Meat & Livestock Australia loses its appeal against Branhaven’s selective breeding patent

The Full Court has refused Meat & Livestock Australia leave to appeal from Beach J’s rulings to grant Branhaven’s[1] patent for the use of genetic information in the selective breeding of cattle. MLA did not seek leave to appeal the ruling that the claims to uses of the genetic information were patentable subject matter.

Image by VIVIANE MONCONDUIT from Pixabay

In its amended form as allowed by Beach J, claim 1 reads:

  1. A method for identifying a trait of a bovine subject from a nucleic acid sample of the bovine subject, comprising identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs) wherein each of the at least three SNPs are significantly associated with the trait, with the degree of statistical significance being p?0.05, and wherein the at least three SNPs occur in more than one gene; and wherein

[and wherein] (a) at least one of the SNPs corresponds to position 300 of any one of SEQ ID NOS: 19473 to 21982, or

(b) the SNP is about 500,000 or less nucleotides from position 300 of any one of SEQ ID NOS: 19473 to 21982 and is in linkage disequilibrium with the SNP at position 300 with an r2 value of ?0.7.

(The [ ] indicates deletions and the italics insertions from the original claim.)

In his Honour’s first ruling, Beach J held that claim 13[2] was invalid as a claim to genetic information, but otherwise rejected MLA’s attacks based on manner of manufacture, novelty and inventive step. His Honour, however, found that the claims lacked clarity. So Branhaven came back with the amended form.

In his Honour’s second ruling, MLA argued there was no power to amend and, in any event, the proposed amendments were not fairly based. In the result, his Honour rejected MLA’s attacks and directed the patent in amended form proceed to grant. MLA sought leave to appeal.

Did the Court have power to permit amendment?

Following the Raising the Bar Act, the power of the Court to deal with amendments was expanded by the addition of s 105(1A):

If an appeal is made to the Federal Court against a decision or direction of the Commissioner in relation to a patent application, the Federal Court may, on the application of the applicant for the patent, by order direct the amendment of the patent request or the complete specification in the manner specified in the order.[3]

At [91] and [93], the Full Court considered the plain meaning of this provision was to confer on the Court power to deal with amendments of patent applications under appeal.

The Full Court considered MLA’s argument that Beach J had decided the appeal in his Honour’s first decision and so was functus officio “untenable”.

When handing down his first reasons for judgment, Beach J had simply ordered:[4]

Within 14 days of the date of these orders, each of the parties file and serve proposed minutes of orders and short submissions (limited to three pages) to give effect to these reasons, including on the question of any steps necessary to deal with any application to amend the claims of patent application no. 2010202253 and on the question of costs.

The Full Court accepted that this order did not dispose of the appeal and so Beach J still had jurisdiction over the patent application in its amended form. At [87]:

The order made by his Honour at the time did not dispose of the appeal but was instead a procedural order requiring the parties to file and serve proposed minutes of order and short submissions to give effect to his Honour’s reasons including in relation to any application to amend the claims of the patent application. There is no substance to the applicant’s submission that either the publication of his Honour’s first set of reasons or the making of that order brought the proceeding to an end.

and [90]:

However, as his Honour correctly observed, the publication of his first set of reasons did not dispose of the appeal since no order to that effect was made. Nor could the publication of his Honour’s first set of reasons amount to an order disposing of the appeal. His Honour made it clear in his reasons that he would refrain from making any such order until any question in relation to amendment had been dealt with.

The Full Court turned then to the substantive argument about whether Beach J erred in allowing the amendments.

Were the amendments permissible?

As already noted, his Honour had found in his first reasons that the relevant claims lacked clarity. The main issue here was that claim 1 did not explicitly state the requirement of “linkage disequilibrium” (LD) for the relevant single nucleotide polymorphisms (SNPs) or what degree of LD was required: see [348] – [362] reproduced at [69] of the Full Court’s reasons.

As the elements were not disclosed in the claim, MLA argued the amendments were impermissible as they introduced new matter into the claims. Beach J, however, allowed the amendments on the grounds that they were limiting amendments and had been in substance disclosed in the specification.

The Full Court essentially accepted this conclusion on the facts. It did note that, generally, a claim which defined an invention more narrowly than the disclosure in the specification would be fairly based, but there may be some situations where that was not the case. The overriding question was whether the claim described an invention different to the disclosure in the specification. At [104] – [105]:

All other things being equal, a claim that defines an invention in terms that are narrower than a more general description in the body of the specification would support is not likely to travel beyond what is more generally described. But there may be some situations in which what is more specifically defined results in a claim that travels beyond what is described in the specification: AstraZeneca at 244 and [285]-286 where reference is made to Sir Robin Jacob’s judgment in Dr Reddy’s Laboratories (UK) Ltd v Eli Lilly and Co Ltd [2010] RPC 9 at [26] and [28]. In these situations a claim may be invalid if the invention more specifically defined is an invention that is different from the invention described in the specification as opposed to some narrower embodiment of the latter.

In circumstances where it can be concluded that there is an implicit disclosure of the relevant feature, it is unnecessary to inquire into whether the feature is truly limiting. But even in the absence of an implicit disclosure, a claim does not necessarily lack fair basis because it includes a matter of detail that is not described in the specification so long as it defines an invention that is not different from the invention described in the specification. The proper characterisation of the invention described in the specification is critical when determining whether the claim is to an invention different from that described in the body of the specification. Each case will depend on its own facts and on the proper characterisation of the invention described in the body of the specification. (emphasis supplied)

If the feature added to the claim was implicitly disclosed in the specification, therefore, the claim could be amended. But, amendment might be permissible even if not implicitly disclosed.

At [110] – [115], the Full Court focused on Beach J’s unchallenged findings including, in particular, that the skilled addressee “would understand that the specification requires that there be high or strong LD between the limb (a) SNP and the limb (b) SNP”, but not necessarily a very high or perfect LD. The proposed amendments gave effect to that understanding by reference to more precise rather than some less precise criteria.

The Full Court accepted MLA’s criticism that the specification (before amendment) made no mention at all of r2 values. Beach J accepted expert evidence, however, that the r2 values were broadly equivalent to LD values that might fairly be regarded as high or strong. As a result, its inclusion was permissible. Noting that high LD or strong LD were “less precise criterion” than the expressed r2 vaues, at [114], the Full Court explained:

…. To hold that it is not open to use the r2 statistic or the 0.7 value for the purpose of ascertaining whether there is a high or strong degree of LD between the limb (a) SNP and the limb (b) SNP would involve, in our view, the very kind of over meticulous verbal analysis that should be eschewed when determining whether a proposed amended claim satisfies the requirements of s 102(1) of the Act. This is particularly so in circumstances where the amendment is propounded for the purpose of clarifying an ambiguity that would otherwise prevent the patent application proceeding to grant. In the present case we do not think the use of the r2 statistic in limb (b) results in a claim that defines an invention different from that which is more generally disclosed in the body of the specification as filed. (emphasis supplied)

As a result, the Full Court came to “the very clear conclusion” that MLA had not made out a clear prima facie case of error where the likely result would be allowing an invalid patent to proceed to grant. Accordingly, leave to appeal was refused.

Since this is a pre-Raising the Bar patent, the old “practically certain” test applies to the opposition. That raises the question whether things would turn out differently in a revocation proceeding on the balance of probabilities. After 949 paragraphs for the first decision and 470 paragraphs for the second, perhaps the “very clear conclusion” language might help discourage that course?

Meat and Livestock Australia Limited v Branhaven LLC [2020] FCAFC 171 (Kenny, Nicholas and Burley JJ)


  1. Cargill Inc. and Branhave were joint applicants but in the course of the hearings before Beach J, Cargill assigned its interest to SelecTraits Genomics LLC.  ?
  2. Claim 13. An isolated polynucleotide identified according to the method of claim 8.  ?
  3. Sch. 3 item 6. Prior to the introduction of this amendment, the appeal to the Court was limited to the form of the specification before the Commissioner in the decision under appeal. If an application to amend was made after the Commissioner’s decision, the application could only be dealt with by the Commissioner: see e.g. Airsense Technology Limited v Vision Systems Limited [2007] FCA 828  ?
  4. Costs were also reserved.  ?

ESCO’s patent did not make a composite promise and so is not invalid afterall

ESCO has won its appeal from the ruling that its patent lacked utility because the claims did not fulfill all promised advantages.

The Patent

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)[1] are for a wear member:[2]

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)[3] are for the wear assembly:[4] 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.

Utility

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 [208]:[5]

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 [239]:

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,[6] 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 [291], 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[7] 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[8] 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 [231], 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.

Novelty

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”.

ESCO Corporation v Ronneby Road Pty Ltd [2018] FCAFC 46 (Greenwood, Rares and Moshinsky JJ)


  1. Strictly speaking, claims 5, 6 and 9 are independent claims, but nonetheless are for “wear members”.  ?
  2. The explanatory interpolations are the Full Court’s.  ?
  3. Claim 19 is also an independent claim for a wear assembly.  ?
  4. 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)  ?
  5. Citing amongst others LaneFox v Kensington and Knightsbridge Electric Lighting Co (1892) 9 RPC 413.  ?
  6. ESCO’s patent being a pre-Raising the Bar patent, s 40 in it earlier form applied.  ?
  7. Presumably, a typo.  ?
  8. By which I of course mean schedule 1 of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.  ?

A real estate franchise agreement

2The Court of Appeal has ruled that Century 21 Australia’s arrangements permitting Victorian Realty Group to trade as “Century 21 Complete Properties” was a franchise agreement for the purposes of the Estate Agents Act 1980 (Vic.).

Section 43(5) of the Victorian Estate Agents Act has its own definition of a “franchising agreement”:

franchising agreement means an agreement whereby an estate agent is authorized to carry on business under any name in consideration of any other person entitled to carry on business under that name receiving any consideration whether by way of a share in the profits of the estate agent’s business or otherwise (emphasis supplied)

One of the reasons this is significant is that each party to the franchising agreement is jointly and severally liable for any defalcations, or negligence, by the estate agent : s 43.

Victorian Realty Group (VRG), while trading as “Century 21 Complete Properties” in Craigieburn, had committed a number of defalcations which resulted in 13 of its clients losing money. Those clients were compensated out of the Victorian Property Fund. The Secretary brought proceedings against Century 21 Australia, the franchisor1 under s 43 to recover those payouts.

Under the terms of the franchise agreement, and the incorporated Policy and Procedures Manual, Century 21 Australia granted VRG the right and obligation to trade exclusively under the name Century 21 Complete Properties. There were other rights and obligations to use “Century 21” in the various ‘trademarked’ forms, and to use various systems and participate in the Century 21 marketing plan. In other words, you and I would consider it a pretty typical example of a franchise arrangement.

The trial judge, however, found that the arrangement was not a “franchise agreement” as defined in s 43 because of the words in the definition “under that name”. VRG was authorised only to carry on business under the name “Century 21 Complete Properties”, not just “Century 21”; and “Century 21 Australia”, the franchisor, did not carry on business under that name.

The Court of Appeal unanimously allowed the Secretary’s appeal. As a matter of practicality and commercial reality both VRG and Century 21 Australia were carrying on business under “Century 21”, not just their respective formal names:

50 In its written case, the respondent seemed to accept that the Franchise Agreement was an agreement that would ordinarily be described as, and understood to be, a franchise agreement. The respondent’s written case described the Franchise Agreement as ‘the unambiguous franchise agreement in this case’. That description was, with respect, apposite. While that description does not relieve the Court of its obligation to properly construe and apply the definition of ‘franchising agreement’, it brings into focus the question of what legislative purpose might possibly exist in differentiating between franchise agreements that have different provisions as to trade names and the terms upon which their use is or is not permitted. That said, it is of course the text of the statutory definition that is paramount in the resolution of this proceeding.

51 ‘Century 21’ is a name. Equally, one might describe the relevant circumstances in this case as involving the use of a name being ‘the Century 21 name’. When one examines the Franchise Agreement (including the P&P Manual) it seems to us that that agreement authorised VRG to carry on business under the name ‘Century 21’ or the Century 21 name. Like any franchise agreement, it did so on particular terms. We have already set out the relevant terms in the present case. The existence of those terms does not gainsay the fact that the Franchise Agreement was one which authorised VRG to carry on business under the Century 21 name.

52 Similarly, in our view, the International Agreement entitled the respondent to carry on business under the name ‘Century 21’ or the Century 21 name within the meaning of the statutory definition. In our view, this conclusion accords with the text of the definition construed, as it must be, in its context and by reference to the legislative purpose of the provisions of the Act.

The focus on commercial reality is no doubt to be welcomed. The decision, however, has little direct relevance to the broader definition of “franchise agreement” for the purposes of the Franchising Code of Conduct as that is not tied just to a name. Instead, clause 5 of schedule 1 to the Competition and Consumer (Industry Codes – Franchising) Regulation 2014 applies to agreements which satisfy 3 requirements including (by way of contrast to the Estate Agents Act) the rather more broadly expressed operation of a business substantially or materially associated with a trade mark, advertising or commercial symbol. More fully, a franchise agreement is an agreement:

(b) in which a person (the franchisor ) grants to another person (the franchisee ) the right to carry on the business of offering, supplying or distributing goods or services in Australia under a system or marketing plan substantially determined, controlled or suggested by the franchisor or an associate of the franchisor; and

(c) under which the operation of the business will be substantially or materially associated with a trade mark, advertising or a commercial symbol:

(i) owned, used or licensed by the franchisor or an associate of the franchisor; or

(ii) specified by the franchisor or an associate of the franchisor; and

(d) under which, before starting or continuing the business, the franchisee must pay or agree to pay to the franchisor or an associate of the franchisor an amount including, for example

Secretary to the Department of Justice and Regulation v Century 21 Australia Pty Ltd [2017] VSCA 205

  1. Century 21 Australia had been appointed the master franchisee for Australia by Century 21 International with powers to appoint and manage “Century 21” franchisees here. ??

Don’t file in the wrong applicant’s name

Because, if you do, the Full Court has definitively ruled that the error cannot be rectified and any resulting registration will be irredeemably invalid.

This is the first of at least two rulings departing from the trial judge’s reasons which the Full Court made in the course of dismissing Pham Global’s appeal from the decision to revoke its trade mark registrations and find it infringed Insight Clinical Imaging’s trade marks. So Pham Global still lost, but with ramifications for us all.

Some background

Since 2008, Insight Clinical Imaging has been using the name INSIGHT and its composite mark for its radiology services largely in Perth, WA.[1]

Mr Pham is a radiologist and the sole director of the company through which a radiology business is conducted in NSW. Originally, the company was called AKP Radiology Consultants Pty Ltd. In December 2011, however, Mr Pham applied to register the Insight Radiology mark as a trade mark for radiology services.

Insight Clinical’s trade mark is below on the left. On the right below is the trade mark applied for by Mr Pham.

In March 2012, AKP Radiology Services first started using the Insight Radiology mark for its business.[2]

On 6 June 2013, Insight Clinical lodged its opposition to Mr Pham’s application.

On 17 June 2013, Mr Pham’s company changed its name from AKP Radiology Services to Insight Radiology Pty Ltd.[3] Then, on 1 July 2013, Mr Pham sought to assign the trade mark application to his company.

Insight Clinical Imaging’s opposition was successful before the Office and Mr Pham’s company appealed unsuccessfully. In accordance with the trial judge’s orders, Mr Pham’s company then changed its name to Pham Global Pty Ltd and sought leave to appeal.

While leave was granted, the appeal was dismissed.

Who is the applicant

The trial judge found that the Insight Radiology mark was designed for, and used by, Mr Pham’s company. It even paid the designer.

Mr Pham, however, maintained that it had not been a mistake that the application was made in his name rather than the company’s. There was no evidence that Mr Pham ever actually licensed his company to use the trade mark. Moreover, Mr Pham’s explanation for why he decided to assign the application to his company – “I just did it” – was not accepted. He explicitly rejected the proposition that he made the assignment in response to Insight Clinical’s opposition to registration of the trade mark or that it was a result of a mistake.

Accordingly, her Honour held that Mr Pham was not the owner of the application when it was made, his company was. In line with the decisions in Mobileworld and Crazy Ron’s, however, her Honour found that the assignment of the application to the company before the trade mark was actually registered rectified the error.

On appeal, the Full Court noted that Mobileworld and Crazy Ron’s were both obiter on this point.

The Full Court then noted that longstanding precedent required that grounds of opposition were assessed at the date the application was filed. That meant that, where the ground of opposition was under s 58 that the applicant was not the owner of the trade mark,[4] the applicant when the application was filed had to be the owner of the trade mark. At [32], the Full Court said:

Once it is understood that the legislative scheme operates in the context of established principle that the alternative sources of ownership of a trade mark are authorship and use before filing an application for registration or the combination of authorship, filing of an application for registration and an intention to use or authorise use, the relationship between s 27 and ss 58 and 59 of the 1995 Act becomes apparent. The grounds of opposition in ss 58 and 59 reflect the requirements of s 27. Only a person claiming to be an owner may apply for registration. That claim may be justified at the time the application is made based on either alternative source of ownership. But if the claim is not justified at that time, ss 58 and/or 59 are available grounds of opposition. Moreover, if the applicant is not the owner of the mark at the time of the filing of the application, the assignment provisions in ss 106 – 111 do not assist because they authorise the assignment of the mark and thus pre-suppose, consistent with established principle, that the applicant owns the mark.

Well, it’s a nice simple rule; should be pretty straightforward to apply in practice shouldn’t it? Of course, it does mean that the law for trade marks is way out of step with the law for patents and registered designs, sections 22A and 138(3)(4).[5]

When time permits, I shall try to do a post on the new law of substantial identity.

Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83 (Greenwood, Jagot and Beach JJ)


  1. It did not apply to register its trade mark until October 2012.  ?
  2. On 17 June 2013, Mr Pham caused AKP Radiology Consultants to change its name to Insight Radiology Pty Ltd. As a consequence of the first instance decision, however, the name of the company was changed again – to Pham Global Pty Ltd.  ?
  3. Mr Pham’s company also made a further application to register the words INSIGHT RADIOLOGY alone. Insight Clinical has also opposed it, but it appears to be stayed pending the outcome of the court case. (There was also an earlier application in 2008, TM Application No 1236945 for INSIGHT IMAGING / INSIGHT RADIOLOGY. This application was made by a Daniel Moses and a Jason Wenderoth, but lapsed after acceptance without ever becoming registered.)  ?
  4. The same principle applies under s 59, which was also in play.  ?
  5. Foster’s Australia Limited v Cash’s (Australia) Pty Ltd [2013] FCA 527.  ?

Abilify interlocutory injunction continues pending appeal

Last month, Yates J found that Otsuka’s patent for aripiprazole was invalid.[1] As a consequence, his Honour ordered that the interlocutory injunction preventing Generic Health from listing its product on the PBS and selling it be dissolved. Otsuka has appealed and now Nicholas J has granted a stay to preserve the interlocutory injunction pending the appeal.

While not being prepared to characterise Otsuka’s prospects on the appeal as higher than arguable, Nicholas J considered the balance of convenience favoured continuation of the interlocutory injunction.

Otsuka relied principally on the fact that there would be an automatic reduction of 16% the price payable under the PBS for Abilify[2] once Generic Health’s product was listed. It contended that it would not be possible to recover that price drop if its appeal were successful.

Generic Health countered that it risked losing the benefits of first mover advantage if it were enjoined and other generic producers were not. Generic Health’s evidence was that pharmacists would usually only carry one generic brand of each drug and that was likely to be the first brand “in”. This would exacerbate the difficulties in calculating its losses. Nicholas J did not dismiss that argument, but Otsuka said it would be seeking interlocutory injunctions against any other generics who tried to enter the market pending the appeal. Nicholas J noted further that, if Otsuka failed in an injunction applications against a second or further generic, that would be a strong basis to terminate the stay.

The Commonwealth also sought a specific undertaking to pay damages from Otsuka as the price of the injunction. It argues it will suffer loss, in the form of the higher prices payable under the PBS, if Generic Health continues to be enjoined but the appeal ultimately fails.

Nicholas J noted that a case has been stated to the Full Court on whether the Commonwealth can indeed claim under the “usual undertaking as to damages”. Subject to the outcome of that case, his Honour considered the Commonwealth was sufficiently within the scope of the usual undertaking and so did not need a separate, specific undertaking.

Nicholas J increased the security for costs that Otsuka had to provide to Generic Health in the amount of an additional $8.7 million[3] and, in addition, required a security of $6 million separately to the Commonwealth. His Honour also noted that the Commonwealth could apply to extend that security if the appeal was not decied in the first half of 2016.[4]

Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd [2015] FCA 848


  1. Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634. Patentology looked at the ‘swiss claims’ aspects of his Honour’s decision.  ?
  2. The commercial name under which aripiprazole is marketed by Otsuka and its licensee.  ?
  3. Otsuka has already provided $6.5 million pursuant to the orders made by Yates J at first instance.  ?
  4. At [35], Nicholas J recored that the Commonwealth estimated its losses from the continuation of the interlocutory injunction would be $6 million over the next 12 months and $15 million over the next 18 months.  ?

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.  ?

Q1?

Mr Spagnuolo has been granted “special” leave to appeal to the Full Court from Reeves J’s dismissal of his opposition to Mantra registering Q1 for a range of accommodation, travel and holiday services.

Some background

Q1 is another one of those “iconic” high rise apartment buildings on the Gold Coast. Its 78 levels boast 526 residential apartments, a retail shopping plaza and a resort / conference complex.

In addition to operating the resort/conference part of the building under Q1 RESORT & SPA, Mantra also has arrangements for renting out 193 of the privately owned apartments.

Mr Spagnuolo owns two of the apartments himself and has arrangements to rent out a number of others’ apartments. He operates his rental business under the name Q1 Holidays Gold Coast and also holds the domain name q1holidaysgoldcoast.com.au.

Mantra’s predecessor applied to register 3 trade marks, Nos 1228706, 1228707 and 1228708 for a range of services in classes 36, 39, 35 and 43. (Not sure why they were in three different applications. has there been a change of practice about these things?)

The Registrar’s delegate had upheld Mr Spagnuolo’s opposition, but Reeves J overturned that decision on appeal.

Why?

While a party may appeal to the Court from the Registrar’s decision in an opposition proceedings as a matter of right, there is no automatic right of appeal from the Court’s decision at first instance. Leave is required: s 195(2).  It is fairly unusual for unsuccessful opponents to the registration of a trade mark to get leave to appeal to the Full Court.

One key factor in why Logan J granted leave was the legal point Mr Spagnuolo wants to run: he argues that Q1 is not inherently adapted to distinguish Mantra’s services as other people wanting to rent out their properties in the Q1 building will legitimately want to use Q1 too. That is, Mr Spagnuolo wishes to contend that Q1 is not inherently adapted to distinguish under s 41 because the Q1 building is not owned by one person. As a result of the disparate ownership of the properties comprising the Q1 building, therefore, Q1 may be the name of “a locality”.

According to Logan J and the parties, this question has not been the subject of judicial decision.

Another consideration was that there were conflicting decisions in the Office and at first instance, with the Registrar’s delegate allowing the opposition and Reeves J rejecting it.

After some rumblings about the potential for litigants with deep pockets to oppress those “not as well financially provided”, Logan J also pointed out that the parties had filed extensive evidence in the court proceedings, the benefit of which would be lost if Mr Spagnuolo was not permitted to appeal and was left to start revocation proceedings anew.

Finally, Logan J granted Mr Spagnuolo an extension of time in which to file his application for leave to appeal. Under the “old” Rules, an applicant for leave had 21 days to file the application. Under the new rules (in force since August 2011), however, applications for leave must be filed within 14 days. That wasn’t an obstacle in this case as Mr Spagnuolo’s advisers filed only 1 week late so there wasn’t really any special prejudice Mantra could point to.

Finally, Logan J granted a stay on Reeves J’s direction that the trade marks proceed to registration:

… Mantra IP has only briefly enjoyed the benefits of the judgment. Before then, its applications stood rejected. It was not greatly pressed, on its behalf, that there was any particular commercial harm that it would suffer beyond the obvious one of its position being unclear until there was a final judgment. It seems to me there would be much potential for mischief in the marketplace in the event that there were not a stay.

Spagnuolo v Mantra IP Pty Ltd [2012] FCA 1038

Apple v Samsung in the High Court 2

Apple’s application for special leave to appeal from the Full Federal Court’s decision to discharge the interlocutory injunction granted by Bennett J will be heard on Friday, 9 December 2011 in Sydney.

In granting the stay on the Full Federal Court’s orders, Heydon J pointed out that the fact that 2 experienced patent judges had reached opposition conclusions, in circumstances which his Honour characterised as the appeal court not disturbing Bennett J’s findings of fact, indicated Apple’s case was not without some prospects of success.

Perhaps more interesting at the level of tea leaf reading, Heydon J expressed his personal concern that no expedited final hearing was ordered in this case:

Secondly, to my mind at least, it is deeply troubling that there was no expedited final hearing in this case. Precisely why there was not, on my perhaps limited acquaintance with the materials, is a somewhat murky question. But why it is that no expedited final hearing took place and how the courts below dealt with the fact that no expedited final hearing took place is a matter of some public interest in the sense in which Ms Howard was using that expression and is a matter which may be thought worthy of close investigation on the special leave hearing.

The Full Federal Court appeared to discount Samsung’s resistance to an expedited hearing.

Apple Inc v Samsung [2011] HCATrans 326

Apple and Samsung in the High Court

The High Court has extended the stay on the Full Federal Court’s dissolution of the injunction against Samsung’s Galaxy Tab 10.1 for another 7 days.

Samsung gets Oz injunction discharged

The Full Federal Court (Dowsett, Foster and Yates JJ) has allowed Samsung’s appeal from Bennett J’s decision and discharged the interlocutory injunctions against the Galaxy Tab 10.1.

On a first read, it looks like a “close run” thing. It also appears the grant of (interlocutory) injunctions for patent infringement in Australia may well be increasingly influenced in the future by the sorts of issues highlighted by the US Supreme Court in KSR v Teleflex (although that case was not referred to).

A factor which appears to have played high importance in the Full Court’s thinking was the recognition (by both parties) that the awarding of the interlocutory injunction in this case was effectively final relief:

49.   In the present case the parties accept that the orders made below are effectively final in that the commercial viability of the Galaxy Tab 10.1 in the Australian market will be lost. We doubt whether the grant of interlocutory relief in the present case avoids frustration of the Court’s process. When one keeps in mind that the Court must seek to do justice to both parties, such a consequence for Samsung can hardly be described as other than a frustration of the Court’s process. In our view, the task facing her Honour was not simply to grant or refuse an injunction. The task was to protect the Court’s process from frustration, as best as could be done in the circumstances, following the guidelines laid down by the High Court in the cases to which we will refer in the next section of these reasons. An “all or nothing” outcome was unlikely to produce that result.

Followed at [50]:

In this case, given the primary judge’s findings as to the merits of both parties’ cases and the even weighting attributed by her Honour to the relevant factors under consideration in her assessment of the balance of convenience, an arrangement which shared the risk of loss was the best that could be done to avoid frustration of the Court’s process, at least in the absence of any conduct by either party which effectively made it the author of its own misfortune. The question, then, was whether Samsung’s conduct in refusing an early trial on the conditions offered, together with whatever may be made of the “eyes wide open” factor and the fact that Apple relies on two patents rather than one leads to the conclusion that Samsung should be denied a trial on the merits. …. (emphasis supplied)

then [51]:

…. Where the merits and the question of convenience are fairly evenly balanced, there will be no injustice in requiring that the party seeking relief demonstrate good prospects of success before imposing almost certain prejudice on the other side.

The strength of Apple’s case

Apple argued that Samsung’s importation and sale of the Galaxy Tab 10.1 would infringe:

Claim 6 provided:

6. A touch panel having a transparent capacitive sensing medium configured to detect multiple touches or near touches that occur at a same time and at distinct locations in a plane of the touch panel and to produce distinct signals representative of a location of the touches on the plane of the touch panel for each of the multiple touches, the transparent capacitive sensing medium comprising:
a first layer having a plurality of lines that are electrically isolated from one another and formed from a transparent conductive material; and
a second layer spatially separated from the first layer and having a plurality of lines that are electrically isolated from one another and formed from a transparent conductive material, the second conductive lines being positioned transverse to the first conductive lines, the intersection of transverse lines being positioned at different locations in the plane of the touch panel, each of the conductive lines being operatively coupled to capacitive monitoring circuitry,
wherein the first layer and the second layer are disposed on two sides of an optically transmissive member.

On this part of the case, the question was whether or not either or both of 2 layers in the Galaxy Tab 10.1’s screen (described as layer D and layer E) satisfied the requirement of “an optically transmissive member”.

While not finally deciding the point, the Full Court considered that Apple’s case on this point was unlikely to succeed:

121.  It is sufficient for us to express the view that, on the present state of the evidence, there is a real and substantial prospect that the importation into and supply in Australia of the Galaxy Tab 10.1 will not infringe claim 6 of the Touch Screen Patent. We have referred to a number of difficulties that confront Apple in making good its case on infringement. It may well be that, on a final hearing, Apple will meet these difficulties. But difficulties they are. Whilst we would not be prepared to say that Apple’s case on infringement is not open to be argued, the difficulties to which we have referred do affect the assessment at the present time of the probability that, if on a final hearing the evidence remains the same, Apple will be found to be entitled to final injunctive relief for infringement of that claim. If Apple has established a prima facie case at all (which we doubt), it is founded upon a construction argument which, if the evidence remains as it is, is unlikely to succeed at trial.

On the other hand, Samsung’s case on the alleged invalidity of claim 6 equally fell short (of course, Samsung would not be liable for infringement if it holds the line on Apple’s positive obligation to prove the infringement):

  1. It is not necessary at this point to resolve the debate between the parties as to whether the reference in the Leeper Article about detecting the presence of “multiple fingers” is to multiple fingers at multiple locations or multiple fingers at a single contact point. It is enough to say that there is some reasonable degree of uncertainty about what the Leeper Article actually discloses in that regard. Moreover, even if one were to assume that the article is referring to the detection of multiple touches or near touches that occur at the same time and at distinct locations in a plane of the touch panel – which on the present state of the evidence would be a generous assumption – there is, importantly, no apparent disclosure in the Leeper Article that the ClearPad is configured to produce distinct signals for each of the multiple touches that are representative of the location of each of those touches.
  2. In our view it follows from that state of affairs that Samsung has not established a prima facie case that the Leeper Article anticipates the touch panel claimed in claim 6 of the Touch Screen Patent.

Samsung’s case on the “Mulligan patent application” was equally suspect: esp. [149] – [150].

The Heuristics patent:

1. A computer-implemented method, comprising:

at a computing device with a touch screen display,
detecting one or more finger contacts with the touch screen display,

applying one or more heuristics to the one or more finger contacts to determine a command for the device; and

processing the command;
wherein the one or more heuristics perform the functions of:

determining that the one or more finger contacts correspond to a one- dimensional vertical screen scrolling command rather than a two-dimensional screen translation command based on an angle of movement of the one or more finger contacts with respect to the touch screen display; and
determining that the one or more finger contacts correspond to a two dimensional screen translation command rather than a one-dimensional screen translation command, based on an angle of movement of the one or more finger contacts with respect to the touch screen display.

and

55. A computer-implemented method of any one of claims 1 to 26, wherein
the one or more finger contacts correspond to a finger gesture with an initial movement and a subsequent movement, and wherein
the function of determining that the one or more finger contacts correspond to a one-dimensional vertical screen scrolling command rather than a two-dimensional screen translation command includes identifying the entire finger gesture as the one-dimensional vertical screen scrolling command and basing the determination on the angle of movement of the initial movement of the finger gesture, and wherein
the function of determining that the one or more finger contacts correspond to a two-dimensional screen translation command rather than a one-dimensional vertical screen scrolling command includes identifying the entire finger gesture as the two-dimensional screen translation command and basing the determination on the angle of movement of the initial movement of the finger gesture.

The issue here is whether or not the Galaxy Tab 10.1 employs gestures based on “the angle of movement”. According to the Full Court, there was no factual dispute between the parties about how gestures worked (or for those familiar with the “other” system, don’t):

155 There seems to be no dispute that, in the Galaxy Tab 10.1, the process for determining the relevant command is as follows. A first user contact on the screen is detected and an X (horizontal) channel and a Y (vertical) channel are generated around the touch point. The touch panel logic then identifies the location of the user’s second touch point at a pre-defined period of time after the first contact is detected. The location of the second touch point is then compared with the locations of the X and Y channels previously generated by the first touch. The software then interprets this as an instruction for screen movement, relevantly a one-dimensional screen scrolling command or a two-dimensional screen translation command, and then processes the command accordingly.

The Full Court considered it was “difficult to discern” Apple’s reading of its claims in this and so concluded that Apple had not established a prima facie case on infringement: [160].

Balance of convenience factors

The factors considered here were

  • whether Samsung had unreasonably refused a proposal for an early trial;
  • whether Samsung’s conduct in entering the market with its “eyes wide open” to the potential for infringement were disentitling; and
  • Apple’s reliance on 2 patents instead of 1.

As to the proposal for an early trial, the Full Court considered that the various proposals were too shifting, too limited and ultimately too unclear to be operative:

190.  …. Had the offer been of a final hearing on all issues, and had the time for preparation been reasonable, the position may have been otherwise. In the circumstances of this case we cannot see how Samsung’s conduct in refusing the offer of an early trial could properly be weighed in the balance of convenience. In those circumstances we consider that her Honour erred in principle by taking into account that irrelevant consideration.

The Full Court gave careful consideration to the “eyes wide open” contention, but concluded her Honour was right to give it little weight:

196.  …. Finally, in the present case, the most compelling features are the assessments of the strengths and weaknesses of the respective cases and the equality of likely detriment. Other considerations pale into insignificance beside those matters.

The Full Court could not see how asserting 2 patents rather than 1 put Apple in any better position (it might be interpolated: both with the issues identified above).

Samsung Electronics Co. Limited v Apple Inc. [2011] FCAFC 156

Lid dip: Peter Clarke