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

Franke Hyland and Macquarie University

Franke Hyland is proud to announce that they have been selected to provide patent attorney services to Macquarie University. After an extensive tender process, Franke Hyland was successful in their tender to provide patent drafting and prosecution services for a three year period.

Macquarie University is on track to become one of Australia's leading research universities. To reach that goal, they are investing heavily in research, new infrastructure, teaching facilities, and in developing mutually beneficial relationships with industry. There are (as at 2010) over 31,000 students, and almost 1,000 academic staff on campus.

We look forward to a long and successful partnership with the University.

The Problem with Provisionals

Provisional patent applications were originally made a part of the patent system to assist inventors. The idea was to allow for a less thorough, and hence less expensive, initial filing as a way of recording that an invention had been made, but without the full detail and formality of a regular patent application. Provisionals act as a ‘place holder’ for a year, within which time a regular patent application must be filed, or the protection lapses.

One advantage of filing a provisional application is that it buys time for the applicant to do further research and refine the invention, before the regular patent application is filed. However, this is often more theoretical than real: the application can only protect what is disclosed in it. So if the further work is to produce more examples within the scope of the already filed provisional, that theory works. If the further work finds new uses, changes significant features or isolates a whole new aspect as important, then the provisional will not, and cannot, protect these aspects.

Provisionals do not require a full set of claims to be drafted, and this can save some expense. However, it is important that they do contain at least broadly stated claims. If you do not define your invention yourself by claims, then you are leaving it to a court to later define what it was you disclosed if this arises in any later court proceedings. In some countries, amendment is only possible within the scope of the invention as disclosed, and if you do not have claims to define a broad scope, there is a risk that it will be read narrowly, and result in limited protection.

There is one clear advantage of filing as a provisional, and that is that you effectively get another year of protection in Australia. Patent term in almost all countries is 20 years from filing. In Australia, this runs from the complete application, not the provisional, so in effect you can get the year of the provisional, plus 20 years. Hence, for products where the extra year is very valuable, such as pharmaceuticals and agrichemicals, provisionals are an important tool to maximise the value of the IP.

The law in Australia is currently out of step with our major trading partners. The Patents Act 1990 provides that a provisional only has to describe the invention, not fully describe the invention as is required for a complete application. This means that a lower level of disclosure has been adequate in a provisional to enable a corresponding timely filed complete application to be validly based on the provisional.

This has lead to the idea that you can file a ‘quick and dirty’ provisional, with a minimum of information and at a minimum of expense, and then fix it up with a well drafted complete within the one year period, generally when funding or a licensee can be located. This is seriously flawed strategy, on several levels.

While this sounds helpful, none of our major trading partners – the United States, European Union, Canada, Japan, China, South Korea – have any kind of comparable provision. In a number of cases in the United States and elsewhere, such a ‘quick and dirty’ provisional has been found to provide an inadequate disclosure and so the initial filing date is lost, often with dire consequences for the patent. You cannot protect what you do not disclose, and so an initial cheap filing is the equivalent of building on poor foundations. No matter what clever (and expensive) strategy you later adopt, you cannot fix the foundations.

This peculiarity of Australian law does no kindness at all to Australian researchers, who may erroneously assume that the law in other countries works in a similar way, and see a ‘quick and dirty’ provisional as a way to save money at the early stage of development. Nothing could be further from the truth – in fact, it will materially reduce the value of the IP in the eyes of licensees and investors, as a weak provisional is essentially an invitation to attack validity of the granted patent.

Very extensive amendments have been proposed in the IP ‘Raising the Bar’ Bill, which has been the subject of extensive consultations over the past two years, and has been read a first time in the Senate. When the bill is passed and enters into effect, a provisional application will be required to fully describe the invention, in order for a complete application based upon it to validly claim the provisional date. The standard of disclosure will no longer be lower.

In fact, since the amendments once active are likely to be operative 6 months after royal assent, likely some time late next year, it is important to take this into account right now. Any provisional filed now is likely to be completed after the new provisions are operative.

The days when the ‘quick and dirty’ provisional had any application are not just over – this amendment puts the final nail in the coffin. The quality and value of any patent is directly determined by the quality of the provisional, and there is no role now for anything less than a well drafted provisional.

by Peter Franke