Will unsuccessful opponents be estopped?

As noted previously, the “Raising the Bar” bill aims to change the standard of proof required for acceptance of a patent application and for successful opposition from the prevailing “practically certain” or “clear” standard to a balance of probabilities.

Currently, an unsuccessful opponent is not estopped from bringing revocation proceedings, largely because of the difference in onus applying at the opposition versus revocation stage: Genetics Institute v Kirin-Amgen at [17] and note Clinique at [13] (trade mark). At [17], the Full Court in Kirin-Amgen said:

17       During the hearing there was some discussion as to the possibility of the owner of a patent the grant of which was unsuccessfully opposed, defending a revocation proceeding instituted by the pre-grant opponent by raising an issue estoppel in respect of the findings of fact of the single judge. In the present case, however, the respondent has conceded that no issue estoppel would apply to the findings of fact of Heerey J in any revocation proceeding instituted by the applicant in respect of the patent. In any event, the difference between the issue determined by his Honour in the pre-grant opposition proceeding, and the issue that would arise for determination in any revocation proceeding instituted by the applicant, is in our view sufficient to preclude the operation of issue estoppel principles in that second proceeding. The overriding issue in the pre-grant opposition proceeding before Heerey J was whether it was practically certain that the patent to be granted on the specification would have been invalid on the ground that the content of the specification was not in accordance with the requirements of s 40 of the Patents Act 1952 (Cth) (Genetics Institute Inc v Kirin-Amgen Inc (No 3) (1998) 156 ALR 30 at 39-41). Even if revocation of the patent was subsequently sought by the applicant on the virtually identical ground of non-compliance with subs 40(2) or subs 40(3) of the current Act (see par 138(3)(f) of the Act), the issue for determination by the judge hearing that revocation application would be whether the patent should be revoked for the specification’s non-compliance with subs 40(2) or subs 40(3). The decision of Heerey J that it was not practically certain that the patent should be so revoked would be inconclusive of this issue. Accordingly, there would be no scope for the operation of an issue estoppel in relation to the decision of Heerey J in any post-grant revocation proceeding instituted by the applicant in respect of the current patent. (emphasis supplied)

What the Full Court said in the emphasised passages was obiter as the point was conceded. Given the reason why the Court accepted the concession, however, it may well be that an unsuccessful opponent will be estopped from from bringing revocation proceedings in those cases where the “practically certain” standard no longer applies.

The absence of discovery and, usually, cross-examination and, possibly, the very nature of opposition proceedings may however lead to a contrary conclusion: see the Court of Appeal’s ruling in Special Effects v L’Oreal (commentary by IPkat and Birds), albeit

(a) involving an opposition in the Registry and not the Court; and

(b) recognising the possibility that the revocation proceedings may be stayed as an abuse of process.

The fact the earlier UK proceeding was in the Registry and did not involve discovery or cross-examination could be a highly important point of distinction as cross-examination and, sometimes, discovery do occur when opposition proceedings are appealed to the Court.

When the change takes effect, prospective opponents would still be very well advised to consider carefully whether to oppose, or keep their powder dry, and, if they do oppose, do it properly right from the start. Of course, even under the current standard, a half-hearted opposition can seriously prejudice the outcome of both the opposition and subsequent revocation proceedings.

 

Microsoft v i4i – US Supreme Court decides

Microsoft has lost its appeal to the US Supreme Court.

Microsoft had argued it should have to prove its claim that i4i’s patent was invalid by “a preponderance of the evidence”.

Under the US Patent Act, however, a patent having been granted after examination by the Commissioner is “presumed valid”. The US Supreme Court has ruled that “presumed valid” in this context had a settled common law meaning which Congress was presumed to have adopted. As a result, Microsoft had to make its invalidity case “by clear and convincing evidence”. That is, there is a strong presumption of validity in the USA.

Microsoft Corp v i4i Limited Partnership

Initial commentary by Patently-O.

The case initially attracted international attention as Microsoft was ordered to stop selling versions of Word which had the capability of opening a .XML, .DOCX, or .DOCM file (“an XML file”) containing custom XML. This presumably means that Microsoft will have to pay the US$290 million damages awarded against it for infringement.

Under Australian law, a person alleging a granted patent is invalid has the onus of proof on the usual balance of probabilities standard.

A person opposing the grant of a patent, however, has to establish their case on the clear and convincing or practically certain standard. The exposure draft of the “Raising the Bar” amendment legislation proposes changing that standard, and the standard for acceptance, to the balance of probabilities standard too. (See items 14 and 15 of Sch. 1 (pdf) and pp 26 – 30 of the (draft) EM (pdf).

Patently-O speculates from the voting alignment of the current Court that the US Supreme Court is now shifting “to the right” or “pro-patentee”.