Ownership and Exploitation
Exclusive Rights of Patentee
Patentee has the right to ‘exploit’ the invention (s 13(1)). 'Exploit' is defined in Schedule 1 to mean:
- In relation to a product: ‘to make, use, sell or otherwise dispose of the product’ or offer to do so, or ‘import it or keep it for the purpose’ of doing so;
- In relation to a process/method: to use the process.
The rights granted to a patentee are personal property: s 13(2).
Section 6 of the Statute of Monopolies referred to the ‘first and true inventor’, which included the person who first introduced the invention into the realm (Edgeberry v Stephens (1693) 2 Salk 447). This is not longer the case today.
An inventor has a right to apply for a patent, but a person can also acquire rights to an invention, for example in the course of employment or by purchasing the right (s 15). Mere importation is no longer sufficient to apply for a patent.
There can be joint inventors of a patent (s 31). Joint inventors take as tenants in common (s 16(1)(a)). Each is enttield to work the invention without accounting to the others (s 16(1)(b)). However, all must cconsent to the grant of a licence or assignment of an interest (s 16(1)(c)). Disputes between co-owners are resolved by the Commissioner of Patents (s 17).
Taylor Lennox on when the rights to an invention will be owned by an employer
Ownership of employee inventions vests in employers where there is an express term in employment contract. Any express term should not be so wide as to constitute a restraint of trade (Electrolux Ltd v Hudson  FSR 312). In that case, an adaptor to fit a bag to a vacuum cleaner was invented by a storekeeper and the terms of his employment had nothing to do with inventing in relation to vacuum cleaners.
Ownership can also vest in employers by way on implied terms. Where employee engaged to use his inventive faculty is doing work he is paid to do - benefits to employer include the rights to invention (UWA v Gray (2009) 82 IPR 206).
Ownership and Exploitation: Assignment and Licensing
Patents are personal property (s 13(2)). Can be bought, sold, traded and licensed. An assignment must be in writing signed by or on behalf of the assignor and assignee (s 14(1)). A patent may be assigned for a place in, or part of, the patent area (s 14(2)) — the patent right can be divided up geographically (e.g. in different states in Australia).
There is a possibility of unregistered equitable interests in a patent (Stack v Brisbane City Council (1996) 35 IPR 297 at 299; ss 189(3) and 196(b)(ii)).
The assignment sale of patent right gives the assignee rights to the patent. Once complete, the assignee owns the patent and the assignor has no residual rights. The details of the assignment must be recorded on the patent register.
License = permission to use. For patents owned jointly, all co-owners must consent the grant of a licence (s 16(1)(c)). Licences do not need to be in writing (but should be for evidentiary reasons)). Licences should be registered (ss 187, 195, 196). Licences can be contractual supported by consideration and for a particular term or can be bear licences determined by will of licensor.
Licensee may terminate licence agreement that is still in force at the time the patent expires (s 145). Can have a contract extending licence of patents over the 20 yr period, if this occurs, can terminate the contract.
Regency Media Pty Ltd v MPEG LA, L.L.C.  FCAFC 183
- Facts: Single licence agreement for multiple patents. Can you terminate for single patent that has expired where the other patents have not expired?
- Answer is no – must be termination of the whole agreement.
Licence may be exclusive, sole or non-exclusive.
- Exclusive licence granted to one perons who can exploit to exclusion of all others including patentee.
- Sole licence like exclusive but patentee can still use.
- Non-exclusive licences are a licence to more than one person and patentee can still exploit. Non-exclusive licences may be limited by geography, duration, purpose, scope, field of industry, etc.
There can also be implied licences, for example a purchaser's right to use a patented product, or a purchaser's right to repair a patented product. Such uses will not breach the patent.
Compulsory licences also exist under the act. A court application is required. These arise where a patentee has failed to exploit the patent in the patent territory (ss 133(2), 135 and 144).
An exclusive licensee may commence infringement proceedings (s 120(1)). Must join the patentee as as party as co-plaintiff (joint legal representation) or as defendant (s 120(2)).
An exclusive licensee means a licensee under a licence granted by the patentee and conferring on the licensee, or on the licensee and persons authorised by the licensee, the right to exploit the patented invention throughout the patent area to the exclusion of the patentee and all other persons (Ex parte British Nylon Spinners (1963) 109 CLR 336).
Cannot have several exclusive licences in respect of different uses of the invention (Bristol-Myers Squibb Company v Apotex Pty Ltd (No 5)  FCA 1114, - per Yates J).
Infringement proceedings available under s 120. Proceedings can be commenced by a patentee or exclusive licensee, although an exclusive licensee must joint the patentee as defendant or plaintiff (s 120(2)). 'Infringment' is not defined. Knowledge and intent are not elements of patent infringement - depends purely on whether a person other than the patentee, licensee or somone authorised is exploiting the exlcusive rights of the patentee.
The exclusive right of the patentee is to exploit the invention (s 13). This means using, selling or making the invention (Sch 1). The rights commence on publication of the complete specification (s 57(1)). Proceedings can only be commenced once the patent is granted (s 57(3)).
Proceedings must be started within the later of 3 years of the patent being granted, or 6 years from the date of the infringing act (s 120(4)).
Test for Infringement
The test for infringment is whether all essential integers (elements) of the patent have been taken - this is question of fact (Rodi & Wienenberger AG v Henry Showell Ltd). A literal interpretation of the patent claims will not always suffice (Populin v HB Nominees Pty Ltd) This is known as the 'pith and marrow' (purposive) approach.
Catnic Components Ltd v Hill & Smith Ltd (No 1) (1982) RPC 183
- Facts: Patent for steel lintels for use in spanning the spaces above window and door openings. Specification required a bar to “extend vertically”. Hill created a virtually identical invention that had a bar that extended upwards 6 degrees from being vertical. The device worked entirely in the same way as Catnic's invention. Created invention that worked in entirely same way as patentee’s invention but was 6 degrees from vertical.
- Held: This was taken to be infringement.
"[A] patent specification is a unilateral statement by the patentee, in words of his own choosing, … by which he informs them what he claims to be the essential features of the new product or process… that constitute the so-called “pith and marrow” of the claim. A patent specification should be given a purposive construction rather than a purely literal one… The question in each case is: whether persons with practical knowledge [in the relevant field] would understand that strict compliance with a particular descriptive word or phrase appearing in a claim was intended by the patentee to be an essential requirement of the invention so that any variant would fall outside the monopoly claimed, even though it could have no material effect upon the way the invention worked. The question, of course, does not arise where the variant would in fact have a material effect upon the way the invention worked."
Contained in s 117 – infringement by supply of products:
- s 117(1) If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.
- s 117(2) A reference in subsection (1) to the use of a product by a person is a reference to:
- (a) if the product is capable of only one reasonable use, having regard to its nature or design that use; or
- (b) if the product is not a staple commercial product any use of the product, if the supplier had reason to believe that the person would put it to that use; or
- (c) in any case the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier.
In Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd & Ors  HCA 50, this defence was raised by could not be made out.
Defences and Exemptions to Infringement
Prior Use Exemption
Section 119 allows a person to continue to exploit a product or process if immediately before the priority date the person was using it in the patent area or had taken definite steps (contractually or otherwise) to exploit the product or process in the patent area.
There must be a continuous use of the invention. This defence can apply where a prior user learns of invention through publication or use in the prescribed circumstances mentioned in s 24(1)(a). A prior user can assign his or her rights to another.
Does this mean the patent wasn't novel? The examination process is susceptible to error, thus why the Act makes it clear that a grant of a patent is no guarantee of validity. This defence largely is relevant where the prior user does not wish to challenge the validity of the patent.
Exemptions for Obtaining Regulatory Approvals
S 119A: obtaining regulatory approval of pharmaceuticals. A pharmaceutical patent is not infringed if a person exploits an invention solely for the purpose of obtaining TGA approval of goods intended for therapeutic use; or obtaining similar regulatory approval in a foreign country.
This exception is for generic versions of drugs – allows them to seek regulatory approval during the patent term, so when the patent expires they can immediately seek patent protection. Does not apply to medical devices or therapeutic devices
S 119B: obtaining regulatory approval of non-pharmaceuticals (eg agricultural chemicals, medical devices etc.)
Experimental Use Exemption
Harry Jobberns on experimental use
Sophie Williams on experimental use: https://voice.adobe.com/a/erG6B
S 119C – introduced with the Raising the Bar amendments
- (1) a person may do an act that would otherwise amount to an infringement of the patent, if the act is done for experimental purposes relating to the subject matter of the invention (scientific research, unfortunately this experimental use exemption is narrow and doesn’t relieve may concerns raised).
- (2) “Experimental purposes relating to the subject matter of the invention” include, but are not limited to:
- (a) determining the properties of the invention
- (b) determining the scope of a claim relating to the invention
- (c) improving or modifying the invention
- (d) determining the validity of the patent or of a claim relating to the invention
- (e) determining whether the patent for the invention would be, or has been, infringed by the doing of an act.
Focuses on the invention, patent, or infringement of the patent – doesn’t extend to using patented invention to discover things not relating to the patent. E.g. if patent is syringe, can only use to see how it works, or to see if patent is valid, cannot use it for experimental purposes to see if you can find a new cure for a disease.
Remedies for Infringement
Remedies for infringment are contained in ss 122 and 123. A court may grant an injunction (on any terms the court thinks fit) or, at the option of the plaintiff, either damages or an account of profits.
The court may also order delivery up for destruction of infringing artices or Anton Piller orders (to preserve evidence).
However, nominal damages will only be available if the infringment was innocent (s 123(1))
A non-infringment declaration can be awarded (ss 125-127). Can only be sought in respect of specified granted patents or certified innovation patents (s 125(2)). Patentee must be joined as a respondent (s 125(3)). The applicant must first notify the patentee with full written particulars of the use or proposed use, and patentee must fail to admit that the use would not infringe before bringing non-infringement declaration (designed to prevent non-essential litigation) (s 126). Potential defendant can approach the court to seek a declaration their actions don’t infringe a registered patent.
A counterclaim for revocation of the patent can be brought by the alleged infringer (s 121). Respondent may allege patent not valid and ask for revocation of patent. This is available since the validity of patent not guaranteed (s 20). A patentee whose claims survive a challenge to their validity in litigation may apply for a certificate of validity (s 19). Certificate says the claim has been challenged and survived, can be used in the future – gives a judge further opportunity to grant an order for costs.
Jack Longley on Section 19 certificates of validity
The provisions dealing with unjustified threats are contained in Part 3, Chapter 11. Section 128 allows a person to apply to the Court for:
- (a) a declaration that the threats are unjustifiable;
- (b) an injunction against the continuance of the threats;
- (c) the recovery of any damages sustained by the applicant as a result of the threats.
However, mere notification of the existence of a patent or a patent application is not a threat for the purposes of s 128 (s 131).
The object of these provisions is to prevent patentees making unjustified threats, where person has not infringed a patent. A threat of litigation may be made via letters, orally, gossip, adverts, whatever. The alleged infringer should be free of unjustified threats.
U and I Global Trading (Australia) Pty Limited v Tasman – Warajay Pty Limited (1995) 32 IPR 494 (Cooper J):
- Whether the language used would convey to any reasonable person that the author of the letter… intended to bring proceedings for infringement against a person said to be threatened. It is not necessary that there be direct words that action could be taken.
- Threat may be implied from the circumstances of communication.
To avoid being named as a respondent to an unjustified threats proceeding:
- Only assert actions that can be proved.
- Only refer to multiple forms of IP rights if infringement can be proved for each and every IP right asserted.
- Only threaten proceedings if the rights holder is ready and willing to institute proceedings promptly.
- Commence infringement proceedings promptly if the infringing conduct does not cease.
International agreements on patent law
Tess Van Geelan on the Doha Declaration and global access to medicines