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Mainly intellectual property (IP) issues Down Under

Intellectual Property Laws Amendment Bill 2017 – exposure draft

IP Australia has published an exposure draft of an Intellectual Property Laws Amendment Bill 2017 and the proposed accompanying regulations, explanatory memorandum and statement. So that everyone at IP Australia has something to do when they come back from their summer hols, you have to get your comments in by 22 January 2017.

A large part of the changes seem to be about aligning the administrative processes under the different statutory regimes According to the EM:

The patents, trade marks, designs and plant breeder’s rights (PBR) systems have a number of different administrative processes and rules specific to each IP right. A number of these differences are unnecessary or too onerous. Some processes take too long to resolve. This needlessly increases complexity, uncertainty and cost for users of the IP system.

This Bill will align and streamline the processes for obtaining, maintaining and challenging IP rights. Using similar processes for the different IP rights will make the IP system simpler and assist businesses dealing with more than one right. A simpler IP system will decrease administration costs for the Australian Government and reduce the regulatory burden for businesses that use it. The Bill will also enable greater use of electronic systems to manage and monitor IP rights.

A laudable objective! But, there are some 23 Parts and 596 items in the exposure draft bill alone. However, lots of them are plainly necessary changes such as replacing “reject” with “refuse” in the PBR Act, but there are others which will have more impact.

Overall, the broad topics addressed are:

  • Part 1 relating to renewals and terminology
  • Part 2 relating to re-examination and re-consideration
  • Part 3 relating to extensions of time
  • Part 4 relating to written requirements
  • Part 5 relating to the filing requirements
  • Part 6 relating to Official Journals
  • Part 7 relating to amendments of applications or other documents
  • Part 8 relating to signature requirements
  • Part 9 relating to computerised decision-making
  • Part 10 relating to addresses and service of documents
  • Part 11 relating to examination of patent requests and specifications
  • Part 12 relating to requirements for patent documents
  • Part 13 relating to acceptance of trade mark applications
  • Part 14 relating to registration of designs
  • Part 15 relating to unjustified threats of infringement
  • Part 16 relating to ownership of Plant Breeder’s Rights and entries in the Register
  • Part 17 relating to trade mark oppositions
  • Part 18 relating to seizure notices
  • Part 19 relating to publishing personal information of registered patent or trade marks attorneys
  • Part 20 relating to (criminal) prosecutions
  • Part 21 relating to the Secretary’s role in the Plant Breeder’s Rights Act
  • Part 22 relating to updating references to Designs Act
  • Part 23 abolishing the Plant Breeder’s Rights Advisory Committee.

I have no hope of trying to cover all that. Some of the things that caught my eye:

Part 15 introduces substantive changes to “unjustified threats”. The provisions in the Trade Marks Act will be amended to remove the defence of bringing infringement proceedings with due diligence. This will bring the trade marks regime in line with that for patents, designs and copyright. A corresponding regime is to be introduced for PBR.

Part 15 will also introduce a right for a victim of an unjustified threat to seek additional damages. What will be a flagrantly unjustified threat should be fun to explore.[1] Curiously, this remedy is not proposed for copyright.[2]

Part 13 proposes to reduce the period for acceptance of a trade mark, but expand the grounds for deferment. Items 421, 423 and 425 of the exposure draft regulations propose to reduce the period under reg. 4.12 from 15 months to 9 months after an adverse first report. However, item 427 inserts a new ground for deferring acceptance on the basis that:

(1A) The Registrar may, at the request of the applicant in writing, defer acceptance of an application for registration of a trade mark if:

(a) the request is made within the period applicable under regulation 4.12 or that period as extended under section 224, 224B or 224C of the Act; and

(b) the Registrar reasonably believes that there are grounds for refusing the application under section 41 or 177 of the Act; and

(c) the applicant is seeking to gather documents or evidence as to why the applicant considers there are no grounds for so refusing the application.

For renewal and re-examination (Part 2), apparently, it is possible to request examination of a registered design even after it has already been examined and certified. A formal re-examination process will be introduced. A re-examination regime is also proposed for PBR. The regimes for re-examination of patents and trade marks will also be clarified.

For re-examination (Part 3)

The EM says there are three broad issues with the current regimes:

> There are three broad issues with the extension of time system. The first issue is the differences in the number and types of extensions available between the IP rights. This increases complexity and confusion as to which extension is applicable and what evidence is required for supporting the request in a given situation. The second issue is the administrative burden placed on customers and IP Australia. Short extensions rarely have a significant impact on third parties, yet require the same declarations from applicants and assessment by IP Australia as long extensions. The third issue is that the protection for third parties that used an invention or trade mark while the IP application or right was lapsed or ceased can be inadequate or burdensome to obtain.  

The EM then says the main changes are:

  • repeal the ‘despite due care’ extension for patents;
  • remove the Commissioner’s and Registrar’s discretion for all general extensions, for all rights. This will
  • simplify the process and ensure compliance with the Patent Law Treaty and Patent Cooperation Treaty;
  • require all requests for extensions to be filed within two months of the removal of the cause of the failure to comply, to ensure there are no unreasonable delays;
  • improve the compensation for third parties that use inventions when a patent lapsed or ceased to reduce the burden on third parties;
  • expand the protection against infringement for third parties that use a trade mark while it was ceased to include while a trade mark application was lapsed;
  • introduce a streamlined process for short extensions, but ensure IP Australia can review and remake a decision on an extension of time;
  • prevent applicants from obtaining consecutive ‘short’ extensions for the same action;
  • provide general extensions and corresponding third party protection for PBRs.

Part 6 plans repeal of the requirements to publish information in the Official Journals, replacing them instead with an obligation to publish some information on the website or other electronic means.

Part 7 plans changes to the processes for amendments of information entered on the Registers and in documents. Perhaps alarmingly, these include plans to allow rights owners to make some changes to the Registers themselves!

Part 9 proposes introducing the potential for computerised decision making. An example of what is intended is the situation where an application has been accepted and the opposition period has expired without an opposition being filed. In such a situation “the computer” will “decide” to grant the right (presumably after,checking the fee has been paid). This seems intriguing, but you will have to go to a proposed legislative instrument to find out what decisions can be (have been) automated.

No doubt there will be something else to meet your curiosity lurking in the details!

You can find links to the exposure draft documents here. Remember though, get your submissions by 22 January 2017.


  1. Of course, in line with the existing provisions for additional damages for infringements, it may be possible to “score” even if the threat itself is not flagrant.  ?
  2. It can’t be because copyright falls under a different department because the exposure draft amends the Copyright Act to allow for electronic notifications (“notice” is also deprecated in this new simplified regime) relating to customs seizures – see Part 18.  ?

Selected links from the last week (or so)

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

Patents

Trade marks

Copyright

Designs

Not categorised

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

Logan J has ruled that documents prepared by a firm of trade mark attorneys in connection with a domain name arbitration are not covered by trade marks attorney privilege. The limits on the scope of “trade marks attorney privilege” is the main takeaway – in particular, Logan J considered that a draft statutory declaration prepared in connection with a UDRP complaint did not fall within the scope of the privilege. There is a warning about how a claim of privilege is made too.

Logan J has ruled that documents prepared by a firm of trade mark attorneys in connection with a domain name arbitration are not covered by trade marks attorney privilege. The limits on the scope of “trade marks attorney privilege” is the main takeaway – in particular, Logan J considered that a draft statutory declaration prepared in connection with a UDRP complaint did not fall within the scope of the privilege. There is a warning about how a claim of privilege is made too.

Titan is suing a Mr Cross and a Dr Harmon alleging that a website they, or one of them, operated – Beware of Titan Garages – infringed its trade mark rights and copyright.

Titan alleges that Mr Cross is a fictitious person.[1]

Titan had previously brought a complaint against Mr Cross under the UDRP unsuccessfully. Mr Cross was represented in that dispute by a firm of patent and trade mark attorneys (the attorneys) and not their associated law firm.

Titan issued a subpoena to the attorneys for production of documents which disclosed information about the identity of Mr Cross. The subpoena allowed redaction of information in the documents protected by client legal privilege (apart from name and contact details). The attorneys produced documents in answer to the privilege in redacted form. After inspection, Titan sought to access the documents in unredacted form. The attorneys objected, citing s 229.

Section 229 provides that a communication, or a record or document, made for the dominant purpose of a registered trade marks attorney providing “intellectual property advice” is privileged in the same way and to the same extent as if made by a lawyer.

The attorneys recognised that the privilege was Mr Cross’ privilege; not theirs. They had made efforts to obtain his instructions, but these were not forthcoming. Mr Cross did not appear at the hearing before Logan J either. As it was Mr Cross’ privilege to waive or not, the attorneys properly maintained the objection.

Why the claim of privilege was refused

In support of the claim, the trade mark attorneys provided an affidavit by the solicitors acting for them in connection with the subpoena. It stated that the deponent was informed the documents:

(1) were part of the trade mark attorney firm’s confidential files; and

(2) contained confidential communications with the attorneys for the purpose of them giving advice in connection with the UDRP complaint.

Logan J considered that the evidence did not rise above “mere assertion” and, in the circumstances of this case, was insufficient to discharge the onus on the person claiming the privilege to prove the privilege applied. His Honour had earlier explained at [9] that:

“the essential issue on a claim for privilege is the purpose for which the document or communication in question was made”: Hancock v Rinehart at [32]. It necessarily follows that the best, though not the only sufficient, source of evidence is the direct evidence of the person whose purpose is in question: Hancock v Rinehart at [32]. Procedural fairness questions in relation to other affected parties intrude in relation to any endeavour to prove the requisite purpose just by an inspection by the Court of the document which is the subject of the asserted privilege. That means that a court ought to be cautious about acting upon an invitation so to do, especially if that invitation is not attended by separate evidence describing the document and the circumstances of its creation….

Logan J did acknowledge that there might be other situations where the circumstances could lead to a different result. His Honour’s approach, however, highlights the risks that can be run by what might be thought to have been a fairly typical form of claim to privilege.

No doubt the attorneys were hampered in preparing the response by Mr Cross’ failure to provide instructions. One might also speculate whether his failure to provide instructions or to appear in circumstances where Titan alleged he was fictitious influenced his Honour’s approach. Titan did not take the point that the affidavit was “on information and belief”, but that is often problematic.[2] Logan J was not invited to inspect the documents and did not consider it appropriate to do so of his own motion. Presumably the point of claiming the privilege would be lost if his Honour had inspected the documents.

The scope of trade mark attorney privilege

Logan J noted that s 229 provides a privilege only in respect of communications and documents made for the dominant purpose of providing “intellectual property advice”.

Relevantly, that was defined as advice in relation to “trade marks” or (one might add) “any related matters”.

His Honour pointed out at [11] – [12] that the privilege was conferred only in respect of the advisory aspect of client legal privilege and did not extend to the litigation aspects.[3] While s 19(2) of the Code of Conduct for Patent and Trade Marks Attorneys 2013 incorporates a duty of confidentiality into the attorneys’ retainer. The terms and scope of that obligation were not co-extensive with the privilege. Consequently at [14]:

As s 229 is presently drawn, it is certainly possible to conceive of anomalous outcomes concerning the existence or otherwise of s 229 privilege with respect to such an arbitral proceeding. For example, it is not controversial that advice as to whether the rights associated with a registered trade mark confer rights in respect of an Internet domain name fall within the definition of “intellectual property advice” in s 229(3). And so, too, would advice as to whether the contents of a statutory declaration for use in an arbitral proceeding were sufficient to demonstrate that those rights did or did not extend to an Internet domain name seem to fall within the ambit of s 229 privilege – either by virtue of paragraph (b) or (e) of the s 229(3) definition. But the mere drafting of that statutory declaration by a registered trade mark attorney would not attract s 229 privilege. Likewise, advice as to what submission ought to be made to demonstrate that the asserted trade mark right did or did not extend to cover a domain name would seem to fall within the scope of the privilege, whereas the mere drafting of such a submission for use in an arbitral proceeding would not. However this may be, the present claim must be determined solely by reference to the scope of the privilege as presently enunciated by Parliament. (emphasis supplied)

If with respect his Honour’s approach is right, there would appear to be potentially quite drastic consequences for the normal practice of attorney firms, and for that matter patent attorneys,[4] in drafting statutory declarations and preparing submissions in contested hearings before the Office such as opposition proceedings.

Of course, given the view Logan J took about the adequacy of the claim to privilege, his Honour’s view on the scope of the privilege is “only” obiter dicta.

And, it must be said, the circumstances were rather unusual given Mr Cross’ failure to provide instructions or defend his claim.

Further, his Honour was not considering the potential application of the privilege to proceedings in the Office. And it might be possible to argue that such proceedings are not what is normally within the scope of litigation privilege rather than “advisory” privilege. Both privilege provisions for trade mark attorneys and patent attorneys draw a clear line between “intellectual property advice” and “court proceedings”. But “arbitrations” under the UDRP are not court cases either, officially being styled administrative proceedings without prejudice to the parties’ rights to litigate in court.

It may be arguable that, given the traditional role of patent attorneys and trade marks attorneys in preparing such documents before the Office (at least), it can be argued that they fall within the scope of the “any related matters” part of the definition of “intellectual property advice”. That may be seen as straining the concept of “advice” too far in the dichotomy Logan J acted under.

On a positive note, Logan J accepted that documents prepared by persons who were not registered trade marks attorneys could benefit from the privilege if prepared under the supervision of a registered trade marks attorney.

Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1241


  1. at [4].  ?
  2. For example, Ansell Healthcare Products LLC v Reckitt Benckiser (Australia) Pty Ltd (No 2)
    [2016] FCA 765 at [32] – [35].  ?
  3. Contrast s 118 and s 119 of the Evidence Act 1995.  ?
  4. Patents Act 1990 s 200  ?

Two points about exclusive licences of patents in Australia

The Full Court has upheld Rares J’s decision that Novartis was an exclusive licensee with standing to sue for patent infringement. However, its sub-licensee was not.[1]

Under the Patents Act 1990, only the patentee and an exclusive licensee have standing to sue for infringement: s 120. For this purpose, the licensee must be the exclusive licensee of all the rights to exploit the patent.[2]

In its initial licence, Orion had reserved to itself the right to manufacture the relevant drugs; granting Novartis the exclusive rights to import, use, offer to sell and sell the drugs. Orion also had rights to introduce its own generic product if a generic producer entered the market.

Following the Full Court’s ruling in BMS v Apotex (Aripiprazole), those terms meant that Novatis was not an “exclusive licensee” as (at the least) the grant did not include also the exclusive right to make the drugs.

Following Aripiprazole, however, Orion and Novartis amended the terms of the licence. Under the terms of the new licence, Orion simply granted Novartis the exclusive licence to exploit the patent in Australia “to the exclusion of all other persons”. In clause 2, however, Novartis undertook to buy all its requirements for the licensed products from Orion. There was also a side agreement that Novartis’ exclusive licence terminated if its rights under another, umbrella agreement[3] terminated.

As Actavis did not contend that the new arrangements were a sham, the Full Court affirmed Rares J’s conclusion that the new arrangements superseded the previous arrangements in which Orion had reserved rights of manufacture. Further, the agreement to buy all its requirements for the patented products did not undercut that exclusivity.

There were textual arguments to support that conclusion, such as recognition that Novartis could apply to IP Australia to register its status as exclusive licensee. Perhaps, the key point is that an exclusive licensee could, if it so wished, contract with some other person for that person to make the products for it. The fact that the “other person” was the patentee did not undermine that proposition.

We are persuaded that the primary judge’s analysis of the relationship between clause 1 and clause 2 is correct. Although it is true to say that the two clauses are connected, we think that the primary judge was correct to conclude that they represent separate promises in the sense that clause 1 creates the plenary rights of an exclusive licensee and clause 2 reflects the agreement between the parties as to how Novartis will exercise its rights. We do not think that clause 2 acts as some exclusion clause or limitation clause in the way in which the appellants contend, such as to cut down the legal effect of the rights granted by clause 1.

The sub-licensee

Novartis itself had granted an exclusive sub-licence of its rights under the exclusive licence to Novartis Australia.

The Full Court rejected the argument (and Novartis itself did not try to defend it) that there had been an assignment of its rights to Novartis Australia.

The Full Court ruled that s 120 is mandatory and not permissive only. That is, only a patentee or an exclusive licensee had standing to sue for infringement. As Novartis Australia was only a sub-licensee, therefore, it had no standing to sue for infringement.

As a sub-licensee, however, Novartis Australia had sufficient interest to have standing as a proper party to the cross-claim for invalidity under s 139.

It is difficult to imagine that in this case this delicate footwork will have much reflection in who pays whose costs. One point where it could have a real impact, however, could be on what damages, if any, were payable. It might well not be possible to claim damages for sales lost by Novartis Australia, if it did in fact lose any sales, as Novartis Australia did not have standing to sue for infringement.[4]

Actavis Pty Ltd v Orion Corporation [2016] FCAFC 121 (Allsop CJ, Nicholas and Yates JJ)


  1. There are 193 paragraphs before the discussion of this issue, dealing with questions of validity and infringement (which seem to turn mainly on points of construction).  ?
  2. From the Dictionary: “exclusive licensee ” means a licensee under a licence granted by the patentee and conferring on the licensee, or on the licensee and persons authorised by the licensee, the right to exploit the patented invention throughout the patent area to the exclusion of the patentee and all other persons.  ?
  3. A so-called Rest of the World Agreement, setting out arrangements between the parties except for the USA and the European Union.  ?
  4. In Insight SRC v ACER, however, a Full Court held that a copyright owner could recover damages for sales lost non-exclusive licensees who did not have standing to sue for infringement.  ?

The patent was not infringed

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

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

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

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

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

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

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

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

Rares J has refused preliminary discovery.

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

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

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

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

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


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

Was the patent infringed?

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

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

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

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

The answer should be posted on Friday.

Selected links,from last week

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

Patents

Trade marks

Copyright

Remedies

Not categorised

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

Selected links from last (couple of) weeks

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

Patents

Trade marks

Copyright

Not categorised

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

Selected links from last week

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

Patents

Trade marks

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

Copyright

Remedies

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

Designs

Not categorised

Future of the profession

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

Selected links from last week

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

Patents

Trade marks

Copyright

Not categorised

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