Description:
The linkage system in Mexico was intended to create legal certainty in the innovative and generic pharmaceutical sectors.  However, the regulations are inadequate and are often misunderstood by administrative authorities and judges.  Thus, the system drifted towards chaos.

This webinar will provide an overview of recent decisions issued by the Supreme Court, the criteria sustained by the Mexican Patent Office regarding the ‘Gazette of Drug Patents’ and the patent reform effects on pharmaceutical patents.  Participants will understand the direct and favorable impact in the enforcement of pharmaceutical patents and will have a framework for deciding how and when to request the inclusion of a patent covering a pharmaceutical composition or formulation in the Gazette.

Date:  Wednesday, November 3, 2010
Time: 12:30 – 1:30 pm EST
Duration: 1.0 Hours (Dial-in Presentation)

Presentation Material:  Will be distributed to Registrants.

Cost to Participate:

No Charge for APLF Member Attorneys
No Charge for In-House Counsel/Corporate Managers
$100 per Telephone Line for Non Member Practicing Attorneys

For membership information, please contact Farhana Iqbal, APLF Administrator, at admin@aplf.org.

TO REGISTER

Email APLF at admin@aplf.org with contact information and number of participants.   Payment instructions will be emailed to you.

CLE CREDIT

If you are interested in one general CLE credit, please do the following:  Prior to the webinar, download the CLE forms.  After the webinar, send your completed forms to our CLE Coordinator (whose contact information is set forth below) along with your check for the CLE fee.  The CLE fee for one credit is $65 for each attorney from an APLF member firm and $75 for each attorney who is not from an APLF member firm.

Our CLE Coordinator is:

Susan R. Freedman, President
S. Freedman and Company, Inc.
The Dorchester Suite 206
226 West Rittenhouse Square
Philadelphia, PA  19103
Tel: 215-985-0257
Fax: 215-790-9020
E-mail: freedman@voicenet.com

Please contact Ms. Freedman for all questions pertaining to CLE credit.

China’s Internet Network Information Center (CNNIC), authorised by the Ministry of Industry and Information Technology of the People’s Republic of China (MIIT), has responsibility for operating and administering China’s domain name registry: the .CN country code top level domain (ccTLD) and the Chinese Domain Name (CDN) system. A Chinese domain name contains Chinese characters.

On December 15, 2009, MIIT circulated a notice about a special campaign to handle online pornographic content, directing responsibility to different authorities and organisations in China, including CNNIC and accredited service registrars. Because some operators of pornographic websites had been evading supervision by frequently switching domain names and IP addresses, MIIT specially required CNNIC and the service registrars to take the following measures:

• Establishing a blacklist to include the holders of those domain names whose websites were shut down
• Requiring all applicants for domain name registrations to provide authentic, accurate and integral information about the registration
• Withholding DNS direction for those websites not recorded at MIIT, and
• Co-operating with the relevant authorities to stop DNS direction for those websites containing obscene or offensive content identified by the relevant authorities, reporting them and including the holders of the domain names on the blacklist.

New requirements

As usual, an applicant must provide the domain name to be registered; number of years of registration, the applicant’s name, address, telephone and fax numbers, and email address, a contact person’s name and server (DNS) information.

In light of MIIT’s policy, CNNIC announced new requirements for registering .CN domain names and Chinese domain names as follows:

l  A copy of the Certificate of Business License of Legal Entity for the applicant company or a copy of the Certificate of National Organization Code of the applicant company, and

l  A copy of the Chinese Resident Identity Card of the contact person of the applicant company.

When the new requirements were implemented on December 14, 2009, CNNIC also required a copy of the application form stamped by the applicant company’s seal, but it no longer requires the form.

The Certificate of Business License is a proof of a registered company’s legal right to operate its business in China. The certificate is issued by an Administration for Industry and Commerce at county, provincial or national level after it checks and approves the registration of the company according to the relevant laws of China.

A National Organization Code (NOC) is a unique and invariable legal identifier issued to an enterprise, a department, a society, an association or a non-profit organisation founded and existing under the relevant laws of China. The Certificate of National Organization Code is issued by the National Administration for Code Allocation to Organization under the General Administration of Quality Supervision, Inspection and Quarantine of China. Any company that has had a Certificate of Business License is eligible to apply for a Certificate of National Organization Code.

Because of the new requirements, individuals are no longer allowed to register .CN domain names and Chinese domain names as of December 14, 2009.

For .CN domain names or Chinese domain names registered prior to December 14, 2009, all registrants, whether individuals or legal entities, are required to submit documentation to their service registrars, which will then be transferred to CNNIC for verification. As a legal entity, it must also submit a copy of its Certificate of Business License or a copy of its Certificate of National Organization Code and a copy of its contact person’s Chinese Resident Identity Card. CNNIC originally determined a deadline of January 31, 2010 for submission, but later agreed to extend the period (the new deadline has yet to be announced).

CNNIC does not distinguish Chinese individuals or entities from foreign individuals or entities that cannot provide Chinese Resident Identity Cards or Certificates of National Organization Code or Certificates of Business License. In practice, service registrars still accept copies of the identification cards or passports of foreign individuals and/or copies of the Certificates of Incorporation of foreign entities and transfer them to CNNIC. CNNIC is awaiting MIIT’s further confirmation on whether those foreign documents are acceptable for verification purposes. Though MIIT has not issued a clear opinion about this, it is commonly thought that they will be acceptable, because a decision to the contrary would be unfair.

Under the new regulations, foreign companies are not allowed to register .CN domain names or Chinese domain names directly as of December 14, 2009. Therefore, it is recommended that a foreign company entrust its branch, subsidiary or representative office in mainland China, all of which are eligible to obtain a Certificate of Business License or a Certificate of National Organization Code, to register its .CN domain names or Chinese domain names. Because not every foreign company has a branch in China, if an eligible branch of a foreign company registers .CN domain names or Chinese domain names, this will possibly be in contradiction with the foreign company’s wish for universal management of its domain names. However, this is the policy and we cannot foresee it changing in the future. Alternatively, if a foreign company does not have a branch in China but wants to immediately prevent those types of domain names from being taken by others, it is possible to authorise a Chinese legal services agency to register them in the name of the Chinese agency and then have them assigned to a company branch in China as soon as a branch is established, or to the foreign company itself should the current policy change. Also, it is feasible for the Chinese legal services agency to arrange for the registered .CN domain names or Chinese domain names to redirect to the foreign company’s website, commonly under a .COM domain name.

For an assignment, based on mutual agreement, of a .CN domain name or a Chinese domain name registered after December 14, 2009, the assignee must provide its identification documents as required for a new applicant, in addition to an application form of assignment duly executed by both the assignor and the assignee.

For an assignment, based on mutual agreement, of a .CN domain name or a Chinese domain name registered before December 14, 2009, if the current registrant has gone through the verification process and its submission has been accepted by CNNIC, the assignee must provide its identification documents as required for a new applicant, in addition to an application form of assignment duly executed by both the assignor and the assignee; however, if the current registrant has not submitted the required documents for verification or its submission has been rejected by CNNIC, it is still possible to assign the domain name without the new requirements applied.

Concerning a forcible transfer, based on a decision made by a domain name dispute resolution organisation, an arbitration organisation or a Chinese court, the registrar shall change the owner in accordance with the decision. However, after the change is made, CNNIC might still require the new owner to supplement its identification documents for verification.



It has been reported that unwanted operations of .CN domain names have declined tremendously since the policy was implemented.

Scam emails

Perhaps you regularly receive emails similar to the following one our firm recently received:

The ‘first come, first served’ principle is commonly applied in domain name registration. A service registrar shall register domain names immediately according to an applicant’s instruction and it has no obligation to withhold one party’s applications and alert another party. XYZ Company may not be an accredited registrar, but perhaps an agent of a registrar behind the scenes. Fabricating an urgent situation in which the so-called Pone Group Inc. is going to register the domain names is a strategy to lure us to register them through XYZ Company or the registrar behind it on an ‘urgent’ basis.

As CNNIC has issued new requirements for registration of .CN domain names and Chinese domain names, such emails including those types of domain names should be considered even more untrustworthy.

Nowadays, it has become an increasingly complex challenge for a company to decide where, when and how to register domain names. Often, it is a consideration of balance between the current or potential value of the domain names in specific countries or regions and the necessary expense of registering and maintaining them. Our firm has registered eight domain names including peksung.com, peksung.cn, and peksung.com.cn. Currently we do not plan to register more though we know the listed domain names are available. So we definitely ignore the scam emails.

Our firm periodically received this type of email from several different senders. And our clients also have received this type of email and have referred to us for advice many times. We usually suggest:

l  Conducting a WHOIS search to identify the status and registration details of the domain names

l  Registering those domain names that are still available and of interest to you through a trusted service registrar

l  Deciding whether to reacquire some domain names by direct warning, anonymous acquisition through a third party, a dispute resolution process or even a lawsuit if they have been registered by unaffiliated individuals or entities.

It is better to consult a local agency for specialist advice according to the sender’s location.

Xiang Gao is a partner at Peksung Intellectual Property Ltd. He can be contacted at: gxiang@peksung.com

Xiang Gao graduated from Peking University, Beijing, China with a Bachelor of Law in 1991, and he also obtained a Master of Intellectual Property and Diploma of Advanced Licensing Institute from Franklin Pierce Law Center, Concord, New Hampshire, in the US in 1997.He registered to practice before the Chinese Trademark Office in 1995. In 2004, Gao joined Peksung Intellectual Property Ltd. as a partner to handle trademark, copyright and domain name matters. He is a member of AIPPI China and INTA.

The Action:

This action was for removal of the SORBENT trade mark registration on two grounds:

i)  That there had been no use of the trade mark by the registered owner or an authorised user; and

ii) That there had been no use for some or all of the goods in class 16 for which SORBENT was registered.

The Outcome:

The decision confirmed that the Registrar has a broad, general discretion to allow a trade mark to remain registered for goods and services.  This discretion may be applied where there has been little or no use of the trade mark for certain goods or services, if it is “reasonable” to do so.

Application to cancel a trade mark registration is likely to be unsuccessful where the trade mark owner can show use of the trade mark for some of the goods or services because of a trade mark owner’s right to register a trade mark for “classes of goods/services” .

“Authorised use” of a trade mark can be established where the trade mark owner and the trade mark user are related entities via a shared parent company, even where there is no evidence of a formal licence arrangement or exercise of “control” over the trade mark use.

Where the trade mark owner’s evidence of use or authorised use is inadequate, the removal applicant should test the evidence by filing evidence-in-answer and/or seeking further and better evidence.

If a trade mark registration is more than five years old and has not been used for three years,        best practice is to refile a new application, to reset the use period, and avoid the risk of           cancellation for non use for a further five years.

Background

In August 2008, Sorbies Pty Ltd (Sorbies) filed an application for the removal of  trade mark registration 907074 SORBENT, alleging that the trade mark had not been used during the relevant three year period in relation to the goods for which the trade mark is registered, namely:

Class: 3 Tissues impregnated with cosmetic lotions;
Class: 16 Articles made of paper and cardboard, tissues, toilet paper, wet wipes; and
Class: 21 Wet wipes, dispensers for wet wipes.

AB SCA Finans (SCA Finans) is the owner of the SORBENT registration and SCA Hygiene Australasia Pty Limited (SCA Australasia) is the authorised user and both companies opposed the removal action.  Evidence was provided that SCA Australasia and SCA Finans were both wholly owned subsidiaries of Svenska Cellulosa AB, and that SCA Australasia manufactured and marketed products under the trade mark under licence from SCA Finans.  Evidence was provided of use and promotion of SORBENT in magazine advertisements and in-store displays, television commercials, for SORBENT branded tissues, paper napkins, paper towels and toilet paper.

Removal or Limitation for non use for some or all of the goods

The Hearing Officer refused to restrict the goods of the registration notwithstanding that there was minimal or no use of SORBENT on goods such as “dispensers for wet wipes” and “articles made of paper and cardboard” and determined that it was reasonable to exercise the Registrar’s discretion in favour of the owner of the SORBENT trade mark which was extensively used on toilet tissue, paper towels and tissues.

What is Authorised Use?

Sorbies argued that use of SORBENT by SCA Australasia was not “authorised use” as there was insufficient proof of the registered owner’s exercise of quality control over SCA Australasia’s use of the trade mark. This claim was rejected because Sorbies had not filed evidence refuting the opponent’s claims of control by the registered trade mark owner, nor requested further or better evidence of the relationship.

The Hearing Officer stated that the examples of control described in sections 8(3) (quality control) and 8(4) (financial control) are non-exhaustive. The Hearing Officer concluded: “I need only take notice of the everyday notoriety of the trade mark to be assured that intra-group ownership, use and control of the trade mark would be regulated in a way satisfying section 8.”

If you have any questions or require any assistance in relation to protection of your trade marks, please email Gail Hill or call on +61 2 8231 1000.

On June 28, 2010, the Supreme Court unanimously held that the patent application filed by inventors Bernard Bilski and Rand Warsaw, which related to a method for hedging risks and commodities trading, was abstract, and therefore, not patent eligible. However, more importantly, the Supreme Court also ruled by a narrow 5 to 4 vote that business methods are not excluded from patent protection. The ruling leaves open the possibility that patent applications related to software technology, medical testing procedures, and various other business methods may be patented.

In its opinion, the Supreme Court dismissed the test developed by the Federal Circuit, the machine-or-transformation test, as the sole test for deciding whether an invention is a patent eligible process. Rather, the Supreme Court stated that the “machine-or-transformation test is a useful and important clue, an investigative tool,” for determining whether some claimed inventions are processes that meet the requirements of 35 U.S.C. § 101. According to the majority opinion of Bilski, written by Justice Kennedy, “the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals.” However, the opinion did not address the precise scope of eligible subject matter, including which business methods may be eligible for patent protection. Indeed, Bilski may be more significant for what it does not provide – a legal standard or test that can be applied to determine the patentability of a particular business method. Accordingly, applying the Bilski decision to already issued business method patents, as well as published business method patent applications to determine validity of the claims at stake, will require thoughtful legal reasoning.

In some ways, the Supreme Court’s Bilski decision echoes the Supreme Court’s KSR decision in 2007. In 2007, the Supreme Court scolded the Federal Circuit for applying an overly rigid standard relating to the teaching-suggestion-motivation test for the question of obviousness. In Bilski, the Supreme Court has struck down the somewhat rigid machine-or-transformation test that the Federal Circuit had applied.

It seems relatively clear that the majority decision favors business growth and development. The Court recognizes that times change and that the law surrounding intellectual property is dynamic and should be designed to encompass new and unforeseen inventions. As American businesses continue to transform from the industrial age to the information age, the decision rendered in Bilski will play a critical role in shaping protection for methods of doing business. For owners of patents that are directly related to banking, financing, or other business methods, for example, the decision is a victory, as the decision rejects exclusion of business methods as patent protectable subject matter.

As stated by Thomas Jefferson, “ingenuity should receive a liberal encouragement.” The Supreme Court’s Bilski decision has indeed provided liberal encouragement to those that wish to utilize the patent system to protect inventions related to business methods. The decision may effect and even assist this country’s efforts in the global market to be more competitive in software, internet technologies, mobile platforms, wireless technologies, financial services, bioinformatics, biotechnologies, and other similar industries.

On June 10, 2010, the Federal Circuit decided Pequignot v. Solo Cup and halted an attorney’s attempt to collect up to $500 dollars in damages for each of the over 21 billion mismarked articles sold by Solo Cup.  False marking occurs if someone marks an “unpatented article” as being patented with intent to deceive the public.  A plaintiff can receive half of the statutory maximum penalty of $500 for each falsely marked article.

As a result of the large potential for damages, over one hundred false marking cases have been filed in the past six months by so-called “marking trolls,” many of which against large manufacturers who have continued to mark their products with expired patents.  Many believe the Solo Cup case is a barometer of things to come for these newly filed lawsuits because Solo Cup clarifies two important issues pertinent to false marking cases.

First, the Federal Circuit confirmed that marking expired patents on products can create potential liability for false marking.  Specifically, the Court found “that an article covered by a now-expired patent is ‘unpatented’” as defined in the false marking statute, 35 U.S.C. § 292.  This conclusion follows logically from the fact that once a patent expires no exclusionary rights prohibit others from implementing the patented technology: “[a]s it is no longer patented, the public need not fear an infringement suit any more than if it were never patented.”  The Federal Circuit rejected the argument that the public should know a patent’s statutorily defined expiration date, because this inappropriately imposes on the public the burden of determining whether an article is improperly marked by virtue of the patent’s expiration.  Indeed, “determining the expiration date of a patent can, at times, be difficult.”

Second, the Federal Circuit found the presumption that Solo Cup falsely marked its products “with intent to deceive” the public was weaker than it otherwise may have been, because Solo Cup merely failed to remove expired patents from its products.  The court noted that the “false markings at issue are expired patents that had previously covered the marked products.”  Furthermore, the Federal Circuit expressed doubt whether Solo Cup’s practice of indicating its products “may be covered” by patents could support a finding of intent to deceive.  The court stated, “it is highly questionable whether such a statement could be made ‘for the purpose of deceiving the public,’ when the public would not reasonably be deceived into believing the products were definitely covered by a patent.”

In the end the Federal Circuit found that Solo Cup presented “credible evidence that its purpose was not to deceive the public” and was therefore not liable for its mismarking.  Importantly, while intent to deceive the public can be presumed, the presumption can be rebutted by “no higher a burden of proof than was needed to create the presumption.”  Manufacturers targeted by “marking trolls” will undoubtedly latch on to this weaker presumption to minimize potential damage awards, because of good faith attempts to comply with statutory marking requirements, especially when patentees rely on advice of counsel and follow well-planned marking policies.

While many hoped the Solo Cup case would end the torrent of false marking cases, lawsuits continue to be filed, and this case serves as a stark reminder of the importance of a comprehensive patent marking policy and reducing the risk of false marking by conducting an audit with your patent attorney.

Author: Dion Ferguson

The Federal Circuit provided relief for Zimmer Holding, Inc., Zimmer, Inc., and Zimmer US, Inc (collectively, “Zimmer”) by granting their petition for writ of mandamus to transfer venue. In the decision, the Federal Circuit noted that a plaintiff will not be allowed to “game the system” by creating a legal fiction as the connection basis for a chosen forum.

MedIdea brought suit against Zimmer in the Eastern District of Texas, arguing that venue was proper due to MedIdea’s principle place of business being located in Longview, Texas. Zimmer disagreed, and requested a transfer to the Northern District of Indiana or the Eastern District of Michigan under 28 U.S.C. § 1404(a), arguing that 1) MedIdea was not registered to do business in Texas, 2) “it was unclear what, if any, relevant business is actually transacted out of MedIdea’s Longview address or whether MedIdea conducts any relevant business anywhere in the state of Texas”, 3) MedIdea shares its Texas Office Space with another of its trial counsel’s clients and 4) while Zimmer is located in Indiana, MedIdea has extensive ties to neighboring Michigan. The District Court denied the motion to transfer, stating that MedIdea’s location in Longview, Texas created sufficient contacts to justify the venue remaining in the Eastern District of Texas. Further, the District Court stressed that MedIdea was already pursuing an ongoing lawsuit based on the same patent in the Eastern District of Texas. Thus, the District Court found that Zimmer had not clearly demonstrated that the proposed venues (i.e., the Northern District of Indiana or the Eastern District of Michigan) were a more convenient venue for the lawsuit.

The Federal Circuit applied the law of the Fifth Circuit to determine if the District Court was clearly erroneous in denying the transfer of venue. The Fifth Circuit applies “public” and “private” factors for establishing forum non conveniens¹. The private factors include 1) the relative ease of access to sources of proof, 2) the availability of compulsory process to secure the attendance of witnesses, 3) cost of attendance for willing witnesses and 4) all other practical problems that make a trial easy, expeditious and inexpensive². The public factors include 1) administrative difficulties flowing from court congestion, 2) local interest in having localized interests decided at home, 3) familiarity of the forum with the law that will govern the case and 4) avoidance of unnecessary problems of conflicts of laws³.

The Federal Circuit applied the factors, and found, based on the substantial conveniences in trying the case in the Northern District of Indiana, the limited relationship between the instant lawsuit and MedIdea’s other pending lawsuit in the Eastern District of Texas, and the “legal fiction” that is the limited connection between MedIdea and the chosen forum, that Zimmer’s petition for a writ of mandamus should be granted. In particular, the Federal Circuit noted that no deference should be given to the forum of MedIdea’s principle place of business because MedIdea appears to be manipulating the propriety of venue. The Federal Circuit focused on the fact that MedIdea is a Michigan limited liability corporation with a registered office in Ann Arbor, Michigan, has only two corporate officers which are both Michigan residents, and all of MedIdea’s research and development and patent prosecution work occurred in Michigan. The Federal Circuit also pointed out that there is no indication that MedIdea has any employees in Texas and shares an office space with a co-client of MedIdea’s trial counsel. Thus, the Federal Circuit concluded that MedIdea was attempting to create “a legal fiction” for the purpose of manipulating venue. With regard to MedIdea’s ongoing lawsuit based on the same patent in the Eastern District of Texas, the Federal Circuit stated that because the on-going lawsuit was still in its infancy, and because the lawsuits involved different products, there was insufficient ties to make litigation of the instant lawsuit more convenient in the Eastern District of Texas.

Accordingly, the Federal Circuit granted Zimmer’s petition for writ of mandamus, and ordered the District Court to vacate its order and transfer the litigation to the Northern District of Indiana.

¹ In re Genetech, Inc., 566 F.3d 1338 (Fed. Cir. 2009).
² In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008).
³ Id.

Avid brought suit against defendants alleging infringement of Avid’s patent directed to a multi-mode radio-frequency identification system for reading biocompatible chips implanted in animals.  The patent was found valid and infringed, but held unenforceable due to inequitable conduct.  Only the district court findings of inequitable conduct are challenged on appeal.

Avid is a small, closely held company that makes biocompatible radio frequency identification (ID) chips for implanting in animals.  Such chips may be implanted in a household pet, allowing a clinic to identify who owns a lost pet.  Dr. Stoddard, a veterinarian and founder of Avid, started the company when he lost his own pet, after which he decided to produce a better system.   Avid began by purchasing unencrypted ID chips, repackaging them, and selling them as a distributor.   However, Dr. Stoddard wanted to develop a proprietary chip and reader system that would use encrypted ID chips, and to develop a reader that would read both unencrypted and encrypted chips.  To realize these products, Stoddard hired three engineers, one being patent attorney.  The three engineers proceeded to develop an encrypted ID chip, and a “multi-mode” reader.

Stoddard demonstrated Avid’s technology at a trade show in April 1990.  Avid filed its patent on a multi-mode encrypted chip and reader system in August 1991.  The district court found inequitable conduct because Stoddard did not disclose documents related to the trade show that were published more than one year prior to the filing of the patent application.

On appeal, Avid contested the district court’s materiality finding and the finding that Stoddard had duty of candor.

The Federal Circuit quickly disposed of the materiality issue.  Avid’s only argument on appeal was that the jury had the trade show documents before them, but did not find patent invalid, thus implying that the documents were not material.  The Federal Circuit, applying a reasonable examiner test, responded that Avid confused “material” and “invalidating.”  A reasonable examiner may find a document important to a determination of patentability even if the document itself does not invalidate the patent.

The Federal Circuit then turned to the duty of candor issue.  Rule 1.56(a) indicates that each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability as defined in this section.  Rule 1.56(c) further defines the individuals associated with the filing or prosecution of a patent application” as (1) each named inventor, (2) each attorney or agent who prepares and prosecutes the application, and

(3) every other person who is substantively involved in the preparation or prosecution of the application and who is associated with the inventor or assignee.  (emphasis added).

The majority held the phrase “substantively involved” means that the involvement relates to the content of the application or decisions related thereto, and that the involvement is not wholly administrative or secretarial in nature. The majority cited with approval the factors considered by the district court in this case.  The factors were (1) the individual’s position with company, (2) the role in developing or marketing the patented idea/product; (3) the individual’s contact with inventors; and (4) representations by the individual to PTO.

With respect to Dr. Stoddard’s position, the district court found that Stoddard was involved in all aspects of company, including sales, research & development.  The majority indicated that this factual finding creates a reasonable inference that he was involved in preparation of patent application, especially in this case where Stoddard’s personal mission to develop a better ID chip was being realized.

The district court also looked at communications Stoddard had with the inventors.  Stoddard was copied on one memo from an inventor of the patent.  The memo contained content for an European patent application that was the international phase of US patent application.  The second memo was from the same inventor advising Stoddard to check with its EU patent attorney before demonstrating technology because such a demonstration might affect Avid’s patent rights in EU.  The majority found that these facts also supported a reasonable inference that Stoddard was involved with the patent application because the European applications involved the same subject matter as the US patent, and were being prepared at the same time.

Lastly, the district court found that Stoddard was personally responsible for the disputed prior art demonstrations, and Stoddard had signed Avid’s small entity status affidavit.  The majority found that these facts also support an inference that Stoddard was substantively involved in preparations for filing the application.

Judge Linn dissented to the duty of candor portion of the case.  Judge Linn would have found “substantively involved” to include a substantive knowledge requirement.  Specifically, Judge Linn argued that the majority’s interpretation places on persons who are not in a position to assess materiality an obligation to disclose information the relevance of which they have no way of determining.  Thus, Judge Linn would have held that unless an individual has knowledge of the technical details or legal merits of the patent application and is engaged in preparation or prosecution thereof, he is not bound by Rule 56.

Specifically, in this instance, Judge Linn noted that there was no evidence that (1) Stoddard had knowledge of technical facts or legal merits of the application, (2) Stoddard participated in any inventor meetings with patent counsel, (3) he received a draft of application, or (4) that Stoddard received any draft response to any Office Action.  The communications involved memos related to an unrelated EU application.  Lastly, the research activities merely showed Stoddard was associated with the inventors.  Similarly, the small entity affidavit only concerned the specifics of the company and did not relate to any substantive aspect of the application.

This case raises some potentially difficult issues for clients with regard to individuals who owe duty of candor to the USPTO.  For example, what about a group leader of a corporate IP department.  Such an individual might be in a similar position in some ways to Stoddard — copied on emails, sporadic involvement in decisions related to prosecution, etc.  Or, how about an attorney managing agents or associates doing substantive work on cases.

It is likely, however, that the fact that the company was a small, closely held company, and the abuse of discretion standard of review carried the most weight in the way this decision came out.  Likely an individual working in a management role of a large corporate IP department would have more insulation from inventors to prevent a finding of a duty to disclose.

Virtually all creative works in the design world are equal at the outset, in that they automatically enjoy copyright protection as an artistic work (typically in the form of drawings or sketches).

However, if the creative work heads down the industrial path, copyright protection may be lost, leaving other forms of intellectual property (IP) as alternatives.

The various forms of IP differ considerably in the scope of protection.  The practical implications in Australia are interesting and sometimes alarming.

Because it is a do or die issue, it is worth revisiting Australia’s unusual position on the copyright / design overlap when a two dimensional design is embodied in a three dimensional work.  No matter how many times you do the mental gymnastics, the end result seems odd.

• Designer makes sketches of a bagel shaped ottoman.  Don’t let the bagel throw you, it could be anything from a mundane milk bottle to a cartoonish tea cup shaped bath.  Copyright subsists in the drawing as an artistic work.
• Designer makes a prototype of the bagel ottoman.  Copyright subsists in the prototype as an artistic work.
• People love the bagel ottoman concept and it is produced commercially.  As soon as 50 ottomans have been made and sold, copyright protection is lost and cannot be enforced anywhere in the world.
• In broad terms, Designer may still have IP protection if she has filed an application to register bagel ottoman as a registered design (this protects the visual appearance but not how the product works) or patent (excludes others from practising the invention but only available if this is a new, useful, non-obvious invention).
• If Designer has not filed for a design or patent before public disclosure / commercialisation, then there is no form of protection to prevent reproductions of the bagel ottoman.

This outcome may not concern you or indeed Designer, but the anomalies in the protection offered by the  IP regimes are at least interesting.

The lack of adequate protection for three dimensional items is exemplified by the issue (and fast becoming old chestnut) of replica designer furniture.

The replica practice is huge and an industry in its own right.  Traders even compete by claiming that they produce the best quality replica.

Aspirational descriptors such as Herman Miller, Eames, Barcelona chair, Le Corbusier, Harry Bertoia diamond chair, Mies van der Rhoe, Arne  Jacobsen, swan lounge and egg chair are liberally used by many traders to promote their particular goods.

Of course these traders have no connection with the real thing and they quietly mention that in a well crafted, well placed disclaimer to absolve themselves of any liability to the design houses who still produce and license the genuine and typically expensive article.  The savvy ones also take great care to ensure that the brands are not used as trade mark.

The rights and wrongs of the modern-classic reproduction industry usually engender passionate philosophical debate.  However, the real problem is that this is not confined to big note designers and not confined to purveyors of ye-olde modern furniture and lamps.  The real problem is that that the limitation of protection applies to anything three dimensional in Australia.  Further, the problem extends beyond mid-century designs to up to the minute designs.

There are also anomalies as to the duration of protection.

Assume Designer does obtain some protection via a registered design for the bagel ottoman.  This registration would provide a maximum of 10 years to produce the bagel ottoman and rely on the design registration for protection against the copycats.

Curiously, Designer would have much stronger rights creating a fabric pattern for the bagel ottoman.  As long as the fabric is purely a representation of two dimensional features of pattern or ornamentation applied to its surface, (as distinct from woven into or otherwise embodied by the fabric) copyright will subsist in the fabric.  Designer will enjoy copyright protection (and all its wonderful licensing opportunities) for her entire life and her heirs will continue this for a further 70 years following her death. Ironically, unlike other forms of IP Designer need not take formal steps such as registration in order to obtain copyright protection.

Assume Designer registers BAGEL as a trade mark in connection with furniture.  If the brand is properly managed such that BAGEL operates as a trade mark and is in continuous use, the trade mark registration lasts 10 years and can be registered indefinitely provided the registration is renewed.

Savvy traders use the long duration of copyright to their advantage and rely on a suite of IP rights for their armoury.

There are of course purveyors of goods featuring big brands, well known trade marks and copyright works, which also have no connection with the genuine trade source.  However, in stark contrast with replica modern furniture, these goods are illegal, their purveyors face criminal penalties and the goods may be subject to seizure and destruction.

Methods of human treatment and “Swiss style” claims are allowable under the Australian patent system.  Combine that with a low threshold for the assessment of inventive step and Australia currently offers a relatively safe harbour for those seeking patent protection in the medical technology fields.  However, can we expect the tide to turn?

The Australian Patent Courts are continuing to endorse claims to methods of human treatment as patentable subject matter in Australia.  The approach follows the High Court decision in Joos v. Commissioner of Patents (1972) in which a claim to a method for improving the strength and elasticity of human nails and hair was found allowable.  The Court saw no logical reason for claims to cosmetic improvement being unpatentable.  Although the Court failed to clarify whether methods of treating disease were patentable, the Federal Court in Rescare v. Anaesthetic Supplies (1992), confirmed methods of treating snoring and obstructive sleep apnoea were patentable subject matter.  In Bristol-Meyers Squibb v. Faulding (2000), the Federal Court went on to consider a dosage regime for an anticancer drug patentable subject matter, having also confirmed at first instance the allowability of “Swiss-style” claim format.

Of course, enforcement of claims to methods of human treatment is a tricky area, given that the likely infringer will be a medical practitioner or similar.  Nonetheless, in combination, where possible, with claims directed at medical products or systems, the additional flexibility offered by method claims gives medical technology companies the potential to obtain a formidable patent scope in Australia.  This is only strengthened by the lenient approach taken by the Australian Courts to the assessment of inventive step.

In the decision of Lockwood v. Doric (2007) the Court confirmed that all that was required in consideration of the existence of an inventive step in Australia was a “scintilla of invention”.  This was in explicit contrast to the threshold applied by the strict “problem solution” approach taken by the European Patent Office, for example.  As a consequence, a patent owner can often obtain broader valid patent protection in Australia than in most other major jurisdictions.

Nonetheless, using the test for inventive step as an example, in IPAustralia’s recent consultation paper, “Getting the Balance Right”, the Government proposed greater harmonisation of Australia’s patent system with foreign systems, such as the US, Europe and Japan.  However, given the lack of harmonisation outside of Australia, the likelihood of a seachange in Australian legislation appears some way off.  Meanwhile, life remains a beach for Medtech companies seeking patent protection in Australia.

For further or more specific information on “Swiss style” claims or any other aspect of Australian practice, please contact Brett Lunn (blunn@fbrice.com.au), or any of the other practitioners of F B Rice & Co via our website at www.fbrice.com.au

In the U.S., section 2173.05(g) of MPEP defines a functional limitation as an attempt to define something by what it does, rather than by what it is. MPEP dictates that a functional limitation is to be evaluated and considered, just like any other limitation of the claim, for what it fairly conveys to a person of ordinary skill in the pertinent art in the context in which it is used.

Similarly, in Canada, functional limitations are permissible so long as the means by which to achieve the defined function is common general knowledge of the person skilled in the art. Moreover, since the functional language can widen the breadth of the claim, whether the description provides proper support for such claims is an important consideration.

What happens when a functional limitation becomes the crux of the claim? In a recent decision of the Federal Court of Canada, Sanofi-Aventis Canada Inc. v. Ratiopharm Inc. 2010 FC 230, Justice Michael Phelan held that where a patent contains the promise of a desired result, failure to fulfill that promise is grounds for invalidity.

Canadian Patent No. 2,177,772 (the ““’772 Patent”) teaches pharmaceutical compositions containing Irbesartan as the active ingredient.  Irbesartan belongs to a family of drugs known as angiotensin II receptor blockers, used in the treatment of various cardiovascular ailments. The ‘772 Patent was held to be invalid because of its breadth and its unproven utility.

One of the claims at issue claims:

1. A pharmaceutical composition comprising, based on weight: (a) from about 20 to about 70% irbesartan or a pharmaceutically acceptable salt thereof, (b) from about 1 to about 70% diluent, (c) from about 2 to about 20% binder; (d) from about 1 to about 10% disintegrant, (e) from about 0.1 to about 5% antiadherent, and (f) from about 0.2 to about 5% lubricant, and, optionally (g) from about 0.2 to about 6% surfactant, and/or (h) up to about 2% coloring agent, wherein a tablet formed from said composition has a dissolution performance such that about 80% or greater of the irbesartan or salt thereof contained in said tablet dissolves within 30 minutes.

A central question in the case was whether the dissolution performance of 80% or greater in 30 minutes is a promise of performance or is a limitation on the formulation, i.e. that only once the formulation reaches the dissolution performance does it fall within the claim.

Justice Phelan interpreted the broad claim of the ‘772 Patent as a promise that the tablet formed from the composition of ingredients will have the stated dissolution performance. Therefore, the dissolution performance is at the crux of what is being claimed.

Justice Phelan also noted because the claims were construed so that the dissolution rate was a limitation, the claim was invalid due to the breadth of what was claimed. Infringement would result “if someone were fortunate enough somehow to find, from the broad ranges claimed, the precise composition that gives the desired dissolution rate” since the claim is to the result, not the process.  “The claims cannot be stretched to allow the patentee to monopolize anything that achieves the desired result.” (Free World Trust v. Électro Santé Inc., 2000 SCC 66, [2000] 2 S.C.R. 1024).

Obviousness was also a “significant problem” for the functional claim.  The court held that, as the “patentably distinct” advantage was the capacity to manufacture tablets with a preferred dissolution rate, that advantage was “obvious to try”.

The decision is consonant with long-standing Canadian jurisprudence that allows for functional claim language only to the extent that the full scope of the invention may be practiced without undue burden or the need to exercise inventive ingenuity. The skilled person should not be required to do experimental work in order to discover how the invention may be made operative. “The patentee is not to tell a man to make an experiment but to tell him how to do the thing.” (Rice v. Christiani & Nielsen [1929] Ex.C.R. 111 at ¶9; rev’d on other grounds).  On the Court’s construction of the claims, the ‘772 patent promised a formulation with a preferred dissolution but did not give a factual basis or sound line of reasoning to a skilled person in terms of which element and in which proportions. Expert evidence proffered on behalf of both parties suggested that testing and experimentation would be necessary in order to come to the promised result.

As such, the ‘772 Patent was invalidated on the basis of inutility, overly broad claims, lack of sound prediction, failure to provide sufficient disclosure to achieve its promise, as well as for being “obvious to try”.

This case is instructive for those involved in prosecuting or opinining on chemical/pharma patents in Canada.  Many Canadian patents and applications express the invention in functional terms.  These should be scrutinized carefully to make sure that the functional terms are enabled by the disclosure, and are not merely “obvious to try”.