Archive for the ‘Patents’ Category
At the end of August, Middleton J overturned the Commissioner’s refusal to grant an innovation patent for RPL’s computerised method entitled ‘Method and System for Automated Collection of Evidence of Skills and Knowledge’. Instead, his Honour held that the method was a manner of manufacture and, novelty and inventive step having been satisfied, patentable.
What the claimed invention was
In essence, the claimed invention allowed a user to access a single point of entry (for example, over the internet using his or her browser), retrieve information about particular qualifications, which was presented in the form of questions to the user, then provide answers and supporting documentation (still for example over the internet), which was then processed by a relevant certifying institution and, if the relevant criteria were satisfied, the relevant qualification would be awarded or, if not, the user could be presented with information about what further steps needed to be undertaken to satisfy the necessary criteria.
This bald summary hardly does justice to what was involved. For example, there are a large number of registered training organisations or TAFEs (RTOs). Collectively, they offer some 3,500 different qualifications and some 34,000 Units of Competency. Any individual RTO therefore offered only a very small set of qualifications or units. RPL’s method, first, circumvented the need for an individual user to identify which RTO was appropriate as RPL’s method retrieved all the necessary information from online databases. Then, RPL’s method converted the criteria into a form of questions which the user could answer. So, to take an example from the judgment, the element of competency required for a particular unit relating to aged care:
demonstrate an understanding of the structure and profile of the aged care sector
Generally speaking and based upon your prior experience and education, how do you feel you can demonstrate an understanding of the structure and profile of the aged care sector?
and a particular performance criterion associated with that:
all work reflects an understanding of the key issues facing older people and their carers
was converted in RPL’s method to:
How can you show evidence that all work reflects an understanding of the key issues facing older people and their carers?
for enabling individuals to get their competency or qualifications recognised under the nationally accredited Unit of Competency scheme.
The specification identified the advantages flowing from this method with its single point of contact:
Individuals are provided with a service which simplifies the identification of relevant Units of Competency, and the gathering of associated assessment information to enable [recognition of prior learning] to be performed. Training organisations are relieved of much of the administrative cost associated with performing [recognition of prior learning]. By the time the training organisation is contacted, the relevant Unit of Competency has already been identified, and required information associated with each of the assessable criteria has already been gathered and packaged in a form enabling an efficient assessment in relation to the [recognition of prior learning] process.
Why this constituted a (patentable) manner of manufacture
Middleton J noted at  that the test for “manner of manufacture” laid down in NRDC, CCOM and Grant required that the claimed invention result in an artificially created state of affairs in which a new and useful effect may be observed. This had to be of utility in practical affairs or be of an industrial, commercial or trading character and belong to the useful arts, not the fine arts, so that its value lay in a field of economic endeavour.
These criteria were satisfied. The results of the method were useful because at  it overcame difficulties involved in seeking out education providers and enabled recognition of prior learning. This was relevant to a field of economic endeavour: the education sector of the economy and thus had the necessary industrial, commercial or trading character.
While the information about RTOs and particular Units of Competency could be accessed individually in undifferentiated form over the internet, the method provided a single point of entry. In addition to the single point of entry:
 The computer programmed in accordance with the Patent further operates to process the retrieved information and to automatically generate data comprising an alternate means of presentation. This alternate means comprises a series of questions which can be presented to an individual user along with user interface elements which implement an online form suitable for the receipt of responses to those questions. An assessment server is programmed, again according to the teaching of the Patent, to present the form to the computer of an individual user, who preferably requires only conventional web browser software to access the assessment server via the internet. In particular, the form provides not only for user-entered responses, but also for upload of one or more files stored on the user’s computer which may comprise, for example, evidence of the user’s competency with regard to the recognised qualification standard. This access to an online form occurs as a result of the retrieval, processing and presentation steps being conducted according to the teaching of the Patent.
The various stages in this process each gave rise to the physical effect required under Grant in the various changes of state in the computer’s memory. Grant itself of course involved no such transformation since it did not involve any use of any computer – just a scheme for the use of a trust.
the “concrete effect or phenomenon or manifestation or transformation” referred to must be one that is significant both in that it is concrete but also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way. Consequently while the step of building a house involves a concrete physical effect it is peripheral to the method of acquiring a house and indeed could hardly be said to characterise the subject matter of the method such that it is considered an artificially created state of affairs. I consider the same to apply to a business scheme implemented in some part by computer and do not believe the patentability of such a method can arise solely from the fact that, in a general sense, it is implemented in or with the assistance of a computer or utilises some part a computer or other physical device in a incidental way.”
The Commissioner argued that the use of the computer here was not central to the method, being merely a “common mechanism to carry out the method in a convenient way.”
At , Middleton J rejected the Commissioner’s view that NRDC, CCOM and Grant required the requirement of substantiality or centrality of a physical effect in the sense the Commissioner contended for.
In addition, Middleton J rejected the Commissioner’s argument that the claimed invention could not be a manner of manufacture as it could be performed without the use of a computer. His Honour rejected this as a matter of principle at : it was not an appropriate way to approach the assessment required under NRDC, CCOM and Grant. In any event, as a matter of fact, the magnitude of the task meant it wasn’t practicable without the use of a computer:
 … as a matter of fact I accept that the magnitude of the task performed by the invention (as previously described) and the express terms of the claims themselves mean that the computer is an essential part of the invention claimed, as it enables the method to be performed.
While his Honour accepted that US cases could be persuasive, he noted he was required to apply the tests developed under Australian law and did not find any assistance in the present context.
At  – , Middleton J distinguished the recent rejection by Emmett J of Research Affiliates claims for a method of generating an index of securities and assets. In Middleton J’s view the central difference was that the specification in Research Affiliates “contained virtually no substantive detail about how the claimed method was to be implemented by a computer”. In contrast, there was detailed information about these matters in RPL’s specification and the computer was central to the method’s working.
RPL Central Pty Ltd v Commissioner of Patents  FCA 871
- The terms of claim 1 are set out here. ?
- Taken from  and  of the Reasons. ?
- At  of the Reasons. ?
- At  – . ?
- Myall at . ?
- While his Honour did not put it this way, that is perhaps unsurprising given the rather uncertain state of the US case law, e.g. here and here. ?
- An application for leave to appeal from Emmett J’s decision has been filed: NSD328/2013. ?
An IPwars first: my colleague, Susan Gatford, provies an update in which a Full Court overturned an interlocutory injunction against an alleged patent infringement. Do you agree with Sue that a trend seems to be developing?
Remember way back at the start of the Apple v Samsung litigation the Full Court dissolved the interlocutory injunction granted to Apple? Well, they did it again earlier this month in GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Limited.
The proceeding concerns an invention for accurately serving up doses of liquid medicines for children. Apparently children don’t like taking medicine from syringes with nozzles because they remind them of bad things (injections). But syringes are the most accurate way to measure doses of medicine accurately. Solution: design a syringe that doesn’t quite look like one. The syringe in the patent looked like this
It was designed by Reckitt and called a flat nosed syringe (i.e. one without a nozzle). It fits into a plastic attachment inserted into the neck of a medicine bottle. The syringe fits tightly into the neck attachment and allows accurate dosages to be measured and then administered. Reckitt has patented its bottle-syringe-bottle neck arrangement. It uses it to sell nurofen for children. This has apparently given their nurofen product a substantial competitive advantage over Glaxo’s panadol (the medicines are largely interchangeable and parents chose the one that is easiest to use in terms of dose measurement and child acceptance).
Interestingly, despite being aware of and seeking to emulate the Reckitt product, Glaxo didn’t do any patent searches. It seems that this was because it was told by the third party manufacturers of the syringe and of the bottle and neck attachment that they as manufacturers held all of the relevant patents. (They were wrong.)
Two injunctions were granted. On 28 May 2013 a Glaxo product that substantially replicated the Reckitt product was injuncted. According to the Court’s reasons Reckitt’s only complaint was the similarity of the bottle neck liner. This wasn’t, however, only what the patent claimed as its invention (remember, the aim was to design a syringe that didn’t look like one).
Glaxo then re-designed the shape of the syringe and advised Reckitt that it intended to sell their panadol with the offending bottle neck liner but with a different syringe. The re-designed syringe looked like this
Reckitt went back to Court to argue that this fell within claim 1 of the patent, which relevantly read:
A liquid dispensing apparatus comprising a bottle, a bottle neck liner and a flat-nosed syringe having a plunger and a barrel, the barrel terminating at its distal end in a generally flat face having a diameter corresponding to the diameter of the syringe and being perpendicular to the longitudinal access of the barrel….
The trial judge held that there was a sufficiently strong argument that the words
“having a diameter corresponding to the diameter of the syringe barrel and being perpendicular to the longitudinal access of the barrel”
would be understood by an addressee skilled in the art at the time of the patent to apply to the distal end of the barrel. Accordingly, his Honour held that Reckitt had a sufficiently strong prima facie case that warranted the grant of an injunction. His Honour rejected Glaxo’s application to lead further evidence as to the balance of convenience and made orders restraining the sale of the re-designed product. Glaxo appealed.
It argued that the trial judge’s interpretation required the additional words “at its distal end” to be added to the above extract, and that this was impermissible. The Full Court agreed. Put simply, its view of the strength of Reckitt’s infringement case on the design-around syringe was substantially lower than that of the trial judge. It also said that the trial judge erred procedurally by forcing Glaxo to rely only on its balance of convenience evidence from the May hearing, and by rejecting the further balance of convenience evidence on which it sought to rely in July. At the May hearing the trial judge had rejected Glaxo’s evidence as to balance of convenience in strong terms and made findings in accordance with of evidence filed by Reckitt in reply to it. The Full Court said
It was, of course, a matter for the primary judge to make findings of fact based on the evidence before him. But having made strong findings of fact, which were directly contrary to Ms Tomkins’ first affidavit, in the context of assessing the balance of convenience at the first hearing, it is difficult to understand why GSK should be prevented at the second hearing from relying upon additional evidence from Ms Tomkins in the form of her second affidavit which expanded upon the reasons why the primary judge’s suggested option was impracticable and posed public health and safety risks (see further below). All the more so in circumstances where the second hearing took place more than six weeks after the first hearing and related to an allegation of patent infringement in respect of a different apparatus. These considerations are not displaced or diminished by s 37M of the FCA Act.
The case is a timely reminder that:-
1. leave to appeal against interlocutory orders in patent and like cases is a serious option;
2. applications relating to “design around” products need to be considered both substantively and procedurally as the separate applications that they are in fact; and
3. it is worth paying very careful attention to balance of convenience evidence, which is often a moving feast, and doing your best to make sure that the Court does too. Referring the Court to this case might just help in that endeavour.
Susan Gatford is barrister on Gordon & Jackson’s list at the Victorian Bar. She practices out of Owen Dixon Chambers in Melbourne and is also a registered trade mark attorney.
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:
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.
ACIP has released an options paper on what to do about the innovation patent system.
An innovation patent is a uniquely Australian contribution towards encouraging innovation. You can get one (if you apply for it) for pretty much anything unless it differs from the prior art only in ways that “make no substantial contribution to the working of the [ahem] invention” as explained by the Full Court in the Delnorth case.
As recounted in the options paper, the basic objective of the innovation patent system is to encourage and promote investment in innovation by Australian (especially) SMEs.
The options paper is full of interesting statistics and there is an accompanying economics paper, the Verve report attempting to get some empirical data. For example, only about 25% of innovation patents ever get certified. Also, more than 50% of innovation patents are allowed to lapse by the end of their third year. The proportion of innovation patents granted to foreigners is 35% and rising.
Insofar as the options paper takes a position, it would seem that there is pretty much universal agreement that the level of innovation required to get an innovation patent is too low.
The options paper also appears to discern evidence that innovation patents are being used “strategically” or “tactically”, at least by some applicants.
ACIP is now seeking your views on what to do.
ACIP itself identifies 3 broad options:
(1) do nothing (option A);
(2) abolish the innovation patent system (option B); or
(3) change the innovation patent system (option C).
Option A: do nothing
ACIP notes that it is too soon to tell how the Raising the Bar reforms will affect those seeking innovation patents. Those changes do nothing, of course, to the level of “innovative step”.
The Verve report received 517 responses to its survey of the 3,195 Australian inventors who have taken out innovation patents to protect their “inventions”. Bearing in mind that these are the people that the innovation patent system is supposed to be encouraging, ACIP notes:
The Verve survey has shown that individuals and SME user-groups appear to be generally satisfied with the innovation patent system—albeit this survey occurring prior to the full impacts of the Raising the Bar Act being felt by users of the system.
The biggest problem with this do nothing option, however, is that it doesn’t do anything to address the apparently widely recognised issue that the innovation threshold is too low.
As ACIP notes, letting people get an innovation patent in Australia for something which is not patentable anywhere else does nothing to encourage Australian businesses to compete overseas. It should also be borne in mind that an innovation patent over something will probably have the effect of meaning its price will be higher than it would otherwise have been.
Option B: abolish the innovation patent system
There is a nice catalogue of what one might think were compelling reasons why this is a good option. There is also a summary of arguments against it.
This (or a variation on it) is widely perceived to be the option proposed late last year by IP Australia. The options paper indicates that the majority of non-confidential submissions to IP Australia and to ACIP didn’t support IP Australia’s proposal.
The options paper also includes a curious page suggesting that the designs registration system could be amended to permit the registration of functional designs. I (perhaps mistakenly) had thought the Franki Committee’s recommendations were implemented by the Designs Amendment Act 1981 s 11 (inserting new s 18) and s 5 (inserting a new definition of ‘design’) and find their current embodiment in s 7(2) of the Designs Act 2003. The “problem”, if it be a problem, with designs registration is that it protects only the visual appearance of a product, not its function. The new Act doesn’t seem to be any different in that respect to the old Act and it was plainly a deliberate policy choice.
Option C: change the innovation patent system
The problem here, at least insofar as the level of innovation is concerned, is what should that new level be and how on earth would the Courts ever work it out. ACIP plainly didn’t like the suggestions of the Law Council, IPTA or FICPI on this front.
The options paper also raises for further consideration changing or limiting the remedies: no injunction or no interlocutory injunctions, but continued exposure to pay damages or account for profits; limiting the ability to recover pecuniary remedies to the period after certification. Oh dear!
ACIP would like to hear your views by 4 October 2013. It is also planning to hold workshops for public consultation during September.
Options Paper here (pdf)
Verve report here
- Patents Act 1990 s 18(2) and (3) exclude some things from patentable subject matter and, apart from the level of innovation prescribed in s 7(4), there are a few other largely technical requirements to satisfy too. ?
- See e.g. recommendations 24, 25 and 26 of the ALRC’s Designs report. Of course, the limitation of the designs registration system to visual appearance only seemed to be one of the main complaints about the system identified by the ALRC: see e.g. 2.44 of the ALRC’s report and 3.49 and 6.5. ?
IP Australia has issued an Issues Paper on the proposed amendments to the Patents Act:
(1) to insert an “objects” clause; and
(2) to exclude from patentable subject matter inventions which it would be “offensive” to commercially exploit.
An objects clause
The consultation paper proposes 2 alternative “objects” clauses:
…. the purpose of the legislation as being to provide an environment that promotes Australia’s national interest and enhances the well-being of Australians by balancing the competing interests of patent rights holders, the users of technology, and Australian society as a whole.
the purpose of the patent system is to provide an environment that enhances the well-being of Australians by promoting innovation and the dissemination of technology and by balancing the competing interests of patent applicants and patent owners, the users of technology, and Australian society as a whole.
Now, one could very well wonder what possible help either of these statements might give a court if they were enacted. The consultation paper even notes that the Parliamentary Draftsman is rather ambivalent about the value of objects clauses in general:
Some objects provisions give a general understanding of the purpose of the legislation…Other objects provisions set out the general aim or principles that help the reader to interpret the detailed provisions of the legislation.
The first option is what ACIP proposed. ACIP considered its proposal a simplified version of the Objects identified in art. 7 of TRIPS:
The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.
The consultation paper thought that Option 1 does not sufficiently recognise the economic and social welfare concerns of patent law and did not sufficiently recognise the interests of patent applicants as well as patent owners (formerly known in Olde English as patentees). As the consultation paper explains:
The economic goals of the patent system are to promote economic growth, trade and investment by encouraging innovation and the dissemination of knowledge and technology.
The patent system encourages innovation by giving patentees a period of market exclusivity in which to recoup their development costs through commercialisation of their inventions. In exchange, patentees are required to disclose the details of their inventions to the public. The patent system contributes to social welfare by providing Australians with access to new technologies and developments that otherwise would not have occurred and that improve our quality of life (for example new pharmaceuticals and medical technologies and improvements to safety and waste management technologies).
However, the patent system will only meet its economic goals if the positive effects of the patent system in stimulating investment in innovation and providing society with access to new technology are balanced against the potential negative effects of patents restricting access to follow-on innovation and increasing costs, and so restricting supply of new patented technologies.
This is better, at least the first 2 paragraphs (if one bears in mind that economists – to the extent they accept the role of patents – think of the market exclusivity as providing an incentive rather than a “reward”). The third paragraph is rather more ambivalent.The danger the third paragraph raises is that it could be used as a basis for excluding something from patentability because someone might use the patent to raise prices or the other evils identified. But, while there are some provisions in the Patents Act that address, or attempt to deal with, these issues, in many respects they seem more properly the territory of (take a deep breath) competition law.
Offensive commercial exploitation
What the consultation proposes is a new exclusion to be added to s 18:
… for an invention the commercial exploitation which would be wholly offensive to the ordinary reasonable and fully informed member of the Australian public.
Apparently, the test of the ordinary reasonable and fully informed member of the Australian public is intended to ensure that the exclusion is “applied in a consistent, predictable and neutral manner”. However, it is also proposed to assist the Commissioner by explicitly empowering the Commissioner in his or her discretion to seek “non-binding” advice on ethical matters.
What seems to trigger the exclusion commercial exploitation in an wholly offensive way rather than at the specific subject matter itself. At what point is the appropriateness of the commercial exploitation determined? Will it be enough that the invention could be exploited in an wholly offensive way? The BRCA controversy erupted when Myriad announced it was going to start charging licence fees for its products. Would the ordinary, reasonable and fully informed Australian have considered its patent wholly offensive before that announcement? This rather suggests that the problem falls within the second type issue identified by ACIP: about how the patent is used, are better dealt with through Crown Use and other compulsory licence arrangements.
If you have views you want to inflict, they should be submitted by 27 September 2013.
Find the issues paper here.
Well written piece in The New Yorker outlining the role of the US International Trade Commission in patent disputes and President Obama’s veto of the ITC’s order to block imports of “older” Apple products.
Mind you, make sure you are not eating your cornflakes over breakfast or sipping your decaf skinny latte when you get to the paragraph:
Samsung’s lawyers may take their talents to Seoul, Tokyo, London, or other venues in which home-court advantage is increasingly important ….
Prof. Wegner apparently saw it differently.
Lid dip: Miguel Belmar
are in the news.
The This American Life podcast did a fascinating exposé on Intellectual Ventures, including that good old Current Affair/Today Tonight ambush attempt.
According to the website:
Two years ago, we did a program about a mysterious business in Texas that threatens companies with lawsuits for violating its patents. But the world of patent lawsuits is so secretive, there were basic questions we could not answer. Now we can. And we get a glimpse why people say our patent system may be discouraging, not encouraging, innovation.
There’s a fascinating visit (for those of us that don’t get to go there) to the Eastern District of Texas.
Even more interesting, despite the patent searcher’s report that there were more than 5,000 patents pending at the time the “poster patent” under investigation was filed, the invalidity argument that got up was the entitlement issue.
Wonder what would happen under our new rules if the true inventors came along to join in with the patentee?
Lid dip: Andrew Woods
p.s. Patentology wonders if a patent “troll” lurks in a sunburnt country
Well, a patents and designs case, but really it’s a case about entitlement: Kenny J has upheld the validity of patents and registered designs for “beer taps” which one company in the Fosters group – Foster’s Group Ltd – applied for “most likely [by] mistake” as one of its subsidiaries, Fosters Australia, was the owner.
Fosters Australia commissioned another party to design some new beer taps for it, on terms that it would own the resulting IP.
When the applicatins for the patents and designs were filed, however, they were filed in the name of Fosters Group Ltd, Fosters Australia’s parent and the holding company of the group.
When the mistake was discovered, Fosters Group assigned everything to Fosters Australia. By then, however, the designs had been registered in Fosters Group’s name, although innovation patent applications were still pending.
Fosters Australia has sued Cash’s for infringing its patents and designs. Cash’s defences asserted invalidity on the basis, amongst other things, that Fosters Group was not an entitled person or the grant was obtained by fraud, false suggestion or misrepresentation.
Kenny J rejected the attack on the patents on the basis that s 29 did not require an applicant for the patent to be the entitled person or someone claiming through him or her; it was necessary only that the patent was granted to someone who qualified under s 15. Kenny J further held that Fosters Group could assign the benefit of its applications to Fosters Australia.
Similar reasoning would apply to the designs s 21 and s 13, but the designs were already registered before Fosters Group assigned its rights to Fosters Australia. However, Kenny J found in circumstances that Fosters Group held the applications and registrations on constructive trust for Fosters Australia.
Patentology makes the point that, while all’s well that ends well, care needs to be taken in deciding who should make the application before it is filed.
Foster’s Australia Limited v Cash’s (Australia) Pty Ltd  FCA 527