Has the Full Court Artificially Rejected AI Inventorship?
In Commissioner of Patents v Thaler 2022 FCAFC 62 a full bench of the Full Court allowed the Commissioner’s appeal and held that an artificial intelligence system or machine cannot be named as an inventor for a patent.
Dr Thaler created an artificial intelligence system which he called DABUS, being the acronym of ‘Device for Autonomous Bootstrapping of Unified Sentience’. DABUS is capable of autonomously creating product designs. Dr Thaler filed a couple of PCT International phase applications from two such product designs naming himself as the applicant and DABUS as the inventor. Various PCT national phase entries and a European regional phase entry were made from those International phase applications. In each of those jurisdictions so far only the South African patent office has allowed DABUS to remain as the inventor. However, that was on account of South African patent applications not being subject to substantive examination. Since the inventor named in the South African national phase entry matched the inventor named in the PCT International phase application no formality objection arose. All the other patent offices that have examined the applications raised objections that DABUS does not qualify as an inventor on account of not being a natural person. With the exception of the Australian Federal Court’s decision all other patent office tribunal and Court appeals from those examination objections have been rejected.
In the Australian Federal Court decision Justice Beach found there was nothing in the Patents Act 1990 which excluded a non-human artificial device or system from being an inventor. It was further found that as the word “inventor” is not defined in the Act or Regulations it has its ordinary meaning. The primary Judge found the word “inventor” to be an instance of an agent noun, being a verb having the suffix “or” or “er”, thereby indicating that the noun (inventor) describes the agent that does the act (invent). The primary Judge then gave the following examples of other agent nouns where the agent can be a human or a device or system: “computer”, “controller”, “regulator”, “distributor”, “collector”, “lawnmower” and “dishwasher”. In accordance with being an agent noun the word “inventor” can validly be used to describe an artificial intelligence system that invents. The primary Judge went on to consider it apt that the concept ” inventor” should be construed in a flexible and evolutionary way, like has occurred with the concept of “manner of manufacture”. It was also considered that such an interpretation is consistent with the Act’s object of promoting economic wellbeing through technological innovation. Consequently, the primary Judge held that the Deputy Commissioner erred in concluding that the name provided did not comply with the requirements of regulation 3.2C(2)(aa) because it was a legal impossibility for an artificial intelligence machine to be the inventor of an invention.
The Full Court considered the section 15 entitlement provision to be central to the issue of who or what can qualify as an inventor. Section 15(1) states:
15 Who may be granted a patent?
(1) Subject to this Act, a patent for an invention may only be granted to a person who:
(a) is the inventor; or
(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
(c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or
(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).
After giving a historical overview of the role of the inventor in entitlement the Full Court noted that the Explanatory Memorandum to the Patents Bill 1989 stated the effect of section 15 as follows:
Broadly, a patent may be granted only to the inventor of the invention concerned or to a person deriving rights from the inventor.
Whereas the primary Judge considered 15(1)(a)-(d) to be alternatives, the Full Court considered that 15(1)(b)-(d) need to be understood as involving parties having a legal relationship to the person mentioned in 15(1)(a). Thaler claims entitlement from DABUS’s invention via section 15(1)(c). However, the Full Court considered that the word “inventor” in section 15(1)(c) only refers to the inventor mentioned in section 15(1)(a), thereby precluding DABUS from being the inventor mentioned in section 15(1)(c). The Full Court found its construction created no inconsistencies with other provisions in the Act that use the term “inventor” or any other provisions. The Full Court found corroboration for its construction in the High Court’s decision in D’Arcy v Myriad Genetics Inc  HCA 35, which at  stated:
As appears from s 6 of the Statute of Monopolies, an invention is something which involves “making”. It must reside in something. It may be a product. It may be a process. It may be an outcome which can be characterised, in the language of NRDC, as an “artificially created state of affairs”. Whatever it is, it must be something brought about by human action.
As noted therein that references the High Court’s pronouncement in National Resource Development Corporation v Commissioner of Patents  HCA 67 that a manner of new manufacture bring about an artificially created state of affairs. The Full Court considered that in both cases there was an assumption that human agency was required in the development of the invention in suit. Yet that corroboration seems weak or begs the question. As DABUS has shown, making an invention does not require human action for the thing made to be an artificially created state of affairs. By appealing to coherence with the historical understanding of the word "inventor" the Full Court somewhat begs the question and does not adequately respond to the trial Judge's contentions that ” inventor” is an agent noun that should be construed in a flexible and evolutionary way
2. Plant Variety Rights
Draft Plant Variety Rights Regulations and Fees Released
The Ministry of Business, Innovation and Employment (MBIE) has now released an exposure draft for the Plant Variety Rights Regulations 2022 along with associated material, including a fees discussion document.
The Regulations relate to the Plant Variety Rights Bill 2021, which will replace the current Plant Variety Rights Act 1987 with significant changes. The Bill as introduced was earlier discussed here and the changes following the select committee were earlier discussed here. The fees discussion document follows on from the earlier consultation on fees as earlier discussed here. Notable provisions include:
- The draft regulations seek to fill considerable procedural gaps in the current regulations by drawing on the framework used for the Patents Regulations 2014.
- It will be mandatory to use the IPONZ Case Management system unless the Commissioner is satisfied that there are exceptional circumstances that justify not using it.
- In addition to an address for service an electronic communication address also needs to be provided.
- Renewal Fees will change from being due 1-month either side of the anniversary date to the three-months ending with the anniversary date.
- It is clarified that fees need to be paid (electronically) at the time of the relevant application, request or other filing unless an arrangement acceptable to the Commissioner has been made. Although for examination and growing trial fees these need to be paid within 2-months of the Commissioner requesting payment, unless the Commissioner is satisfied that exceptional circumstances exist.
- The denomination (name to be recorded in the registry for a protected variety) needs to be supplied within 3-months of the application date.
- Schedule 2 of the Regulations sets out 10 non-indigenous plants of significance to Maori. However, it is noted that this list may be added to following the response to the WAI 262 Report.
- The structural changes to the fees set out in the earlier fees consultation document are to be implemented, with significant increases in fees on account of the changes that have occurred since fees were last reviewed.
3. Trade Marks
EU Commission Publishes Proposed GI Regulations for Non-Agricultural Products
Further to the earlier notified EU consultation on extending geographical indication (GI) protection to non-agricultural products, the EU has now proposed a framework to protect craft and industrial products that rely on the originality and authenticity of traditional practices from their regions.
As earlier discussed, EU-wide GI protection is currently available for agricultural products and foodstuffs, including wine and spirits, which is wider than the TRIP’s minimum of GI protection for wine and spirits. Within the EU GI protection for non-agricultural products is only available at state level in about half of the EU states. In 2020 the EU was one of the founding members of the Geneva Act of the Lisbon Agreement. The Geneva Act allows for both appellations of origin and geographical indications. The former, which are also provided for under the Stockholm Act of the Lisbon Agreement, requires that the product’s raw materials be sourced and processed in the place of origin, while the latter only requires that the given quality, reputation or other characteristic of the product is essentially attributable to its geographical origin. In either case, whether under the Stockholm Act or Geneva Act of the Lisbon Agreement, the qualifying criteria for protection is independent of whether or not the product is an agricultural product. However, in the absence of EU-wide GI protection for non-agricultural products, EU-based producers of non-agricultural products can only use the Lisbon Agreement to protect GIs that are relevantly linked with those products if they are in states that are members of the Lisbon Agreement and that allow protection for GIs for non-agricultural products.
Nonetheless, currently the origin of non-agricultural products can be protected at the EU level by way of collective trade marks – such as Swiss for watches etc or Solingen for cutlery etc. However, using a collective trade mark does not enable manufacturing associations to certify the link between quality and geographical origin according to pre-determined EU-level standards, such as occurs with EU Regulation 2012-1151 on Quality Schemes for Agricultural Products and Foodstuffs.
Once adopted, the Regulation will apply to craft and industrial products such as natural stones, jewellery, textiles, lace, cutlery, glass and porcelain. Although sharing features of EU Regulation 2012-1151 the Regulation will be separate to rather than an amendment of that Regulation. In order to benefit from GI protection, the product needs to comply with the following eligibility requirements that are focused on the geographically rooted product quality:
- Originate in a specific place, region or country;
- Have a quality, reputation or other characteristic that is essentially attributable to its geographical origin; and
- Have at least one production step taking place in the defined geographical area.
The registration procedure for applications involving GIs located within the EU will involve two levels. The initial application will be made with the competent national authority of the applicant’s member state which will examine and run a national opposition procedure. If the application passes this step, then the national authority will submit an EU level application to EUIPO who will examine and run a worldwide opposition procedure. If EU level registration is achieved, then any national level registrations within the EU will be cancelled as co-existence will not be allowed. EU level registration will also allow applications to be made for protection in non-EU countries that are members of the Geneva Act to the Lisbon Agreement and which allow GI protection for non-agricultural products. Likewise, applications for EU GI protection for non-agricultural products can be made by registrants in those non-EU countries, which will be examined by the EUIPO.
The EU also proposes to extend such GI protection into countries that are not members of the Geneva Act to the Lisbon Agreement by way of including such provisions in bi-lateral free trade agreements (FTAs). In this regard both Australia and New Zealand are in FTA negotiations with the EU, having each recently concluded an FTA with the UK. Those AU and NZ FTA agreements with the UK contain provisions to the effect that if AU and/or NZ expand the scope of their GI protection (such as on account of a concluded FTA with the EU), then their FTA with the UK in that regard can be renegotiated. Although, currently the UK’s GI protection is for agricultural products and foodstuffs, including wine and spirits.
Registration Shield Evades Issues with Establishing Reputation
In Toyota New Zealand Limited v Vanguard Trademark Holdings USA LLC 2022 NZIPOTM 9 Vanguard had mixed results, but its class 39 registration proved sufficient against core aspects of Toyota’s goods and services specifications in classes 12 and 35.
Background: Vanguard opposed Toyota’s November 2017 applications for the following three marks: DRIVE HAPPY; THE DRIVE HAPPY PROJECT; and the TOYOTA DRIVE HAPPY PROJECT device mark, each covering the same goods and services in classes 9, 12, 16, 25, 35, 36, 37, 41, and 42. The marks achieved acceptance in February 2018 after Toyota agreed to remove class 39 from the specifications and Toyota launched its Drive Happy Project shortly thereafter, based around a fundamental change in sales model.
In early 2014 Vanguard obtained registration in New Zealand for DRIVE HAPPY in class 39 covering vehicle renting and leasing services and reservation services for the rental and leasing of vehicles, having allowed a 1999 registration for the same mark in class 39 to expire in 2006. Use of Vanguard’s mark in the course of trade in New Zealand commenced around 2012 and is made through use by its USA subsidiary Alamo Rent A Car. In earlier proceedings between the parties Toyota had sought to revoke Vanguard’s class 39 registration on the basis that it had not been used for a continuous period of three or more years up to 22nd January 2018. However, the same Assistant Commissioner found that use in the course of trade in New Zealand during the relevant period was established and that the services did not need to be physically provided in New Zealand in order to count as being used in the course of trade in New Zealand.
Grounds of Oppositions: By the hearing Vanguard limited its pleaded grounds of opposition to section 17(1)(a) – use likely to deceive or confuse, and section 25(1)(b) – confusion likely in relation to its class 39 registration covering the same or similar services. However, shortly before the hearing Vanguard sought to amend its pleadings in relation to Toyota’s application for the identical trade mark DRIVE HAPPY so that it was under section 25(1)(a) instead of section 25(1)(b) as the likelihood of confusion is presumed for the former where the services are identical. Given the late stage of the amendment application IPONZ declined to allow it. The scheduled hearing occurred despite the period within which Vanguard could appeal the amendment rejection expiring the next day. The Assistant Commissioner concurred with IPONZ’s rejection, finding it would prejudice Toyota and that on balance the public interest favoured declining the amendment request.
Likelihood of Deception or Confusion: For the section 17(1)(a) ground Vanguard had the initial onus of establishing awareness of its mark in New Zealand prior to the application date of Toyota’s marks. While there were significant sales through the Alamo website covering a 5-year period for car related services in New Zealand, it was not clear whether that revenue was generated in relation to the DRIVE HAPPY mark or under the ALAMO brand. The website evidence of use Vanguard provided was undated, which led the Assistant Commissioner to hold that the sales only evidenced awareness of the ALAMO brand. Similarly, evidence of visits to the ALAMO website by people in New Zealand did not establish awareness of the DRIVE HAPPY mark in the absence of dated evidence thereof. Even a significant history of New Zealand customers making bookings of Alamo rental cars was found not to establish awareness of the DRIVE HAPPY mark. In 2012 Alamo and Vanguard entered into long-term rental contracts with 3 New Zealand based travel agents, which included authorised use by the travel agents of the DRIVE HAPPY mark along with having Alamo promotional brochures and fleet cards that included the DRIVE HAPPY mark available for customers. However, the Assistant Commissioner found the mark to be not particularly prominent and raised further doubts around its evidential worth. While there was evidence of the mark being used on Alamo’s social media accounts there was no evidence regarding whether these sites were visited by people in New Zealand. Further, the use of the mark in close proximity to the ALAMO brand meant it functioned as a secondary mark having diminished reputation compared to standalone use. The Assistant Commissioner held that Vanguard had not discharged the onus of establishing awareness of its mark in New Zealand and so rejected the section 17(1)(a) ground. That somewhat harsh result seems to be on account of the Assistant Commissioner’s piecemeal approach to considering the evidence. The use made through the contracts with New Zealand based travel agents seems to be Vanguard’s strongest evidence. Given that the mark was used on the promotional brochures and fleet cards it would seem fair to infer that the mark would have been similarly displayed (in even clearer resolution) on the website, the address of which would have been on the brochures. By allowing one source of evidence to corroborate other evidence using prima facie valid inferences there appears to be sufficient basis for establishing awareness of the mark in New Zealand, even if the mark was only used as a secondary mark.
Similar Prior Registration: As the consideration of deception or confusion under section 25(1)(b) is made on the basis of notional use (in a normal and fair manner) in relation to the registered mark’s specified services, establishing actual use is not required.
At the hearing Vanguard conceded that Toyota’s class 16, 25 and 42 goods and services were not the same as or similar to the services of their registration. While both companies can be described as operating in the car business and Toyota’s specifications cover vehicle related goods and services, Toyota argued that a more nuanced consideration of similarity is required given the expansive nature of the vehicle industry. While accepting on a notional basis that Vanguard could offer software to facilitate its provision of class 39 services, the Assistant Commissioner considered such offering would be incidental and insufficiently similar to Toyota’s class 9 goods. The Assistant Commissioner also rejected Vanguard’s contention that Toyota’s lease financing services are similar to its vehicle leasing services. While the respective services will involve similar users, the uses and physical acts of service are not similar or competitive. Toyota’s class 41 services were similarly found to be insufficiently similar to Vanguard’s services. For class 12 motor vehicles were found to be similar, but motor vehicle parts and fittings were not. Motor vehicles have the same uses and can have the same users and, particularly for online purchases, the trade channels can be similar, and the supply of motor vehicles (for sale) is in competition with the leasing of vehicles. In class 35 wholesaling and retailing services in relation to vehicles and auction sales and services were readily found similar to Vanguard’s renting and leasing services. However, the class 37 maintenance, repair and servicing of vehicles services were, on balance, considered insufficiently similar.
The Assistant Commissioner readily found Toyota’s DRIVE HAPPY mark to satisfy the similar mark requirement under section 25(1)(b). Given the prominence of that phrase in the overall impression created by Toyota’s other word and device mark applications and the unusual or unexpected nature of that phrase, those marks were also found to satisfy the similar mark requirement. The word “PROJECT” was considered to add little as it plays a descriptive role that is conceptually consistent with the idea evoked by Vanguard’s mark. While the device mark includes the distinctive word “TOYOTA”, it is not as prominent and reputation in that element cannot be considered under section 25(1)(b) and it has no plain meaning in English. While the length of the device mark creates auditory differences the opposed goods and services would not be purchased solely in an auditory context.
In considering the likelihood of deception or confusion the Assistant Commissioner noted that a high degree of similarity between the marks can offset a lower degree of similarity between the respective goods and/or services (or vice versa). The absence of evidence of confusion was found to be unsurprising given Vanguard has not had large volumes of sales under its mark, and does not establish that confusion or being caused to wonder might not occur in the future, particularly if DRIVE HAPPY is not used in close proximity to the ALAMO brand. The Assistant Commissioner agreed with Vanguard that use of the opposed marks by Toyota could cause consumers to wonder if there is a close association, commercial link or co-branding alliance between Toyota and Alamo, and that the presence of the word “PROJECT” can reinforce rather than allay that impression. Consequently, the Assistant Commissioner held that Toyota had not established that a substantial number of prospective purchasers are not likely to be confused if it uses the opposed marks in relation to motor vehicles, or wholesale and retail services in relation to vehicles, or auction sales and services in relation to motor vehicles. That finding was more finely balanced in respect to Toyota’s device mark, but was still sufficient to engage section 25(1)(b).
While the section 25(1)(b) finding only affected several of the numerous goods and services in Toyota’s applications, they are nonetheless core aspects of Toyota’s business. Given that Toyota is still using the marks on its website (https://www.toyota.co.nz/drive-happy/) presumably they are going to appeal the decision.