Australia

Patenting computer programs or business methods in Australia

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.[1]

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

became:

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?[2]

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:[3]

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 [127] 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 [129] 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:

[141] 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.[4] 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 Commissioner had recognised that such a transformation did take place, but it was not sufficient. In a line of decisions beginning with Invention Pathways, the Commissioner had ruled that: [5]

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 [147], 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 [157]: 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:

[158] … 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.[6]

At [171] – [172], 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”.[7] 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 [2013] FCA 871


  1. The terms of claim 1 are set out here.  ?
  2. Taken from [21] and [24] of the Reasons.  ?
  3. At [42] of the Reasons.  ?
  4. At [143] – [144].  ?
  5. Myall at [53].  ?
  6. 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.  ?
  7. An application for leave to appeal from Emmett J’s decision has been filed: NSD328/2013.  ?

Patenting computer programs or business methods in Australia Read More »

When do 4 stripes infringe 3?

adidas has successfully sued Pacific Brands for infringing its “3 stripes” trade mark through the sale of three styles of shoes with 4 stripes; but failed in respect of six other styles. Three other styles settled before action, 2 without admissions.

adidas relied on 2 registered trade marks, TM No 131325 dating from 1957 and TM No 924921 dating from 2002. (If you have been on Mars for the last 50 years) you get the basic picture from TM No 924921:

TM 924921
TM 924921

registered for “footwear including sport shoes and casual shoes” in class 25. There is also an endorsement:

Trade Mark Description: The trademark consists of three stripes forming a contrast to the basic color of the shoes; the contours of the shoe serves to show how the trademark is attached and is no component of the trademark. * Provisions of subsection 41(5) applied.*

First, accepting that the stripes played a decorative role, Robertson J nonetheless found that Pacific Brands used all the stripe combinations on the shoe styles in issue as trade marks. In reaching this conclusion, his Honour was heavily influenced at [64] by the evidence [1] that sports shoe manufacturers typically placed their trade marks on the side of the shoe. Consistently with orthodoxy, it was nothing to the point that consumers might not know which manufacturer was actually behind the product or that other trade marks such as “Grosby” also appeared on the shoe.

The Airborne Shoe illustrates why Robertson J held some styles infringed:

Airborne shoe
Airborne shoe

The fact that there were 4 stripes rather than 3 tended against a finding or infringement. However, that was outweighed by the overall impression conveyed. At [235], his Honour explained:[2]

this shoe is deceptively similar to the applicants’ trade marks. I note in particular the parallel equidistant stripes of equal width (with blue edgings) in a different or contrasting colour to the footwear, running from the lacing area to the instep area of the shoes.

In contrast, the shoes found not to infringe were all found not to convey the sense of equidistant stripes against a contrasting background, let alone a sub-set of three “parallel” stripes.[3]

Perhaps, most strikingly, the Basement style at [282] conveyed the idea of two sets of two stripes rather than three or four equidistant stripes.

Basement shoe
Basement shoe

Next, the Boston shoe:

Boston shoe
Boston shoe

did not convey the idea of a group of stripes against a contrasting background:

there are four stripes rather than three and an obvious slightly wider gap between the second and third stripes. That is the first point. I do not conclude that there are two groups of two stripes. In addition, the inclusion of panels in the shoe of a similar colour to the stripes (black or close to black), and the stitched-in element of contrasting colour (white) extending behind the stripes, mean that as a matter of impression there is no deceptive similarity with the applicants’ trade marks. There is no sufficiently clear impression of the stripes forming a contrast to the basic colour of the shoes or being a colour different from that of the article of footwear to which the stripes were applied.

The idea of four stripes with the central pair “bridged” extended through into the Apple Pie Pink style at [296]:

Apple Pie shoe
Apple Pie shoe

Robertson J also found that the Stingray Black style did not infringe:

Stingray Black shoe
Stingray Black shoe

At [305], his Honour explained:

there are four “stripes”; the stripes taper to a narrower end towards the sole of the shoe and are therefore not of equal width; the gaps between the stripes are not equal and taper towards the top of the shoe at the lacing; and the four stripes have a curved element and are therefore not parallel. The features of the applicants’ trade marks relied on by the applicants in relation to this shoe are not those which give rise to the dominant visual impression of the trade marks as three parallel equidistant stripes of equal width. This shoe does not create the visual impression of three parallel equidistant stripes of equal width.

A couple of other points

First, Robertson J did not buy adidas’ invitation to infer an intention to infringe, or at the very least “to sail too close to the wind”[4] from an alleged pattern of copying. Pacific Brands withdrew two shoe styles said to be the foundation of this pattern without any admission of liability. A third style, the Stringray boot was withdrawn with an admission, but his Honour regarded that matter as resolved.

Secondly, adidas made an interesting attempt to bolster its case on infringement by the use of a survey. The survey purported to show that some 14%, 34% and 19% of those shown three different styles “similar” to Pacific Brands’ styles identified adidas as the source of the product because of the presence of stripes.

The survey was conducted online. Each participant was shown one of four images of a leg with a shoe style on its foot. (Three were intended to be versions of Pacific Brand styles; one, the control, was unmarked.) The participants were then asked a series of questions including:

B1. Who do you think makes this shoe?

B2. Why do you say that? Please be specific and explain the reasons for your answer in question B1.

Robertson J, however, accorded the survey little weight in making his assessment. There were a variety of reasons for this. These included, first, at [196] that the showing of the images online did not sufficiently replicate or correspond to the experience of the consumer in the market place (apparently this is known as “ecological validity”). Secondly, at [205] question B1 was impermissibly leading. Thirdly, at [210]-[211] the “control leg” was inadequate for the purpose because the absence of decoration signalled to some consumers that it was not sourced from a major brand.

adidas AG v Pacific Brands Footwear Pty Ltd (No 3) [2013] FCA 905 (version with images here)


  1. Referred to at [54].  ?
  2. Likewise, the Stingray shoe at [293] and the Apple Pie at [296].  ?
  3. At [217], his Honour found these features constituted the dominant impression conveyed by the registered trade marks.  ?
  4. Invoking the well-known formulation from Australian Woollen Mills at 658.  ?

When do 4 stripes infringe 3? Read More »

Dosing up children, overturning interlocutory injunctions and the balance of convenience

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

Patented embodiment
Patented embodiment

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.[1] (They were wrong.)

Two injunctions were granted. On 28 May 2013 a Glaxo product that substantially replicated the Reckitt product was injuncted.[2] According to the Court’s reasons Reckitt’s only complaint was the similarity of the bottle neck liner.[3] 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).

Version 1
Version 1

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

Version 2
Version 2

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.[4] 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.

GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Limited [2013] FCAFC 102

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.


  1. Reckitt Benckiser Healthcare (UK) Ltd v GlaxoSmithKline Australia Pty Ltd [2013] FCA 583 (Reckitt (No.1)) at [36].  ?
  2. Reckitt (No.1).  ?
  3. Reckitt (No.1) at [37].  ?
  4. Reckitt Benckiser Healthcare (UK) Ltd v GlaxoSmithKline Australia Pty Ltd (No 2) [2013] FCA 736 at [20].  ?

Dosing up children, overturning interlocutory injunctions and the balance of convenience Read More »

Designs Act 2003 review

In May 2012, ACIP was directed to investigate the effectiveness of the Designs Act 2003 which commenced operation on 17 June 2004.

Now ACIP has published an issues paper.

Chapter 3 sets out 22 questions ACIP is seeking answers to. However, ACIP does also say:

the main purpose of the paper is to provoke discussion and any other relevant comments are very welcome.

The topics identified (so far) for comment include:

  • Duration of design protection
  • Grace period
  • Statement of Newness and Distinctiveness
  • Publication
  • Unregistered Designs Rights (UDRs)
  • Harmonisation with international practices (i.e. The Hague Agreement)
  • Border Protection Measures
  • Design overlap with other IP rights
  • Threshold of registrability
  • Confusion regarding the registration/publication/examination process;
  • The (potential) impact of new technologies, such as 3D printing technologies and graphical user interfaces.

There are some interesting statistics:

  • about 6,000 design applications filed each year (the Germans do 50,000+ a year, the Chinese are a whole order of magnitude bigger)
  • 90% proceed to registration (wonder how the other 10% manage to stuff up filling in the form?)
  • 20% of registrations have examination requested (so you can sue someone for infringement or try and revoke them)
  • 10% of those examined fail (i.e., 90% get certified)

Table 4 sets out the classes in which most applications are being made and Table 5 outs those who file the most applications.

The closing date for submissions is 31 October 2013.

Download the issues paper from here (pdf).

Lid dip: Janice Luck

Designs Act 2003 review Read More »

Innovation Patents: what to do?

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[1] 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.[2]

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


  1. 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.  ?
  2. 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.  ?

Innovation Patents: what to do? Read More »

FPInnov

Where do you appeal to?

The Registrar of Trade Marks has successfully applied for dismissal of ADJR Act proceedings challenging decisions to revoke registrations and the acceptance of trade marks.

The Registrar used her powers under section 84A to revoke the registration of 8 of FPInnovation’s trade marks. Then the Registrar used her powers under s 84C to revoke their acceptance. (The Group A trade marks.[1]) The Registrar also used her powers under s 38 to recoke the acceptance of four other applications. (The Group B trade marks.) According to the judgment, the decisions to revoke registration and acceptance were all based on the ground that the trade marks were likely to deceive or cause confusion, contrary to s 43.

Section 84D confers a right of appeal to the courts[2] from a decision to revoke registration under ss 84A and 84C. there is no appeal from a decision to revoke acceptance under s 38. In the normal course, however, the trade mark would go through the examination process and a decision to refuse an application would also be subject to an appeal to the courts under s 35.[3] These “appeals” of course are really hearings de novo on the merits rather than appeals proper.

FPInnovation did not choose to exercise these appeal rights: instead it sought judicial review under the ADJR Act – that is, a challenge essentially to the “procedural” soundness of the decisions.[4]

The Registrar successfully applied to have the ADJR Act proceedings dismissed under s 10(2) and s 16 on the basis that the options for “appeals” which allowed for determinations on the merits provided a more suitable and efficacious avenue for review. Cowdroy J explained the purpose of the legislative scheme:

The legislative purpose is, as Katzmann J said at [67] in 1–800-Flowers, clear. Parliament intended with respect to decisions to revoke the acceptance of applications for registration ‘that any challenges be made to the decision to refuse or limit registration, not to the anterior decision to revoke acceptance’. The intent with respect to decisions to revoke the registration of trade marks is equally as clear; that is, the affected trade mark owner should file an appeal under s 84D. Such processes are, in the words of Finn J in Wyeth Australia at [44], ‘deliberately contrived’ by the legislature. It is against this background that the Court must consider the prejudice claimed by FPInnovation.

Cowdroy J considered thar any prejudice FPInnovation suffered from any defects in the decision-making process to revoke registration and/or acceptance should be cured by the subsequent decisions on the merits. In addition:

FPInnovation contends that certain factual findings would again have to be contended for should re-examination of the trade mark applications occur. Whilst this is true, it is a necessary consequence of the process of review intended by Parliament. It also ensures that the central issue in the overall dispute between the parties is resolved, namely whether the trade marks should ultimately be registered, and as a corollary, whether those trade marks in relation to the categories for goods and services for which they were, or were proposed to be, registered are likely to deceive or cause confusion. These are questions that the Court cannot entertain on judicial review.

FPInnovation Pty Ltd v Registrar of Trade Marks [2013] FCA 826


  1. They were for marks in class 36 such as KFH, Kuwait Finance House and amislamic. (Revocation of acceptance seems at best implied by s 84C(5). So may be, it was under s 38.)  ?
  2. That is, the Federal Court or the Federal Circuit Court.  ?
  3. Given the terms of s84C(5), re-examination would seem to be mandatory on revocation under s 84A.  ?
  4. See the grounds here.  ?

FPInnov Read More »

The power of a registered trade mark

If you have tried to buy, sell or rent property in Australia in the last 10 years (at the least!), like some nearly 7 million other Australians you have no doubt come across realestate.com.au, the web-portal run by REA Group. Real One also competes in that space.[1]

Bromberg J has held that Real One’s logos:

Real One 2nd logo
Real One 2nd logo
Real One 1st logo
Real One 1st logo

did not “pass off”[2] REA Group’s logos:

559.1

Nor did they infringe REA Group’s registered trade mark: [3]

TM No 1478263
TM No 1478263

However, the use of Real One’s URL in ads like this:

Real One Ad
Real One Ad

did infringe the registered trade mark! [4]

Bromberg J held that the uses both in the first line and the second line of the advertisment infringed. In contrast to his Honour’s rejection of the claim for misleading or deceptive conduct, Bromberg J explained at [241]:

In my view, the display of the term “realestate1.com.au” in the heading of a sponsored link would have been regarded by many consumers to be the trading and domain name of the business whose link it was. One of the central distinguishing features of REA’s realestate.com.au trade marks is the idea that the term “realestate.com.au” is both a brand name and a domain name at the same time. When Real Estate 1 used “realestate1.com.au” as a trading name, it took up that precise idea. In that context consumers are likely to pay substantive attention to “.com.au” because it serves the function of identifying the brand whose domain name is also being used as a brand. The whole of the domain name is likely to be read or at least scanned. In a circumstance such as that, there was in my view, a real danger of confusion on the part of a consumer familiar with REA’s realestate.com.au trade marks. That principally arises because in a scanning process of the kind which can occur on a search results page, the “1”, which is not very distinct in the context of a domain name in ordinary type face, is likely to be missed by some consumers.

First, his Honour distinguished Perram J’s proposition in the Solahart case that usually one can ignore the inclusion in a sign of elements like “www” and “.com.au” as merely “accoutrements” of the domain name system and so not matters that the public would pay attention to. Unlike the situation before Bromberg J, however, that observation was not made in a context where the .com.au element formed part of the registered trade mark.[5]

Second, I can certainly see that the bold “headline” (the first line) in Real One’s advertisment is plainly being used as a trade mark. But the use in the second line???

Yes, I know that cases have held that domain names / URLs are the Internet’s equivalent of a sign or billboard. That can certainly be true and, in the first line of the advertisement, the URL is plainly being used in that way, but surely with respect in the second line the URL is no more than an address.

Third, one might express some alarm that anyone can stop someone else using the term “real estate” (in connection with real estate services). There are, after all only 387 other registered trade marks in class 36 alone which include the words “real estate”. On the Internet, there is also at the least realestateview.com.au. Bromberg J’s first answer in [241] above is that it was not just the use of “real estate” that gave rise to liability: it was the use of that term and “.com.au” in combination and the comparative insignificance of the “1” in Real One’s URL.

Bromberg J did, however, recognise the problem and said at [247]:

As my conclusions demonstrate, registration of REA’s realestate.com.au marks has effectively given REA a monopoly over two highly descriptive terms when used in combination. Those terms are likely to be the most common terms on a search results page where a search has been conducted for a residential real estate portal. The protection conferred by REA’s trade marks over the use of “realestate” and “.com.au” in combination, provides REA with a monopoly over the term “realestate” in circumstances where its rivals seeking also to use “realestate” or a close variant thereof as a second-level domain, do not forego the advantages of using “.com.au” in their domain names. The natural advantage of a domain name which incorporates “realestate” to the commercial success of property portals will be apparent from observations I have already made. There is also a natural advantage in the use of the suffix “.com.au”. It is troubling that terms that are highly descriptive of a particular area of commerce and which provide significant commercial advantage should not be readily available for use by all who seek to participate in that commerce. However, in the absence of a successful challenge to the registration of REA’s realestate.com.au trade marks, whilst that may be troubling, REA is nevertheless entitled to the protection of the monopoly which has been conferred upon it.

The question has to be asked, however, on what basis could REA group’s logo be revoked or refused registration? Given the device elements (and the large number of other, competing devices), it would surely be held to be capable of distinguishing. The “good” old days (i.e., before the 1995 Act) were at least better in this respect: the Registrar could impose disclaimers to ensure these sorts of monopolies should not arise.

Two short points in conclusion:

His Honour did also find that Real One’s “real commercial” logo infringed REA group’s registration for its “real commercial” logo.

It would seem that Real One is still able to operate from its “.net.au” URL.

REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559


  1. Bromberg J found at [258] that the principal of Real One adopted the name to pressure REA group into buying him out at some point, but also went on reluctantly to find no accessorial liability (akin to authorising).  ?
  2. For simplicity, I will treat that term as covering the actions for misleading or deceptive conduct (now under s 18 of the ACL formerly known as s 52 of the Trade Practice Act 1974) which, of course, was really the focus of that part of the case.  ?
  3. The number doesn’t seem to be identified, but TM Nos 811931 and 1075935 are for the mark in black and white and TM No. 1478263 is for the colour version reproduced in his Honour’s reasons.  ?
  4. Also contrast this result with the Thredbo Resort’s failure to stop ThredboNet using Thredbo in domain names to market rental accommodation at Thredbo village: Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2013] FCA 563 – Thredbo Resort having only pending opposed applications.  ?
  5. Decision under the UDRP have reached similar positions.  ?

The power of a registered trade mark Read More »

Patentable subject matter reform

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.

These plans arise out of a recommendations made by ACIP which the Government announced it accepted. The consultation now is on the wording to implement those policies.

An objects clause

The consultation paper proposes 2 alternative “objects” clauses:

Option 1

…. 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.

Option 2

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.

Wholly offensive?

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.

Patentable subject matter reform Read More »

A couple of other points from Insight on appeal

Following on from the earlier post, the Full Court did, however, dismiss ACER’s appeals against Besanko J’s rulings that:

  1. Dr Hart owned the copyright in the SOQH, even though it was created while he was employed by the Department of Education; and
  2. The assignment of the right to sue for past infringements was valid.[1]

The ruling on the right to sue for past infringements is particularly important as it is the first substantial appellate consideration of the question. It is all the stronger because it was executed some 2 years after the assignment of copyright but Besanko J and the Full Court found there was sufficient nexus with the copyright assignment to support its validity.

Insight SRC IP Holdings Pty Ltd v Australian Council for Educational Research Ltd [2013] FCAFC 62


  1. Bit more on the ownership, assignment and additional damages questions here. ?

A couple of other points from Insight on appeal Read More »

Turns out, damages were payable after all

The Full Court has upheld Insight SRC’s appeal that it was entitled to compensatory damages under s 115(2) of the Copyright Act.

When ACER committed the infringements by reproducing the SOHQ, Dr Hart, the owner of the copyright, exploited it through his Insight company as an informal licensee or licensee at will.[1] As is probably not uncommon with “family” companies, the terms of the licence were so unclear Besanko J could not ascertain them. In these circumstances, Besanko J had ruled at [118]:

it is necessary to consider what action Dr Hart could have taken immediately prior to the execution of the Deed on 12 May 2011 by way of a damages claim for infringement of the copyright in the SOHQ. The possibilities are general damages under subs 115(2) and additional damages pursuant to subs 115(4) of the Act. As to the former, the difficulty for the applicants is that Dr Hart was not personally conducting a business involving the use of the SOHQ between the beginning of 2006 and 1 October 2009 and it has been no part of their case before me that Dr Hart personally would have exploited any commercial opportunities with ISV. Furthermore, Dr Hart did not claim that he could recover any such loss as the major shareholder of Insight SRC and that the Court could lift the corporate veil. On the other hand, what Dr Hart did have as the copyright owner was a right to nominal damages for infringement of copyright and a right to claim additional damages under subs 115(4). ….

ACER had used the copyright infringements to obtain contracts with ISV. It appears to have been accepted by both sides on the appeal that ISV would have had to award the contracts to Insight to be permitted to use the copyright. Bearing in mind that damages under s 115(2) are compensatory, the Full Court considered Dr Hart had suffered loss in the form of being prevented from procuring for his company the contracts ACER obtained by its copyright infringements. At [23]:

it is safe to infer that Dr Hart’s damage was the value of the loss of his ability to cause Insight to enter into a contract with ISV that would have generated the profit of $130,000 for Insight as found by the primary judge. Neither party at the trial asked his Honour to assess, as an alternative, the value of the loss of a chance to make such a contract.

From here, things get tricky. The Full Court went on to say at [24] that Dr Hart’s loss was not the royalty he would have received through the licence arrangement or the dividend he might have been paid from Insight’s profits:

An important component of this identification of what Insight’s damage would have been, is that Dr Hart wanted Insight to benefit by receipt of the profit. That is different to the characterisation urged by ACER that his damage was what might be received by him after Insight, Insight Holdings and the interposed trusts had received and made sequential distributions. Dr Hart used his efforts in exploiting the copyright to benefit Insight.

The reasoning seems to have been influenced by the proposition that a donor of a gift is entitled to recover the replacement value of the gift if it is wrongfully destroyed by another before receipt by the intended donee. (Perhaps, the real problem was that the licence arrangement was so amorphous[2] that it was not really possible to identify what fee was payable for the use of the copyright.)

In an attempt to kill off the case once and for all, the Full Court then went on to say that Dr Hart was entitled to at least $130,000 and, if the parties didn’t accept that, maybe more.

The $130,000 figure is interesting. It is the amount of profit Besanko J found ACER made on the ISV contracts it obtained by infringing the copyright. Presumably, that is the damages that Besanko J would have awarded on the basis that Insight would also have made that much profit.[3] I’m not sure why that follows but, perhaps, the Full Court had in mind that, possibly, Insight’s profit may have been higher than ACER’s as it may have had lower overheads?

Wouldn’t things have been easier if the majority in Aristocrataristocrat had agreed with Rares J’s view (and that of the English courts) that a reasonable royalty could be awarded as compensatory damages?

Insight SRC IP Holdings Pty Ltd v Australian Council for Educational Research Ltd [2013] FCAFC 62


  1. Insight did not become a formal, exclusive licensee until ACER’s infringements ceased. Bit more on the ownership, assignment and additional damages questions here.  ?
  2. The Full Court described it as “the informal, oral or bare licence that he granted it, or treated it as having had before the formal, exclusive licence [was] granted”. (emphasis supplied)  ?
  3. Damages under s 115(2) being an alternative to an account of profits must be the loss the copyright owner suffered, not the profits the infringer made which is the remedy obtained through an account. See e.g. Aristocrat and Rifai.  ?

Turns out, damages were payable after all Read More »