IPwars.com

Mainly intellectual property (IP) issues Down Under

The patent was not infringed

Thank you to all those readers who expressed a view in last Tuesday’s poll. The good news is that better than 80% of you answered correctly. According to the traditional view, recently applied by Rares J, there would be no infringement in Australia in the circumstances outlined.

On the traditional view, a patent (like any other intellectual property right in Australia) is a territorial right. A patent, of course, confers the exclusive right to exploit the claimed invention in the patent area. Exploit in this context meaning:

(a) where the invention is a product–make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b) where the invention is a method or process–use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.

Under the old form of the patent grant, the patentee was granted the exclusive right to make, use, exercise and vend the invention. In BASF v Hickson, the House of Lords ruled that a defendant in England, who entered into a contract with another party to make some goods for that third party in Switzerland and deliver them to that third party in Switzerland, did not infringe even though the third party subsequently imported the goods into England.[1] Lord Davey said:[2]

It must be such a vending as will be in a sense a working or use and exercise of the invention in this country or an appropriation by the vendor of some advantage which the patentee can derive from such use and exercise. A contract to deliver the goods abroad does not in any way interfere with the patentee’s rights to work and utilize his invention in this country. It is a contract to do a perfectly lawful act, and whether the contract be made in this country or abroad does not in itself affect the patentee’s monopoly of working his invention. Nor is it material to consider whether or when the property in the goods passed to the purchaser. It is lawful to be the owner of the goods if made and situate abroad, and neither the vendor nor the purchaser in my opinion thereby infringes the patent. The goods may or may not be afterwards brought into this country, and a different question will then arise, but that is no concern of the vendor after he has parted with them. I am of opinion that “vending the invention” in the common form of patent is confined to selling goods made or brought into this country ….

Load and Move has a patent in Australia for spreaders and tipplers, which are apparently used in the loading and tipping of shipping containers. CTS, another Australian company, entered into a contract with a mine in Eritrea to supply the mine with spreaders and tipplers which Load and Move considered would infringe its patent. However, CTS agreed to have the spreaders and tipplers made in China and delivered to the port in China FOB or ex works for delivery directly to the mine in Eritrea. The spreaders and tipplers would never come into Australia.

Load and Move was seeking preliminary discovery from CTS to establish whether payments for the contract with the Eritrean mine were received in Australia.

Rares J has refused preliminary discovery.

One of the conditions that must be established to obtain preliminary discovery is that the applicant reasonably believes it has a right to obtain relief against a prospective respondent.[3]

Rares J began by pointing out that a subjective belief that one’s right was being infringed was not enough; the belief had to be reasonably held. That required the existence of facts from which a reasonable person could form the required belief. That is, the belief was tested objectively.

Here, the question was whether there were facts from which a reasonable person could conclude that Load and Move’s patent was being infringed in Australia. In light of BASF v Hickson, however, Rares J held that a reasonable person could not hold such a view.

Load and Move Pty Ltd v Container Rotation Systems Pty Ltd
[2016] FCA 843

ps Sorry no post on Friday: let’s just say there was a synchronisation glitch.


  1. The third party would infringe by importing.  ?
  2. Badische Anilin Und Soda Fabrik v Hickson [1906] AC 419 at 422 – 423 cited by Rares J in Load and Move at [26].  ?
  3. FCR r 7.23.  ?

Was the patent infringed?

Both A Pty Ltd and R Pty Ltd are located in Australia.

A Pty Ltd has a patent in Australia over a gizmo.

R Pty Ltd has entered into a contract with T LL C to make 100 gizmos for T for delivery to T’s facility in Eritrea. R Pty Ltd won’t make the gizmos itself; they will be made by its manufacturer in Shenzhen, China . Once made, R’s manufacturer will deliver the 100 gizmos FOB to a ship T has chartered in Hong Kong.

Assuming that the gizmos made in Shenzhen fall squarely within the claims of A’s patent, has R Pty Ltd infringed A’s patent? Cast your vote (anonymously) below:

The answer should be posted on Friday.

Selected links,from last week

Here is a selection of links to IP-related matters I found interesting this week:

Patents

Trade marks

Copyright

Remedies

Not categorised

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Chemist Warehouse dismissed

While we are on the subject of misleading or deceptive conduct, the Full Court has dismissed “Chemist Warehouse”‘s appeal from Middleton J’s dismissal of its claim that stores like these:

Another view
Another view
Direct Chemist Outlet
Direct Chemist Outlet

misrepresented an association of some sort with stores looking something like this:

Some Chemist Warehouse storefronts
Some Chemist Warehouse storefronts

image022

 

 

 

 

 

 

 

There were some 19 grounds of appeal which the Full Court worked their way through in detail. The central problem for Chemist Warehouse was that Full Court said there was no error in Middleton J’s finding that the predominantly yellow colouring of the exterior of the Chemist Warehouse outlets was not distinctive – the distinctive feature was the “Chemist Warehouse” logo:

no error has been shown in his Honour’s findings that the primary colour palette used by Chemist Warehouse was not distinctive. First, there was considerable variability in the nature of the Chemist Warehouse get-up. The primary judge distinguished other authorities where secondary branding had been accepted on the basis of a consistent presentation of colours in a particular juxtaposition. Second, the colours had a functional aspect. Colour can be used for its practical or functional utility, for example, high visibility for a road sign. In the present case his Honour appears to have accepted that the colour yellow was used to take advantage of the attributes of visibility and its association with discount value; but such a function could apply to any type of discount goods, not just pharmacy goods. The use of yellow to create the so-called “yellow box” was also to draw the attention of potential consumers on the street; it cannot be said that the use of the colour yellow in that way denoted trade origin. His Honour accepted the functionality of yellow (see at [9], [10], [12], [14] and [100]). He also accepted that the yellow, blue and red combination served a functional purpose (see at [240]). No error is demonstrated in any of these findings.

Fourth, the dominant and distinctive “Chemist Warehouse” logo was the only consistent branding element across the appellants’ stores prior to May 2006 ….

The fact that other stores, like JB Hi-Fi and Ted’s Camera’s used a predominantly yellow background to attract attention was also not irrelevant to whether its use on pharmacies was distinctive.

Moreover, even if the get-up had been distinctive, there would have been no misrepresentation:

in any event, even if a colour-based reputation could have been shown, that would not have answered the question of whether there had been misleading or deceptive conduct or a misrepresentation.  The respondents had a different get-up with different distinguishing features.  Indeed the primary judge had distinguished the respondents’ stores by not only the “Direct Chemist Outlet” trade mark but also the different distinctive logo, cleaner appearance and lifestyle photographs.  None of these were part of the appellants’ pleaded get-up.  The respondents’ schedules two and three to its closing submissions, by reference to the primary evidence before his Honour consisting of the relevant photos, well summarise the variability in get-up used at the DCO stores and the Chemist Warehouse stores, and relevant differences.

The Full Court pointed out that proof DCO had copied elements of its get-up from Chemist Warehouse was not sufficient to invoke the principle from Australian Woollen Mills that someone who sets out to deceive will be presumed to have succeeded. For that principle to apply, it was necessary to show not just copying but also a subjective intention to mislead or deceive – to appropriate part of the trade or reputation of the competitor.

Finally (for the purposes of this note), the Full Court accepted Middleton J’s view that the appropriate time to assess whether DCO’s conduct was misleading or deceptive was when DCO first commenced use of its present get-up. Chemist Warehouse argued, in the alternative, that Middleton J should have made the assessment for each individual DCO store at the time it opened – the so-called geographical approach. Middleton J pointed to a number of problems with this approach. One problem was that there were some areas where the Chemist Warehouse store opened after the DCO store – who would be making the misrepresentation then. Further:

… if the Applicants and Respondents were concurrently trading and building independent reputations in separate areas, it may have been the case that it was not the Respondents’ conduct that was misleading or deceptive at that later time.

For example, the Lalor DCO store opened in 2014, well after 26 May 2006. Both parties had advanced their own reputations by that time. What is the Court to conclude is the position of the competing parties in that particular area and at that particular time? It is to be recalled that since 26 May 2006 both businesses involved in this proceeding have increased their respective exposure to the relevant consumers by opening many new stores. There has been co-existence in the market place for approximately eight years prior to litigation commencing. Further, stores have opened in numerous locations, and Chemist Warehouse stores have opened in close proximity to existing DCO stores (as in the case of the Warrnambool store, for example).

In any event, his Honour considered that the DCO get-up sufficiently distinguished its stores from Chemist Warehouse stores that no misrepresentation was likely to arise.

The Full Court considered Middleton J’s analysis was “unremarkable” and no error was identified.

Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104

Pacific (f)ale

Moshinsky J has rejected Stone & Wood’s attempt to block Thunder Road Pacific Ale and, instead, ruled that Stone & Wood made unjustified threats of trade mark infringement.[1]

In 2010, Stone & Wood renamed its Draught Ale product as Stone & Wood Pacific Ale. Stone & Wood has 3 other main products in its line up of beers, but the Pacific Ale makes up some 80 – 85% of its sales. These sales were mainly in the Northern Rivers area of NSW, south eastern Queensland, Sydney and Melbourne.

Pacific Ale was a name Stone & Wood coined for its product. At the time, Stone & Wood was based in Byron Bay and ‘Pacific’ was chosen partly to reflect Byron Bay’s location on the Pacific ocean and partly for its ‘calming, cooling emotional response’.

The second respondent, Elixir,[2] also started up in 2010, in Brunswick, Melbourne Victoria, which some people might consider far from the Pacific. One of its lines of beers is its Thunder Road range. In 2015, it added a Thunder Road Pacific Ale to that range.

misleading or deceptive conduct / passing off

This is what individual bottles of the competing products looked like:

image002

image004

The Thunder Road logo is on the label around the neck. This is what a six pack of each looked like:

image006 image008

Stone & Wood contended that Elixir’s use of Pacific Ale and/or the ‘similar’ green and orange colour scheme misrespresented that the Thunder Road product was Stone & Wood’s or in some way associated with it in contravention of s 18 or s 29 of the ACL or a passing off.

The essential problem with this type of claim is that whether or not there is a real possibility of misrepresentation falls to be determined in all the circumstances. What would the ordinary consumer of the relevant products think in all the circumstances. Moshinsky J’s reasoning is much more detailed than I am going to attempt here, but notwithstanding the large and prominent display of Pacific Ale on Elixir’s product:

  • the dominant element on Stone & Wood’s packaging and get-up was its name: Stone & Wood;
  • there was no use of Stone & Wood on the Thunder Road product;
  • the words Pacific Ale on the Elixir product was very closely associated with Thunder Road, itself a well-known brand amongst the discerning hipsters and others in the market for craft beers;
  • although Pacific Ale was not a technical ‘style’ recognised at beer shows, it had become by the time Elixir introduced its product, descriptive for many consumers of a beer made from Galaxy hops, a particular Australian variety which gave the beer a fruity or tropical flavour – this was reinforced by the reasons why Stone & Wood had adopted the name in the first place;
  • the colour schemes and get-up are, shall we say, pretty different.

Moshinsky J accepted that Elixir knew full well that Stone & Wood had a Pacific Ale product when it decided to launch its own Pacific Ale and was trying “to some extent” to take advantage of consumers’ recognition of the term Pale Ale. That was not the same thing, however, as trying to take advantage of the name Stone & Wood or trick people into thinking the Thunder Road product was the Stone & Wood product which was what Stone & Wood needed to show.

Stone & Wood also deployed expert evidence from the marketing expert, Professor Lockshin.[3] Prof. Lockshin argued that marketing theory posited consumers might have come to identify Stone & Wood’s product just by the sub-brand Pacific Ale. Moshinksy J was not prepared, however, to overlook the significance of the prominent use of Stone & Wood on Stone & Wood’s products and the other differences between the products in the absence of testing which showed how consumers actually reacted.

In an attempt to repeat Bodum’s rather surprising success against Euroline, Stone & Wood pointed to a blackboard in a bar which simply listed PACIFIC ALE as one of the beers on tap; the beer of course being Thunder Road, not Stone & Wood. Moshinky J was not prepared to infer that patrons ordering the beer from that listing were necessarily trying to order Stone & Wood Pacific Ale as opposed to a pacific ale. Also, Elixir should hardly be liable for the actions of an independent bar owner.

Trade Mark infringement

Stone & Wood has a trade mark, No. 1395188, registered in class 32 for beer:[4]

image012

The problem Stone & Wood confronted with its infringement case is that Pacific Ale is such a subsidiary feature of the trade mark. Moshinsky J was not prepared to find that the words Pacific Ale in that configuration were likely to be an essential feature of the mark. His Honour considered that the Crazy Ron case required him to assess the essentiality of a feature in the context of the trade mark as a whole. It would have been wrong to focus on part of the mark in isolation only.

Groundless threats

Section 129 provides someone threatened with an action for trade mark infringement to bring proceedings for unjustified threats. A declaration that the threat was unjustified can be obtained, injunctions against repetition and, if damage be suffered, damages.

The Trade Marks Act is rather curious in that it is a defence to such an action if the trade mark owner starts proceedings for infringement “with due diligence”, even if the infringement allegation ultimately fails.[5] Moshinsky J denied Stone & Wood’s reliance on this defence in this case.

Stone & Wood had sent a letter of demand which included allegations of trade mark infringement as well as misleading or deceptive conduct, and threatened proceedings. When the correspondence did not lead to a resolution of the dispute, it started proceedings against Elixir, but only for misleading or deceptive conduct / passing off. It did not bring proceedings for trade mark infringement. It only brought the infringement proceedings by way of amendment after Elixir cross-claimed for unjustified threats.

In that respect, Moshinsky J distinguished Stone & Wood’s position from the trade mark owner in the Montana case. There, Wilcox J had rejected reliance on the ‘with due diligence’ defence, but the Full Court overturned that on appeal. In Montana, TTS did bring the infringement proceedings by way of cross-claim. However, it did not start the proceedings with a misleading or deceptive conduct claim. Montana started the earlier proceedings with its claim against unjustified threats and TTS brought the cross-claim at the first available opportunity.

The matter will continue to ascertain whether Stone & Wood will have to pay any damages.

It is tempting to wonder whether Stone & Wood would have had more success if it had promoted Pacific Ale more prominently and independently of its name, Stone & Wood. Perhaps, but these types of sign are slippery and it doesn’t take much for them to slide into descriptiveness. CAPLETS, for example, was a coined word, but not infringed.

If you have a comment or a question, please feel free to post it in the comments section. Or, if you would prefer, email me.

Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820


  1. His Honour’s reasons run for some 95 pages or 245 paragraphs, so I am not going to try and convey all the nuances which were explored before his Honour in a blog post such as this.  ?
  2. The operation is sufficiently crafty, or un-boutiquey, that the first respondent is the holder of the group’s intellectual property rights.  ?
  3. If his name sounds familiar, that is because he was unsuccessfully deployed by Henschke in the Hill of Grace case.  ?
  4. It also has a pending application for PACIFIC ALE, but that has been opposed by, you guessed it, Thunder Road.  ?
  5. Dowsett J has recently pointed out that the patents legislation used to have this defence, but it was repealed a long, long time ago.  ?

Selected links from last (couple of) weeks

Here is a selection of links to IP-related matters I found interesting this past week (or two):

Patents

Trade marks

Copyright

Not categorised

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Selected links from last week

Here is a selection of links to IP-related matters I found interesting last week:

Patents

Trade marks

  • Is the US Olympic Committee’s [#TwitterBan Fair or Foul?](https://t.co/kmG0Avith) compare
    Telstra ‘Go to Rio’ campaign cleared by Federal Court, AOC case dismissed

Copyright

Remedies

  • Want An Enforceable Online Contract? Don’t Use A Footer Link Called “Reference”–Zajac v. Walker (USA)

Designs

Not categorised

Future of the profession

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

A “new” Act designs case!

Nicholas J has ruled that by selling its Razor fan Martec has infringed Hunter Pacific’s registered design for a ceiling fan hub, ADR No. 340171.

On the right below are two of the representations in the design:[1]

ADR 340171 perspective
ADR 340171 perspective
796.12
Martec’s Razor

 

 

 

 

 

 

 

 

 

ADR 340171 hub
ADR 340171 hub

 

Martec's Razor hub
Martec’s Razor hub

 

 

 

 

 

 

 

 

 

 

 

 

and on the left above are corresponding views of Martec’s infringement.

On the s 19 analysis mandated by s 71, Nicholas J recognised a number of obvious differences between the registered design and the Razor. However, the overall impression conveyed was one of similarity. In particular, the lower “hubs” were similarly proportioned and conveyed a generally sleek and flat appearance. This was particularly important as this was the feature which contributed most to the informed user’s assessment of the design. As Hunter Pacific’s expert pointed out, that was significant as a ceiling fan hub would be viewed from underneath, looking up. Thus, his Honour concluded:

Although they exhibit a number of obvious differences in shape and configuration, these differences are in my view insufficient to displace what I consider to be significant and eye-catching similarities that create an overall impression of substantial similarity.

It is a bit difficult to tell as images of the prior art are not included. That said, the verbal descriptions suggest that the Razor was much closer to the registered design than any of the prior art. The number of prior art advanced by Martec served to emphasise that there were many different ways to achieve the same functional outcome. Accordingly, while the designs were to some extent dictated by function, there was no significant restriction on the designer’s freedom to innovate.

Nicholas J did not explicitly take sides on the debate about who was the informed user, simply restating the statutory test.[2] His Honour did follow Yates’ J lead, however, in emphasising that the impression that the informed user would form was not based on a fleeting or casual inspection. Rather, it required a careful and deliberate visual inspection.

Hunter Pacific International Pty Ltd v Martec Pty Ltd [2016] FCA 796


  1. The annotations were marked up by one of the witnesses.  ?
  2. Contrast the “Review” approach vs Multisteps discussed by Yates J at [57] – [71].  ?

Selected links from last week

Here is a selection of links to IP-related matters I found interesting this week:

Patents

Trade marks

Copyright

Not categorised

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Omnibus claims: substantially the same

In partly allowing Glaxo’s appeal, the Full Court (Allsop CJ, Yates and Robertson JJ) has ruled against an expansive interpretation of omnibus claims.

You may recall (here and here) that Reckitt Benckiser has a patent protecting its bottle / syringe combination for dispensing Panadol to children aged between 1 – 5 years old.[1]

Claim 1 claimed:

A liquid dispensing apparatus comprising a bottle, a bottle neck liner and a flat-nosed syringe having a plunger and a barrel, the barrel terminating at its distal end in a generally flat face having a diameter corresponding to the diameter of the syringe barrel and being perpendicular to the longitudinal axis of the barrel, the bottle having a bottle neck in which is located the bottle neck liner having a cylindrical body sealingly engaged inside the bottle neck such that liquid cannot flow between the bottle neck liner and the bottle neck, the bottle neck liner comprising a sleeve comprising at its lower end an inward step located within the bottle neck, an aperture being defined inwardly of the inward step, wherein the cylindrical body and the sleeve are connected together with a web of material only at the upper end of the cylindrical body and of the sleeve, wherein the sleeve is formed with a flared portion at its upper end into which the distal end of the syringe barrel passes; wherein when the syringe barrel is inserted into the sleeve the inward step prevents the syringe barrel from protruding past the step and liquid cannot flow between the sleeve and the barrel, but can leave the bottle only via the aperture and thence the syringe. (emphasis supplied)

and claim 9 was an omnibus claim:

A liquid dispensing apparatus, substantially as described with reference to the drawings and/or examples.

Glaxo marketed two different versions of its competing product:

Glaxo Version 1
Glaxo Version 1
Glaxo Version 2
Glaxo Version 2

The trial Judge held that Version 1 infringed claim 1 but, because it had a narrower nozzle section at the spout[2] and so the barrel was not uniform along its length, Version 2 did not. The barrel of Version 2 did not terminate “at its distal end in a generally flat face having a diameter corresponding to the diameter of the syringe barrel”. The trial Judge, however, then went on to find that Version 2 infringed the omnibus claim because it functioned substantially in the same way as described in the patent:

The alternate syringe has exactly the same function as that described in the patent and the drawings. The alternate syringe is a flat-nosed syringe that has a distal end that fits into the liner and achieves a good seal with it so that it can draw up liquid without leaking from the bottle or the syringe. The mere fact that there is a corresponding tip on both the barrel and the reciprocating plunger used in the alternate syringe in the second product complained of should not be allowed to disguise that that product has taken the substantial configuration resulting from the patentee’s invention and its character for the dispensing of liquids from bottles without mess using an apparatus with a flat-nosed syringe: Radiation 60 CLR at 52; Raleigh 65 RPC at 160. The alternate syringe, as incorporated into the second product complained of, is not a substantially new or different combination

The Full Court dismissed the appeal from the trial Judge’s finding that Version 1 did infringe claim 1 and Version 2 did not. Importantly for present purposes, it allowed Glaxo’s appeal from the finding that Version 2 nonetheless infringed claim 9, the omnibus claim:

[79] … contrary to the conclusion of the primary judge, the use of the word “substantially” in claim 9 in the expression “substantially as described with reference to the drawings and/or examples” does not extend the definition of the invention to “the substantial idea” disclosed by the specification and shown in the drawings.

[80] The word “substantially” provides no warrant for departing from what the specification itself mandates to be the essential features of the invention. A flat-nosed syringe dimensioned as described in the consistory statement is one of the essential features of the invention. Thus, whatever work the word “substantially” is to perform in claim 9, it cannot transform a feature made essential by the description of the invention into one that is now inessential. Put another way, an embodiment that does not possess the essential features of the invention as described, cannot be one that is “substantially as described”. Thus, the word “substantially” in claim 9 does not do the work which the primary judge held that it did.

The Full Court pointed out that the description and drawings were a particular form of the first embodiment in the patent. It was plain from the consistory clause describing the embodiment and claim 1 that a barrel of uniform diameter throughout its length was an essential feature of the invention. All claims apart from the omnibus claim were dependent from claim 1. Claim 1 was the widest form of the claimed invention. Accordingly, the omnibus claim, which is a more narrowly defined claim, could not be wider than claim 1.[3]

Perhaps continuing the swing of the interpretation pendulum back towards the ‘literal meaning’ approach, their Honours also warned against too ready an assumption that some wording in a claim was just “a slip of the pen” rather than a carefully chosen limitation.

ps As Dr Patentology points out, s 40(3A) bans (or tries to ban) the use of omnibus claims in patents the subject of the new rules under the Raising the Bar regime; i.e., in broad terms, patents the subject of an application filed on or after 13 April 2013 or, if filed earlier, which had not been the subject of a request for examination before 13 April 2013.[4]

If you have a comment or a question, please feel free to post it in the comments section or, if you would prefer, email me.

GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Ltd [2016] FCAFC 90

[lewis]:


  1. Australian Patent No. 2003283537 (the patent) entitled “Improvements in and relating to liquid dispensing”.  ?
  2. In expert witness legalese, “the indented section at the distal end”.  ?
  3. As the High Court explained in [Radiation]: “But it is said that the words in the claim. “ substantially as described,” tie the claim to the particidar form of construction illustrated in the drawings. The effect of the words depends upon the construc­ tion of the claim as a whole, but “ in general the words exercise a limiting effect by tying ” the claim “ more closely to the preceding description ” (See Fletcher Moulton on Patents (1913), p. 128). They do not, however, limit the claim to the precise construction shown in the drawings but rather to the kind of apparatus mentioned and the method described in the specifications and illustrated in the drawings.”.  ?
  4. Someone made a more detailed attempt to explain the transition provisions in Lahore, Patents, Trade Marks & Related Rights at [12,000].  ?