2018 saw some significant developments in Australian intellectual property cases including guidance in respect of the deceptive similarity of trade marks; the first judicial consideration of quantification of a claim on the undertaking as to damages in patent disputes; a number of decisions concerning patentable subject matter; and legislative reform arising out of the Productivity Commission Report.

In this wrap up of the year, we outline some of the key developments in 2018 and make some predictions for areas to watch in 2019.

A role for reputation in deceptive similarity?

In the recent decision in Australian Meat Group Pty Ltd v JBS Australia Pty Limited [2018] FCAFC 207, the Full Court of the Federal Court considered the relevance of reputation of registered trade marks, in the context of overturning the primary judge's findings that allegedly infringing marks used by Australian Meat Group were deceptively similar to registered marks.

The Full Court held that the primary judge was impermissibly influenced by the reputation he found to exist in each of the registered marks and allowed the appeal. Importantly, the Full Court held that the decision in Registrar of Trade Marks v Woolworths stood for the "…proposition that deceptive similarity from imperfect recollection might be countered by showing the well-known nature of the registered mark and the lessened likelihood of imperfect recollection." The Full Court declined to engage in any reconsideration of the authorities in relation to deceptive similarity, including Woolworths, on the basis that the argument was raised too late in the proceedings.

Biosimilars in court

In September 2018, the Federal Court granted the first interlocutory injunction in Australia to restrain the launch of a biosimilar product (F. Hoffman-La Roche AG v Sandoz Pty Limited [2018] FCA 874). The product at issue was Sandoz's RIXYMIO, a biosimilar of rituximab, marketed by Roche under the name MABTHERA. The Court held that Roche had a prima facie case of patent infringement and it could not be concluded on a provisional basis that invalidity arguments made by Sandoz were sufficiently strong to qualify it. As to the balance of convenience, the Court considered that there would be complexities in calculating potential losses by both Roche (if the injunction was not granted and the patents were held valid and infringed) and Sandoz (if the injunction was granted and the patents were ultimately revoked). However, the overall balance was found to favour granting an injunction to preserve the status quo until 11 August 2019, being the date of expiry of the first of the Roche patents. The substantive hearing in the matter is scheduled for June 2019.

More recently, just before Christmas, the Court dismissed an application by Sanofi for an interlocutory injunction against Alphapharm to restrain infringement of patents relating to an injector pen for SEMGLEE, a biosimilar of Sanofi's insulin glargine product LANTUS, and to require Alphapharm to withdraw its application for listing of the injector pen on the Pharmaceutical Benefits Scheme (Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd (No 3) [2018] FCA 2060). The Court determined that there was a sufficiently strong lack of novelty case to qualify Sanofi's prima facie case of infringement. Further, the Court found that while the balance of convenience was "quite evenly balanced", the harm suffered by Alphapharm, if an injunction was to be wrongly granted, would be less readily compensated by an award of damages than for Sanofi, if an injunction was not granted.

Damages in pharmaceutical patent disputes

The decision in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth was the first of its kind in Australia. Justice Jagot ordered that Wyeth must pay compensation to three generic companies and associated manufacturers/suppliers for lost opportunities suffered as a result of the "usual undertaking as to damages" given in respect of interlocutory injunctions for threatened patent infringement which were later held to be wrongly granted. The decision confirms that parties who were not the subject of an interlocutory injunction may be entitled to damages under the "usual undertaking" if they can demonstrate that they were "adversely affected" by the interlocutory injunction and their loss was reasonably foreseeable at the time the injunction was granted. You can read more about the decision in our previous discussion of the case here.

Substantial consideration was given during 2018 to the quantification of damages for infringement of pharmaceutical patents in Generic Health Pty Ltd v Bayer Pharma Aktiengesellschaft [2018] FCAFC 183 and H. Lundbeck A/S v Sandoz Pty Ltd [2018] FCA 1797. In each of these cases, a discount to the damages awarded was applied to reflect the fact that the assessment of a lost opportunity to sell products at a certain price, but for the infringing conduct, inevitably involves an estimation and not a certainty.

Perhaps significantly, in Lundbeck, Justice Jagot commented that it was far easier for Lundbeck to prove the value of its loss on the basis of the generics having entered the market than it was for the generics in Sigma v Wyeth to prove the value of their loss on the basis that they were wrongfully held out of the market. In Hoffman-La Roche v Sandoz, in determining that the balance of convenience in relation to irreparable harm in that case was "finely tuned", Justice Burley also commented on the "complexities" that would be involved if Sandoz was required to establish a claim on the undertaking as to damages. Similar comments regarding the difficulties in calculating harm upon the wrongful grant of an interlocutory injunction were repeated in Sanofi-Aventis Deutschland v Alphapharm (discussed above).

Patentable subject matter

There were a number of Patent Office and Federal Court decisions in 2018 in relation to the patentability of computer-implemented and genetic inventions.

A computer-implemented method was held to lack a manner of manufacture in Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2018] FCA 421. An appeal from this decision was heard in November 2018 by a special sitting of five judges. More recently, in Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988, a computer-implemented business method was found to be patent-eligible subject matter on the basis that it presented a technical solution to solve a technical problem and improved computer technology.

In Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51, the Federal Court held that claims to a method of identifying a trait of a bovine subject from a nucleic acid sample employing single nucleotide polymorphisms (SNPs), and a claim to a bovine resulting from a cloning method, involved a manner of manufacture. However, a claim to an isolated polynucleotide did not. Meanwhile, in the patent office, claims to an exon skipping oligonucleotide for treating forms of muscular dystrophy were held to be patentable subject matter (Academisch Ziekenhuis Leiden and BioMarin technologies B.V. [2018] APO 49).

Copyright

The Federal Court heard three applications for site blocking injunctions pursuant to section 115A of the Copyright Act 1968 (Cth) last year. In Foxtel Management Pty Ltd v TPG Internet Pty Ltd [2018] FCA 933 orders were made to block target online locations that permitted users to access copyright-protected content using torrent or streaming technology.

Significantly, in a world-first, blocking orders were also applied to online locations that were not websites but rather locations which facilitated access to copyright-protected content via particular Android applications. These blocking orders targeted online locations supporting the HDSubs+ Android streaming app, which can be installed on Android devices such as the X-96 Smart TV Box, allowing the user to stream and watch various TV channels including from the BBC, Fox and Disney or video on demand content (Roadshow Films Pty Limited v Telstra Corporation Limited [2018] FCA 582) and certain Android apps on set-top streaming boxes enabling users to receive Hong Kong television broadcasts in Australia via the internet without a subscription (Television Broadcasts Limited v Telstra Corporation Limited [2018] FCA 1434). You can read more about this decision in our discussion of the case here.

Legislative Reform

There were important copyright law reforms in 2018, including the Copyright Amendment (Service Providers) Act 2018 (Cth) and Copyright Amendment (Online Infringement) Act 2018 (Cth). The Service Providers amendment extends the safe harbour protection to schools and TAFEs thereby shielding them from copyright infringement actions because of the infringing actions of users. The Online Infringement Amendment extends the current site blocking provisions to enable the Court to direct search engine providers not to provide a search result that refers users to the piracy website. The Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth) came into force in August. This Act introduced s 122A with the objective of clarifying the circumstances in which genuine trade marked goods may be imported into or sold in Australia without infringing a registered trade mark. The overall principle of the amendment is to provide that the registered owner’s rights are exhausted following the initial application of the trade mark in relation to goods. While s 122A has already commenced, certain other amendments to IP legislation made by the Act are not due to commence until February 2019.

Crystal ball gazing for 2019

We predict an active year ahead for intellectual property disputes.

Trade marks and branding

It remains to be seen whether there will be any reconsideration of the authorities in relation to deceptive similarity in respect of trade marks, in particular the application of the principles in Woolworths regarding the role of reputation in the context of infringement allegations. Furthermore, 2019 may be the first time in which the parallel importation defence under the new s 122A of the Trade Marks Act 1995 (Cth) is considered. It will be interesting to see what sort of inquiries the Court considers reasonable to defeat a claim for trade mark infringement in respect of parallel imported goods.

Patents

Given the increasing numbers of biologics and biosimilars obtaining marketing approval and PBS listing in Australia, we expect disputes regarding these products to remain a prominent fixture in the patent landscape.

We will also be keeping our eyes peeled for the outcome of pending cases in which the Commonwealth Government has sought compensation pursuant to undertakings as to damages given in respect of interlocutory injunctions obtained to restrain the launch of generic pharmaceutical products that were subsequently found to have been wrongly granted. According to the Government's Mid-Year Economic and Fiscal Outlook published in December, the Government has reiterated its commitment to litigate and seek compensation for losses incurred as a result of pharmaceutical companies taking legal action to delay or prevent the listing of generic medicines on the PBS.

Patentable subject matter will remain of interest, with the Full Court's decision in the appeal in Encompass expected this year. Whatever the result, the decision will provide welcome guidance as to the circumstances in which inventions involving software and computer-implemented inventions possess a manner of manufacture. The decision in Sequenom Inc v Ariosa Diagnostics, Inc, in relation to a patent claiming a prenatal test for detecting foetal genetic conditions, is also expected to be delivered in 2019.

Motorola Solutions' global patent dispute with Hytera in relation to alleged patent infringement for its digital mobile radio (DMR) technology is due to go to trial in Australia commencing in July 2019.

Copyright

The introduction of the Copyright Amendment (Online Infringement) Act 2018 (Cth) has increased the scope of the current site blocking provisions. We may therefore see further site-blocking applications which include application to online search engine providers.

Legislative Reform

The Exposure Draft of the Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2018 was released by IP Australia in July 2018. The Exposure Draft Bill proposed amendments to the inventive step requirements for Australian patents; the introduction of an objects clause to the Patents Act and the phasing out of the innovation patent system. Following a public consultation, the Government has indicated its intention to postpone the proposed changes to inventive step and continue to develop the Bill for introduction without those measures. Comments on draft regulations to accompany the Bill were sought prior to 21 December 2018 with the Bill expected to be tabled in Parliament this year.

Thank you to Anna Harley and Chantal Savage for their assistance in preparing this alert.