Bucknell) — Mon, 20 Oct 2008 05:57:00 +0000

From the latest Federal Court Practice News (No. 59), comes the following:

Review of Practice Note No 17 - Guidelines for the Use of Information Technology in Litigation in Any Civil Matter

In 2007 the Federal Court commenced a comprehensive review of Practice Note No 17 with the assistance of a consultant, Ms Jo Sherman.

Following extensive consultations with litigants, legal practitioners and others, a draft Practice Note and related materials were finalised by Ms Sherman and referred to the Court's National Practice Committee in mid 2008.

These draft documents are now being reviewed by the Court in light of recent case management initiatives (including the legislative reforms in this area proposed by the federal Attorney-General) and further comments provided by litigants, legal practitioners and others with an interest in the use of technology in legal proceedings.

It is expected that a number of changes will be made to the documents, and that the final versions will be formally released in early 2009.

In the meantime, any comments or queries concerning the review of the practice note may be provided to:

Mr Philip Kellow
Deputy Registrar
Telephone: 02 9230 8336
Email: Philip.Kellow@fedcourt.gov.au

Mr Philip Kellow
Deputy Registrar

Innovation Policy in Australia - Commercialising Inventions – What’s the Story?

noreply@blogger.com (Ben Roxborough) — Mon, 13 Oct 2008 21:05:00 +0000

The implementation of the venturousaustralian report would seem to be in full swing.

IPRIA also seems to be joining the debate through public forums in addition to its continued research into Intellectual Property. The forum: Commercialising Inventions – What’s the Story? on Tuesday 17 February 2009 in Brisbane and Thursday 19 February 2009 Melbourne, should provide fruitful discussion – see http://www.ipria.com/events/conf/expintform.cfm The forum is set to feature results from several national surveys of inventors, including a survey of 4000 Australian inventors. Such studies are similarly being examined abroad as noted in a previous post: http://www.iproo.net/2008/09/australias-national-innovation-review.html

The target audience includes senior business managers, IP lawyers, patent attorneys and policy analysts.

What will be of particular interest is how IP strategy plays into the discussion and whether the analysis will be purely examining the role of standard patents or a broader analysis of what role innovation patents, shape/sound and/or colour marks play in product designs for commercialization purposes. See http://duncanbucknell.com/blog/438/Trade-mark-marking-strategy---R-and-TM-disappearing and http://duncanbucknell.com/blog/366/Colour-branding-and-IP-Strategy regarding TM considerations.

Moreover, it will be interesting to hear discussion on any of the following:

• The importance of US commercialization efforts to inventors and the importance of VC funding in making an invention a genuine success.
• What role do consumer interests play in the innovation design processes and whether good scientific products fail because they fail to meet consumers’ needs.

As to the last of these points, I recently found the following illustrative of how good inventions need to be coupled with good education and awareness programs:

“In 2005, sales of CFLs accounted for less than 5 percent of the total lightbulb market. But only two years later, in 2007—the year that the public woke up to the looming threat of climate change—CFLs captured an estimated 20 percent of the lightbulb market, according to the U.S. Environmental Protection Agency (EPA). Companies that sell CFLs, like General Electric Co. (GE), have increased their revenues, enhanced their brands, and strengthened their competitive positions in the market.
…
Toyota likewise had to tackle early perceptions that the Prius had less power than non-hybrid cars. Toyota did this by redesigning the Prius to meet performance and style preferences of consumers. The carmaker increased the horsepower and conducted a campaign promoting the vehicle as “quick, roomy, and economical.”

The article also plays strong emphasis on education (and when one thinks about it, this is a role where government and the private sector can work together):

“Because consumers are largely unaware of green alternatives, businesses first need to think of themselves as educators, not salespeople. And they must expand their lesson plans beyond their own products to the larger issues of pollution, climate change, overfishing, and other environmental problems.”

See Cultivating the Green Consumer by Sheila Bonini & Jeremy Oppenheim http://www.ssireview.org/articles/entry/cultivating_the_green_consumer/

These considerations, amongst others (if discussed at the IPRIA forum), should make the forum ‘a must’ for those interested in the innovation narrative. No doubt that narrative will be critical to the larger global economic picture for innovation and future patterns both here and abroad.

Australian patentability criticised as controversial human cloning patent accepted nowhere else

noreply@blogger.com (Duncan Bucknell) — Sat, 27 Sep 2008 10:32:00 +0000

Hwang Woo Suk was at the centre of a controversy back in 2005 over data which Hwang admitted was faked in a scientific journal article claiming to describe the first ever cloning of a human embryo.

The patent application allegedly arising from the same work have so far failed to be accepted or allowed (let alone granted) anywhere, except Australia. The Australian equivalent is AU2004309300. Copy of the specification here.

Apparently in an 11th hour move (which may turn into a bar-to-sealing action), IP Australia has withheld the patent from proceeding to issue.

Although this sounds bad for patent standards at IP Australia (for one thing processes for producing human beings are barred from patentability), there's no doubt a lot more to the story than initially meets the eye (or is reported in the popular press, such as here and here.) Those familiar with drafting or prosecuting patents will know that all sorts of reasons may rationally explain why the patent has been accepted in Australia.

Having said that, it certainly seems worthwhile to investigate further. The next step is obviously to obtaint he file history and have a good look at it.

Please do come and add your comments if you know more of the background.

(Thanks to Michelle for the tip off about this.)

The VC-IP Interface: Can Intellectual Property fill the void left by the Subprime Crisis?

noreply@blogger.com (Ben Roxborough) — Fri, 26 Sep 2008 22:31:00 +0000

In light of the recent financial developments, policy makers are attempting to nut out how the sub-prime crises can be fixed. While it is difficult to foresee a silver bullet in the short term, it will be important in the long term that new forms of capital can be relied upon to stimulate global markets.

Recent posts on IPROO have looked at the VC-IP interface, particularly in light of venturousaustralia report on national innovation released earlier this month. Excerpts from an article below continue to provide insight as to how IP can attract VC investment and assist in stabilizing economic markets:

“Reinforcing and broadening the rights provided to holders of intellectual property have resulted in increasing their value to enterprises. This, in turn, has helped venture capitalists to see potential returns for their investments that in turn lead to more innovations and growth in markets.

Over the last decades patents have played an increasing important role in innovation and economic performance. This role of intellectual property has led not only to economic growth but also to the stabilization of markets. When investors see growing markets they then move to capture the economic rents that may be associated with the growth.

On an individual enterprise basis, as the companies receive economic benefits from their intellectual property they tend to reinvest a portion of their gains into research and development (R&D). This R&D leads to further innovations and thus helps enterprises when seeking additional capital for growth. All of these factors not only generate capital for enterprises enjoying the benefits of the intellectual property but to venture capital
entering new markets.”

In my view, IP unto itself can not provide the answer to the current financial situation, but valuation of genuine IP assets can provide security to those who invest as illustrated below:

“The economic value of a patent, a trademark, software, a domain name, and any intellectual property must be carefully weighed in the analysis of which companies deserve to receive venture capital investments. Not all intangible assets are equal. The venture capitalist must use consistent techniques for valuating the intangible assets of the target enterprise and take decisions on when and whether to invest based on such valuation.

One of the most important issues evaluated by venture capitalists is the security of intellectual property. Normally, a strong patent position is desired and the issues of ownership of intellectual property need to be well understood, particularly where the inventor is doing the research at a university or other research institution. The venture capitalist must also consider all the potential costs associated with patents and their protection.”

The excerpts above are found in an article by Mario W. Cardullo, P.E. at http://www.wipo.int/export/sites/www/sme/en/documents/pdf/venture_capital_investments

CSIRO on the U.S Stage – Patenting Wireless Technology

noreply@blogger.com (Ben Roxborough) — Fri, 26 Sep 2008 18:22:00 +0000

Australia’s leading scientific organization, CSIRO, has received a somewhat promising result in relation to an appeal to the Court of Appeals for the Federal Circuit. The Federal Circuit provides the U.S. Circuit system with an appellate court to hear, primarily, patent matters. The decision is of significant import to CSIRO, as it has been said that its technology pioneered one of the initial patents in the wireless technology industry.

While affirming the lower court’s novelty finding in favour of CSIRO, the Federal Circuit did, however, remand the obviousness finding. The order was predicated on the basis that the lower court heard the action pre-KSR, which criticized the rigid application of the TSM test for obviousness regarding prior art references. In relation to obviousness, the Federal Circuit held:

“In sum, we conclude that the evidence offered by Buffalo created a genuine issue of material fact as to whether there was a motivation to combine prior art references dealing with the multipath problem and whether the combination of those prior art references disclosed all of the limitations of the independent claims of the ’069 patent. We therefore vacate the district court’s summary judgment of nonobviousness and remand for further proceedings on that issue.”

The following link provides access to the decision: http://www.cafc.uscourts.gov/opinions/07-1449.pdf
In light of the above, the lower courts finding on obviousness will be much anticipated…

WIPO – Australian Confirmed Director General

noreply@blogger.com (Ben Roxborough) — Wed, 24 Sep 2008 20:35:00 +0000

As followed in previous posts, Dr Francis has now been confirmed as the next Director General of the World Intellectual Property Organisation (WIPO). Links to WIPO and Australian press releases can be found at the following links: http://www.wipo.int/portal/index.html.en and http://www.ipaustralia.gov.au/resources/news_new.shtml#46

Australia's innovation review - an IP joke

noreply@blogger.com (Duncan Bucknell) — Tue, 23 Sep 2008 11:41:00 +0000

I've now been asked by several journalists from top international intellectual property publications to comment on the intellectual property recommendations in the Australian government's recent Innovation review.

In short, I think they're poorly thought out. Here's what I think - what do you think?

(This is also posted over at IP Think Tank - you may want to add your comments there.)

Recommendation 7.2: Patent law should be reviewed to ensure that the inventive steps required to qualify for patents are considerable, and that the resulting patents are well defined, so as to minimise litigation and maximise the scope for subsequent innovators.

'the inventive steps required to qualify for patents are considerable' – this is a phrase written by someone who has no understanding of inventive step or patentability.

What does ‘considerable’ mean? Exactly how do they propose to define this in a way that will be flexible into the future. The whole point about the common law (ie case law, not codified) legal systems is to allow judges the flexibility to interpret the law and allow it to move with the times. They seem to want to codify ‘considerable inventive steps’ whatever that means(?)

Even if they can do this – this will not minimise litigation. The threshold for patentability (and inventive step – if that is what they mean) does not drive litigation frequency or litigation extent (ie how far any given proceedings extends). So changing this will not ‘minimise litigation’. There will always be incentives to enforce patents and to defend with an invalidity cross claim. If they mean that this new higher requirement will in some way decrease the number of patents and thereby decrease the amount of litigation, then they have little understanding of the statistics about this. This will reduce the instance of low quality patents – but these are very rarely the ones being litigated in any event. Etc.

'and that the resulting patents are well defined' – fine, a good idea.

What does 'maximise the scope for subsequent innovators' mean? Maximise the scope of what? I presume it means freedom to operate. Freedom to operate is not going to be affected in reality by low quality patents as they are quickly seen through.

The theory here is that by tightening what you can claim based on the written description, you narrow the scope of the ‘thicket’ of patent claims out there and so make it easier for subsequent innovators to manoeuvre. The reality is that broad claims will still be granted in any event because the patent office is not going to be able to police them to the extent that a court would. So, the primary stated objective (of removing uncertainty over patent infringement) would not be met in any event.

Perhaps ‘maximise the scope’ means the scope of patentable subject matter. This would make sense if ‘the resulting patents are well defined’ refers to fair basis (ie sufficiency (EP) / written description (US)). However, the text of the relevant section only refers to freedom to operate and a ‘patent thicket’. Even if it was an attempt to allow subsequent innovators the ability to obtain patents (notwithstanding that it is at odds with the other recommendations), it wouldn’t work, because tightening the fair basis rules would only narrow the claims that the patentee can obtain, and will not impact on the amount of irrelevant, crystal ball gazing that he or she puts in the specification (which affects patentability of future applications).

Recommendation 7.3: Professional practitioners and beneficiaries of the IP system should be closely involved in IP policy making. However IP policy is economic policy. It should make the same transition as competition policy did in the 1980s and 90s to being managed as such.

Fine

Recommendation 7.4: Firms asserting or defending intellectual property should have a right to opt out of ‘appellate double jeopardy’

I love this one.

As I understand it, this would involve a change to the Court Rules to allow either party to opt out of appealing from the decision and in so doing, bind the other to paying all of its costs should it appeal the first instance decision.

This is supposedly aiming at driving down litigation costs. Assuming that the constitutional and procedural hurdles (in both the Federal Court and all of the relevant State and Territorial Courts) could be surmounted to get this through (not to mention the uproar from the legal profession), it won’t have much impact at all on the cost of litigation because most cases are not appealed and very few litigants, having spent the enormous sums to get through a first instance trial are going to be happy to waive their right to an appeal so that they can save a sum which is quite small in comparison to what they have just spent.

Venture Capital and the value of IP continued….some ideas for bridging the gap?

noreply@blogger.com (Ben Roxborough) — Wed, 17 Sep 2008 02:25:00 +0000

The VC-IP Interface continued...

Further to an earlier post on Australia’s VC-IP interface, the venturousaustralia Report provides numerous recommendations regarding venture capital with no specific description of how IP can play a role as VC incentive; nor in overcoming some of the hurdles explored in a previous post with respect to the difficulties in securitizing ‘intangible property’: http://www.iproo.net/2008/09/australias-national-innovation-review.html

For example, recommendation 9.6 provides that the government:

“…consider strategies to attract international venture capital fund(s) to Australia as the base for investment in the Asia Pacific Region, with the short term objectives of attracting a major US venture capital firm to Australia and strengthening links to capital markets.”

The goal is not unrealistic given Australia’s close proximity to the Asia-Pacific region. Perhaps, however, Australia’s close geographic ties can be coupled with it matured administrative IP framework to further assist in making the goal an achievable one. Joining such ‘dots’ has recently been explored by Pankaj Ghemawat in his book, ‘Redefining Global Strategy’. The book takes a good look at how administrative, cultural and geographic factors interplay in global strategy.

Applied in the Australian context, unique aspects of IP system could act as a lure to attract innovation and VC investment. The Innovation Patent System is but one example. Despite some faults, the system can provide quick, efficient and affordable patents to applicants: http://www.ipaustralia.gov.au/patents/what_innovation.shtml.

Two further benefits exist:

(a) the innovative step standard provides strong shield against invalidity actions: Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225 (13 August 2008) see pars [53] – [55]: http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2008/1225.html?query=%5eDelnorth and

(b) the scope of such patents is as strong as that of standard patents. See Nufarm Ltd v Jurox Pty Ltd[2008] FCA 178: http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2008/178.html?query=%5enufarm

Other forms of IP should not be discounted, such as trade marks and industrial design. Specifically, Australia’s Trade Mark System allows for registration and protection of shape marks without need for secondary meaning evidence. See: Global Brand Marketing Inc v YD Pty Ltd [2008] FCA 605:http://www.iproo.net/2008/05/goods-or-shape-of-goods-as-trade-mark.html

With market distinction critical to investment decisions, the appeal of shape ‘registered’ marks may provide incentive for VCs that are seeking market protection for products against piracy.

As patents, designs and trade marks are ‘registered’ forms of property, they surely provide a form of protection that allows for greater security for VC investors. Fence-posts are figuratively placed around the intangible, but practical, idea. It’s mindful to note, however, that when the useful idea is patented it becomes part of the public domain. Determining when IP is appropriate is critical to any innovation strategy at both a government level and for the entrepreneur (and, of course, the VC who may provide the investment!).

Australia’s National Innovation Review Report: Ventureaustralia - venture capital and the value of IP?

noreply@blogger.com (Ben Roxborough) — Tue, 16 Sep 2008 05:31:00 +0000

The VC-IP Interface: http://www.innovation.gov.au/innovationreview/Documents/NIS-review-web1.pdf

After further analysis of the venturousaustralia Report, it does not take long to appreciate that the Report views venture capital (VC) as essential to promoting Australian innovation. One need read no further than the title of the Report itself to see the emphasis of this investment structure for Australian innovators.

The Report does note, however, several difficulties regarding VC investment in innovation. Specifically, at 39, the Report states that the “intangibility of knowledge renders it problematic as collateral for financing.” Ideas are contrasted with tangible property such as houses to emphasize the point.

To provide security for VC investment, the protection of ideas through IP may be one means to ameliorate the difficulties of unsecured collateral. There is limited research on this issue, but a group at Berkeley’s Center for Law and Technology, is collating data on the importance of patents to entrepreneurs and venture capital investment: http://www.law.berkeley.edu/institutes/bclt/entrepreneurship/about.html with generous funding from Ewing Marion Kauffman Foundation http://www.kauffman.org/ .

No doubt the findings will be important to both private entrepreneurs and VCs in strategizing investments (and, of course governments in formulating policy). The Australian government’s innovation agenda is no exception.

Innovation patents - in need of better formalities review

noreply@blogger.com (Duncan Bucknell) — Mon, 15 Sep 2008 02:10:00 +0000

Michael Bates, a patent attorney and solicitor with 1 Place Patent Attorneys and Solicitors, wrote in with the following query.

It seems as though a slightly more thorough formalities review prior to grant of an innovation patent would be in order. (There are of course a couple of strategic options for people trying to do a freedom to operate analysis, such as focussing on independent claims and paying to have the patent examined, but this misses the point.)

We'd love to hear your comments:

Is there a blog concerning the paradoxes in policy implementation of the Patent Act 1990?

An example of such a paradox is as follows:

Section 40 Specifications

... (2)(c) where it relates to an application for an innovation patent—end with at least one and no more than 5 claims defining the invention.

However, in practice practitioners are lodging innovation patents and IP Australia is sealing innovation patents with more than 5 claims (example: Innovation patent 2008100748 sealed with eight claims).

The consequence of this that an innovation patent can be lodged and sealed with say 100 claims and not examined for up to eight years. A competitor/third party is consequently placed in the difficult position of possibly having a V&I analysis performed on a broader scope of claims at considerable expense before the innovation patent is examined.

Only at examination will the claim number be reduced to five claims. At this stage the applicant can decide which claims they wish to run with. This creates considerable uncertainty in the patent system, particularly since a competitor/third party is less likely to request examination when the applicant can narrow the scope of the patent to maximise their interest at examination. Also, it is unclear to me why IP Australia deals with an issue such as the maximum number of claims (5) as a substantive issue, to be left until examination, rather than as a procedural issue, which can be the basis for rejecting the application until amendment. The end result with an innovation patent is that the patent can be sealed (albeit unenforceable) with a larger number of claims than is permitted under s 40. This practice appears to be in contrast to what the legislation states both in spirit and through black letter interpretation. Why the number of claims is less important than other procedural issues such as the size of the margins is mystifying.

Section 40 requirements relate solely to an innovation patent application, not requirements for examination for a certified innovation patent. The consequences of IP Australia not considering the number of claims until examination raises the following difficulties:

Uncertainty arises with the innovation patent system;
The cost and risk to a third party requesting examination is considerably increased; and
with such a paradox it is not in a client's interest to lodge an innovation patent limited to 5 claims, since the scope of the innovation patent can remain ambiguous until examination is requested.

I have raised this issue with one of IP Australia's senior examiners, who stated that s 40 issues are not considered until examination; however, they could not give the basis of such a policy decision.

Moreover, they stated that they had never previously considered the issue and I could write to the policy unit; however, they are unlikely to consider such an issue from a single attorney. Consequently, I feel that there should be a forum for policy and practice paradoxes.

Please let me know your thoughts on the s40 policy paradox and is there such a forum to debate these Australian issues openly?

Kind regards

Michael

Dr Michael Bates

Registered Patent Attorney + Solicitor

1 Place Patent Attorneys + Solicitors

Innovation Review Released – Room for Potential Patent Reform?

noreply@blogger.com (Ben Roxborough) — Wed, 10 Sep 2008 01:46:00 +0000

Australia’s Innovation Review Committee handed down its green paper on innovation earlier today: http://www.innovation.gov.au/innovationreview/Documents/NIS-review-web.pdf

The Review examined numerous issues relevant to innovation, patent law being amongst them. The Review put forward the following recommendation:

"Patent law should be reviewed to ensure that the [inventive step] required to qualify for [a patent is] considerable, and that the resulting patent [is] well defined, so as to minimize litigation and maximize the scope for subsequent innovators."

The recommendation conforms with the submission made by IP Australia tracked in blog posted earlier this year, see: http://www.iproo.net/2008/06/ip-australia-improvement-to-australian.html

The recommendation will no doubt become the subject of further research and debate – particularly when the inventive step standard is compared with Australia’s trading partners.

Australians make MIP’s Most Influential

noreply@blogger.com (Ben Roxborough) — Thu, 04 Sep 2008 02:47:00 +0000

Asia-Pacific IP Influence

Two Australians have recently been identified as Asia-Pacific’s most influential people by the well-known publication: Managing Intellectual Property. The two include:

Dr Francis Gurry as the elected nominee for the position of Director General of WIPO. Dr Gurry, however, will not be formally anointed until the WIPO General Assembly meets in late September this year. The nomination was posted by IPROO earlier this year: http://www.iproo.net/search/label/WIPO

Rhonda Steele as President of the International Trademark Association (INTA) - a not-for-profit membership association dedicated to the support and advancement of trademarks and related intellectual property: http://www.inta.org/

The selections represent an increase in Asia-Pacific IP specialists to make MIP’s top 50 most influential people, amongst other nations such as China and India. See: http://www.managingip.com/Article.aspx?ArticleID=1998865

Copyright protection for TV guides

noreply@blogger.com (Ben Roxborough) — Wed, 03 Sep 2008 01:49:00 +0000

IceTV Pty Ltd & Anor v Nine Network Australia Pty Limited [2008] HCATrans 308 (26 August 2008)

In an earlier post this year, we looked at the appeal in Nine Network Australia Pty Limited v IceTV Pty Limited [2008] FCAFC 71 (8 May 2008) involving copyright protection in TV guides:
http://www.iproo.net/2008/05/copyright-protection-for-tv-guides.html

Recently, special leave was granted to have the matter heard before the High Court. In transcript, Justice Gummow said:

"There will be a grant of a special leave in this matter. The Court will allow one and a half to two days, I think, and we expect to have the assistance of counsel to deal with this matter thoroughly without any reticence in starting at the bottom, so to speak, and we expect counsel to be familiar with the academic writing in this field. They have already been referred, I think, to an article by Dr Deazley in [2004] Intellectual Property Quarterly 121. There is also what may be a useful article by Professor Sterk in Michigan Law Review for 1996, Volume 94, pp 1197 called Rhetoric and Reality in Copyright Law. There is a lot of other material out there as well. I hope the arguments will be informed with all of that, at least in a suitable background."

Given the High Court's referral to academic literature abroad, the final judgment will no doubt provide an insightful framework for future cases in this copyright field.

Patents: The Need for New or Useful Results!

noreply@blogger.com (Ben Roxborough) — Fri, 29 Aug 2008 08:35:00 +0000

Milton Edgar Anderson [2008] APO 19 (11 August 2008) http://www.austlii.edu.au/au/cases/cth/APO/2008/19.html

In a recent decision of the Patent Office, the Deputy Commissioner has re-affirmed the view that scientific theories or discoveries of the laws of science without a specific practical and useful application are not patentable.

The claimed invention related to a “the new science of subtronics” and “a new law of electric induction” that, allegedly, stemmed from the discovery of electrosubtronic fields.

The claimed invention was rejected.

Specifically, the Deputy Commissioner found that the claimed invention was not a manner of manufacture within the meaning of section 6 of the Statute of Monopolies as required by section 18(1)(a) of the Act. To support the decision, the following passage was cited from Lane Fox v Kensington and Knightsbridge Electric Lighting Company (1892) 3 Ch. 424 at 428,429:

".....a man who discovers that a known machine (his Lordship might equally have said a known substance) can produce effects which no one before him knew could be produced by it has made a discovery, but has not made a patentable invention unless he so uses his knowledge and ingenuity as to produce either a new and useful thing or result, or a new and useful method of producing an old thing or result."

Patent opposition and 'microemulsions'

noreply@blogger.com (Rob Roy Rankin) — Tue, 05 Aug 2008 11:18:00 +0000

William A. Newman v Solutions-IES, Inc [2008] APO 18 (28 July 2008)

http://www.austlii.edu.au/au/cases/cth/APO/2008/18.html

In this recent decision from the Patent Office, all claims found to be entitled to the earliest priority date. Although claim 28 does not contain some features of claim 1, these features are matters of routine that are always carried out. All claims were found to be novel and inventive. None of the documents that form part of the prior art base disclose the use of microemulsions. There is no evidence that it was a matter of routine to prepare a microemulsion with droplets of less than one micron.

At para 40, the Commissioner looked at the term ‘microemulsion’, “Is the term “microemulsion” used as a term of art, with a droplet size as understood in the art, or does it simply mean an emulsion with small droplets, and the size of the droplets solely defined by the words “having an average droplet size less than that of the sediment”. I note that the Federal Court recently considered a patent involving the term “microemulsion” in a different technology (Nufarm Ltd v Jurox Pty Ltd [2008] FCA 178). The court reached the view that there was some ambiguity in the size of droplets encompassed by the term, and had regard to the description on the point. While that case is not authority for the meaning of a technical term, it demonstrates the proper approach to the construction of ambiguous technical terms.”

Two minor section 40 deficiencies were identified in relation to the fair basis of claim 8 and the clarity of claim 28.
Costs awarded against the opponent.

Obviousness, admissions on the face of the specification and the possible emergence of a five-step approach?

noreply@blogger.com (Ben Roxborough) — Tue, 05 Aug 2008 10:59:00 +0000

Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd [2008] FCAFC 139 - http://www.austlii.edu.au/au/cases/cth/FCAFC/2008/139.html

In a recent decision made publicly available on austii, the Full Federal Court has given consideration to a raft of patent issues, with obviousness being a key consideration.

After providing the relevant provisions going to inventive step, their Honours then proceeded to a five step approach to the obviousness analysis. At [80], their Honours said:

“80 It follows from the provisions of the Act outlined above that in determining the issue of obviousness, it is necessary:

(1) to identify the invention "so far as claimed in any claim";

(2) to identify the "person skilled in the relevant art";

(3) to identify the common general knowledge as it existed in Australia before the priority date;

(4) to inquire under s 7(2) whether the invention referred to in (1) above would have been obvious to the person referred to in (2) above in light of the knowledge referred to in (3) above; and

(5) to inquire whether that invention would have been obvious to that person in the light of that knowledge when that knowledge is considered together with either kinds of information mentioned in s 7(3) (additional prior art information).”

The decision is also of interest with respect to it consideration of common general knowledge and admissions on the face of the specification as raised in the recent Lockwood and Wrigley decisions.

Strong USPTO Ties with IP Australia

noreply@blogger.com (Ben Roxborough) — Fri, 25 Jul 2008 09:23:00 +0000

IP Australia Recognised as an International Search Authority by the USPTO: http://www.ipaustralia.gov.au/pdfs/news/USPTO_IPA_Pressrelease.pdf

IP Australia and the United States’ Patent and Trademark Office (USPTO) have announced an agreement which will see IP Australia act as an international search and examination authority for international applications filed with the USPTO under the Patent Cooperation Treaty (PCT).

The media release said that the "arrangement follows the successful conclusion of a pilot program between IP Australia and the USPTO which focussed on search and examination of PCT applications."