16 June 2005

Jupiters Misses the Jackpot

On 23 May 2005, the Full Federal Court handed down Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90 . The respondent, "Neurizon" is the proprietor of Australian patent no. 714299. Claim 1 is most relevant. It describes "a method of awarding a prize in a gaming system comprising at least one gaming machine characterised in that the probability of each gaming machine winning the prize is dependent upon at least some of the amount wagered on that gaming machine during an elapsed period of time." In such claims, the characterising portion sets out the distinguishing feature of the claimed invention.

The appellant, Jupiters, developed a gaming system after the priority date of the above patent. This matter arose when Neurizon sued Jupiters for infringement. Neurizon was successful. Jupiters and a number of other parties appealed. As is usual with such cases, the matter also involved a cross claim by Jupiters and the others for revocation of the Neurizon patent on a number of bases, including lack of novelty, lack of inventive step and lack of fair basis of the claims on the specification.

The method used by the Jupiters system was similar to the method described in claim 1. The difference of opinion between the parties arose from the interpretation of "an elapsed period of time" in claim 1. The Jupiters gaming system carried out the step of polling the gaming machines every second to determine the amount wagered on that machine. Jupiters contended that its "Cougar" system did not use"an amount wagered during an elapsed period".

In short, Neurizon managed to show that the Cougar system did infringe claim 1. Jupiters failed to show that the claimed invention lacked novelty. The matter was referred back to the primary court on the question of inventive step since further evidence was required.

The court set out a list of points gleaned from authoritative cases useful when interpreting a specification:

1. The proper construction of a specification is a matter of law.
2. A specification is to be given a purposive and not a purely literal construction.
3. The words of a specification are to be interpreted as if by a person of ordinary skill in the art.
4. The scope of the claims should not be broadened or narrowed by adding glosses drawn from other parts of the specification. However, unclear terms may be defined by referring to the specification.
5. Experts can give evidence on the meaning which those skilled in the art would give to technical, scientific or unusual terms and phrases.

The court held that the expression "an elapsed period" is neither uncertain nor ambiguous. Importantly, claim 1 did not need to specify a method for determining the boundaries of the "elapsed period". The evidence of a witness indicated that there were many ways in which an elapsed period might be determined in a gaming system and that this would be clear to those skilled in the art from what is taught by the patent. It was clear that the Cougar system based a probability of winning upon at least some of the amount wagered on a machine "during an elapsed period".

On the issue of whether or not the claims were fairly based on the specification, the court turned to Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 232 ALR 1. It is wrong to consider whether "essential features" in the body of the specification correspond to essential integers of a claim. The question is whether there is a real and reasonably clear disclosure in the body of the specification of what is claimed. As with the Lockwood case, it was found that the consistory clauses (broad statements in a summary of the invention) provided sufficient basis for the claims.

Bazpat will look out for the inventive step decision.

14 June 2005

Harmonization in the US?

Dennis Crouch of the Patently-O blog has just provided a redlined version of the proposed United States Patent Reform Act 2005, as it stands presently. The Promote the Progress blog is also a good source of developments.

Introduction of the Act will impact significantly on Australians seeking US patent protection. It may also be a move towards harmonization at least on some basic principles.

For now, some points proposed by the Act are of interest:

a) The right to file a patent application in the US will not be limited to the inventor. The right to file can, in terms of an assignment or other legal mechanism, be vested in a party other than the inventor. This is in line with both Europe and Australia.

b) The usual 12 month "grace period" after any publication of the invention in which to file the application will change. The relevant section will provide a 12 month grace period to any form of disclosure made only by the inventor or assignee/s of the inventor. This is in line with Australia. No such grace period exists in Europe.

c) At the moment, an invention is not patentable if it was used or known by others in the US prior to filing the patent application for the invention. According to the Act a claimed invention is not patentable if the invention was just "known". However, the subject matter is "known" when it becomes " reasonably and effectively accessible". This can happen through use or any other form of disclosure or when "it has been made inherently known from subject matter that has become reasonably and effectively accessible ". Knowledge will be "reasonably and effectively accessible" if the "subject matter can be accessed and comprehended, without resort to undue efforts, by persons of ordinary skill in the art to which the subject matter pertains. " In Australia and Europe, becoming "known" through non-confidential disclosure of any sort is sufficient to render an invention unpatentable.

d) The Act proposes that a claimed invention may not support a patent if the claimed invention was, inter alia, described "in an application for patent published under section 122(b)". This existed before. However, the Act proposes that such an application be defined as an application that provides a priority date for a US application. Thus, an Australian provisional patent application could block the allowance of a US patent application with a later filing date. This will obviate the benefit of filing a US provisional patent application. Both Australia and Europe have similar provisions.

The Act proposes a number of other important changes, which can be read on the above blogs.

02 June 2005

ICI "reverses" the Commissioner of Patents

The "reverse infringement test" is the accepted test for whether or not a particular claim lacks novelty. In short, if an allegedly anticipating publication would infringe a patent claim, then the invention covered by that claim lacks novelty. However, in Imperial Chemicals Industries Pty Ltd (ICI) v Commissioner of Patents 63 IPR 476 Crennan J held that caution should be exercised in applying such an approach where a prior claim of a broad class of chemicals is compared with a later claim describing a particular chemical compound within that broad class.

This case was an appeal against a decision by a delegate of the Commissioner of Patents that ICI's patent lacked novelty when compared with an earlier patent owned by Lubrizol. The relevant claim of the Lubrizol patent provided for the combination of a refrigerant of hydrocarbons and a lubricant of carboxylic esters. The relevant claim of the ICI patent provided for the combination of a refrigerant of three specific hydrofluorocarbons, 1,1,1,2-tetrafluoroethane, difluoromethane and pentafluoroethane, and a lubricant of carboxylic esters.

The appeal was allowed. ICI's claim was held to be inventive in spite of the fact that the specific ternary composition of hydrofluorocarbons and the lubricant of carboxylic esters was encompassed by the claim of the Lubrizol patent. The Lubrizol patent did not teach or direct the use of ICI"s ternary composition, and was therefore held not to cover such a ternary composition.

Rather than excluding the "reverse infringement test" this case emphasizes that the test should be applied carefully. It is necessary with such chemical patents to consider the material actually disclosed rather than simply investigating the scope of the earlier patent.

The Government Responds to "Business Method" Recommendations

In September 2003, the Advisory Council on Intellectual Property (ACIP) released a report reviewing the "patenting of business methods". The report contained eleven recommendations. On 26 May 2005, the Government issued a media release in which it announced that it has accepted ten of the eleven recommendations. The Government's response includes ten of the recommendations:

1. No changes are recommended to Australian legislation regarding the issue of patentable subject matter.

2. IPAustralia should monitor the number and significance of "business system patents". The Government has mentioned that the classification system that we use does not have sufficient classifiers, making it difficult to identify and monitor such patents.

3. IPAustralia should make further use of non-patent literature during patent examination.

4. Training for patent examiners requires enhancement.

5. IPAustralia should conduct education programs for SME's in this field.

6. IPAustralia and IP Professionals should encourage media debate.

7. IPAustralia should raise public awareness of the ability of third parties to submit relevant prior art which could prevent the issuance of invalid patents.

8. IPAustralia is encouraged to make the abstracts of all Australian patents and published patent applications searchable by text and classification.

9. IPAustralia should provide a specific online search facility through the relevant "business system" class on its website.

10. IPAustralia should consider increasing response fees on examination reports for responses filed more than 12 months after the examination report.

I will be following this with interest.