March 2018

1. General

Australia

New Bill Omits Recommended Abolition of Innovation Patent System
On 28th March 2018 the first reading of the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 occurred.

The Bill follows the earlier reported Government response to the Productivity Commission’s recommendations in relation to intellectual property legislation, and subsequent consultations by IP Australia. The Bill notably omits the Productivity Commission’s recommendation to abolish the innovation patent system. However, while that recommendation was omitted from the Bill, whether or not the recommended abolition is subsequently effected will depend upon further consultation with and consideration of the effect that such abolition would have on small and medium sized enterprises (SME). During the consultation phase and following IP Australia’s response to the public consultation various IP firms and organisations objected to the abolishing of the innovation patent system, arguing that there was insufficient research to back the recommendation and that doing so would likely be counterproductive to the intended beneficiaries (SME).

New Zealand

Liberalizing Amendments to IP Regulations
Amendments to the Regulations for Patents, Trade Marks and Designs have been gazetted and will enter into force on 5th April 2018.

The amendments are generally liberalizing in nature in that they will make it easier for applicants. Each of the amended regulations will allow the address for service to be in either New Zealand or Australia. The amended Patent Regulations further provide that—

• regulation 19(2)(b) is revoked so that only form requirements need to be satisfied for documents to be considered filed – they do not need to otherwise comply with the requirements of the Act and the regulations:
• regulation 52(3) is revoked and regulation 82 amended to apply requirements regarding the respective non-overlap of substantially the same content of divisional and parent patent applications at the acceptance stage, rather than the application stage:
• regulation 59 (which relates to deposit requirements for micro-organisms) is amended to provide that the prescribed period for the purposes of section 43(1)(b) of the Patents Act 2013 is the same as the period prescribed for the purpose of section 71(1) of that Act (which relates to the time for putting an application in order for acceptance), namely, 12 months after the date of issue of the first examination report under section 65 of that Act:
• the time limit in regulation 61 for amending a PCT International phase application under Article 34 will change from 19 months to 22 months after the earliest priority date:
• regulations 103, 104, and 161 are amended to clarify that the period for filing a counter-statement to an application for revocation of a patent may also be extended under regulation 161 in certain situations. The effect of the amendments, in summary, is that extensions will be possible under both regulations 103 and 161 in certain circumstances, and either 1 or 2 extensions are possible depending on which regulation the first extension application is made under.

However, it is notable that no amendments were made to regulation 80, which the Assistant Commissioner recently recommended for amendment​.

2. Patents

Australia

Synergy of Combinations can be Obvious if Discovered by Routine Steps
In the recent Hearings Office decision Syngenta Crop Protection AG v Bayer Intellectual Property GmbH the Delegate held that claims to a synergistically effective active compound combination to be obvious as the person skilled in the art would find the synergistic effect through routine trials.

Under the pre-raising the bar legislation Syngenta opposed Bayer’s application for the synergistic combination of known active substances which individually have different but known insecticidal properties. The aim of Bayer’s alleged invention is to provide an insecticidal composition of the nicotinergic acetylcholine receptor modulators and anthranilamides with a better activity spectrum than the compounds have individually. This synergistic effect is satisfied when the action of the active compound combinations exceeds the total of the actions of the active compounds when applied individually. The specification states that the weight ratio’s of the active ingredients can be varied across a relatively wide range but notes that the synergistic effect is particularly pronounced in certain weight ratios. Claim 1 claims an insecticidal composition comprising a synergistically effective active compound combination of one compound of formula (I) selected from the group consisting of Ia, Ie, Ig, Ik, Im and one compound of formula (II-1) in a weight ratio of 25:1 to 1:10.

Prior art publication D4 is directed to various anthranilamides, their N-oxides and their use for controlling invertebrate pests. Among the compositions disclosed in D4 are the anthranilamides of formula (II-1) mixed with at least one additional biologically active compound or agent including insecticides, fungicides, nematocides and bactericides. D4 further specifies compounds Ia, Ik, Im as preferred insecticides.

It was well known to persons skilled in the art (PSA) at a general level that combinations of active compounds could have synergistic effects such as providing improved insecticidal activity, broadening the spectrum of activity and minimising the development of resistance. However, Bayer argued that for particular combinations synergy was certainly not a given or inevitable and that there was no reasonable expectation on the part of the PSA that synergy would occur.

The Judge found that the PSA could be reasonably expected to ascertain, understand and regard D4 as relevant. Further, given that D4 specifies compounds Ia, Ik, Im as preferred insecticides, the PSA would try them when formulating a combination insecticide. The Judge then went on to conclude that all but two of the applications claims lacked an inventive step as the PSA would discover the synergy and weight ratios between the compounds through routine steps of optimisation.

3. Designs

Europe

Designs can be Solely Dictated by Technical Function even when Alternative Designs Exist
In DOCERAM GmbH v CeramTec GmbH the Court of Justice (CJEU) gave a preliminary ruling on the interpretation of Article 8(1) of the Community Designs Regulations, and in particular whether a design can subsist in the features of appearance of a product which are solely dictated by its technical function when alternative designs exist.

In infringement proceedings between Doceram and CeramTec the ECJ was asked by the referring Court for a preliminary ruling on the correct interpretation of the technical function exclusion on account of differing judicial approaches to the interpretation of that provision in both the European Community Design Regulations and the EU Designs Directive.

The ECJ noted that neither the European Community Design Regulations nor national laws under the EU Designs Directive specify what is meant by the expression ‘features of appearance of a product which are solely dictated by its technical function’. The ECJ further noted that in such scenarios it is required to give an autonomous and uniform interpretation of the expression, taking into account the context of the provision and the legislative objectives.
In considering the referred question the ECJ first noted that it cannot be assumed that the existence of other designs is the only criterion for making such a determination. Next the ECJ noted that recital 10 in the preamble to the European Community Design Regulations states that while protection should not be granted to features of shape that are solely dictated by function, it does not follow that a design must have an aesthetic quality.

The ECJ then noted that the substantive provisions of the legislation use appearance or impression as the decisive factor. Applying this rationale to Article 8(1) the ECJ held that the exclusion from protection applies when the fulfilling of a technical function is the only factor in the designer’s choice of features of appearance of a product. Where that is the case technological innovation should not be hampered by granting protection to those features. As technical function is the only consideration in this regard the existence of other designs is not decisive since alternative designs can fulfil the same technical function. If alternative designs were sufficient to evade application of Article 8(1) then potentially a single market operator could obtain protection for different features of shape all performing the same technical function, thereby obtaining protection similar to that of a patent, although without having to fulfil all the requirements of the latter.

It was further held that in determining whether the relevant features of appearance of a product are solely dictated by its technical function the court must take account of all the objective circumstances relevant to each individual case, with such objective circumstances not being limited to those by the perception of an ‘objective observer’.

4. Trade Marks

Australia

Proof Required where Subsidiary Claimed to Authorize Use by Parent
In the recent Delegate’s decision Interactive Engineering Pty Ltd v Orchestral Developments Limited a trade mark application was refused registration on account of not being in the name the relevant party.

Orchestral Developments applied to register ORION HEALTH in classes 9, 16, 38, 42. Orchestral Developments is the IP holding company of the Orion Health group of companies, which operate in the IT Healthcare sector, and Orion Health Group Ltd is the ultimate holding company of Orchestral Developments.

Interactive Engineering opposed Orchestral Developments’ accepted application on account of its prior registrations for or containing ORION as a dominant element for similar goods and services. Orchestral Developments claimed that its application should be allowed to proceed to registration on account of honest concurrent use. However, this was resisted by Interactive Engineering on account of the IP holding company not itself being the user of the contended mark in relation to the goods and services in question. Orchestral Developments attempted to counter this by using the authorised user provisions of the Act which allow authorised use of a trade mark to count as use by the owner.

However, Orchestral Developments was held not to have discharged its onus of establishing that it authorised the use of the mark ORION HEALTH in Australia. Rather, in the absence of evidence to the contrary, since Orion Health Group Ltd is the ultimate holding company of Orchestral Developments, it is the former, not the latter that would authorise use of the mark. There was no evidence to the effect that Orchestral Developments have made Orion Health Group Ltd an authorised user of the mark. Consequently, the honest concurrent user defence was rejected and the mark was refused registration since trade marks filed in the wrong name cannot later be corrected by assignment.

Canada

Promotional Use Insufficient to Constitute Genuine Use
In the non-use case Riches, McKenzie & Herbert LLP v Cosmetic Warriors Ltd a Federal Court Judge overturned a Registrar of Trade Marks decision and held that something more than promotional use is required to constitute genuine use of a trade mark.

The cosmetics company Cosmetic Warriors registered the mark LUSH in relation to t-shirts. Employees of the company wear t-shirts bearing the mark as part of their uniform and they can also purchase them at cost price for themselves and as gifts for family and friends. There was evidence of modest sales, both in Canada and the United States of America, on this basis, however the t-shirts were not otherwise available for sale to the public.

The Registrar found that the t-shirts were not merely uniforms as they could be purchased for third parties, albeit via employees. Likewise they were not found to be merely promotional and it was considered inappropriate to require goods to be sold for monetary profit to be considered as used in the normal course of trade. On this basis the Registrar held that Cosmetic Warriors had satisfied the use requirement and so rejected Riches non-use application.

As a starting point the Judge noted that the distribution of free promotional goods only satisfy the use requirement if such use is part of an overall purpose of deriving profits and developing goodwill in those goods and where those goods are goods in which the business normally deals. The Judge then proceeded to find that payment or exchange for the goods is not sufficient to establish use in the normal course of trade, pointing to precedent that it needs to be for the purpose of acquiring goodwill and profits from the marked goods.

Against this background, and on the facts of the case, the Judge held that the absence of profit, minimal sales and the fact that Cosmetic Warriors are not normally in the business of selling clothing combine to make the Registrar’s determination unreasonable. In the absence of profit the restricted sales to employees were considered to be primarily promotional and not in the normal course of trade.

Cosmetic Warriors also sought to establish use in Canada by way of its export of the t-shirts to its stores in the United States of America, which were also used by and sold at cost to employees. It argued that the use requirement for export is less onerous to satisfy as it does not include the normal course of trade requirement that applies to local use.

Following precedent the Judge found that the use by export provision allows for a deemed use rather than an actual use that is distinct from its use within Canada. Given the earlier finding that Cosmetic Warriors t-shirt sales in Canada do not establish trade mark use, the Judge held that those same activities do not rise to the level of use simply because an export has taken place. Instead, the export by use provision is there to protect entities who would not otherwise be able to satisfy the use condition on account of the sales being made outside Canada as well as to protect them against counterfeit exporters.