Enforcing foreign judgments – consultations

The Commonwealth government is participating in negotiations for a new Convention on the recognition and enforcement of foreign judgments. Now it is seeking public input on a range of outstanding issues.

One of the general issues on which input is sought is the extent to which and the nature of problems experienced in trying to enforce a judgment in a foreign country.

Intellectual property issues are high on the list of matters being debated. Chapter 5 of the consultation paper is directed to intellectual property rights’ issues.

The issues include whether or not intellectual property rights should even be included in the judgments covered by the Convention. So draft article 2(m) proposes to exclude judgments about intellectual property rights from the Convention altogether; alternatively, articles 5 and 6 proceed on the basis that intellectual property rights are included. Which approach should it be?

If included, the basic idea is that a judgment on subsistence, ownership or infringement of an intellectual property right made by a Court in the country which granted the right could be enforceable under the proposed Convention to the extent that the judgment dealt with the subsistence, ownership and infringement of the right in that country.

It is proposed to treat judgments about the subsistence, ownership and infringement of registered rights granted by the country where the judgment is made as falling exclusively under the Convention. Judgments about unregistered rights, such as copyright and unregistered designs, would not be exclusive.

According to the consultation paper, one consequence of this arrangement would be that judgments involving “multi-state IP infringements” of registered rights will be enforceable under the Convention only to the extent that the judgment relates to infringements in the country/jurisdiction issuing the judgment.

No doubt for sound philosophical rationalising, trade secrets do not count as intellectual property rights under the draft Convention. Practically speaking from a business’ perspective, however, one might wonder why confidential information should be treated differently to unregistered “rights”.

Another area of issues raised in the consultation paper is the extent to which awards of damages, especially additional or exemplary or otherwise punitive damages, should be capable of enforcement under the Convention.

As the next (and possibly final) meeting of the commission preparing the draft for a Treaty conference is on 24 – 29 May 2018, the deadline for submissions is COB 27 April 2018.

Hague Conference Judgments Project: Recognition and enforcement of foreign judgments

Pregabalin 2 – the invalidity appeal

In addition to clarifying infringement of method claims, the Full Court in Warner-Lambert (Pregabalin) also dismissed Apotex’ appeal against the findings that the Patent was fairly based and not invalidated by a false suggestion.

As you will recall, Warner-Lambert’s patent claimed methods for treating pain using pregabalin. The methods included claims 16 – 30 which were Swiss claims.

Apotex argued that the claims were not fairly based and had been obtained by false suggestion.

The main basis for these attacks stemmed from the parties’ acceptance that the point of the patent was the use of pregabalin to treat humans. However, the examples in the patent related to tests conducted on rats. Apotex argued that it was not certain that a compound shown to be efficacious in rats would necessarily work for humans or, if it did, what a “therapeutically effective amount” for humans would be without a considerable amount of testing and experiment. Apotex argued that the “prolonged research, inquiry or experiment” involved fell well short of what was required for a sufficient description of the invention. (This was the pre-Raising the Bar Act version of s 40(2)(a)). Accordingly, as laid down in Kimberly-Clark:

The question is, will the disclosure enable the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty?

The Full Court accepted that it would be a complicated and expensive business to produce from the information in the Specification a medicament for the treatment of humans. After all, we are talking about a drug. However, the Full Court agreed with the trial judge that the work involved was nonetheless “routine” and did not require invention. For example, at [126] the Full Court accepted:

The need to produce “new inventions or additions” or to carry out “prolonged study of matters presenting initial difficulty” may mean that a description is insufficient. The need for time, cost and detailed work will not; at least where, as here, the work involved is of a routine and conventional kind.

“Routine” in this context was not merely simple and easy. The skilled addressees were scientists with Ph Ds and considerable experience.

An important consideration in reaching this conclusion was the nature of the claimed invention. According to the Full Court, the invention lay in the broad recognition that pregabalin, otherwise a known drug, could be used in the treatment of pain. It was not concerned with any particular dosing regime.

It also appears that (see [39] of the Full Court’s reasons) Apotex’ evidence did not identify any particular problems that would be encountered if one were to embark on formulating the drug for the relevant purpose.

In reaching this conclusion, the Full Court was also highly critical of Apotex’ attempt to characterise the work involved as imposing an “undue burden”. This formulation was derived from EPO and English cases in which the statutory test was close to the Raising the Bar Act formulation:[3]

(a) disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art; and

So it was irrelevant to the test under the pre-Raising the Bar Act form of s 40(2)(a) and, in any event, was an unhelpful gloss on the terms of the statute.

Bearing in mind the history of the terminology adopted in the Raising the Bar Act version of s 40 and the similarity of the wording to the EPC / UK Act, it is to be hoped that the High Court’s warnings in Lockwood v Doric not to get entangled in English cases post–1977 will fall away when a case arises under the new form of the provision.

Dr Summerfield addresses the invalidity issues of the appeal here.

Warner-Lambert Company LLC v Apotex Pty Ltd (No 2) [2018] FCAFC 26 (Jagot, Yates and Burley JJ)

How you infringe a Swiss claim in Australia

The Full Court has upheld Nicholas J’s ruling that Apotex infringed the Swiss claims in Warner-Lambert’s (Pfizer’s) pregabalin patent by making the product outside Australia and then threatening to import it into Australia for sale.

Claims 16 to 30 of the pregabalin patent were Swiss claims. For example, claim 16 was for “use of a compound of Formula 1 or a pharmaceutically acceptable salt diastereomer or an enantiomer thereof … in the manufacture of a medicament for the treatment of pain.”

Apotex’ plan was to have its product made overseas by a third party, then import the product and offer it for sale.

As you know, infringement requires the infringer to “exploit” the claim said to be infringed in the patent area.[1] For this purpose, the Dictionary defines exploit to mean:

“exploit ”, in relation to an invention, includes:

(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.

Apotex argued that it was not going to infringe because Swiss claims are method claims[2] and so, according to Apotex, could be infringed only by practising the method in Australia. Therefore, according to Apotex, paragraph (b) of the definition of “exploit” should be limited to products made by practising the method in Australia only.

In Lundbeck at [693] – [694], Lindgren J had found infringement in similar circumstances, but through some rather convoluted reasoning. At [167], while rejecting Apotex’ criticisms of Lundbeck, the Full Court upheld the trial Judge’s finding of infringement on the basis of his Honour’s reasoning in preference to Lindgren J’s reasoning. Nicholas J found at [296]- [298]:

296 The definition of “exploit” makes no reference to the patent area. As I have said, the express territorial limitation upon the patentee’s exclusive rights is found in s 12 and s 13. In my respectful view, there is therefore no reason to read down the words of either para (a) or para (b) of the definition of “exploit” to found any territorial limitation. This is because the Act expressly provides that a patent only has effect in the patent area: see also s 70 of the Patents Act 1952 (Cth).

297 Paragraph (b) of the definition of “exploit” refers to the doing of an act referred to in para (a) which includes to make or import a product. The patentee’s exclusive rights are infringed (subject to available defences) if another person does any such act within the patent area. The fact that the patented method is performed outside the patent area does not avoid infringement of a method claim (including a Swiss claim) if the product imported and sold in Australia was made using the patented method because the acts of importation and sale occur within the patent area. The relevant act of infringement is not the use of the method outside the patent area but the exploitation (by importation and sale) in Australia of a product made using the patented method.

298 In my respectful opinion, contrary to the approach taken by Lindgren J, the relevant territorial limitation is reflected in the language of s 12 and s 13(3) and there is therefore no justification for importing words of territorial limitation into the definition of “exploit”. It follows that I take a somewhat different approach to the construction of the definition of “exploit” to that taken by Lindgren J in Alphapharm, though I do not think the difference has any impact on whether or not Apotex threatens to infringe the Swiss claims in this case.

So the question now appears to be “Is the respondent exploiting in Australia a product which was made by a method as claimed in the patent?” It does not matter whether the method was performed in or outside Australia.

If Apotex imported its product as planned, therefore, Apotex would infringe because it would be importing into Australia and then offering for sale a product which had been made by one of the claimed methods. Any other result, of course, would have seriously compromised the utility of method patents.

The Full Court also dismissed Apotex’ appeal against the findings that the Patent was fairly based and not invalidated by a false suggestion. That may be a topic for another day.

 

Warner-Lambert Company LLC v Apotex Pty Ltd (No 2) [2018] FCAFC 26 (Jagot, Yates and Burley JJ)


  1. Or authorise someone else to exploit the invention: s 13.  ?
  2. Otsuka at [120].  ?
  3. Article 83 of the European Patent Convention provides “The European patent application shall disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art.”  ?

Copyright modernisation downunder – a consultation paper

The Australian government has issued a consultation paper on copyright modernisation: Copyright modernisation consultation paper.

The three main issues on which consultations are being undertaken are:

  1. flexible exceptions
  2. contracting out of exceptions; and
  3. access to orphan works.

The consultation paper arises from the Government’s response to the Productivity Commission’s final report into Intellectual Property Arrangements indicating that these matters required further consideration.

Following the Productivity Commission’s report, the consultation paper sets out an interesting framework for considering how to approach these matters. According to the consultation paper, the proposals “recognise copyright’s role as part of a wider intellectual property system that is:

  • effective—The system should be effective in encouraging additional ideas and in providing incentives that ensure knowledge is disseminated through the economy and community.
  • efficient—The system should provide incentives for IP to be created at the lowest cost to society.
  • adaptable—The system should adapt to changes in economic conditions, technology, markets and costs of innovating.
  • accountable—The policies and institutions that govern the system, and the way that changes are made to them, need to be evidence-based, transparent, and reflect community values.” [1]

The consultation paper proposes seven questions:

Flexible exceptions

Question 1
To what extent do you support introducing:
• additional fair dealing exceptions? What additional purposes should be introduced and what factors should be considered in determining fairness?
• a ‘fair use’ exception? What illustrative purposes should be included and what factors should be considered in determining fairness?

Question 2
What related changes, if any, to other copyright exceptions do you feel are necessary? For example, consider changes to:
• section 200AB
• specific exceptions relating to galleries, libraries, archives and museums.

Contracting out of exceptions

Question 3
Which current and proposed copyright exceptions should be protected against contracting out?

Question 4
To what extent do you support amending the Copyright Act to make unenforceable contracting out of:
• only prescribed purpose copyright exceptions?
• all copyright exceptions?

Access to orphan works

Question 5
To what extent do you support each option and why?
• statutory exception
• limitation of remedies
• a combination of the above.

Question 6
In terms of limitation of remedies for the use of orphan works, what do you consider is the best way to limit liability? Suggested options include:
• restricting liability to a right to injunctive relief and reasonable compensation in lieu of damages (such as for non-commercial uses)
• capping liability to a standard commercial licence fee
• allowing for an account of profits for commercial use.

Question 7
Do you support a separate approach for collecting and cultural institutions, including a direct exception or other mechanism to legalise the non-commercial use of orphaned material by this sector?

In a final section of the consultation paper, a number of “ongoing concerns raised by federal cultural and collecting institutions”[2] are identified for consultation. Apparently, these “arts portfolio agencies” are concerned that copyright is being used to inhibit their ability to “provide broad-based access to their collections”. The consultation paper explains:

This includes concerns over exceptions being tied to an institution’s physical location, and thus preventing offsite supply of material. At other times, exceptions permit digitisation of content but not providing digitised content to users. Some arts portfolio agencies expend a disproportionate effort on copyright due diligence, especially when identifying and locating authors of works. This can discourage institutions from digitising, promoting or providing access to their collections. As a result, copyright law may inhibit them from adopting modern cultural institution practices and engaging with Australians online. The Department notes that, at least in some cases, better online access would involve non-commercial use or the use of copyright material with low commercial significance.

Accordingly, the consultation paper questions whether the Copyright Act 1968 should be amended by:

  • adding a fair dealing exception for libraries and archives, which may provide scope for ‘off-site access’ to be provided to those wishing to use and access certain digitised collections;
  • expanding the scope of the current fair dealing exception for ‘research or study’ to include situations where a person has a family connection to the work;
  • refining the current s 200AB flexible exception for libraries and archives, including by removing existing restrictions on the provision only applying to ‘special cases’ and where another provision of the Copyright Act could not otherwise be relied on;
  • broadening the range of libraries to which document supply provisions can apply to libraries outside Australia—this would accommodate the prevalence of overseas Australians seeking access to library material.

Submissions should be provided to the Department of Communications and the Arts by 5pm on 4 June 2018.


  1. Productivity Commission, Intellectual Property Arrangements – Final Report p. 61ff.  ?
  2. These include the National Library of Australia, the National Film and Sound Archive, the National Gallery of Australia, the National Portrait Gallery, the Australian National Maritime Museum, the Museum of Australian Democracy and the Bundanon Trust. The consultation paper does point out, in addition, that there are many state and territory institutions of similar nature which may well have similar concerns.  ?