Patents

2nd tranche of Raising the Bar draft regulations

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IP Australia today released the second tranche of exposure draft regulations implementing the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.

This tranche deals with schedule 3 (reducing delays in resolving patent and trade mark applications) and schedule 6 (simplifying the IP system).

Comments still need to be submitted by 21 November 2012.

Go here, and scroll down (past the first tranche if you already have them).

Dr Summerfield prepared a marked up version of the regs as the first tranche would amend them and discussed the new search fee implications.

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Tobacco Plain Packaging reasons

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Having previously announced the conclusion that the Tobacco Plain Packaging laws were valid, today the High Court published their reasons.

6 of the judges, Heydon J dissenting, ruled that s 51(xxxi) did not apply because there was no “acquisition” of the tobacco companies’ intellectual property rights. It was true that the ability, or rights, of the tobacco companies to use their intellectual property rights was severely curtailed, if not extinguished. That was insufficient to constitute an acquisition in itself. But, the Tobacco Plain Packaging legislation did not appropriate those rights for use by the Commonwealth.

As a result, it was unnecessary to consider the Commonwealth’s further argument that, if there were an acquisition, it was justified and reasonable in the circumstances.

JT International SA v Commonwealth of Australia [2012] HCA 43

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Patents, copyright and competition

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Judge Posner, one of the authors of the leading modern text on the economics of intellectual property (amongst many other things), has published a controversial blog post questioning whether patents and copyright law, but particularly patents, are granting excessive protection.

Judge Posner accepts that patents for pharmaceuticals are the “poster child for patent protection”, but contrasts that to patents for computer software.

The IPKat explores some aspects of this part of Judge Posner’s critique.

In his judicial capacity, Judge Posner recently dismissed both Apple’s and Motorola Mobility’s attempts to use their respective patent portfolios to extract injunctions and damages from the other (pdf of the Opinion).

On copyright, Judge Posner is particularly concerned about the term of protection: currently (i.e., until Mickey Mouse next nears expiry) 70 years after the death of the author(s) for published works and the very restrictive approach to “fair use”. Amongst other things, Judge Posner refers to the music companies’ practice of requiring licences for “samples”.

Wonder what he would make of the Kookaburra that scotched Men at Work?

The 1709 blog delves into this part of his Honour’s views.

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Innovation patents – further chance to protest

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IP Australia is seeking comments on how the innovation patent system is working.

Since 2001, Australia grants 2 types of patent: the standard patent with a normal term of 20 years and an innovation patent with a term up to 8 years.

Ann innovation patent need show only an innovative step over the prior art to be valid. According to the Full Court in Delnorth, this requires a difference that the person skilled in the art would understand makes a substantialmaterial contribution to how the product / method works. As the Full Court acknowledged, this is nothing like the inventive step requirement for a standard patent.  See also the SNF case.

According to IP Australia’s website:

Since the Delnorth (2009) decision in the Federal Court, relatively obvious minor improvements to inventions have been patentable.  There has been an unusual growth of innovation patent applications for certain technologies. There is some evidence that larger companies might be using the innovation patent system to extend the life of their patents and deliberately targeting competitors.

ACIP is already undertaking a review into the innovation patent system as a whole. The consultation paper for this (IP Australia’s) review explains:

The Advisory Council on Intellectual Property is presently conducting a review of the Innovation Patent system as a whole. In the mid term, this will provide valuable insights and recommendations for improvements.

In the short term, however, there is a pressing need to address emerging risks of the Innovation Patent system being used in ways which would lead to undue costs to consumers and to businesses that compete with owners of Innovation Patents. For example, there is a need to ensure that Innovation Patents do not inappropriately extend the life of pharmaceutical patents and delay the introduction of less expensive generic medicines, leading to increased costs to consumers and an increase in government expenditure through the Pharmaceutical Benefits Scheme.

As a result, the Government proposes to amend the Patents Act 1990 to raise the threshold for inventiveness to the same level as for Standard Patents (Attachment A refers). This approach is consistent with the second tier patent systems operating in countries such as Germany and Japan.

Comments are requested by 25 October 2012.

You can download the consultation paper, Innovation Patents – Raising the Step (sic), via this page.

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Raising the Bar regulations

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IP Australia has published the first tranche of draft regulations to implement the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (most of which comes into force on 15 April next year).

This tranche includes the draft regulations for:

  •  Schedule 1 – Raising the quality of granted patents,
  • Schedule 4 – Assisting the operations of the IP profession, and
  • Schedule 5 – Improving mechanisms for trade mark and copyright enforcement.

Comments should be submitted by 21 November 2012.

Download all the gory details, including draft EMs, here.

Lots have people have had a go at trying to explain some, or all, of the ramifications of the Act. If you don’t want to Google, or bing, or duck duck go, the EM can be found on Parliament’s site here and the Bills Digest prepared by the Parliamentary secretariat is here.

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Trying to sue an (alleged) overseas infringer

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Bennett J has refused Servier’s attempt to join several Apotex entities located outside Australia in its infringement action against the Apotex Australian arm.

Servier is the patentee of Australian patent No 2003200700 for the arginine salt of perindopril (perindopril arginine). Apotex Pty Ltd obtained listing with the Therapeutic Goods Administration (TGA) for a generic version of perindopril arginine. It commenced proceedings under s 138 of the Patents Act to revoke Servier’s patent.

Servier counter-claimed for infringement. Apotex Pty Ltd conceded the product it proposed to import would infringe Servier’s patent, if valid, and consented to an injunction prohibiting the importation and sale of its product pending the outcome of the revocation action.

Subsequently, Servier wished to join several related Apotex entities, all located and operating outside Australia, to its infringement allegations pursuant to Part 10.4 of the Rules. The infringements alleged were common design and authorisation. Bennett J had previously granted Servier leave to serve its infringement proceedings for another of its perindopil patents against at least 2 of the Apotex entities in question, Apotex Inc. and Apotex Pharmacem Inc.

As there can be no liability for authorisation or common design unless there is an act of primary infringement (i.e., someone must actually do something which is an act of infringement such as making or importing or selling or using the patented invention),  Servier sought relief on a quia timet basis; i.e., the risk that infringements would occur in the future.

 Servier relied principally the nature of the Apotex group as “a vertically integrated corporate group or a single worldwide organisation”, evidence from the earlier case that Apotex Inc. was the parent of Apotex Pty Ltd and directed its operations and information gleaned from Apotex Pty Ltd’s submissions to the TGA for marketing approval showing involvement by Apotex Pharmacen Inc. and several other entities whose names were redacted.
The central reasons for Bennett J’s refusal to permit service out were that:
60. The problem for Servier … is that there is no present actual or threatened primary infringement. If the Patent is valid, it is admitted by Apotex that the sale of Apotex P/L’s perindopril arginine is an infringing product. The only conduit for its sale, on the evidence, is Apotex P/L. Apotex P/L is subject to an interim injunction which will be made permanent if the Patent is valid. If the Patent is invalid, there is no question of infringement.
61. If Apotex P/L is not infringing and there is no present threat by Apotex P/L to infringe, there is no present basis for an injunction against the overseas cross-respondents to restrain any presently occurring act; there is no present infringement and no present threat to infringe.
62. Servier suggests that it could be the case that the overseas cross-respondents could produce a new product or enter into a common design with another Australian company to infringe the claims. Apart from a hypothetical suggestion made by Servier’s counsel, there is no factual basis for such a threat or such an apprehension.
63. In the present case, the threat is not imminent. There is no demonstrated real risk of wrongful conduct which would cause injury. ….
The evidence in this case, in contrast to the earlier case, showed that Apotex Inc. was not in fact the parent of Apotex Pty Ltd, they were different arms of the same corporate group.
In addition, both Apotex Inc. and Apotex Pharmacen Inc. were the subject of injunctions in Canada which precluded them from making perindopril arginine.
All of these facts distinguished the present application from the earlier case. Moreover, to date, only Apotex Pty Ltd had marketing approval from the TGA to import and offer for sale the Apotex version of perindopril arginine.

A second point is of general application.

The old rule in terms conferred a discretion on the Court whether or not to permit service out. Servier pointed out that Rule 10. , in contrast, is not expressed to be discretionary and, accordingly, it was entitled to an order for service out having satisfied the criteria specified. Bennett J was having none of that:

  • rule 10.43 set out matters an applicant for service out needed to satisfy, it did not constrain the Court;
  • after reference to s 37M, her Honour pointed that
    • Rule 1.31 empowered the Court to make any order in the proceeding having regard to the nature and complexity of the proceeding and taking into account proportionality
    • Rule 1.32 empowered the Court to make any order that the Court considers appropriate in the interests of justice (which included the power not to make an order) and
    • Rule 1.34 permitted the Court to dispense with compliance with the Rules

(Although it was unnecessary for her Honour to mention it, Rule 1.35 also permits the Court to make orders inconsistent with the rules.)

Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2012] FCA 748

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Intellectual Property Laws Amendment Bill 2012 – exposure draft

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IP Australia has released for public comment an exposure draft of the proposed Intellectual Property Laws Amendment Bill 2012. The Bill has 2 purposes:

  1. to amend the Patents Act 1990 in light of the DOHA Declaration / TRIPS Protocol; and
  2. to confer original jurisdiction in matters arising under the Plant Breeder’s Rights Act 1994 on the Federal Magistrates Court in addition to the Federal Court’s existing jurisdiction.

DOHA Declaration[1] / TRIPS Protocol

Article 31 (scroll down) of the TRIPS Agreement permits members of the WTO to permit the use of patented inventions without the permission of the rightholder in the circumstances set out in the article.

The HIV/Aids crisis in Africa revealed a problem in this regime in that a number of countries which needed to rely on these provisions did not have the infrastructure, or were otherwise unable effectively, to take advantage of this regime. The basic idea underlying, first, the DOHA Declaration and, then, the TRIPS Protocol is to enable such countries to take advantage of the facilities and expertise in other countries by having the relevant drug made under compulsory licence in the foreign country.

So far, only Canada has notified the WTO pursuant to the DOHA Declaration that it has granted a compulsory licence to Apotex to export TriAvir[2] to Rwanda.[3]

Following on from consultations begun in 2010, the Government announced its intention to amend the Patents Act to implement the DOHA regime in March last year. The object of the proposed amendments is to introduce a regime for the grant of compulsory licences of pharmaceutical products on public health grounds for export to least-developed or developing countries (to be defined in the Bill as “eligible importing countries”).
As the TRIPS Protocol is not yet in force,[4] schedule 1 of the Bill is intended to implement the interim regime adopted under the DOHA Declaration. When the TRIPS Protocol does come into force, the regime in schedule 1 will be superseded by the regime to be enacted by schedule 2 of the Bill.

In either case, the regime will be separate from, and independent of, the existing compulsory licensing regime relating to domestic non-use which is currently the subject of a reference to the Productivity Commission.

As with the existing “non-use” regime, any compulsory licences would be granted only on application to the Federal Court, and not the Commissioner of Patents. If the patents in question are innovation patents, it would be necessary to apply for certification (where that has not occurred already).

Federal Magistrates Court

The extension of jurisdiction over PBR matters to the Federal Magistrates Court, which “is designed to deal with less complex matters more quickly and informally than the Federal Court”, follows several years experience with copyright matters and the extension of jurisdiction over patent, trade mark and registered design matters enacted by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, which comes into effect on 15 April 2013.

Onus in trade mark oppositions

I wonder why the bill doesn’t fix up the onus for oppositions to the registration of trade marks to the “balance of probabilities” standard in line with the amendments – see Part 2 – that will apply in patent oppositions from 1 April 2013?

Submissions should be made by 1 October 2012.

Intellectual Property Laws Amendment Bill 2012 – exposure draft

Exposure draft Explanatory Memorandum

IP Australia’s Home Page for the exposure draft process.

  1. This is not strictly accurate terminology: I am using it as shorthand to refer to the WTO Council decision in December 2003 on paragraph 6 of the DOHA Declaration made in 2001. The WTO’s overview page is here.  ?
  2. A fixed-dose combination product of Zidovudine, Lamivudine and Nevirapine, according to Rwanda’s notification: see View Notifications.  ?
  3. The compulsory licence was issued by the Commissioner of Patents on 19 September 2007 for a period of 2 years: click on View notifications.  ?
  4. Australia has already accepted the TRIPS Protocol, but it does not come into force until two thirds of WTO’s 155 members accept it. If one counts the EU as “one” member – not sure on the politics of this as there are currently 27 members of the EU, as at May this year 44 members had accepted the TRIPS Protocol.  ?

Intellectual Property Laws Amendment Bill 2012 – exposure draft Read More »

Tobacco plain packaging

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

Quote from the High Court:

At least a majority of the Court is of the opinion that the Act is not contrary to s 51(xxxi).

Reasons (which may explain that rather cryptic quantity) to follow later.

So, by 1 December 2012, all retail cigarette packs in Australia will look something like this. – the colour is officially described as Pantone 448C.

Tobacco Plain Packaging Act 2011

Tobacco Plain Packaging Regulations 2011

Tobacco Plain Packaging Amendment Regulations 2012 – extending regime to cigars and tobacco pouches.

On the global front, Ukraine, Honduras and Dominican Republic have brought complaints against Australia before the WTO dispute resolution process and, so far, Brazil, Canada, El Salvador, the European Union, Guatemala, Indonesia, Nicaragua, New Zealand, Norway, the Philippines, Uruguay and Zimbabwe have joined in the consultations.

So far as I can work out, the arbitration between Philip Morris and Australia under the 1993 Agreement between the Government of Australia and the Government of Hong Kong for the Promotion and Protection of Investments has reached the stage where the panel of 3 arbitrators has been established.

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Apotex v Sanofi

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The Full Court (Keane CJ, Bennett and Yates JJ) has unanimously dismissed Apotex’ appeal from Jagot J findings that it had infringed Sanofi-Aventis’ patents and copyright. Bennett and Yates JJ delivered a joint opinion, Keane CJ his Honour’s own reasoned opinion.

Patent

Sanofi’s patent had just one claim:

A method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis, which comprises administering to a recipient an effective amount of pharmaceutical composition containing as an active ingredient a compound of formula I or II … [i.e., leflunomide]

Manner of manufacture

Keane CJ recorded at [25] that Apotex did not press orally its argument that methods of medical treatment are not patentable in Australia. Both judgments, however, explicitly refused to re-open the question following Rescare and Bristol-Myers Squibb in light of long standing practice and Parliament’s lmitation of the exclusion from patentability in s 18(2) to humans and the biological processes for their generation.

Keane CJ, Bennett and Yates JJ would also have granted leave to Apotex to argue on appeal that “methods of medical treatment for a “second or later medical use” not limited by the purpose of the treatment are not patentable inventions.”

Whatever the merits of that ground “(a matter on which we express no view)”, however, Bennett and Yates JJ considered at [195] it could not succeed in this case as there was no disclosure on the face of the specification to found the Microcell argument as interpreted in Bristol-Myers Squibb. Keane CJ at [27] considered the ground as argued failed because, properly construed, the claim did not extend to any use of leflunomide that inevitably had some incidental beneficial effect on psoriasis.

Infringement

The Court unanimously rejected Sanofi’s argument that the claim covered any administration of leflunomide which happened to (or also to) result in the treatment of psoriasis. In this context, their Honours were concerned about giving Sanofi a “monopoly” wider than its disclosure or the consideration for the grant of the patent.

This didn’t help Apotex, however.

First, Apotex’ product was approved for, and its product literature stated it was indicated for the treatment of active rheumatoid arthritis and active psoriatic arthritis. The product literature also stated “Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease.”

Use of leflunomide to treat rheumatoid arthritis itself would not infringe. However, those treating psoriatic arthritis knew that the patient would also have psoriasis or, if not treated, would develop psoriasis. Thus, the Full Court agreed with Jagot J that the plain meaning to those skilled in the art of the statement “Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease” was an instruction to use Apo-Leflunomide for the treatment of psoriasis in conjunction with the treatment or prevention of psoiratic arthritis.

Secondly, use for the purpose of treating, or preventing, psoriasis in conjunction with psoriatic arthritis would be an infringing use. Their Honours were not overwhelmed by the supposed terrors of determining the purpose for which leflunomide was prescribed, bearing in mind that it was a prescription drug. Bennett and Yates JJ saw this at [126] is simply a question of characterising the impugned conduct. Keane CJ questioned at [38] to [40] whether the proposition from Merrell Dow that infringement did not depend on the infringer’s state of mind was in fact “absolute” and noted that, in circumstances where a prescription only drug was being prescribed by medical practitioners, the purpose of administration should be reasonably ascertainable.

Accordingly, Apotex infringed on the basis of (at least) s 117(2)(c).

Copyright

May be the subject of a later post.

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (No 2) [2012] FCAFC 102

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Compulsory licensing of patents

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The Assistant Treasurer has referred the operation of the compulsory licence regime within the Patents Act 1990 to the Productivity Commission for review.

At present, sections 133 to 140 of the Patents Act provide for applications to be made to the Federal Court for a compulsory licence to work a patent where

(i) the applicant has tried for a reasonable period, but without success, to obtain from the patentee an authorisation to work the invention on reasonable terms and conditions;

>(ii) the reasonable requirements of the public with respect to the patented invention have not been satisfied;

(iii) the patentee has given no satisfactory reason for failing to exploit the patent; or

the patentee has contravened the anti-competitive provisions in Part IV of the Competition and Consumer Act 2010.

The Terms of Reference require the Productivity Commission to:

  1. Assess whether the current Australian provisions can be invoked efficiently and effectively to deal with circumstances where reasonable requirements of the public are not being met or where the patentee engages in anti-competitive conduct. This includes, but is not limited to, consideration of concerns that gene patents may hinder access to affordable healthcare, including access to medical advice that relies on the identification and use of gene sequences related to human health and disease.
  2. Advise on the frequency, and impact, of the issue of compulsory licences in comparable markets and the common features in such compulsory licenses.
  3. Recommend any measures that may be required to efficiently and effectively exercise these safeguard provisions and invoke their use in a manner consistent with Australia’s international obligations, without limiting access to overseas technologies, technology transfer, research and development investments or substantially reducing the patent incentive for innovation.
  4. Recommend any alternative mechanisms deemed necessary to ensure that the balance between incentives to innovate and access to technology best reflect objectives of ensuring reasonable access to health care solutions, maximising economic growth and growing the Australian manufacturing industry.
  5. Recommend measures to raise awareness of these provisions and their purpose, including the specific challenges of raising awareness among small businesses and the healthcare sector.

The genesis of the reference seems to lie in the uproar resulting from the attempt to charge licence fees for diagnostic kits based on the BRCA 1 patent and, more recently, the smartphone wars.[1]

A number of submissions to the Senate’s Community Affairs committee claimed that there were a range of deficiencies with the present scheme. In addition, IP Australia told the Senate’s Community Affairs committee when it was investigating these (and other matters) that, in the 100+ years our law has had such provision, there had been only 3 applications for the grant of a compulsory licence. The ALRC had also recommended that the scope of ‘reasonable requirements of the public’ be clarified (the recommendation to make the competition test a basis for licensing having been sort of implemented when s 133(2)(b) was inserted in 2006.

The Terms of Reference also note that Australia is a net importer of technology with, for example, only 1,178 (or 8%) of the 14,557 patents granted in 2010 being granted to Australian residents.

The TRIPS Agreement allows us to do something in this sphere. See art. 40 and art. 27.2 even goes so far as to allow us to exclude from patentability things necessary to protect ordre public “including to protect human … life or health”.

Of course, the multi-million dollar question in all of this is what that elastic word “reasonable” might mean?

Do also note paragraph 4 of art. 40, which gives a country that is concerned its nationals are being prejudiced by the exercise of such rights an “opportunity for consultations”. Of course, such a country might just move straight to the dispute resolution processes. I wonder how a more liberal use of compulsory licensing, or the threat of it, would play with those of our trading partners who consider compulsory licences of patents to be anathema?

According to the Productivity Commission’s website:

1 an issues paper will be released in August;
2 initial submissions will be due by 28 September;
3 there will be a draft report released in early December;
4 public hearings will be held in February 2013; and
5 the final report will be delivered to the government on 29 March 2013.

  1. According to the Press Release amongst other things: “Of concern to government is a perception that patents over genetic technologies, or a perceived lack of licences to use these patents in Australia, unreasonably restricts or delays patient access to medical advice based on the latest diagnostic tests. Other areas of sensitivity include climate change mitigation, food security and alternative energy technologies, and technical standards essential patents (for example, in telecommunication technologies).”  ?

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