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Patent License Termination

19/1/2015

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The Full Bench of the Federal Court has recently considered Section 145 of the Patents Act. 

Section 145 reads as follows:
Termination of contract after patent ceases to be in force

             (1)  A contract relating to the lease of, or a licence to exploit, a patented invention may be terminated by either party, on giving 3 months' notice in writing to the other party, at any time after the patent, or all the patents, by which the invention was protected at the time the contract was made, have ceased to be in force.

             (2)  Subsection (1) applies despite anything to the contrary in that contract or in any other contract.
Regency Media Pty Ltd had entered into an agreement to license several patents from MPEG LA LLC (‘MPEG’).  Regency Media Pty Ltd contended that Section 145 of the Patents Act allowed them to terminate the agreement when one of the patents lapsed.  In the appeal the Court held that Section 145 did not allow the agreement to be terminated.

In arriving at the decision the Court considered the commercial reality of licensing multiple patents and the intention of section 145.  The Court also considered the unfairness in relation to the case at hand.  Notably, nowhere in the agreement were the inventions referred to separately. Rather reference was made to the ‘MPEG-2 Decoding Products’, the ‘MPEG-2 Encoding Products’, and the ‘MPEG-2 Packaged Medium’.   Various interpretations were applied to the wording of Section 145.

The case serves as a warning when preparing and entering into patent licensing agreements.

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Coca-Cola’s Trade Marked Bottle

15/1/2015

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Coca-Cola commenced legal action against PepsiCo Australia Holdings Ltd (‘PepsiCo Australia’) and Schweppes Australia Pty Ltd (‘Schweppes’) (‘The Respondents’) in Federal Court.

The case concerned Pepsi’s ‘Carolina Bottle’ in comparison to Coca-Cola’s ‘Contour Bottle’ as shown below.
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Coca-Cola's 'Contoured Bottle' was the subject of a number of registered trade marks:
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It was alleged that Pepsi were using Coca-Cola's trade marks. 

Both Pepsi and Coca-Cola’s bottle’s origins were discussed in view of the history of the bottles and the design. It was seen that the waist of the Coca-Cola registration would not be not more prominent than the other features of the trade mark in the eyes of an ordinary consumer. It was noted that ‘Carolina bottle’ had no fluting and a belt band in the middle.  The horizontal waves of the Pepsi’s bottle were seen to be distinguishing features.

More particularly, with respect to the fluted trade marks Justice Besanko held:

  1. The outline or silhouette is not the essential feature.

  2. There is no reason to give any feature prominence over the other features. It cannot be said, for example, that a bottle with a waist is so extraordinary, or a bottle with vertical flutes and a clear belt band so common, that the outline or silhouette should be considered the essential feature.

With respect to the silhouetted trade marks, it was held that

  1. The outline or silhouette of the Carolina Bottle was not deceptively similar.

The case highlights the importance of considering the overall scope of a trade mark in view of its distinctive features.  The case also highlights the importance of obtaining legal advice.

http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2014/1287.html?stem=0&synonyms=0&query=pepsi
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Software - Financial Schemes

11/1/2015

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The Full Federal Court has held that a financial scheme was not fit subject matter for a patent.  The patent claim concerned:

A computer-implemented method for generating an index, the method including steps of:

(a) accessing data relating to a plurality of assets;

(b) processing the data thereby to identify a selection of the assets for inclusion in the index based on an objective measure of scale other than share price, market capitalization and any combination thereof;

(c) accessing a weighting function configured to weight the selected assets;

(d) applying the weighting function, thereby to assign to each of the selected assets a respective weighting, wherein the weighting:
    (i) is based on an objective measure of scale other than share price, market capitalization and any combination thereof; and
   (ii) is not based on market capitalization weighting, equal weighting, share price weighting and any combination thereof;

thereby to generate the index.
Among other things, it was found that:
  1. The approach to be taken to deciding whether a claimed method or product is properly the subject of letters patent must be flexible and must allow for new technologies presently unknown. The principles should be applied irrespective of the area of human endeavour and invention under consideration. 

    However, that is not to say that any and every claimed method or process is properly the subject of a patent. Examples of exceptions have been identified, such as abstract ideas and mere schemes. There is no formula to be mechanically applied. It is a question of understanding what has been the work of, the output of, and the result of, human ingenuity, and to apply the principles that have been developed and explained so well in     NRDC.

  2. In the context of the claim, the significance lies in the content of the data rather than any specific effect generated by the computer..., in examining whether a claimed invention is properly the subject of letters patent, it is necessary to look not only at the integers of that claimed invention but also at the substance of that invention.
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCAFC/2014/150.html?stem=0&synonyms=0&query=2005213293
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High Court Allows Foreign Marks

11/1/2015

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The High Court has overturned the The Full Court's finding in  Modena Trading Pty Ltd v Cantarella Bros Pty Ltd [2013] FCAFC 110. 

Among other things it was held that: 'The evidence led by Modena to show that some traders in Australia used the expression "five star" on packaging of coffee and many traders used "five star" in respect of a range of services including restaurant and accommodation services also fell well short of proving that "cinque stelle" is understood in Australia by persons concerned with coffee products to be directly descriptive of the character or quality of such goods.

The court found that the question concerns 'the legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods'.  "ORO" and "CINQUE STELLE" were not shown to 'convey a meaning or idea sufficiently tangible to anyone in Australia concerned with coffee goods, as to be words having a direct reference to the character or quality of the goods'.

The full decision is available on http://www.austlii.edu.au/au/cases/cth/HCA/2014/48.html 
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    Adam Law
    BSc(Hons) BE(Hons) FIPTA(Patent Attorney)

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