November 2017

1. General

New Zealand

Relationship Property Review Raises IP Considerations
The Law Commission has released an issues paper titled: Dividing Relationship Property - time for a change? The review of the Property (Relationships) Act 1976 (Act) is wide ranging and intellectual property considerations arise in several areas.

In considering whether the definition of property is future proof it is noted that with increasing numbers of people being involved in developing software and other forms of digital design intellectual property is likely to become more of an issue when partners separate. It is noted that the Act’s current definition of property is wide enough to capture all sorts of intangible property, but raises the question of whether it provides sufficient guidance on whether and when such forms of property are property for the purposes of the Act. This can give rise to omission from the property pool on account of being overlooked or cause costly disputes about whether such an item is relationship property. There are also issues around valuing such property, especially when such values can be highly volatile. These considerations gave rise to the following consultation questions:

• Should the Act’s definition of property be retained so that questions of whether the PRA applies to emerging forms of property are left to the courts to decide on a case by case basis?
• Should the Act’s definition of property be amended so that it defines property in greater detail? If so, is it preferable to amend the definition to expand the items that are included as property? Which items ought to be included?

In considering cross-border issues it is noted that the distinction between movable and immovable property varies across different jurisdictions. The Act currently does not apply to immovable property outside of New Zealand, and applies to movable property anywhere provided at least one of the partners is domiciled in New Zealand at a complying date. Patent grants and Trade Mark and Design registrations are considered to be immovable property as they are situated where they can be transferred according to the law of their creation. Copyright on the other hand is movable as it automatically arises without being subject to registration.

The provision regarding the Act not having effect in relation to foreign immovable property is based on the Mocambique Rule that derives from a late 19th century UK House of Lords decision. A more recent UK Supreme Court decision notes that much of the underpinning of the Mocambique Rule has been eroded, such that the Rule now applies primarily to disputes relating to title or possession of immovable foreign property. New Zealand case law has established two exceptions to the Rule: (i) for the administration of deceased estates and (ii) where there exists some personal obligation between the parties arising out of a fiduciary relationship, implied contract or other conduct which an equity Court would consider unconscionable.
These considerations gave rise to the following consultation questions:

• Should there be express statutory reference to exceptions to excluding foreign immovable property from the PRA in keeping with the exceptions to the Mocambique Rule?
• Should provision be made in the PRA to allow a court to order compensation to take into account foreign immovable property?

2. Patents

Australia

Plausibility Judged Relevant for Assessing Sufficiency
In Australian Patent Office decision Evolva SA [2017] APO 57 the Hearings Officer approved the use of UK and European jurisprudence in assessing sufficiency, and in particular the notion of plausibility.

Amongst the amendments introduced to the patents legislation in 2013 by the “Raising the Bar” amendment Act were changes to the disclosure requirements that sought to align Australia with Europe and the UK. Of relevance to the case at hand subsection 40(2)(a) was amended so as to require that:

(2) A complete specification must:
(a) disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art.

Evolva’s invention relates to methods and materials for enzymatic synthesis of mogroside compounds. The examiner raised a sufficiency objection, which was maintained despite several rounds of amendments to the claims. In particular, the examiner considered that the 5 methods disclosed in the specification did not provide a principle of general application that would enable the invention across the full scope of its claims. Consequently, the person skilled in the art would need to produce every single peptide encompassed by the claims and conduct an assay on each to determine which possessed the desired activity. While this would be routine for a given peptide, the shear number of peptides involved was considered to place an undue burden on the person skilled in the art.

The Hearings Officer referred to several UK and European cases on what constitutes an undue burden on a person skilled in the art in the context of determining sufficiency. It was noted that the person skilled in the art can be taken to be trying to make the invention work, although the reasonable time and energy involved in doing so will depend upon the complexity of the technology. Making the invention work does not include achieving regulatory approval as the patent system does not require the same level of proof. However, the assertion that the invention will work across the scope of the claim must be plausible or credible. The plausibility criterion implies a threshold test for sufficiency, although one that is satisfied by a low threshold designed to prohibit speculative claiming rather than one that gives a reasonable expectation of success. In summarising the principles behind the UK and European cases on point the Hearings Officer stated that:

the scope of the monopoly, as defined in the claims, must correspond to the technical contribution the patentee has made to the art. If the assertions made in the specification are not plausible then it cannot be reasonably said that the patentee has made a contribution to the art.

The Hearings Officer also affirmed UK authority for a two-stage test for sufficiency, stating that:

an invention that is plausible may still fail on sufficiency if the specification essentially sets out a research programme and there is an undue burden of experimentation required to put it into practice.

In applying these principles the Hearings Officer held in light of the prior art that the skilled person would consider it plausible that the invention can be worked across the full scope of the claims, which require the use of polypeptides that are functional variants of the 5 given polypeptides to a level of identity of at least 90%. The Hearings Officer also held that the 90% threshold would sufficiently limit the candidate polypeptides and that the remaining trial and error or experimentation would not amount to a research project meaning that the invention can be performed across the full scope of the claim without undue burden.

Singapore

Method of Treatment Claims Held Not Amendable to Swiss-Style Claims
In Warner-Lambert Company LLC v Novartis (Singapore) Pte Ltd the Court of Appeal considered the allowability of amending method of treatment claims to Swiss-style claims.

Warner-Lambert’s patent claimed the use of the active pharmaceutical ingredient pregabalin for the treatment of pain, and so was in method of medical use form. Novartis had sought to market a generic version of the medicament and, after Warner-Lambert initiated infringement proceedings, counter-claimed for revocation on the basis that the patent is impermissibly in method of medical use form. Despite being in an impermissible claim format, Warner-Lambert obtained grant since prior to February 2014 Singapore had a “self-assessment system”. Under that system patent applications could be granted, even if their examination reports contain objections, provided the applicant self-certified the patent’s compliance with Singapore’s patentability requirements.

Warner-Lambert sought to avoid the invalidity attack by amending the method of medical treatment claims post-grant into Swiss-style claims. In upholding the High Court’s rejection of the proposed amendments, the Court of Appeal held that claims that are obviously invalid on account of not meeting the patentability threshold and as such were invalid at the time of grant could not be amended as there was no valid right to amend. For completeness, the Court of Appeal also held that even if amendment was in-principle allowable that the amendments would not be allowed on account of extending the scope of the claims.

It was further held that Warner-Lambert had exercised undue delay in bringing the amendment application. The Court of Appeal considered that the self-assessment system puts the onus on the applicant to act in the public interest and that consequently Warner-Lambert should have amended its application at the earliest opportunity. In this respect it was noted that the PCT International Preliminary Examination Report noted that not all countries allowed method of medical treatment claims.

The Court of Appeal also took the opportunity to make an obiter finding that second and subsequent medical use claims are in apparent compliance with Singapore’s Patents Act. Consequently, while Swiss-style claims are allowed, in the future applicants may instead prefer to apply for purpose limited product claims.

United Kingdom

Changes to UK Patent Fees and Fee Structure
Following a consultation the UK Intellectual Property Office (UKIPO) has decided to both increase some fees and change the fee structure. The changes will take effect from 6th April 2018.

Currently the bulk of the IPO’s costs from granting patents are recovered via renewal fees. While, this will continue to be the case, the increases will predominantly apply to pre-grant application fees so as to maintain a sustainable income stream and encourage good filing practices by applicants. The main changes are:

• The application fee will rise and a 25% surcharge is introduced if it is not paid at the time of filing.
• The fees for requesting search and substantive examination will rise.
• An excess claims fee will be introduced, being £20 for the 26th and each subsequent claim, and will be payable with the search fee.
• An excess pages fee will be introduced, being £10 for the 36th and each subsequent page, and will be payable as part of the fee for requesting substantive examination.
• Each of the renewal fees from the 11th anniversary onwards will increase by £10.

United States of America

USPTO to Increase Various Patent Fees
From 16th January 2018 various USPTO patent fees will increase. While the utility patent fee increases are modest there are significant increases to the design patent fees. The more notable fee increases are given below in USD at the large entity rate, although 50% and 75% reductions are available for small entities and micro entities respectively.

Utility Filing Fee changes from $280 to $300
Utility Search Fee changes from $600 to $660
Utility Examination Fee changes from $720 to $760
Utility Issue Fee changes from $960 to $1,000
Each Independent Claim in Excess of Three changes from $420 to $460
Each Claim in Excess of 20 changes from $80 to $100
Multiple Dependant Claim changes from $780 to $820
Submission of an Information Disclosure Statement changes from $180 to $240
Design Filing Fee changes from $180 to $200
Design Search Fee changes from $120 to $160
Design Examination Fee changes from $460 to $600
Design Issue Fee changes from $560 to $700

While expected to apply to fewer than 10 applications a year it is noteworthy that the USPTO has introduced a surcharge fee for the submission of mega sequence listings that are 300MB in size or greater.

3. Copyright

New Zealand

ESR Denied Leave to Appeal Copyright Infringement Finding
In ESR Group (NZ) Ltd v Burden the Supreme Court has dismissed ESR Group’s application for leave to appeal the Court of Appeal’s determination which found in favour of Burden.

The Court of Appeal had found that Burden’s companies PGT International and PGT Vietnam were the owners of the copyright in the technical drawings. While they were not in prescribed convention countries, the copyright was nonetheless enforceable in New Zealand under section 18(2) of the Copyright Act 1994 given that Burden is a co-author and citizen of a prescribed convention country.

ESR argued that the Court of Appeal was wrong to make such a finding on the basis that it goes against the spirit of section 232(4)(b), which prohibits any Order being made that recognises protection of works from a state entity if that entity does not provide reciprocal protection to copyright owners. In particular, ESR emphasised that the reciprocity condition of section 232(4)(b) requires satisfaction in respect of owners not authors.

However, the Supreme Court held that this argument by ESR did not reach the required threshold of raising a point of general or public importance or general commercial significance, and that further there was nothing in the material presented to the Court that caused them to doubt the correctness of the Court of Appeals finding.

Another ground of appeal by ESR was in regard to the date at which ESR could be expected to have knowledge or reason to believe that their furniture infringed copyright. The Court of Appeal found that this knowledge should be assessed on the date the products arrived in New Zealand, but ESR argued it should be assessed at the date the importer loses control (i.e. prior to shipment). The Supreme Court acknowledged that the point had some general significance, but found there was nothing in the material presented to the Court that caused them to doubt the correctness of the Court of Appeals finding.