IP Newz (May 2010)
New Zealand's legislation update
Update on the Patents Bill
Matt Adams
The Commerce Select Committee reported back on the Patents Bill on 30 March. The main points in the report were:
- computer programs cannot be patented
- methods of medical treatment of human beings cannot be patented
- a request for examination will be introduced
- there will be an absolute novelty standard
- there will be examination for inventive step and usefulness (as well as novelty)
- accepted patents will be able to be re-examined
- pre-grant opposition will remain
- a Maori advisory committee will be established.
For a full explanation of the main points in the Select Committee report, click here.
Patent Attorneys Bill
Matt Adams
The Commerce Select Committee report on the Patents Bill recommended a separate Bill, called the Patent Attorneys Bill, be created.
The Patent Attorneys Bill covers the registration of patent attorneys and regulation of the patent attorney profession in New Zealand.
The Commerce Select Committee report recommends changes to provide a single trans-Tasman framework for regulating patent attorneys. The Patent Attorneys Bill was created so these changes would not slow the progress of the Patents Bill.
Bill proposing design amendment has second reading
Matt Adams
The Regulatory Improvement Bill had its second reading in the House at the end of March.
This follows the release of the Commerce Select Committee report on the Bill in October last year. For a copy of the report, click here.
The Bill’s second reading included the Committee’s amendments to provide a statutory basis for the restoration of lapsed design applications in addition to lapsed design registrations. The Committee also recommended that bibliographic details of design applications could be published by the Intellectual Property Office of New Zealand (IPONZ).
The Bill will have a third reading before it is passed into law.
Trade Marks Amendment Bill awaits second reading
Damian Broadley
The Trade Marks (International Treaties and Enforcement) Amendment Bill awaits its second reading in the House. It is currently item 30 on Parliament’s order list.
The second reading follows the release of the Select Committee report in September last year. Click here to read the Foreign Affairs, Defence and Trade Select Committee report.
The Trade Marks (International Treaties and Enforcement) Amendment Bill will amend the Trade Marks Act 2002 and the Copyright Act 1994. It will give effect to Government decisions relating to various international agreements, and will allow New Zealand to join the Madrid Protocol. It will also support the enforcement of criminal offence provisions related to counterfeit goods and pirated works.
Copyright (Infringing File Sharing) Amendment Bill
Simon Fogarty
The Copyright (Infringing File Sharing) Amendment Bill was introduced into Parliament on 23 February. The Bill repeals Section 92A of the Copyright Act and replaces it with a three-notice system to deter illegal file sharing.
The Bill has had its first reading and is now before the commerce Select Committee.
The Bill proposes the following process to deal with illegal file sharing.
- Copyright owners will contact account holders through internet service providers (ISPs) to report misuse of their copyright works.
- Internet users caught illegally downloading copyright material will be given up to three infringement notices.
- A detection notice will inform the user that they have downloaded copyright material and that their actions are illegal.
- A warning notice will be sent to a user if they infringe copyright again (and they have already received a detection notice).
- An enforcement notice will be sent to a user if they infringe copyright again (and they have already received a warning notice).
- After issuing an enforcement notice, the rights holder can seek reparation costs of up to $15,000 through the Copyright Tribunal.
- Internet pirates who continue to download copyright material can also have their internet account suspended by order of the Copyright Tribunal for up to six months.
- Account holders will have the right to challenge any notice, make submissions to the Copyright Tribunal refuting the claims, and request a hearing if they disagree with the claim that they have infringed copyright.
To read the Bill click here.
Update on WAI 262 claim
New Zealand’s Waitangi Tribunal is expected to release its decision soon on the WAI 262 claim, following three years of deliberation.
The decision is likely to impact on New Zealand’s intellectual property (IP) framework, including access to, and use of, indigenous flora and fauna; and the use of Maori words, imagery, and artworks as trade marks, copyrights, and designs.
Background on the claim
The WAI 262 claim raises important IP issues in New Zealand. The claim also generated international interest, because it was recognised as one of the first claims of its kind. The name WAI 262 became synonymous with the plight of indigenous peoples for recognition and protection of indigenous people’s rights to indigenous flora and fauna and traditional knowledge.
The role of the Waitangi Tribunal
The Waitangi Tribunal was established under the Waitangi Act 1975. Maori can lodge a claim with the Waitangi Tribunal if they are, or are likely to be, prejudiced by legislation, Crown policy or practice, or any act of the Crown which is “inconsistent with the principles of the Treaty of Waitangi”. The WAI 262 claim is the 262nd claim before the Waitangi Tribunal. The Tribunal will consider claims, and if successful, can recommend the Government compensate or remove the prejudice.
What the WAI 262 claim covers
The WAI 262 claim asserted the Crown breached the Treaty of Waitangi, because the Crown:
- failed to actively protect the exercise of tino rangitiratanga (authority) and kaitiakitanga (guardianship) by the claimants over indigenous flora and fauna, and other taonga (treasures), and also over matauranga Maori (Maori traditional knowledge)
- failed to protect the taonga itself
- implemented policy and legislation that disregarded Maori tino rangatiratanga and kaitiakitanga of flora and fauna and other taonga
- agreed to various international agreements and obligations that affect indigenous flora and fauna and intellectual property rights and rights to other taonga.
The claimants asked that one of the remedies include a framework for recognising Maori rights to exercise tino rangatiratanga and kaitiakitanga over indigenous flora and fauna, other taonga, and matauranga Maori.
The claim’s progress
The progress of the claim has been slow. After the claim was filed in 1991, hearings began in 1997 and were completed in 2007. Recent signals indicate a decision could issue in coming weeks.
The Tribunal’s decision is not binding on the New Zealand Government. But the decision will undoubtedly receive significant political support in New Zealand and overseas.
It will be interesting to see whether the structures proposed by the Waitangi Tribunal incorporate the suggested amendments to the Patents Amendment Bill (currently before the New Zealand Parliament) or any of the frameworks proposed by World Intellectual Property Office through the Intergovernmetal Committee on IP and Genetic Resources, Traditional Knowledge, and Traditional Cultural Expressions.
Changes could lead to .au domain name ownership issues
The body responsible for regulating the .au domain space, the Australian Domain Name Administrator (auDA), is changing the way expired and deleted .au domains drop from the registry. An ‘official domain drop list’ will now inform the public immediately when expired or deleted domain registrations become available. The change will mean registrants who do not renew their domain registrations on time will face an increased risk of losing them. The new policy started on 18 April 2010.
What are the changes?
Under the new policy, expired and deleted .au domain names will be published on the official domain drop list as soon as they become ‘eligible for purge’. Eligible expired and deleted domain names will be purged from the registry at 1.00pm Australian Eastern Standard Time every day, including weekends and public holidays. Previously, purges occurred at a random time on the next business day after an expired domain name became eligible for purge.
Domain names regulated by auDA may be renewed a maximum of 90 days before their expiry date. On the expiry date, the domain name is immediately removed from the domain name system (DNS). While the internet site attached to it will stop functioning immediately, the domain name will be ‘held’ for the owner for a further 30 days after the expiry date. Following this 30 day period, the domain name will be become ‘eligible for purge’ and will be published on the official domain drop list.
Another change in the new auDA policy is the introduction of a domain sync service. Registrants will be able to amend the expiry dates of their domain names so that they fall on the same date.
Having one renewal date will make it easier for registrants to keep track of their domain name portfolios. While domain sync services will now be permitted by auDA, they may not necessarily be offered by the individual registrars.
What are the implications for registrants?
The policy change means that registrants will need to be vigilant about renewing their domain names on time. Removal of a website from the DNS can serve as a reminder to some registrants to renew their registrations. However, some registrants may not check their websites regularly, while others may not have an active website attached to their domain name. These registrants may not notice their domain names are not working for some time. Third parties are likely to move quickly to register desirable domain names if they are allowed to expire and become available.
There are already a number of unofficial domain drop lists available on the internet, but the provision of an official list by the auDA is likely to lead to increased numbers of dropped domain names being picked up by third parties.
What can registrants do to protect themselves?
We advise registrants to keep their own records of expiry dates for their domain names rather than relying on reminders from their registrar. Registrants should also ensure their registrar has correct contact details for the staff responsible for maintaining domain name registrations. Registrants with important domain names or portfolios may want to consider having their domain names externally managed as well.
Best approach for best mode requirement
The patent system is based on a social contract between the patentee and society. The patentee fully describes their invention and provides the best method, or ‘best mode’, for carrying out the invention. This information allows society to build on the patentee’s development in the future. In exchange, the patentee gets the exclusive rights to make, use or sell the claimed invention for 20 years.
The requirement to disclose the ‘best mode’ is a safeguard against the possibility that patentees may try to get patent protection without making a full disclosure.
Ajinomoto v International Trade Commission
A recent US case (Ajinomoto v International Trade Commission [Fed. Cir. 2010]) has confirmed that any improvements made to the invention, up until filing the complete specification that materially affect the properties of the invention, must be disclosed. This includes anything that relates to the claimed invention, and not just the ‘inventive aspects’.
New Zealand and Australia require only the complete specification to disclose the best mode, not just the priority application. Other jurisdictions such as Europe and the UK have no best mode requirement.
The requirement to disclose the best mode in the priority application is only relevant in the US. So should the patentee disclose their best mode in their priority document even through there is no statutory requirement to do so in NZ, Australia or Europe?
US and non-US applications—things to consider
If, in the US, there is a need to rely on the non-US filed priority application, the best mode known to the inventors at the time of filing the priority application needs to be described. This also gives a further advantage. If the claims of a patent application need to be limited during examination to include features of the best mode, the claims will still have a date of invention of the priority application.
If the US is a key target for patent protection, there are some advantages when the priority application is itself a US application.
For example, a US priority application can be used as prior art against other later filed US applications despite not yet being published. If the priority application is a non-US application then it only becomes available as prior art against other US applications once it is published, or once it is filed in the US.
Therefore, if the US priority application is to be relied upon, then it is important that the application describes the best mode of performing the invention known to the inventors at the time of filing.
Discovering and disclosing the best method
There is no obligation on the inventors to discover a better method of performing the invention. If only one method is known then this method must be described in the patent application. If two or more methods are known then the preferred option must be disclosed in the patent application. There is no obligation to describe the less preferred methods.
Disclosing the best method of performing the invention will ensure that you meet your statutory obligations. Failure to update the priority application before filing the complete specification will risk invalidating your patent application. Therefore, it is important that you tell your patent attorney about any improvements to your invention before filing the complete specification.
Changes to New Zealand’s science system
The New Zealand Government has announced that it will implement most of the recommendations in the Crown Research Institute (CRI) Taskforce Report.
This should allow CRIs to focus on their core activities, provide them greater financial certainty and stability and remove significant bureaucracy from the science funding system. However, some care will be needed to avoid CRIs being encouraged into practices that dilute the positive impacts of these changes. Particularly in relation to the taskforce’s recommendations on technology transfer.
Benefits for New Zealand Inc
One of the taskforce’s key recommendations is that CRIs should not focus on commercialising intellectual property (IP). Instead, CRIs should aim to move IP into the private sector as soon as possible. This can happen by publishing research, releasing open source material and partnering with the private sector.
It is easy to agree that research results should not be locked away inside CRIs, public good data should be freely available and the private sector must be able to easily engage with CRIs.
However, technology transfer should be managed so it does not result in the value of that technology being lost to New Zealand. Examples of our IP benefiting offshore competitors are well known in a number of industries from forestry to aquaculture.
Relatively simple steps are needed to ensure that IP transferred out of CRIs is used for the advantage of New Zealand industries. These steps include:
- putting in place appropriate processes around publications and seminars;
- maintaining confidentiality; and
- formal IP protection.
CRIs should also work to retain rights to continue undertaking research in the relevant field. This will allow them to build their expertise and increase the value of the IP they generate.
Finding the right partner
The taskforce suggests that CRIs have been pushing too hard to get a good deal for their IP at the expense of striking any deal at all.
While there may be examples of this, in our experience, there are also examples of the opposite being the case. CRIs have often struck unfavourable deals simply to show that a project has ‘engaged with industry’ given the tremendous sway this is seen as having in obtaining further Foundation for Research, Science and Technology funding. This may have been positive for some projects. However, there are a number of examples where it has not been.
Getting IP out of CRIs does not mean that it will automatically find its way into the hands of the party that best values it, and is best able to extract value from it. Unlike other tradable assets, the value of IP can easily be lost or limited through poor management or under investment in research or protection.
While more technology transfer to the private sector is needed, it is not in New Zealand’s interest for Crown-funded IP assets to be given away to the first person through the door if this means the value of that IP will be wasted.
The taskforce recommends that CRIs be subject to more thorough performance measures. These measures will need to be appropriately focused to ensure that the transfer of IP out of CRIs is well considered and enhances, rather than hinders, the value of that IP for New Zealand.
Will the private sector bridge the gap?
The taskforce also suggests that CRIs have invested in spin-out companies because of a drive for profitability and that CRIs are not well-suited to run these companies.
Profitability has not been the only motivation for CRIs. Technology often needs to traverse a wide gap between leaving the laboratory and becoming commercially viable. The private sector is often hesitant to take on the high risk of failure for any technology traversing this gap. Also, inventors often need to be closely involved at this stage. As a result, CRIs have been motivated, and encouraged by targeted Crown funding, to spin out companies to get technology to a stage where private sector investment can be found.
If CRIs are not appropriately skilled for this role, the Government needs to look at other methods of bridging this gap. This may mean encouraging the New Zealand private sector to fulfil this role.
Otherwise, there is a risk that CRIs will focus on incremental technologies for which it is easy to find a private sector partner rather than step-change technology for which a partner may be hard to find, but which may ultimately be more valuable for New Zealand.
It is clear from the taskforce report that CRIs need to loosen their grip on the IP they develop. However, they should not be encouraged to exert no control at all over that IP. A balance needs to be struck if the real potential of CRIs is to be harnessed to drive economic growth in New Zealand.
Myriad’s BRCA1 & BRCA2 gene patents held invalid
High-profile litigation in the United States involving Myriad’s BRCA1 and BRCA2 gene patents has caused concern in the biotechnology sector. Last week, Judge Sweet of the US District Court for the Southern District of New York ruled in Association for Molecular Pathology v The USPTO that the seven Myriad patents in suit were invalid.
Judge Sweet found that the invention Myriad’s patents protect—the BRCA1 and BRCA2 genes associated with breast cancer—was not patent-eligible subject matter. Judge Sweet ruled that the purified or isolated BRCA1 and BRCA2 gene sequences are “products of nature” and are therefore patent-ineligible.
Isolated genes vs genes per se
The US courts and the USPTO have long considered that isolated genes could be patented. The act of isolating the DNA encoding the gene(s) and determining its sequence distinguishes the isolated gene from its natural form. The isolated gene is, therefore, fundamentally different to anything that occurs in nature.
However, in Judge Sweet’s view: “[m]any, however, including scientists in the fields of molecular biology and genomics, have considered this practice a ‘lawyer’s trick’ that circumvents the prohibitions on the direct patenting of the DNA in our bodies but which, in practice, reaches the same result”.
Judge Sweet held that the isolation of DNA does not alter its fundamental quality as it exists in the body, nor does it alter the information it encodes. The result? Isolated genes are no different to those occurring in nature—indeed, they are “products of nature”—and so are unpatentable.
This result is at odds with the prevailing case law in the US, and with the position taken by other jurisdictions. It mirrors, however, the plaintiff’s view that gene patents “put up unacceptable barriers to the free exchange of ideas”.
Gene patents stifle innovation, don’t they?
Opponents of the patent system trumpet the argument that patents stifle innovation. They argue that gene patents prevent fundamental biological research.
However, in most Commonwealth jurisdictions ‘research exemptions’ provide researchers with a defence to patent infringement. Researchers studying a gene to understand more about its biology - its structure and function, factors affecting its expression, it’s variation across populations - are able to assert this defence.
Additionally, most Commonwealth jurisdictions exclude from patent infringement any use of a patented invention in order to generate information for regulatory approval. Significant research programmes can therefore be undertaken, within some limits.
Clearly, it is important to distinguish between innovation and commercialisation. Gene patents do not stifle innovation, but they can stop others from exploiting the fruits of one’s labour.
Just compensation for innovation
It is important to remember that Myriad’s BRACAnalysis test, and the patents that protect it, are the result of an enormous amount of basic research, clinical trials and regulatory approval, development work—not to mention vast expenditure. This research had to recognise that various candidate genes may determine genetic risk of cancer, to correctly identify the BRCA1 and BRCA2 genes from a great number of dead ends, sequence them (in the days before genomic-scale sequencing technologies were available) to identify mutations, and correlate those mutations with a statistically significant risk of cancer in a range of patient populations.
Myriad undertook this to prove that their test works to the satisfaction of the regulators in order to gain registration for their test—a test that would not exist otherwise.
Would Myriad have undertaken this work (and would the BRACAnalysis test exist) if there was no opportunity to reap some reward? Even the most altruistic must accept they would not.
Into uncharted waters . . .
Importantly, AMP v USPTO does not mean that any, and all, uses to which genes, mutations or polymorphisms within them, or the products they encode are put are unpatentable.
Furthermore, AMP v USPTO will almost certainly be appealed—Myriad has promised to do so. That appeal will be of such significance that there is a good chance it will be considered by a full Court of Appeals bench. It will also be the first time that a specialist patent court deliberates on the substantive issues, and has an opportunity to provide some certainty on the patent-eligibility of this fundamental building block of the biotech industry.
Also - all eyes on Bilski case
One other ongoing US case of interest to the biotech sector is the Bilski case currently being deliberated by the United States Supreme Court. This case hopefully will determine the patentability of business method inventions. It may, however, also influence the availability of patent protection for diagnostic methods, methods of disease prediction, genetic testing, and methods for designing and monitoring treatment regimes. At this point it is impossible to say exactly how Bilski will be applied to the biotech sector.
These are two cases that the biotech sector must watch.
Initiatives to fast-track your clean technology patents
What is the Green Technology Pilot Program?
In December 2009, the United States Patent and Trademark Office (USPTO) launched a Green Technology Pilot Program (GTPP). It is an incentive program aimed at inventors of specified classes of ‘clean technology’ (or cleantech).
Cleantech is recognised potentially as a massive source of future growth (where the planets future ‘big players’ like Microsoft, Shell and BP will come from). So the idea behind the incentive scheme is to get cleantech inventions through the patenting process as quickly as possible, so that they can better support the commercialisation of technology. The GTPP recognises that most new start-up companies will struggle to gain the interest of investors and joint venture partners without a granted US patent, and aims to streamline the flow of cleantech inventions through the bottleneck caused by the current backlog of patent applications.
Under the current program, the USPTO will accept only the first 3,000 “petitions to make special” from previously filed new applications, provided that the petitions meet GTPP requirements.
The GTPP will run for twelve months. Therefore, petitions under the GTPP must be filed before December 8, 2010. The USPTO may extend the pilot program (with or without modifications) depending on the feedback from the participants and the effectiveness of the pilot program.
What is the likely effect of GTPP?
Under the GTPP, applications that meet the requirements will be advanced more rapidly through patent office examination.
Currently, there are other ways a patent application (that is not cleantech) can be accelerated to examination. But petitions for this normal accelerated examination must meet very strict (and prohibitive) requirements. Cleantech applications meeting the requirements for the GTPP will not be subject to these usual restrictive requirements.
When a petition under the GTPP is accepted, the accepted application jumps to the front of the line and begins examination immediately. Normal patent applications can take two to three years before examination even starts.
The application will also have “special” status in any appeal process and also in the patent publication process. This will mean that they take priority over other patent applications.
What are the requirements for acceptance under the GTPP?
The main requirement is that the claims must be directed to a single invention that materially:
- enhances the quality of the environment, or
- contributes to:
(1) the discovery or development of renewable energy resources;
(2) the more efficient utilisation and conservation of energy resources; or
(3) greenhouse gas emission reduction.
The term ‘‘renewable energy resources’’ in the first category includes hydroelectric, solar, wind, renewable biomass, landfill gas, ocean (including tidal, wave, current, and thermal), geothermal, and municipal solid waste, as well as the transmission, distribution, or other services directly used in providing electrical energy from these sources.
The second category would include inventions relating to the reduction of energy consumption in combustion systems, industrial equipment, and household appliances.
The third category would include, but is not limited to, inventions that contribute to:
Other administrative requirements must also be met.(a) advances in nuclear power generation technology; or
(b) fossil fuel power generation or industrial processes with greenhouse gas-abatement technology (e.g. inventions that significantly improve safety and reliability of such technologies).
Cleantech initiatives in other countries
Other countries’ patent offices are also incentivising cleantech. In October 2009, South Korea’s patent office launched a cleantech initiative that expedites the examination of applications where the subject matter of the application is “green”.
Also, since May 2009, the United Kingdom has been fast-tracking patent applications for inventions that could have a significant impact on combating climate change. According to the UK Intellectual Property Office, this initiative will allow UK businesses working in green technologies to get patent rights faster.
Can you take advantage of the GTPP?
If you think that your existing US patent application could qualify for acceptance under the GTPP, and you would like to have your US patent application accelerated, talk to us as soon as possible.
Or, if you anticipate filing a patent application in the US or any other country for cleantech in the near future, and would be interested in having your application accelerated, we can help you make the most of the latest cleantech initiatives.
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