Sunday, April 29, 2012

The ram goes out

Over the last 10 years of living off the land we have grown accustomed to the logical order of things. As the days grow shorter and the evenings grow cooler we now recognise that it is time to put the ram out. It's been almost a year since we farewelled our last ram so it is obviously time to borrow a new one.

We've spent the last month 'flushing' our ewes. This is where the ewes (female sheep) are fed on a steadily increasing ration in the weeks leading up to what is known as the 'ram date'. It's a tried and true technique that is supposed to cause multi-ovulation. I guess it works. We always seem to have good lambing rates.

We followed the same arrangement as we did last year. Our neighbour Dave borrowed an end-of-the-line ram from a real farmer. We picked up his ewes and the ram and brought them back to our place for a few months.

The new ram looks like quite a character. He looks part Suffolk, with a characteristic black face and solid build. We'll hopefully resist giving him a name as we have previously. The new guy looks more fertile than Lego and calmer than Sid. Within minutes he was chasing our well-conditioned ewes around the paddock like some sort of woolly teenager, chin forward and ears back.

I think it's going to work out.

The tobacco wars

Tobacco sheds
We have seen some recent litigation in the Australian High Court relating to a tobacco company challenge to legislation requiring plain packaging of cigarettes. The New Zealand government may be looking toward similar legislation if Australia is successful in removing all tobacco company logos from cigarette packs.

The issue in Australia is whether the Australian government, in banning use of logos and other insignia on packaging, has acquired property in the form of these marks. This argument is based on trade marks being a form of property. There is an argument that preventing their use amounts to effective seizure or acquisition of the trade marks.

In response, the Australian Government says that trade mark use by companies in Australia is a privilege. A privilege is not a property right and can be curtailed. Trade marks registrations provide only a liberty to act subject to regulation by law.

My view is that intellectual property rights (for example trade marks) have long been accepted as a form of property, rather than as a privilege. For example, the New Zealand government is permitted to use a patented invention in certain limited cases, but is required to pay reasonable compensation to the patentee, presumably as recognition of the restriction on their rights.

It will be interesting to see how the Australian High Court handles this one. There will be significant implications if the Court finds that trade marks are not actually a form of property. These implications will extend not only to tobacco, but to all goods and services. It could be that intellectual property rights are at risk in ways we have not previously considered.

Thanks to Jonathan Aumonier-Ward for this article.

A world first in Australia

The Australian law requires all cigarettes to be sold in plain olive packs, with 80 per cent covered in graphic health warnings, and labels printed in the same simple font. Australia is not the first country to draft legislation like this, but it is the first country to pass it into law. A similar bill in Canada failed in 1995 following a Supreme Court fight and pressure from affected companies.

The four largest tobacco companies selling in Australia are Philip Morris, British American Tobacco, Imperial Tobacco and Japan Tobacco. The four companies joined forces when the Australian legislation was proposed, forming the Alliance of Australian Retailers.

The companies argue that the Australian government is acting unconstitutionally and in violation of international agreements. They argue the government is trying to take ownership of the companies’ intellectual property by preventing them from using it in the country.

The Australian government has responded to tobacco companies, saying it does not intend to acquire or expropriate any of their property rights – merely curtail those rights.

Property or privilege?

The Australian case has significant implications for intellectual property in general, if the court finds that plain packaging is not an unreasonable limitation on intellectual property rights. These implications extend not only to tobacco, but to all goods and services.  Intellectual property rights are at risk in ways we have not previously considered.

Philip Morris Asia, in bringing the court case against the Australian government, has argued that the government seeks to deprive tobacco companies of its very lucrative investments in trade marks and other intellectual property.

The New Zealand aspect

New Zealand is a party to a number of international intellectual property treaties that restrict rights to unjustifiably deny the use of trade marks. These include the WIPO  Paris Convention for the Protection of Industrial Property and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. Complaints have been made to the WTO in relation to the Australian legislation based on these treaties. The same complaints could be expected if New Zealand follows Australia’s lead.

The benefit or otherwise of any international agreement is a political and economic consideration, not a legal one. That will be a trade policy decision for the government of the day to make. It is not an intellectual property issue.

The real issue for New Zealand is the potentially fundamental shift signalled by the government. Intellectual property has long been a right not merely a privilege. Generally speaking people have been allowed and encouraged to acquire and exploit their intellectual property. The government seems to be signalling this may no longer always be the case. This could open the flood gates into other areas.

What now?

We have seen that the new laws in Australia have brought about a number of complaints. There has been action in the local Court. There has been complaint to the WTO. The core issue involves breaches of treaties and other agreements prohibiting the ‘unjustifiable denial’ of a person’s right to use their own trade marks. It seems inevitable that if you are taking away someone’s right to do something that you will face complaints.

Photo courtesy of author trbpix under Creative Commons licence.

Tuesday, April 24, 2012

BPAI round-up

On The Move #1 of a set

This round-up of recent decisions of the US Board of Patent Appeals and Interferences (BPAI) focuses on cases involving issues of patentable subject matter. We haven't seen too many surprises. There have been rejections to claims directed to a database, a structured data object, an abstract idea, a mathematical algorithm and a computer-readable medium.

Non-functional material

Ex Parte Fitzpatrick, No. 2010-001946 (BPAI Apr 15, 2012) involved a database, method and system whereby accurate prices paid for products in stores are captured at a frequent shopper card level and archived for consumer access and market analysis.

The claims at issue from a subject matter point of view were claims 52 and 55. Both claims were dependent on claim 40 that appellant Catalina Marketing Corporation had already cancelled.

Claim 40 was directed to:
A price-paid database aggregated from a plurality of retail stores, comprising:
a first field for storing an item identification corresponding to an item purchased from the plurality of retail stores; and
a second field for storing the price paid for said item purchased.
The examiner had said that claims 52 and 55 were “directed to a computer program per se or data structure of a computer or software.”

The Board affirmed the rejection, observing that:
[c]laims 52 and 55 recite a database with data fields and their contents, and are thus construed as claiming an assortment of data, which is not an eligible category of patentable subject matter. The contents of the data fields are non-functional descriptive material and are afforded no patentable weight.
Another non-functional data case was Ex Parte Falk et al, No. 2009-012172 (BPAI Apr 10, 2012). This case involved techniques for data integration operative in a data processing system having a windows-based graphical user interface (GUI).

Claim 12 at issue read as follows:
12. A structured data object for use in a data integration display method, the structured data object comprising:
a structured content model representation;

a first set of one or more sockets representing one or more inputs to the structured content model representation; and

a second set of one or more sockets representing one or more outputs from the structured content model representation;

wherein the sockets facilitate creation of a given visual mapping when the data object is displayed in juxtaposition with one or more other data objects; wherein at least one of the sockets communicates data;

and wherein the structured content model representation is visually representative, at least in part, of a data structure encoded within a computer readable medium.
The Examiner had said that claim 12 was "drawn to non-statutory subject matter because the structured data object is not embodied in a computer-readable media". The structured content model representation only represents a data structure, and therefore the claimed structured data object is not [inherently] required to be embodied in a computer-readable medium.

The Appellants argued that claim 12 in question recited a structured content model representation that visually represents a data structure encoded within a computer readable medium. Therefore the data structure is structurally and functionally related to the medium, and is statutory. The Appellants argued that the Examiner was wrong to conclude that the structured data object as recited is not [inherently] required to be encoded within a computer readable medium.

The Board agreed with the Examiner, observing that claim 12 (and 13) were not drawn to statutory subject matter as claim 12 is limited to a structured data object that includes a structured content model representation, which in turn is only partially visually representative of a data structure that is encoded within a computer readable medium. The claimed structured data object, said the Board, does not fall within one of the four statutory classes of patentable subject matter.

The data structure is not limited to being associated with the structured data object or the structured content model representation. Therefore the claimed structured data object also imparts no functionality and is not embodied in a tangible computer readable medium.

Abstract ideas and algorithms

Ex Parte Merkley et al, No. 2010-009843 (BPAI Apr 15, 2012) involved a technique for marketing an agricultural input via electronic communications. At issue in this case were method claims 1-7 and system claims 14-20.

The Examiner had said that claim 1 for example recites steps including obtaining information, establishing (finding programs), marketing (promoting), and providing a financial tool (a mathematical algorithm). Claim 1, according to the Examiner, performs no physical transformation and does not recite how a specific machine is used. The claim therefore recites no more than an abstract idea.

The Appellants, Deere & Company, argued that the claim performs transformation as data processing.

The Board agreed with the Examiner, referring to Bilski v. Kappos, 130 S.Ct. 3218, 3231 (2010) and observing that abstract ideas are not patent eligible. Claim 1, said the Board:
does no more than lay out the concept of promoting the sale of some abstract ideas. The claims neither refer to a specific machine by reciting structural limitations to any apparatus, nor recite any specific operations that would cause a machine to be the mechanism to obtain, find, promote and provide an algorithm. Absent any specific structural limitations on how one acts to perform these steps, these claims recite no more than the abstract concept of marketing a service. As in Bilski, a patent including these claims would allow the Appellants to pre-empt the use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.
Furthermore, the claimed step of “marketing, for the retailer via the data processing system” could mean just sending out an e-mail and is insignificant extra-solution activity as is the step for “providing a financial analysis tool” which could be a mathematical algorithm.

Setting its sights on system claim 14, the Board observed that simply using some data processing device in some undefined manner alone cannot confer patentability CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 2011). Claim 14, said the Board, recites no specific structure beyond a general purpose data processing device as the claimed modules may be software, but only recites performing the steps of claim 1 with a data processing device. The use of the data collector in the claimed system of marketing is insignificant extra-solution activity.

In another case, we were reminded that mere algorithms are not eligible for patent protection. In Ex Parte Chen et al, No. 2009-013261 (BPAI Apr 11, 2012) the Board considered an invention directed to a machine-accessible medium and method for performing, in a processor, motion compensation and bi-linear interpretation on packed data.

Claim 1 for example was directed to a method for performing bi-linear interpolation or a motion compensation of a digital image or video. The examiner said this was simply a method for performing a computation via a mathematical algorithm. The only result was interpolated data. The claim, according to the examiner, was not limited to a practical application of the mathematical algorithm because the result was not a tangible result. The result (interpolated data) was not a real-world result.

The Board also noted that the claims recite an algorithm to produce interpolated data or motion compensation. The claims, according to the Board, recite no specific environment in which the interpolation or motion compensation is performed nor are the claims directed to a particular machine to perform the interpolation or motion compensation. Therefore the claims wholly preempt all uses of the algorithm.

Transitory signals

I'm surprised that we are still seeing arguments at the BPAI level over whether the term “machine-readable medium” includes transitory propagating signals.

In Ex Parte Van der Voort et al, No. 2010-011853 (BPAI Apr 2, 2012) the Board affirmed the Examiner's rejection of claims 15- 22. Independent claim 15, said the Board, recites “machine-readable medium.” The patent specification discloses that machine usable mediums include transitory propagating signals which are non-statutory subject matter.

It would have been pretty hard to come to a different conclusion. The patent specification includes the paragraph shown below with my emphasis added:
Examples of machine usable mediums include: nonvolatile, hard-coded type mediums such as read only memories (ROMs) or erasable, electrically programmable read only memories (EEPROMs), user-recordable type mediums such as floppy disks, hard disk drives and compact disk read only memories (CD-ROMs) or digital versatile disks (DVDs), and transmission type mediums such as digital and analog communication links.

Photo courtesy of author sirwiseowl under Creative Commons licence.

Friday, April 20, 2012

The show goes on

notice to burglars
It has been an interesting week for copyright infringement actions. We have seen a conclusion to the long running dispute between Roadshow Films/AFACT and iiNet in Australia. We have also seen a couple of test cases emerge for New Zealand's three strikes law.

Roadshow Films

Today the highest court in Australia, appropriately called the High Court, dismissed an appeal by a bunch of film and television companies from a decision of the Full Court of the Federal Court of Australia. In Roadshow Films Pty Ltd & Ors v iiNet Limited [2012] HCA 16 (20 April 2012), the High Court found that internet service provider iiNet had not authorised the infringement by its customers of the appellants' copyright in commercially released films and television programmes.

It had already been acknowledged by all parties that there were 'stealsies' going on. The customers of iiNet had infringed copyright in films by making them available online using the BitTorrent peer-to-peer file sharing system.

The Australian Federation Against Copyright Theft (AFACT) had served notices on iiNet alleging that iiNet's customers had infringed copyright in films. iiNet did nothing.

In the High Court the appellants argued that iiNet had the power to prevent copyright infringement by issuing warnings and suspending or terminating customer accounts. They argued that the AFACT notices provided credible information of infringement. And they argued that once iiNet had this information, doing nothing amounted to authorisation of infringement.

The Court didn't agree. It observed that iiNet couldn't stop its customers using BitTorrent to infringe copyright. All it could do was terminate its contractual relationship with its customers.

The notices weren't that good either. The Court said the AFACT notices didn't provide iiNet with a reasonable basis for sending warning notices to individual customers threatening to suspend or terminate accounts.

I suspect the show will still go on and that ISPs will still be a target for actions of their users. The Full Court had observed that in some cases ISPs may well be found to authorise infringement of their users

Three strikes

Last year the New Zealand Government passed the Copyright (Infringing File Sharing) Amendment Act 2011. The Act creates a procedure for a rights holder to object to unlawful file sharing. A rights holder is able to ask an internet service provider (ISP) to send an infringement notice to the account holder. I covered this topic in an earlier blog post.

Infringement notices come in three forms: detection, warning, and enforcement notices. Put simply, if a person infringes copyright then, on a request from the rights holder, the ISP must send the account holder a detection notice. If the same person infringes the same rights holder’s copyright again, then, on request, the ISP must send a warning notice to the account holder. A third infringement of the same rights holder’s copyright will lead to the final notice, an infringement notice, being sent to the account holder.

This week we saw the first two final notices sent out. In both cases the Recording Industry Association of New Zealand (RIANZ) instructed ISPs Telstra Clear and Vodafone respectively to send the notices. Both notices contained allegations of illegal download of music.

In each case it will have cost RIANZ NZ$275 in disbursements assuming each case goes to the Tribunal. If successful the offender can be fined anywhere from NZ$275 up to NZ$15,000. Currently there is no provision to suspend an offender's internet account.

It makes me wonder who these customers are. They have presumably downloaded more than a single copyright work. And they have presumably made more than one copyright work available for download. But they have not taken any steps to mask their Internet Protocol (IP) address.

It will be interesting to see how these cases unfold.

Photo courtesy of author vistavision under Creative Commons licence.

Sunday, April 15, 2012

New trade mark system for Vanuatu

Sunset in Vanuatu
The Republic of Vanuatu is an island nation nestled in the South Pacific. Vanuatu has put in place a new trade mark registration system. The old system allowed an owner of a trade mark registration within the European Union to re-register that trade mark in Vanuatu. There has now been a change to a local registration system. Thanks to Lynell Tuffery Huria and Damian Broadley for this article.

The Trademarks Act 2003 (Vanuatu) came into force in Vanuatu on 8 February 2011 after its publication in the Official Gazette in Vanuatu.  No supporting regulations were passed to support that legislation, and until December 2011, the trade marks law in Vanuatu was unclear.

On 1 December 2011, a new Registrar was appointed and the new law became effective.  Since then, the Vanuatu Intellectual Property Office has been established within the Ministry of Trade, Tourism, and Industry, and more supporting regulations have been passed.  New filings and recordals are now being accepted at the new Ministry.

The new legislation transforms the trade mark registration system from a re-registration system (based on registrations achieved in any member state of the European Union) to a local registration system.

Some highlights of the new registration system are:

  • trade mark applications can also claim convention priority from convention countries declared by regulation.  A list of countries that fall within the definition of “convention country” is yet to be declared at this stage.
  • trade mark applications can cover multiple classes
  • applicants must have a local address for service
  • the Act introduces examination (absolute and relative) provisions, acceptance, opposition, and registration provisions
  • the grace period for renewals is three months.

The Act also confirms that all registrations achieved under the Registration of EU Trade Marks [Cap. 81] will still be considered valid registrations under the new Act.

Photo courtesy of author Arthur Chapman under Creative Commons licence.

Wednesday, April 11, 2012

Weak Intellectual Property Laws are Trade Barriers

Countryside view in the area
The United States doesn't like New Zealand's proposed patent exclusion for computer programs, lack of patent term extensions and an unfavourable environment for innovative medicines. What has now emerged in a recent report is that the United States considers these to be significant trade barriers.

Background to the Report

The 2011 National Trade Estimate (NTE) Report on Foreign Trade Barriers is the twenty-sixth in an annual series that surveys significant foreign barriers to U.S. exports. Every year the U.S. Trade Representative is required to submit to the President, the Senate Finance Committee, and appropriate committees in the House of Representatives, an annual report on significant foreign trade barriers.

There is a statutory requirement of an inventory of the most important foreign barriers affecting U.S. exports of goods and services, foreign direct investment by U.S. persons, and protection of intellectual property rights. Such an inventory facilitates negotiations aimed at reducing or eliminating these barriers. The report also provides a valuable tool in enforcing U.S. trade laws, with the goal of expanding global trade and strengthening the rules-based trading system, which benefits all economies, and U.S. producers and consumers in particular.

Trade barriers are broadly defined as government laws, regulations, policies, or practices that either protect domestic products from foreign competition or artificially stimulate exports of particular domestic products.

The report classifies foreign trade barriers into nine different categories. These categories cover government-imposed measures and policies that restrict, prevent, or impede the international exchange of goods and services. They include:
  1. Import policies
  2. Government procurement
  3. Export subsidies
  4. Lack of intellectual property protection
  5. Services barriers
  6. Investment barriers
  7. Government-tolerated anticompetitive conduct of state-owned or private firms that restricts the sale or purchase of U.S. goods or services in the foreign country‘s markets;
  8. Trade restrictions affecting electronic commerce
  9. Other barriers
Intellectual Property Rights Protection

One of the sections of the report deals with New Zealand. The report notes that:
'New Zealand generally provides for strong IPR protection and enforcement. Recent developments include the introduction of a new patent bill. Although the draft bill strongly supports New Zealand’s objective of improving its patent system, the United States has concerns over certain elements of the current draft bill.'
Computer programs

The report notes that:
'[t]he exclusion from patent eligibility of computer programs is of particular concern as it is unconstitutional with patent eligibility standards in other developed economies and is a departure from New Zealand’s current Patents Act.'
What the report is saying is that the proposal to exclude computer programs from patent protection is a significant trade barrier as far as the US is concerned.

The report on Australia does not include any such admonishment. There is no legislative exclusion for computer programs in Australia. The report notes that:
'Australia generally provides strong intellectual property rights (IPR) protection and enforcement through legislation that, among other things, criminalizes copyright piracy and trademark counterfeiting.'
What might be surprising to some is that the approach to intellectual property rights within the European Union does not provide a significant trade barrier either. As many of us know, the European Patent Convention includes a specific exclusion for computer programs as such. Nevertheless the report notes that:
'[t]he EU and its Member States generally provide strong protection for intellectual property rights (IPR). However, U.S. industry has concerns regarding the implementation of key provisions of EU IPR directives and overall IPR protection in some Member States.'
The concerns noted are unrelated to patent policy.

Why does the current European exclusion provide no significant trade barrier for the European Union? Why does a proposed exclusion in New Zealand provide a significant trade barrier for New Zealand?

I suspect that doing away with the exclusion to keep us aligned with Australia would address this trade barrier. Alternatively, amendment of our proposed exclusion to align it with Europe may also achieve the same goal, as far as the US is concerned.

Patent term extension

Patent term extension (or lack of) also appears to be a significant trade barrier as far as the US is concerned. Apparently the proposed bill in New Zealand does not include other provisions in keeping with international best practices.

One example given in the report is that:
'the bill does not include provisions allowing for patent term restoration, which would enable rights holders to recoup the effective patent term lost due to delays in the marketing approval process. The absence of such a provision makes it more difficult for an innovator to recoup his investment in developing new medical products.'
Although the report refers to "restoration" it means "extension". In this business we are used to people using different words to talk about the same thing.

Other barriers - Pharmaceuticals

A US report on trade barriers would not be complete without a dig at Pharmac.

According to the report the U.S. pharmaceutical industry has strong concerns regarding restrictions to access to New Zealand’s pharmaceutical market. The New Zealand government is the primary purchaser of pharmaceuticals in the country. Within a budget set by the Minister of Health, PHARMAC determines which medicines to fund, negotiates prices with pharmaceutical companies, and sets the subsidy levels and conditions.

The report notes that:
'[US i]ndustry representatives criticize PHARMAC for a lack of transparency, timeliness and predictability in the reference pricing process and for unreasonable delays in reimbursing new products. Combined, these issues create an unfavorable environment for innovative medicines. PHARMAC is reportedly working to improve transparency and increase stakeholder involvement in its processes. The pharmaceutical industry has also reached out to partner with the government of New Zealand and other stakeholders to achieve better provision of quality medicines, as well as better health and economic outcomes.'
Where to from here?

The report doesn't tell us anything we don't already know. The US considers that our proposed patent exclusion for computer programs, our lack of patent term extensions and an unfavourable environment for innovative medicines caused by PHARMAC are all significant trade barriers.

It is now a question of what changes we want to make to address these trade barriers. Our proposed patent exclusion for computer programs is not yet a trade barrier. Removing it will require no change to our current environment. Food for thought.

Photo courtesy of author BeckyCortino under Creative Commons licence.
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