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News from Australia and New Zealand
World Patent Information 29 (2007) 76–79 www.elsevier.com/locate/worpatin
News from Australia and New Zealand
1. Amendments to Australian IP laws The Australian Intellectual Property Laws Amendment Act 2006 received Royal Assent on 27 September 2006. The major changes are in the areas of patents and trademarks. These changes are discussed separately below: 1.1. Patent act The Amendments to the Patents Act deal with the areas of: 1.1.1. The introduction of exemplary damages for wilful infringement Patentees can now extract exemplary damages for flagrant infringement of patents. The court can take into account the conduct of the infringer, including any notice they may have had, in determining the level of damages awarded. 1.1.2. Modification of the secret prior use provisions The previous secret prior use provisions have been repealed and new provisions created which allow for a defence to infringement of independent secret use within Australia before the priority date of the invention. Additionally, the prior use right can be assigned from one party to another, but not licensed. 1.1.3. Modifications of the springboading provisions for obtaining regulatory acceptance of generic pharmaceuticals Under the new provisions, the ability to conduct springboarding activities relating to obtaining regulatory approval (both in Australia and overseas) of a pharmaceutical patent can occur at any time during the life of a patent – as opposed to the present situation in which activities to obtain regulatory approval are only allowed for patents that have been extended and for the period following the grant of the extension. Various importation activities relating to patented products, for regulatory approval purposes will also be allowed. doi:10.1016/j.wpi.2006.07.016
1.1.4. Expansion of the compulsory licensing provisions The application of the Australian Compulsory Licensing provisions have effectively been all but inoperative. The provisions have been redrafted with a view to easing the tests where the patentee has a ‘‘substantial market power’’ in a particular area. In such cases, where the patent can be shown to be ‘‘lessening competition’’, it is likely the licence will be easier to obtain. 1.2. Trademarks act The new amendments broaden the power of the Registrar to revoke registrations where the registration should not have been accepted. Previously, only the Federal Court had the power to cancel a trademark and the revisions pass this power to the Registrar, with the caveat that the owner has the right to be heard. The intent of the provisions is to provide a simpler methodology for revocation. The Act also provides the Registrar with statutory power to withhold from publication documents containing sensitive business information. Peter Treloar Partner
2. Specification key to unlocking prior art admissions Lockwood Security Products Pty Ltd. v. Doric Products Pty Ltd. [2005] FCAFC 255 (8 December 2005). 2.1. Summary The Full Court of the Federal Court has dismissed an appeal by Lockwood Security Products Pty Ltd. (Lockwood) and has held that several claims in Lockwood’s Australian Patent No. 702534 (the Patent) were invalid for being obvious. In addition, the Full Court also held that Doric Products Pty Ltd. (Doric) did not infringe those claims that covered the preferred embodiment of the invention described in the Patent. This case reminds practitioners and patentees of the need to carefully draft patent specifications when describing known prior art.
News from Australia and New Zealand / World Patent Information 29 (2007) 76–79
2.2. Background to the judgement In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd. (2004) 214 CLR 274, the High Court of Australia held that the claims of the Patent were fairly based and remitted the matter back to the Full Court to determine the remaining issues of infringement of the claims defining the preferred embodiment of the invention described in the Patent (the preferred embodiment claims) and obviousness of the broader claims of the Patent. The Patent related to a ‘‘deadlock’’, which has an inner lock and an outer lock, allowing the deadlock to be locked from the outside or the inside of the door. The Patent broadly claimed a deadlock in which the inner lock could be unlocked from the outside when the key unlocks the outer lock. The invention was designed to prevent a person being accidentally locked inside when the key is lost or left within the outer lock. 2.3. The full court judgement The Full Court upheld the trial judge’s finding that Doric did not infringe the preferred embodiment claims of the Patent on the basis of the evidence presented at trial. In respect of the validity of the broader claims, the Full Court held that these claims were invalid on the ground of obviousness. The specification of the Patent described the problem of the prior art as being that the inner lock could not be unlocked from the outside, and the object of the invention was to make the inner lock release at the same time as the outer lock by actuation of the key. The expert evidence called by both Doric and Lockwood showed that the ‘‘solution’’ described as the object of the invention was well known. What was not known was how to implement this solution; that is, the exact mechanics to make the solution work. The Full Court concluded that the problem was admitted in the specification as being part of the common general knowledge in the technical field. On this basis and the expert evidence, the Full Court held that the broader claims were obvious because they claimed the concept of any means of releasing the inner lock from the outside of the door, and not how the inner lock was released, unlike the preferred embodiment claims. Doric also submitted that the broader claims were invalid on the ground of insufficiency under subsection 40(2)(a), which requires that the specification must describe the invention fully, including the best method known to the applicant of performing the invention. Doric argued that the invention had not been described fully because the consistory clause (mirroring claim 1 of the broader claims) misleads the reader as to the improvement, being the preferred embodiment. In addition, the broader claims of the Patent were not warranted by the disclosure in the specification of the preferred embodiment. In making these submissions, Doric relied on the earlier High Court decision of Sami S Svendsen Inc. v Independent Products Can-
77
ada Ltd (1968) 119 CLR 156, decided under the previous Patents Act 1952. In that case, it was held that a patent for a sausage holder was invalid for failing to describe the invention because the specification ‘‘did not enable the reader to discern what was the invention in the total thing that it describes’’. The Full Court rejected Doric’s submissions because they mixed sufficiency with fair basis. The element of Sami Svendsen relied on by Doric was not good law because the word ‘‘invention’’ in Sami Svendsen was used in relation to inventive step, whereas the High Court said that ‘‘invention’’ in s40 did not mean ‘‘inventive step’’, but included an alleged invention and ‘‘the embodiment which is described, and around which the claims are drawn’’. The Full Court held that subsection 40(2)(a) only requires a patentee to describe the invention so that a skilled addressee would understand what the invention is and how it is best worked. It was not necessary for the patentee to identify the inventive step involved in the invention, as this should be properly dealt with on the separate ground of obviousness. Thus, the patent complied with sufficiency requirements under subsection 40(2)(a). An application for special leave to appeal to the High Court from the Full Court decision was recently filed. 2.4. Comment The decision in this case turned on the characterisation of the problem in the specification. As the problem and object of the invention were expressed in such a way as to suggest the solution that was the subject of the broader claims of the Patent, this led to the finding of obviousness of those broader claims. It is clear from this case that patent specifications should be carefully drafted to ensure that the claimed invention does not appear to be readily apparent from the manner in which the problem in the prior art is described. Otherwise, the broader claims of the patent are likely to be vulnerable to an attack on the ground of obviousness. The case also clarifies what is necessary to meet the statutory requirement of sufficiency, and the Full Court has confirmed that patentees are not obliged to identify the inventive step in the patent specification. Andrew Lowe Associate Russell Davies Partner 3. Allowability of ‘‘mirror-image’’ Swiss-style and method of treatment claims Prosidion Limited v Novo Nordisk [2006] APO 6 A recent decision of the Australian Patent Office has clearly stated that Swiss-style claims cover the manufacture of a medicament wherein the medicament is intended for a
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News from Australia and New Zealand / World Patent Information 29 (2007) 76–79
specific medical treatment, but do not extend to the method of medical treatment itself. The accepted claims of the subject patent were in Swiss-style format, being directed to the ‘‘use of activitylowering effectors of dipeptidyl peptidase (DPIV), or of DPIV-like enzyme activity, for the preparation of a medicament for lowering elevated blood glucose levels’’. The patentee had sought to add ‘‘mirror-image’’ claims to a ‘‘method of lowering elevated blood glucose levels by the administration of a therapeutically effective amount of activity lowering effectors of DPIV, or of DPIV-like enzyme activity’’. However, more than three months had elapsed from the date of advertisement of acceptance. Australian practice requires that, under such circumstances, the amended claims must fall within the scope of the accepted claims. Recent Patent Office practice was to accept an amendment to introduce method of treatment claims that mirrored accepted Swiss-style claims under these circumstances, notwithstanding the fact that such claims are clearly directed to different potential infringers. However, inclusion of the additional claims was opposed in the present case on the grounds that such claims would not fall within the scope of the accepted Swiss-style claims and that the claims would not be succinct (the latter being a requirement under Section 40 of the Patents Act 1990). The Patent Office considered relevant European, British and New Zealand decisions related to the construction of Swiss-style claims. It was concluded that there appears to be a general agreement as to the proper construction of Swiss-style claims, i.e. that they are directed to the manufacture of a ‘‘good’’ and do not extend to a method of treatment. Any reference to ‘‘therapeutic use’’ in a Swissstyle claim, it was said, is not determinative of the scope of the claim. For instance, the construction adopted by the New Zealand Court of Appeal in Pharmaceutical Management Agency Ltd. v Commissioner of Patents (Pharmac) (2000) NZCA 330, was that ‘‘the Swiss-form of a claim has been devised to avoid claiming the method of treatment...’’ The abiding principle adopted in the present case was that, in Australia, such claims should be construed for consistency with accepted international practice. The practical effect of such a construction is that a Swiss-style claim is regarded as being directed to the manufacture of the medicament with the intention of a specific medical use, without the claim extending to that use. It is therefore limited to the preparation and sale of a product for the purpose of carrying out a specific medical treatment, and not to that treatment, per se. When assessing the allowability of an amendment lodged more than three months after acceptance of the patent application, the present case confirms that the relevant test is the so-called ‘‘Distiller’s Test’’ (The Distillers Co Ltd’s Application (1953) 70 RPC 221), which asks whether a proposed new claim would extend the monopoly such that something that was previously not an infringe-
ment in respect of the original claims now becomes an infringement. Since the original Swiss-style claims were directed only to the manufacture of a medicament, the medicament being intended for a specified medical treatment, they were deemed not to extend to the method of medical treatment itself. As a consequence, the method of treatment claims were not allowed. Gareth Dixon Patent Attorney Jacinta Flattery-O’Brien Partner 4. Report backs GM crop cultivation in Australia Moratoriums on commercial cultivation of genetically modified (GM) crops in Australia should be lifted, according to a report prepared by the Agriculture and Food Policy Reference Group (AFPRG) and submitted to the Minister for Agriculture, Fisheries and Forestry in February 2006. Several GM food products are consumed in Australia but only GM cotton and GM blue carnations are grown commercially. Notwithstanding the Commonwealth’s national biotechnology strategy to develop biotechnology in Australia and the approval of two licences for GM herbicide-tolerant canola varieties for commercial release by Australia’s Gene Technology Regulator, five Australian states and the Australian Capital Territory have moratoriums (of varied stringency) on the commercial cultivation of GM crops – only Queensland currently allows cultivation of GM crops. Resulting confusion has led to the withdrawal of investment for agricultural research and development in Australia by some companies. The AFPRG’s report, ‘‘Changing our Future - Agricultural and food policy for the next generation’’, notes that commercial cultivation of a range of GM crops is growing rapidly in many countries and points out that while 99% of GM crops cultivated globally have input traits such as herbicide and insect resistance, development of crops with many more GM traits is underway. The AFPRG’s report suggests that Australia would not remain globally competitive in the face of growing acceptance of GM crops internationally if the moratoriums are not lifted. Potential gains of $1.5–5.8 billion would be lost over the next 10 years if the Australian moratoriums continue, it is claimed. The report recommends:
• that governments give higher priority to communicating the benefits of agrifood biotechnology and publicise the robustness of the regulatory regime; • that agriculture and food businesses work with governments to facilitate the uptake of agrifood biotechnologies that will contribute to better health, a cleaner environment and more globally competitive industries; and
News from Australia and New Zealand / World Patent Information 29 (2007) 76–79
• that state governments lift their moratoriums on the commercial use of GM crops and work with the government, industry and researchers to achieve nationally consistent traceability and tolerance protocols and to clarify legal liability issues surrounding the use of GM organisms in agriculture and food products. Should the recommendations be adopted, the Australian agricultural industry and the public will be able to tap into the opportunities presented by GM technology and consumers will be better informed.
79
Carmela Monger Patent Attorney Jacinta Flattery-O’Brien Partner Shelston IP, Level 21, 60 Margaret Street, Sydney, NSW 2000, Australia E-mail address: [email protected]
News from Australia and New Zealand
1. Amendments to Australian IP laws The Australian Intellectual Property Laws Amendment Act 2006 received Royal Assent on 27 September 2006. The major changes are in the areas of patents and trademarks. These changes are discussed separately below: 1.1. Patent act The Amendments to the Patents Act deal with the areas of: 1.1.1. The introduction of exemplary damages for wilful infringement Patentees can now extract exemplary damages for flagrant infringement of patents. The court can take into account the conduct of the infringer, including any notice they may have had, in determining the level of damages awarded. 1.1.2. Modification of the secret prior use provisions The previous secret prior use provisions have been repealed and new provisions created which allow for a defence to infringement of independent secret use within Australia before the priority date of the invention. Additionally, the prior use right can be assigned from one party to another, but not licensed. 1.1.3. Modifications of the springboading provisions for obtaining regulatory acceptance of generic pharmaceuticals Under the new provisions, the ability to conduct springboarding activities relating to obtaining regulatory approval (both in Australia and overseas) of a pharmaceutical patent can occur at any time during the life of a patent – as opposed to the present situation in which activities to obtain regulatory approval are only allowed for patents that have been extended and for the period following the grant of the extension. Various importation activities relating to patented products, for regulatory approval purposes will also be allowed. doi:10.1016/j.wpi.2006.07.016
1.1.4. Expansion of the compulsory licensing provisions The application of the Australian Compulsory Licensing provisions have effectively been all but inoperative. The provisions have been redrafted with a view to easing the tests where the patentee has a ‘‘substantial market power’’ in a particular area. In such cases, where the patent can be shown to be ‘‘lessening competition’’, it is likely the licence will be easier to obtain. 1.2. Trademarks act The new amendments broaden the power of the Registrar to revoke registrations where the registration should not have been accepted. Previously, only the Federal Court had the power to cancel a trademark and the revisions pass this power to the Registrar, with the caveat that the owner has the right to be heard. The intent of the provisions is to provide a simpler methodology for revocation. The Act also provides the Registrar with statutory power to withhold from publication documents containing sensitive business information. Peter Treloar Partner
2. Specification key to unlocking prior art admissions Lockwood Security Products Pty Ltd. v. Doric Products Pty Ltd. [2005] FCAFC 255 (8 December 2005). 2.1. Summary The Full Court of the Federal Court has dismissed an appeal by Lockwood Security Products Pty Ltd. (Lockwood) and has held that several claims in Lockwood’s Australian Patent No. 702534 (the Patent) were invalid for being obvious. In addition, the Full Court also held that Doric Products Pty Ltd. (Doric) did not infringe those claims that covered the preferred embodiment of the invention described in the Patent. This case reminds practitioners and patentees of the need to carefully draft patent specifications when describing known prior art.
News from Australia and New Zealand / World Patent Information 29 (2007) 76–79
2.2. Background to the judgement In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd. (2004) 214 CLR 274, the High Court of Australia held that the claims of the Patent were fairly based and remitted the matter back to the Full Court to determine the remaining issues of infringement of the claims defining the preferred embodiment of the invention described in the Patent (the preferred embodiment claims) and obviousness of the broader claims of the Patent. The Patent related to a ‘‘deadlock’’, which has an inner lock and an outer lock, allowing the deadlock to be locked from the outside or the inside of the door. The Patent broadly claimed a deadlock in which the inner lock could be unlocked from the outside when the key unlocks the outer lock. The invention was designed to prevent a person being accidentally locked inside when the key is lost or left within the outer lock. 2.3. The full court judgement The Full Court upheld the trial judge’s finding that Doric did not infringe the preferred embodiment claims of the Patent on the basis of the evidence presented at trial. In respect of the validity of the broader claims, the Full Court held that these claims were invalid on the ground of obviousness. The specification of the Patent described the problem of the prior art as being that the inner lock could not be unlocked from the outside, and the object of the invention was to make the inner lock release at the same time as the outer lock by actuation of the key. The expert evidence called by both Doric and Lockwood showed that the ‘‘solution’’ described as the object of the invention was well known. What was not known was how to implement this solution; that is, the exact mechanics to make the solution work. The Full Court concluded that the problem was admitted in the specification as being part of the common general knowledge in the technical field. On this basis and the expert evidence, the Full Court held that the broader claims were obvious because they claimed the concept of any means of releasing the inner lock from the outside of the door, and not how the inner lock was released, unlike the preferred embodiment claims. Doric also submitted that the broader claims were invalid on the ground of insufficiency under subsection 40(2)(a), which requires that the specification must describe the invention fully, including the best method known to the applicant of performing the invention. Doric argued that the invention had not been described fully because the consistory clause (mirroring claim 1 of the broader claims) misleads the reader as to the improvement, being the preferred embodiment. In addition, the broader claims of the Patent were not warranted by the disclosure in the specification of the preferred embodiment. In making these submissions, Doric relied on the earlier High Court decision of Sami S Svendsen Inc. v Independent Products Can-
77
ada Ltd (1968) 119 CLR 156, decided under the previous Patents Act 1952. In that case, it was held that a patent for a sausage holder was invalid for failing to describe the invention because the specification ‘‘did not enable the reader to discern what was the invention in the total thing that it describes’’. The Full Court rejected Doric’s submissions because they mixed sufficiency with fair basis. The element of Sami Svendsen relied on by Doric was not good law because the word ‘‘invention’’ in Sami Svendsen was used in relation to inventive step, whereas the High Court said that ‘‘invention’’ in s40 did not mean ‘‘inventive step’’, but included an alleged invention and ‘‘the embodiment which is described, and around which the claims are drawn’’. The Full Court held that subsection 40(2)(a) only requires a patentee to describe the invention so that a skilled addressee would understand what the invention is and how it is best worked. It was not necessary for the patentee to identify the inventive step involved in the invention, as this should be properly dealt with on the separate ground of obviousness. Thus, the patent complied with sufficiency requirements under subsection 40(2)(a). An application for special leave to appeal to the High Court from the Full Court decision was recently filed. 2.4. Comment The decision in this case turned on the characterisation of the problem in the specification. As the problem and object of the invention were expressed in such a way as to suggest the solution that was the subject of the broader claims of the Patent, this led to the finding of obviousness of those broader claims. It is clear from this case that patent specifications should be carefully drafted to ensure that the claimed invention does not appear to be readily apparent from the manner in which the problem in the prior art is described. Otherwise, the broader claims of the patent are likely to be vulnerable to an attack on the ground of obviousness. The case also clarifies what is necessary to meet the statutory requirement of sufficiency, and the Full Court has confirmed that patentees are not obliged to identify the inventive step in the patent specification. Andrew Lowe Associate Russell Davies Partner 3. Allowability of ‘‘mirror-image’’ Swiss-style and method of treatment claims Prosidion Limited v Novo Nordisk [2006] APO 6 A recent decision of the Australian Patent Office has clearly stated that Swiss-style claims cover the manufacture of a medicament wherein the medicament is intended for a
78
News from Australia and New Zealand / World Patent Information 29 (2007) 76–79
specific medical treatment, but do not extend to the method of medical treatment itself. The accepted claims of the subject patent were in Swiss-style format, being directed to the ‘‘use of activitylowering effectors of dipeptidyl peptidase (DPIV), or of DPIV-like enzyme activity, for the preparation of a medicament for lowering elevated blood glucose levels’’. The patentee had sought to add ‘‘mirror-image’’ claims to a ‘‘method of lowering elevated blood glucose levels by the administration of a therapeutically effective amount of activity lowering effectors of DPIV, or of DPIV-like enzyme activity’’. However, more than three months had elapsed from the date of advertisement of acceptance. Australian practice requires that, under such circumstances, the amended claims must fall within the scope of the accepted claims. Recent Patent Office practice was to accept an amendment to introduce method of treatment claims that mirrored accepted Swiss-style claims under these circumstances, notwithstanding the fact that such claims are clearly directed to different potential infringers. However, inclusion of the additional claims was opposed in the present case on the grounds that such claims would not fall within the scope of the accepted Swiss-style claims and that the claims would not be succinct (the latter being a requirement under Section 40 of the Patents Act 1990). The Patent Office considered relevant European, British and New Zealand decisions related to the construction of Swiss-style claims. It was concluded that there appears to be a general agreement as to the proper construction of Swiss-style claims, i.e. that they are directed to the manufacture of a ‘‘good’’ and do not extend to a method of treatment. Any reference to ‘‘therapeutic use’’ in a Swissstyle claim, it was said, is not determinative of the scope of the claim. For instance, the construction adopted by the New Zealand Court of Appeal in Pharmaceutical Management Agency Ltd. v Commissioner of Patents (Pharmac) (2000) NZCA 330, was that ‘‘the Swiss-form of a claim has been devised to avoid claiming the method of treatment...’’ The abiding principle adopted in the present case was that, in Australia, such claims should be construed for consistency with accepted international practice. The practical effect of such a construction is that a Swiss-style claim is regarded as being directed to the manufacture of the medicament with the intention of a specific medical use, without the claim extending to that use. It is therefore limited to the preparation and sale of a product for the purpose of carrying out a specific medical treatment, and not to that treatment, per se. When assessing the allowability of an amendment lodged more than three months after acceptance of the patent application, the present case confirms that the relevant test is the so-called ‘‘Distiller’s Test’’ (The Distillers Co Ltd’s Application (1953) 70 RPC 221), which asks whether a proposed new claim would extend the monopoly such that something that was previously not an infringe-
ment in respect of the original claims now becomes an infringement. Since the original Swiss-style claims were directed only to the manufacture of a medicament, the medicament being intended for a specified medical treatment, they were deemed not to extend to the method of medical treatment itself. As a consequence, the method of treatment claims were not allowed. Gareth Dixon Patent Attorney Jacinta Flattery-O’Brien Partner 4. Report backs GM crop cultivation in Australia Moratoriums on commercial cultivation of genetically modified (GM) crops in Australia should be lifted, according to a report prepared by the Agriculture and Food Policy Reference Group (AFPRG) and submitted to the Minister for Agriculture, Fisheries and Forestry in February 2006. Several GM food products are consumed in Australia but only GM cotton and GM blue carnations are grown commercially. Notwithstanding the Commonwealth’s national biotechnology strategy to develop biotechnology in Australia and the approval of two licences for GM herbicide-tolerant canola varieties for commercial release by Australia’s Gene Technology Regulator, five Australian states and the Australian Capital Territory have moratoriums (of varied stringency) on the commercial cultivation of GM crops – only Queensland currently allows cultivation of GM crops. Resulting confusion has led to the withdrawal of investment for agricultural research and development in Australia by some companies. The AFPRG’s report, ‘‘Changing our Future - Agricultural and food policy for the next generation’’, notes that commercial cultivation of a range of GM crops is growing rapidly in many countries and points out that while 99% of GM crops cultivated globally have input traits such as herbicide and insect resistance, development of crops with many more GM traits is underway. The AFPRG’s report suggests that Australia would not remain globally competitive in the face of growing acceptance of GM crops internationally if the moratoriums are not lifted. Potential gains of $1.5–5.8 billion would be lost over the next 10 years if the Australian moratoriums continue, it is claimed. The report recommends:
• that governments give higher priority to communicating the benefits of agrifood biotechnology and publicise the robustness of the regulatory regime; • that agriculture and food businesses work with governments to facilitate the uptake of agrifood biotechnologies that will contribute to better health, a cleaner environment and more globally competitive industries; and
News from Australia and New Zealand / World Patent Information 29 (2007) 76–79
• that state governments lift their moratoriums on the commercial use of GM crops and work with the government, industry and researchers to achieve nationally consistent traceability and tolerance protocols and to clarify legal liability issues surrounding the use of GM organisms in agriculture and food products. Should the recommendations be adopted, the Australian agricultural industry and the public will be able to tap into the opportunities presented by GM technology and consumers will be better informed.
79
Carmela Monger Patent Attorney Jacinta Flattery-O’Brien Partner Shelston IP, Level 21, 60 Margaret Street, Sydney, NSW 2000, Australia E-mail address: [email protected]