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Monday, July 29, 2013

Could an Expert Panel Opinion be the answer for effective patent enforcement in Australia?

By Senior Associate Louise Brunero

Significant costs, delays and a high degree of uncertainty of outcome are major concerns for those involved in patent enforcement in Australia.

Attempts to find a solution to the difficulties for those enforcing patent rights in Australia has been the topic of independent reviews, government response, court and practitioner input and, most recently, academic consideration. We explore here whether the most recent offering on this topic, Australian Patent Enforcement – A Proposal For An Expert Panel Opinion – Part 1, addresses the difficulties or whether the proposal potentially creates a further hurdle for parties to overcome as they pursue patent enforcement in the courts.

Back in 2006, the Australian Government responded to concerns raised about difficulties in enforcing patent rights by asking the Advisory Council on Intellectual Property (ACIP) to conduct a review of post-grant patent enforcement strategies. In its Issues Paper, ACIP identified a number of problems with patent enforcement in Australia, including:

  • cost of legal proceedings compared to possible returns on the invention;
  • lack of patent owner's financial capacity to fund enforcement proceedings;
  • delay and the ability of a 'deep-pocketed' litigant to protract disputes;
  • uncertainty as to outcome; and
  • lack of knowledge about the processes of enforcement,
and called for comment.

In the Final Report in 2010, ACIP recommended the establishment of a non-judicial Patent Tribunal which could issue binding determinations in a more cost effective environment. However, the recommendation fell foul of the Constitution and was rejected in the Government Response. ACIP's alternative proposal for a Patent Tribunal issuing non-binding decisions was also rejected on the basis that the Tribunal would only add another layer of appeal.  
In recent years the Federal Court of Australia has proposed a number of practices to respond to criticism of patent enforcement proceedings, such as:
  • ordering meetings of experts to attempt to agree non-contentious technical issues for inclusion in a technical primer or similar document;
  • limiting expert affidavit evidence at trial or directing the parties to agree a list of questions on which the experts respond;
  • adopting a 'hot tub' method in which experts give their evidence concurrently;
  • considering issues for separate questions or patent construction questions in a similar manner to US Markman hearings; and
  • limiting discovery, or ordering evidence before discovery in an attempt to narrow the scope of discovery.
However, these practices have not been consistently adopted across the Registries of the Federal Court or by the Judges within Registries. Without a coordinated and consistent approach, these practices can add to uncertainty in patent enforcement proceedings and make it difficult to advise litigants on strategy for patent litigation.
The proposed model is for the establishment of a specialist, independent three-member panel of experts to provide an opinion to the court on the issue of patent validity and technical clarification at an early stage in the proceedings. The 'Expert Panel' would consist of three senior IP Australia patent examiners and would be appointed by the court upon the application of a party or at the court's own volition. An 'Expert Panel Opinion' would express the majority view of the panel and would not give rise to any presumptions of validity, nor would the judge be at all bound by the opinion.
It is not suggested that the proposed model removes the ability of the parties to obtain their own independent experts. However, it is suggested that the parties' experts may test the opinion, or, where the opinion is in a party's favour, that party may elect not to brief their own expert.
While the proposed model overcomes the constitutional issues raised by the ACIP Patent Tribunal proposal, it potentially raises its own difficulties:
  • It is not clear how the opinion will relate to the existing IP Australia model, as IP Australia already provides an opinion on validity through opposition proceedings and re-examination.
  • IP Australia may not house three experts with the necessary technical expertise to constitute the panel. Where this is the case, it is not clear how the court will locate and assess the suitability of additional experts needed to complete the panel. 
  • It is not clear whether the proposal would receive the support of IP Australia, and in particular, whether current IP Australia senior examiner resources are sufficient to meet the time demands of the proposed model.
  • The 'skilled addressee' in patent litigation should be non-inventive. While IP Australia examiners will not be actively inventing themselves, their training and day-to-day work in considering patentability of claims may ultimately undermine their suitability as experts to a proceeding.
  • It is not clear whether there is a mechanism for the parties to challenge the suitability of one or more of the experts on the panel. This may be necessary where a party wishes to challenge the technical expertise of a panel member or to test their independence having regard to their previous employment, known affiliations with a party to the dispute, or previous dealings with the patent in question. It is also not known to what extent information regarding the panel members will be made available to the parties so that this assessment can be made.
  • There may be a lack of transparency in the process. This is particularly the case where the opinion is to be delivered as a majority view. It is not clear whether the parties will be informed whether the opinion was unanimous. Where the opinion is not unanimous it is not clear whether a dissenting opinion would be issued. Also, where the judge liaises with the panel for technical clarification, it is unclear whether this process would be open to the parties or otherwise documented in the opinion. It is also unclear whether the parties would have an opportunity to engage with the panel.
  • As the opinion is not binding it may be of limited value.
In light of the above difficulties, the proposed model is unlikely to reduce the costs, time and complexity of patent proceedings in Australia. It potentially adds another layer of complexity and may require parties to brief expert witnesses to refute the opinion, as well as give their own evidence on validity.
The proposal does, however, again raise the issue of effective patent enforcement in Australia and we can remain hopeful that those seeking to enforce their rights will benefit from the debate.

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