November 2018

1. General

New Zealand

Soon to Commence CPTPP Amendment Act Requires Only Minor Amendments to IP Acts
On 30th December 2018 the non-suspended provisions of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act 2018 will enter into force. In respect of New Zealand’s intellectual property laws this will require relatively few amendments. The following changes to the relevant IP Acts will take effect on 30th December 2018:

The Copyright Act 1994 will be amended to provide for:

  • performers rights, being both property and moral rights over both live communication of and recordings of their performances;
  • new powers for New Zealand Customs Officers to act on their own initiative if they have reasonable cause to suspect that an item infringes copyright (or trade mark rights);
  • Customs’ border protection measures will also extend to the exportation of copyright (and trade mark) infringing goods.

In addition to the above Customs measures, the Trade Marks Act 2002 will be amended to give the High Court the ability to award ‘additional damages’ for trade mark infringement, in addition to the compensatory damages already available.

The Patents Act 2013 will be amended provide for a general 1-year grace period for disclosures made by the patentee or nominee, the person from whom they derive title or consented persons thereof.

2. Patents

United Kingdom

UK Supreme Court Decision Raises Disclosure Requirements for Patentees
In the recent Supreme Court decision 2018 UKSC 56 Warner Lambert Company LLC v Generics (UK) Ltd several points of law relating to Swiss Style patent claims were clarified.

The decision concerns Warner Lambert’s second medical use patent for the use of pregabalin in the treatment of pain, where claim 1 covers all pain and the other claims are directed to specific types of pain. Generics (UK) (and another party – but herein referred to as Generics (UK)) achieved marketing authorisation for the use of pregabalin for other medical conditions for which previous patent protection had expired, and so are marketed with a ‘skinny label’ specifically stating the medical conditions it is to be used for. Generics (UK) sought revocation of the patent for inventive step and insufficiency, while Warner Lambert claimed infringement of claim 1 and claim 3 – with the latter being for the treatment of neuropathic pain, being pain initiated or caused by a primary lesion or dysfunction of the nervous system.

The lack of inventive step argument was rejected by the Patents Court, but both the Patents Court and Court of Appeal held that many of the patent’s claims were invalid for insufficiency as well as for lack of support. The breadth of the finding of insufficiency mostly followed from the finding that claim 3 was insufficient on account of being construed as covering all neuropathic pain, whereas only peripheral and not central neuropathic pain was found to be disclosed. Given that claim 1 covered all pain this was held to lack sufficiency as were several other claims that were found to be in respect of instances of or involving central neuropathic pain. Claims to idiopathic pain – pain of unknown origin - were found to lack any support. Warner Lambert’s subsequent attempt to amend claim 3 was rejected as an abuse of process. This left Warner Lambert’s patent with claims to the use of pregabalin in the treatment of inflammatory pain and some specific instances of peripheral neuropathic pain.

On account of the potential effect on various third parties from the points of law made in the Patents Court and Court of Appeal decisions the Supreme Court’s decision covers wider issues than those directly under appeal.
Warner Lambert argued that claim 3 was not insufficient by asserting that when properly construed claim 3 only covers peripheral neuropathic pain. Warner Lambert supported this assertion by claiming that neuropathic pain had no settled meaning at the priority date and that significant parts of the specification point to the narrower meaning and further that the examples in the specification only relate to peripheral neuropathic pain. Warner Lambert argued that if there was still residual ambiguity this should be resolved in its favour by applying a validating construction – a construction which results in the claim being treated as valid. However, while noting that validating constructions have been applied in patent cases, it was noted that this approach to construction is more appropriately applied in contract law. Its application in patent law can run counter to the requirement for clarity and increase the potential for abuse of monopoly, both of which are especially crucial considerations with second medical use patents where clarity around infringing and non-infringing uses of the substances is vital on public policy grounds. Its application in patent law had justification prior to the adoption of purposive construction and under the pre-1977 UK patent law which was more restrictive regarding amendment.

The Supreme Court unanimously held that claim 3 can only be construed as applying to all neuropathic pain. It found that central and neuropathic pain were distinguished at the priority date and that the use of the phrase ‘neuropathic pain’ in the specification is not reserved solely for peripheral neuropathic pain. Further, the claims were found to clearly have a hierarchical structure going from the general to the specific and that this supported the face value finding that claim 3 covers all types of neuropathic pain.

While unanimous with regards to central neuropathic pain, by majority the Supreme Court found that even peripheral neuropathic pain was insufficiently disclosed. Support for this finding was found in the European and UK Court developed requirement that the specification should at least make the claimed subject matter plausible. Such a requirement is considered crucial in the case of second medical use patents, since the active ingredient is already known so the quid pro quo contribution to the art needs to be something more than mere speculation, with the onus being on the patentee to establish it. However, plausibility does not require definitive evidence, which would only be available after clinical trials were done and which can further support a patent application as post-published evidence, but nonetheless some reasonable basis for making the claim needs to be present in the application on its filing date. While acknowledging that the threshold for establishing plausibility is relatively low, the majority found that threshold to be higher than that required by the Judges in the trial and appeal decisions as well as the dissenting Supreme Court Judges, who were inclined to shift the burden onto objectors to substantiate any doubts that the claimed effect can be achieved.

By majority, the Supreme Court also held that the infringement of a purpose limited second medical use claim does not depend on the intention of the alleged infringer. Rather, it is the objective evidence of the product and the accompanying labelling and packaging that will determine whether a second medical use patent has been infringed.

3. Trade Marks

Madrid Protocol

Madrid Common Regulations Regarding Division and Merger Soon to be Amended
From the 1st February 2019 several notable changes will be made to the Common Regulations under the Madrid Agreement and the Madrid Protocol.

Division of an International Registration in respect of a particular designated Contracting Party: Currently division of an International Registration can only be made under Rule 23 by way of division of the basic application during the first 5-years from the date of international registration, in which case the division has effect in all the designated states unless those states do not allow for division.

Introduced Rule 27bis will allow division of an International Registration to be made in respect of a particular designated Contracting Party. Such requests need to be filed directly with the Contracting Party in which division is sought (using Form MM22), who can also require a fee in addition to the standard fees, the latter of which needs to be paid to the International Bureau (IB). If the request is in compliance with the relevant national or regional law, then the Office of the Contracting Party sends the request to the IB, optionally along with any statement of interim status or grant of protection to be accorded to the goods and services listed in the request. The IB then examines the request with the Office of the Contracting Party needing to remedy any defects within 3-months. Where the requirements are met the IB records the division and then creates a new International Registration specific to the designated contracting party for the divided goods and services.

Merger of International Registrations: Current Rule 27(3) will be replaced by Rule 27ter, which will further specify that a divided International Registration can only be merged with the International Registration from which it was divided. Such a request needs to be made through the Office of the Contracting Party in which division of the International Registration had earlier been requested.

Contracting Parties whose law does not allow for division or merger are expected to notify the IB prior to the later of 1st February 2019 or when they become bound by the Madrid Protocol of that incompatibility.

4. Copyright

Europe

CJEU Holds that Tastes Do Not Qualify as a Work for Copyright Purposes
In response to a referred question the Court of Justice of the European Union (CJEU) recently gave a preliminary ruling in C 310-17 Levola Hengelo BV v Smilde Foods BV to the effect that tastes do not qualify as a ‘work’ and so cannot be the subject matter in which copyright subsists.

In 2007 a new spreadable dip called Heksenkaas, which contains cream cheese and fresh herbs was created, with the intellectual property rights therein assigned to Levola in 2011. In 2014 Smilde began manufacturing a product which Levola claimed infringed its copyright in the taste of Heksenkaas. Levola claimed that copyright subsists in Heksenkaas as it is a work of intellectual creation which can be classified as either a work of literature, science or art, and that if, as the Netherlands Supreme Court held in 2006, copyright can subsist in a scent then it should also be able to subsist in a taste. Levola further claimed that copyright in a taste refers to the overall impression on the sense of taste caused by the consumption of a food product, including the sensation in the mouth perceived through the sense of touch.

The referring Court noted that in 2013 the French Supreme Court categorically rejected copyright in scents. It further noted that while Article 2(1) of the Berne convention concerns every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression, the (non-exhaustive) list of examples thereof relate only to works that can be experienced by sight and/or hearing. Consequently, it referred several questions to the CJEU, which in the first instance concerned whether copyright protection for the taste of a food product is precluded on account of:

  • none of the examples in Article 2(1) of the Berne Convention involving taste?
  • the instability of a food product and/or the subjective nature of the taste experience?
  • the system of exclusive rights and limitations, as governed by Articles 2 to 5 of Directive [2001/29]?

If these were not found to preclude copyright protection for the taste of a food product further questions were posed around:

  • whether such copyright protection would be solely based on taste or could a recipe also qualify?
  • would evidence in infringement proceedings be in the form of food products for tasting and smelling or could it also involve written descriptions or recipes?
  • what extent of taste correspondence would be required for infringement?

The CJEU found that EU law requires a copyright work to be both the author’s own intellectual creation and expressed in a manner which makes it identifiable with sufficient precision and objectivity, even though that expression is not necessarily in permanent form.

The CJEU held that the taste of a food product cannot satisfy the second criterion, since it cannot be pinned down with precision and objectivity. Unlike literary, pictorial, cinematographic or musical works, which are a precise and objective form of expression, the taste of a food product will be identified essentially on the basis of taste sensations and experiences, which are subjective and variable and for which no other precise and objective means of identification is available. It was further held that this determination also applies to national copyright legislation within the EU region. On account of its determinations the CJEU declined to answer the second set of questions.

New Zealand

Broad Range of Issues Raised for Consideration in Copyright Issues Paper
On 23rd November 2018 an Issues Paper on the Copyright Act 1994 was released, with feedback sought (by the 5th April 2019) on a wide range of issues, which will influence the subsequent production of an Options Paper.

The Issues Paper is informed by the Ministry of Business, Innovation and Employment’s (MBIE) December 2016 Copyright and Creative Sector Report, which examined how the creative sector interacts with the copyright and registered design regimes in the context of a changing technological environment. Feedback is particularly sought on the following topics:

  • whether to introduce legislative objectives for the of the Copyright Act, what they should be and how they are weighted and interrelate;
  • the types of protected works and whether skill, judgment and labour is the correct test for copyright protection and is it being appropriately applied;
  • commissioning rule and the allocation of rights, how and whether rights should be allocated for AI works and better facilitating the reversion of rights from a publisher back to an author;
  • term of protection, exclusive rights and infringement provisions;
  • whether authorisation as infringement should include websites that link to infringing material;
  • specific issues with current rights (e.g communication to the public and communications works);
  • whether the term ‘object’ should be defined so as to specifically include intangible content;
  • moral rights, performers rights and technological protection measures;
  • fair dealing, exceptions for incidental and transient copying and exceptions to facilitate non-expressive uses & freedom of expression;
  • exceptions for libraries, archives and educational institutions;
  • exceptions relating to computer programmes, format shifting, time shifting, free public playing exceptions, reception and re-transmission of broadcast content;
  • whether to specifically prohibit agreements from contracting out of exceptions;
  • whether the safe harbour provisions for ISPs should be broadened to include search engines and platforms for user generated content;
  • the efficiency of the market regarding licensing and assignment;
  • the role of Collective Management Organisations;
  • the role of the Copyright Tribunal in licensing disputes;
  • impediments to the use or availability of orphan works;
  • whether to broaden the unjustified proceedings provisions to include groundless threats of legal action;
  • the adequacy of border protection measures and whether the $5,000 bond is prohibitive;
  • improving the utility of the infringing file sharing regime
  • additional enforcement measures for online infringements, including website blocking injunctions;
  • whether ISPs should contribute towards the cost of enforcement;
  • the types of criminal offences and the size of the penalties;
  • whether industrial designs should have dual protection under the Copyright Act and the Design Act 1953, as this favours foreign designers and can lull NZ based designers into relying too heavily on copyright and thereby losing the ability to get industrial design protection in foreign jurisdictions;
  • whether to join the Hague Agreement on Industrial Designs;
  • whether changes can or should be made to the Copyright Act in response to the Waitangi Tribunal’s Wai 262 Report, which recommended introducing distinct forms of protection for taonga and matauranga Maori works instead of changes to the IP Acts.
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