August 2016

1. Patents

Hong Kong

Hong Kong to Allow for Direct Standard Patents
Recently Hong Kong passed the Patents (Amendment) Ordinance 2016, although it is not expected to commence until 2018. Upon commencement the Ordinance will allow the Hong Kong Intellectual Property Department (HKIPD) to receive and process filings for standard patents (20-year term). Currently standard patents can only be obtained in Hong Kong by way of re-registration of either a UK or Chinese patent application, while the HKIPD only grants short-term patents (8-year term) following a formalities examination.

The Ordinance will supplement rather than replace the re-registration system. Given that Hong Kong is not a member of the PCT, a standard patent can only be obtained in Hong Kong via the re-registration procedure. Where entitlement is in issue, this will need to be determined via the relevant office of filing, which in the case of a re-registration application will be the UK or China. For applications processed by the HKIPD, whether for standard or short-term patents, third parties will be able to submit observations during the substantive examination procedure. The Ordinance will also expressly allow for ‘second medical use’ patents, which, although currently allowed in practice, are not currently explicitly legislated for.

The Ordinance will also amend the short-term patents provisions by introducing substantive examination, which will need to be requested before commencing enforcement proceedings. Third parties will also be able to request examination. Once filed, the request for examination cannot be withdrawn. The Ordinance will also allow short-term patents to have two independent claims.

New Zealand

Enhanced Configurability Saves Patent from Invalidity but also Results in No Infringement
In Assa Abloy New Zealand Limited v Allegion (New Zealand) Limited the High Court Judge held that the respective parties infringement and invalidity claims are premised on a monopoly that does not conform to the patent’s terms.

Assa Abloy claim that Allegion’s Stella sliding door locking mechanism infringes some claims of their Latch Patent. Allegion countered that the Latch Patent is obvious and that in any event the respective mechanisms apply different mechanical principles.

In adopting a purposive approach the Judge stated that the central focal point in construing the patent is the language of the patent in light of its purpose and context. The Judge accepted Assa Abloy’s construction of the object of the invention as being to simply provide a latching mechanism which can be configured to end-use requirements. In rejecting other constructions of the object of the invention by some of the experts, the Judge cautioned against conflating the object of the invention with its advantages. Here the Judge referred to precedent noting that the advantages that will result from achieving the object of the patent need not be co-extensive with the object.

The primary claim in contention is claim 18 of the Latch Patent, which reads:

18 A latching mechanism including a movable snib, a drive member, coupled to the snib and rotatable by the snib about a first axis, a receiver including a first angular receiving area and a second angular receiving area each configured to receive a tailbar of a lock cylinder, said receiver being rotatable about a second axis independent of the drive member, and a selector adjustable by a said tailbar received in said receiver to move a lock bolt between a locking position where the snib is prevented from movement and an unlocking position where the snib is able to be moved, wherein the first and second axes are coaxial.

Allegion contended that the two drive spigots in the Stella do not constitute ‘a’ drive member. However, the Judge held that the two drive spigots can constitute a drive member since the latter can consist of more than one part or driving element. Similarly, although the Stella contains two lock pins, that still qualifies as ‘a’ lock bolt as specified in claim 18.

Nonetheless, the Judge held that the Stella does not contain a drive member coupled to the snib, since in the Stella the driver and snib are integrally formed by moulding and so are not ‘coupled’. The Judge accepted the expert evidence which found in context ‘coupled’ envisages two separate components coming together. The Judge rejected Allegion’s contention that such integral forming constitutes a minor variation that falls within a purposive construction on the basis that the integral forming inherently reduces the potential configurability of the latching mechanism, which is contrary to the object of the Latch Patent.

The question arose whether claim 18 requires a separate receiver and selector, given that these components are integrally formed in the Stella. However, in contrast to the driver and snib finding, the Judge held that claim 18 does not expressly require those components to be coupled and that a purposive construction does not obviously demand it.

Regarding the invalidity attack, the Judge held that the prior art did not contain all the elements of claim 18 and had lower configurability. Further, while the Latch consists of a combination of known elements, the Judge held that the combination has a synergistic interaction that constitutes an inventive step that would not have been obvious to a person skilled in the art at the priority date.

United Kingdom

UK Government Agrees with Proposed Patents Rules Changes
The UK Government recently issued its response to proposed changes to the Patents Rules 2007. It approves of the following proposed changes and plans to implement them at the next suitable opportunity:

• Introducing a notification of intention to grant, that will be sent either 4-weeks or 1-month before grant. This will give applicants a firm deadline for filing divisionals, rather than having to file divisionals in anticipation of the application being granted.
• Prohibiting the use of omnibus claims unless absolutely essential. In particular, omnibus claims will only be allowed where the technical features of the invention cannot be clearly defined either in words, by a mathematical or chemical formula or by any other written means.
• Removing the ability to request reinstatement of an application within 2-months of the removal of the cause of non-compliance, but retaining the ability to apply for reinstatement of an application up until 12-months from the date the application was terminated.
• Allowing applicants to request a two-month extension of time for filing the address for service. Currently the address for service needs to be provided within two-months of the filing date with no extension of time possible. The proposed two-month extension of time will be available as long as it is applied for within two-months of the end of the specified two-month time period.
• Providing legislative backing to the current UKIPO practice of allowing black and white photographs and shaded drawings to count as drawings provided they are clear and reproducible.
• Removing the requirement for patent holders to each year provide the UKIPO with the address for service that they wish to receive renewal reminders at.
• Clarifying that PCT applications can be amended upon entry to the UK national phase.
• Clarifying that rule 49 covers both corrections and changes to names, addresses and addresses for service.
• Removing a discrepancy between the primary and secondary legislation by amending rule 75 so that it is consistent with section 75. In particular, whether or not an amendment proposed during infringement or revocation proceedings gets advertised will be at the discretion of the Comptroller. In practice this is only expected to affect proposed amendments that are so insignificant that nobody could reasonably want to oppose them.

United States of America

Susceptibility of 'Means-Plus-Function' Claims to Indefiniteness Clarified
In Advanced Ground Information Systems Inc v Life360 Inc the Court of Appeals for the Federal Circuit (CAFC) held that four claims of two of AGIS’s patents qualified as means-plus-function claims and were held invalid for indefiniteness on account of insufficiently disclosing the structure of a key claim term.

AGIS’s patents concern methods, devices and systems for establishing a communication network amongst mobile device users. AGIS claimed that Life360 infringed some of the claims of the two patents and Life360 counterclaimed that the patents were invalid for indefiniteness.

According to precedent, there is a presumption that a claim is in means-plus-function form under §112(f) of the US Patents Act if the claim contains the word ‘means’ and recites a function. However, it is not necessary for a claim to contain the word ‘means’ in order to be construed as a means-plus-function claim. In particular, a claim can be construed in means-plus-function form if a claim term fails to recite sufficiently definite structure or recites function without reciting sufficient structure for performing that function. A means-plus-function claim is limited to the means specified in the specification and equivalents thereof.

In this case the asserted claims did not contain the word ‘means’. In the preceding proceedings the District Court held that the term ‘symbol generator’ is analogous to a means for generating symbols on the basis that the term is simply a description for the function performed and is not relevantly used to designate structure. AGIS’s expert testified that the term designated structure on the basis that those skilled in the art would have understood a ‘symbol generator’ to refer to a well-known class of existing, available, standard modules of software code used to generate symbols on a display.

However, the CAFC found that that testimony was undermined by the expert’s testimony that the term was coined for the patents in suit and that while the individual terms ‘symbol’ and ‘generator’ are known within the field of computer science the combined term does not recite a definite structure understood by those skilled in the art. Rather, the combined term as used in the context of the relevant claim language suggests that it is simply an abstraction that describes the function being performed. The CAFC also held that the claim term by itself does not identify a structure by its function.

Having found that the claim term is a means-plus-function term, the CAFC agreed with the District Court’s determination that the claim term is indefinite since the specification fails to disclose an algorithm or description of how the symbols are actually generated. At best the specification only discloses the medium through which the symbols are generated. By not specifying the structure corresponding to the claimed function the patentee was held to be attempting to claim in functional terms unbounded by any reference to structure in the specification, meaning that such claims are indefinite.

2. Trade Marks

New Zealand

Majority Dispense Sobering Judgement on Misleading Evidence
In Red Bull New Zealand Ltd v Drink Red Ltd the Court of Appeal by majority judgement allowed Red Bull to adduce further evidence and then granted them an interim injunction on the basis that the High Court Judge would have done the same if he had not been misled by the evidence.

In early 2015 Drink Red began marketing ready-to-drink pre-mixed alcoholic drinks (RTDs) consisting of energy drink and vodka under a series of marks for or incorporating ЯED or RED. Although Red Bull does not sell RTDs they objected to Drink Red’s marketing of its RTDs, given that one of the key ways that Red Bull’s energy drink is marketed is as a mixer with spirits. Drink Red claimed that the marks were chosen on account of their strong ties with Russia, the birth place of vodka, and because they are simple, short and clear with the ability to stand out and denied any piggy backing on Red Bull’s branding. In late 2015 Drink Red launched a non-alcoholic drink called ЯED Energy, which on its cans and packaging contained the following statement:

This product does not contain Red Bull and it is not endorsed by or affiliated in any way with Red Bull. We know you would not think that but their lawyers thought you might.

Red Bull applied for an interim injunction in respect of both Drink Red’s RTD’s and energy drink products on the basis of trade mark infringement, the tort of passing off and breach of section 9 of the Fair Trading Act 1986. In the proceedings before the trial Judge Red Bull led evidence that some staff in premises stocking ЯED RTD or ЯED Energy products considered them to be Red Bull products.

The trial Judge declined Red Bull’s interim injunction application. In respect of passing off and breach of the Fair Trading Act the trial Judge considered that Red Bull’s evidence meant Drink Red had a serious question to answer and that there was a likelihood that consumers could be misled or deceived. However, the trial Judge held that the evidence was not sufficient for establishing Red Bull’s contention that Drink Red intended to mislead or deceive. The trial Judge similarly held that the evidence fell short of establishing a strong prima facie case under the Trade Marks Act. The trial Judge held that the balance of convenience lay with Drink Red mainly on account that an interim injunction would put Drink Red out of business.

On appeal Red Bull applied to adduce new evidence relating to earlier versions of reports issued by Red Bull’s marketing company Strategy Design and Advertising. In particular, an earlier version of the report contained direct references to trading off of Red Bull’s equity. A majority of the Court of Appeal found this new evidence to be fresh, highly material and cogent and that its omission from evidence before the trial Judge was misleading. It was also held that there was no privilege in the new evidence and that even if there was privilege it was right to disallow any claim for privilege on account of the intent to dishonestly create a misleading report.

A majority of the Court of Appeal then held that had the new evidence been before the trial Judge that he would have been satisfied that Red Bull had established a strong prima facie case. The majority also held that the balance of convenience favoured Red Bull, since Drink Red was the author of its own inconvenience and had proceeded with their eyes open. It was also noted that the issuing of the injunction did not necessarily mean that Drink Red would go out of business. The interests of justice favoured granting the injunction, since such misleading behaviour should be discouraged and should not be allowed to bring into question the integrity of the administration of justice.

In a dissenting judgement Fogarty J considered that the new evidence did not justify granting an interim injunction. Fogarty J considered that the primary issues in the forthcoming substantive trial are whether Red Bull can monopolise the word RED and if not whether Drink Red can otherwise be prohibited from using RED as a brand. Fogarty considered that if those issues are decided in Drink Red’s favour, then trade mark infringement or passing off will be difficult to establish, irrespective of Drink Red’s intent as demonstrated by the new evidence. Fogarty J also questioned the admissibility of Red Bull’s evidence of confusion and stated that Red Bull should not be able to end the litigation because Drink Red attempted to mislead the Court’s over its legitimate competitive behaviour.