Nicholas J has granted further injunctions under s 115A against the telcos / ISPs to block access to websites related to HD Subs+.
The interesting point about these injunctions is that the blocked websites provide software to be downloaded for X–96 Smart TV Boxes, set-top boxes which provide a subscription service to access pirated streams of films and television programs.
Once the user had downloaded the software and activated a subscription, the software would connect to “facilitating servers” which authenticated the user, provided electronic programming information, software updates and content management information – allowing retrieval of the IP addresses of the “content servers” that hosted the movie or TV program to be streamed.
Thus, the primary purpose of the HD Subs service was to “facilitate” copyright infringement. At , Nicholas J explained:
The target online locations contribute functionality to a subscription based online service (“the HD Subs service”) that facilitates the electronic transmission of films and television broadcasts in which copyright subsists, without the licence of the copyright owners. The target online locations facilitate such infringements by providing updates, authenticating users or providing EPG information for the HD Subs service. This appears to be their sole function. In the case of the HD Subs website, it provides the HD Subs+ Apps, processes payments, and provides activation codes that enable a user to access the HD Subs service. Again, this would appear to be its sole function.
The terms of the injunctions correspond with the decisions already handed down – so much so that the ISPs didn’t turn up.
ESCO has won its appeal from the ruling that its patent lacked utility because the claims did not fulfill all promised advantages.
ESCO’s patent relates to a wear assembly for securing a wear member to excavating equipment. Think of it as a way of attaching “teeth” to an excavating bucket and for a design of the “teeth” themselves.
There are 26 claims.
Claim 1 (and its dependent claims) are for a wear member:
a wear member for attachment to excavating equipment. The wear member comprises:
(a) a front end (to contact materials being excavated and to protect the excavating equipment);
(b) a rear end;
(c) a socket that opens in the rear end of the wear member (to receive a base fixed to excavating equipment);
(d) a “throughhole” in communication with the socket;
(e) a lock “integrally connected” in the throughhole and movable without a hammer;
(f) between a “hold position” and a “release position”;
(g) the lock and the throughhole being cooperatively structured to retain the lock in the throughhole in each of the hold and release positions;
(h) irrespective of the receipt of the base into the socket of the wear member or the orientation of the wear member;
(i) a “hold position” (where the lock can secure the wear member to the base); and
(j) a “release position” (where the wear member can be released from the base).
Claim 13 (and its dependent claims) are for the wear assembly: essentially, a wear assembly designed to enable the attachment of the wear member of claim 1 to the bucket.
You may get some idea of what is claimed from these figures. The wear member is 28, shown fitted to the base 15 of the wear assembly.
The trial Judge
Paragraph 6 of the Specification was the first paragraph under the heading “Summary of the Invention”:
The present invention pertains to an improved wear assembly for securing wear members to excavating equipment for enhanced stability, strength, durability, penetration, safety and ease of replacement. (Full Court’s emphasis)
As to which the expert evidence was:
In relation to enhanced strength, none of the claims would achieve this advantage.
In relation to enhanced stability, claims 3 and 5 may provide a minor stability advantage as set out in paragraphs 14–21 of my first affidavit. ….
In relation to enhanced durability, none of the claims would achieve this advantage.
In relation to enhanced penetration, none of the claims would achieve this advantage.
In relation to enhanced safety, claims 1, 11, 13, 21, and 22 would achieve this advantage.
In relation to enhanced ease of replacement, claims 1, 4, 6, 8, 9, 12, 13, 16, 19, 22, and 25 would achieve this advantage.
In light of this evidence, the trial Judge had found ESCO’s patent invalid because the claims did not achieve all six of benefits promised by paragraph 6 of the Specification.
The Full Court
On appeal, the Full Court accepted the basic premise applied by the trial Judge: a claim is bad for inutility if following the teaching in the Specification does not lead to the promised result. There has been a failure of consideration. So, the Full Court explained at :
first, provided the results promised by the specification can, on the evidence, be achieved and, second, provided that those results can be applied to at least one useful purpose, the patent for the claimed invention does not fail for inutility. If, however, the promised results are unfulfilled or unrealised, the patent for the claimed invention will be bad for inutility
Further, if the Specification properly understood contained a “composite” promise, any claim which failed to achieve any one of the elements of that composite promise would be bad for inutility. At :
We therefore accept that if para 6 of the Patent Application, properly understood having regard to the whole of the Specification including the claims, contains a “composite” promise for the described invention, a failure to attain any one of the elements of the composite promise in any claim defining the invention renders the invention so far as claimed in any claim, inutile.
The question then is – what is the promise of the invention?
It followed from the requirements of s 40, which required the specification to describe the invention fully and claims to define the invention, that identification of the “promise” of the invention required consideration both of the body of the specification and the claims.
That consideration led the Full Court to conclude either that paragraph 6 of the Specification was not the “promise” of the invention. Or, alternatively, if it were, the several elements in paragraph 6 were to be read disjunctively rather than, as the trial Judge had done, conjunctively. In either case, ESCO’s patent was not bad for inutility.
The central consideration here was that the claims were directed to two related, but different entities: claims 1 to 12 being directed to the “wear member” only; claims 13 to 22 being directed to the “wear assembly”. Correspondingly, paragraphs 7 to 20 of the specification dealt with various “aspects” of the invention and, in doing so, paragraphs 15 and 16 identified the “promises” of the invention.
The Full Court considered paragraph 5 of the specification as reciting historical attempts “to enhance the strength, stability, durability, penetration, safety and/or ease of replacement of “such wear members” … with varying degrees of success.” The Full Court then characterised paragraph 6 as continuing that discussion to open the summary of the invention.
Paragraphs 15 and 16 of the specification said:
In one other aspect of the invention, the lock is integrally secured to the wear member for shipping and storage as a single integral component. The lock is maintained within the lock opening irrespective of the insertion of the nose into the cavity, which results in less shipping costs, reduced storage needs, and less inventory concerns.
In another aspect of the invention, the lock is releasably securable in the lock opening in the wear member in both hold and release positions to reduce the risk of dropping or losing the lock during installation. Such an assembly involves fewer independent components and an easier installation procedure. (Full Court’s emphasis)
So, at , the Full Court explained:
It seems to us that the language of para 6 consisting of a single sentence under the heading “Summary of the Invention” is not, properly construed, the language of “promises” (as Ronneby would have it) for the invention described in the Specification as a whole, including the 22 claims, some of which are concerned only with the wear member and others with the wear assembly. Rather, the language of para 6 is seeking to do something less than that. The language of para 6 resonates with para 5 and seems to be used in the sense of reciting those things to which the invention relates having regard to the design efforts that went before, and thus the relationship between “the invention” and those things recited in para 6 is one of identifying the topics or subject matter to which the invention relates (rather than “promises” for the invention), which, having regard to paras 7 to 20 “describing” the invention (including the best method in conformity with s 40(2)(a)), may or may not find expression in the claims “defining” the invention for the purposes of s 40(2)(b). In that sense, the fully described invention may go beyond the scope of that which is actually claimed. Thus, it is necessary to identify the “teaching” of the Specification and the relationship between the teaching and the claims. Rather, the promises for the invention so far as claimed in, at least, Claim 1 and the dependent claims, are to be found in paras 15 and 16 of the Specification as we explain later in these reasons.
The two different targets of the two sets of claims were also significant for the alternative conclusion that the list of achievements in paragraph 6 should be read disjunctively. The Full Court accepted that the language of paragraph 6 of the specification was appropriate for the claimed wear assemblies achieving all 6 listed benefits. However, the Full Court considered that the language of paragraph 6 was incompatible with the idea that each claim for the wear member must satisfy all 6 promises.
Accordingly, paragraph 6 of the specification should be read disjunctively and the claims were not bad for inutility.
In the course of its lengthy historical review, the Full Court did note that s 7A now required the Specification to disclose a specific, substantial and credible use for the claimed invention for it to be useful. Section 7A had been introduced into the Act by the Raising the Bar Act and so was not relevant to ESCO’s patent. The Full Court noted, however, that s 7A was intended to add additional requirements to the test of utility, not displace the old requirements. Thus, at , the Full Court commented:
Rather, the invention [subject to the Raising the Bar Act amendments] must meet the new test and meet the requirements of the existing law: EM p. 44.
I am guessing we shall see significantly more patent specifications in the future which claim that it is “an object of the invention to …” or, perhaps, the invention achieves “one of more of ….” Might be a bit tricky to amend assertions in a patent first filed overseas.
ESCO’s novelty appeal was also successful. It was essentially an exercise in construction, turning on whether the locking mechanism in the prior citation was “integral” and moved between two defined points- a “hold position“ and a ”release position”.
Strictly speaking, claims 5, 6 and 9 are independent claims, but nonetheless are for “wear members”. ?
The explanatory interpolations are the Full Court’s. ?
Claim 19 is also an independent claim for a wear assembly. ?
A wear assembly for attachment to excavating equipment comprising: (1) a base fixed to the excavating equipment; (2) a wear member including a front end to contact materials being excavated and protect the excavating equipment, and a rear end to mount to the base fixed to the excavating equipment; and (3) a lock integrally connected to the wear member and movable without a hammer between a hold position where the lock contacts the base and the wear member to secure the wear member to the base and a release position where the wear member can be released from the base, wherein the lock remains secured to the wear member in the release position. (My numbering to deal with formatting limitations) ?
Citing amongst others LaneFox v Kensington and Knightsbridge Electric Lighting Co (1892) 9 RPC 413. ?
ESCO’s patent being a pre-Raising the Bar patent, s 40 in it earlier form applied. ?
IP Australia has published a cost benefit analysis for Australia joining the Hague Agreement for registration of designs.
You are no doubt thinking that sounds very exciting (not). But, even if you are not into registered designs, you SHOULD READ IT. This is the Government’s first attempt at applying the Productivity Commission’s call for any proposals to reform intellectual property laws to be economically justified. As the Report says in the first paragraph of the Executive Summary:
The report assesses the impacts [i.e., the costs and benefits to Australia of joining the Hague Agreement] with reference to the Productivity Commission’s (PC) guiding principles of effectiveness, efficiency, adaptability and accountability. This report is intended to form part of the evidence base in relation to whether Australia should join the Hague Agreement.
So, unless it involves an acronym that is like TPP, this could well be a harbinger of things to come.
And what does it conclude find:
IP Australia’s best estimate of the net benefit for Australian designers is $1.7 million;
IP Australia’s best estimate of the net cost to Australian consumers from higher prices resulting from the longer term of design protection is $58 million;
to add a little bit more spice to the debate, IP Australia’s best estimate of the net cost to Australian IP professionals is $2.5 million; and
IP Australia’s best estimate of the net cost to the Australian government of implementing new systems etc. to comply with Hague is $2.8 million.
The big question IP Australia is asking you is how realistic are these estimates?
Now, in arriving at these numbers, the Report does include quite a lot of hard data.
For example, most Australians who file designs overseas do so in the EU, the USA, NZ and China. On the other side of the coin, most incoming design registrations were from the USA, the EU, Japan, NZ, Switzerland and China.
On the other hand, the Productivity Commission reported that less than 20% of registered designs are renewed beyond the first 5 year term. According to IP Australia, however, approximately half of all design registrations are renewed for the second 5 year term and non-residents are more likely to renew than Australians.
Will we become better at designing if we “stick” with our current settings – 19th out of the top 40 – or should we “twist” and sign up? Of course, there is an anterior question: do we even care about good design in the first place?
IP Australia is seeking feedback on its cost-benefit analysis and its proposed methodology to elicit additional evidence and views with the aim of finalising the analysis in 2018. You should get your say in by 31 May 2018.
This represents the costs savings from the simplified application procedure and the increased profits from taking new designs overseas. IP Australia estimates the range of benefit is from $0.03 million to $6 million. ?
This represents how much Australian consumers would pay to overseas owners of registered designs if the term of a registered design was extended from 10 years (currently) to the minimum 15 years required under Hague. IP Australia estimates a resulting range of net outflows from $23 million to $114 million. ?
IP Australia anticipates that “IP professionals” will garner some extra work at the examination stage but will lose work at the filing stage as the Hague Agreement provides for one central application to WIPO rather than multiple individual application to each separate jurisdiction. IP Australia estimates a range from a benefit of $0.3 million to a cost of $12 million. ?
The Government (presumably that means IP Australia) will incur costs between $2.3 and $3.4 million in upgrading its IT systems. ?
Report p. 10. It’s not clear from this part of the Report whether Australian applicants filed in all, some or only one of those destinations. ?
Like MICHIGAN for farm equipment and OXFORD for books, Burley J has ordered that Bohemia Crystal’s trade marks, BOHEMIA and BOHEMIA CRYSTAL be revoked because they are not distinctive of “glassware”.
Bohemia Crystal (BCP) had been formed in 1975 to distribute in Australia Skloexport’s products. Skloexport was the State-owned entity responsible for the export of all crystal and glassware products made in Czechoslovakia. In 1999, Skloexport went into liquidation and BCP took an assignment of its Australian trade marks. The main trade mark BCP used in this period, which had been registered since 1962 was the stylised BOHEMIA Glass mark, TM No. 319701:
Versions of this mark were used with or without the words “Made in Czech Republic” or substituting the word “Glass” for “Crystal”.
On 5 October 2001, BCP applied for and successfully registered BOHEMIA CRYSTAL for glassware and on 2 May 2003 BCP applied for and successfully registered BOHEMIA for glassware.
Host is an importer and supplier of catering goods and equipment in Australia. The business was started in 1999. One range within its 2,500 product lines is its range of glassware sourced from another Czech supplier, Forincorp, marketed under BANQUET BY BOHEMIA  or:
Host started importing this line in 2015. BCP made the fateful decision to start proceedings for infringement of its registered trade marks and contravention of the Australian Consumer Law for false and misleading conduct.
Burley J held that BCP’s trade marks lacked any capacity to distinguish and had not been used in such a way as to have acquired secondary meaning for the purposes of s 41(6). Burley J also dismissed BCP’s allegations of misleading or deceptive conduct.
It is not going to be possible in a blog post to do justice to Burley J’s 376 paragraphs. Instead five points particularly caught my eye.
First, Burley J (who was a very experienced intellectual property barrister before his appointment) pointed out that the High Court in Cantarella referenced both ordinary consumers and traders as the criterion for whether or not a sign was inherently adapted to distinguish.
BCP argued that the test focused on what ordinary consumers would think the sign meant. It had found an expert who opined that ordinary members of the public would think “bohemia” was a reference to persons with an artistic or unconventional lifestyle.
After analysing Cantarella from  on, his Honour concluded at :
in a case such as the present, it is necessary to consider the ordinary signification of the words “Bohemia” and “Bohemia Crystal” in the context of the “target audience”, being traders and consumers of the relevant goods, to determine whether at the relevant dates other traders might legitimately desire to use these words or something similar in connection with their goods, for the ordinary signification which they possess. …. (emphasis supplied)
Here, despite the evidence of BCP’s principle witness, the evidence was largely one way. It was beyond dispute that for many centuries the geographic region known as “Bohemia” which is now in the Czech Republic had a strong reputation for producing high quality crystal and glassware. There was evidence that between at least four and ten different manufacturers used the term “Bohemia” at an important annual glassware trade show to signify the geographic origins of their products. There was also evidence from a number of dealers that the term signified to the public glassware originating from the Bohemia region. BCP’s own registered user agreements for the use of Skloexport’s trade marks had also required it to promote its products as from the geographic region, Bohemia.
Burley J concluded that other traders who had glassware manufactured in the region formerly known as Bohemia legitimately and honestly wanted to use that word to describe the geographic origins of their products. The fact that Bohemia was no longer a separate country (and had not been since the World War I) and not even the contemporary name of the region was not significant.
Second, Burley J found that the evidence of use of the BOHEMIA and BOHEMIA CRYSTAL did not establish that those terms had been used by BCP as trade marks or in such a way as to have acquired secondary meaning. There were three aspects to this conclusion.
Following BP v Woolworths, promotion and use is not enough. It had to be shown that the signs as registered had been used in some way to identify the signs as being trade marks.
Next, for the most part the relevant evidence showed that what BCP had been using as a trade mark was Skloexport’s composite mark, not the terms as registered. This was not use of either trade mark as registered. Moreover it was the combination of the elements in the signs as a whole which comprised the distinctiveness. These signs should not be dissected into their component parts:
228 I have some difficulty with the proposition that the words “Bohemia” or “Bohemia Crystal” should in this context be regarded as having separate trade mark signification beyond the combination in which they appear in the composite marks described above. In my view, it is the combination of elements that is distinctive. The trade mark should be viewed as a whole and not dissected into parts. Although this is likely to be a matter of fact for each case, it is notable that several cases have cautioned against the proposition that separate elements should be so distilled; see Diamond T Motor Car Company  2 Ch 583 at 588, Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2)  FCA 81; (2012) 201 FCR 565 at , .
229 To my eye, the whole of the 701 mark is to be regarded as creating a complicated image that taken collectively represents a sign, or badge of origin. I do not think that the elements within it may be dissected or that they would be dissected by an ordinary consumer of goods within the relevant classes. In any event, I consider that the words “Bohemia Crystal” and “Made in Czech Republic” within the 701 mark tend to reinforce the descriptive, geographical signification of those words. ….
The third factor is the way that evidence was advanced did not help BCP’s case. A lot of the evidence was vague, or general, rather than specific to what needed to be proved here: use of the signs as trade marks before the filing date. In this respect, his Honour’s discussion will repay careful study as it is not uncommon to see evidence prepared for the Office suffering from similar problems.
Third, BCP did not demonstrate any sufficient reason why its trade marks should not be removed from the Register. Burley J accepted that, Host having established the marks were invalidly registered, BCP bore the onus of satisfying the Court that there was sufficient reason not to order cancellation.
Here, the evidence did not establish that BCP had acquired distinctiveness in its signs. Importantly, allowing BCP to keep its registrations would give it an unfair advantage. At , his Honour explained:
…. The presence of the existing ground of revocation via the operation of subsection 88(2)(a) and s 41 indicates an intention on the part of the legislature to ensure that historical registrations should not remain on the Register where they should not have been granted in the first place. In the present case, to permit such a course would advantage the unmeritorious registrant who has incorrectly had the benefit of the monopoly since the relevant dates. BCP is able to apply to register the Bohemia marks now, should it choose to do so.
Of course, if it were to do so, it would run the risk of other traders wishing to use the terms opposing (if the Registrar got suckered into accepting the applications in the first place).
Fourth, if his Honour had not found BCPs trade marks invalidly registered, Host would have infringed. Its attempt to rely on s 122(1)(b) would have failed. This part of the case essentially turned on Host’s use being BANQUET by Bohemia (emphasis supplied) rather than BANQUET from Bohemia.
Burley J accepted that s 122 could be invoked to protect trade mark use, not just descriptive use. However, Host’s form of use showed that Host was trying to assert origin in some particular trade source rather than some geographical origin. At :
…. Ms Flint and Mr Sullivan adopted this language, notwithstanding the obvious difficulty with the perception of “by” and with no knowledge of either BCP or the Bohemia marks. However, I find that they did not do so for the purpose of using “Bohemia” to designate the geographical origin of the goods, but to designate the trade origin of the goods lying in a particular entity (which was ultimately Forincorp). Accordingly, the use does not fall within the defence ….
Fifth, BCP’s allegations of misleading or deceptive conduct also failed. A number of factors contributed to this including the particular trade marks BCP had actually used and the good old-fashioned Hornsby Building Information Centre proposition. In contrast to the trade mark case, in addition, it was highly significant that Host’s market and BCP’s market were quite different. BCP’s market was member of the general public looking for premium quality products. Host’s customers, however, were cafes, restaurants, pubs, clubs, community groups and the like who were cost conscious but attended to their purchases with considerable care. So, for example, at :
the typical reasonable consumer is most likely to perceive the October 2015 catalogue use to represent that the manufacturer or producer of the glassware is an entity known as “Banquet by Bohemia” or “Bohemia”, there is no more than a remote prospect that reasonable customers are likely to consider that the goods offered in the catalogue are offered with the sponsorship or approval of BCP or are offered by Host with the approval of BCP or that the Banquet products emanate from BCP. First, I do not consider that the typical Host customer who encounters this publication would be likely to be aware of BCP. Secondly, I consider that any Host customers who are aware of BCP would understand it to be a retailer of a range of glassware products sold under a range of different brands. Thirdly, to the extent that such customers perceive that BCP has a trade connection with products that it sells, those customers are likely to do so by reference to the common use of the 701 mark or the modified 701 mark. Without the presence of that mark, in my view they are unlikely to consider that the word “Bohemia” as it appears in the impugned uses connotes a connection or association with BCP. Needless to say, no such mark appears in the October 2015 catalogue. Fourthly, such customers would also be influenced by the geographical nature of the term and the material differences between the Host and BCP products such as price, quantity and quality. ….