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Authored by Greg Whitehead and Allira Hudson-Gofers

Innovation by small and medium enterprises (SMEs) plays a significant role in the Australian economy.  For such companies, it is important that they adequately capture and control the commercial path for each innovation so as to maximise their return on investment in research and development.

Many SMEs recognise that the starting point for capturing value in innovation rests in the various intellectual property (IP) systems – patents for inventions, trade marks for brands and copyright for original works to name a few.

In a bid to provide increased support for SMEs in relation to the various IP systems, IP Australia (the Australian Government agency tasked with administering IP rights and related legislation) has launched a new IP portal for SMEs – IP Australia’s SME Portal.

The SME Portal includes a number of useful tools and resources in one convenient location to assist SMEs in navigating the IP process.  The available resources include information on the fundamentals of IP (webinars, toolkits, how-to guides, etc) together with details of several programs and services designed to assist SMEs in the process of taking an innovation to market.

We believe the SME Portal will be a valuable resource of general information on IP for SMEs seeking to secure IP rights in Australia.  Should you have any specific questions concerning your current IP position, please contact us and we will be happy to assist.

IAM Patent 1000: The World’s Leading Patent Professionals 2020 has again listed Shelston IP as Highly Recommended for their patent prosecution.

Congratulations to our ranked practitioners Paul Harrison, Chris Bevitt, Greg Whitehead and Michael Christie.

“The impeccably qualified team of patent attorneys and attorneys at law at Shelston IP has achieved great success in recent years, especially in tapping into the Chinese market. Processing one out of every 15 applications entering national phase in Australia already, the side now represents the greatest number of Chinese entities among Australian IP firms and files the most China-originating patent applications in Australia. Paul Harrison  and Greg Whitehead are fine examples of the group’s first-rate advisers. With a chemical engineering background, Harrison aptly handles building and construction products and systems, material separation, treatment and handling, metallurgy, food processing, medical equipment and process technology briefs. He is also the Asian Patent Attorneys Association Conference chair 2020. Head of the mining team, Whitehead is not just technically excellent, he also has a great track record building up and consolidating the patent portfolios of start-ups for commercialisation. Similarly, Michael Christie, a former senior associate at MinterEllison who joined the firm in May 2020 to head up the life science practice, specialises in molecular biology. Elsewhere, Chris Bevitt is the commercial law team leader who tackles transactional work effortlessly.”

Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2020] FCA 408

This decision forms part of an ongoing battle between two Australian companies over patented technology for improving the efficiency by which authorities monitor and manage access to public parking.  In this decision, the Federal Court of Australia provides some helpful guidance on the approach to assessing whether or not a claimed invention involves an inventive step (i.e. is not obvious) under the current provisions of Australian patent law.

Background

Vehicle Monitoring Systems Pty Ltd (VMS) developed a Parking Overstay Detection System (the POD system), which uses in-ground sensors to detect changes in the earth’s magnetic field when a vehicle enters a parking space (or bay).  A message is sent wirelessly to a device carried by a parking officer who can then issue an infringement notice, as required.

VMS sought to collaborate with SARB Management Group Pty Ltd (SARB) to advance the POD system technology.  SARB is the designer and distributor of software popularly used with generic handheld PDAs for issuing parking infringement notices by council officers.  However, no collaboration eventuated from these discussions.  Instead, SARB developed its own vehicle detection system which was also based on the use of a sensor to detect changes in the earth’s magnetic field when a vehicle enters a parking space.

More specifically, SARB’s system incorporated a vehicle detection unit (VDU) using a magnetic sensor capable of detecting occupancy of a vehicle space by a vehicle; a storage device carrying parameters which define notifiable vehicle space occupancy events; and a processor operable to initiate a communication from the VDU to a supervisory device (such as a PDA) upon occurrence of a notifiable event (such as a parking violation), wherein the communication includes data items pertaining to the notifiable event and is communicated in a format suitable for pre-population into infringement issuing software.

SARB’s system became the subject of Australian Patent Application No. 2013213708, entitled ‘Vehicle Detection’ (SARB application).  Relevantly, VMS opposed the SARB application on the grounds that the claimed invention lacked an inventive step and that SARB was not entitled to the grant of a patent for this invention under the Patents Act 1990.

An opposition hearing was conducted before the Australian Patent Office (Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2017] APO 63).  The Patent Office rejected each of these grounds as advanced by VMS, determining that claims 1-24 should proceed to grant (but claims 25-28 should not be granted).

VMS appealed this decision to the Federal Court of Australia and the present decision concerns the outcome of this appeal.

Arguments

VMS submitted that claims 1-24 of the SARB application lacked an inventive step in light of the common general knowledge and five sources of prior art information, including: a published PCT application (filed by VMS); a published Australian patent, a published journal article; slides of a presentation given at an industry conference in 2005; and details of an oral presentation given at an industry conference in 2006.

Additionally, VMS submitted that SARB is not entitled to be the person to whom the patent is granted because Mr Welch of VMS, or alternatively Mr Welch and Mr Gladwin of Maribyrnong City Council conceived of all or part of the invention disclosed in the SARB application and communicated it to Mr Del Papa of SARB, and in doing so sufficiently contributed to the invention to be named as inventors.

Decision

The decision involved a comprehensive assessment of facts, technical details, claim construction, and a determination of the common general knowledge involving expert witnesses and submissions from both parties.

Claim construction

For ease of reference, claim 1 is reproduced below:

  1. vehicle detection unit (VDU) comprising:
    1. magnetic sensor able to sense variations in magnetic field and for outputting a sensor signal caused by occupancy of a vehicle space by a vehicle;
    2. storage device carrying parameters which define notifiable vehicle space occupancy events;
    3. processor (a) operable to process the sensor signal to determine occupancy status of the vehicle space, and (b) operable to compare the occupancy status of the vehicle space with the parameters in order to determine whether a notifiable event has occurred, and (c) operable to initiate a communication from the vehicle detection unit to a supervisory device upon occurrence of a notifiable event, wherein the communication includes (i) data items pertaining to the notifiable event and (ii) communicated in a format suitable for pre-population into infringement issuing software.

There were contentions over the construction of the scope of claim 1, particularly as to whether the VDU initiates a communication only upon the occurrence of a notifiable event or whether the claim includes that the VDU is operable (i.e. able) to initiate a communication at a time other than when a notifiable event has occurred.  The Court preferred the latter construction advanced by VMS as to do otherwise would inappropriately add a limitation to the claim that is not present – that is, inserting the word ‘only’ before ‘operable’.  Additionally, the Court considered that data items pertaining to the notifiable event did not include ‘all’ data items as the plain language of the claim simply refers to ‘data items’ not ‘all data items’.

Furthermore, there was consideration of the feature ‘communicated in a format suitable for pre-population into infringement issuing software.’  VMS submitted that this required the data communicated from the VDU to the supervisory device to be able to be pre-populated into the data fields in the infringement issuing software without further data processing by the supervisory device.  SARB largely accepted this construction but submitted that the language of claim 1 does not preclude additional necessary processing at the supervisory device; for example to receive and organise the data packets.  The Court agreed with VMS’s construction and SARB’s qualification.

Inventive step

In Australia, an invention is taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed before the priority date of the relevant claim.  The assessment can be made against the common general knowledge separately or together with certain other pieces of prior art information.

Accordingly, when assessing whether or not a claimed invention involves an inventive step it is first necessary to establish the relevant common general knowledge of the trade.

The prior information that can be used to supplement the common general knowledge to support an assertion of lack of inventive step is provided by section 7(3) of the Patents Act 1990 as follows:

(a)  any single piece of prior art information; or

(b)  a combination of any two or more pieces of prior art information that the skilled person could, before the priority date, be reasonably expected to have combined.

Section 7(3)(a) enables any publicly available single item of prior art information to be added to the common general knowledge for the purpose of considering whether or not an invention involves an inventive step.  Section 7(3)(b) facilitates the addition of a combination of two or more (publicly available) pieces of prior art information to supplement the common general knowledge for the consideration of invention step, subject to the condition that the skilled person could be reasonably expected to have combined them.

The requirement that the prior information merely be publicly available for it to be available for the consideration of inventive step represents a significant departure from the more rigorous requirements that existed before the changes to Australian patent law introduced by the Raising the Bar Act.  Previously, no prior art information could be added to the common general knowledge unless the skilled person could, before the priority date, be reasonably expected to have ascertained, understood, and regarded it as relevant.

Despite this framework, there was some dispute between the parties as to the proper approach to be taken when seeking to combine two or more pieces of prior art information under s 7(3)(b).  The Court reviewed the submissions from each party and summarised the relevant law before stating:

‘It follows that I do not accept that it is necessary for VMS to demonstrate any more for the purpose of s 7(3)(a) than that the prior art information has been made publicly available. Once it has done so, such information is notionally supplied to the person skilled in the art within s 7(2). For combining two or more pieces of prior art information, s 7(3)(b) deems that if those pieces of information are ‘publicly available’, they are be made available to the person skilled in the art. It will be a question of fact whether or not they may be reasonably be expected to be combined.’

In the respective approaches to inventive step, there was general agreement on the common general knowledge of electrical engineers with respect to wireless sensor networks.  However, there was some disagreement over whether or not the POD system formed part of the common general knowledge and, if so, what information concerning that system was known at the time.

The Court considered that the broad working of the POD system formed part of the common general knowledge in the art but did not accept that the common general knowledge would include a detailed understanding of the mechanisms of the POD system, or experience of using the POD system. In particular the means of communication between the in-ground sensor and the various remote terminals was not considered common general knowledge nor was the manual entry problem of transcription errors when using the POD system.

VMS first relied on the combination of the PCT application with information contained in an article on the POD system entitled ‘PODS – the Next Big Thing’.  However, the article did not consider pre-population of data items into infringement issuing software, which was a crucial item of detail absent from the disclosure of the PCT application.

VMS also cited a PowerPoint presentation, by Mr Gladwin, only as a publication of the slides.  The meaning of the slides, shorn of detail provided during the presentation, was opaque and the information in them was not considered to be of any practical use in the implementation of the PCT application.

Additionally, VMS cited a presentation given by Mr Welch at a conference in November 2006.  However, VMS faced insurmountable hurdles in proving the content of the presentation was made publicly available.  The Court noted the intrinsic danger in relying on an unaided recollection of events.  Whilst it was agreed Mr Welch was doing his best to assist the Court, it was noted that memories fade and, as such, it was unlikely that he would recall what he said with any reliable accuracy.

In considering inventive step, the Court was conscious that the question is whether the combination, not each integer, is obvious.  On this basis, the Court identified four points of uncertainty for the skilled team seeking to implement a system or method as disclosed in the PCT application.  Referring to the four identified points of uncertainty, the Court considered that each point required decisions on how to proceed which would involve prototype testing and evaluation. The Court noted the following:

“In my view, whilst the number of alternative solutions is relatively limited, there is no single line of logic that leads to the invention as claimed such that it can be concluded that the combination arrived at was ‘very plain’, or obvious. In my view the qualitative evaluation weighs sufficiently in favour of SARB to arrive at this conclusion.”

Accordingly, the Court held that VMS had not discharged its onus of demonstrating, on the balance of probabilities, that the invention claimed in claim 1 lacks an inventive step in view of the prior art PCT Application.  The remaining prior art information relied on by VMS was also not successful in demonstrating that the claimed invention lacked an inventive step, as they did not touch upon the most material aspects of the claimed combination.

Entitlement

Regarding VMS’s claim that SARB lacked entitlement to the invention, there was some dispute over the content of the conversations between Mr Del Papa, Mr Gladwin and Mr Welch when proposing the collaboration between VMS and SARB.

The Court found that the message conveyed to Mr Del Papa was, at its highest, the idea that the POD system could possibly be adapted in the way suggested by Mr Welch and Mr Gladwin. In the Court’s view the invention disclosed in the specification and the subject of the claims was not that obvious, high level idea, but rather a more prosaic, practical implementation. It was the reduction of that concept to a working apparatus that is the invention. The Court considered that neither Mr Welch nor Mr Gladwin played any role in arriving at the solution and rejected that Mr Welch or Mr Gladwin should be named either as the sole inventor or as a co-inventor.

Orders

The Court found that the grounds of opposition to the grant of a patent on the SARB application, as advanced by VMS, had not been made out.  Accordingly, the appeal was dismissed and it was ordered that claims 1-24 of the SARB application proceed to grant.

Significance

This decision provides some helpful clarification that publicly available prior art information can be readily added to the common general knowledge when assessing whether or not a claimed invention possesses an inventive step, following changes made to Australian patent law under the Raising the Bar Act.  This decision also highlights the practical difficulties that can arise when relying on non-documentary publications such as presentations and lectures, particularly the difficulty in determining precisely what information was made publicly available by such events over time.

For further information, please contact Dean Bradley and Greg Whitehead.

IAM Patent 1000: The World’s Leading Patent Professionals 2019 results have been announced.  Shelston IP have again been Highly Recommended for their patent prosecution.

Those who have been commended, are to be congratulated.

“Shelston IP is head and shoulders above the rest, for its holistic service and deep reserves of knowledge. The team is super proactive and always one step ahead of the opposition; they work around the clock, never missing a deadline and will go above and beyond to ensure the work is first-rate.” An example of the firm’s innovative tendencies is its recent launch of OneAsia, a business solution aimed at providing clients with seamless one-stop shop protection across the Association of Southeast Asian Nations. Paul Harrison leaves both clients and peers in awe. As one patron enthuses: “Paul fuses his technical knowledge in chemical engineering with his legal expertise and sound commercial thinking, to produce great work. He has strong patent searching and analysis skills and his overall strategic approach makes him a stand out. Paul is proactive and his ability to understand complex processes and distil it into simple and easily digestible language is extremely valuable.” Patent attorney Greg Whitehead has a broad mechanical engineering practice; he possesses detailed and unique knowledge of robotic systems, automation equipment and industrial drying and heating machine patents. Commercial law department spearhead Chris Bevitt comes “highly recommended for his finesse in transactional matters. He has the ability to take intricate commercial arrangements involving the past, present and future rights and obligations of parties and draft meticulous, concise and effective clauses to reflect them perfectly. Chris’ turnaround is fast and his communication extremely effective – he proposes alternative solutions to achieve the best possible outcome. He is courteous and always available to answer questions too.”

For many manufacturers in Australia, Intellectual Property (IP) can be the most valuable asset the business owns. Why? Because IP can be used in a variety of ways to support a business, writes Greg Whitehead in the latest edition of AMT (Australian Manufacturing Technology) magazine.

For many manufacturing businesses in Australia, Intellectual Property (IP) can be its most valuable asset.  Why?  Because IP can be used in a variety of ways to support a business.

However, after the best part of two decades working within the IP industry and seeing numerous missed opportunities, it remains an unfortunate reality that leaders and key decision makers at many of Australia’s most innovative manufacturing enterprises, particulars SME’s, do not adequately understand the full range of ways in which they can capitalise on their IP.

This is a common theme across Australia’s advanced manufacturing sector, including within our most innovative companies developing highly specialised products and processes in areas such as aerospace and defence, automotive, clean and renewable technology, medical technology, biopharmaceuticals, mining and agribusiness.

All too often the typical ‘understanding’ is that IP is only used “to stop others from copying us”.  This results in the limited view that it is necessary to have a hard fought and costly battle in Court to resolve the issue at hand and gain value from an IP portfolio.

Such a narrow outlook adversely limits the potential to maximise the commercial value of innovations and ultimately the value of a company – in short, it potentially reduces the return on R&D expenditure.

This is not to say that a business should or must seek to register all of its IP.  Rather, it is incumbent on all business owners and managers to properly consider their company’s IP position so that they can confidently answer the question “Why have you, or why have you not, registered the company’s IP?

And for a business manager to be in a position to answer this question they must be well-informed and have a clear understanding of the potential means by which they can exploit IP rights to the benefit of the company.

By way of example, some benefits which can be realised with a structured IP strategy/portfolio include:

Recognition as market leader:  innovations can take many forms – from incremental improvements in a product to ground breaking developments which create a new standard for a specific industry.  For such innovations which become widely used and known throughout an industry, the existence of a corresponding IP portfolio can aid in further enhancing the profile and reputation of the company which produced the developments.  This can lead to growth for the business not only by way of increased sales but also by increasing the prospect of winning competitive tenders, particularly those having a relatively long-term supply and/or maintenance contracts.  Here the IP portfolio creates confidence and a point of difference for the company at the negotiating table.

Collaborative partnerships:  a further potential opportunity that arises from growing a company’s profile and reputation as an industry leader in providing innovative products and services relates to new opportunities to collaborate with third parties.  Such collaboration can arise through new relationships as a result of the company’s enhanced reputation within the relevant industry, as well as with existing partners such as suppliers, where the IP portfolio can be leveraged to negotiate better pricing to the benefit of the company owning commercially relevant IP rights.

Growth and expansion without capital expenditure:  by registering IP rights for key innovations, a company has opportunities to obtain revenue over and above that generated from its own sales alone.  Such additional revenue can be obtained through royalties paid to the IP owner by third parties who license the IP rights.  In this way, the IP owner can bring in additional revenue based on the actions of a third party, thereby saving on the expense of establishing new production facilities with additional capital equipment to increase capacity.  Here, it is important to recognise that registered IP rights are tied to a particular jurisdiction, which allows technology to be licensed on a state-by-state or country-by-country basis.

For example, a manufacturing companying operating only in the eastern states of Australia, and with no interest in expanding to the west, could license their technology to a companying operating in Western Australia.  The Eastern based company would benefit from increased revenue through royalty payments, thereby increasing its return on investment in the R&D which led to the relevant innovative breakthrough.  A similar strategy could be employed to license technology to a company in a foreign country outside Australia, particularly where the technology is likely to be adopted widely throughout an industry.

It should therefore be appreciated that the benefits of developing an IP portfolio and associated strategy tailored to the specific needs of a company, more often than not, arise from proactive, collaborative-based actions to leverage greater value from the effort and expenditure undertaken in R&D by the company, rather than battles within the Courts.  In other instances, a passive approach relying on the existence of an IP portfolio and associated profile in the market can also bring benefits, where third parties actively reach out to an IP owner to seek authorisation to use the IP under license or make an offer to purchase the technology.

In summary, the key take home message is for business leaders to consider whether their products/processes offer a competitive advantage in the market.  If so, some time should be spent considering the company’s IP position and put in place the most appropriate and robust IP strategy – whether by applying to register certain rights (e.g. patents, trade marks) or through controlled management of confidential information and trade secrets.

Finally, it is important to remember that the potential benefits outlined above reside with the true IP owner, and there are IP ownership implications associated with all business relationships – starting from employee contracts and the actions of staff to dealings with third party contractors.  Care must therefore be taken to ensure there is a suitable IP clause clarifying ownership in any contract before signing it.

This article was written and first published in AMT (Australian Manufacturing Technology) Magazine in their Feb/March 2019 issue.

Intellectual Asset Management recently released their 2018 IAM Patent 1000 survey results. Shelston IP are proud to be listed as a Highly Recommended firm for prosecution.

We also congratulate Shelston IP attorneys Paul Harrison, Greg Whitehead and Chris Bevitt for being listed as standout attorney’s in their field.

Keeping future enforcement priorities firmly in mind, Shelston IP conducts an exceptional programme of core prosecution services. Value is added throughout the patent lifecycle by a straight-shooting litigation team and a long list of support functions, including assistance with securing funding and reacting to legislative changes in the IP environment. The offices are staffed with crack prosecutors, from which Paul Harrison stands out; recently concluding a term as president of the Asian Patent Attorneys Association Australia Chapter, Harrison is “renowned for his robust engineering expertise”, though his talents are in demand among a broad heavy-industry following. Newly ranked  Greg Whitehead share a fanbase of ASX-listed companies that value their technical gifts. Devoting his time to instructions in the mechanical engineering space, Whitehead focuses on advising mining operations and technology start-ups. Leading the commercial law team with aplomb, Chris Bevitt offers his remarkable business acumen to rights holders seeking commercialisation opportunities.

The Australian registered designs system provides a fast and efficient mechanism for innovative companies to secure a monopoly for the visual appearance of commercially valuable products. Arguably, the Australian registered designs system is somewhat underutilised by those companies who would most benefit from its features.

To assist innovative companies in gaining a better understanding of the value of the Australian registered designs system, this Handbook provides: a quick reference practical guide to the features of the system, and a summary of Australian Designs Office decisions issued in 2017.

Please click here to access the Handbook and do not hesitate to contact any member of the Shelston IP Design Team if you are interested in learning more.