Patents

Confidentiality orders in court proceedings

1 Comment / Confidential Information, Patents / / / , , , , , , , ,

Motorola is suing Hytera for infringement of its patents relating to mobile phone technology.1 As part of the proceeding, Hytera is seeking to invoke a Digital Mobile Radio Essential Properties Cross Licence Agreement. Hytera has obtained an order that information about various terms in the agreement be kept confidential (I.e., suppressed) for 10 years after the proceeding is decided.

Section 37AF of the Federal Court of Australia Act provides the Court with power to suppress or restrict the publication of evidence. In the case of confidential information, such as trade secrets, the party seeking to restrict access to the information must show under s 37AGthat the restriction “is necessary to prevent prejudice to the proper administration of justice”.

Perram J noted that some scepticism might be felt towards the idea that protection of confidential information met the strict standard of necessity. His Honour accepted, however, case law recognised that commercial sensitivity, especially if it were likely that competitors could benefit from information which made public through the Court system, is a circumstance in which the necessity standard could be met.The integrity of the litigious process might be undermined if parties were precluded from advancing relevant information as a result of the harm potentially flowing from publication. In this case, the agreement in question was still on foot. And the information would place Hytera at a competitive disadvantage in future negotiations with third parties. At [15], his Honour explained:

disclosure of the information would be prejudicial to the proper administration of justice because it would tend to ‘destroy or diminish’ (Origin Energy at 148) the value of confidential information with the possible consequence that commercial parties will be more reticent to approach the Court to settle their disputes. I am therefore satisfied that an order under s 37AF in this case is appropriate.

Perram J was not prepared, however, to grant Hytera’s request that the information be kept sealed for 10 years. There was no evidence about the nature and lifespan of the digital mobile radio technology in issue or the life cycle of the telecommunications standards. Having reviewed the agreement and the substance of the information that had been disclosed, Perram J was prepared to order suppression for three years only. His Honour was prepared to reconsider if further evidence were put on.

If you are going to seek suppression orders – i.e, that information be kept confidential, therefore, you will need to lead evidence which establishes (1) that the information is in fact confidential and (2) there is a real risk of prejudice if the confidentiality is not preserved. Another factor which the Court seems to be mentioning more often was that the affidavit evidence was through the solicitor “on information and belief”, rather than from someone knowledgeable within Hytera itself.

Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (No 2) [2018 FCA 17

  1. Apparently, the trial is scheduled to run for 5 weeks. There are also parallel actions in the USA, China and Germany. ?

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IP Amendment (Productivity Commission Part 1 …) Bill – exposure draft

1 Comment / Enforcement, Patents, PBR, Trade marks / / / , , , , , , , ,

IP Australia has released an exposure draft bill and regulations to implement some of the Productivity Commission’s recommendations from its Intellectual Property Arrangements report. Intended to be the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2017.[1]

According to the news release, the amendments will:

  • commence the abolition of the innovation patent system (PC recommendation 8.1)
  • expand the scope of essentially derived variety declarations in the Plant Breeder’s Rights (PBR) Act (PC recommendation 13.1)
  • reduce the grace period for filing non-use applications under the Trade Marks Act (PC recommendation 12.1(a))
  • clarify the circumstances in which the parallel importation of trade marked goods does not infringe a registered trade mark (PC recommendation 12.1(c))
  • repeal section 76A of the Patents Act, which requires patentees to provide certain data relating to pharmaceutical patents with an extended term (PC recommendation 10.1)
  • allow PBR exclusive licensees to take infringement actions
  • allow for the award of additional damages, under the PBR Act
  • include measures intended to streamline a number of processes for the IP rights that IP Australia administers,

and everyone’s favourite “a number of technical amendments”.

On the parallel imports front, the bill would introduce a new s 122A to replace s 123(1) with the object of overruling the Federal Court’s case law severely restricting the legality of “parallel imports” since the 1995 Act came into force. It’s a “doozy”.

For example, it attempts to reverse the onus of proof that the courts have imposed on parallel importers by providing that

at the time of use, it was reasonable for the [parallel importer] to assume the trade mark had been applied to, or in relation to, the goods by, or with the consent of, a person who was, at the time of the application or consent (as the case may be):

(i) the registered owner of the trade mark; or

(ii) an authorised user of the trade mark; or

(iii) a person authorised to use the trade mark by a person mentioned in subparagraph (i) or (ii), or with significant influence over the use of the trade mark by such a person; or

(iv) an associated entity (within the meaning of the Corporations Act 2001) of a person mentioned in subparagraph (i), (ii) or (iii).

 

I suppose “reasonable to assume” does at least require some objective support for the “assumption”.

The second part – (iii) and (iv) above – is trying to deal with the situation where the registered owner assigns the trade mark to someone in Australia, but with the capability of calling for a re-assignment.[2]

This will require considerable flexibility by the Courts in interpreting “significant influence”.

If you have made such and assignment, or your client has, you had better start re-assessing your commercial strategy, however. The transitional arrangements say the amendment will apply to any infringement actions brought after the section commences. Moreover, this will be the case even if the “infringing act” took place before the commencement date.

Comments should be submitted by 4 December 2017.

Exposure draft bill

Exposure draft EM

Exposure draft regulations

Exposure draft explanatory statement

  1. Seems like the “short title” of bills are reverting to the old form “long” titles!  ?
  2. For example, Transport Tyre Sales Pty Ltd v Montana Tyres Rims & Tubes Pty Ltd [1999] FCA 329.  ?

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AIPPI Sydney 2017 – Day 3: patents, copyright and …

Leave a Comment / Copyright, IP generally, Patents / / / , , , , , , ,

Some more reports from the AIPPI Congress 2017 in Sydney – Day 3:

  1. My post on the panel discussing the issues patenting medical devices (apparatus or apparatus + drug) including significant changes in the EU next year;
  2. Clare Cunliffe reporting on the panel discussing issues arising when an innovator is seeking a final injunction against another innovator (rather than a generic); and
  3. James Elmore’s report on the Business of IP – IP venturing.
  4. Clare also reports on intermediary liability for copyright infringement.
  5. Finally, James reports on the panel on whether not identification of the technical problem solved by the patent is required in the USA, the EPO, China and Japan.

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AIPPI Sydney 3 – sufficiency

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My attempt to summarise Parma Session 1 ‘Sufficiently plausible’ has been posted on IPKat here.

Clare Cunliffe’s report on the session about IP and competition is here.

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AIPPI Sydney

1 Comment / Copyright, Patents, Trade marks / / / , , , , , ,

Over the weekend, I shall be attending the annual Congress of AIPPI in Sydney.

Lots of interesting sessions and practitioners from all round the world

If you are attending or in the vicinity, say “hello”.

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Government consultation papers on patent and trade marks

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Government consultation papers on patent and trade marks

Government consultation papers on patent and trade marks

The Australian government has issued 5 consultation papers on how to implement some of the recommendations it has accepted from the Productivity Commission’s Final Report into Intellectual Property Arrangements:

Submissions are required by 17 November 2017 (with a view to introducing a bill as soon as possible).

I can’t say that introducing yet another inventive step test (there are 4 if you count common general knowledge alone – depending on which regime applies to the patent in question) makes much sense.

Most of the Productivity Commission’s reasoning was based on the common general knowledge alone test used in Alphapharm.1 It did find, however, that there had not been much change in the Commissioner’s rate of granting patents relative to the EPO since the Raising the Bar act was passed. However, so far as I could see, it doesn’t tell us how many applications the Commissioner had examined under the Raising the Bar regime and you would have to guess a large number were still under the 2001 regime.2

Essentially, the Raising the Bar regime allows any piece of prior art to be combined with common general knowledge to test obviousness. It also allows prior art information to be combined in the same way as one might expect an English court or an EPO board would.3 The Raising the Bar regime should in fact operate just like the UK/EPC regime and one would have thought we should give it a good chance to work!

  1. See e.g. the reliance on Angiotech Pharmaceuticals v Conor Medsystems Inc. [2007 EWCA 5 at [43]. ??
  2. The Merial case is the only judicial consideration I am aware of applying the regime introduced in 2001 but, if you know of others, let me know. ??
  3. See e.g. KCI Licensing v Smith & Nephew [2010 EWCA Civ 1260 at 6. ??

 

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Government response to Productivity Commission IP report

Leave a Comment / Copyright, IP generally, Patents / / / , , , , , ,

The Government has published its response to the Productivity Commission’s Intellectual Property Arrangements – Final Report.

Further comment will have to await. In the meantime, the media release notes:

A key priority will be to align Australian inventive step law with international best practice to ensure that the necessary protections are available to deserving inventions. The Government has also accepted the Productivity Commission’s recommendation to phase out the Innovation Patent System.

and, in not accepting the proposal to adopt a general “fair use” defence to copyright:

It is important copyright reform is considered in a holistic context rather than focused on individual issues. We will continue to work closely with stakeholders over the next 12 months to develop effective options for copyright reform.

The Australia Copyright Council is very pleased.

There will also be a new IP Policy Group (within government) to, er, monitor IP policy!

According to the Government’s Media Release, the Government is still considering the merits of a number of other proposals and “will work on these further”.

Australian Government Response to the Productivity Commission Inquiry into Intellectual Property Arrangements (pdf)

Media release 25 August 2017

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No damages for unjustified threats

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Following on from the Full Court’s warnings in Australian Mud Company v Coretell, Dowsett J has now dismissed Morellini’s claim for damages for unjustified threats. This is a short point, but it bears notice as people often come to me thinking it is enough to show there has been an unjustified threat – it isn’t, if you want monetary compensation.

Mizzi and Morellini are both in North Queensland and came up with machines for planting sugar cane. Mizzi patented his. Dowsett J found that Morellini’s machine did not infringe Mizzi’s patent and Mizzi had made unjustified threats of patent infringement. On appeal, the Full Court also ruled that Mizzi’s patent was invalid for false suggestion.

There was no dispute that Mizzi had made unjustified threats. On 5 April 2010, it had caused to be published in the Canegrower trade magazine a notice about its pending patent and an article by “Invention Pathways” about the consequences “[i]f the patent owner decides to pursue his rights ….” Then in June 2011, Mr Mizzi made oral threats to a Mr Girgenti about the use of a Morellini machine.

The problems for Morellini were essentially two fold. First, much of the evidence about people’s reluctance to deal with Morellini related to things which happened before the threats were made or in circumstances where Dowsett J could not attribute them to the actual threats as opposed to just rumours circulating in the industry:

There is no direct evidence that anybody declined to deal with Mr Morellini as a result of the threats. It seems that even before the newspaper article on 5 April 2010, there was a degree of reluctance concerning any such dealings. That reluctance cannot have been attributable to the threats. Mr Morellini has not demonstrated that any adverse effect resulted from either of the threats.

Secondly, Dowsett J accepted that damages could be available for lost sales opportunities and delayed sales, if they could be linked to the threats. However, Morellini did not provide detailed evidence about how he would have exploited his machine commercially and why he had not been exploiting it “in more recent times”. That is, Dowsett J wanted to know what was Morellini’s plan (if he had one) for exploiting his machine commercially and why he had not been doing so.

Mizzi Family Holdings Pty Ltd v Morellini (No 3) [2017] FCA 870

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Widespread dissatisfaction in US with Supreme Court’s patentable subject matter tests

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The USPTO has published a report on its public review of the rules patent eligible subject matter under US law – what we would call a “manner of manufacture”.[1]

The Report does not appear to be the US Commissioner’s recommendations, but rather the results of consultations with the public.

As the Report notes, it is widely accepted in the USA that the Supreme Court’s decisions between 2010 to 2014 in Bilski, Mayo, Myriad and Alice have substantially altered what is patentable subject matter under US law and what not. The most dramatic effects being experienced by the life sciences and computer-related technologies.

While some submissions considered that it would sufficient to let the common law process of evolution unfold or the Commissioner could take administrative action to alleviate the effects of the Supreme Court’s decisions, “a majority, however, recommended legislative change”:

According to these participants, the Court’s precedent is having such a harmful impact on innovation and business development that a legislative solution is critical. ….

There appears to have been rather less uniformity about what the legislative solution should be.

  1. Some submissions called for a legislative requirement only that the claim be for a technological or useful art, without a requirement for “newness”.
  2. Some submitted that the requirement should be something having a practical application.
  3. Some submissions argued that express legislated exceptions should replace the Supreme Court’s common law exceptions. AIPLA for example contended for an exception:

    A claimed invention is ineligible … only if the claimed invention as a
    whole exists in nature independent and prior to any human activity, or
    can be performed solely in the human mind.

  4. Some submissions called for the legislation to make it clear that patent eligibility is a separate requirement to the other requirements such as novelty and obviousness, and to be considered separately from those requirements.
  5. Several commentators thought that the problem of “pre-emption”[2] could be addressed by introducing a specific exemption from infringement for research.

Our High Court in its own Myriad decision managed to adopt an even more alarming approach to patentable subject matter notwithstanding that Parliament had introduced an explicit research defence in s 119C. While it would appear likely to be some time before a clear solution emerges in the USA, maybe these developments should also give us pause for thought, given how enthusiastically the Patent Office and, under its guidance, the Full Court has jumped on the Alice type bandwagon, albeit drawing on the even more curious European approach.

Lid dip: Patently-O

Patent Eligible Subject Matter: Report on Views and Recommendations from the Public (pdf)[3]

  1. Patents Act 1990 s 18(1)(a)  ?
  2. That is, “concerns that patents on foundational technological tools may stifle scientific progress by tying up the basic building blocks of human ingenuity”.  ?
  3. For a rather more humorous take, see IP Musings.  ?

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US Supreme Court adopts international exhaustion for patents

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Last week, in Impression Products v Lexmark the US Supreme Court declared that an authorised sale of a patented product abroad exhausts the patentee’s rights within the United States of America. This follows on from 2013’s Kirtsaeng ruling adopting international exhaustion for copyright.

There is lots of analysis already, including Patently-O and Scotusblog, so this will be brief:

The underlying issue is printer manufacturers’ ongoing attempts to extract value according to usage of the printer by “metering” usage through charges on toner cartridges.

Lexmark has a number of patents over its toner cartridges. It offered patented toner cartridges for sale in two ways: at full price, with no restrictions or, for a 20% discount in return for a signed contractual condition that the customer would not refill the cartridge but return it to Lexmark.

Remanufacturers (vendors of refilled toner cartridges) had been acquiring Lexmark toner cartridges, circumventing the microchips preventing refilling then and reselling them.[1]

In this action, Lexmark had sued two groups of remanufacturers . The first group had obtained the cartridges they refilled within the United States (presumably the original owner of the cartridges was in breach of its contract by passing its used (empty) cartridges along). The second group had acquired their cartridges outside the United States and imported them into the United States for resale.

In summary, the majority of the Supreme Court[2] held:

We conclude that a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale.

In the majority opinion, Robert CJ noted that the 1890 decision of Boesch v Graff – the Supreme Court’s only previous consideration of this issue, did not concern parallel imports, but products made in Germany legally by someone other than the US patentee.

Given Lexmark itself appears to have sold the cartridges overseas, Prof. Wasserman Rajec notes that the Supreme Court’s decision does not settle what qualifies as an sale abroad authorised by the patentee.

Ginsburg J dissented

As her Honour did in Kirtsaeng, Ginsburg J dissented from the adoption of international exhaustion:

Because a sale abroad operates independently of the U. S. patent system, it makes little sense to say that such a sale exhausts an inventor’s U. S. patent rights. U. S. patent protection accompanies none of a U. S. patentee’s sales abroad—a competitor could sell the same patented product abroad with no U. S.-patent-law consequence. Accordingly, the foreign sale should not diminish the protections of U. S. law in the United States.

Her Honour also considered that patent law and copyright law were sufficiently different that the rule applicable in copyright (in the USA) should not apply to patent law:[3]

the two “are not identical twins,” id, at 439, n. 19. The Patent Act contains no analogue to 17 U. S. C. §109(a), the Copyright Act first-sale provision analyzed in Kirtsaeng. See ante, at 13–14. More importantly, copyright protections, unlike patent protections, are harmonized across countries. Under the Berne Convention, which 174 countries have joined, members “agree to treat authors from other member countries aswell as they treat their own.” Golan v. Holder, 565 U. S. 302, 308 (2012) (citing Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, as revised at Stockholm on July 14, 1967, Arts. 1, 5(1), 828 U. N. T. S. 225, 231–233). The copyright protections one receives abroad are thus likely to be similar to those received at home, even if provided under each country’s separate copyright regime.

What’s the position in Australia?

Until the High Court makes another one of its ex cathedra policy declarations,[4] the position in Australia is different.

First, when a patentee sells a patented product in Australia, the purchaser gets an implied licence to exercise all the rights in the patent: National Phonograph Co v Menck.[5] Being an implied licence, it could be excluded by appropriate contractual terms.

Secondly, where a patentee itself sells the product in an overseas market, there is also an implied licence to import it into Australia.[6] If the sale in the overseas market was made by a licensee from the patentee which did not also have a licence to sell in Australia, however, parallel importing would infringe.[7]

Impression Products Inc v Lexmark International Inc (30 May 2017)

  1. Lexmark had previously failed to stop these types of practices using the anti-circumvention provisions of the Digital Millennium Copyright Act.  ?
  2. Ginsburg J dissented from that part of the Court’s ruling relating to international exhaustion.  ?
  3. In International Parcel Express v Time Life, the High Court considered that copyright law involved different considerations to patent law and distinguished the patent law treatment in the context of parallel importing of books.  ?
  4. See for example iceTV and D’Arcy v Myriad.  ?
  5. The Time Life decision affirmed the continuing validity of National Phonograph v Menck, albeit in dicta.  ?
  6. Betts v Wilmott (1871) LR 6 Ch App 239.  ?
  7. Société Anonyme des Manufacturers de Glaces v Tilghman’s Patent Sand Blast Co Ltd (1883) 25 Ch D 1.  ?

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