Amazon Takes Pro-Active Steps to Eliminate Counterfeits from its Marketplace
Amazon has adopted two programs in an effort to discourage the sale of pirated or counterfeit goods on its website, namely the “Project Zero” and “Neutral Patent Evaluation” programs.
The Project Zero program is currently in an invitation only pilot phase and has three elements to it. The first element is an automated tool that utilizes the power of Amazon’s machine learning technology to scan for and remove listings of suspected counterfeit goods on a daily basis. To make use of this feature a participating rights owner needs to upload their registered brand data, such as textual and device trade marks. This feature has resulted in a dramatic decrease in the amount of counterfeit listings. The second and potentially controversial element gives rights holders the power to remove listings that they consider to be for counterfeit goods. Such removals also feed into and inform the algorithms for the automated removal tool. As a guard against abuse of this facility Amazon requires a very high percentage of the removed counterfeit listings to have been correctly identified as such, failing which a rights owner will be removed from the Project Zero program. The third element is product serialization for third-party products purchased in Amazon stores. This requires each unit of each third-party product to be assigned a unique code which is then attached to the product in the manufacturing process so as to allow Amazon stores to scan and verify its authenticity when purchased. The optional product serialization service is offered for a volume weighted per unit charge.
In order to qualify the registration needs to have been issued by at least one of the government trade mark offices in the following countries / regions: the United States, Australia, Brazil, Canada, the European Union, France, Germany, India, Italy, Japan, Mexico, Spain, the United Arab Emirates, or the United Kingdom. Owners also need to have an Amazon account. Only owners can enrol their brands in the Amazon Brand Registry, but the owners can then authorise agents to be representatives in relation to some or all of those brands.
The Neutral Patent Evaluation program began in late 2018 and provides patent owners with a non-judicial process to challenge products on the Amazon marketplace that they believe are infringing their patent rights. This is done by way of referral of the issue to an independent expert who is tasked with determining whether patent infringement has occurred on the basis of written submissions by both parties, with the patent owner making the allegation to which the merchant replies to which in turn the patent owner has a right of reply. The product is removed if an infringement determination is made, as well as if the merchant does not provide a response to the patent owner’s allegation. The entire process should take no more than 4-months and the losing party has to pay the charge of US$4,000. The parties retain the right to initiate infringement or invalidity actions through the Courts. However, each use of the Neutral Patent Evaluation program needs to be in respect of a single claim of a single US utility model patent.
CAFC Clarifies Written Description Standard
In 17-2473 Nuvo Pharmaceuticals v Dr Reddy's Laboratories Inc the Court of Appeal for the Federal Circuit (CAFC) held two patents to be invalid for lack of adequate written description, since the reason for the claimed effectiveness of the compositions was not sufficiently disclosed in the context of ordinarily skilled persons not expecting them to work.
In earlier District Court proceedings between Nuvo and various Generics the asserted claims (which essentially share a specification) were held to be non-obvious, enabled and adequately described. The patents concern an orally administered pharmaceutical composition that contains non-steroidal anti-inflammatory drugs (NSAIDs) for the control of pain, but encapsulated in a way that reduces the gastrointestinal side effects of taking NSAIDs, thought to be caused by the combination of NSAIDs and stomach acid. Prior to the patents some doctors had prescribed acid inhibitors for co-administration with NSAIDs, but the effectiveness of this approach in avoiding the side effects of NSAIDs was unreliable mainly due to imprecision in the timing of the NSAID’s release in a suitably low acidic environment. The inventor, whose patents eventually became assigned to Nuvo, formulated a single tablet containing a core of an NSAID, an enteric coating around the NSAID that prevents its release before the pH increases to a certain desired level, and an acid inhibitor around the outside of the enteric coating that actively works to increase the pH to the desired level. In turn the acid inhibitor also had an enteric coating, but this would be incomplete so as to allow for the release of some acid inhibitor in the stomach and upper small intestines.
However, while the specification teaches methods for preparing and making the claimed formulations including examples of their structure and ingredients, it contains no experimental data demonstrating the therapeutic effectiveness of any amount of the specified uncoated acid inhibitor and coated NSAID in a single dosage form. The Generics asserted that this meant enablement was satisfied, but written description wasn’t, and further argued that the finding of non-obviousness supported their lack of written description contention regarding the effectiveness of uncoated acid inhibitor. Namely, if ordinarily skilled persons would not have expected it to work and the specification provides no experimental data or analytical reasoning showing the inventor possessed an effective uncoated acid inhibitor, then there is a lack of written description. The testimony of Nuvo’s expert witness identified parts of the specification that were alleged to provide written description support for the effectiveness of the uncoated acid inhibitor. However, those parts were only found to disclose typical dosage amounts and did not discuss or explain the claimed efficacy. At best the specification was held to provide nothing more than the mere claim that uncoated acid inhibitor might work, even though persons of ordinary skill in the art would not have thought it would work. As such, it fell short of demonstrating actual invention.
Nuvo also asserted that experimental data and additional explanations demonstrating the invention works are unnecessary and that the therapeutic effectiveness of uncoated acid inhibitor should be accepted as a matter of inherency. However, the CAFC noted that the purpose of the written description requirement is wider than that of enablement as it requires the specification to notify the public about the boundaries and scope of the claimed invention and show that the inventor possessed all the aspects of the claimed invention. Nonetheless, it was noted that the CAFC’s own precedent and the Manual of Patent Examining Procedure recognised that inherency can satisfy the written description requirement., with the later stating at §2163:
Under the doctrine of inherent disclosure, when a specification describes an invention that has certain undisclosed yet inherent properties, that specification serves as adequate written description to support a subsequent patent application that explicitly recites the invention’s inherent properties.
However, the CAFC distinguished the present case from its precedent by noting that in this case the efficacy of the uncoated acid inhibitor is disputed. The evidence on record was not found to establish that uncoated acid inhibitor necessarily is effective in a certain amount (consistent with the specification), and as such inherency is not demonstrated.
Legislative Push-Back Proposed to Counter Judicial Restrictions on Patent Eligibility
A draft Bill has recently been released that aims to amend several fundamental sections of the Patents legislation and it has both bipartisan and bicameral support.
The draft Bill seeks to remove what are considered to be judicially created obstacles to patenting, particularly in the biotechnology and computer science fields, following the Supreme Court’s decisions in Mayo v Prometheus (2012) and Alice v CLS Bank (2014).
In the month prior to the draft Bill’s release a draft framework was released. The main focus of that draft framework was to legislatively clarify the boundaries of patentability under §101 with a closed list of exclusions to patentability. All other judicially created exclusions would be officially abolished, and the closed list would prevent the Courts from creating new exceptions. The closed list of exclusions to patentability was comprised the following categories:
- Fundamental scientific principles;
- Products that exist solely and exclusively in nature;
- Pure mathematical formulas;
- Economic or commercial principles; and
- Mental activities.
However, the draft Bill dispenses with the closed list and so would officially abolish all judicially created exclusions to patentability, and have the provisions of §101 construed in favour of eligibility.
The draft framework sought to legislatively clarify that eligibility is determined by considering each and every element of the claim as a whole and without regard to considerations properly addressed by novelty (§102), non-obviousness (§103) and specification requirements (§112) sections. Related to this it sought to remove the ‘new and useful’ criteria from the §101 eligibility requirements.
In the draft Bill the proposed legislative clarification of eligibility is modified so as to be determined only while considering the claimed invention as a whole, without discounting or disregarding any claim limitation, and without regard to considerations properly addressed under §102, §103 or §112. While the ‘new’ criterion would still be removed, the ‘useful’ criterion would be retained in §101 and defined in §100 to mean any invention or discovery that provides specific and practical utility in any field of technology through human intervention.
The precursor to both drafts was the May 2018 joint legislative proposal by the American Intellectual Property Law Association (AIPLA) and the Intellectual Property Owners Association (IPO). Of the three versions the draft Bill would represent the biggest legislative shift, but most likely has been drafted with the expectation that the scale of the legislative shift will need to be scaled back in order to be enacted.
3. Trade Marks
Brazil Soon to Join the Madrid Protocol
On the 22nd May 2019 the Federal Senate of Brazil (BR) followed its House of Representatives in approving legislation that allows Brazil to become a member of the Madrid Protocol. The final step, which can be expected shortly, is for Brazil to deposit their instrument of accession to the Madrid Protocol, 3 months after which they will become a member of the Madrid Protocol. Brazil will apply a refusal period of 18 months.