2024 Issue 3
1. General
Incentive to File Prior to IP Australia Increasing Many Official Fees on 1st October 2024
IP Australia has now confirmed wide ranging official fee changes that will takes effect from 1st October 2024, following its earlier consultation on its draft Cost Recovery Implementation Statement (CRIS).
Most of the standard prosecution fees increase by around 10% - 20%, although design application fees reduce. Patent hearing fees are doubled, and trade mark hearing fees are restructured. Costs awarded following proceedings will significantly increase.
The following is a summary of notable changes.
Patents
Fee Type Currently From 01/10/2024
Application Fee: (provisional) $110 $100
Optionally Requesting International-type Search $950 $1,100
of Provisional Application
Application Fee: (standard or national phase) $370 $400
Requesting Examination – Standard (if PCT $300 $350
IPER done by IP Australia)
Requesting Examination – Standard (otherwise) $490 $550
Asking Commissioner to Direct Applicant to $100 $150
Request Examination
Acceptance Fee $250 $300
Application for Extension of Term $2,000 $2,500
(Pharmaceutical Patent)
The fees for excess claims will remain unchanged. However, where examination is requested on or after 1st October 2024, IP Australia will charge for excess claims based on the number of claims in the application at the time of the first examination report (instead of at acceptance). Applicants will be notified approximately 6-months prior to examination occurring, giving them the opportunity to amend the number of claims prior to the first examination report. Following IP Australia’s determination of the excess claim fees due applicants will have 1-month to pay. If payment is not timely made the application will lapse and the examiner will not consider any responses filed to the examination report. Such lapsed applications can be revived if the excess claim fees are paid prior to the final date for acceptance. The number of excess claims will then be reassessed at the point of acceptance to capture any increase in the number of claims filed through the examination process.
The 6th year renewal fee will increase by $10 with every subsequent renewal fee increasing by a further $10, i.e., the 7th year fee by $20 and the 8th year fee by $30 and so on, until the 15th year where the annual increases are $15 each year until and including the 19th year.
All patent hearing fees are doubled.
Trade Marks
IP Australia will introduce a new fee structure for filing a Statement of Grounds and Particulars (SGP) in opposition to the registration of a trade mark/extension of protection for an international registration designating Australia. The first three grounds that are nominated will not attract a fee. However, a fee of $250 per ground above the threshold will be levied against each of the subsequent grounds nominated. Where section 44 is nominated it will count as one ground when the opponent nominates up to 10 of their trade marks. However, a fee of $250 will be charged for each extra trade mark nominated. Subsequent amendments to the SGP that increase the grounds or nominated trade marks within these thresholds will incur a fee of $250 per ground or extra nominated mark.
Requesting removal for non-use increases from $250 to $350.
Trade Mark hearing fees will change as follows:
- by written submissions only increases from $400 to $500
- oral hearing (remote) increases from $600 to $700 per day or part-day
- oral hearing (in person) decreases from $800 to $700 per day or part-day
Designs
Fee Type Currently From 01/10/2024
Application Fee: (1st Design) $250 $200
Application Fee: (Subsequent Co-Filed Designs) $200 $150
Excess Designs Fee $250 $200
Owner Requests Examination $420 $500
Direction to Request Examination $210 $250
(Third Party Component)
Direction to Request Examination $210 $250
(Owner Component)
Plant Breeder’s Rights
Fee Type Currently From 01/10/2024
Application Fee: $345 $400
Examination Fee (at a centralised testing $920 $1,400
centre (CTC))
Examination Fee (per variety if multiple varieties $1,380 $1,600
at same time and place – not in a CTC)
Examination Fee (Otherwise or based solely $1,610 $2,000
on overseas test data)
Application for Declaration of Essential Derivation $800 $850
Granting Fee $345 $500
Renewal $400 $600
Other
All fees to renew the registration as a patent and/or trade mark attorney will increase by $50.
2. Patents
No Elbow Room Given for Resmed’s Broad Nasal Mask System Claims
In Resmed Pty Ltd v Commissioner of Patents [2024] NZHC 1881 Resmed’s appeal concerning the claims of its nasal mask system was unsuccessful. The High Court of New Zealand upheld the Assistant Commissioner’s finding that the claims were not fairly based on the patent specification.
Background: The patent application in question (New Zealand Patent Application No. 786047) was filed on 10th March 2022. However, through a series of divisional filings, it was requested that the date of filing of this patent application be antedated to the date of filing of the PCT application. The PCT application had a deemed filing date that preceded the commencement of the Patents Act 2013, and so the provisions of the Patents Act 1953 applied.
Under the Patents Act 1953 the determination of whether the claims go beyond the disclosure in the specification is assessed on the basis of whether the claims are fairly based on the matter disclosed in the specification. In comparison, the Patents Act 2013 requires the claims to be supported by the matter disclosed in the complete specification, which is a higher hurdle to clear.
The classic test for fair basis is the test that was formulated in the UK Patents Appeal Tribunal decision Mond Nickel Co Ltd’s Application [1956] RPC 189. The test expounded therein involves considering whether the complete specification is fairly based on the provisional specification. However, it is accepted that with some rewording the Mond Nickel test also applies for considering whether the claims are fairly based on the complete specification. This involves answering the following three sequential questions:
(a) Is the alleged invention as claimed broadly described in the body of the specification?
(b) Is there anything in the body of the specification which is inconsistent with the alleged invention as claimed?
(c) Does the claim include as a characteristic of the invention a feature as to which the body of the specification is wholly silent?
New Zealand Patent Application No. 786047 concerned a nasal mask system for treating and/or preventing respiratory disorders, including sleep disordered breathing. See example embodiment here. The complete specification described a part between the air delivery tube and the patient interface as an ‘elbow’, but in the claims it was referred to as a “connector”. The part is referred to as number 125 in the above example embodiment.
The glossary section of the complete specification defined elbow as:
A conduit that directs an axis of flow or air to change direction through an angle. In one form, the angle may be approximately 90 degrees. In another form, the angle may be less than 90 degrees. The conduit may have an approximately circular cross-section. In another form the conduit may have an oval or rectangular cross-section.
During examination Resmed asserted that fair basis for the use of the term “connector” in the claims could be found in paragraph [000248] of the complete specification, which stated:
[000248] The elbow may be referred to as an adaptor, connector or may be described as any element attach [sic] an air delivery tube to a patient interface.
The examiner maintained the fair basis objection finding that paragraph [000248] merely shows that the elbow may be referred to, in a functional sense, as an adaptor, connector or element for attachment, but it is still an elbow shape. The examiner found that the complete specification requires the part in question to have an inherent bend and so use of the term “connector” would be too broad as connectors can be straight and so are not synonymous with the term “elbow”.
Assistant Commissioner’s Decision: In the subsequent (unpublished) Assistant Commissioner (AC) decision the AC applied the modified Mond Nickel test. Regarding the first step the AC agreed with Resmed that the invention as claimed is broadly described in the body of the complete specification, accepting that an elbow has the functional characteristics of a connector. However, in considering the second step of whether there is anything in the body of the specification which is inconsistent with the alleged invention as claimed, the AC found that there is an inconsistency between the complete specification’s use of the term “elbow” and the claim’s use of the term “connector”. In arriving at that conclusion the AC considered both the noted glossary definition of “elbow” along with the ordinary dictionary definitions and found that the connector referred to in paragraph [000248] can only be in the shape of an elbow and that the paragraph is only specifying what function the elbow must perform. The AC also noted that there are numerous references in the complete specification to the purpose of the elbow shape being to decouple drag forces from the patient interface, which assists in maintaining the seal of the mask to the patient. Having answered step of the modified Mond Nickel test in the affirmative it was not necessary to consider the third step and the AC held that claim one and all dependent claims were not fairly based on the original complete specification.
High Court Appeal: Resmed’s appeal to the High Court centred around the AC’s assessment of step two of the modified Mond Nickel test. Resmed sought to downplay the importance of an angled elbow shape submitting that it is unnecessary to use that shape to realise or attain the invention, with the venting arrangement being the inventive concept of the claims. Resmed submitted that the references to “elbow” in the complete specification including the drawings contained in it, should be regarded as merely illustrative and not limiting. Resmed also submitted that the fair basis test should only be applied to the entire claim, not its constituent parts and that the fair basis test needs to be applied in a way that acknowledges that there does not need to be identity of language between the body of the complete specification and the claims since otherwise there would be no need for a fair basis test at all.
The Judge rejected Resmed’s submissions, finding that it would be clear to a person skilled in the art that the complete specification discloses the use of an elbow, rather than a more generic form of connector, and indicates the advantages of using an elbow and the disadvantages of not using an elbow. The Judge agreed with the AC’s conclusion that the element coupling the air delivery device to the mask was only disclosed and contemplated as being in the form of an elbow, with the result of the complete specification being inconsistent with a claim extending to any and all forms of connector. While two of the preceding divisional applications had been granted in this New Zealand patent family, neither of the claims of those granted patents use the broader term “connector” to define the component connecting the mask to the air delivery tube.
Accordingly, that was sufficient for the Judge to make a finding of lack of fair basis due to the claims going beyond the disclosure in the complete specification. However, the Judge further reinforced that conclusion by finding that the complete specification is silent on whether a general connector may be used to form the flow path of gases from the air delivery tube to the mask. As with the examiner and the AC, the Judge found paragraph [000248] only related to different words that can be used to describe an elbow.
Concluding Remarks: The Judge’s decision noted the public interest factors underpinning the fair basis requirement, including fairness to competitors who make decisions based on what is contained in the patent specification. Such public interest factors were further prioritised under the Patents Act 2013, which has the higher hurdle of requiring the claims to be supported by the disclosure in the patent specification.
This case highlights the importance of using consistent and precise terminology in patent specifications. Ensuring that the terms used in the claims align with those in the specification is essential for avoiding potential challenges.
Initial steps such as reviewing your patent specifications for consistent terminology, ensuring alignment between the claims and the body of the patent specification, and conducting initial searches for relevant patent publications in your field can all be highly valuable. Focusing on clarity and precision to secure robust and defensible patents can ultimately save time and money in the long run.
Judge Allows Patent Divisional Deadline Reprieve But Legislative Change Preferable
A recent High Court decision provides some hope to applicant’s who seek to correct an error when their patent application missed a deadline due to no fault of their own.
In NXT Building System Pty Ltd v Commissioner of Patents 2024 NZHC 2141 the High Court Judge allowed NXT’s appeal of an Assistant Commissioner’s decision which had refused NXT’s request to correct their Australian attorneys’ error of not requesting postponement of acceptance of a New Zealand PCT national phase application, which resulted in the inability to file divisional applications.
Background: For a fuller discussion of the background and the Assistant Commissioner’s (AC’s) decision (NXT Building System Pty Ltd 2023 NZIPOPAT 15) please see our earlier article: Divisional Deadlines Still Between a Rock and a Hard Place. For present purposes the following background details provide context for the Judge’s decision.
Section 34 of the Patents Act 2013 requires divisional applications to be made prior to acceptance of the parent application. It is possible to postpone acceptance by up to 12-months from the date of the first examination report, and it is considered good practice to request postponement of acceptance when filing a patent application, in order to prevent the option of filing a divisional application being foreclosed by the issuing of a Notice of Acceptance. A further factor requiring early consideration is regulation 71(a) of the Patents Regulations 2014, which creates a five-year deadline to request examination of both the parent application and any related divisional applications.
On the 7 April 2015 NXT filed a PCT application that claimed priority from six Australian provisional applications filed 12-months earlier. It was always NXT’s intention after entering PCT national phase in its selected jurisdictions to protect all six inventions by filing five divisional applications in each jurisdiction. The application entered national phase in New Zealand as patent application 726018, but a request for postponement of acceptance was not filed. The 5-year deadline for requesting examination of application 726018 and any divisional applications was 7 April 2020. A request for examination of 726018 was filed on 13 February 2020, but no request for postponement of acceptance was filed at that time either. When application 726018 was accepted on 15 March 2022 no divisional applications had been filed and the option for filing any divisional applications was no longer available since a Notice of Acceptance had been issued and no request had previously been made to postpone acceptance.
It was only following acceptance of application 726018 that the responsible attorney realised the issue, and, on 30 March 2022, filed five divisional applications and sought an extension of time for filing the requests for examination, on the basis of exceptional circumstance under regulation 147. IPONZ declined the extension of time request. A correction of error under section 202 was then sought on the basis that there was an error or omission in not requesting a 12-month postponement of acceptance.
AC’s Decision: The AC accepted that the failure to request postponement of acceptance was an error or omission. However, the AC declined to exercise their discretion to allow correction of the error on the basis that doing so would bypass or nullify the regulation 83(2) requirement that the Commissioner must be notified of a request to postpone acceptance under section 75(1) before the application is accepted. The AC distinguished previous section 202 postponement of acceptance decisions where the correction of error requests were allowed from the scenario in question, on the basis that in the prior decisions the correction of error requests were made before acceptance.
Although not required to do so, the AC went on to consider if the extension of time under regulation 147 would have been granted had the application for correction of error been allowed. The AC accepted that the evidence showed the failure to request examination was due to a combination of circumstances that qualify as unusual or exceptional for regulation 147 purposes. While those circumstances involved the attorney failing to act with due diligence and prudence the AC found that such failure did not preclude the discretion to allow an extension of time under regulation 147.
Judge’s Decision: The Judge allowed the appeal, emphasising that the focus should be on the consequences of making the decision having regard to the purposes of the Act, including the effect on the interests of the patent holder, any impact on the interests of third parties, and the potential effect on maintaining an efficient and effective patent system.
The Judge found that the balance of competing interests favoured correction, namely because: NXT’s clear intentions were not carried out by its attorneys with the result that, if the error was not corrected, they would lose valuable property rights; NXT and its attorney acted quickly when they discovered the error; there was no prejudice to third parties if the correction was made, and in any event, any potential prejudice to third parties could be cured by requiring publication of the proposed correction pursuant to s 202(3); there had been no other non-compliance with the legislative requirements; while the degree of the non-compliance with legislative requirements might be a relevant factor, it was not a material or decisive factor in this case when considered in isolation from the conduct that led to the errors.
The Judge did not accept the Commissioner’s finding that the degree to which the applicant or its agents are at fault is an irrelevant consideration, because too readily correcting errors when attorneys do not have reasonable systems in place, or have otherwise acted incompetently, could undermine the statutory purpose of providing an efficient and effective patent system. The Judge stated that applicants and their attorneys should be incentivised to ensure that they invest in and maintain reasonable systems and instruct and employ competent practitioners. However, in this case, there were extreme personal circumstances that led to the attorney’s error, hence this factor did not outweigh the other matters that favoured correction of the error.
Concluding Remarks: The Judge’s findings will be welcomed by patent applicants, and patent practitioners alike. As discussed in our previous article, New Zealand’s legislation regarding the filing of divisional patent applications is out of step with other jurisdictions and presents difficulties for both patent applicants and practitioners, that can have significant impacts on important property rights if things go wrong. While this decision provides a welcome step in the right direction, ultimately, legislative and/or IPONZ policy changes need to be considered in order to more properly safeguard the rights of patent applicants.
3. Trade Marks
The Cost of Trade Mark Non-Use – Duelling Over Crocodile Marks Continues
In Lacoste v Crocodile International Pte Limited 2024 NZHC 1333 the Judge confirmed that pleading non-use puts both genuine use and use as a trade mark in issue and that pleading non-use in respect of all goods and/or services does not preclude a finding of partial revocation.
Background to the Duelling Crocodiles – Draining the Swamp: The case is part of on-going proceedings between the parties over a composite mark containing a stylised version of the word Crocodile and a left-facing curved crocodile that was initially created by the owner of a predecessor entity of Crocodile International.
Lacoste was the first to use a (right-facing curved) crocodile device as a trade mark in respect of clothing items. However, it was Crocodile Garments Ltd, a predecessor entity of Crocodile International, that in 1963 first registered a crocodile device mark in New Zealand, being the above noted composite mark containing a left-facing curved crocodile. However, the mark being the subject of that registration (70068) was not used in New Zealand. This prompted Lacoste to file a non-use revocation proceeding against registration 70068 in 1999 and, as part of a wider global settlement agreement between the parties, in 2003 Crocodile Garments assigned registration 70068 to Lacoste. Lacoste had begun using a right-facing curved crocodile device trade mark in New Zealand in 1983, but it was only in 2005, subsequent to the settlement agreement, that it was able to achieve registration in class 25 for its right-facing curved crocodile device trade mark in New Zealand.
However, Lacoste also did not use the 70068 subject mark in New Zealand. Indeed, it became apparent during the subsequent proceedings that Lacoste’s purpose in acquiring the mark from Crocodile Garments was to preclude its use in the New Zealand market. This enabled Crocodile International in 2008 to apply for revocation of registration 70068 on the basis of non-use. Likely in anticipation of registration 70068 being revoked, prior to the Assistant Commissioner’s (AC’s) decision, Lacoste made two applications (837027 and 978868) for the identical mark covering the identical goods (articles of clothing) in class 25, and both applications were accepted. Crocodile International opposed application 837027 and filed an invalidity action against 978868 after it was registered in December 2013, although this was later dropped after being replaced by a non-use revocation action in April 2018.
In February 2014, the AC’s decision regarding registration 70068 issued, holding that it be revoked for non-use on the basis that Lacoste could not claim use of that registration via its use of its right facing curved crocodile device. On a global appreciation approach, the AC held that section 7(1)(a) of the Trade Marks Act 2002 was not available to Lacoste as Lacoste’s use of its right-facing curved crocodile device was use in a form differing in elements that alter the distinctive character of the 70068 mark.
While Lacoste’s appeal of that decision was pending, the same AC issued their decision in the opposition against application 837027 by Crocodile International. The opposition had two main asserted bases: (i) a claim that use of the device would amount to copyright infringement as it claimed copyright was not assigned with the trade mark; and (ii) that Lacoste had no intention of using the mark. The AC held that (i) was statutorily precluded by clause 28 of schedule 1 of the Copyright Act 1994, which denies copyright to artistic works created before 1st April 1963 that constitute a design capable of registration under the Designs Act 1953 and which have been multiplied by an industrial process. Regarding basis (ii), the AC decided that while an application is prima facie evidence of intention to use, this was displaced by Lacoste’s pleadings, which shifted the onus to them to establish that use of its right-facing curved crocodile device supports an intention to use the left-facing composite mark. In line with their decision regarding registration 70068, the AC held that Lacoste had not displaced that onus due to material differences between the device marks.
However, the AC’s decision to revoke registration 70068 was successfully appealed, with the High Court Judge agreeing with Lacoste’s contention that the central message of both the left and right-facing trade marks was the same. In the context of the similarities, the differences were held to be minor and did not alter the distinctive character of registration 70068, with the Judge finding that an average consumer would conclude that the different marks are associated with the same manufacturer.
While Crocodile International’s appeal of that decision was pending Lacoste also successfully appealed the AC’s decision in the opposition to application 837027. The Judge upheld the finding that copyright in the device was statutorily precluded, adding that even if copyright existed the facts and circumstances supported an implicit agreement to Lacoste’s use of the mark. The Judge also rejected the AC’s finding that Lacoste’s pleadings suggested a lack of intention to use on the basis that it sets the bar for such a finding too low, instead finding that Lacoste’s history of using various crocodile marks reinforces the prima facie presumption of intention to use that applicants enjoy.
The April 2016 Court of Appeal decision regarding revocation of registration 70068 also went in Lacoste’s favour. The Court of Appeal agreed with the High Court that the central idea and message was retained despite minor differences and that informs the likely impact of the mark on the average consumer taking into account the visual, aural and/or conceptual qualities of the mark.
The February 2017 revocation ruling by the Supreme Court reversed and agreed with the AC, finding that the central message approach both risks ignoring or downplaying potentially significant visual differences between trade marks and can lead to greater uncertainty in the case of trade marks that may be taken to have multiple messages. In rejecting the ‘central message’ approach they held that it risks over-extending the penumbra of protection for a trader and so is contrary to the policy of not clogging the register. Instead, the correct approach was to assess the differences between trade marks in terms of distinctive character, which involves a global appreciation of the visual, aural and conceptual qualities of the trade mark.
The Supreme Court decision noted at [20] that the opposition to application 837027 was before the Court of Appeal. No decision issued from that appeal, and application 837027 was voluntarily withdrawn in January 2018. However, Lacoste still had registration 978868 for a mark and goods identical to the revoked registration 70068, although Crocodile International filed a non-use revocation action against registration 978868 in April 2018.
More to Chew Over or a Case of Crocodile Tears?: The current case involves an appeal from a direction issued by the AC regarding pleadings and admissibility issues in the non-use revocation action against registration 978868. Lacoste alleges Crocodile International's written submissions prior to the scheduled hearing raised new grounds. Crocodile International’s non-use pleadings recited the text of section 66(1)(a). While that is standard practice, Lacoste argued that they had not been put on notice that they needed to demonstrate ‘use as a trade mark’, and considered that the pleading only required them to demonstrate genuine or non-token use. They also argued that partial revocation had not been pleaded.
IPONZ declined Lacoste’s application to be heard on the matter, but instead agreed to a Case Management Conference (CMC), where the AC concluded there was no defect in Crocodile’s pleadings and no basis upon which to grant Lacoste leave to file further evidence of its use of the registered mark. The AC then directed the substantive hearing on the revocation application should proceed without delay.
Lacoste appealed the AC direction, while Crocodile sought to strike out the appeal on the basis that an appeal can only be made from a decision, not a direction. Crocodile also described Lacoste’s application for leave to file further evidence on appeal as an attempt to circumvent the high threshold and strict procedural requirements for filing evidence out of time before the IPONZ. The Judge noted that the regulations distinguish between a decision and a direction, but considered it is the substance of the determination that is important when considering the right to appeal. While stemming from a CMC rather than a hearing, the Judge held that the AC still effectively issued a decision that Lacoste had a right to appeal from, and further noted that appealable decisions include substantive issues and mere procedural rulings.
The Judge agreed with the AC’s determination that Crocodile International’s non-use pleading put both genuine use and use as a trade mark in issue. The Judge also found no merit in Lacoste’s contention that partial revocation needed to be additionally pleaded as it would prevent the Commissioner or the Court from making a partial revocation ruling if revocation had been sought for all goods and/or services. Given those findings, the Judge declined Lacoste's request to admit additional evidence. While that evidence was relevant and cogent, it was not fresh and there was no exceptional reason to allow late filing.
Anything Gained or Lost?: Given the Supreme Court’s ruling in respect of an identical mark and goods, and Lacoste’s reluctance to use the left-facing composite mark, it looks like it will soon be game, set and match to Crocodile International in respect of the revocation of that mark. Given Lacoste’s extensive and continuous prior use rights in its right-facing curved crocodile device marks, it needs to be asked what Crocodile International seeks to gain from this battle.
In November 2013, Crocodile International filed application 988410 for a refreshed version of the left-facing curved crocodile composite mark in class 25 for clothing, footwear and headgear, and this remains unexamined and in abeyance. Once registration 978868 is revoked, Crocodile International will have a strong case for ownership of that device mark given its differences to the versions Lacoste uses (and the expired copyright). However, will Crocodile International be able to register application 988410 or use it in respect of clothing without Lacoste suing for infringement? While the left and right-facing marks are not similar enough for one to constitute use of the other, they are arguably similar enough for the lesser standard of causing deception or confusion. Lacoste will also likely be able to utilise the enhanced protections available for well known marks.
This is not to say that Lacoste has established a monopoly in respect of crocodile or alligator device marks in New Zealand in relation to clothing, footwear and headgear. Currently, there are 7 other owners of registrations in class 25 that have been classified as containing crocodile or alligator devices, but none of those registrations are sufficiently similar to the marks involved in the long running proceedings between Lacoste and Crocodile International.