Author name: war

A barrister practising mainly in Australian patents, trade marks, copyright and other IP law; lecturer and contributing author to LexisNexis' Copyright & Designs and Patents looseleaf services

The Commonwealth gets nothing on Sanofi’s undertaking as to damages

Nicholas J has dismissed the Commonwealth’s application for Sanofi to pay it compensation under the undertaking as to damages when Sanofi obtained an interlocutory injunction against Apotex’ plans to launch clopidogrel in Australia, but the patent was ultimately ruled invalid.

The decision is some 698 paragraphs long, so this going to be the briefest overview of some highlights only.

Some litigious background

Clopidogrel is a medication which can be used to inhibit blood clotting. Sanofi (then called Sanofi-Aventis) had patents protecting it around the world and had generated over US$1 billion in revenues. Sales in Australia being under Sanofi’s Plavix trade mark and BMS’ Iscover trade mark.

In August 2007, Apotex commenced proceedings for the revocation of Sanofi’s Australian patent.[1] Shortly after, Apotex also obtained registration of its generic version of clopidogrel on the Australian Register of Therapeutic Goods. In September 2007, it then applied for listing of its generic clopidogrel in the Pharmaceutical Benefits Scheme (PBS), through which the Commonwealth government subsidises the price of drugs in Australia.

As it missed the cut off date for the next round of listings in the PBS, it withdrew that application with the intention of making a further application before the next round closed on 1 December 2007. An application made in the December round would be for listing on the PBS from 1 April 2008.

In September 2007, however, Sanofi obtained an interlocutory injunction restraining Apotex from importing or selling in Australia pharmaceuticals which included clopidogrel as their active ingredient. Sanofi gave the usual undertaking as to damages as the price for that interlocutory injunction.

At the hearing for the interlocutory injunction, Apotex also gave an undertaking not to make an application for listing in the PBS pending the outcome of the trial. Apotex did not obtain from Sanofi an undertaking as to damages for that undertaking.

At the substantive trial, Gyles J dismissed Apotex’ application for revocation and instead found that it had infringed Sanofi’s patent. In September 2009, however, the Full Court upheld Apotex’ appeal and ordered the patent be revoked.[2] Sanofi’s application for special leave was dismissed by the High Court on 12 March 2010.[3]

Sandoz obtained PBS listing for its generic clopidogrel on 1 April 2010. Apotex did not obtain listing of its product until 1 May 2010. So, in addition to whatever sales it lost between 1 April 2008 and the lifting of the injunction in 2010, Apotex also lost whatever advantages may have flowed from being the first generic mover.

Sanofi and Apotex settled Apotex’ claims for compensation on the undertaking as to damages out of court.

The Commonwealth’s claims

The Commonwealth also claimed compensation under the undertaking as to damages.

Its case was that Apotex would have been listed on the PBS from 1 April 2008 if Sanofi had not been granted the interlocutory injunctions and so, as a result of the interlocutory injunction, the price payable for clopidogrel:

(a) was not reduced by the statutory reduction to the Approved Price to Pharmacists of 12.5%[4] (i.e. in very loose terms, the Commonwealth paid a price 12.5% higher than it should have been on all sales of clopidogrel between 1 April 2008 and 1 May 2010);

(b) further statutory reductions of 2% each were not triggered on, respectively, 1 August 2009 and 1 August 2010; and

(c) additional price reductions consequent upon the triggering of a statutory price disclosure regime which should have occurred on 1 April 2008.

(From [653] in his Reasons, Nicholas J discusses various scenarios for the calculation of how much the grant of the interlocutory injunction cost the Commonwealth. The lowest amount his Honour would have found in terms of compensation was in the order of $15 million.)

To succeed in its claim, Nicholas J held (at [196]) that the Commonwealth had to show:

· Would the relevant loss have been sustained but for the grant of interlocutory injunction?

· Did such loss flow directly from the interlocutory injunction?

· Could loss of the kind sustained have been foreseen at the time the interlocutory injunction was granted?

Why the Commonwealth lost

The Commonwealth was able to secure a number of witnesses from Apotex. These included the managing director of Apotex Australia, a Mr Millichamp, whose affidavit evidence was to the effect that Apotex was committed to launch its generic clopidogrel in Australia if, having been notified of Apotex’ plans to launch, Sanofi did not obtain an interlocutory injunction.[5]

The problem for the Commonwealth was that Apotex Australia is part of a corporate group controlled by Apotex Canada and the decision on whether or not to launch the product in Australia was to be made by Apotex Canada – specifically its founder and managing director, Dr Barry Sherman.

The evidence did show that in February 2007, Dr Sherman did plan for Apotex to launch its generic clopidogrel in Australia if Sanofi did not get an interlocutory injunction against it. Over time, however, the situation developed further. For example, the evidence included an email Mr Millichamp sent to one of his offsiders on 27 June 2007 when it appeared that the TGA listing was imminent (emphasis supplied) which stated:

[redacted]

[redacted] If we are successful in avoiding an injunction we will plan to launch subject to Barry’s further advice / approval.

If anything changes I’ll let you know.

“Barry” being Dr Sherman. At [251], Nicholas J considered this email indicated that Apotex had not yet decided whether it would launch its clopidogrel product in Australia if Sanofi did not succeed in getting an interlocutory injunction to restrain it.

Secondly, Apotex appears to have been planning to supply Australia from US stocks, but the shelf life of those products would not extend beyond August 2008 which was not very practical – especially when the earliest launch date would be April 2008.

Thirdly, Apotex’ challenge to Sanofi’s patent in the USA had been rejected by the trial judge.

Fourthly, Apotex’ communications to pharmacies did not definitely commit to a launch of the product.

Fifthly, Apotex had not exposed its legal advice on its prospects so Mr Millichamp’s evidence that “we always believed that all of the claims of the patent were invalid”

are not persuasive in circumstances where any legal advice upon which such a belief was based is not in evidence particularly in circumstances where the validity of the US Patent had already been upheld by the US District Court in a decision that was later affirmed on appeal.

Sixthly, at the time of the hearing for the interlocutory injunction in September 2007, the judge had indicated the final trial of substantive issues would be heard in April 2008 and he would give judgment by August 2008.[6] That is, the trial would take place in the same month as the earliest date that Apotex could be in the market if it re-submitted its PBS application before 1 December 2007.

In these circumstances, Nicholas J considered at [286]:

In the absence of evidence from Dr Sherman, I am not persuaded that he would have authorised a launch at risk in circumstances where an interlocutory injunction had been refused, but a final hearing was fixed to commence on 28 April 2008. ….

Rather, Nicholas J considered there was every reason for Dr Sherman to have deferred Apotex’ decision whether to launch or not until the last possible moment.

At this point, the failure (or inability) of the Commonwealth to call Dr Sherman as a witness became decisive all the more so as the Commonwealth was able to produce for cross-examination other Apotex witnesses who did travel from Canada and India. Nicholas J concluded at [347] – [349]:

I conclude that Dr Sherman was a witness who I would have expected to have been available to the Commonwealth and who would have had a close knowledge of relevant facts. In circumstances where the Commonwealth’s decision not to call Dr Sherman was wholly unexplained, I infer that the Commonwealth chose not to call him because it considered that his evidence would not have assisted its case.

I am not prepared to infer, based on the 20 February 2007 email, or any of the subsequent correspondence in evidence which was said to justify the drawing of such an inference, that Dr Sherman was likely to have instructed Mr Millichamp to procure the listing of Apotex’s clopidogrel products with effect from 1 April 2008.

In my opinion, the Commonwealth’s case suffers from an evidentiary deficiency which cannot be made good by drawing inferences from correspondence written by Dr Sherman in the lead up to the hearing of the interlocutory application. In particular, I do not think it can be inferred that if Dr Sherman had known that the trial of the patent proceeding would commence in the same month that Apotex Australia obtained a PBS listing of its clopidogrel products (triggering a 12.5% statutory price reduction), that he would have, in those circumstances, authorised Apotex Australia to obtain such a listing before judgment was delivered or, at least, until the trial had concluded (by which time he and his colleagues and his legal advisers may have had a clearer view of the strength of Sanofi’s case).

In the result, at [351], Nicholas J held that the Commonwealth’s claim must be dismissed.

Some other matters

Having dismissed the claim, Nicholas J went on to consider a number of other matters, albeit by way of obiter dicta.

Apotex’ undertaking not to seek PBS listing was not direct loss

The fact that Sanofi did not give an undertaking as to damages in return for Apotex’ undertaking not to seek PBS listing if an interlocutory injunction restraining sale was made would have provided a second basis for dismissing the Commonwealth’s claim.

Nicholas J accepted that the losses claimed by the Commonwealth were a foreseeable consequence of the interlocutory injunction, however, they were not a sufficiently direct consequence of it.

Apotex had recognised that, if an interlocutory injunction restraining sale was granted, there was no point seeking PBS listing. It would not be able to give the guarantee of supply required to obtain PBS listing and so any listing would fail or be revoked. In addition, it might expose it to increased damages having to compensate Sanofi for the profits lost on the automatic 12.5% reduction in price.

While Nicholas J accepted the Commonwealth’s loss was a reasonably foreseeable consequence of the interlocutory injunction, his Honour held it did not result directly from the injunction in the relevant sense. At [445], his Honour explained:

Even if it is accepted, as I have found, that the first Apotex undertaking would never have been given if the interlocutory injunction had not been granted, it does not follow that the Commonwealth’s loss flowed directly from the interlocutory injunction. The terms of the interlocutory injunction did not prevent Apotex Australia from applying for a PBS listing of its clopidogrel products or from taking any other steps to obtain such a listing. Doing so would not have involved a breach of the interlocutory injunction. The Commonwealth’s loss was a natural and direct consequence of Apotex Australia not being able to apply to list its clopidogrel products on the PBS with effect from 1 April 2008, which was the precise conduct to which the first Apotex undertaking was directed, but not something the interlocutory injunction expressly or implicitly prohibited. This strongly suggests, in my view, that the loss alleged by the Commonwealth in this case was an indirect consequence of the interlocutory injunction.

It is worth considering the ramifications of that conclusion. First, it has been held that it is not an infringement of the patent for someone to apply for PBS listing of a drug containing the protected invention.[7] Further, the Commonwealth is not in a position to require a generic company to refrain from giving an undertaking not to seek PBS listing unless there is an undertaking as to damages. Thirdly, His Honour’s reasoning would apply equally to the losses claimed by Apotex under the undertaking as to damages, not just the Commonwealth’s. If you are acting for a ‘generic’ in this situation, therefore, make sure any undertaking as to damages extends to any undertaking not to seek PBS listing.

Sanofi argued that, even if it did not get an interlocutory injunction, the Minister (or delegate) would refuse listing of Apotex’ product in the PBS on the grounds of patent infringement until the outcome of the proceeding was known. Sanofi’s own witnesses, however, admitted such an outcome was unlikely. Instead, Nicholas J considered an application for listing would most likely have been approved if Apotex had given the necessary guarantee of supply. At [419], Nicholas J said:

I do not think it likely that the Delegate would have refused the application on the basis that a trial of the patent proceedings would shortly take place or that a judgment might be expected to be given some time between May 2008 and August 2008. In my view the Delegate is likely to have been most influenced by two matters: first, the willingness of Apotex Australia to provide an assurance of supply and, second, the absence of any interlocutory injunction restraining any such supply. I think it unlikely that a Delegate would have questioned the ability of Apotex Australia to either comply with its assurance of supply or comply with its obligations under the guarantee of supply. So far as the latter was concerned, I consider it most likely that the Delegate would have proceeded on the basis that, in the event that there was some failure on the part of Apotex to supply during the guaranteed period, then it would be open to the Minister in that situation to exercise one or more of the powers available under the relevant provisions of the NHA including the power to delist the Apotex Australia clopidogrel products and the power to reverse the 12.5% statutory price reduction.

Another area of dispute between the parties was what would have happened if the interlocutory injunction had not been granted but, as in fact happened, the trial judge found Apotex infringed. Mr Millichamp from Apotex gave evidence Apotex would have applied to have the Apotex product delisted. Sanofi argued that, in that situation, it would have been able to get the 12.5% automatic price reduction reversed. The Commonwealth contended that reversal was unlikely. There was a at least one prior case where the price reduction had been reversed before the price reduction became automatic. In the unexplained absence of the person who was the relevant decisionmaker within the Government at the time,[8] Nicholas J considered at [529] the chance the Commonwealth would not have reversed the price reduction to be less than 10%.

Sanofi disputed that interest was payable on compensation ordered under the undertaking as to damages. While his Honour did not finally decide the point, Nicholas J indicated at [697] that he would have ordered Sanofi to pay simple interest on the sum awarded on the basis that it would have been just and equitable to do so.

In light of the evidence that it would take only 2 to 3 weeks for Apotex to have written its own Product Information, Nicholas J would not have denied the Commonwealth recovery because the Product Information (and other stipulated regulatory disclosures) infringed Sanofi’s copyright.[9] His Honour considered at [643] there was “good reason to believe” that no interlocutory injunction would have been granted to restrain copyright infringement in that time frame.

Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) (No 5) [2020] FCA 543


  1. Australian Patent No 597784 for the dextro-rotatory enantiomer of methyl alpha–5 (4,5,6,7-tetrahydro (3,2-c) thieno pyridyl) (2-chlorophenyl)-acetate, a process for its preparation, and pharmaceutical compositions containing it.  ?
  2. One curiosity of this outcome is that Sanofi’s corresponding patents in Canada and the USA were both upheld as valid and infringed.  ?
  3. Further interlocutory injunctions were put in place pending the outcomes of the appeals.  ?
  4. In essence, while there was only one source of clopidogrel – Sanofi (and BMS as a licensee) – clopidogrel was listed in the PBS in formulary F1. As soon as a second, competing source obtained listing, Sanofi’s listing would be moved into formulary F2 with an automatic price reduction of 12.5% imposed by statute. See [144] – [145]. Paragraphs [36] – [77] contain a useful explanation of how the pricing of products listed on the Pharmaceutical Benefits Scheme works and, in particular, the automatic reductions on pricing that apply when a second (usually generic) drug is listed.  ?
  5. The evidence disclosed that Apotex’ strategy, having successfully developed its generic clopidogrel (and having at least a further 18 months to complete development of a product based on a different salt), was (1) to secure ARTG listing then in short order (2) to apply for PBS listing, (3) to launch to the trade on an “at risk” basis – i.e. ensure the trade knew Apotex might have to withdraw the product if Sanofi’s patent was valid and (4) then to put Sanofi on notice of its plans to launch by bringing the revocation proceeding. An explicit part of the strategy was to secure the benefit of the undertaking as to damages if Sanofi did block sales through an interlocutory injunction.  ?
  6. The trial judge reached the statutory age for retirement in that month.  ?
  7. Warner-Lambert Company LLC v Apotex Pty Ltd (2017) 249 FCR 17  ?
  8. The fact that the person was no longer working for the Commonwealth was not a sufficient justification for the failure to call her.  ?
  9. The Copyright Act 1968 was subsequently amended to preclude the use of copyright against such materials. See now s 44BA.  ?

The Commonwealth gets nothing on Sanofi’s undertaking as to damages Read More »

Productivity Commission Response No 2 – No 2

The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 received Royal Assent on 26 February 2020.

The Act as actually passed (with amendments) is available here (to get the text from Austlii when I went there, I had to download the RTF or plain text format). There is also now a Revised Explanatory Memorandum.

As assented to, section 2 now prescribes that the abolition of the innovation patent regime will occur 18 months after Royal Assent — 26 August 2021.

(Remember, this is achieved by specifying an additional ground for “the formalities check” in new s 52(3) – an application for an innovation patent may pass “the formalities check” only if the date of the patent would be before [26 August 2021]. There is presumably a good reason why it doesn’t just say The Commissioner must reject the application for an innovation patent if the date of the patent would be on or after [26 August 2021].)

The Revised Explanatory Memorandum explains that 18 months has been chosen to ensure that persons who have filed a provisional application or a basic application under the PCT are not prejudiced. Such a person has up to 12 months from the filing date to file a complete application in Australia and an additional 6 months has been allowed to allow them enough time to make a decision.

As you will recall both ACIP and the Productivity Commission recommended abolition of the innovation patent. The Revised Explanatory Memorandum explains that the Government has accepted those recommendations because (footnotes omitted):

The policy intention of the IPS was to encourage SMEs to innovate and benefit from their scientific progress. In practice however, the innovation patent system has been found to have limited use by SMEs as 74 per cent of SMEs and private inventors filed once and never again; 83 per cent never received an enforceable right; and 78 per cent let their innovation patent expire early rather than pay the minor cost of the renewal fee. The Productivity Commission found that the majority of SMEs who use the innovation patent system do not obtain value from it, and that the system imposes significant costs on third parties and the broader Australian community. Given this, the innovation patent system has shown to be unlikely to provide net benefits to the Australian community or to the SMEs who are the intended beneficiaries of the system.

Section 4 in the Act as passed also requires the Minister to establish a review of the accessibility of patents for small and medium enterprises within 3 months (i.e. by 26 May 2020). Matters the review should consider include:

(a) the cost of applications for patents; and

(b) processing times of patents; and

(c) advice provided by the Australian Government with respect to the patent application process; and

(d) awareness of the patent application process.

The written report from the review must be submitted to the Minister within 12 months of commencement and the Minister must table it in both Houses of Parliament within 15 sitting days of receiving the report.

In addition to these matters, the Act also:

  • introduces an objects clause into the Patents Act 1990 – Sch 1 Part 1;

The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public.

  • revises the Crown use provisions in both the Patents Act and the Designs Act – Sch 2 & 3;
  • amends the compulsory licence provisions for patents to be based on a “public interest” test rather than a failure to meet the reasonable requirements of the public in Australia – Sch 4;
  • provides for electronic seals in the Patents and Trade Marks Offices – Sch 5;
  • permits objection to ‘omnibus claims’ to be raised at opposition, re-examination and revocation stages as well as examination – Sch 6;
  • permits the Commissioner of Patents to redact information (i.e. parts of documents) as well as documents where confidentiality requires it – Sch 7; and
  • amends the circumstances a translation of a patent application originally in a foreign language will require a certificate of verification – Sch 8.

All the amendments commenced on 27 February 2020 except for the abolition of innovation patents and Sch 8. The timing of the abolition of innovation patents has been discussed above. Sch. 9 commences on 26 August 2020.

Productivity Commission Response No 2 – No 2 Read More »

Productivity Commission Response No 2

Parliament has now passed the wonderfully named Intellectual Property Law Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019. Text here[1] and EM here.

When enacted, the “Act” will amongst other things:

(a) insert an objects clause, new section 2A, into the Patents Act:

The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public.

That clears things up nicely doesn’t it?

(b) suppress the granting of more “innovation” patents;

(c) harmonise the regimes for Crown use of patents and registered designs;

(d) introduces a revised regime for compulsory licensing of patents.

The suffocation of innovation patents will be achieved by introducing new sub-section 52(3) into the Patents Act.

Sub-section 52(3) will make it a requirement of the formalities check that the date of the patent (if granted) must be a date before the date the amendment came into force.

According to the form of the “Act” on Parliament’s website sub-section 52(3) will come into force 12 months after the “Act” receives Royal Assent.[2]

Once the sub-section comes into force, therefore, it will be possible to seek further innovation patents only where they are based on filings with a date before the commencement date so, for example, a divisional application.


  1. The bill does not become an Act until it receives the Royal Assent.  ?
  2. There had been reports that the phase out period would be extended to 18 months, but that does not appear to be reflected in the document on Parliament’s website. These reports also indicated that there was to be a review of the impact of “abolition” on Australian small and medium enterprises.  ?

Productivity Commission Response No 2 Read More »

Special leave!

The High Court has granted Calidad special leave to challenge the rules for parallel importing patented products.

Seiko’s Epson inkjet printers require print cartridges fitted with a chip which stores information about the model and the number of prints made. The chip on the cartridge interacts with the printer so that, amongst other things, each time a print is made, the chip memory is updated. When the number of prints stored on the chip reaches a number indicating that the ink has been used up, the printer is unable to print until a new print cartridge is inserted.

Seiko’s patent relates to the configuration of the cartridge in a particular way to achieve this proces.[1]

Calidad imported into Australia Epson printer cartridges. It had obtained the cartridges from Ninestar in Malaysia. Ninestar acquired genuine used Epson printer cartridges and “refilled” them. There was no dispute that the imported cartridges were genuine Epson products. The issue came down to whether what Ninestar did to “refill” the cartridges constituted “repair” or “making”.

At first instance, Burley J found that Calidad’s importation and sale of products imported before April 2016 infringed, but those imported after April 2016 did not.

The Full Court, however, upheld Seiko’s cross-appeal and found all imported products infringed.

In some respects, this is a rather “odd” case to be given special leave.

First, the rule about parallel imports and implied licence has been in place for almost 150 years.[2] Recently, however, the United States Supreme Court has affirmed that American patent law applies a doctrine of exhaustion rather than implied licence for imported as well as domestic products. The case also involved refilled printer cartridges – laser toner rather than inkjet. The US Supreme Court explained the difference between exhaustion and implied licence:

The problem with the Federal Circuit’s logic is that the exhaustion doctrine is not a presumption about the authority that comes along with a sale; it is a limit on the scope of the patentee’s rights. The Patent Act gives patentees a limited exclusionary power, and exhaustion extinguishes that power. A purchaser has the right to use, sell, or import an item because those are the rights that come along with ownership, not because it purchased authority to engage in those practices from the patentee.

The High Court’s questioning on the special leave application focused on the fact that the Privy Council decision in Menck in 1911 (before the Australia Act 1986) overturned the High Court’s adoption of the US domestic exhaustion doctrine. And the use of IP rights to enforce territorial restrictions has been the subject of regulatory comment.[3]

Secondly, the doctrine of exhaustion is predicated on marketing of the patented products by or with the consent of the patentee. As we have seen with attempts to adopt exhaustion for both copyright and trade marks, however, it has been necessary for legislation to enact extended definitions of “consent” to enable prospective parallel imports to act confidently.

For example, to override the decisions in Sporte Leisure and Lonsdale, Parliament introduced section 122A into the Trade Marks Act which embraces within “consent” trade marks applied by or with the consent of not just the trade mark owner in Australia but also related bodies corporate, associated persons and anyone having “significant influence” over the use of the trade mark in Australia, regardless of where those persons are located or act.

Moreover, it appears from section 122A(2) and (3) that it should not matter whether a licensee or distributor was actually acting within the scope of its licence.[4]

Furthermore, Parliament felt it necessary to shift the risks from the parallel importer to the trade mark owner as it does not appear the goods actually have to be genuine. Section 122A(1)(c) requires only that a reasonable person would conclude from the reasonable inquiries that have been made that the trade mark was applied by or with the consent of a relevant person.

I don’t know whether territorial division is as prevalent for patents as it appeared to be for trade marks or copyright. For starters, there don’t seem to have been the same number of cases. And it used to be the case that American patentees in particular were nervous about potential anti-trust liability. But, the potential role of limited consents is certainly a live issue: as long ago as 1883, the English Court of Appeal allowed a patentee to block imports put on the market by its French licensee on the basis that the French licensee’s licence did not extend to selling in England.[5]

Thirdly, the Calidad decision might not be thought to raise the question of exhaustion or implied licence. The “real” question seems to be whether what Ninestar did was just “repair” or involved “making” (in effect) a new product.

The products Burley J found did not infringe involved “only” drilling holes in the cartridges to clean and refill them, sealing the holes up and reprogramming the chip already installed on the cartridge. Burley J considered at [240] – [243] that reprogramming the chip, in particular, did not interfere with the patent as the claim was directed to the chip only, not the content stored on it. Similarly, “the minor physical” changes to the cartridges were not the subject of features of a claim.[6] The products which his Honour found did infringe at [271] – [277] involved similar acts but, in addition, involved Ninestar removing and replacing the computer chip so that the ink cartridges would communicate their “new” status to the printer.

In contrast, the Full Court (in three separate judgments) considered that what Ninestar did was so substantial as to be making a new product. Accepting that whether what was done involved “repair” or “making” was a question of fact and degree in any particular case, Jagot J explained at [166]:

It cannot be doubted that on the facts as found by the primary judge, none of the Calidad products are the product as sold by Seiko. The products which Seiko sold all embodied the claimed invention including that part of the first integer consisting of a “printing material container”. Step 2 of the process for all categories of container involved creating a new hole in the container to enable the container to be filled with fresh ink and then sealing both the new hole and the original hole with plastic by applying heat and pressure: [240]. While the primary judge described this at [240] as a “minor physical alteration” with no relationship to the claimed invention, as Seiko submitted, at the moment the new hole was created, there was no longer an essential integer of the claimed invention, a “printing material container”, as unless and until the new seals were applied, the purported container could not contain printing ink. Nor do I see how it could be concluded that the implied licence which arose on sale enabling the purchaser to use and repair the original Epson printer cartridge could be thought to extend to re-purposing the cartridge once it was empty of ink by creating a new injection hole for ink to enable the cartridge to be re-filled and sealing the original and new holes so that the cartridge, which had ceased to be a printing material container, was made into a new printing material container. That is not a use of the patented article as sold at all; it is the making of a new article within the scope of the patent. As sold, the patented article could not be re-used at all for two reasons. One, the container was empty of ink. Two, the memory recorded that the container was empty of ink so it would no longer function. As re-purposed, the product was still an embodiment of the invention but was capable of re-use. Of itself, these facts indicate to us that the modifications involved the making of a new embodiment of the invention, outside of any implied licence arising on sale and outside any notion of repair of the original cartridge.

and at [172] in relation to reprogramming the memory:

…. I am unable to agree with the primary judge that the claim involves the mere physical existence of the memory chip. Integer [2] claims a memory “driven by” a memory driving voltage. The only thing which is driven by the memory driving voltage is the memory in the sense of the information stored on the chip. The fact that the chip has information on it which is able to be changed (driven by) the memory driving voltage is an essential part of the claimed invention. It may be accepted that the actual status of the memory (that is, whether it shows the cartridge as full, empty or anywhere in between) is not part of the claim, but the fact that the claim involves a memory driven by a memory driving voltage is not irrelevant. Considered in the context of the product as sold, which is essential to the scope of the implied licence to use the product without infringement of the patents, the fact that the re-purposing of the cartridges, as a minimum, involves re-programming the chip to change the memory supports the conclusion that the imported Calidad cartridges are outside the scope of any possible implied licence or any concept of repair.

At [180], Jagot J summarised her Honour’s conclusions:

In the present case, every purchaser purchased an embodiment of the invention which, in the form it was purchased, permitted a single use only. To render the cartridge capable of re-use, the acts described above were required. In the context of the invention as embodied in the product sold, I am unable to accept that what was done was other than an infringement of the patents. It was outside the scope of any implied licence which could have arisen on sale and outside any reasonable concept of repair. (emphasis supplied)

See also Yates J at [276] “On no reasonable view can it be said that the modifications carried out by Ninestar to the original Epson cartridges constitute “repair”.” and Greenwood J at [85].

Before Jagot J embarked on the detailed reasoning summarised above in terms of the scope of the implied licence and the right to repair, her Honour noted that the European doctrines of exhaustion did not extend to “making” a new product. At [164], Jagot J explained:

… none of the English cases suggest that the Privy Council’s decision in Menck altered the fact that a purchaser has no right to make a new embodiment of the invention. The implied licence arising on unrestricted sale could never extend so far. Nor could the doctrine of exhaustion of patent rights result in the loss of the right to prevent the making of new embodiments of the invention, whether or not the new embodiment involved starting from scratch or re-using and modifying parts of the patented product as sold. I accept that in the latter case questions of fact and degree will be involved, with the necessary focus being the nature of the patented product as sold and the nature of the acts done to that product, but I do not consider any aspect of the present case lies at the “borderline” between repair and making. (emphasis supplied)

In the Lexmark case, however, the US Supreme Court upheld Impression Products’ right to import the toner cartridges even though it seems Impression Products installed “unauthorised” replacement chips on at least some of the imported cartridges to circumvent the re-use restriction.[7]

The parties’ written submissions are due to be completed by the end of February 2020. Brave New Year indeed!

Calidad Pty Ltd & Ors v Seiko Epson Corporation & Anor [2019] HCATrans 225


  1. Claim 1 of AU 2009233643 for example has 11 integers and reads: “[1] A printing material container adapted to be attached to a printing apparatus by being inserted in an insertion direction, the printing apparatus having a print head and a plurality of apparatus-side terminals, the printing material container including: [2] a memory driven by a memory driving voltage; [3] an electronic device driven by a higher voltage than the memory driving voltage; [4] a plurality of terminals including a plurality of memory terminals electrically connected to the memory, and a first electronic device terminal and a second electronic device terminal electrically connected to the electronic device, wherein: [5] the plurality of terminals each include a contact portion for contacting a corresponding terminal of the plurality of apparatus-side terminals, [6] the contact portions are arranged in a first row of contact portions and in a second row of contact portions, the first row of contact portions and the second row of contact portions extending in a row direction which is generally orthogonal to the insertion direction, [7] the first row of contact portions is disposed at a location that is further in the insertion direction than the second row of contact portions, [8] the first row of contact portions is longer than the second row of contact portions, and, [9] the first row of contact portions has a first end position and a second end position at opposite ends thereof, [10] a contact portion of the first electronic device terminal is disposed at the first end position in the first row of contact portions and [11] a contact portion of the second electronic device terminal is disposed at the second end position in the first row of contact portions.”  ?
  2. Betts v Willmott [1871] 6 Ch App 239. The continued validity of the rule was acknowledged by the High Court a mere 40 years ago in the Time-Life case – admittedly, a copyright case.  ?
  3. In addition to the introduction of Trade Marks Act 1995 s 122A, see e.g. At What Cost? IT pricing and the Australia Tax.  ?
  4. See also Explanatory Memorandum para. 26. For copyright, see the definitions of “non-infringing copy” of sound recordings, computer programs, electronic literary or music items and [accesories][access].  ?
  5. Société Anonyme des Manufactures de Glaces v Tilghman’s Patent Sand Blast Co. (1883) 25 Ch. D. 1  ?
  6. In all his Honour was required to consider 9 different categories of imported products and there were a range of variations to Ninestar’s interventions depending on the category.  ?
  7. The US Supreme Court does not directly refer to this, but see Lexmark International Inc. v Impression Products Inc 816 F 3d. 721 (Fed. Cir. 2016) at 727. Lexmark had previously attempted to argue [unsuccessfullystatic the replacement microchips violated copyright and the DMCA.  ?

Special leave! Read More »

Registered Designs consultation

IP Australia has started consultations on policy issues to implement the accepted recommendations arising from ACIP’s 2015 Report. There is also “a more holistic review of the designs ecosystem, as part of the Designs Review Project”, but these proposals don’t relate to that.

In an interesting development, IP Australia has prepared a quick video overview.

There are three “key” topics as part of the current review:

  1. Examining the scope of design protection
  2. Early flexibility for designers
  3. Simplifying and clarifying the designs system

IP Australia’s website summarises the topics addressed by Examining the scope of design protection as including:

  • whether it should be possible to seek protection for partial designs;
  • whether screen displays, screen icons and GUIs should be protectible as designs; and
  • how s 19 works.

Early flexibility for designers addresses matters such as:

  • introducing a grace period;
  • delaying publication of design applications so that they can be synchronised with launch dates;
  • and getting rid of the pointless “publication” option.

Simplifying and clarifying the designs system trots out yet again the “technical” proposals to simplify and clarify the system. While previously these proposals were going to be the subject of a bill, now:

IP Australia seeks any views on these proposals, including their relative priorities, to help understand how and when they should be progressed.

If you want to contribute a submission, you should do so by 20 December 2019

Registered Designs consultation Read More »

auDRP: .com.au and .net.au allocation rules

auDA is in the process of reviewing the rules for name allocation in the .com.au and .net.au spaces.

According to the Explanatory Guide the significant areas of the proposed changes include:

(1) eligibility rules for the .au namespace (these include allowing registration of second level domain names – i.e., not requiring registration in .com.au or .net.au); 

(2) changes to the use of the State and Territory namespaces to include Peak State and Territory bodies; 

(3) the use of internationalised domain names in the .au namespace; 

(4) the omission of the Domain Monetisation test for com.au and net.au namespaces; 

(5) a new prohibition on sub-leasing, renting or otherwise allowing another party to use a licence, except where the Person is a related body corporate; 

(6) a public interest test to deal with government requests; and 

(7) a new suspension power to provide a more proportionate response to non-compliance with the Licencing Rules. 

A roadshow concludes with a public workshop in Brisbane today.

A draft of the proposed rules for allocation can be found here and a statement of Key Consultation Issues here.

The Consultation page with further documents can be found here.

As part of that review, it is undertaking a survey to gauge community / stakeholder views.

You can take the survey here.

auDRP: .com.au and .net.au allocation rules Read More »

Encompass is still too abstract to be patentable subject matter

A Full Bench[1] of the Federal Court’s appeal jusrisdiction has dismissed Encompass’ appeal against Perram J’s ruling that its computer-implemented method was not a patentable invention because it was not a manner of manufacture.

Encompass had two innovation patents covering its concept. It sued Infotrack for infringing them. Infotrack admitted its conduct would infringe, but contended the patents were invalid on the grounds that they did not claim a manner of manufacture and did not involve “an innovative step”.[2]

At first instance, amongst other things, Perram J found the claims did involve an innovative step, but were not patentable because they were not for a manner of manufacture.

Infotrack was joined in resisting the appeal by the Commissioner of Patents (appearing as of right pursuant to r 34.23. The Institute of Patent Attorneys also sought and obtained (on a limited basis) leave to intervene.[3]

The claimed invention

Encompass’ (innovation) patent claimed a computerised method and apparatus for displaying business intelligence about “entitites”. The idea seems to have been to facilitate searching of multiple third party electronic databases[4] to ascertain and present aggregated data about the “entity” of interest. Claim 1 provided:

A method of displaying information relating to one or more entities, the method including, in an electronic processing device:

a) generating a network representation by querying remote data sources, the representation including:

i) a number of nodes, each node being indicative of a corresponding entity; and,

ii) a number of connections between nodes, the connections being indicative of relationships between the entities; and,

b) causing the network representation to be displayed to a user;

c) in response to user input commands, determining at least one user selected node corresponding to a user selected entity;

d) determining at least one search to be performed in respective of the corresponding entity associated with the at least one user selected node by:

i) determining an entity type of the at least one user selected entity;

ii) displaying a list of available searches in accordance with the entity type; and,

iii) determining selection of at least one of the available searches in accordance with user input commands;

e) performing the at least one search to thereby determine additional information regarding the entity from at least one of a number of remote data sources by generating a search query, the search query being applied to one of the number of remote databases to thereby determine additional information regarding the entity; and,

f) causing any additional information to be presented to the user.

Crucially for the outcome of the appeal, the Court noted at [30] that neither claim 1 nor any of the other claims “characterised” the electronic process device which performed the method – “any suitable process system” may be used.

Encompass’ challenge

Basing itself on NRDC and CCOM, Encompass argued that the concept of manner of manufacture required the claim to give rise to an artificially created state of affairs which had economic significance. These requirements were satisfied, Encompass argued, because the claimed invention involved:

(a) the interrogation of remote data sources;

(b) the generation and display of the network representation;

(c) the interaction with the network node to initiate a further search;

(d) the determination that the results thereby produced relate to the same entity as the one produced from the first search (the contention that this is a step of the claimed method is an issue in this appeal); and

(e) the display of the results of that search.

Encompass argued that Perram J had erred by considering whether the claimed invention “improved the functionality of the machine”. This was said to be an erroneous incorporation of the “machine or transformation” test from US law.

The appeal

Despite what it described as the “oblique attacks” made by Encompass and IPTA on Research Affiliates and RPL Centrol, the Court considered at [77] the appeal did not raise any significant question of principle. Their Honours considered that, having regard to the submissions made by Encompass and IPTA, the correctness of the two earlier decisions was not seriously in doubt. Rather, the issue was whether Perram J had applied the principles from those cases correctly.

The Court started by noting that the High Court in Myriad had agreed with NRDC that the issue is whether the claimed invention is a proper subject for the grant of a patent.

At [80], therefore, the Court noted that to determine whether a claimed invention involves a manner of manufacture requires a characterisation of the claim.

At [81], the Court reiterated that this characterisation is to be undertaken as a matter of substance rather than merely as a matter of form.

At [83], the Court noted the Myriad majority had held the NRDC court had not been attempting an exhaustive definition of “manner of manufacture” when it referred to ‘an “artificially created state of affairs of economic significance”’. Further, the satisfaction of that formulation did not necessarily lead to a finding of “inherent patentability”.

Encompass’ reliance on the reasoning in CCOM was misplaced. The Full Court in CCOM had explained why the computer program in that case was a manner of manufacture in the following terms:

The NRDC case at 275–277 requires a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the field of economic endeavour. In the present case, a relevant field of economic endeavour is the use of word processing to assemble text in Chinese language characters. The end result achieved is the retrieval of graphic representations of desired characters, for assembly of text. The mode or manner of obtaining this, which provides particular utility in achieving the end result, is the storage of data as to Chinese characters analysed by stroke-type categories, for search including “flagging” (and “unflagging”) and selection by reference thereto.

First, however and as the High Court in Myriad had confirmed, this reaoning was a guide only and not a rigid formula.

Secondly, the Court rejected Encompass’ argument that the proposition in Grant that a manner of manufacture required a “physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation” was inconsistent with CCOM and Catuity. Rather, both CCOM and Catuity involved methods where a component was physically affected or a change in state or information in a machine.

The Court then confirmed that the presence of a physical effect in the broad sense envisaged in Grant was also not conclusive. (There being such a transformation in the electronic processing device’s state by performing Encompass’ method.) The question was whether the claimed invention as a matter of substance transcended an abstract idea or mere information.

Encompass’ claimed invention did not provide sufficient specificity to transcend the abstract idea. At [99], the Court explained:

99 the method claims in suit are, in truth, no more than an instruction to apply an abstract idea (the steps of the method) using generic computer technology. The appellants endeavoured to explain why the claimed method falls within the notion of an artificially created state of affairs by attributing computer functionality to the method: the computer (or, in the language of the claims, the electronic processing device) searches remote data sources; the computer generates a network representation; and the computer responds to a user’s selection to conduct a further search. The appellants also attributed computer functionality to the method by the computer determining additional information relating to the same entity. As we have previously noted, this involves the contentious question of “entity matching”—a step which the primary judge found was not a step in the claimed method. We discuss this below when dealing with the grounds relating to innovative step. But even if for present purposes “entity matching” is taken to be a step in the claimed method, neither it nor the other steps, individually or collectively, amount to anything more than a method in which an uncharacterised electronic processing device (for example, a computer) is employed as an intermediary to carry out the method steps—where the method itself is claimed in terms which amount to no more than an abstract idea or scheme. (emphasis supplied)

The Court accepted that Encompass’ method could not be implemented using “generic software”. This did not save the claims as they did not specify as an essential feature of the invention any particular software or programming. It was left to a user of the method to devise and implement their own suitable computer program. According to the Court, this was merely an idea for a computer program. As in Research Affiliates and RPL Central, at [101] the Court characterised Encompass’ claims as merely a “method … in an electronic processing device”, which itself is not characterised.”

Finally, the Court at [105] – [110] rejected Encompass’ criticism that Perram J had improperly required the claimed method to result in “an improvement in the computer” by reference to the Research Affiliates court’s discussion at [104] – [105] to Alice Corporation in the USA. The Court considered that Perram J’s reference to these matters, properly understood, was just “an inquiry into and search for possibly patentable subject matter by reference to a touchstone of such subject matter.”

So, there you have it; all cleared up!

Next up, the Commissioner’s appeal (NSD66 of 2019) against the finding that Rokt did claim a manner of manufacture.

IPTA’s intervention

The Court summarised IPTA’s intervention as seeking to contest the Commissioner’s approach to computer related inventions. The Court outlined how it understood IPTA’s proposed intervention:

72 IPTA’s submissions took issue with the Commissioner’s statement that, in considering the patentability of computer-implemented methods, a key consideration is determining where the alleged ingenuity lies. IPTA submitted that this statement is “misconceived” because it intrudes questions of novelty and inventive step into the question whether the invention is a manner of manufacture; it suggests that the way in which the method is implemented in the computer is decisive and directs attention away from the method as claimed; and it suggests that a method characterised as a business method or a scheme is unpatentable, whereas it is only methods or schemes that are no more than a method of doing business or an abstract idea (with no practical application or effect) that are not patentable.

73 IPTA submitted that the Commissioner’s “misconceptions” had become established practice when examining patent applications. IPTA said that this was of “central concern to IPTA and its members’ clients seeking patent protection for their inventions”. IPTA said, further, that these “misconceptions” are reflected in the Australian Patent Office Manual of Practice and Procedure (the Manual) on which the Commissioner’s delegates rely for authoritative guidance in the examination of patent applications. IPTA argued that this has “led … to a confused state of affairs in the examination of computer-implemented inventions, and will cause examination of many such applications to miscarry”.

The Court, however, refused to buy into this fight on the grounds that the correctness or otherwise of the Commissioner’s earlier decisions was not a controversy before the court. The Court also refused to engage with what it described as “IPTA’s editorial comments” on the Manual of Practice and Procedure.

Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 (Allsop CJ, Kenny, Besanko, Nicholas and Yates JJ)


  1. A sitting of the Full Court constituted by 5 judges, rather than the more usual 3 judges. A bench of 5 judges appears to be appointed where there appear to be inconsistent rulings of differently constutited (3 Judge) full courts or there may be some compelling reason to doubt the correctness of an earlier decision.  ?
  2. Patents Act 1990 s 18(1A).  ?
  3. IPTA’s intervention sought to challenge the Commissioner’s approach to computer related inventions  ?
  4. For example, land registries, ASIC company records, police records “or the like”.  ?

Encompass is still too abstract to be patentable subject matter Read More »

GIs and proposed EU FTA

The Australian government has released the list of geographical indications (GIs) the EU is seeking protection for if/when the proposed free trade agreement goes ahead.

According to the announcement, the EU is seeking protection for 236 spirit names and 172 agricultural or other types of name.

The full list can be found via here.

The EU is seeking that included GIs be protected against:

  1. any direct or indirect commercial use of a GI name:
    1. for comparable products, or 
    2. in so far as such use exploits the reputation of the GI, including when that product is used as an ingredient; 
  2. any misuse, imitation or evocation, even if the true origin of the product is indicated or if the protected name is translated, transcribed, transliterated or accompanied by an expression such as “style”, “type”, “method”, “as produced in”, “imitation”, “flavour”, “like” or similar, including when those products are used as an ingredient; 
  3. any other false or misleading indication as to the origin, nature or essential qualities of the product, on the inner or outer packaging, advertising material or documents relating to the product concerned, and the packing of the product in a container liable to convey a false impression as to its origin, including when those products are used as an ingredient; 
  4. any other practice liable to mislead the consumer as to the true origin of the product.

No more mozzarella on top of your pizza, no more prosciutto around your melon balls, no more puy lentils (unless they’re imported from over there)?

If you think the inclusion of a name in the list will harm your interests, you should get your objection in by 13 November 2019.

The government says, however, you should base your objections on at least one of the following grounds:

  • the name is used in Australia as the common name for the relevant good; 
  • the name is used in Australia as the name of a plant variety or an animal breed; 
  • the name is identical to, or likely to cause confusion with, a trade mark or GI that is registered or the subject of a pending application in Australia; 
  • the name is identical to, or likely to cause confusion with, an unregistered trade mark or GI that has acquired rights through use in Australia;  or 
  • the name contains or consists of scandalous matter.

GIs and proposed EU FTA Read More »

Licensing relief

The Full Court has restored some commercial sanity to trade mark licensing in Australia and ruled that Manassen, the parent company, was an authorised user of the TRIDENT trade marks owned by Trident Foods (the subsidiary). This is an important ruling as it is a common arrangement for a corporate group’s trade marks to be held by an IP “holding company” which is often not the parent of the group.

Trident Seafoods, a large American corporation, has its trade mark:

blocked in Australia by Trident Foods’ TRIDENT registrations. It therefore tried to get Trident Foods’ registrations removed for non-use.

The trial judge found that Trident Foods had not used its trade marks in the relevant period, but exercised her Honour’s discretion against removal. Her Honour found that Trident Foods did not use its trade marks itself; they were used by Manassen, which was Trident Foods’ parent. The trial judge considered that the arrangements did not constitute the exercise of control by Trident Foods over Manassen to qualify as authorised use under section 8. Trident Seafood appealed her Honour’s decision not to order removal. The Full Court held that her Honour had erred and should have found Manassen’s used was authorised use and so the removal action failed because Trident Foods proved use of its trade marks in the relevant period. It also held that there was no error in the exercise of the discretion not to remove the registrations.

There was licensed use

At [44], the Full Court set out the trial judge’s findings that Manassen was not Trident Foods’ authorised user:

I am not satisfied that the evidence identified by Trident Foods shows that Manassen’s use of the “TRIDENT” trade mark has been “under the control of” Trident Foods within the meaning of s 8 for the following reasons:

(1) The corporate relationship between Trident Foods and Manassen does not place Trident Foods in a relationship of control over Manassen; rather, the converse is the case. The commonality of directors does not, without more, permit Trident Foods to exercise control over Manassen.

(2) Ms Swanson’s evidence is in the nature of assertion. It does not include any particular illustration of conduct by Trident Foods amounting to actual control of the use of the “TRIDENT” trade mark.

(3) The fact that Ms Swanson considered it unnecessary to give directions, whether by reason of the existence of the VQM Manual or otherwise, is not relevant to the question of whether Manassen had obligations to Trident Foods in relation to the use of the “TRIDENT” trade mark.

(4) Any control that Ms Swanson might personally exercise by virtue of her membership of the Innovations Council (which was asserted but not demonstrated) does not prove control by Trident Foods.

(5) The identification of Trident Foods as trade mark owner on products supplied by Manassen does not prove use of the trade mark under the control of Trident Foods.

(6) Assuming that the VQM Manual is owned by Trident Foods jointly with other corporate entities in the Bright Group, Trident Seafoods did not demonstrate that the VQM Manual conferred any relevant control on Trident Foods over Manassen.

(7) I am not satisfied on the evidence that there was an unwritten licence agreement in place, notwithstanding the recitals to the 3 November 2017 agreement. The affidavit evidence does not support the accuracy of the recital as to that unwritten agreement.

At [44], the Full Court noted that Lodestar required actual control over the use of the trade mark to qualify as authorised use under section 8. Whether there was actual control was a question of fact and degree. However, control could arise “where there was obedience to the trade mark owner “so instinctive and complete that instruction was not necessary”.

At [45], the Full Court considered the relevant issue was not which company controlled the other, but whether or not Trident Foods had control over the use of the trade marks by Manassen even though Trident Foods was its wholly owned subsidiary. The Full Court held that there was relevant control. The two companies were acting with “unity of purpose”. Here:

  • the two companies had common directors;
  • as directors of Trident Foods, those directors had obligations to maintain the value of its trade marks (which were valued in its books at $10 million)

    To that end Trident Foods necessarily controlled Manassen’s use of the marks by reason of the simple fact that it owned the marks and its directors, who were also Manassen’s directors, must have had one common purpose, being to maximise sales and to enhance the value of the brand.
    So it was “commercially unrealistic” in these circumstances not to infer the common directors necessarily wished to ensure the maintenance and enhancement of the value of the brand (emphasis supplied)

  • further, every packet sold by Manassen bore a notice that the trade marks were owned by Trident Foods
  • the corporate relationship, the commonality of directors and the shared processes between the two companies meant it was not surprising there were no particular instances of actual control being exercised over Manassen
  • It was inconceivable that Manassen was using the trade marks without the knowledge, consent and authority of Trident Foods

As a result, the Full Court considered it was not accurate to characterise Trident Foods as merely acquiescing in Manassen’s use of the trade marks rather than controlling that use. At [51]:

Mere acquiescence denotes passive acceptance of Manassen’s use but the corporate relationship, common directorships and arrangements between the companies required active engagement by those directors to protect Trident Foods’ valuable goodwill ($10 million in the books of Trident Foods, PJ [161(1)]). Trident Foods’ active consent and authority must constitute an unwritten licence for use of the marks.

So, Trident Foods demonstrated that it had used its trade marks (through its authorised user, Manassen) during the relevant non-use period.

The discretion not to remove under s 101(3) & (4)

If it had been necessary, the Full Court also rejected Trident Seafoods’ argument that the trial judge should not have exercised her discretion against removal. In reaching that conclusion, the trial judge had properly taken into account the length and extent of Trident Foods’ reputation in the TRIDENT trade marks and the potential for confusion if Trident Seafoods introduced its trade mark into the market place.[1] At [37]: the Full Court explained:

The criticisms of the primary judge are unfounded. The primary judge did identify the relevant context and the evidentiary foundation for her conclusion about confusion. Trident Seafoods’ asserted error constitutes nothing more than a disagreement with the evidence the primary judge considered should be given weight and her characterisation of the relevant context. At PJ [161] the primary judge identified, amongst other things, that the Trident marks have a substantial reputation in Australia having regard to the brand’s “high penetration in Australian households that it is probably in most households at some point during the year”, the fact that there is “not an independent retail channel in Australia that does not carry a ‘TRIDENT’ brand product”, “‘TRIDENT’ branded products are on promotion with independent retailers every month of the year, across the range”, and “‘TRIDENT’ is the number 1 selling brand for sweet chilli sauce, dates and coconut cream”. The primary judge also referred expressly to the competing contentions of Trident Seafoods about the potential for confusion at PJ [159] to [165]. It must be taken from the primary judge’s conclusion at PJ [179], particularly PJ [179(5)] that the primary judge was not persuaded by Trident Seafoods’ submissions about the prospect of confusion. We also do not accept that, in the circumstances identified by the primary judge at [161], there was insufficient evidence for the primary judge to conclude that removal of the marks would create a prospect of confusion in the minds of consumers. The primary judge’s finding at [179(5)] that “confusion is likely to be experienced by consumers who purchase food products at supermarkets because the ‘TRIDENT’ mark is likely to be associated in the minds of those consumers with an array of food products (not necessarily assumed to be limited to, for example, tinned products or tinned products of a particular variety) emanating from a single supplier and available for purchase at supermarkets” is unassailable. The finding was not only open on the evidence but, in our view, was correct. The fact that her Honour did not consider the TRIDENT brand had any residual reputation in respect of fish is not inconsistent with and does not undermine this conclusion.

The Full Court also rejected Trident Seafoods’ arguments that the trial judge had erred in treating mussels, oysters and oyster sauce as falling within “fish” and “fish products”. Trident Seafoods based its arguments on dictionary definitions of these terms. However, a “fair reading of the Nice Classifications discloses that molluscs and crustacean were treated as within the meaning of “fish” and other dictionary definitions also included molluscs and crustaceans within the meaning of ”fish”.

Trident Seafoods Corporation v Trident Foods Pty Ltd [2019] FCAFC 100 (Reeves, Jagot and Rangiah JJ)


  1. Trident Seafoods currently markets its products in Australia under the trade mark “Bountiful”.  ?

Licensing relief Read More »

check your e-filing receipts carefully

Now that IP Australia has essentially moved to electronic lodgement, a recent case shows that you need to check your e-receipts carefully. The decision may also prove useful to understanding the Registrar’s obligation to give a party an opportunity to be heard.[1]

Facts

Foxtel instructed their lawyers to file a notice of intention to oppose a trade mark filed by Unicom. Foxtel’s instructions were to file on the last day available to oppose. The notice was prepared and on the last day for filing a legal secretary submitted it through eServices. A transaction receipt was received by return.

Ten days later the in-house lawyer at Foxtel rang up the lawyers, alerting them to the fact that Unicom’s trade mark was now registered. Checking the Register revealed that no notice of intention to oppose had been received. The legal secretary:

then checked her files and the transaction receipt. As it turned out, the receipt was not for the lodgement of the notice of intention but concerned a different transaction altogether. Subsequent review of the electronic log provided by IP Australia indicates that although the process for filing the notice of intention had been commenced, the payment had not been received and lodgement had timed out before the filing was complete.

The lawyers then promptly wrote to the Registrar requesting that the registration of Unicom’s trade mark be revoked under s 84A and s 84B, providing an explanation and subsequently filed the proposed Statement of Grounds and Particulars of Opposition (if the registration were revoked).

The Registrar then wrote to Unicom’s attorneys indicating that, having regard to Foxtel’s intention to oppose and the explanation why that had not been effected, her she intended to revoke the registration, but giving Unicom an opportunity to be heard.

Unicom replied; arguing that something is not regarded as filed under the eServices system until and unless a filing receipt is issued. It also contended that the proposed revocation was outside the power conferred by s84A. After considering the submissions, the Registrar decided not to revoke the registration.

Foxtel, through its lawyers, then obtained a copy of Unicom’s submissions through s 217A and made an application for judicial review under s 5 of the ADJR Act and/or s 39B of the Judiciary Act.

Decision

Burley J has dismissed Foxtel’s application.

Foxtel’s first argument was that it had been denied procedural fairness because it was not provided with an opportunity to respond to Unicom’s submissions before the Registrar changed her mind and decided not to revoke the registration.

The Registrar denied that it owed Foxtel any duty of procedural fairness. She was under no obligation to make a decision under s 84A and, in any event, the terms of s 84A required her to give an opportunity to be heard only to the registrant and people with interests recorded under Part XI.

At [40], Burley J held the Registrar did owe Foxtel a duty of procedural fairness, but the failure to provide it with Unicom’s submissions was not a material breach of that duty.

A duty to provide procedural fairness arises whenever the exercise of a statutory power affected a person’s rights, interests or legitimate expectations unless the duty has been excluded by plain words or necessary intendment.

The public interest in the purity of the Register – that the Register should not be clogged with invalid trade marks – meant Foxtel had a sufficient interest that required it be accorded procedural fairness. At [49], Burley J explained:

…. The “interest” of Foxtel is in persuading the Registrar that, in all the circumstances that existed when the trade mark was registered, the trade mark should not have been because, but for the error in filing the notice of intention to oppose there would have been an opposition on foot at the time of registration (s 84A(1)). In my view this is a form of possible adverse affectation that is sufficient to qualify as an interest to attract the protection of the rules of procedural fairness.

That s 84A did specify some people whom had to be given an opportunity to be heard did not lead an implication that Foxtel was not owed a duty. An intention to exclude natural justice was not to be inferred from the presence in the Act of rights which “are commensurate with some [only] of the rules of natural justice”.[2] While not obliged to make a decision under s 84A, the Registrar was obliged to accord Foxtel natural justice having embarked on the exercise.

While Burley J accepted Foxtel’s argument that it was owed a duty of procedural fairness, his Honour did not accept it had been denied natural justice.

Foxtel argued that, as the Registrar indicated to Unicom she would revoke the registration if Unicom did not respond, Unicom’s submissions must have been material to the Registrar’s change of mind – deciding not to revoke. Therefore, Foxtel argued that the failure to disclose Unicom’s submissions before the Registrar decided not to revoke the registration denied it natural justice.

Burley J examined the reasons the Registrar gave for deciding not to revoke; these had been outlined only in short form in the letter advising her decision. From that letter, his Honour found that the Registrar had in fact rejected Unicom’s arguments on the construction of s 84A and accepted Foxtel’s construction. Therefore, Foxtel had not been denied natural justice on the point.

Burley J was not prepared to accept Foxtel’s argument that the short form letter did not set out the real reasons for the decision, especially in circumstances where Foxtel had not sought a statement of reasons from the Registrar under ADJR Act s 13.

Burley J next rejected Foxtel’s argument that the Registrar’s decision was an improper exercise of power because it was so unreasonable that no reasonable person could have exercised the power that way.

Here, Foxtel’s conscious decision to instruct that the notice of intention to oppose be filed on the last day of the opposition period – not an uncommon practice – loomed large.

Burley J accepted that the scheme of the Act reflected an intention that the Register be pure. His Honour noted, however, that the Act and reg.s also provided for deadlines for filing documents in oppositions and, in addition, provided a further opportunity for objectors to seek rectification through s 88. His Honour also pointed out that the Explanatory Memorandum linked s 84A(6) – which explicitly states the Registrar has no duty to consider whether to revoke a registration under s 84A – to the objectives of the section:

…. Revocation of registration under section 84A is not intended to provide a way of settling competing claims to ownership of a trade mark. This can be pursued through the courts, with section 86 of the Trade Marks Act providing for the Federal Court to cancel a registered trade mark. Nor is it intended to be a mechanism for parties to file de facto oppositions after a trade mark has been registered. This provision is only intended to provide an administrative mechanism to undo a registration where it was wrongly registered.

The Registrar’s letter stated that she had considered “all of the circumstances” and so taken into account all mandatory considerations. Further, as already noted, the procedure was not intended to provide a mechanism “for parties to file de facto oppositions after a trade mark has been registered” and Foxtel could still seek rectification under s 88. In these circumstances, Burley J held the Registrar’s decision was not so unreasonable that no reasonable person would have exercised the power that way.

Rather than take up the invitation to seek rectification under s 88, Foxtel has appealed (NSD795/2019).

Foxtel Management Pty Limited v Registrar of Trade Marks [2019] FCA 605 (Burley J)


  1. Reg. 21.15 applies where the Act or the reg.s “provide for a person to be heard”.  ?
  2. Citing Annetts v McCann [1990] HCA 57; 170 CLR 596 at [2].  ?

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