Patentology

There Ain’t No Such Thing as a Free Video Codec

2013-05-19T23:52:00.001+10:00

Google, Inc recently achieved something that perhaps no other company or organisation on the planet could have done – it secured an agreement from most of the major corporate owners of patents relating to digital video coding standards, which will enable developers and users to access digital video on the web without payment of patent royalties.

At least, this is what will happen if the World Wide Web Consortium (W3C) takes up the opportunity that Google has created. However, Google’s recent publication of the proposed terms of a royalty-free cross-licence for implementers of it’s digital video technology has drawn predictable criticism from a number of sources, including Open Source Initiative President Simon Phipps (‘proposal closes door on software freedom’) and FOSS Patents blogger Florian Mueller (effectively accusing Google of hypocrisy and disingenuousness).

It is easy to be cynical about the motivations of a company as large and ubiquitous as Google. But it is worth having a closer look at exactly what Google has achieved here, regardless of its level of self-interest. In my opinion, the deal that Google has struck is a significant step forward for royalty-free and open standards on the internet. And while it is never going to satisfy those individuals and organisations at the more radical end of the free software and/or anti-patent movements, as a practical matter the deal will give the vast majority of internet users an assurance that there will be an open source and royalty-free video standard available for use on the World Wide Web.
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Raising the Bar – New Life for Patents of Addition?

2013-05-12T16:53:00.001+10:00

If you have never heard of a ‘patent of addition’, I am sure that you are not alone. Even those of us who practice in a jurisdiction in which these beasts are rumoured to exist have rarely, if ever, actually seen one. It is not even easy to track one down, or to find out how many of them there may be out there in the wild, since IP Australia’s AusPat database does not provide a facility to search specifically for applications and patents of addition.

However, readers experienced with US patent law and practice may already be familiar with the basic rationale behind the patent of addition, which has much in common with what is known as ‘non-statutory obviousness-type double patenting.’ The principle applied in both cases is that an applicant can be permitted to obtain a second patent for a new, but obvious, variation of an invention already claimed in an earlier patent, but that the second patent may not outlive the first. In this way, the patentee’s rights are insured, but not improperly extended.

It is possible that one reason why patents of addition have been uncommon in Australia is because the law relating to inventive step has been so weak that they have generally been unnecessary (see my recent article on Australia’s ‘four laws of inventive step’).

However, with the commencement of the Raising the Bar reforms in Australia on 15 April 2013, perhaps the patent of addition will have a new lease on life. After a decade in the Australian patent profession, I have yet to set eyes on an actual application for a patent of addition, but I have been involved with a number of US applications in which obviousness-type double patenting objections have been raised.

If there is anything to this theory, applicants and their advisors in Australia will want to make sure that they are sufficiently familiar with the patent of addition to identify when it might be useful.
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New Zealand Resolves ‘Software Patent’ Impasse

2013-05-09T23:44:00.000+10:00

If you read what has been written in the media today (e.g. in The New Zealand Herald, Forbes, The Register, and ZDNet, to name just a few who have jumped on the bandwagon) you might think that New Zealand has just outlawed ‘software patents.’

If so, then you would probably be, strictly speaking, mistaken. As I shall explain, it is quite likely that a wide variety of computer-implemented inventions will continue to be patentable in New Zealand, assuming the Patents Bill passes in the proposed form. However, it is also true that many of the types of ‘software patents’ which cause the greatest concern to advocates of free and open source software (FOSS) will be excluded under the proposed provisions, just as they are in Europe.

However, it appears that the amendment put forward by aptly-named Commerce Minister Craig Foss in a new Supplementary Order Paper (SOP) is the result of an extended process of consultation behind the scenes, which has resulted in it receiving broad-based support across the New Zealand IT industry, and political opponents of the previous version of the provision (including Labour MP Clare Curran, who rather hyperbolically refers to the addition of what amounts to a clarification as ‘a humiliating back down’ by the Government).

As I have explained previously, the New Zealand Government had adopted a ‘European-style’ approach to software patents, excluding computer programs from patentability, but ‘only to the extent that a patent or an application relates to a computer program as such’. Those two little words – ‘as such’ – which also appear in the European Patent Convention, and corresponding national laws, were the cause of great consternation among opponents of software patents, such as the New Zealand Open Source Society (NZOSS) accusing Minister Foss of throwing Kiwi software developers ‘under a bus’ (yes, hyperbole does seem to be par for the course over in New Zealand).

But even though the two evil words remain in the latest SOP, NZOSS is now back on speaking terms with Mr Foss, proclaiming itself ‘gratified by the government's willingness to work with the software industry to reach this stage’.

More importantly, the fact that the New Zealand Government has managed to find an acceptable compromise means that the Patents Bill should now be able to proceed through the remainder of its passage into law. I can only agree wholeheartedly with NZOSS that this update to the creaky old Patents Act 1953 is long overdue.
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Australia’s Four Laws of Inventive Step

2013-05-06T01:25:00.000+10:00

As I reported in a recent article, the Australian Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came full effect on Monday, 15 April 2013. Among the many reforms introduced by the Raising the Bar Act was a change to the procedure for assessing inventive step, which raises standards to bring Australia’s laws more into line with major trading partners such as the US and Europe.

Of course, it would be unjust to make the changes retrospective – there could be many patents previously granted, and applications previously filed, which would have been rendered invalid overnight. So the new laws apply only to those applications and patents in which a request for examination is filed on or after 15 April 2013.

My previous article on this topic included some astonishing statistics on the number of new applications filed in the weeks leading up to commencement of the Raising the Bar reforms. I have since heard that in the first two weeks of April, around 16,000 requests for examination were filed. To put this in perspective, in 2012 IP Australia granted a total of 17,724 patents, so those two weeks’ of requests alone added the better part of a year’s worth of examination work to the pipeline.

If you have only a casual interest in Australian patent law, or you have not been following the subject for very long, you might think that there are now two different standards of inventive step to keep in mind when considering the validity of Australian patents and applications. However, you would be wrong. In fact, right now there are live Australian applications and patents variously subject to no fewer than four different standards of inventive step.
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IP Australia Delivers Mixed Report Card on Australian IP

2013-05-05T17:19:00.000+10:00

Last month IP Australia launched the Australian Intellectual Property Report 2013.

This report contains an attractively-packaged compilation of data and information about the IP system in Australia, and how the country measures up internationally.

While the report includes information on patents, registered designs, trade marks and plant breeder’s rights, naturally my primary interest is in the statistics on Australia’s performance in relation to patents and technology innovation.

And what IP Australia’s report has to tell us about this is not exactly discouraging, but will hardly set the world on fire. ‘Revelations’ in the report include:

Australians are filing more patent applications than ever before, both locally and overseas;
however, increasing patenting activity is not leading to any significant change in Australia’s ‘IP balance of trade’;
foreign nationals file the vast majority of Australian standard patent applications, and receive most of the patents granted here; and
it appears that the big challenge for Australian companies lies in capturing and extracting value from intangible assets, currently languishing at only 4% of tangible asset value (compared with 91% in the US).

IP Australia promises that this will be the first in an ongoing series of reports and updates, and it is well worth a read..
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“Worthwhile to Try” is Not Obvious Enough in Australia

2013-04-29T01:08:00.000+10:00

Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2) [2013] FCA 279 (4 April 2013)

The Federal Court has again confirmed that, contrary to the impression you might obtain from reading IP Australia’s Patent Examiners Manual, ‘obvious’ or ‘worthwhile’ to try does not form part of the test for inventive step under Australian patent law.

I wrote recently about another aspect of the judgment in Bayer v Generic Health, namely the alleged inconsistency of the testimony of an expert who also provided evidence in a dispute more than a decade ago, between generic manufacturer Alphapharm Pty Ltd and originating pharmaceutical manufacturer Aktiebolaget Hässle. Coincidentally, the High Court’s decision in Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 is also the source of the current Australian law in relation to ‘obvious’ or ‘worthwhile’ to try (at paragraphs [66]-[76]).

IP Australia changed its ‘practice’ in relation to this aspect of examination of patent applications back in August 2010. At the time, I questioned this change, noting that ‘the High Court majority drew a distinction between “matters of routine” (discussed at paragraphs [50]-[53]) and “obvious or worthwhile to try” (discussed at paragraphs [66]-[76]). I also observed that the previous guidance for examiners – which adopted a quite different interpretation of the Hässle case – was still available for comparison in the Internet Archive (a.k.a. ‘Wayback Machine’). Unfortunately, this is no longer the case, because IP Australia, in its wisdom, has decided that earlier versions of its practices should not be available, for posterity or any other purpose, and has added all of the relevant subdirectories of its web site to its robots.txt file.

It is timely to revisit this issue now, with the Raising the Bar reforms just having come fully into effect, because as a subsequent Official Notice revealed, the change in examination practice was one of the first steps to be implemented in IP Australia’s reform agenda. Apparently, IP Australia accepted ‘stakeholder feedback’ that ‘“obvious to try with a reasonable expectation of success” … has support in the High Court decision in Aktiebolaget Hässle v Alphapharm Pty Ltd’.
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EFF Off the Mark With Latest ‘Abuse’ Allegations

2013-04-25T23:01:00.001+10:00

The Electronic Frontier Foundation’s (EFF) Daniel Nazer and Julie Samuels have a tragic tale to tell, which they hope will stir the souls of the online community to action.

In a nutshell, the narrative goes something like this…

Once upon a time, a few innovative, dedicated entrepreneurs started a Little Red Riding Company called Ditto Technologies, Inc, based on the great idea of letting people try on eyeglasses in a virtual environment by using webcam images to build a 3D model of their heads and faces. Within two years, their hard work in building an appealing product was starting to pay off. Ditto had received funding to build its business, employ new staff, and continue to improve its product.

But then along came a Big Bad Wolf Company, called 1-800 CONTACTS. Although the Wolf was already in the business of selling prescription eyewear (i.e. contact lenses) online, it had no product that competed directly with Ditto. Yet the Wolf had purchased a patent from a ‘defunct company’ which (it alleged) covers Ditto’s virtual try-on service, and was now suing California-based Ditto in the distant Land of Utah.

The cost of litigation (and the possibility of losing) threatens Ditto’s very existence, unless an army of diligent Woodcutters can be rallied to find prior art capable of invalidating the Wolf’s patents!

Poor little Ditto. But is it possible that there is another side of the story? One in which the Big Bad Wolf is just misunderstood, and the Little Red Riding Company might be, to some extent, a victim of its own (and its investors’) mistakes?
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The Perils of ‘Professional’ Experts

2013-04-21T18:42:00.001+10:00

Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2) [2013] FCA 279 (4 April 2013)

Dr James Rowe has had over 30 years’ experience in the pharmaceutical industry. He obtained a Bachelor of Pharmacy degree in 1966, a Masters of Science in 1976, and a PhD in Pharmaceutics in 1980. He is also somewhat familiar with the inside of a courtroom. In 1998 and 1999 he gave evidence on behalf of generic manufacturer Alphapharm Pty Ltd, in a dispute with originating pharmaceutical manufacturer Aktiebolaget Hässle (a member of the Astra group, now AstraZeneca) over a patent covering the compound omeprazole, better known as heartburn drug Prilosec (or, in some markets, Losec).

The omeprazole case went on to become a leading authority on the law of inventive step in Australia, after it was successfully appealed by Astra to the High Court of Australia (Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59).

This year Dr Rowe has again appeared in court on behalf of generic manufacturers – Generic Health Pty Ltd and Lupin Australia Pty Ltd – where it seems his past has come back to haunt him. In the decision in Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd (No 2), issued earlier this month, Justice Jagot concluded that Dr Rowe’s evidence was inconsistent with the evidence he had given in his 1998 affidavits in the omeprazole case, and that this tended ‘to undermine the weight which would otherwise be given to [his] evidence’.

There is a lesson in this for all litigants when selecting expert witnesses. It is natural that the opinions of a skilled professional might change over time, not least because new knowledge and experience may bring to light information that was not previously available. However, in this case the priority date of the Bayer patent was 31 August 1999, i.e. the critical date for assessing the claimed invention was contemporary with the time at which Dr Rowe gave evidence in the omeprazole case. And even though the omeprazole patent had a priority date in 1986, it seems to me that it should have been reasonably foreseeable that Dr Rowe’s earlier evidence would be used against him.
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Research Affiliates Will Have Its Day Before the Full Court

2013-04-20T18:44:00.001+10:00

Last month, I reported on the application by Research Affiliates, LLC (‘RA’) for leave to appeal the decision of the Federal Court of Australia upholding the Patent Office’s rejection of its patent application directed to the computer-aided construction and use of passive portfolios and indexes for securities trading.

On 12 March 2013, RA appeared before Justice Flick to argue its case for the appeal to be heard by a Full Bench (three judges) of the Federal Court. A decision was handed down on 12 April 2013 (Research Affiliates LLC v Commissioner of Patents [2013] FCA 329), according to which RA has been granted the opportunity to appear before the Full Court. And while it has not yet actually been decided that the court will hear the appeal, that now appears to be the most likely outcome.

Justice Flick could have heard RA’s full arguments in favour of allowing it to appeal the initial decision, and then made orders that the appeal should either proceed, or be denied. In the event, however, RA’s application for leave to appeal has yet to be decided. That question has itself been passed to a Full Bench of the Federal Court, which will have the option of hearing the application for leave either separately from, or concurrently with, the substantive arguments on appeal.

Keen followers of Australian patent litigation may recall that this same approach was taken in the case of Samsung’s application for leave to appeal the decision of Justice Bennett awarding Apple a preliminary injunction blocking sale of the Galaxy Tab 10.1 in Australia. On that occasion, the court elected to hear the application for leave, and the substantive case, concurrently, resulting in a judgment which both granted leave and overturned the original decision.
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‘Raising the Bar’ Raises Patent Filings

2013-04-19T10:41:00.002+10:00

As many readers will be aware, the Australian Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came full effect on Monday, 15 April 2013. A concise summary of the reforms, and a number of ‘fact sheets’, are available from the IP Australia web site.

As I wrote back in March last year, among other reforms, the new laws substantively raise patentability standards. Significant changes include:

enhanced disclosure requirements in the patent specification;
enhanced disclosure requirements in a priority document in order to obtain the benefit of an earlier filing;
replacement of the old ‘fair basis’ standard with a European-style ‘support’ standard;
a new ‘utility’ standard;
removal of the geographical limitation on the ‘common general knowledge’ forming the background for inventive step and innovative step assessment; and
removal of the requirement that prior art documents be ‘ascertained, understood and regarded as relevant’ by a person skilled in the art before they can be considered in an inventive step assessment.

All of this means that some claims which would have been patentable prior to 15 April 2013 might no longer be patentable under the new laws.

Under the savings and transitional provisions of the Raising the Bar Act, the former law continues to apply to any application and patent:

which was filed prior to 15 April 2013; and
for which a request for examination was made prior to 15 April 2013.

I predicted back in November last year that these transitional provisions would have a significant effect on applicant behaviour. It is now possible to gain some insight into just how great that effect has been. And it is pretty huge!
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Pharma Patents Review Proposes Reduced Term Extensions

2013-04-14T12:55:00.002+10:00

On 2 April 2013, the Australian Government’s Pharmaceutical Patents Review published its draft report. I last wrote about the review when the panel released its Issues Paper last November. The draft report is some 250 pages long, including appendices, and I do not intend to attempt a full review here! Interested parties are encouraged to read the complete draft, bearing in mind that the period for providing written responses is extremely short, expiring on 30 April 2013.

The draft report includes 15 draft findings, many of which (if implemented) would not result in substantive changes to the provisions of Australian patent law. For example, there are recommendations as to how the Government should conduct itself in future international trade negotiations, for future reviews of the performance of the patent system to be undertaken, and for changes in the way the regulatory approval process, the Australian Register of Therapeutic Goods and the Pharmaceutical Benefits Scheme are managed and documented.

Here, I wish to focus on just one area of the draft report, namely its two alternative proposals for a reduction in the extension of term available to pharmaceutical patents as compensation for the effective loss of benefit due to delays in obtaining regulatory approval. It appears to me that, perhaps as a result of the very short timeframes provided to the review panel, these proposals have not been adequately thought-through.

Arguments for a reduced extension of term are bolstered by a dizzying array of tables, calculations and charts, which in my view serve only to obscure the basic policy question underlying the provision of an extension of term on pharmaceutical patents – for how long, in any given case, is Australia prepared to pay a premium for a patented drug before the introduction of generic competition? Currently, the answer to that question is ‘for up to 15 years’. Reducing this period would obviously save money – which is the primary argument presented in the draft report.

However, it is a basic fact of modern life that we must pay for the things we want, and that (by and large) we get what we pay for. Yet there is a notable absence in the draft report of any evidence that a shorter term would provide a better ‘balance’ between the interests of the originating drug companies and those of the Australian community.
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Australian Training for Overseas Patent Examiners

2013-04-11T09:47:00.001+10:00

If you are an Australian taxpayer reading this article, you can give yourself a pat on the back and feel a warm glow of satisfaction – your tax dollars are helping to enhance the skills of patent examiners in Indonesia, Malaysia, Philippines, Kenya and the African Regional Intellectual Property Office (ARIPO)!

On Monday, 8 April 2013, IP Australia announced the launch of its Regional Patent Examination Training program (RPET). The program is conducted largely online, via an e-learning platform developed by IP Australia, and involves one-on-one training and support for overseas examiners, provided by experienced Australian examiners.

The IP Australia announcement indicates that RPET is a ‘significant activity’ of the ASEAN-Australia-New Zealand Free Trade Agreement Economic Cooperation Work Program (AANZFTA ECWP). Australian Government funding for this program is provided via AusAID.

‘Upon completion of the program,’ says IP Australia, the participating overseas examiners ‘will be able to consistently examine to the standards expected of their Australian counterparts.’
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Take THAT, New Zealand Patent Attorneys!

2013-04-08T00:08:00.000+10:00

Last week, IP Australia announced that ‘in March 2013 Australia and New Zealand signed a bilateral arrangement for the trans-Tasman regime of patent attorneys.’

Perhaps I have just not been paying enough attention, but this announcement took me completely by surprise. Of course, I was aware that there has been an ongoing project for some time to create a closer ‘Single Economic Market’ (SEM) across Australia and New Zealand, and I have written in the past about some of the proposals pertaining to the two countries’ IP systems, such as the implementation of a single integrated application and examination process, and a unified regulatory regime for patent and trade marks attorneys.

However, I was not aware of any specific progress on the patent attorney regulatory regime. Until this announcement, the most recent update on progress in the SEM initiatives was back in January, when IP Australia indicated that further development of the single application/examination process was dependent upon passage of the NZ Patents Bill 2008, in order to ‘more closely align the patents laws of New Zealand and Australia.’

What I found surprising was not merely that an agreement [PDF, 92 kB] has been drafted and signed by the Australian and New Zealand governments, but that New Zealand has completely capitulated to the Australian regulatory regime, in the form it will take following commencement of the Raising the Bar reforms on 15 April 2013. This is despite the fact that New Zealand practitioners responded to a discussion paper on the proposal back in 2011 with almost universal (and quite understandable) opposition to the idea of a common regulatory regime based on the Australian system.

New Zealand patent attorney Matt Adams has written on his PatentBuff blog, with some justification, that this move could result in further contraction of the (already small) cohort of registered patent attorneys in New Zealand.
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The Growth Profession of ‘IP Economist’

2013-03-31T12:22:00.000+11:00

The Managing IP blog reported this week on comments made by Professor Sir Robin Jacob in his speech inaugurating the Sir Hugh Laddies Chair in IP Law at University College London. In particular, Managing IP blogger James Nurton took Sir Robin to task for his criticisms of the increasing role being played by economists in IP policy.

I recently had the privilege of hearing Sir Robin speak at the University of Melbourne, on the topic of 'Patents – is Europe making a mess of things?' In that talk, he also touched on what he sees as the inappropriate, unnecessary and potentially damaging influence of economists over IP policy in various jurisdictions.

I have to say that I am inclined to similar views. We are seeing a corresponding rise of economists to positions of influence within the Australian IP system.
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High Court Declines (Again) to Weigh In on Innovative Step

2013-03-27T20:27:00.001+11:00

The High Court of Australia has turned down an opportunity to review the standard of ‘innovative step’ under the Patents Act 1990, effectively confirming once again that the Full Bench of the Federal Court in Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd [2009] FCAFC 81 correctly decided the matter back in 2009.

This latest opportunity arose in relation to a dispute over mining processes, between SNF (Australia) Pty Ltd (‘SNF’) and Ciba Specialty Chemicals Water Treatments Limited (‘Ciba’). Ciba is the owner of a number of innovation patents covering methods for processing waste products from mining, i.e. the so-called 'tailings', which generally comprise a slurry of particles (clay, sand, dirt, etc) suspended in water. Ciba accused SNF of infringing its patents, and SNF in fact conceded that it had been using a process which fell within the scope of Ciba's claims, and thus would be liable for infringement, if the claims were valid.

Naturally, SNF contended that Ciba's patents claims were invalid for (among other grounds) lack of novelty, and lack.of innovative step.

I wrote about another aspect of the original decision in this case (the application of the indirect infringement provisions in section 117 of the Patents Act) back in July 2011. The issues of novelty and innovative step, which appeared to have been decided in accordance with the established legal principles, did not seem very interesting at the time.

The Story In Brief

The primary judge found in favour of Ciba, i.e. that its claims were novel, and involved an innovative step. SNF appealed this ruling to a Full Bench of the Federal Court, which handed down its decision upholding the original judgment in June last year (SNF (Australia) Pty Ltd v Ciba Specialty Chemicals Water Treatments Limited [2012] FCAFC 95). I did not report on that largely unremarkable decision at the time, however it has taken on new interest in view of the fact that SNF sought Special Leave to appeal to the High Court of Australia.

The Special Leave application was heard – and denied – on 15 March 2013. SNF presented the High Court panel (comprising Chief Justice French and Justice Gageler) with an interesting proposition in relation to innovative step. Specifically, counsel for SNF contended that if a point of difference between a claim of an innovation patent and the prior art could, in at least some circumstances, have a negative or disadvantageous effect, then this should mean that the claimed feature makes 'no substantial contribution to the working of the invention', and thus does not comprise an innovative step.

The High Court was profoundly uninterested in taking up this point. Nor did it consider the other ground of appeal raised by SNF – regarding interpretation of the term ‘improved rigidification’ – to involve any legal principle worthy of its attention. Indeed, the Court did not even need to hear from counsel for Ciba before refusing the application for Special Leave, with costs awarded against SNF.
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Patents Not to Blame for High Cost of Drugs in Australia

2013-03-21T00:51:00.001+11:00

An article in the Fairfax media this week contends that ‘Australia is wasting more than a billion dollars a year by paying up to 64 times too much for some prescription drugs’.

The claim derives from a report (wittily entitled Australia’s Bad Drug Deal) prepared by Stephen Duckett, former secretary of the Australian Commonwealth Health Department, for the non-aligned think tank The Grattan Institute.

Casual readers skimming over this news might well be inclined to assume that the usual suspects are to blame for high drug prices, i.e. ‘big pharma’, and its pushing of patented ‘blockbuster’ drugs. However, the report makes for very interesting reading, and tells a very different story.

In reality, according to Duckett, patents pay only a minimal role in the excessive prices being paid, in comparative terms, by the Australian people, mostly by way of the government support provided by the federal government under the Pharmaceutical Benefits Scheme (PBS). Most of the A$1.3 billion annual savings identified in the report would be made on generics, not patented original drugs.

The real culprits, according to Duckett, are the government itself – for failing to compel more substantial price reductions when drugs go off-patent – and retail pharmacies – for cosy arrangements with both the government and the generic suppliers, which net the industry A$105 million per year in government subsidies, along with an unknown amount resulting from manufacturer discounts. Duckett describes these discounts, which put money directly into the pockets of pharmacists, as ‘windfall income [that] was not intended when PBS prices were agreed.’ A more recent price disclosure policy has gone some way towards reining in excess profits resulting from discounts, although there appears to be evidence that pharmacists and suppliers are finding creative ways around this policy.
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How PatentlyApple Harms Patents – Including Apple’s

2013-03-16T19:13:00.001+11:00

Up until now I have had an informal, unwritten policy of not critiquing other blogs. After all, I know as well as anyone just how much hard work goes into maintaining a blog, coming up with ideas for articles, and finding the time and energy to actually write them. Anybody who does that deserves a certain degree of respect, even if I happen to disagree with everything they say! After all, everyone is entitled to their opinion.

However, there are opinions, and then there are facts. And when a widely read blog consistently posts false or misleading information, there is absolutely no good reason not to call them on it. This is particularly true when that misinformation has the potential to influence views in a matter of significant public interest, such as the debate over the merits (or otherwise) of patents for computer-implemented inventions (please note that I am deliberately avoiding the meaningless term ‘software patents’).

One blog with which I have a huge problem in this regard is PatentlyApple. For those unfamiliar with the blog, it is an overtly partisan celebration of all things (allegedly and actually) innovative at Apple, Inc. Occasionally, this involves spiteful attacks on all things (allegedly and actually) imitative at Apple’s competitors, such as Samsung and Microsoft. However, it is not these matters of opinion or rhetoric with which I have a problem.

My big issue with PatentlyApple is the way in which it consistently misconstrues and misrepresents the content and scope of the patents and applications – of Apple and others – which it purports to explain. The reason for this is simple – PatentlyApple is not written by a patent attorney. The fact is that it takes many years of training and experience to interpret a patent specification, and particularly the claims, which are ultimately determinative when it comes to assessing what the patent covers. And having typically spent a number of illustrated paragraphs purportedly explaining to a large audience what a patent application is all about, PatentlyApple’s disclaimer that it is necessary to read the ‘full text’ of the document to obtain complete details just does not cut it!

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Innovation Patent Claims Found Invalid in Dynamite Decision

2013-03-13T19:58:00.001+11:00

Dynamite Games Pty Limited v Aruze Gaming Australia Pty Limited [2013] FCA 163 (4 March 2013)

Australia’s innovation patent is widely considered to have an unreasonably low threshold of validity – so much so, in fact, that last year IP Australia put forward a proposal to eliminate the ‘innovative step’ standard entirely, and require that innovation patent claims meet the same test for ‘inventive step’ as a standard patent. You could therefore be forgiven for thinking that pigs might sprout wings and take to the air before an innovation patent would be found invalid on grounds of lack of innovative step.

Yet – until and unless there is a successful appeal – you may need to keep your eyes peeled for porcine aviators, because a judge in the Federal Court of Australia has done just that, striking down all asserted claims of an innovation patent held by Dynamite Games Pty Ltd (‘Dynamite’) for failing to meet the innovative step threshold. Dynamite had sued Aruze Gaming Australia Pty Ltd (‘Aruze’) for infringement of various claims of a standard patent relating to gaming machines, along with a number of claims of a related innovation patent.

Aruze, in turn, sought revocation of the patents on numerous grounds available under the Patents Act 1990 – that none of the claims is for a manner of manufacture; that the claimed invention is not novel; that the claimed invention does not involve an inventive step or an innovative step; that the claims are not clear and succinct; and that the claims are not fairly based on the matter described in the body of the respective specifications.

The decision is interesting for a number of reasons, starting with the fact that it is a judgment of Justice Emmett, the same Federal Court judge who recently found the ‘business method’ claims of a patent application filed by Research Affiliates, Inc, to be invalid on the basis that they were not patent-eligible under the ‘manner of manufacture’ test. Justice Emmett considered all of the asserted grounds of invalidity of Dynamite’s patent claims, but declined to formally rule on any of the others after first finding the standard patent claims to be obvious, and the innovation patent claims to lack an innovative step. However, he did indicate that, had he needed to do so, he would have been inclined also to rule against Dynamite on the grounds of lack of novelty and lack of ‘manner of manufacture’. In doing so, he reprised some of the themes of his Research Affiliates decision.

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Yvonne D’Arcy Appeals Decision Upholding Patenting of Genes

2013-03-07T01:34:00.001+11:00

On 4 March 2013 the law firm of Maurice Blackburn filed an appeal to a Full Bench of the Federal Court of Australia, on behalf of cancer survivor Yvonne D’Arcy, challenging the 15 February ruling of Justice Nicholas, in which the court confirmed the patent-eligibility of isolated gene sequences.

The original challenge was launched by Ms D’Arcy, along with Cancer Voices Australia Pty Ltd, asking the Federal Court to revoke claims 1 to 3 of Australian Patent no. 686004, each of which is directed to ‘an isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide…’. Mutations in the BRCA1 gene are correlated with increased breast cancer risk, and can therefore be used as a basis for early detection of a predisposition towards development of cancer.

Other claims of the patent, directed to related subject matter such as ‘probes’, ‘cloning vectors’, ‘expression vectors’, ‘transformed host cells’, along with methods of testing and diagnosis, have never been challenged in these proceedings.

The recent decision of the court was therefore directed to a very narrow single issue: whether isolated genes are inherently eligible for patent protection (assuming that they meet all of the other requirements, such as novelty, inventive step, utility and so forth). Justice Nicholas essentially ruled that since an isolated gene, removed from its natural environment with a cell, and separated from the remainder of a DNA molecule, can only occur as a result of human intervention, it constitutes an ‘artificial state of affairs’ which is eligible, in principle, for patent protection.

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Inventiveness – It’s Just Not Obvious!

2013-03-04T00:32:00.001+11:00

I am going to go out on a limb, and suggest that the Holy Grail of patent law is an objective standard of nonobviousness. Despite everybody having an opinion about how much ‘inventiveness’ should be required to justify the grant of a patent monopoly, there has never been a universally-accepted standard against which this can be assessed, and I suspect that there never will be.

I think it is worth having another look at this issue now, with new Australian legislation set to ‘raise the bar’ on inventive step (among other requirements) from 15 April 2013. How successful will this latest effort be in striking the right balance of ingenuity against the reward of a patent? I confess to being somewhat sceptical, based on the history of inventive step in the Anglo-Australian tradition, especially when other countries seem to be faring little better with their own approaches.

Arguably, the most disastrous attempt to introduce objectivity into inventiveness has occurred in Australia. The Patents Act 1990 set out a formula for the assessment of inventive step that was so inflexible it proved possible, metaphorically speaking, to crawl under the bar, leading to what was possibly the worst ever patent judgment by the High Court of Australia, Philips v Mirabella [1995] HCA 15.

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Research Affiliates Appeals ‘Business Method’ Loss

2013-03-02T18:44:00.002+11:00

On 27 February 2013, Research Affiliates, LLC (‘RA’) filed an application for leave to appeal the decision of a single judge in the Federal Court of Australia, which upheld the Patent Office’s rejection of a patent application directed to the construction and use of passive portfolios and indexes for securities trading.

As I explained in my report of the recent decision, I believe that there are a number of questionable aspects of the court’s reasoning which leave the law regarding the patentability of computer-implemented business processes in an unsatisfactory state of uncertainty. I am therefore very pleased to see that RA is seeking to take this issue to the next stage, and I am hopeful that the Full Court will agree to hear the appeal.

In many disputes that come before the Federal Court, there is an automatic right of appeal to a Full Bench (three judges) of the court. However, this is not the case where the initial decision is itself the result of an appeal from a decision of the Commissioner of Patents. Subsection 158(2) of the Patents Act 1990 states that:

Except with the leave of the Federal Court, an appeal does not lie to the Full Court of the Federal Court against a judgment or order of a single judge of the Federal Court in the exercise of its jurisdiction to hear and determine appeals from decisions or directions of the Commissioner.

Attorneys Slam Australian Pharmaceutical Patents Review

2013-02-24T23:31:00.001+11:00

In a submission to the Governments Pharmaceutical Patents Review [PDF], the peak body representing Australian registered patent attorneys, the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) has accused the Terms of Reference for the review, and the composition of the review panel, of being biased towards the interests of generic drug manufacturers. IPTA has also criticised the timing of the review and the short period provided for public submissions, and alleged that the overall conduct of the review sends a ‘negative message to the research-based pharmaceutical industry’.

IPTA’s complaints have been fully supported by a submission [PDF] made on behalf of the Australian Federation of Intellectual Property Attorneys (FICPI Australia).

I have written about this latest review of the patent system on two previous occasions – firstly when it was initially announced, and then again when the ‘Background and Suggested Issues Paper’ was released. I expressed similar concerns to those of IPTA regarding the limited two-month period for public submissions, particularly considering that this spanned Christmas and the New Year, when many Australians take annual holidays and some companies – and all Australian universities – have official ‘close-down’ periods.

I was also concerned about the impact of yet another review, when it seems that the Australian patent system has been under incessant review and reform for a number of years, and particularly considering that the broad Terms of Reference for the Pharmaceutical Patents Review overlap with other recent and ongoing enquiries relating to patentable subject matter, the use of innovation patents, gene patenting, and compulsory licensing. One might form the impression that somebody is determined to keep reviewing the system from different angles until they eventually get the answers they want, whatever those might be!
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4 Tips for the Coming Australian Patent Law Reforms

2013-02-23T18:19:00.000+11:00

Regular readers of this blog will be aware that it was almost a year ago now that the Intellectual Property Amendment (Raising the Bar) Act 2012 was signed into law. All Patentology articles relating to the patent law reforms in the Act are marked with the tag ‘Raising the bar’.

The majority of changes in the law – which will generally raise standards so that patents will be harder to obtain and defend than is currently the case – come into effect on Monday, 15 April 2013. As a result, Friday, 12 April 2013 will be the final day on which to act if you have an application which you wish to be examined and granted under the existing law.

Here, therefore, are four things you may wish to consider in the final weeks leading up to the big changes.
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Myriad Revisited – Morality and the Patent Law

2013-02-20T01:13:00.001+11:00

Last week’s decision by Justice Nicholas, in the Federal Court of Australia, regarding a patent covering the BRCA1 ‘breast cancer gene’, raises important questions about our patent laws, but has been much misunderstood, and misreported in the media.

Even sources which one might expect to provide a more informed and balanced view of the case, such as this article at The Conversation, have contributed to the general level of confusion and misinformation. For example, the article quotes Cancer Council CEO, Professor Ian Olver, stating that ‘[d]iscovering and isolating genetic materials is not inventive, yet the current law gives licence to biotechnology companies to claim ownership of naturally occurring substances.’ However, the court was not asked to address the question of whether the processes of discovery and isolation were inventive.

Professor Dianne Nicol of the University of Tasmania is quoted as saying that Justice Nicholas ‘has given a broad reading of the “invention” requirement in Australian law (referred to as manner of manufacture).’ While the Professor’s desire to simplify the legal language of the Patents Act 1990 is understandable, this statement does little to help clarify what the case was actually about – which was not ‘invention’, in the everyday sense of the word, but more correctly the appropriateness of isolated genes as subject matter for a potential invention, independently of any assessment of inventiveness.

Had the case been about the wheel, rather than an isolated gene, the question for the court would not have been whether a particular wheel, or even wheels in general, are patentably new and inventive. Rather, the question would have been whether, as a general proposition, a wheel is the kind of thing for which a patent might be granted if it is also shown to be new and inventive. And it is no answer to this analogy to say that genes are different in that they are naturally occurring, while wheels are not. The end result of isolating a gene is no more ‘natural’ than the end result of cutting away all of the wood from a tree that is ‘not wheel’ in order to leave behind a wooden wheel! Both processes result in a product that simply does not arise in the absence of human intervention, skill and effort.
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Patents, Invention, Employment and Slavery

2013-02-17T20:18:00.002+11:00

Do you know who ‘owns’ your inventions?

I read a fascinating story last week, entitled ‘How the Patent Office Helped to End Slavery’. It has all the elements a good story needs – celebrity (Jefferson Davis, the future Confederate president), adversity (the denial of the rights of a slave, Benjamin Montgomery), conflict (the Union versus the Confederate patent offices), and the triumph of good over evil (emancipation, and victory of the Union patent laws).

In a nutshell, the question arose as to who ‘owned’ inventions made by slaves, and was thus entitled to ownership of any resulting patent. It will come as no surprise to learn that slave-owners, such as Jefferson Davis’ brother Joseph, considered that they were entitled to the fruits of the ingenuity of their human chattels.

However, the US Commissioner of Patents, Joseph Holt, disagreed. In 1857 he ruled, essentially, that since slaves had no legal rights, they could not possess rights as inventors, and therefore they had no recognisable intellectual property that could be transferred to their owners. Since neither Jefferson nor Joseph Davis was the first and true inventor of the improved riverboat propeller invented by Joseph’s slave Benjamin Montgomery, and nor could they be the legitimate assignees of any purported ‘rights’ to the invention (since no such rights ever existed), the USPTO simply refused to grant patents to either one of the brothers, or indeed to any other slaveholders who sought to claim ownership of inventions devised by their slaves.

Although the Confederate enacted its own patent law which secured ownership by slaveholders of inventions developed by their slaves, it appears that no such patents were ever granted (and if they had been granted, they would not have been in force for very long).

While ownership of inventions by slave owners is no longer an issue in developed nations, the right of one party to claim ownership of an invention made by another, remains very much a live issue. We are fortunate that, nowadays, all free women and men are entitled, the the first instance, to ownership of the products of their own ingenuity, should they choose to capitalise on that right. However, it remains the case that many inventions for which patent rights are sought are made by employees in the course of employment, and are claimed as the property of their employers.
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