Patents

Contributory patent infringement

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The High Court has allowed the Northern Territory’s appeal against the finding that it infringed the Collinses’ patent under section 117 of the Patents Act 1990 (Cth) by granting a statutory licence to ACOG to harvest certain trees from Crown land.  It was alleged ACOG then used oil extracted from the trees to make blue cypress oil by a process protected by the Collinses’ patent.

From a quick skim of the judgments (there are several), it appears that the Northern Territory escaped liability because the trees were a staple commercial product and so it was necessary to show that the Northern Territory had given instructions or inducements to use the product by means of the patented process (not merely ‘facilitated’ it).

It also looks like the High Court rejected the Northern Territory’s argument that Rescare set out the correct interpretation of s 117; not Bristol-Myers Squibb v Faulding.

Northern Territory v Collins [2008] HCA 49.

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Troubles with the grace period

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The Patents Act was amended (in relatively controversial circumstances) to include a 12 month grace period (somewhat a la the USA) so that use or publication of the invention in the 12 months before the complete specification was filed could not be relied on to destroy validity: see s 24(1)(a) and reg.s 2.2(1A) and 2.3.

Assume that a complete application for a standard patent was filed on 13 May 2005.  Then a complete application for an innovation patent, as a divisional from the standard, was filed on 22 November 2006.

Assume further that the first publication of the invention the subject of both applications was in October 2004.

Which complete application does time run (backwards) from?

If the standard application, the innovation patent will be valid; if not, it will be invalid.  If time runs from the date of the complete application for the innovation patent, however, the divisional status of the innovation application will not have all the usually expected effects.

Stone J has found that the relevant application, on the basis of the specific wording of the legislative provisions, is the complete application for the innovation patent:

10 There does not appear to have been any previous judicial consideration of the present question. Both parties submit that, having regard to the context in which they appear, the ordinary and natural meaning of the provisions supports the construction for which they respectively contend. For reasons given below I have concluded that the construction for which the respondent contends is correct, namely, that where the specification filed in respect of a parent application discloses the invention claimed in a divisional application based on the parent, the “complete application” to which cl 2.2(1A) refers is the divisional application. Consequently I would answer the question for determination as follows:

For the purpose of determining the validity of the Australian Innovation Patent No 2006100978 (Innovation Patent), and on the facts stated in the orders made by Bennett J on 11 December 2007, “the filing date of the complete application” within the meaning of reg 2.2(1A) of the Patents Regulations 1991 (Cth) is the filing date of the complete application for the Innovation Patent on 22 November 2006.

28 I reject the applicant’s argument that the respondent’s construction creates an anomaly by providing the innovation patent with the benefits of divisional status whilst depriving it of the grace period benefits otherwise accruing to that status. As the respondent correctly submits, the consequence of its view is that the grace period simply runs from a later date, which may or may not extend past the priority date based on the filing of the parent application. This is said to reflect:

… a decision not to allow divisional applications to benefit more than they already do from the earlier priority date in circumstances where the divisional application is filed more than a year after the parent application.

Be very, very very careful if you have to rely on the grace period!

Mont Adventure Equipment Pty Limited v Phoenix Leisure Group Pty Limited [2008] FCA 1476.

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Patent application searching

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IP Australia and the US PTO have reached agreement to permit some international searching for US patent applications to be undertaken by IP Australia.

According to IP Australia:

The arrangement, which comes into effect on 1 November 2008, will allow applicants from the US to choose IP Australia to undertake the initial search and examination of their patent application under the Patent Cooperation Treaty (PCT). Applications that may not be covered under the arrangement are certain international applications relating to particular mechanical engineering or analogous fields of technology.

The arrangement starts on 1 November 2008.

A bit more detail here.  Nothing on USPTO site as yet.

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Manner of manufacture

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The hyper-driven David Brennan is also doing a free lunch time presentation at Allens Arthur Robs in Melbourne on 14 November.

Registration and more details here (pdf).

Attempt to patent the new (?) science of subronics here and check out Prof. Lemley’s take on the issue or bone up on the ACIP review via here.

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Innovation review

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I’m still wading my way through the Innovation Review.

Meanwhile Duncan Bucknell is highly critical, particularly of recommendation 7.2:

Recommendation 7.2: Patent law should be reviewed to ensure that the inventive steps required to qualify for patents are considerable, and that the resulting patents are well defined, so as to minimise litigation and maximise the scope for subsequent innovators.

As Duncan points out, what does this actually mean?  Well, Ben Roxborough at IPRoo thinks we should pay much more attention to this recommendation as it appears to be, or be very close to, what IP Australia thinks should happen.  Follow Ben’s link from here.

If that is right, then there must be a very good chance that, whatever it means, it is going to happen.

One certainly can’t quibble with the idea that patents should be certain and clear in scope.  Indeed, Besson & Meurer contend that one of the main reason why the patent system in the USA is not working properly is precisely because patents there are not clear and certain in scope. (Blog summaries here and here.)

Given Australia’s role as an IP importer, and bearing in mind we have the innovation patent too, one can’t really quibble with the idea that we shouldn’t be granting standard or “real” patents for things that wouldn’t get patented overseas – well, I suppose one can quibble, but I’m not at all sure what would be the justification for allowing patents in Australia which are not patentable elsewhere.  

(As an aside, I wonder how requiring more inventiveness, if it can be defined, fits in with having innovation patents – which are certainly real – but for rather more limited, limited terms.)

In the Alphapharm case (see esp. [80 -81], however, the majority of the High Court pointed out that there didn’t seem to be a “standard” international approach.  On the other hand, there is some evidence emerging that it may be easier to get patents in Australia than Europe and Japan but, possibly, not the USA.

If that is what the evidence does suggest, one might then have to go on to ask (amongst other things) how much of the difference is due to, say, EU-centric rules like no patents on computer programs as such?

Now, I have previously mentioned that Prof. Mark Lemley provides one of the clearest explanations I have come across on whay that is not a good idea (listen to podcast #62).  And that was in the context of considering patentable subject matter.

And guess what, that is the subject of another Australian governmental review.  So, it looks like change is coming.  Perhaps, you should get involved?

On recommendation 7.3:

Recommendation 7.3:  Professional practitioners and beneficiaries of the IP system should be closely involved in IP policy making.  However IP policy is economic policy. It should make the same transition as competition policy did in the 1980s and 90s to being managed as such.

I can’t do better than quote the new DG:

In this regard, it is useful to remember that intellectual property is not an end in itself. It is an instrumentality for achieving certain public policies, most notably, through patents, designs and copyright, the stimulation and diffusion of innovation and creativity on which we have become so dependent, and, through trademarks, geographical indications and unfair competition law, the establishment of order in the market and the countering of those enemies of markets and consumers: uncertainty, confusion and fraud. In the end, our debates and discussions are about how intellectual property can best serve those underlying policies: whether modifying the international framework will enhance or constrain innovation and creativity and contribute to their diffusion, and whether it will add confusion, rather than clarity, to the functioning of the market.

Unfortunately, that doesn’t tells us in any particular case whether more protection or better exceptions are required.  It does, however, remind us what the rules are trying to balance.

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Misleading or deceptive conduct?

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Lilly has a patent in Australia for “difluro nucleoside antivirals”.  In January 2000, it was granted an extension of term for the patent until March 2009.  In March 2008, Interpharma brought proceedings to have the extension of term revoked.

One of the grounds for Interpharma’s action was that Lilly had engaged in misleading or deceptive conduct contrary to the Trade Practices Act 1974 to secure the extension of term.  (For those interested in the technicalities, the application for an extension was said to claim that the substance claimed in claims 1 to 4 of the patent was a substance listed on the Australian Register of Therapeutic Goods – see Patents Act s 70.)

Sundberg J granted summary judge against this claim on the grounds that, even if it were misleading or deceptive, Lilly’s application to and communications with the Commissioner were not conduct in “trade or commerce”.  Lilly was of course engaging in trade and commerce, but what needed to be shown was that the representations were made in the course of a trading or commercial relationship between Lilly and the Commissioner.

Lilly also obtained summary judgment against Interpharma’s remaining claims on the basis of Interpharma’s delay.

The extension was granted in 2000 and by s 75 (and the regulations) anyone wishing to challenge must file an opposition within 3 months.

Interpharma did not come into existence until 2 years after the extension of term was granted. Sundberg J was particularly critical of Interpharma’s delay after it became aware of the extension of term – a period of 7 months including 5 months after obtaining the complete file from the Commissioner and the institution of proceedings.  However, his Honour’s reasoning would appear to be much broader:

40 I agree with Lilly that once the opposition period has expired and an extension is granted, the patentee and third parties are prima facie entitled to proceed on the basis of the extension. Admittedly, one must take into account that the applicant was not incorporated until nearly two years after the extension. Nevertheless, the public interest to which I have referred is relevant notwithstanding that. As a matter of fairness in the administration of the patent system, it would be extraordinary if extensions could be challenged some eight years after grant. Even taking into account the applicant’s date of incorporation, it would still be extraordinary that a challenge could be made six years after that.

The case is Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1283.

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University of WA v Gray (No. 24)

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What do you do if you have an appeal on foot, but the other side starts selling off the subject matter of the dispute?

Now that French J has gone on to loftier planes, Siopis J has inherited this behemmoth.

In the principal proceedings, the University had sued Dr Gray claiming (in very broad terms) that he had invented some very successful the micro sphere technologies while an employee with the consequence that he held the rights to the technologies on trust for the University.  Dr Gray, however, had sold the IP to Sirtex in which, after its public listing, he became the owner of a large parcel of shares.

Dr Gray and Sirtex had given undertakings not to deal with the IP or the shares pending trial of the matter.

The action failed, but the University has appealed and the appeal is due to be heard in November.  

The undertakings also lapsed when French J gave his judgment.  Dr Gray and Sirtex refused to continue the undertakings pending the appeal.  Despite diligent monitoring by the University’s solicitors, Dr Gray sold both his shares in Sirtex to another company, ACN, of which he was the sole shareholder and director.

The University did two things.  First, it sought interlocutory injunctions against Dr Gray and ACN to restrain dealing in the shares in ACN and the proceeds of the sale of the shares to ACN.  Secondly, it sought to amend the application in the original proceeding to add ACN as a party and bring new claims against it – remember, judgment has already been given and there is an appeal on foot.

While Siopis J acknowledged there were cases where originating documents and pleadings could be amended, even after judgment, this was not one.

13 In my view, O 13 is not to be construed as permitting the amendment of the originating application or pleadings to plead causes of action based on facts and matters which occurred after the date of the judgment. A construction of the Rules which would permit amendment in those circumstances would be inconsistent with the finality principle and the principle that an appeal in this Court is by way of a rehearing directed at correcting error. (See Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at 432-440.) The policy considerations militating against the University’s contention are expressed in the following observations of Gibbs CJ, Wilson, Brennan and Dawson JJ in Coulton v Holcombe (1986) 162 CLR 1 at 7:

It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at trial. If it were not so the main arena for settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish.

So, the amendment application was refused.  However, the interlocutory injunction was granted and the University ordered to commence a separate proceeding against Dr Gray and ACN within 7 days.

University of Western Australia v Gray (No 24) [2008] FCA 1400

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Patents List procedures

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The Victorian Bar’s website has posted the Victorian Registry’s new Notice on Patents List procedures:

Notice to Practitioners and Litigants issued by the Victorian District Registrar –  Proceedings under the Patents Act 1990 (Cth) dated 2 September 2008.

They don’t seem to be up on the Federal Court’s site yet.

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How innovative must an innovation patent be?

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In Delnorth v Dura-Post, Gyles J had to decide whether or not innovation patents for (e.g.)

A roadside post comprising an elongate body formed of sheet spring steel and having a longitudinal axis, a transverse axis transverse to said longitudinal axis, a front face and a rear face, said front and rear faces transversely extending generally parallel to said transverse axis, wherein said body is elastically bendable through 90 degrees from an unbent state about said transverse axis.

were valid and infringed.  More detail here and here and here.

Much of the judgment concerns (fairly) routine questions of interpretation.  On the question of validity, however, his Honour had to confront, so far as I’m aware really for the first time, the quality that comprises an innovative step.

For this purpose, s 7(4) of the Patents Act 1990 tells us:

(4)  For the purposes of this Act, an invention is to be taken to involve an innovative step when compared with the prior art base unless the invention would , to a person skilled in the relevant art, in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, only vary from the kinds of information set out in subsection (5) in ways that make no substantial contribution to the working of the invention.

Gyles J first rejected a submission that the innovation had to be coterminous with the invention as claimed at [47] – [51].  Then, his Honour outlined how the statutory test is to be approached:

52 There is no need to search for some particular advance in the art to be described as an innovative step which governs the consideration of each claim. The first step is to compare the invention as claimed in each claim with the prior art base and determine the difference or differences. The next step is to look at those differences through the eyes of a person skilled in the relevant art in the light of common general knowledge as it existed in Australia before the priority date of the relevant claim and ask whether the invention as claimed only varies from the kinds of information set out in s 7(5) in ways that make no substantial contribution to the working of the invention. It may be that there is a feature of each claim which differs from the prior art base and that could be described as the main difference in each case but that need not be so. Section 7(4), in effect, deems a difference between the invention as claimed and the prior art base as an innovative step unless the conclusion which is set out can be reached. If there is no difference between the claimed invention and the prior art base then, of course, the claimed invention is not novel. (emphasis supplied)

HIs Honour then had to decide what’s a substantial contribution to the working of the (claimed) invention:

53 The phrase “no substantial contribution to the working of the invention” involves quite a different kind of judgment from that involved in determining whether there is an inventive step. Obviousness does not come into the issue. The idea behind it seems to be that a claim which avoids a finding of no novelty because of an integer which makes no substantial contribution to the working of the claimed invention should not receive protection but that, where the point of differentiation does contribute to the working of the invention, then it is entitled to protection, whether or not (even if), it is obvious. Indeed, the proper consideration of s 7(4) is liable to be impeded by traditional thinking about obviousness.

and

59 …. The focus is upon working of the invention (as claimed) not to the degree or kind of variation from the kinds of information set out in s 7(5). In other words, the variation from the kinds of information might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step.

That, of course, led to the question what qualifies as ‘substantial” and concluded in this context:

61 In my view the provenance of the phrase “make no substantial contribution to the working of the invention” indicates that “substantial” in this context means “real” or “of substance” as contrasted with distinctions without a real difference. That confirms my impression from construction of the words of the section itself.

Here there was an innovative step.  For example, and at the risk of gross over-simplification, the key point against one citation was that the invention was for a roadside post made of sheet spring steel which would happily spring back into position after being bent flat by a heavy object (such as a car).  The citation, however, was made of plastic.  The fact that the (claimed) invention used sheet spring steel made a substantial contribution to the way it worked:

63 …. Each of the claims involves construction by sheet spring steel. The SupaFlex post is plastic. The materials are quite different, although, no doubt, they each have the same objective. As I have endeavoured to explain, the question is not whether flexible sheet steel is better than flexible PVC – it is certainly different. It cannot be seriously argued that the material sheet spring steel does not make a substantial contribution to the working of the roadside post claimed in each claim.

Other citations failed also.

Finally, at [67] – [76], his Honour reviewed and applied the case law on whether or not a prior act had made the invention publicly available.

Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225 (13 August 2008).  Lid dip, Duncan Bucknell.

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Monopolies and IP round up

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IPKat reviews 2 new texts on the “interface” between aspects of IP and anti-trust or competition and an economics “reader”:

(1) Nuno Pires de Carvalho, TRIPS Regime of Antitrust and Undisclosed Information; and

(2) Irina Haracoglou, Competition Law And Patents: a Follow-on Innovation Perspective in the Biopharmaceutical Industry; and

(3) Robert P. Merges (ed), Economics Of Intellectual Property Law.

IPKat’s review here,

and the IP Dragon entices us with news of a new (1 August) anti-monopoly law in China. which, apparently, reserves well-known trade marks and traditional Chinese brands on grounds of national security.

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