IP SPOTLIGHT SEPTEMBER 3

IP SPOTLIGHT NEWS FROM AUSTRALIA

3 September 2020

USING PRELIMINARY DISCOVERY IN YOUR IP ENFORCEMENT STRATEGY IN AUSTRALIA

I NTRODUCT ION You have secured your patent rights and are enjoying the fruits of your innovative labour – the benefits that come from supplying a product that outperforms the competition – when a new business appears with an offering that matches your own. You are suspicious that they are using your patented technology (they have no history of serious R&D, so have they really invested the time and resources to develop their own?), but you cannot get your hands on one of their products to open it up and determine how it works. Another part of your business is selling a product that is manufactured using a process that remains a closely guarded secret. One of your fiercest competitors recently launched a similar product and is starting to eat into your market share. You notice on LinkedIn that one of your trusted ex-employees recently began working for them. They may have shared sensitive information about your secret process with their new employer but, as there are no definitive tell-tale signs of the manufacturing process present in the final product, you cannot confirm your suspicions.

In both cases, you cannot work out from materials that are made publicly available whether your rights are being infringed. But you worked hard to develop your intellectual property, and do not want to let your competition get away with using it. What can you do? Preliminary discovery is designed to assist in precisely these types of situation. Preliminary discovery, if awarded, requires a competitor to provide documents disclosing the information you need to determine whether their activities infringe your rights. And the good news is that it is relatively easy to persuade a court that you are entitled to preliminary discovery. Courts recognise the difficulty facing rights holders in obtaining the information necessary to determine whether there is infringement, so the bar to obtaining preliminary discovery is relatively low. Courts are keen to ensure that a competitor cannot infringe with impunity by remaining behind a cloak of secrecy.

“ In some instances, it might be helpful to hire a private investigator to obtain more information about your competitor’s product. ”

AVA I LABLE DOCUMENTS Although courts are relatively quick to award preliminary discovery, they are also conscious of the harm that can be caused to an innocent party required to hand over sensitive documents to a bitter competitor. Courts attempt to minimise the potential for harm in two ways. First, they are reluctant to order wide-ranging preliminary discovery. Generally, preliminary discovery is limited to those documents that you can show are necessary to determine whether your competitor has infringed your rights. It is important to be targeted in your request, and show the court that you have requested the documents in good faith. Courts will scrutinise a broad request for documents. Second, it is common for a strict confidentiality regime to be put in place to protect the discovered documents and ensure that they can only be used for determining the infringement position. This may include the documents being provided only to your lawyers (and, if appropriate, an independent expert), unless and until you commence infringement proceedings. CONCLUS ION The court’s preliminary discovery processes provide a beneficial, and relatively inexpensive, process for rights holders to confirm whether those rights are being infringed. The inclination of courts to award preliminary discovery also increases the likelihood of a competitor voluntarily providing documents upon request, rather than incurring the expense and inconvenience of (likely) unsuccessfully contesting a preliminary discovery. If you believe that someone might be infringing your rights, even if you are not sure, you might be surprised how straightforward it is to confirm the situation and take action to protect your market.

irrational or baseless, you are likely to succeed in establishing that your belief is reasonable. In other words, the cards are stacked in your favour. The recent Federal Court case of Sovereign Hydroseal Pty Ltd v Steynberg [2020] FCA 1084 provides a neat example of the application of these principles. Sovereign owned a patent for sealing cracks and joints by injecting a liquid composition with a specific formula. Sovereign believed Steynberg was infringing its patents but was unsure of his precise formula. The court ordered preliminary discovery primarily because Steynberg was an ex-employee of Sovereign and thus familiar with the patented technology, and was using a sealing process that involved injecting a liquid (in accordance with the patent). Even though Sovereign had no information pertaining to the formula being used, those facts were sufficient for the court to find that Sovereign had a reasonable belief that Steynberg may have infringed its patent rights. You may also be able to refer the court to any standard industry practices in terms of developing or manufacturing products, or even your competitor’s past infringing conduct, to support your belief of infringement, though this on its own is unlikely to be enough to get your application across the line. In some instances, it might be helpful to hire a private investigator to obtain more information about your competitor’s product (as the applicant did in Sovereign Hydroseal v Steynberg ). The court will usually be content to accept such information into evidence. Helpfully, you will not be held to the usual rules of evidence during a preliminary discovery application. If you have information about your competitor’s product from a source that you believe is reliable, a court will usually accept that information into evidence without requiring evidence direct from that source (though you will still need to explain to the court why you believe the source is reliable). This gives you more options for supporting your belief.

PR I NCI PLES A court will award preliminary discovery if you reasonably believe that another party has infringed your intellectual property rights but, after making reasonable inquiries, you do not have sufficient information to decide whether to start infringement proceedings against them. There is also a requirement that you reasonably believe that the potential infringer has documents that will help you determine whether there is infringement. The issue most commonly in dispute during a preliminary discovery application is whether you reasonably believe that there is infringement. As the belief must be reasonable, it is not enough for you to subjectively, albeit honestly, hold that belief. You must have some grounds supporting your belief. That support is often found by inspecting (whether visually or physically) or otherwise testing the properties, characteristics or performance of your competitor’s product. You could alternatively rely on the way your competitor has described its product in its marketing materials or to customers.

It is then important to explain to the court why those properties, characteristics or performance of your competitor’s product indicate, suggest or are consistent with the possibility that it infringes your rights. Provided that link is plausible, it is often enough to persuade a court that your belief of infringement is reasonable. And, unusual for court proceedings, the court will allow you to engage in a degree of speculation about your competitor’s product (provided there is a reasonable basis for that speculation). A potential infringer generally cannot escape preliminary discovery by arguing that there is an innocent, and equally or perhaps even more plausible, an explanation for its product’s properties, characteristics or performance. Of course, the more likely an innocent explanation is correct, the less inclined the court will be to award preliminary discovery. That said, during preliminary discovery applications, courts generally loathe to resolve disagreements between expert witnesses as to how likely it is that the competing product infringes. Courts try to avoid turning these hearing into mini- trials. As a result, unless your belief is based on considerations or views that are unreasonable, untenable,

ANDREW MULLANE Special Counsel

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EMD’S ARGUMENTS EMD argued that the amended claims were not allowable because: – – the amended claims extended beyond the matter disclosed in the specification as filed, as the additional features in the amended claim were not clearly and unambiguously disclosed in the specification as filed. The delegate however found that the amendments did not introduce any inconsistency or disclose matter that extended beyond the disclosure of the specification as filed – – the amended claims extended beyond the scope of the claims of the specification before the amendment because something that was not an infringement prior to the amendment would be an infringement as a result of the amendment, particularly in view of the lack of clarity of the scope of the claims. However, the Delegate found that the amendment only added features to claim 1, and the terms in the claim were clear, so the amended claims fell within the scope of the claims before amendment – – as a result of the amendment, the specification does not disclose the invention in a manner which was clear enough and complete enough, and that the amended claims were not supported by the specification. As the delegate found that the relevant terms were clear, and did not go beyond the disclosure in the specification as filed, the delegate found that the specification was clear enough and complete enough, and the claims were supported by the disclosure in the specification. KEY TAKEAWAYS In undertaking the above analysis, the delegate considered the whole disclosure of the patent, rather than formalistically looking at whether the precise terms used in the amended claims appeared in the specification as filed. Therefore, this case serves as a reminder that the assessment of the allowability of post acceptance amendments will be based on a wholistic review of the disclosure of the patent, and a consideration of the context in which the original disclosure was made. Further information can be found in the reported patent office decision of EMD Millipore Corporation v Asahi Kasei Medical Co., Ltd. [2020] APO 39 (21 August 2020).

– – to disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art – – to disclose the best method – – for the claims to be clear, succinct, and supported by the matter disclosed in the specification (i.e. the requirements of clarity and support). The delegate provided that the correct approach in considering whether an amendment would result in the specification claiming or disclosing new matter, is to ask whether the skilled person would learn anything about the invention which they could not learn from the specification as filed. The delegate stated that: “This comparison is a strict one in the sense that subject matter will be added unless it is clearly and unambiguously disclosed in the relevant documents…” THE CLA IMS The specification provided that the object of the invention was to provide a “porous membrane by which a useful component such as protein can be recovered in a highly efficient manner while suppressing clogging during filtration of a protein solution and from which only a small amount of an eluate is eluted even when an aqueous solution is filtered.” The claims specified the particular features of the porous membrane such as the characteristics of the polymers from which the membrane was constructed, the layers present, the upstream and downstream portions, and the gradient index of the average pore diameter in the layers. The claims were amended to include additional features such as the specific location of the layers, specific pore diameters in the layers, how the gradient index was to be calculated and how the pore diameters were to be calculated.

ASAHI SUCCEEDS IN DEFENDING THE ALLOWABILITY OF ITS POST-ACCEPTANCE CLAIM AMENDMENTS IN OPPOSITION PROCEEDINGS BROUGHT BY EMD

In the latest Australian Patent Office decision to consider the allowability of post-acceptance amendments, the patent applicant, Asahi Kasei Medical Co., Ltd. (Asahi), prevailed over the opponent EMD Millipore Corporation (EMD) in defending its amended claims. EMD opposed the grant of Asahi’s patent application for a porous membrane that is useful for removing, by filtration, viruses and other pathogens from fractionated plasma products and other biopharmaceuticals. In the course of the opposition proceedings, Asahi filed amendments to its claims. These amendments were opposed by EMD. This decision of the Australian Patent Office considers the allowability of the amendments.

RELEVANT LAW Under the Patents Act Cth (1990) (incorporating the Raising the Bar amendments which apply to all patent applications for which examination was requested after 15 April 2013), post-acceptance amendments are not allowable if, as a result of the amendment: – – the specification would claim or disclose matter that extends beyond that disclosed in the complete specification as filed (section 102(1)(a)) – – a claim would not in substance fall within the scope of the claims of the specification before amendment (section 102(2)(a)) – – the specification would not comply with s40(2), (3) or (3A) (section 102(2)(b)) - meaning that the specification would not comply with the requirements (amongst others):

BINDHU HOLAVANAHALLI Associate

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“ IPONZ have since identified all affected IRNZs and are currently working with WIPO to correct their database. ”

It has recently come to our attention that the Intellectual Property Office of New Zealand (IPONZ) has mistakenly issued misleading status notifications to WIPO regarding a number of New Zealand trade marks, by incorrectly indicating that the New Zealand designation for the affected International Registrations (“IRNZ”) has been refused or accepted.

Consequently, the status of some IRNZ’s is incorrectly displayed on both the WIPO and IPONZ databases. For example, some IRNZ’s were listed as refused, when in fact, prosecution was still ongoing. In other cases, the IRNZ was listed as accepted when it had been formally refused, and vice versa. This system error has caused confusion and uncertainty for applicants with respect to their IP right and any associated deadlines. IPONZ have advised that these incorrect notifications were the result of a “system issue” concerning communications between IPONZ and the World Intellectual Property Organisation (WIPO) who oversee the international trade mark registration system. IPONZ have since identified all affected IRNZs and are currently working with WIPO to correct their database. It is not expected that an incorrect status of a trade mark right on WIPO’s database will impact the status of the relevant IRNZ on the New Zealand database or the enforceability of the trade mark in New Zealand.

If you or your client have any concerns about the current status of a New Zealand trade mark (including an international trade mark designating New Zealand), we would be more than happy to assist you. Please do not hesitate to contact us.

DONNA MEREDITH Associate

IPONZ TRADE MARK SYSTEMS ERROR

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About Wrays

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