Group Reports at APAA Patents Committee in Fukuoka

Group Reports at APAA Patents Committee in Fukuoka

October 25, 2004

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Australia

By Peter Smith, Greg Munt and Greg Bartlett

The most significant recent development in Australian patent law has been the implementation of the US Free Trade Agreement.

A.  Legislative changes

Implementation of the US Free Trade Agreement – Grounds for patent oppositions

Changes to the Patents Act 1990 came into effect on 16 August 2004 to meet Australia’s obligations under the Free Trade Agreement with the US.

The central thrust of the Free Trade Agreement, from an IP perspective, is to harmonize the IP laws of the two countries. “Harmonization” was anticipated to include bringing the novelty and inventive step requirements of Australia and the US into line. Those changes did not eventuate. Instead, the only significant change to Australian patent legislation has been the expansion of the grounds on which grant of a patent for a standard patent application can be opposed.

The new opposition grounds are that an invention is not useful (i.e. does not achieve the purpose that it sets out to fulfil) and an invention has been secretly used by a patent applicant before the priority date. While the opposition grounds now mirror the previously existing grounds on which a court may revoke a granted patent, lack of utility and prior secret use are not considered during examination.

Implementation of the US Free Trade Agreement – “Evergreening”

In finalising the legislative changes to implement the US Free Trade Agreement, the Australian Parliament debated "evergreening" (the patenting of modifications, improvements or variations of existing technologies that are subject of soon to expire patents to effectively extend a monopoly, particularly in the pharmaceutical area). The debate resulted in amendments to the Therapeutic Goods Act 1989. The Act now requires an applicant seeking marketing approval for a therapeutic product to certify that they believe the product will or will not infringe a claim of a third party patent. The Act also now requires a certificate from a person bringing an infringement action, against a person who provided a certificate at the time of seeking marketing approval, to the effect that the proceedings are being commenced in good faith, have a reasonable chance of success and will be conducted without reasonable delay. Heavy penalties apply if any of the certificates are false or misleading.

B.  Legislative changes reported previously

Grace period, infringement and secret use

Simultaneously with the introduction of the 12-month grace period provisions, an infringement exemption was been introduced to cover situations where a third party begins exploiting an invention as a consequence of deriving the invention from public disclosures by the applicant/patentee during the grace period.

However, the exemption is drafted narrowly and only allows a third party to make the product or use the process despite the grant of a patent for the product or process.

In relation to patented products, it appears that a third party will infringe a patent, after making the products with the protection of the exemption, if they subsequently sell, hire, offer to sell or hire, or otherwise dispose of the products, use the products or keep the products for the purpose of doing any of those things.

In relation to the issue of whether the grace period covers “secret use” of the invention in the 12 months before lodgment of the complete application, the uncertainty has yet to be resolved. The issue has yet to be tested in court.

C.  Court and Patent Office decisions

In Merck & Co Inc v Arrow Pharmaceuticals Ltd [2003] FCA 1344, handed down on 25 November 2003, Merck successfully applied for an extension of term for its patent covering a metabolite. An earlier expired Merck patent disclosed the pro-drug (Lovastatin) of the metabolite, so the claims of Merck’s subsequent patent had to be restricted to the metabolite. The Patent Office had rejected Merck’s application to extend the patent because the Register of Therapeutic Goods did not include “goods containing, or consisting of” (s70 Patents Act 1990) the claimed metabolite. Merck had registered a good that contained Lovastatin and impurity amounts of the metabolite.

The Federal Court overturned this decision on the basis that the Patents Act does not specify a quantity or proportion of the claimed metabolite that had to be present in the registered good. This decision shows that the courts may be inclined to adopt a broader interpretation of the extension of term legislation that has previously been read restrictively.

The prohibition on the patentability of inventions for “human beings, and the biological processes for their generation” was considered in the Patent Office decision of Fertilitescentrum AB and Luminis Pty Ltd [2004] APO 19. During prosecution of Australian patent application 44916/99 the Patent Office proposed a direction to delete certain claims from the application which breached the prohibition. The subject matter of the application was a growth medium (naturally found in the fallopian tubes) that enhances growth of human embryos, but the claims covered the growth medium, a method of growing human embryos and an IVF program. The applicant voluntarily deleted the IVF program claims but refused to delete the method claims – the claims to the growth medium were otherwise acceptable.

The applicant argued that the intermingling of DNA from respective parents in a fertilized ovum was the “biological process for generating human beings” that was prohibited from patenting. Thus, their method of nurturing the existing embryos to grow fell outside the prohibition. The hearing officer disagreed by concluding that the biological processes for generating humans includes the processes that last from fertilization to birth. The following construction s18(2) was given.

“The prohibition of `human beings' in my view is a prohibition of patenting of any entity that might reasonably claim the status of a human being. Clearly a person that has been born is covered by this exclusion. But to the extent that there is a process of generation of a human being that lasts from fertilization to birth, I consider that a fertilized ovum and all its subsequent manifestations are covered by this exclusion.

“The prohibition of `biological processes for (the generation of human beings)' clearly covers all biological processes applied from fertilization to birth - so long as the process is indeed one that directly relates to the generation of the human being. I also consider the exclusion of biological processes includes the processes of generating the entity that can first claim a status of human being.”

As cloning and other human reproduction technologies filter through the patent system, this case will be taken as the starting point for further argument. By contrast, Australian patent application 2003204164, for a method of producing hybrid embryos by transferring the nucleus of a human cell into a bovine ovum, was refused because use of the invention would have been contrary to law. In a hearing (Woo-Suk Hwang [2004] APO 24) following the Fertilitescentrum decision, the Patent Office concluded that the invention would contravene the Prohibition on Human Cloning Act 2004.

The first infringement action involving an innovation patent has failed to produce a judicial guide as to what an “innovative step” involves. The cross-claim for invalidity of the innovation patent in Datadot Technology Ltd v Alpha Microtech Pty Ltd [2003] FCA 962 was not supported by evidence, so the patent was held to be valid and infringed. The alleged infringer did not appear at the proceedings.

HONG KONG

By Mark Irons and Douglas Clark

Legislative Changes

The Intellectual Property (Miscellaneous Amendments) Ordinance 2001 and the Patents (General) (Amendment) Rules 2004 came into effect on 7 May 2004, making various changes to the Patents Ordinance (Cap. 514) and Patents (General) Rules.

The main changes can be summarized as follows:

1.  Many of the changes relate to the introduction of the necessary procedures to allow electronic filing and processing of patent applications, including the recognition of digital signatures, and the keeping of electronic records, including the inclusion of published details of patent applications and patents in the on-line Hong Kong Intellectual Property Journal.

2.  Various of the changes relate to simplification and streamlining of procedures at the Patents Registry, those of particular interest including:

i)  removal of the requirement that the official form accompanying a maintenance fee payment on a pending application be signed by the applicant or his authorized agent. Such forms can now be filed by anyone (in keeping with the requirement for patent renewals).

ii)  removal of the requirement that translations of documents into an official language (English or Chinese) be formally “certified”. It is now merely required that the translation “state the name of the translator and his official capacity, if any”.

iii)  removal of the requirement on short-term patent applications that the copy of the previous application (ie priority document) be “verified”. A simple copy will now suffice, although the copy must include “a copy of a certificate issued by the authority that received the application and states the date of filing of the application”.

iv)  removal of the requirement on a short-term patent application that the International Patent Classification be given. The Registry will now take this information from the search report obtained from a designated body, which must be filed by the applicant as part of the patent application procedure.

v)  very significant reductions in official fees. With the replacement of the hard copy Hong Kong Government Gazette by the electronic Hong Kong Intellectual Property Journal, advertisement fees have been very substantially reduced, resulting in total fee reductions of some 80%.

3. i) The amendment to the rules governing post grant amendment merit further mention. Post grant amendment of a patent requires application to the Court in all situations aside from where the amendment is to reflect a European patent amended during opposition proceedings. Section 39 of the Ordinance previously required that, following an order of the Court approving the amendment, the proprietor had to file with the Registrar a copy of the order to amend within one month of the order. The Court of Final Appeal ruled in the case of Merck Sharp & Dohme Ltd v Registrar of Patents (mentioned in last year’s Report to this committee) that this section was ultra vires. The present law changes have repealed Section 39 in its entirety.

ii)  In the case of post grant amendment where the Hong Kong patent is derived from a European (UK) Patent subject to European opposition proceedings and which is maintained in amended form, Section 35 of the Patents Ordinance provides for amendment of the Hong Kong patent application directly before the Registrar. The changes to Section 35 have altered the period within which such application to amend may be made from three months from the date of amendment of the designated patent to six months from this date.

Rules of Court for Patent Cases

Rules of Court for Patent Cases have been drafted and are currently being considered by the High Court Rules Committee. The Rules follow substantially Rule 104 of the Rules of the High Court in England.

Cases before the Courts

The case Shanghai Reeferco Container Co Ltd v Waggonbau Elze involved letters threatening to take action on a Hong Kong patent for a drainage device sent to a number of container companies outside Hong Kong. The patent was based on a Chinese patent re-registered in Hong Kong.

The Plaintiff (a Shanghai company) issued an action for damages in Hong Kong seeking injunctions and damages for sending an unjustified threats. The Plaintiff also sought to invalidate the Hong Kong patent as part of the proceedings. The Plaintiff had also filed an application to cancel the underlying Chinese patent in the Patent Review and Adjudication Board (“PRAB”) in China.

The Defendant sought to dismiss the threats action on the grounds the Hong Kong courts did not have jurisdiction over letters sent outside Hong Kong. The Defendant also sought to stay the invalidation action pending the decision of the PRAB. (If the patent was invalidated in the Mainland of PRC, the patent should also be invalidated in Hong Kong).

Deputy Judge Poon decided that letters threatening patent infringement proceedings on a Hong Kong patent must be sent to a party in Hong Kong be actionable in Hong Kong and dismissed the Plaintiff’s threats claim. The Deputy Judge refused the Defendant’s application for a stay of proceedings on the grounds that Hong Kong law and Mainland PRC law on validity were different and therefore it was not appropriate to stay the proceedings.

The decision in relation to the threats action is under appeal and the appeal is due to be heard on 12 October 2004.

Proceedings have recently been initiated under a Hong Kong Short-Term Patent for among other things, patent infringement in the case Chung Wai Lun v Candace Guidance Signage Limited. The patent relates to markers used for attachment to floor surfaces to assist blind and partially sighted people in finding their way.

INDIA

Made by D. Calab Gabriel and Hari Subramaniam

Subsequent to the 49th council meeting of APAA in the year 2003, held at Kota Kinabalu in Malaysia, no changes have been brought into the Indian Patents Act. However, in order to fulfill its remaining obligations under the TRIPS Agreement, on December 22, 2003, the Government of India introduced an Amendment Bill in the Lower House of Parliament. This was to mark the final phase of amendments to the Patents Act, 1970. However, with the dissolution of Parliament in the month of February 2004, the Bill has lapsed. After the new Government assumed office in the month of June this year, the Patents (Amendment) Bill, 2003 was once again referred to a Ministerial Committee for reconsideration. It is, however, believed that the lapsed Patents (Amendment) Bill, 2003 will be passed with minor modifications by the Parliament in the upcoming winter session this year.