- explaining why they succeeded and
- offering some useful tips on how to stop such sign becoming generic.
Last month, Dallas Buyers Club LLC was reported to have started that process. It has commenced proceedings against various telcos and ISPs seeking preliminary discovery from them of the identities of their customers who were using IP (as in Internet Protocol) addresses at times Dallas Buyers Club LLC says illegal copies of the film were being downloaded from those addresses.
Last Monday, Perram J rejected an application by some journalists and others for access under FCR r 2.29 to most of the documents on the court file. His Honour noted the usual rule that affidavits are not “public” until they have been used in court and the potential privacy sensitivities or releasing, amongst other things, subscriber identification information at this very early stage of the proceeding.
Apparently, Dallas Buyers Club LLC’s application for preliminary discovery will be heard all the way off on 17 – 18 February 2015.
For cases where the record companies successfully obtained preliminary discovery from the Universities of some student details alleged to be engaging in infringing activities, see Sony v University of Tasmania here, here, here and here.
On a slightly different tack, it was reported on 19 November that some Universities have been suspending staff and student access to the internet, and in at least the case of UNSW, issuing fines where “internet piracy” has been discovered.
Dallas Buyers Club, LLC v iiNet Limited (No 1)  FCA 1232
The High Court has dismissed Alphapharm’s appeal from the Full Federal Court’s ruling granting Lundbeck an extension of time to apply to extend the term of the escitalopram patent. It was close though: 3 to 2.
You will recall that Lundbeck applied 10 years late to extend the term of its pharmaceutical patent. So, not only was Lundbeck applying to extend the term of its patent (under s70), it was applying for an extension of time in which to make that application. In granting special leave, the High Court accepted that, if the power were available, the circumstances justified the 10 year extension. The question was a matter of statutory interpretation: was there power to extend.
Section 71(2) specifies when an application to extend the term of a pharmaceutical patent must be made:
(2) An application for an extension of the term of a standard patent must be made during the term of the patent and within 6 months after the latest of the following dates:
(a) the date the patent was granted;
(b) the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, any of the pharmaceutical substances referred to in subsection 70(3);
(c) the date of commencement of this section.
Lundbeck’s application was made within the term of the standard patent (with 1 day to spare), but well outside the dates specified in paragraphs (a) – (c).
Section 223 confers a general power to extend the time for making an application. Under s 223(11), however, the power cannot be used to extend time in relation to “prescribed actions”. One of those prescribed actions related to s 71(2):
(b) filing, during the term of a standard patent under subsection 71(2) of the Act, an application under subsection 70(1) of the Act for an extension of the term of the patent; ….
Crennan, Bell and Gageler JJ, after noting the long history in patents legislation of the power to apply for an extension of time, even after the time had expired, as an important safety valve in the system, ruled that s 71(2) specified 2 requirements. The first time requirement is that the application must be filed within the term of the standard patent. The second time requirement was that the application must also satisfy at least one of the requirements set out in paragraphs (a) – (c).
Crennan, Bell and Gageler JJ held, however, that reg. 22.11 applied only to the first requirement: that the application was made within the term of the standard patent. Their Honours considered this was important otherwise a “gap” could arise between when a patent expired but was then restored. That would be highly undesirable. In contrast, there was no policy reason why reg. 22.11 should apply to the second time requirement. At :
There is nothing in any of the extrinsic materials, or in the long policy debates on simplifying extensions of term, which would suggest any rationale for excluding the second time requirement from the remedial power to extend time under s 223(2)(a). Alphapharm’s senior counsel conceded, correctly, that if Alphapharm’s construction of reg 22.11(4)(b) were correct, the remedial power in s 223(2)(a) could never apply to extend time in relation to the second time requirement, no matter what the quality or provenance of any “error or omission” made in respect of that time. Alphapharm’s construction would introduce an inexplicable asymmetry between a patentee and a competitor opposing a s 70(1) application. An opponent can access the general remedial power to extend times cast upon it in mandatory terms. Had it been the legislature’s intention to exclude the second time requirement in s 71(2) from the general remedial power in s 223(2)(a), that would have been simple to accomplish.
Accordingly, s 223 could be invoked as Lundbeck had satisfied the first time requirement (and so did not need it to be extended) but needed an extension in relation to the second time requirement – which reg.22.11 did not apply to.
In dissent, Kiefel and Keane JJ rather tersely said at :
s 71(2) cannot reasonably be read as referring to two actions. There is but one action referred to in s 71(2) – making an application for extension of the term of a patent. That one action is to be done on a date that satisfies the two requirements as to time set out in s 71(2). It is that action to which s 223(2) would apply, were it not for reg 22.11(4)(b).
Their Honours did explain why they considered policy and historical considerations did not lead to a different conclusion. Of potentially more general interest, however, their Honours took a different stand on the role of statutory interpretation at :
In any event, as was said in Federal Commissioner of Taxation v Consolidated Media Holdings Ltd, legislative history and extrinsic materials cannot displace the meaning of statutory text; nor is their examination an end in itself. (footnote omitted)
A big bill coming? After the standard term of the patent expired but before the expiry of the extended term, Alphapharm and other generics commenced marketing their own versions of the drug.
Alphapharm Pty Ltd v H Lundbeck A/S  HCA 42
The Full Federal Court has upheld the Commissioner’s refusal to grant Research Affiliates’ patent for a computer implemented method for constructing a portfolio management index.
The central claim reads:
A computer-implemented method for generating an index, the method including steps of:
(a) accessing data relating to a plurality of assets;
(b) processing the data thereby to identify a selection of the assets for inclusion in the index based on an objective measure of scale other than share price, market capitalization and any combination thereof;
(c) accessing a weighting function configured to weight the selected assets;
(d) applying the weighting function, thereby to assign to each of the selected assets a respective weighting, wherein the weighting:
(i) is based on an objective measure of scale other than share price, market capitalization and any combination thereof; and
(ii) is not based on market capitalization weighting, equal weighting, share price weighting and any combination thereof;
thereby to generate the index.
The Court posed the issue before it as being:
whether computer implementation of an otherwise unpatentable business scheme is sufficient to make the claimed method properly the subject of letters patent.
One might think, put that way, there is only one answer. May be. It makes it very important, however, how one determines whether the “scheme” is itself unpatentable.
Another intriguing aspect of the decision is that, before it embarked on analysing whether this was indeed a “manner of manufacture, the Court engaged in a very extensive review of how this issue is approached in other jurisdictions, including the USA and UK.
Time pressures don’t permit extended analysis at this stage. In the meantime:
and no doubt others. It will be interesting to see what happens to the RPL Central appeal.
Research Affiliates LLC v Commissioner of Patents  FCAFC 150 (Kenny, Bennett and Nicholas JJ)
Software hacking and “property”
Clive Elliot QC draws attention to a New Zealand Court of Appeal decision ruling that downloading data from a computer does not constitute dishonestly obtaining property.
Watchorn was an employee of TAG. He downloaded to his personal computer files containing geophysical data relating to oil and gas exploration TAG had engaged in. The files were downloaded between 4:00pm and 9:30pm. The next day he went on holiday to Canada where amongst other things he met with officers from one of TAG’s competitors; the end result being he resigned from TAG on his return to start work for the competitor.
Watchorn was convicted in the District Court on 3 counts of accessing a computer system and thereby dishonestly obtaining property contrary to s 249 of the Crimes Act.
As the data downloaded was not “property”, the Court of Appeal quashed the convictions. The Court also refused to substitute convictions for dishonestly obtaining a benefit as the Crown had not sought to articulate what the “benefit” was. The Court did, however, accept the benefit could be a non-pecuniary advantage.
It might be possible to fit Watchorn’s actions within the scope of s 247H of the Crimes Act 1958 (Vic), but the other “serious computer offences” seem like a stretch and, on the Court of Appeal`s approach the “theft” provisions shouldn’t apply.
Watchorn v R  NZCA 493
Well, it seems the 10th anniversary of IPwars has come and gone! Yes, the first IPwars blogpost (on the now defunct iBlog system) was back on 4 October 2004, inspired by Marty Schwimmer, Denise Howell, Evan Brown, Ernie the Attorney and others who were originally “Between Lawyers” but have since moved on to podcasting, video casting and other, bigger things.
In the meantime, my article on Trade Marks and Parallel Imports has been published in Volume 22 No. 1 of the Competition & Consumer Law Journal starting at p. 54. It is essentially an overview of the Federal Court’s case law on s 123(1) to date.
In the same issue of the CCLJ, you will also find articles by:
I am afraid the online versions of these papers are behind the LexisNexis paywall.
Happy anniversary! and thanks for stopping by, especially those of you who have left a comment.
Mastronardi applied to register ZIMA as a trade mark in class 31 for tomatoes. The Registrar refused the application on the grounds that it was not inherently adapted to distinguish. Gordon J has now upheld Mastronardi’s appeal and directed the trade mark be registered.
ZIMA sofar as anyone knows is an invented word; it has no meaning at all. Apparently, however, it is only ever used in relation to one “variety” of tomato. The Registrar refused the application on the basis that:
“the word ZIMA appears to be a reference to a single kind of tomato plant and its fruit” and that the trade mark “lacks any inherent adaptation to distinguish the Applicant’s tomatoes as it appears to be an appropriate description of the goods in respect of which it is to be used”.
As the trade mark had not been used in Australia before the date of the application to register it, therefore, it failed.
The question fell to be determined under the old form of s 41 (although it should be the same under the (it is hoped, more clearly expressed) new form. Thus, a sign is registrable as a trade mark if it is “inherently adapted to distinguish”. Both Mastronardi and the Registrar accepted on the appeal that, even under the old form of s 41, a sign is presumed to be inherently adapted to distinguish unless the Registrar (or the Court) is (positively) satisfied it is not.
A sign would not be inherently adapted to distinguish if other traders in such products would legitimately wish to use it to refer to those products even if they were not the applicant’s products. The issue turns on:
the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
Consequently, Gordon J explained there were two questions that needed to be addressed:
(1) how would ZIMA be understood as at 25 July 2011 by ordinary Australians seeing it for the first time used in respect of tomatoes; and
(2) how likely is it that other persons, trading in tomatoes and being actuated only by proper motives, will think of the word ZIMA and want to use it in connexion with tomatoes in any manner which would infringe a registered trade mark granted in respect of it?
As it was an wholly invented word, with no meaning, the answer to the first question was easy: it wouldn’t convey any meaning.
The Registrar argued on the second question that ZIMA was in fact, and was treated by other traders, as the name of a particular variety of tomato. The expert evidence before the Court, however, disclosed that “variety” in the context of tomatoes was a very rubbery (no pun intended?) term and, while there were a few varieties of tomato registered under the Plant Breeder’s Rights Act, thousands were not.
More directly, Mastronardi’s evidence was that it did not source its ZIMA brand tomatoes from just one variety. In Australia, there are apparently 50 different cultivars of orange grape tomatoes; Mastronardi used only six of these and only two were supplied to it exclusively. Moreover, when it launched its product in Australia, it had been very careful in its usages referring to its ZIMATM golden grape tomatoes or sweet orange grape tomatoes or golden snacking tomatoes.
So, it followed that other tomato suppliers had a range of terms they could use to describe their own sweet orange/golden grape tomatoes and, therefore, ZIMA was inherently distinctive.
Her Honour’s decision highlights the importance of careful use of trade marks, particularly if there is a risk the trade mark may become the commonly accepted term for a variety or type: the trade mark should be used as an adjective and not as a noun (or verb). This is a problem that practices in the pharmaceutical industry have had to grow up to develop – a different name for the active ingredient to the “brand” name – but, as this case shows, of potentially much wider application.
Mastronardi Produce Ltd v Registrar of Trade Marks  FCA 1021
The Full Court has dismissed both Bluescope’s appeal and Gram’s cross-appeal from the ruling that Bluescope infringed Gram’s registered design for the Smartascreen fencing panel.
This is an “old Act” case. At first instance, Jacobson J held that Bluescope’s product was an obvious imitation of Gram’s registered design. However, his Honour rejected the allegation that it was also a fraudulent imitation.
Bluescope (then Lysaghts, part of BHP) had long been the market leader for fencing made from metal sheeting. There was a problem, however: one side of the fence was less desirable because the posts and rails supporting the cladding were visible. Gram came up with its Gramline solution which was symmetrical, looking the same from both sides. It quickly usurped Bluescope’s position as the market leader. Bluescope then spent (roughly) 6 years trying to come up with a competing design. In the course of doing so, it rejected a number of alternatives in favour of one that so closely resembled Gram’s product that the two could be stacked one on top of the other.
Besanko and Middleton JJ endorsed the trial judge’s principles for construing the design, summarising them at :
(a) a design is the mental picture of a shape, configuration, pattern or ornamentation of the article to which it is to be applied;
(b) construction is a question of fact for the Court to determine by the eye alone;
(c) expert evidence may be led to assist the Court;
(d) the Court is to apply an ‘instructed eye’ to the design – that is the Court must be made aware of the characteristics of the article to which the design is applied, and the manner in which such articles would normally be found in trade, commerce and in use; and
(e) however, considerations of utility have no relevance to the proper construction of a design.
In applying those principles, the trial judge found
“the primary feature was the sawtooth pattern consisting of six identical repeating pans, oriented vertically. The sawtooth pattern was the product of the unique proportions of the wavelength, amplitude and angles of each sawtooth module”.
It was this combination of features, which contributed to the symmetricality of the product, that ultimately conferred the design with novelty and which were taken by Bluescope, leading to the finding of obvious imitation. Three points of note on these parts of the case.
First, at  Besanko and Middleton JJ rejected Bluescope’s challenge to the trial judge’s reliance on Gram’s design being viewed vertically as an in-fill sheet between posts so that the saw-tooth ran top to bottom:
While considerations of utility are not relevant, designs cannot be construed without context. It is often the case that features of the article to which the design applies, will serve both visual and functional purposes. Where this is the case, the implication of BlueScope’s submission is that the feature’s appearance and utility must be divorced. However, a design without context is a meaningless drawing. As Lockhart J observed in Dart Industries 15 IPR 403 at 408, the design is ‘the mental picture of the shape, configuration, pattern, or ornament of the article to which it has been applied’ (emphasis added). It is inescapable that the Design is for sheet metal fencing and the construction of the Design must reflect this.
That is, because the design was for a sheet metal fencing panel which “worked” in one way, it should be interpreted in the way (presumably) those who would use it for that would understand it.
Secondly, the trial judge had not impermissibly referred to the fact that the Bluescope product could be “nested” with the Gram product (embodying the design). But, it was not the fact of “nestability” as such that was important. Rather, it was relevant because it was helpful in forming a view about the similarity of the sawtooth profile. Besanko and Middleton JJ explained at :
the nesting qualities are instructive. As has been discussed at length, the combination of amplitudes, wavelengths and angles create the sawtooth profile. For the GramLine and Smartascreen sheets to nest, albeit imperfectly, they must by logical extension, have similar amplitudes, wavelengths and angles. This is clearly helpful in deciding if Smartascreen is an obvious imitation of GramLine, and it was entirely open for the primary judge to be assisted by the nesting properties of the two articles. It is further relevant because as noted above, an obvious imitation is not one which is the same as the design, but one that is an imitation apparent to the eye notwithstanding slight differences.
Care definitely needs to be taken with this as the physical embodiment of the registered design is not always the same as the design and the comparison must be between the accused product and the registered design. It is important to note, therefore, that the Full Court treated this as confirming or reinforcing the view based on comparison of the appearance of the infringing article to the registered design.
Thirdly, the Full Court considered the trial judge had impermissibly taken into account Bluescope’s commercial objectives – to introduce a product to compete with the Gramline product – in deciding whether or not the Smartascreen was an obvious imitation. With respect that must be right as the test of obvious imitation is an objective test based on visual resemblance. Yates J, however, was prepared to accept at  to  evidence such as that Bluescope was attracted to the design because “it had a similar appearance to the GramLine sawtooth profile and would gain ready market acceptance” as a kind of expert evidence about the similarity of Bluescope’s product to Gram’s design.
In Polyaire, the High Court rejected the interpretation of fraudulent imitation which had required the alleged infringer to have attempted to disguise its copying. Instead, the High Court had said at :
the application of a “fraudulent imitation” requires that the application of the design be with knowledge of the existence of the registration and of the absence of consent to its use, or with reason to suspect those matters, and that the use of the design produces what is an “imitation” within the meaning of par (a). This, to apply the general principle recently exemplified in Macleod v The Queen, is the knowledge, belief or intent which renders the conduct fraudulent.
At , the High Court approved Lehane J’s formulation of the test for fraudulent imitation in the following terms:
[T]he essential questions are, first, whether the allegedly infringing design is based on or derived from the registered design and, then, whether the differences are so substantial that the result is not to be described as an imitation. ….
In this case, the trial judge considered that fraudulent imitation required a finding that the infringing product was deliberately based on the registered design. The Besanko and Middleton JJ endorsed that test at :
In our opinion, it must be shown that there was deliberate, in the sense of conscious, copying for there to be fraudulent imitation. If imitation imports the notion of making use of the registered design, there must be at least a conscious use of the registered design before it could be concluded there was fraudulent imitation.
The trial judge had found that:
His Honour was also “sceptical” of Bluescope’s claim that the resemblance to Gram’s design was coincidental. Gram argued that, given these findings, what other conclusion could there be but deliberate copying.
The Full Court upheld the trial judge’s refusal to find the Smartascreen was deliberately based on the Gramline design. Two factors seem to have played an important role here.
First, the Full Court accepted at  that an allegation of fraudulent imitation was a serious matter and the level of proofs needed to reflect the gravity of that.
Secondly, the evidence showed that the Bluescope employees who came up with the final design from 2000 onwards were influenced by, or at least referred to, design work done by a Mr Field in 1996.
Mr Field did not give evidence so it was not clear on the evidence what influences or references he made use of. Now, in many cases, the unexplained failure of a key player in the design process to give evidence (especially when there are inferences (at least) suggestive of copying available) might be sufficient to give rise to a Jones v Dunkel that the witness could not say anything helpful to the defendant’s case. Here, however, Mr Field’s absence was explained: he was old and in very poor health. His design work had taken place in 1996 very early in the picture. Moreover, Bluescope’s product had been introduced in 2002. Gram had of course known about it pretty much straightaway, but had delayed until 2010 before taking action. One may speculate, therefore, that the Court was not willing to allow Gram the benefit of negative inferences when its own delay had contributed to the witness being unavailable.
BlueScope Steel Limited v Gram Engineering Pty Ltd  FCAFC 107
IP Australia has published consultation paper on the Plant Breeder’s Rights Advisory Committee.
The PBRAC is established under the Plant Breeder’s Rights Act 1994 to advise the government about issues arising under the Act. As part of the Government’s commitment to efficiency and streamlining the public service, the National Commission of Audit recommended that the functions of PBRAC be considered for consolidation into the department with portfolio responsibility for PBR.
The Government, through IP Australia, is now seeking input about the role of PBRAC and whether there are other, more efficient ways to access the technical expertise that PBRAC is expected to provide.
Submissions are sought by 31 October 2014.
Consultation paper here (pdf).
ps The National Commission of Audit also questioned the continuation of ACIP, but that will be the subject of a separate paper.
The way the press is reporting it, the Minister for Communications – one of the two Ministers who released the Online Copyright Infringement discussion paper in July – recognises it’s back to the drawing board in light of the (apparently) unanimous disapproval.
You can find the submissions received here (apparently they are being uploaded over time).
Will the ISPs voluntarily sit down and negotiate a warning system with the copyright owners? Do we really want the copyright owners and the ISPs coming up with their own scheme without “our” input?