Archive for the ‘IP generally’ Category

Something to think about in drafting an exclusive licence

Thursday, July 10th, 2014

The Full Court has declared that a former exclusive licensee has to contribute towards the costs of patent infringement litigation. Cementech has a patent, No 2007219709, for a “matrix of masonry elements and method of manufacture thereof”. It had granted Austral an exclusive licence for a term of 4 years commencing in February 2010. Austral had an to renew, but didn’t take it up. There were provisions in the licence agreement dealing with infringements. There was the usual clause requiring Austral to tell Cementech if it came across any infringements. Then clause 9.2 provided:

9.2 Infringement Actions

(a) Upon receipt of an Infringement Notice [Cementech] may, at its sole discretion, take all steps reasonably required to protect the Intellectual Property from infringement.

(b) In the event that [Cementech] elects to initiate proceedings for prosecuting or defend any Claims with respect to the Intellectual Property, all expenses incurred by [Cementech] in conducting any such proceedings or defending any Claims will be borne by the parties equally and all amounts received (including in respect of costs) from settlements or adjudications will be dealt with in the manner described in clause 9.2(f).

….

Cl 9.2(f) went on to provide for distribution of any monetary awards resulting from the litigation to pay down the costs and the balance to be split between the parties in proportion to their losses suffered.

Cementech started infringement proceedings against Adbri during the term of Austral’s licence. Austral first tried to argue that, since it hadn’t given notice of the infringement to Cementech, cl. 9.2 didn’t apply. That went for six (well, five reasons):

  • the words “in the event that” in cl 9.2(b) established a condition, but not one triggered by any notice from Austal
  • the parties had a common interest in stopping infringements
  • Cementech could take proceedings regardless of receipt of a notice from Austral
  • (as is quite common) the scheme of the clause allowed Cementech first choice whether to sue or not – Austal did get rights to sue during the term if Cementech did not take action
  • under the terms of the licence, Austral did not have a discretion to notify infringements, if it became aware of one, it had an obligation to notify.

The real bite in the clause, however, is that the Full Court held it meant Austal had to pay half the costs of the infringement action against Adbri even after the licence had come to an end. Austral argued that the licence having terminated, the obligation terminated too citing the Westralian Farmers case. The Full Court however held:

It must have been in the common contemplation of the parties that Cementech might commence proceedings during the term which would continue after the expiry of the term. Clause 9.2(b), if engaged by the commencement of proceedings during the term, survives termination of the Licence Agreement, as does cl 9.2(f). It is apparent from the scheme of cl 9.2, which is a code in respect of litigation commenced during the term as Cementech submitted, that the parties intended the cost burden provision (cl 9.2(b)) and the proceeds benefits provision (cl 9.2(f)) to survive. That intention prevails …

The Full Court pointed out that under clause 9.2(f) Austal had a right to claim its proportionate share of any pecuniary remedies even after the licence terminated. The Full Court noted tersely:

The examples of commercial impracticality advanced by Austral apply equally during the term. The parties simply did not provide details about how their relationship in respect of the litigation other than in respect of cost sharing and benefit sharing would be regulated. But that is no reason to rewrite the commercial deal they did. Nor is the fact that, as it turns out, Austral does not wish to fund these particular proceedings.

If you are thinking about using this clause as a model for your future contracts, the Full Court recognised that the scheme set up by the parties might not work to either’s benefit in different cases:

Austral’s reluctance to be bound by cl 9 is understandable. The provision is capable of working to its disadvantage. For example, Austral (as apparently in the present case) may not agree that there has been any infringement and thus may not wish to fund any part of the proceedings. Austral’s interest in the proceedings may be limited depending on the nature of the alleged infringement and the time during the term when the proceedings are commenced (presumably, Austral’s interest might be greater if proceedings are commenced earlier rather than later in the term). Austral may well perceive, accurately, that it will pay 50% of the costs of expensive proceedings which will lead to no or little reward for it if Cementech manages to obtain any proceeds from the litigation. But all of these circumstances might apply equally to Cementech in different circumstances. As Cementech submitted, the potential for an unequal commercial interest in proceedings results from the deal the parties did when they entered into the Licence Agreement.

Austral Masonry (NSW) Pty Ltd v Cementech Pty Limited [2014] FCAFC 72 (Jagot, Nicholas and Yates JJ)

Dr Gurry re-appointed

Tuesday, May 13th, 2014

Last week, 8 May, WIPO’s General Assembly re-elected Dr Francis Gurry to a second 6 year term, beginning 1 October 2014 as Director-General of WIPO.

Congratulations, Dr Gurry!

In his acceptance speech, Dr Gurry highlighted the challenge facing WIPO:

I believe that the fundamental challenge that we face as an Organization is to achieve a shared understanding of the contribution and value of intellectual property to economic, social and cultural development. This is by no means an easy task. Many obstacles lie in the path – different competitive interests in an economy in which knowledge- and technology-intensive industries account for an increasing 30% share of global economic output; asymmetries of wealth, opportunity and knowledge; historical and contemporary trust deficits; and the reality of a multi-speed and multi-tiered world in which multilateralism, while being the highest expression of inclusiveness and legitimacy, is nevertheless the slowest solution.

It would appear this means continued development of the international agenda on specific issues.

Press Release

Acceptance Speech

Intellectual Property Laws Amendment Bill 2014

Thursday, March 20th, 2014

After the consultation, the Intellectual Property Laws Amendment Bill 2014 has been introduced.

  • Schedules 1 and 2 aim to implement the TRIPS Protocol:

    According to the EM:

    Under the new scheme, Australian laboratories will be able to apply to the Federal Court for a compulsory licence to manufacture generic versions of patented medicines under specific conditions, and export these medicines to developing countries. Adequate compensation for the patent holder will be negotiated, to ensure that they are not disadvantaged by the arrangements.

    Schedule 1 introduces provisions to implement the “interim waiver” agreed in the Doha Declaration 2001; Schedule 2 implements the TRIPS Protocol regime agreed in 2003 (or, I think, 2005).

    According to the EM, only one licence has been issued under these regimes – Canada in 2007. Apparently, Canadian generics would like to engage in further licensing, but the procedures are too complicated. Also, Least Developed Countries do not need to provide patent protection until 2016 and there is said to be a lack of awareness of the regime.[1]

  • Schedule 3 confers jurisdiction over plant breeder’s rights matters on the Federal Circuit Court (in addition to the Federal Court)
  • Schedule 4:
    • introduces the “single examination” model for patent applications in Australia and New Zealand;[2]
    • the single regulatory regime for patent attorneys and trade mark attorneys in both countries – the so-called trans-Tasman regulatory regime; and
    • provides for a single address for service in either Australia or New Zealand to be used under the patents, trade marks, registered designs and plant breeder’s rights legislation.
  • Schedule 5 is headed “Technical Amendments” which include repealing “unnecessary document retention provisions” and addressing “minor oversights in the drafting of” the Raising the Bar Act. These include:
    • amending s 29A so that an international applicant under the PCT cannot require anything to be done in Australia until the application enters the national phase;
    • amending s 29B so that only the prescribed period under s 38(1A) applies to Paris Convention applications;
    • amending ss 41 and 43 in relation to disclosure requirements for micro-organism inventions
    • amending s 43 to permit reference to the combination of prescribed documents, not just to individual prescribed documents alone
    • the defence in s 119(3)(b) will be amended to bring it into line with the amended form of s 24(1)(a)
    • amending s 191A so that the requirement for the Commissioner to hear both parties prescribed in s 191A(4) applies only in entitlement disputes.

Intellectual Property Laws Amendment Bill 2014

Explanatory memorandum


  1. The Regulatory Impact Statement included in the EM estimates that 63 in-house legal professionals and 128 patent attorneys in external firms will need to familiarise themselves with these changes for a total start up cost to business of $13,782.60 and an ongoing annual cost of $105. These costs include allowance for savings in legal costs because it will be possible to bring proceedings for infringement of plant breeder’s rights in the Federal Circuit Court, rather than the Federal Court. Perhaps confusing costs with earnings, the Regulatory Impact Statement relies on the ABS Employee Earnings and Hours Survey to estimate the average cost of patent and trade mark attorneys as $50 per hour (junior solicitors $60 per hour, IP attorneys $74.10 per hour and barristers $92.70 per hour, after including a 50% loading for overheads). The Statement does recognise that charge out rates “for lega”for legal professionals can range from $120 per hour to $800 per hour or more, viewed on 4 December 2013 at http://www.legallawyers.com.au/legal-topics/law-firm-sydney/solicitor-prices/. These costs do not reflect the opportunity cost of labour.” You may also be interested to know that the Regulatory Impact Statement estimates the costs of an application to the Federal Court for a licence at around $21,650 for the applicant.  ?
  2. The substance of the two countries’ respective patent laws is not being harmonised (yet).  ?

Securities over IP

Thursday, January 23rd, 2014

IP Australia has published a reminder:

The transitional period to register any securities (charges, mortgages etc.) you may have taken out over IP ( registered trade marks, patents, designs etc.) on the Personal Property Securities Register expires on 31 January 2014.

The Personal Properties Security Register is a national register of claims to security interests over personal property (which includes our imaginary subject matters) in essence to provide a one stop shop for notice about such claims.

If you (or your client) has taken out a security over someone else’ intellectual property or where the other person’s intellectual property is being used as collateral for repayment, the security should be registered on the Personal Property Securities Register. In very broad terms: if the security isn’t registered in the Personal Property Securities Register, its claim to priority over any later security or even enforceability could be lost.

IP Australia’s warning points out that it is not enough to have registered the security interest in a register of IP such as the Trade Marks Register, the Patents Register, the Register of Designs or the Register of PBR. These registrations will not be transferred automatically to the Personal Property Securities Register. Morever, registration of the security interest on one or more of those IP Registers will not take priority over a later registration on the Personal Property Securities Register.

So, if you or your client have taken out such a security and haven’t registered it in the Personal Property Securities Register yet, ‘hurry, hurry, hurry; quick, quick, quick’ (with apologies to Alexis Jordan).

Although IP Australia’s warning relates specifically to the registered IP it administers, the legislation also applies to unregistered IP such as copyright.

IP Australia’s media release.

IP Australia’s general overview of PPS

PPS R.

Summer must be over …

Friday, January 17th, 2014

IP Australia has released a consultation paper (pdf) (with exposure draft bill (pdf) and draft EM (pdf)) on the proposed Intellectual Property Laws Amendment Bill 2014.

According to the overview, the proposed bill will:

  • implement the Protocol amending the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property (TRIPS Protocol – links via here), enabling Australian medicine producers to manufacture and export patented pharmaceuticals to countries experiencing health crises, under a compulsory licence from the Federal Court
  • extend the jurisdiction of the former Federal Magistrates Court, the Federal Circuit Court, to include plant breeder’s rights matters
  • allow for a single trans-Tasman patent attorney regime and single patent application and examination processes for Australia and New Zealand, as part of the broader Single Economic Market (SEM) agenda
  • make minor administrative changes to the Patents, Trade Marks and Designs Acts to repeal unnecessary document retention provisions that are already adequately governed by the Archives Act 1983
  • make minor technical amendments to the Patents Act to correct oversights in the drafting of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 which was passed by Parliament in March 2012.

The proposed bill succeeds the Intellectual Property Laws Amendment Bill 2013, which proved rather more controversial than the former government, or its advisors, expected (see, for example, here (pdf)) and lapsed with the calling of the election.

According to the consultation paper, the proposed bill largely replicates the lapsed bill, but there have been changes in 5 key areas.

The provisions relating to Crown Use in the lapsed bill have been withdrawn and will be the subject of a separate bill in the future.

The provisions to implement the TRIPS Protocol drew much of the controversy. According to the consultation paper, these have been amended in a number of important respects. First, it is proposed that separate applications will be required for each patent that a person seeking a licence to manufacture under the TRIPS Protocol requires. It is hoped that this will address concerns about an imbalance of negotiating power if the patentee of one patent also required access to someone else’s patent(s) to take advantage of the proposed compulsory licence.

Secondly, the proposed compulsory licence will be to exploit the patent for the relevant purpose rather than the more limited “work” the patent.

To preclude the need to change the regulations when (perhaps that should be “if”) there is a change in a country a country qualifies as a permissible import destination, and the notification requirements according to whether the country is a member of the WTO or an LDC, the regulations will refer simply to the relevant lists maintained by the WTO and/or the UN.

Whether these changes will meet the substantive objections raised against the lapsed bill remains to be seen.

Unfortunately, the draft bill fails to address one important oversight from the Raising the Bar Act. The Raising the Bar Act replaced the standard applicable during examination and opposition to the grant of a patent from one of practically certain to be invalid to one of balance of probabilities: see Sch. 1 Part 2 items 39 to 54.

It has not been determined finally what standard applies in trade mark proceedings, although the preponderance of authority in the Federal Court appears to support the “practically certain to be invalid” standard to the examination and opposition of trade marks. See for example NV Sumatra v BAT at [16] – [38]. This position was adopted by analogy to, and for conformity with, the position then prevailing for patents. The reasons why this was changed for patents are equally applicable for trade mark applications. One would think it was high time to address this.

Comments and submissions are required by 7 February 2014.

Links to IP Australia’s documents via here.

Re-thinking the role of IP: Francis Gurry lecture

Thursday, August 29th, 2013

Last week, the 5th Francis Gurry Lecture at the University of Melbourne was given by Dr Francis Gurry, the Director-General of WIPO (and so the highest ranking Australian official in UN organisations), himself. The topic “Re-thinking the Role of IP’.

Dr Gurry’s central theme was that the context in which intellectual property operates has changed so much that the way in which we think about IP and its role in society needs to be reconsidered.

One of the key changes Dr Gurry identified was the economic shift from wealth derived from tangibles to wealth generation deriving from intangibles. As one indicator of this, Dr Gurry pointed out that US industries in the IP field accounted for some 35% of its GDP. Another indicator showed that in 1978 95% of the value of the Standard & Poors 500 came from tangible assets, down to 20% in 2010.

The second key change Dr Gurry identified was the economic shift from the West to the East. China is now the second largest investor in R & D in absolute terms in the world. Japan the third.

The third key change identified was the empowerment of non-state actors. One illustration of this was the Day the Internet went Dark. More than 115,000 websites closed or limited access. More than 2.4 million anti-SOPA tweets were generated. One of my favourite images (lid dip Marty Schwimmer was the impact on the US Congress:

sopa-pipa-one-day

We are seeing a little bit of that here.

Of course, the Department of Homeland Security, or the FBI, also flexed its muscles.

Among the many consequences arising from these changes:

  • much greater focus on IP and much greater intensity – Smartphone wars anyone, industrial espionage
  • much greater attention to what IP rights are granted for and focus mediating what is acceptable to the general public

Although not an example used by Dr Gurry, we have seen that here too. Dr Gurry did point out, however, an apparent paradox:

No one minds, it seems, someone making billions out of new social networking or media technology, but there is widespread social unease at someone making billions out of a new life-saving drug. Which outcome do we want to achieve in the innovation system?

Dr Gurry went on to explain that this changes in turn raised many questions for entitlement, appropriability and policy-making. Dr Gurry’s presentation in written form can be found here (pdf). Definitely repays reading. Lid dip @MsSamMcHugh

 

Update: A video of the lecture and the paper itself can now be found here.

Another IP amendment bill

Thursday, May 30th, 2013

The Intellectual Property Laws Amendment Bill 2013 was introduced into Parliament today.

The changes include:

  • amendments to the Crown use provisions in the Patents Act to ensure they apply where the relevant Commonwealth, State or Territory government has primary responsibility for funding or providing the service and to include a requirement for approval by the relevant Commonwealth, State or Territory Attorney-General
  • implementation of the TRIPS protocol to enable generics to apply to the Federal Court for a compulsory licence to manufacture a patented drug for export to developing countries experiencing a serious public health problem (or, as the EM puts it, a Health Crisis) to which the drug relates
  • conferring jurisdiction over plant varieties rights matters on the Federal Circuit Court (formerly the Federal Magistrates Court)
  • implementation of the Trans-Tasman patent attorney regime (whereby patent attorneys registered in Australia or NZ are entitled to practise in the other country as well)
  • so-called “technical amendments” to ensure that the amendments made by the “Raising the Bar” Act operate as intended.

Intellectual Property Laws Amendment Bill 2013

Explanatory Memorandum

IP Australia’s announcement

Raising the Bar update

Monday, January 21st, 2013

Following the conclusion of consultations about the draft Intellectual Property Legislation Amendment Regulations (the regulations to implement the “Raising the Bar” amendments), IP Australia has published a document outlining the outcomes of the consultation process.

The document outlines what IP Australia is proposing to do/implement in relation to:

 

Schedule 1

 

  • preliminary search and opinion
  • search fee
  • priority date
  • other things

 

Schedule 3

 

  • filing of evidence in oppositions
  • extensions of time to file evidence
  • confidentiality
  • fees for notice of intention to defenddefence (TM oppositions) (lid dip: Andrew Sykes)
  • cooling off period for patent oppositions (not in the public interest)
  • dismissing trade mark oppositions for inadequately particularised grounds
  • document service
  • no changes to basis for adding grounds / particulars to a notice of opposition
  • no change to costs provisions

 

Schedule 4

 

  • suspension regime for patent / trade mark attorneys will be retained

 

Schedule 5

 

  • customs seizure: regulations will be amended to require importers to provide full name, telephone number and address for service in ‘claim for release’ forms
  • email address will not be made mandatory

 

Schedule 6

 

  • applicants for patents will have 2 months to respond to a direction to request examination after examination has been deferred
  • acceptance period after 1st report on patent application has been issued will be reduced to 12 months
  • “IP Australia will not require a statement of entitlement at filing for standard patents (or at national phase entry for PCT applications). Instead, the statement will be required when the applicant requests examination, as part of the approved form.” Applicants for an innovation patent will still need to provide the statement when filing the application
  • The Commissioner / Registrar will retain discretion to decide whether hearings should be decided on the papers without oral presentation
  • Apparently, there are technical corrections that will be implemented to

Links to:

 

Public Consultation Update papers

IP Australia’s Press Release

 

 

IP Australia’s helicopter summary of Raising the Bar, more links and IP Australia’s summaries for patents, copyrighttrade marks and designs.

Patentology looks at the good news for SMEs and some of the things rejected, here.

Raising the Bar regulations

Friday, September 21st, 2012

IP Australia has published the first tranche of draft regulations to implement the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (most of which comes into force on 15 April next year).

This tranche includes the draft regulations for:

  •  Schedule 1 – Raising the quality of granted patents,
  • Schedule 4 – Assisting the operations of the IP profession, and
  • Schedule 5 – Improving mechanisms for trade mark and copyright enforcement.

Comments should be submitted by 21 November 2012.

Download all the gory details, including draft EMs, here.

Lots have people have had a go at trying to explain some, or all, of the ramifications of the Act. If you don’t want to Google, or bing, or duck duck go, the EM can be found on Parliament’s site here and the Bills Digest prepared by the Parliamentary secretariat is here.

The Chief Justice’s address

Thursday, August 2nd, 2012

A video of Chief Justice French’s 4th Annual Francis Gurry address A Public Law Perspective on Intellectual Property Law is now online.