Indirect Infringement: Australian and U.S. approaches compared

Dr. Victoria Longshaw and Dr. Elizabeth Houlihan

A recent decision handed down by the Federal Court of Australia, Blue Gentian LLC v Product Management Group Pty Ltd [2014] FCA 1331, illustrates the different way in which Australian Courts assess induced or indirect patent infringement when compared to Courts in the U.S.

Inducement of infringement in the U.S.

In terms of 35 U.S. Code § 271 (b), “whoever actively induces infringement of a patent shall be liable as an infringer.” A finding of indirect inducement infringement in the U.S. requires a plaintiff to successfully show that (a) another person actually infringed the Patent, (b) the defendant knew of the Patent, and, (c) knowingly induced the infringing acts of the other person with a specific intent to encourage infringement by that person (Vita-Mix Corp. v. Basic Holding, Inc. 581 F.3d 1317, 1328 (Fed. Cir. 2009)).

Inducement of infringement in Australia

In Australia, indirect infringement by inducement does not require any knowledge on the part of the defendant either of the Patent or of any direct infringement of the Patent. However, it does require that another person would directly infringe the Patent if using the product supplied, according to any instructions supplied with the product.

Indirect infringement is regulated by Section 117 of the Patents Act 1990 (Cth) which simply requires that “if the use of a product by a person would infringe a Patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the Patent.” The use of the product includes, inter alia, “the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier.”

The Case

The recent decision in Blue Gentian LLC v Product Management Group Pty Ltd [2014] illustrates the typical way in which an Australian Court reaches a finding of indirect infringement by inducement.

The case involved infringement proceedings initiated by Blue Gentian LLC (“Blue Gentian”), the Patentee of Australian Innovation Patents 2012101797 and 2013100354 (“the Patents”) and its exclusive licensee, Brand Developers Aust Pty Ltd (“Brand Developers”) against Product Management Group Pty Ltd (“PMG”).

The Patents relate to an expandable and contractible hose having an elastic inner tube and an inelastic outer tube, attached at their respective ends. The hose had a water flow restrictor attached to one end and was designed to attach to a water faucet at the other. When the water faucet was turned on, the increased water pressure in the inner tube caused it to expand in length and diameter until constrained by the outer tube. When the water faucet was turned off, the water pressure decreased and the water drained from the inner tube causing it to contract. The outer tube then also contracted, gathering in folds along the length of the hose. This lightweight hose was described as easy and convenient to pack and store, as well as convenient to use because it does not “kink”.

Blue Gentian claimed that PMG’s importation and sale of a “Pocket Hose” directly infringed both of its Patents. Blue Gentian also claimed that PMG’s supply of instructions with the Pocket Hose which instruct a user to connect the one end of the hose to a tap and the other end to a spray nozzle, turn on the water supply and allow the hose to fully expand before use, constituted indirect infringement of the Patents.

PMG cross-claimed that the Patents were invalid on various grounds including that the Patents were anticipated by an earlier U. S. Patent describing a self-elongating oxygen hose for a stowable aviation crew oxygen mask.

The Court systematically construed each of the integers of the Patent Claims and concluded that the Claims were clear, fairly based and sufficiently described, and furthermore that the prior art provided by PMG did not anticipate the Patents.

After upholding the validity of the Patents, the Court turned to the question of infringement. PMG was held to have directly infringed several Claims of the Patents, as the Pocket Hose had all of the integers of the Claims based on the Courts construction. In addition, the Court found that the use of the Pocket Hose as instructed involved the use of a garden hose having all of the features of the pleaded Claims and, as such, constituted indirect infringement in terms of Section 117(2)(c).

Take Home Message

It is worth bearing in mind that a claim of indirect patent infringement by inducement in Australia has different requirements to an analogous claim in the U.S. It is not necessary for a plaintiff in Australia to prove that a defendant knew of the Patent or knew that use of an infringing product by another person either infringed, or would infringe, the Patent.

In order for a Patentee of an Australian Patent to successfully pursue a claim of indirect infringement by inducement, it must be shown that another person would directly infringe the Patent if using the product supplied by an infringer, according to any instructions supplied with the product.

License Agreements for Patent Pools: licensees beware

Dr. Victoria Longshaw and Dr. Elizabeth Houlihan

A recent case before the Full Bench of the Australian Federal Court of Australia, Regency Media Pty Ltd v MPEG LA., L.L.C. [2014] FCAFC 183, is a cautionary tale for licensees entering into a License Agreement for a Patent pool which includes Australian Patents.

In this case, the Court confirmed that a licensee will only be statutorily entitled to terminate a Patent License Agreement in Australia when all of the Patents described in the Agreement have ceased.

The case involved an appeal from MPEG LA., L.L.C. v Regency Media Pty Ltd [2014] FCA 180, in which a licensee, Regency Media Pty Ltd (“Regency Media”) unsuccessfully relied on Section 145 of the Patents Act 1990 (Cth), and was found to have unlawfully terminated a Patent Portfolio License Agreement (“the PPL Agreement”).

This Decision provides guidance on how Section 145 of the Patents Act 1990 (Cth) should be interpreted. Until now, the application of this provision in terminating Patent License Agreements has received little judicial consideration in Australia.

The Facts of the Case

MPEG LA., L.L.C. (“MPEG”) represents Patent owners in relation to various Patent pools, such as those essential to a standard, in this case the MPEG-2 Standard, an international standard relating to video data compression and data transport.

MPEG entered into the PPL Agreement with Regency Media in relation to a pool of Patents, the “MPEG-2 Essential Patents.” The Patent pool included Australian Patents and foreign patents. The PPL Agreement provided to Regency Media “a royalty-bearing worldwide, non-exclusive, non-transferable sublicense under all MPEG-2 Patent Portfolio Patents to make, have made, use, and sell, or offer for sale MPEG-2 Decoding Products.” Similar rights were granted with respect to “MPEG-2 Encoding Products” and “MPEG-2 Packaged Medium.”

Importantly, the license was granted for inventions which were described and defined in the PPL Agreement using the terms “MPEG-2 Decoding Products,” “MPEG-2 Encoding Products” and “MPEG-2 Packaged Medium,” rather than by reference to the inventions described in the Patents covering those inventions.

The PPL Agreement provided that Regency Media may “not terminate this Agreement prior to December 31, 2015.” Some of the Australian Patents that were the subject of the license expired prior to 5 July 2012, while others expired between July 2012 and October 2013. A further Patent expired on 17 January 2014, and other Australian Patents were due to expire between March 2014 and January 2015.

After some of the Patents had expired, Regency Media relied on the statutory entitlement of a licensee to terminate a contract which is provided by Section 145 of the Patents Act 1990 (Cth) and purported to terminate the PPL Agreement by way of a letter dated 5 July 2012. This termination was disputed by MPEG as unlawful.

The Earlier case

The issue in dispute was whether Regency Media could rely on Section 145 to terminate the PPL Agreement.

Section 145 provides for the termination of a contract after a Patent ceases to be in force as follows:

“s145    (1) A contract relating to the lease of, or a license to exploit, a patented invention may be terminated by either party, on giving 3 months’ notice in writing to the other party, at any time after the Patent, or all of the Patents, by which the invention was protected at the time the contract was made, have ceased to be in force.

(2) Subsection (1) applies despite anything to the contrary in that contract or in any other contract.(emphasis added)

MPEG argued that the “patented invention” of Section 145 referred to the “MPEG-2 decoding Products,” “MPEG-2 Encoding Products” and “MPEG-2 Packaged Medium” as described in the PPL Agreement.

Regency Media argued that the term “patented invention” of Section 145 referred to each “invention” embraced by a single Patent.

The Court preferred MPEG’s construction of Section 145. Regency Media was found to have unlawfully terminated the PPL Agreement.

The Appeal Case

Regency Media appealed to the Full Bench of the Federal Court. The central issue to be determined was the meaning of “a patented invention” in Section 145(1).

The Court also had to determine whether entitlement to terminate a License Agreement for a Patent pool arises when (1) all of the Patents in a licensed patent pool expire, or (2) when all of the Patents that protect any one invention expire.

Relying on Section 23(b), together with Section 2, of the Acts Interpretation Act 1901 (Cth), MPEG argued that the singular reference to “a patented invention” includes the plural, “unless the contrary intention appears.”

The Appeal Court disagreed with the finding of the primary Court and accepted Regency Media’s argument that the term “patented invention” of Section 145 is not defined by reference to the PPL Agreement, but instead refers to each “invention” embraced by a single Patent.

However, the Appeal Court also agreed with MPEG’s argument that the singular reference in Section 145 to “a patented invention” includes the plural. Consequently, Section 145 was interpreted as requiring that there may be termination of a contract only after all of the Patents the subject of the contract, that is, all of the Patents for all of the inventions the subject of the contract, have expired.

The Appeal was dismissed and half of the costs of the appeal awarded to MPEG.

Take Home Message

The current position in Australian law is that Section 145 is to be interpreted to mean that a License Agreement may only be terminated under this provision when all of the licensed Patents have expired.

Licensees should be cautious when entering into Patent License Agreements which include the grant of Patent rights in Australia. Where a licensee negotiates a license fee that includes Patents due to expire during the term of the Agreement, the licensee will be taken to have been aware of the expiry of Patents during the term of the Agreement when it negotiated that fee.

Tiered royalty payment structures should be included in any Patent License Agreement entered into in order to take into account Australian Patents due to expire during the term of the Agreement. Otherwise, licensees could well end up paying full royalties under an enforceable Patent License Agreement even after some of the Australian Patents of the portfolio licensed have ceased.

Using an abbreviated form of a Registered Trade Mark: Trade Mark infringement or honest practice?

Dr. Victoria Longshaw and Dr. Nigel Parker

A recent case before the High Court of New Zealand, Co-Operative Bank Ltd v Anderson [2014] NZHC 2686, illustrates the enforcement difficulties faced by an owner of a New Zealand Registration for a Trade Mark which relies on an industry-specific descriptive word to impart distinctiveness.

Background

Co-operative Bank Ltd (“TCB”), previously the Public Service Investment Society (“PSIS Ltd”) opened its previously limited membership to the New Zealand public in 1995. It is a co-operative registered with the Co-operative Companies Act 1996. TCB changed its name from PSIS Ltd and registered as a bank in 2011. It is currently the only bank in New Zealand that is registered as a co-operative. TCB registered a logo with the words THE CO-OPERATIVE BANK. However, an Application to register THE CO-OPERATIVE BANK as a word Mark was unsuccessful.

In comparison, the New Zealand Association of Credit Unions (“NZACU”) is a representative industry body cooperatively owned by 17 member Credit unions and Building Societies. However, unlike TCB, NZACU is not a bank, and neither are its members.

NZACU recently underwent a rebranding process, to change its name from the NZACU to Co-op Money NZ. Aspects of NZACU were also changed to include the words “co-op,” such as to change the name FACTS Ltd of its business-to-business trading section to Co-op Services NZ and its insurance service section from Credit Union Insurance Ltd to Co-op Insurance Ltd.

NZACU applied to register logos containing the words CO-OP SERVICES NZ, CO-OP INSURANCE NZ and CO-OP MONEY NZ as Trade Marks (the “Trade Mark Applications”) in New Zealand. When the Trade Mark Applications were accepted for registration, TCB filed opposition proceedings against their registration, as well as an application for an interim injunction to restrain the trustees of NZACU from using, or asserting a right to use, names that include the words “co-op.” NZACU postponed its rebranding efforts pending the outcome of the dispute.

The Dispute

TCB did not object to the use of the descriptor “co-operative” by NZACU, but only to the use of the words “co-op.” TCB argued that NZACU’s proposed use of these words would be deceptively similar to TCB’s name, “The Co-Operative Bank”.

An interim injunction was sought to prevent NZACU from using, and from claiming any right to use, Marks using the words “co-op” on the basis of passing off, Trade Mark infringement, and breaches of the Fair Trading Act 1986.

NZACU argued that “co-operative” and “co-op” are generic descriptive terms in the financial services sector, that they are entitled to use these words, and that the balance of convenience would be against the grant of such an injunction. They asserted that there was no serious question to be tried.

The Decision

Passing off

The Court held that NZACU would not be passing itself off as TCB if it uses the word “co-op.” Although TCB successfully established that limited goodwill existed in its name “The Co-Operative Bank,” and that a significant group of customers associated the use of the word “co-op” with TCB, it failed to persuade the Court that any secondary meaning attached to the words. Since NZACU was not yet publicly using any of its new brands, TCB also failed to show that there would be a misrepresentation by NZACU to the public if the new marketing strategy proceeded. The Court regarded it as unlikely that there would be any confusion that would lead to any significant damage to TCB’s goodwill.

The Court considered the word “co-op” is a widely used abbreviation of “co-operative”, both terms being regarded as descriptive. Furthermore, the convenient short form of “co-operative” was considered to be a different word, diminishing the similarities between the TCB and the NZACU names, and reducing the risk of confusion. The Court was unsympathetic to TCB, stating that “even if there is going to be some confusion in the marketplace when NZACU re-brands, it is the sort of confusion that parties who choose to use descriptive names have to tolerate.”

Breach of the Fair Trading Act 1986

Since TCB had failed to prove that there would be any misrepresentation by NZACU or a likelihood of confusion, the Court also held that there was no breach of Sections 9, 11 or 13 of the Fair Trading Act 1986.

Trade Mark Infringement

The Court found there was no exact similarity of words between the Marks of TCB and NZACU. The only overlap was “the use of the word ‘the’ and the use of part of ‘cooperative’ being ‘co-op’. The get-up of the Marks and their visual appearance were regarded as very different. The Marks were not considered to be similar or likely to cause deception or confusion and, as such, no infringement was found. The use of the word “co-op” was considered to be a fair presentation of the nature of the entities involved and the services offered. Accordingly, the Court considered Section 95(c)(i) of the Trade Marks Act to apply. This Section provides that a person does not infringe a registered Trade Mark if that person uses the Mark in accordance with honest practices in industrial or commercial matters to indicate a kind, quality, quantity, or other characteristic of the goods or services.

The balance of convenience was also held in favour of NZACU, and the application for an interim injunction was dismissed.

Take Home Message

This case is a useful reminder that the New Zealand Court is unsympathetic to parties seeking monopolies on descriptive words, particularly those that are widely used in the industry concerned. A party choosing to use a descriptive word to distinguish their goods or services from other traders will be expected to tolerate any small risk of confusion in the marketplace.

Thus, even though a party may have registered Trade Mark Rights to a Mark, if that Mark relies on a full descriptive word to impart distinctiveness, it may be difficult to enforce such a Registration in New Zealand against a party using an abbreviated or shortform version of the Mark.

Owners of registered Trade Marks which rely on descriptive words would be well advised to be pro-active in protecting their existing Trade Mark portfolio and pursue Trade Mark Rights for the abbreviated or shortform version of the Mark, even if they are descriptive. Abbreviations of Marks may still be registrable as Trade Marks in New Zealand as long as they can be shown to have acquired distinctiveness through use. For comprehensive protection, it is important to include Registrations for possible abbreviations of a Mark in a Trade Mark portfolio so as to prevent a competitor from filing future Trade Mark Applications using the abbreviation and from unauthorised use of the abbreviation.

When Opposition Proceedings get hijacked by the Registrar’s discretion to revoke acceptance

Dr. Victoria Longshaw and Dr. Jim Onishi

In Australia, the Registrar has the discretion to revoke acceptance of an Application for registration of a Trade Mark in terms of Section 38 of the Trade Marks Act 1995 (“the Act”) if he or she is satisfied that the Application (a) should not have been accepted and (b) that it is reasonable to revoke the acceptance, taking into account all of the circumstances.

 

It is worth bearing this discretionary power of the Registrar in mind in Opposition Proceedings against a Trade Mark Application, particularly in circumstances where the accepted Mark is contained wholly within an earlier registration.

 

An example of a typical circumstance in which Section 38 is applicable arose in recent Opposition Proceedings at the Australian Trade Marks Office against Trade Mark Application No. 1597007 (“the Application”) for TASMAN, which was filed in the name Endeva Pty Ltd (“the Applicant”).

 

The Facts

 

The Application was filed in Class 25 for apparel (clothing, footwear, headgear), and claimed a priority date of 18 December 2013. After examination, a clear report issued on 16 January 2014 indicating that the Application had been accepted. Acceptance was advertised on 8 May 2014. Winterworth Pty Ltd (“the Opponent”) filed a Notice of Intention to Oppose on 8 July 2014, followed by its Statement of Grounds and Particulars on 8 August 2014.

 

In the meantime, a Notice of intention to revoke the acceptance of the Application (“the Notice”) was sent to the Applicant on 9 July 2014, stating that the Examiner had not taken into consideration an earlier registration, Trade Mark No. 1452777 (“the earlier registration”):

cugg1

The earlier registration included the term TASMAN, and was considered to claim the same or similar goods in Class 25 to that of the Application. Accordingly, the Registrar considered revocation of acceptance to be reasonable, in view of the earlier registration and the surrounding circumstances. The matter proceeded to a hearing.

The Decision

Since the hearing related to the Notice, only the Applicant (and not the Opponent) was required to provide submissions. However, the Delegate was not persuaded by any of the Applicant’s arguments, and revoked acceptance of the Application. The Delegate also directed that the Application undergo re-examination once the period for appeal had expired.

 

Exercising the discretion to revoke acceptance

 

The discretion of the Registrar to revoke the acceptance of an Application for registration is defined in Section 38 of the Act as requiring two factors.

First limb of the test: Was there a valid ground for rejecting the Application?

 

After reviewing the examination file of the Application, the Delegate concluded that the search strategy used by the Examiner should have located Trade Mark No. 1452777 and extracted it for consideration. However, there was no record that this had been done by the Examiner.

 

The earlier registration included the word TASMAN and was filed for similar goods in Class 25. The Delegate considered that there was a valid ground for rejecting the Application during the examination process in that the Mark was substantially identical with, or deceptively similar to, the earlier registration in terms of Section 44 of the Act.

 

The Applicant argued that TASMAN was sufficiently different to the early registration, which included the term “UGG” in prominent and distinctive font. It was submitted that the recognisability of the term “UGG” in Australia was such that it overshadowed the other components of the Mark of the earlier registration. The Applicant also argued that the use of the term TASMAN in the earlier registration was likely to suggest a geographical origin of the products.

 

In contrast, the Applicant argued that TASMAN was a “portmanteau” word. That is, the Mark was a compounded word made up of the shortened version of “Tasmania” and “man.” It was also brought to the Delegate’s attention that a number of Trade Marks containing the word TASMAN already co-exist on the Registrar so that there could be no deceptive similarity of the respected Marks.

 

The Delegate was not persuaded by these arguments and stated that she was satisfied that a likelihood of confusion existed. The additional components in the earlier registration were not considered to be sufficient to differentiate the Marks from each other.

 

Second limb of the test: is it reasonable to revoke acceptance?

 

Taking into account the search strategy of the Examiner that failed to locate the earlier registration, the Delegate took the view that information had been overlooked that, had it been properly considered, would have resulted in a valid ground for rejection being raised.

 

The Applicant argued that the dispute between the parties would be better served in the forum of opposition proceedings. The Delegate did not accept this view and, on balance, considered that it would be preferable to exercise the discretion under Section 38 as the matter was still in its early stages.

 

Take-home message

 

There are not many instances in which the discretion under Section 38 has been applied. Circumstances in which Section 38 may be applicable include: where the Application has been accepted due to an administrative error or oversight by an Examiner of the Australian Trade Mark Office during the examination process, such as (a) the appropriate research not being carried out, (b) an inappropriate search strategy being used, or (c) where an application is accepted because a citation was missed due to an indexing error.

 

Many of these circumstances are outside of the control of the Applicant. However, in arguing against a Notice to revoke acceptance, an Applicant needs to put forward arguments for both limbs of the test. That is, that no valid ground to reject the application existed at the time of acceptance, but also that it is not reasonable to revoke acceptance in the circumstances. Arguments against a Section 38 Notice include where the basis of the revocation merely amounts to a change of opinion or where the balance of convenience favours the Applicant.

Are hidden Trade Marks registrable?

Dr. Victoria Longshaw and Mr. David Franklin

In a recent decision by the High Court of New Zealand, NYDJ Apparel LLC v Commissioner of Trade Marks [2014] NZHC 2678, the Court considered the registrability of a Trade Mark that is not typically displayed in plain sight.

The background of the case

NYDJ Apparel LLC (“NYDJ”), a US company, has since 2003 been manufacturing and selling jeans designed for curvy or older women. The jeans are designed to flatten the belly and the lower abdomen by way of inner panels sewn to the inside of the front pockets, which create a horizontal band across the front of the abdomen, reducing the stretch of the garment in that area.

The jeans are sold in many countries around the world under the Trade Marks “Tummy Tuck” and “Not Your Daughters Jeans” and include a criss-cross stitching pattern applied to the inside of the two front pockets to designate that the jeans have the slimming panels, as follows:

tm1

NYDJ jeans bearing this stitching pattern have been sold in New Zealand since 2007 in both small boutiques and department stores.

Marketing activities include promotion of the jeans through “fit days”, involving a “fitting expert” who assists customers with the selection and fit of the jeans and shows customers the stitching on the inside of the jeans. Promotional and marketing activities make use of the following NYDJ Trade Mark which includes two red crosses in a stylised version of the criss-cross stitching:

tm2

NYDJ applied to register the Trade Mark in Class 25 as a criss-cross stitching pattern on the inside pocket of a pair of jeans, for articles of clothing as shown in the following representation:

tm3

The IPONZ Decision

The Trade Marks Examiner formally rejected the Application on the basis that the Mark was not considered to be distinctive.

The Applicant requested a hearing, at which the Assistant Commissioner directed that the Trade Mark not be registered. The Assistant Commissioner considered that the criss-cross stitching design had a “low level” of inherent distinctiveness.

Since the Mark is not a highly stylised image or device, and comprises a simple criss-cross stitching pattern, the Assistant Commissioner concluded that consumers may assume it to be functional, particularly as the Mark had been selected to highlight a particular technical function of garment.

The location of the stitching design on the inside garment was considered to be one where consumers are less accustomed to finding a trade mark. Consumers were likely to assume that the stitching had a functional purpose for strengthening or reinforcing the jeans, and other traders may wish to incorporate such a simple stitching design on the inside of their garments.

In considering evidence of use of the Mark to determine if it had acquired distinctiveness, the Assistant Commissioner was not convinced that consumers would associate the Mark with NYDJ. Most of the advertising material submitted made little or no reference to the criss-cross stitching, and it was not clear to the Assistant Commissioner that even purchasers of the jeans would see the criss-cross stitching as a Trade Mark. Furthermore, customers who had already purchased the jeans would not become “walking advertisements” for the Mark, because it was located inside the garment. NYDJ failed to convince the Assistant Commissioner that consumers would recognise the stitching both as a trade mark and as a trade mark connected with NYDJ.

The Appeal Decision

On appeal to the High Court, NYDJ argued that plain and simple Trade Marks can nevertheless be distinctive, and gave the red sole of a Christian Louboutin shoe as an example. Furthermore, jeans are commonly distinguished by the stitching applied to, for example, the pockets of Levis, Wrangler and Lee jeans, some of which are registered Trade Marks.

The Court considered two issues: (1) whether the Trade Mark had an inherent distinctive character and (2) whether the Trade Mark had acquired a distinctive character.

(1) Inherent distinctive character of the stitching

The Court acknowledged that stitching on jeans is capable of distinguishing the goods. However, since the stitching was ordinary machine stitching, it held that the contrasting red and purple colours made the difference and enhanced the distinctive character of the Mark. Without the colour contrast, the Court considered that the Mark was less inherently distinctive and consumers could well regard the stitching as having a general functional purpose.

(2) Acquired distinctiveness through use

In assessing whether the Mark had acquired distinctiveness through use, the Court said that the Assistant Commissioner had raised the bar too high. It also regarded the use of the criss-cross Mark in the “NYDJ” logo Mark as serving to link the criss-cross pattern to NYDJ. The fitting days assisted in pointing out the criss-cross stitching to customers, and NYDJ’s evidence showed that many retailers also regarded the stitching on the inside of the jeans as distinctive and associated with NYDJ. The Court ruled the evidence was sufficient to show that distinctiveness had been acquired through the use made by NYDJ of the Trade Mark.

The Commissioner concluded that the Trade Mark was therefore distinctive and registrable subject to the Application being amended as follows:

  1. The Explanation of the Mark be amended to say a “non-functional criss-cross stitching pattern in a contrasting red or purple colour, on the inside pocket of a pair of jeans,…”
  2. The Goods “articles of clothing” be limited to “jeans;” and
  3. A disclaimer be included that the registration of the Trade Mark gives “no right to the exclusive use of stitching in a criss-cross pattern except in the form shown and explained in the registration.”

Conclusion

Interestingly, the relatively hidden location of the Mark in this case on the inside of the garment, was not considered to be a bar to its registrability. Once purchased, it was not necessary for distinctiveness purposes for the Mark to be visible on the goods. Accordingly, if it can be demonstrated that consumers are aware of the hidden Mark before and at the time of purchase and that it serves to distinguish a trader’s goods from others, then the Mark is arguably distinctive.

Pharmaceutical Bioequivalence and Patent Claim infringement: a Catch 22

Dr. Victoria Longshaw and Dr. Elizabeth Houlihan

In a recent case before the Federal Court of Australia, Glaxo SmithKline Australia Pty Ltd v Pharmacor Pty Ltd (2014), Glaxo SmithKline Australia Pty Ltd (“GSK”) successfully applied under r 7.23 of the Federal Court Rules 2011 (Cth) that Pharmacor Pty Ltd (“Pharmacor”) give discovery and inspection of various documents lodged at the TGA and, in terms of Section 23 of the Federal Court of Australia Act 1976 (Cth), provide a sample of at least 50 tablets of each of its two modified release oral paracetamol products (“the Pharmacor Products”).

The Application for discovery and inspection was made by GSK on the grounds of potential entitlement to relief, including injunctive relief, declaration and damages, as a result of Pharmacor’s alleged misrepresentations of bioequivalence of its products to the TGA; the actual or anticipated promotion of Pharmacor’s products to pharmacists and consumers; and Pharmacor’s alleged potential infringement of the claims of Australian Patent No. 2001260212 (“the Patent”).

What is interesting about this case is that the discovery and inspection order was obtained on the basis of the actual or anticipated promotion of Pharmacor’s products to pharmacists and consumers. GSK’s arguments relating to Pharmacor’s alleged misrepresentations to the TGA and potential infringement of the Patent failed.

This decision is relevant to pharmaceutical companies seeking to protect their Patent Rights in Australia. It is also relevant to generic pharmaceutical companies who are preparing to enter the market and planning their marketing and promotion efforts accordingly.

Background

The Patent is filed in the name of GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No. 2) Ltd and relates to bilayer sustained release oral paracetamol tablet with a stipulated dissolution rate. GSK, an exclusive licensee, has been marketing and supplying two products in Australia which are covered by the Patent: Panadol Back and Neck Long-Lasting, and Panadol Osteo, since 2001 and 2005, respectively. Until about October 2012, the GSK products were the only modified release paracetamol products registered on the Australian Register of Therapeutic Goods (“ARTG”).

Pharmacor registered the Pharmacor Products on the ARTG and applied to have the products listed on the Schedule of Pharmaceutical Benefits (“PBS”).

GSK applied to the Federal Court for an Order of discovery and inspection, asserting that it did not have sufficient information to decide whether or not to commence Patent infringement proceedings against Pharmacor. GSK contended that there was reasonable cause to believe that it had a right to obtain relief and that Pharmacor had misrepresented the bioequivalence of its products to the TGA; had passed off its products to pharmacists and consumers as bioequivalent to Panadol Osteo; and that Pharmacor’s actions constituted potential infringement of the Claims of the Patent.

Pharmacor argued that the Pharmacor Products were bioequivalent to Panadol Osteo, but that they were differently formulated such that they do not infringe any of the Claims of the Patent.

In response, GSK argued that if the Pharmacor Products were not bioequivalent to Panadol Osteo, then they would be unlikely to provide adequate therapeutic plasma concentrations for the required eight hours, leading to consumer confusion and potentially resulting in the undesirable use of higher doses.

The Court held that:

  • There was no reason to believe that Pharmacor has made any misrepresentations to the TGA or that there has been any mischaracterisation of bioequivalence of the Pharmacor Products to the TGA.
  • The specification of the Patent demonstrated that there can be bioequivalence between two products which demonstrate different pharmacokinetic properties. GSK was considered to have failed to establish the requisite belief in relation to the potential Patent infringement claims.
  • There was a reasonable belief that Panadol Osteo has different therapeutic effects to the Pharmacor Products and accordingly that the promotion and representations by Pharmacor to pharmacists and consumers regarding “bioequivalence as approved by the TGA” or “brand equivalents as approved” without disclosing the relevant differences may constitute misleading or deceptive conduct.

GSK was thus considered to be entitled to an order for preliminary discovery in relation to Pharmacor’s representations or “half-truth scenario” under the Australian Consumer Law.

Take-home message

Where a Patent infringer has applied to the TGA for registration of a generic product demonstrating bioequivalence to another product, and claims to avoid infringement of an Australian Patent for that product due to formulation and/or pharmacokinetic differences, then any representations to the public of bioequivalence or “brand equivalence” may constitute misleading and deceptive conduct.

Patent owners in Australia for inventions in the pharmaceutical industry can look to this decision as support for obtaining a court Order for discovery and inspection of documents and pharmaceutical samples from potential infringers. However, such an Order may be more easily obtained under Australian Consumer Law on the basis of misrepresentations of bioequivalence made by the potential infringer, if any, to customers and pharmacists than on a claim of potential patent infringement.

Crocodiles in New Zealand: defending Trade Marks against revocation for non-use

Dr. Victoria Longshaw, Dr. Jim Onishi, and Mr. David Franklin

In a recent High Court decision in the long-running Court battle between Lacoste and Crocodile International Pte Ltd (“CIPL”) in New Zealand, Collins J allowed Lacoste’s appeal from an Intellectual Property Office of New Zealand decision to revoke the registration of a “Crocodile” and Crocodile Device Trade Mark on the grounds of non-use.

This decision is relevant to Trade Mark owners finding themselves in similar circumstances of defending a New Zealand trade mark registration against revocation for non-use where the Mark is in a different form to that used by the Trade Mark owner. But note the peculiar circumstances of this case – the Mark in question was previously owned by an associated company of CIPL and was only assigned to Lacoste as part of a commercial settlement.

Background

Since 1927, Lacoste and its predecessors have sold clothing bearing the Lacoste “Crocodile” Marks in many countries around the world. Various versions of the Crocodile Marks were registered in New Zealand, including the LACOSTE Word and Crocodile Device Mark, and the Crocodile Device Mark (both shown below), and a “CROCODILE” Word Mark. Lacoste clothing products bearing these Trade Marks have been sold throughout New Zealand since 1981.

croc1

On the other hand, CIPL, a Singaporean clothing company trading throughout Asia, and its predecessors have used the word Mark “CROCODILE” and Crocodile Device Marks since 1947 in various countries in Asia, although it seems not in New Zealand.

In 1961, Crocodile Garments Ltd, a related company of CIPL, registered “CROCODILE” and the following stylised Crocodile Device Mark, under New Zealand Trade Mark No. 70068.

croc2

Lacoste applied for revocation of Trade Mark No. 70068 from the New Zealand Trade Mark Register in 1999 on the grounds of non-use. Lacoste’s case was dismissed in 2002, and on appeal, was referred back to the Assistant Commissioner of Trade Marks.

However, before the matter proceeded to a further hearing, the parties settled in 2003 and, as part of their agreement, Crocodile Garments Ltd assigned Trade Mark No. 70068 to Lacoste. The assignment was registered on 29 June 2004.

Assistant Commissioner’s Decision

On 24 June 2008, CIPL applied for revocation of Trade Mark No. 70068 on the grounds of non-use. CIPL relied on three non-use periods: 12 December 1996 to 12 December 1999, 25 August 2001 to 25 August 2004, and 24 May 2005 to 24 May 2008. Importantly, Lacoste had only been registered as owner of Trade Mark No. 70068 since 29 June 2004, and so it could theoretically only show its own use (if any) of Trade Mark No. 70068 during the two most recent non-use periods.

Although Lacoste had taken an assignment of Trade Mark No. 70068, it simply continued to use its own well-known Marks and did not put Trade Mark No. 70068 as depicted into use. To defend Trade Mark No. 70068, Lacoste tendered evidence of use of its own very similar Marks.

On comparing the Marks, the Assistant Commissioner found a number of “striking and memorable” differences between Lacoste’s Device Mark and Trade Mark No. 70068, and quoting the relevant requirement when use of a “similar” Mark is relied on, that the differences in Lacoste’s Device Mark “altered the distinctive character” of Trade Mark No. 70068.

It was therefore held that Lacoste had not put Trade Mark No. 70068 to genuine use during the alleged non-use periods, and by inference had only used its own Marks. It was further held that there were no exceptional circumstances excusing this non-use and that Trade Mark No. 70068 should be revoked effective from 12 December 1999, the end of the earliest of the non-use periods identified.

Lacoste appealed the decision to the High Court.

The High Court Decision

Of the issues raised, the High Court focused on two questions: whether the Assistant Commissioner was correct in concluding that:

  1.  Lacoste had not established genuine use of Trade Mark No. 70068 between 24 May 2005 and 24 May 2008, and
  2. Lacoste must establish use of Trade Mark No. 70068 during each of the three non-use periods identified by CIPL.

In approaching the first question, the High Court applied the two-step analysis of Podnik v Anheuser-Busch Inc [2002] EWCA Civ 1534 RPC 25, required by section 7(1)(a) of the Act, and assessed whether Trade Mark No. 70068 had been used within the meaning of section 7(1)(a) which defines “use [of] a Trade Mark.” The “points of difference between the Mark as used and the Mark as registered” are to be assessed before it is ascertained whether the differences “alter the distinctive character of the Mark as registered.

The High Court found that the Assistant Commissioner should have also compared the other Marks Lacoste had been using with Trade Mark No. 70068 and not just with Lacoste’s Device Mark.

After comparing the visual and conceptual differences between Lacoste’s Device Mark and LACOSTE Word and Device Mark and Trade Mark No. 70068, the High Court found the main point of visual difference in the Devices to be the opposing directions in which the respective Crocodiles face. However, the Court found that this was not particularly relevant and considered that it and the various other points of difference were “minor” and insignificant. Therefore, they did not “alter the distinctive character” of Trade Mark No. 70068 which is dominated by the image of a crocodile very similar to the Lacoste Crocodile Device.

In respect of the second question, the High Court considered that it was only necessary for Lacoste to show use during the most recent three year period, that is, between 24 May 2005 and 24 May 2008, to avoid revocation. Notwithstanding this, the High Court was of the view that Trade Mark No. 70068 had been used in New Zealand by Lacoste throughout all the periods of non-use alleged, in view of the extensive evidence of use of distinctively similar Lacoste Marks submitted by Lacoste.

Accordingly, the appeal was allowed and the order revoking Trade Mark No. 70068 set aside.

Take-home message

Although in our respectful view, the High Court has incorrectly applied section 7(1)(a) to overturn the Assistant Commissioner’s decision, its application of the two-stage analysis of section 7(1)(a) may be useful to other Trade Mark owners who find themselves party to non-use proceedings.

This decision also indicates that when defending a revocation for non-use action in New Zealand where the Trade Mark depicted in the Registration is different to the actual Mark or Marks being used, it is possible to succeed if you can show the Marks in use are very similar and only have differences that do not detract from “the distinctive character” of the Trade Mark.

Also, this decision indicates that if more than one period of non-use is alleged, a Trade Mark owner only needs to demonstrate use within the most recent continuous period of three (3) years and not during all periods of alleged non-use.

This decision was open to appeal at the time of writing, and some of these issues will be re-examined if CIPL take the case to the New Zealand Court of Appeal

Trade Marks and Plant Varieties

Dr. Victoria Longshaw and Mr. David Franklin

In the recent Federal Court decision, Mastronardi Produce Ltd v Registrar of Trade Marks [2014], Mastronardi Produce Ltd appealed the 23 October 2013 decision of the Delegate of the Registrar of Trade Marks which rejected its Trade Mark Application for “ZIMA” in class 31 for tomatoes.

This decision is of interest to Applicants and owners of Registered Trade Marks associated with plant varieties in Australia.

Background

Mastronardi is a Canadian company producing wholesale fruit and vegetables, including tomatoes. Mr Paul Mastronardi, the president of Mastronardi, coined the word “ZIMA” in early 2010 for a range of golden grape or orange grape tomatoes. The word “ZIMA” had no meaning in the English language, and had not been previously associated in any way with tomatoes in Australia or elsewhere.

Mastronardi obtained Trade Mark Registrations for ZIMA in Canada with effect from 26 April 2010, in the United States with effect from 30 July 2010, in Japan with effect from 27 July 2011, and in New Zealand with effect from 3 August 2011.

 

On 25 July 2011, Mastronardi filed Australian Trade Mark Application No. 1438732 to register ZIMA in class 31 for “tomatoes.” Between November 2011 and June 2013, the Registrar issued three official reports refusing acceptance and as a result Mastronardi requested a hearing to seek review of the refusal. The matter was heard on 12 September 2013.

 

In her decision of 23 October 2013, the Delegate rejected the Application, finding that “the word ZIMA appears to be a reference to a single kind of tomato plant and its fruit” and accordingly that it “lacks any inherent adaptation to distinguish the Applicant’s tomatoes as it appears to be an appropriate description of the goods in respect of which it is to be used,” and also finding that the Applicant’s evidence of use of the Mark “demonstrates that the Applicant uses the word ZIMA, and that the buying public regard the word ZIMA, as a reference to a particular cultivated variety of orange grape tomato.” Mastronardi appealed the decision on 14 November 2014.

 

Submissions

 

The Registrar as Respondent contended that the intended use of ZIMA by Mastronardi was not as a Trade Mark to distinguish its goods from those of others, but rather to distinguish its particular kind of tomatoes from other kinds of tomatoes. That is, it was “intended for use to distinguish one variety of tomato introduced by Mastronardi from the generality of tomatoes.” As such, it was likely to be required for use by other traders without improper motive to refer to tomatoes for instance with “ZIMA” characteristics. The Respondent relied on Wheatcroft Brothers Limited’s Trade Marks [1954] Ch 210, which concerned the rejection of a Mark intended to be used as the name of a single new variety of rose which would be characterised by that name in the Register of the relevant Rose Society.

 

mastronardi argued that ZIMA was not the name of the new variety of tomato and submitted unchallenged expert evidence that the word ZIMA is not used by retailers, suppliers or consumers to refer to a variety of tomato.

 

Mastronardi also submitted evidence that, in the case of tomatoes, there are hundreds if not thousands of different varieties in Australia, many of which are referred to in terms of broad category names such as cherry, truss, roma, grape and cocktail. It also submitted that often a very large number of cultivars are sold under a particular category such as the golden grape tomato. Suppliers typically assign a name (often an alpha-numeric code) to particular seeds and not the category name associated with that variety. Mastronardi submitted that it uses six different types of seeds to produce six varieties of golden grape tomato, all of which bear the ZIMA trade mark when sold.

 

Appeal Decision

 

The Court reversed the Delegate’s decision, and ordered that the Trade Mark should be registered.

 

Part of the problem appears to have been due to the use of the word “variety” by Mastronardi to market ZIMA tomatoes. The word “variety” in that context was considered by the Court to have more than one meaning, being a loose term used without precision and used differently in the retail and fresh foods industry compared to its botanical context. The Court found that of the six cultivars presently used by Mastronardi, only two were supplied exclusively to Mastronardi, and that other traders were not prevented from producing orange grape tomatoes from any one of the 50 cultivars available. The Court also considered that a number of descriptors were available to other traders for describing their tomatoes, such as “golden snacking tomatoes.”

 

The Court applied the test for assessing whether a Trade Mark is “inherently adapted to distinguish” as articulated by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511, and concluded that it is unlikely that other persons, trading in tomatoes and being actuated only by proper motives, will think of the invented word ZIMA and desire to use it for tomatoes. The Court also confirmed the dicta of Gibbs J in Burger King v Registrar of Trade Marks (1973) 128 CLR 417 that actual use of the Trade Mark is irrelevant in assessing the inherent nature of the Trade Mark itself.

 

Take home message

 

This decision is a welcome confirmation that distinctive Trade Marks used in connection with fruit, vegetables and other plant varieties should not be automatically rejected as unregistrable if they are in fact used as a sign to distinguish the Applicant’s goods rather than as a plant varietal name. While this decision turned on the facts of the case, any Applicant finding themselves in a similar situation may wish to challenge any Section 41 rejection by the Registrar made on the grounds that the Mark is a varietal name or used as the name of a single kind of plant.

 

In summary, in circumstances where the Trade Mark is a distinctive Mark (such as an invented word) and is used as a Trade Mark by a trader to distinguish its fruit from the fruit of other traders, all things being equal the Trade Mark should be registrable. However, if the Trade Mark is used to denote a single plant variety, especially where the plant variety is on an official register with a varietal name identical to the Trade Mark, and other traders arguably need to use the Trade Mark to refer to that plant variety, it will be very difficult to register that Mark in Australia.

Trade Secrets in the Cloud

Dr. Victoria Longshaw and Dr. Elizabeth Houlihan

The recent hacking scandal in which dozens of celebrity photos were leaked from iCloud, Apple’s cloud storage facility, is a stark reminder of how difficult it is to protect Confidential Information in the age of the Internet.

However, cloud services are not limited to photograph depositories, but include Web-based e-mail and any decentralised IT infrastructure technologies making use of the Internet, many of which are used by commercial entities. As such, cloud computing has become the norm for many businesses, and owners of Confidential Information rely heavily on the security measures put in place to protect their trade secrets. While Cloud providers generally have standard terms and conditions that apply to all of their customers, these may or may not include a contractual undertaking to keep information confidential and to ensure that their staff do so too.

The growing storage of Confidential Information in the cloud, and the complex relationships and contractual obligations surrounding such activity, is fast outstripping the laws that are intended to regulate it in many countries. Moreover, in Australia, the courts have had little opportunity to consider how a damages claim may be approached for the breach of Confidential Information relating to an invention for which an Applicant has not yet obtained enforceable Patent rights.

Protecting Confidential Information in Australia

 

  • Equitable Action for Breach of Confidence

Australian law provides an action under the equitable Doctrine of Confidence. However, for a person or business entity to be able to apply for an injunction, or to support a claim of damages for disclosure of Confidential Information, they must first meet onerous evidence requirements.

In an action seeking damages for breach of confidence, the relevant Confidential Information must have been specifically identified as confidential; the information must have the necessary quality of confidence; it must have been given or received to import an obligation of confidence; and there must have been unauthorised use or disclosure of the information.

  • The Privacy Act 1988 and Australian Privacy Principles (“APPs”)

Recent privacy law reform has resulted in the amendment of the Privacy Act 1988, which now includes a set of 13 new harmonised privacy principles regulating the handling of personal information by Australian and Norfolk Island government agencies and private sector organisations with an annual turnover of less than $3 million dollars.

These principles, effective from 12 March 2014 and called the Australian Privacy Principles (“APPs”), cover the collection, use, disclosure and storage of personal information. Personal information is defined as “information or an opinion about an identified individual, or an individual who is reasonably identifiable, whether the information or opinion is true or not and whether recorded in a material form or not.”

The Privacy Act 1988, and APPs, which regulate the inter alia collection and storage of personal information, may not immediately appear to be relevant to the protection of Confidential Information in the course of business. However, many companies regard the identity of their credit providers, suppliers and customers as Confidential Information, the secrecy of which is crucial to their bottom line.

The recent privacy law reforms provide recourse to the Office of the Australian Information Commissioner (“OAIC”), which investigates privacy complaints. Furthermore, civil penalties apply to credit reporting bodies inappropriately using or disclosing Confidential Information and reporting bodies must take reasonable steps to protect information from misuse, interference, loss, unauthorised access, modification or disclosure. The OAIC has issued extensive guidance as to what these “reasonable steps” include, many of which are more than what many businesses, and cloud storage providers, are currently doing to protect Confidential Information.

Some Practical Measures

  • In circumstances where Confidential Information relating to an invention, for which a Patent Application has not yet been filed, is disclosed without the consent of the inventor or owner, Patent protection may still be obtained in Australia. Australia, fortunately, has a grace period in which to file a Patent Application should there be any unauthorised public disclosure of the invention. However, such a Patent Application must be filed within twelve (12) months of the unauthorised disclosure.
  • In the event that a Patent Application is filed by a third party for an invention relating to the Confidential Information, entitlement Proceedings under section 36 of the Australian Patents Act 1990 may be filed. Under this section, a person who believes that they are entitled to any Patent rights resulting from the Patent Application filed by another person is entitled to change that Patent Application and claim ownership of it. If the Commissioner is satisfied that the invention has indeed been invented by the Applicant in section 36 Proceedings, the Patent Application may be assigned to that person. However, the Australian Patent Office has not yet had the opportunity to consider entitlement Proceedings in circumstances where disclosure of Confidential Information has occurred due to a cloud storage security breach, and the evidence required to satisfy the Commissioner may be difficult to obtain.
  • A business can take precautionary steps by clearly dating and leaving documents as confidential, for instance by including the word “confidential” on top of each document, electronically password protecting the documents, and splitting any Confidential Information into separate documents, stored in different locations. This is to assist in establishing evidence for any equitable action for breach of confidence, should it be required in the future.
  • If a cloud computing service provider must be used, it is a good idea to carry out due diligence on what security the cloud provider has in place, as well as assess the terms and conditions of any cloud provider before signing up for it, and entrusting Confidential Information to its care. While it is not always possible to negotiate contractual measures, it is worth assessing the risks of proceeding without certain privacy protections and liability undertakings being put in place. It goes without saying that any electronic files should be encrypted before being uploaded to any cloud storage service, and it is important to ensure that the cloud storage service encrypts files during transmission using an HTTPS connection, or secure link.
  • Where the Confidential Information to be stored relates to personal information, it is worth bearing in mind that the collection of personal information is governed by the Privacy Act 1988, information collecting and reporting bodies must take substantial steps to protect the information given to them, and a complaint may be filed with the OAIC for any breach of APP obligations under this legislation.

Construing relative terms in Australian patent claims: when expert evidence does not assist

Dr Victoria Longshaw and Dr Nigel Parker

In a recent decision, Fei Yu trading as Jewels 4 Pools v Beadcrete Pty Ltd [2014], the Federal Court of Australia dismissed an appeal by Fei Yu trading as Jewels 4 Pools, and it distributors (“the Appellants”), against the primary Court’s decision to uphold Beadcrete Pty Ltd’s (“the Respondent”) Australian Patent No. 733668, and confirmed infringement by Fei Yu, and it’s distributors.

This decision provides a useful construction of the relative term “average” as used in the claims of the patent at issue. The way in which the court approached the interpretation of this relative term is relevant to Applicants prosecuting Patent Applications in Australia.

The Patent

Australian Patent No. 733668 relates to surface finishes for pathways, walls, swimming pools and other structures. The claimed invention is directed to aggregate mixes which include glass beads mixed in a matrix of cementitious material. Beadcrete Pty Ltd had observed difficulty in using glass beads, either alone or with other aggregate materials such as semiprecious stones etc. in such aggregate mixes, as the glass beads tended to lack the required porosity or toughness to establish an effective bond with a matrix material. The glass beads also tended to impart alkalinity.

In solving this problem, Beadcrete Pty Ltd had claimed an invention having glass beads of varying sizes with an average particle size within the range of 1.5 to 4.5 mm, and having a size distribution defining a major component of beads within a relatively large incremental size range and a minor component of beads in a smaller incremental size range, the weight of the beads in the larger incremental size range being greater than those within the small incremental size range.

Validity Issues

On appeal, the Appellants argued that the majority of the claims were unintelligible, incapable of infringement, and invalid because the claim referring to the particle size distribution did not identify a “specified midpoint.” The appellants also argued that the claims lacked novelty in light of prior art which, it was asserted, disclosed the addition of large beads within the size distribution cited in the claims.

Expert evidence was submitted as to the meaning of the word “average.” This evidence was provided by an engineer who specialised in the construction of swimming pools. However, the Appellants did not suggest that the expert’s evidence was directed to the meaning of technical or scientific terms, or to unusual or special meanings.

The Respondents adopted an approach to claim construction which depended upon the term “average particle size,” submitting that the meaning of the word “average” had to be determined within the context of the definition of the particle size distribution. That is, that there were to be larger and smaller glass beads. Four meanings of the word “average” were advanced, each meaning providing a possible method for assessing the average size of particles in a sample of aggregate.

The primary judge had not been convinced that the expert for the appellants was a skilled addressee in the art, and further considered that the term “average particle size” was not a technical term requiring expert evidence, stating that it was for the Court to construe the claim. The judge concluded that an average particle size could easily have been determined by a person skilled in the art by simply identifying the weighted average particle size based on the weight distribution of different sizes of particles. The primary judge observed that “it would have been inconceivable to those skilled in the art of mixing an aggregate into a cementitious matrix to form a surface finish that they would concern themselves with the absolute number of glass beads or the absolute size of any particular glass bead, be it the largest or smallest, in any given matrix.”

The primary judge also held that the prior art did not anticipate the claimed invention because it failed to teach that there could be a particle size distribution in which there were more larger sized beads than smaller sized beads.

The Court of Appeal agreed with the primary judge’s conclusions, and upheld the patent.

The Appellants construction case, alleging that the integer citing “a particle size distribution” must be construed in isolation from other integers in the claim, was considered by the Court of Appeal to be fundamentally flawed. The Court reiterated that the meaning of each claim must be determined by reference to the words, in the context of the specification as a whole.

The infringement order was also upheld, and infringement by the respondents confirmed pursuant to section 117 of the Patents Act 1990. Section 117 provides that patent infringement occurs where a product is supplied by one person to another, in circumstances where the use of that product by that person would infringe that patent.

Take-home message

This case is a useful reminder to Patent Applicants and Patentees in Australia, that although experts may give evidence as to the meaning which those skilled in the art would give to technical or scientific terms and phrases, it is for the Court to interpret words bearing ordinary meanings. Furthermore, integers cited in a patent claim will be interpreted within the context of other integers in that claim, and within the context of the specification as a whole. In such circumstances, the submission of expert evidence as to the meaning of a relative term used in the claims, and which has an ordinary meaning, will not assist.