5 min read

Sovereign Hydroseal Pty Ltd v Steynberg [2020] FCA 1084

An application for preliminary discovery of documents relating to the constituents of a ‘sealing composition’ and methods of using it to seal passages was granted in circumstances where an exclusive licensee of the asserted patent suspected infringement by a third party based on past employment, access to confidential information, information from a private investigator, and the similarities of the processes being carried out by both parties. The scope of the discovery order was limited due to the financial circumstances of the respondent.

Background

Sovereign Hydroseal Pty Ltd (Sovereign) is the exclusive licensee of Australian Patent No. 2012216392 (392 Patent) which relates to a method and composition for sealing passages such as cracks, joints and voids in concrete structures and geological formations using a sealing composition. The sealing composition, which includes a mix of latex and additional components, is delivered into a passage under pressure in order to seal the structure from water ingress.

Together with the joint patentees, Relborgn Pty Ltd and Triomviri Pty Ltd, Sovereign sought an order for preliminary discovery of documents to be produced by Mr Johannes Steynberg (Steynberg), a former employee of Sovereign operating a business called ‘H2O Seal’, pursuant to which a process was being used for sealing cracks and joints involving a ‘liquid rubbery substance’ injected by pumps. Sovereign contended that it required production of these documents on the basis that it did not have sufficient information to decide whether to start a proceeding against Steynberg in respect of causes of action for patent infringement, breach of confidence, breach of contract, and contempt.

During the period July 2008 to June 2009, when Steynberg was employed by Sovereign, he had received training on how to seal a passage in a body such as a geological formation with a seal composition, including insight into types of equipment as well as details of the materials and compositions used. For the purposes of his work, Steynberg had access to Sovereign’s confidential information including details of product specifications and formulations, processes involving those products, customer records and customer information.

Since cessation of his employment by Sovereign in 2009, Steynberg had held multiple business interests in Queensland in relation to waterproofing and water sealing. On two separate occasions in 2009 and 2011, Steynberg established businesses which were subsequently deregistered after settlements with Sovereign. On both occasions, Steynberg was alleged to have infringed on the intellectual property of Sovereign, which he denied. Justice McKerracher declined to take into account material from these previous disputes, other than in a general sense by way of common background. However, his Honour noted that it was relevant to showing that Steynberg had some opportunity to acquire relevant information.

In September 2019, Sovereign became aware of Steynberg’s involvement in H2O Seal by way of a ‘flyer’ on the H2O Seal business, internet-based searches, and enquiries made by a private investigator. The investigator obtained information that indicated Steynberg was using a product called ‘N-LICS’, and that H2O Seal used ‘a natural nano-technology rubber grout injected under pressure into the voids sealing cracks and joints’. Concerned that Steynberg was using at least one method of sealing cracks and joints that infringes the method claimed in the 392 Patent, Sovereign applied for preliminary discovery under Rule 7.23 of the Federal Court Rules 2011 (Cth). Other related issues included Steynberg’s alleged contraventions of contractual obligations and injunctive orders entered, as part of earlier proceedings in 2011.

Arguments

Steynberg did not contest that Sovereign subjectively believed that it may have a right to obtain relief, but argued that the belief was not reasonably held. Steynberg argued against Sovereign’s allegations as follows.

  1. The photos on the flyer did not ‘reveal any confidential information of Sovereign’ and ‘it would be difficult to conclude that [Sovereign] has a reasonable belief’ based on them.
  2. The material filed by Sovereign included evidence of Steynberg employing a blend of rubber emulsions injected under pressure into a passage, which convert from liquid to solid via coagulation, but did not reveal whether Steynberg was using the same formula as Sovereign. Accordingly, Steynberg argued, the evidence and Sovereign’s contentions were insufficient to ground a reasonable belief as defined in subrules 7.23(1)(c) that he may be using the same method, process or composition as Sovereign such that a potential patent infringement claim may arise.
  3. Steynberg further alleged that Sovereign had engaged in misleading or deceptive conduct by accusing him of using ‘very similar chemicals and methods’ previously used in his H2O Control Systems business, but that the present proceedings had not revealed he had been doing so.
  4. Finally, Steynberg pressed the point that Sovereign’s right to discovery under Rule 7.23 needs to be weighed against Steynberg’s interest in protecting his own intellectual property rights with respect to the methods he had developed and was using from disclosure to Sovereign (his competitor).

Decision

In considering subrule 7.23(1)(a) and (c), the Court found that the evidence established the following.

  1. Even though none of the information provided by Sovereign proved that Steynberg was employing the same method or chemical compositions, the processes being carried out by both parties appeared on their face to be very similar.
  2. It was not clear how more detailed information regarding the precise constituent element of Steynberg’s sealing composition could be obtained outside of the preliminary discovery orders sought, and therefore Sovereign was entitled to test that composition.
  3. Neither a lack of awareness of the 392 Patent, nor the fact that others were apparently using the same process in the market, provided an adequate response to Sovereign’s patent infringement allegation or an answer to Sovereign’s discovery orders.
  4. Steynberg held documents regarding the methods and chemical compositions he used to seal passages which were directly relevant and could help Sovereign in deciding whether to seek relief.

Justice McKerracher concluded that Sovereign had established an adequate foundation for a ‘reasonable belief’ that it may have had the right to obtain relief from Steynberg, and that Steynberg may have had documents directly relevant to that question. In relation to subrule 7.23(b), the Court ruled that in combination with prior enquiries including web-based searches and an investigation, the contested discovery notice served by Sovereign to Steynberg constituted a sufficiently reasonable enquiry.

Considering the requirements for an order to be fulfilled, McKerracher J allowed Sovereign’s application for preliminary discovery subject to the provision of security for the costs of compliance. The order to provide security for costs was made in response to the expansive terms of discovery sought by Sovereign, taking into account concerns regarding Steynberg’s financial capacity to comply.

Significance

This case highlights how preliminary discovery applications can be used by a patentee or exclusive licensee to inform its decision-making in relation to whether to commence a proceeding in respect of potential patent infringement.

The case also confirms the observations made by the Full Court in Pfizer Ireland Pharmaceuticals v Samsung Bioepis Au Pty Ltd (2017) 257 FCR 62 (which we previously analysed here). In terms of subrule 7.23(1)(a), the main point of consideration when granting preliminary discovery orders is not whether the belief in the applicant’s rights to relief is based on speculation, but rather whether the belief resulting from that speculation is a reasonable one. Potential applicants should bear in mind, however, that the scope of discovery sought can be restricted as a result of factors such as the financial capacity of the third party to comply with the order.

This decision is another illustration of the relatively low thresholds for obtaining preliminary discovery in connection with suspected infringement of an Australian patent, particularly for patents that claims compositions or manufacturing processes that cannot otherwise be readily discerned from public information or inspection of product samples (even if such samples can be obtained).

Authored by Chris Byrnes and Duncan Longstaff

2 min read

To celebrate International Women in Engineering day (23 June 2020), Shelston IP would like to highlight our outstanding female patent attorneys and patent engineers qualified in this field.

With 30 years of experience in the patent profession, Caroline Bommer is the female engineer that we aspire to be. She provides a wonderful example of the possibilities for our young female attorneys and is appreciated by all of her clients, particularly in her effective communication and her ability to understand their business strategies. Caroline’s mechanical engineering expertise is also extensive, including practical knowledge acquired prior to joining the patent profession in the industries of building, transport, aerospace, and defence. She has a keen interest in green technologies, with many years of personal involvement in solar car racing. Ask her to take you for a spin!

Tam Huynh works in the fields of electrical engineering and information technology patents. Growing up, Tam would find any excuse to integrate electronics into her arts and crafts projects. This included raiding her Dad’s electronics kit to make LED greeting cards for her family. She went on to study Computer Engineering at University and undertook a project exploring the use of solar power technologies and their application with mobile devices. Tam now assists with the ongoing management of patent portfolios in a range of fields, including electrical power systems, information and software systems, mining and automation, and medical devices. Tam also holds a Bachelor of Commerce degree and her accounting background adds additional depth to her handling of financial-system related inventions.

With childhood memories of jumping off a red billy cart and yelling “Newton’s third law”, Allira Hudson-Gofers brings her enjoyment of physics and engineering into her role as the head of Shelston IP’s Engineering and ICT Patents Group. Allira studied both mechatronics and biomedical engineering at University, going on to develop particular expertise in research, product development, regulatory affairs, and intellectual property in the medical technology space. She now applies this expertise, together with her recent MBA studies, to help her clients protect and commercialise their innovations.  

Connie Land had her interest in the human body and medical devices sparked in high school, which lead her to pursue a degree in Biomedical Engineering. Connie started her career with hands-on experience maintaining, repairing, and programming medical devices.  Last year, after discovering that the role of a patent attorney was a career option for engineering graduates, she hung up her tools and joined Shelston IP as a Patent Engineer. Connie now works with medical devices in a different capacity and uses her passion and knowledge of medical devices and technology to help her clients navigate the path to obtaining patent and design protection. She is currently studying a Masters in Intellectual Property and is looking forward to becoming a registered patent attorney in Australia and New Zealand. 

Authored by Allira Hudson-Gofers, Caroline Bommer, Tam Huynh and Connie Land

1 min read

Welcome to Shelston’s wrap-up of the most notable patent decisions in Australia and New Zealand delivered during 2019. It was a busy year for patent jurisprudence with some interesting themes emerging – in particular, it has been a banner year for decisions on the “manner of manufacture” requirement for patentable subject matter.

Read our full report

  • An expanded Full Federal Court clarified the “manner of manufacture” test for computer-implemented methods to be patentable (Encompass), a topic that was also central to several other Federal Court (TettmanRepipeWatson) and Patent Office (Apple) decisions.
  • There were also important “manner of manufacture” decisions in the life sciences space, with single judges finding both a diagnostic method involving a process of detecting genetic material (Sequenom) and use of genetic information to infer traits (Meat & Livestock Australia) to be patentable subject matter.
  • The Full Court confirmed there is no doctrine of patent exhaustion in Australia, the critical distinction being between repairs permitted by implied or express licence terms brought home to the purchaser of a product, and the impermissible re-making of the product beyond the scope of any licence (Calidad (No. 1)).
  • The Full Court confirmed that a permanent injunction framed in general form by reference to the claims of an infringed patent is generally appropriate and may be ordered in addition to a specific injunction describing products or conduct found to infringe (Calidad No. 2).
  • The Full Court overturned an award of additional damages for flagrant patent infringement on the basis that the infringer had believed, on objectively reasonable grounds, that its conduct did not infringe the patent (Oxworks).
  • The tide continued to turn against pharmaceutical patentees being granted interlocutory injunctions (MylanSanofi-Aventis).
  • Patentees learned some harsh lessons as the Full Court dismissed infringement claims based on the construction of the terms “contains” (construed exhaustively in Nichia) and “recognise” (construed broadly in Davies).
  • There were several applications by patentees to amend patent claims and specifications after commencing infringement proceedings (Meat & Livestock AustraliaNeurimBlueScope), with mixed success.
  • Consideration was given in the Patent Office to Australia’s “raised bar” requirements for support and sufficiency (Gary CoxUniversal Polymers).
  • Both clinical trial patient consent forms (InterPharma) and academic conference posters (Regeneron) were considered prior art documents in life sciences cases.
  • There were further decisions regarding families of patents that have been litigated for a decade or more (GlobaltechSNF).
  • There were also decisions regarding the admissibility of “WayBackMachine” evidence (Dyno Nobel), summary dismissal of an infringement case (Pilkin), a successful application for preliminary discovery (MMD), a failed cross-claim for unjustified threats (Liberation), a failed attempt to withdraw admissions relating to infringement (Juno), a “strawman” opponent to a patent application having to pay security for costs in an appeal despite winning the opposition (Toolgen) and a party commencing infringement proceedings despite not being a proper exclusive licensee having to pay indemnity costs (Vald).
  • Two recent decisions issued by the Intellectual Property Office of New Zealand provide new hope that, in certain circumstances, it may be possible to obtain an extension of time to file a divisional patent application (PrimapakMagic Leap).

As 2020 gets underway, we hope this provides a useful and practical resource and, of course, please do not hesitate to take the opportunity to contact our authors, all subject-matter experts in their respective fields, for advice on the issues raised by these important decisions.

Authored by Dr Roshan Evans, Duncan Longstaff and Onur Saygin

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.

Authored by Gareth Dixon, PhD

Shelston IP congratulates its valued client Finisar Australia on being the recipient of the Prime Minister’s Prize for Innovation. The team at Finisar, which included Dr Simon Poole, Mr Andrew Bartos, Dr Glenn Baxter and Dr Steven Frisken, were awarded the prize at a ceremony on 17 October 2018 for their development of wavelength selective optical switches in the early 2000s. The switches use a dispersive prism to separate different colours of light and a liquid crystal on silicon chip to switch the different colours between optical fibres. The optical switches are now in use across the globe and have helped to increase the capacity and reliability of communications networks.

Shelston IP is proud to have assisted Finisar with the protection of their IP around the wavelength selective switch technology and many other inventions.

Authored by Peter Treloar

The purposes of the claims of a patent are to define the metes and bounds of an invention, and to place the public on notice of what constitutes an infringement. Generally speaking, the requirements for patent claims are that they must:

  • define the matter for which protection is sought, preferably in terms of the “technical features of the invention”,
  • be clear and concise/succinct, and
  • supported by matter disclosed in the specification, and enabled across their full scope.

There are arguably only 2 basic types of patent claim:

  1. claims to a physical entity (e.g., compound, product, apparatus) and,
  2. claims to an activity (e.g., process, use).

For many inventions, claims in more than one category are needed for full protection. In the field of chemical sciences (meaning chemical compositions such as those arising in the fields of chemistry, materials science, petrochemicals, pharmaceuticals, and biotechnology), to properly protect the invention a patent may protect any one or more of the following subject matter:

  • a compound, which may be defined as a class of compounds, as a specific compound, or group of specific compounds,
  • a composition containing the compound,
  • an article made from, or containing the compound,
  • a process for preparing the compound (and the compound when prepared by the process),
  • a composition when used in a particular manner or under some defined circumstances (generally understood as a pseudo method claim),
  • a compound for treating a medical condition,
  • a method of using a compound for a specific purpose (e.g., for curing a polymer composition), or for treating a medical condition (a method of treatment claim), and
  • the use of a compound in the manufacture of a medicament for treating a medical condition (known as “Swiss style” claims).

Another common claim type is a claim to a kit, which either comprises a novel component (compound or composition), or is constructed to ensure that the kit components are applied simultaneously/sequentially to produce a new product or synergistic affect, or the kit limited to use in a novel and inventive method.

In the field of biotechnology, patentable subject matter includes isolated naturally-occurring micro-organisms, peptides, or proteins, and (under some limited circumstances) gene sequences. Patent claims can therefore be directed to one or more of these categories, too. For protein-type inventions claims can be directed to a nucleic acid encoding the protein, a vector containing the nucleic acid, and a host cell comprising the nucleic acid or vector.

Depending on the circumstances, there are a myriad of other claim types that can be pursued. For example, claims to a precursor or an intermediate (e.g., such as a pre-polymer) may be appropriate. In another example, claims could be directed to a solution that has some specific use. For example, a copper electroplating solution that comprises a solution of copper sulfate, sulphuric acid, and wherein the pH has been adjusted to a specific range.

In another example, the invention may lie in methods of identifying compounds that achieve a certain technical effect (e.g., A binding assay for detecting one or more specific analyte(s) in a sample), or may lie in the particular spatial configuration of entities of a mixture (e.g., one entity may be an immediate release phase and the other entity may be a prolonged release phase).

Closing comments

In the field of chemical sciences (e.g., chemistry, materials science, petrochemicals, pharmaceuticals, biotechnology, etc) to protect an invention one or more different types of patent claims may be required.  The choice of claim types depends on the invention at hand, under what circumstances there may be infringement, who may license the patent, and should ultimately align with the applicant’s commercial objectives.

Outlined in this article is a summary of the main types of claims that are pursued when drafting a patent application in the chemical sciences field. It is impossible to foreshadow all the types of patent claims that may be pursued, and thus when an idea is an important commercial asset, it is wise to engage a qualified patent attorney to assist in the generation of relevant intellectual property rights that suitably protect that commercial asset. At Shelston IP, we have a number of highly experienced attorneys who can assist in navigating these complexities.

The content of this article is general in nature and must not be relied on in lieu of advice from a qualified professional in respect of your particular circumstances.

Authored by Michael Christie, PhD

The Australian Government has announced an independent review of the Defence Trade Controls Act 2012. 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 (remembering it is the Government that decides this – not you, and not us), then please read on…

Review of the Defence Trade Controls Act 2012

The Government has announced the appointment of Dr Vivienne Thom AM to conduct an independent review of the Defence Trade Controls Act 2012 (“the DTC Act”), which will be guided by the Terms of Reference.  The review is largely to determine if the DTC Act is meeting its purpose.  Submissions are due by 31 May 2018.

Insofar as the DTC Act relates to locally-originating patent applications, Shelston IP has been fully compliant since the 2015 amendments (prescribing criminal sanctions for breaches) took effect.  Our local clients have benefitted from such compliance on our part.  On this basis, there’s possibly not a great deal that our clients may wish to feed back to the Government by way of submission.  However, the review does place 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.

The 2015 amendments – criminal sanctions for non-compliance

The Defence Trade Controls Amendment Act 2015 entered into Australian federal law on 16 May 2015.  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.

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 the Defence Export Controls Office (DECO) throughout the 2015 public consultation process, and as a consequence, our internal systems are fully compliant with the restrictions imposed.  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.

Criminalising non-compliance

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 technology 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 technology 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 DSGL.  The DSGL, accessible here, is a 350-page legislative instrument defining as “dual use” a broad range of otherwise fairly benign-sounding technologies.  As such, potentially one could assume a technology was exempt on the basis that it had no immediately or apparent primary military end use.  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.

Non-compliance is a criminal offence

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”.  We communicate technology internally, domestically and internationally on a daily basis – and our clients do the same.  It is useful, therefore, to understand the activities that will be exempted under the DSGL regulations.

Firstly, the “pre-publication” exemption amounts to recognition, on DECO’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, DECO 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

At Shelston IP, being aware of the potential impact of the DTC Act, we closely monitored progress throughout the public consultation process (dating back to 2014).  We have liaised with DECO 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.

Authored by Gareth Dixon, PhD