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Proceedings recently commenced in the Federal Court of Australia by the Scotch Whisky Association (SWA) serve as a reminder of the ability to use the trade mark system to protect Geographical Indications (GIs) in Australia.  The use and protection of GIs in Australia will be of particular interest to followers of the Australian-European Union free trade negotiations, where GIs have been flagged by the European Union as a critical issue.

In this case, the SWA has commenced proceedings against D’Aquino Bros Pty Ltd (D’Aquino) in relation to D’Aquino’s use of the mark SCOTCH WHISKY, which SWA has registered in Australia as a certification trade mark.

While conventional trade marks function as a badge of origin to distinguish the goods or services of one trader from another, a certification trade mark can be used by multiple traders to indicate that goods or services sold by reference to the mark possess certain characteristics, including (in the case of goods), original, material or mode of manufacture.  Applicants for certification trade marks must file a set of rules which govern the use of the trade mark, and those rules must be approved by the Australian Competition and Consumer Commission.  The rules are then made publicly available on IP Australia’s website.

The SCOTCH WHISKY rules specify, amongst other things, that whisky bearing the SCOTCH WHISKY mark must have been distilled in Scotland and must have an alcohol content of no less than 40%.

Media reports indicate that the SWA has commenced proceedings on the basis that D’Aquino has been using the SCOTCH WHISKY mark on whisky which has not been distilled in Scotland.  The proceedings are listed for a case management hearing on 3 August 2018.

Please contact us if you would like to learn more about certification trade marks.

By Alex Dunlop and Karen Liu

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It was one of those big dramatic days the European Parliament had already seen before. A YES or NO vote in Plenary charged with huge political and social pressure. And, as it is common in these occasions, Members of Parliament were called to vote not about what the text submitted to them actually and literally said (a balanced result of two years of debates, legal analysis and delicate negotiations);  but about the catastrophic consequences that a positive vote would have for freedom of speech around the planet.

Internet and all its benefits were threatened if this infamous article 13 of the new Copyright Directive were to pass in its proposed text. Or so pretended the loud voices against it: “If Article13 passes it will change the way that the Internet works, from free and creative sharing to one where anything can be instantly removed, by computers”, said a powerful lobbying NGO. Both battling armies looked for external support: Wikipedia closed down its Italian and Spanish editions; Sir Paul McCartney wrote to the legislators in support of the new rules.

Technically, the vote was about confirming, or not, the text proposed by the responsible Committee (Committee on Legal Affairs, JURI Committee), as a basis for negotiation with the Council. In other words, this was not at all a final vote on a law. The JURI Committee had already softened the original text proposed by the Commission, reduced its scope, and introduced several measures to limit abuse and preserve proportion in any obligation on removal of unlicensed content. And, by the way, it had also made it clear that a website like Wikipedia would never be covered by the rule. According to the discussed article 13, “in the absence of licensing agreements with right holders online content sharing service providers shall take, in cooperation with right holders, appropriate and proportionate measures leading to the non-availability on those services of works or other subject matter infringing copyright or related-rights”. But “the implementation of such measures shall be proportionate and strike a balance between the fundamental rights of users and right holders”; besides, “shall […] not impose a general obligation on online content sharing service providers to monitor the information which they transmit or store”.

But at the end no nuance was accepted, and the joined vocal effort of internet libertarians and interest groups won this battle: on 5 July 2018, the Plenary rejected the draft by 318 votes against, 278 in favour and 31 abstentions. This was a first in the Parliament’s history, as the possibility of overruling the Committee proposal is new and had never been used with success. Now the full Parliament has until mid-September to introduce amendments, which will be then voted in Plenary. The resulting text will be the one with a mandate for negotiation with the Council (including representatives of the 28 Member states and acting as co-legislator much in a way an upper House would).

If there is no agreement, everybody will lose: the real result would be to prevent the modernization of copyright in the internet era, and to leave it with many absurd limitations that right holders had accepted to modernize.

To be continued…

By Ignasi Guardans

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The U.S. District Court for the District of Delaware denied a motion  for reargument sought by Alvogen Malta Operations Ltd. (Alvogen) in their dispute against Pernix Ireland Pain DAC and Pernix Therapeutics, LLC, (collectively Pernix) regarding the subject matter eligibility of Pernix’s patents under 35 U.S.C § 101 (§ 101).

Alvogen asserted that, in denying summary judgment, the court misapprehended the claims at issue, and had failed to individually analyze some of the claims.

Background
We previously reported on the opinion denying summary judgment.   In the motion for reargument, Alvogen asserted that the claims fall into two categories and the court failed to appreciate the distinction between them.

The first category of claims recite a method of treating pain in certain hepatically impaired patients “using an oral dose of an extended release of hydrocodone bitartrate as the only active ingredient, wherein the starting dose is the same as it would be for a non-hepatically impaired subject.”  The first category of claims is referred to as the “non-adjustment” claims.

The second category of claims recite an extended release formulation with hydrocodone bitartrate as the only active ingredient, and specify that “the dosage provides a release profile of hydrocodone that is defined by designated pharmacokinetic factors, as compared to the release profiles in subjects not suffering from renal or hepatic impairment.” The second category of claims is referred to as the “PK-only” claims.

Order Denying Reargument
In its order denying the motion for reargument, the court stated that it was aware of the difference between the claims, and that it was correct when it previously held that like Vanda, “the claims asserted in this case describe a specific dosing regimen to treat a specific condition based on the patient’s medical status.” Although the term “dosing regimen” typically refers to the amount and frequency of the dosage of a drug, the asserted claims put forth dosing regimens in an unconventional manner.  The claims provide dosing regimens for the non-adjustment claims by defining the dosing level “for hepatically impaired subjects… as being the same as the dosing level used for normal subjects.”  The claims provide dosing regimens for the “PK-only” claims by designating the dosing level for hepatically impaired subjects by “the level that results in specific pharmacokinetic results, as compared to the results obtained in subjects not suffering from renal or hepatic impairment.”

Importantly, the court explained that the claims do not need to recite “specific dosage amounts and frequencies of administration” to be patent eligible.  According to the court’s order, the “PK-only” claims were eligible under § 101 by simply reciting “a method for treating pain in subjects with mild or moderate hepatic impairment comprising administering an oral dosage of hydrocodone bitartrate as the only active ingredient, wherein the dosage unit comprises an extended release formulation of hydrocodone bitartrate.”  The court reasoned that adding more limitations to a claim directed toward eligible subject matter does not make the claim patent ineligible.

Alvogen analogized the claims to those in Mayo  and distinguished the claims from those in Vanda.  But the court did not agree.  According to the court, all of the claims at issue were “‘treatment steps’—that is, directed at a new and useful method of treating pain in a certain population of patients using a specific set of hydrocodone bitartrate formulations.”  For this reason, the court found the claims to be directed toward patent eligible subject matter under § 101.

Finally, Alvogen argued that § 101 analysis requires a consideration of the claimed advance over the prior art and that there should not be a per se rule that all method of treatment claims are patent eligible.  The court stated that it was not adopting a per se rule that all method of treatment claims are patent eligible, but noted that the § 101 analysis does not contain a “strong novelty inquiry.” It was sufficient, for § 101 purposes, that the claims were directed toward a new way of using an existing drug, i.e., “by treating a special subpopulation of patients with a limited genus of formulations of a particular pharmaceutical.”

By Aaron Morrow, Chris Roberts and Margaux Nair

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Waitrose has agreed to stop producing “copycat” chocolate slabs following an ongoing dispute with Hotel Chocolat.

Hotel Chocolat accused Waitrose of infringing its intellectual property rights in its distinctive curved shaped chocolate slab.  This was further reinforced when individuals were taking to Twitter to question whether Hotel Chocolat were actually producing the chocolate slabs for Waitrose.  Hotel Chocolat requested that Waitrose removed the offending chocolate slabs from sale.

During the contention, Hotel Chocolat’s co-founder also declared a chocolate “amnesty”, offering anyone who had purchased one of the Waitrose chocolate slabs to exchange it for one of Hotel Chocolat’s equivalents – free of charge.

Hotel Chocolat had previously registered the shape and appearance of their chocolate slab as a Registered Community Design (RCD).  An RCD is a means of obtaining effective design protection across the European Union and is generally used to protect products whose design, product shape, packaging or appearance, for example, are often more important than how the product works or its name.  RCDs can be particularly advantageous in the food, beverage and fashion sectors.

The recent dispute serves as a useful reminder to brands wishing to ensure brand protection from “copycats” or other brand providers which are less luxurious than their own, to consider protecting the appearance of their own products/product parts in this way. As a result of its RCD, Hotel Chocolat had a much more robust position when objecting to Waitrose’s alleged infringement than that of not having an RCD.

Without an RCD, Hotel Chocolat might have been able to rely on unregistered design rights.  However, an unregistered design right is not a “monopoly right”, which drastically reduces its ability to protect a design in the event of an alleged infringement.

Whilst Waitrose strenuously denied that it had infringed Hotel Chocolat’s designs, it stated that it was not in its best interest to enter into a legal dispute with Hotel Chocolat.  As such, once Waitrose’s existing chocolate slabs are sold, it was agreed that they would no longer be stocked and sold in Waitrose stores.

By Keisha Phippen

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Bill introduced to Parliament that will pave the way for parallel importers in Australia.

Proposed laws favouring the parallel importation of goods are currently being considered by the Australian Parliament. The Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 (Bill) was introduced to the House of Representatives on 28 March 2018.

As we blogged in January 2018, parallel importation refers to the importation and sale of goods by reference to a registered trade mark that were legally purchased in another jurisdiction. Parallel imports fall outside the trade mark owner’s authorised distribution channel. The price and quality of goods across jurisdictions can vary depending on the marketing strategy of the trade mark owner. Parallel importation therefore involves a conflict of interests between promoting competition and protecting the intellectual property rights of the trade mark owner.

In Australia, trade mark owners have been able to strategically use trade mark law to prevent parallel imports, by assigning registered Australian trade marks to local licensees, distributors or subsidiaries. The proposed new section 122A will preclude trade mark owners from relying on this mechanism. This means that under the proposed new laws decisions like Lonsdale Australia Limited v Paul’s Retail Pty Ltd [2012] FCA 584 and Fender Australia Pty Ltd v Bevk (1989) 15 IPR 257 would be decided differently.

The Bill marks a shift in interests to the detriment of trade mark owners. In his second reading speech, the Minister said that “[r]ecent legal decisions have increased the difficulty for importing legitimately marked goods into Australia. This bill will amend the Trade Marks Act 1995 to reduce uncertainty for importers, which will ultimately strengthen competition, benefiting the market and consumers.”

There is no recognition in the Bill between goods that are sold in one jurisdiction that have a material difference to goods sold in another jurisdiction. A material difference could relate to quality, language, lack of warranty, absence of instructions or incorrect measurements.  Trade mark owners would need to rely on the Australian Consumer Law if they wish to raise a material difference with the Court.

By Chris Round and Olivia Coburn

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The Federal Circuit, in a nonprecedential decision, held that claims of a reissue application were properly rejected because they recaptured subject matter surrendered during the original prosecution of U.S. Patent No. 8,282,591 (“the ’591 patent”).[1]

The ’591 patent is directed to an arteriovenous shunt that connects a graft to an artery and passes returned blood through a “single lumen venous outflow catheter” into the right atrium of a patient’s heart.  This system reduces the risk of infection, clotting, and hyperplasia compared to systems that remove and return blood through a graft connected to a vein.[2]

During prosecution of the ’591 patent, Drs. Iftikhar and Nazir Khan (the Khans) amended the claims to require a “cylindrical cuff” to direct passage of blood from the arterial graft to the venous outflow catheter and argued that the cited art did not disclose a cylindrical cuff.[3]  The Khans then sought reissue of the ’591 patent, filing new claims that omitted the cylindrical cuff limitation.  After the examiner rejected these claims for recapturing subject matter surrendered during the original prosecution, the Khans appealed to the Patent Trial and Appeal Board (the Board).[4]  The Board affirmed the examiner’s rejection and the Khans appealed to the Federal Circuit.[5]

35 U.S.C. § 251 permits a patentee to seek a broadening reissue of a patent within two years from the grant of the original patent where, through error, the patentee claimed less than he had a right to claim.  The patentee, however, may not recapture subject matter through reissue that was intentionally surrendered during the original prosecution to overcome the prior art.

The Federal Circuit applied a three-step analysis to determine whether recapture occurred.  First, the court considered whether and in what aspect the reissue claims were broader than the original patent claims.  The court found that the reissue claims were broader because none required the cylindrical cuff recited in the patented claims.[6]   In step two, the court determined whether the broader aspects of the reissue claims related to surrendered subject matter.  The court held that the cylindrical cuff related to surrendered subject matter because the Khans amended the claims in response to prior art rejections to require the cylindrical cuff and relied on this aspect to distinguish the claims over the prior art.[7]  The court stated that it not need address the third step ― whether the reissue claims were materially narrowed in other respects such that they may not have been enlarged ― because the Khans did not argue that the independent reissue claims were materially narrowed in other respects.[8]  The court found that because the Khans did not separately argue the patentability of dependent claims before the Board, these arguments were waived, and therefore affirmed the Board’s rejections of the reissue claims for impermissibly recapturing surrendered subject matter.[9]

While this decision did not address whether claims were materially narrowed in other aspects such that they may not have been enlarged, applicants seeking a broadening reissue of their patent claims will want to carefully consider both broadening and narrowing aspects of the claims to be pursued in their reissue application.

By Aaron Morrow and Kelly Plummer

[1] In re: Iftikhar Khan, Nazir Khan, No. 2017-2207 (Fed. Cir. Feb. 15, 2018)
[2] Id. at 2.
[3] Id.
[4] Id. at 3.
[5] Id.
[6] Id. at 4.
[7] Id.
[8] Id. at 5.
[9] Id. at 5-6.

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April 26, 2018 is a remarkable date: first it’s World IP Day celebrating IP around the world. Second, and this is unique, the British IP Minister Sam Gyimah MP announced that the UK ratified the Unified Patent Court Agreement (UPC Agreement). By doing so the UK agreed to be bound to both the UPC agreement and the UPC’s Protocol on Privileges and Immunities (PPI). The UPC will be a court common to the contracting member states within the EU having exclusive competence in respect of European Patents and European Patents with unitary effect.

In addition to Paris and Munich, London hosts a section of the Court’s central Division dealing with patents in the field of life sciences and pharmaceuticals. The way is now open for discussion about UK’s future within the UPC system after-Brexit. As of today, the UPC Agreement is ratified by 16 countries of the European Union.

To bring the Agreement into force, UK, France and Germany have to ratify the UPC Agreement and the PPI, now everyone is waiting for Germany, as France has already ratified.

Germany’s completion is currently on hold due to a constitutional complaint pending before the German Federal Constitutional Court.  According to rumours abound in the German IP community this complaint might be dismissed and the ratification will be finished during this year.

It’s time to get ready for playing with the new system!

By Christiane Schweizer

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In a big day for inter partes review (IPR) at the U.S. Supreme Court, the Court issued two opinions, Oil States Energy Services, LLC v. Greene’s Energy Group, LLC et al. and SAS Institute Inc. v. Iancu et al.

In Oil States, the Supreme Court held in a 7-2 decision that IPR proceedings are constitutional and do not violate Article III or the Seventh Amendment of the Constitution and that patent rights are public rights arising between the government and others.

The Court further explained that an IPR involves the same matter and same interest as the original patent grant as it simply reconsiders the granted right, and the similarities between district court proceedings and IPR proceedings do not undermine any of the holdings of the case.

The Court was very careful in crafting its decision, ensuring the holding of the case is narrow and addresses only the constitutionality of IPRs and the precise constitutional challenges raised by Oil States.  Oil States does not disrupt any of the other patent cases where patent rights were deemed private property of the patentee (for the purposes of the Takings Clause or the Due Process Clause).

In SAS Institute Inc. v. Iancu et al. in a 5-4 decision, the Supreme Court applied the plain language of 35 U.S.C. §318(a) in deciding that the final written decision in an IPR proceeding must address all claims that the Petitioner elected to challenge.

The Court held that the Board must institute trial on all claims if the Petition carries its burden on at least one claim, doing away with the practice of partial institution. In doing so, the Court compared the statutory language of IPR proceedings, which the Court considered an “adversarial” process akin to civil litigation, with that of ex parte reexaminations, which the Court considered a more “inquisitorial” process between the Patent Office and patent owner.  §318(a) “categorically commands the Board to address in its final written decision ‘any patent claim challenged by the petitioner.’”

The Court found that “the statute tells us that the petitioner’s contentions, not the Director’s discretion, [that] define[s] the scope of the litigation all the way from institution through to conclusion.”

The Director is given a binary choice of whether to institute IPR: if there is a reasonable likelihood that the petitioner will prevail on at least one claim challenged in the petition, trial will be instituted; if not, trial will not be instituted.

Further, no ambiguity was found in the language of the statute meaning the Board’s rules were not entitled to Chevron deference.  The Court found that Congress, not the Court, was the proper place to make the policy arguments the Director relied upon to support partial institutions, finding that the Court’s job was to follow congressionally enacted policy.

By Jason Engel, Ben Weed and Erik Halverson

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The Court of Justice of the European Union (CJEU) recently confirmed that the “no-aesthetic-consideration” test is the preferable approach when deciding whether a design is “solely dictated by its technical function”.  As a result, if aesthetic considerations are completely irrelevant the design should not be registered.  However, this does not mean that the legislation requires a design to have an aesthetical merit in order to be registered as a Community Design.

Last month, the CJEU published their long-waited decision on the request for a preliminary ruling raised by the Oberlandegericht Düsseldorf (the “German Court”) back in 2016.

The CJEU has provided some clarity on the interpretation of Article 8(1) of the Community Design Regulation (CDR) and how to determine if a product’s features are “solely dictated by its technical function”. The CJEU took the chance to stress, once again, that the determination “must be interpreted in a uniform manner in all Member States”, which strongly reiterates the EU’s objective for cohesive legal application.

Historically, Member States have interpreted Article 8(1) CDR in different ways. In fact, the UK and French courts tend to prefer the ‘no-aesthetic-consideration’ test, whereas the German and Spanish courts opted for the ‘multiplicity of forms’ test. The first test asks whether the design was created based on some aesthetic-considerations, although it also presents some functional elements; if so, then it is capable of being protected.  By contrast, the ‘multiplicity of forms’ test asks whether there is an alternative form of the same product which could fulfil the same function; if there is, then the design cannot be ‘solely dictated by its technical function’ and is registrable.

In the UK this test was first adopted in Landor & Hawa v Azure Designs and it has been criticised by several commentators as it would not be difficult to obtain a monopoly on a certain function by registering more than one design. As a result, the ratio of the exclusion dictated by Article 8(1) CDR would be frustrated.

The Facts
DOCERAM and CeramTec manufacture ceramic weld centring pins (alongside other items). DOCERAM brought an action to stop CeramTec using their registered design and, as often happens, CeramTec filed an invalidity counterclaim based on the “technical functions” exclusion. CeramTec’s counterclaim was successful at first instance and DOCERAM appealed the decision to the German Court.

The German Court stayed the proceeding and referred the following questions to the CJEU:

  1. Shall Article 8(1) CDR be interpreted as meaning that the existence of alternative designs is decisive?
  2. Shall the features of appearance of a product be determined based on the perception of the ‘objective observer’? If so, how is such an observer to be defined?

In answering the first question the CJEU confirmed that the ‘no-aesthetic-consideration’ test should be applied (as previously stated in the UK in Amp v Utilux and, more recently, in Lindner v Franssons and Dyson v Vax).  In fact, by adopting this test, a single economic operator cannot obtain several Community Design registrations for alternative forms of a product incorporating features that are exclusively dictated by its technical function. This prevents operators benefiting from exclusive protection equivalent to that offered by a patent without being subject to the requirements for obtaining a Community design.

In answer the second question, the CJEU stated that there is no mention of an ‘objective observer’ in the law and thus the national courts must take into account all objective and relevant circumstances of the case.

The CJEU decision was largely anticipated by the Advocate General’s opinion.  He also opines that the existence of a design alternative can be taken into account when determining a product’s features but it should not be the decisive test. On a side note, the Advocate General also suggested that using expert opinions for particular questions may be helpful.

In conclusion, this decision will find large application in future disputes regarding Community design rights as the national courts are now provided with a clear reference to the no-aesthetic consideration test.  On the other hand, right holders will be able to receive clearer answers when it comes to considering potential invalidity claims, which are likely to increase in light of this landmark decision.

By Serena Totino and Georgie Rigg

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On 9 March 2018, Byron Bay brewery Stone & Wood lost an appeal in the Australian Full Federal Court of Appeal to Brunswick based brewer Thunder Road with respect to their respective uses of the word PACIFIC for their rival beers.

Stone & Wood sells craft beer, including its best-selling beer “Pacific Ale”. Thunder Road launched its “Thunder Road Pacific Ale” in 2015, which it renamed “Thunder Road Pacific” later that year following letters of demand from Stone & Wood.

In 2016, Stone & Wood’s claims against Thunder Road for misleading or deceptive conduct, false or misleading representations and for passing off were rejected by Justice Moshinsky as was Stone & Wood’s trade mark claim.

Stone & Wood appealed that decision on the grounds that the primary judge failed to recognise that the form of passing off that had occurred in this case was to an impression of an association between the Stone & Wood and Thunder Road products. Stone & Wood’s critical submission was that in January 2015, the only connotation of “Pacific Ale” or “Pacific” in the context of the craft beer market was an association with Stone & Wood or its Pacific Ale.  The trade mark claim was not pursued on appeal.

However, Chief Justice Allsop, and Justices Nicholas and Katzmann rejected each of the appeal grounds and found there was no error in the primary judge’s decision.

It is doubtful that this will be the end of this dispute. In separate proceedings in relation to Stone & Wood’s trade mark application for “Pacific Ale”, Thunder Road has appealed the Australian Trade Mark Office’s decision that it failed to establish either of its grounds of opposition to the trade mark. The Federal Court has listed the appeal to be heard in August 2018.

To view the decision, click here: Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2018] FCAFC 29

By Simon Casinader and Olivia Coburn

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