Senate Passes Part 2 Productivity Commission Response Changes
The previously summarized Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 has now been passed by the Senate and is expected to soon be passed by the House of Representatives and thereafter receive Royal Assent.
The Senate have amended the commencement date of the repeal of the innovation patent provisions from 12-months to 18-months from the day after the date of Royal Assent.
Another amendment requires a review of the accessibility of patents for small to medium size businesses to be commenced within 3-months of the day after the date of assent and for the results of the review to be reported with 12-months of commencing. The review will particularly consider:
(a) the cost of applications for patents; and
(b) processing times of patents; and
(c) advice provided by the Australian Government with respect to the patent application process; and
(d) awareness of the patent application process.
Foreign Prosecution History Ruled Relevant in Canada
In Canmar Foods Ltd v TA Foods Ltd (2019 FC 1233) the Federal Court ruled that Canada’s recently enacted prosecution history provisions can extend to include foreign prosecution history.
Until the December 2018 amendments prosecution history was not admissible in patent legal proceedings, either by way of statute or jurisprudence. Amongst other things the December 2018 amendments appended section 53.1 to section 53. Section 53.1 concerns what is admissible in evidence in legal proceedings and provides that the contents of prosecution, disclaimer or re-examination communications between the patentee and the Office are admissible for the purposes of rebutting the patentee’s claim construction.
Canmar brought infringement proceedings against TA Foods in respect of their patent for a method of roasting flax seeds. TA Foods then sought summary judgment of non-infringement, and sought to make use of the prosecution history of Canmar’s Canadian and USA patent.
While section 53.1(1) makes no reference to the prosecution histories of foreign applications the Judge held that such prosecution histories should not be admissible in general, but could be in extraordinary circumstances. To allow general admission of foreign prosecution histories was considered to be opening a Pandora’s box in needing to account for differences in legislation and jurisprudence. TA Foods argued that the prosecution history of the USA patent was incorporated by reference on account of being the subject of communications between the patentee and the Office. The Judge agreed, finding that the patentee specifically referred to the USA application prosecution history and acknowledged that the amendments to the Canadian claims were made to overcome novelty and obviousness concerns as raised in the USA Application. The Judge held this to qualify as an extraordinary circumstance that allowed the intent behind the amendments to the Canadian patent to be inferred from the amendments to the USA patent and incorporated into the purposive construction of the claims. Further justification for this approach was found in the Patent Prosecution Highway (PPH) provisions of the legislation, under which the allowability of corresponding claims in select foreign jurisdictions allows expedited examination of equivalent claims in Canada.
Despite making these findings the Judge went on to hold that the finding that TA Foods does not infringe can be made from the clear meaning of the claims whether or not the prosecution history of the USA patent is taken into account.
Direct Option Standard Patents Soon to Commence
Further to the August 2016 notification Hong Kong has now issued a Commencement Order for the Patents (Amendment) Ordinance 2016, which will become effective from 19th December 2019.
The Ordinance allows standard patents to be applied for directly via the Hong Kong Registry as an alternative to re-registration of a UK, EP(UK) or Chinese granted patent. Such applications will be subject to substantive examination, which in general needs to be requested within 3-years of the filing date, as well as opposition and revocation actions.
As also earlier notified short-term patents, which have a maximum term of 8-years, will be allowed to have 2 independent claims. There will also be the option of having examination requested for short-term patents and examination has to be requested before any proceedings can be commenced.
A revised official fee schedule will apply from 19th December 2019.
Feedback on Implementation of Designs Recommendations Sought
Following on from the earlier noted 2014 Options Paper and 2015 Final Report on Australia’s designs legislation by the Advisory Council on Intellectual Property (ACIP), which the government largely approved, IP Australia is now seeking feedback on how to implement the accepted recommendations. Feedback is sought by 20th December 2019.
One of the accepted recommendations of the intervening Productivity Commission (PC) review was that intellectual property policy should be informed by a robust evidence base and be guided by the principles of effectiveness; efficiency; adaptability and accountability.
ACIP recommended that design protection continues to apply only to a whole product and so did not approve of partial designs – being designs that are not made or sold separately from a design in which it is incorporated. However, they were open to changing that position if it could be shown that allowing partial designs would allow for international harmonization in a way that substantially benefits Australian applicants – a view which the PC shares. While not expressing a preference IP Australia has now presented 3 options regarding partial designs:
(1) No change – Statement of Newness and Distinctiveness (SoND) can highlight particular aspects, but design right is only in relation to the product as a whole.
(2) Allow for partial designs, with the scope extending to products in the same or similar Locarno class. Along with option (3) this would require something other than a SoND in order to clearly indicate what the partial design is. This could involve visual or written disclaimers in conjunction with a Statement of Monopoly. However, it is noted that the 1906 Act had Statements of Monopoly, but that they were dropped on account of being subject to more uncertainty than a SoND.
(3) Allow the design right to extend to the highlighted aspect on any product. While being in harmony with several significant trading partners this would also involve greater searching costs.
Currently, provided they are linked to a tangible product, virtual or non-physical designs can be registered, but not certified, in Australia, since the assessment of the design only takes into account its ‘resting state’. Nonetheless, protection may be available via trade mark registration or by copyright. ACIP recommended extending protection to virtual designs by taking into account their ‘active state’. While not expressing a preference IP Australia has now presented 3 options regarding virtual designs:
(1) No change – Virtual designs can be registered, but not certified.
(2) Allow virtual designs to be certified provided they are linked to a physical product. This would require a change from the visual features of a design being applied to a product to one where they are embodied in the product, and would also allow the visual feature to be transitory. This would be in-line with the approach in China, Japan, South Korea and the USA.
(3) Allow virtual designs to be certified whether or not they are linked to a physical product by including virtual designs in the definition of a product, although likely subject to an exclusion for computer programs - which are protected by copyright. This option would be strongest if partial designs are allowed. This would be in-line with the approach in the UK, EU (and EU countries) and Brazil.
Assessment of Distinctiveness
Currently designs need to be distinctive in addition to being new, with distinctiveness being measured in relation to the informed user - who is familiar with but not necessarily a user of the product. Subsections 19(1)-19(3) provide a list of factors to be taken into account in the determination of distinctiveness, but does not indicate their relative weighting. ACIP recommended no changes to the determination of distinctiveness only the basis that it only involves a minor degree of uncertainty. IP Australia also recommends no changes if there are no changes in respect of partial and virtual designs, but is particularly open to feedback on the determination of distinctiveness in the event that partial and virtual designs are allowed. It provides the following 3 options:
(1) No change – Section 19 factors taken into account from perspective of an informer user who is familiar with the product.
(2) Retain the informed user criterion, but provide guidance on the relative weighting of the section 19 factors. A SoND would be compulsory.
(3) Require the informed user to be an actual user of the product or similar products. SoND would not be taken into account, with distinctiveness being determined in relation to the appearance of the design as a whole.
Grace Period for Disclosures
Currently Australia applies the Paris Convention minimum of a 6-month grace period for disclosures made at qualifying international exhibitions. However, many trading partners apply a general 6-month or 12-month grace period for any disclosure by the applicant (or their predecessor). Allowing for a general grace period is seen as providing protection from inadvertent disclosure, minimising grace period confusion resulting from differences with trading partners and the Patents Act provisions, and also allowing scope for product development time. IP Australia’s recommendation is for a general grace period which applies up to 12-months prior to the filing date or the priority date (if claimed), being the most common grace period applied by other countries. This would also be subject to the introduction of a prior use defence for uses by third parties during the grace period and it is also IP Australia’s preference that applicants would be required to declare the relevant prior uses at the time of filing. The other options are having the same terms apply to a 6-month grace period or having no change. It is also noted that a draft Designs Law Treaty (DLT) would require contracting parties to have a grace period of either 6-months or 12-months prior to the filing date or the priority date (if claimed).
Deferred Publication or Automatic Publication
Unlike many of its trading partners, currently there is no formal mechanism to defer publication of a design application in Australia. The draft DLT would require contracting parties to allow publication to be deferred for a minimum of 6-months from the filing date or priority date (if claimed). If deferred publication is allowed, then its length, whether it is opt-in or opt-out and whether it needs to be requested or applies automatically would need to be determined. Another policy area that impacts on this is the ACIP recommendation to remove the ability to request publication but not registration. The rarely used option to request publication without registration means the design becomes available for all to use. IP Australia’s preference is to remove the option of publication without registration and to have applications automatically published with registration at 6-months from the priority date and to retain the status quo of having no option to defer publication.
Currently Schedule 2 of the Designs Regulations 2004 sets out the form that documents must take to be accepted for filing or publication. However, this was drafted with paper documents in mind, whereas now 99% of filings are done electronically. As was recently done for the Patents Regulations, IP Australia favours the option of repealing Schedule 2 and instead amending the Act so as to enable the Commissioner of Designs to issue a non-legislative instrument to determine formality requirements. The other option of modernising the terminology in Schedule 2 is considered less flexible meaning that on-going amendments to the regulations are likely to be required.
Currently designs that pass the formalities requirements are referred to as registered whether or not they are subsequently examined and issued with a certificate of examination. Designs are only optionally examined after registration, but need to be examined in order to be enforced. Referring to unexamined designs as registered is not aligned with other key jurisdictions or the Trade Marks and Plant Breeder’s legislation, and is considered to be a source for confusion by various interested parties. IP Australia agrees with the ACIP recommendation that for unexamined designs ‘registered’ should be replaced with ‘uncertified’. There is also the option of referring to designs that have passed examination as ‘certified’, but it is considered that ‘registered’ is appropriate.
IP Australia is also undertaking a more holistic review of the designs ecosystem, as part of the Designs Review Project, which seeks to:
- learn about the varied experiences that people face in the design process,
- understand what motivates businesses to invest in design, and
- identify the variety of roles people play in the design process and the barriers and challenges they face.
It will also look at:
- the economic impact of the design rights system,
- the effects of policy variations in designs in other countries and over time,
- how deep-set trajectories of change (e.g. in the economic and technological environment) are reshaping design innovation, and challenging current intellectual property systems.
4. Trade Marks
Interim Injunction not Estopped by Prior Agreement
In 2019 NZHC 2522 Rapid Labels Ltd v Excel Digital Ltd the Judge held that a prior agreement between the parties did not estop Rapid from seeking an interim injunction against Excel.
Communications between the parties commenced after Rapid learnt of Excel’s launching of a subsidiary that would use the brand RAPT in relation to labels. Subsequent to direct communications between the chief executives in late March 2019 the subsidiary changed its name to W-RAPT LABELS LIMITED, following which Rapid commenced litigation seeking an interim injunction under the Fair Trading Act to prevent use by the subsidiary of the brands RAPT, WRAPT, W-RAPT or logos containing a W standing on its left-side followed by RAPT.
Excel claim that in the meeting it had been indicated that no branding objection would be raised if they added a W in-front of RAPT, and that they incurred expenses in rebranding for a 1st April launch. However, although accepting the evidence was admissible for the purpose of showing there was an agreement, Rapid sought to have those communications privileged for any other purposes on account of being on a ‘without prejudice’ basis.
The Judge held that the representations by Rapid’s chief executive were not clear and unequivocal and were subject to formal approval that would involve further conditions, while also noting precedent to the effect that agreements in principle are not binding. Consequently it was unreasonable for Excel to rely upon the agreement in principle when rebranding before a formal agreement was reached. Further, by including a hyphen between the W and R and by using logos containing a W standing on its left-side followed by RAPT, Excel were found to have gone beyond what was agreed in principle. Consequently, Rapid were not estopped from bringing the interim injunction proceedings.
Nonetheless, the Judge went on to decline the interim injunction. While the aural similarities with Rapid’s brand – which has a high level of awareness amongst relevant consumers – are sufficient for establishing a serious question to be tried given the prevalence of cold-calling in the market, the balance of convenience was found to favour Excel. Despite the aural similarities there are also visual and conceptual differences which would make the determination of the likelihood of confusion at full trial finely balanced and Excel would be irrevocably prejudiced by the granting of an interim injunction.