Issue 52 • March 2022 Don’t Try to Hide the Truth in a Case of ‘Bad Faith’ ‘For use’ not always suitable for use: injunction denied due to wrongly granted PTE A film is not a photo and other lessons from the Copyright Act Could a high-level concept in a proposal give rise to entitlement to an invention as a co-inventor? Patents | Trade Marks | Designs | IP Research | Legal Services Welcome The validity of IP rights is often challenged on external grounds such as lack of novelty in the case of patents or distinctiveness for trade marks. However valid ownership or entitlement is becoming increasingly scrutinised and ensuring correct chain of title to IP is vital to securing valuable and enforceable rights. Inspire March 2022 In this edition of Inspire, Melissa Wingard reviews the decision in Whitsunday Aerial Solutions Professionals v Emprja in which the applicant sought to rely upon purported oral and subsequent written “confirmatory” assignments of copyright. The decision highlights both the importance of the circumstances in which the rights come into being in determining the original owner of those rights as well as the effectiveness and limitations of purported assignments. Inventorship, described as “one of the muddiest concepts in the muddy metaphysics of the patent law” continues to exercise the minds of the Federal Court, this time in the decision in Vehicle Monitoring Systems v SARB. As Helen McFadzean explains, determining the “ inventive concept” by reference to the whole of the specification 2 and not just the claims is a crucial element of test to be applied. While the Full Court confirmed that invention may reside in the conception of an idea without the need for reduction to practice, the idea must nevertheless be a sufficiently material contribution to the inventive concept as a whole. Matthew Overett discusses the use of disclaimers in Australian patent practice. As the decision in Boehringer Ingelheim v Elanco illustrates, the pre-raising the bar amendment test is rather generous to patentees seeking to avoid prior art, allowing a disclaimer directed to subject matter which was not specifically disclosed in the original specification. However, the current provisions may not be so benevolent, meaning patentees must remain cautious when making such amendments. Vale Graham Cowin It is with great sadness that we advise that our former Managing Partner, Graham Cowin, passed away suddenly in March this year. Graham’s career commenced as an Examiner of Patents with the Australian Patents Office. He became a registered Patent Attorney in 1978 after joining Phillips Ormonde Fitzpatrick in 1975. Ten years later he became a partner with the firm, and was Managing Partner from 2005 until 2015. His contribution to our firm for well over 40 years was extraordinary. He was incredibly well-respected by his peers and within the world of IP. Graham was a Councilor of the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) for many years from 1996 with various responsibilities including Convener of the Education Committee, Chair of the IPTA Academy of Education, and a member of the Ethics and Disputes Committee. He was elected President of IPTA in 2011. Our thoughts are with his wife Helen, his children Andrew and Prue, friends and colleagues at this sad time. Also in this edition, Leigh Guerin looks at claim construction of relative terms, Ye Rin Yoo provides an update on the ground of bad faith in trade mark oppositions, Jessica Chadbourne analyses how a challenge to a patent term extension can play a role in defeating an interlocutory injunction application, and we say welcome to some new recruits across our technology teams. Adrian Crooks, Principal BEng(Civil)(Hons) LLB LLM FIPTA adrian.crooks@pof.com.au What is patent claim construction essentially about? Claim 1 of the patent in issue recited, in part, “A pharmaceutical composition comprising… (a) at least one water-soluble therapeutic agent…in a therapeutically effective total amount constituting about 30% to about 90% by weight…”. Further, claim 11 recited a composition “that consists essentially of the therapeutic agent and the buffering agent”. In his reasons Justice Burley made light work of the construction of “essentially”. Whilst essentially is a relative term, it was given its ordinary meaning of “mostly”, but not exclusively, which was consistent with its use in the claims and the specification. The terms “therapeutic agent” and “about” required a little more consideration. The claims encompassed a pharmaceutically active parent compound (in the form of a prodrug) or a sodium salt of the parent compound. Because the sodium salt of the parent compound is heavier than the parent compound alone, it needed to be determined if the claimed weight range of the “therapeutic agent” related to the parent compound only or could also relate to the salt. With reference to the specification, Justice Burley determined that either the sodium salt or the parent compound alone can be regarded as therapeutic agents even though only the parent compound exerts a therapeutic effect. Hence a composition having 31% of the sodium salt would fall within the claimed range of 30% to 90% for the “therapeutic agent” even though the percentage (by weight) of the pharmaceutically active component (i.e. the parent compound) was less than 30% when the weight of the sodium is disregarded. The term “about”, like “essentially”, is a relative term. In the context of the patent claims it was used to define the weight ranges of the various components of the composition. Justice Burley was asked to determine if “about” should allow a 5% margin of error (i.e. “to 90%” would become “to 94.5%”) or should only allow for rounding to the nearest number (i.e. “to 90%” becomes “to 90.49%”). It was agreed by both sides that the term “about” was not a term in the precise field of pharmaceutical sciences and therefore was “mostly avoided”. Consequently, the experts assisting the court struggled to give relevant meaning to the term. Justice Burley turned to the ordinary English meaning of the term (“near; close to”) and the use of the term in the patent specification. Notably, the term was not defined in the specification. Therefore, the applicants asserted that specific examples and disclosures in the specification supported the broader 5% margin of error. However, Justice Burley did not agree that the passages cited by the applicants clearly supported the broader range. He further stated that it could not be the intention of the inventors for the meaning of the word “about” to be mined from obscure passages in the specification, nor could such obscurity provide sound basis for construing a claim. Ultimately, the term “about” was narrowly construed to allow for rounding errors only (i.e. “to 90%” was considered as “to 90.49%”) In comparison the term “about” was briefly considered in Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51, also in relation to a claimed numerical range. Here Justice Beach construed “about” as providing a 10% margin of error. Importantly, unlike the present case, the specification clearly defined “about” as meaning ±10%. While it is common to use relative or imprecise terminology in claims, this should be done with caution. Typically, these terms are used as a fallback allowing extension of the claimed boundaries, which may provide utility if a potential infringing act or product arises. However, as exemplified with the term “about” this extension of the boundaries may be limited and may vary depending on the technical field of the invention. 3 Dr Leigh Guerin | Senior Associate BMedPharmBiotech(1st Class Hons) PhD MIPLaw 1 Pharmacia LLC v Juno Pharmaceuticals Pty Ltd [2022] FCA 92 Inspire March 2022 Anyone familiar with patents in the life sciences space will be familiar with patent claims that use terminology such as “essentially”, “therapeutic agent” and “about”. The familiarity of such terms means that they are often recited without much consideration. However, their meaning was in issue in the recent decision in Pharmacia LLC v Juno Pharmaceuticals Pty Ltd. 1 leigh.guerin@pof.com.au Claim disclaimers in Australian patent practice Inspire March 2022 Patent applicants and patentees may amend the claims of their patent specification to distinguish the invention from relevant prior art. The use of a disclaimer – if permissible under s 102 of the Patents Act – can be an effective strategy to limit the claim scope to the minimum extent necessary. 4 In deciding the substantive The decision opposition by Merial, Boehringer The relevant version of s 102, Ingelheim’s predecessor, the predating the Raising the Bar Act, Patent Office found that claim 1 stipulates that “an amendment lacked novelty over prior art which … is not allowable if, as a result of disclosed an anti-mastitis formulation the amendment, the specification containing acriflavine, an acridine would claim matter not in substance compound. 2 While acriflavine was not disclosed in the specification as explicitly taught to be present as an filed”. Similarly, s 102 prohibits antiseptic, and had other known uses, amendments after acceptance of the evidence established that the an application if the resultant claims skilled person understood acriflavine would not be fairly based on matter to have antiseptic properties and described in the specification. that acriflavine would inherently have Boehringer Ingelheim argued an antiseptic action in the disclosed that Elanco’s amendment was amount present in the prior art impermissible under this framework, formulation. In response, Elanco The background because the specification did not amended claim 1 with the following Elanco’s accepted patent application sufficiently disclose an invention novelty-restoring disclaimer: related to the use of teat seal where acridines are specifically “wherein the antiseptic is not an formulations to prevent mastitis in excluded from use as the antiseptic acridine”. Boehringer Ingelheim then animals. The claimed formulations compound. Indeed, the specification appealed the Patent Office decision contain an oil-based barrier material did not mention acridines at all, either allowing the amendment to the mixed with an “antiseptic compound as antiseptic compounds to be used Federal Court. … in sufficient quantity to act or avoided. Instead, the specification effectively as an antiseptic”. identified a small number of preferred, non-acridine antiseptic compounds, and a list of preferred 1 Boehringer Ingelheim Animal Health USA Inc v Elanco New Zealand [2021] FCA 1457 properties of suitable antiseptics. 2 Merial, Inc v Bayer New Zealand Limited [2017] APO 27. For example, if a claim relating to ‘a vehicle’ is anticipated by prior art which discloses a ‘bicycle’, an amendment restricting the claims to ‘a vehicle which is not a bicycle’ will restore novelty at the least cost to the claim scope. A recent Federal Court decision in Boehringer Ingelheim v Elanco 1 confirms the generous dispensation for the allowability of such amendments under Australian patent law, at least for patents to which the Raising the Bar amendments to the Patents Act do not apply. form of s 102 prohibits amendments Nevertheless, Elanco’s claim if the resulting specification amendment by “undisclosed would “claim or disclose matter disclaimer” was found allowable, extending beyond that disclosed … and the appeal was dismissed. in the specification as filed” or, for While acknowledging that narrowing applications already accepted, if amendments are not automatically the resulting claims would not be allowable, Besanko J said that there “supported by the matter disclosed was a “real and reasonably clear disclosure” of formulations containing in the specification”. The revised statutory language is intended to antiseptics other than acridines, align Australia’s law with European and rejected an argument that the exclusion of acridines from the claims and UK patent law, ensuring that patent applicants cannot “add matter” was fundamentally inconsistent after the filing date to address with the invention described at an insufficient disclosure of the filing. This was despite evidence that invention across its full breadth. antiseptic acridines possess several of the preferred properties identified In the absence of judicial in the specification for suitable consideration, the allowability of antiseptics. It was not common disclaimers under the new s 102 general knowledge that acridines remains an open question. The had these properties, and the skilled Australian Patent Office appears person would therefore have found to consider that disclaimers remain no positive recommendation in the allowable even if the disclaimed specification towards the use of subject matter is not disclosed acridine antiseptic compounds. in the specification as filed. 3 By contrast, the European Patent Office Effects of the Raising interprets Article 123(2) EPC 4 , the the Bar Act? equivalent to s 102, as imposing significantly greater restrictions Patent applications currently in on disclaimers. 4 The specification prosecution are typically subject as filed must “directly and to the Patents Act as amended by unambiguously” disclose the subject the Raising the Bar Act. The new 3 4 IP Australia Patent Manual of Practice and Procedure, 2.23.8.2A EPO Enlarged Board of Appeal decisions G2/10, G1/03 and G1/16. matter remaining in the claim after the amendment. Claim amendment by undisclosed disclaimer is exempt from this strict rule only under special circumstances, which are not obviously applicable to the situation in Boehringer Ingelheim v Elanco. Given the readiness of Australian courts to follow European case law when construing sections of the Patents Act amended by Raising the Bar, a cautious approach to the use of disclaimers may now be warranted in Australia. Significantly, a patentee may be exposed to severe consequences (e.g. revocation or loss of priority date) if a court finds that amendments to a patent were impermissible under s 102, notwithstanding the approval of those amendments during examination by the Patent Office. Inspire March 2022 In the absence of judicial consideration, the allowability of disclaimers under the new s 102 remains an open question. 5 Matthew Overett | Senior Associate BSc (Hons), PhD Chem, MIP matthew.overett@pof.com.au Don’t try to hide the truth in a case of ‘bad faith’ Inspire March 2022 The Federal Court has allowed an appeal in Enagic v Horizons 1 on grounds including s 62A of the Trade Marks Act (‘Act’) that the application subject to the opposition was filed in ‘bad faith’. The determination of this ground heavily turned not only on the evidence that was submitted, but also evidence that was not submitted or was redacted. This case not only highlights the highly evidence-based nature of the s 62A opposition ground, but also the need to take care when redacting evidence, when choosing witnesses, and with the drafting of specifications of goods and services. The appeal related to Enagic’s opposition to Horizons’ application 1798917 for KANGEN in class 35 in Australia. Enagic and Horizons are direct competitors that have a complex history of disputes. Enagic was incorporated in Japan in 1974 and has an affiliated company in Australia. 6 1 Enagic Co Ltd v Horizons (Asia) Pty Ltd (No 3) [2021] 1512 Ye Rin Yoo | Trade Marks Attorney Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (2012) 201 FCR 565 (‘Fry Consulting’). 3 DC Comics v Cheqout Pty Ltd (2013) 212 FCR 194 (‘DC Comics’). 2 BCom(Finance) LLB GradDipLegalPrac yerin.yoo@pof.com.au Inspire March 2022 > Horizons registered at least 59 redactions to be unnecessary and It manufactures and supplies water- domain names using KANGEN, the ionisation systems for the production inferred an attempt to conceal the business names ‘KANGEN’ and of alkaline water branded as ‘Kangen’ fact that the same invoices were ‘KANGEN AUSTRALIA’ and the repeated three times and that the water. Horizons is based in Australia smart number 1300 526436 that goods were not delivered in Australia. and supplies bottled water products. expressed as 1300 KANGEN, none Enagic opposed Horizons’ application of which were used for business to register KANGEN on grounds or other ordinary purposes. under ss 42(b), 43, 44, 58, 59, 60 In reaching a conclusion on bad faith, and 62A of the Act, of which all Charlesworth J commented that except the ss 43 and 59 grounds ...none of the individual none of the individual matters relied were pressed. The Registrar upon by Enagic would in isolation dismissed Enagic’s opposition on all matters relied upon have proven bad faith. However, grounds. Notably, the s 62A ground by Enagic would in the s 62A ground requires the was dismissed on the basis of isolation have proven evidence to be regarded as a whole insufficient evidence of Horizons’ bad bad faith. However, the and, on that basis, Horizons filed its faith, as well as the fact that Horizons s 62A ground requires application in bad faith as its overall was already the owner of a separate the evidence to be conduct fell short of acceptable registration 1280502 for KANGEN. commercial behaviour. In particular: regarded as Enagic appealed to the Federal “…the mark was applied for with a Court where Charlesworth J a whole... consciousness of Enagic’s trading allowed its appeal in so far as it activities and the intention of related to grounds under ss 44, 58 preventing its use by Enagic in and 62A of the Act. Of particular respect of services in which Enagic note are his Honour’s comments was perceived to be engaged on the s 62A ground relating to The witness was also found to and not for the purpose of using bad faith. The test to be applied be unreliable. His Honour was it as a trade mark in respect of in determining bad faith was that not satisfied that the witness had a bona fide course of trade…” established in Fry Consulting 2 personal knowledge of the relevant and adopted in DC Comics 3 . An Finally, his Honour also dismissed financial matters which would enable application will be filed in ‘bad faith’ the probative value of Enagic’s them to give evidence regarding the if “…reasonable and experienced evidence as to the “vacant and invoices. During cross-examination, persons in the field would view derelict” appearance of Horizons’ the witness was questioned on such conduct as falling short of current premises, and the non- the selection of invoices and while acceptable commercial behaviour”. fulfillment of a trap purchase it was initially suggested that they made by on Horizons’ website. After citing Fry Consulting and DC were “randomly selected” and were a Comics Charlesworth J focused on “representative sample”, this was later The decision provides important Horizons’ subjective intention when guidance on the determination of contradicted by the claim that “we filing its application. Horizons relied the ground of bad faith. In focussing pull[ed] out what was consider[ed] on a witness who gave evidence on the subjective intention of the a sample collection of what I was that: “…I was instructed personally to applicant, his Honour’s applied looking for”. In assessing Horizons’ apply for registration of [the Opposed intense scrutiny to the evidence and subjective intention, Charlesworth J Mark] which I did on 24 September also took into account of the fact that: other factual circumstances to infer 2016, in conjunction with Horizons’ that intention. This case also provides > The witness drafted Horizons’ plans to expand the KANGEN a warning about the potential class 35 services as an almost distribution services in Australia in implications of redacting evidence exact copy of Enagic’s registration the context of exports…”, however and witnesses giving evidence of 1615861 ENAGIC as “she was this was not accepted as being matters not within their personal not a lawyer” and because they determinative of Horizons’ intention. knowledge. Copying of specifications “seemed to fit the bill”. of goods and services from existing Charlesworth J found the above > Horizons’ application contained registrations or applications may also witness’ statement to be a mere an endorsement that the mark give rise to an adverse inference. assertion that was not supported by KANGEN is a ‘coined word’ documentary evidence, particularly and that its English translation in relation to any current or potential is ‘healthy’, which was later export business. The documentary disproved by a certified translator. evidence as filed, seven invoices, > Horizons previously applied to did not relate to an export business register ENAGIC on the same and was also deemed false or day as KANGEN, offered for sale misleading. Horizons had redacted bottled water products bearing information including the invoice both ENAGIC and KANGEN, and numbers and ‘ship to’ addresses had a pattern of filing applications in the evidence as filed. After the shortly after Enagic filed unredacted invoices were produced applications. on discovery, his Honour found the 7 Inspire March 2022 ‘For use’ not always suitable for use: injunction denied due to wrongly granted PTE 8 In the recent interlocutory decision in Biogen v Pharmacor 1 , the Federal Court has denied patentee Biogen a preliminary injunction to restrain generic manufacturer Pharmacor from selling a generic version of its successful multiple sclerosis drug, Tecfidera ® . Key to Pharmacor’s success was its case that the term of Biogen’s patent was invalidly extended based on a claimed invention in the format “Substance X for use in treatment Y”. Pharmacor’s success demonstrates the advantages of pressing a strong wrongful term extension and invalidity case at the early, interlocutory stage of pharmaceutical litigation in addition to the usual submissions regarding quantification of damages. The decision stands out amongst the many recent cases where the balance of convenience has favoured the patentee, and a preliminary injunction has been granted. It also stands as a lesson to all patent practitioners to pay close attention to the format of claims upon which an actual or likely patent term extension will be sought. Background Biogen is the patentee of AU 752733 entitled “Utilisation of dialkyl fumarates” and proprietor of the product Tecfidera ® , a dimethyl fumarate (DMF) medication prescribed for the treatment of multiple sclerosis (MS). Biogen obtained an extension of the term of this patent based on the following claim: “A pharmaceutical preparation in the form of micro-tablets or micro-pellets… consisting of one or more dialkyl fumarates… for use in transplantation medicine or for the therapy of autoimmune diseases…” Claims to a substance ‘for use’ in treatment such as that above are usually construed during prosecution as claims to a substance merely ‘suitable for use’ in the recited treatment but not limited to that treatment, i.e., as claims to a substance per se. This is notably different from interpretation of these claims in Europe, where they are known as ‘EPC 2000’ claims and are considered purpose-limited product claims capable of protecting new therapeutic uses of known substances. construction would render the patent wrongfully extended under the PTE scheme as there was no claim to a substance per se. But for the PTE, the patent would have expired in 2019. ...this case serves as a warning to all actual or likely PTE applicants to keep a close eye on the claims of any patents covering potentially registrable medicines. The Court’s decision and reasoning The reasons advanced in favour of a purpose-limited construction, and the reasons Rofe J was prepared to accept it “at least on a provisional view”, included: (a) The description disclosed that dialkyl fumarates per se were not new, as they were to be prepared by processes known in the art; (b) The specification discussed the invention and its objectives Key issue: was the and aspects as tied to use in PTE valid? transplantation medicine or therapy of autoimmune diseases Pharmacor conceded that its generic in all but two paragraphs; and DMF product would fall within the (c) 209 of the 211 claims in the scope of the relevant claim, and thus patent made express reference if the claim were extant and valid, to use of the preparations in Biogen’s prima facie infringement transplantation medicine or case was strong. However, Pharmacor therapy of autoimmune diseases, submitted the strength of its case and the two remaining claims on invalidity and wrongful PTE were omnibus claims. qualified Biogen’s infringement case sufficiently such that the preliminary Rofe J also drew some parallels injunction should be refused. between EPC 2000 claims and Swiss- style claims, in that both feature a Pharmacor put to the Court that the “for the prevention/treatment”/“for relevant claim should be construed the therapy of”-type integer. Her as a purpose-limited product Honour noted that in Swiss-style claim because “it claims an actual claims, this integer has the effect achievement of a therapeutic act of purpose-limiting the claim (per the being a functional technical feature Full Court in Mylan v Sun Pharma). 4 of the claim”. 3 If accepted, this It therefore seemed to her Honour that the therapeutic purpose should be considered an essential integer of the relevant claim in the present case and that use of DMF micro- tablets/pellets for any non-recited therapeutic uses would fall outside the scope of the claim. Her Honour concluded that the relevant claim was not a claim to a substance per se and that there was “a sufficiently strong prospect that the extension of the patent may have been wrongly granted”. The preliminary injunction was denied. Conclusions Although the wrongly granted PTE was the key determining factor for denying an injunction in this case, for completeness, Rofe J also looked at the “basket of discretionary factors”, such as the adequacy of damages. Her Honour considered most of these factors to be quite evenly balanced between the parties. The one exception was launch of Biogen’s new MS therapy, Vumerity, into the DMF market, which was predicted to have a profound impact on DMF sales and act as a factor tending against the granting of the interim injunction. As noted above, this case serves as a warning to all actual or likely PTE applicants to keep a close eye on the claims of any patents covering potentially registrable medicines. It is also a timely reminder of the importance of monitoring claim scope across jurisdictions and, where possible, leveraging broad claims. In this case, claims to pharmaceutical products per se without the ‘for use’ limitation were being pursued in at least Europe prior to acceptance of the Australian patent, and were ultimately granted there. It would thus appear that there was scope to pursue at least one claim excluding the “for use” integer in Australia, either in this application or in a divisional. 9 1 Dr Jessica Chadbourne | Associate 2 MIP, PhD, BSc (Adv) (Hons&UM), JP Biogen International GmbH v Pharmacor Pty Ltd [2021] FCA 1591 T he only exception to this rule is that patents to pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology are also eligible for PTEs in Australia. 3 Biogen v Pharmacor, [108]. 4 Mylan Health Pty Ltd & Anor v Sun Pharma ANZ Pty Ltd & Anor [2020] FCAFC 116. Inspire March 2022 It is relevant in the present case that Australia’s statutory patent term extension (PTE) provisions only allow for extensions to be granted in respect of pharmaceutical substances per se, where the substance is both disclosed in the specification and in substance falls within the scope of at least one claim of the patent. In practice, a patent must contain a product claim to a substance per se to qualify for a PTE. 2 Patents containing only method of treatment claims and Swiss-style use claims, for example, are not eligible to be extended under the PTE scheme as they are not considered to disclose and claim a pharmaceutical substance per se. Presumably due to the practice noted above of construing ‘substance for use’ claims as claims to the substance per se, Biogen was successful before the Patent Office in obtaining a PTE based on DMF being in substance within the scope of the relevant claim. However, interestingly, and perhaps in something of a contradiction, the Australian Patent Examiner’s manual now and at the date of the patent specifically states that claims in the format “substance X for use…” are not considered directed to substances per se and therefore cannot form the basis of a PTE request. This creates some ambiguity around the PTE eligibility of ‘substance for use’ claims which, until the present case, has not been considered by an Australian Court. jessica.chadbourne@pof.com.au A film is not a photo and other lessons from the Copyright Act The Federal Circuit Court decision in Whitsunday Aerial Solutions Professionals v Emprja 1 has served as a reminder of three key things to remember when dealing with copyright works... (1) The Copyright Act 1968 (Cth) applies differently to Works and Subject Matter other than Works. It is critical to understand the nature of the work that you are dealing with and the circumstances in which copyright right arose. (2) There is a significant benefit in documenting commercial agreements at the outset rather than litigating over them later on. (3) Assignments are important documents and need to be treated as such. It is important to understand who has ownership rights and how an assignment of them is to operate. Inspire March 2022 Background 10 In this case Whitsunday Aerial Solutions Professionals Pty Ltd (WASP) claimed that Emprja Pty Ltd, trading as Abel Point Marina (APM), infringed its copyright in film footage of the 2016 Clipper Round the World Race that was taken by a drone owned and operated by WASP. In 2016, APM was successful in its proposal to host a race stopover for the Clipper Round the World Yacht Race. As part of hosting the race stopover APM held a welcome party for the crews of the yachts participating. In late 2015, Project 64 Pty Ltd (Project 64) had acquired a helicopter business called Helitaxi which provided scenic flights out of APM. Project 64 was looking to promote the Helitaxi business and agreed with APM that Helitaxi would be a co-sponsor of the welcome party. As part of that sponsorship arrangement, Project 64 agreed to obtain drone footage of the yacht stopover at APM, amongst other things. Project 64 then commissioned WASP to take the drone footage. The agreement between APM and Project 64 as to sponsorship was not documented, and neither was the agreement between Project 64 and WASP. WASP gave the 2016 Clipper drone footage to Project 64 without any specified limitation, and with no watermarks as to ownership included on the footage. Project 64 then provided the same footage to APM, again without any restrictions as to use of the footage. WASP claimed that that there was an oral agreement between Project 64 and WASP, under which WASP owned all the copyright in the footage. As Project 64 was only permitted to use the footage to promote Helitaxi, APM’s licence to use the footage was limited to promoting the 2016 race. When APM started using the footage to promote the 2018 Clipper Round the World Yacht Race, WASP claimed infringement and commenced the proceedings against APM. Copyright in the drone footage It was not contested by the parties that the drone footage was a cinematograph film within the meaning of the Act, however WASP asserted that as it had created the footage, it was the owner. 1 Justice Baird did not agree. She found that WASP had been commissioned by Project 64 to make the footage within the meaning of s 98(3) of the Act. Section 98(3) provides that in the absence of an agreement to the contrary, the commissioning party will be automatically deemed to be the copyright owner of a cinematograph film. Justice Baird found that WASP had not established on the balance of probabilities that there was an agreement to the contrary regarding ownership of copyright, and therefore s 98(3) of the Act operated to make Project 64 the owner of the copyright. Having considered the correspondence, invoices, witness statements and actions of the parties, Justice Baird was not satisfied that there was any agreement or even a discussion as to the ownership of copyright. Rather, at the time the footage was created the parties had not even turned their minds to the question of copyright ownership. WASP further asserted that even if it did not own copyright in the footage, the footage was only commissioned by Project 64 for a limited purpose, being that of promoting HeliTaxi, and APM’s involvement in the Clipper Round the World Yacht Race. Justice Baird rejected this claim noting that WASP did not include any copyright notice or claim in the footage they delivered, and no limitations were discussed at the time. Project 64 commissioned the work as part of its sponsorship of the APM welcome party and the footage was passed onto APM without limitation. Whitsunday Aerial Solutions Professionals Pty Ltd v Emprja Pty Ltd [2021] FCCA 1578 It was not contested that the drone footage was a cinematograph film within the meaning of the Act, however WASP asserted that as it had created the footage, it was the owner. When WASP became aware of APM’s more recent use of the footage it sought to ‘confirm’ ownership of the copyright by asking Project 64, in March 2018, to enter into a ‘Confirmatory deed – Copyright ownership’. This Confirmatory Deed stated that WASP owned the copyright in accordance with the 2016 oral agreement. Project 64 and WASP later entered a ‘deed of assignment’ which stated that to the extent Project 64 owned any copyright in the footage it assigned its rights to WASP ‘with effect from the date of creation’. Justice Baird in considering the two deeds concluded that: > the ‘Confirmatory deed – Copyright ownership’ was of no effect as it had already been concluded that the oral agreement did not vest copyright ownership in WASP, therefore the confirmatory deed could not alter the status quo; > the ‘deed of assignment’ was generally valid and effective, however it was subject to the licence that Project 64 had granted to APM to use the footage. This was despite it being expressed as assigning the right from the date of creation. The court found that Project 64 was the owner of the copyright from creation, and had granted a licence to APM. WASP therefore as successor in title was bound by the terms of the APM licence as per section 196(4) of the Act. As there was no earlier oral agreement, the deed could not operate to perfect an earlier equitable assignment. The deed also did not operate as an ‘agreement to the contrary’ for the purposes of section 98(3) of the Act, and whilst it did operate as a retrospective assignment it did not negate the vesting of copyright in Project 64 or the operation of section 196(4). Conclusion This case has highlighted the importance of having a complete understanding of how the Copyright Act applies differently to differing subject matter including with respect to ownership. Both the nature of the work and the circumstances in which it was created must be considered in determining the true owner. With respect to assignment documentation, whilst it often seen as an administrative overhead, the form and interaction with the Act present challenges which need to be carefully considered. Inspire March 2022 The need for correct documentation 11 Melissa Wingard | Special Counsel BA(Eng&Hist) LLB(Hons) GradDipLegPrac GradDipAppFin&Inv MCyberSecOps melissa.wingard@pof.com.au Can a high-level concept in a proposal give rise to entitlement to an invention? Inspire March 2022 The Full Court decision in Vehicle Monitoring Systems v SARB Management Group 1 has given detailed consideration to the notion of “inventive concept” in the context of determining entitlement to an invention. The case relates to Australian Patent Application no. 2013213708 entitled “Vehicle Detection” in the name of SARB. which describes systems and methods for detecting vehicle parking infringements. 12 The applicant, Vehicle Monitoring Systems (VMS) contended that its managing director, Fraser Welsh was entitled to be named as an inventor for the invention the subject of the 708 application. Further, as the respondent, SARB had not derived title to the invention from Mr Welch, VMS was not a person who could be granted a patent under s 15 of the Patents Act (the Act). In early 2005, the Maribyrnong City Council had commenced a trial for a system called the Parking Overstay Detection System (the POD system) developed by VMS using in-ground sensors to monitor vehicle non-compliance with parking restrictions. The sensors detected changes in the Earth’s magnetic field when a vehicle entered a parking bay. The POD system was invented by Mr Welch. 1 The trial revealed a problem, in that the issuing of parking infringement notices required the parking officer to manually enter the details into a ticket issuing machine, which led to a degree of frustration among parking officers and errors in transcription that could invalidate the infringement notices. This was referred to as the “manual entry problem” by the primary judge. The Manager of Parking and Local Laws at Maribyrnong City Council, Mr Gladwin, was aware that SARB had expertise in ticket issuing machines with the Council having previously purchased SARB’s ticket issuing device called PinForce. Mr Gladwin facilitated contact between Mr Welch and Mr Del Papa, who was a senior salesman for SARB at the time. In a telephone conversation in or around August 2005, Mr Welch communicated a proposal to Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2021] FCAFC 224 Mr Del Papa, which involved integrating the POD system with a ticket issuing device so that the infringement details were automatically entered into a ticket issuing software application. Findings of the Primary Judge The primary judge found that whilst the proposal of Mr Welch led Mr Del Papa and SARB to develop the invention the subject of the 708 application, the information conveyed to Mr Del Papa was a high-level idea. The primary judge determined that the invention was the reduction of the high-level concept to a working apparatus, which provided a solution to the manual entry problem. As Mr Welch did not play a role in arriving at the solution, it was found that Mr Welch should not be named as a co-inventor. Whilst the term ‘inventor’ is not defined in the Act, current Australian case law takes the ‘inventor’, for the purposes of s 15(1)(a) of the Act to be a person who materially contributes to the ‘inventive concept’. The notion of the ‘inventive concept’ has been used in Australian case law as the tool of analysis for determining questions of entitlement. In Polwood v Foxworth 2 , a leading authority in Australia, the Full Court specified that the inventive concept should be discerned from the whole specification, including the body of the specification and the claims. However, the Full Court clarified that not everyone who contributes to the invention is an inventor. For example, a person will not establish a claim to entitlement where their claimed contribution to the inventive concept is merely making a vague proposal or suggestion. Nonetheless, it is generally accepted that the invention may reside in the conception of an idea, without the need for reduction to practice. It was also noted that when it came to the question of entitlement, the law in Australian diverges from the law in the UK, with developments in UK case law suggesting that inventiveness in the context of claim validity may have a role in determining questions of entitlement. The Full Court confirmed that rights in an invention are determined by objectively assessing contributions to the invention, rather than assessing the inventiveness of respective contributions. The inventive concept is to be discerned from the whole of the specification, not just the claims. Thus, the question of entitlement is separate to, and distinct from, the question of patentability assessed by reference to the patent claims. Findings of the Full Court The Full Court found that the primary judge erred by confining the inventive concept of the 708 application to the embodiments closely reflecting the device claimed in claim 1. This was in part due to the primary judge’s finding that the reduction of the concept to a working apparatus involved solving the manual entry problem in a way that balanced power saving considerations. The Full Court noted that the specification did not identify a manual entry problem, nor was the invention described directed to providing a solution to a manual entry problem. The Full Court determined that the specification was of far greater breadth, and seats the invention as an automated parking enforcement system that provides advantages over a manual parking enforcement system. ...the Full Court clarified that not everyone who contributes to the invention is an inventor. In particular, the Full Court accepted submissions by VMS that the inventive concept was broader than that determined by the primary judge, and included the idea of an integrated automated parking enforcement system in which magnetic sensors are able to output a sensor signal caused by the occupancy of a vehicle space by a vehicle, and in which details pertaining to a notifiable event are pre-populated into infringement issuing software. However, when considering the quality of Mr Welch’s contribution to the inventive concept, the Full Court found that Mr Del Papa, and other industry professionals already knew how the POD system worked in broad terms due to information published in an industry journal article prior to Mr Welch’s proposal. Mr Gladwin also gave a presentation at an industry conference shortly after the proposal from Mr Welch discussing the use of the PODs system at Maribyrnong. The evidence showed that Mr Gladwin had telephoned Mr Del Papa before Mr Welch’s proposal, seeking to talk about whether the POD system’s software could be run on the PinForce device. Considering this, the Full Court was not persuaded that Mr Welch’s proposal, which conveyed the broad workings of the POD system, the idea that the POD system should be integrated with SARB’s PinForce software, and that data items pertaining to a notifiable event should be communicated in a format suitable for pre-population into the infringement issuing software, was significant enough to be taken to be a material contribution to the inventive concept. It was therefore concluded that Mr Welch should not be named as an inventor in the 708 application. Conclusions So, can a high-level concept in a proposal give rise to entitlement to an invention as a co-inventor? Unfortunately, there is no straight forward answer, and each case must be considered based on its own merits. Whilst the Full Court acknowledged that the invention may reside in the conception of an idea, without the need for reduction to practice, this may not always be so. In this case, while the Full Court reached a conclusion that the inventive concept was broader than that determined by the primary judge, it was nevertheless found that Mr Welch’s contribution to the inventive concept was either known to Mr Del Papa from other sources prior to Mr Welch’s proposal, or not significant enough to warrant a finding of material contribution. 13 Helen McFadzean | Senior Associate BE(Hons) Mechatronics MIP FIPTA helen.mcfadzean@pof.com.au 2 Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9 Inspire March 2022 Inventive Concept Welcome to our new associate and new trainee patent attorneys Phillips Ormonde Fitzpatrick extends a big welcome to the newest additions to our Chemistry and Life Sciences (C&LS), Engineering, and Electronics, Physics and information technology (EPIT) teams. We’d like to welcome Dr Jessica Chadbourne, who has joined our Sydney office as an associate in our C&LS team, as well as our new Trainee Patent Attorneys Nireekshan Sodavaram and Nic Bouverie, who will be joining our EPIT and Engineering teams in Melbourne. Jessica has experience across the full spectrum of patent practice, including preliminary invention advice, drafting, filing, prosecution, strategic patent portfolio management, freedom- to-operate and validity opinions, expert evidence preparation, and Australian and New Zealand patent oppositions. She has also been actively involved in Australian pharmaceutical patent litigation proceedings. Contact us info@pof.com.au Nireekshan joined our EPIT team four months ago. He is currently undertaking a Master of Intellectual Property course at the University of Technology Sydney, while working for POF. He also has a Master of Engineering degree, majoring in very large-scale integrated circuits and ASICs, and has immense industry experience in building ASICs and FPGAs for biomedical applications. Nic recently moved to Australia from New Zealand and has joined our Engineering team. He has a Bachelor’s degree in mechanical engineering, and has a particular interest in aeronautics and mechanical systems design. Prior to joining POF, Nic worked as a Design Engineer, designing repair schemes and modifications for large aircraft. Nic also previously worked as a Patent Examiner in New Zealand, which sparked his interest in the IP industry. We are thrilled to welcome Jessica, Nireekshan and Nic to POF. 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