Issue 270 | 29 October 2008 |
Article written by David Clark, Partner at Blake Dawson.
In Delnorth Pty Ltd v Dura Post (Aust) Pty Ltd, Gyles J considered infringement of the applicant's three Australian innovation patent numbers 2005100978 (Patent No. 1), 2006100297 (Patent No. 2) and 2006100696 (Patent No. 3). The respondent cross claimed for invalidity of each of the three innovation patents on numerous grounds including s 18(1A) of the Patents Act 1990 and whether the invention as claimed involves an innovative step.
This is the first decision where an Australian court has considered the innovative step introduced into the Patents Act from 24 May 2001 by the Patents Amendment (Innovations Patent) Act 2000 (Cth). By way of background, the innovation patent system was introduced to provide a patent for what the Advisory Council on Intellectual Property (ACIP) referred to as “lower level inventions”.
The intent of the amended legislation is to provide the innovation patent as an incentive to innovate in areas which previously may not have been considered sufficiently inventive to qualify for a standard patent. The scope and protection provided by the innovation patent is essentially the same as the standard patent except it has a shorter term of eight years and is limited to five claims only.
Delnorth Pty Ltd (Delnorth) alleged infringement by Dura Post (Australia) Pty Ltd (Dura Post) of the three innovation patents. Dura-Post manufacture and sell roadside posts known as “Flexi Steel” posts. The invention as defined in each of the innovation patents is limited to a roadside post formed of sheet spring steel and being elastically bendable through 90 degrees. It is understood that this characteristic allows a roadside post to be driven over and return to its original vertical position. The independent claims of Patent No. 1 and 3 are further limited to a “marker hole” and a “surface coating”, respectively.
The court found that the “Flexi Steel” posts infringed at least the independent claims and the majority of the dependent claims of all three of the innovation patents. His Honour held that claims 1 and 2 of the broadest Patent No. 2 and claims 1 and 2 of the “surface coating” Patent No. 3 invalid for lack of an innovative step. On the other hand, Patent No. 1, having the additional feature of the “marker hole”, was considered valid with the requisite innovative step.
Section 7(4) of the Patents Act defines an innovative step as follows:
“7(4) For the purposes of this Act, an invention is to be taken to involve an innovative step when compared with the prior art base unless the invention would, to a person skilled in the relevant art, in light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, only vary from the kinds of information set out in subsection (5) in ways that make no substantial contribution to the working of the invention.”
Section 7(5) then goes on to define the prior art base as covering both public documents and information made publicly available by use anywhere in the world.
Gyles J in considering whether the invention as claimed involved an innovative step formulated a two step process, namely:
1. compare the invention as claimed in each claim with the prior art base and determine the difference or differences
2. look at those differences through the eyes of a person skilled in the relevant art in the light of common general knowledge as it existed in Australia before the priority date of the relevant claim and ask whether the invention as claimed only varies from the prior art base in ways that make no substantial contribution to the working of the invention.
In interpreting the phrase “in ways that make no substantial contribution to the working of the invention”, His Honour discussed the decision of the High Court in Griffin v Isaacs from which s 7(4) has been taken virtually verbatim. It was emphasised that the differences from the prior art are to be examined in terms of the working of the invention as claimed and the degree or extent to which the claimed invention varies from the prior art base is largely irrelevant. That is, Gyles J explained that although a variation from the prior art base may be slight, if it makes a substantial contribution to the working of the invention, then there is an innovative step.
The judge, Gyles J, considered “substantial” in the phrase “make no substantial contribution to the working of the invention” to mean a “real” or “of substance” contribution. In comparing the claimed invention with the prior art of plastic or PVC posts, His Honour explained that in making an inquiry as to an innovative step, it is inappropriate to question whether flexible sheet steel is better than flexible PVC. Rather, it is more relevant to ask whether the use of sheet spring steel makes a substantial contribution to the working of the roadside post. In this case it was decided that the different material contributes substantially to the manner in which the roadside posts as claimed performs and as such there was considered to be an innovative step in light of the prior art plastic posts.
The court in considering the “marker hole” of Patent No. 1 felt that this difference from the prior art was considered to constitute a sufficient difference to have an innovative step on the basis that the marker hole made “a real contribution which is of substance to the working of the invention” (underlining added). The embedding of the post in the ground was considered a significant aspect of the operation of the roadside post and the maker hole was considered an essential ingredient in performing this function. On the other hand, in considering the “surface coating” of Patent No. 3, it was found that there was no innovative step. This finding was on the basis that the surface coating, although contributing in a functional sense, did not provide a significant enough contribution.
It appears as though the court, in considering innovative step, has followed the recommendation of ACIP in providing protection for lower level inventions. If an invention is not eligible for a standard patent where it fails the test for an inventive step, then an innovation patent may provide an alternate solution. Having said that, it is clear from at least this decision that resolution on what makes a substantial contribution to the working of the invention is likely to be subjective and will depend largely on expert evidence.
Further information on the author, David Clark, can be found here.
There was no doubt that the respondent in the following decision had blatantly copied the applicant's manual used in conjunction with their training seminars. As such, the applicant elected for an account of profits for the infringement. The respondent argued however, that his labour costs should be deducted from the profit made.
The applicant developed a manual called the “Original Manual”, to be used in conjunction with its training seminars.
The second respondent had been exposed to the “Original Manual” when he had conducted seminars on the applicant's behalf.
Subsequently, the second respondent in conjunction with the first respondent conducted their own seminar, at which seminar participants were given a manual (referred to in the judgment as the “Reed Manual”). This manual appeared to be substantially the same as the Original Manual. The second respondent was paid $2,711.71 by the first respondent for conducting the seminar.
The applicant brought a copyright infringement claim against the respondents (the applicant has since settled with the first respondent). The second respondent consented to various orders including an injunction against reproduction or publishing of the Reed Manual, delivery up of infringing copies and discovery as to profits. The applicant elected for an account of profits (for the sum of $2,711.71).
The second respondent asserted that the applicant was not entitled to this amount as he actually made a loss on conducting the seminars. He argued that his minimum fee was $500 per day and that he had spent 21 days compiling the Reed Manual at a cost of $10,500 and 14 days preparing the delivery and presentation of the workshop at a cost of $7,000. He also claimed a further amount for printing costs and GST payable to the Australian Tax Office.
The court noted that there is authority for the proposition that where a person makes a profit by the use or sale of some thing, and the whole thing came into existence by reason of a wrongful use of another's person's copyright etc, the infringer must account for all the profits which he has made (as per Windeyer J in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25).
The respondents’ seminar involved blatant and wholesale copying of the Original Manual and the court noted that the second respondent would not have been able to conduct the seminar without the Original Manual. It was therefore determined that the gross revenue received by him should thus be the starting point for the calculation of profit.
The court noted that it would be wrong in principle to allow the second respondent a deduction for the time he had spent working on his seminar with the aid of the Original Manual. Justice Heerey noted that this would be “tantamount to making a copyright owner pay an infringer for the time and effort spent in infringement”.
Further, it was also noted that an infringer cannot claim costs not actually incurred, even though they might reasonably have been incurred.
Justice Heerey noted that as a matter of ordinary business practice the “profit” the second respondent made for conducting the seminar was the amount he received from the first respondent less his actual outlay. If the time spent was truly worth $17,500, he presumably would have charged the first respondent this amount.
A deduction for the cost of printing and GST was allowable because these reduced the actual profit derived by the second respondent from the infringement.
Citation: Tenderwatch Pty Ltd v Reed Business Information Pty Ltd (2008) AIPC ¶92-310.
Article written by Dr Alpana Roy, IP Lecturer at the University of Technology, Sydney.
The Federal Court in the following decision determined that the respondent had not infringed copyright in the applicant's project homes and plans. Of particular importance to the respondent's case was the fact that they had retained a series of plans leading up to the allegedly infringing home design and thus were able to demonstrate a “clear evolution of design”.
The applicant was a designer and builder of high-quality project homes in Victoria. The respondent was also a volume builder in the Victorian project home market.
The applicant asserted that the respondent, by the design and construction of its project homes, particularly a home known as the Villa View, substantially reproduced and therefore infringed the applicant's copyright in the design of two of its project homes, the Urban and Seasons.
While the respondent admitted all formal matters and conceded that the applicant held copyright in the Urban and Seasons designs, it denied any infringement of that copyright.
The respondent contended that it created the Villa View design without reference to, or even knowledge of, the Urban or Seasons and that there was a “clear evolution of design” in its housing plans. The respondent tendered a series of plans which showed each of the project homes that it had designed leading up to the Villa View.
Moreover, it argued that the applicant was seeking impermissibly to protect merely “an idea” and not “the expression of that idea”. Finally, it maintained that it had not, in any event, reproduced “a substantial part” of the Urban or Seasons designs.
The court held that there were three issues to be determined as follows:
• whether Boutique made use of any of Inform’s designs or buildings to create the Villa View
• if it did, whether the Villa View reproduced a substantial part of the Urban and Seasons designs
• whether that which Inform was seeking to protect was amenable to copyright protection.
The Federal Court decided in favour of the respondent, determining that there had been no copyright infringement. The court noted that the real dispute between the parties essentially turned upon a simple question of fact ie had the applicant established by reliance upon inference that those involved in the design and construction of the Villa View copied central elements of the Urban or Seasons? The court answered this question in the negative.
From the evidence led, it was not apparent that anyone associated with the respondent had copied any of the applicant's designs. Particular weight was given to how the Villa View came to be designed over several months, with hundreds of changes made to the plans based on trial and error. The court noted that this was hardly consistent with a case of copying, whether conscious or subconscious. The similarities between the Seasons and the Villa View were fully and rationally explained.
The decision is particularly useful for its summary of copyright law as it applies to project home plans. It can also be contrasted with the recent decision of Metricon Homes Pty Ltd v Barrett Property Group Pty Ltd (2008) AIPC ¶92-284, where the Full Federal Court determined that copyright in the relevant housing plans had been infringed.
Citation: Inform Design and Construction Pty Ltd v Boutique Homes Melbourne Pty Ltd (2008) AIPC ¶92-301.
Facebook, Inc. filed a complaint with the WIPO Arbitration and Mediation Centre, regarding an Australian company's registration of the domain name www.facebook.com.au.
Facebook is the owner of the extremely popular social networking www.facebook.com website. It is also the owner of numerous trade marks incorporating the word FACEBOOK including two Australian marks registered prior to the commencement of the proceedings.
The respondent did not actually sell any goods or services from the website published on its www.facebook.com.au domain name. Instead the website redirected traffic to promote goods and services of related companies. Facebook asserted that the purpose of the website was to obtain traffic generated from the goodwill of Facebook's mark where the Internet user had intended to go to Facebook's website.
Facebook was successful, having satisfied the criteria as set out in paragraph 4(a) of Schedule A of the .au Dispute Resolution Policy. The Administrative Panel determined that:
(i) the respondent's domain name was identical or confusingly similar to Facebook's trade marks, and
(ii) the respondent had no rights or legitimate interest in respect of the domain name, and
(iii) the domain name had been registered or subsequently used in bad faith.
The Panel rejected the respondent's assertions that it was intending to operate a “click-to-call service” from the website and had made a “considerable financial investment” in its business model for the website. The respondent's argument that it had used the generic terms “face” and “book” to form its domain name and thus had a legitimate interest as the first to register the words as a domain name was also rejected.
It ordered that the respondent's domain name be transferred to Facebook.
Citation: Facebook, Inc v Callverse Pty Ltd (2008) AIPC ¶92-308.
The following decisions have also been included in this Report:
• Hearst Corporation v FinancialCare Group Pty Ltd (2008) AIPC ¶92-305, a Trade Marks Office decision concerning an opposition to the registration of the trade mark “Smart Money Ed” on s 44 grounds
• Nufarm Ltd v Jurox Pty Ltd (2008) AIPC ¶92-306, a Federal Court patents decision, where the respondent was held not to have infringed the applicant's patent because of certain examples given in the applicant's patent specification
• Kimberly-Clark Worldwide, Inc v Goulimis (2008) AIPC ¶92-307, an appeal against the Registrar's decision to permit registration of the trade mark “HUGGIE” MUMMY. The applicant successfully argued before the Federal Court that the registration application should have been rejected on s 42(b), 44, 59 and 60 grounds, and
• DCK Australia Pty Ltd v Vincona Pty Ltd (2008) AIPC ¶92-309, a Trade Marks Office decision concerning an unsuccessful opposition to the registration of the applicant's “DIVA DOLLS” trade marks on s 44 and 60 grounds.
IMPORTANT DISCLAIMER. No person should rely on the contents of this publication without first obtaining advice from a qualified professional person. This publication is sold on the terms and understanding that (1) the authors, consultants and editors are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication; and (2) the publisher is not engaged in rendering legal, accounting, professional or other advice or services. The publisher, and the authors, consultants and editors, expressly disclaim all and any liability and responsibility to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication. Without limiting the generality of the above, no author, consultant or editor shall have any responsibility for any act or omission of any other author, consultant or editor.
© 2008 CCH AUSTRALIA LIMITED
101 Waterloo Road, North Ryde, NSW 2113.
Postal address: GPO Box 4072, Sydney, NSW 2001.
Document Exchange: Sydney DX 812.
Head Office North Ryde Ph: (02) 9857 1300
Fax: (02) 9857 1600
CCH Customer Support Ph: 1 300 300 224
Fax: 1 300 306 224. For the cost of a local call anywhere within Australia.
All rights reserved. No part of this work covered by copyright may be reproduced or copied in any form or by any means (graphic, electronic or mechanical, including photocopying, recording, recording taping, or information retrieval systems) without the written permission of the publisher.