Australia’s pre‑grant opposition proceedings are playing a more significant role in the strategies of patentees and challengers. 

However, facing a patent opposition in Australia is a new experience for many patent owners. So, what should a patent owner do when faced with an opposition in Australia?

Time is on your side, but don’t sit around

As a patent applicant, time is on your side at the start of the patent opposition procedure. Work on the overall defence plan should commence promptly. Early decisions can be crucial to success, and early mistakes could end up being fatal. Accordingly, long-term planning ought to be done sooner rather than later.  In the past, patent opposition proceedings in Australia often became protracted due to generous provisions relating to extensions of time for lodging evidence. This is no longer the case.

Evidentiary time periods are still extendable, but the regulations relating to extensions of time for evidentiary periods are now reasonably onerous and strictly applied by IP Australia. Unless a party can show that they acted promptly and diligently and made all reasonable efforts to file the evidence in time, an extension will not be granted. In situations where, for example, a party wishes to provide experimental evidence to support their case, such studies may need to be set up early on in the proceedings.

What does an Australian patent opposition involve?

Patent oppositions are conducted before the Australian Patent Office (IP Australia). Any person can oppose the grant of a patent on a patent application by filing a notice of opposition (a simple one-page form) within three months of publication of acceptance of the patent application. Straw man oppositions, where the opposition is filed in the name of a third party (usually a patent attorney firm), are also possible.

After filing the notice of opposition, the opponent has three months to file a statement setting out the grounds and particulars of the opposition, together with a copy of any documents referred to in the statement. The grounds for opposition include:

  • non-entitlement;
  • the invention is not a patentable invention (including not patentable subject matter, lack of novelty or inventive step, in-utility, prior secret use); and/or
  • the specification does not comply with the written description requirements section 40(2) or 40(3) of the Patents Act 1990 (Cth).

Both parties are given the opportunity to file evidence. The evidence in patent oppositions is filed in the form of declarations. In a typical opposition the evidence will include declarations by one or more experts. 

Once all the evidence has been filed, the opposition is then set down for a hearing. Submissions may be made at the hearing in person, by video-conference or in writing. The hearing officer usually takes about three to six months to issue a written decision. The decision in an opposition can also be appealed as of right to the Federal Court of Australia.

Develop a strategy early

Initially patent owners should conduct a cost-benefit analysis, e.g. evaluating the value of the patent versus the cost of fighting the opposition, in view of the likelihood of success. In doing so, it is important to bear in mind that the fact an opposition has been filed strongly indicates that it is at least commercially important to the opponent to try and ‘clear the path’.

If defence is warranted, it is critical to identify potential experts that might assist with providing evidence at an early stage. Obviously, any expert must have the relevant expertise, but they also need to be available to assist, both logistically and in terms of potential conflicts. In highly specialised technical areas the number of potential experts can be small, and it can be a race to secure the best options.

Whilst the case against the patent application cannot be fully understood until the evidentiary rounds are complete, we recommend conducting an analysis of the opposition at an early stage once the Opponent’s Statement of Grounds and Particulars is received, and then updating that analysis on receipt of the evidence. This early review includes understanding the commercial position, considering the patent specification and prior art, and reviewing prosecution history in Australia and other major countries. The analysis can assist with identifying suitable experts, understanding which topics are important to address in the evidence, and highlighting possible amendments that may strengthen the patent application.

Patent applications under opposition can be amended as of right at any time, even after a written decision has issued. The procedure takes time, however, as the amendments need to be advertised for two months and can delay the proceedings. If amendments might be required or desirable, it is important to consider the best timing for making those amendments.

Consider your options for new representation

Opposition practice is a specialised area of Australian patent law, particularly with regard to areas such as preparation of expert evidence, hearing preparation, dealing with procedural aspects and extending into commercial aspects such as settlement negotiations and licensing.

Not all Australian patent attorneys handle patent oppositions regularly and even some that do simply default to a ‘wait and see’ approach when acting for patent applicants. Sometimes that is the right approach, but not always. If your Australian patent attorneys are not proactively engaging with you on these issues, then it is worth considering whether they are the right team for your matter.

How we can help

Griffith Hack’s experts have extensive experience in handling Australian patent oppositions. Our combined patent attorney and legal team provides integrated scientific and legal expertise, together with strategic, commercially-relevant insight, and has a proven track record in delivering results.

To discuss patent oppositions further with a member of our team, click on their profiles on this page.

The phase out of Australia’s innovation patent system caused a flurry of filing activity in 2021, so what are your options if you identify an innovation patent that affects your freedom to operate?

There was a spike in filing activity as part of the phase out of Australia’s innovation patent system, with over 2,700 innovation patents filed in August 2021 alone. With so many recently filed innovation patent cases, it is a good time to consider the available options if you identify an innovation patent that might affect your freedom to operate.

First, is there really a problem?

If you are worried about an innovation patent, it can be useful to get some early advice on the potential scope of the patent rights and, if necessary, the prospects for challenging validity. You may find that the patent claims do not cover your proposed commercial activities. Alternatively, you might get some clarity around a potential problem so that you can start developing a strategy to address it.

Tailor your strategy

If you identify a problematic innovation patent, it might be worthwhile to challenge that validity of it and we touch on some of the available options below. However, in some cases, you may prefer to negotiate with the patentee in order to reach a mutually beneficial commercial solution (e.g. licensing or assignment of the patent rights). Sometimes a validity challenge can be used strategically to encourage the patentee to come to the negotiating table, or to shift the balance in your favour during negotiations.

There is no single strategy that is appropriate in all circumstances. The best course of action for you will depend on your commercial goals and individual circumstances. The Griffith Hack team can assist you with developing a tailored strategy: feel free to contact us if you would like to discuss your options.

A granted (innovation) patent doesn’t always mean much

It is important to remember that innovation patent applications proceed to grant after only a formalities check. However, they do not become enforceable until they have completed substantive examination and been certified. If you are concerned that infringement proceedings might be commenced against you once an innovation patent has been certified, it may be beneficial to consider pre-certification options.

How likely is invalidity?

Requesting substantive examination of an innovation patent is voluntary. As a result, applicants sometimes take an “optimistic” approach to the subject matter being pursued. This may be done by some foreign applicants to take advantage of financial incentives in their country of origin. Alternatively, the underlying strategy may be for the granted (but uncertified) innovation patent to act as a deterrent to competitors, who might not go the additional step of seeking advice on whether the innovation patent is likely to stand up to scrutiny.

China’s utility model is a similar second-tier of patent protection to the innovation patent. Recent figures indicate that patent invalidation proceedings in China have been successful in a significant proportion of cases. Of the concluded invalidation proceedings for utility model patents in 2020, 39.2% of cases were invalidated entirely, 18.2% were invalidated partially, and only 42.6% of the challenged utility models were maintained.

Much is made of innovation patents being harder to invalidate due to the innovative step being a lower threshold than the inventive step requirement of standard patents. While it is true that the innovative step threshold is lower, it is not a free pass to validity. For example, it is important to bear in mind that innovation patents must meet the same validity requirements as standard patent cases for the level of disclosure in the patent specification. Recent case law indicates Australian patent specifications must now meet a higher standard, more aligned with UK and European requirements. With these recent developments in mind, it is wise not to take an innovation patent (especially an uncertified one!) on its face.

Pre-certification options

Third-Party Examination Requests

Sometimes the simplest way of dealing with a problematic case is to ask the Patent Office to look at it. Substantive examination of innovation patents is voluntary, but third parties can request that an innovation patent be examined. This can be done anonymously or by ‘strawman’. Both the third party and the patentee must pay an examination fee in relation to the third party’s examination request. If the patentee fails to pay this fee, the patent will cease. For patentees who filed an innovation patent with no real intention of having it certified, being asked to pay the examination fee may be enough to cause them to abandon the case.

Notice of Matters Affecting Validity

If you would like to enhance the likelihood of objections in examination, you can give the Patent Office a bit of help. It is possible to file a Notice of Matters Affecting Validity (NMAV). The NMAV can provide submissions (and supporting material) asserting that the claimed invention lacks novelty and/or an innovative step. The Patent Office is required to consider the NMAV when the innovation patent is examined (irrespective of who made the examination request).

You can file an NMAV at any time from when the complete specification for the patent becomes open to public inspection to immediately before the Commissioner decides to certify the patent. Again, this can be done anonymously or by ‘strawman’.

Post-certification options

After certification, a patentee can commence enforcement proceedings to assert their patent rights. Accordingly, it is important to consider the risk of the patentee commencing infringement proceedings when contemplating a post-certification challenge to the validity of an innovation. There are a number of different options available, and we recommend consulting with an IP professional to develop a strategy suited to your circumstances.

Re-examination

If the innovation patent has been examined and certified, that does not have to be the end of the matter. If you still have validity concerns, you can ask the Patent Office to re-examine the innovation patent. Again, this can be done anonymously or by ‘strawman’. Re-examination requests can address more grounds than an NMAV including written description requirements.

Re-examination can be considered a “passive” approach in that you provide information to the Patent Office and hope that they will use it wisely. If the Patent Office raises objections in the light of the re-examination request, the patentee will be given the opportunity to respond to the objections, but the party requesting re-examination does not have a formal opportunity to contest the patentee’s response. Re-examination can be a cost-effective option in circumstances where there are clear invalidity grounds.

Opposition

Alternatively, if it is strategically beneficial to take a more active approach to contesting the validity of an innovation patent, you can commence opposition proceedings before the Patent Office. In opposition proceedings, both the opponent and the patentee are given the opportunity to file evidence and make submissions in support of their respective cases. The opposition can proceed to a formal hearing, where each party can be heard and a hearing officer from the Patent Office will prepare a formal decision on the opposition. The grounds of opposition include the same grounds as re-examination.

Revocation

There is also the option of commencing revocation proceedings before the Federal Court. We do not suggest litigation lightly, but in some circumstances revocation proceedings can be the best approach. The grounds of revocation generally include the same grounds as for oppositions.

If you are dealing with nuanced technical issues or a complicated case, it may be beneficial to actively contest the validity of the innovation patent in opposition or revocation proceedings. As noted above, the best strategy will depend on the specific circumstances of any matter.

How we can help

Griffith Hack is a full-service specialist IP firm. We combine a highly experienced and technically diverse patents team with a legal team with a strong track record. At Griffith Hack, our attorneys and lawyers work together to provide you with commercially astute advice and execute a strategy tailored to your needs.

To discuss the available options, please contact a member of our team.

The draft version of legislation to strengthen the existing unfair contract term protections in the Australian Consumer Law (ACL) was recently released for public consultation, giving us a peek into what is to come. The proposed changes are significant, including potential penalties of AU$10 million, and businesses trading in Australia will likely need to review their contract terms. 

The current unfair contract term protections under the ACL have sometimes been described as a “toothless tiger”. Currently, the protections are quite limited in application and where a term is found to be an “unfair contract term”, it is simply void. Only parties who prove to a court that they have suffered loss or damage as a result of the unfair term can be compensated. No penalties currently apply.

This is set to change and businesses trading in Australia will need to prepare.

In August 2021, the Exposure Draft Legislation and accompanying Explanatory Materials were released for public consultation. The changes proposed are intended to provide fairer allocation of risk in standard form contracts and improve consumer and small business confidence when entering into such contracts. We provide a summary of the changes proposed in the Draft Legislation below.

Increased scope of application to larger businesses and no limit on contract value

The scope of application of unfair contract term laws will likely be broadened. It will continue to apply to standard form contracts which are “consumer contracts” or “small business contracts”, but those definitions would be expanded.

Currently, one of the requirements for a contract to be a “small business contract” is that at least one party to the contract is a business employing fewer than 20 persons. The Draft Legislation increases this to either 100 employees or alternatively, for the company to have an annual turnover threshold of less than $10 million.

Also, the requirement that the upfront payable price of the contract must be below a certain threshold is to be removed. This brings many more companies within the ambit of the legislation. 

We can also expect some increased clarity around the definition of a “standard form contract”. The Draft Legislation specifies that courts must not take into account opportunities to negotiate minor or insubstantial changes to the terms of the contract, opportunities to select a term from a range of options, and the extent to which parties to another separate (but perhaps similar) contract were given opportunity to negotiate its terms. This further solidifies the need to provide the other party with an effective opportunity to negotiate the contract if the unfair contract term provisions are to be avoided.

Terms declared by court to be unfair cannot be used

The Draft Legislation provides that if a term has been declared by a court to be unfair, there will be a presumption in subsequent proceedings that terms which are the same or have a substantially similar effect will also be unfair. This will require businesses to stay abreast of changes to the law in this area by actively reviewing and amending the terms in their standard form contracts in accordance with the court’s decisions.

Growing “teeth” – significant civil penalties and potential remedies

There are currently no penalties for parties using unfair contract terms in their standard form contracts. The Draft Legislation would introduce penalties not only for proposing an unfair term but also for relying on the term. Further, it creates separate contraventions for each term which is unfair. This means that a business may breach the prohibition multiple times in a single contract (and therefore, attract multiple penalties), when they propose the term and again when they rely on it.

For a company, the maximum amount of the penalty will be the greater of: AU$10 million; three (3) times the value of the benefit the company obtained from the breach of the law (if that can be determined; or, if the court cannot determine the value of that benefit, 10% of the company’s annual turnover.

The Draft Legislation also introduces some new remedies specifically for unfair contract terms. A court can now make orders to void, vary or refuse to enforce part or all of a contract if the court thinks this is appropriate to prevent or reduce loss or damage that may be caused (or to remedy loss or damage that has occurred). Unlike other orders the court can make under the ACL, there is no need to show that loss or damage has occurred, only that it may

A court can also make some new special orders on the application of the regulator, including orders injuncting the offending party from using an unfair term (or terms similar to it) in any future contracts. These orders can be made up to six (6) years after the court declares a term is unfair. This gives the regulator significant power to crack down on unfair terms on an ongoing basis.

Other proposed changes

  • It would be expressly stated that remedies for the breach of unfair contract term provisions are also available to non-parties to the contract, and regardless of their status as a consumer or small business.
  • The Draft Legislation would also clarify that if a law of the Commonwealth, State or Territory requires or reads in certain terms into a standard form consumer or small business contract, even if the law does not require or expressly permit those terms per se, it still cannot be considered an unfair contract term under the ACL.

Key takeaways for businesses

With the upcoming changes, business should prepare to review their standard form agreements (under the new definition) for use in Australia and remove or amend any unfair terms. For example, terms of sale or terms of use agreements, licensing agreements, distribution agreements, and service agreements (such as SaaS agreements), are all examples of agreements which may be considered “standard form agreements” depending on the relevant circumstances and may contain “unfair terms”.

If you’d like our assistance with conducting a review of your standard form agreements, please contact us.

In a recent decision of the Australian Patent Office, Cytec Industries Inc. successfully defended its Australian Patent Application No. 2014370386 against all grounds of opposition.1 The decision highlights some key aspects of Australian patent oppositions, including the emphasis placed on expert evidence by the Patent Office when deciding on grounds such as inventive step, and the importance of formulating a clear position supported by the evidence in hearing submissions.

Griffith Hack were involved in the latter stages of CSIRO v Cytec, handling preparation of submissions and hearing strategy on behalf of Cytec.

Technology

The patent application concerned the production of polyacrylonitrile (PAN) polymer suitable for use in producing carbon fibre and having particular properties, including a requirement for high molecular weight and narrow polydispersity index. Claims were directed to a multi-step process for producing the polymer including the use of reversible addition/fragmentation chain transfer (RAFT) agents, and also to processes for producing carbon fibre from the polymer.

Straw Man Opponent

Any person can oppose grant of a patent application in Australia, and in CSIRO v Cytec the opposition was originally filed by a ‘straw man’ opponent. A so-called ‘straw man’ opposition usually involves an attorney or attorney firm opposing on behalf of somebody else – to conceal the identity of the true opponent. Opponent status was transferred to CSIRO late in the proceedings, after questions were raised about a possible association between some of the expert witnesses and the true opponent.

Expert Evidence

In Australian patent oppositions, providing strong expert evidence on matters such as common general knowledge or steps that a person skilled in the art (PSA) would have taken is often critical. The hearing officer will generally rely on such evidence rather than their own technical expertise. It is also preferable to involve independent experts where possible.

In CSIRO v Cytec the Delegate considered that, whilst one of the opponent’s expert witnesses had considerable expertise in RAFT polymerisation and a high level of inventive capacity, they were not truly representative of a polymer scientist of ordinary skill. Whilst the evidence was not excluded, consideration was given as to whether it went to the issue of what the common general knowledge was and what a PSA would do, rather than what the witness themselves knew.2

Two expert witnesses emerged as being employees of the true opponent, and a third was a director of a joint venture set up by the opponent. Concerns over the identity of the true opponent not being disclosed earlier in the process, and its impact on the value of the evidence, were also addressed by the Delegate.

He emphasised that the witnesses were provided with the Federal Court’s Expert Evidence Practice Note, and were aware of their role in providing relevant and unbiased evidence, and so their evidence was not disregarded.

However, it was also noted that at times declarants went beyond the role of providing evidence on technical issues. The Delegate further commented that, whilst witnesses will understandably disagree with each other, and may express those differences in strong terms, such statements can indicate a lack of objectivity or suggest that the witness is acting as an advocate. As a result, some of the evidence was approached with caution.3

Inventive Step

Alongside preparation of evidence, a key facet of opposition practice is the ability to set out a party’s case strongly in written and oral submissions, and to anticipate and respond to arguments made by the other side.

The main ground of opposition pressed at the hearing in CSIRO v Cytec was lack of inventive step. The Delegate agreed with Cytec’s position that the problem solved by the invention was the provision of PAN polymer suitable for use in producing carbon fibre, and having a low polydispersity and high molecular weight, preferring that to the opponent’s alternative problem of producing PAN polymer with low polydispersity.4

Further, Cytec’s position was preferred on a number of key issues, supported by their expert evidence, including that:

  • it was not common general knowledge that RAFT could be used to prepare PAN copolymers; and
  • there was a technical prejudice in the art that RAFT presented challenges in achieving the appropriate properties for PAN copolymers, namely achieving both high molecular weight and low polydispersity.5

Attention was also drawn to a contemporaneous paper published by CSIRO authors. The parties presented differing views as to what the paper taught, but ultimately the Delegate held that the document indicated that the manufacture of PAN polymers having high molecular weight and low polydispersity suitable for production of high quality carbon fibre presented challenges.6

Against that background, the claims were held to be inventive, both in the light of the common general knowledge alone, and the common general knowledge together with the cited prior art documents.

Final Thoughts

Since the Raising The Bar Amendments to the Patents Act 1990 came into force a number of years ago, Australia has become a more challenging jurisdiction for patent applicants requiring greater consideration of strategy than in the past. An opponent now only needs to prove their case on the balance of probabilities rather than demonstrating that the application is clearly invalid, and there are increased support and sufficiency requirements intended to align with UK and European provisions.

Whether an owner or a challenger, careful preparation of evidence and submissions is a key aspect of opposition practice. Factors important for success in Australian oppositions also include an understanding of the scientific and legal issues, developing an effective opposition strategy, and evolving that strategy as necessary as the opposition progresses.

When faced with an opposition, patentees should consider whether they have the best team to successfully defend the patent application. Transfer of the representative on an opposed application is allowable, and may be preferable for some high value cases and situations where opposition experience is essential.

How we can help

Griffith Hack has a patent attorney and legal team with a strong track record, not only in defending patent applications where we have been responsible for prosecution, but also in getting across the scientific and legal issues quickly, and delivering results when we are brought in specifically to handle the opposition.

To discuss patent oppositions further with a member of our team, click on their profile below.


Commonwealth Scientific and Industrial Research Organisation v. Cytec Industries Inc. [2021] APO 27.
2 Ibid, [36]. 
3 Ibid, [37]-[39].
4 Ibid, [63].
5 Ibid, [85}, [91].
6 Ibid, [100].

The Full Court of the Federal Court of Australia has now confirmed that a non-invasive diagnostic test for prenatal conditions is patentable subject matter in Australia.

The decision in Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101 contains useful guidance for industry and is significant in that it diverges from the result before the US Court of Appeals for the Federal Circuit (the US Supreme Court declined to hear an appeal) where the majority found the counterpart US patent to be ineligible for patent protection.

Background

Sequenom surprisingly found cell free foetal DNA (cffDNA) in the blood plasma and serum of pregnant women. This discovery allowed: (a) genomic testing of a foetus without invasive testing such as inserting a needle through a mother’s abdomen or cervix (which increases the risk of miscarriage); and (b) more reliable quantitative or qualitative diagnostic testing of a foetus (improving existing methods that may give significant false positive or negative rates). On the basis of this discovery, Sequenom obtained grant of Australian Patent No. 727919 (the Patent) with claim 1 in the following terms:

“A detection method performed on a maternal serum or plasma sample from a pregnant female, which method comprises detecting the presence of a nucleic acid of foetal origin in the sample.”

Ariosa conducts a non-invasive prenatal test that analyses cell free DNA in plasma of pregnant women, to estimate the risks of foetus genetic disorders (Harmony Test). Ariosa licensed Sonic Health Ltd and Clinical Laboratories Pty Ltd to conduct the Harmony Test in Australia. Sequenom claimed this infringed it’s Patent. Arisoa cross-claimed that Sequenom’s Patent was invalid on various grounds.

Manner of Manufacture (the Australian term for “patentable subject matter”)

As part of its challenge to the validity of the Patent on the ground of lack of patentable subject matter, Ariosa submitted that:

  1. Each claim of the Patent involves the detection of what is naturally occurring; being a mere discovery of a law of nature.
  2. The leading authority of the High Court of Australia, D’Arcy v Myriad Genetics Inc [2015] HCA 35 (Myriad), required the Full Court to look at the “end result” of each claim to see if there was an artificial effect and that the end result of each claim of Sequenom’s Patent was mere information.
  3. No claim in Sequenom’s Patent was for a new method of detection (e.g. the ccfDNA was detected and extracted using well known methods) or a new method of applying the detection of ccfDNA in maternal plasma or serum (e.g. methods to analyse the ccfDNA such as genetic disorder markers, PCR, gel electrophoresis and fluorescent labelling techniques were well known).

The only new subject matter was that ccfDNA is detectable in maternal serum or plasma samples – maternal plasma was routinely thrown away by investigators researching non-invasive prenatal diagnosis.  Arisoa submitted that “detection” of the ccfDNA is no different from the discovery that cffDNA is detectable.

The tension between mere discovery vs. invention

The Full Court referred to previous judicial considerations about the difficulties finding the line between discovery and invention. The Full Court distilled three points of emphasis from the relevant authorities (at [114]) which can be summarised as follows:

First, the distinction between mere discovery and an invention lies in its practical application to a useful end.

Second, it is important that the invention is considered as a unitary concept, and not segregated into parts. The invention may still be patentable if the combined effect of an idea and its application in a well-known way is patentable subject matter.

Third, a patentable invention can be an abstract idea put to a useful end (even if the way of putting it to that useful end is obvious or well known).

Distinguishing Myriad

In Myriad, the High Court of Australia held that naturally-occurring DNA sequences, even when extracted from the native cell nucleus and isolated by human involvement, cannot be validly made the subject of patent protection in Australia (see our analysis here). In this decision, the Full Court considered that Myriad could be distinguished on the basis that the disputed patent claims in that case were directed to a product (the isolated BRCA1 gene sequences).    

The Full Court cited Gordon J’s comments in Myriad (at [136]):

“In my opinion, invention may lie in the idea, and it may lie in the way in which it is carried out, and it may lie in the combination of the two; but if there is invention in the idea plus the way of carrying it out, then it is good subject-matter for Letters Patent.”

Gordon J’s reasoning in Myriad distinguished the invalidity of claims to the isolated BRACA1 sequence themselves, and the validity of claims (such as claim 4 of the patent in Myriad) directed to a method of using specific mutations or polymorphisms to suggest a predisposition to breast cancer and ovarian cancer. In Myriad, it was not disputed that if the BRCA1 gene was isolated and found to have specified mutations which indicated malignancies, then that was patentable subject matter.

Claim 1 in Sequenom’s Patent was directed to a method involving the application of a means for identifying and discerning between maternal and foetal nucleic acid. Not unlike claim 4 in Myriad, Seqeunom’s Patent claimed a process used to convey some useful information, the Full Court holding (at [159]):

“Here, the invention as claimed carries into effect an idea that the presence of information within the naturally occurring code of a person will be useful. By a process of detection that information is yielded up. The claim construed as a whole necessarily involves an artificially created state of affairs yielding an outcome that is of economic utility.”

The correct identification of the invention

Ultimately the Full Court considered that (at [153]):

“[The invention] lies not in the mere observation that cffDNA is to be found in maternal plasma (or serum), but in the explanation as to how that knowledge may be unlocked for others to use it (that is, the explanation of how to extract the cffDNA from the plasma or serum). It is the idea coupled with a practical means of application that makes the invention.”

The invention was not, as Arisoa sought to characterise it, the mere observation of cffDNA in maternal plasma or serum. The invention ‘unlocked’ that knowledge for others to use; it was a new means by which foetal DNA may be detected, other than by dangerous invasive techniques, or using methods with poor diagnostic capability.

Infringement

Before Ariosa’s Australian licensees, Sonic and Clinical Laboratories, started conducting the Harmony Test in Australia, they would collect blood samples from pregnant women in Australia, and send them to Ariosa in the United States. Ariosa them conducted the Harmony Test and sent written test result reports back to Sonic/Clinical in Australia.

A question for the Full Court was whether this ‘send out’ model infringed Sequenom’s exclusive rights to ‘exploit’ the invention claimed in the Patent. Were the test results mere information, or a ‘product’ within the definition of ‘exploit’? The invention in Sequenom’s Patent was a ‘method’ or ‘process’, and ‘exploit’ for the purposes of the Act includes ‘doing any act […] in respect of a product resulting from [using the method or process]’. The Full Court rejected the primary judge’s characterisation that the reports were ‘products resulting from such use’ captured by the meaning of ‘exploit’.   

It was not necessary for a method or process to result in a product, provided it can be commercially exploited (at [266] and [269]):  

“In our view, a construction of the word “product” in the context of the definition of “exploit” which recognises that not all methods or processes will led [sic] to a product resulting from their use is to be preferred.”

“The fact that such information is derived from a patentable process or method cannot render the information itself patentable.”

So Sonic and Clinical did not infringe Seqeunom’s Patent by sending specimens to Ariosa in the United States for the purposes of the undertaking the Harmony Test in that jurisdiction. Sonic and Clinical did, however, infringe Seqeunom’s Patent when they undertook the Harmony Test in Australia.

Take Aways

Key take aways from this decision include:

  1. Diagnostic methods remain patent-eligible in Australia and this decision highlights the distinction between the treatment of method and product patent claims in Australia.
  2. ‘Discoveries’ of nature may be patentable in Australia, if the patent claims a process or method that uses that discovery in some new and commercially valuable way (even if the techniques involved are not themselves new or non-obvious). In other words, the combination of an ‘unknown idea’ and ‘known practical application of the idea’ can be patentable.
  3. Where an Australian patent claims a diagnostic method, it is possible that third parties could subject test samples taken from Australian patients to the patented diagnostic method in jurisdictions where there is no patent protection, and then deliver the results to Australian patients without infringing the Australian patent.

 It is still possible for Ariosa or even Sequenom to make an application for special leave to appeal the Full Court’s decision to the High Court of Australia. We will keep you updated of any further important developments. If you have any questions about how this case relates to your patent strategy for Australia, please get in touch. 

Nearly three years ago, we reported on a decision of the Australian Designs Office that suggested that the automatically generated ‘Confidentiality Notice’ in the footer to your email may not always be effective.

The decision was appealed and last month the Federal Court handed down its reasons for judgment allowing the appeal and setting aside the decision of the Delegate of the Registrar of Designs.

To recap, in the original proceeding before the Australian Designs Office, Sun-Wizard made a third‑party request for examination of Key Logic’s registered and certified design for a “Solar bollard”. Sun-Wizard relied on two emails with attached images as invalidating prior publications of the design. Key Logic conceded that the images attached to the emails were of the design. Therefore, the decision turned on whether the emails were publications, that is, made available to member(s) of the public without any restriction as to secrecy or confidentiality.

Key Logic submitted that the contents of the emails and the attachments “were confidential and received in circumstances importing an equitable obligation of confidence”. Each of the emails was sent to “All EXlites Associates”. In the proceeding before the Australian Designs Office, it was unclear exactly how many recipients this constituted, but it was apparent that most of the recipients were sellers of Key Logic’s products. Each of the emails included after the signature block, in a smaller font size, a confidentiality notice in the following terms:

Confidentiality: This E-Mail is from EXlites. The contents are confidential and are intended only for the named recipient. The recipient is hereby notified that any use, copying, disclosure or distribution of the information contained in the E-Mail is strictly prohibited. If you have received this E-Mail in error, please reply to us immediately at . Please delete the document from your E-Mail system.

In relation to Key Logic’s attempt to rely on the confidentiality notice at the end of each email, in the original proceeding the Delegate of Registrar of Designs found as follows (at [46]):

I am not persuaded that the confidentiality notice at the bottom of the email has the effect submitted by the Owner. Case law on the effectiveness of such notices is scant to say the least. Nevertheless, it is apparent that notices of that type are added almost universally by businesses as a matter of course beneath the signature blocks of their emails regardless of the content of the email to which they are appended. It is unlikely that any recipient of an email in a business setting reads beyond the signature block every time they receive an email. It is far more likely that they never read beyond the signature block. While a recipient is likely aware that there is probably such a notice lurking there—should they happen to turn their mind to the question—the ubiquitous presence of such notices means that they are unlikely to have the effect asserted by the Owner, regardless of the nature of the material either in the email or attached to it. It seems to me that in cases where what is contained in emails is truly confidential, and a sender wishes to make that known, a confidentiality notice at the beginning of an email is far more likely to be effective in importing an obligation of confidence to the recipient.

The appeal of this decision to the Federal Court was in the nature of a rehearing. It is apparent from the lengthy reasons for judgment, some 285 paragraphs long, that a considerable volume of fresh evidence was adduced as to the circumstances surrounding the emails in dispute. In the end the appeal was successful as Justice Greenwood found that in all the circumstances the relevant disclosures in the emails were made under an obligation of confidence.

Despite the somewhat dramatic foreshadowing of Justice Greenwood in stating (at [282]) that a matter that “loomed large in the proceeding was the significance of the text of a footer at the end of each email”, there is unfortunately almost no discussion of this issue in the decision. The only relevant finding by Justice Greenwood on this point was (at [284](16)) that the confidentiality notice in the footer to the relevant email “operated as a cognitive cue of some importance […] but by itself it was not determinative of the character of the information communicated by the emails.”

The due date to seek leave to appeal to the Full Court of the Federal Court has now passed so it seems as though this is where the story ends.

Accordingly, even though the appeal was successful the usefulness of a confidentiality notice in your email footer still appears to be limited. In any event, there does not appear to be any need to go and delete the confidentiality notice in your email footer.

If you have any questions or require expert advice, please don’t hesitate to contact us.

There have been several significant developments internationally in trade secret protections over recent years. This rise in prominence is potentially explained by many factors, including increased employee mobility and improvements in document storage technology that have arguably increased the risks of misappropriation of trade secrets.

Another contributing factor is ongoing uncertainty around the ability to protect computer-implemented technology with patents making the trade secret alternative more appealing than it has been in the past.

USA

Back in 2016, we reported President Obama signing the Defend Trade Secrets Act (DTSA) into law on 11 May 2016. The DTSA provides a federal private right of action for trade secret protection creating a uniform standard for trade secret misappropriation. Existing US state laws on trade secrets are nonetheless still in place.

As a result, trade secret case filings increased 30% between 2015 and 2017, and remained steady at that increased level between 2017 and 2019 (Lex Machina 2020 Trade Secret Litigation Report).

More recently, district courts have held that liability under the DTSA can extend to extraterritorial defendants if an act in furtherance of the misappropriation of the trade secret(s) occurred in the USA. This may mean more protection is available under the DTSA than in alternative jurisdictions as long as there is some nexus to the USA. 

European Union

About two weeks after the DTSA became law in the US, the European Council approved Directive 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. Member States of the European Union had until 9 June 2018 to implement the Directive into national law.

The Directive is a minimal harmonising legislation, which means that Member States are permitted to provide for a higher level of protection for trade secrets, so long as at least the same level of protection and minimum standards for measures, procedures and remedies are ensured for trade secret holders.

Notwithstanding Brexit, the Directive was implemented into UK law on 9 June 2018. Prior to this, trade secrets in the UK were protected by the law of confidence derived from principles of equity (as is the case in Australia). Now the two systems operate in parallel.

China

The Anti-Unfair Competition Law of the People’s Republic of China was revised with effect from January 2018 and again in April 2019.

Under the revised law a trade secret is defined as “technical information, business operation information, and other commercial information that are not known to the public and have commercial value”, whereas prior to 2018 the definition required “economic benefits and practical value”. A third party with actual or constructive knowledge of the theft of a trade secret can now also violate the law.

The penalty for violation now ranges up to RMB 5 million (approx. AU$1 million), compared to the previous limit of RMB 0.2 million (approx. AU$40,000). Also, punitive damages are available which can be one to five times the actual loss or illegal gains.

Where to for Australia?

Although the topic was essentially overlooked in The Productivity Commission report into Australia’s Intellectual Property Arrangements in 2016, it was apparent from the report that use of secrecy or confidentiality arrangements was significant in Australian innovation-active businesses relative to more formal IP rights.

While there is currently no trade secrets legislation in Australia, there is an established cause of action for breach of confidence, which includes trade secrets, similar to that in the United Kingdom. Codification of trade secret protection in Australia could potentially streamline enforcement procedures, further legitimize what is sometimes seen as an ‘informal’ IP right and would, at least, make us consistent with many of our major trading partners. However, it seems unlikely that there will be any legislative push for codification in the medium term in the absence of some external factor, such as, for example, as part of a free trade agreement.

Getting on the front foot

In any event, the enforceability of any rights in relation to a trade secret will almost always depend on how well it has been documented and protected. A documented inventory of trade secrets, along with standard protective measures which might include access control, confidentiality agreements and/or document labelling, will help prepare your business to enforce its rights if it becomes necessary. A systematic approach to these issues can also create a culture of careful management of sensitive information in your business, and hopefully prevent any future need for enforcement.

A new wine export label directory to help Australian wine producers protect their intellectual property rights is expected to commence in April 2021.

The Wine Australia Amendment (Label Directory) Bill 2019 finally passed both houses of Parliament on 9 December 2020 enabling Wine Australia to establish the wine export label directory helping brand owners protect their export wine labels against copycat labelling.

While regulations implementing the detail of the directory are currently being finalized, Wine Australia says

The directory will require all Australian wine exporters to submit images of their labels to Wine Australia prior to gaining export approval. Brand owners will then be able to search the directory to identify breaches of their intellectual property rights, and the public will be able to verify whether the Australian wines they consume originated in Australia.

Wine Australia

The establishment of the new wine export label directory follows a number of significant instances of counterfeiting of Australian wine brands in export markets, particularly in Asia, starting with the seizure in November 2017 of 14,000 bottles of fake Penfolds wine being sold by counterfeiters in China. 

We will provide an update when further information about the new wine export label directory becomes available.

Griffith Hack is thrilled to formally announce the elevation of two high-performing team members to the position of Principal (effective as of 1 January, 2020). Lawyer Gavin Adkins and Patent Attorney Robyn Heard have been key contributors in Griffith Hack’s Melbourne and Sydney offices (respectively); Gavin joining Griffith Hack as an Associate in 2015 and Robyn as a trainee in 2003.

Executive General Manager David Madigan said the decision was an important signal for the Griffith Hack’s future. 

“Gavin and Robyn’s addition to our leadership group reinforces the firms’ commitment to delivering exceptional client service and top-tier technical expertise. It also demonstrates the genuine opportunities available to those with the skills required to meet our clients’ current and future needs. I congratulate both Gavin and Robyn on this milestone achievement”.

Robyn Heard – Patent Attorney

Robyn has specialist knowledge and experience in the patenting of technologies for Universities, and companies from start-ups and small to medium entities and large corporations in the areas of IT, software and computer system based inventions, telecommunications, electronics, data analytics, e-health and medical devices.

“While working as an engineer I met a patent attorney and thought ‘that sounds like a really interesting job’.  A few years later, at a career crossroads, I decided to take a chance and go for that interesting job. I was hired by Griffith Hack as a trainee, and learned just how interesting and challenging being a patent attorney can be – balancing IP law with commercial strategies for various technologies. It is an honour to now step up beside the attorneys who trained and mentored me over the years, to lead our Sydney Electrical & IT patent team”

Gavin Adkins – Lawyer

Gavin is most passionate about IP litigation and disputes, but also has prior experience as a patent attorney. In previous roles and during his time at Griffith Hack, Gavin has assisted clients with litigation raising issues in patents, designs, trade marks, the Australian Consumer Law, contractual disputes, domain names and copyright infringement. Gavin was recognised in Managing Intellectual Property’s IP Rising Stars list for 2018 and 2019.

“When I finished my law degree I got on a plane to Japan to work at a patent attorney firm. I didn’t even know what a patent was when I accepted the job. 13 and a half years later, I am incredibly humbled to be appointed a Principal of Griffith Hack. It’s a pleasure to work with great colleagues on interesting and challenging IP disputes for our clients”.

The recently released Legal 500 Asia Pacific Guide for 2020 reconfirms Griffith Hack’s position as Australia’s highest ranked specialist IP firm.

In addition to the overall firm ranking which highlights Griffith Hack’s expertise in contentious IP work and trademark prosecution, National Practice Group Leader Derek Baigent was recognised as a ‘Leading Individual’ within the Intellectual Property practice area.

Derek said that the outcome was indicative of a collaborative effort and that “this kind of recognition is only possible due to the contribution each team member makes’ and the trust that our valued clients place in us”.