Issue 42 • September 2018 The Coca-Cola Company wins green trade mark fight First of its kind: Injunction restraining launch of biosimilar granted in Australia Damages for design infringement – an exercise in guesswork? Patents | Trade Marks Congratulations to our new Partners and Associates | Designs | IP Research | Legal Services Welcome The process of securing or enforcing intellectual property rights can sometimes take many years. In this edition of Inspire, we look at a number of cases in which decisions made at an early stage in the process had profound implications later on. In Frucor v TCCC, the trade mark applicant was unable to establish that it had a reputation in the colour green, in part because it was unclear which shade of green was the subject of the application. This was the result of a disconformity between the written and visual descriptions of the mark in the application as filed. Matthew Overett reports on the prosecution of a patent family in which the original application was rejected by the patent office for failing to disclose the best method of performing the invention. While the applicant was able to circumvent the issue by filing a divisional application which corrected this deficiency, the approach taken by the patent office may have a sting in the tail for those filing divisional applications. The decision in Gram v Bluescope highlights the difficulty of proving the damage caused by infringing conduct which may have taken place many years in the past. While the Court is willing to accept that a degree of speculation or guesswork may be necessary, a claimant must still prove their case. This can be challenging, particularly where records of what occurred during the period of infringement are sparse. Also in this edition, Alexis Keating discusses the dangers of making unjustified threats of infringement, Chris Schlicht delves into the world of superhero licencing, David Longmuir asks whether a trade mark can be too famous and we say congratulations to our new Partners and Associates. Adrian Crooks, Partner BEng(Civil)(Hons) LLB LLM FIPTA Inspire September 2018 adrian.crooks@pof.com.au Congratulations to our new Partners and Associates We are delighted to announce our new appointments for 2018 – David Longmuir and Raffaele Calabrese as Partners in our 01 Melbourne and Adelaide office, and Dr Matthew Overett and Dr David Hvasanov as Associates in our Melbourne and Sydney office. David Longmuir joined in 2003 and is part of associated law firm, Phillips Ormonde Fitzpatrick Lawyers. He has an extensive practice in patents, trade marks and plant varieties and has acted for several of our major clients in complex contested opposition and litigation work. Raffaele Calabrese is a member of our Electronics Physics and IT team and has been with POF since 2011. He has a strong and established patent drafting and prosecution practice, with experience in protecting inventions relating to ICT, software and engineering. Dr David Hvasanov joined POF in 2014. A member of the Chemistry Life Sciences team, he has experience in drafting and prosecuting patent applications in chemistry and applied chemistry both in Australia and overseas. He recently relocated to our Sydney office, bolstering the firm’s service offering in this market. Dr Matthew Overett joined POF in 2015, and although only relatively recent to the profession, he moved quickly to registration. Most recently, he has been drafting and prosecuting patent cases for a range of important clients in our Chemistry and Life Sciences team. It’s risky business bringing proceedings for IP infringement without proper legal advice. A self-represented Debra Crocker learnt this the hard way over a series of court proceedings, which saw her sentenced to time in prison for contempt of Court and prohibited from instituting proceedings in the Federal Court with limited exception. Following these recent proceedings 1 , Justice Reeves of the Federal Court made orders restraining Ms Crocker from making further unjustified threats of infringement proceedings and repeating false, misleading or deceptive representations in contravention of ss 18 and 29 of the Australian Consumer Law (ACL). Background In the mid-90s, Ms Crocker operated a company that manufactured and supplied child car-safety restraints. When the company ceased trading in 1998, one of its customers, Infa Products, began manufacturing the child restraints itself, marketed as the ‘Securap’. In 2006, Infa Products agreed to pay Ms Crocker a royalty, in the belief she held a patent over the Securap. However, it declined to make further payments, when it came to light that the patent had lapsed. The company (and its corporate successor, Infa-Secure) then continued to market the Securap until 2014. In 2014, Ms Crocker commenced proceedings against Infa-Secure and three of its retail customers for trade mark infringement, copyright infringement, misleading or deceptive conduct and passing off. Infa-Secure Pty Ltd v Crocker (No 3) [2018] FCA 605 2 Infa-Secure Pty Limited v Crocker [2015] FCA 830 1 Proceedings against Ms Crocker However, she was later found guilty of contempt of Court for Before discontinuing the breaching her undertaking 2 and proceedings against Infa- was sentenced to a term of 13 Secure, Ms Crocker sent a weeks imprisonment (11 weeks series of inflammatory emails of which were suspended). to retailers of baby/children’s products, which included Infa-Secure then sought a permanent untrue representations that: injunction against Ms Crocker, restraining her from repeating Infa-Secure infringed Ms the representations. It Crocker’s intellectual further sought a property by declaration under supplying the s 202 of the Securap Ms Crocker’s Copyright Act Infa-Secure various proceedings that Ms Crocker’s committed threats of action serve to highlight a criminal for copyright offence by the importance of infringement supplying exercising self- were the Securap unjustifiable, restraint in alleging the together with an infringement of addressees injunction against your IP. would the repetition commit a of such threats. criminal offence by In May 2018, Justice supplying the Securap Reeves found that Ms Crocker retailers of the Securap had contravened ss 18 and 29 would be liable to account to of the ACL and that Infa-Secure Ms Crocker for proceeds of the was entitled to the above relief. sales Look before you leap – those trading in the Securap always seek advice first were liable to civil suit by Ms Crocker’s various proceedings consumers purchasing the serve to highlight the importance of Securap exercising self-restraint in alleging Ms Crocker was entitled to infringement of your IP. Tread possession of Securaps in a carefully and always with legal trader’s possession advice, as certain representations Infa-Secure and the retailers may amount to false, misleading or acted in disregard of children’s deceptive conduct. Furthermore, welfare in trading in the threatened parties can apply Securap. to the Court for relief, including an injunction to prevent further In response, Infa-Secure threats and damages for loss brought separate proceedings suffered as a result of the threat 3 . against Ms Crocker, claiming her representations were false, misleading or deceptive in contravention of ss 18 and 29 of the ACL. Infa-Secure sought an interlocutory injunction restraining Ms Crocker from repeating the representations and she gave undertakings to this effect. See Trademarks Act 1995 (Cth) s 129, Patents Act 1990 (Cth) s 128, Designs Act 2003 (Cth) s 77 and Copyright Act 1968 (Cth) s 202 3 Alexis Keating, IP Lawyer LLB (Hons), BSc alexis.keating@pof.com.au Inspire September 2018 What a Crocker... Groundless threats result in permanent injunction 02 Inspire September 2018 First of its kind: Injunction restraining launch of biosimilar granted in Australia 03 The first interlocutory injunction restraining the launch of a biosimilar pharmaceutical product was granted by the Federal Court of Australia in a decision on 12 June 2018 1 . The law applicable to interlocutory relief The two main principles concerning the grant of interlocutory relief are: whether the applicant for relief has established a prima facie case whether the balance of convenience and justice favours the grant or refusal of an injunction. Background The decision concerns the monoclonal antibody rituximab, a biologic therapy which is prescribed in Australia to treat a number of immunology conditions including lymphoma, chronic lymphocytic leukaemia and rheumatoid arthritis. The applicants, F. Hoffman-La Roche AG and its Australian subsidiary Roche Products Australia Pty Ltd (Roche), own four patents relating to methods of use of rituximab in the treatment of a number of specified medical conditions. They supply a number of products in Australia under the MABTHERA brand which have rituximab as their active ingredient. The respondent, Sandoz Pty Ltd (Sandoz), are planning to launch two biosimilar products called RIXIMYO. They have obtained regulatory approval of similar scope to MABTHERA. Sandoz also applied to have RIXIMYO listed on the Pharmaceutical Benefits Scheme (PBS), with a view to launch later this year. Roche, concerned that the effect of the PBS listing would be to cause a sequence of irreversible and harmful consequences to it, sought interlocutory relief preventing Sandoz from infringing five claims of four of their patents relating to rituximab. The question of arguable case For the purposes of the present application, Sandoz accepted that its proposed conduct would have infringed Roche’s asserted claims. Nevertheless, Sandoz contended they had established a strong case that the asserted claims are invalid for lack of inventive step. Roche responded that the case advanced by Sandoz on the cross- claim was arguable, but no more, submitting that the overwhelming strength of its infringement case is not weakened by the existence of a merely arguable cross-claim. With the question of Roche’s claim of infringement made out, the question before the Court was the strength of Sandoz’s invalidity challenge. Upon consideration of conflicting evidence from a range of experts in relation to all four patents, Burley J surmised that the evidence did not permit any provisional conclusion as to the strength of the validity case beyond the observation that it is arguable. F.Hoffman-La Roche AG v Sandoz Pty Ltd [2018] FCA 874 1 The decision concerns the antibody rituximab, which is prescribed in Australia to treat a number of immunology conditions. The balance of convenience Roche submitted that several factors favoured granting interlocutory relief - particularly that the launch of a generic rituximab would cause losses to Roche that could not be adequately calculated or compensated by an award of damages. These included, for example, a 16% price drop mandated by the PBS, as well as loss of market share and loss of goodwill. Sandoz submitted that the potential losses outlined by Roche were overblown and that its own losses by the granting of an injunction, which may later be overturned, would be harder to calculate and would result in greater irreparable harm. Ultimately, Burley J found that the balance of convenience and justice favoured granting an injunction against Sandoz until 11 August 2019, the date upon which the first of the Roche patents is set to expire. Roche have also been granted leave to apply for continuation beyond this date, depending on circumstances at that time. Dr Annabella Newton, Associate MChem(Hons) MCommrclLaw PhD AMRSC MRACI annabella.newton@pof.com.au The Coca-Cola Company wins green trade mark fight Justice Yates handed down his decision in the appeal between Frucor Beverages Limited and TCCC on Monday 2 July, 2018 1 . Frucor had sought to register a particular shade of the colour green as a trade mark in relation to energy drinks. TCCC had opposed the application and had succeeded in its arguments before the Registrar of Trade Marks. Frucor appealed the Registrar’s decision and the appeal was heard last year. TCCC argued that Frucor had not demonstrated that the colour green used on the V brand Energy drinks had operated as a trade mark. It was telling that Frucor sold other variants of its energy drinks in different coloured packages. Its lemon “V” energy filed did not include a swatch drink was, for example, sold in having the correct colour green. a yellow container not a green There was disconformity between one. Justice Yates agreed. the Pantone number mentioned The Court was also of the view on the application and the actual that consumers would see the representation attached to the “V” brand as the trade mark and application. The Court found that would associate green with the this disconformity was fatal. Frucor core product in the “V” offering, but couldn’t establish that the mark would not see the colour as a trade was distinctive when it was mark. The survey evidence not clear what shade of presented by Frucor did green was the subject not assist matters, as of the application. Justice Yates did Frucor attempted not consider that to amend its the questions The crucial issue application to were directed correct this [was] whether at the crucial error, but Justice issue of whether consumers saw Yates found that consumers saw the colour as correction of a the colour as an indication of mistake was a an indication of matter for the trade origin. trade origin. Registrar, and To make matters in any event, worse for Frucor, amendment of this the application when type was now precluded because of the delay. Whilst the Trade Marks Act introduced the possibility of colours being registered as trade marks in 1995, this is another example of the difficulties inherent in showing that a colour truly operates to indicate trade origin. Inspire September 2018 TCCC has scored a big victory over Frucor in its battle over the colour green. 04 Chris Schlicht, Deputy Managing Partner BSc LLB FIPTA chris.schlicht@pof.com.au Frucor Beverages Limited v The Coca- Cola Company [2018] FCA 993 1 Can a trade mark be too famous? Inspire September 2018 such that as a matter of impression The Federal Court has and common sense, a person of dismissed an appeal ordinary intelligence would not be by telecommunications likely to be confused or deceived giant Singtel Optus by the OPTUM mark, even allowing for an imperfect recollection. from a decision of It was considered that the fame of the Trade Marks the registered OPTUS marks Office, rejecting reduced the chances of a its opposition consumer’s imperfect recollection of to health them. A trade information mark owner’s The decision technology reputation in a suggests that and particular mark owners of famous is not a relevant services trade marks may find consideration in company the assessment it difficult to take Optum’s of deceptive action against use application similarity. of similar marks by However, for third parties. in assessing registration the nature of a of its OPTUM consumer’s imperfect recollection of a mark, the trade marks 1 . 05 The decision suggests that owners of famous trade marks may find it difficult to take action against use of similar marks by third parties. The decision also appears to have significantly expanded the “other circumstances” that would permit acceptance or registration of trade marks over earlier substantially iden- tical or deceptively similar marks. Comparing OPTUS and OPTUM The Court rejected the submission that the marks were substantially identical, noting the letters “S” and “M” were not visually similar, differed in sound and affected how the words are pronounced to make words aurally distinct. Even when emphasis is placed on the first syllable of each word, the visual and aural differences produced by the different last letter of each word were found to make the marks sufficiently different to distinguish them on a side by side comparison. Further, the Court accepted that the OPTUM marks were not deceptively similar to the prior OPTUS mark. The aural and visual differences were Singtel Optus Pty Limited v Optum Inc [2018] FCA 575 1 fact that the mark is notoriously ubiquitous and of such long standing that consumers generally must be taken to be familiar with it may be relevant. The Court found that the fame of the OPTUS mark with respect to telecommunication services reduced the chances of a consumer’s imperfect recollection of them such that there was no real risk of confusion between the marks. “Other circumstances” Interestingly, the Court also held that even if the marks were deceptively similar, there were other circumstances within the scope of section 44(3)(b) which meant that it would be proper to permit registration of the OPTUM marks. These factors included that the Optum marks use the company’s name, and that given its extensive use overseas in relation to services in the healthcare industry it would cause substantial prejudice to Optum if it was unable to use its marks in Australia. Despite the marks only coexisting after the priority date, the fact that there was no evidence of actual confusion was also a relevant factor in permitting registration. This aspect of the decision appears to significantly broaden the “other circumstances” which would justify acceptance and registration of a mark and do not reflect current Trade Marks Office practice. Finally, the Court held that the reputation which existed in the OPTUS marks did not preclude registration of OPTUM. Optus’ reputation was found to be limited to telecommunications and did not extend to the services in respect of which Optum sought registration. Consistent with the findings in relation to deceptive similarly, it was also noted that the differences in the marks and the strong reputation in the OPTUS mark in relation to telecommunications made it unlikely that consumers would be confused or deceived by the use of the OPTUM marks. The decision highlights that in cases of well-known or famous trade marks, the Court will be reticent to make allowance for the imperfect recollection a person may have of a trade mark in an assessment of deceptive similarity or the likelihood of deception or confusion. It also appears that extensive use of a trader’s own name in other jurisdictions, together with co-existence of marks in Australia without confusion, may be sufficient to permit acceptance or registration of a mark despite an earlier conflicting registration. David Longmuir, Partner BSc(Hons) LLB(Hons) LLM FIPTA david.longmuir@pof.com.au The marvellous world of superhero licensing So what was the problem with Quicksilver? There are a number of characters that branched over a complicated middle ground of IP between the two studios. The rights affected both Quicksilver and Scarlet Witch, but to date only the former has been cast in both an X-Men film and an Avengers film. Quicksilver (aka Pietro Maximoff) first appeared in the X-Men comics in 1964, created by writer Stan Lee and For a shared fictional universe artist Jack Kirby. He is a mutant that as vast as the one Marvel can move at lightning speeds and have presented, there have notably was revealed to be a son of been surprisingly few issues in Magneto, one of the most famous production. However in 2013 when X-Men villains. Problematically, details of the second Avengers film, over the course of the comics, Age of Ultron, were being released, he became a crucial part of both an interesting IP dispute raised its the X-Men and The Avengers. head. Specifically, there were some This meant that both Marvel and additions to the Avengers family – Fox would have rights to use Quicksilver and Scarlet Witch aspects of the copyright – that fans of the original relating to Quicksilver comics had seen under the licensing before in another agreements. successful Both films movie franchise, were therefore There are a number X-Men. allowed to depict of characters that But why would Quicksilver on branched over a this cause screen. For confusion? complicated middle Fox, this was straightforward The character ground of IP between – no mention of of Quicksilver the two studios. The Avengers. is famously a But there were mutant and a some caveats key part of the on Marvel’s use X-Men comic books. of the character. Crucially, Marvel The key ones being that in does not own the rights to the The Avengers universe, Marvel X-Men, they’re instead owned by 20th Century Fox (Fox). Back in 1993, cannot refer to Quicksilver as a when Marvel Studios was struggling mutant, or depict any connection to the X-Men or Magneto. financially, they licensed out some of their characters to various other In Age of Ultron, Marvel took extra studios, while keeping the rights to steps to distance themselves from The Avengers. Fox took advantage any overlap. Notably, “Quicksilver” of the situation and bought the was referred to solely by his name, film rights for the X-Men. From the Pietro Maximoff, in the film and the first instalment of the X-Men film character was of Eastern European franchise in 2000, it was established descent. Additionally, the word that Fox held the reputation for the “enhanced” was used to explain X-Men and the mutant superheroes his powers, with amendments to that make up that team. his backstory such that they were formed through experimentation by Hydra, a villainous organisation portrayed in the Marvel films. Based on the continued expansion of the Marvel universe and the number of licensing agreements that stem back to the decisions the studio made in the 90s, there was the possibility of further conflicts arising. However, the recent purchase of Fox Studios by Disney should clear up the murky overlap between the studios, bringing the X-Men under the same umbrella company as Marvel. The manner by which each studio dealt with Quicksilver ended up being an intriguing case study in how shared IP rights in elements of a character could be similarly depicted in two separate media entities. Inspire September 2018 The Marvel Studios franchise has enjoyed unprecedented box office success over the last decade. Much of Marvel’s cinematic world revolves around The Avengers, arguably one of the studio’s most popular film franchises right now.s 1 . 06 Chris Schlicht, Deputy Managing Partner BSc LLB FIPTA chris.schlicht@pof.com.au Co-Authored by Amanda Morton Australia opines on designs: No agreement on the Hague Agreement Inspire September 2018 The economic question of whether Australia should join the Hague Agreement concerning the International Registration of Industrial Designs has been considered in a recent report issued by IP Australia. 07 Public consultation on this report concluded in May this year, with the public’s response being largely critical. It was asserted that, when assessing the costs and benefits of joining the Hague Agreement, the costs were vastly overstated and the nature of the monopoly of a Registered Design was not property understood. In light of this feedback, IP Australia is currently reviewing its position, and will provide a response in the near future. Background In recent times, Australia has been experiencing a boom in public consultations and reform in intellectual property. Industry groups, the profession, and individuals could be forgiven for having ‘consultation fatigue’ - providing comment over the last few years on everything from the trans-Tasman patent examination, trans-Tasman patent attorney registration, right through to the attempted abolition of Australia’s innovation patent system. Most recently, interested parties have been asked to provide comment on an economic report from IP Australia as to whether Australia should join the Hague Agreement. Wizened designs law trainspotters might say Australia’s talk of joining the Hague Agreement is as old as the Hague Agreement itself (which in its original form dates back to 1925). In contrast, Australia joined the Patent Co-operation Treaty in 1980 (a little over two years from when it first entered into force) and the Madrid Protocol for Trademarks in the early 2000’s (a little over ten years after it first entered into force). Anecdotally, the lack of impetus for Australia to join the Hague Agreement over the years has stemmed from the: (relatively) low number of design filings fact that a number of Australia’s larger trading partners were not party to it cost, in light of all of the above. However, in the last few years, the situation has changed with a number of Australia’s largest trading partners – notably Japan, US, UK and Korea – joining the Hague Agreement. There is also an indication from China, Canada and Thailand that they too will join the Hague Agreement in the near future. Review of the Designs Act 2003 Australia’s ‘new’ Designs Act 2003 (which replaced the 1906 Act) was reviewed three years ago by the Australian Council on Intellectual Property (ACIP). One of the recommendations of the ACIP report was: Amending the Designs Act to bring Australian designs law into better alignment with equivalent laws of major trading partners, international treaties and proposed international treaties such as the Hague Agreement and the Designs Law Treaty (including extending the maximum term of protection of designs from 10 years to 15 years). The Economic Report In 2018, in response to the ACIP recommendation, IP Australia completed a report which investigates the implications of Australia joining the Hague Agreement. The report is largely an economic analysis which explores the costs and benefits to Australia of joining the Hague Agreement. The report found that joining would result in both advantages and disadvantages, concluding that the economic costs outweigh the benefits. Disadvantages Australian consumers will pay more to foreign designers (extended 15 year monopoly for designs - more international design filings in Australia). Australian IP professionals receiving less business (non- resident applicant who would have engaged an Australian IP professional to file, prosecute, and manage a direct application, instead switches to the Hague system and has their local IP professional file and manage the Hague application). IP Australia incurring setup costs in the accession to the Hague agreement. Australian firms and designers having to avoid more design rights. Non-IT set up costs for the Government, such as the costs of training examiners, making legislative amendments, and costs associated with the treaty making process. Australia has been experiencing a boom in public consultations and reform in intellectual property. Public consultation on the Economic Report As previously mentioned, public consultation on IP Australia’s report to provide feedback on the methodology and assumptions of the economic analysis concluded in May this year. Public response to consultation has been largely critical of the report. Some submissions asserted that some of the costs were vastly overstated and that the nature of the monopoly provided by a Registered Design is not properly understood in the economic analysis, with the majority of the assumptions made therein simply assumptions with no real basis in reality. IP Australia has advised that it is considering submissions lodged and will developing a response to this consultation which will be provided in the near future. Inspire September 2018 Advantages Saving on Government fees via Hague Agreement. Red tape savings (including professional fees) for filing, translation, examination and renewals. Incentivise additional innovation and designs (ease of filing and possible 15 year term). 08 Mark Williams, Senior Associate BCSE(Hons) MIP FIPTA mark.williams@pof.com.au Damages for design infringement – an exercise in guesswork? Inspire September 2018 The two key remedies sought by intellectual property owners in infringement cases are an injunction to stop the infringing conduct and compensation in the form of damages or an account of profits. 09 Typically, the Court will determine the question of infringement separately and prior to considering what, if any, compensation should be awarded. In many instances the issue of compensation is resolved between the parties without the need for judgement. However, this was not the case in the long running design infringement dispute between Gram Engineering and Bluescope Steel. The recent decision of the Federal Court 1 provides a useful reminder of the principles to be applied in assessing damages for IP infringement. Gram elected to calculate its compensation by reference to the damage caused by the sale of Bluescope’s infringing Smartascreen fencing panel. Although sales of the Smartascreen product had commenced in 2002, Gram did not commence proceedings until 2011 and so the six year limitation period meant that no claim could be made in respect of conduct occurring before 2005. Gram sought to calculate its damage on the basis that its business had grown rapidly up until 2002 when Gram Engineering Pty Ltd v Bluescope Steel Ltd [2018] FCA 539 1 the Smartascreen product entered the market and thereafter suffered a decline in sales. Gram claimed that but for the infringing conduct, its business would have continued to grow as it had previously. The Court considered this approach to be problematic for a number of reasons including that it was based on Gram’s total sales rather than sales of Gram’s products which competed with Smartascreen. This [case] highlights the importance of maintaining good records relating to any loss suffered as a result of IP infringement. Further, it took no account of the actual sales of Smartascreen made by Bluescope or of other changes in the market during the infringement period including the introduction of other competing products. Bluescope contended that damages should be calculated on the basis of the lost sales to Gram being a percentage of its total sales of Smartascreen. It argued that because Gram had not provided any evidence that sales of Smartascreen represented lost sales to it and that its own evidence indicated that Gram was unlikely to have made such sales, the percentage should be low in the order of 5%. In assessing damages, the Court noted the general proposition that speculation and guesswork may be required and are permissible. Once some level of loss was proven, doubts should be resolved against the infringing party and damages assessed with a ‘liberal hand’. While accepting that damages should be calculated as a percentage of Bluescope’s sales, the Court considered that 5% was too low. The Court inferred that Smartascreen, which was found to be an obvious imitation of Gram’s registered design, was intended by Bluescope to be directly substitutable for Gram’s products. Gram’s declining sales after 2002 was a strong indicator that this intention was in fact achieved. Bluescope’s evidence that its customers would not have purchased Gram’s products was largely discounted because those customers were resellers rather than end users. If the Smartascreen product had not been available, demand for Gram’s products via its own resellers would have been higher, leading to greater sales for Gram. Bluescope’s resellers would still have been in competition with Gram’s, but would have done so without the benefit of Smartascreen. While the Court took account of other market factors including the introduction of third party competing Inspire September 2018 products, it also noted that Gram’s sales began declining from 2002, prior to those products coming onto the market. Ultimately the Court found that damages should be assessed based on Gram having lost sales volume in an amount equal to 25% of Bluescope’s actual sales volume of the infringing Smartascreen product as well as an equivalent proportion of sales of associated parts and accessories sold along with the infringing goods. This equated to an amount in excess of AUD2 million with a further amount in excess of AUD2 million awarded in interest. Although the damages awarded to Gram were significant, the evidence it put forward to substantiate its loss was criticised as being less helpful than it might have been. This may have been because it simply did not have sufficient proof of the damages it believed it had suffered. Although rarely required in Court, this highlights the importance of maintaining good records relating to any loss suffered as a result of IP infringement. 10 Adrian Crooks, Partner BEng(Civil)(Hons) LLB LLM FIPTA adrian.crooks@pof.com.au Omission of best method disclosure can be rectified in a divisional application Inspire September 2018 The Patent Office decision in Merial v Bayer 1 earlier this year highlighted the grave risks of failing to disclose the ‘best method known to the applicant of performing the invention’ as required by section 40 of the Australian Patents Act. 11 Omission of a best method disclosure can have catastrophic consequences for patent applicants in Australia, regardless of any wilful intent to conceal key aspects of the invention. Applicants are thus advised to proactively address best method issues, in collaboration with their Australian patent attorneys, prior to filing their application. However, a question that was left open from this decision was whether such a failure might be remedied by filing a divisional application with the necessary disclosure added to the specification. A much more recent acceptance of a divisional application indicates that – in the view of the patent office at least – the answer to this question is yes. Applicants should therefore note the possibility of side- stepping a patent validity issue by filing a divisional application which includes an adequate disclosure of best method. It remains to be seen, however, whether the courts will find that section 40 imposes an onerous obligation to disclose the current understanding of best method when filing divisional applications. The latest case In Kineta, Inc 2 , the patent office refused AU2012315953 on the basis that the specification taught no method (and thus omitted the best method) of obtaining the therapeutic compounds claimed in the application. Since the application was subject to the post-Raising the Bar provisions of the Patents Act, the specification could not be amended to add the necessary best method disclosure. Kineta then filed divisional application AU2017254812, which disclosed that the compounds had been sourced from a contract manufacturer (known to Kineta when filing the parent) and also described the synthetic methodology (which Kineta did not know at the parent filing date). The application has recently been accepted without objection from the Examiner. Date when best method must be disclosed? Although case law is inconclusive on the point, it is generally accepted that the best method disclosure obligation must be fulfilled at the filing date of an application. For a divisional application, however, the further question is whether the relevant filing date is that of the divisional application itself or of the original parent application. Given the acceptance of AU2017254812 after the refusal of its parent, the patent office has apparently concluded that the relevant date is the divisional Dr Matthew Overett, Associate BSc (Hons), PhD Chem, MIP matthew.overett@pof.com.au Merial, Inc. v Bayer New Zealand Limited [2018] APO 14 2 Kineta,Inc. [2017] APO 45 (Kineta Inc) 1 info@pof.com.au filing date. This contrasts with the requirement that an enabling disclosure of the invention must be found in the parent specification if divisional status is to be claimed. Unintended consequences? While providing a happy outcome for the applicant in this case, the patent office’s interpretation raises a troubling question: does the applicant have a duty to disclose their current understanding of best method in the divisional specification, or is it sufficient to rectify – at the divisional filing date – the omission of the best method known when filing the parent? Divisional applications are typically filed many years after the priority date of the original parent application, by which time the underlying technology may have been further advanced or commercialised. In practice, the divisional specification is seldom updated to reflect post-filing developments of the invention. Indeed, such a requirement would be unacceptable to many applicants, given the practical burden of ascertaining current “best method” and the implication that confidential technical or commercial information may need to be divulged. Melbourne Level 16 333 Collins St Melbourne 3000 +61 3 9614 1944 Sydney Level 19 133 Castlereagh St Sydney 2000 +61 2 9285 2900 Adelaide Level 5 75 Hindmarsh Sq Adelaide 5000 +61 8 8232 5199