Design by Committee ends in Revocation

Allen Hardware Products Pty Ltd v Tclip Pty Ltd [2008] ADO 8, saw delegate Herald consider an application by Tclip for revocation of certain registered designs in the name of Allen Hardware on the basis of lack of entitlement.

The delegate considered that principles relating to inventorship under the Patents Act should be applied to questions of designership under the Designs Act as “Both involve activities of original creativity. Both involve situations where multiple people can be involved in the creative exercise.”

Having determined that two persons associated with Tclip and also two persons associated with Allen Hardware were all co-designers of the designs in question, the delegate directed that the designs be revoked pursuant to s 52, the original registered owner not being the sole person entitled to the design.

The delegate noted that the parties may wish to apply jointly for new design registrations relying on the provisions of s 54.

NZ Copyright (Artists’ Resale Right) Amendment Bill 2008

The Copyright (Artists’ Resale Right) Amendment Bill 2008 amends the Copyright Act 1994 to establish a mandatory resale right for certain artists when their artistic works are resold in New Zealand. A resale right entitles an artist to receive a resale royalty payment each time an original artistic work is resold on the secondary art market. It does not apply to the first sale of the work. The Bill creates a property right for an artist and his or her successors over the artist's artistic creations for a period expiring (broadly) 50 years after the death of the artist. During that time the holder of the resale right would be entitled to a royalty payment to be obtained by a collecting agency.

New Zealand Copyright (New Technologies) Amendment Act 2008

The Copyright (New Technologies) Amendment Act 2008, which received the Royal Assent on 11 April 2008, has amended infringement provision relating to the importation of films.

A person will now infringe copyright in a film if that person:

“(a) imports a copy of the film into New Zealand within 9 months of first being made available to the public; and
(b) knows or has reason to believe that the film is imported into New Zealand within 9 months of first being made available to the public; and
(c) is not the licensee of the copyright in New Zealand; and
(d) imports the film into New Zealand other than for that person's private and domestic use."

Case review - Ranbaxy Australia v Warner-Lambert Company

Phillips Ormonde & Fitzpatrick Lawyers' Fiona Galbraith has published an analysis of the Full Federal Court appeal - Ranbaxy Australia Pty Ltd v Warner-Lambert Company LLC(No 2) here.

Who pays the cost of copying?

The manner of calculating an account of profits by reason of copyright infringement was considered by Heerey J in Tenderwatch Pty Ltd v Reed Business Information Pty Ltd [2008] FCA 931.

On the question of what proportion of the profits made were attributable to the infringement, his Honour considered that the use made of the infringing work was so fundamental to the activities of the infringer that the whole of the profit should be so attributable.

On the question of whether the infringer was entitled to deduct from the gross profits, an amount based on his time spent in preparing the infringing work his Honour considered that such a deduction would be wrong in principle, stating that “This would be tantamount to making a copyright owner pay an infringer for the time and effort spent in infringement.” The cost of printing the infringing works was however held to be properly deductible.

Anti-counterfeiting trade agreement negotiations

Both the Australian and New Zealand governments have announced that they will join with a number of other countries (including the USA, Japan, Switzerland, Canada, Korea, Mexico and the EC) to develop an Anti-Counterfeiting Trade Agreement (ACTA) as part of an international effort to curb the trade in counterfeit goods and pirated works.

It is intended that ACTA will set a common standard for intellectual property rights enforcement in matters such as criminal enforcement, border protection measures and civil enforcement; and establish enforcement best practices and mechanisms for international cooperation.

Barefoot and Fancy Free

In E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934, handed down on 20 June 2008, Flick J considered a claim by Gallo that Lion Nathan had infringed Gallo’s trade mark BAREFOOT, registered in relation to wine, by the sale of beer under the trade mark BAREFOOT RADLER.

On the question of infringement, it was held that BAREFOOT and BAREFOOT RADLER were not substantially identical but were deceptively similar. Curiously, his Honour considered that had the comparison been between the registered mark BAREFOOT and the combination of the words Barefoot Radler and a “bare foot device” as used by Lion Nathan, no such deceptive similarity would have been found. Despite the finding of deceptive similarity, Flick J held that there was no infringement because the goods in question, being wine and beer respectively, were not goods of the same description.

Flick J also held that Lion Nathan was entitled to succeed in its application for revocation of the Trade Mark on the ground of non-use. While there were sales of BAREFOOT wine in Australia during the relevant period, the use of the trade mark by reason of those sales was not attributable to Gallo. In considering whether there were in fact any sales at all in the relevant period, his Honour rejected as inadmissible, evidence purporting to establish the offer for sale of wine at some time in the past on the basis of material obtained from the “Internet Archive Wayback Machine".

Commonwealth v Charlesworth - Entitlement

This case (The Commonwealth of Australia v John Murray Charlesworth [2008] APO 16 (3 June 2008)) related to a successful challenge by the Commonwealth of Australia, c/– Minister for Defence under Sections 32 and 36 of the Patents Act in respect of a water concentration measuring device conceived by Dr John Murray Charlesworth while employed by Defence Science and Technology Organisation (DSTO).

In considering recent decisions on this issue including the decision of Justice French in University of Western Australia v Gray (No 20) [2008] FCA 498 Delegate Powell found that when trying to decide what the invention is, if the applicant has clearly stated in the specification what they believe their invention to be (possibly in a consistory statement or clause), and that invention is different to the prior art that is described in the specification, then it is reasonable to proceed on the basis that the invention is what the applicant says it is. To do otherwise would be to ignore the disclosure of the specification.

Beware of the former search result requirement

Peter John Ward v Embrey Attachments and The Stanley Works [2008] APO 17 (12 June 2008) related to a Section 223 extension of time within which to comply with section 45(3). Although the need to file search results was abolished in October 2007, this decision is a reminder that the requirement still exists for those cases (albeit a small number) where the search results were completed before 22 April 2007, and examination was requested before 22 April 2007 and the application was advertised as accepted before 22 July 2007. If the former search result requirement is not complied with, then it will affect a patentee’s ability to amend by reason of section 102(2C).

In this case there was a third party request for re-examination under section 97(2) in respect of prior art raised in EP and US. This art was material that should have been brought to the attention of the Patent Office by the Patentee. The Australian re-examination report found that claims 1-5 and 7 were not novel and claims 6, 8-11 lacked an inventive step based on a number of these documents.

In response to the re-examination report, the Patentee proposed a number of amendments noting that these were for the purpose of overcoming the Examiner’s objections regarding lack of novelty and inventive step. The examiner granted leave to amend without recognizing that the amendments might not be allowable under section 102(2C). Fortunately for the Patentee, it was not possible for the Commissioner to review or reverse this decision to consider the implications of section 102(2C). Whilst in this particular case the Patentee was able to provide a full and frank disclosure to establish a causative error to enliven section 223 and thereby extend the time in which to file the search results, the outcome would have been disastrous for the Patentee if section 223 did not apply and the Examiner has refused the amendments by reason of section 102(2C).

Federal Court to Implement new Patent Procedure

Attached as a schedule to the judgment of Heerey J in Black & Decker Inc v GMCA Pty Ltd (No 3) [2008] FCA 932 handed down yesterday was an outline of the Federal Court’s new procedure for the management of patent cases to be implemented on a trial basis.

The procedure is directed to narrowing the issues in dispute as early as possible in the proceeding in an attempt to reduce the time and cost of patent matters.

Post Trial Prior Art

In Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 875, handed down on 5 June 2008, Gyles J granted leave to Dura-Post to re-open its case seeking to revoke various innovations patents in the name Delnorth.

Following the close of the hearing of the matter, a prior published US patent came to the attention of Dura-Post, who brought an application to be allowed to amend the particulars of invalidity to rely upon the prior publication under the grounds of novelty and lack of innovative step, and tender the patent in evidence.

Gyles J, being satisfied that there was sufficient explanation as to the delay in raising the point, that the prior publication was of apparent relevance to the issues in the case and that any prejudice to Delnorth could be cured by appropriate orders as to costs, granted leave as sought. The court also noted that: “it is relevant to take into account that a patent revocation suit has some of the characteristics of an action in rem. It does affect the public and I must bear in mind that anybody else could come along and seek to revoke using this very piece of art.”

The decision is here.

ACIP to conduct review of patentable subject matter

On 2 June 2008, the Advisory Council on Intellectual Property (ACIP) announced that it will be conducting a review of patentable subject matter. The review will investigate the ‘appropriateness and adequacy’ of the manner of manufacture test, and the historical requirement that an invention must not be ‘generally inconvenient’. An Issues Paper is expected to be circulated in July, with consultations in late 2008 and a request for written submissions by September. Members of the PO&F Group will be taking part in the review. For more information about the review, click here

Purpose v Purposive

The decision of the Full Court in Term-Seal (Aust) Pty Limited v Termite Tite (NZ) No 2 Limited [2008] FCAFC 95, provides a reminder that when taking a purposive approach to claim construction, it is the purpose for which the patentee has used a particular form of language to define an integer of the invention which is relevant, not the purpose of that integer in the patentee's invention.

The first instance decision of Besanko J, previously discussed here, was appealed on the issues of infrigenment and validity.

On the question of infringement, the appellant sought to overturn the trial judge’s finding that their product included, as required by claims 1 and 2 of the patent in suit, a “membranous termite barrier comprising a matting impregnated with a termite resisting product”.

The appellant argued that while their barrier included matting which was impregnated with disodium octaborate (accepted to be a termiticide), the purpose of that chemical within the matting was to act as a preservative or fungicide and not to resist termite attack. The Full Court considered the relevance of that argument to be “elusive” stating that “Purpose can hardly affect construction of the claims or infringement of them where purpose is not part of any claim”.

Secondly, the appellants argued that their barrier did not include this integer of the claims because its termite resistant properties were entirely mechanical, such that the disodium octaborate was not an “effective” termite resisting product. This contention was also rejected, the Full Court stating that it:

“involves an unexpressed limitation of the integer said to be akin to a limitation based upon result. In other words, there is no infringement unless the appellants’ product is effective. The appellants argued a variation on that theme in that the relevant claims should be construed as requiring an effective chemical barrier, whereas their product utilised a physical barrier. We can see no warrant for reading such limitations into any of the relevant claims.”

The appellant’s arguments seeking to overturn the trial judge’s finding that the patent was valid in light of certain alleged anticipations were also rejected.

The case can be found here.

Costly Consequences

Three decisions handed down on 12 June 2008 illustrate how various tactical decisions can have implications on the costs awards made in intellectual property litigation.

In ITW AFC Pty Ltd v Loi and Tran Pty Ltd (No 2) [2008] FCA 895, Finkelstein J held that costs should lie were they fell in a patent dispute where both the claim for infringement and the cross-claim for revocation were unsuccessful. In rejecting the respondents argument that the proceeding should be treated as a single case in which the patentee failed, his Honour made several comments on the undesirability of parties bringing revocation actions without merit for purely tactical reasons concluding that:

“The usual order for bringing a hopeless case is to require the losing party to pay indemnity costs. Sometimes even that might not be enough. In patent litigation the parties are often large organisations that will not sufficiently feel the pain of an indemnity costs order. In those cases (I do not suggest this one) the proper order might be to require the legal practitioner to himself bear the costs, coupled with an order that the practitioner shall not be entitled to recover those costs from his client, notwithstanding any agreement to the contrary.”

In Nutrasweet Australia Pty Ltd v Ajinomoto Co Inc (No 4) [2008] FCA 876, also decided by Finkelstein J, his Honour was not prepared to award the successful party their costs on an indemnity basis because the ground upon which they had succeeded was raised only six days before the trial.

Finally, in Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd (No 3) [2008] FCA 896, Besanko J ordered that the applicant should have its costs of the infringement of copyright and breach of implied contractual term claims on which it succeeded, but that the respondents should otherwise have their costs of the proceeding. Despite the applicant being awarded only $10 nominal damages for the infringement of copyright, his Honour also made an order that the costs payable to the applicant not be reduced pursuant to O 62 r 36A(1) on the basis that copyright litigation is appropriately commenced in the Federal Court even where the monetary claim is small.

Dismissal of opposition

The case of Memcor Australia Pty Ltd v Zenon Environmental Inc. [2008] APO 14 follows on from decision of Delegate McCaffery in Les Laboratoires Servier v Apotex Pty Ltd [2008] APO 11 (11 April 2008).

This case relates to an application by Zenon Environmental Inc. for dismissal of an opposition under section 104 by Memcor Australia Pty Ltd. In this decision Delegate Barker confirms that the new practice of the Australian Patent Office in considering such applications will be that as reflected in section 31A of the Federal Court of Australia Act ie namely whether an opposition has any no reasonable prospect of success as opposed to the previous test which was whether an opposition is obviously or manifestly groundless or untenable.

In addition Delegate Barker reaffirms the longstanding view that decisions of the Commissioner do not give rise to an issue estoppel.

The decision is here.

Copyright and confidentiality

In Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd [2008] FCA 803, the applicant was successful in its claims for infringement of copyright and breach of confidence. The applicant had disclosed to the respondents as part of a quote to build trucking trailers, information regarding a load restraint system. The respondents argued that the information could not be confidential because it was not sufficiently original or novel having regard to information already in the public domain. Gordon J held that the information did have the necessary quality of confidence and in doing so noted that: “To put it more plainly, information need not be patentable, copyrightable, or otherwise protected by the intellectual property laws in order to be confidential.” The decision is here.