July 2020

1. Patents

Australia

Manufacturer’s Intention Not Necessarily Relevant to Infringement of Swiss-Style Claims
In Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd the unanimous decision of the Full Court of the Federal Court (FCAFC) held that when assessing whether a Swiss-style patent claim has been infringed the intention of the accused infringer is not a necessary factor to take into consideration.

The case considered whether Sun Pharma had infringed three patents, where Mylan is the exclusive licensee in respect of two and a licensee in respect of the third. Each of the patents involves Fenofibrate, which is a fibric acid derivative that is used to regulate lipoproteins and triglycerides in blood and more recently to treat diabetic retinopathy. Swiss-style claims were only in issue in respect of the first patent (2006313711), which contained claims to the use of fenofibrate or a derivative thereof for the manufacture of a medicament for the prevention and/or treatment of retinopathy, in particular diabetic retinopathy. For the purposes of considering infringement claim 5 was in issue, which involved specific dosages of fenofibrate.

The trial Judge held the claims in issue for the 2006313711 patent to be invalid on account of both lack of novelty and lack of inventive step in light of prior art – the ACCORD Eye Study Protocol – which contained an untested hypothesis that fibrate therapy would be effective in reducing the risk of diabetic retinopathy. In addition to that finding, the trial Judge also held that validity issues aside threatened infringement had not been established due to a lack of proof regarding the manufacturer’s intention when making the medicament – given that fenofibrate had other medical uses.

On appeal, the FCAFC found the trial Judge had erred in how he arrived at the conclusion that the relevant claims of the 2006313711 patent lack an inventive step, but that on their reassessment the conclusion that there is a lack of inventive step was upheld. The FCAFC also upheld the lack of novelty determination, finding from applying the reverse infringement test that the hypothesis prior published the invention on account of disclosing its essential features with sufficient specificity, and that it did not matter that the skilled addressee would not have used the untested hypothesis.

Mylan’s other point of appeal in respect of the 2006313711 patent took issue with the trial Judge’s contention that a manufacturer’s intention when making a medicament is required for making an infringement determination. In making that statement the trial Judge sought to distinguish the case from precedent that Merck sought to apply. In Otsuka Pharmaceutical Co. Ltd v Generic Health Pty Ltd (No 4) it was held that infringement determinations in respect of Swiss-style claims should be made on the basis of suitability for use rather than the way the product is marketed. Mylan sought to use that to argue that the intention of the manufacturer is irrelevant as the primary consideration is whether it is suitable for an infringing use. However, the primary Judge held that the Otsuka case was not addressing the question of the manufacturer’s purpose or intention and that suitability for use on its own is not sufficient for making an infringement determination for Swiss-style claims as there will be valid non-infringing uses. Citing the UK Supreme Court case Generics (UK) v Warner-Lambert the trial Judge held that, in addition to suitability for use, the other factor is whether the manufacturer has or will make the product with the (objectively determined) intention that it will be used to treat the condition that is the subject of the Swiss-style claims.

In its appeal Merck argued that the trial Judge mis-applied the UK Supreme Court case, and claimed that the UK Supreme Court had used an outward presentation test – whether the manufactured product was presented as suitable for the use specified in the Swiss-style claims - which involves no mental element. In the alternative, Merck argued that if the objective intention test was used that infringement should be determined by reasonable foreseeability.

The FCAFC noted that Swiss-style claims are purpose limited process claims. It also noted that the UK Supreme Court case was not decided unanimously. Two of the Judges advocated the outward presentation test on the basis that infringement is solely determined by the suitability for use of the end product (including labelling and pamphlets). Another two Judges advocated the subjective intention test on the basis that a mental element is an essential feature of claims that are limited by purpose. In doing so they noted that while subjective intention is routinely proved by objective evidence of conduct, the purpose for which something is manufactured is not always obtainable from such objective evidence. The fifth Judge advocated an objective appearance and characteristics test that in some circumstances would hold a manufacturer to infringe unless they positively exclude the use specified in the Swiss-style claims.

The FCAFC took from this that the UKSC rejected an objective test for purpose satisfied by the reasonable foreseeability test. The FCAFC also found that the remaining differences between the UKSC Judges stemmed from their respective attempts to satisfy the Protocol on Interpretation of Article 69 of the EPC, which requires the extent of protection to combine fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties. It was noted that in Australia claims are not construed by such a policy objective, but rather are guided by context dependent common law principles. The FCAFC held that for Swiss-style claims the manufacturer’s intention is not an essential feature of the invention, and as such infringement is not concerned with what the manufacturer intends to do, rather it is concerned with what they have done – whether the medicament as manufactured is for the alleged therapeutic use. Nonetheless, the FCAFC held that where direct evidence of the manufacturer’s intention is available it can form part of the matrix of considerations in an infringement determination. In further contrast to the UKSC the FCAFC also held that reasonable foreseeability can be useful, but is not determinative in an infringement determination - it might be reasonably foreseeable that a product might be put to a particular use, but it does not necessarily follow that the product, as manufactured, is for that use. The FCAFC agreed with the trial Judge’s holding that suitability for use is an insufficient test for infringement of a Swiss-style claim. Hence, while holding that the manufacturer’s intention is not necessary for making an infringement determination in respect of a Swiss-style claim, the FCAFC left open several factors that in a given case can assist in determining whether a generic medicament as manufactured is for the Swiss-style claimed therapeutic use.

On the facts of the case the FCAFC held that Sun Pharma’s manufactured product (including labelling, information given to patients and product information lodged with the Therapeutic Goods Administration (TGA)) was clear in what it was to be used for and involved substantial therapeutic uses. On account of that and despite the product information lodged with the TGA stating that it is bioequivalent to Merck’s product a statement excluding the use specified in Merck’s Swiss-style claim (had it been valid) was not required. Nor was Sun Pharma obliged to write to medical practitioners and pharmacists instructing them not to prescribe or dispense it for the use specified in Merck’s Swiss-style claim. The FCAFC indicated that this last consideration concerns downstream activity and is more relevant to defending a claim to contributory infringement of a method of treatment claim than to defending a claim to infringement of a Swiss-style claim. The FCAFC also noted that the differences between Swiss-style claims and method of treatment claims mean that infringement of one does not necessarily imply infringement of the other. In this respect they found that the trial Judge was not acting inconsistently in finding the Swiss-style claim not infringed and the method of treatment claims to be infringed, given that reasonable foreseeability could be found to be established for the latter, but not the former.

China

Draft Amendments to China’s Patent Law
China’s National People’s Congress has published a Draft of its proposed amendments to the patent law for the purpose of seeking public feedback by 16th August 2020.

China’s Patent Law 1984, which includes utility models and industrial designs within its scope, was last amended in 2008, with prior amendments in 2000 and 1992. The proposed amendments notably include:

• Supplementing the exceptions to novelty defeating disclosures with a 6-month grace period for disclosures made for public interest purposes during a national emergency or extraordinary situation;
• Allowing for the possibility of patent term extensions on the basis of unreasonable delays in prosecution where the patent only achieves grant more than 4-years after filing and 3-years after requesting examination;
• Allowing for the possibility of patent term extension on the basis of obtaining regulatory approval for pharmaceuticals, with the maximum extension being the lesser of an extra 5-years or 14-years from market entry;
• Allowing damages to be multiply increased up to 5 times the determined actual amount in the case of wilful infringement, in addition to increasing the maximum statutory damages available;
• Increasing the Statute of Limitations period for bringing a lawsuit from 2-years to 3-years from when the patentee knew or should have known of the infringement and the infringer;
• Increasing the term for designs from 10-years from the filing date to 15-years from the filing date – it is notable that this would satisfy a key requirement for China to join the Hague Agreement;
• Allowing partial designs – which are already allowed for in major jurisdictions such as the EU, US, UK, Canada, Singapore, Japan and South Korea.

United Kingdom

Report Warns Against UK Leaving EPC for US FTA
A commissioned report has found that if the UK leaves the EPC in order to secure a free trade agreement with the USA it would have numerous detrimental effects, including for applicants from the USA who predominantly use UK attorneys when filing with the EPO.

With the UK having formally left the EU and with the transition period finishing at the end of the year the UK is seeking to enter into free trade agreements with various countries, with the USA being a priority. However, in their respective stated objectives for the free trade agreement the UK and the USA have indicated differences in intellectual property policy. The UK seeks a patent system that is consistent with the EPC, whereas the USA seeks a patent system that reflects or is similar to its current one. Notable differences between the EPC and the USA’s patent system include:

• Methods of medical treatment and diagnostic methods are not patentable under the EPC;
• The USA has relative novelty with a general one-year novelty grace period for disclosures by the applicant or by a related party, whereas the EPC has absolute novelty and only allows a 6-month novelty grace period in respect of disclosures at recognised exhibitions or for disclosures done in abuse of the applicant’s rights;
• For the USA prior use does not need to be enabling in order to invalidate;
• The whole contents of prior applications that were not published at the application date of the subsequent application are available for both novelty and inventive step challenges in the USA, whereas they are only available for novelty challenges under the EPC;
• The EPC allows individual claims to have multiple priorities;
• The EPC requires examination to be requested, whereas examination is automatic in the USA.

A further difference between the UK and USA patent systems is that the USA has no compulsory licence provisions with patents not being required to be worked, whereas for the UK compulsory licences can be requested from 3-years after grant subject to certain conditions.

Not all of the above differences would need to be resolved in order for a free trade agreement between the UK and the USA to be concluded. However, concerns over the possibility that the UK may leave the EPC in order to achieve a free trade agreement with the USA led the Chartered Institute of Patent Attorneys (CIPA) and the IP Federation to commission the former chief economist of UKIPO to report on the effects of the UK leaving the EPC. The report titled ‘The European Patent Convention and its Impact on the UK Economy and Innovation’ has now been published. The report makes the following findings and scenario predictions:

• Currently most English speaking firms around the world use UK IP professionals to secure patent protection across Europe with international clients making up about 80% of UK IP professionals work;
• 90% of patent rights created in the UK from 2000 - 2018 were grants by the EPO, validated for UK. Less than 10% were granted by UKIPO. Of all EPO grants, inventors validate over 90% in UK;
• If the UK were to leave the EPC UK based patent attorneys would be no longer be eligible as representatives before the EPO;
• The cost of filing in both the UK and the remaining EPC countries would increase, with USA businesses being the most effected as the biggest filer with the EPC via the UK;
• Relocation of innovation management services and R&D work to continental Europe;
• Reduction of influence and cases for the currently highly regarded UK judicial system;
• UKIPO, which is substantially funded by EPO renewal fees, would have to significantly upscale its operations and raise its fees or accept EPO examination results where available rather than making its own examination.

United States of America

Means-Plus-Function Structure Cannot be Incorporated by Reference
In 19-1005 Fiber LLC v Ciena Corp the Court of Appeals for the Federal Circuit (CAFC) confirmed that means-plus-function structure sufficient for avoiding a finding of indefiniteness cannot be incorporated by reference.

Fiber’s patent relates to an optical beam switching system which uses a mirror that can move in two axes so as to allow an optical beam to be directed amongst a plurality of optical switching units. The independent claims in issue used the term ‘control’ in relation to the optical beam switching system, but the specification did not contain any structure in regards to the control mechanism. While the claims did not use the term ‘means’ the claims can be found to be in ‘means-plus-function’ form if the claim term fails to recite sufficiently definite structure or else recites function without reciting sufficient structure for performing that function. The District Court found ‘control’ to be used in relation to the function of positioning the beam directing device and that in effect the word ‘control’ could be replaced with the word ‘means’ without substantially changing the meaning of the claims. In considering whether structure sufficient for performing the function could be found in the specification, and thereby avoiding a finding of indefiniteness, the District Court rejected Fiber’s assertion that it was incorporated by the specification’s reference to another patent. In particular, the District Court found that the other patent discussed data gathered in relation to mirror positioning and that this did not provide structure for the term.

On appeal the CAFC noted from precedent that it is not permissible for structure for a means-plus-function term to be incorporated by reference. Even if it were permissible, the CAFC affirmed the District Court’s finding that the cited patent did not provide structure for the term. Further, the CAFC held that expert testimony could not be used to create structure where none is adequately disclosed in the specification. Consequently, the patent was found to be invalid on account of indefiniteness.

2. Trade Marks

Madrid Protocol

WIPO Launches Madrid Application Assistant
WIPO have launched Madrid Application Assistant, which is an electronic version of the MM2 form, as part of its on-going efforts to allow all communications under the Madrid system to be electronic.

It allows logged-in WIPO account users to import the Office of origin’s relevant national/regional trade marks database record, which then populates relevant fields in the international application. Users are taken through a step by step process with data validation to help ensure the accuracy of captured information. It is integrated with the Madrid Goods and Services Manager and so allows goods and services to be checked for classification purposes and, where relevant, translated. It also allows real-time calculation of fees, thereby allowing cost-estimates for different filing scenarios to be quickly generated. The international application is saved within the user’s account, and when completed a PDF version of the international application can be generated for submitting with the office of origin for verification. Users have the option to pay the automatically calculated fees using e-payment, by credit card or by debiting them from a current account with the International Bureau soon after the International Bureau receives the international application from the Office of origin. Users may also pay the fees by transferring the required amount to WIPO’s bank or postal account. It is expected that international applications made via the Madrid Application Assistant will also lead to increased efficiencies for the certification process by the Offices of origin.

United States of America

Supreme Court Holds Compounds of Generic Terms can be Registrable
In 19-46 USPTO v Booking.com BV the Supreme Court held that there is no per se rule to the effect that the combination of a generic term and a top-level domain is itself generic.

In 2012 Booking.com BV applied to register BOOKING.COM in classes 39 and 43 in the United States of America by way of the Madrid Protocol. Both the USPTO and the Trademark Trial and Appeal Board (TTAB) refused the application on the basis that it is generic – in which case no amount of distinctiveness through use will allow it to be registered. Booking.com BV sought judicial review, and in the District Court for the Eastern District of Virginia it was held that the combination is descriptive rather than generic and that the extensive evidence of consumers associating the mark with Booking.com BV meant that it was registrable for the class 43 services. The USPTO appealed the finding on genericness to Court of Appeals for the 4th Circuit (CA4C), which upheld the District Court’s finding in that respect and rejected Booking.com BV’s contention that there is a general rule to the effect that the combination of a generic term with a top-level domain is itself generic.

The majority judgment of the Supreme Court upheld the CA4C’s judgment. The majority held that the genericness of a compound term needs to be determined from considering the compound term as a whole rather than separately considering the genericness of its constituent terms. The consideration of genericness is from the standpoint of relevant consumers and the majority found no reason to reject the Courts’ evidence based finding that consumers do not perceive BOOKING.COM as being generic.

In response to the USPTO’s contention that the combination of a generic term with a generic domain is per se generic, the majority noted that the USPTO has itself not followed any such rule, and that there is no support for such a rule in the legislation. The USPTO cited precedent to the effect that adding a generic corporate designation like “Company” to a generic term does not allow it to be source identifying and argued that the addition of a generic top-level domain is analogous. The majority rejected that analogy, noting that as only one entity at a time can have the right to use a particular domain name consumers can recognise the domain name as a source identifier from their interactions with the associated website. The majority also emphasised that consumer perception is foundational to trade mark law and that applying a categorical rule in respect of eligibility that disregards consumer perception is incompatible with trade mark law. The majority further noted that other traders remain free to use the word “booking” in relation to the same services.

The dissenting Judge considered that the addition of a generic domain to a generic term is analogous with the precedential case on the addition of a generic corporate designation to a generic term. The Judge considered that for the compound term to evade genericness the additional element has to be transformative so as to make the whole greater than the sum of its parts. That the compound term is comprised of the second-level and a generic top-level of a domain name was not considered to be transformative. The dissenting Judge considered that to be classed as a descriptive mark the compound term would need to identify either a particular characteristic or quality of something, whereas the term in question instead only refers to the basic nature of the thing – a website associated with booking. However, the dissenting Judge was open to the top-level domain being transformative, particularly with the recent broadening of top-level domains such as .guru, .club and .vip, which could convey a characteristic or quality of the website.

The dissenting Judge noted that on the majorities approach the only thing standing in the way of automatic registration of a generic.com mark is survey evidence, and took the view that such consumer association is unreliable and does not validate changing the nature of a term. The dissenting Judge considered the majorities ruling will increase the likelihood of such generic.com marks being used anti-competitively or will have a chilling effect on the legitimate use of variants.