Scintilla – a flash, a spark, an iota. Shorthand for creativity and an indicator of inventiveness under Australian law.

Thursday, September 1, 2016

A Poisonous Path for Patents?

By Richard Hamer, Partner, and Suzy Roessel, Senior Associate

A number of patents which would not be at risk in major jurisdictions have recently been invalidated in Australia. These cases involve three grounds of invalidity where Australian law departs significantly from the law of major filing countries - best method, inutility and false suggestion.

Since 2013, patent amendments which disclose new matter are not permitted in Australia, so there is limited opportunity to amend a complete specification to fix these issues in the Australian national phase, particularly in relation to adding best method disclosures.

The three 2016 cases of interest are outlined below.

Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27 (special leave to appeal to the High Court refused)

Australia requires disclosure of the best method known to the patent applicant of performing the invention. It was decided that a general disclosure sufficient for the skilled addressee to get to the best method (or a method at least as good) is not enough – detailed steps of the actual method known must be provided. The best method must be the best method known to the applicant as at the complete filing date. Further, the "invention" for the purposes of describing the best method is not confined to the invention as claimed, but extends to the underlying invention. It is to be noted by way of comparison that this ground of invalidity is no longer open in any major filing country and in other smaller jurisdictions the requirement is ordinarily to disclose the best method known to the inventor at the priority date.

Morellini v Mizzi Family Holdings Pty Ltd [2016] FCAFC 13

The specification included the statement "it is found …", which the court said conveyed that the patentee had in fact experimentally proved the stated benefit. The statement was found to be false, as the patentee had not made any such finding specifically in relation to the example referred to and there was no experimental evidence to that effect. The whole patent was invalid as a result. The decision means that traditional boilerplate language like "it has been found" may lead to patent invalidity in Australia if not supported by evidence. By way of comparison, false suggestion is not a ground of invalidity in many other jurisdictions. In jurisdictions where a similar ground is available it is often directed to deliberate deception rather than puffing statements and not so much would be read into traditional language like "it is found".

Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588 (under appeal, to be heard 4 November 2016)

The patent set out a number of advantages of the claimed invention. It was held that the claims must deliver each and every one of the promised advantages. Because none of the claims delivered all of the promised advantages, the patent was invalid for lack of utility. This position is not in line with jurisdictions with an industrial applicability requirement rather than a utility test (such as Europe), and is also not consistent with jurisdictions that do have a utility requirement, but which do not require the claimed invention to have every advantage mentioned in the specification. You can read our more detailed analysis here.

What's the poison?

If these cases are right, best method, false suggestion and utility are poisonous areas of divergence in Australian patent law. There are further current cases where these issues are raised which will clarify the extent to which the cases mentioned above are outliers, or reflective of a trend. In the case of best method, the Australian requirements are already inconsistent with Article 29.1 of the TRIPS Agreement, which provides only for an optional requirement to disclose the best method known to the inventor at the priority date.

Is there an antidote?

In the short term, where Australia forms a significant part of a global portfolio, patent drafters need to bear these Australian requirements in mind at the time of drafting the complete (usually PCT) application. We review and seek to remedy these issues during the national phase, but that is not now always possible particularly where the remedy requires additional disclosure.

Some key lessons are:

  • DO include detail of the best method known to the patentee at the complete filing date (not just what was known to the inventor at the priority date).
  • DON'T file complete PCT applications which simply mirror the provisional specification unless there has been no intervening development work.
  • DON'T include puffing statements about the invention which are not supported by evidence. Statements such as "it has been found" may represent that there is experimental evidence to support the finding.
  • DON'T overstate the advantages of the invention. If the invention fails to meet any one of a list of alleged advantages it can be invalid for inutility. 
  • DO avoid absolute language about the benefits of the invention. Remove such statements or use "may have some of the following advantages" rather than "has the following advantages".

Prevention is better than cure

In the longer term, industry should come together and campaign for greater consistency in patent laws across national borders.

While treaties and multilateral agreements have a role to play in setting minimum standards and the general framework for intellectual property laws, such agreements are not adaptable to changing circumstances, given the difficulty in reaching agreement with multiple national stakeholders.

A better approach when it comes to the detail of a patent system is for countries to voluntarily harmonise their laws in order to provide consistent laws and therefore certainty for companies engaging in commerce across those jurisdictions. In this case a suggested solution would be to harmonise Australian law relating to best method, false suggestion and utility with Europe.

As we have previously reported, the Australian intellectual property system is currently the subject of an inquiry by the Australian Productivity Commission. Preliminary indications are that the report will recommend that - as a net importer of IP - Australia should follow a policy of providing the minimum IP rights compliant with international treaties. This would take Australia still further away from consistency with international practice, and is the opposite of voluntary harmonisation. If Australia and other nations follow this road there may be no alternative than to achieve harmonisation though prescriptive treaties.

This article is an abridged version of an analysis to be published in Asia IP.

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