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.
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- 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.”
- SNF (Australia) Pty Limited v BASF Australia Ltd  FCA 425 (20 march 2019)
- Section 9(e) Australian Patents Act 1990
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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It is with great pleasure that we announce that Dr Michael Dow has won The Institute of Patent and Trade Mark Attorneys of Australia (IPTA) Institute Prize for 2018.
The Institute Prize is one of IPTA’s most prestigious awards with a long and distinguished history. It is awarded to a newly qualified candidate who has shown excellence in academic subjects and has best demonstrated that they have the potential to contribute substantially to the profession.
Michael joined Madderns in February 2013 after working as a research scientist in Australia and the United States. He studied at the University of Adelaide where he obtained a PhD in plant biotechnology, and previously at Flinders University where he obtained a Bachelor of Biotechnology with first class honours.
Michael is no stranger to success having been awarded a Dean’s Commendation for Doctoral Thesis Excellence from the University of Adelaide and receiving the University Medal for his academic achievements at Flinders University.
We are proud of Michael’s latest achievement, which we believe has resulted from Michael’s outstanding work and has been facilitated by the environment in which Madderns provides for its trainees’ development.
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When choosing a trade mark, keep in mind that marks with geographical connotations can be difficult to protect and enforce.
This case illustrates that even trade marks with references to former geographical locations can be problematic, particularly if that area was and still is well-known as a source of particular products.
The relevant geographical location in this case is the area in the Czech Republic which was formerly known as “Bohemia”. The parties involved in the dispute both distributed crystal-ware and glassware in Australia under different “Bohemia” brands: Bohemia Crystal Pty Ltd under the name “Bohemia”, and Host Corporation Pty Ltd under the name “Banquet Crystal by Bohemia”.
Bohemia Crystal Pty Ltd claimed that, by selling products under the “Banquet Crystal by Bohemia” brand, Host had engaged in misleading or deceptive conduct and infringement of the following Australian Trade Mark Registrations:
- 891129 for the words “BOHEMIA CRYSTAL” covering “glassware being tableware, stemware and decorative items including crystal glass figurines, glass jewellery holders and trophies” in class 21, and
- 952530 for the word “BOHEMIA” covering “glass and glassware, crystal and crystal ware of all kinds not included in other classes including vases, figurines, bowls, wine glasses, goblets, drinking glasses, ornaments, giftware, decorated glass, painted glass; china, porcelain and earthenware” in class 21.
In response, Host Corporation Pty Ltd claimed that Registration Nos. 891129 and 952530 should be cancelled pursuant to sections 41 and 88 of the Trade Marks Act 1995 (Cth). Host Corporation Pty Ltd argued that both “BOHEMIA CRYSTAL” and “BOHEMIA” were too descriptive to be registered as trade marks, given that these marks incorporated the name of a former geographical location that was, and still is, particularly well-known for the type of goods covered.
Bohemia Crystal Pty Ltd did not dispute that the former area of “Bohemia” was previously known as a source of high quality glassware and crystal products. However, Bohemia Crystal Pty Ltd argued that when seeing products labelled with their “BOHEMIA” and “BOHEMIA CRYSTAL” trade marks, ordinary consumers were more likely to think of the “artistic or conventional” Bohemian lifestyle than the former geographical location.
The Court accepted that “Bohemia” could be defined as either (1) the name of a former geographical location in the modern Czech Republic, or (2) a mythical place from which people who “adopt an unconventional lifestyle”, ie “Bohemians”, live or originate. However, in the context of crystal-ware and glassware, the Court held that only the first definition was relevant. The Court noted that, when seeing glassware and crystal products labelled with the “BOHEMIA” and/or “BOHEMIA CRYSTAL” trade marks, both ordinary consumers and other traders were only likely to think of “Bohemia” as “a region from where glassware is manufactured” given the history and reputation of that location as a place of manufacture of quality crystal-ware and glassware. The Court also noted that “BOHEMIA CRYSTAL” may suggest a “style of glassware” originating from Bohemia to some traders and consumers. In light of this, the Court held that both “BOHEMIA” and “BOHEMIA CRYSTAL” were not distinctive enough to be registered as trade marks and, consequently, Bohemia Crystal Pty Ltd’s Trade Mark Registration Nos. 891129 and 952530 were cancelled and they could not prevent Host Corporation Pty Ltd from continuing to use the “Bohemia” name.
Take-home message: trade marks with geographical connotations can be difficult to protect and enforce and we would recommend selecting alternative marks. However, if you still wish to use a trade mark which has geographical connotations, consider incorporating a more distinctive element.
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Congratulations to VitaChar on winning first prize at the University of Adelaide’s Australian eChallenge awards, for most outstanding entrepreneurial venture of the year.
Madderns has been a sponsor of the Australian eChallenge since its inception 18 years ago and Partner Bill McFarlane has been a contributor each of those years to the IP education aspect of the competition. On Thursday evening 15 November 2018 at the formal awards ceremony VitaChar won the first prize in a high quality group of finalists in the competition. Bill was not only a Judge of the finalists he also gave a speech and presented the People’s Choice Award during the event. Madderns has and continues to be an active supporter of the Entrepreneurial ecosystem in South Australia.
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