19 July 2005

US Court Emphasizes Written Description

Dennis Crouch's patently-o blog (see link in side bar) reports that the U.S. Court of Appeals (Federal Circuit) has just handed down Phillips v AWH Corp. (Fed. Cir. 2005).

In this case, the court held that the primary source of reference for the meaning of words in a claim should be the specification rather than extrinsic references, such as dictionaries. The basis lies in the US statutory requirement that the inventor provide a "full" and "exact" description of the claimed invention. In spite of this, however, it is important to bear in mind that the court held that each patent still had to be treated individually. In other words, there may be cases where such a rule may not be appropriate. An interpretation must always be carried out in the shoes of a person of ordinary skill in the field of the patent. Such a person may find that the wording of the patent precludes limitation of the claims by a specification.

In Australia, Section 40 of our Act holds, inter alia, that a complete specification must describe the invention fully, including the best method known to the applicant of performing the invention. Proper claim interpretation requires that the description and the claims be read as a whole. This allows the description to set up a dictionary for the claims. However, our courts have held that the description must be read as a technical document, while the claims must be read as a legal document. Furthermore, if the claims are clear and unambiguous, the description should not be used to read meanings into the words of the claims. Only if the words are not readily understandable should reference be made to the description.

Given that many Australian-prepared patent specifications form the basis of US patent applications, practitioners should remain aware of developments such as these in the US.

18 July 2005

Another Argument in Favour of Software Patents

An online IPAustralia name search (excluding PCT applications, details of which are recorded by IPAustralia) today revealed 337 entries for "Microsoft". While we all know that this is a minor investment for a company like Microsoft, It is clearly only a matter of time before it enforces its patent rights.

Many in the Australian ICT industry do not place sufficient value on software patents. This is both short-sighted and dangerous. It is important to understand that according to our law, software patents are fully recognised and enforceable. Furthermore, for the purposes of litigation, patents are presumed valid and the onus is on a defendant to prove that the patent is invalid. Those practitioners who have experience with software patents will agree that such an onus could be extremely difficult and expensive to discharge.

Most Australian investors are beginning to rely on patents for some degree of comfort. However, apart from the obvious reasons associated with the ability to protect their investment, there are other, perhaps even more significant reasons. These relate to identification of the intellectual property.

An effective agreement must define the intellectual property. Without a patent application, a software product can usually only be defined as a set of instructions stored on computer readable media. It follows that there is no inherent breadth in the definition. This can limit the effectiveness of an agreement. In other words, it may be impossible to expand the reach of a license agreement beyond a reference to a particular set of instructions. On the other hand, if a software product is defined in a patent application, then the license agreement can refer to the patent application and automatically cover a broad definition of the software product.

Software producers in Australia need to stake their claim. Software is an ever-developing field. However, Bazpat is certain that there will come a time when our industry will start clashing with organisations such as Microsoft. Without a patch of patent land, the results of such a clash could be catastrophic.

07 July 2005

Delegate Finds Fair Basis in Thermostable Enzyme

On 4 July 2005, the Delegate of the Commissioner of Patents handed down F.Hoffman-La-Roche AG v Bresagen Ltd and New England Biolabs, Inc [2005] APO 31 .

This matter originated in opposition proceedings launched by Bresagen and New England Biolabs against F.Hoffman-La-Roche. In that matter the Delegate found, inter alia, that the invention as defined in the claims lacked novelty. The Delegate also found that the claims did not comply with section 40 of the Patents Act in that they were not fairly based on the specification. In particular, the Delegate held that the term "thermostable" in the claims was defined too broadly in the specification. F. Hoffman-La-Roche appealed the decision to the Federal Court and amended the specification to narrow the definition in an attempt to comply with section 40. The Federal Court referred the matter back to the Delegate to determine whether or not the claims were fairly based on the specification, as amended.

The relevant amendment appears as follows: "As used herein, the term "thermostable enzyme" refers to an enzyme which is stable to hear and is heat resistant and catalyses (facilitates) combination of the nucleotides in the proper manner to form the primer extension products that are complementary to each nucleic acid strand, and is stable to heat and is heat resistant to the extent that it would be effective for the amplification reaction described herein, ie, the enzyme does not become irreversibly denatured (inactivated) when subjected to the elevated temperatures for the time necessary to effect denaturation of double stranded nucleic acids ." Bresagen and New England Biolabs submitted that the amendment did not overcome the lack of fair basis. They contended that the amendment affected the definition of a specific term, namely "thermostable enzyme". The term was used in the body of the specification but not in the relevant claims. The relevant claims instead used the terms "thermostable DNA polymerase" and "thermostable polymerase", which are not the subject of any definition in the specification. New England Biolabs argued that the amended definition of "thermostable enzyme" could not be read into the claims to qualify the clear meaning of the wording of the claims. They thus held that the term "thermostable" had no clear meaning in the specification and the claims were not fairly based.

The Delegate disagreed. He pointed out that the definition of "thermostable enzyme" as set out in the specification described a specific enzymatic reaction. DNA polymerase is the only enzyme disclosed in the specification which is able to catalyse this reaction. In his view, the claimed DNA polymerase was thus clearly encompassed in the dictionary definition of "thermostable enzyme" provided in the specification. Furthermore, the Delegate held that there was nothing in the specification or in the evidence to suggest that the word "thermostable" would have had a different meaning when used as an adjective for "enzyme" and for "polymerase".

01 July 2005

Reverse Mortgage System Fails Subject Matter Test

On 5 May 2005, the Delegate of the Commissioner of Patents handed down Peter Szabo and Associates Pty Ltd [2005] APO 24. The matter arose out of an attempt by the patentee, Peter Szabo and Associates Pty Ltd, to obtain certification of innovation patent no. 2004100848. By way of background, please see my post of 20 April 2005.

The Subject Matter
The patent was directed to a "reverse mortgage" system. In such a system, an aged person can part-sell an interest in their home in return for a cash deposit. Settlement occurs after death. A disadvantage is that a financier can make an excessive profit in the event of an early death. The claimed invention addressed this by providing a rebate in certain circumstances. The patent set out a number of mathematical expressions for determining the amount of the rebate. During the certification process, the patent Examiner raised an objection that the invention was not proper subject matter for a patent.

The Law
According to the Australian Patents Act, an invention is patentable if, inter alia, the invention as claimed is a "manner of manufacture within the meaning of section 6 of the Statute of Monopolies". The rules governing patentable subject matter depend on a continuous re-defining of that phrase in our courts. As a result, it has been possible for Australia to adapt to changing technologies without the need for statutory amendments.

The present hearing is useful in that it summarizes the landmark National Research Development Corporation v. Commissioner of Patents (1959) 102 CLR 152 case. It also sets out a very useful table of cases and the related subject matter in issue.

The Delegate reinforced a number of principles enumerated below:

1. The purpose of section 6 of the Statute of Monopolies was to encourage development in the fields of science and technology. To be a manner of manufacture an invention must contain some material element that relates to science or technology.

2. The invention must fall within the scope of the useful arts as opposed to the fine arts. Useful arts involve the application or use of science and/or technology in a material manner.

3. The use of mathematical expressions does not necessarily indicate that the subject matter falls within the useful arts. It is necessary to investigate what is represented by the mathematical expressions.

4. It is not enough that an invention addresses a practical need. The investigation must apply the principles which have been developed for the application of section 6 of the Statute of Monopolies.

The Decision
The Delegate held that the claimed invention did not define a manner of manufacture. In particular, the Delegate held that the claimed invention as a whole did not embody in any material manner elements of science or technology. The claimed invention was held to be no more "than a prescription of the basis of a contractual agreement between parties, based on mathematical expressions formulated to produce a more equitable arrangement."

The Delegate revoked the patent.