A ‘biosimilar medicine’ or ‘biosimilar’ is a highly similar, but not identical, version of an original biological medicine (‘reference medicine’) – a medicine comprised of large complex molecules derived in some way from a living organism.  In this sense, a biosimilar differs to some extent from a traditional small molecule “generic” medicine, which is commonly understood as a pharmaceutical product that is identical, at least in terms of active ingredients, to the original branded “originator” or “innovator” product.  As the understanding and technology required to develop biological medicines continues to advance rapidly, they are increasingly prominent in the Australian and global pharmaceutical markets. 

Biological medicines are costly to develop, manufacture, store and supply, making their cost to healthcare providers such as the Australian Government through the Pharmaceutical Benefits Scheme (PBS) relatively high compared to conventional “small molecule” medicines.  In 2015, the Australian Government committed AU$20 million to a 3-year awareness campaign to support the increased use of biosimilar medicines by patients, pharmacists and specialists.1  The Government recently granted a further AU$5 million to the Generic Biosimilar Medicines Association (GBMA) to continue the awareness initiative until December 2020.2  The Government hopes its investment in biosimilars will provide significant savings and improve competition.  

In a patent context, the encouragement of biosimilar products may bring with it more litigation as innovators seek to protect the markets for their biological medicines through patent enforcement.  The dynamics of that patent litigation will often be different to conventional “innovator vs.  generic” disputes over small molecule medicines.  Often the party seeking to introduce a biosimilar product is itself traditionally an innovator pharmaceutical company, and the costs of developing both an original biological medicine and a biosimilar are orders of magnitude higher than the costs of developing most small molecule medicines (especially generic versions).  These and other factors will undoubtedly influence parties’ commercial imperatives and their appetite for litigation or settlement, as well as the factual and legal issues that emerge during litigation. 

Biological medicines include antibody-based medicines that treat diseases such as cancer and rheumatoid arthritis, as well as other recombinant proteins that ameliorate conditions such as diabetes.  Biological medicines tend to be significantly more expensive to manufacture than traditional generic medicines that are limited to chemically-synthesised small molecules.  These increased development costs are reflected in significantly higher prices for biological medicines, including biosimilars, compared to most small molecule medicines.  For example, a year of treatment with pembrolizumab (trade name Keytruda, Merck Sharp & Dohme), a selective humanised monoclonal antibody for metastatic malignant melanoma, cost up to AUD $150,000 before it was subsidised by PBS.3  There are currently 24 biosimilar brands listed on the Australian Register of Therapeutic Goods (ARTG), 12 of which are subsidised by the PBS.4  Under the National Health Act 1953 (Cth), Part VII, Division 3A, a statutory price reduction of 25% is applied to existing PBS-listed products on the listing of the first new bioequivalent or biosimilar item that has the same route of administration as an existing brand or item.

Although biosimilars are necessarily highly similar to the innovator biological medicine (“reference medicine”), they are not bioequivalent and do not follow the same regulatory pathways as generic small molecule medicines.  More rigorous testing is required for biosimilars.5  Generic versions of small molecule medicines must contain the same active ingredient as the innovator product, and must also be bioequivalent (the rate and extent of absorption by the body of the same dose of the active ingredient are expected to be essentially the same).6  In the context of small molecule medicines, bioequivalence can generally be reliably proven.  However, as biological medicines are often produced by living cells, differences may exist between different batches of the same medicine.  Their safety and effectiveness can also be affected by small changes in manufacturing and storage conditions.  This necessitates different approval procedures.

The Australian Therapeutic Goods Administration (TGA) has largely adopted the European approach to regulatory approval of biosimilars.7  To obtain TGA approval, each biosimilar must be evaluated using clinical, pre-clinical and laboratory-based comparability studies to generate evidence of similar quality, safety and efficacy of each new biosimilar.  There has been some controversy nationally and internationally about appropriate data threshold requirements for biosimilar regulatory approval.  Concerns have also been expressed regarding patient switching between a reference medicine and a biosimilar, due to, for example, limited long-term efficacy, safety and immunogenicity data.8

Compared to the courts in the US and Europe, which have been busy applying and interpreting the law around biosimilars, and where there are a number of pending biosimilar-related disputes, this space has to date been relatively quiet in Australia.  Litigation is continuing to emerge, though, and this trend is expected to continue in light of the Australian Government’s encouragement of biosimilar medicines.

Over much of the past decade, Australian courts have demonstrated a readiness to grant interlocutory injunctions restraining launch of generic products while patent litigation continued through to at least a first instance (trial) decision on validity and infringement, with the patentee required to give an undertaking to compensate any party for losses arising from the injunction should the patent ultimately be found invalid or not infringed.  This has occurred primarily on the basis that the balance of convenience favoured the innovator/originator in light of the practically-irreversible price drops for PBS reimbursement once a generic product enters the market.  However, in a number of more recent cases, Australian courts have declined to grant interlocutory injunctions to pharmaceutical patentees.  In particular, having recently conducted the first contested trials to enforce the patentee’s undertaking as to damages, the Federal Court has cited “the difficulty, complexity and uncertainty involved in assessing compensation under an undertaking as to damages given in patent infringement proceedings involving the supply of pharmaceutical products in the Australian market” as a factor pointing against the grant of an interlocutory injunction: Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd (No 2) [2019] FCA 505 (11 April 2019) at [137].  Accordingly, it has become more difficult to predict whether an interlocutory injunction is likely to be obtained by a patentee seeking to prevent the PBS listing and launch of a biosimilar pending the trial outcome, and each case will turn very much on its own facts regarding the market and also the strength of the patents and nature of the products involved.

The first interlocutory injunction against a biosimilar was granted by the Federal Court of Australia in F. Hoffman-La Roche AG v Sandoz Pty Ltd [2018] FCA 874 (12 June 2018).  Roche is the registered proprietor of several patents relating to methods of use of rituximab, a biologic therapy prescribed in Australia to treat immunological conditions such as chronic lymphocytic leukaemia, lymphoma, and rheumatoid arthritis.  The Federal Court restrained Sandoz from launching its biosimilar, Riximyo, on the basis that there was a prima facie case that such supply would infringe the claims of 5 method of treatment type patents owned by Roche and the balance of convenience favoured preserving the status quo pending the trial outcome.

By contrast, the Federal Court in Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd (No 3) [2018] FCA 2060 (19 December 2018) refused Sanofi’s application for an injunction to prevent Alphapharm from launching and selling its Semglee product.  The Semglee product is a biosimilar to Sanofi’s product, Lantus SoloStar, both of which are new generation insulin products.  Sanofi’s patent relates to the syringe containing a medicine. The Semglee product was intended to be sold with a syringe.  Sanofi applied for leave to appeal to the Full Federal Court (Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd [2019] FCAFC 28) but leave was refused.

As previously reported, Burley J of the Federal Court denied Pfizer’s application (Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCA 285 (21 March 2017)) for preliminary discovery of documents sought in order to determine whether Samsung Bioepis AU’s biosimilar product (trade name BRENZYS) infringed one or more patents claiming manufacturing processes for Pfizer’s biological medicine, Etanercept (trade name ENBREL).  As we subsequently reported, Pfizer appealed the decision and the Full Federal Court unanimously overturned Burley J’s decision, granting Pfizer preliminary discovery (Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193).  That litigation between Pfizer and Samsung Bioepis AU continues, and Pfizer has recently applied for preliminary discovery from Sandoz with respect to potential infringement of those same manufacturing process patents by Sandoz’s ERELZI etanercept biosimilar products (which have TGA approval but are not yet listed on the PBS).

It appears inevitable that the Australian Government will continue to focus on reducing healthcare expenditure and we will likely see further policies and developments that encourage biosimilars.  We expect a corresponding trend towards litigation activities relating to biosimilars in Australia, as sponsors of original biological medicines seek to protect the markets for their products through their patent portfolios.  Given the technical complexity and unique commercial factors involved in producing and supply biological medicines, such litigation, including the trials and any appeals in the cases that are already underway, will likely produce interesting and important case law on an array of invalidity and infringement grounds.


1 Media release by the Honourable Sussan Ley, Member for Farrer, Minister for the Environment, Pharmaceutical Benefits Scheme to be reformed, <http://sussanley.com/pharmaceutical-benefits-scheme-to-be-reformed/>.

2 Australian Government, Department of Health, Biosimilar Awareness Initiative (02 Dec 2019) <https://www1.health.gov.au/internet/main/publishing.nsf/Content/biosimilar-awareness-initiative>.

ABC News, ‘Revolutionary’ melanoma drug worth $150,000 a year listed on PBS, saving Australian patients thousands (28 Jun 2015) <https://www.abc.net.au/news/2015-06-28/melanoma-drug-listed-on-pbs-saving-patients-thousands/6578554>.

Australian Government, Department of Health, Which biosimilar medicines are available in Australia (02 Dec 2019) <https://www1.health.gov.au/internet/main/publishing.nsf/Content/biosimilar-which-medicines-are-available-in-australia>.

Australian Government, Department of Health, Biosimilar medicines regulation (04 Apr 2018) <https://www.tga.gov.au/publication/biosimilar-medicines-regulation>.

Australian Government, Department of Health, Prescription medicines: registration of new generic medicines and biosimilar medicines (05 Dec 2019) <https://www.tga.gov.au/prescription-medicines-registration-new-generic-medicines-and-biosimilar-medicines>.

Australian Government, Department of Health, EU guidelines (18 Dec 2019) <https://www.tga.gov.au/ws-sg-index?search_api_views_fulltext=CHMP/437/04>.

Thomas Dörner, Vibeke Strand, Paul Cornes, et al, ‘The changing landscape of biosimilars in rheumatology’ (2016) 75 Ann Rheum Dis.  974-982.

The “glass half empty” headline: Innovation patent spends Christmas on death row.

The “glass half full” headline: Innovation patent lives to fight another day (year).

Notwithstanding, optimistic and the pessimistic angles will invariably converge early in the New Year, as the fate of Australia’s second-tier “innovation patent” is up there with death and taxes as one of life’s inevitabilities.

Has the innovation patent been abolished?

Not yet, although it is surely now inevitable that it will be.  The legislation containing provisions to abolish the innovation patent (amongst other measures; the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019; “the Bill”) was passed in the Senate back in October 2019.  It has spent the past two months awaiting effective “rubber stamping” in the House of Representatives in what is the final step in the legislative process prior to Royal Assent.

The House of Representatives had its final sitting for 2019 on 5 December.  It does not reconvene until 4 February 2020.  At the time of adjournment, the Bill was actually next in line to be read.  Technically, and subject to the inevitability of it being passed by the House, the innovation patent indeed lives to fight another year.

Why is passage of the Bill considered inevitable?

The draft legislation has bipartisan support in the House and will easily obtain the numbers required (if not unanimity).  When the Bill was before Senate, the Opposition’s support was garnered by extending the “sunset” period for the filing of new innovation patents from the original 12 months to 18 (and by guaranteeing that a Government review of small-to-medium enterprise (SME) innovation was to be undertaken within three months).  The Government was seemingly happy to accede to these conditions.  Death, taxes and the demise of the innovation patent.

When the Bill passes, what happens then?

Royal Assent generally follows within a month.  In the context of the innovation patent, Applicants will then have 18 months within which to file new innovation patent applications (or to convert standard patent applications to innovation patents).  Following this date, no new innovation patents can be filed, although existing rights will not be affected.

A summary of the transitional provisions can be found in our earlier article (although note that this earlier article was based upon the original 12-month sunset window; this will be extended to 18, as noted above).

It will be appreciated that upon eight years from the “sunset” date (i.e., itself, 18 months from the date of Royal Assent) all innovation patents will have expired.  Ultimately, the innovation patent system is being phased out as opposed to abolished, per se.

Next steps?

As noted above, the next step in the legislative process is that the Bill is passed by the House of Representatives.  The next sitting is scheduled for 4 February 2020, and in the absence of a complete reshuffle of the agenda in the interim, the Bill should be first up, or close to it.

What else was included in the legislation?

Although the phasing out of the innovation patent is unquestionably the headline act of the new legislation, it certainly isn’t the only feature. The Bill further purports to amend the Patents Act 1990 to: introduce an objects clause; replace the “reasonable requirements of the public” test in relation to applications for a compulsory licence with a public interest test; provide that only the patentee of a dependent patent can seek a compulsory licence over the use of the original patent; provide for omnibus claims in patent specifications to be removed at stages of consideration subsequent to examination; clarify the Commissioner of Patents’ power to redact sensitive information from patent documents; remove the requirement to file a certificate of verification for documents translated into English, unless required by the regulations; clarify that Crown use can be invoked for the provision of a service that any Commonwealth, state or territory government has the primary responsibility for providing or funding; require governments to seek negotiated outcomes with patent owners before invoking Crown use; and require ministerial authorisation for invoking Crown use if a negotiated outcome is unsuccessful or in emergency situations.  The Bill amends the Designs Act 2003 to modify provisions relating to Crown use consistently with the changes to the Patents Act 2003; and Patents Act 1990 and Trade Marks Act 1995 to enable the Patent Office and Trade Mark Office to keep and use their official seal in electronic form when supplying electronic certified copies of documents to customers.

Summary

Despite several blog posts claiming the Bill has been passed, it hasn’t (yet).  That said, it is literally just a matter of the House getting around to it – and this will surely happen in early February 2020.  As always, we will keep readers apprised of progress.

Pinnacle Runway Pty Ltd v Triangl Limited [2019] FCA 1662 (10 October 2019)

Question: When is a name that is used to distinguish, not being used to distinguish?

Answer: When it is a style name

The Case

In Federal Court proceedings Pinnacle Runway Pty Ltd (“Pinnacle”) alleged infringement of its trade mark registration for DELPHINE by Triangl Group Ltd (“Triangl”). The allegation concerned the use of that word in relation to bikinis.

The key issue and basis of the ultimate decision is neatly summarised by Justice Murphy:

Triangl admitted that, over a period of six weeks, it marketed and sold in Australia a bikini style in three different floral designs under the TRIANGL Trade Mark using the name DELPHINE, but denied using DELPHINE “as a trade mark”. It argued that it employed the TRIANGL Trade Mark to distinguish its products from those of other traders and it only used DELPHINE as a “style name” so as to assist consumers to differentiate that one of its many bikini styles from its other styles. It put on evidence to show that there is a widespread practice in the women’s fashion industry in Australia of using style names in relation to women’s fashion garments, including swimwear, and that women’s names are commonly so used. Triangl contended that consumers were used to this practice and that its use of the name DELPHINE was unlikely to be perceived by consumers as distinguishing Triangl’s goods from the goods of other traders.

The Issue 

For a trade mark registration in Australia to be infringed, the infringing use needs to be use “as a trade mark”. Consequently, determining whether a name or other sign is used “as a trade mark” is an issue of key importance in any such proceedings.

The present case concerned a fundamental clash over whether and when a name is being used as a trade mark. At the heart of this issue is the view of the Court that there will only be use as a trade mark when that use is intended to distinguish the user’s goods from those of other traders.

Further to this, the Court accepted evidence that various names are used not to distinguish one trader’s goods from those of another, but to distinguish only the different products within a range sold by a particular trader.

The Evidence

Pinnacle presented evidence from a marketing consultant and lecturer in marketing concerning brand architecture and perceptions. It claimed that sub-brands function as trade marks and referenced the typical brand architecture hierarchy of:

(a) corporate or company brand, which is the overall or head brand;

(b) family brand, which is a brand that is used in more than one product category but is not necessarily the name of the company or corporation;

(c) individual brand, which is a brand that is restricted essentially to one product category, although it may be used for several product types; and

(d) modifier, which describes a specific size, flavour, configuration or function of the product.

Triangl presented evidence from a public relations and marketing consultant with experience in the fashion industry. His evidence was that there is common use of ‘style’ names simply to distinguish the different collections sold by traders, rather than to indicate origin.

It was claimed that typically the business’ principal brand, in this case TRIANGL, performed the role of distinguishing the trader’s goods from the goods of others, not the style names used.

The Use

DELPHINE was used on Trangl’s website, with varying degrees of prominence, in contexts such as:

Triangl image 1
triangl image 2
Triangl image 3

The Decision 

The Court was persuaded by the industry evidence. In concluding that DELPHINE was not being used by Triangl as a trade mark, it took into account factors such as:

  • Evidence from Triangl that it did not intend to use the name to distinguish its goods from those of other traders but only to distinguish a particular style of bikini from those within its broader range;
  • Whenever DELHINE was used, there was generally more prominent use of TRIANGL;
  • Typically, DELPHINE was used in a similar font size as the names given to the different colours and floral patterns, which is inconsistent with use as distinguishing commercial origin;
  • DELPHINE products were generally displayed as part of a wider range of styles with various different names. For example, on the website if the consumer clicked “View All” they would see images of approximately 35 Triangl bikini styles (all having different names) and if they clicked “New Arrivals” they would see 4 new styles

As a consequence, the Court was convinced that consumers would understand that TRIANGL was the trade mark being used to identify the source of the bikinis and that DELPHINE, like other style names, was not being used as a badge of origin or as a ‘sub-brand”.

The Court emphasised that the context of use is “all important“ in assessing such issues and found that use in the present case was not use “as a trade mark”.

Additional Evidentiary Issue  – Wayback Machine

The case also included an interesting observation on the admissibility of evidence from the Wayback Machine. While this is generally considered hearsay, it has been admitted on occasions as a matter of discretion.

In the present case, Justice Murphy accepted evidence that Wayback screenshots are ordinarily produced automatically. As a consequence, in the absence of evidence to the contrary, it was accepted on the basis of being a document produced without human intervention.

Comment 

The case breaks new ground and challenges perceptions of what a trade mark is, and when a name is functioning as a trade mark.

The case creates additional uncertainty for parties seeking to enforce trade mark rights and provides a new characterisation of the defence that a name is not being used as a trade mark, when there is also use of principal or ‘house’ brand.

Whether a name is being used as a style name (or something akin to a style name) rather than being used as a trade mark, will depend upon the circumstances of each case, and it is an issue that will likely give rise to considerable debate.

The case is presently the subject of an appeal, and assuming it proceeds to a decision, the result will be closely watched.

It seems the abolition of Australia’s second-tier patent system, the innovation patent, (as detrimental as this will be for Australian business) could be considered a high-profile distraction to divert attention away from new laws that will potentially render patents claiming chemical compounds, with reference to a structural formula, vulnerable to invalidation.

This issue relates to new laws that apply to Section 40(3A) of the Patents Act 1990, which was originally introduced in 2013 to remove the use of claims that refer to examples in a specification, i.e. omnibus claims. At that time, Section 40(3A) recited that “the claim or claims must not rely on references to descriptions or drawings unless absolutely necessary to define the invention”. More recently, the Intellectual Property Bill (Productivity Commission Response part 1 and other Measures) Bill 2018, expanded the scope of Section 40(3A) to cover claims referring to “drawings, graphics or photographs”.

Relevantly, Section 40(3A) does not refers to “parts” of the specification – it simply refers generally to “descriptions, drawings, graphics and photographs”. Thus, current Section 40(3A) appears to go beyond its initial purpose of removing the use of omnibus claims and potentially renders claims that include drawings, graphics and photographs unacceptable. This arguably includes frequently used chemical claims that refer to a structural formula as a graphic representation of the molecular structure of a chemical compound, or an X-ray diffraction pattern, i.e. drawings or graphics.

Currently, Section 40(3A) can only be considered during examination and, in our experience, the Patent Office is only enforcing it against claims that refer to parts of the specification. However, when the Intellectual Property Bill (Productivity Commission Response part 2 and other Measures) Bill 2019 comes into force, most likely at the end of November 2019, Section 40(3A) will become a ground for re-examination, opposition and revocation.

At the very least the new laws, as they relate to Section 40(3A), introduce considerable uncertainty as it is not clear how they will be interpreted judicially. The explanatory memorandum to the Bill is not helpful because it only considers Section 40(3A) as covering omnibus claims. Moreover, as there is a reasonable argument that reference to a structural formula in a claim is not absolutely necessary to define the invention because compounds can be defined by chemical names, future patentees of chemical compounds have a right to feel nervous. For this reason, it may be prudent for applicants of chemical compound applications to cover their most commercially relevant embodiments in independent claims that define a chemical compound by its IUPAC name, in addition to relying on claims that define a structural formula. Notwithstanding, that a claim that refers to a chemical structure is more succinct than one that refers to a long and potentially unclear chemical name.

Shelston IP will, of course, continue to monitor the introduction of the new laws and provide necessary updates.

In recent years, IP “buzzwords” have included superconductors, gene patents, business methods and computer software.  Society’s ever-increasing environmental awareness now dictates that “cleantech” is the latest vogue.  The Australian Patent Office offers the facility to request expedited examination of any patent application if the applicant provides good reason (this may be as vague as “commercialisation”).  However, the Office singles out cleantech-related applications by not requiring a reason other than that the invention is in the (somewhat imperfectly-defined) area of “green [clean] technology (climate ready)” research.  In this article, we consider some of the pros and cons of proceeding toward accelerated patent grant in Australia for cleantech inventions.

Cleantech and the “patent bargain”

Unlike gene patents, business methods and computer software (each of which have been uniquely polarising) there is a general acceptance that clean technologies should be patentable.  The minority dissenters who argue that such technologies should be in the public domain appear to overlook the basic quid pro quo of the “patent bargain” – being that without the prospect of patent protection, researchers would have no incentive to develop such technologies in the first place.  In this respect, any patentability issues surrounding clean technologies are more closely akin to those experienced a quarter century ago in relation to superconductors – in other words, how can the patent system be poked and prodded in order to better accommodate these technologies?

How clean is “clean”?

Any special treatment for clean technologies of course first requires a standard definition of precisely how “clean” (or “green”) any new technology must be in order to qualify.  On the one hand, a technology that must be shown to mitigate an environmental problem or provide a solution sets the bar rather high – and excludes “net-red-relative-green” technologies that although “cleaner” than existing competitor technologies, may still cause some degree of environmental damage.  On the other hand, it could be argued that these technologies (for instance, a more environmentally-friendly method for manufacturing cement) are just as deserving.  Accordingly, at least in the patent world, the term “cleantech” appears to be interpreted fairly broadly.

Expedited examination for cleantech applications in Australia

Notwithstanding any posturing as to what is or isn’t properly “cleantech”, the Australian Patent Office offers to expedite the examination of patent applications on the grounds that it relates to clean technologies.  Of itself, this is nothing new – indeed, expedited examination has been offered for many years, irrespective of technology.  However, as a reason must be given in order to have examination expedited, this platform has largely been the domain of applicants wishing to expedite grant of their application with a view to commencing infringement proceedings as soon as possible thereafter – or those requiring a granted patent as a condition of obtaining investor funding.  At present throughputs, expedited examination typically saves the applicant around 12 months of waiting for a first examination report to issue – and the potential benefits are clear in this regard.  As such, literally checking a box asserting that an application relates to clean technology will be just as valid any reason typically employed in the past.  The Office then makes a fairly subjective assessment as to whether the technology is clean enough to qualify under the scheme.

Faster isn’t necessarily better…

On the other hand, proceeding in the “regular” manner and not applying for expedited examination provides an applicant with additional time in which to determine whether their invention is commercially viable; this is important on a cost-basis given that a decision to proceed with patent prosecution is sometimes akin to a “commitment to pay”.  Of course, as with everything in the patent game, how best to proceed is a delicate balancing act and will vary from applicant to applicant, country to country and technology to technology.

Claim scope and eventual validity

Another aspect that must be considered when deciding whether to request expedited examination of a cleantech patent application – especially in Australia, relates to claim scope.  Australian patent examiners frequently draw upon the prosecution history of any US or EP counterpart applications.  Accordingly, there is the potential to obtain relatively broad coverage in Australia by first requesting expedited examination – and relying on the possibility that the corresponding US/EP prosecutions are not yet significantly advanced.  Of course, this must be counterbalanced against the likelihood – and with it, expense, of later needing to file post-acceptance voluntary amendments to the Australian claims in order to keep them “valid” in view of prior art later uncovered elsewhere.  The facility to file divisional patent applications is another means of maintaining pendency, and with it, flexibility.

The international picture

Australia is not the only country to offer expedited examination for cleantech patent applications – indeed, the United Kingdom, United States, South Korea, Japan, China, Israel and Canada (amongst others) offer (or have offered in the recent past) such a platform.  Although the respective rules and eligibility criteria may be slightly different from those of Australia, the above-noted “pros and cons” are just as applicable in an international context.

There is evidence – both anecdotal and tangible, that patent applicants are making good use of the expedited examination platform.  For instance, the United Kingdom Intellectual Property Office has granted well over 100 patents under the Clean Channel Patent Examination Acceleration scheme, which was purported to reduce the average pendency of a UK patent application from around 36 months to less than eight.

Furthermore, in 2013, the International Centre for Trade and Sustainable Development published an empirical analysis of several fast-track examination programs. It concluded that such platforms for cleantech applications reduced the average grant time of a patent by up to 75%.  It further concluded there was strong demand for such programs, especially from SMEs (small-to-medium enterprises), and that fast-tracked patents were of good commercial value.

Cleantech and the Patent Prosecution Highway

Another way in which expedited examination of cleantech patents may be attractive is that it allows applicants to take advantage of the various Patent Prosecution Highway (“PPH”) agreements that exist between certain countries.  For instance, one may look to invoke the AU-US PPH by using a quickly-granted Australian cleantech patent as the basis for expedited examination in the USPTO.  However, anecdotal evidence suggests that proceeding via the dedicated route for cleantech patents is likely to be the quicker option.  Nonetheless, the various PPH mechanisms remain useful supplementary options for the expeditious grant of a cleantech patent in certain foreign jurisdictions.

So I’ve got a fast-granted Australian (cleantech) patent – now what?

A quickly-granted Australian patent is actually quite a powerful prosecution tool when it comes to our little corner of the world.  For instance, an Australian allowance opens up the GPPH route in Singapore and the modified examination procedure in Malaysia.  A fast-granted Malaysian or Singaporean patent in turn unlocks the ASPEC pathway, which includes Brunei Darussalam, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Thailand and Vietnam (and Malaysia or Singapore, if not actioned earlier).  Net result: much of Asia-Pacific is taken care of with an absolute minimum of fuss and bother.  Of course, our attorneys are well-versed in managing this sort of filing program and the potential benefits, which include from our end, bulk purchasing power and compatible time zones should not be underestimated.

What about New Zealand?

Expedited examination is also offered in respect of New Zealand patent applications where “good and substantial reasons” exist (Reg.77(1)(b)) and where the request is accompanied by evidence in support of the request (Reg.77(2)).  Experience suggests that the evidentiary bar has been set rather high.  However, on the other hand, proving that an application relates to clean technology shouldn’t be especially onerous given that much of the “hard work” (IPC codes and the like) has been done already.

Any decision to request expedited examination in New Zealand should be offset against the fact that even if proceeding via the “regular” route, a first examination report typically issues from IPONZ within about 6 months.  Jumping through a few extra hoops in order to save only a couple of months wait time may not be to everyone’s taste.

Shelston IP’s cleantech team

In response to the increasing recognition being afforded to clean technologies throughout the patent world, Shelston IP has in place a “cleantech IP Team” comprising professional staff from varying scientific, engineering and legal backgrounds.  We are well placed to advise clients as to how best to prosecute their clean technologies by making best use of the various facilities available under the Australian and international patent systems.

The Intellectual Property Amendment (Productivity Commission Response part 2 and other Measures) Bill 2019 was passed by the Senate on 16 October 2019. This will result in the abolition of Australia’s second-tier patent system, the innovation patent.

Many small- and medium-sized Australian businesses and relevant industry groups, including the Australian Chamber of Commerce and Industry, which represents around 300,000 Australian businesses, expressed strong and well-reasoned support for retaining the innovation patent. These views were seemingly ignored by both the Government and Opposition, whose reasons for phasing out the innovation patent have never been credibly articulated.

Notably, the Opposition proposed amendments to the bill, to which the Government agreed. This included extending the period for phasing out the innovation patent from 12 to 18 months after the Bill becomes enacted and the implementation of a review considering the accessibility of the patent system for small and medium businesses as detailed below.

(1)     The Minister must cause a review of the accessibility of patents for small and medium sized enterprises within three months of the commencement of this section.

(2)   Without limiting the matters the review should consider, the persons conducting the review must examine:

 (a)       the cost of applications for patents; and

 (b)       processing times of patents; and

 (c)       advice provided by the Australian Government with respect to the patent application process; and

 (d)       awareness of the patent application process.

(3)     The persons conducting the review must provide the Minister with a written report of the review within 12 months of the commencement of the review.

(4)     The Minister must cause copies of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.

Relevantly, the terms of the review above do not specifically detail consideration of the value or benefit of offering some form of patent protection for inventions that do not meet the inventive step threshold required for standard patents. This appears to be particularly relevant, as raising the threshold of inventive step remains on the Government’s agenda. The consequence is that protecting commercially valuable inventions will become significantly more difficult in Australia which, according to business owners will stifle innovation.

Passage of the amended Bill through the House of Representatives will be a formality, as it has bipartisan support and is expected to occur during the week starting November 25. Once passed, the provisions preventing the filing of innovation patents will come into force after June 2021. Shelston IP will, of course, keep you updated once the Bill has been passed by the House of Representatives.

Malaysia has introduced a new Trademarks Bill 2019 (Bill) which is set to replace the current Trade Marks Act 1976. It is anticipated that the new Act will come into force on 27 December 2019.

Some of the key changes are set out below:

Accession to the Madrid Protocol

Malaysia is set to join the Madrid Protocol from 27 December 2019. This means that a trade mark can be protected by way of an International Application covering Malaysia, instead of filing a separate national Malaysian trade mark. This is particularly useful if there are multiple countries of interest, as it is generally more cost effective to file a trade mark via an International Application which designates more than one country, as opposed to filing national applications in each country of interest.

Multi class applications

Currently, only single class trade mark applications are accepted in Malaysia. However, the Bill will allow for multi-class applications to be filed.

Non-traditional trade marks / collective trade mark

The Bill recognises non-traditional trade mark marks such as the following, however, they must be capable of being graphically represented:

  • shape mark or its packaging
  • sound
  • scent
  • colour
  • hologram
  • positioning
  • sequence of motion

The Bill also recognises collective trade marks.

Filing Date

The date of filing will no longer be recorded as the date of receipt of a new application. It will only be recorded once all formality requirements have been met (e.g. lodgement of power of attorney).

Division and Merger of trade mark applications and registrations

The Bill will provide for the division and merger of applications and registrations. Consequently, it may be possible for trade mark owners to consolidate current single class registrations. This may assist in the reduction of future renewal costs.

Defensive and Association trade marks

Defensive and association trade marks will no longer be available.

Security Interests

It will be possible to apply for registration of a security interest over a pending or registered trade mark.

Registration conclusive period

Currently, a trade mark is taken to be valid in all respects after a period of 7 years unless the registration (1) was obtained by fraud, (2) offends against Section 14 of the current Act (Section 23 of the proposed new Act) or (3) that the trade mark was not distinctive of the goods or services. This period will be reduced to 5 years.

Infringement

  • Scope – The scope of trade mark infringement is to be expanded to cover goods or services which are similar to those registered under the trade mark.
  • Groundless threats – Groundless threats provisions will be introduced, where it will be possible for an aggrieved person to bring an action against a person who threatens trade mark infringement without basis.
  • Remedies – The remedies available under a trade mark infringement action include damages, account of profits, injunctions (including interim injunctions) and mandatory orders.

Final Comments

As noted above, from 27 December 2019, Malaysian applications can be filed via the Madrid Protocol filing process in addition to national Malaysian applications.

If you have an International Registration and are considering seeking trade mark protection in Malaysia, you may wish to apply for a subsequent designation to extend protection of the registration to cover Malaysia, rather than applying for a separate national application.

Further, if your national Malaysian trade mark registrations have upcoming renewal deadlines due after 27 December 2019, you may also wish to consider the merging of your registrations in order to reduce future renewal and maintenance costs.

More detailed information regarding the Bill can be found in the Intellectual Property Corporation of Malaysia’s Consultation Paper at: http://www.myipo.gov.my/wp-content/uploads/2019/09/Consultation-Paper-Trademarks-Regulations.pdf

It’s that time of the year once more in Australia: National Ride2Work Day (Wednesday 16 October 2019).  In celebration of pedal power, here’s a tour of some weird and wacky cycling patents.

One wheeled vehicle (US patent 325,548)

This curious vehicle, where the rider sits inside the wheel, was patented by John Otto Lose in 1885.  I love the way the illustrator has gone to the trouble of including a little umbrella in case of rain (not an essential feature of the invention).

Aerial bicycle (US patent 563,793)

Another slightly bizarre contraption was invented by Hiram Nickerson and patented in 1896.  The crucial problem, which seems to render this invention almost completely impractical, is that without a network of elevated track, the aerial bicycle can’t go anywhere.

Rowing bicycle (US patent 642,544)

Like the idea of rowing and fresh air but scared of the water?  No problem!  Louis Burbank has the solution for you with this rowing bicycle, patented in 1900.  More recent iterations of such a machine are available for purchase in 2019, but I suspect it’s probably a niche market.

Double bicycle for looping the loop (US patent 790,063)

Next up, it’s Karl Lange’s patent, granted in 1905, for a “double bicycle for looping the loop for circus and other performances.”  I’m not sure I fancy my chances with this one.  Especially without a helmet.

Exercising device for water use (US patent 4,241,688)

More recently, Ralph and Kathryn Mansolill’s 1980 patent is for a device useful for exercising in a swimming pool or other body of water.  The general idea is not to achieve some sort of miraculous unicycling on water.  In essence, the device is buoyant so that it can support a person “in a substantially seated upright position in the body of water such that the neck, head and upper shoulders of the person remain out of the water, allowing the person to exercise the legs, arms and torso while neutrally buoyant.”

Mowing apparatus adapted to be towed by a pedal-operated vehicle and the like (US patent 5,410,864)

Can’t afford a motorised ride-on lawnmower?  In 1995, Thomas Lacy and Kenneth Shackles, Jr. patented this mowing apparatus adapted to mount to the frame of a vehicle such as a bike.  Especially handy if you have a long, thin lawn.

Apparatus for harnessing wind to drive a bicycle (US patent 6,932,368)

Granted in 2005, Vladimir Zam’s patent protects his sail attachment which, when connected to a bicycle, harnesses wind to drive the bicycle forward.  My assumption is that it’s not intended for use on crowded city streets and I guess it might take a bit of practice not to fall off and hurt yourself when the wind changes direction.  However, Google suggests that others have also proposed bicycles with similar attachments – so perhaps this idea may have wind in its sails yet.

Body-connected bike (US patent 6,805,657)

Do you live in a small apartment and don’t have space for a bicycle?  Just do away with the frame.  And the pedals.  Indeed, Justin Trenary’s 2004 patent does just that.  It’s an interesting concept, probably quite exciting for downhill riding, but I’m not tempted to replace my commuting bike with one of these any time soon.

First of all, what is a patent family?  Like a family made up of people, it’s a collection of things that are related in some way, where the things just happen to be patent documents.  Although all methods of constructing a patent family are artificial, some are more artificial than others, which, I guess, implies that some are almost natural.

There are really two main types of patent family:  simple and extended.  These two are the most logical, but there are a few that aren’t so logical, and really just exist so as to give a convenient name to a particular collection of patent documents.

The table below can be found in quite a few publications explaining how patent families are constructed.  I’ll add a bit of colour to it as we go to help explain the difference between the various types.

Patent families table 1

Simple

In a simple patent family all of the patent documents have exactly the same priority document (or documents), which means they all include basically the same inventive subject matter.

Essentially we’re looking at a nuclear family.  Mum and/or Dad are the priority documents, and their offspring are the patent documents.

Family 1 is a single parent family with one kid, while Family 2 is a two parent family with two kids, and so on.  Things are kept, well, simple and easy to understand.

Patent families table 2

While each patent document belongs to a single family, this table clearly shows that a priority document can belong to more than one family, so where I say above that a patent family covers an inventive subject matter, it’s not necessarily mutually exclusive with the subject matter of a second patent family.  For example, Family 4 has the elements of Priority P3, which must also form part of Family 3’s subject matter, but Family 3 also contains the elements of Priority P2, which is sufficient to differentiate it from Family 4 and to call it a separate patent family.

So, why don’t we define a patent family by a single priority document instead…

Complex

A complex patent family is generally defined as one where all patent documents are linked by at least one priority document.

The definition says ‘at least one’ but the table below doesn’t provide an example.  In the table above, Family 2 could also be considered to be a complex patent family as it has a pair of priority documents that are both shared by Patent documents 2 and 3.  It doesn’t include Patent documents 1 and 4 as they don’t share both priority documents.

Otherwise, this is a people family where the parents have separated.  You have Family 1 with Mum with three kids, and Family 2 with Dad, also with three kids, but where two of the kids are in common.  Depending on which family you are looking at, sometimes the kids in common are staying with Mum, and sometimes with Dad, and Dad’s just hanging out for that one weekend in a blue moon when he has no kids at home and he can go and play a round of golf.

Patent families table 3

I prefer the simple patent family approach to this one as, in complex families, a single patent document can belong to more than one family.  The simple family allows for the concept of patent equivalents.  As the priority document and subject matter are the same, you can say that Patent document 2 is an equivalent of Patent document 3.  You can look at the claims of one and be certain that they will be substantially the same as the other.  It’s handy when one of the patent documents is not in English as you can read an equivalent that is.  You can’t say the same about Patent documents 1 and 2 in complex Family 1.

So, what’s the solution…

Extended

In an extended patent family all patent documents have at least one priority document in common with at least one other family member.  An extended patent family is the marriage between a simple patent family and a complex patent family.

This can lead, in some instances, to extraordinarily large patent families where the family members are in a similar technical area, but with potentially a larger diversity because two family members with different priorities may cover different inventions.

Now you have Mum, your stepdad, Dad, Dad’s new girlfriend, half brothers and sisters, cousins, second cousins once removed, aunts, and mad Uncle Bob, all of whom may live in different cities or countries, perhaps never having had met except for that one time when your grandmother died, and you wouldn’t know them if you passed them in the street.

Patent families table 4

An extended patent family does provide the whole picture by putting everything you need to know in one place.  From there you can tease out a number of simple patent families (or complex ones if that’s your thing), or report the family as a whole.  It really depends on the question you are looking to answer.

Technical

This is perhaps the most artificial of all the patent families.  It draws together patent documents that are not related by a common priority, but is determined intellectually, i.e. by sitting down and using your necktop computer.  Patent documents in technical families will sometimes have priority documents in common, but others will have same inventor(s), and the same or similar title, subject matter and drawings, and so should be included for a sense of completeness.

Patent documents can become separated from what would have been their simple patent family as a result of missing a convention filing or divisional applications not being connected properly with their parent application.

This has to be Kevin from Home Alone.  Mom and Dad (Inventors 1 & 2) have applied for “Christmas Vacation” in the United States but have forgotten one of their patent documents when it came to flying out to the “Paris Convention”.

Patent families table 5

National

A national patent family consists of any patent applications from a single country having at least one priority in common, so for example, in addition to the original application, patents of addition, divisional children, and continuations.

Domestic

A domestic patent family relates to subsequent publications of same application, i.e. with same number but with different kind codes. For example the published application (A1) and the granted patent (B1).

Where can you find patent family data?

In an automated world, patent family information has to be constructed from priority data, which is why the technical family above has to be constructed manually.  It also goes some way to explaining why some members can get separated from their patent family as priority data isn’t particularly standardised.  Even if you apply a reasonable standard, a missing or extra zero somewhere can throw the system out, but that’s up to people like me to notice and correct.

The best free aggregating sources are the European Patent Office’s INPADOC database available via Espacenet, and to a large degree, WIPO’s PatentScope.  Google Patents should also provide a reasonable patent family.

There are other free patent information databases, like Depatis and the USPTO, among many others, that you can use to construct your own patent family if you are so inclined, but that level of enthusiasm is best reserved for looking for any outliers in countries not usually covered by the aggregating sources.

The other sources are commercial patent databases such as PatBase or Derwent Innovation, among a few others, but of course you will need to pay for the privilege.  Commercial patent database providers define patent families for their own purposes, whether it’s to differentiate themselves from their competitors, or it’s just easier to do from a technical viewpoint, but they are always mixtures of the types described above, and sometimes you have the option of choosing your family, unlike the real world.

The notion of what constitutes “best practice” when it comes to prosecuting a New Zealand patent application has always been somewhat subjective.  For every move that seems like a good idea, there’s usually a decent counterpoint.  However, we have recently attempted to reconcile all the pros and cons – and came to the conclusion that requesting early examination was as close to “best practice” as you were going to get.

More recently, the Intellectual Property Office of New Zealand (IPONZ) has announced some (fairly modest) increases in official fees, along with some new fees altogether.  In combination, these stand as further drivers toward requesting early examination.  In fact, if Applicants act quickly (i.e., prior to 13 February 2020), the additional fees may be avoided altogether.

Why again was early examination thought to be “best practice”?

It’s all to do with managing the 5-year statutory bar on requesting examination of a new Act (Patents Act 2013) case.  Beyond five years of its filing date, a request for examination cannot validly be made.  This, of course, creates all sorts of headaches when it comes to potential divisional applications (which can be filed, but not examined; the “zombie divisional” scenario).  Throw in the fact that IPONZ presently has a large backlog of cases awaiting examination, and an Applicant risks having the 5-year bar expire on them before such time as they know where they stand on the divisional issue.  Applicants can either guess – and file a precautionary divisional that may never be needed, or else run the gauntlet and risk missing out altogether in the event that unity is later raised, or the application cannot be placed in condition for acceptance prior to expiry of the 12-month acceptance deadline.

This is all a bit messy.

Accordingly, “best practice”, according to us, was to request examination of a New Zealand application as early as possible following filing in IPONZ (as a Convention or National Phase application).  That way, by the time a first report issues, the Applicant will still have plenty of time up their sleeve when it comes to the 5-year bar.  If a divisional is required, the Applicant is thereby enabled to make an informed decision as to whether to proceed.

Better still, in our recent experience, Applicants seem generally happy to accept this advice.  This, of course, avoids attorneys later having to write “awkward” letters in the event that the divisional route turns out to be unavailable.

So, what does this have to do with IPONZ’ fee increases?

For existing Applicants (or Applicants filing in IPONZ within the next few months), requesting examination before 13 February 2020 avoids two further fees – one increased, and one new.

Increased fee for requesting examination

The official fee for requesting examination prior to 13 February 2020 is NZ$500 (about US$315, €290, RMB2300, or ¥34,000).  If requesting examination on or after this date, the fee rises to NZ$750.

The justification for the fee increase is the labour-intensity of conducting examination under the Patents Act 2013.  However, it also makes a New Zealand application costlier to examine than its Australian counterpart.

Keeping the magnitude of the increase in perspective, it will be appreciated that the increase in official fee provides a mild driver for Applicants to consider early examination as a means of avoiding it.

New fee for “excess” claims (30 or more)

Again, requesting examination before 13 February 2020 avoids this new fee entirely.  Requesting examination on or after this date means that the fee becomes payable if, at any stage during examination, the specification contains 30 or more claims.

The new fee will be payable following acceptance of a New Zealand application (i.e., payment is necessary before an accepted application moves to grant) and is levied at NZ$120 for each 5th claim in excess of 25 (e.g., 30 claims = NZ$120; 56 claims = NZ$720, etc).  Importantly though, the fee is payable based upon the maximum number of claims on file during examination.  Reducing the number of claims immediately prior to acceptance (as we do, routinely, under Australian practice) does not avoid or lessen the fee.

Because IPONZ has never previously levied a “claims fee” of any type, we’ve never had to worry about the number of claims on file at any stage during prosecution.  The new fee will thereby precipitate a slight change in practice amongst New Zealand attorneys – best request examination early (prior to 13 February 2020) and avoid it altogether.

The solution

Requesting early examination not only ensures that the divisional route remains available, it also minimises the official fees payable to IPONZ.  However, the only way to effectively achieve both outcomes is for an attorney to be both vigilant and proactive in managing it.  As such, the suggested action is clear: request examination as soon as possible upon NZ national phase entry.  This maximises the chances that an Applicant will have, at least, a first examination report prior to expiry of the statutory bar – and as such, will have at least a pointer as to where they may stand in relation to a potential divisional application.

In fact, if an Applicant requests voluntary examination upon entering the NZ national phase, there is probably sufficient time (without rushing unduly) to begin prosecuting a second-generation divisional prior to expiry of the statutory bar.

NZ NP and Exam

Any reasons why early examination may not be “best” practice?

Perhaps the most significant downside to early examination is that post-acceptance amendments in New Zealand are fairly heavily restricted.  Aside from correcting obvious mistakes, an Applicant can generally only amend down (i.e., narrow) an accepted claim – you can’t broaden, and you can’t move sideways should a killer piece of prior art emerge after an application has been accepted.

Although readers will appreciate that this is, of itself, a good reason to delay (rather than expedite) examination in New Zealand, it should be tempered with the observations that: a) international phase searching is generally fairly comprehensive; b) IPONZ only rarely uncovers new prior art itself; and c) with the majority of New Zealand applications coming by way of the US or Europe, additional high-quality searching will usually have been completed well before the counterpart New Zealand case is due for acceptance – even if examination is brought forward, as suggested.

The other main drawback to requesting early examination is that it brings forward costs that may not have been budgeted for so soon after the significant expense of a foreign filing campaign.

Conclusion – what is current New Zealand examination “best practice”?

With so many moving pieces to consider, the notion of “best” practice is perhaps a little subjective.  Rather, let’s only make the claim that we’re suggesting “good” practice.  To this end, even though such pieces will probably never synchronise, a proactive attorney can effectively manage the 5-year absolute bar for requesting examination and with it, mitigate any attendant risks (and minimise official fees payable to IPONZ) by:

  • Reviewing international phase/EPO/USPTO prosecution histories shortly (g., 2-3 months) following NZ national phase entry.
  • Incorporating any potential issues that may give an applicant cause to want/need to file a divisional into early advice following NZ national phase entry.
  • Assuming it is in an applicant’s best interests, counsel them to request examination sooner, rather than later.
  • Proactively managing IPONZ’ new response deadline (this action is largely self-regulating; IPONZ sets the deadline and attorneys/applicants need to comply).
  • Avoiding, to the extent possible, applications going “down to the wire” in terms of the 12-month acceptance deadline. Rather, address the Examiner’s objections as soon as possible and if necessary or advisable, maintain the postponement of acceptance.
  • Maintaining postponement of acceptance until such time as the applicant has made an informed decision regarding a divisional (remembering that acceptance of a NZ application triggers an unextendible bar on filing a divisional from it).
  • Being cognisant of the restrictions on post-acceptance amendments under New Zealand practice – what are the chances of close prior art surfacing after the case has been accepted?
  • Whilst juggling each of these seven balls, keep the closest eye on the 5-year statutory bar deadline – and remember it’s not just for filing a (or all) divisional application/s – it’s for requesting examination of any such application/s.

To conclude, if there’s one thing to take away from this article, it’s that these considerations are perfectly manageable – both individually and in sum.  However, it requires an attorney who is in sync with the requirements and their limitations working in combination with an Applicant who is prepared to prioritise – at least during the initial stages, a filing in what is likely one of the smaller jurisdictions in which they have elected to pursue.  Whereas our general preference is to request examination at the time of entering the NZ national phase, this must be offset against incurring costs that can always be deferred.  As always, it’s a case-by-case, client-by-client proposition – but it is eminently manageable.

Which other fees will increase on 13 February 2020?

The fact this this is hidden at the back end of this article reflects its secondary importance relative to the notion of New Zealand best practice.  In general, the cost of the more labour-intensive tasks (re-examination, assessing applications for restoration, etc.) has been increased, and the cost of annuity fees brought into closer conformity with those levied in Australia.

Patent fee changes

Renewals

1

Filing and examination fee changes

2

Excess claims fee changes

3

Amendment fees

4

Restoration fees

5

Trade mark fee changes

Renewals

6

Application fees

7

Search and preliminary advice fees

8

If readers have any questions about the fee increases, please do not hesitate to contact any of our Shelston IP patent attorneys.