Australia & New Zealand Intellectual Property Law

Commissioner’s Decision not Irrelevant on Appeal

2008-11-21T16:34:00.002+11:00

The Full Court of the Federal Court has overturned the decision of Jessup J in Sherman v Commissioner of Patents [2008] FCA 1026 previously discussed here.

The Full Court was not persuaded that s160(a) of the Patents Act, which provides that on hearing an appeal against a decision of the Commissioner, the Federal Court may admit further evidence orally, or on affidavit or otherwise, resulted in the evidence before the Commissioner was automatically evidence in the appeal.

However, the Court held that:

Evidence as to the decision of the delegate is relevant on two bases. First, the fact that it was made is a fact on which the jurisdiction of the Court depends ... Secondly, the substance of the decision on novelty and inventiveness (considered as a statement of the delegate’s opinion) is a matter that the Court may take into account: see [21] above. This is because the delegate (in contrast to the Court) is credited with having some technical expertise.

Further, as evidence of the Commissioner’s decision is both relevant and admissible, so too is the material upon which that decision was based, including prior art and witness declarations filed during the opposition, because “in order to understand the delegate’s decision, it is necessary to have regard to the material that the delegate thought pertinent to his decision”.

This decision reopens the prospect of the Commissioner playing an important public interest role in proceedings where the opponent decides not to contest an appeal.

Film industry launches legal action against ISP over copyright infringements

2008-11-20T15:29:00.002+11:00

Several film companies and licensees today initiated proceedings in the Federal Court against iiNet, a major Australian Internet service provider, over its alleged failure to prevent its customers downloading unauthorised copies of films and programs.

See here for a media release.

Review 2 Pty Ltd v Redberry Enterprise Pty Ltd

2008-11-13T17:06:00.003+11:00

On 5 July 2006 Review 2 Pty Ltd was registered as the owner of Design Registration No. 307708 in relation to ladies garments (“the Review Design”). This case considered whether Redberry Enterprise Pty Ltd (“Redberry”) infringed the Review Design and considered Redberry’s cross-claim that the Review Design was invalid.

Kenny J found that the Review Design was valid but that Redberry had not infringed it. This case reminds us that while a design registration may be found valid, the monopoly conferred by registration can be closely confined by what has been disclosed in the prior art.

Read the Phillips Ormonde & Fitzpatrick review of this case here.

IPONZ announces new online filing facility for patent applications

2008-11-03T16:36:00.000+11:00

The long-awaited online facility for filing patent applications in New Zealand will be introduced by IPONZ in early November. See here for the IPONZ announcement.

Copyright Owners Keep on Trucking

2008-10-29T16:51:00.001+11:00

In most intellectual property litigation in Australia, an order is made at a relatively early stage that issues of liability be determined separately from and prior to issues of quantum of any relief. While there are good reasons for the making of such an order, it does mean that a finding that a valid IP right has been infringed often means the battle is only half won. Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (No 2) [2008] FCA 1493 addresses the question of pecuniary relief following a finding of liability for copyright infringement, previously reported here.

The Fourth Respondent, Vawdrey, had been found to have infringed copyright owned by Krueger in certain drawings for a truck load restraint system. Krueger sought damages under s 115(2) of the Copyright Act as well as additional damages under s 115(4). In response, Vawdrey’s primary submission, in reliance on s 115(3), was that it was not liable to pay any damages because it was an innocent infringer. Vawdrey had not directly copied the drawings of Krueger, but had done so indirectly by following instructions given by the First Respondent, Camerons.

Gordon J noted that Vawdrey bore the onus of proving its innocence and that if it intended to rely on s 115(3) “it had to lead evidence to establish that, at the time of the infringement of Krueger’s copyright, it was not aware of and had no reasonable grounds for suspecting that the act constituting the infringement was an infringement.” In the circumstances, Vawdrey’s failure to make any inquiries about the source of Cameron’s instructions was found to preclude a finding of innocence.

On the quantification of damages, Vawdrey’s submission that it was only liable for lost profits on the load restraint systems themselves, rather than on the entire trailers incorporating such systems, was rejected. As Gordon J noted “Any loss related to non-copyright items is recoverable where it is a foreseeable consequence of the infringement.” Having considered the competing methodologies for calculating lost profits, as presented by various expert witnesses, Gordon J awarded damages in the amount of $346,449 for lost profits. A further amount of $10,000 was awarded for lost goodwill.

Finally, Gordon J considered Krueger’s claim for additional damages, finding that “while Vawdrey’s infringement was not the most flagrant it was also not innocent”, noting in particular the failure to make reasonable inquiries as to the provenance of Camerons’ instructions. Also taken into account was the need to deter conduct of the type engaged in by Vawdrey, and the benefit which accrued to it by that conduct, with $30,000 in additional damages being awarded.

The Jury is still out on whether section 117 applies to patented methods or processes

2008-10-22T10:15:00.003+11:00

The High Court (Gummow ACJ, Kirby, Hayne, Heydon and Crennan JJ) recently handed down its decision in Northern Territory v Collins [2008] HCA 49 concerning the “contributory infringement” provision of the Patents Act 1990 (Cth). In four separate concurring judgments (Gummow ACJ and Kirby J issued a joint judgment) the Court overturned the Full Federal Court’s decision and held that the timber of Callitris intratopica was a “staple commercial product” and as such the conduct of the appellant, the Northern Territory Government, did not fall within the scope of section 117(2)(b) of the Act. While the findings in relation to the timber being a staple commercial product were by themselves sufficient to dispose of the appeal, it is unfortunate that only two judges of the Court (Hayne and Crennan JJ) gave any real consideration to the construction of s 117 and its applicability to patented methods or processes. Unfortunately, the question of whether s 117 has any operation for patented methods or processes remains largely unanswered.

The issue before the High Court was whether the Northern Territory Government was liable under s 117 for infringement of the Collins’ patent by its supply of timber to Australian Cypress Oil Company Pty Ltd (“ACOC”). For the purposes of the appeal it was accepted that ACOC extracted blue cypress oil from the trees using the patented process and was a direct infringer.

S 117 provides as follows:

"(1)
If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.

(2)
A reference in subsection (1) to the use of a product by a person is a reference to:
(a) if the product is capable of only one reasonable use, having regard to its nature or design – that use; or
(b) if the product is not a staple commercial product – any use of the product, if the supplier had reason to believe that the person would put it to that use; or
(c) in any case – the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier."

In deciding this issue the High Court had regard to three questions put forward by the Northern Territory. First, whether the literal meaning of s 117(1) has the consequence that supply of an "input" into a patented method or process (or an input into a resulting product) is incapable of engaging the operation of this section. Second, whether the grant of statutory licences to ACOC under the Crown Lands Act by the Northern Territory constituted a "supply" of a "product" within the meaning of s 117(1). Third, whether the "product", the supply of which was alleged to breach s 117, namely timber, was a "staple commercial product" within the meaning of s 117(2)(b). In short the Northern Territory succeeded on the appeal but only in relation to the third question.

Notwithstanding their decision on the third question, both Hayne and Crennan JJ considered in some detail the question of the application of s117 to the supply of an "input" into a patented process. In separate judgments their Honours noted that to engage s 117(1) there needed to be “the supply of [a product] by one person to another”. In Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205, the then Justice Gummow in the Federal Court suggested that because the term 'infringe' was not defined by the Act, the starting point for any enquiry in relation to contributory infringement was with the definition of 'exploit', being the exclusive right granted to the patentee by a patent pursuant to s 13 of the Act (which had the affect of rendering s 117 inoperative for patented methods and processes). However, Justices Hayne and Crennan suggested that the starting point should be s 117 itself, read as a whole.

At [35]-[36] Hayne J noted

“Although s 117(1) is engaged only where there is "the supply of [a] product by one person to another", s 117 is directed to an identified sub‑set of such transactions. That sub‑set is identified first by the introductory words of s 117(1) – "[i]f the use of a product [the product that is supplied] by a person would infringe a patent" – and second by the amplification in s 117(2) of what is meant by "the use of a product by a person". At the risk of undue abbreviation the amplification provided by s 117(2) can be described as inviting attention, in the particular cases identified in each paragraph of the sub‑section, to "only use" (s 117(2)(a)), "known use" (s 117(2)(b)) and "instructed use" (s 117(2)(c)). In many, perhaps most, cases a convenient point at which to begin consideration of an issue about the application of s 117(1) will be to examine what is said to be the use of the product that is alleged to engage the provision. It is that use which must be identified as the use which would infringe the patent because the hinge about which s 117 turns is its introductory words: "[i]f the use of a product by a person would infringe a patent".

When the question is approached in that way, it will be observed that to ask whether supply of an input for a patented method or process (or resulting product) is capable of attracting s 117(1) may direct attention away from the relevant statutory questions. Those questions are: is there a supply of a product; what is the use of the product (as use is elucidated in s 117(2)); and does that use infringe the patent?”

On the question of whether the definition of “exploit” limits the operation of s 117 on process and method patents Crennan J noted at [128] that:

a consideration of the complete definition of “exploit” in respect of a method or process indicates that there is no reason to deny the application of s 117 to a product (including, as here, an unpatented product) supplied by the supplier, preparatory to any carrying out of the patented method by a person to whom the product is supplied. The secondary materials referred to above [the IPAC Report] show that the latter type of product was the main target of the legislation. The word “product” in s 117 is not confined to a product resulting from the use of a patented method or process.”

Heydon J did not reach a firm conclusion on this issue but rather concurred with Crennan J that the conduct of the Northern Territory Government did not fall within the scope of s 117(2)(b) and as such it was not necessary to consider the other two questions raised.

Gummow ACJ and Kirby J on the other hand raised a number of observations about the first question but again did not reach any firm conclusion. In what appears to be a passing shot at Crennan J and her Honour’s reliance on the IPAC Report, Gummow ACJ and Kirby J first observed that it was the fundamental duty of the Court to “give meaning to the legislative command according to the terms in which it has been expressed; legislative history and references to the pre‑existing law should not deflect the Court from its duty in resolving an issue of statutory construction which ultimately is always a text based activity.” Their Honours then noted that there were a number of significant provisions in the Act, which operate in a wide range of circumstances, and draw a clear distinction between an invention that is a product and one which is a method or process. Gummow ACJ and Kirby J then noted the principles expounded by the High Court in NRDC concerning the concept of “manner of manufacture” and what can be regarded as a “vendible product” and that the distinction between an invention that is a product and an invention that is a method/process that may or may not yield a product continues on in the current Act through the definition of “exploit”. Finally, again noting that the current Act does not provide a definition of what constitutes an infringement, their Honours at [21] simply observed:

“Section 117 does not itself speak to the exclusive rights given by the patent. Rather, the provision identifies conduct and prescribes conditions in which that conduct will be an infringement of the patent. The conduct is the "supply of [a] product" by one person to another. The critical condition for the imposition of liability for infringement is that which is stated first. This is that "the use of [the] product" by the person to whom it is supplied "would infringe [the] patent" (s 117(1)). As the reasons of Hayne J demonstrate, this is informed by the application of s 117(2) and consideration of the exclusive rights given by the patent.”

While the common law principle of accessorial or joint tortfeasor liability remains available in Australia and, notwithstanding its limitations, may provide some comfort to holders of patents directed to processes or methods, it is nonetheless disappointing that the High Court was unable to reach a unanimous decision on the operation of s 117 as it relates to process or method patents.

Ignorance, Inconvenience & Interlocutory Injunctions

2008-10-21T11:43:00.003+11:00

Since 2005, the first inclusion of a generic medicine in the Pharmaceutical Benefits Scheme (PBS) has resulted in an automatic 12.5% price reduction in the government subsidy of all medicines of that type, including the original listing. This factor has become increasingly significant in applications for interlocutory injunctions in pharmaceutical patent litigation, as illustrated by the decision of Jessup J in Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498.

In considering this price reduction on the question of the adequacy of damages should an injunction not be granted, his honour considered that if a 12.5% reduction in the price paid to the patentee would be the only impact of the entry of the generic product into the market “it would be difficult to conclude that the cross-claimants’ losses could not ultimately be calculated, and compensated in damages”. However, according to Jessup J:

the real problem is whether it would ever be possible to restore the cross-claimants to the position they now occupy, should they succeed at trial but not secure the interlocutory restraints they seek.

This problem was considered, at least in part, to be due to the apparent absence of any mechanism for restoring the price to its original level should a patentee ultimately obtain final injunctive relief.

In assessing the balance of convenience in granting or refusing the injunction, his Honour found persuasive the argument of the patentee that the alleged infringer, “has undertaken all its commercial preparations in the knowledge of one or both of the patents, or at least had been less than assiduous in its inquiries as to whether the marketing by it [of the allegedly infringing product] might have constituted an infringement”. On this issue, Jessup J concluded that:

I am not disposed to allow it to rely on its own ignorance as leading to a situation in which it would now be commercially inconvenienced were it to be subject to an interlocutory restraint of the kind that the cross-claimants seek.

Ultimately, an interlocutory injunction was granted in respect of one of the two patents said to be infringed.

Designs Act 1906 no Flash in the Pan

2008-10-15T10:30:00.001+11:00

While Australia has had a new Designs Act for over four years now, the previous Designs Act 1906 still has a significant role to play in respect of designs registered under that act.

Caroma Industries Ltd v Technicon Industries Pty Ltd [2008] FCA 1465 illustrates the breadth of the infringement provisions of the 1906 Act. As noted by Cowdroy J a design registered under the 1906 Act may be infringed by the application to an article of a design which is (i) the registered design, (ii) an obvious imitation of the registered design or (iii) a fraudulent imitation of the registered design.

In this instance, his Honour found that on first impressions Caroma’s registered design, in respect of a toilet pan, and Technicon’s alleged infringement were very similar, however:

the visual comparison undertaken by the Court involves both first impressions and later impressions. The Court accordingly observes that while the similarities between the Technicon pan compared with the registered design are initially striking, closer inspection reveals certain differences.

Cowdroy J concluded that the differences between the two meant that the alleged infringement did not “possess such a close resemblance to the registered design that it is ‘almost unmistakeable’” and therefore was not an obvious imitation.

On the question of fraudulent imitation, the Court noted that:

whether a product constitutes a fraudulent imitation of a registered design requires an examination of the alleged infringer’s state of knowledge of the relevant registered design ... it is not necessary that the alleged infringer had actual knowledge of the fact of registration of the registered design, but merely that the alleged infringer had reason to believe or strongly suspect, or had wilfully disregarded the likelihood of such registration

In this instance, and in part relying on Technicon’s familiarity with the registered design system having sought design registration itself, it was held that Technicon ‘had reason to believe or strongly suspected’ that the design of the Trident toilet pan (the commercial embodiment of the registered design to which it had reference) may have been registered.

The Court further found that the Technicon pan “incorporates significant visual features of the registered design”, which combined with the finding of implied knowledge, led to a finding of fraudulent imitation and hence infringement.

This decision highlights the dangers of seeking to adopt or adapt a competitor’s product design and that lack of actual awareness of the existence of registered rights will not necessarily prevent a finding of infringement. Generally it will be preferable to be fully aware of all relevant design registrations in order to better design around the rights of others.

IP Australia and USPTO sign international patent search arrangement

2008-10-13T09:14:00.002+11:00

IP Australia and the USPTO have entered into an arrangement that will see IP Australia act as an international search and examination authority for certain international patent applications filed with the USPTO. The arrangement comes into effect on 1 November 2008 and will allow US applicants to choose IP Australia to undertake the initial search and examination of their patent application under the Patent Cooperation Treaty (PCT).

The Privilege of Amending Patents

2008-10-10T11:09:00.002+11:00

Section 105 of the Patents Act empowers the Court to direct amendment of a patent which is the subject of pending legal proceedings, including at the request of the patentee. The course of patent litigation may give rise to many good reasons for considering amendment to the patent in suit, however any decision to do so must be very carefully considered, as illustrated by the judgement of Bennett J in Apotex Pty Ltd v Les Laboratoires Servier [2008] FCA 1466.

In considering whether to direct an amendment under s 105, the Court has a wide discretion and will consider the public interest in allowing the amendment but also conduct of the patentee. This gives rise to an obligation on the part of the patentee to disclose information relevant to the amendment. A decision not to disclose relevant documents on the basis that they a privileged may bear on the exercise of the Court’s discretion.

In Apotex v Les Laboratoires Servier, the patentee, Servier, sought to explain the “reasons for and factors impacting on” its decision to seek amendment via affidavits from the solicitor having the conduct of the proceedings. Apotex served a notice to produce, seeking documents recording or referring to the solicitor’s views as expressed in the affidavits, including his views that amendments to the patent were necessary. Servier resisted production, claiming privilege in the documents sought.

Bennett J noted that “Apotex does not presently rely on a primary obligation to waive legal professional privilege as part of the obligation of good faith on the part of a party seeking to amend a patent.” Rather, Apotex relied upon an implied waiver of privilege by Servier due to its reliance on the affidavits which disclosed the giving of advice regarding the amendment. Her Honour, having considered the authorities relating to waiver, concluded that:

It must be accepted that the application to amend was made with instructions from Servier. Accordingly, Servier intentionally presented Mr Hamer’s affidavits and evidence as evidence of its reasons for making that application. In effect, Servier has disclosed the legal advice of Mr Hamer by presenting that advice as the totality of its reasons for seeking amendment. It is then inconsistent with that presentation to claim legal professional privilege with respect to the communications between Servier and Mr Hamer concerning Mr Hamer’s opinion, Servier’s instructions, the application for amendment and Servier’s reasons for making it.

This decision provides another clear illustration of the importance of carefully reviewing a patent with a view to the need for any amendment prior to the commencement of proceedings.

Beware of the Australian Grace Period provision – It has limitations!

2008-10-07T16:52:00.003+11:00

In Mont Adventure Equipment Pty Limited v Phoenix Leisure Group Pty Limited [2008] FCA 1476 Justice Stone was asked consider the meaning of "the filing date of the complete application" in clause 2.2(1A) of the Patents Regulations 1991 (Cth) in the context of a divisional application. In brief the facts of the case were as follows.

On 13 May 2005 the Applicant, Mont Adventure, filed a complete application for a standard patent. On 22 November 2006 and with the aim of obtaining immediate patent rights to commence infringement proceedings against the Respondent, Mont Adventure filed a complete application for an innovation patent as a divisional application of the standard patent application and also filed request for expedited examination.

Prior to filing the standard patent application Mont Adventure’s “Astro 65” and “Astro 80” model travel packs that embodied each of the integers of claims 1-5 of the Innovation Patent were offered for sale to the public on or about October 2004.

Section 24(1)(a) of the Patents Act provides as follows:

“(1) For the purpose of deciding whether an invention is novel or involves an inventive step or an innovative step, the person making the decision must disregard:
(a) any information made publicly available, through any publication or use of the invention in the prescribed circumstances, by or with the consent of the nominated person or patentee, or the predecessor in title of the nominated person or patentee; and
(b) …
but only if a patent application for the invention is made within the prescribed period.”

The relevant Patent Regulations include cl 2.2(1A) and cl 2.3, which provide:

Cl 2.2 sets out the “prescribed circumstances” as follows:

“(1A) For paragraph 24(1)(a) of the Act, the circumstance that there was a publication or use of the invention within 12 months before the filing date of the complete application, is a prescribed circumstance.”

Cl 2.3 provides the “prescribed period” to be as follows

“(1A) For information of the kind referred to in paragraph 24 (1) (a) of the Act, if the applicant relies on the circumstance in subregulation 2.2 (1A), the prescribed period is the period of 12 months after the information was first made publicly available.
(1) …
(2) …
(3) Subregulation (4) applies:
(a) if an application for a patent is a divisional application:
(i) under section 79B of the Act for an invention disclosed in the specification filed with a previous application for a standard patent (the original application); …
(ii) …; and
(b) only to information disclosed in the divisional application that was disclosed in the original application.
(4) For determining the prescribed period for subsection 24 (1) of the Act, the filing date of the divisional application is taken to be the filing date of the original application.”

The issue before Her Honour was whether for the purpose of determining the validity of the Innovation Patent, and on the facts stated above, “the filing date of the complete application” within the meaning of clause 2.2(1A) of the Patent Regulations was:

Putting the issue of the claims in the innovation patent being fairly based on the specification for the standard patent application, her Honour noted that if the “filing of the complete application” had the meaning set out in paragraph (a) of the question the 12 month ‘grace period’ provided for in cl 2.2 would commence on 13 May 2004. This would mean that, pursuant to s24, the information made publicly available by the sale of the travel packs on or about October 2004 would have to be excluded from the prior art base in determining whether the invention claimed in the Innovation Patent is novel or involves an innovative step.

Conversely if construction (b) was correct meaning then the grace period would commence on 22 November 2005 and as such the information made publicly available by the sale of the packs could be taken into account in assessing the prior art base.

Justice Stone held that the "complete application" to which cl 2.2(1A) refers is the complete application for the Innovation Patent and therefore the information made publicly available by the sale of the travel packs from October 2004 could be taken into account in determining whether the invention claimed in the Innovation Patent is novel or involves an innovative step.

This decision has highlighted the limitations of the Australian grace period provision especially for divisional applications and the importance of keeping quiet before filing.

King for a Day

2008-10-07T10:06:00.002+11:00

A number of recent Federal Court decisions have highlighted the importance of correctly identifying inventors and owners in the context of patent applications. Anakin Pty Ltd v Chatswood BBQ King Pty Ltd [2008] FCA 1467 illustrates the importance of clearly identifying ownership in the context of Trade Mark rights.

The first applicant and registered trade mark owner, Anakin, was one of a number of companies which, along with certain individuals, had been involved in the operation of a Chinese restaurant under the name “B.B.Q. King” since the early 1980’s. As noted by Branson J “considerable informality has attended the business affairs of the companies associated with the BBQ King restaurant”, leading to uncertainty as to the actual owner of the BBQ King trade mark at the date the application for registration was filed.

Her Honour found that at the time of filing, the second applicant Gold Kings owned the goodwill in the trade mark as well as the right to conduct the BBQ King business. As the applicant was not the owner of the trade mark at the date of filing, the respondent’s cross-claim for rectification was made out. Having regard to the informal way in which the affairs of the applicants were handled, including failures to comply with the Corporations Act and to pay stamp duty on transfers of the business, Branson J refused to exercise discretion allowing the trade mark to remain on the register.

The applicants were however successful in their claim for passing off and breach of the Trade Practices Act, obtaining orders for damages in the amount of $20,000 and an injunction restraining the respondent from using the name “Chatswood BBQ King”.

No Lucky Break For Nestle's Kit Kat Shape

2008-09-30T15:41:00.004+10:00

Nestle has lodged a Federal Court appeal against a recent Australian Trade Marks Office decision not to register its popular KIT KAT chocolate bar as a shape trade mark.

The Registrar’s Delegate, Terry Williams found in favour of supermarket giant Aldi Stores who opposed the registration of Nestle’s four bar chocolate product pursuant to s.41, 59, 58 and s.62 of the Trade Marks Act 1995 (Cwth). Mr Williams took the view that the shape trade mark was “not a trade mark at all, it is a functional shape of the goods, one which the applicant does not use as a trade mark but is attempting to disguise as one for the purpose of this exercise”.

Nestle relied on the decision of the Intellectual Property Office of New Zealand in Societe des Produits Nestle S.A. v Horizon Biscuit Company Limited and Cadbury Confectionery Limited to argue that the four-bar shape did have capacity to distinguish the goods, and qualified as a trade mark. In that decision, although the Kit Kat shape was found to have some functional elements, it was not entirely functional and it was the other non- functional elements that could give the shape the capacity to distinguish. So the shape was held to meet the requirements of a trade mark.

In assessing whether the mark was capable of distinguishing, Mr Williams had regard to firstly, whether the trade mark was inherently adapted to distinguish chocolate confectionery, Mr Williams found Aldi’s evidence that various other chocolate products could be divided up into squares or small portions, showed the commercial desirability of being able to break portions into smaller portions. Moreover, whatever the reasons behind Nestle’s adoption of the shape in 1935 or 1948, Mr Williams said it must now be seen as a functional shape, and that consumers were aware of the convenient breakability of the mark. So the very feature that Kit Kat’s HAVE A BREAK advertising campaigns play on that is, the shape of the four ‘snapable’ finger like portions, was found not to be inherently capable of distinguishing chocolate confectionery pursuant to s.41(3) of the Trade Marks Act 1995 (Cwth).

In the alternative, Nestle argued the extensive use of the shape meant that it had acquired distinctiveness and should be accepted for registration pursuant to s.41(6) of the Trade Marks Act 1995 (Cwth). As well as relying on its sales and advertising of the product, Nestle relied on survey evidence to establish factual distinctiveness. Of the 300 people Nestle had, had professionally surveyed, 86% upon seeing a wax bar in a chocolate colour identical in size and shape to the Kit-Kat four-bar product (without the Kit Kat trade mark) recalled seeing a similar shaped product previously. 89% of those people also associated it specifically with Nestle’s Kit Kat. This equated to roughly 77% of the population associating the four-bar shape with Nestle.

However, whilst noting 77% this was an impressive number, Mr Williams found the responses of those who did not make the connection with Nestle but associated the shape with chocolate confectionery generally, or confused it with other brands of chocolate more compelling. He said it indicated that the shape was “generic or something very like it”, and was not prepared to find that the mark was factually distinctive on the basis of this evidence.

In any event, Aldi argued that the recognition of the trade mark was not important if the shape mark was not actually used as a trade mark. Nestle relied on its advertising and point of sale materials to show that the mark was used as a trade mark. However, whilst Mr Williams found use of a shape in advertising could amount to use as a trade mark, it did not in this case. In particular, Nestle’s evidence of its advertising campaigns, including the popular HAVE A BREAK campaign, emphasised the breakability of the chocolate bar and tended to show the four-bar or two-bar form of the Kit Kat broken into two pieces or a single piece. Mr Williams considered that this meant the public was not being educated to see the 4-bar shape as a trade mark, but rather that it was functional i.e. it could be snapped into single or 2-bar portions.

The shape mark was therefore found not capable of distinguishing chocolate confectionery and its registration refused.

Interestingly, Nestle’s application to register the two bar Kit Kat as a shape trade mark was abandoned after it was opposed.

RSS feeds

2008-09-30T10:59:00.007+10:00

To date, users of this Blog have been able to subscribe to RSS feeds for each of the IP categories, or to all stories.

For technical reasons and in light of the relatively modest number of posts, we are rationalising our RSS feed options to one covering all posts. If you previously subscribed to individual category feeds, please subscribe to this feed. We apologise for any inconvenience.

NZ Designs Act to permit restoration of a Registered Design

2008-09-29T16:28:00.006+10:00

The Regulatory Improvement Bill that, inter alia, will introduce a new procedure for restoration of a registered design through non payment of a renewal fee was introduced into the NZ Parliament in early September. This proposed legislation is now public and can be found at the following link

Regulatory Improvement Bill

Following the recent announcement of a general election for 8 November 2008, the timeframe for the enactment of this legislation is unknown. At this stage it is unlikely that the first reading will take place before the Parliament is dissolved on the 3rd of October. However given that this bill is considered non controversial and will reduce the compliance burden on business, it is likely that this Bill will pass quickly through the new Parliament early next year and come into effect in late 2009.

It is worth noting that at this stage the Bill is not retrospective in effect i.e. it will not apply to designs that have already lapsed at the time the legislation is enacted and does not seek to address the issue of restoration of lapsed registered design applications through failure to meet a prosecution deadline. The opportunity to raise these matters will come when the Bill is referred to the Select Committee for scrutiny.

Smelly trade mark accepted

2008-09-26T14:11:00.001+10:00

Trade Mark Application No 1241420 has recently been advertised as accepted in Australia. The trade mark consists of "a Eucalyptus Radiata scent" for golf tees and was accepted without the need for the applicant to file any evidence of use.

Australian confirmed as WIPO head

2008-09-23T15:04:00.002+10:00

Dr Francis Gurry has been confirmed as Director General of the World Intellectual Property Organization (WIPO).

Dr Gurry is now the most senior Australian in the United Nations system; the first Australian to head a United Nations specialised agency since 1992, and only the third Australian to do so

Patent Office Flies the Flag for “Clear and Unmistakeable Disclosure”

2008-09-23T10:53:00.006+10:00

The decision of the Delegate of the Commissioner of Patents in Cadbury Schweppes Pty Ltd v Wm. Wrigley Jr Company [2008] APO 20 provides an interesting counterpoint to the decision of Gyles J in Apotex v Sanofi-Aventis.

The claims of the opposed application related to a method of coating comestibles (principally chewing gum), which included the application of a suspension coating syrup, (a “suspension coating method”) rather than a solution coating syrup, (a “solution coating method”). Each of the suspension and solution coating methods were know to have various advantages and disadvantages.

Under the ground of novelty, the Opponent relied, inter alia, on two documents identified as DA3 and DA8, which were technical application sheets produced by the manufacture of the sugar derivative Isomalt used to produce the coating syrup. In assessing whether these documents anticipated the claims of the application, the Delegate noted that:

Both documents have very specific directions about how to make a suspension of Isomalt ST in an Isomalt GS solution. However, there is little detail of how this suspension is then used in a coating process in either document apart from a table outlining general process parameters ... Without such detail, it is not clear that either DA3 and DA8 contains sufficient information to meet the Hill v Evans [supra] test of being the same as the claimed invention for the purposes of “practical utility”.

The Delegate considered whether, assuming the skilled worker could supply the missing detail, the documents otherwise anticipate the claims. It was noted that while each of the documents were individual recipes, they formed part of a larger technical document supplied by the manufacture to its customers. In the Delegates view:

Being part of a larger collection of recipes, DA3 and DA8 have to be read in the context of all the other technical application sheets because considering them in isolation might be seen as rummaging through the prior art’s "flag locker" to pull out the relevant “flag” (against the teaching of ICI Chemicals v Lubrizol Corp [supra]).

In this regard, while DA3 and DA8 both outline the suspension method, another Palatinit technical application sheet (Technical Application sheet 3.5.2b) describes an alternative method (the solution method).

The Delegate considered that having regard to the entire collection of technical application sheets, at the relevant date “the manufacturer was not necessarily recommending the suspension method to their clients”, concluding that:

Against this background unless there was a clear direction in the citation (or from the common general knowledge) to explain why a method was particularly advantageous, I am not convinced that there are clear and unmistakeable directions for the skilled worker to use the exact method outlined in DA3 or DA8.

Giving Goliath the Slingshot

2008-09-16T15:14:00.003+10:00

It seems that the Federal Court is not the only one to take issue with the current conduct of IP litigation in Australia. The report of the Review of the National Innovation System “venturousaustralia - building strength in innovation” includes a section headed “The costs of enforcing IP rights”. The report's solution to the perceived problem of such costs takes the form of Recommendation 7.4 that “Firms asserting or defending intellectual property should have a right to opt out of ‘appellate double jeopardy’.”

The proposal effectively provides that any party may elect not to appeal the first instance decision unless it funds the costs of both itself and the other parties in doing so. If any party makes such an election, all parties would be bound by it. How this proposal is intended to “level the playing field ... between large and small firms” is unclear, given that such an election would effectively mean that only large firms (having sufficient funds) could appeal an unfavourable decision.

Counterfeit brands website shut down

2008-09-16T11:36:00.002+10:00

The Australian Competition and Consumer Commission has shut down the 'Designer Brand Outlet' website.

The ACCC alleged that false, misleading and deceptive representations were made on the website and that some of the clothes supplied were counterfeit copies.

The ACCC release is here.

Federal Court’s Flu Shot for Patent Law

2008-09-16T11:35:00.003+10:00

Over 100 years ago Lord Esher, in Ungar v Sugg (1892) 9 RPC 113, opined:

that a man had better have his patent infringed, or have anything happen to him in this world, short of losing all his family by influenza, than have a dispute about a patent. His patent is swallowed up, and he is ruined. Whose fault is it? It is really not the fault of the law; it is the fault of the mode of conducting the law in a patent case. This is what causes all this mischief.

Today it seems little has changed, at least in the minds of the Judges of the Federal Court who have set out to change the way Patent litigation is conducted in Australia.

Following a somewhat informal release back in June, the Victorian and New South Wales district registries of the Federal Court have each now officially released a “Notice to Practitioners - Proceedings under the Patents Act 1990 (Cth)” outlining new procedures for proceedings under that Act.

The procedures are stated to be “deliberately not overly prescriptive, with an emphasis on flexibility of application to each proceeding” and are clearly aimed at narrowing the issues in dispute as early as possible. The specific matters addressed include:

Ground of Invalidity: Particulars of invalidity are to include details of the passages of any prior publication relied upon for novelty purposes and after filing of the particulars, the party seeking revocation must explain how each ground of invalidity can be supported.
Expert Evidence: The Court will enquire whether any expert evidence will be required, whether a single expert is appropriate for all or any part of the evidence, whether any of the evidence can be given orally or by reference to standard texts, or by a combination of summary outline and oral evidence, whether a primer is appropriate and as to the appropriate method of evidence. The last matter may include whether there should be prior meetings of experts to explain or narrow the issues in dispute

Discovery: Before discovery is ordered, the parties must confer to discuss the issues to be addressed by discovery and the nature of the documents sought, and whether evidence should precede discovery

The procedure also provides for procedural mediation or case management conferences to try and narrow the issues in dispute and resolve interlocutory matters.

These procedures will hopefully play an important role in streamlining the conduct of certain patent disputes and may provide SME’s with the prospect of being able to enforce their patents without significant expense. However already this year the Federal Court has handed down patent decisions in relation to the pharmaceuticals Liptor and Plavix, which had global sales of USD13.5 billion and USD7.3 billion respectively in 2007. Where the monopoly rights conferred by a patent are of sufficient value, it is likely that litigants will still wish to fight every point and the procedures may have a limited impact.

The battle to keep “The Secret” continues

2008-09-03T16:17:00.004+10:00

The dispute between the creator of “The Secret”, Rhona Byrne and her company TS Productions LLC and the Australian director Drew Heriot concerning the copyright in the film and the related book continues in Australia. Earlier this year, Justice Sundberg of the Federal Court of Australia, ordered a stay of the Australian proceeding pending the outcome of the US proceeding.

A major issue before his Honour was whether in the US proceeding, the US court would apply the law of that country or Australian law. After considering the rival opinion evidence of two American lawyers, his Honour found that US law would be applied.

After argument had concluded, but before Justice Sundberg delivered his judgment, the US District Court delivered a judgment declining to stay the US proceeding. The judge, the Honourable Suzanne B Conlon, reached the same conclusion as Sundberg J as to the choice of law in the US proceeding. Judge Conlon made various procedural directions including discovery and other dates for joint pre-trial orders.

The matter has again returned to the Federal Court of Australia where TS Production LLC has sought leave to appeal to the Full Court from the judgment and orders of Justice Sundberg. The issue before Justice Heerey was not the substantive question of leave but whether the application for leave should be dealt with by a single judge or by the Full Federal Court. Order 52 r2AA of the Federal Court Rules requires some ground to be shown as to why an application for leave to appeal should be determined by the Full Court. Heerey J noted that this case could not be “characterised as a minor interlocutory squabble over discovery or the like” but rather one in which Sundberg J’s orders could give rise to important consequences for the parties. Despite various contentions from Drew Heriot’s counsel that the only prejudice to the applicant was the cost of the US proceeding and that there was no “substantial injustice” to the applicant that would warrant the appeal being considered by the Full Court, Heerey J granted TS Production’s request on the basis that Sundberg J’s judgment deals with substantial legal issues which are appropriate for resolution by a Full Court.

Historic agreement between Australia & Korea

2008-09-01T14:05:00.002+10:00

IP Australia reports that an agreement has been reached with the Korean IP Office relating to the PCT International Search Authority and International Preliminary Examination Authority

Gummow J sets homework assignment for IceTV and Nine

2008-09-01T10:18:00.005+10:00

As reported elsewhere , the High Court last Tuesday granted IceTV special leave to appeal against the Full Court's finding that it had infringed Nine's copyright in its TV schedule. The transcript of the special leave hearing is now available and makes for interesting reading.

Gummow J gives some interesting clues as to how the Court may approach the appeal, noting in particular that the principles underlying the US decision in Feist, dealing with originality in compilations, may have some application to the issue of substantial part under Australian law. His Honour concludes by noting that:

we expect to have the assistance of counsel to deal with this matter thoroughly without any reticence in starting at the bottom, so to speak, and we expect counsel to be familiar with the academic writing in this field. They have already been referred, I think, to an article by Dr Deazley in [2004] Intellectual Property Quarterly 121. There is also what may be a useful article by Professor Sterk in Michigan Law Review for 1996, Volume 94, pp 1197 called Rhetoric and Reality in Copyright Law. There is a lot of other material out there as well. I hope the arguments will be informed with all of that, at least in a suitable background.

So what's the difference?

2008-08-29T10:26:00.005+10:00

The first serious consideration of section 7(4) of the Patents Act 1990 relating to innovative step, the decision of Gyles J in Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225, gives a somewhat unexpected interpretation of the phrase “substantial contribution to the working of the invention”.

Gyles J commences with a concise explanation of the approach to be taken in assessing innovative step, consistent with recent approaches to the question of inventive step, noting that:

There is no need to search for some particular advance in the art to be described as an innovative step which governs the consideration of each claim. The first step is to compare the invention as claimed in each claim with the prior art base and determine the difference or differences. The next step is to look at those differences through the eyes of a person skilled in the relevant art in the light of common general knowledge as it existed in Australia before the priority date of the relevant claim and ask whether the invention as claimed only varies from the kinds of information set out in s 7(5) in ways that make no substantial contribution to the working of the invention. It may be that there is a feature of each claim which differs from the prior art base and that could be described as the main difference in each case but that need not be so. Section 7(4), in effect, deems a difference between the invention as claimed and the prior art base as an innovative step unless the conclusion which is set out can be reached.

His Honour then considered the background to the introduction of innovation patents, including the High Court decision in Griffin v Isaacs from which the phrase “substantial contribution to the working of the invention” is derived, concluding that

The focus is upon working of the invention (as claimed) not to the degree or kind of variation from the kinds of information set out in s 7(5). In other words, the variation from the kinds of information might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step.

The judgement then turns to the presence or absence of innovative step in this particular instance, with Gyles J noting at [63] that:

As I have endeavoured to explain, the question is not whether flexible sheet steel is better than flexible PVC – it is certainly different. It cannot be seriously argued that the material sheet spring steel does not make a substantial contribution to the working of the roadside post claimed in each claim

And again at [78]:

The different material contributes substantially to the manner in which that invention as claimed performs. As I have said earlier, it is not a question as to whether these claims are better than the disclosure by Kennedy, or whether it was obvious to move from Kennedy to this invention. Therefore, there is an innovative step over Kennedy.

Accordingly, the test applied by Gyles J appears to be whether the feature, which varies from the prior art, in and of itself makes a substantial contribution to the working of the invention, rather than whether the nature of the variation, the extent to which that feature differs from the prior art, makes such a contribution. Indeed it appears that the feature which varies may be inferior to that disclosed in the prior art and the invention nevertheless involve an innovative step.

The judgement also implicitly confirms that all prior art information may be relied upon in assessing innovative step provided it is publicly available, in contrast with inventive step where that information must satisfy the requirement of section 7(3).