22 August 2005

Novartis Fails to Describe Best Method

On 16 August 2005, the Delegate of the Commissioner of Patents handed down Novartis AG v Monsanto Co [2005] APO 36.

The matter arose out of an opposition by Monsanto to the grant of a patent to Novartis on Australian patent application no. 720095. The matter is interesting in that it sets out an example of an insufficient description of a preferred embodiment of an invention. Section 40 (2)(a) of the Australian Patents Act 1990 sets out that a complete specification must describe the invention fully, including the best method known to the applicant of performing the invention. The matter also canvassed the issues of novelty and inventive step.

The relevant claims are extensive and Bazpat will not repeat them here. In short, claim 1 is directed to a process for the control of weeds, where the process is characterised in that a "synergistic amount" of at least one herbicide is added to "a phospho-herbicide selected from the group comprising glufosinate and glyphosate". A further independent claim 14 is directed to a composition of "...glufosinate and a synergistic amount of at least one further herbicide selected from...". Yet a further independent claim 15 is directed to a composition of "...glyphosate and a synergistic amount of at least one further herbicide selected from ...".

The Delegate interpreted the claims as having "a synergistic amount" of the co-herbicide as an essential feature. The Delegate held that: "Synergy is established by comparing the effect of each of the components individually with the effect of the mixture of components. If the effect of the mixture is greater than the sum of the individual components, then there is synergy."

The Delegate pointed out that the specification indicated that the proportion of the active ingredients is preferably in the range of 1:100 to 1:0.001. There was no suggestion in the specification whether any ratio in that large range was more likely to be synergistic. No examples of a synergistic amount were given. In the words of the Delegate: "A person seeking to work the invention is confronted with the need to undertake a potentially huge amount of experimentation in order to find a suitable composition".

The specification was held to leave the reader without guidance of where success is likely, or even where success is possible. Thus, the Delegate held that the specification clearly failed to disclose a manner of carrying out the invention, and consequently did not fully describe the invention.

14 August 2005

Federal Court Refuses Protection for Structuring Financial Transactions

On 12 August 2005, the Federal Court handed down Grant v Commissioner of Patents [2005] FCA 1100. Branson J. held that the invention defined by the following claim was not proper subject matter for a patent (see my previous post for some background on this aspect of our patent law):

"An asset protection method for protecting an asset owned by an owner, the method comprising the steps of:

(a) establishing a trust having a trustee,
(b) the owner making a gift of a sum of money to the trust,
(c) the trustee making a loan of said sum of money from the trust to the owner, and
(d) the trustee securing the loan by taking a charge for said sum of money over the asset."


The matter was an appeal from a decision of the delegate of the Commissioner of Patents. The Applicant argued that the invention was patentable because it concerned a method of creating an artificial state of affairs and had economic utillity in practical affairs. The argument was based on the well-known National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC) case. The Applicant quoted that judgement as setting out:
'... the method the subject of the relevant claims has as its end result an artificial effect falling squarely within the true concept of what must be produced by a process if it is to be held patentable ... It is a "product" because it consists in an artificially created state of affairs, discernible by observing over a period the growth of weeds and crops respectively on sown land on which the method has been put into practice. And the significance of the product is economic; for it provides a remarkable advantage ... for one of the most elemental activities by which man has served his material needs, the cultivation of the soil for the production of its fruits.'

However, the Delegate noted that the concept of manner of manufacture has consistently involved either the discovery of laws of nature or the application of a technology based on the laws of nature. He set out that the invention was " a discovery in relation to the laws of Australia, useful in the affairs of the populace." As such, the Delegate concluded that the invention did not result in an "artificially created state of affairs " in the sense discussed in NRDC.

Branson J. supported the delegate's conclusion, but varied in her reasoning. She cited the NRDC case: "any attempt to state the ambit of s6 of the Statute of Monopolies by precisely defining "manufacture" is bound to fail ". She held that it would be wrong to see NRDC itself as defining a manner of manufacture as resulting in an artificially created state of affairs of economic significance.

As part of her reasoning Branson J. went back to the Statute of Monopolies upon which our interpretation of patentable subject matter is founded. In that statement any manner of new manufacture should not be " contrary to the law nor mischievous to the state, by raising prices of commodities at home, or hurt of trade, or generally inconvenient." Thus, this was intended to allow the grant of monopolies for a limited time where the public benefit might be expected to outweigh the public cost of the resultant interference with free trade. Branson J. reiterated the principle that applying the Statute of Monopolies involves more than just identifying classes of invention which have in the past been found to constitute a manner of manufacture. Our courts have repeatedly held that advances in science and the development of new technologies render this approach unsound.

Her honour applied the principle derived from the Statute of Monopolies that an invention should only enjoy the protection of a patent if the social cost of the resulting restrictions upon the use of the invention is counterbalanced by resulting social benefits. She cited NRDC in which it was set out that the invention " must be one that offers some advantage which is material, in the sense that the process belongs to a useful art as distinct from a fine art -- that its value to the country is in the field of economic endeavour." Her honour held that the value of the invention was only to those whose assets are ultimately protected - and possibly to their professional advisers. She held that the performance of the invention will not add to the economic wealth of Australia or otherwise benefit Australian society as a whole. For that reason, in her view, the invention was not proper subject matter for a patent. Her honour went on further to state that the claimed invention is a method by which the owner may be insulated from the operation of laws intended to serve the public interest. She held that a court of law must assume that the performance of the invention will not advance the public interest but merely advance private interests. Finally, her honour held that the social cost of conferring on the invention the protection of a patent would not be counterbalanced by any resultant benefit to the public.

03 August 2005

Post-Grant Re-examination Loses Some Teeth


On 25 July 2005, Lindgren J. handed down Emperor Sports Pty Ltd v Commissioner of Patents [2005] FCA 996. This is the first time that the Australian Federal Court has been required to consider section 97(2) of the Patents Act 1990, which provides for post-grant re-examination of a patent.

The Law
By way of background, the relevant section provides that the Commissioner must re-examine a complete specification if asked to do so by the patentee or any other person.The regulations provide that the request must identify the documents on which an assertion of lack of novelty or inventive step (obviousness) is made. The request must state the relevance of the documents. The Act directs the Commissioner to ascertain and report whether, to the best of his or her knowledge, the invention is not novel and does not involve an inventive step. If the Commissioner makes an adverse report the patentee may dispute the whole or any part of the report, whether or not steps are taken to amend the specification. If the Commissioner has given the patentee a reasonable opportunity to be heard and given the patentee a reasonable opportunity to amend the the specification and the patentee fails to do so, the Commissioner must revoke the patent.

The Claims
In brief, the relevant claim covered: "A device for use in sport, including one or more indicia, the, or each, indicium being adapted for removable attachment to a user's garment, such that in use and when attached to a user's garment, the removal of the, each, or one or more of further indicia indicates a predetermined result." In making the request for re-examination, the Australian Football League (AFL) identified eight US patents together with a statutory declaration. During the proceedings, Emperor attempted to amend the claim as follows: "A device for use in sport when used in the game of Rugby League or Australian Rules football, the device including one or more indicia...further indicia takes the place of a tackle in the game."

The Commissioner's Decision
The delegate of the Commissioner decided that the amendment was not allowable and that the patent should be revoked. The procedure followed by the delegate was flawed in that the issue of the amendment should have been settled first before the decision to revoke. However, the parties agreed that no injustice had occurred and Lindgren J. thus dealt with both the application for amendment and the decision to revoke together.

The Court's Decision
In connection with the amendment, the wording of the Act is important and, in particular,
section 102(1) provides that an amendment of a complete specification is not allowable "if, as a result of the amendment, the specification would claim matter not in substance disclosed in the specification as filed". The court held that the amendment was allowable. In coming to this conclusion Lindgren J. raised an interesting point concerning interpretation.

One of the reasons provided by the delegate for refusing the amendment was that by amending "a device for use in sport..." to "a device when used in...", the claim was being amended from a device claim to a method claim and there was no disclosure in the specification of a "method of playing Australian Rules football". Lindgren J. held that the delegate was putting too fine a point on it and held: "I regard all of the original claims as, in substance, method or process or means claims, rather than pure device claims."

The revocation decision was considered by Lindgren J. with the claims in the notionally amended form.

In having to decide the issue of inventive step, the delegate and the Court had to make a decision as to whether information in cited documents (a) formed part of the common general knowledge of a coach, referee or administrator; or (b) is information which such a person could be reasonably expected to have ascertained, understood and regarded as relevant. Lindgren J. held that it is not possible to make such a decision in the absence of evidence. In the absence of evidence " resolution of these issues is a matter of mere speculation." His honour based this contention on well known judicial precedents, such as
Minnesota Mining and Manufacturing Co. v Beiersdorf (Australia) Ltd (1980) 144 CLR 253. While that may be, the problem is that post grant re-examination proceedings are ex parte. In other words, the Commissioner cannot hear evidence from coaches, referees or administrators.

His honour thus concluded that "the Commissioner was not at liberty to decide whether a hypothetical person skilled in the art would have ascertained the existence of the Cited Documents. In the absence of evidence, the Commissioner was relegated to speculation. The Commissioner did not give effect to the opening words of s 7(2) of the Act... ".

The Result
The decision has serious ramifications for pre-grant examination, which is also ex-parte. In fact, immediately preceding the above passage, his honour stated that he saw no reason why the approach taken in pre-grant examination should not be taken in relation to post-grant re-examination. As any practitioner knows, the Commissioner regularly makes decisions regarding inventive step.

Lindgren J. went on to state that he appreciates that his conclusion may signify that post-grant re-examination may not readily lead to revocation on the ground of lack of inventive step. His honour then made some surprising statements, to say the least:

a) "The procedure has a greater role to play in relation to novelty."
b) "It always remains open to a third party requesting re-examination to bring a revocation proceeding."
c) "The re-examination procedure may have the beneficial effect of leading to amendments."

It is not clear to Bazpat how his honour comes to the conclusion in (a). The statement (b) undermines the purpose of the post grant re-examination procedure. The statement (c) is in Bazpat's view a specious argument.

It will be interesting to see what, if any, fall out there is from this decision. Bazpat will be keeping an eye out.