February 2016

1. Patents

Australia

IP Australia Updates Practice Note on Patentability of Software
Following the Full Federal Court’s decision in Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 IP Australia has updated its practice note on the patentability of software or computer implemented methods. In determining whether such proposed inventions meet the requirements for patentability of being a manner of manufacture which is not a mere scheme, abstract idea or mere information, the following factors should be considered in the context of the specification as a whole and the relevant common general knowledge:

• whether the contribution of the claimed invention is technical in nature.
• whether the invention solves a technical problem within the computer or outside the computer or whether it results in an improvement in the functioning of the computer, irrespective of the data being processed.
• whether the claimed method merely requires generic computer implementation.
• whether the computer is merely an intermediary or tool for performing the method while adding nothing of substance to the idea.
• whether the ingenuity in the invention is in a physical phenomenon in which an artificial effect can be observed rather than in the scheme itself.
• whether the alleged invention lies in the way the method or scheme is carried out in a computer.
• whether the alleged invention lies in more than the generation, presentation or arrangement of intellectual information.

The practice note also indicates that the following factors are not determinative of patentability:

• that the claimed method can only be implemented in a computing environment.
• limitation of the claims to other technological environments when what is claimed is a scheme or abstract idea.

New Zealand

Patent Revocation Procedure Clarified
In 2015 NZHC 3282 Hoyle v Hoyle the High Court allowed revocation of a patent where the revocation application was not made by way of an originating application.

The plaintiff owner of the patent initially commenced proceedings against the defendant for infringement under the Copyright Act 1994 and the Patents Act 1953. In his second amended statement of defence and counterclaim the defendant sought revocation of the patent on the grounds of prior use and obviousness. The plaintiff subsequently consented to the revocation of the patent.

However, the Judge queried whether the Court had jurisdiction to revoke given that r 22.17 of the High Court Rules. In particular, given that the plaintiff abandoned the patent infringement proceedings did this mean that the revocation application was no longer in the course of proceedings and so must be made as an originating application? However, the Judge accepted the defendant’s submission that r 5.59 of the High Court Rules means that the revocation application was properly made by way of counterclaim and continues in effect despite the abandonment of the infringement proceedings.

2. Designs

New Zealand

Appeal Struck Out as Abuse of Process
In 2015 NZCA 627 Peterson v Lucas the Court of Appeal dismissed Peterson’s appeal against a High Court decision which struck out as an abuse of process Peterson’s attempt to re-litigate prior proceedings and to claim damages for groundless threats under s 34 of the Designs Act.

In 2009 Peterson sought to bring copyright and patent infringement proceedings against Lucas. However, after successfully defending patent infringement proceedings brought by Lucas, Peterson had little funds for that purpose and Lucas was subsequently successful in requiring Peterson to provide security for costs in such proceedings. In 2011, following discussions initiated by Lucas, an agreement was reached whereby Peterson agreed not to continue copyright and patent litigation, and the High Court was advised of the settlement agreement. Shortly thereafter Peterson advised that he did not intend to settle and that he had entered into the agreement under duress on account of Lucus’s threat of copyright infringement in respect of worldwide copyrights he had recently acquired.

However, the High Court held that on the facts Peterson’s assertion of coercion was untenable and that the settlement agreement should stand. In a subsequent proceeding before the Court of Appeal Peterson attempted to vacate and/or stay the High Court judgment through the introduction of new evidence. Firstly, Peterson argued that the Judge had not taken into account the groundless threats provisions of the Designs Act 1953. However, the Court of Appeal found that the Judge had taken account of the issue but found that it was not established on the facts. Secondly, Peterson sought to use Article 5 of the Berne Convention to argue that he could rely on section 74 of the Copyright Act 1994 to avoid infringement. However, the Court of Appeal found that section 74 does not assist Peterson’s case, since the copyright asserted by Lucas was not embodied in a ceased New Zealand patent or design. The Court of Appeal rejected Peterson’s recall application and concluded that his pleadings only amounted to a recasting of arguments previously given or putting forward other arguments that could have been raised at the earlier hearing but were not.

In subsequent High Court proceedings which this case appeals Peterson again pleaded that he was the victim of illegitimate threats and that section 74 should provide a defence to infringement. For the latter claim Peterson argued that it is absurd to consider that a published and abandoned United States patent will be accorded special rights, powers, or exemptions not available for local New Zealand art.

However, the Court of Appeal concurred with the Judge’s dismissal of Peterson’s pleadings as an abuse of process, since it is not a ground for reopening argument that the litigant has a better understanding of the law and could have improved upon the case. To allow such would be contrary to the important common law principle that a party must bring their whole case to the court as there is a community interest in finality of litigation. The Court of Appeal, nonetheless, considered the merits of Peterson’s claim under section 34 of the Designs Act and found that it had no prospect of success, since there was no New Zealand design that was asserted against Peterson.

3. Trade Marks

New Zealand

Plain Packaging Legislative Push Resumes
Following the Select Committee’s report on the Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill 2013 in August 2014 the Bill was left in limbo pending the outcome of the WTO’s ruling on the legality of Australia’s law on the plain packaging of tobacco products. In late 2015 the WTO ruled in favour of Australia and in mid-February 2016 it was signalled that the Bill is likely to be passed before the end of this year.

Wrong Way Round Confusion Not the Right Sort of Confusion
In 2015 NZHC 3333 TomTom Communications Limited v TomTom International BV the High Court upheld an Assistant Commissioner’s decision which rejected TomTom Communications’ opposition to TomTom International’s trade mark applications.

TomTom International’s device marks for TOMTOM in classes 9, 38, 39 were opposed by TomTom Communications who had word mark registrations for TOM TOM in classes 35, 41, 42, which included marketing, business communications and public relations services. TomTom Communications commenced use of its marks a couple of years before TomTom International, and the former were registered more than 7 years before TomTom International officially entered the New Zealand market and more than 10 years before the opposed applications were filed. However, the latter quickly established a significant reputation worldwide, including in New Zealand, in its marks for portable navigation devices and systems.

Although the marks are essentially identical, the Assistant Commissioner rejected the section 25(1)(b) opposition on the basis that the services are distinct and conducted through different trade channels. While both involve communications, that was considered too broad a categorization when comparing the respective services. The Judge agreed with that assessment.

Nonetheless, the Assistant Commissioner had to account for why instances of confusion by members of the public were not sufficient for satisfying section 17(1)(a), which states that the Commissioner must not register as a trade mark or part of a trade mark any matter that would be likely to deceive or confuse. The instances of confusion were classified as ‘wrong way round’ confusion, which occurs when members of the public think the opponent is associated with the applicant. The Judge agreed with the Assistant Commissioner that assessment under section 17(1)(a) requires a threshold enquiry as to whether or not the opponent has established sufficient awareness of its mark in New Zealand to make confusion a reasonable possibility, and that wrong way round confusion cannot establish that. Section 17(1)(a) is concerned with confusion as to the origin of the opponent’s goods or services, whereas the instances of confusion were simply a failure by people to make contact with the organisation they were trying to make contact with. Such instances of confusion are not confusion as to the origin of the opponent’s services.

While acknowledging that the threshold for confusion under section 17(1)(b) is higher compared to section 17(1)(a), TomTom Communications nonetheless argued that the evidence of actual confusion was sufficient to establish misleading or deceptive conduct under the Fair Trading Act 1986. However, the Judge was satisfied that there had not been and would not in the future be any misrepresentation by TomTom International when it uses the mark that is the subject of its application. Although some people formed mistaken beliefs it is the perspective of the hypothetical reasonable person that is important, and TomTom International’s conduct was held not to mislead or deceive such a person.

4. Copyright

New Zealand

Privilege Held Not to Thwart Reasonable Search Requirement
In 2015 NZHC 3001 Hoyle v Hoyle the Judge partially allowed the plaintiff’s discovery application in respect of documents relevant to copyright infringement proceedings.

The plaintiff alleges infringement of their copyright in drawings and designs of agricultural machinery. They sought laser cutting and shape files provided by the defendant to any laser cutting firms since 2004 and all correspondence between the defendant and such laser cutting firms. While numerous such documents were provided in affidavits filed by the defendant, the plaintiff alleged that not all documents were provided and sought particular discovery under r 8.19 of the High Court Rules.

The Judge noted that the plaintiff had the onus of establishing grounds for believing that the defendant had withheld documents that should have been discovered. The plaintiff claim the laser cutting and shape files must exist since machinery was manufactured and it is implausible to believe the defendant’s contention that he works from memory and has not committed the designs to paper. The plaintiff also claim the defendant had an obligation to take all reasonable steps to preserve the documents after receiving the cease and desist letters.

However, the Judge held that the defendant’s affidavits must be accepted as complete, but noted that cross-examination on those points could arise during trial. Regarding the obligation to preserve documents, the Judge held that it is not indefinite and ceases when proceedings are no longer reasonably contemplated. Given that nearly 6 years elapsed between cease and desist letters the Judge held there was no duty to preserve those earlier documents.

Nonetheless, the Judge allowed particular discovery in respect of what steps were taken to discover correspondence between the defendant and the laser cutting firms. The Judge held it was unfair on the plaintiff that the defendant had passed responsibility for such searches to their legal advisors and then claimed privilege in documents revealing what searches were undertaken. Hence, with limited exceptions, the Judge ordered the defendant to file another affidavit complying with r 8.15 of the High Court Rules particularising what steps were taken in fulfilment of the obligation to make a reasonable search for relevant correspondence.