Posts Tagged ‘Australia’

Zima is a registrable trade mark

Thursday, September 25th, 2014

Mastronardi applied to register ZIMA as a trade mark in class 31 for tomatoes. The Registrar refused the application on the grounds that it was not inherently adapted to distinguish. Gordon J has now upheld Mastronardi’s appeal and directed the trade mark be registered.

Unknown

ZIMA sofar as anyone knows is an invented word; it has no meaning at all. Apparently, however, it is only ever used in relation to one “variety” of tomato. The Registrar refused the application on the basis that:

“the word ZIMA appears to be a reference to a single kind of tomato plant and its fruit” and that the trade mark “lacks any inherent adaptation to distinguish the Applicant’s tomatoes as it appears to be an appropriate description of the goods in respect of which it is to be used”.

As the trade mark had not been used in Australia before the date of the application to register it, therefore, it failed.

The question fell to be determined under the old form of s 41 (although it should be the same under the (it is hoped, more clearly expressed) new form. Thus, a sign is registrable as a trade mark if it is “inherently adapted to distinguish”. Both Mastronardi and the Registrar accepted on the appeal that, even under the old form of s 41, a sign is presumed to be inherently adapted to distinguish unless the Registrar (or the Court) is (positively) satisfied it is not.

A sign would not be inherently adapted to distinguish if other traders in such products would legitimately wish to use it to refer to those products even if they were not the applicant’s products. The issue turns on:

the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.[1]

Consequently, Gordon J explained there were two questions that needed to be addressed:

(1) how would ZIMA be understood as at 25 July 2011[2] by ordinary Australians seeing it for the first time used in respect of tomatoes; and

(2) how likely is it that other persons, trading in tomatoes and being actuated only by proper motives, will think of the word ZIMA and want to use it in connexion with tomatoes in any manner which would infringe a registered trade mark granted in respect of it?

As it was an wholly invented word, with no meaning, the answer to the first question was easy: it wouldn’t convey any meaning.

The Registrar argued on the second question that ZIMA was in fact, and was treated by other traders, as the name of a particular variety of tomato. The expert evidence before the Court, however, disclosed that “variety” in the context of tomatoes was a very rubbery (no pun intended?) term and, while there were a few varieties of tomato registered under the Plant Breeder’s Rights Act, thousands were not.

More directly, Mastronardi’s evidence was that it did not source its ZIMA brand tomatoes from just one variety. In Australia, there are apparently 50 different cultivars of orange grape tomatoes; Mastronardi used only six of these and only two were supplied to it exclusively. Moreover, when it launched its product in Australia, it had been very careful in its usages referring to its ZIMATM golden grape tomatoes or sweet orange grape tomatoes or golden snacking tomatoes.

So, it followed that other tomato suppliers had a range of terms they could use to describe their own sweet orange/golden grape tomatoes and, therefore, ZIMA was inherently distinctive.

Her Honour’s decision highlights the importance of careful use of trade marks, particularly if there is a risk the trade mark may become the commonly accepted term for a variety or type: the trade mark should be used as an adjective and not as a noun (or verb). This is a problem that practices in the pharmaceutical industry have had to grow up to develop – a different name for the active ingredient to the “brand” name[3] – but, as this case shows, of potentially much wider application.

It is also interesting that her Honour has directed that the trade mark be registered rather than accepted and advertised.[4]

Mastronardi Produce Ltd v Registrar of Trade Marks [2014] FCA 1021


  1. Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 514.  ?
  2. The date of Mastronardi’s application to register its trade mark in Australia.  ?
  3. See also s. 25.  ?
  4. Which in some cases carries the risk of opposition.  ?

Fraudulent imitation

Monday, September 22nd, 2014

The Full Court has dismissed both Bluescope’s appeal and Gram’s cross-appeal from the ruling that Bluescope infringed Gram’s registered design for the Smartascreen fencing panel.

This is an “old Act” case.[1] At first instance, Jacobson J held that Bluescope’s product was an obvious imitation of Gram’s registered design. However, his Honour rejected the allegation that it was also a fraudulent imitation.

Bluescope (then Lysaghts, part of BHP) had long been the market leader for fencing made from metal sheeting. There was a problem, however: one side of the fence was less desirable because the posts and rails supporting the cladding were visible. Gram came up with its Gramline solution which was symmetrical, looking the same from both sides. It quickly usurped Bluescope’s position as the market leader. Bluescope then spent (roughly) 6 years trying to come up with a competing design. In the course of doing so, it rejected a number of alternatives in favour of one that so closely resembled Gram’s product that the two could be stacked one on top of the other.

AU 121344

AU 121344

Smartascreen

Smartascreen

Construction of the design

Besanko and Middleton JJ endorsed the trial judge’s principles for construing the design, summarising them at [28]:

(a) a design is the mental picture of a shape, configuration, pattern or ornamentation of the article to which it is to be applied;

(b) construction is a question of fact for the Court to determine by the eye alone;

(c) expert evidence may be led to assist the Court;

(d) the Court is to apply an ‘instructed eye’ to the design – that is the Court must be made aware of the characteristics of the article to which the design is applied, and the manner in which such articles would normally be found in trade, commerce and in use; and

(e) however, considerations of utility have no relevance to the proper construction of a design.

In applying those principles, the trial judge found

“the primary feature was the sawtooth pattern consisting of six identical repeating pans, oriented vertically. The sawtooth pattern was the product of the unique proportions of the wavelength, amplitude and angles of each sawtooth module”.

It was this combination of features, which contributed to the symmetricality of the product, that ultimately conferred the design with novelty[2] and which were taken by Bluescope, leading to the finding of obvious imitation.[3] Three points of note on these parts of the case.

First, at [51] Besanko and Middleton JJ rejected Bluescope’s challenge to the trial judge’s reliance on Gram’s design being viewed vertically as an in-fill sheet between posts so that the saw-tooth ran top to bottom:

While considerations of utility are not relevant, designs cannot be construed without context. It is often the case that features of the article to which the design applies, will serve both visual and functional purposes. Where this is the case, the implication of BlueScope’s submission is that the feature’s appearance and utility must be divorced. However, a design without context is a meaningless drawing. As Lockhart J observed in Dart Industries 15 IPR 403 at 408, the design is ‘the mental picture of the shape, configuration, pattern, or ornament of the article to which it has been applied’ (emphasis added). It is inescapable that the Design is for sheet metal fencing and the construction of the Design must reflect this.[4]

That is, because the design was for a sheet metal fencing panel which “worked” in one way, it should be interpreted in the way (presumably) those who would use it for that would understand it.

Secondly, the trial judge had not impermissibly referred to the fact that the Bluescope product could be “nested” with the Gram product (embodying the design). But, it was not the fact of “nestability” as such that was important. Rather, it was relevant because it was helpful in forming a view about the similarity of the sawtooth profile. Besanko and Middleton JJ explained at [89]:

the nesting qualities are instructive. As has been discussed at length, the combination of amplitudes, wavelengths and angles create the sawtooth profile. For the GramLine and Smartascreen sheets to nest, albeit imperfectly, they must by logical extension, have similar amplitudes, wavelengths and angles. This is clearly helpful in deciding if Smartascreen is an obvious imitation of GramLine, and it was entirely open for the primary judge to be assisted by the nesting properties of the two articles. It is further relevant because as noted above, an obvious imitation is not one which is the same as the design, but one that is an imitation apparent to the eye notwithstanding slight differences.

Care definitely needs to be taken with this as the physical embodiment of the registered design is not always the same as the design and the comparison must be between the accused product and the registered design. It is important to note, therefore, that the Full Court treated this as confirming or reinforcing the view based on comparison of the appearance of the infringing article to the registered design.

Thirdly, the Full Court considered the trial judge had impermissibly taken into account Bluescope’s commercial objectives – to introduce a product to compete with the Gramline product – in deciding whether or not the Smartascreen was an obvious imitation. With respect that must be right as the test of obvious imitation is an objective test based on visual resemblance. Yates J, however, was prepared to accept at [198] to [201] evidence such as that Bluescope was attracted to the design because “it had a similar appearance to the GramLine sawtooth profile and would gain ready market acceptance” as a kind of expert evidence about the similarity of Bluescope’s product to Gram’s design.

Fraudulent imitation

In Polyaire, the High Court rejected the interpretation of fraudulent imitation which had required the alleged infringer to have attempted to disguise its copying. Instead, the High Court had said at [17]:

the application of a “fraudulent imitation” requires that the application of the design be with knowledge of the existence of the registration and of the absence of consent to its use, or with reason to suspect those matters, and that the use of the design produces what is an “imitation” within the meaning of par (a). This, to apply the general principle recently exemplified in Macleod v The Queen, is the knowledge, belief or intent which renders the conduct fraudulent.

At [36], the High Court approved Lehane J’s formulation of the test for fraudulent imitation in the following terms:

[T]he essential questions are, first, whether the allegedly infringing design is based on or derived from the registered design and, then, whether the differences are so substantial that the result is not to be described as an imitation. ….

In this case, the trial judge considered that fraudulent imitation required a finding that the infringing product was deliberately based on the registered design. The Besanko and Middleton JJ endorsed that test at [115]:

In our opinion, it must be shown that there was deliberate, in the sense of conscious, copying for there to be fraudulent imitation. If imitation imports the notion of making use of the registered design, there must be at least a conscious use of the registered design before it could be concluded there was fraudulent imitation.

The trial judge had found that:

  • Bluescope knew the Gramline design was registered;
  • Bluescope knew that Gram had achieved runaway commercial success with its product;
  • Bluescope was trying to design a “Gram lookalike”;
  • Bluescope had come up with a number of different symmetrical designs to Gram’s design, but rejected those in favour of the Smartascreen design; and
  • Bluescope had adopted a panel size of 762mm which was the same as Gram’s but different to the standard 820mm panel prevailing in the industry at the time.

His Honour was also “sceptical” of Bluescope’s claim that the resemblance to Gram’s design was coincidental. Gram argued that, given these findings, what other conclusion could there be but deliberate copying.

The Full Court upheld the trial judge’s refusal to find the Smartascreen was deliberately based on the Gramline design. Two factors seem to have played an important role here.

First, the Full Court accepted at [118] that an allegation of fraudulent imitation was a serious matter and the level of proofs needed to reflect the gravity of that.

Secondly, the evidence showed that the Bluescope employees who came up with the final design from 2000 onwards were influenced by, or at least referred to, design work done by a Mr Field in 1996.

Mr Field did not give evidence so it was not clear on the evidence what influences or references he made use of. Now, in many cases, the unexplained failure of a key player in the design process to give evidence (especially when there are inferences (at least) suggestive of copying available) might be sufficient to give rise to a Jones v Dunkel that the witness could not say anything helpful to the defendant’s case. Here, however, Mr Field’s absence was explained: he was old and in very poor health. His design work had taken place in 1996 very early in the picture. Moreover, Bluescope’s product had been introduced in 2002. Gram had of course known about it pretty much straightaway, but had delayed until 2010 before taking action. One may speculate, therefore, that the Court was not willing to allow Gram the benefit of negative inferences when its own delay had contributed to the witness being unavailable.

BlueScope Steel Limited v Gram Engineering Pty Ltd [2014] FCAFC 107


  1. Given the transitional provisions, there are potentially almost 6 more years for designs for designs under the old Act to still be in force. Design applications that were pending on 17 June 2004, when the 2003 Act came into force, continue to be governed by the old Act’s provisions for validity and infringement unless they were “converted” to “new” Act designs.  ?
  2. Full Court at [63], [71] – [72] (Besanko and Middleton JJ), [163] – [181] (Yates J).  ?
  3. Full Court at [89] – [93], with a useful summary of the key principles at [82] (Besanko and Middleton JJ). There were differences between the Smartascreen’s appearance and the registered design, but these were treated as insubstantial: [] (Besanko and Middleton JJ) and [188]ff (Yates J).  ?
  4. Yates J to similar effect at e.g. [166], [174].  ?

Online copyright infringement – back to drawing board

Thursday, September 11th, 2014

The way the press is reporting it, the Minister for Communications – one of the two Ministers who released the Online Copyright Infringement discussion paper in July – recognises it’s back to the drawing board in light of the (apparently) unanimous disapproval.

SMH

News

You can find the submissions received here (apparently they are being uploaded over time).

Will the ISPs voluntarily sit down and negotiate a warning system with the copyright owners? Do we really want the copyright owners and the ISPs coming up with their own scheme without “our” input?

Refusing a lapsed patent application and other powers of the Commissioner

Tuesday, September 9th, 2014

The Commissioner of Patents has power to refuse an application even after it has lapsed (but is still capable of revival by payment of “late” fees). The Full Court has also affirmed the Commissioner’s power to set a two month time limit for response (especially where she actually allows six months) and to institute a hearing on her own motion.

In some ways, this is a “silly” case, but it does explain how the application process and restoration of a lapsed application works. The chronology was as follows:

  • In December 2011, Miles requested examination of his patent application.
  • In May 2012, the Commissioner’s delegate raised objections to grant, giving Miles two months in which to overcome the objections or risk the Commissioner making a direction to amend under s 107 or refusing the application.
  • Miles did not respond.
  • In September 2012 (i.e., 4 months later), the Commissioner wrote advising that, as no response had been received, the matter would be set down for hearing and allowing one month for submissions to be filed. The Commissioner’s letter warned that it was possible for the Commissioner to refuse the application or direct amendment and inviting Miles to submit his own amendments.
  • October 2012 was the fifth anniversary of the application and continuation fees were payable. Miles did not pay the continuation fees.
  • On 1 November 2012, the Commissioner refused Miles’ application on the basis that objections to grant had been appropriately raised and not overcome.
  • On 28 March 2013, Miles paid the continuation fee (under s 142) and sought to amend the patent application.

The Commissioner said “bad luck, your application has already been refused” (or words to that effect).

Miles sought judicial review under s 39B of the Judiciary Act unsuccessfully. The Full Court (Bennett, Greenwood and Middleton JJ) dismissed his appeal.

Miles’ first argument was that the Commissioner had no power to refuse his application (in November 2012) because his application had already lapsed in October 2012 when he failed to pay the continuation fees.

The Full Court was having none of that. It was predicated on a misunderstanding of reg. 13.3(1) and 13.3(1A). Section 142(2)(d) provides that a patent application lapses if the applicant does not pay a continuation fee within the “prescribed period”. What constitutes the “prescribed period” is defined by reg. 13.3(1) and (1A):

(1) For paragraph 142(2)(d) of the Act:

>(a) a continuation fee for an application for a standard patent is payable for a relevant anniversary at the last moment of the anniversary; and

>(b) the period in which the fee must be paid is the period ending at the last moment of the anniversary.

(1A) However, if the continuation fee is paid within 6 months after the end of the relevant anniversary (6 month period):

>(a) the period mentioned in paragraph (1)(b) is taken to be extended until the fee is paid; and

>(b) the continuation fee includes the additional fee stated in item 211 of Schedule 7; and

>(c) the additional fee is payable from the first day of the 6 month period.

Reg. 13.3(1) and (1A) were not to be read in some bifurcated manner, but in combination. This meant that, if the continuation fee was paid in the 6 month grace period, the “prescribed period” was extended up until the date the fee was paid, i.e. 28 March 2013. As the continuation fee was paid in this case within the 6 month period, therefore, the application was still on foot when the Commissioner refused it in November 2012.

The Full Court went on to reject Miles’ arguments that the Commissioner had no power to set a two month time limit for response to the Examiner’s report in May 2012[1] or to unilaterally institute a hearing.

One “odd” outcome of this, however, is that Miles’ application would indeed have lapsed in October 2012 if he had not paid the continuation fee in the grace period. In that case, the Commissioner would not have had power to refuse the application. I am not sure how that would help Miles either as, presumably, by that stage it would be too late to file another application.

Miles v Commissioner of Patents [2014] FCAFC 109


  1. The Full Court essentially adopted the primary judge’s reasons at [55] to [93] and pointed out that Miles had been given opportunitites to address the grounds of objection and had failed to take any of them up.  ?

$150,001 damages for infringing compatibility chart

Thursday, September 4th, 2014

Tonnex was found to have infringed Dynamic’s copyright in its printer cartridge compatibility chart. That finding was upheld on appeal. Now, Yates J has ordered Tonnex to pay Dynamic $150,001.00 in damages. The damages are comprised of compensatory damages under s115(2) of $1.00 and $150,000 by way of additional damages under s115(4).

The $1.00 nominal damages was agreed by the parties before the hearing. Interestingly, Yates J did not comment on this.[1]

Dynamic had argued for an award of additional damages of $400,000; Tonnex, while denying any award should be made, argued for an amount in the “tens of thousands”. Yates J arrived at $150,000 in the exercise of his Honour’s evaluative judgment.

Yates J’s reasons contain a useful summary of the applicable principles for the court to decide whether it is appropriate to award additional damages at [37] – [53].

Recognising that flagrancy is not required before an award of additional damages can be made, his Honour nonetheless found that the infringement was deliberate and studied. Although Tonnex’ directors denied knowledge of the copying and gave evidence that they had specifically instructed there was to be no copying,[2] the knowledge and acts of the employees involved – who included the National Marketing Manager – were at [101] relevantly the acts and knowledge of Tonnex. Further, Tonnex’ position throughout had not just been reliance on legal advice that copyright could not subsist in such a compilation. It had hi-handedly denied any copying at all.

Yates J also noted that, even if the directors were innocent of infringing knowledge, the situation should have changed after detailed particulars of infringement had been served (albeit late in the picture). Those particulars appear to have identified mistakes and other typographical peculiarities in the Tonnex catalogue which were really consistent only with copying from Dynamic. In other words, the directors were put on inquiry.

Instead, Tonnex sent out 38,000 emails with links to its infringing catalogue after Dynamic notified its infringement claims to it; only stopping just before the liability trial:

…. The cessation of Tonnex’s conduct was taken at a time of its own choosing, without regard to Dynamic’s rights. Regardless of Mr Solomon’s and Mr Kozman’s state of knowledge in that period, by reason of Mr Rendell’s knowledge, Tonnex must be taken to have known the true position regarding its copying of Dynamic’s Compatibility Chart. With that knowledge, it undoubtedly took commercial advantage of its wrongful conduct.

Tonnex did introduce an approvals process to vet material before it was published in future. Yates J was not particularly satisfied by this. His Honour was also concerned that Tonnex’ witnesses did not really exhibit appropriate contrition, but rather saw the litigation as a tactic by Dynamic rather than vindication of its rights.

The need to mark the court’s disapproval of Tonnex’ conduct and signal to the community that it was not alright to copy others’ property with impunity (i.e. deterrence) also played roles.

Dynamic Supplies Pty Limited v Tonnex International Pty Limited (No 3) [2014] FCA 909


  1. Contrast the apparent questioning of the practice raided by French and Kiefel JJ in [Venus Adult Films v Fraseride][venus] at [94].  ?
  2. it is fair to say his Honour expressed a degree of scepticism towards this evidence at esp. [102] and [103].  ?

auDRP Overview

Monday, August 25th, 2014

You probably know that the auDRP is the dispute resolution policy for the .au domain name space. You may not know that there have been about 330 decisions in its roughly 12 years of operation.

Prof Andrew Christie, with a helping hand from James Gloster, Jeffry Kadarusman and Daniel Lau, has prepared an “Overview” outlining how the decisions have treated the various issues arising under the auDRP. And he is launching the auDRP Overview at a Workshop on Wednesday 27 August at 9:15 am to 10:45. Venue the Crown Promenade.

Details here.

Prof Christie is the Professor of Intellectual Property at the University of Melbourne a very experienced domain name panelist, having amongst other things written the seminal decision Telstra v Nuclear Marshmallows D2000-0003If you find yourself with a dispute over a domain name registered in the .au domain name space, I anticipate you will find your first stop being this overview. Given the influence of UDRP decisions on auDRP decisions, although there are some important differences, you will also probably find it helpful in the context of the UDRP too. Make sure you read it.

The WIPO Overview to the UDRP version 2.0 here.

Five Judges speak with one voice on Australian Patent Law Construction and Fair Basis*

Friday, August 22nd, 2014

The Rosuvastatin case is that rare beast – a decision of a 5 member Full Bench of the Federal Court. It canvases many issues and, no doubt, we shall be picking over it for years to come. Susan Gatford, at the Victorian Bar, has kindly provided a guest post on the section 40 issues. Take it way Sue:

The judgment in AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99 is an authoritative statement by a Full Court of the Federal Court of current patent law in Australia on novelty, obviousness, fair basis and indirect infringement. Further, neither the parties nor the Full Court at [37] demurred from the primary judge’s summary of the relevant authorities as to what constitutes common general knowledge and the attributes of the hypothetical skilled addressee. Likewise, neither the parties nor the Full Court at [90] disagreed with the primary judge’s exposition of the principles governing the construction of the claims and body of a specification of a patent.

The Full Court was principally constituted with five justices so as to address issues in regard to obviousness[1]. But the decisions at first instance and on appeal, taken together, also provide a “go to” exposition of most of the legal issues that commonly arise in Australian patent cases.

The Court’s views on the different validity grounds and on indirect infringement each warrant separate commentary and analysis. This article considers one of the construction issues, the decision as to fair basis and the interplay between construction and fair basis.

Background

Statins are a group of drugs that reduce the levels of cholesterol in the blood. Rosuvastatin (marketed in Australia as CRESTOR) is a very successful statin. No patent was ever filed in Australia for the rosuvastatin chemical compound. But AstraZeneca (Az) owns a number of secondary Australian patents relating to rosuvastatin. Two such patents are the subject of the appeal decision. One (the low dose patent) is for the administration of a particular dose or dosage range of rosuvastatin for the treatment of excess cholesterol in the blood stream. The other (the cation patent) is for a pharmaceutical composition (combination) of rosuvastatin mixed with certain inorganic salts.

The Full Federal Court’s decision affirms, although with some differences of reasoning and grounds, Apotex’s victory last year before Justice Jagot, in which it obtained orders revoking both patents.

The outcome of the appeal

The low dose patent was held:

  • to have named the wrong inventor (with a discussion of the current and former entitlement provisions of the Patents Act);
  • to be obvious (with a discussion of the starting point at which obviousness is to be considered and the impact of section 7 of the Patents Act); and
  • not to have been infringed (with a discussion of section 117 of the Patents Act)
  • 

However, reversing the decision of the primary judge, the Full Court held that the low dose patent was novel despite the existence of prior publications disclosing both rosuvastatin and a dosage range that covered the dosage range the subject of the claims.

The cation patent was held:

  • to have impermissibly claimed too early a priority date;
  • to have been anticipated (not novel);
  • to be obvious; and
  • not to be fairly based on the specification (despite the presence of claim 1 as a consistory clause within the body of the specification).

The five judges agreed with each other on all issues. Justices Besanko, Foster, Nicholas and Yates wrote a joint judgment which dealt with all issues except obviousness. Justice Jessup wrote a separate judgment on obviousness with which the rest of the Court agreed.

Patent construction and section 40 issues in relation to the cation patent.

The cation patent was for rosuvastatin mixed with certain multivalent cation inorganic salts. The salts were not therapeutic – their role was said to be simply to stabilize the rosuvastatin and prevent it from degrading. The patent specification described rosuvastatin and various salts being mixed together into a tablet which was then coated.
There was a disagreement between the parties as to the meaning of the words “pharmaceutical composition” in claim 1 of the cation patent. Apotex submitted that in the context of the cation patent “pharmaceutical composition” referred only to the rosuvastatin-salt mixture, and did not include the tablet coating. This was because the proposed Apotex product did not have a rosuvastatin-salt mixture – in its tablet the salt was placed into the coating, not mixed with the rosuvastatin.

Az, in order to maintain its infringement case, argued that the words “pharmaceutical composition” in claim 1 meant the whole tablet i.e. the means by which rosuvastatin is administered or delivered to the patient, whatever form that takes. The primary judge agreed with Az, as did the Full Court.

But, Apotex said, if this is what claim 1 means then it is not fairly based on the specification, as there is no real and reasonably clear disclosure in the specification of a pharmaceutical composition in which the relevant inorganic salt is contained solely within the coating of the pharmaceutical composition and not mixed with the active ingredient, being rosuvastatin. They noted that every disclosure in the cation patent of the use of a relevant salt, including in each of the examples, involved the salt being mixed or blended with rosuvastatin. They also noted that the only theory advanced in the specification to explain how the multivalent cation salt improved the stability of rosuvastatin was that it stabilised its chemical structure, which the experts’ evidence confirmed required “intimate mixing”.

Az did not dispute this evidence but submitted that the fact that claim 1 was repeated in the body of the specification as a consistory clause was itself sufficient for fair basis, relying on statements in Lockwood Security Products Pty Limited v Doric Products Pty Limited (2004) 217 CLR 274 (Doric No 1) at [38] and [91] to [93]. The primary judge had agreed with that submission.

The Full Court, however, disagreed. It said at [421]

“The question that must be addressed is whether there is a real and reasonably clear disclosure in the specification of an invention in which there might be no mixture of the active ingredient and inorganic salt. In our opinion, the specification, when read as a whole, does not make any such disclosure even in the most general sense.”

In other words, the claim was for a composition which contained three things – rosuvastatin, salt and a coating. The claim did not require the salt and the rosuvastatin to be mixed, so the salt could either be with the rosuvastatin or in the coating. In the invention disclosed in the specification, though, the salt and the rosuvastatin were always mixed. The possibility of the salt not being mixed with the rosuvastatin was not contemplated and not disclosed.

Section 40(3) of the Patents Act as applied to this patent (i.e. as it stood before the 2013 amendments to the Patents Act) requires that “the claim or claims must be … fairly based on the matter disclosed in the specification”.

The Court’s finding of lack of fair basis refocuses attention on the construction of claim 1 contended for by Apotex. But the Court was not prepared, in light of the authorities, to read claim 1 as requiring the salt and the rosuvastatin to be mixed, as it considered that to do so would be to draw an impermissible gloss from the specification.

The Court was, however, prepared to use section 40 to strike down what it evidently regarded as a claim that was too widely drawn. Whether the judgment will result in an increase in the number of successful challenges based on section 40 grounds remains to be seen.

AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99

 

Thanks, Sue.


  1. As to which see Mark Summerfeild’s recent blog post  ?

Patent application data in Australia

Monday, August 11th, 2014

IP Australia has published a report looking at patent backlogs, inventories and pendency. [1]

The Report has been prepared using the same framework used by the USPTO and UK IPO.

Apparently, the number of pending applications peaked in 2009 at 100,000. By 2013, it was down to 90,000. The number of applications being filed has finally recovered to “pre-GFC” levels.

There are 278 pending applications per examiner; the lowest number since 2001. In the USA (which has a much larger number of applications) the number is 169 applications per examiner and, in the UK, 198 per examiner.

There were 26,394 applications filed in 2008. Approximately 52% passed through examination and opposition (if any) to grant. Some 9.4% were still “pending” as at May 2013.

About 20% of applications made in 2008 were the subject of a voluntary request for examination; almost all of the remainder are subject to a direction to request examination.

Almost 20% of all applications lapsed or were withdrawn when the Commissioner directs the applicant to request examination. Almost 15% lapsed or were withdrawn at the first report stage. A further 2% lapsed or were withdrawn after further reports.

950 of the applications made in 2008 (0.36%) have been subject to opposition (to date). Of those, the opposition led to only 68 (0.026%) being rejected or withdrawn.

You can read the Report here.

The UK IPO and USPTO ‘Working draft‘ from last year (pdf) (media release).

Patently-O has been looking at aspects of the US data here, here and here.


  1. Ahmer Iqbal Siddiqui, Report on patent backlogs, inventories and pendency. IP Australia Economic Research Paper 01.  ?

An arbitration clause means arbitrate

Wednesday, July 9th, 2014

The Irelands were Subway franchisees.

Their franchise agreement with Subway included an arbitration clause:

10. DISPUTE RESOLUTION. The parties want to settle all issues quickly, amicably, and in the most cost effective fashion. To accomplish these goals, the parties agree to the following provisions that will apply to resolve any dispute or claim arising out of or relating to this Agreement, or any other Franchise Agreement the parties have with each other (a ‘Dispute’):

c. The parties will arbitrate the Dispute if the mediation clause in Subparagraph 10.a. is not enforceable, or the parties do not settle the Dispute under the informal discussion and mediation procedures above, or the Dispute is one which this Agreement provides will be submitted directly to arbitration, except as provided in this Agreement. The arbitration will be held in accordance with the United Nations Commission on International Trade Regulations and Law (UNCITRAL) Arbitration Rules administered by an arbitration association, such as the American Arbitration Association or the Institute of Arbitrators or Mediators Australia, at a hearing to be held in Queensland. The arbitration will be conducted in English and decided by a single arbitrator unless the law of Australia requires three (3) arbitrators. Any court having jurisdiction may enter judgment on the arbitrator’s award. Except as provided in this Agreement, a party must commence and pursue informal discussions, mediation, and arbitration to resolve Disputes before commencing legal action.

The Irelands, however, commenced proceedings against Subway in the Victorian Civil and Administrative Tribunal (VCAT) alleging breaches of the franchise agreement, negligence and misleading or deceptive conduct.

Subway applied to VCAT to have the proceeding referred to arbitration pursuant to clause 10. VCAT refused. The Supreme Court dismissed Subway’s appeal. The Court of Appeal, Maxwell P and Beach JA, Kyrou J dissenting, have allowed Subway’s further appeal and sent the matter to arbitration.

Section 8 of the Commercial Arbitration Act 2011 (Vic) provides:

8            Arbitration agreement and substantive claim before court (cf Model Law Art 8)

(1)  A court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party’s first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

As the heading indicates, this provision is part of a national scheme to implement the UNCITRAL Model Law on commercial arbitration.

The “problem” was that reference to “court”. While it was not a defined term in the Act, there are any number of court rulings declaring in no uncertain terms that VCAT is not a court – it is an administrative tribunal.

Maxwell P and Beach JA standing back and looking at the big (international) picture, however, held that for the purposes of the Act – a law designed to promote commercial arbitration as a dispute resolution mechanism – VCAT qualifies as a “court”. Maxwell P and Beach JA took somewhat different routes to reach that conclusion but it is perhaps best encapsulated in Maxwell P’s observation:

The clear policy of the Act (and of the model law which it enacts) is that, when parties have agreed to have disputes between them determined by private arbitration, neither party is at liberty to litigate the matter in dispute through the adjudicative mechanisms of the State. For this statutory purpose, in this statutory context, the Tribunal is indistinguishable from those other adjudicative bodies of the State which bear the title ‘court’.

I don’t know if other States or Territories operate under regimes similar to VCAT in, er, parallel to the court system but, as Croft J noted at first instance, Parliament set up VCAT to provide a speedy and inexpensive, low cost, accessible, efficient means of dispute resolution and, apparently, it handles the vast bulk of legal disputes here. But not disputes between franchisors and franchisees (where there is an arbitration clause).

Subway Systems Australia Pty Ltd v Ireland [2014] VSCA 142

ACIP on innovation patents

Wednesday, June 25th, 2014

ACIP’s final report into Innovation Patents has been published.

Key points / recommendations:

  • ACIP can’t find evidence to support conclusion that innovation patents promote innovation

 

  • ACIP recommends that, if the innovation patent system be retained:

 

    • there be a new “innovation” threshold:

amending the Patents Act 1990 (Cth) to raise the level of innovation to a level above the current innovative step level, but below the inventive step level that applies to standard patents. A suitable level of innovative step would be provided by the test of inventiveness described by the High Court of Australia in Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9: (1980) 144 CLR 253; (1980) 29 ALR 29 with a modification to that test to include the current definition of what is relevant CGK. In order to be innovative an invention would need to be non-obvious by reference to CGK either within or outside the patent area but not by reference to prior art information that is not part of CGK at the priority date of the relevant claims of the innovation patent. This would be a lower threshold than is applied to standard patents, where the invention must be non-obvious by reference to the CGK and any piece of prior art.

I suppose that would at least be a test that requires some advance over the prior art and is (at least in theory) something which those of us who started growing up under the 1952 Act should be familiar with.

    • a request for examination must be filed within 3 years
    • the term “patent” be reserved for certified “patents” only;
    • exclude from innovation patents “all methods, all processes and all systems “.

The Government has indicated it will respond in due course.

ACIP’s Innovation Patent Inquiry page.

Link to the Final Report (pdf).