What the heck is a Retroactive Foreign Filing Licence, and why should you care?

/ Bill McFarlane / Articles

Does your company employ US residents, and do those employees or contractors sometimes invent while they are living or working in the United States? Then take note.

Did you know that any United States (US) Patent naming that person as an inventor may be liable to be invalidated – just because a Foreign Filing Licence had not been obtained from the US Patent and Trademark Office (USPTO) prior to filing in another country?

Whether you were aware of the regulations or not, the USPTO administratively examines every US patent provisional and non-provisional (complete) application to determine if the subject matter is of importance to the security of the US.  The details in the patent application could include anything from a method of making a deadly virus, the method of providing unbreakable digital security or the parts and method to make a nuclear explosive.

If someone were to apply for a patent for such methods or devices, the US Government would want to know sooner rather than later. And it’s more than just a concern for the US Government; most countries have a patent application vetting process. If the idea in a patent requires classification as a secret (so it does not become published), it is within the powers provided by the respective patents Act  to prohibit the publication of that patent and prevent the grant of a patent until the patent subject matter is no longer considered a secret. (Refer to an earlier article I wrote on this subject here)

For that reason and others, the USPTO reviews every patent application filed in the US. In most cases, the patent application will proceed into the USPTO system and will have a licence to do so. If you look carefully at the patent filing receipt which is issued by the USPTO, you will note the explicit mention of a Filing Licence. Without even touching on the US resident issue or discussing inventions ‘made’ in the US, you can already see that all patent applications create much more activity than many people would have ever thought necessary.

Why you must file with the USPTO

 The US Government has declared it essential for an American resident (or anyone located in the US) inventing while in the US, to file for a licence before they have filed for their invention overseas (a non-US application). Note that this only applies if the US resident or other person was in the US when they conceived and put the invention into practice, which is not just the making of a prototype but potentially includes the drafting of information that ends up in the patent specification assuming the invention has not been reduced to practice.

How does that affect Australian companies?

You might be wondering how that affects a company based in Australia, and what that might mean for you. In Australia, it is common to file an Australian provisional patent application and within 12 months file a PCT application, which within 30 months of the provisional filing enters into the US as a national phase patent application. The US foreign filing licence law also affects Australian companies if they file by other patent filing routes, and subsequently file a US patent application.

If there is no foreign filing licence and one of the inventors is a US resident and they invented (or made the invention) while in the US, there must be an application to the USPTO for what is termed in this case a Retroactive Foreign Filing License under 37 CFR § 5.25.  This retroactive license empowers the USPTO to authorise those patent applications which were inadvertently filed overseas before the US application was filed. This is assuming you did not know you had a duty to request the Foreign Filing Licence before you filed the Australian provisional.

 US residents who invent and what that means for your business

As mentioned, it is not uncommon for a patent application in the US to eventually become granted, naming that US resident who invented while in the US as an inventor (and it does not matter what level of inventorship was involved). If there is no Foreign Filing License issued by the USPTO, the Granted patent will be declared invalid as soon as the patent is challenged. No ifs, No buts – INVALID.

Another critical point is that the US law relates to the concept of an invention ‘made’ in the US. This means that anyone who is in the US and invents, automatically triggers the need to obtain a Foreign Filing Licence or a Retroactive Foreign Filing Licence.

Foreign inventors studying or working in the US

A resident of another country attending a university in the US is a great example of how the Foreign Filing License laws play out. Although they arenot a US resident, any invention conceived or developed in the US will need a Foreign Filing Licence, and they’ll need it before they file in their own country.

Another scenario of concern is when an Australian resident visiting the US to work temporarily conceives or develops the invention while in the US and then returns to Australia. Any intention to file for a patent for the invention ‘made’ in the US will trigger the need to obtain a Foreign Filing Licence, again technically before filing in their country of choice.

 What should you do if you already have a US patent pending or Granted?

To deal with the US resident issue:

Consult with your inventor/s and find out if they are a US resident and whether they were living or working in the US when the invention was created or prototyped. If so, check with your attorney to determine if a Foreign Filing Licence exists for that invention’s patent.

To deal with the non-US resident issue:

Consult with your staff and find out which country they were in when they conceived and brought into practice or created a prototype of the idea that has become the subject of a patent (in any country, but more importantly the US). If ‘made’ in the US, then check with your attorney to determine if a Foreign Filing Licence exists for that invention’s patent.

If you are just venturing into the patent realm and you are employing, or plan to employ a US resident, or your firm contracts a US resident to invent who also happens to be working in the US for you, then keep this sobering issue in mind. If any of your staff are intending to travel to the US and intend to invent while there, you also need to ensure this is a consideration. If your patent attorney does not raise the issue, you need to.

If a foreign filing licence is not in place and it should be, you need to act quickly. You must present your case with complete honesty and candour to the USPTO to seek and obtain a Retroactive Foreign Filing Licence – that step may save your patent and your job.

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Are you infringing a method claim in Australia if you perform the method overseas?

/ David Bey / Articles

Sequenom, Inc. v Ariosa Diagnostic, Inc. [2019] FCA 1011, is a recent Australian Federal Court decision, which has been widely reported on, with writers predominantly focusing on aspects of validity (whether or not the invention claimed was a manner of manufacture) and infringement. This article however, focuses on the lesser reported aspect of the decision relating to infringement of the patent.

In short, Sequenom holds a patent comprising a series of method claims directed toward a prenatal detection method using non-invasive techniques. Co-respondent, Ariosa, developed the Harmony non-invasive prenatal test some 15 years after the priority date of the patent. Aspects of the Harmony Test were found to infringe the claims of the patent.

A portion of this much larger decision dealt with whether infringement occurred during a period of time, where prior to being licensed by Ariosa to use the Harmony Test in Australia, Australian co-respondents Sonic Healthcare and Clinical Laboratories each operated a “send out” testing service where they collected blood samples from pregnant women in Australia and sent those samples to Ariosa in the United States, where Ariosa would use the Harmony Test to produce the results which were then provided to Sonic and Clinical in Australia, and were subsequently forwarded to healthcare professionals in Australia. Sonic and Clinical each promoted and supplied Harmony Test results produced by their own and Ariosa’s use of the Harmony Test in the United States.

Sequenom sought relief for infringement against Sonic and Clinical, arguing that the Harmony Test results were a “product” resulting from the performance of the patented method and the promotion and supply of the results was an infringement.

The respondents cross-claimed that the test results were not a product that could be imported (or kept or sold) within the meaning of the definition of “exploit” in the Patents Act, and that the test results were “the information that could be brought within Australia by a form of communication, or by a person receiving that communication directly overseas and themselves travelling to Australia whilst retaining that information in their memory”.

In reaching his conclusion, Justice Beach turned to Section 13 of the Act, which provides that the patent gave Sequenom the exclusive rights during the term of the patent, to “exploit” the invention as defined in the relevant claims and to authorise another person to exploit the invention.

Schedule 1 of the Act states that where the invention is a method or process, “exploit” in relation to an invention includes use of the method or process or to make, hire, sell or otherwise dispose of a product resulting from such use, offer to make, sell, hire or otherwise dispose of such a product, use or import it, or keep it for the purpose of doing any of those things.

Accordingly, a person will be taken to have infringed a method claim of a patent if that person:
(a)        within Australia uses the invention; or
(b)        exploits, in Australia, a product resulting from the use, anywhere, of the method or process; or
(c)         authorises or procures from anywhere an infringing act referred to in (a) or (b).

Justice Beach explained that the term “product” is not defined in the Act and should thus be afforded its ordinary meaning as “covering anything resulting from the patented method that can be commercially exploited”… “a vendible product” should be “understood as covering every end produced or artificially created state of affairs which is of utility in practical affairs and whose significance thus is economic”.

Critically, Justice Beach explained that “Interpreting the definition of “product” broadly limits the undesirable possibility that a potential infringer could utilise a patented process overseas and then import the resulting product into Australia, and so circumvent the monopoly granted by the method patent”.

Unpersuaded by the argument presented by the respondents, his Honour said “In my view, the reality is that the Harmony Test is carried out for the purpose of obtaining the results. The results are clearly commercially valuable; patients pay in the order of $400 to obtain them. The Harmony Test results, whether recorded in electronic or paper form, are the product of a patented process for the purposes of the definition of “exploit”. Moreover, by supplying the Harmony Test results to clinicians in Australia, Sonic and Clinical infringed the relevant claims during the send out [testing service] period.”

What could this mean?

This decision provides an important precedent that the exploitation in Australia of a product produced overseas by a patented process (i.e a process patented in Australia) constitutes an infringement. It is not limited to tangible products, but can also be found where the product of the patented process is one which is intangible such as medical test results like the prenatal test results obtained with the Harmony Test. It is, however, not hard to imagine how this decision might also be followed where the product of a patented process performed overseas constitutes some other commercially valuable information such as an online gaming outcome, or even a received telecommunication signal processed overseas according to a patented method, so the findings of this decision ought to be considered in analogous situations in other technical fields.

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Obtaining Trade Mark Protection in New Zealand

/ Irena Fizulic / Articles

Australia and New Zealand are close trading partners and it is therefore worth considering whether to register your trade mark in both countries simultaneously. Madderns has attorneys registered in both Australia and New Zealand and can assist with filing New Zealand trade mark applications, as well as Australian trade mark applications.

New Zealand trade mark applications and registrations are overseen by the Intellectual Property Office of New Zealand (IPONZ). The process for filing a New Zealand trade mark application is similar to filing a trade mark application in Australia.

A New Zealand trade mark application can be filed directly with IPONZ or a New Zealand designation can be made through the Madrid Protocol System for international registrations (New Zealand became a member of the Madrid Protocol System in December 2012).

Like Australia, the New Zealand trade marks system follows the International NICE Classification whereby all goods and services are classified in one or more of 45 classes. Madderns can provide tailored advice on filing strategies, assist with drafting an appropriate description of goods and services for which protection is sought and then prepare and file the application with IPONZ.

Prior to formally filing a new trade mark application, it is also possible to file a request for a “Search and Preliminary Advice Report” (S&PA) from IPONZ. The S&PA report consists of two parts and provides an assessment within five working days as to whether your proposed trade mark complies with the requirements of the New Zealand Trade Marks Act 2002. The “Search Report” will involve the IPONZ Examiner searching the Register for any pre-existing conflicting trade marks and the “Preliminary Advice Report” will advise as to whether the proposed trade mark is distinctive enough within your industry to act as a trade mark. After receiving the S&PA report from IPONZ, you can decide whether you would like to proceed with formally filing your application or to abandon the process.

Once the New Zealand application is filed, it will generally be examined by IPONZ within 5-10 working days. If objections are raised during Examination (for example, based on the nature of the mark itself or pre-existing conflicting trade marks on the New Zealand Register), IPONZ will issue a Compliance Report. The Applicant will then have a period of 12 months (calculated from the filing date of the application) to file a response to the Compliance Report.

Once the application is accepted, it will be advertised in the public domain for a period of three months.  During this three month period, any third party may oppose the acceptance of the application. Assuming that there are no oppositions filed, the application will then proceed to acceptance.

In summary, the registration process in New Zealand, as well as Australia, can typically take around 8-9 months from the date the application is filed through to registration.

New Zealand trade marks are valid for a ten year period and can be renewed every ten years. There is also a 12 month “grace period” within which the renewal fees can still be paid after the registration has expired.

Finally, like Australia, it is possible to record registered New Zealand trade marks with New Zealand Customs in order to arrange border protection for your trade marks. In New Zealand, there is a requirement to file a “Customs Authorisation” and a “Security under the Trade Marks Act 2002” form, together with a security bond of NZ$5,000. In contrast, Australian trade mark registrations can still be recorded with Australian Customs by filing a “Notice of Objection” and “Deed of Undertaking”, however, there is no security bond required at the time of filing the two forms.

Madderns has experience in filing and prosecuting New Zealand trade mark applications and managing New Zealand trade mark portfolios, in addition to Australian trade marks. If you would like our assistance with New Zealand trade marks, please do not hesitate to contact us.

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Secret Use and “Trial and Experiment” in Australian Patent Law

/ Martin Pannall / Articles

Many people are aware that for an invention to be patentable, the invention must not have been publicly disclosed prior to filing a patent application for the invention (i.e. must be “novel”). Public disclosure of the invention as claimed in a patent application may prevent grant of the patent application, or may later invalidate an Australian patent granted for the invention.

Less well-known, is the fact that “use” of the invention, even if under confidential terms (or “in secret”), can, in some cases, equally invalidate a patent granted for the invention, if that use was made before the earliest priority date of the patent1.

The philosophy behind the secret use provisions is to prevent a patentee from obtaining a “de-facto extension” of term of the patent, beyond the normal 20 year term2 (or 8 years for an Innovation Patent). The classic example of this is in the case where a company makes and sells a product that is manufactured using a secret manufacturing process and then some years later, seeks to obtain patent protection for the process to obtain a 20-year monopoly, thus having effectively had over 20 years of protection. Under the normal “novelty” requirements, because the process was never made public (i.e. had been kept secret), the invention is novel at the time of filing a patent application and would, but for the secret use provisions, mean that a valid patent may be able to be obtained.

Section 9 of the Australian Patents Act 1990 sets out the provision of Secret Use, and in particular, sets out what is not to be taken as secret use, as paraphrased below:

(a)  use of the invention for the purpose of reasonable trial or experiment only;

(b)  any use of the invention occurring solely in the course of a confidential disclosure of the invention

(c)  any other use of the invention for any purpose other than the purpose of trade or commerce;

(d)  any use of the invention by or on behalf of the Commonwealth, a State, or a Territory where the patentee or nominated person, has disclosed the invention, to the Commonwealth, State or Territory.

Thus, it can be seen that a number of factors will exclude use as “secret use” for the purposes of considering the validity of a patent. One of these factors is whether the “use“ was for “reasonable trial and experiment” (subsection 9(a)), rather than for the main purpose of gaining commercial benefit..

In a recent Federal Court Decision, SNF (Australia) Pty Limited v BASF Australia Ltd2, this concept of what is “reasonable trial and experiment” was considered. In this case, SNF (Australia) Pty Limited (SNF) attacked the validity of Australian Patent App Nos. 2004203785 and 2013204568   entitled “Treatment of Aqueous Suspensions”, and directed to a process of treating a material, claiming that they were invalid because Ciba Specialty Chemicals Water Treatments Limited (Ciba), the previous owner of the patent applications, had secretly used the claimed inventions on a number of field sites prior to filing any patent application.

SNF contended that Ciba had (among other things), used the claimed invention at 3 mines between Dec 2002 and the priority date (2003); sold 29 tonnes of flocculent for a value of $93,915 for use in the claimed invention before the priority date; and sold or licensed equipment for use in the claimed invention before the priority date and derived at least $50,000 from that use.

SNF argued that these examples of use clearly provided Ciba with a commercial advantage and was thus not solely for “reasonable trial and experiment”.

BASF Australia Ltd (BASF) countered that the use was for reasonable trial and experiment because (among other things); the trial team at Ciba were involved in the use at all times and the results of the trials were discussed at monthly meetings; the work was undertaken to support patent applications and further data collection; secrecy agreement was in place, which is only really used when trialling an invention; both CRL (the owner of the sites and for whom the invention was being trialled) and Ciba made R&D tax claims for the work; the nature of the invention required testing in the field – not just in the laboratory; and that at no point during the trial work did CRL accept the technology to be proven, even well into 2003 (and well after the earliest priority date of the patent applications of 7 May 2003).

In deciding whether the use was for “reasonable trial and experiment”, despite the fact that some monies were charged during the trials, Justice Beech noted the following considerations:

First, the relevant enquiry is whether the true purpose of the use was reasonable trial or experiment. If the true purpose of the use is found to be for trial or experimentation, the fact that there may be some commercial benefit to the patentee will not constitute invalidating prior use.

Second, the assessment of whether a series of activities can be characterised as trials or experiments must be made in light of the nature of the invention to be claimed and the tasks and conditions for which it was designed.

Third, to constitute reasonable trial or experiment there must be some intention to use the invention to be claimed with a view to its development or validation including proof of concept.

Fourth, it may be significant that no remuneration was received for any of the trials. To receive remuneration may point away from reasonable trial or experiment; and

Fifth, it may be significant that although there have been negotiations for the supply and manufacture of the invention, the negotiations were not concluded until after the priority date. If they have been concluded beforehand, that may support an invalidating secret use.

Taking all considerations and facts into account the use by Ciba was held to be for reasonable trial and experiment and thus not to be secret use for the purposes of invalidating a patent.

Thus, when considering whether use is made of the invention in secret, and even in cases where monies were charged or other commercial events took place, that use may be excluded from secret commercial use if it falls under one of the exemptions of Section 9, including “reasonable trial and experiment”, and thus the specific details of the use must be sought and considered.

It is also worth noting that under the current patent law, which was not applicable in this case, any use which would otherwise be considered to be “secret use”, and thus potentially invalidating, is to be disregarded if a Complete patent application is filed within 12 months of the first of that use3.

  1. Paragraph 18(1)(d) of the Patents Act 1990 states that an invention is patentable if (among other things), the invention “(d)  was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor in title to the invention.”
  2. SNF (Australia) Pty Limited v BASF Australia Ltd [2019] FCA 425 (20 march 2019)
  3. Section 9(e) Australian Patents Act 1990
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Are plants patentable in Europe?

/ Michael Dow / Articles

The rules keep changing over whether plants or plant products obtained by means of an essentially biological process are patentable in Europe.

Under Article 53(b) EPC (and Article 4 Biotech Directive), European patents shall not be granted in respect of plant varieties or essentially biological processes for the production of plants. Originally, this was interpreted to extend to plants and plant products obtained by means of an essentially biological process.

This was challenged in Broccoli/Tomatoes I (G 0002/07 & G 0001/08) and Broccoli/Tomatoes II (G 0002/12 & G 0002/13), following which, it was allowable to have a product claim directed to plants or plant material such as a fruit, even though the plant or plant material might be obtained by an essentially biological process, which is not patentable.

The European Commission considered the issue (2016/C 411/03) and took the view that the EU legislator’s intention when adopting the Biotech Directive was to exclude from patentability products (plants and plant parts) that are obtained by means of essentially biological processes.

The Administrative Council of the EPO then introduced Rule 28(2) to modify Article 53(b) EPC. Rule 28(2) states that European patents shall not be granted in respect of plants exclusively obtained by means of an essentially biological process.

Recently, the Technical Board of Appeal decided that Rule 28(2) is in conflict with Article 53(b) EPC and therefore, in accordance with Article 164(2) EPC, the provisions of the Convention prevail. Accordingly, Rule 28(2) is void.

This means that European patents can again be granted in respect of plants exclusively obtained by means of an essentially biological process. The question now is: how long will it last?

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