UK Updates Unjustified Threats Law
The recently assented Intellectual Property (Unjustified Threats) Act 2017 will replace the current law on groundless threats once it is fully enacted by way of further regulations.
The amendments bring a more uniform approach to unjustified threats across the patents, trade marks and designs legislation, and attempt to better balance the rights of IP owners with the rights of businesses to operate without being subjected to unjustified threats.
An unjustified threat claim will not be actionable where the threat is made in relation to an action or intended action that is or would be an infringement or if the alleged threat is a permitted communication. Permitted communications are communications consisting only of information necessary for either giving notice that a patent exists, discovering whether or by whom a patent has been infringed or giving notice that a person has a right under a patent, providing the communicator reasonable believes the information to be true. However, a Court will have discretion to include communications made for other purposes, provided the other purpose does not amount to:
(a) requesting a person to cease doing, for commercial purposes, anything in relation to a product or process,
(b) requesting a person to deliver up or destroy a product, or
(c) requesting a person to give an undertaking relating to a product or process.
Where a threat is actionable proceedings can be brought against the person who made the threat for:
(a) a declaration that the threat is unjustified;
(b) an injunction against the continuance of the threat;
(c) damages in respect of any loss sustained by the aggrieved person by reason of the threat.
The unjustified threats provisions will not apply to persons acting in their capacity as a professional adviser, provided they are acting on the instructions of another person and that they identify that other person.
For patents and trade marks the amendments will apply to any threats made after publication, while for designs they will apply to any threats made after application.
Entitlement to Priority Cannot be Retrospectively Assigned
In the recently published decision Tenaris Connections Ltd v Vallourec Oil and Gas France the EPO Boards of Appeal confirmed that entitlement to priority cannot be retrospectively assigned and must have been assigned for a claim to entitlement to be valid.
A PCT International application was filed in the name of Tenaris Connections AG which, amongst others, resulted in a PCT European regional phase application which was granted and validated in various EP states. However, it claimed priority from an Italian application filed in the name of Tenaris Connections BV. The assignment between to two corporations was filed shortly after the PCT International application and outside the priority period, but contained a clause specifying that the assignment had retrospective effect back to the beginning of the year. Under Italian law respective assignments are valid and under Dutch law, being the jurisdiction in which Tenaris Connections BV is registered, Tenaris Connections AG would be recognised as being the successor in title to the priority right. In earlier opposition proceedings the EPO Opposition Division considered that the clause stating that the assignment was retrospective meant that priority had been validly claimed.
However, on appeal to the EPO Boards of Appeal, it was held that the priority claim was invalid on account of the assignment being concluded after the effective filing date of the European application. While national laws might recognise the assignment as being valid or effectual, this was not the case for the purposes of the European Patent Convention. As a consequence of not being able to claim priority the patent was revoked for lack of inventive step.
United States of America
CAFC Confirms Continuing Relevance of On-Sale Bar
In Helsinn Healthcare SA v Teva Pharmaceuticals USA Inc the Court of Appeals for the Federal Circuit (CAFC) held that a conditional supply and purchase agreement that was entered into before obtaining FDA approval can invalidate on account of contravening the on-sale bar.
Nearly two years before applying for a patent Helsinn and MGI Pharma Inc entered into a licence agreement and a supply and purchase agreement in relation to pharmaceutical products that later became the subject of 4 patents held by Helsinn. Three of the patents were filed prior to the America Invents Act (AIA) and the fourth was filed afterwards. As Helsinn was still in the process of obtaining FDA approval for the pharmaceuticals, Helsinn had the option of terminating the agreements if FDA approval was not obtained. With the exception of the price terms and the specific dosage formulations the agreements were publically disclosed in a Securities and Exchange Commission filing by MGI.
In 2011 Teva filed an Abbreviated New Drug Application (ANDA) for a generic version of the pharmaceutical product along with an assertion that the patents were either invalid or not infringed. Helsinn subsequently brought infringement proceedings alleging infringement on account of the ANDA filing. Before a District Court it was both held that Teva’s ANDA infringed all 4 patents and that all 4 patents were valid. While the District Court held that the agreements constituted a sale for the three pre-AIA patents, it was held that the invention was not on-sale prior to the pre-filing grace period on the basis that the invention was not ready for patenting as it had not been reduced to practice. It further held that the invention patented under the AIA did not qualify as being on-sale on the basis that the new legislation required a public sale or offer for sale, and that this was not satisfied due to the omission of the dosage formulations from the public disclosure of the agreements.
On appeal, the CAFC concurred that the agreements constituted a sale in relation to the three pre-AIA patents as the agreements bear all the hallmarks of a commercial contract for sale. While the agreements were effectively conditional upon FDA approval, they nonetheless constituted a valid and enforceable contract as such conditionality is a basic feature of contract law.
However, the CAFC reversed the District Court’s finding in relation to the post-AIA patent. Helsinn (and the US Government) argued that the inclusion of the phrase “or otherwise available to the public” in the novelty provision of the AIA meant that the on-sale bar no longer encompasses secret sales as they do not make the invention available to the public. The CAFC rejected that argument on the basis that the AIA floor statements by Senators did not change the on-sale bar precedential law which holds that sale or offer documents do not themselves need to publicly disclose the details of the claimed invention before the critical date for the on-sale bar to apply. Publicly offering a product that embodies the claimed invention for sale is sufficient to place it in the public domain, regardless of when or whether actual delivery occurs or whether members of the public are aware that the product sold actually embodies the claimed invention. The CAFC noted the parallels with the 1829 Supreme Court case of Pennock v Dialogue. That case held that failing to hold such public sale invalidating would materially retard the progress of science and the useful arts by effectively creating a longer monopoly period for those who are least prompt to communicate their discoveries. The CAFC opined that if such a sweeping change to the on-sale bar jurisprudence had been intended by Congress it would have done so by clear language.
The CAFC then considered whether the inventions had been reduced to practice and so be ready for patenting before the critical date. Given that the formulation was made and was stable before the critical date this issue boiled down to whether Helsinn had determined whether the invention would work for its intended purpose. In this regard it was noted that the utility test in patent law is less rigorous than that used by the FDA. For patent law the invention only had to work for its intended purpose beyond a probability of failure, but not beyond a possibility of failure, and that later refinement or on-going testing does not preclude reduction to practice at an earlier date.
The CAFC held that the District Court had erred in applying an FDA level standard for utility, as the completion of Phase III studies and final FDA approval are not pre-requisites for an invention being ready for patenting. It was noted that applying the District Court’s standard would preclude the filing of meritorious patent applications in a wide variety of circumstances. Rather, in this case, the CAFC considered that the invention was ready for patenting from the final report of the Phase II trials, which were before the critical date. Consequently, the 4 patents were held to be invalid.
3. Trade Marks
Classification Practice by IB Clarified
While the Madrid Protocol has many benefits for trade mark applicants, one drawback is that WIPO examiners apply a more precise standard for allowable specifications of goods and services than is applied by most offices of contracting states. In recognition of the on-going compliance issues this creates for applicants WIPO has now produced a document outlining the classification guidelines that it applies, with the intention that it will reduce the number of non-compliant specifications.
Under Rule 9(4)(a)(xiii) of the Common Regulations the International Bureau (IB) requires the specification to be in precise terms and preferably expressed in the terms appearing in the alphabetical listings of the Nice Classification. The IB notifies the Office of Origin (and the applicant) where it does not agree with a classification or the use of a term in the specification along with its proposed remedy. Unless swayed by the Office of Origin the IB can modify the application as it sees fit. Where such modification requires the payment of extra fees, such as on account of requiring extra classes of goods or services, then the application can be marked as abandoned if the extra fees are not paid in time.
While the indications of goods and services in the alphabetical listings of the Nice Classification are not exhaustive, applications still need to be classified according to the Explanatory Notes, or, if that is not possible, in line with the principles found in the General Remarks to the Nice Classification.
It is noted that some indications of goods and services can be classified under more than one class depending on factors such as the purpose, material, function, mode of operation or degree of processing. If a particular indication can be classified in more than one class due to more than one of the above factors and only one class is specified, then the IB will raise an irregularity notice. For example: ‘doors’ would need further elaboration as they can be classified according to either their material or purpose.
The Nice Classification includes a number on general terms, which are indicated in the alphabetical listings by an * after the term. Each such general term has a natural class to which it belongs. For example ‘clothing’ is a general term with class 25 being its natural class. Where such terms are used in their natural class no further qualification is required. However, the use of an unqualified general term outside of its natural class will result in an irregularity notice from the IB.
The IB will also object to certain expressions in a specification. The expression “such as” is objected to for merely illustrating an indication and not further specifying or restricting it. The expressions “and the like” or “etc” are objected to for lacking accuracy and not allowing for a clear identification of goods or services. While the IB allows the use of class headings, the expressions “all goods” or “all other goods” or “all services” or “all other services” are too broad and will be objected to. Referencing another class in the specification is generally objected to, but may be allowed in the case of services in relation to a given class of goods. Examples of common indications that require further specification are: “manufacturing of goods”, “association services”, “kits”, “parts and fittings (or accessories)”.
Incorrect use of punctuation will result in objections where it results in a specification that is not sufficiently clear or would require reclassification. Commas should be used for listing alternatives of a category or limitation of goods or service, semi-colons for distinguishing between categories of goods or services and a full stop only at the end of each class. It should also be noted that inadvertent punctuation use can result in a specification that is clear, but unintentional.
Abbreviations or acronyms should only be used on their own where the relevant goods or services can be accurately and unequivocally identified or their use is widely known, easily understandable and unequivocal. Otherwise, they should only be given in square brackets after the full expression.
Reputation can Accrue even though Use Contrary to Law
In Auckland Agricultural Pastoral and Industrial Shows Board v Royal Agricultural Society of New Zealand an Assistant Commissioner held that an opponent can establish awareness of the marks it relies on under s 17(1)(a) of the Act even when use of those marks may have been a technical breach of other legislation.
Under section 17(1)(a) of the Trade Marks Act 2002 the Commissioner must not register as a trade mark or part of a trade mark any matter the use of which would be likely to deceive or cause confusion.
The Royal Agricultural Society of New Zealand opposed Auckland Agricultural Pastoral and Industrial Shows Board’s application to register the word mark THE ROYAL EASTER SHOW. The opposition was based on the opponent’s claimed reputation in the marks ROYAL SHOW and ROYAL NEW ZEALAND SHOW dating back to the 1920’s. In 1923 the opponent obtained permission from the relevant authority to use ‘ROYAL’. The original documentation was unable to be located, but the evidence pointed towards the opponent only being granted permission to use that word in their organisation name and not in relation the marks they claim reputation in.
The applicant had run the event known as THE EASTER SHOW since 1953, and from 1989 – 2011 the event was known and promoted as THE ROYAL EASTER SHOW after the opponent granted the applicant the right to use the word ‘ROYAL’ subject to the payment of an annual fee.
In 2011 the Ministry for Culture and Heritage advised the applicant that the opponent did not have the authority to grant the applicant the right to use the word ‘ROYAL’ as this breached the Flags, Emblems, and Names Protection Act 1981. However, by the end of 2014 the applicant received the Queen’s approval to use the word ‘ROYAL’, following which IPONZ accepted the applicant’s mark.
In the subsequent opposition the applicant asserted that the opponent could not rely upon the existing rights provisions of the Flags, Emblems, and Names Protection Act 1981 in relation the marks they claim reputation in as they did not have express permission to use the word ‘ROYAL’ for that purpose.
The Assistant Commissioner noted that the focus of section 17(1)(a) is the protection of consumers and so applies a lower threshold than section 25, which protects the rights of traders. It was further noted that according to precedent the opponent only needs to show awareness, knowledge or cognisance of its mark in order to rely on its provisions, and that it applies equally to registered and unregistered marks. Given that registration is not a prerequisite for section 17(1)(a) it is distinguishable from section 17(1)(b) which prevents the Commissioner from registering any trade mark the use of which is contrary to New Zealand law. As such it cannot be implied that the intent behind section 17(1)(b) also applies in relation to establishing reputation. In light of this the Assistant Commissioner concluded that the opponent could rely on the reputation in their marks, since whether or not the opponents use of their marks was in breach of some other legislation is irrelevant to whether the opposed mark is likely to deceive or confuse consumers.
Nonetheless, the Assistant Commissioner went on to hold that the applicant’s trade mark is not likely to cause confusion or deception amongst a substantial number of consumers, and the other 5 grounds of opposition also failed.