IPTA SEPTEMBER 2010

Welcome to the September 2010 edition of the IPTA Newsletter.

I’d like to thank Mark O’Donnell for his valiant efforts as previous editor and I now feel the pressure of the handing over of the baton. I am looking forward to the task and hope over time to introduce a more ‘corporate’ fl avour to the newsletter, to better refl ect the growing number of corporate members of IPTA and the growing number of patent and trademark attorneys employed by in-house IP departments.

I hope you enjoy the essay feature of this edition, the Malcolm Royal prize winning essay by Sylvan Browne “The Problem in Hindsight: Addressing the Hindsight Bias in Assessing

Obviousness” and we hear from Sylvan on his choice of international conference on which to spend the AU$10,000.00 prize money.

I hope to maintain this tradition of an essay feature in the newsletter and welcome ideas and contributions.

Finally, I’d like to thank you all for the opportunity to represent you on the IPTA council (my fi rst year). You will see the composition of the various committees on page 18 of this newsletter and having now attended several meetings myself, I would like to acknowledge and applaud the time and effort made by each committee member behind the scenes.

Looking forward to a great year ahead.

Christine Emmanuel

Editor2

From the editor...

ContentsMalcolm Royal prize winning essay 2 - 7

Essay competition rules and eligibility: Malcolm Royal Prize 8

Diary dates 9

Recent case law-Ian Horak 10- 11

Online CPE seminars 12

IPTA Notices to members 13- 14

Oddfellow article 15- 18

IPTA council committees 19

IPTA advertisement 20 - 22

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“The Problem in Hindsight: Addressing the Hindsight Bias in Assessing Obviousness”Sylvan BrowneMelbourne, Australia

Please enjoy the Malcolm Royal prize winning essay by Sylvan Browne “The Problem in Hindsight: Addressing the Hindsight Bias in Assessing Obviousness”.

Sylvan mentioned that he was actually getting into a good position with his camera to take the photograph of the winner of the prize, when it was being announced at the last IPTA conference. So, that tells you how much he was expecting to win!

Sylvan will be attending the 42nd International Congress of AIPPI, held in Paris between 3-6 October 2010 and is looking forward to it.

If you are interested in entering this competition, please see the notice on page 8.

Please enjoy.....

ABSTRACTThis essay attempts to explain the nature and sources of the hindsight bias in assessing obviousness of novel inventions during examination or litigation, touching upon aspects of European, Australian and US practice that involve subjective assessments tending to show a hindsight bias. On the view that the hindsight bias is unfair to patentees or patent applicants in a way that runs contrary to apparent current public policy objectives, this paper suggests attempting to re-order certain aspects of how questions of obviousness are addressed by decision makers, going on to note one possible change that could be made in litigation involving jury trials and to suggest a possible change to search and examining procedures during prosecution.

1. Introduction

Generally, the patent laws of many countries require that the invention claimed in a patent or patent application be new relative to what has gone before, which is commonly described as the “novelty” requirement. The newness effectively means there must be difference between the invention as claimed and the citable prior art. It is also common in many countries to require that such a difference be not obvious to one of ordinary skill in the technical art to which the invention pertains. This requirement is sometimes termed the “non-obviousness” requirement, such as in the United States, or analogously as the “inventive step” requirement, such as in Australia and Europe, for example.

Commonly, assessing whether or not a claimed invention involves an inventive step involves considerations made several years after the earliest priority date to which the claim defi ning the invention is entitled. In areas of high research activity, much can change in a technical fi eld during this time. Consequently, by the time a decision maker, whether an Examiner or a judge or jury member, is faced with considering whether the claimed invention would have been obvious to a hypothetical person of ordinary skill in the art just before the earliest priority date of the claim, there may have been many subsequent developments and improvements in the technical area, with consequent changes to what is accepted to be the “state of the art” over time.

As the inventive step assessment is necessarily performed by someone other than the inventor and is performed some years after the invention was made, the decision maker is asked to make a subjective assessment as to whether the claimed invention would

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have been obvious as to the hypothetical person of ordinary skill in the art. Whether this assessment is approached in a structured or unstructured manner, it is diffi cult for any such decision maker to avoid indulging in hindsight during that assessment, particularly when such decision makers have knowledge of the invention having been made.

2. Sources of Hindsight

Hindsight bias can arise during examination of a patent application by an Examiner or Board of Examiners or during litigation before a judge and/or jury. Hindsight bias is generally recognised as being an impermissible indulgence in assessing questions of inventive step. Examiner’s manuals, such as the Australian Patent Manual of Practice and Procedures and the US Manual of Patent Examining Procedure (MPEP), specifi cally require Examiners to avoid indulging in hindsight (or ex post facto analysis) when considering whether the claimed invention would have been obvious. The Courts, such as those of the United States Federal Circuit and Supreme Court, have recognised and decried the indulgence of hindsight in assessing inventive step. In In re Dembiczak, the Federal Circuit took the view that using the claimed invention as a “blueprint for piecing together the prior art [in order to fi nd the invention obvious was] the essence of hindsight.”

The decision maker is inevitably being asked to make the assessment in the ex post facto circumstance, having knowledge of the invention already having been made and usually having evidence, often in the form of technical documents and sometimes expert’s opinion, of what came before. Such decision makers are asked to do the impossible: take themselves back in time to a point just before the invention was made, to assimilate the state of the art as it existed at that time, usually from a large number of technical sources, and to pretend that they do not know the invention was in fact made. In such circumstances, decision makers are effectively asked to make a subjective assessment of the ex ante world prior to the invention having been made, but with the decision maker being fi rmly rooted in the ex post world, without indulging in any hindsight bias. As the amount of litigation on the issue of inventive step suggests, this is a diffi cult position for a decision maker to get a grip on. In fact, there is evidence that human beings are cognitively unable to erase knowledge of existence of a thing, such as an invention, and are therefore unable to place themselves in a position of not knowing something that they have already come to know.

Professor Gregory Mandel of Temple University in the United States has conducted an empirical study of the hindsight bias in US patent decisions and concludes that, despite judicial recognition of the desirability of avoiding hindsight, the hindsight bias pervades US patent law to a substantial extent.

Under the European Patent Convention, a structured approach is used in analyzing whether a claimed invention involves an inventive step, called the “Problem-Solution Approach” (PSA) . The PSA is designed to allow the question of inventive step to be determined as objectively as possible. A problem-solution approach generally involves determining the closest prior art, establishing the “objective technical problem” to be solved, and then considering whether or not the claimed invention, starting from the closest prior art and in view of the objective technical problem, would have been obvious to a person skilled in the art. This approach necessarily involves determining who the person skilled in the art is and what their characteristics are, as well as whether the claimed invention would have been obvious to that person prior to the earliest priority date of the claim. While the Examining Guidelines of the European Patent Offi ce and the decisions of its Appeal Board provide guidance as to how such determinations should be made, there are numerous determinations that are necessarily subjective. In particular, formulation of the “objective technical problem” is performed by an Examiner with knowledge of the invention and having already performed a search to locate specifi c documents that would tend to show that the invention as claimed is not novel or inventive. The Examiner then proceeds to formulate an objective technical problem

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based on a selected document located in the search. This approach does not take into account the problem or circumstance which actually faced the inventor, if in fact there was such a problem or circumstance that spurred the genesis of the invention. By having the Examiner formulate the objective technical problem, the Examiner is allowed to frame the objective technical problem in a manner that would make the differences of the claimed invention over the state of the art appear relatively trivial in hindsight without any attempt to return to the ex ante world of the inventor prior to having made the invention. Thus, while the PSA is commendable for adopting a structured approach and attempting to be as objective as possible, subjective elements remain, including the hindsight bias.

In the United States, most obviousness issues are decided under section 103(a) of chapter 35 of the United States Code, which reads in part:

A patent may not be obtained…. if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.

In effect, section 103(a) allows a claim to be rejected for obviousness based on a combination of prior art sources which, in practice, are usually patent documents or technical publications. Although historically there needed to be a suffi cient nexus between any prior art sources that were combined in support of an obviousness rejection, the recent Supreme Court decision of KSR v Telefl ex appears to be commonly held to have relaxed this nexus requirement so that it is no longer necessary that there be a teaching, suggestion or motivation among the cited documents in order to support their combination in the manner alleged by the Examiner. While US Examiners are warned in the MPEP against use of hindsight to combine documents in support of an obviousness rejection, such rejections based on tenuous combinations of prior art sources are nonetheless common-place, indeed frequent in the Author’s experience. This is despite the Supreme Court in Graham v John Deere stating that hindsight has no place in an obviousness analysis . The loose nexus required of documents combined to support an obviousness rejection seems to allow Examiners to pick and choose claimed features from among the prior art, sometimes apparently based on little more than a keyword search hit in the cited document, which the author contends is a clear indulgence in hindsight reasoning.

As Mandel notes, the hindsight bias even appears to permeate the US legal issues concerning the enablement requirement, the judicial Doctrine of Equivalents and claim construction.

In Australia, the approach to assessing inventive step allows the combination of a single piece of prior art information with common general knowledge as it existed in Australia before the priority date, provided that the piece of prior art information could reasonably be expected to have been ascertained, understood and regarded as relevant by the skilled person . A combination of pieces of prior art information can also be used as the basis for alleging lack of an inventive step, provided that the skilled person could be reasonably expected to have combined the pieces of prior art information.

As with the approach taken in Europe and the US, the Australian approach to assessing inventive step recognises that the assessment of whether or not an invention would have been obvious is to be made by a person of ordinary skill in the art as of the priority date (or as of the date of invention, for the US). However, this is necessarily a subjective assessment as the person making this assessment is not, and cannot be, in the shoes of the hypothetical person of ordinary skill in the art, being possessed of the common general knowledge in the art, as of the priority date. Even if the decision maker were capable of time travel, the decision maker would need to somehow cognitively erase any knowledge that the invention was in fact achieved in order to place the decision maker

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in the ex ante world that the hypothetical skilled person and the inventor both saw. Until methods of cognitive erasure are invented (and presumably patented), decision makers are forced to undertake an impossible exercise.

In recent times, Australian Examiners have tended to inspect the fi le histories of corresponding US and European applications as part of the Australian examination process, and Australian Examiners often appear content to reiterate objections made in the US and European counterpart applications, without specifi cally framing such objections under Australian law. Although the problem solution approach is recognised in Australia as being one possible approach to assessing inventive step, other approaches can also be used. Australian Examiners often tend to adopt objections based on combinations of references made in US counterpart applications, thereby importing some of the same issues of hindsight bias as are present in the US examination process.

For combinations of two or more pieces of prior art information, the decision maker needs to assess whether the hypothetical skilled person could be reasonably expected to have combined the pieces of information . While it is not clear from the Patents Act 1990 and the jurisprudence exactly what is meant by “reasonably expected”, this is clearly a subjective question susceptible to hindsight bias.

3. Is true objectivity possible?

Given that the exercise of human judgment is involved in assessing issues of obviousness, and that to exercise judgment in matters involving various shades of grey is a subjective experience, it seems that true objectivity in assessing questions of obviousness cannot be achieved. Assuming, however that public policy makers do not intend for the hindsight bias to adversely affect the rights of the patentee or patent applicant in obtaining the breadth of patent scope to which the patentee is entitled, it would seem fair to the patentee to attempt to remove or ameliorate the hindsight bias as much as possible.

The author does not suggest that the hindsight bias should necessarily be avoided, for example where a legislative body decides to adopt a specifi c public policy approach to patents that openly acknowledges and embraces the hindsight bias as a means of raising the inventiveness threshold needed to warrant the granting of exclusive rights. However, on the face of the current legislation and case law, both of which seem to try to avoid openly indulging in hindsight, the public policy positions in European, US and Australian jurisdictions appear to favour a lower inventiveness threshold than would be the case if hindsight combination of prior art were openly indulged.

If one accepts that hindsight bias results in unfairness to the patentee, then the question becomes “what do we do to mitigate the effect of the hindsight bias?”

4. Towards a solution, perhaps

Given that there is evidence to show that human beings are cognitively unable to unknow what they have come to know , it seems that one way to try to achieve true objectivity is, where possible, to not let the decision maker know about the ex post position before they are informed of the ex ante position. For example, if the decision maker is presented with documents describing the state of the art just before the invention was made and is presented with the problem, circumstance or task that faced the inventor at that time, then, assuming the decision maker is able to put himself or herself in the shoes of the non-inventive skilled person, the decision maker can attempt to address the problem, circumstance or task faced by the inventor. If the decision maker is an Examiner, the Examiner may use the technical expertise in the area that the Examiner usually will have developed in the course of their studies and work. If the decision maker is a judge or jury member, expert witness testimony may be used to assist a judge or jury member to understand the state of the art and to stand in the shoes of the skilled person.

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When faced with circumstances as closely mirroring the inventor’s circumstances as possible, if the decision maker arrives at an invention falling within the scope of the claims of the application or patent, this may give rise to a strong inference of lack of an inventive step. On the other hand, if the decision maker’s attempt to create an invention does not result in any solution or a solution that does not fall within the scope of the claims, this may give rise to a strong indication that the claimed invention does involve an inventive step.

Mandel suggests that, for US jury trials, the trial could be bifurcated into non-obviousness issues to be tried fi rst, with other issues, such as anticipation, to be tried later. Under such a scenario, the jury would not be exposed to pre-trial hearings to determine the relevant prior art, the level of ordinary skill in the art and what a skilled person would know how to do. Such pre-trial hearings could also be used to identify the problem or circumstance that the inventor faced, if any, before the invention was made. Before the jury, the parties and their experts could only present evidence of the prior art, the skill level and knowledge of a person having ordinary skill in the art and the problem or circumstance that the inventor faced. The jury could then decide whether any invention was obvious in view of the information before them and, if not, a conclusion could be drawn that the claimed invention was not obvious. If the jury concluded that at least one solution could be obviously arrived at from the information before them, then that could be compared with the scope of each claim at issue. To the extent that a claim could be read on to the solution arrived at by the jury, or an equivalent thereof, this may give rise to a strong indication that the claimed invention was obvious. Otherwise, the conclusion should be in favour of non-obviousness.

Mandel’s proposal for a bifurcated trial to attempt to place the jury in the ex ante condition may work for jurisdictions such as the United States, where jury trials are not uncommon in patent litigation, but may not be feasible in jurisdictions such as Australia, where jury trials are uncommon. Although Mandel’s proposal attempts to mitigate the hindsight bias in litigation, it leaves the patentee or patent applicant exposed to hindsight bias exercised by patent Examiners, possibly resulting in unfairly limited claim scope or rejection of the patent application entirely.

One possible way of attempting to mitigate the hindsight bias during examination would be to allow a patent applicant to formulate a search précis, setting out a fi eld of search, and possibly identifying the problem or circumstances faced by the inventor, if applicable. The search précis could be used by the Examiner to conduct a prior art search in an effort to determine the state of the art just before the claimed priority date, but without having reviewed the applicant’s specifi cation, claims or drawings. If the applicant elects to rely on the search précis, the Examiner may be bound to use it in conducting the initial search and to mostly rely on documents located in the initial search for subsequent examination. If the Examiner later conducts a supplemental search, having read the applicant’s description of the invention and the claims, there could be a presumption that any cited document identifi ed in such a supplemental search was located with the use of hindsight, if that document was not also identifi ed in the initial search based on the search précis.

Where the search précis prepared by or on behalf of an applicant is overly broad or vague, the Examiner may be allowed to ask the applicant for supplemental detail to refi ne the fi eld of search. As a sanction against abuse of the search précis, where an applicant is proven to have been misleading or to have made false statements in the search précis to point the Examiner’s initial search away from the invention, there may be consequences to the enforceability of any patent granted on an application in which the search précis was submitted.

While the use of such a search précis in the manner proposed may present practical diffi culties for Examiners and may not easily sit with existing examining procedures or

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legislative requirements in some countries, the intended effect of such a search précis would be to blind the Examiner or other person initially conducting the searching from knowledge of the invention having been made, thereby reducing the likelihood of the Examiner using the applicant’s own description as the basis for picking and choosing pieces of prior art information with the benefi t of hindsight. Admittedly, this would still not erase the passage of time and the decision maker’s knowledge of subsequent advances in the art, so some hindsight bias may remain.

5. Conclusion

The hindsight bias in obviousness assessments is signifi cant and there appears little ability to meaningfully mitigate its effect under current examining practice and litigation practice. As one of the primary sources of hindsight bias appears to arise from decision makers having knowledge of the invention (i.e. being in the ex post position) before trying to place themselves in the position of the person of ordinary skill in the art at a time just prior to the invention (or the application) having been made (i.e. being in the ex ante position), it follows that some mitigation of the hindsight bias could be achieved by placing the decision maker in the ex ante position as far as is practicable, should be done before the decision maker obtains knowledge of the invention. Some possible changes might be made to current litigation and examining procedures in order to facilitate the decision maker being put in the ex ante position before being put in the ex post position.

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Essay CompetitionMALCOLM ROYAL PRIZEThe Institute of Patent and Trade Mark Attorneys of Australia conducts an essay competition named in honour of former President and active member of the Institute, Malcolm Royal. The purpose of the competition is to encourage and promote higher learning within the IP profession in Australia, and so the essay may be on any intellectual property subject having relevance to Australian practitioners.

Entries in this year’s competition are now invited. The closing date for entries is Friday 31 October 2010.

PrizeThe Malcolm Royal Prize will include a payment of AU$10,000.00 toward the cost of registration, accommodation and travel associated with attending a recognised international IP conference or meeting as selected by the winning author(s). The prize will be presented at the 2011 IPTA annual conference.

The winning entry will be published in the internationally circulated magazine Managing Intellectual Property.

EligibilityTo be eligible to enter the competition, the author(s) must be:

an Australian resident, and•

a current IPTA member (including Student and Ordinary members, and Fellows).•

RulesThe rules of the competition are:

Essays must be previously unpublished works.•

Essays must be original works of the author(s).•

Essays may be co-authored, but the prize will be shared equally amongst the • winning author(s).

Essays are to be a maximum of 3,000 words, plus a maximum 100 word abstract.•

The prize must be taken within twelve months of its presentation.•

The prize is not transferable or redeemable for cash.•

The prize will not necessarily be awarded.•

The decision of the judges will be fi nal and no correspondence regarding the decision • will be entered into.

IPTA Council may in its discretion publish non-winning entries in the IPTA Newsletter.•

Entry SubmissionEach entry should consist of a typed copy of the essay accompanied by a separate sheet containing the name and contact details of the or each author.

Entries should be sent to:Ms Linda TocchetExecutive SecretaryThe Institute of Patent and Trade Mark Attorneys of Australia

September 2010

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diary dates

DIARY DATESSydney 3 December 2009,

IPTA Christmas Lunch, Ocean Room Ground Level,Overseas Passenger Terminal, Circular Quay West,The Rocks

Perth 3 December 2010,IPTA Christmas Lunch, Gershwin’s Hyatt Regency Hotel 99 Adelaide Terrace, Perth

Melbourne 10 December 2010,IPTA Christmas Lunch, MCG, Brunton Ave,Jim Stynes Room Olympic Stand Lvl 2Access via Gate 3 Richmond

Adelaide 8 December 2010IPTA Christmas lunch, The Wine Underground121 Pirie Street Adelaide SA 5000

Northern Territory

IPTA Annual Conference6-10 April 2011Voyages Sails in the DesertUluru, N.T.

Essay competition: Malcolm Royal Prize

Closing date for entries: 31st October 2010

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rt Recent Case LawPrepared by Ian Horak

Bristol-Myers Squibb Company v Apotex Pty Ltd (No 2) [2010] FCA 901Federal Court of Australian, Yates J (23 August 2010)Patents - costs of amendment before the Federal Court

The applicant sought to amend the patent during Court proceedings. A dispute arose as to whether the applicant should pay the respondent’s costs on the amendment application. The Court considered that an amendment by the patentee was an indulgence being sought from the Court and, as a consequence, the respondent was entitled to its costs despite there being no opposition to that amendment.

Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2010] FCA 723 Federal Court of Australia, Spender J (12 July 2010)Patents – infringement – innovative step – failure to defi ne an invention

The applicant was the owner of two innovation patents for a “fi sh stunning apparatus”. It alleged that the respondent’s fi sh stunning apparatus infringed both innovation patents. The respondent denied infringement of the fi rst innovation patent and sought revocation of the second.

The fi rst innovation patent claimed an apparatus which included a feature where the fl oor moved between positions to permit the fi sh to move unidirectionally from the front to the exit of the apparatus. The Court held that this feature was not present in the respondent’s apparatus and it considered the respondent’s device functioned in a different way as follows:

[86] That connection of movement of those parts is not of the same substance or effect as the movement of a pivoting fl oor from fi rst to second position, allowing or permitting the fi sh to move unidirectionally from the front to the exit of the device. Claims 1 and 5 of the First Innovation Patent teach that after the fi sh is stunned, the movement of the fl oor to the second position allows fi sh to move towards the exit. The movement of the fl oor acts like a gate, door or fl ap, operating to allow the fi sh to move towards the exit. In the respondents’ devices, after the fi sh is stunned, the passageway constituted by the chin plate, the two or four cheek plates, and the top plate, expands, sphincter like, to allow the fi sh to move towards the exit.

[87] In the impugned devices, lowering of the chin plate, as a matter of language, does not allow or permit the fi sh to pass from the front to the exit of the device. The mechanism in the impugned devices for achieving that unidirectional fl ow of fi sh is a substantially new or different mechanism.

The Court went on to consider the validity of the second innovation patent and held it was invalid. It appears from the decision that a fi nding of invalidity is based on a fi nding that the claims did not defi ne an invention pursuant to section 40 of the Patents Act 1990 (Cth). The Court concluded that:

[116] The claims do not defi ne the invention, because they do not disclose elements of the invention that are necessary to make it work, principally how it is that the striker operates on the fi sh so as to stun it (that is, how the fi sh is stopped, held, and then released). The invention is an apparatus “wherein” (that is, in which) the fi sh moves from the entrance to the exit, yet how the fi sh so moves (that is, how it is held for stunning and then released) is not revealed. That is the critical point which the patent must address, but is silent on this point.

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Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664 Federal Court of Australia, Kenny J (25 June 2010) Trademarks – not inherently adapted to distinguish – insuffi cient evidence of use

The applicant sought registration of the trade mark “TENNIS WAREHOUSE” in respect of “online retail services featuring tennis clothing, tennis footwear, tennis gear, tennis equipment, tennis accessories, and tennis sport bags”.

The trade mark application was successfully opposed on the basis that it was contrary to section 41 of the Trade Marks Act 1995 (Cth). The applicant appealed to the Court and the same grounds were argued before the Court.

The Court held that the words “TENNIS WAREHOUSE” had a low level of inherent distinctiveness and that it is incumbent on the applicant to show factual distinctiveness through evidence if it is to achieve registration.

Considering the evidence of use by the applicant, the Court considered there was insuffi cient factual distinctiveness because the words were used with another logo. It held that when the “TW” logo was placed in close association with the words “TENNIS WAREHOUSE”, this had the effect of substantially diluting any trade mark signifi cance that attached to the words “TENNIS WAREHOUSE” by themselves.

The Court therefore refused to register the trade mark pursuant to section 41 of the Trade Marks Act 1995 (Cth).

Ian Horak is a barrister at the Victorian Bar. He is also a Patent and Trade Marks Attorney and member of the Institute. The following is a selection of cases that are intended to be of interest to practitioners. The full text of each of these decisions may be found on the AustLII case law database at www.austlii.edu.au. It is understood that this decision is currently under appeal.

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IPTA Online CPE SeminarsThe following online seminars have recently been added to the Members pages of the IPTA website:

Topics Speakers Date

Trade Mark Rights: Their Use and Abuse Ms Siobhan Ryan &Ms Janice Luck

17/4/10

Negoiating the Responsibility Rapids Ms Sigrid Higgins &Mr Pat Monahan

16/4/10

Islands of Rights in a Sea of Competition Prof. Andrew Christie 16/04/10

Research in the Market Place Dr Anna Johnston &Dr Jason Coonan

16/04/10

So You Have A Monopoly? Dr Philip Williams &Mr Alan Kasper

16/04/10

IP Australia in International Policy Mr Ian Goss 16/04/10

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IPTA NOTICES TO MEMBERS VIA EMAIL 01/04/10 to 30/08/10

Date To Subject

01-Apr-10 Fellows Council Ballot Papers due 9 April 2010

06-Apr-10 Members IP Professionals Gathering, Sydney

09-Apr-10 Fellows Special Meeting of Fellows

19-Apr-10 Members auDA Panel releases discussion paper on new 2LDs

29-Apr-10 WA Members Legalwise Seminars 3 June

29-Apr-10 Qld Members Legalwise Seminars 28 May

29-Apr-10 Vic Members Invitation to IP Forum 25 May

29-Apr-10 Vic Members Legalwise Seminars 27 May

29-Apr-10 Vic Members Invitation to IP Forum 25 May

29-Apr-10 NSW Members Legalwise Seminars 3 June

29-Apr-10 Vic Members Invitation to IP Forum 25 May

30-Apr-10 Vic Members Legalwise Seminars 27 May

30-Apr-10 Members IPTA Newsletter April

05-May-10 Members IP Professional Gathering Sydney

07-May-10 Members IPTA Newsletter

07-May-10 Members IPRIA/IPTA Seminars, Inventive Step

11-May-10 Members PCT Seminar

18-May-10 Members PCT Seminar - Reminder

27-May-10 Members IP Professionals Gathering, Sydney 2 June

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02-Jun-10 Members PCT Seminar Presentation

07-Jun-10 Adelaide & Perth Members IPRIA/IPTA Seminars, Inventive Step Seminar 17 & 18 June

10-Jun-10 Members IPRIA/IPTA Seminars - Aust Inventors

15-Jun-10 Perth Members IPRIA/IPTA Seminars - Aust Inventors

01-Jul-10 Members New Zealand Patents Bill

02-Jul-10 Members IP Professional Gathering Sydney - next meeting 1/9/2010

05-Jul-10 Members DBCDE releases gTLD Fact Sheet

07-Jul-10 Members Call for Nominations for auDA’s 2010 Names Policy Panel

19-Jul-10 Members Patent Fee Increases and other Changes to Patent Regulations 1991

20-Jul-10 Firm Contacts IPTA Fellows Brochure August 2010 with attachment

22-Jul-10 Melb MembersIPRIA/IPTA Seminar - The Importance of Patents: IP Litigation in the Pharma-ceutical Industry

22-Jul-10 NSW MembersIPRIA/IPTA Seminar - The Importance of Patents: IP Litigation in the Pharma-ceutical Industry

22-Jul-10 SA MembersIPRIA/IPTA Seminar - The Importance of Patents: IP Litigation in the Pharma-ceutical Industry

23-Jul-10 Members Changes to the au Dispute Resolution Policy

26-Jul-10 MembersauDA terminates Australian Style Pty Ltd (t/a Bottle Domains) registrat ac-creditation

05-Aug-10Sydney Fellows/Ordinary Members

IPTA 2010 Sydney Xmas lunch

05-Aug-10 Perth Members IPTA/Reg Wray Christmas Function

05-Aug-10 Melb Fellows/Ordinary Members 2010 IPTA Christmas Lunch

13-Aug-10 Members auDA introduces “auDRPe”

25-Aug-10 Members IP Gathering Sydney - next meeting 1/9/2010 - reminder

30-Aug-10 Members Call for nominations for election to auDA Board

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Flying the fl ag…20 August 2010I always do at EPO oral proceedings. Although I have a pathological dislike of ties, I wear a tie on two occasions. I have an emerald green one for St. Patrick’s Day, and the IPTA tie for oral proceedings before the EPO. I regard the latter as my “battle fl ag”, like the ensign traditionally run up by warships going into battle. And so far the fl ag has fl own victoriously.

In the latest incident, I had to confront an Examining Division for the fi rst time. As you all probably know, European examination is conducted by a so-called Examining Division, a group of three Examiners. In practice, one is the primary Examiner and does all the spadework, and the other two sign off on his/her work. In oral proceedings, all three appear, with, again, the primary Examiner doing the major work, and with one of the others acting as Chairman. The case was a tricky one, with the nearest prior art (our own) very close, but only citable for novelty because it was a so-called “54(3)” reference (fi led before, but published after, the application in suit). The Examining Division had stated its intention to reject the application, but as we had asked for oral proceedings if rejection was being contemplated, we got it. All European applicants have the right to oral proceedings, so it is universal to ask for oral proceedings as a precaution. (It is also essential to ask for them in oppositions, because, if you don’t, what would otherwise be the preliminary opinion of the Opposition Division may become the fi nal decision).

In our case, the primary Examiner was Italian, the Chairman was a Hungarian lady and the third member was a Greek senior Examiner. They conducted the hearing with enormous professionalism, for which I thanked them afterwards. It was run in the same way as are oppositions – both sides would put their positions, there would be discussion and we (our junior patent attorney came with me) would be asked to leave while the Division considered its verdict.

The affair lasted from 9.00 to just after 13.00. It would have been much shorter (and much more negative) had I not spotted something when reading over the case in the hotel room after breakfast and before walking up to the EPO’s PschorrHofe premises (just down the road from Munich’s main station). One bit of German practice that has passed into the EPO is the business of auxiliary requests. In Australian practice, if claim 1 is invalid, the tribunal/judge goes on to claim 2, etc. Not in German practice; you lose claim 1, you lose the lot – unless you have fi led auxiliary requests. So, your main request might be “maintain patent as granted”, your fi rst auxiliary request might be, in essence, “make claim 2 the main claim”, your second “make claim 3 the main claim”, and so on. So, I scribbled down the bit I found into the claims, had the hotel produce photocopies for me, and gave it to the Examining Division at the start of oral proceedings. It was this hastily-devised auxiliary request that won the day. Perhaps Somebody Up There really does like me after all.

It was a relief because, although the device is hardly rocket science from a technical point of view, two very large customers are sniffi ng at it. The last thing you want in such a situation is for either customer to run off and make it itself without any possibility of hindrance from us.

The new EQE regulation has just appeared. To give it its full offi cial handle, “Decision of the Administrative Council of 10 December 2008, amending the Regulation on the European qualifying examination for professional representatives before the European Patent Offi ce”. While mostly relating to who is responsible for what, there is one signifi cant difference for the poor cannon fodder who roll up for this annual torture – starting in 2012, there will be a “pre-examination”, which has to be taken before the main exam can be taken. According to the EPO:

“This proposal includes legal questions and questions directed to aspects of claim analysis. The aim is to test legal knowledge and knowledge of the basic competences related to claim analysis such as novelty, inventive step (problem and solution analysis), “added matter” and clarity, needed for sitting papers A, B, C and D.

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The proposal has been prepared in multiple choice format. With this format for the pre-examination, candidates would not be required to formulate answers to questions, this being tested in papers A, B, C and D, but would need to select from among alternative answers to questions2.

The EPO stuck a mock paper for the exam on its website. Even though this was in a multiple choice format, I’m glad my examination days are behind me. Why this new hurdle? one might ask. I think it’s an attempt to improve the pass rate (or, more accurately, to reduce the fail rate). Recent fi gures have shown that, while the number of exam candidates is increasing, the number of people passing is not. Moreover, one investigator found, to his surprise, that, nearly 30 years after the EQE was instituted, 40% of German Professional Representatives are “grandfathers”, people who automatically became Professional Representatives when the EPO came into being. When he was an Examiner, former Novartis patents “wise man” and author Philip Grubb commented to me that there were exam candidates who were clearly in the wrong profession. Perhaps this pre-exam is meant to be a coarse fi lter.

I’m not sure how this pre-examination will affect Dawn, our junior attorney. She was to try the exam in 2011, but she has recently revealed that she is, as the Victorians delicately put it, in a condition, one that will make her Christmas most interesting. We are suggesting that, if possible, she do Papers A and B (drafting and offi ce action answering). They are taken on the morning and afternoon of the same day, and they require the minimum amount of studying, so they fi t in less worse with night feeds and dirty little bottoms. And even an attempt at A/B may allow her to avoid any pre-exam. The details as to how this system will work are not at all clear, so we’ll see as time goes on.

(Going back to Philip Grubb, I thought that the Fourth Edition of his book on patents for chemists and biotechnologists would be the last. He admitted to me that, with his retirement from Novartis, he hadn’t the same ready access to sources. However, I was pleased to see that Oxford University Press announced a Fifth Edition. The reason is that he has now found a collaborator in the Novartis Patent Department. Hopefully the collaborator will supply the up-to-date knowledge and Philip the sharp and witty commentary. Anything else wouldn’t be Grubb.)

Back on the subject of European patents, the recipent of the most recent Egg-on-Face Award is Alison Brimelow, immediate past-President of the EPO. As you may know, the Enlarged Board of Appeal of the EPO addresses only contentious points of law, not cases. These arise because there are two lines of Board of Appeal decisions going in different directions on a legal question and the question requires a defi nitive answer. The referral may be made by a Board of Appeals in the course of an appeal or by the President of the EPO. In this case (G3/08), on the eternally-vexed subject of the patenting of computer programs, Ms. Brimelow referred the following questions to the EBA:

1. Can a computer program only be excluded as a computer program as such if it is explicitly claimed as a computer program?

2. (a) Can a claim in the area of computer programs avoid exclusion under Art. 52(2)(c) and (3) merely by explicitly mentioning the use of a computer or a computer-readable data storage medium?

(b) If question 2(a) is answered in the negative, is a further technical effect necessary to avoid exclusion, said effect going beyond those effects inherent in the use of a computer or data storage medium to respectively execute or store a computer program?

3. (a) Must a claimed feature cause a technical effect on a physical entity in the real world in order to contribute to the technical character of the claim?

(b) If question 3 (a) is answered in the positive, is it suffi cient that the physical entity be an unspecifi ed computer?

(c) If question 3 (a) is answered in the negative, can features contribute to the technical character of the claim if the only effects to which they contribute are independent of any particular hardware that may be used?

4. (a) Does the activity of programming a computer necessarily involve technical considerations?

(b) If question 4 (a) is answered in the positive, do all features resulting from programming thus contribute to the technical character of a claim?

(c) If question 4 (a) is answered in the negative, can features resulting from programming contribute to the technical character of a claim only when they contribute to a further technical effect when the program is executed?

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The referral invited a multitude of amicus briefs. Now I’m no computer expert, but I had thought that the answers to the questions were well known. So did the EBA; it refused the referral, saying that there was no divergence in the case law of the Boards of Appeal with respect to computer-related inventions (it took 59 pages to say it). So, as we were. Wherever that was.

Meanwhile, on the other side of the pond, a lot of people are breathing big sighs of relief, after the Supreme Court fi nally got around to giving an opinion on Bilski. The Court basically had the job of throwing out the bathwater (the Bilski “invention” itself, which everyone except Bilski thought was complete piffl e) but retaining the baby (software patents), and it did this by basically saying nothing very much of moment at all. It said that the machine-or-transformation test applied by the Federal Court was useful, but not the be-all-and-end-all, but declined to provide a be-all-and-end-all. Of course, perhaps this can and should never be done, and one (this one anyway) appreciated anew the wisdom of the formulation of the Australian High Court all those years ago in NRDC’s Application:

...any attempt to state the ambit of s.6 of the Statute of Monopolies by precisely defi ning “manufacture” is bound to fail…It is, we think, only by understanding the word “product” as covering every end produced, and by treating the word “vendible” as pointing only to the requirement of utility in practical affairs that the language [of the old UK “Morton’s rules”] may be accepted as wide enough...

I recently attended a seminar in Basel on the new rules of the EPO, which came into force, appropriately, on 1 April. These govern amendments and divisionals. We have already been confronted with one of the odder ones, the revised R161, which declares that, if the EPO has been the PCT ISA/IPEA, and has issued a negative report, the applicant is required to respond to this on receipt of a letter notifying him of this R161 issue – within one month. So, what is expected by way of response? Mystery reigns. The EPO Head of Legal Division (now retired) giving the lecture said that “Dear Sirs, drop dead”, or even “Dear Sirs, we disagree entirely” were not appropriate responses. But then, what is? It’s not an offi ce action (“Communication pursuant to R.94(3)” in EPO parlance), so does it merit an offi ce action-type reply? We’re still not sure. We’ve been providing modifi ed claims, plus a simple statement to the effect that these revised claims are novel and inventive. We await comment on the appropriateness or otherwise of this approach.

There recently seems to be no shortage of weighty tomes and studies on intellectual property and its utilisation. The latest to come my way is one by London Economics on behalf of the Intellectual Property Offi ce (what we old fogeys still call the British Patent Offi ce), and entitled “Economic Study on Patent Backlogs and a System of Mutual Recognition”. In 188 pages (less than half of which is report, the rest is appendices), based on data from the ten major patent offi ces (Australia, Canada, China, EPO, Germany, India, Japan, Korea, UK, USA), it analyses patent backlogs, their cost and the possibility of alleviation. “Backlog” has, to me, the connotation of an unnecessarily long waiting time before anything is done by a patent offi ce, or in doing it. Given that all patent offi ces have work waiting, which could in a way be considered “backlog”, how to distinguish the normal from the abnormal? London Economics proposes the concept of the “backlog month”, defi ned as the number of pending applications (for which work has been requested) divided by the rate at which applications are disposed of by the patent offi ce. The study data indicate that, over the next 5 years, backlogs will rise from 35 to 48 backlog months. The longer pendency times may lead to greater uncertainty and therefore a reduced willingness to innovate or invest. There is also a fi nancial penalty; London Economics estimates that a one-year increase in pendency at the three Trilateral Offi ces (EP, JP, US) will cost the global economy £Stg.7.6 billion.

You can see immediately where it’s all heading – mutual recognition of each other’s granted patents. According to the study, the key fact is that something like 34% of all patent applications are duplicate applications, and if some sort of mutual recognition system allowed examiners to reduce the time spent on such applications by 25%, the backlog would be reduced by 9 backlog months (19%) after 5 years. If a 60% reduction were possible, the backlog would shrink by 23 backlog months (48%), and if there were complete mutual recognition, the reduction would be 37 backlog months (77%). All of these go far beyond the various “patent prosecution highway” mechanisms already in place between some pairs or groups of patent offi ces. As the report says

“Under a system of full mutual recognition, workload is predicted to fall initially by more than a third, with further gains as patent offi ces are able to reduce their stock of pending applications annually. By year fi ve, the introduction of a system of mutual recognition is predicted to reduce backlogs by around three-quarters at the seven patent offi ces incused in the model”

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I have often dealt with inventors talking about “world patents” they have seen (misreading the WO codes on PCT publications). But is this about to happen? The report recognises that 100% recognition is probably out of the question because of the need of patent applications to comply with differences in national laws.

This meshes quite well with the aforementioned Ms Brimelow’s recent 2010 Francis Gurry Intellectual Property Lecture at the Melbourne Law School. Ms. Brimelow brought up the subject of harmonisation, but mentioned several very important elements in the debate. First of all, there’s the gap between what people say and what people are prepared to do. Allied to this, there’s the natural inclination of bodies natural and corporate is to say, “Let’s compromise – let’s do it my way”. People are perfectly happy to accept change, provided someone else does the changing. It seems, sadly, that, as Mark Twain famously said about the weather, everyone talks about it but nobody ever seems to do any thing about it. Perhaps the enormously wasteful burden of duplication among patent offi ces is as immune to human interference as the weather.

We sometimes suspect that Switzerland has such good employment fi gures because oil heating is so prevalent. Most of us have in our basements one of these substantial devices, with accompanying tank (in our case a 6000 litre monster). And when it isn’t being maintained, it’s being fi xed. There are guys to maintain it and repair it when it goes wrong, guys to fi ll its tank, guys to clean its tank, guys to check its tank, guys to clean its chimney, guys to check that its burner is not polluting the local atmosphere too much. In short, a vast battalion of guys just to keep our humble installation going. Multiply that by the vast number of such devices across Swizzieland and you have a big industry. We look forward to the day when solar energy will make the grade and we can have essentially guy-free heating. Some big German towns are already deriving substantial power from solar panels. It’s coming, but much too slowly for our liking.

There are alternatives, of course, but not many. For a time, during the fi rst oil crisis (in the 1970s, during Israel v. Arabs, Round 3) when the Arabs used the oil weapon for the fi rst time and the price quadrupled, electrical heating was allowed (the type of heating requires the permission of the Gemeinde (local council)). However, this stopped when the oil price fell again and electrical heating ceased to be competitive. There’s wood, of course, which is plentiful, but then you need to fi nd somewhere to put the stuff when it’s delivered, and a winter’s worth is a serious stack. More recently, there have been heaters running on pelletised wood. However, there are space considerations – there has to be suffi cient space to have the storage hopper close to the burner. For all its smelly disadvantages, oil does have its advantages. But roll on the day when we can be modern sun-worshippers.

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Administrative Committees Convenor 2009

Annual Conference Leon Allen, Anne Makrigiorgos, Trevor Davies,Stuart Smith, Christine Emmanuel

Education Graham Cowin, Marguerite Port*, David Carmichael*, Karen Sinclair*, Virginia Beniac-Brooks*, David Tadgell, George Griziotis*

Ethics & Disputes Trevor Davies, Jeremy Dobbin, Graham Cowin

Fees Richard Baddeley, David Griffi th, Grant Adams*,Alun Thomas, Graham Cowin

Finance & Secretariat Richard Baddeley, Graham Cowin, Leon Allen

IP Australia Business Relations Janelle Borham, Greg Gurr

Membership Mark O’Donnell, Trevor Davies, Janelle Borham, Jeremy Dobbin

Publications Christine Emmanuel, Karin Innes*, Richard Baddeley, Mark O’Donnell

Public Relations Stuart Smith, Tania Obranovich, Trevor Davies

Rules Janelle Borham, Paul Davis, David Griffi th ,Jeremy Dobbin, Trevor Davies

Legislative Committees

Designs Jeremy Dobbin, Ray Hind*, Caroline Bommer*,Lee Pippard*, Shaun Griffi n*

International Patents David Tadgell, Paul Davis, Virginia Beniac-Brooks*,Damian Slizys*, Michael Caine

Patents Legislation Michael Caine, Trevor Davies, Richard Baddeley, Greg Gurr, Jason Coonan*, Kathryn Morris*, Graham Cowin, David Tadgell

Patent Practice Greg Gurr, Janelle Borham, Graham Cowin, Michael Caine, Richard Baddeley, Stephen Friend*

Plant Breeders Rights Trevor Davies, Simon Tout*, Mark O’Donnell

Trade Marks (Australia + International) Siobhan Ryan*, David Griffi th, Michael Wolnizer*

comm

ittees 2010/2011

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