In review: key recent IP developments and trends in Australia

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Recent developments

The Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth) (the PC Act 1) was geared towards an appropriate balance between encouraging innovation and investment in inventiveness and creativity, and access to ideas and products. It amended the Designs Act 2003 (the Designs Act), Patents Act 1990 (the Patents Act), Plant Breeder’s Rights Act 1994 (the PBR Act), Trade Marks Act 1995 (the Trade Marks Act), Copyright Act 1968 (the Copyright Act) and the Olympic Insignia Protection Act 1987 (the Olympic Insignia Protection Act). The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Regulations amended the Patents Regulations 1991 (the Patents Regulations), Trade Marks Regulations 1995 (the Trade Marks Regulations), Designs Regulations 2004 (the Designs Regulations) and Plant Breeders Rights Regulations 1994 (the PBR Regulations).

The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 (Cth) (the PC Act 2) further amended the Designs Act, Patents Act and Trade Marks Act and began phasing out the innovation patent system.

i Patents

The last day on which an innovation patent could be filed was 25 August 2021, unless filed as a divisional patent from an existing patent. Existing innovation patents will continue to be enforceable until their expiry.

Following assent of the PC Act 2, an objects clause was also introduced into the Patents Act, which states that it provides ‘a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public.’ Section 15AA of the Acts Interpretation Act 1901 states: ‘In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.’ This is proving to be significant in guiding judicial understanding and interpretations (it was referred to in important recent patents decisions such as Thaler (AI and inventorship) and Calidad (patent exhaustion), which are described below in Section V).

Other measures introduced with the PC Act 2 include clarification about when and how Crown use for patents and designs may be invoked; replacing the ‘reasonable requirement of the public’ test with a ‘public interest’ test for compulsory licensing; and amending the Patents Act (and Trade Marks Act) to improve, streamline and modernise the administration of the Australian IP system, in terms of seals being kept in electronic form, provision for technical correction of ‘omnibus claims’ in patent specifications and removal of the requirement to file a certificate of verification for most patent documents.

In May 2021, the Australian Government proposed the introduction of a ‘patent box’ regime to encourage investment in Australian medical and biotech advances. The regime proposes to incentivise investment in these areas by taxing income derived from Australian medical and biotech patents for inventions developed in Australia at 17 per cent (instead of the usual 30 per cent corporate tax rate and 25 per cent tax rate for certain small and medium-sized enterprises).

ii Designs

There have been other recent important legislative changes to the Designs Act 2003 (Cth), with some of the legislative changes having taken effect from 11 September 2021 with the balance to take effect on 10 March 2022. The amendments introduced through the Designs Amendment (Advisory Council on Intellectual Property Response) Act 2021 have clarified the standard for assessment of design registrability and infringement from an ‘informed user’ to someone who is ‘familiar’ with the product. Key amendments also include the introduction of a 12-month grace period and a prior use defence, and the ability of an exclusive licensee to commence design infringement proceedings.

iii Trademarks

The most recent major developments in trademark law were introduced in 2013 as part of the Raising the Bar Act. These included alternations made to opposition procedures and timelines. In addition, amendments were made through Section 41(1) to provide for the rejection of a trademark if it is not capable of distinguishing the applicant’s goods and services from the goods or services of other persons.

The PC Act 1 amended the Trade Marks Act to include a new Section 122A providing for exhaustion of a registered trademark in relation to goods, and removal of the references to ‘goods’ in the then existing Section 123 (this section now applies to services, not goods). Section 122A can apply to goods to which a trademark has been attached by or with the permission of relevant persons, including the registered owner or authorised user and anyone they allow to use it. To rely on the section as a defence to infringement, ‘reasonable inquiries’ must be made that show that, ‘at the time of use, a reasonable person, after making those inquiries, would have concluded that the trade mark had been applied to, or in relation to, the goods by, or with the consent of a (relevant) person’, thus facilitating parallel importation (or limiting a trademark owner’s potential action in terms of parallel imports) of goods with registered trademarks.

iv Copyright

In 2018, the website blocking regime that was first introduced in 2015 was broadened to include websites that have the primary effect of facilitating copyright infringement, to extend the regime to enable site blocking orders to be made against search engines and to permit court orders to be extended by agreement to further domain names, URLs and internet protocol addresses where identified after an earlier injunction is ordered.

Also in 2018, the Copyright Amendment (Service Providers) Act 2018 expanded the operation of the ‘safe harbour scheme’ under Division 2AA (formerly limited to internet service providers (ISPs)) to a broader range of service providers in the disability, educational and cultural sectors.

The government is currently in the consultation phase of proposed reforms to copyright law to improve access to copyright material by introducing a limited scheme for the use of ‘orphan works’, a new fair dealing exception for non-commercial quotation, and amendments to the libraries, archives and educational exceptions and the exceptions for government use.

Trends and outlook

Recent decisions about intellectual property at examination levels and within litigious proceedings reveal a general trend pointing to decision-makers’ concerns about ensuring there is an appropriate balance between owners’ and ‘user’ rights within an economic climate and policy settings that are intended to be pro-competition or anti-monopolistic. There is an increasingly discernible tendency away from computer-implemented inventions being patentable in Australia.9 A similar trend around the limits of intellectual property owners’ rights generally can also be tracked within recent developments in other areas of intellectual property, such as trademarks, designs, copyright and related rights.10

i Patents

Significant controversies under patent law include the treatment of computer-implemented inventions, AI-based inventions and embracing of the doctrine of exhaustion in patent law replacing over 100 years of implied licence doctrine.

Computer-implemented inventions

Computer-implemented inventions continue to be an area of uncertainty under Australian patent law. Under Australian law, a patentable invention is one with a claim to ‘a manner of manufacture within the meaning of Section 6 of the Statute of Monopolies’.11 Although this does not pose any difficulty in relation to many types of patents, this has not been the experience with computer-implemented inventions. Although there is no statutory exclusion of computer-implemented inventions from patentable subject matter, in practice, Australia courts have tended to apply a de facto exclusion.

Since 2014, the Federal Court has heard a number of cases in which computer-implemented inventions had sought patent protection. Frequently, the cases have involved challenges brought by or against the Commissioner of Patents.12 In Research Affiliates, a patent for sampling a weighted portfolio of assets (such as shares) into an index by reference to criteria other than share price, market capitalisation or equal weighting has been held to be invalid for lack of satisfying the requirement in Section 6 of the Patents Act. The same result followed in Commissioner of Patents v. RPL Central in relation to a patent for a method for gathering evidence relating to an assessment of an individual’s competency relative to a recognised qualification standard.13

This was followed by Encompass Corp v. Infotrack,14 in which an enlarged bench of the Full Court of the Federal Court held that a patent for a method of undertaking searches over multiple, remote databases and displaying results in an interactive network representation, which was used as a functional element to perform a subject search of another remote database, did not disclose a manner of manufacture. Three subsequent cases (Repipe, Watson and Rokt)15 fell the same way. More recently, in Aristocrat v. Commissioner of Patents,16 a single judge of the Federal Court found that four innovation patents claiming the same components of a gaming machine operated to produce a result qualified as eligible, an appeal from which to the Full Court reversed the result and by majority restated the test for eligibility in terms different from those previously adopted by the courts.17 An application for leave to appeal to the High Court of Australia is pending and is expected to be dealt with in 2022.

Artificial intelligence

In 2021, Australia became one of the few justifications in which a court ruled in favour of an application of a patent made in the name of artificial intelligence. In Thaler v. the Commissioner of Patents, a judge of the Federal Court found that ‘an inventor as recognised under the Act can be an artificial intelligence system or device’ (at [226]). Noting that ‘such a non-human inventor can neither be an applicant for a patent nor a grantee of a patent’ (at [226]), the judge determined that ‘so to hold is consistent with the reality of the current technology. It is consistent with the Act. And it is consistent with promoting innovation’ (at [226]).18 The appeal in the Thaler litigation has recently been heard by an enlarged bench of the Full Court of the Federal Court of Australia and a decision is expected in 2022.

Patent exhaustion

In 2020, in Calidad v. Seiko Epson Corporation,19 the High Court of Australia delivered a decision that Australia would no longer adopt the historical doctrine of implied licence and would instead follow the doctrine of exhaustion on first sale. In a fundamental shift in the law that had stood for more than 100 years, the High Court allowed an appeal from the supplier of remanufactured printed inkjet cartridges that had been found to have infringed patents held by Seiko Epson. A primary judge had previously held that some of the modified cartridges infringed the patents because they could not be considered reasonable repair. On appeal, the Full Court overturned the decision and held that all forms of modification and resupply of the used cartridges fell outside the implied licence to repair. The majority of the High Court held that the doctrine of exhaustion on first sale was to be preferred because of the ‘virtues of logic, simplicity and coherence with legal principle’.20 The decision in Calidad has triggered likely legislative reform around the rights of consumers and businesses to repair products without interference from intellectual property owners.

ii Trademarks

Ongoing questions about the extent to which a trademark owner can control its use and the appropriate characteristics of a sign such that its ownership or monopolisation is warranted in the first place continue to emerge around issues such as use in connection with social or industrial purposes, comparative advertising and descriptive use.

Use in connection with social, political or industrial purposes

In AGL Energy Limited v. Greenpeace Australia Pacific Limited [2021] FCA 625, the Federal Court of Australia (Burley J) determined that Greenpeace Australia Pacific Limited’s (Greenpeace) use of AGL Energy Limited’s (AGL) logo in a campaign (calling AGL ‘Australia’s biggest climate polluter’), along with posters featuring phrases such as ‘Australia’s dirtiest company’ and ‘Australia’s greatest liability’, was satirical fair dealing and, consequently, did not amount to use of a trademark.21

The court denied AGL’s application for interlocutory orders restraining Greenpeace from using its trademark or copyright works and found that the altered logo did not constitute trademark use. Similarly, the satirising of the logo, amounting to ridicule, did not constitute trademark use (at [63]).

Comparative advertising

The efficacy of the comparative advertising defence in the Trade Marks Act, in particular, will be of interest in terms of the appeal of Allergan Australia Pty Ltd v. Self Care IP Holdings Pty Ltd [2021] FCAFC 163, in which a three-member bench of the Full Federal Court of Australia overturned the decision of a single judge of the Federal Court (Stewart J), which judgment dismissed Allergan Australia Pty Ltd’s (Allergan) lawsuit alleging that Self Care IP Holdings Pty Ltd (Self Care) infringed its ‘Botox’ trademark with Self Care’s ‘Freezeframe Protox’ mark.

In overturning the primary judge’s decision, the Full Court said that he had asked the wrong question in deciding whether consumers would be confused between Botox and Protox and should have asked whether confusion would have arisen as to the source of the products.22 The Full Court found Protox and Botox ‘so nearly’ resembled each other that there was a ‘real risk’ that consumers would think that the products came from the same company.23 The court also found that Self Care was using ‘instant Botox alternative’ as a trademark.

Descriptive use

Recent cases that serve as illustrative examples of ongoing issues within Australian trademark law about the contours of descriptive use at all stages of the ‘life’ of the mark include a2 Milk,24 Victoria Coffee and Urban Pale Ale. The delegate in the Australian Trade Marks Office who determined recently that ‘Victoria Coffee’ was not registrable described how the name did not distinguish the product from other coffee businesses from the Australian state of Victoria and, ‘as such, the registration would potentially impair the rights of other traders to honestly use what is a highly descriptive term in relation to coffee products’ (at [28]).25

In Urban Alley Brewery Pty Ltd v. La Sirène Pty Ltd [2020] FCAFC 186, the Full Federal Court of Australia upheld the primary judge’s decision and dismissed the appeal of Urban Alley Brewery Pty Ltd (Urban Alley), which had sued La Sirène Pty Ltd (La Sirène) for infringement of its trademark comprising the words ‘urban ale’. The single judge of the Federal Court of Australia found that the use of ‘urban’ was as a ‘laudatory epithet to describe inner-city craft breweries, their beers and their target market’26 and is associated with ‘craft beer products and breweries’ and ‘does not have any particular significance in terms of beer style or flavour characteristics and was a very generic term used to describe the location of a brewery or its target audience’.27 La Sirène’s application to have the ‘urban ale’ trademark cancelled because it was not capable of distinguishing between goods was upheld.

iii Copyright

Following the seminal decision of the High Court in IceTV v. Nine,28 the extent to which commercial data and information works are protected under Australian copyright law remains uncertain. In IceTV, certain members of the court identified the potential difficulty in protecting works in which authors utilised computer technology without the benefit of a deeming provision akin to Section 9(3) of the UK’s Copyright, Patents and Designs Act 1988. Subsequent decisions have revealed the extent of the gap left by this decision. It is likely that some legislative response will be required as these works become increasingly commercially valuable.

Online infringement of entertainment content (music, sound recordings, films) was previously addressed through a series of actions for infringement brought against the operators of websites, platforms, peer-to-peer lending platforms and Australian ISPs. After the decision of the High Court in Roadshow Films v. iiNet,29 fault-based claims against ISPs ceased to be pursued, and the focus shifted to the enforcement of the ‘no fault’ site blocking scheme under Section 115A of the Copyright Act. The site blocking scheme has been used successfully by a variety of copyright owners in the entertainment industry, against a variety of online infringing services, largely without opposition and often with the cooperation of Australian ISPs.



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