Australia and the United Kingdom recently agreed to the broad terms of a Free Trade Agreement, part of which seeks to enhance design rights. As a result, Australia has (finally!) agreed in principle to join the Hague Agreement on Industrial Designs.

What is the Hague Agreement?

The Hague Agreement establishes an international system (the Hague System) administered by the World Intellectual Property Organization (WIPO) which allows designers to seek design protection in many countries at once, with fees paid in one currency, through a single international application. For those familiar with trade marks, the Hague System for Industrial Designs provides a similar procedure to the Madrid Protocol. That is, a single international application applied through WIPO enables applicants to secure rights in multiple participating countries.

How can designers benefit from the Hague System?

Centralised Management of Design Portfolios

Under the current system, Australians can apply for registered designs in Australia and overseas. However, for overseas protection, applicants need to engage in each country of interest a local agent and file a registration application through the relevant national IP administration office . Unsurprisingly, this can be an expensive endeavour, incurring costs for official fees, red tape costs at filing, translations (for non-English speaking countries) and substantive examination, all required for each country.

The Hague System enables designers to file a single design application through WIPO that can protect their designs in (currently) 92 countries simultaneously. Advantageously, this mitigates some of the costs associated with separate national filings by replacing multiple applications (and procedures and formalities) with a single application that only requires a single translation be provided with an application. This can be particularly advantageous for applicants filing designs into multiple non-English speaking countries.

There may be less of a need to involve local attorneys, but a local attorney may be required when an adverse official report issues in connection with a design in a specific country. One drawback in filing a single design application through the Hague System is that the design application may not meet the specific design registration requirements in a specific country. For example, China and the US have very particular design drawing requirements that could normally be addressed prior to filing after consultation with a local attorney.

A Single Application with Simultaneous International Design Rights

The Hague System allows designers to access some of Australia’s key international trading partners. For example, Australian designers planning to launch their designs into the global export market can utilise the Hague System to secure rights in the United States of America, United Kingdom and Canada. Additionally, designers looking to manufacture their products overseas can access design rights in Viet Nam, Japan and Korea. A full list of the contracting parties is available here.

An Option to Defer Publication

The Hague System allows applicants to defer publication of their international design applications. Advantageously, Australian designers can utilise this provision of the Hague System to keep their designs secret for up to 30-months after filing. On the international stage, this may stand as a strategic advantage for some Australian applicants. For example, registered designs can be selectively published according to e.g. a product release schedule or ‘roadmap’. In this way, an applicant can be agile with their product portfolio, publishing their registered designs when most suitable, or in alignment with a broader marketing strategy.

Term of Protection

In joining the Hague System, Australia will need to extend the term of protection from 10 years to a minimum of 15 years. Currently, in Australia, designs proceed directly to registration with only a formalities check. There is no need to undergo a substantive examination process unless the design owner wants to enforce the design. It is likely that the Australian Designs Act will be revised to not only cater for the longer term of protection, but also provide an opposition system given the increase term of protection.

Partial Designs and Graphical User Interfaces

Australian designers will also see the introduction of protection for partial designs and virtual designs in the coming years as the UK-Australia Free Trade Agreement takes shape. For those unfamiliar with partial designs and virtual designs:

a partial design registration will allow an applicant to protect a part, i.e. a ‘signature feature’ of their whole design (or product); and

a virtual design registration will allow an applicant to protect screen displays, graphical user interfaces (GUIs) and screen icons.

The Hague System includes protection for partial designs and virtual designs. IP Australia deferred introducing protection for these types of design registrations in the recent round of Design Law reforms which will come into effect in March 2022. Although not part of the current program of reforms, movement towards the Hague System will force the Australian Government to afford protection to these types of designs in order to align with other jurisdictions such as the European Union, United Kingdom and United States of America.

What can Australian Designers expect from the UK-Australia Free Trade Agreement?

As a part of the UK-Australia Free Trade Agreement, Australia has committed to make all reasonable efforts to join the UK as a member of the multilateral Hague Agreement on Industrial Designs.

While an ‘Agreement in Principle’ was announced on 15 June 2021, the Free Trade Agreement is not expected to come into effect until at least 2022, allowing for final negotiations to be made and the required legislation passed by both Australian and UK Parliaments.

In the years to come, leading to the finalisation of the Free Trade Agreement, designers can expect to see further changes to design rights in Australia. Royal assent to the current reforms to the design rights system was given on 10 September 2021 and thus will come into force on 10 March 2022 for the substantive law changes. While it is unclear how the Hague System reforms will materialise in Australia at this stage, some of the current reforms are consistent with the provisions of the Hague System. For example, the reforms introduce a 12-month grace period for design registrations in Australia which will come into effect March 2022.

The legislative and system changes associated with these reforms will benefit designers looking to maximise protection in international markets and lead Australia to the international partnership of the Hague System.

The Designs Amendment Bill 2020 has passed through Parliament ushering in a wave of reform in Australia. Jennifer Wyndham-Wheeler looks at the changes and what they mean for you. 

The Designs Amendment (Advisory Council on Intellectual Property Response) bill 2020 (‘the Designs Bill’) was passed by both houses of Federal Parliament on 30 August 2021, ushering in a wave of reform in Australia. 

Initiated by a comprehensive review in 2019, the Designs Bill enacts the following changes as recommended by the Advisory Council on Intellectual Property and public consultation:

  • A 12-month grace period. The grace period will protect designers against inadvertent self-disclosure (i.e., publication or use) prior to filing a registered design. This provides flexibility for designers starting out with new products who are unfamiliar with the design system. Designers will no longer lose the ability to register a design for a product that they have self-disclosed within the preceding year. Another benefit may be to allow designers to test products in the market before filing designs and make more informed and strategic design filing decisions.

  • Infringement exemption for prior use. Third parties who start using a design before it is published on the designs register – i.e., during the grace period – are exempt from infringement. This change balances the rights of designers with third parties. Once a design is registered and published, then third parties are considered put on notice of those exclusive rights. Prior to that it seems unfair to punish third parties who have started using an identical or similar product to the design that they may very well have created independently. The third party is able to continue using, making, importing and selling products which are identical or similar to the design.

  • Registration of designs and removal of the publication option. The registration process is now simplified and more streamlined. A request for registration of the design may be made at filing or within 6 months from filing. If a request for registration is not made within the 6-month time period, then the design will automatically proceed to registration. Once the design is registered, publication occurs within a few weeks. The option to publish the design without registering it has been removed. For overseas applicants filing design applications into Australia (i.e., up to six months after an original (Convention priority) filing), the six-month period will have already elapsed and the design will register and publish shortly after filing.

  • Relief from infringement before registration. This reform is an extension of the current innocent infringer defence which prevents third parties infringing a design that they do not know is registered.  The extension also applies the innocent infringer defence to the time period between filing and registration which as previously mentioned can be a time period of up to 6-months. This reform is consistent with the policy of balancing the rights of designers and third parties. Again, where a design is not published on the Register then the competitor could not have known about the existing exclusive rights.

  • Formal requirements. Formal requirements are directed to rules regarding drawing requirements, the specification and information that may (or may not) be included in an application, such as scandalous material. Moving the formal requirements to a non-legislative instrument allows for greater flexibility in updating these requirements with changing technology.

  • Changes to the ‘informed user’ standard. The legal standard of the ‘informed user’ is used to assess the validity (i.e., newness and distinctiveness) of registered designs and the infringement of registered designs. The primary change is that the ‘informed user’ no longer needs to be a user of the product.

Now that the Designs Bill has been passed, it will be provided to the Governor-General for Royal Assent (which typically occurs quickly). Once Royal Assent is provided, some changes including the legal standard will have immediate effect, and some changes, most notably the grace period, will commence 6 months after Royal Assent.

Of the changes to design law summarised above, the introduction of the grace period will have real tangible benefit for designers by providing flexibility for inadvertent self-disclosure. In the longer term, IP Australia intends to explore further reform measures of the design rights system to better support innovation in Australia.

How can we help

If you have any queries as to how these changes may affect your own situation, do not hesitate to get in touch with Jennifer Wyndham-Wheeler, or your usual Griffith Hack contact. 

Cytec Industries Inc. v Nalco Company [2021] FCA 970

In a recent opposition appeal decision of the Federal Court of Australia, Nalco Company’s Australian patent application no. 2012220990 was found invalid for lack of support and lack of clear enough and complete enough disclosure (sufficiency).1

The decision highlights the Court’s approach in considering the meaning of claim terms that might on first glance be considered conventional, and emphasises the need to consider whether the claims are commensurate with the technical contribution provided by the specification. Toby ThompsonKathryn Morris, and Tim Fyfe discuss.

The technology

The technology of the application related to the “Bayer process”, an industrial process used to extract alumina from bauxite. Precipitation of aluminosilicate scale can occur during the process, forming obstructions and affecting efficiency. The patent application was directed to methods for reducing scale during the Bayer process, involving use of additive compositions containing certain small molecules.

Support and sufficiency

A key issue in the proceedings was the requirement in claim 1 for:

“a composition comprising at least one small molecule selected from the group consisting of compounds (I)…(LX) within a product mixture formed from the reaction of…”

The judge first decided that the language of claim 1 encompassed a composition made up of a single type of small molecule, alongside encompassing mixtures of small molecules. Such a finding is uncontroversial, and most practitioners would agree that it is common when drafting to use “at least one” to cover situations where either a single component or multiple components are to be protected.

Having arrived at that construction, the judge went on to hold that the claims lacked support as a result. The specification described the small molecules as being produced by the reaction of three components, which resulted in the production of complex mixtures of small molecules. However, there was no disclosure regarding how to produce a single small molecule, or how to separate components of the product mixture. Whilst embodiments of claim 1 involving mixtures of small molecules were supported, embodiments involving only a single type of small molecule were not.2

For similar reasons, the judge also found that the specification did not disclose the claimed invention in a clear and complete enough manner for it to be performed by a person skilled in the art (insufficient). Insofar as the claims included a product mixture made up of a single type of small molecule, undue experimentation was required to perform the invention.3

Vulnerability of claims containing conventional terms

The decision in Cytec v Nalco follows on the heels of MSD v Wyeth last year, where use of an apparently conventional drafting term also resulted in invalidity (see our article here). In that case, the term “comprising” resulted in claims directed to vaccine compositions being held to lack support, insofar as the claims encompassed vaccines having additional polypeptide-protein conjugates beyond the thirteen specified.4 The decision in MSD v Wyeth also cemented that evaluation of compliance with Australian support provisions involves assessment of the technical contribution to the art disclosed by the specification, and requires that the breadth of the monopoly claimed must be justified by that technical contribution.5

On the face of it, these decisions might cause concern that other patents containing similar commonly used claim terms might also be vulnerable. However, in both MSD v Wyeth and Cytec v Nalco, the decisions were heavily dependent on the facts. As discussed above, in Cytec v Nalco there was a lack of disclosure in the specification relating to production or isolation of single small molecule products. The expert evidence further indicated that a skilled person would not have known how to obtain a single small molecule. In MSD v Wyeth, the evidence supported that the selection of additional serotypes beyond the 13 specified in the claims would be a complex and difficult process. Given that, it should not be assumed that all Australian patents using terms such as “at least one” or “comprising” are likely to be considered to lack support or be insufficient.

However, these decisions highlight the approach of the Australian courts, not only in carefully considering the language of the claims, but in also evaluating whether all embodiments falling within the claims can be obtained based on the specification and the common general knowledge. We can also expect that challengers will continue to raise lack of support and insufficiency attacks in invalidity proceedings. As a result, particularly for cases where litigation may be anticipated, patentees should consider whether the claims of their patents reflect the technical contribution to the art.

Grace period applicable to “novelty-only” patent publications

An unsuccessful lack of novelty attack was also made by Cytec based on an earlier filed-later published “whole of contents” Nalco publication “WO 873”. In confirming that the Australian grace period provisions are applicable to such documents, the judge confirmed the position taken by the Australian Patent Office in recent years,6 providing additional clarity in this area.

The judge disagreed with the Opponent’s view that the 12-month grace period only applied to prior art documents which had already been published by the priority date of the claim, holding that a reading down of the words “publicly available” in section 24 of the Patents Act to exclude prior unpublished patent specifications from the grace period provisions, was unwarranted.

For more information regarding this case, or if you have questions regarding how to navigate Australia’s support and sufficiency requirements, please get in touch with a member of our team.


1Cytec Industries Inc. v Nalco Company [2021] FCA 970.

2Cytec Industries Inc. v Nalco Company [2021] FCA 970, [129]-[133].

3Cytec Industries Inc. v Nalco Company [2021] FCA 970, [149].

4Merck Sharp & Dohme Corporation v Wyeth LLC (No 3) [2020] FCA 1477;

5Merck Sharp & Dohme Corporation v Wyeth LLC (No 3) [2020] FCA 1477, [547].

6Biogen Idec MA Inc. [2014] APO 25; Rozenberg & Co Pty Ltd. v Velin-Pharma A/S [2017] APO 61

As foreshadowed in our recent article on Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643 (Ono), the Federal Court of Australia has issued Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2021] FCA 947 (MSD), a further decision regarding patent term extension (PTE).

Whereas Ono considered PTE in the context of a pharmaceutical substance listed on the Australian Register of Therapeutic Goods (ARTG) by a third party prior to the patentee’s ARTG listing, MSD relates to PTE in the context of a patent that covers two or more pharmaceutical substances listed on the ARTG by the patentee or a related entity.

MSD had two pharmaceutical substances listed on the ARTG, both covered by claims of the one patent. Based on the pharmaceutical substance first listed on the ARTG, the patent was ineligible for PTE, because 5 years had not elapsed between the effective filing date of the patent and listing of the first pharmaceutical substance on the ARTG. However, based on the second pharmaceutical substance with the later listing on the ARTG, the patent was granted PTE, because greater than 5 years had elapsed between the effective filing date of the patent and that listing on the ARTG.

Merck Sharp & Dohme Corp. (MSD) initiated proceedings against Sandoz Pty Ltd (Sandoz) alleging threatened infringement during the PTE period. In response, Sandoz cross-claimed that the PTE based on the second pharmaceutical substance was erroneous and sought rectification of the patent register to indicate that the patent expired 20 years after its effective filing date.

MSD proposed a construction on the calculation of the extension of term with reference to Ono, effectively by replacing recitation of “s70(2)” in s77 with “s70(3)”. At [49], Jagot J noted that “MSD relies heavily on Ono at [118] and [144].” However, Jagot J was not swayed, not least in noting at [53] that:

All of the above paragraphs from Ono [relevant to MSD’s construction] are obiter dicta. The ratio of the case is confined to the answer Beach J gave to the issue of construction with which he was dealing, namely, as identified at [27]:

…whether an application for an extension must be filed within 6 months of the first inclusion in the ARTG of goods containing or consisting of any pharmaceutical substance falling with the claims of the patent:

  1. where the goods were those of the patentee (the applicants’ position); or
  2. irrespective of whether the goods were those of the patentee, that is, they could be the goods of a third party that had nothing to do with the patentee and, moreover, might be a competitor (the Commissioner’s position).

In short, Jagot J held that recitation of “earliest” in s77 relating to calculation of PTE duration meant exactly what is said. Therefore, the duration of PTE was to be calculated using the date of listing the pharmaceutical substance listed first on the ARTG, not the pharmaceutical substance listed second (or subsequently) on the ARTG. It followed that the term of the patent should not have been extended, or technically, the PTE should have been calculated as zero days.

Consequently, it remains best practice to pursue each pharmaceutical substance likely to be listed on the ARTG in a separate divisional application.

For more information, please contact Malcolm Lyons.

In a recent decision of the Australian Patent Office, Cytec Industries Inc. successfully defended its Australian Patent Application No. 2014370386 against all grounds of opposition.1 The decision highlights some key aspects of Australian patent oppositions, including the emphasis placed on expert evidence by the Patent Office when deciding on grounds such as inventive step, and the importance of formulating a clear position supported by the evidence in hearing submissions.

Griffith Hack were involved in the latter stages of CSIRO v Cytec, handling preparation of submissions and hearing strategy on behalf of Cytec.

Technology

The patent application concerned the production of polyacrylonitrile (PAN) polymer suitable for use in producing carbon fibre and having particular properties, including a requirement for high molecular weight and narrow polydispersity index. Claims were directed to a multi-step process for producing the polymer including the use of reversible addition/fragmentation chain transfer (RAFT) agents, and also to processes for producing carbon fibre from the polymer.

Straw Man Opponent

Any person can oppose grant of a patent application in Australia, and in CSIRO v Cytec the opposition was originally filed by a ‘straw man’ opponent. A so-called ‘straw man’ opposition usually involves an attorney or attorney firm opposing on behalf of somebody else – to conceal the identity of the true opponent. Opponent status was transferred to CSIRO late in the proceedings, after questions were raised about a possible association between some of the expert witnesses and the true opponent.

Expert Evidence

In Australian patent oppositions, providing strong expert evidence on matters such as common general knowledge or steps that a person skilled in the art (PSA) would have taken is often critical. The hearing officer will generally rely on such evidence rather than their own technical expertise. It is also preferable to involve independent experts where possible.

In CSIRO v Cytec the Delegate considered that, whilst one of the opponent’s expert witnesses had considerable expertise in RAFT polymerisation and a high level of inventive capacity, they were not truly representative of a polymer scientist of ordinary skill. Whilst the evidence was not excluded, consideration was given as to whether it went to the issue of what the common general knowledge was and what a PSA would do, rather than what the witness themselves knew.2

Two expert witnesses emerged as being employees of the true opponent, and a third was a director of a joint venture set up by the opponent. Concerns over the identity of the true opponent not being disclosed earlier in the process, and its impact on the value of the evidence, were also addressed by the Delegate.

He emphasised that the witnesses were provided with the Federal Court’s Expert Evidence Practice Note, and were aware of their role in providing relevant and unbiased evidence, and so their evidence was not disregarded.

However, it was also noted that at times declarants went beyond the role of providing evidence on technical issues. The Delegate further commented that, whilst witnesses will understandably disagree with each other, and may express those differences in strong terms, such statements can indicate a lack of objectivity or suggest that the witness is acting as an advocate. As a result, some of the evidence was approached with caution.3

Inventive Step

Alongside preparation of evidence, a key facet of opposition practice is the ability to set out a party’s case strongly in written and oral submissions, and to anticipate and respond to arguments made by the other side.

The main ground of opposition pressed at the hearing in CSIRO v Cytec was lack of inventive step. The Delegate agreed with Cytec’s position that the problem solved by the invention was the provision of PAN polymer suitable for use in producing carbon fibre, and having a low polydispersity and high molecular weight, preferring that to the opponent’s alternative problem of producing PAN polymer with low polydispersity.4

Further, Cytec’s position was preferred on a number of key issues, supported by their expert evidence, including that:

  • it was not common general knowledge that RAFT could be used to prepare PAN copolymers; and
  • there was a technical prejudice in the art that RAFT presented challenges in achieving the appropriate properties for PAN copolymers, namely achieving both high molecular weight and low polydispersity.5

Attention was also drawn to a contemporaneous paper published by CSIRO authors. The parties presented differing views as to what the paper taught, but ultimately the Delegate held that the document indicated that the manufacture of PAN polymers having high molecular weight and low polydispersity suitable for production of high quality carbon fibre presented challenges.6

Against that background, the claims were held to be inventive, both in the light of the common general knowledge alone, and the common general knowledge together with the cited prior art documents.

Final Thoughts

Since the Raising The Bar Amendments to the Patents Act 1990 came into force a number of years ago, Australia has become a more challenging jurisdiction for patent applicants requiring greater consideration of strategy than in the past. An opponent now only needs to prove their case on the balance of probabilities rather than demonstrating that the application is clearly invalid, and there are increased support and sufficiency requirements intended to align with UK and European provisions.

Whether an owner or a challenger, careful preparation of evidence and submissions is a key aspect of opposition practice. Factors important for success in Australian oppositions also include an understanding of the scientific and legal issues, developing an effective opposition strategy, and evolving that strategy as necessary as the opposition progresses.

When faced with an opposition, patentees should consider whether they have the best team to successfully defend the patent application. Transfer of the representative on an opposed application is allowable, and may be preferable for some high value cases and situations where opposition experience is essential.

How we can help

Griffith Hack has a patent attorney and legal team with a strong track record, not only in defending patent applications where we have been responsible for prosecution, but also in getting across the scientific and legal issues quickly, and delivering results when we are brought in specifically to handle the opposition.

To discuss patent oppositions further with a member of our team, click on their profile below.


Commonwealth Scientific and Industrial Research Organisation v. Cytec Industries Inc. [2021] APO 27.
2 Ibid, [36]. 
3 Ibid, [37]-[39].
4 Ibid, [63].
5 Ibid, [85}, [91].
6 Ibid, [100].

With Australia’s innovation patent system set to end later this month, pre-grant opposition proceedings will likely play a significant role in the strategies of challengers going forward – and owners will want to be prepared. Gavin AdkinsDr Toby Thompson and Amanda Stark discuss. 

Australia’s innovation patent system is ending soon. As a result, Australia’s pre‑grant opposition proceedings will likely play a more significant role in the strategies of patentees and challengers in the future.

Innovation patents are subject to a different ‘post-grant’ opposition procedure to standard patents that is stayed by the commencement of court proceedings. As a result, divisional innovation patents are sometimes used as a litigation tool in order to, among other things, short circuit the enforcement delay associated with the pre‑grant opposition procedure for standard patents. As the innovation patent system is phased out, this tactic will fall away.

Australia’s pre-grant patent opposition procedure is long-standing but has undergone some important changes in recent years that will become critical in the future.  These changes include higher requirements for several grounds of opposition, resulting in a less pro-patentee opposition regime than was previously the case.   

Lower burden of proof

Previously, in order to succeed in opposing grant of an Australian patent it was necessary for an opponent to establish that the patent, if granted, would be clearly invalid.

Now an opponent need only satisfy the Hearing Officer on the balance of probabilities that a ground of opposition to the grant of the standard patent is made out.

Stronger grounds for opposition

In respect of standard patent applications which are filed on or after 15 April 2013, or for which examination is requested after this date, there are four substantive changes that strengthen the grounds for challenging validity:

1. Broader prior art base for inventive step (obviousness)

Firstly, the background “common general knowledge” is no longer confined to that which existed in the art in Australia. In practice, this removes the need to use local Australian experts or otherwise prepare evidence in order to establish that the relevant art is ‘international’ in nature.

Secondly, in order for prior art to be eligible for assessing inventive step it is no longer necessary to establish that it must be “information that a skilled person […] could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant”. This removes another evidentiary obligation from an opponent and broadens the prior art base substantially.

2. US utility requirement

An express utility requirement was inserted to align with the US position such that “a specific, substantial and credible use for the invention (so far as claimed) is disclosed in the complete specification”. This is in addition to the pre-existing requirement for the invention itself to be useful.

3. UK/European enablement and support requirements

The disclosure requirement for complete applications has been amended to conform substantially to the corresponding UK provision, such that the complete specification must “disclose the invention in a manner which is clear enough and complete enough for an invention to be performed by a person skilled in the relevant art”.

Further, the ‘old test’ for fair basis has been replaced with a requirement based on UK/European law that that the claims are “supported by” the description. The ‘old test’ for fair basis was essentially limited to a textual comparison between the claims and the body of the specification or priority document that did not involve any inquiry into ‘technical contribution to the art’.

4. Tighter restrictions on amendments

While not a ground for invalidity, patent applicants are not allowed to add matter that goes beyond the disclosure contained in the specification at its filing date, except to correct a clerical error or obvious mistake.

Strict time-frames for evidence

In the past, patent opposition proceedings in Australia often became protracted due to generous provisions relating to extensions of time for lodging evidence. This is no longer the case.

Evidentiary time periods are still extendable, but the regulations relating to extensions of time for evidentiary periods are now reasonably onerous and strictly applied by IP Australia. Unless a party can show that they acted promptly and diligently and made all reasonable efforts to file the evidence in time, an extension will not be granted.

The procedure from filing the Notice of Opposition to the issuance of a written decision on validity can now be completed within about 18 months, although extensions of time (where allowed), amendments and procedural disputes can extend this time-frame.

Use all available options

It is currently still possible to file new applications for innovation patents in Australia, until 25 August 2021. Even after that date, it will still be possible to file applications for innovations which are divisionals of existing applications filed before that date.  As a result, if your invention is of significant commercial value and is likely to be commercialised in the short to medium term, an 8-year term innovation patent may still be a useful option.

How we can help

Facing a pre-grant opposition in Australian is often a new experience for many patent owners, and opponents also.  Opposition practice is a specialised area of Australian patent law, particularly with regard to areas such as preparation of expert evidence, hearing preparation, dealing with procedural aspects such as amendment requests and extensions, and extending into commercial aspects such as settlement negotiations and licensing.

Griffith Hack’s experts have extensive experience in handling Australian patent oppositions. Our combined patent attorney and legal team provides integrated scientific and legal expertise, together with strategic, commercially-relevant insight, and has a proven track record in delivering results.

To discuss patent oppositions further with a member of our team, click on their profiles below. 

AusBiotech has released a draft strategic roadmap for a new regenerative medicine Catalyst, and is now seeking sector feedback from those interested in the future of regenerative medicine in Australia.

On 29 July 2021, AusBiotech released for comment a draft roadmap for Australian regenerative medicine (RM), with the aim of developing strategic goals, objectives and priority actions for a national RM sector ‘catalyst” collaboration body, the Catalyst Body.

We welcome the impetus of the seven consortium members of the Regenerative Medicine Catalyst Project in seeking to advance the development and earlier access to ground-breaking regenerative medicine therapies for Australian patients.

The draft roadmap states:

“Our vision is that Australian patients have access to world-class regenerative medicine therapies sustained by a thriving Australian RM industry. 

Our mission is to create an end-to-end world-class value chain that can discover, develop, and distribute regenerative medicine, while creating jobs, commercialising research, and exporting Australian therapies to the world.

An excellent summary of the strategic plan is provided in Figure 1 on page 8 of the draft roadmap, outlining priority actions to build stakeholder engagement and encourage investment within the sector, establish forward-looking regulatory pathways, and develop the requisite manufacturing capability needed to accelerate growth in regenerative medicine therapies.

The underlying theme of the draft roadmap is that the vision and mission will only be achieved through collaboration, with a call for greater coordination and cooperation concluding the draft roadmap.

The Australian RM sector is invited to comment on the draft roadmap by Friday, 13 August 2021 by providing feedback to Camille Shanahan, National Projects Manager – Regenerative Medicine.

We look forward the RM sector’s input on this important initiative.

The Full Court of the Federal Court of Australia has now confirmed that a non-invasive diagnostic test for prenatal conditions is patentable subject matter in Australia.

The decision in Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101 contains useful guidance for industry and is significant in that it diverges from the result before the US Court of Appeals for the Federal Circuit (the US Supreme Court declined to hear an appeal) where the majority found the counterpart US patent to be ineligible for patent protection.

Background

Sequenom surprisingly found cell free foetal DNA (cffDNA) in the blood plasma and serum of pregnant women. This discovery allowed: (a) genomic testing of a foetus without invasive testing such as inserting a needle through a mother’s abdomen or cervix (which increases the risk of miscarriage); and (b) more reliable quantitative or qualitative diagnostic testing of a foetus (improving existing methods that may give significant false positive or negative rates). On the basis of this discovery, Sequenom obtained grant of Australian Patent No. 727919 (the Patent) with claim 1 in the following terms:

“A detection method performed on a maternal serum or plasma sample from a pregnant female, which method comprises detecting the presence of a nucleic acid of foetal origin in the sample.”

Ariosa conducts a non-invasive prenatal test that analyses cell free DNA in plasma of pregnant women, to estimate the risks of foetus genetic disorders (Harmony Test). Ariosa licensed Sonic Health Ltd and Clinical Laboratories Pty Ltd to conduct the Harmony Test in Australia. Sequenom claimed this infringed it’s Patent. Arisoa cross-claimed that Sequenom’s Patent was invalid on various grounds.

Manner of Manufacture (the Australian term for “patentable subject matter”)

As part of its challenge to the validity of the Patent on the ground of lack of patentable subject matter, Ariosa submitted that:

  1. Each claim of the Patent involves the detection of what is naturally occurring; being a mere discovery of a law of nature.
  2. The leading authority of the High Court of Australia, D’Arcy v Myriad Genetics Inc [2015] HCA 35 (Myriad), required the Full Court to look at the “end result” of each claim to see if there was an artificial effect and that the end result of each claim of Sequenom’s Patent was mere information.
  3. No claim in Sequenom’s Patent was for a new method of detection (e.g. the ccfDNA was detected and extracted using well known methods) or a new method of applying the detection of ccfDNA in maternal plasma or serum (e.g. methods to analyse the ccfDNA such as genetic disorder markers, PCR, gel electrophoresis and fluorescent labelling techniques were well known).

The only new subject matter was that ccfDNA is detectable in maternal serum or plasma samples – maternal plasma was routinely thrown away by investigators researching non-invasive prenatal diagnosis.  Arisoa submitted that “detection” of the ccfDNA is no different from the discovery that cffDNA is detectable.

The tension between mere discovery vs. invention

The Full Court referred to previous judicial considerations about the difficulties finding the line between discovery and invention. The Full Court distilled three points of emphasis from the relevant authorities (at [114]) which can be summarised as follows:

First, the distinction between mere discovery and an invention lies in its practical application to a useful end.

Second, it is important that the invention is considered as a unitary concept, and not segregated into parts. The invention may still be patentable if the combined effect of an idea and its application in a well-known way is patentable subject matter.

Third, a patentable invention can be an abstract idea put to a useful end (even if the way of putting it to that useful end is obvious or well known).

Distinguishing Myriad

In Myriad, the High Court of Australia held that naturally-occurring DNA sequences, even when extracted from the native cell nucleus and isolated by human involvement, cannot be validly made the subject of patent protection in Australia (see our analysis here). In this decision, the Full Court considered that Myriad could be distinguished on the basis that the disputed patent claims in that case were directed to a product (the isolated BRCA1 gene sequences).    

The Full Court cited Gordon J’s comments in Myriad (at [136]):

“In my opinion, invention may lie in the idea, and it may lie in the way in which it is carried out, and it may lie in the combination of the two; but if there is invention in the idea plus the way of carrying it out, then it is good subject-matter for Letters Patent.”

Gordon J’s reasoning in Myriad distinguished the invalidity of claims to the isolated BRACA1 sequence themselves, and the validity of claims (such as claim 4 of the patent in Myriad) directed to a method of using specific mutations or polymorphisms to suggest a predisposition to breast cancer and ovarian cancer. In Myriad, it was not disputed that if the BRCA1 gene was isolated and found to have specified mutations which indicated malignancies, then that was patentable subject matter.

Claim 1 in Sequenom’s Patent was directed to a method involving the application of a means for identifying and discerning between maternal and foetal nucleic acid. Not unlike claim 4 in Myriad, Seqeunom’s Patent claimed a process used to convey some useful information, the Full Court holding (at [159]):

“Here, the invention as claimed carries into effect an idea that the presence of information within the naturally occurring code of a person will be useful. By a process of detection that information is yielded up. The claim construed as a whole necessarily involves an artificially created state of affairs yielding an outcome that is of economic utility.”

The correct identification of the invention

Ultimately the Full Court considered that (at [153]):

“[The invention] lies not in the mere observation that cffDNA is to be found in maternal plasma (or serum), but in the explanation as to how that knowledge may be unlocked for others to use it (that is, the explanation of how to extract the cffDNA from the plasma or serum). It is the idea coupled with a practical means of application that makes the invention.”

The invention was not, as Arisoa sought to characterise it, the mere observation of cffDNA in maternal plasma or serum. The invention ‘unlocked’ that knowledge for others to use; it was a new means by which foetal DNA may be detected, other than by dangerous invasive techniques, or using methods with poor diagnostic capability.

Infringement

Before Ariosa’s Australian licensees, Sonic and Clinical Laboratories, started conducting the Harmony Test in Australia, they would collect blood samples from pregnant women in Australia, and send them to Ariosa in the United States. Ariosa them conducted the Harmony Test and sent written test result reports back to Sonic/Clinical in Australia.

A question for the Full Court was whether this ‘send out’ model infringed Sequenom’s exclusive rights to ‘exploit’ the invention claimed in the Patent. Were the test results mere information, or a ‘product’ within the definition of ‘exploit’? The invention in Sequenom’s Patent was a ‘method’ or ‘process’, and ‘exploit’ for the purposes of the Act includes ‘doing any act […] in respect of a product resulting from [using the method or process]’. The Full Court rejected the primary judge’s characterisation that the reports were ‘products resulting from such use’ captured by the meaning of ‘exploit’.   

It was not necessary for a method or process to result in a product, provided it can be commercially exploited (at [266] and [269]):  

“In our view, a construction of the word “product” in the context of the definition of “exploit” which recognises that not all methods or processes will led [sic] to a product resulting from their use is to be preferred.”

“The fact that such information is derived from a patentable process or method cannot render the information itself patentable.”

So Sonic and Clinical did not infringe Seqeunom’s Patent by sending specimens to Ariosa in the United States for the purposes of the undertaking the Harmony Test in that jurisdiction. Sonic and Clinical did, however, infringe Seqeunom’s Patent when they undertook the Harmony Test in Australia.

Take Aways

Key take aways from this decision include:

  1. Diagnostic methods remain patent-eligible in Australia and this decision highlights the distinction between the treatment of method and product patent claims in Australia.
  2. ‘Discoveries’ of nature may be patentable in Australia, if the patent claims a process or method that uses that discovery in some new and commercially valuable way (even if the techniques involved are not themselves new or non-obvious). In other words, the combination of an ‘unknown idea’ and ‘known practical application of the idea’ can be patentable.
  3. Where an Australian patent claims a diagnostic method, it is possible that third parties could subject test samples taken from Australian patients to the patented diagnostic method in jurisdictions where there is no patent protection, and then deliver the results to Australian patients without infringing the Australian patent.

 It is still possible for Ariosa or even Sequenom to make an application for special leave to appeal the Full Court’s decision to the High Court of Australia. We will keep you updated of any further important developments. If you have any questions about how this case relates to your patent strategy for Australia, please get in touch. 

Principal Karen Sinclair discusses the Australian Government’s proposed patent box scheme, the key role IP strategy will play in the ability of Australian companies to benefit from it, and what needs to be considered to ensure successful implementation.

Announced as an incentive for Australian medical and biotech companies to “undertake their R&D in Australia, keep patents here and manufacture patented technologies onshore1, the proposed patent box scheme is an ideal opportunity for the Australian Government to demonstrate that it really understands that new tech and sovereign manufacturing capacity is the future for Australia – one that extends beyond digging resources out of the ground.

Past reviews of the patent box model, both here2 and overseas3, suggest that introducing a patent box scheme runs several risks, including domination by multinationals, opportunistic patent applications based on R&D performed offshore, and adding little benefit to the local economy.

On the upside, it has been cautiously suggested that businesses using the patent box display an approximate 10% increase in business-level capital investment over the post implementation period4. The design of the incentive needs to be right for the scheme to be successful, and to ensure that future governments are discouraged from tinkering with the rules.

The patent box scheme: A quick refresher

Announced in the Australian Government’s Budget 2021, the patent box scheme aims to encourage businesses to undertake their R&D in Australia and “keep patents in Australia” by reducing taxes on income from innovative patented research.

Specifically, from 1 July 2022, income derived from Australian medical and biotech patents will be taxed at a concessional corporate tax rate of 17%. Only granted patents, which were applied for after the Budget 2021–22 announcement, will be eligible.

Getting the design right

It is vitally important that the patent box scheme benefits Australia by way of increased investment, job opportunities and exports through greater participation in global value chains.

On Budget 2021 night, the Federal Government signalled its intention to consult with the clean energy sector and to comply with OECD standards on patent box regimes, but was otherwise silent on detail.

We suggest that the following key requirements need to be considered in the design of the patent box scheme:

  • A cynic might suggest that by landing on the medical and biotech sector, the Federal Government exposes itself to little downside because of the long path to market of many products in this sector. Through a “COVID-19 lens”, extending the incentive to technologies which Australia will need to rely upon in the future for economic success makes sense. Politics aside, this must include clean and green energy. The defence sector also comes to mind. Although careful definition is required, to rebuild Australia’s manufacturing sector and to take advantage of residual programs set up by the departing car industry, manufacturing technologies are also a must.
  • Relevant IP rights must include both rights created by the beneficiary of the tax concession, and rights exclusively licensed-in by Australian companies. Consistent with policy aims, in both cases there must be an obligation to significantly develop, and even manufacture, the technology in Australia. Australia has demonstrated expertise in the ‘R” of R&D; it’s the Development and commercialisation part of the pathway that needs incentivising. Logically, to monitor and support development activities there would be a connection to the R&D Tax Incentive.
  • If the concessionary rate is to be higher than that of similar programs abroad (e.g 10% in the UK), then as an offset, it must be the case that all profits from commercialisation of the patented technology, no matter where they are made, will qualify. As an extra incentive and given Australia represents a small market, a further concessionary rate might be offered for income from products manufactured in Australia and then exported.
  • It may seem obvious, but the more regulatorily complex the implementation is, the less likely it is that Australian businesses will opt to take part. This may mean, for example, that complex business structures and IP holding companies might be excluded from eligibility. But there needs to be a focus on the policy objectives at all times: building Australia’s technology skillset and making the program accessible and economically successful.
     

The IP nexus

Patent and more generally, IP management and exploitation strategy, will play a key part in the ability of Australian companies to truly benefit from the proposed regime. Alignment between corporate strategy and IP strategy has never been more important to get the best out of the proposed patent box scheme.

What we need in Australia is more of this sentiment:

“The establishment of the patent box has transformed how we see the UK as a place to invest. As a result, last year we announced we were building our first new factory in the UK for 40 years.”

GlaxoSmithKline’s President of Global Manufacturing and Supply in 2013

and less:

“GSK announced … that we will close the Boronia [Melbourne] manufacturing facility at the end of 2022. …This decision aligns with a global focus on innovation…. the new GSK biopharma company needs to become more competitive, so we can spend more on vital investments in innovation, growth and the future success of our business….”

GlaxoSmithKline, press release 22 July 2020

With access to data-backed technology landscaping and analytical tools, deep expertise in securing IP protection for Australian businesses, and with a passion for Australian innovation, Griffith Hack’s team looks forward to making the implementation of the patent box scheme a winner for Australia’s technology future.


Footnotes:

Austrade 

Patent box policies, Department of Industry, Innovation and Science 

Patent box evaluation, HM Revenue and Customs 

Ibid

Griffith Hack has maintained its status as a Tier 1 firm for patent prosecution in the IP STARS 2021 rankings, with principals Amanda Stark and Janelle Borham named as Patent Stars.

The results highlight Griffith Hack’s standing as a leader in patent work both within Australia and internationally.

Earlier in 2021, Griffith Hack was also named as a Tier 1 firm for trade mark prosecution by IP STARS, with Anne Makrigiorgos recognised as a Trade Mark Star.

Published by Managing IP, IP STARS recognises firms and senior practitioners who have been identified as leaders in their fields and is considered one the most comprehensive and widely respected guides in the IP profession.