IP Australia Patent Searching Update

Change to operation of Patsearch

From 22 November 2008 the data in Patsearch, IP Australia’s legacy patent search system, will be updated weekly with new data available each Monday. Previously this data was refreshed daily.

IP Australia introduced AusPat, the new search system for Australian patents, on 28 April, 2008. At that time users were advised to discontinue using Patsearch and to conduct their searches in AusPat.

Patsearch is expected to be decommissioned by the end of February 2009. The first step in that process is a move to a weekly refresh cycle of the data contained in Patsearch.

AusPat may be accessed online at this location: http://www.ipaustralia.gov.au/auspat

The IP Marketplace and Patent Reform – Implications for Patentees, VCs and the Economy.

With patent reform continuing to be debated in the US and Australia as covered in previous posts, there would seem a heightened emphasis on creating a system that can create a market place for innovation and, importantly, investment. Australia’s National Innovation System Report (venturousaustralia) is a good example. Recently, the following 4 points were identified by the US Federal Trade Commission calling for submissions on the “Evolving Intellectual Property Marketplace” with respect to patent reform in the United States:

“6. How will changes in patent law rendered by Supreme Court and Federal Circuit decisions of the past five years affect the value of patents? How will these changes affect the operation of the IP marketplace? How will they affect innovation and competition?
7. How does uncertainty regarding the validity and scope of patents affect the operation of the IP marketplace? Does the current system adequately fulfill the notice function of patents? How does uncertainty influence the operation of the IP marketplace? What are the sources of uncertainty that affect the value of patents and the operation of the IP marketplace? What could be done to address them?
8. How transparent is the current IP marketplace? Can it be made more transparent? Is that desirable?
9. During the past five years, what new learning has furthered the understanding of the patent system and the IP marketplace?”

On first blush, the questions suggest that the IP market is one that the US is looking to as a means of stimulating not only innovation, but financial markets through heighted valuation of patents. Placing a more concrete value on patents provides, in theory, a more solid vehicle for investment and securitization. Venture capitalists for instance could possibly make more informed decisions when a start-up knocks on the door with a patent in hand seeking funds. With the total asset value of patents worldwide estimated be in excess of one trillion dollars there would seem much room for growth and much needed research. The following article by David Edwards is a good starting point: Patent Backed Securitization.

Accordingly, in light of the recent questions created by the sub-prime crisis, there is a need for investment in other assets. Patents and the IP marketplace may well be the answer. As I suggested in a previous VC-IP post, intangible property could provide a substitute to traditional bricks and mortar that have been typically relied upon as a secure asset. Time will tell…

In the meanwhile, patent owners should see the current reform debates as an opportunity, rather than a drawback on the existing system.

Novelty – Direction, Recommendation, or Suggestion

Kinabalu Investments Pty Ltd v Barron & Rawson Pty Ltd [2008] FCAFC 178 http://www.austlii.edu.au/au/cases/cth/FCAFC/2008/178.html

The Full Court recently endorsed the requirement that a novelty defeating document must have a “direction, recommendation or suggestion” to clearly show the skilled addressee that the document anticipates an invention. The relevant passages of law in the judgment are at pars [25]-[27]:

“25 In Hill v Evans (1862) 4 De GF & J 288 at 300; 45 ER 1195 at 1199 (Hill v Evans) Lord Westbury LC said:

The question then is, what must be the nature of the antecedent statement? I apprehend that the principle is correctly thus expressed:- the antecedent statement must be such that a person of ordinary knowledge of the subject would at once perceive, understand, and be able practically to apply the discovery without the necessity of making further experiments and gaining further information before the invention can be made useful. If something remains to be ascertained which is necessary for the useful application of the discovery, that affords sufficient room for another valid patent.

26 In Flour Oxidizing Co Ltd v Carr & Co Ltd (1908) 25 RPC 428 at 457 Parker J said:

But where the question is solely a question of prior publication, it is not, in my opinion, enough to prove that an apparatus described in an earlier Specification could have been used to produce this or that result. It must also be shown that the Specification contains clear and unmistakable directions so to use it.

27 In Bristol-Myers Squibb Co v FH Faulding & Co Ltd (2000) 97 FCR 524 (Bristol-Myers) at 548, Black CJ and Lehane J, after referring to Hill v Evans and Flour Oxidizing (amongst other cases), said:

What all those authorities contemplate, in our view, is that a prior publication, if it is to destroy novelty, must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it.

See also Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 68 IPR 1 at [313]-[314] per French and Lindgren JJ.”

BILSKI’S RELEVANCE TO AUSTRALIA – ACIP REVIEW (Part II)

In light of Bilski, it will be interesting to see whether it shapes the Australian debate with respect to manner of manufacture – particularly the overlapping nature of the grounds of invalidity regarding inventive step and inventiveness. This conundrum is notably stated on page 36 of ACIP Issues Paper titled, Patentable Subject Matter (2008):

“From Lockwood v Doric it is not clear whether the threshold test articulated in Philips v Mirabella still stands. Some commentators have said that the decision has appropriately made it more difficult to revoke a patent on the grounds of non-inventiveness. The Philips v Mirabella decision meant there was effectively two tests for both novelty and inventiveness - one based only on the information in the specification and the other based on what is known from the prior art. Some argued that the threshold test was necessary because the tests based on the prior art are too narrow and difficult to sustain, and so do not eliminate all undeserving patents. The main argument against the test is that combining novelty and inventive step with the manner of manufacture test unnecessarily complicates understanding and administration of patent law. Also, it was in an applicant’s interest to disclose less about the prior art in their specification in order to reduce the likelihood of this information being used against them.”

The problem with the legislative history of Australian patent law is that is caught between the Patents Act 1952 and the Patents Act 1990 that incorporated definitions from the earlier act, whilst at the same time redefining the grounds of invalidity in s 18. For detailed discussion on the manner of manufacture test, do review the Issues Paper as it provides an excellent historical perspective of the relevant law. See:http://www.acip.gov.au/library/Patentable%20Subject%20Matter%20Issues%20Paper.pdf and a previous blog at http://www.iproo.net/2008/06/acip-review-of-patentable-subject.html

While legislative reform is touted with respect to the test for manner of manufacture, the problem outlined above (post-Doric), in the Issues Paper, will perhaps be best reconciled when the legislature addresses the nuances of prior art and common general knowledge. Such nuances, which I will address in future posts, simply do not exist in US law. This may be one reason why the Bilski decision was so clear in its reasoning as it was not hindered by tests examining ‘admissions on the face of the specification’, Gerber rebuttals and the issue of disclaimers. The following article written (albeit pre-Doric) may provide further insights: Admissions on the Face of the Specification - Practical Implications for Patent Drafting and Litigation, Intellectual Property Forum (March 2007).

Bilski and (Un)Patentable Inventions: Hedging the Bets (Part I)

In re Bilski: http://www.cafc.uscourts.gov/opinions/07-1130.pdf

Today the United States Court of Appeals for the Federal Circuit handed down the much awaited Bilski decision. The Court held against Bilski's method patent relating to hedging risks in the commodities market. At page 10, the Court said:

“A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”

Interestingly, the Court also noted the important distinction between patentable subject matter and tests relevant to novelty and obviousness. The following is illustrative:

“We discern two other important aspects of the Supreme Court's § 101 jurisprudence. First, the Court has held that whether a claimed process is novel or non-obvious is irrelevant to the § 101 analysis. Diehr, 450 U.S. at 188-91. Rather, such considerations are governed by 35 U.S.C. § 102 (novelty) and § 103 (non-obviousness). Diehr, 450 U.S. at 188-91. Although § 101 refers to "new and useful" processes, it is overall "a general statement of the type of subject matter that is eligible for patent protection 'subject to the conditions and requirements of this title.'" Diehr, 450 U.S. at 189 (quoting § 101). As the legislative history of § 101 indicates, Congress did not intend the "new and useful" language of § 101 to constitute an independent requirement of novelty or non-obviousness distinct from the more specific and detailed requirements of §§ 102 and 103, respectively. Diehr, 450 U.S. at 190-91.15 So here, it is irrelevant to the § 101 analysis whether Applicants' claimed process is novel or non-obvious. Second…”

Author’s Emphasis

The judgment is quite lengthy and whilst completing its review I will consider how it may be relevant to Australian law in upcoming posts, particularly in light of the recent ACIP Issues Paper on Patentable Subject Matter (July 2008) which was covered in a previous post: http://www.iproo.net/2008/06/acip-review-of-patentable-subject.html. In the meanwhile, the 132 pages of judgment should provide some light reading…enjoy!

Valuating IP: Reputation in Trade Marks and Section 60 Evidence?

Nylon Films Pty Ltd v Nylon Studios Pty Limited [2008] ATMO 81 (25 September 2008)
TMO Site last Updated: 23 October 2008
http://www.austlii.edu.au/au/cases/cth/ATMO/2008/81.html

In a recent decision of the Trade Mark Office, Delegate Murray found against an applicant’s trade mark titled, NYLON. The trade mark was found to contravene s 60 of the Act when compared with the common law trade mark, NYLON FILMS. In reasoning the section 60 ground, the Hearing Officer reiterated factors that go to establishing reputation. At pars [21]-[22], the Delegate said:

“The courts have recognised that, for the purposes of section 60, an opponent's reputation can have accrued from a variety of sources. Kenny J in McCormick & Co v Mary McCormick (2001) 51 IPR 102, at page 129, quoted with approval the following discussion, by Hearing Officer Iain Thompson, of how reputation can be developed:

[I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.

As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also the esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the `recognition' component of the trade mark's reputation. The credit, image and values projected by a trade mark attaches to the `esteem' component of the reputation as do the public events and other trader's marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, `contra deals' and so forth.

It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.[5]

In conclusion, I accept Ms Niehus’ claims to a significant reputation within the highly specialized, close-knit industry in which her television commercial production company operates in this country. I also accept her claims to having considerable first-hand experience of the deception and confusion caused to members of that industry by the applicant's use of its trade mark on its sound production services, in the face of that reputation. I find the opponent's ground of opposition under section 60 to be successful.”

In light of recent IP valuation blogs both here and elsewhere(see http://duncanbucknell.com/blog/457/Exploding-the-Intangible-Asset-Market-Cap-myth and http://www.iproo.net/2008/09/australias-national-innovation-review.html), the decision is a timely reminder of how IP can be valued and the type of evidence that is required to succeed under s 60 of the Act. With factors such as commercial success applying in other IP fields, such as patents, it will be interesting to take stock of future trends in how financial data and qualitative brand factors will be used by IP owners in litigation.

Information technology in Federal litigation - a review

From the latest Federal Court Practice News (No. 59), comes the following:

Review of Practice Note No 17 - Guidelines for the Use of Information Technology in Litigation in Any Civil Matter

In 2007 the Federal Court commenced a comprehensive review of Practice Note No 17 with the assistance of a consultant, Ms Jo Sherman.

Following extensive consultations with litigants, legal practitioners and others, a draft Practice Note and related materials were finalised by Ms Sherman and referred to the Court's National Practice Committee in mid 2008.

These draft documents are now being reviewed by the Court in light of recent case management initiatives (including the legislative reforms in this area proposed by the federal Attorney-General) and further comments provided by litigants, legal practitioners and others with an interest in the use of technology in legal proceedings.

It is expected that a number of changes will be made to the documents, and that the final versions will be formally released in early 2009.

In the meantime, any comments or queries concerning the review of the practice note may be provided to:

Mr Philip Kellow
Deputy Registrar
Telephone: 02 9230 8336
Email: Philip.Kellow@fedcourt.gov.au

Mr Philip Kellow
Deputy Registrar