04 May 2013

Patent Valid - Innovation Patent Invalid

Delnorth Pty Ltd v Commissioner of Patents [2013] FCA 165

This case illustrates the types of prior art information available for determining "innovative step" for innovation patents and "inventive step" for patents. In some case the difference can mean that a standard patent can be found valid while its counterpart innovation patent is found invalid.

Assessment of prior art information must be made in the shoes of the skilled addressee. That is, "the person skilled in the relevant art in the light of the common general knowledge".

The recent Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) has allowed greater leeway for combining 2 or more pieces of prior art information for testing inventive step - see this post on my website. However, the previous test is applicable in this case and will remain so for all patents with an effective date earlier than 15 April 2013. The previous test requires that the skilled person be reasonably expected to have ascertained, understood, regarded as relevant and combined the 2 or more pieces.

For innovative step, the assessment of prior art information includes determining whether or not prior art information made "publicly available in 2 or more related documents or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art would treat them as a single source of that information." This provision has not changed.

As you can see, it is conceivable that the test for combining documents can be stricter for standard patents than for innovation patents.

In Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225, it was found that 2 counterpart innovation patents were invalid, having failed the "innovative step" test in light of 2 patents that fell within the definition of "prior art information".

In this case, however, the court held that the evidence did not justify a finding that a skilled person would reasonably expected to have ascertained, understood, regarded as relevant and combined the 2 patents. The evidence made no reference to the 2 patents. The court held that even "if they were known to him, they do not appear to have been perceived by him as relevant to the issues to which his affidavit was directed."

This matter appears to indicate that it is not enough to show that the skilled person would have carried out patent searches. Rather, it should show that the skilled person would carry out searches published in a particular period for the purpose of solving the problem to which the patent is directed.

06 February 2013

Novozymes v Danisco

Link:  Novozymes A/S v Danisco A/S [2013] FCAFC 

Date: 4 February 2013

  • Requirement of clarity in patent claims
  • Whether claims not novel when compared with prior art base - inevitable outcome and understanding of skilled person
  • Manner of Manufacture - requirement that invention appear new on face of specification

24 January 2013

The Problem with Apps

I have recently received a number of enquiries from inventors looking for patent protection to cover an app. Theoretically, there is no reason, at least in Australia and the US, that you should not be able to cover your app with a patent application. However, there are practical and legal implications that could result in you throwing good money after bad.

In this post, I am considering Australia and the US only.

An app is a software product and so does fall within the category of products that can be covered by a patent. But what does your app actually do? As a general rule, if you're just receiving information, re-arranging it and then presenting it, then it might be difficult to convince an examiner or a court that your invention is "proper subject matter" for a patent. But proper subject matter aside, you need to bear in mind that changing information and not structure or the manner in which that information is manipulated could result in the invention falling foul of the "novelty" and "inventive" step requirements. That's because you can't get patent protection for information per se.

How clever is your app? A patent examiner or a court is more likely to favour an invention in which the mobile device is used to perform some relatively complex or clever algorithms. So, for example, if your app is a directory-type app, it is less likely to attract patent protection than an app that is capable of predicting stock price changes using heuristic algorithms.

Then there's the timing. It could take up to 4 to 5 years from the date of our first meeting before you achieve patent protection. Some apps have been around for that long and are proving to be very successful. Others tend to fizzle out after a few years, even if they have generated significant cash flow during that time. While it is possible to put competitors on notice once a patent application is published, it might be difficult to obtain a damages award for the period that the patent application was pending. Of course, many investors will require that you file a patent application. But if that's not your model, then you do need to bear the time factor in mind.

How will you enforce the patent, if and when it is granted? A patent application must set out a full disclosure of the invention and how it is to be enabled. However, an infringer does not have the same obligation. The app may be of the type that would indicate clear infringement just from executing the copy. But there may be cases in which you simply cannot determine whether or not your invention is being copied, even though you are losing market share.

And never forget the cost. It can be very expensive to have a patent application prepared and filed for a software product. Not only that, but the cost of prosecuting the application through to grant of a patent can also be extremely costly. This is a function of the difficulty in writing software patent specifications. It is also a function of the fact that there seems to be a large amount of prior art out there which is difficult to filter and analyse. While the examiners are improving, it can be difficult to convey an understanding of the invention to an examiner.

So, at the end of the day, think carefully before going down this route. As a general rule, unless you have a good budget or keen investors and a product that is relatively sophisticated from an algorithmic point of view, the journey will more than likely be harrowing.

20 January 2013

R&D Tax Incentives

Almost all my clients are involved in R&D according to the definition of that term by the Australian Tax Office.

In short, investigative and experimental activities qualify for the R&D tax incentive if:

  • their outcome is uncertain
  • the outcome can only be determined by experiment
  • the activities are for the purpose of acquiring new information
It is important to understand that you may be overlooking activities that you consider routine. The scheme provides a net after-tax benefit of 10 cents and up to 15 cents for companies with a group turnover of less than $20 million. Here is the link to the AusIndustry website: http://www.ausindustry.gov.au/programs/innovation-rd/rd-taxincentive/Pages/default.aspx

I'm no tax expert, but this is surely not an opportunity to be overlooked. Please do contact me if you're interested. I would be delighted to point you in right direction - barry@beagar.com.au