April 2017

1. General

Australia

Rules for Intangible Property Depreciation Changing Soon
On 30th March 2017 the Treasury Laws Amendment (2017 Enterprise Incentives No 1) Bill 2017 was read a first time. Chapter 2 of the Bill will make changes to the rules for intangible property depreciation in relation to intangible property assets that a taxpayer starts to hold on or after 1st July 2016.

Once the changes are in force taxpayers will have the option of self-assessing the effective life of depreciating intangible assets that the taxpayer started to hold on or after 1st July 2016, rather than using the statutory effective life. Any such self-assessment must take into account:

• how they expect to use the asset;
• the estimated period of time that the asset can be used by any entity to derive income at its start time;
• the likelihood of the asset becoming obsolete; and
• the estimated time when the asset is scrapped or abandoned.

The taxpayer will also be able to recalculate the effective life in later income years if the effective life the taxpayer has been using is no longer accurate because of changed circumstances relating to the nature of the asset’s use. The taxpayer must recalculate the effective life of the asset if the cost of the asset increases by at least 10 per cent in a later income year.

2. Patents

Australia

Extension of Term Applications Trigger Re-Examination
IP Australia has recently amended its practice in relation to processing an extension of term request.

Section 70 of the Patents Act 1990 allows the patentee to apply for an extension of term for patents for pharmaceutical substances on the Australian Register of Therapeutic Goods for which the date of regulatory approval was at least 5-years after the date of the patent. In addition to the statutory requirements for extension of term applications, IP Australia is now re-examining patents for which an extension of term has been requested on the basis that extending the term of a patent which is clearly invalid is not in the public interest. While re-examination is not a statutory requirement for an extension of term, under section 97 the Commissioner has discretion to initiate re-examination. In general such re-examination will primarily involve checking the status and scope of patent family members in other jurisdictions and for any relevant court proceedings in relation thereto to ascertain if there is any information which may have bearing on the validity of the Australian patent.

Canada

Free Trade Agreement Terms Unable to Reverse Inutility Finding
In Eli Lilly and Co v Government of Canada the Investment Treaty Arbitration tribunal rejected Eli Lilly’s final attempt to challenge the invalidation of two of its patents by the Canadian courts.

The patents had been invalidated on account of failing to satisfy the promise doctrine in Canada’s patent law utility requirements. The olanzapine patent was found not to have met the promise, at the time of filing, that it would provide markedly superior clinical treatment of schizophrenia with a better side-effects profile than other known antipsychotics. The atomoxetine patent was found not to have met the promise, at the time of filing, that it was clinically useful for treating ADHD.

Both patents had been applied for in the 1990’s. Eli Lilly contended that from 2002 – 2008 the Courts’ effected a dramatic change in evaluating utility by adopting the promise doctrine. Prior to 2002 utility was satisfied by a mere scintilla of utility. Eli Lilly contended that the judicially adopted promise doctrine not only meant that a patent could be invalidated if the patentee over-promised what the invention was, it also meant that the promise of the invention could be read into the patent even when none was intended. Eli Lilly further contended that the Courts also started rejecting post-filing evidence of utility and only accepting pre-filing evidence of utility where such evidence was referenced in the specification.

Eli Lilly had tried to use the North American Free Trade Agreement (NAFTA) to argue that the alleged dramatic changes in the law of utility were outside the scope of the acceptable margin of change that investors had to anticipate. It considered the changes to amount to a new and arbitrary law that particularly discriminates against pharmaceutical companies and that as a result its patents have been wrongfully expropriated.

However, the tribunal found no violation of NAFTA and found the promise doctrine to have its foundation in Canadian law on utility at the patents filing dates. Even so, the tribunal accepted the law of utility did undergo a reasonable measure of change and development, but considered it was within the bounds of changes that could and should have been anticipated as resulting from judicial decision making.

General

WIPO Pearl Terminology Portal Updated
WIPO has updated WIPO Pearl - its multilingual terminology portal involving a database of scientific and technical terms in the 10 publication languages of the PCT.

WIPO Pearl is free and was set-up with the aim of promoting accurate and consistent use of terms across languages. A user can either utilize the linguistic search option or the concept map search option.

In the linguistic search a search term can be searched across one, many or all subject fields and from and to one, many or all of the available languages. The results list gives instances of the searched term grouped by subject field and indicates the terms reliability. It also allows the user to search for the term in Patentscope, or view a concept map that includes the searched term or view images of the searched term. From the results list the full record for a given result can be viewed by clicking the speech bubble icon in the relevant subject field. Amongst other things the full record specifies whether the term is a head term or a synonym of a head term and gives an example context in which the searched term is used.

In the concept map search a user can either get to a concept map by clicking on a subject field button and then a subfield button, or can enter a search term and select the appropriate option from a drop down list. The concept map indicates whether the relation between two concepts is associative (non-hierarchical) or generic (hierarchical). From within a concept map if there is a path from one concept to another, then it can be isolated by using the path search option. The full record for a given term in a concept map is opened by clicking on the term.

Following the recent updates the database now contains over 133,000 patent terms and 18,000 patent concepts, all validated by WIPO-PCT language experts. 13,000 of the patent concepts are linked to other concepts in the database. It is also now possible to export all or a subset of the terms in an isolated concept map into a Patentscope search.

A related feature on the WIPO website is the Cross-Lingual Information Retrieval (CLIR) tool in Patentscope. This allows the Patentscope database to be searched for terms and there equivalents in up to 8 other PCT languages as well as relevant IPC codes. The expansion of the searched term can either be automatic or supervised and using a variable precision rating. Using the supervised expansion option the user can add search terms by selecting from the proposed synonyms. The searched terms can be restricted to particular fields or a combination of fields. The resulting Patentscope search can then be further amended if needed.

A one-hour WIPO webinar on using the CLIR tool will be held at 7:30pm (NZST) on Thursday 11th May 2017 and can be joined using the following link: https://attendee.gotowebinar.com/rt/52457 2978687305220

3. Trade Marks

New Zealand

Court of Appeal Upholds Finding that Devices are Dissimilar on Balance
Omega has longstanding New Zealand trade mark registrations for a device mark incorporating an Ω symbol in relation to watches and numerous other goods.
 
Guru sought to register what has been described as an upside down omega symbol in relation to a wide range of goods, including watches and related goods in class 14. Omega was unsuccessful in opposing Guru’s application before an Assistant Commissioner and also in appealing that case to the High Court. The Assistant Commissioner held that there was insufficient evidence to establish that Omega had reputation in the Ω symbol on its own in the relevant market, and also held the respective marks to be visually, phonetically and conceptually dissimilar. In its appeal to the High Court Omega showed evidence of use of the Ω symbol on its own. Nonetheless, the Judge also found the respective marks to be visually, phonetically and conceptually dissimilar. Principally this was due to the likelihood that the Ω symbol would be seen as a Greek character, but the dissimilarities were also held to outweigh the similarities even if the respective symbols were considered to be abstract figures with no particular meaning.

To succeed on appeal Omega needed to show that the use of Guru’s mark would be likely to deceive or cause confusion at its application date. While Omega only obtained registration subsequent to that date for the Ω symbol in relation to relevant goods, their unregistered rights in that mark could be used for the purpose of establishing the required likelihood of deception or confusion. However, the Court of Appeal found that Omega’s reputation in the Ω symbol on its own was insufficiently established by the supplied evidence of such use. Nonetheless, the Court of Appeal referred to its own precedent to hold that use of a component of a mark by a competitor could give rise to deception or confusion if that component is an essential feature and significant part of the reputation of the full mark.

In considering deception or confusion the Court of Appeal held that the Judge was not entitled to assume that a significant number of New Zealanders know that the Ω symbol is a Greek letter. This is somewhat surprising given that the Ω symbol is used to represent electrical current resistance and is introduced to high school students for such use.

As Guru had yet to make any use of its mark the Court had to compare actual use of Omega’s mark with the notional use of Guru’s mark, and taking into account imperfect recollection. The Court of Appeal found that the visual differences outweighed the similarities, noting in particular differences in the orientation, shape, angle and thickness of the lines. The overall impression of the Omega mark was given as a bottom opening oval while the Guru mark was given as a stylised ‘U’ shape. The Court of Appeal held that even if the Guru mark was rotated the other differences would still be sufficient to prevent deception or confusion. It also noted that given the predominant use is in relation to watches the correct orientation of the mark would be determined by the watch face, and that interested purchasers of luxury watches and jewellery would closely examine such goods.