10 min read

Office of the Retirement Commissioner v Cash Converters Pty Ltd [2020] NZIPOTM 27 (23 December 2020)

This recent decision provides helpful guidance on the principles for partial revocation of trade mark registrations in New Zealand and the determination of a “fair description” for goods and services.

The decision also highlights important differences between the law and practice on non-use removal proceedings in Australia and New Zealand.

Background

Cash Converters Pty Ltd (“Cash Converters”) sought partial revocation of the Office of the Retirement Commissioner’s (ORC) Registration No. 637400 SORTED. It covered Class 36 services in providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement, and providing financial information relating to retirement.

They also sought partial revocation of Registration No. 976028 SORTED, which covered broadly worded Class 36 services “financial affairs; monetary affairs; real estate affairs” and various services in providing advice, consultancy and information the areas of finance, monetary affairs, retirement, real estate, property and insurance and Class 41 educational services and services in providing educational material and information relating to insurance, financial affairs, monetary affairs, real estate affairs.  The full specifications for the registrations are at [1].  

Revocation was sought on the basis of non-use of the SORTED mark for a continuous period of three years.

Facts/evidence

ORC started using its SORTED mark in 2001, when it established its website www.sorted.com for providing information and tools, such as online calculators, to help New Zealanders prepare for, and manage, their finances during retirement. 

From at least 2013 ORC’s use of SORTED expanded to a broader range of services in providing information, advice and resources to promote “the life-long financial literacy of New Zealanders”.  With this expansion in 2013, ORC obtained the later Registration No. 976028 SORTED for the broader range of services. 

ORC’s evidence of use included use of the SORTED mark on guides, booklets, seminar and course details, on online tools and calculators and on an online forum.  [2]

Discussion

As the SORTED mark had not been used on all of the services covered by the registrations, partial revocation was in order.   

The Assistant Commissioner noted the High Court decision in Sky Network Television Ltd v Sky Fiber Inc (Sky Network) confirming how partial revocation applications should be considered:

The case law establishes that the first task is to find as a fact what goods or services there has been genuine use of the trade mark in relation to; and then to ‘arrive at a fair specification of goods having regard to the use made’.”  [3]

ORC was found to have used the SORTED mark to provide generalised information, advice and education on retirement planning and financial literacy generally.  ORC was also found to have used the mark to provide online calculator tools and an online community forum which provided users with more specific information and recommendations. 

In considering what was a “fair description” of those services provided under the mark, the Assistant Commissioner identified the principles set out by Mallon J in Sky Network:

“(a) The assessment has “nothing to do with the defendant.” Defining the goods negatively by reference to the defendants’ activities is therefore not the approach. 

(b) The proprietor has protection outside his or her specification of goods in areas where he or she can demonstrate a likelihood of deception under other provisions. “There is no pressing need, therefore, to confer on the proprietor a wider protection than his [or her] use warrants by unduly broadening the specification of goods.

(c) The width of the surviving specification “must depend largely upon questions of fact and degree.”  “Wide words can cover what are commercially quite different sorts of articles”.  If there is shown to be use of just one of those things “it would be commercially nonsense to maintain the registration for all goods caused by the wide words”. [4]

In summary, and further quoting Mallon J in Sky Network, the Assistant Commissioner noted that:

The “fair description” is one “which would be given in the context of trade mark protection” and depends on the nature of the goods, the circumstances of the trade and the breadth of use proved” and should be approached as ““objective and impartial, balancing the competing interests” and “a view from the trade”.[5]

The Assistant Commissioner recognised the important “balancing exercise” of competing interests of the owner, competitors and the public:

  1. to have the Register uncluttered with unused marks or with registrations with overly broad specifications;
  2. to prevent parties being unjustifiably exposed to infringement of registrations with overly broad specifications; and
  3. “the owner’s interest in protecting its brand” which “aligns with the public interest in consumers not being deceived or confused by use of another trade mark” and the owner’s entitlement “to commercially realistic protection, remembering the test for infringement, extends to similar goods and services”.  [6]

Findings 

The scope of the original specifications was considered to “extend well beyond the actual use that had been made of the SORTED mark”.  [7]

The Assistant Commissioner considered that a “fair description” of the services offered under the SORTED mark could be reached by considering the “functions (the way the mark has been used) and the generalised, rather than personalised, nature of the education, information and advice ORC provides”.  [8] 

ORC was not using the SORTED mark in relation to all types of information, education and advisory services in the areas of insurance, finance, money, real estate and investment.  Those services were all provided in giving advice and information focusing on retirement and personal financial literacy, and not on all aspects of insurance, finance, money and other matters.

The Assistant Commissioner found that it was appropriate to limit the specifications to reflect the focus of the use and reworded the services more narrowly and as all “relating [or related] to retirement and personal finance”.

Further, ORC’s advice was not personalised advice given to individuals.  Rather, it was generalised advice and information.  The general description “advisory services relating to…” in the original Class 36 specifications for both registrations was considered too broad.  The Assistant Commissioner considered that it would be fair to describe those services as “general advice relating to…”.

The original term “consultancy services relating to…” used in the Class 36 specifications for both registrations was removed because ORC would not be reasonably understood to be a consultancy business.  The Assistant Commissioner noted that “there is no aspect of the ORC business that technically requires the description to be used. ORC is able to have commercially realistic protection without the reference to consultancy”.  [9]

The full specifications as amended are at footnote  [10].

Earlier cases considering partial revocation

The Assistant Commissioner provided a helpful summary of earlier partial revocation cases and what was found to be a “fair description” for the goods and services.  This can be found at paragraph 71. 

These decisions show that precise descriptions are applied in partial revocation actions and that broad and unqualified descriptions are unlikely to be allowed under New Zealand practice. 

Comparison with Australian law

The decision highlights some important differences between the law on revocation/non-use removal actions in Australia and New Zealand. 

1. Discretion to remove or restrict a registration

The Assistant Commissioner noted in the decision that there is no “overriding discretion to refuse to revoke or partially revoke a registration”, which follows from the decision Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [97].  [11]  Under New Zealand law, a trade mark owner must show use during the three year non-use period, or special circumstances that justify non-use of their mark, to successfully oppose a revocation application.

Unlike New Zealand, under Australian law the Registrar has the discretion under s 101(3) of the Trade Marks Act 1995 not to remove a registration even where there has not been use of the mark if “satisfied that it is reasonable” not to remove the registration.  Further, s 101(4) provides that in deciding under subsection (3) not to remove a registration the Registrar may take into account use of the mark on similar goods or closely related services or similar services or closely related goods. 

2. Standing to apply for removal for non use

New Zealand law requires that only an “aggrieved person” can apply for revocation of a registration.   As noted in the decision “the term “aggrieved person” is given a wide and liberal interpretation.  This will generally include trade rivals.  As well as someone who is disadvantaged in a legal or practical way.”  [12]

However, under Australian law any person can apply for removal of a registration for non-use and there is no requirement for the removal applicant to show aggrievement to have standing to apply for removal. 

3. Date of revocation

In the New Zealand decision, the Assistant Commissioner noted that “the result of revocation is that the owner’s rights cease to exist on the date the application revocation was filed, or at an earlier date if the Commissioner is satisfied the non-use ground has been made out at an earlier date.”  [13]

Under Australian law, the date of removal of a registration for non-use is the date of the Registrar’s decision and the Registrar does not have the discretion to determine an earlier date for removal.

Takeaway

There are important differences in relation to standing and discretion in revocation/non-use removal proceedings in New Zealand and Australia which trade mark owners should note.

When defending a non-use removal action in Australia, and there has been no use of the mark during the 3 year non-use period, trade mark owners should still consider whether there are grounds for convincing the Registrar to refuse removal of the registration, such as some residual reputation in the mark from earlier use or possibly overseas reputation.

In New Zealand, it is much more likely than it is in Australia that broad descriptions will be restricted to more specific and limited descriptions.


[1] Services covered by Registration No. 637400 SORTED:

Class 36:Providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement; providing financial information relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet

Services covered by Registration No. 976028 SORTED:

Class 36: Financial affairs; monetary affairs; real estate affairs; providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement; advisory services relating to real estate ownership; providing financial information relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet; consultancy services relating to insurance; information services relating to insurance; insurance advisory services; insurance information; provision of insurance information; consultation services relating to real estate; providing information, including online, about insurance, financial and monetary affairs and real estate affairs; provision of information in relation to real estate; provision of information relating to property (real estate); provision of information relating to real estate; real estate advisory; services; real estate investment advice

Class 41: Dissemination of educational material; education services; educational services; life coaching (training or education services); provision of educational information; provision of education services via an online forum; publication of educational materials; publication of educational texts; the aforementioned relating to insurance, financial affairs, monetary affairs, real estate affairs

[2] Arguing that ORC did not provide financial advisory services, Cash Converters’ evidence in support of the revocation application referred to ORC’s disclaimers on its website that its information and tools “should be treated as a guide only” and should be used before seeking professional advice.  It was also noted that ORC’s “Investor Kickstarter” guide is referred to on the website as a guide only which  “does not constitute investment advice to any person”.  The evidence also noted that ORC is not a registered financial services provider under the Financial Services Provider (Regulation and Dispute Resolution) Act 2008 (RDR Act). 

In reply, ORC filed evidence that it is not required to be registered under the RDR Act as it is not a business which provides financial services as defined under the Act.  ORC also noted that their “Investor Kickstarter” tool asks high level questions to categorise participants into one of five types of investors and that their disclaimer clarifies that the advice given through this tool is not the type of financial advice to which the Financial Advisors Act 2008 would apply. 

[3] Office of the Retirement Commissioner v Cash Converters Pty Ltd [2020] NZIPOTM 27 (23 December 2020), paragraph 39.

[4] ibid, paragraph 44.

[5] ibid, paragraph 45.

[6] ibid, paragraph 52.

[7] ibid, paragraph 110.

[8] ibid, paragraph 113.

[9] ibid, paragraph 96.

[10] Registration No. 637400

Class 36: Providing information services and general advice relating to finance, investment and financial planning for and during retirement; providing financial information and general advice relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the worldwide web, an intranet or the Internet

Registration 976028

Class 36: Providing information and general advice, including online, about insurance, financial and monetary affairs and real estate affairs related to retirement and personal finance; provision of financial calculation services relating to retirement and personal financial planning including budgeting, personal debt, home buying, mortgages, superannuation, investment and savings, including by way of online; calculators; providing information services and general advice relating to finance, investment and financial planning for and during retirement; providing financial information and general advice relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet.

Class 41: Education services related to retirement and personal financial matters including financial planning and budgeting, debt, home buying, mortgages, superannuation, investment and savings; provision and dissemination of educational material and information related to retirement and personal financial matters, including by way online communication, websites, web blogs, social media, forums, publications (including texts, guides and brochures), news articles, training, courses, seminars and meetings.

[11] ibid, paragraph 12 quoting  Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [97]

[12] ibid, paragraph 28.

[13] ibid, paragraph 11.

Authored by Michelle Howe and Sean McManis

7 min read

Sandoz Pty Ltd v H Lundbeck A/S [2020] FCAFC 133 (4 August 2020)

In the long-running patent dispute relating to Lundbeck’s blockbuster antidepressant, Lexapro® (escitalopram), the Full Court of Australia’s Federal Court overturned a decision of Jagot J, who had found Sandoz liable for infringement of the Lexapro patent and awarded Lundbeck more than AU$16 million in damages. Lundbeck has recently been granted special leave to appeal to the High Court of Australia, which for the third time will hear an appeal regarding an aspect of this litigation.

Background

The original 20-year term of the Lexapro patent (AU 623144) was due to expire in June 2009. In April 2004, the Commissioner of Patents granted a 5-year extension of the patent term, calculated by reference to the first regulatory approval date for Lexapro. The active ingredient of Lexapro is escitalopram, the S-enantiomer of citalopram. A racemic form of citalopram (a mixture of the S- and R-enantiomers) was earlier marketed in Australia by Lundbeck under the trade name Cipramil.

In subsequent Federal Court proceedings, that extension of term was held invalid (Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618; upheld on appeal: H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151). The Court found that any extension of term application needed to be made by reference to Cipramil, being the first approved therapeutic goods that “contain” the S-enantiomer of citalopram within the meaning of the Patents Act 1990 (Cth) (the Act). It followed that such application was required to be made within six months of the first regulatory approval date for Cipramil. Lundbeck’s application was therefore submitted out of time.

In consequence, the Lexapro patent expired on 13 June 2009, at the end of its original term. Three days later, Sandoz and other generics launched generic escitalopram products. In doing so, they appeared to be taking a risk. On 12 June 2009, Lundbeck had sought an extension of time to submit a new extension of term application, based on the first regulatory approval date for Cipramil.

Given that the time limit for submitting such an application expired in mid-1998, Lundbeck required a 10-year extension of time. Nevertheless, that extension was granted, on the basis that the applicable time limit had been unclear until determined by the Federal Court in June 2009 (Alphapharm Pty Ltd v H Lundbeck A/S (2011) 92 IPR 628; upheld on appeal: Aspen Pharma Pty Ltd v Commissioner of Patents (2012) 132 ALD 648; Aspen Pharma Pty Ltd v H Lundbeck A/S (2013) 216 FCR 508; Alphapharm Pty Ltd v H Lundbeck A/S (2014) 254 CLR 247).

Armed with this extension of time, Lundbeck submitted a new application to extend the term of its Lexapro patent. In June 2014, some 5 years after the patent had expired, that extension was granted (Alphapharm Pty Ltd v H Lundbeck A/S (2014) 109 IPR 323; upheld on appeal: Alphapharm Pty Ltd v H Lundbeck A/S (2014) 110 IPR 59; Alphapharm Pty Ltd v H Lundbeck A/S (2015) 234 FCR 306; Alphapharm Pty Ltd v H Lundbeck A/S [2016] HCATrans 52).

The newly extended term of the Lexapro patent expired in December 2012. By that time, Sandoz and other generics had been marketing escitalopram products in Australia for over three years. Lundbeck sought damages for infringement of the Lexapro patent during that period.

In defence of such damages claim, Sandoz relied on a settlement agreement it had reached with Lundbeck in February 2007 (Settlement Agreement). In return for Sandoz discontinuing its revocation case against the Lexapro patent, Lundbeck agreed to grant Sandoz an irrevocable licence to the patent, effective from a date two-weeks prior to its expiry (the Early-entry licence).   

At the time that agreement was reached, the expiry date of the Lexapro patent remained uncertain – litigation concerning the validity of the original extension of term was ongoing. The agreement recorded several alternative dates on which the Early-entry licence might commence. However, it did not address the possibility that the term of the Lexapro patent might expire and, sometime later, be extended. That is, of course, what transpired.

In defence of Lundbeck’s damages claim, Sandoz submitted that, on a correct construction of the Settlement Agreement, the Early-entry licence commenced in May 2009, two-weeks before expiry of the Lexapro patent, and remained in force thereafter. By contrast, Lundbeck submitted that, because the term of the patent was extended to December 2012, the early-entry licence did not commence until November 2012, leaving Sandoz liable for infringement in the intervening period.

First instance decision

Lundbeck was successful before the primary judge (H Lundbeck A/S v Sandoz [2018] FCA 1797). However, Jagot J did not accept either party’s construction of the Settlement Agreement.

Her Honour found that, under the terms of the Settlement Agreement, the Early-entry licence commenced in May 2009, two weeks before the Lexapro patent expired. In reaching that conclusion, Jagot J held that the operation of the agreement ought not be tested by reference to the fact that, 5 years later, a new extension of term was granted, because this could not have been predicted by the parties in February 2007, when they entered into the Settlement Agreement.

However, in Jagot J’s view, this was not the end of the matter. Noting that Sandoz would not require a licence after the Lexapro patent had expired, her Honour found that the effect of the Settlement Agreement was to confer on Sandoz a licence which commenced in May 2009 and ceased to operate two weeks later, upon the expiry of the patent’s original term.

It followed, in Jagot J’s view, that Sandoz did not have the benefit of a licence when the term of the Lexapro patent was subsequently extended. Based on these findings, Jagot J held Sandoz liable for infringing the patent between June 2009 and December 2012, awarding Lundbeck in excess of AU$16 million in damages.

Decision

An appeal by Sandoz to the Full Court was successful. The critical issue on appeal concerned the construction of the Settlement Agreement, in particular, whether the Early-entry licence ceased to operate on expiry of the original term of the Lexapro patent in June 2009, or continued thereafter.

In approaching that question, the Full Federal Court reiterated well-established principles of contract construction. The terms of a contract are to be construed objectively. The question is what the language used would convey to a reasonable business person, in light of the surrounding circumstances known to both parties at the date of their agreement, including the objects of the contract, and assuming that the parties intended to achieve a commercial result. A court will be slow to adopt a construction that would give a contract an effect that is commercially nonsensical.

On the other hand, the Full Court emphasised that commercial common sense and surrounding circumstances may not be invoked to discount the language in which a contract is expressed. The fact that a contractual provision may operate to disadvantage one party to an agreement is not a reason to depart from the ordinary meaning of the language in which that provision is expressed.

In the view of the Full Court, the language of the Settlement Agreement was sufficiently clear. It granted Sandoz an irrevocable licence that commenced in May 2009, two weeks before expiry of the Lexapro patent, and remained in force thereafter. The Full Court held that, objectively ascertained, it was the parties’ intention to stipulate a start date for the licence, but not an end-date.

Notably, the Full Court agreed with Jagot J that it appeared neither party had, at the time of concluding the Settlement Agreement in February 2007, turned their mind to the possibility that the Lexapro patent might expire and only subsequently have its term extended. That is unsurprising, given unprecedented course of the Lexapro proceedings. As the Full Court observed, had the parties been able to foresee the course those proceedings would take, it is likely that express provision would have been made for such eventualities in the Settlement Agreement.

Significance

The Full Federal Court’s decision highlights the complexity of the extension of time and extension of term provisions under Australia’s patent legislation which, together or separately, can significantly affect the course of the litigation and the negotiation of commercial settlement terms.

The decision of the Full Federal Court does not yet bring to a close one of the most complex patent disputes in Australian legal history, as Lundbeck was recently granted special leave to appeal to the High Court of Australia (H. Lundbeck A-S & Anor v Sandoz Pty Ltd; CNS Pharma Pty Ltd v Sandoz Pty Ltd [2021] HCATrans 13 (11 February 2021). That will be the third time this litigation has reached the High Court for a substantive appeal, with Lundbeck previously succeeding in obtaining both its application for an extension of time to apply for an extension of term and then the extension of term application itself. Over its long course, the Lexapro litigation has made a number of significant contributions to Australian patent law, including in relation to the validity of enantiomer claims and the operation of the provisions of the Act which govern extensions of term and extensions of time, and now it appears set to contribute to Australia’s contract law as well.

Authored by Andrew Rankine and Duncan Longstaff

3 min read

IP Australia is providing free, streamlined extensions of time of up to three months if a deadline cannot be met due to the effects of COVID-19.  Whilst the maximum length of extension that can be requested at one time is three months, additional extensions of time of up to three months are available if needed.

The period for requesting a streamlined extension has been extended until 31 March 2021.  However, IP Australia now indicates that, subject to any further developments in the COVID-19 pandemic, streamlined extensions will not be available after 31 March 2021.

What are the streamlined extensions?

IP Australia has implemented a streamlined process for requesting an extension of time of up to three months when an IP Rights holder is unable to meet a deadline due to the disruptive effects of the COVID-19 pandemic.  No declaratory evidence or fee is required; all that is needed is to check the relevant box on IP Australia’s eServices system to declare that the deadline cannot be met due to disruptions from the pandemic. 

However, the streamlined extensions are not a simple free-for-all (see our earlier article here).  If asked, a requestor must be able to provide genuine reasons and evidence to justify the grant of the extension.  In addition, IP Australia warns that a false declaration could put the validity of an IP right at risk.

Many deadlines for patents, trade marks and designs are covered by the streamlined extensions of time, including deadlines associated with oppositions and hearings processes (such as periods to file evidence).  However, there are some exceptions.  For example: these extensions of time do not apply to deadlines for payment of renewal fees for patents, trade mark and designs, for which the usual 6 month grace period applies.  For trade marks, these extensions are also unavailable for filing of divisional applications.

What if I want to request an extension of time after 31 March 2021?

If you are unable to meet a deadline due to the COVID-19 pandemic, it will still be possible to request an extension of time after 31 March 2021.  However, such an extension will not be available via the streamlined process and a declaration will be required to explain why you cannot meet the deadline.

The grant of an extension of time due to the effects of the pandemic does involve an element of discretion.  Such extensions fall under section 223(2)(b) of the Patents Act 1990, according to which an extension of time “may” be provided if a deadline is missed because of “circumstances beyond the control of the person concerned”. 

Requests for extensions of time due to COVID-19 made after 31 March 2021 will be considered on a case-by-case basis and the Commissioner’s/Registrar’s review will consider the impacts of the pandemic.  

We can help

For more information about extensions of time in Australia, see our earlier article here.

If you require assistance with your IP Rights, please contact us. 

Authored by Serena White, DPhil and Gareth Dixon, PhD

11 min read

Axent Holdings Pty Ltd t/a Axent Global v Compusign Australia Pty Ltd [2020] FCA 1373 (25 September 2020) 

This decision of Kenny J of the Federal Court of Australia considers many issues including the Crown use defence; whether information published by the Crown (and made available to it by a patentee) can be novelty defeating; and the effect that requesting an extension of time to renew a patent outside of the renewal fee grace period has on the relevant period during which the patent is taken to have ceased before it is restored.

The Background

Axent Holdings Pty Ltd, trading as Axent Global (Axent), commenced proceedings against Compusign Australia Pty Ltd and Compusign Systems Pty Ltd (together Compusign) as well as Hi-Lux Technical Services Pty Ltd (Hi-Lux) (the respondents) for infringing Australian Patent No. 2003252764 titled “Changing Sign System” (764 Patent). The 764 Patent claimed an earliest priority date of 4 October 2002 and was granted on 26 June 2008. The respondents filed a cross claim asserting the 764 Patent was invalid. Except for any issues under ss 22A and 138, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (Raising the Bar Act) did not apply.

The invention related to a changing sign system for use as a variable speed limit sign (VSLS) on roadways. The VSLS could be used to display a lower hazard speed limit instead of the normal maximum safe speed when a certain condition is detected. When the hazard speed limit is displayed, a portion of the sign is varied to conspicuously indicate the change of conditions.

Independent claims 1, 17 and 20 described an electronic variable speed limit sign, which has a plurality of lights forming the central speed limit numerals and annulus rings around those numerals. The specification explains that a change of conditions is indicated by flashing some of the annulus outer rings while always retaining one ring on, to fulfil the criteria of being a speed display sign, that is, by always showing a number in a circle on a display panel. Dependent claims 2 to 16, 18 to 19 and 21 to 27 specified a number of further features, and claim 28 was an omnibus claim.

In September 2001, Mr Fontaine, the director of Axent and named inventor of the 764 Patent, met with Mr Bean, who worked for VicRoads, to view a demonstration of Axent’s variable speed limit sign with a partly flashing annulus. Mr Fontaine stated that he subsequently received tender documents which included a VicRoads specification (the September 2001 specification), which contained a requirement, for variable speed limit signs, that part of the inner diameter of the annulus should be capable of flashing on and off.

The issues

Product or method claims

A preliminary question arose as to whether the claims were product or method claims for the purposes of determining infringement. Axent pleaded that the claims were to a product. The respondents submitted that the claim integers formed part of a method of using a variable speed limit sign. Her Honour rejected Axent’s submissions that the claims were framed in terms of capabilities, yet still construed the majority of the claims as product claims limited by result. Claims 12, 14 and 16 were construed as method claims which describe the operation of the claimed sign system.

Clarity

The respondents contended that independent claims 1, 17 and 23 lacked clarity because of the use of the terms “normal speed”, “input criterion” and “change in conditions”. Her Honour considered that when the claims were read as a whole, in the context of the specification, the skilled addressee would have no real doubt about what is intended by the above features and that the claims were clear.

Direct Infringement

Axent’s case was in substance that the supply by Hi-Lux and Compusign of their respective variable speed limit signs infringed all the claims of the Patent. Axent was unable to establish that either the Hi-Lux signs or the Compusign signs included relevant features of the product claims or that Hi-lux or Compusign performed the relevant claimed method in making their signs. Thus, the product and method claims were not infringed.

As omnibus claim 28 was narrowed “with reference to the examples”, and the specification included no ‘examples’, her Honour considered that there can be no infringement or alternatively that claim 28 was invalid for lack of clarity.

Indirect Infringement

Axent also relied on s 117 of the Patents Act 1990 (Act) to allege indirect infringement initially on the sole basis that the supply of a sign is, in and of itself, a supply that attracts the operation of s 117. Axent subsequently sought to broaden their case for indirect infringement to instances where the invention was for a method, rather than a product. Axent also sought leave to elicit from the respondents’ witnesses in cross-examination evidence as to the directions given and steps taken by the respondents when supplying their signage. The respondents submitted that it would be unfair to permit Axent to seek to make out an infringement case based on s 117 that it had not opened or properly foreshadowed. Her Honour agreed and held Axent to the case on which it opened. The evidence given by the respondents’ witnesses by way of cross-examination was admitted, however, it was limited in its use so that it could not be used to form the basis of an infringement case by reference to s 117. Axent was not able to make out its case of indirect infringement against the respondents.

Crown use defence

Hi-Lux submitted that each of VicRoads, the South Australian Department of Planning, Transport and Infrastructure, and the City of Greater Geelong was an authority of a State for the purposes of s 163 of the Act which provides that exploitation of an invention by or for the services of the Commonwealth, or a State is not an infringement of any patent rights.

Her Honour considered that each of the organisations were an Authority of the state and that the exploitation of the sign was for the services of each Authority. However, this was subject to s 163(3) which required that the exploitation of the invention was necessary for the proper provision of the services within Australia. Her Honour considered it may be that exploitation was not strictly necessary in the sense contemplated by s 163(3) because alternative signage was available and widely used. However, this was not considered further, in any event, as Hi-Lux failed to satisfy her Honour that the infringement  was authorised in writing by an authority of the State.

In particular, the documents in relation to Hi-Lux’s supply of signs to VicRoads and the City of Greater Geelong left open the possibility that Hi-Lux had a choice as to the electronic speed sign supplied, leaving it free to perform the relevant contract without infringing the claims of the Patent. It was clear that Hi-Lux was under no contractual obligation to supply an infringing item.

The contract for the supply and installation of variable speed limit signs between the Commissioner of Highways and Hi-Lux included a specification which set out the requirements for the variable speed limit signs. Her Honour noted the possibility this contract may have required a product that infringed the 764 Patent and thus, the infringing acts may well have been authorised for the purposes of s 163. However, in the absence of submissions or evidence to this effect, her Honour was not satisfied that the contract with the Commissioner required Hi-Lux to supply goods that necessarily infringed the patent in suit. Accordingly, Hi-Lux’s defence under s 163 of the Act did not succeed.

Innocent infringement

Compusign argued that they were not aware and had no reason to believe that a patent existed for the invention before receiving the letter of demand from Axent. Compusign gave evidence to the effect that they had not expected a patent to exist in relation to the requirements of the roads authorities’ specifications without the specifications referring to the patent. Her Honour considered that there was nothing in the relevant roads authorities’ specifications that would put a reader on notice of the existence of a relevant patent. Axent did not address the issue of innocent infringement.

Accordingly, if it were necessary to do so, her Honour would have provisionally refused to make an award of damages or an order for an account of profits in respect of any infringement by Compusign prior to the date of the receipt of the letter of demand.

Lapse of patent

Axent did not pay the renewal fees for the 764 Patent by the due date of 6 October 2015; nor did it pay the fees by 6 April 2016, within the 6 month renewal fee grace period. Axent applied for an extension of time which was granted on 1 September 2016 and the renewal fees were then applied to the 764 Patent. The 764 Patent therefore ceased to be registered for a period for the non-payment of fees.

The respondents submitted that Axent could not assert infringement of the patent from the day after that on which the renewal fee for the 764 Patent was due, 7 October 2015, to the day on which an application to extend the time to pay the renewal fee was granted, 1 September 2016. Axent submitted the relevant period began on 5 April 2016 (that is, approximately 6 months after 7 October 2015) and concluded on 1 September 2016. The commencement of the relevant period turns on the construction of reg 13.6 of the Patents Regulations 1991 (Cth), which relevantly provides that the period in which the renewal fee must be paid is the period ending at the last moment of the anniversary, however, if the renewal fee is paid within 6 months after the end of the relevant anniversary the period is taken to be extended until the fee is paid. The respondents submitted, and her Honour accepted, that the period is only “taken to be” extended if the condition of the renewal fee being paid within the 6 month grace period is satisfied. Had Axent paid the renewal fee at any time before the end of the 6 month grace period, the 764 Patent would never have ceased as the prescribed period would have been extended by reg 13.6(2)(a) to end on the day Axent paid the fee. However, Axent did not pay the renewal fee before 5 April 2016, and in consequence reg 13.6(2)(a) had no application.

Therefore, the prescribed period for renewal ended on 7 October 2015 being the point after the last moment of the anniversary date for the Patent. It follows that the Patent ceased on that day. The Patent was restored on 1 September 2016, when the extension of time for the renewal fee application was granted.

Prior use

The respondents relied on s 119(1) by way of defence to Axent’s infringement case. In the absence of evidence that either Hi-Lux or Compusign Australia was “making” an infringing product or “using” an infringing process before the priority date, neither could satisfy the requirements for the prior use defence required by s 119(1) prior to the Raising the Bar Act changes.

Invalidity of the Patent

The respondents submitted the claims were not novel because the invention was disclosed by the September 2001 specification and as part of the installation process for the Western Ring Road Project. Axent submitted that the September 2001 specification was merely a “wish list” that provided insufficiently direct disclosure and in any event was excluded from being considered for the purposes of novelty and inventive step because of s 24(1)(b) and/or s 24(2). Relevantly, s 24(1)(b) provides that, when assessing novelty and inventive step, the person making the decision must disregard any information derived from the patentee and made publicly available without their consent. Under s 24(2), the person making the decision must disregard any information given by, or with the consent of, the patentee, to the Crown, but to no other person or organisation.

Axent argued that it had disclosed its invention to VicRoads confidentially and never consented to VicRoads on-disclosing it in the September 2001 specification. The respondents contended, and her Honour agreed, that s 24(2) did not apply because the September 2001 specification was a disclosure made by, and not to, the Crown and the language of s 24(2) did not support the “reach-through effect” that Axent had argued.

There was still the further question as to whether s 24(1)(b) operated. A central issue was whether the information was made publicly available without the consent of Axent. Whilst there was no evidence that Axent expressly gave consent, having regard to the circumstances and the evidence, her Honour was satisfied that Axent positively consented to the inclusion of the claimed invention in the September 2001 specification. Accordingly, s 24(1)(b) did not apply.

Kenny J rejected the contention that the September 2001 specification was part of the common general knowledge or that it could be combined with the common general knowledge. Accordingly, the critical question was, whether each of the claims lacked inventive step by reference to common general knowledge alone. The evidence was clear that, apart from the flashing annulus feature, the other features of the claims were obvious as at the priority date. However, there was clear evidence that the skilled worker was aware of a flashing annulus feature well before the priority date.

Her Honour considered that no problem was overcome or barrier crossed by the adoption of the flashing annulus feature and that the evidence indicated a person skilled in the art would have taken the steps leading from the prior art to the claimed invention as a matter of routine. The 764 Patent was found invalid for lack of inventive step by reference to the common general knowledge alone, and claims 1, 9, 10, 14, 15, 17, 20 and 27 were invalid for want of novelty in light of the disclosure of September 2001 specification.

The Decision

Ultimately, Axent failed in its infringement case, even if it had succeeded, Compusign succeeded in its innocent infringement defence and all respondents succeeded on the lapsed patent defence. The Crown use and prior use defences failed.

Significance

The decision clarified that the prescribed period to pay a renewal fee to prevent a patent ceasing is only taken to be extended to the date of payment, if the fee is paid within the 6 month grace period. Accordingly, when the renewal fee is paid after the 6 month grace period by relying on an extension of time, the patent is taken to have ceased from the point after the last moment of the anniversary of the patent.

Regarding the Crown Use defence, the decision indicated that written authorisation by the Crown to exploit an invention may be explicit or implied, but the authorisation must be specific such that the necessary exploitation of the invention is authorised and that alternatives are not possible.

For information made available to the Crown by a patentee and subsequently published by the Crown, the decision indicated s 24(2) did not provide a “reach-through effect” to exclude such a publication from the prior art when considering novelty and inventive step.

The decision also offers guidance on the evidence required to establish innocent infringement in the case that a defendant was not aware, and had no reason to believe, that a patent for the invention existed.

Authored by Tam Huynh and Dean Bradley

4 min read

In brief

In this Federal Court case, Pfizer’s attempt to obtain documentation from Sandoz regarding its ERELZI etanercept product failed, Justice Burley finding that undertakings provided by Sandoz to give notice prior to exploiting ERELZI products in Australia removed any reasonable belief that Pfizer might have the right to obtain relief as at the time of the application. The circumstances illustrate the significance of the form of undertakings given by potential generic/biosimilar entrants when patent disputes erupt.

Background

The background to this case is set out in more detail here. In short, Pfizer markets the highly successful etanercept therapy under the name BRENZYS in Australia, for conditions including rheumatoid and psoriatic arthritis. In October 2017 Sandoz obtained registration on the Australian Register of Therapeutic Goods (ARTG) for its biosimilar, ERELZI. The Department of Health’s Pharmaceutical Board Advisory Committee recommended that the products be listed in March 2018, subject to certain further information being provided. In April 2018 Sandoz informed the Department of Health that it had decided not to proceed to the next step “at this point in time”. Sandoz has taken no further steps with respect to launch of ERELZI in Australia since that time. In December 2019, Pfizer sought preliminary discovery from Sandoz for documents relating to the manufacture of ERELZI, on the basis that it may have a right to relief for infringement of three of its patents.  

The decision

The test for obtaining preliminary discovery has recently been clarified by the Full Court of the Federal Court in a case brought by Pfizer against Samsung Bioepsis in respect of its biosimilar etanercept product. The Full Court confirmed that as long as there are reasonable grounds for a belief that there may be a right to relief, it is not necessary to show, for example via expert evidence, that such a claim would succeed. Indeed the purpose of obtaining preliminary discovery is to determine whether a right to relief in fact exists.

In light of the Samsung decision, it would likely have been difficult for Sandoz to show in this case that Pfizer did not have the requisite level of belief that ERELZI may fall within the scope of the claims of its patents, and indeed Sandoz accepted that Pfizer had such belief for the purposes of the application. 

However, Sandoz relied on undertakings offered to Pfizer, pursuant to which it undertook not to exploit any ERELZI products in Australia or take steps to proceed with PBS listing, for the duration of the patent, without first giving Pfizer certain notice. The length of the notice offered is not recorded in the judgment for confidentiality reasons, however the judgment notes that in earlier correspondence Sandoz had offered to give Pfizer 150 days’ prior written notice. It is assumed therefore that the notice period offered is relatively substantial. Sandoz also agreed to provide certain discovery with a period of time after giving any such notice (the details of this undertaking were also confidential).

In these circumstances, Pfizer contended that the notice period offered was insufficient to allow it to obtain relief in time if Sandoz did in fact give notice of an intention to launch. It sought an order that Sandoz give preliminary discovery of specified schedules of documents within 7 days of giving the relevant notice and a ‘Sabre order’ requiring it to seek production of any such documents held by related companies. The issues were therefore quite confined.

Burley J refused the orders sought by Pfizer. Based on the language of the relevant Federal Court Rules governing preliminary discovery, his Honour concluded that Pfizer needed to show a reasonable belief that its rights may be infringed as at the date when the application is being assessed. Calling in aid notions of quia timet relief, Pfizer argued that the relevant question was whether it held a reasonable belief that the notice offered by Sandoz was likely to affordPfizer sufficient time to protect itself from material harm.  However Burley J held that the circumstances of the case did not warrant a reading of the Rules which would in effect provide an exception to the reluctance of the Court to answer questions based on hypothetical facts, as was the case here where Sandoz had not yet made a decision to launch. He gave examples of difficulties which could arise, in particular, the appropriate scope of any preliminary discovery could be affected by admissions which Sandoz might make with respect to infringement.

Significance

While the outcome in this case is highly dependent on the specific facts, it does highlight the effectiveness of appropriately crafted undertakings in resisting legal action, where a product has been listed on the ARTG and steps have been taken to list on the PBS, circumstances which would generally amount to a threat of patent infringement, in the absence of any undertakings.  

Preliminary discovery applications are set to become a more common weapon in patent litigation arsenal in years to come, particularly given the increasing significance in Australia (as elsewhere) of biosimilar patent litigation, where patents covering manufacturing processes are likely to assume greater importance given the additional complexities at play in claiming active biological molecules per se, and the significance of specific manufacturing processes in the production of biologics. Given the likely lack of available information as to a competitor’s manufacturing processes, preliminary discovery may be an essential prelude to patent infringement claims in such cases, assisted by the planned Therapeutic Goods Administration “transparency measures” which will introduce an earlier notification scheme for generic and biosimilar medicines. Equally we expect to see the strategies to resist such applications develop providing more case law in this area.

Authored by Katrina Crooks

7 min read

Defence export controls (limitations on exporting “sensitive” Australian technologies) and intellectual property (especially patents) have been linked for the best part of a decade.  A 2018 review predicated on strengthening the restrictions appeared to go nowhere – that is, until an interesting article in this morning’s Guardian hinted that tightening the laws is still very much on the cards.

Local inventors (and indeed, patent attorneys) may think “so what?  Unless I’m looking to patent a weapon, how is this remotely relevant to me?”  Well, if your invention falls into what’s termed the “dual use” category – inventions having potential downstream military application (and it’s the Government that decides this – not you, and not us), then please read on…     

The status quo

The Defence Trade Controls Amendment Act 2015 entered into Australian federal law on 16 May 2015 and amended the original Defence Trade Controls Act 2012 (“the DTC Act”).  The (criminal) sanctions for non-compliance took effect from 2 April 2016.  In regulating the extent to which one can communicate new technologies overseas – and in providing criminal sanctions for non-compliance, the legislation stands to impact significantly upon the day-to-day activities of Australian patent attorneys – and their clients.  On this basis, the fact that defence export controls has raised its head again places this little-known piece of legislation squarely in the public eye and provides an opportunity to issue a reminder as to the scope and significance of the DTC Act.    

Criminal sanctions for non-compliance with the restrictions

The DTC Act regulates the overseas supply and publication of Defence and Strategic Goods List (DSGL) technologies and the brokering of DSGL goods and technology.

Shelston IP actually worked closely with Defence Export Controls (DEC) throughout the 2015 public consultation process, and as a consequence, our internal systems have been fully compliant with the restrictions imposed for the best part of five years.  In short, when dealing with Shelston IP, local clients can rest assured that we fully understand the situation and will have taken the necessary steps to minimise any risks to the parties involved.

Communicating technology – restrictions on our “day jobs”

As patent attorneys, the communication and publication of “technology” is a staple of our everyday work.  Often, such communications are sent offshore.  Other times, we communicate new technologies in the form of patent specifications to our local clients, who in turn, send these documents overseas.  Depending on the nature of the “technology”, the DTC Act stands to criminalise such activities.

Because the offence provisions for supplying and publishing DSGL technology and for brokering DSGL goods and technology took effect from 2 April 2016, individuals and organisations are required to seek permits for any otherwise-offending activities. 

Why have export controls in the first place?

The DTC Act is a little-known document having significant, wide-reaching consequences.  Australia’s export control system aims to stop goods and technologies that can be used in military applications from being transferred to individuals, states or groups of proliferation concern.  As a member of various international export control regimes, Australia is part of a global effort to regulate the export of items of concern, many of which have potential terrorism or weapons of mass destruction applications.

Australia already regulates the physical export of certain military and dual‐use items under Regulation 13E of the Customs (Prohibited Exports) Regulations 1958.  However, the DTC Act is Australia’s means of closing any gaps that have appeared in the interim (as required by the Wassenaar Arrangement, to which Australia is a signatory).

Accordingly, the DTC Act regulates three main activities:

  • The intangible supply (transmission by non‐physical means, such as e-mail) of controlled technology from a person in Australia to a person outside of Australia;
  • Publishing controlled military technology; and
  • Brokering (akin to enabling another to communicate overseas) controlled military goods or technology.

How do I know if my technology is covered under the DTC Act?

The DTC Act applies to different stakeholders, depending on whether their activities involve military or “dual‐use” items listed in the Defence and Strategic Goods List (DSGL).  The DSGL, accessible here, is a 338-page legislative instrument defining as “dual use” a broad range of otherwise fairly benign-sounding technologies.  As such, one could assume (fairly reasonably) that a technology was exempt on the basis that it had no immediate or apparent primary military end use.  However, as noted above, it’s the Government that has the final say by way of the DSGL listing being the sole arbiter.  It is important to note that secondary or incidental military applications may suffice, hence the term “dual use” technologies.

International export control regimes are generally conscious of their impact upon people’s day-to-day activities, and so the controls are designed to only capture what is considered necessary.  For example, the DSGL lists computers that are specifically designed to operate below ‐45 °C or above 85 °C.  The DTC Act controls only apply to the technology which is necessary for the computer to operate at these extreme temperatures.  Technology that does not influence the computer’s ability to function at these temperatures is not controlled.  Using the above example, an Australian inventor who has created such technology for the primary purpose of, say, exploring the surface of Mars, would need to be acutely aware of the restrictions imposed by the DTC Act – as would his/her patent attorneys.

All things in perspective…

As mentioned, the offence provisions specified in the DTC Act came into force from 2 April 2016.  Although the sanctions for non-compliance are criminal in nature, this should be tempered with the knowledge that being hit with the full extent of the sanctions (10 years’ imprisonment) would require prosecutors to prove the requisite levels of intent, knowledge, recklessness and negligence.  The operation of the Criminal Code Act 1995 means that a person who mistakenly supplies, publishes or brokers controlled technology contrary to the DTC Act after diligently following institutional compliance processes would be unlikely to be prosecuted, much less to the full extent of the law.  The Code applies general principles of criminal responsibility to Commonwealth offences; in particular, the knowledge requirement is akin to having received fair warning. 

If the goods or technology at issue are listed in the DSGL, a permit or approval may be required from DECO.  The qualifier “may” is dependent upon:

  • The activity being undertaken (“supply”, “brokering”, or “publication”); and
  • Whether it is a military or a “dual‐use” DSGL technology; and
  • Whether an exemption applies (such as “basic scientific research” or material that has been lawfully placed into the public domain).

As readers will appreciate, a simple “yes/no” answer as to whether a permit is likely to be required is necessarily dependent upon the unique circumstances that each scenario presents.  

Patent-specific exemptions

As mentioned, a staple of our day-to-day activities as patent attorneys is the exchange of information relating to “technology”.  On a daily basis we communicate technology internally, domestically and internationally – and our clients do the same.  It is useful, therefore, to understand the activities that are exempted under the DSGL regulations.

Firstly, the “pre-publication” exemption amounts to recognition, on the Government’s part, that they cannot regulate the publication of information.  As such, the communication of information contained in a patent document that will later be published (e.g., a draft convention application or a draft PCT application) appears to fit comfortably within the definition of “pre-publication”.  On the other hand, provisional patent applications do not appear to fit within this category – and as such, another exemption must be invoked.

To this end, the “patent application exemption” covers activities “directly related to seeking a patent”:

This exemption applies to the supply of DSGL technology where it is done for the purpose of “seeking a patent” in Australia or overseas. “Seeking a patent” includes lodging a patent application and the supply of DSGL technology to a person or organisation (e.g., a Patent Office, patent attorney, research collaborator or a patent review panel) that is directly associated with the lodging (or potential lodging) of a patent application, or as a result of the patent examination process.

Supply for a purpose that is not directly related to seeking a patent will require a permit (unless other exemptions apply). This includes supply of DSGL technology to a research collaborator located overseas before a decision is made to seek a patent. Once a provisional patent application is filed, any supplies of DSGL technology to further develop an invention prior to preparing/submitting a complete patent application will require a permit. Supplies of DSGL technology to locate investors and determine overseas markets (including forwarding a recently-filed provisional application) will require a permit.

The process of publishing a patent (or an unsuccessful application) into the public domain is covered by this exemption. Until such time as that information exists in the public domain, it is still controlled and would require a permit to be supplied if it is not for the purpose of “seeking a patent” and no other exemptions applied.

As such, the Government would appear to have intentionally extricated the acts of overseas communication for the purposes of preparing a patent application (exempt) and communication with a view to ancillary business activities such as seeking investor funding (not exempt).

We will keep abreast of any changes to, or unusual interpretations of this new exemption.  As it is, it is clearly important to the manner in which we – and our clients – go about our everyday professional activities.    

Shelston IP’s proactive approach to the DTC Act restrictions

Being aware of the potential impact of the DTC Act, Shelston IP has closely monitored progress throughout the public consultation process (dating back to 2014).  We have liaised with DEC on a regular basis and have developed an internal best practice guide.  Adherence to such best practice will protect not only our interests, but also those of our clients.  This, in turn, means that clients dealing in controlled or dual-use technologies can be assured that their interests are in safe hands.

Based on our experience and understanding, compliance with the DTC Act can be as easy as following a few simple rules.  In some instances, a deeper consideration of the specific circumstances and legislative requirements will be necessary.  Those concerned about their own internal procedures under the DTC Act are invited to make contact with their Shelston IP patent attorney. 

Our specialist patent searcher, Frazer McLennan, is an expert in assessing technologies against what is prescribed in the DSGL register.

Authored by Gareth Dixon, PhD and Frazer McLennan

2 min read

The World Intellectual Property Organisation (WIPO) have been adding a range of useful tools for many aspects of intellectual property for a while now, including searching databases for patents, trademarks and designs; classifications; statistics; and multilingual terminology across patent documents.  I’ve written before about where you might go to conduct a search, sticking mainly to free sources, but WIPO have just introduced a new tool called WIPO Inspire that is a collection of reports on patent databases and their features.

There are only 24 databases at present but I’m sure that list will grow as new entrants establish themselves in the market.  It’s weighted slightly in favour of fee paying, or commercial, databases, and the free ones are currently restricted to the IP5 (the five largest intellectual property offices), but not either of PatFt or AppFT from the United States, but including WIPO’s own PatentScope, and a few others such as The Lens.  If you need to look further afield, WIPO Inspire has incorporated the older Patent Register Portal page, so you can still locate the relevant national databases for jurisdictions outside the IP5.

The reports on each database are quite extensive, and go into detail regarding the jurisdictions covered, which patent classifications can be used, how their patent families are structured, and how you can manipulate your results through sorting, export or analysis features, plus a lot more.

While it is a short list of databases, and quickly scanned, it is also possible to filter the databases by their features.  For example if you are looking for a database that allows semantic searching, to find those that do involves checking a box within the menu on the left hand side.

WIPO Inspire includes a comparison tool that sits up to four database selections side by side so the features of particular interest can be compared easily.

WIPO Inspire looks like a good tool to help if you are unfamiliar with patent databases, in terms of knowing what their names are, and what they can do.  You may just find one that has the combination of features you’re after.

Authored by Frazer McLennan and Gareth Dixon, PhD

5 min read

Introduction

IP Australia is providing free extensions of time of up to 3 months if a deadline cannot be met due to the effects of COVID-19.  As reported here https://www.shelstonip.com/news/covid-19-update-ip-australia-now-extended-streamlined-relief-measures-31-january-2021-provide-certainty-holiday-period/, the period for requesting such an extension currently ends on 31 January 2021 with the prospect of the period being further extended. 

A streamlined process has been implemented for requesting COVID-19-related extensions.  No declaratory evidence or fee is required; all that is needed is to check the relevant box on IP Australia’s eServices system to declare that the deadline cannot be met due to disruptions from the pandemic (equating to circumstances beyond control).  Although these COVID-19 extensions of time have so far been routinely allowed, they are nonetheless subject to the Commissioner’s discretion. 

New decision from IP Australia

A recent decision from IP Australia, Shell Internationale Research Maatschappij B.V. v Yara International ASA [2020] APO 55, http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/APO//2020/55.html, relates to a request for a COVID-19 extension in the context of a patent opposition.  It provides a reminder that care is required when requesting COVID-19 extensions at IP Australia, both in terms of the timing of the request and the reasoning.

Shell Internationale Research Maatschappij B.V. (the Opponent) filed a Notice of Opposition and, at the same time, requested a COVID-19 extension of 3 months for filing the Statement of Grounds and Particulars (SGP), which was due to be filed within 3 months of the Notice of Opposition. 

In accordance with usual procedure under Australian law, Yara International ASA (the Applicant) was afforded the opportunity to comment on the Opponent’s request for an extension of time.  The Applicant opposed the Opponent’s request for an extension of time. 

The Opponent’s submissions

The Opponent filed a declaration which provided a general overview of the COVID situation in the UK and at Shell.  The declaration noted that, as a consequence of the pandemic, the responsible in-house attorney had commenced working at home in April 2020, solely with the use of a laptop, without access to printers or desktop monitors, and that he did not have access to numerous physical documents that were required for the opposition.  The declaration also reasoned that, due to COVID-19, obtaining mandates and financial approvals for the opposition at Shell had become more difficult. 

The Applicant’s submissions

The Applicant, however, noted that the Opponent had filed two rounds of third-party observations at the EPO on the corresponding European application.  The Applicant argued that, although another Shell attorney had filed those third-party observations, the Opponent had not provided any reason why that attorney could not have prepared or assisted with the preparation of the SGP or why the task could not have been delegated to the Australian representative.  The Applicant pointed out that preparation of the SGP does not need expert witnesses and that the amount of time required to prepare the SGP is significantly less than that required for the preparation of evidence.  Furthermore, the Applicant argued that an undue delay would lead to an extended period of uncertainty for the Applicant and would not be in the public interest. 

Decision to grant a shortened extension and reasoning

The Commissioner commented that it was “not the existence of the pandemic, but rather the specific impacts on the responsible person, that must be taken into consideration”. 

The Commissioner considered that the extension request was “largely prospective and based on conjecture of circumstances that might arise in the future”.  The fact that the extension request had been filed at the same time as the Notice of Opposition did not work in the Opponent’s favour.  In this regard, the Commissioner observed that “if a party can anticipate on-going delays, and even quantify those delays in requesting an extension upfront, then presumably they can also plan and take action to mitigate their impact”.  The Commissioner expressed concern that “a party obtaining an upfront extension and working to an extended deadline may not be as diligent in completing their work, or as motivated to consider and implement mitigating strategies that could enable them to meet the original deadline”.

In the concluding remarks, the Commissioner adjudged that, whilst there were circumstances that had impacted on the Opponent’s ability to complete the SGP in time, the request was made at the beginning of the period for preparing the SGP when the impacts and the extent of delay were uncertain.  Further, the Commissioner was not satisfied that the Opponent had provided a sufficiently detailed disclosure of the circumstances to justify the request for an extension at that time, including the reasons why no strategies were available to mitigate the impacts. 

On balance, the Commissioner decided to allow an extension but the length of the extension allowed was less than the 3 months requested.

The Commissioner noted that the decision to allow the extension of time of course does not preclude the Opponent seeking a further extension based on current circumstances that may prevent completion of the SGP by the extended due date.

Conclusion

Whilst a shortened extension was granted in this circumstance, this decision serves as a stark reminder that IP Australia’s COVID-19 streamlined extension provisions are not a simple free-for-all.  An element of discretion does apply. 

A requestor must be able to provide genuine reasons and evidence to justify the grant of the extension and the timing of the request can also be of significance. 

In addition, it is worth mentioning IP Australia’s warning that a false declaration could put the validity of an IP right at risk.

For more information, or if you have been affected by the COVID-19 pandemic and require assistance with your IP Rights, please contact us. 

Authored by Serena White, DPhil and Michael Christie, PhD

5 min read

A recent YouTube spat over an AI created cover of Britney Spears’ 2004 song “Toxic” demonstrates that AI has now made it possible for one artist to sing a cover of another artist, no human required! In this case, a group called DADABOTS, which describes itself as “a cross between a band, a hackathon team and an ephemeral research lab”, created the rendition using software enabling generation of audio content in the voice of a particular artist, in a particular genre or as a novel fusion. The end result was a Frank Sinatra cover of the Britney Spears song.

Whilst this is a prospect that is bound to be exciting to some, from the perspective of conventional copyright law (and perhaps defamation law), the path to creating such a custom cover track using AI is fraught with complexity and uncertainty.

Yet that didn’t stop DADABOTS rendition being met with something a little more conventional, a copyright takedown notice and subsequent removal from YouTube, as Futurism’s Dan Robitzski recently reported. Futurism noted that GreyZone Inc., a company which offers copyright infringement identification and reporting services, was responsible for the complaint but wasn’t able to identify on whose behalf.

Appeal of YouTube take down

The basis for the original takedown notice is unclear – presumably representatives of either Frank Sinatra or Britney Spears’ respective record labels took the view that their copyright was infringed in some form. In Australia, their songs are likely to be covered by a suite of copyright and related rights, potentially including copyright in the lyrics, the musical work, performance rights and recording rights.

In this case, DADABOTS appealed YouTube’s decision to remove the rendition, calling in aid the US copyright doctrine of fair use. This doctrine is codified in the US Copyright Act and allows “fair use” of copyright works without infringing copyright. Unlike in Australia where the equivalent “fair dealing” is limited to quite specific circumstances, the US Courts have a broad discretion to determine what use is “fair”, depending on factors such as the nature of the copyright work, the purpose of the use and the effect of the use on the potential market for the copyright work. YouTube accepted the appeal and DADABOTS upload was reinstated, albeit with YouTube flagging it as a cover of “Toxic”. YouTube offers a service which allows eligible copyright holders to set up rules dealing with any third party copies of their exclusive copyright content uploaded on YouTube. This might include blocking the uploaded media, taking ad revenue from it or tracking the viewership information. YouTube’s flag of the DADABOTS version presumably makes it subject to any such controls in place in respect of “Toxic”.

Use of copyright works during development of AI powered applications

To make the rendition, DADABOTS used an AI software tool developed by California based OpenAI. Known as “Jukebox”, the software utilises neural networks, a form of machine learning. To become competent, Jukebox was trained by processing various datasets, which in turn allowed it to create the rendition on the basis of what it learnt from that data processing. In this case Jukebox then performed lyrics (of “Toxic”) in the voice and/or genre of the artist on which the software had been trained (Frank Sinatra). According to Open AI’s website, Jukebox was trained on 1.2 million songs, corresponding lyrics and metadata, including artist, genre, year and associated keywords.

Interestingly, Futurism’s article suggests the YouTube appeal arguments were crafted without reference to the use of AI to create the DADABOTS rendition. The fair use arguments were focussed on the end result (i.e. the new rendition) as a fair use in itself, rather than by reference to the method used to create it. Separate to issues around copyright ownership of works created wholly or substantially by AI technologies, the use of copyright works for AI related functions, such as machine learning and datamining is very much a live issue globally. The extent to which such uses are thought to be “fair uses”, is likely to influence the development of the fair use doctrine in copyright, the bounds of which already vary considerably from country to country, if not lead to specific copyright provisions. One notable mover in this space is Japan, which from 1 January 2019 enacted various provisions in its Copyright Act aimed at exempting computer data processing and analysis of copyright works from infringement in certain circumstances. The way in which the law on this topic develops globally may well be a factor which influences where companies with a focus on developing AI powered applications choose to base themselves (if it is not already). Differences in the law on this topic around the globe may also lead to potentially complicated questions of jurisdiction where AI generated material is exported from one country to another.

In Australia, the current law is likely to be less friendly to machine learning and AI powered applications, as a result of the stricter confines on fair dealing, and other limited exceptions to copyright infringement. Certainly where AI applications are used for development which is commercial in nature, it is unlikely that Australian copyright exemptions would apply. While section 40 of the Copyright Act 1968 (Cth) does provide an exemption for fair dealing for research purposes, it has generally been given a narrow reach.

Indeed, extension of the fair dealing provisions in Australia was a topic considered extensively by the Productivity Commission in its review of intellectual property laws in Australia and consequent report issued in 2016. Submissions made on this issue included those from tech companies supporting a broader fair use exception and specifically referring to machine learning in this context. The Productivity Commission ultimately recommended significant reforms in this area paving the way for a US-style fair use exception. However following two years of further consultation, the Government announced in August 2020 only a limited extension of the fair dealing exceptions for non-commercial quotation.

As a consequence, use of datasets to train AI systems in Australia appears likely to carry with it a significant risk of copyright infringement for the foreseeable future, in the absence of an appropriate licence. As the law in this area continues to develop worldwide, this is clearly a space to watch for both copyright owners and anyone using databases of copyright material to power or utilise AI technologies.

Authored by Onur Saygin and Katrina Crooks

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Authored by Greg Whitehead and Allira Hudson-Gofers