March 2019
1. General
Changes to Patent and Trade Mark Fees Imminent
Following feedback from submissions sought during the middle of 2018 IPONZ has now submitted and received Cabinet approval for its Fees Review, which will involve amendments to patent and trade mark fees and hence regulations. The implementation date, which has yet to be notified, will be notified a minimum of 3-months before its effective date. Notable changes include:
- Patent renewal and application maintenance fees will generally double, but will more than double for renewals from the 10th anniversary onwards.
- The fee for requesting patent examination or re-examination will increase by 50%.
- An excess claim fee will be introduced per set of up to each 5 claims in excess of 30.
- The complete specification application fee will double and increases of even greater magnitude will apply for amendment after acceptance and restoration requests.
- The trade mark application and renewal fees will reduce. The degree of the reduction for application fees will be determined by whether the application is based on pre-application advice received from IPONZ or whether the pick-list of pre-approved classification terms are used.
2. Patents
Interpretation of "Comprising" Considered by CAFC
In 18-1772 In Re Qapsule Technologies Inc the Court of Appeal for the Federal Circuit (CAFC) confirmed that the use of the transitional term “comprising” creates a presumption that the recited elements are only a part of the device and that the claim does not exclude additional unrecited elements.
Qapsule’s patent application relates to encapsulating recombinant enzymes and other cargo proteins within the interior space of protein nanoparticles. Claim 1 of the disputed application begins as follows:
1. A synthetic capsule construct for providing a protected chemical milieu, the construct comprising:
A prior art document was found to disclose a recombinant influenza A virus and other documents were relied upon to evidence the inherent structural features of such a virus. Various elements of the virus were found to interact in ways that inherently anticipate the various limitations in claim 1.
Before the Patent Trial and Appeal Board (PTAB) Qapsule sought to distinguish claim 1 from the prior art document by arguing that claim 1 includes a limitation that the shell proteins are recombinant whereas the shell proteins identified in the prior art document are not recombinant. However, the PTAB rejected that argument on the basis that incorporating a method step into a product claim, where the product is patentably indistinguishable from the prior art, cannot impart patentability on an old product. Irrespective of by which methods the shell proteins were produced, the final constructs including the shell proteins would be expected to be structurally identical because they would share the same amino acid sequence, same glycosylation patterns (if any), as they would be produced by the same cell.
Before the CAFC Qapsule argued for the presence of structural differences between its claimed invention and the prior art. In particular, in the prior art document virus assembly requires both viral RNA and ribonucleoprotein (RNP) to bind with the viral shell proteins, whereas Qapsule asserts that for its invention RNP does not need to be present. However, the CAFC held that on account of using the transitional term “comprising” in claim 1 the claim was inherently anticipated by the prior art document, since it does not exclude the possibility of capsule assembly in the presence of RNP. Given that claim 1 does not exclude the presence of RNP from the process of capsule assembly the unclaimed differences could not be used to distinguish the claim from the prior art document and so could not be used to avoid inherent anticipation.
3. Designs
Spare Parts Defence Given First Substantive Consideration in AU
In 2019 FCA 97 GM Global Technology Operations LLC v SSS Auto Parts Pty Ltd the wide scope and presumption in favour of the spare parts defence to design infringement was confirmed.
After seeking legal advice SSS Auto Parts began importing non-genuine parts relating to the Holden Special Vehicle (HSV) range, including parts that GM Global has design registrations for. GM Global noticed that non-genuine HSV spare parts were in the Australian market in 2013. After establishing that SSS Auto Parts was importing those non-genuine spare parts GM Global commenced design infringement proceedings against them in 2015. SSS Auto Parts readily concede that the imported parts infringe the design registrations, but claim that they have a complete defence under spare parts provisions given in section 72.
Subsection 72(1) provides that the use of a product does not infringe a registered design if the product is used for the purpose of repair of a complex product so as to restore the complex product’s overall appearance in whole or in part. Subsection 72(2) provides that where the repair defence is asserted the registered owner of the design bears the burden of proving that the person knew, or ought reasonably to have known, that the use or authorisation was not for that purpose.
The Judge noted that the Explanatory Memorandum to the Designs Act 2004 discussed both of these subsections. In regard to subsection 72(1) it was stated that the defence does not apply when the use of a component part results in the enhancement of the appearance of the complex product. In regards to subsection 72(2) it was stated that placing the onus on the suppliers or manufacturers of spare parts would disincentivise legitimate competition, but the onus can readily switch if they know they are or should have reasonably known that they are participating in using parts for non-repair purposes.
GM Global contended that SSS Auto Parts should have known that the parts were not being used for repair purposes for several reasons, principle amongst which being that:
- there is a notable aftermarket industry catering to vehicle owners wanting to customise or upgrade the appearance and performance of their vehicles;
- by contrast the market for repairs is notably smaller;
- when sold to online resellers, as opposed to panel beaters and smash repairers, the parts were most likely to be used for customisation and enhancement;
- many of the online resellers had the word ‘customisation’ or ‘enhancement’ or minor variations thereof in their business name.
However, the Judge found that the objective evidence pointed away from GM Global’s inference as to SSS Auto Parts business practices. In particular, a number of policies had been implemented to reduce the risk that parts would be sold for non-repair purposes. Since July 2012 all invoices contained the notice ‘All parts authorised only for use in repairs’, and by March 2014 SSS Auto Parts had adopted a policy of labelling the outer packaging of all restricted parts with a sticker stating ‘Authorised for use only in repairs’. In January 2015 all sales representatives of SSS Auto Parts signed a declaration to the effect that they only sought sales of parts for repair purposes.
Regarding the limited consumer demand submissions the Judge found that the owner of SSS Auto Parts was not in a position to know or ought reasonably to have known the number of HSV’s in the market when importing the non-genuine parts as such figures were kept confidential.
Nonetheless, the Judge found that there was sufficient evidence in a limited number of sales in which the sales representatives should have known that the parts were not being purchased for the purpose of repair, and which consequently amounted to infringement.
SSS Auto Parts counterclaimed for unjustified threats made by GM Global both to them and the resellers they supply. Under subsection 77(3) threatening to bring infringement proceedings in respect of a registered design that has not been certified constitutes an unjustified threat. The question arose as to whether section 78 allows the Court to not grant relief in respect of such unjustified threats if the registered design is subsequently certified (prior to being raised in proceedings). The Judge found that the use of the present tense in the relevant wording in section 78 meant that the Court could decline relief. Nonetheless, GM Global was found to have made unjustified threats where it had referred to registered designs that were never certified. The Judge also clarified that the owner of a registered design that is a part of a more complex product is not obliged to consider whether the section 72 defence applies prior to threatening infringement proceedings.
4. Trade Marks
Canada Joins Three International Trade Mark Instruments
On 17th March 2019 Canada deposited its instruments of accession to the Madrid Protocol, Singapore Treaty and the Nice Agreement. They will enter into force with respect to Canada on 17th June 2019.
Disclaimers Held Irrelevant to Assessment of Liklihood of Confusion
In C 705/17 Patent- och registreringsverket v Mats Hansson an Advocate General gave their opinion, in response to questions referred to it by a Swedish Court of Appeal, on the status and effect of disclaimers on the global assessment of factors relevant to establishing the likelihood of confusion.
The referred questions stemmed back to the Swedish Patent Office’s rejection of the application for the mark ROSLAGSÖL in respect of non-alcoholic beverages and beers on account of the earlier registration of the given device mark in respect of alcoholic beverages. The earlier registration is subject to a disclaimer to the effect that it does not give an exclusive right over the word “Roslagspunsch”, which was made on account of Roslagen being the name of a geographical region on Sweden’s eastern seaboard.
That rejection was overturned by the Swedish Patents and Market Court which held that despite the disclaimer the words ‘Roslags’ and ‘Punsch’ had to be taken into consideration in the assessment of the likelihood of confusion, but nonetheless found no likelihood of confusion on account of the low visual and aural similarities and the low degree of similarity between the goods. The Swedish Patent Office appealed that decision to the Svea Court of Appeal, which then referred questions to the European Court of Justice to the effect of whether an element of an earlier mark that is covered by a disclaimer can affect the assessment of the likelihood of confusion, and if so how.
The Advocate General noted that the European Trade Marks Directive applying to these proceedings (Directive 2008/95) concerned the harmonisation of the substantive aspects of national trade mark laws that directly affect the functioning of the internal market. Given that that Directive was not a full-scale approximation of the trade mark laws of the Member States, it allowed procedural issues, including those relating to the registration of trade marks, to remain within the competence of Member States. Although that Directive was subsequent repealed and replaced by Directive 2015/2436, which extended harmonisation to include the principal procedural rules in the area of trade mark registration, Member States were still allowed to establish more specific rules. Disclaimers are not part of either Directive, but are not necessarily inconsistent with them either, with some Member States, including Sweden, allowing for them. The Advocate General noted as examples that the use of disclaimers would be inconsistent with the Directive(s) where the mark consists only of the disclaimed matter or where the distinctive elements of a mark are disclaimed.
The Advocate General then noted that the assessment of the likelihood of confusion under Directive 2008/95 requires a global assessment in which the perception of the signs by the average consumer of the goods or services in question plays a decisive role. Further, case law has established that the average consumer perceives signs as a whole and that their assessment of the similarity of signs is based on the overall impression they create on the average consumer taking into account factors affecting their interaction with the respective signs, including imperfect recollection. Consequently, while the individual components of a mark may be analysed to determine their relative importance, the assessment of the likelihood of confusion cannot properly be made if some components of a mark have been excluded from consideration. On this basis the Advocate General considered that disclaimers should not affect the assessment of the likelihood of confusion, and are only a means of explicitly stating particular, but by no means all, areas to which a composite mark’s monopoly does not extend.
The Advocate General further noted that the assessment of the likelihood of confusion in this case is to be made at the time when the application to register ROSLAGSÖL was filed. In light of this it should not be ruled out that elements of a mark that were earlier disclaimed have subsequently achieved some distinctive capacity in relation to the goods and services they have been used on. Consequently, the Advocate General also considered that disclaimers should not affect the assessment of the degree of distinctiveness of components of a mark.
Existing Registration Not Necessarily a Bar for a Different Applicant's Identical Application
In 2019 NZCA 61 International Consolidated Business Pty Ltd v SC Johnson & Son Inc the Court of Appeal confirmed that when a prior registration is in force a different applicant can make a valid application for the identical mark and goods, which can proceed to registration once the prior registration is no longer in force.
Both parties seek ownership of the ZIPLOC mark primarily in respect of plastic bags and plastic wrap. On 19th April 2013 SC Johnson filed its application for the ZIPLOC mark and three days later filed an application for revocation of International Consolidated’s registration based on non-use. The revocation application was successful and was held to take effect from 22nd April 2013. Following the acceptance of SC Johnson’s application, International Consolidated filed another application for the mark and subsequently opposed SC Johnson’s application. The Assistant Commissioner’s decision held that SC Johnson’s application was not valid on the basis that International Consolidated were the owner of the mark at the date of SC Johnson’s application. As earlier reported the High Court Judge quashed the Assistant Commissioner’s decision on the basis that when making the determination of ownership at the date of application there is discretion available under section 26(b) to take events subsequent to the application date into account. In exercising her discretion to give effect to the purposes of the Act the Judge held that the effective date for revocation of International Consolidated’s registration was 19th April 2013. The Judge ordered a rehearing before the Assistant Commissioner on the issue of ownership.
The Court of Appeal first held that the Judge did not have jurisdiction to alter the deemed date of revocation, as the time for determination of that issue was when the revocation action was determined. Nonetheless, the Court of Appeal held that the date of revocation has no bearing on the date that an identical application can be filed in the name of another party. It noted that when the Trade Marks Act 2002 was being formulated and introduced there was no evidence that it was the intention of the legislature to prohibit the long-established practice of filing applications for registration in anticipation of and conditional upon a successful application for removal for non-use.
The Court of Appeal also held that a corollary of the non-use provisions is that first use of a trade mark does not determine ownership in perpetuity. As such, a party who has had their registration revoked for non-use can only subsequently establish ownership by way of use on account of use made after the non-use period which caused the revocation of their prior registration. A further consequence of this was that International Consolidated were not able to rely on prior use to support their opposition to SC Johnson’s application.
Consequently, given there were no outstanding section 17 issues and given that SC Johnson’s ownership claim is not defeated by any qualifying use by International Consolidated, the Court of Appeal found no benefit in referring the matter back to the Assistant Commissioner and so ordered that SC Johnson’s mark proceed to registration.
Division and Merger of Madrid Protocol Marks Now Possible in NZ
As recently announced changes were made to the Madrid Protocol regulations to allow division to occur before individual designated countries and to specify when merger could occur. To allow those changes to have effect in New Zealand the Trade Marks (International Registration) Regulations 2012 have been updated with effect from 21st March 2019. From that date international trade mark owners will be able to divide goods and/or services out of their International Registration into a divisional registration. In cases where the application is undergoing examination, this will allow acceptable goods and/or services to proceed to acceptance. This will also allow trade mark owners to merge records that have previously been partially assigned or divided, back into a single International Registration.