New issue paper on a ‘Review of Pharmaceutical Patents’

On 15 October 2012, the Parliamentary Secretary for Industry and Innovation, Mark Dreyfus, announced the establishment of a Pharmaceutical Patents Review Panel. The panel has now released an issues paper inviting public submissions on the topic. A link to the issues paper can be found here.

One of the key topics of interest relates to the issue of extensions of term under Australian patent law. Pharmaceutical patents are potentially eligible for a grant of an extension of term beyond the normal maximum 20 years. The extension mechanism is designed to be a matter for compensating a patentee for being unable to commercially exploit the patent while delays are encountered when seeking regulatory approval from the Therapeutic Goods Administration.

It should be noted that no other type of invention is able to apply for an extension of term and, in fact, there are particular requirements that dictate what can be considered a pharmaceutical patent.

Australia, in accordance with obligations under the TRIPS agreement, is required to offer some form of extension of patent term for pharmaceutical patents. However, the extent of extension or how it should be applied and calculated is left open under the TRIPS agreement.

The issues paper notes that a comparative study of extensions of term by Australia and other major jurisdictions indicates that Australia may be more generous in the extent of extra term granted compared with other countries. This implies that the Review Panel may indeed be targeting this issue to align Australia’s extension of term provisions closer to those applied elsewhere.

The closing date for public submissions for review is 21 January 2013.


by Simon Ellis

IP and Fast Moving Consumer Goods

I have had a number of interesting discussions with people working in innovation in the Fast Moving Consumer Goods (FMCG) industry in the past month. A few of these occurred at the 'Innovating for the Future' workshop in Sydney a couple of weeks ago, at which I spoke on intellectual property in the food industry.

What I am seeing from these companies are a lot of 'light-bulb' moments where they are finally starting to see the value in strategically protecting their technology- and design-related intellectual property (IP).

One of the reasons why this value may not have been so evident in the past is due to the nature of the industry. The IP system is fundamentally set up to encourage innovation in situations where innovation might not naturally occur. However, part of the nature of the FMCG business is that innovation has been a given: new features, new flavours, new packaging are a must to compete in a crowded shelf space. No special incentives have historically been necessary in a world where products lives are relatively short and competitors are continually pushing for market share.

That is the way things have been. But that is changing.

Throughout the developed world, and especially so in Australia, the rise of the 'private label' or house brand product in the various supermarket chains means your biggest threat now comes from your main customer! Where those customers are large and dominant in the market place, which is certainly the case in Australia's concentrated retail environment, the FMCG manufacturer is being squeezed continuously.

Most significantly, the retailers are adept and pressuring the innovative manufacturer to 'hand over' any successful innovation for use in their own private label range. This, over time, because a severe disincentive to innovate, as the expense and energy required to deliver innovation now provides almost no period of exclusivity in which the innovator can recoup and profit on their investment in innovation. There are always contract manufacturers who the retailers will set up to copy innovations almost immediately if the innovator is reluctant to share their work with the retailer.

And so enters the IP system, where innovation is has been disincentivised, a new tool can be found to, if not stop, at least slow down the march of innovations from the innovator to the retailer. Judicious use of the patent and design systems can create a better power relationship between the innovator and the retailer. The contract manufacturer can no longer step in with impunity to copy a protected new package, product, ingredient etc. In turn, the retailer has to wait longer, or pay more, for innovative FMCG products.

I expect to see this as a trend amongst the more 'switched on' FMCG companies.


by Adam Hyland

Changes Proposed to Australian Patent Prosecution

We have previously reported on the extensive changes to substantive patent law which will come into effect on 15 April 2013.

As with all patent office examinations throughout the world, one aspect is the substantive law: the other is the procedural rules under which the patent office operates. The draft amended regulations which implement these aspects of change have now been placed open for public comment.

Patent Examination
As had been foreshadowed by IP Australia, there are changes to the time frames for dealing with examination. Australia operates a deferred examination system, in which you may request examination at any time, but must do so within five years of the effective filing date, or within a deadline set by IP Australia in a direction to request examination. Third parties can also request examination. In many cases, international applicants await a direction.

At present, directions from IP Australia have a deadline of 6 months. This will now become 2 months. In general, this is a positive change, as it will reduce the period of time in which it is unclear whether an applicant will proceed further or not. From the perspective of the public, or someone conducting a freedom to operate enquiry, time periods where the intention of the applicant to proceed is unclear create uncertainty, and potentially clog up the system with patent applications that are never going to be progressed. It does mean that applicants will have to act more promptly on receiving a direction to request examination.

In a similar vein, at present once a first examination report issues, the applicant has 12 months to place the application in order for acceptance, plus a further 9 months for which response fees are payable, but only when a response is filed. This creates the situation that even where a highly adverse examination report issues, another party cannot be sure of the fate of the application for almost two years, until the notice of lapsing is published. That will now be reduced to a straight 12 months. Consequently, in almost all cases (other than where a hearing or appeal is filed), the fate of an Australian patent application will be clear within a year.

Again, in most cases this is a positive change, as it will mean that applications will be brought to a conclusion more quickly. However, it does allow less time for an applicant to wait for the outcomes of prosecution in other countries, which may lead to inefficiencies in some cases.

Effective date
These changes are proposed to be effective for any application where a request for examination or direction to request examination (as applicable) occur after 15 April 2013. We think that it is unlikely that these changes will not proceed.

These changes provide another reason why we urge applicants to consider entering national phase in Australia early, and requesting examination prior to April 2013. The changes to onus of proof, new rules on support for claims, increased scope for inventive step attacks, and other amendments mean that there are very clear advantages for applicants to have requested examination in Australia before 15 April 2013.


by Peter Franke

New Zealand to join Madrid Protocol

The New Zealand government and IPONZ have announced that New Zealand will be a member of the Madrid Protocol, effective 10 December 2012. The instrument of accession was deposited on 12 September 2012.

The Madrid Agreement and Protocol is  a series of international agreements that allow an applicant from a member country to file a single application, designating many different territories, and if successful obtain protection in all of them, without requiring local action in those countries. Among the 88 members are  Australia, the US, European Union (and member states), Russia, China, Japan and South Korea. A full list of members is available here:
http://www.wipo.int/export/sites/www/treaties/en/documents/pdf/madrid_marks.pdf.

This means  that New Zealand can be designated in new or existing Madrid Protocol trade mark filings after that date. This may in many cases simplify and reduce the cost of the process of obtaining protection in New Zealand for Australian brand owners.


by Peter Franke

Atomo wins Engineering Excellence Award

We are delighted to congratulate our client Atomo Diagnostics Pty Ltd, and its development partner, design firm IDE, as winners of the Sydney Engineering Excellence Awards for 2012 for their MicroRapid Integrated Rapid Blood Test Device, the world’s first hand held integrated rapid diagnostic device.


MicroRapid won the Small Business Award, received a highly commended in the Innovations & Inventions category, and was also presented with the prestigious Bradfield Award. The Bradfield Award is the highest award across all categories and "recognises an accomplishment of exceptional engineering merit which makes a major contribution to the community".

Atomo aims to bring the detection of a range of diseases out of the laboratory and into homes and outreach clinics across the globe. A test for the rapid detection of HIV is the first clinical application being commercialised using the device and is due to be launched later this year.

The integrated design runs the complete test in a single device. This makes it ideal for clinicians to use away from the laboratory as well as enabling individuals to conduct their own blood tests at home. Current blood tests using similar formats require the use of a kit containing five or six items making them quite complex to use and resulting in high error rates.

"Our device makes rapid blood testing easier, more reliable and much more user friendly. This allows testing to be performed by anyone in any setting" said John Kelly, Chief Executive Officer of Atomo Diagnostics.

MicroRapid can be used for a variety of clinical testing including the detection of cardiac and cancer markers, a wide range of infectious diseases as well as consumer focused self screening for common conditions such as Celiac, Allergy, Thyroid imbalances and Anaemia.

The Engineering Excellence Awards Sydney (EEAS) recognise the expertise of both individuals and engineering organisations in the community. Their aim is to create wider recognition for the valuable input of engineers in our lives. Atomo’s MicroRapid device will now go on display in the Powerhouse Museum for twelve months. This display is expected to be seen by over a half a million Museum visitors throughout the year.


Franke Hyland are proud to represent Atomo and assist them in the strategic development of their IP portfolio internationally.

What Is A Design Worth?

Most people are aware, at least in a 'big picture' sense, what patents and trade marks are all about. Trade marks are there to tell you whether the product or service you are buying is 'genuine'. Patents allow an invention to be 'owned' by the person or people who invented it, so others can't copy the idea.

But what of design registrations? They protect the 2D or 3D appearance of many objects, but their scope is quite narrow. Design protection does not travel far beyond the exact shape or pattern that is registered. This means it often seems that the protection of the whole 'concept' that a patent provides is a far more useful way to spend one's IP protection dollars.

Alternatively, the ability to protect against the use of an image or shape that may not be identical, but may simply be confusingly similar, to one's distinctive product, makes trade mark protection seem the better option for IP protection of patterns and shapes.

However, a recent decision of a U.S. jury in the Apple v Samsung battle (U.S. District Court, Northern District of California; Apple Inc v. Samsung Electronics Co Ltd et al, No. 11-1846) reminds us of the value that a well-chosen design registration can have. In this case, the jury awarded Apple total damages of USD 1.05 Billion, based on the infringement of a number of Apple patent and designs, and on 'trade dress' infringement, by 28 different Samsung products.

Although the jury didn't spell out precise reasons for each of the damages amounts, it is interesting to look at which products attracted the biggest payouts. For example, the Galaxy Tab 10.1 WiFi PC, which infringed some patents but not any designs, attracted damages of USD 833,076 from 1.2 million units sold. By contrast, the Fascinate smartphone, which infringed a number of designs as well, attracted damages of USD 143,539,179 from 1.4 million units sold.

That seems to indicate that Samsung's design infringement was viewed as somewhat more serious than their patent infringement for these products. Perhaps this is not surprising for products whose sales are driven by design and 'coolness'.

Perhaps designs can hold their own in an IP strategy after all?

by Adam Hyland

Grants for Low Carbon Solutions

We are always conscious that some of our clients are looking for funding and venture partners, and on the lookout for ways to help.

GE have a new Ecomagination Challenge, which will see five winners awarded $100,000 cash, and a potential capital pledge of up to $10 million. This is specifically directed at technology which has the potential to delivery reduced energy and carbon footprints. For more information, see:

http://www.startupsmart.com.au/funding/$100000-grants-up-for-grabs-for-carbon-cutting-innovation/201208277373.html?utm_source=StartupSmart&utm_ca


by Peter Franke

Bye Bye Fair Basis?

As previously reported, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 was enacted on 15 April 2012.

One aspect of the changes is the apparent demise of the test for 'fair basis'. Prior to the amendment, the claims of a patent must be (among other things) 'fairly based' on the matter described in the specification. The changes now say that the claims must be 'supported' by matter disclosed in the specification. This 'supported' concept is in line with the majority of overseas jurisdictions and was intended to be so.

The concept of 'fair basis' has often been a difficult concept to properly define. As a component of Australian patent law it was supposed to be a mechanism for balancing the scope of a patent claim granted to a patentee against what the patentee has revealed, in a practical sense, of how to implement the invention. In other words, the test for fair basis was to ensure that a patentee was not given a scope of patent monopoly beyond what is fair in consideration of what the patentee provides to the public. This is in line with the public policy considerations of the patent system, whereby a patent monopoly, of finite term, is given in exchange for a full public disclosure of how to implement the invention, which disclosed teaching is effectively public domain at the end of the patent's life.

What, then, is to provide the checks and balances against undue(albeit 'supported') breadth of patent claims?

There are two further changes effected by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 which may go towards filling in the gap left by fair basis in this regard.

Firstly, there has been a raising in the standard of disclosure in a patent specification. Whereas, a patent specification, prior to the amendment, was required to described an invention fully; it must now disclose the invention in a manner clear enough and complete enough for the invention to be performed by a person skilled in the relevant art. This raised standard of disclosure now also applies to Australian provisional patent applications. Consequently, provisional applications having overly conceptual disclosure (which was permitted) rather than real nuts and bolts practical disclosure will now be a thing of the past.

The second significant change relates to the issue of utility. A claimed invention has been required to be 'useful' to be patentable. The changes have introduced a threshold definition of when a claimed invention is to be taken as not useful: "... an invention is taken not to be useful unless a specific, substantial and credible use for the invention (so far as claimed) is disclosed in the complete specification". Furthermore, "the disclosure in the complete specification must be sufficient for that specific, substantial and credible use to be appreciated by a person skilled in the relevant art".

This change not only raises the disclosure requirements for Australian patent specifications, but also requires a disclosure of utility which supports the entire breadth of the invention claimed. In other words, conceivably a claim which covers something more than the level of disclosure provides sufficient utility may be found to be lacking in utility. An example of where this may prove relevant are claims which provide excessive ranges of parameters but where the specification provides practical working examples of only specific parameters, i.e. not the entire claimed range. This is not an uncommon feature of chemical and pharmaceutical patents.

This change in the utility threshold does have an aspect of providing some of the balance against undue claim scope which 'fair basis' once presided. One can predict that this area of patent law may become fertile ground for judicial review and development in the years to come.

The above changes will come into effect for all Australian patents and patent applications in which a request for examination is filed on or after 15 April 2013. Consequently, these changes can have a retrospective effect on existing pending Australian applications, unless a request for examination is filed by 14 April 2013.

by Simon Ellis

Thoughts from IFT12

I recently had the opportunity to attend the U.S. Institute of Food Technology (IFT) 2012 annual convention (IFT12) in Las Vegas. It was even bigger than IFT11: over 18,000 attendees, over 1,000 exhibiting companies.

So while the U.S. food manufacturing industry appears to be in rude health, food technologists are worried. They fear the erosion of trust by the public of the food industry as a whole. The misunderstanding (wilful or otherwise) of what ‘processed food’ actually is continues to be a very real threat to the industry, and also the food technology profession’s ability to attract students and members.

A number of presentations addressed this issue at the convention. The fundamental fact is that humans have been processing food for thousands of years. ‘Processing’ has always been performed to make food last longer, less susceptible to spoilage, better tasting, more convenient to store and consume, etc.

However, when consumers are surveyed as to what they think about processed foods, the most common reactions include words such as: ‘added chemicals’, ’unnatural’, ’preservatives’, and ’unhealthy’. Even the term ‘food technology’ had become problematic, as consumers don’t enjoy the idea that ‘technology’ has somehow been involved in the production of their food, in contrast to the way that they DON’T have an issue with ‘medical technology’ or ‘communications technology’.

Now with the proliferation of social media and the ‘food bloggers’, some of whom have an ‘anti-processing’ agenda, the ability of misinformation about food processing to spread and become part of public consciousness has changed the game for food manufacturers. The message I heard at IFT12 is that while patient explanation of the scientific reality of modern processed foods is still necessary, it will never be enough on its own to win the debate.

Some of the collective wisdom of the presenters is:

• Communicate the real need for food science and technology, e.g. that the world will need to feed 33% more mouths in the next few years, but that right now 30% of the worlds food production is spoiled by pests or micro-organisms long before it reaches the consumer.
• Play up the culinary aspect of food manufacturing, because this is something consumers can more readily engage with.
• Get on the front foot against misinformation – don’t run from or hide the fact that food technology is a key part of a safe and reliable food chain.
• Never overestimate the credentials and knowledge of those seeking to spread sensational misinformation – challenge their ‘facts’; don’t accept their premise.
• Recognise that in a politically polarised media landscape, the noisiest minority views will tend to rule.
• Be transparent: throw open the factory door; don’t appear secretive as this will equate to a perception of underhandedness.
• Partner, at ‘arm’s length’, with independent online opinion leaders. This means maintaining an open, factual dialogue with them, not necessarily trying to ‘recruit’ them as a mouthpiece.

The IFT itself has responded to what they see as a crisis, via activities such as a workshop entitled ‘Changing the Conversation About Food Science’, reported here.

I particularly like the following observation:

Author Michael Pollan, an outspoken critic of processed foods, says that “food is what your great-grandparents ate,” said Fergus Clydesdale of the University of Massachusetts, adding that he hopes that is not the case because what our grandparents ate wasn’t always optimal. Consider Ireland in the mid-19th century, for example; when the potato blight struck, millions died or were forced to emigrate.

“I really think the media should look at just how good were the good old days,” said Clydesdale. “We have to approach it on an historical level with real data.” He pointed out that many people today are losing touch with some of the benefits of food science because they’ve rarely encountered a spoiled food and “therefore they don’t understand how a food stays stable and safe and why they should be concerned about it.”

The IFT has also produced a number of emotive videos aimed at reminding consumers of the positive role food science plays in a modern society, which are published here.

The challenge is real, and the message is important, because the misinformation that pushes consumers away from ‘processed foods’ may well be pushing them toward unsafe foods.


by Adam Hyland

Raising The Bar On Inventive Step

As previously reported, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 was enacted on 15 April 2012. One of the most significant and publicised changes concerned the inventive step test.

The inventive step test revolves around a hypothetical person skilled in the relevant art to an invention under scrutiny. If this person would have considered the claimed invention to have been obvious as at the claim's priority date then the claim in question fails the inventive step test.

The question of obviousness is effectively based upon two sources of information, that being common general knowledge and prior art information (or a combination of common general knowledge and prior art information).

Common General Knowledge

Prior to the recent changes, the common general knowledge was restricted to that as it existed in the patent area (which effectively meant Australia). The changes have now removed this jurisdictional limitation. Hence, the test now allows consideration of a conceptually global common general knowledge.

Prior Art Information

Prior art information includes documents made publicly available (anywhere in the world) and information made publicly available through an act (anywhere in the world). In assessing inventive step, the skilled person is allowed to consider a single piece of prior art information or a combination of pieces of prior art information (if the skilled person could have been reasonably expected to make the combination).

Prior to the recent changes, there were restrictions upon the applicability of each piece of prior art information. In effect, each piece of prior art information needed to satisfy the requirement that the skilled person could reasonably have been expected to have ascertained, understood and regarded as relevant the prior art information as at the priority date. The changes have now removed these restrictions. In effect, if something is prior art, it is applicable.

Ramifications

While the changes to inventive step have, in essence, raised the threshold bar; the changes have also, in fact, simplified the inventive step question in a more practical sense. The benefits of this simplification will probably become more apparent in cases where the validity of a claim is challenged in oppositions and judicial proceedings. Wrangles over what prior art information can or cannot be considered may become a thing of the past. Furthermore, the admissibility or relevance of evidence from overseas experts will become uncontroversial.

The changes have moved the inventive step question closer in line with other major patent jurisdictions. Whether this means a claim passing inventive step scrutiny by IP Australia will give better weight when the claim is assessed in other jurisdictions will remain to be seen. However, it's nice to be optimistic.

Coming Into Effect

The relevant changes will come into effect on 15 April 2013. However, the manner in which the changes take effect requires careful consideration.

The new inventive step test will be applicable to all Australian patents and patent applications in which a request for examination is filed on or after 15 April 2013.

As a consequence, the new inventive step test can have a retrospective effect on existing pending Australian patent applications, unless a request for examination is filed by 14 April 2013. On the flip side, future Australian patent applications which are filed on or before 14 April 2013 AND have examination requested by 14 April 2013 will retain the application of the lower threshold inventive step test.

While, under Australian practice, examination must be requested within certain deadlines (i.e. within 5 years of filing or 6 months from being directed to do so), examination can be requested voluntarily at any time. Hence, if the change in inventive step test raises any cause for concern, it may be worth considering voluntarily requesting examination before 14 April 2013.

On a similar note, anybody considering filing an Australian patent application in the future (whether as an application claiming priority from an overseas application or a national phase from a PCT application) may want to think seriously about doing so earlier than planned and also requesting examination.

by Simon Ellis

Trouble with Chinese IP? You bet!

It is a fairly common fear of those whose businesses rely on intellectual property rights: the worry that the Chinese manufacturing juggernaut will thumb their nose at their IP rights and ride roughshod over them by sheer weight of numbers, unencumbered by the need to respect IP rights or the responsibility of doing their own research and development.

Looking to the future, I think Chinese companies will continue to present serious IP challenges, although perhaps of a different kind to those of the past.

There is no doubt that enforcing IP rights against Chinese companies, especially in China, has been difficult in the past. However, it would be wrong to think that China is akin to a lawless land, inhabited by IP cowboys.

Some interesting facts to consider:

• There are over 697,000 valid Chinese patents, and 351,000 of these are owned by Chinese companies. For the first time, more than 50% are owned by Chinese companies.

• In 2009, over 30,000 lawsuits were filed in the Chinese IP courts (absolutely dwarfing the number of cases filed in Australia).

• Approximately 90% of IP lawsuits in China involve Chinese companies suing one another.

• China is ranked 4th behind the USA, Japan and Germany in the number of international PCT patent applications filed, and they are growing more rapidly than any other country.

• Chinese companies ZTE and Huawei are ranked 1st and 3rd on the list of top PCT patent applications published in 2011, having had 4,657 PCT applications published between them – that’s over 12 patents filed for every day of the year!

So what does this mean? Chinese companies are filing, and will be granted, a massive number of patents at home and around the world; they are used to IP litigation and they won’t be afraid to use it, especially in the more established Western legal systems.

So what does this mean for you? The real problem you will have with Chinese competitors and IP rights is that soon they will be enforcing their rights against you, in your backyard. So you need to be prepared, not caught thinking about how it used to be.


by Adam Hyland

Patent Harmonisation – what is it all about?

History
Patent law is a public policy instrument to encourage innovation. It has been employed over hundreds of years by many countries. Each country historically imposed its own rules, restrictions and processes around patent law, and operated its law in isolation. This was very problematic for early inventors, and the likes of Colt, Watt and Edison famously spent large sums of money to protect their inventions outside their home countries. As is the case today, significant inventions were not confined to the country of the inventor – they have international application, and the inventors therefore require protection throughout many different countries.

The Paris Convention of 1883 established some minimum requirements on signatories. Each country agreed to provide a right of priority to applications filed in other member countries, provided they were filed within a year of the first application. Another important requirement imposed by the treaty is national treatment – nationals and residents of member countries must be treated by the national laws no less favourably than nationals of that country.

The Paris convention has been expanded and updated several times, and other agreements have governed areas such as formal requirements for patent applications (Patent Law Treaty), a common filing and preliminary search and examination process (Patents Co-operation Treaty), and deposits of micro-organisms to support patent applications (Budapest Treaty). Over the years, more and more countries have joined these agreements, so that the major agreements are operative in over 140 countries, including all developed countries and major emerging economies such as China, India, Brazil, and Indonesia.
Even more significantly, an intellectual property agreement, TRIPS, is a key component of the international trade system established and regulated by the World Trade Organisation. This allows countries to use the dispute provisions of the WTO when IP standards are not being honoured, and this has been used on several occasions.

In parallel, there has been a gradual trend towards national laws being amended so as to reduce unnecessary differences. Recent major amendments in the United States and Australia are illustrative of this trend. Hence, the core features of patent legislation are not greatly different between most countries, particularly developed countries, and most of the formal requirements can be met in most cases by following appropriate common standards. This also applies to emerging economies such as China, Indonesia, Thailand, and Malaysia.
Further substantive patent law harmonisation at the international level has been slow, but there are recent signs of progress.

So where is the problem?
‘Black letter’ patent law being harmonised is important, and carries great advantages for technology developers. However, the law is administered by a patent office in each country, which examines and grants patents. Patents are enforced by courts, which apply the law through the filter of their own national constitution, other fundamental laws, and underlying practices and principles.
As I will explain in more detail below, even if the same laws are in place and the same patent application is filed, completely different practical outcomes in different countries will be achieved if the administrative authorities operate different rules and practices. Similarly, if the courts apply different approaches to interpreting and enforcing patents, then even the same law and the same patent will produce different outcomes.

Patent Examination
In the past, each country has conducted its own search, examination and grant processes, in isolation from all other patent offices. A patent filed in 10 countries will be examined on similar grounds by 10 different Examiners, and this is a waste of resources. This is hugely inefficient on any objective analysis. This is particularly the case for the search component of examination, where often the same search is repeated in each country. While different patent offices will search somewhat differently – for example, the Japanese Examiner will often search Japanese material better than anyone else – there is a large degree of duplication. On the other hand, even where law appears similar, patent examination can be very different. It is not uncommon for the same patent have few objections which are readily overcome in one country, and have significant difficulties in another, based on the same prior document.

A form of harmonisation is taking place at many levels to improve co-operation between patent offices and remove duplication. One approach is a regional patent office, which examines for all the countries in a region, at least when the applicant decides to use that path. This exists in Europe, as the European Patent Office (EPO) and in parts of Africa.

Another form is the increased co-operation between patent offices, particularly in sharing their Examiners’ work. There are even proposals to have the Examiners from different countries discuss a particular invention which has been applied for in both countries, in some circumstances. The largest patent offices – the United States, China, European Patent Office, Japan, and South Korea - have all invested large resources in working to allow recognition and understanding of each other’s work products. This ranges from making translations of their national filings available in search databases, to working groups of Examiners examining the same applications and comparing the results. This is likely to eventually bear significant fruit.

The resources at stake are considerable - for example, the USPTO employs over 6,800 Patent Examiners, and has 644,387 applications (as at April 2012) that it has not yet examined. The statistics of the other large offices are similar in dimension. The economic drivers for improvement and co-operation are clear.
Despite some regional success with the EPO, there are many political barriers to any formal, legal recognition system for granting patents. However, from hearing speakers from all of the major patent offices over the past year, it is clear that they are all moving to recognise each other’s work, which in turn will tend to remove unnecessary differences in practice and approach between the different patent granting authorities. This is a project which all the large patent offices see as essential. The advantages for an Australian applicant are that this should reduce the cost of obtaining international protection.

The Courts
In the final analysis, the value of a patent is the ability to enforce it against an infringer. The underlying court processes of each country differ considerably, and this inevitably affects the enforceability of a patent in each territory. I am not referring here to patent law as such, but to issues such as the availability and quantum of damages, the availability of injunctions pending trial and final injunctions afterwards, the ability to compel the production of documents and witnesses, the time to reach a decision and the cost of proceedings. These are all matters of carefully protected national sovereignty, and not likely to change in a hurry.

Within the specific scope of patent law, one of the best examples is the Remington lady shaver case. This was a granted European Patent, with identical claims and (in principle) harmonised law in each country, and an identical infringing product. However, enforcement of European patents is a national activity. Out of seven cases in different countries, three went in favour of the infringer, four in favour of the patentee. This illustrates the complexity of practical harmonisation. Unless the patents are interpreted in the same way, differences will persist in outcomes even in a system of common administrative processes and closely harmonised law.
Judges in different countries who try patent cases do hold conferences, talk to each other, and reference each other’s judgements. There is a lot more scope for judge made harmonisation, but it is as yet embryonic.

Conclusion
From the perspective of the patent owner, in an ideal world, one authority would grant patents which would be granted internationally, and enforced internationally at a single court. This is not going to happen any time soon.

Gradual measures to harmonise the law, and remove formal and procedural differences between jurisdictions, have been occurring and are likely to continue. Patent offices are working together more than ever, with improved tools and a new determination from the administrators in each country. Judges are also talking to each other and this can only help to achieve improved consistency and understanding.
However, a grand, complete harmonisation is nowhere on the horizon. Improvements will come, but don’t hold your breath.

The only practical strategic approach is to try and draft patents to ensure that the specific requirements of the target countries are all considered in preparing the specification.

by Peter Franke

Innovation, Change and IP

It is a common refrain from business commentators and government – businesses must become more innovative. ‘Innovation’ can sometimes be a handy piece of jargon, thrown in to any address or policy paper in order to appear modern, up to date with trends and economically responsible.

So what is innovation, and why does it matter?

Innovation is a word which is not in itself well defined, and so it is important to be clear what I mean by innovation. One useful definition of innovation which has been developed by the OECD (the Oslo manual) is:

An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations.

That is, innovation is a much broader concept than just product and technological innovation. It extends to business practices, business process and how businesses interact, both within the organisation and external to the organisation. In one sense, it is the adaptive changes that a business makes in order to adapt to the changing markets, technologies and general business environment. It is possible to run a business which has a little or no innovation. However, any such business is vulnerable to the inevitable shifts in the market and changes in competitor behaviour. With few exceptions, businesses which fail to innovate fail to thrive, and often die.

From an overall economic perspective, it is useful to consider the role of innovation in increasing productivity. A variety of studies have indicated that the major component of productivity growth in organisations and in the economy at large is innovation.

What implications does increasing the level of innovation within an organisation have for their IP strategy and risk profile?

Firstly, a simple statement. If you keep doing exactly what you have been doing for the last 20 years, then you have no real IP risks, and you have no IP opportunities. Of course, you are completely vulnerable to all changes in technology, and if you want to change to match the actions of competitors, you may not find the world so simple.

The more complex part is that as any organisation increases its level of innovation, then it also increases both the opportunities for IP protection, and the risks of infringing another party’s IP.

The first part is fairly intuitive – if you are doing something new, you will inevitably be producing new IP. This can range from copyright in new artwork, software, packaging and manuals, through trade marks for new brands, and patent and design protection for new products or processes. If you are investing in innovation, then to ensure you maximise the benefits of it, you need to be able to control the innovation. This can mean making sure that agreements with employees and contractors transfer the IP to your company, that there are effective processes to record and capture IP, and that there are incentives and rewards for those who are doing the innovating in your company. It is never just about the IP in isolation – it is always about how the IP serves and supports your business strategy.

Why do risks increase? Well, if you are doing something new, there is a risk that someone else has already established rights. A competitor may have a trade mark, or sometimes a party in another industry may have a broad trade mark registration which your new product name infringes. If you broaden your product offering, you will have a whole new set of competitors. Competitors may have broad patents over platform technologies that you need for your new product.

Innovation also encompasses doing something new in your business which competitors are already doing, and the risks are fairly clear in that case. Failure to check a competitor’s rights in such a situation is akin to walking into a wall.

The message is that as you innovate more, so your exposure to IP – both as a protection for your business and a potential intrusion into the rights of others – will increase. Asking questions along the way, anticipating possible issues and managing the risk, with the help of your IP advisors, will ensure that innovation is more of an opportunity than a risk.



by Peter Franke

Changes effected to Australian Trade Mark Opposition Process

As previously reported, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 was enacted on 15 April 2012. While the main changes in the Act pertain to Patent law, other legislation was also affected, including Trade Mark legislation. In particular there is an aim to effect changes which will reduce delays in third party opposition proceedings against the registration of a trade mark application.

The relevant changes introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 will come into effect of 15 April 2013.

After IP Australia has formally accepted a trade mark application for registration, a third party is entitled to commence an opposition against the registration of the mark by filing a notice of opposition. Currently, an opponent has a three month period from advertisement of acceptance to file the notice; although this can be readily extended by a further three months. After filing the notice of opposition, the proceedings head into an evidence stage, the first evidence stage being the opponent’s evidence-in-support. Currently, evidence-in-support is to be completed within three months of the notice of opposition being filed. Fairly lenient extension of time provisions mean that in practice the evidence-in-support may not be required to be completed for a much longer period. Following the evidence-in-support, the applicant may counter with evidence-in-answer. In effect, this is the first part of the opposition proceedings in which the applicant makes any contribution. This could potentially be a year since the opposition began. The applicant also has time (readily extendible) before completing evidence-in-answer.

In practice, until the applicant does anything, which could now be 18 months after the opposition began, the opponent has no idea of gauging whether the applicant is really going to defend the mark. By which point, the opponent has obviously spent considerable time and money.

A key change that will come into effect on 15 April 2013 is the introduction of an additional step in the opposition proceedings. Following the filing of a notice opposition by an opponent, the applicant ‘may’ file a notice of intention to defend the mark. This is not as optional as it ‘may’ appear as the consequences of not doing so will result in the application being taken to have lapsed, thus ending the opposition at a very early stage.

While this is one change that is to be effected to opposition proceedings under the Trade Marks Act, further changes to the opposition proceedings are afoot under new Regulations which have yet to be finalised. The Regulations govern aspects of procedural timing and rules concerning extensions of time. It is understood that the intention will be to cut a number of the deadline periods for the opposition stages and toughen the requirements for obtaining extensions of time. Therefore, we will have to stay tuned to see how the timing issues are affected.

by Simon Ellis

Raising the Bar Bill passes House of Representatives

On 20 March 2012, the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 was passed by the House of Representatives, and will enter into force once the royal assent is granted by the Governor General in Council, likely within a week or two.

This brings into law the most wide ranging changes to Patent law in Australia for 20 years, and makes changes to Trade Marks, Designs, Copyright and Plant Breeder's legislation and other legislation as well. The bill was passed with bipartisan support and without amendment.

I have outlined the most important changes in earlier posts: Major Changes to Australian Patent Law is now Imminent!; More on major changes afoot for Australian patent law; and Major changes afoot for Australian Patent Law. Important substantive changes to the inventive step test and prior art base, requiring disclosure of a 'specific, sustainable and credible use', changes to the nexus between a provisional specification and to the support requirement are only a few of the important changes.


When will it come into effect?

Most of the changes will come into force a year after royal assent. However, some important provisions are effective more or less immediately.

The Act creates new, specific patent infringement exemptions for two situations.

First, acts done solely for the purposes of obtaining an approval required under a Commonwealth or State or Territory law, or similar law of another country, are not infringements. This does not apply to pharmaceutical patents, which already have a comparable provision (new S119B).

Second, acts "done for experimental purposes relating to the subject matter of the invention" do not infringe (new S119C). An inclusive definition of such purposes includes determining the properties of the invention, improving or modifying the invention, and various activities relating to determining the scope, validity and infringement of the invention. Importantly, there is no 'academic' or 'non-commercial' criteria here - the exemption specifically applies to an attempt to improve, or indeed disprove, the efficacy of a competing commercial product.

Another area is in effect more or less immediately, by implication. The legislation, in a year plus a few days, will require some new things of a patent specification in Australia:

• That (in order to be considered useful) a specific, substantial and credible use for the invention (so far as claimed) [must be] disclosed in the complete specification, and the disclosure in the complete specification must be sufficient for that specific, substantial and credible use to be appreciated by a person skilled in the relevant art (section 7A).
• That the specification disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art (s 40(2)(a)).
• That the claim or claims must be clear and succinct and supported by matter disclosed in the specification (s 40(3)).

These are new requirements in Australian law, although they are familiar requirements in other jurisdictions. What is important is that all new filings, especially provisional applications and complete applications on which a claims to priority may be made, MUST now be drafted to meet these requirements.

We will be working through many of the changes over a series of blogs – but be aware, major change is coming.

by Peter Franke

Major Changes to Australian Patent Law is now Imminent!

Further to our blogs of 27 January 2011 and 4 March 2011, we can now report that The Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 passed the Australian Senate on 27 February 2012. The Bill was passed without any changes being proposed. The Bill now awaits a final passage through the House of Representatives before it can be passed as an Act. It is expected that this may occur within the next three or four months.

As a consequence, it would appear that the number of issues we highlighted in our 27 January 2011 blog are about to happen. Patent applicants will face a tougher standard to obtain valid patent rights in Australia, more closely aligned with the standards in other major jurisdictions. Furthermore, a number of procedural issues are being tightened up to remove potential options for patent applicants to exploit procedural delays when prosecuting a application.

We will provide more detailed review of the pending changes in future blogs once the final wording of the Act becomes public.

by Simon Ellis

IPONZ Leading the Way

Franke Hyland is pleased to hear about the recent developments in the way the Intellectual Property Office of New Zealand (IPONZ) will be communicating with patent, trade mark and design applicants, and their agents.

IPONZ is in the midst of implementing (for trade mark and design applications) a full 'B2B' communication system for all official correspondence. This means NO MORE PAPER. This is a bit unusual for the IP world, and as far as national IP offices go, we think IPONZ are the first to be fully electronic.

The new system went live for trade marks and designs on 13 February 2012 and is expected to extend to patents in mid-2012. More information is available from the IPONZ website at:
http://www.iponz.govt.nz/cms/iponz/latest-news/expired-items/iponz-new-case-management-system.

The system IPONZ is implementing travels beyond the optional use of email or fax to receive documents; this is a system where all communication from IPONZ will be via direct download from their database, and communications to IPONZ will be by upload to their database.

Each application will have its own 'page' on the IPONZ website (www.iponz.govt.nz) where all transactions can be effected – reading examination reports, uploading responses to examination reports, submitting assignments to the recorded, changing the applicant’s or agent’s details etc. Specifically, IPONZ will not be issuing paper of any kind to applicants – even registration certificates will be 'download only'. No more stamps, ribbons or other traditional finery.

An area where problems may arise for IPONZ, at least for the medium term, will be in the issue of certified copies to other national IP offices to support Paris Convention applications made in those offices. Nevertheless, their policy is that they will provide these electronically. If this is in some way unacceptable to a National Office, IPONZ will deal with them directly.

This is a bold, but welcome, move by IPONZ. As a relatively smaller office, they are well placed to try to bring the business of national IP offices into the 21st century. This obviously accords very well with Franke Hyland's approach to communication with clients and IP offices, and we are looking forward to working with IPONZ's new system and seeing it develop.


by Adam Hyland

What is the problem with confidential information?

For all kinds of business purposes, it is essential to disclose confidential information. Some common examples include providing specifications to suppliers, business proposals to financiers and customer lists to sales or marketing consultants. However, this is a process which needs to handled with great care. I will discuss some of the issues below, but here are the key issues in a nutshell:

1. If it isn't really a secret, you can't protect it.
2. If it isn't your secret, then you have no right to protect it.
3. If it isn't something specific and identifiable, you can't protect it.
4. You need to make it clear to the receiving party in writing (even by email) that you are telling them something confidential. A signed agreement is preferable.
5. You have to manage the information as if you think it is a secret and take steps to keep it that way – or the court will not assist you.
6. You should consider other ways to protect the information, such as a patent where you can, because once the secret is gone you can't get it back in your control.

Requirements for protecting confidential information
Generally, such disclosures are best covered by a clear, written confidentiality agreement. However, confidentiality can also be protected without a written agreement, where the basic requirements for confidential information being protected by the courts are met. These vary from country to country. In Australia, the three requirements for protection by the courts are:

• can the information be identified with 'specificity, and not merely in global terms';
• does the information have the necessary 'quality of confidence'; and
• has the information been imparted in circumstances where the party receiving the information would understand that there is an obligation of confidence?

What information can be protected?
The first requirement means that it is no good alleging that the confidential information was 'all our future business plans'. It must be something much more specific. Typical protectable confidential information includes customer lists, financial records, specific written business proposals, detailed future marketing plans, confidential process parameters, designs that have not been made public, and in some cases, formulae and recipes.


What information can't be protected?
It isn't possible to protect negative information. What is negative information? It is knowledge of what a company can't or won't do, or that something doesn't work. You don't generally need to tell anyone else negative information, it is used in the background to assist in making decisions. For example, consider the situation where a researcher has considered 17 different ways to achieve a particular product outcome. There are only three possibilities left. The researcher leaves and works on the remaining three for a new employer. Assuming that those possibilities are not in themselves confidential, this is not a breach of confidence; the researcher just doesn't go down blind alleys.


What does confidential mean?
In short, it has to be secret – not generally known. The information must be treated internally as something confidential and protected – taking steps such as control of copies and access, marking 'confidential', and not providing access to people who do not need access. You can't leave a document, for example, on a generally accessible server in a large company system, and later allege that it is confidential.


You also can't magically make something confidential which is known elsewhere – if the information is able to be ascertained without breaching confidence, then it does not have the quality of confidence. You can't change that with an agreement.


This leads to one of the key weaknesses of confidential information. When the genie is out of the bottle, it can't be put back in. The internet is forever. Even if the first breach is unlawful, other parties who come across the information in most cases will not be able to be effectively restrained from using the information.
Does the party receiving the information understand that there is an obligation of confidentiality?


This requirement is best met with a clear written agreement. It is really best if the agreement is specific as to what is going to be disclosed, not just a generally expressed 'everything we disclose is confidential'. This is for two reasons. First, much of what you discuss will not objectively be a secret, and it leaves the task of sorting out what is really covered to the courts. Second, if the disclosures are 'new product specifications for our cleaning liquid', ideally with an annexed written disclosure, then no one is in any doubt what is covered.
It isn't a good idea to try and fix this afterwards, with an agreement which purports to be backdated, or to confirm that the disclosure was confidential. Prevention is better than cure – especially when it isn't difficult or expensive, as in this case.


Pitfalls for the unwary
A recent Australian case provides a good example of when failure to think through a disclosure of confidential information in advance, and then attempting to rectify it later, can lead to disaster. In Abrahams v. Biggs, [2011]FCA 1475, Mr Abrahams was a property manager who became aware of the problem of bed bugs. He came up with the idea of a device to be attached to the bed, to prevent the bugs crossing a barrier, formed from a sticky material. He filed a patent application for that idea.


Mr Abrahams then had a non-confidential discussion with Dr Doggett, an expert on bed bugs. In the course of that discussion, the idea of a device based not on glue, but on the need to traverse a surface that the bugs could not grip, was conceived. Dr Doggett suggested that a possible material was Teflon.


To halt the story at this point, Abrahams has already acted fairly unwisely. He has sought a solution from an expert, with no agreement in place. The best interpretation at this stage is that if there is any invention, it is jointly owned by Doggett and Abrahams, as they have both been necessary contributors. On another interpretation, Doggett alone owns the invention. A simple consulting agreement with Doggett could have created a confidential relationship, transferred any IP rights, and avoided this situation.


He then had a conversation, and subsequent email exchanges, with Ms Biggs, an acquaintance of his, about the product and the proposed improvements. The exact nature of the discussions, and who said what to whom, was the subject of some dispute.


However, the general thrust is that Abrahams initiated a discussion with a business acquaintance, and did not make it clear in writing or verbally that it was confidential – at least until after they talked. There was a degree of on-going interaction, but in the end no business arrangement went ahead.


Biggs then proceeded to produce her own design, using Teflon, and using Doggett as a consultant. She, perhaps unwisely, made what were held to be misleading statements comparing the effectiveness of her product and Abrahams. One wonders if this dispute would ever have got to court had this action not happened to inflame matters.


On the confidential information issue, however, Abrahams failed, on the basis that none of the key requirements for a breach of confidence action were made out. His Honour held that the information was conveyed to Biggs in general terms, that at that stage Abrahams had no idea what his design was, and so the information lacked sufficient specificity. He also held that on the basis that there was evidence that Teflon was known as a material for impeding the movement of insects already, and in any case the suggestion originated with Doggett, so the information did not have the necessary quality of confidence. Finally, it was not clear on the facts that Biggs ought to have understood that the information was received in confidence.




by Peter Franke

Swear words can’t be registered as trade marks can they? That would be “Nuckin’ Futs”

Then again, maybe they can, as the mark NUCKIN FUTS has indeed been recently accepted for registration as an Australian trade mark in respect of certain snacks foods such as nuts and potato crisps.

The case is relatively unremarkable, aside from the relative ease with which the mark overcame objections raised by the trade mark Examiner.  But it does add up with a number of other cases over recent times concerning so-called ‘scandalous marks’ which exposes just how far one can push the boat in terms of taste before a mark will fall foul of the ‘scandalous mark’ exceptions to trade mark registration in Australia.

The relevant ground under the Trade Marks Act 1995 is Section 42(a), which provides that the Registrar of Trade Marks must reject a mark if satisfied that the mark ‘contains or consists of scandalous matter’.

In the case of NUCKIN FUTS, the Examiner did raise an objection on the Section 42(a) ground noting that the mark was an obvious ‘spoonerism’ and evokes an offensive word.

The applicant argued that the swear word evoked by the mark is now part of everyday language in Australia and should not be considered offensive. Furthermore it was pointed out that the product was intended to be marketed to an adult market in adult venues, this was emphasised by the addition of a disclaimer to the mark stating that the mark will not be marketed to children.

Something in the response worked, as the mark was subsequently accepted.

There is now a line of cases that suggest that misspelled swear words, whilst being obvious and evoking the swear word, are passing the Section 42(a) threshold. The most famous mark possibly being FCUK (owned by French Connection). Other marks include CNUT and ABSOFCUKINGLUTELY (albeit this mark followed the unsuccessful attempt at seeking registration of ABSOFUCKINGLUTELY).

Culturally, the crude spoonerism is nothing new. In this regard, I’m reminded of ‘The Pheasant Plucking Song’. Apparently, I’m not the only one as there is a registered trade mark for PHEASANT PLUCKER!
There also appears to be a trend that accepts that Australians will find certain marks (while of potentially bad taste) playful rather than offensive, such as POMMIEBASHER and
LOOK GOOD + FEEL GOOD = ROOT GOOD.

Nevertheless, despite all attempts at arguing the misspelling line and even going so far as to question the pronunciation, the marks KUNT and KŰNT failed to achieve registration.

If there is some undying desire to evoke crude swear words in a trade mark, it would appear to be the case that IP Australia will not stand in the way and will not take the position of being the judge of what may be in bad taste. However, more direct usage of a swear word will indeed face a strong challenge on the basis of Section 42(a).



by Simon Ellis

So what exactly IS a 21st Century Patent Attorney firm?

In some of our marketing materials we referred to Franke Hyland as a 21st Century Patent & Trade Mark Attorney firm. At the outset, that label represented our aspiration for what we wanted Franke Hyland to represent to our clients, colleagues and partners.

Now that we have completed our second year of operation (time flies when you are having fun) we think it is a good time to reflect and expand on what it means to be a modern firm in 2012.

We see the environment in which we operate as having changed significantly from how it was for most of the latter part of the 20th century. Some of these changes have made life harder for the patent attorney in private practice, and some of them have made it easier.

Some of the downsides for the entrenched ways of operation are:

• Increasing alignment of the patent/trade mark/design laws and systems in each country mean local expertise is perceived as less necessary (especially for larger organisations); and local attorney 'value add' is harder to demonstrate.
• Large corporations are investing in more sophisticated in-house IP departments to handle a lot of the procedural work that used to be done by external providers.
• Consequently, much of the remaining procedural patent prosecution work is increasingly the subject of price/volume competition.
• Medium size clients are much savvier about demanding value for money from service providers, so the scope of work, and fees for the attorney, are being focussed on what can be justified as providing value to the client.
• The Madrid Protocol has seen international businesses file and maintain their trade mark portfolio with minimal need for local agents.

However, there are a lot of upsides to being a patent attorney in the 21st century.

• The flip side of greater harmonisation in IP laws is that when acting for a local client, we can be much more in control and maintain a much better detailed oversight of implementation of the IP strategy. It has also significantly reduced the cost of filing internationally (also helped by the strong Australian dollar).
• Electronic communications with clients and government IP offices such as IP Australia mean our work can be done faster and more efficiently, with the location of client and attorney being less critical.
• Electronic communications also mean we don't need to rely on paper files, mail, storage etc. Nor do we need as many support staff to manage client files.
• The ability to outsource non-critical activities allows us to concentrate on the real value areas for our clients, including higher-level advice, IP strategy development, better patent drafting and IP education.

We think the 'upsides' outweigh the 'downsides' for us as attorneys ... IF we are prepared to embrace a different mindset. To us, being a 21st century firm means:

• Concentrating on local (for us Australian-based and New Zealand-based) clients, who may be foreign owned or controlled, but who have significant local IP development activities.
• Always understanding that the client's IP strategy must be accountable to their business strategy, and so investing the time and effort to properly understand that business strategy so that our work will deliver them value far in excess of their investment in IP strategy.
• Being entrepreneurial and flexible in the way we will work with clients and in setting up fee structures that work for us and our clients (this is much easier to do when you have a very efficient and streamlined operation)
• Recognising that our clients are usually not IP or legal experts, and that it is OUR job to communicate in a way that makes it easy for them to incorporate IP advice into their business planning. 
• Being prepared to invest time and effort in raising a client's level of awareness or competence in dealing with IP – because we have learned that the more the client understands, the easier it is for us to deliver value to them.

We are happy to say that two years in to our journey that our '21st Century' vision is paying off for our clients and for us!

by Adam Hyland

Medical Treatment Claims for Medical Devices

One of the most contentious areas in patent protection internationally are claims to methods of medical treatment. Such claims are only possible in two countries - Australia and the US.

The aspects most often discussed in the debate relate to direct surgical or medical treatment, pharmaceutical dosage regimes, and diagnostic techniques practised directly on the human body.

In practice, to obtain effective protection for some medical devices, it is important to obtain some protection for the device as used, or where appropriate, for aspects of how the device interacts with the user. For instance, where the device is used to facilitate a service, the major economic benefit may not reside in the cost of the device itself, but in the improvement it provides to the service. One example is an improved reagent delivery cartridge, to speed up a process and improve safety. Another is where an active implanted medical device uses measurements within the body to calibrate or modify the stimuli which are delivered. In this case, the device may have the same cost, and the same components, but the software is modified to provide an altered operation mode.

In many other countries, claims to a method of medical treatment are expressly prohibited. For example, in India, China, Japan and Europe, such methods are included in a list of subject matter which is expressly excluded from patent protection. Given the restrictions, how can protection for these aspects be achieved?

Part of an effective response is to understand the rationale behind the prohibition. In general terms, the argument relates to a general principle that permitting the monopolisation of medical and surgical techniques would not be in the public interest. The specific instances raised include:

• hindering medical research by restricting the free flow of knowledge;
• exposing medical practitioners to personal liability for, e.g., performing life saving procedures; and
• enabling patentees to control access to medical procedures, so as to take a general public service and place it in the hands of only those who can afford to pay.

The first reason is common to all patenting, applies in any case to pharmaceuticals which are routinely patented, and is not specific to methods of medical treatment. Combining the last two, the guidelines operated by major patent offices generally are centred around the work of the medical professional, so that the claim must not cover the actual delivery of therapy, or the work normally carried out by medical practitioners. Hence, claims directed straight at ‘A method of treating medical condition X wherein device Y is deployed as follows ...’ are doomed to failure.

What is required is an analysis of the technical and business processes concerned, to isolate patentable aspects. It is protection of sometimes incidental, sometimes pre-patient or internal methods, which can provide some degree of protection. There is no substitute for a careful analysis and strategy process prior to drafting claims and the patent specification, taking these factors into account. This may result in a patent that looks misdirected to the medical practitioners and product developers, because it will necessarily not focus on what is happening to the patient directly, but it is how to achieve a claim which can be negotiated through the patent office policies and statutory restrictions.

It is important to appreciate that the restriction does not prevent obtaining a patent for a medical device as such. Hence, patents to mechanical, electrical, electronic or materials aspects of devices can be obtained in any jurisdiction. It is when the issue is one of processes within the devices, or that use devices, that a problem arises. While there are no hard and fast rules, some useful approaches include:

• A focus on processes internal to the device, with no therapy delivered. For example, the method may receive sensor data, apply an algorithm, and modify a table of data. The data is what is used to determine therapy values, but that step is not claimed.
• Consider the steps required to take a device from a latent state to a state ready for use. These will be carried out in the clinic, and are preparatory to any actual treatment, so can be claimed.
• Claims can be directed to hardware components ‘adapted to be used’ in a process, or in some cases even to ‘when used’, to import at least some of the constraints of the process, if that helps with patentability.
• Consider aspects of the product design that are required to make it suitable for a particular purpose. If you can protect any use of a device which could be used in a process, even if these are less significant technically, then this may provide effect use protection.

Of course, the field is much more open in the U.S. and Australia, however, the application of these approaches in addition to more direct method of treatment claims will only improve the effective scope of the patents obtained. The situation in the U.S. is somewhat under challenge, as there is a pending appeal to the US Supreme Court in Mayo v. Prometheus, dealing partly with these issues, in which oral argument was heard in December.

As in all patent drafting, careful strategic analysis and a solid understanding of business models is critical to obtaining effective, and hence valuable, IP rights.

by Peter Franke