AJPark

New Zealand's IP legislation update

Report on Designers Amendment released

On October 27, the Commerce select committee released its report on the Regulatory Improvement Bill.

The Committee proposed amendments that would provide a statutory basis for the restoration of lapsed design applications in addition to lapsed design registrations.  The amendments also proposed that bibliographic details of design applications could be published by the Intellectual Property Office of New Zealand (IPONZ).

For a copy of the report, click here: 

Patents Bill report due next year

The select committee report on the Patents Bill will be released in March 2010.

Submissions closed in July this year and are now being considered by the Commerce select committee.

The Patents Bill is designed to replace the Patents Act 1953.  The Bill aims to update the New Zealand patent regime to ensure an appropriate balance between adequate incentives for innovation and technology transfer on the one hand and protecting the interests of the public on the other.

Trade marks Amendment Bill report released

The select committee report on the Trade Marks (International Treaties and Enforcement) Amendment Bill was released on 15 September 2009.

The Foreign Affairs, Defence and Trade select committee report is available online. Click here to read the select committee report.

The Trade Marks (International Treaties and Enforcement) Amendment Bill will amend the Trade Marks Act 2002 and the Copyright Act 1994. It will give effect to Government decisions relating to various international agreements, and will allow New Zealand to join the Madrid Protocol.  It will also support the enforcement of criminal offence provisions related to counterfeit goods and pirated works.

Update on New Zealand copyright law

The government is considering the 113 submissions it received on its new version of section 92A of New Zealand¡¦s Copyright Act.
Section 92A aims to deal with internet piracy in New Zealand.  In its original form (not in force), it required ISPs to terminate the accounts of users who repeatedly infringe copyright.  However, objections to section 92A led the government to undertake a review of that section of the Act.

A Bill is expected to be introduced by the end of the year. The public will have a chance to comment on that Bill at the select committee stage.

For a summary of the submissions, visit: http://www.med.govt.nz/templates/MultipageDocumentTOC____41847.aspx

What does it mean to patent a gene?

An 'inquiry into gene patents' is underway in Australia.  Jon Ashen explains.

The Senate Community Affairs Committee of the Australian Parliament will report on the social and economic impacts of gene patents in Australia.  The scope of the inquiry relates to patents 'over human and microbial genes and non-coding sequences, proteins, and their derivatives, including those materials in an isolated form'.

The Committee will consider the impacts of gene patents on:

• the provision and costs of healthcare
• training and accreditation for healthcare professionals
• progress in medical research
• the health and wellbeing of the Australian people.

Measures that would "ameliorate any adverse impacts arising from the granting of [such] patents ... including whether the Patents Act 1990 should be amended..." will also be identified.

The committee will also consider if the Patents Act 1990 should be amended to 'expressly prohibit' the grant of gene patents.  The report is due by the last sitting day of 2009. 

The committee had received at least 70 submissions by 16 October.  A list of submissions is available at: http://www.aph.gov.au/SENATE/COMMITTEE/CLAC_CTTE/gene_patents/submissions/sublist.htm

A variety of opinions are expressed in the submission - both for and against gene patents.  Overall, the gene patents discussion reflects society's struggle with the moral, ethical and technical implications of patent monopolies that may directly relate to human beings and their rights to their own bodies.
 
Both sides of this debate can present scientifically, morally or ethically compelling arguments for either including or excluding 'genes' from patentability.  The law, however, as it now stands, considers genes patentable, assuming all other requirements for patentability are met.

Of particular interest for biotechnology clients is the Cancer Council of Australia's (CCA) submission 18 August 2009, which includes a proposed amendment to the Patents Act 1990 (Submission No. 50). 

CCA's proposed amendment of the Patents Act 1990 specifically excludes from patentability:

"Biological materials, including recombinant materials (including but not limited to their components, parts, derivatives, whether isolated or purified or not and regardless of their state and processes used in their production) which are identical or substantially identical, individually or collectively, to those that exist in nature."

CCA says the reason for their proposed amendment is to stop the patenting of genetic and protein materials that are rudimentary, in the sense that they are identical or substantially identical to their natural counterparts.   CCA believes doing this can encourage future innovation in fields which use these types of 'biological materials' in new, inventive and practically useful ways.

Australia is not the only place where gene patents are being challenged.  In the US, the issue of bans on gene patenting is being hotly debated in view of the pending Federal District Court decision on whether to allow a lawsuit against Myriad Genetics and the University of Utah (among others) to go forward.

In a recent article in Nature Biotechnology, the authors report the results of a comprehensive empirical study of the effects of gene patenting.  The authors conclude that the greatest impact of gene patents on innovation is the legal uncertainty of these patents, rather than the monopolies covered by these grants per se (Huys et al. 2009 "Legal uncertainty in the area of genetic diagnostic testing" Nature Biotechnology Vol. 27(10)).

It is 25 years since the first gene patent was issued in the US (US Patent 4447538 to the Regents of the University of California relating to the recombinant expression of chorionic somatomammotropin in bacteria).  It is interesting that the issue of gene patents is still being challenged at the fundamental level of patentability.  We wonder, however, about the real prospects of legislative change in Australia (or elsewhere for that matter). Is there a chance that the above amendment (or something similar) could be introduced into Australian intellectual property law?

It is not possible to predict what a legislative body will do.  However, we note that an exclusion of 'biological materials' as proposed by the CCA would place Australia in breach of its treaty obligations under the TRIPS agreement, at least.

Jon Ashen is a Patent Executive in our Biotechnology and Life Science team.  Email: jon.ashen@ajpark.com

The case of the chocolate seahorse

After a seven year bid, Beligum-based chocolate manufacturer, Guylian, has failed to register its seahorse shape as a trade mark for chocolate in Australia.  Judith Somaratne explains why this case highlights the need to protect shape marks early given the tough resistance shape mark applicants are facing to register their shape marks as trade marks in Australasia.

Background

Guylian began selling seahorse-shaped chocolates in Australia in the 1980s.  Since then, the brand has become a favourite with chocolate lovers and has achieved multi-million dollar sales.  However, despite this long-standing use, the Australian Federal Court recently confirmed the seahorse shape didn’t qualify for registration as a shape trade mark because it wasn’t distinctive of Guylian. 

The case for Guylian

Guylian argued that:

• Through its widespread sales of its seahorse-shaped chocolate, the seahorse shape had become distinctive of Guylian.
• Although its seahorse is based on a real seahorse shape, it has a few key differences that make the shape “fanciful” and therefore registrable.  These include:  
• the seahorse tail which wraps up behind the spine rather than in front of it.
• the solid ‘chunky’ appearance of the seahorse, rather than a slender and elongated shape normally associated with seahorses.
  
• If the Guylian seahorse shape was registered, other traders would only be prevented from using a seahorse shape that looked like Guylian’s seahorse.   

Guylian also argued that a national survey found 40.6% of participants (out of a total of 1496), associated the shape with Guylian. 

The Court’s decision

Guylian’s case was rejected by the Court.  The Court gave the following reasoning for rejecting Guylian’s case:

• Despite the slight differences, Guylian’s seahorse shape was still very similar to a normal seahorse.  Allowing Guylian to register its seahorse shape as a trade mark would prevent other traders from selling any seahorse shaped chocolate.  There was evidence showing that other traders were selling seahorse-shaped chocolates, along with their sea shell and other sea creature-shaped chocolates.
• The seahorse shape was just one of many other non-seahorse marks used by Guylian on its packaging.  This lessened the effectiveness of the seahorse shape acting as a trade mark and showed that Guylian had not educated the public to view the shape as a trade mark in its own right.
• Although the evidence showed that the public associated the shape with Guylian, this did not prove that the public acknowledged that the shape acted as a trade mark.

Lessons to be learnt

Guylian should have protected its seahorse shape mark early on.  While using a seahorse shape mark on chocolate was unique when Guylian first entered the market, over the years, other traders have effectively piggy-backed off Guylian’s success. 

Make sure you clearly use a shape mark as a trade mark in its own right at the outset.  Also, be proactive to keep the marketplace clean of copycats early on.  This will help make sure your shape mark does not become generic over time.

Judith Somaratne is a Solicitor in our trade marks and branding team.  Email: judith.somaratne@ajpark.com

UKIPO changes for Trade mark applications

The United Kingdom Intellectual Property Office (UKIPO) recently introduced a number of changes designed to make it cheaper and easier for businesses to register their trade marks in the United Kingdom. These changes include a reduction in the official fees for filing a trade mark application electronically, and the introduction of a new ‘Right Start’ service. The UKIPO also introduced changes that will affect series trade mark applications filed in the United Kingdom.

E-filing fee reduction

It is now cheaper to file a trade mark application in the United Kingdom, if the application is filed electronically.

E-filed applications will receive a £30 (about NZ$65) reduction off the official fee of £200 (about NZ$430). However, the official fee of £50 (about NZ$110) for each additional class in a multi-class application remains unchanged. The cost of filing an application by other means, such as by post or fax, will also remain unchanged.

The reduced fee will no doubt be warmly welcomed by applicants, but the benefits should also be felt by the UKIPO. The UKIPO expects that the reduced fee will raise the number of trade mark applications filed electronically from about 50% of total filings to about 80%. This should help reduce some of the administrative burden on the UKIPO which might lead to faster turnaround times.

‘Right Start’

The new ‘Right Start’ service allows applicants to pay half the standard application fee when they file their trade mark application electronically.

The remaining half only becomes payable after the UKIPO has issued its examination report, and the applicant decides to continue with the publication and registration of the mark. The applicant has 14 days from the date of the UKIPO’s report to continue with the application.

The aim of the service is to give an applicant an indication of whether their application will be successful before they commit to paying the full application fees. The UKIPO also offers to discuss any problems with the trade mark application with the applicant.

There does not seem to be any benefit in using the ‘Right Start’ service as a way to speed up the examination process.  This is unlike Australia, where a similar service is offered. The UKIPO expects that examination reports under the ‘Right Start’ service to be issued in the standard turnaround time (which is currently about 10 working days).

The ‘Right Start’ service could be useful if it’s not clear whether your trade mark will be accepted for registration by the UKIPO. The service would allow you to ‘test the waters’ with the UKIPO without having to pay the full application fee upfront. But the service should not be used as an alternative to conducting a full clearance search.

Series trade marks

The UKIPO has also introduced changes which will affect applications for series trade marks. For applications filed after 1 October 2009:

• the UKIPO will only accept up to six trade marks in a series of applications
• each additional mark beyond the first two in a series application will be subject to an additional £50 (about NZ$110) fee
• the UKIPO will take the same approach as Intellectual Property Office of New Zealand’s (IPONZ) current practice of not allowing trade marks which do not constitute a valid series to be ‘divided out’ of an application

USPTO patent rule changes

Teresa Griffiths discusses the recent changes in the United States that include controversial patent rule changes withdrawn and non-rule based changes proposed.

The history

In August 2007, the United States Patent and Trademark Office (USPTO) proposed new patent rules.  For each application, the rules limited:

• the number of continuing applications to two
• the number of claims to 25
• the number of independent claims to five.

The new rules were designed to help the USPTO to process patent applications faster, and reduce the backlog of unexamined applications. 

The rules were controversial because they limited an applicant’s ability to comprehensively protect their inventions.  The biotech industry, which uses continuing applications more than other sectors, were particularly vocal in their opposition to the new rules.  A complaint was laid in the US Federal Court by an inventor (Tafas) and GlaxoSmithKline.  Injunctions against implementing the rules were issued.

New director at USPTO

The Obama administration recently appointed a new director of the USPTO.  On 8 October 2009, new director Kappos issued a decision to withdraw the new rules.  While the ‘new’ rules are gone, other steps are being taken to manage the case load at the USPTO.

Requests for Continuing Examination

Until now, Requests for Continuing Examination (RCEs) have usually been actioned by examiners within two months of the request being made.  An RCE was treated almost as a response to an office action.  Under new procedures RCEs will join the queue with divisional and continuation applications.  USPTO responses to RCEs will therefore be pushed out by many months.  This could be good or bad depending on the technology area.

The way forward

The USPTO encourages examiners to find patentable subject matter as early as possible—and to work directly with applicants to do so.  The old rule of ‘less patents means better patents’ no longer applies.  A new system to recognize examiner performance puts more effort on credit for first actions, and less for RCEs.  This gives examiners more incentive to focus on the issues in first office actions.  The new steps sound positive for applicants, as well as good news for managing USPTO caseloads.  As always, it will be interesting to see how this shift in philosophy plays out in practice.

Teresa Griffiths  is a Partner in our Biotechnology and Life Sciences team.  Email: teresa.griffiths@ajpark.com

Changes to New Zealand’s advertising codes

Dan Winfield explians how the codes that govern advertising food or other products to children in New Zealand are set to change further in the next 12 months.

Last year’s changes to television advertising

A year ago, the Television Council Bureau (which includes TVNZ, TV3 and Sky) established a new classification system for advertising to children on television. Those changes have seen a dramatic drop in the number of advertisements approved to screen during children’s programming times—from around 85% to 15%. Banning the advertising of ‘occasional’ foods during children’s programming times was a major change in the classification system.  This classification is in line with the Ministry of Health’s Nutrition Guidelines that define foods as ‘everyday’, ‘sometimes’ or ‘occasional’ foods.

Further changes for all advertising

Earlier this year, New Zealand’s Advertising Standards Authority (ASA) established a panel to review its Code for Advertising Food and Code for Advertising to Children. The panel is due to report its recommended changes to these codes soon. Changes are likely, with some calling for the definition of ‘children’ to be raised from under 14 years old to 18 years old.  Also possible, is a pre-approval process similar to the one used for liquor and therapeutic products advertising.

However, the biggest changes are likely to be to advertising food to children. The motivating force is a growing acceptance worldwide of the link between child obesity and the advertising of ‘occasional’ foods to children.  The panel could recommend, among other things, that all internet advertising of occasional food (or companies that sell occasional foods) feature an entry page that restricts access to children. It is worth noting that a similar restriction has been included in the new Code for the Naming, Labelling, Packaging and Promotion of Liquor which came into force on 1 October 2009.

What to do?

The rules for advertising food and other products to children in all media are likely to tighten over the next twelve months.  This is something to bear in mind if you are developing next year’s advertising for food products, or other products aimed at children.

Dan Winfield  is an Associate in our Advertising and Regulatory team.  Email: dan.winfield@ajpark.com

Clarity on Commerce Act exemption for anti-competitive conduct

Kate McHaffie discusses the New Zealand Supreme Court decision that pharmaceutical companies will be specifically interested in. The decision hasconfirmed that pharmaceutical companies negotiating supply agreements with Pharmac (New Zealand Government’s purchasing agency) can rely on a Commerce Act exemption that renders anti-competitive behaviour lawful (AstraZeneca Limited v Commerce Commission and Pharmac [2009] NZSC 92).

Background

Pharmac and AstraZeneca were negotiating a long-term agreement for the supply of Betaloc CR, used to treat heart conditions.  After negotiations stalled, AstraZeneca advised Pharmac that if it could not secure the supply agreement for Betaloc CR it would have to review whether it could continue to supply Betaloc IV, an intravenous form of Betaloc.  Pharmac had no ready substitute for Betaloc IV. 

Concerned that AstraZeneca was engaging in anti-competitive behaviour by tying the supply of Betaloc CR to the continued supply of Betaloc IV, the Commerce Commission (the Commission) issued a notice under section 98 of the Commerce Act requiring AstraZeneca to supply specified information and documents relating to the alleged tie. 

AstraZeneca sought judicial review of the Commission’s decision to issue the section 98 notice.  It was unsuccessful in both the High Court and the Court of Appeal, and appealed to the Supreme Court.

Argument

Section 53 of the Commerce Act provides that the Act does not apply to any agreement to which Pharmac is a party and that relates to pharmaceuticals, any act done by any person for the purposes of entering into such an agreement, or any act done by any person to give effect of such agreement.  AstraZeneca argued that in its communication to Pharmac that it would withdraw supply of Betaloc IV if it was unable to achieve security of supply for Betaloc CR was done in the context of negotiations for the purpose of entering into an agreement with Pharmac, and was therefore exempt under section 53.  Accordingly, the issuing of the section 98 notice was unlawful. 

Decision

The Supreme Court found for AstraZeneca.  It did not accept the Commission’s argument that the section 53 exemption was intended to enable Pharmac alone to exercise market power in a way that would normally contravene the Commerce Act.  The Supreme Court held that provided a pharmaceutical company’s purpose is the negotiation of an agreement with Pharmac falling within section 53(2)(a), the exemption applies to any anti-competitive behaviour on the pharmaceutical company’s  part directed to that end during the negotiating process.

The court held that all of the relevant actions taken by AstraZeneca were done for the purpose of obtaining an agreement with Pharmac, and therefore the section 98 notice was invalid.

Conclusion

This is the first decision on section 53 of the Commerce Act, and provides welcome clarification that the exemption does not exist only to protect Pharmac.  The decision is also important for its reminder to the Commission that it can only issue a section 98 notice where there is a reasonable basis for believing that there may be undiscovered facts that could give rise to a breach of the Commerce Act.  A section 98 notice cannot be used to ‘fish’ for facts to justify the issue of the notice.

Kate McHaffie  is a Senior Associare in our Litigation team.  Email: kate.mchaffie@ajpark.com