12 April 2006

Damages and Springboarding in New Bill

On 30 March 2006, the Intellectual Property Laws Amendment Bill was read into parliament. The purpose of the bill is to address certain issues in Australian trade marks and patents practice. In particular, the changes help us to comply with our free trade agreement with the United States.

Since this is a patents blog, I will consider some of the more important proposed changes to our Patents Act.

1. DAMAGES

1.1. The Current Situation

Section 122 simply allows a court to grant an injunction and, at the option of the plaintiff, either damages or an account of profits. It is unusual for a court to grant damages, and the financial penalty paid by the loser is generally restricted to the legal costs.

1.2. The Proposal

Proposed section 122(1A) sets out that a court has discretion to increase an assessment of damages based on a number of factors. These include the flagrancy of the infringement and the need to deter others from infringing. Other factors are the conduct of the infringer after the act of infringement or after that party was informed that it had allegedly infringed the patent and any benefit shown to have accrued to the infringer as a result of the infringement.

2. INFRINGEMENT EXEMPTIONS

2.1. The Current Situation

Section 119 in its present form allows a person to continue to “make the product, or use the process, (or continue to do so)” without infringing a patent claiming such a product or process if that person was already doing so or had taken definite steps to do so immediately before the priority date of the patent. The section makes no mention of whether or not that right is transferable.

2.2. The Proposal

Proposed section 119 sets out that a person may “do an act that exploits a product, method or process and would infringe the patent”, without infringing the patent. The necessary proviso is that the person: (a) was exploiting the product, method or process…; or (b) had taken definite steps to exploit the product, method or process, immediately before the priority date of the relevant claim.

The proposed section introduces a definition of “exploit”, which is substantially more extensive than just “make” or “use”. In particular, “exploit” in relation to a product is to be understood to cover making, hiring, selling, “otherwise disposing of”, offering to do these, using, importing and keeping the product for the purpose of doing the preceding acts. In relation to a method, “exploit” is to be understood to cover using the method or process and doing the acts mentioned above in relation to a product resulting from the use of the method or process.

The proposed section also allows that right to exploit to be successively transferred to other persons.

3. SPRINGBOARDING

3.1. Proposed new section 119A(1)(a) provides an exemption from infringement of a pharmaceutical patent if exploitation of the invention claimed in the patent is solely for obtaining registration of goods that are intended for therapeutic use and that are not devices as defined in the Therapeutic Goods Act 1989. Section 119A(1)(b) applies the exemption if the purpose is connected with obtaining similar approval under a law of a foreign country.

3.2. Proposed new section 119(A)(2) excludes 119(A)(1)(b) for export from Australia of goods unless the term of the patent has been extended and the goods comply with certain characteristics. In particular, the goods need to be a pharmaceutical substance per se, as disclosed in the complete specification and in substance falling within the scope of the claims. Alternatively, the goods need to be a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology.

4. THE EFFECTS OF THE BILL

Any provision that allows an Australian court greater discretion to increase damages is welcome. A patent is property, albeit intangible. Theft of such property should be dissuaded as far as possible.

The new infringement exemptions are a substantial departure. Applicants need to be particularly wary of the fact that the exploitation rights arising from prior use are fully transferable.

As far as the springboarding provision is concerned, it is clear that the major pharmaceutical patent holders will not be happy. More litigation perhaps?




06 April 2006

Nokia Claims Found Deficient


Opposition to Patent Application No. 732973 in the name of NOKIA CORPORATION by QUALCOMM INC.


TOPICS: Section 40 issues, clarity of claims. Claims found to lack fair basis.

Background

Nokia Mobile Phones Limited filed patent application 732973 on 17 June 1997 entitled "Control of Transmission Power in Wireless Packet Data Transfer". The application was accepted on 3 May 2001. On 3 August 2001, Qualcomm Inc filed a Notice of Opposition. The serving of evidence finally completed on 12 November 2004.

The Patent Application

According to the specification, the invention concerns a method for controlling the transmission power taking the special features of packet-switched links into account. The specification exemplifies the invention with the GSM (Global System for Mobile Communications) system. In such a system, the data transfer capacity to be reserved for one link is one traffic channel formed by one Time Division Multiple Access (TDMA) time slot being cyclically repeated in the transmission frequency and on the receiving frequency.

In circuit switched data transfer, one problem is the sufficiency of radio frequencies. Data transfer in packet form has been developed as a solution. However, data transfer in such a form causes problems relating to the control of the transmission power.

Claim 1 read as follows: "A method for controlling transmission power in a terminal device of a cellular radio system, the radio connection of which with a certain base station comprises an alternative first state (10) and second state (11), in the first state of which the terminal device receives (30) signals transmitted regularly by the base station and in the second state of which the terminal device additionally transmits (34) data as packets to the base station, characterized in that in said first state the control of the default value of the transmission power in said terminal device is based on measuring (31, 32) of the signals transmitted regularly by the base station, and in said second state the control of the transmission power in said terminal device is based both on the feedback transmitted by the base station on the quality of the data transfer link (35, 36, 37, 39) and on measuring of other signals transmitted regularly by the base station."

The other independent claim, claim 13, read as follows: "A method for controlling the transmission power in a base station of a cellular radio system, the radio connection of which at least with one terminal device comprises an alternative first state (10) and second state (11), in the first state of which the base station transmits regularly control signals and in the second state of which the base station additionally transmits data as packets to a certain terminal device, characterized in that in said first state the default value of the transmission power in said base station is the same as the maximum transmission power of the base station and in said second state the control of the transmission power in said base station is based as well on the feedback of the quality of the data transfer link (35, 36, 37, 39) said feedback being transmitted by the terminal device, as on the time passed from the reception of the previous acknowledgment message by the base station from said terminal device."

The Grounds of Opposition

Qualcomm held that the claimed invention is not a manner of manufacture, is not novel, and does not involve an inventive step. Further, Qualcomm held that the specification did not describe the invention fully and the claims were not clear or fairly based on the matter described in the specification.

For the purposes of this post, I will look at the clarity and fair basis issues.

Interpretation of the Claims

Much of the discussion at the hearing was related to whether the claims related to packet-switched or circuit-switched systems.

Nokia asserted that the claims should be read in the context of the specification and of the published knowledge existing at the time of the application. Thus, they asserted that the common sense approach was that the claims referred to packet-switched connections. In response to this the Delegate of the Commissioner, citing D├ęcor Corporation Pty Ltd v Dart Industries Inc, 13 IPR 385, commented that it seems impermissible to confine the claims to elements of the description if such elements are not expressly or by proper inference found in the claims themselves.

The Delegate had a problem with the claims since they did not define the radio connection between the terminal devices. He set out that the claims were wholly silent in respect to whether the radio connection is packet-switched, circuit-switched or an overlay of one over the other. He again referred to the Decor case and stated that it was not legitimate to confine the scope of the claims by reference to packet-switched limitations that may be found in the specification.

Evidence adduced by Nokia initially made much of the special features associated with packet-switched systems and that the specification inherently described such features. One of the witnesses set out that it was absurd to say that a circuit-switched radio connection can exist in alternative first and second states. The reason for this is that a circuit-switched radio connection is a continuous circuit which either exists or does not and so cannot exist in more than one state at a time. The converse is true of a packet-switched system.

The Delegate held that there was nothing in the claims that clearly defines the operation of the two states. Due to the absence of this operational link, the Delegate held that it may even be interpreted that one or other state is optional since the word "alternative" does not mean the states alternate.

The Delegate noted that the above independent claims were "notably silent" regarding any switching alternately between states. Thus, the Delegate regarded claims 1 and 13 as unclear.

Fair Basis

In considering the evidence of Nokia that the invention applied to packet-switched systems, the Delegate held that claims 1 and 13 were not fairly based on the specification since these features were absent from the claims.

Lessons

The Delegate raised a number of other issues, including a rather "startling submission" by the patent attorney for Nokia that an Applicant would not knowingly claim beyond the descriptive part of the specification or claim the prior art.

In any event, this matter emphasizes the need for patent attorneys to ensure that the claims are both easy to understand and that the scope of the claims can readily be ascertained. The claims should be reviewed to ensure that the essential features of the claims correspond with features in the specification.

It is clear that a thorough review of Nokia's specification by their Australian agents would have saved them a lot of trouble. This is a good lesson for us Australian practitioners.