Some more quick pointers

Gosh, too much IP/Tech news is just never enough, right? There's heaps going on right now. I've commented on the whole patent injunction issue (Blackberry, and eBay v MercExchange) below. But there's so much more going on, I'll just post a couple of pointers to more info:

• the Kazaa contempt case (over Kazaa's decision to block Australian access, rather than alter its software) was listed, as I understood, for hearing in Sydney yesterday. Does anyone know what happened?
• Google has made the decision to go into China, despite having to comply with China's censorship policies. Controversial and difficult, and I'm not really sure where I stand on this one. But if you want to follow up the issue, I suggest you go to John Battelle's Searchblog (apropos of that, by the way, I read his book The Search recently, and can recommend it as an eminently readable and interesting discussion both of Google generally, but also on the concept and importance of 'search'. If you're interested in Google not so much for the 'business' story but for the broader 'networked society' implications, I would recommend this book over other 'google biographies'.). Other sources on the Google-China story include SearchEngineWatch blog, and Rebecca McKinnon has an excellent collection of links from the mainstream media.
• Google is in a fight with the DOJ about releasing data. Yahoo! and AOL reckon they complied but didn't release anything personally identifying. Again, John Battelle is a source - there's a lot of debate about (a) how much this implicates privacy and (b) whether the whole thing is far less 'sexy' than it seems - it's a trade secret, rather than a privacy of users thing for Google, is the argument of some. I'm more interested, actually, in Geist's perspective: I think he's right then he says that:

'While much of the focus has been on the privacy implications of the USDOJ request, the story highlights a much bigger issue - the significant risks and rewards that arise from retaining enormous amounts of data.'

As he points out, the dispute does indicate is that (a) a helluva lot of data is collected, and (b) things could go further, and finally (c) this raises real issues about the ethics of data retention. This has been an interesting area of the law. Governments over the last few years have been making arguments for, and imposing requirements of minimum periods of data retention by people like ISPs. One of my students last year, Alex Lew, wrote a good paper on online data retention, arguing in favour of maximum period of retention too. We'll need some more debate here: as Geist points out, 'Policy makers worldwide have scarcely begun to reconcile the risks and rewards of data retention'.

• Google's cache has been held to be fair use - Sarah has some comments at LawFont on the case and its more general implications.
• For those interested in DRM, and that Sony Debacle, Ed Felten has been posting parts of a draft paper on lessons to be learned from the incident. WELL worth reading.

 
Book Published Alert!

Guess what Professor Sam Ricketson just put on my desk? The two volumes of Ricketson and Ginsburg's new tome, International Copyright and Neighbouring Rights: The Berne Convention and Beyond. This book updates Ricketson's seminal earlier work on The Berne Convention 1886 - 1986. The new edition not only adds Professor Jane Ginsburg's expertise, but is quite comprehensively updated, including commentary on such treaties as the WIPO Copyright Treaty, and even developments in relation to Bilateral Free Trade Agreements, and Private International Law aspects of international copyright. It even has a companion website.



While I've not yet dipped into these pages of wisdom and scholarship, I have a feeling this is bound to end up as important, frequently cited and influential as Professor Ricketson's earlier work. Can't wait to read it!

 
Ebay v MercExchange, Blackberries, and Injunctions for Patent Infringement

It's an explosive mix isn't it? If you're looking blank right now and trying to work out how these fit together, let me explain....

This year, the US Supreme Court is hearing a case in which it will presumably determine whether a patentee should have a right to an injunction once infringement is found. The case is eBay v MercExchange, and it concerns a case brought by Thomas Woolston, creator of the MercExchange, who won a $35 million patent infringement suit against eBay for infringement of his patents covering live internet auctions. The district court refused an injunction, however, giving 4 concerns:

1. General concern over the viability of business method patents;
2. A strong likelihood of continuing disputes based on eBay workarounds;
3. MercExchange’s willingness to license; and
4. MercExchange’s failure to request a preliminary injunction.

On March 16, 2005, the Federal Circuit released its decision on appeal, reversing the decision in-part, but rejecting each of these arguments against a permanent injunction. The CAFC held that 'that the district court "did not provide any persuasive reason that this case is sufficiently exceptional to justify the denial of a permanent injunction', and noted:

'If the injunction gives the patentee additional leverage in licensing, that is a natural consequence of the right to exclude and not an inappropriate reward to a party that does not intend to compete in the marketplace with potential infringers. . . . We therefore see no reason to depart from the general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances.

Personally, I find the concept of an automatic injunction a bit strange. My colleague over at LawFont, Ben, has explained the issue in more detail:

'Injunctions are equitable remedies, and it used to go without saying that an injunction did not issue as of course. Particularly in cases where the injunction is interlocutory (ie while the lawsuit is still being fought), the party seeking it must show irreparable injury if it were not granted. '

Today, Patently-O has a summary of the briefs received in the US Supreme Court thus far. Parties briefing include Yahoo!, the EFF, AIPLA, 52 Law Professors (written by Mark Lemley, who has written prolifically and informatively on matters of patent litigation generally), a bunch of technology companies (including a joint brief from Intel, Microsoft, Oracle and Micron), Nokia and others. Read the summaries, they are short, to the point summaries of the briefs (I had to think about synonyms for 'short' there...).

One of the briefs comes from RIM - hinting at the broader background for this whole thing. You see, this Supreme Court case occurs against a rich tapestry of a background on patent law, patent law reform, software patents, business method patents and patent 'trolls', and, of course, the Blackberry case.

Last year, one of the issues Congress was grappling with was patent law reform, and some of the issues in that reform process should be easy - the shift to the world standard of first to file rather than first to invent. But one of the key issues that stalled progress on patent law reform has been the issue of injunctions. To quote from an address by Orrin Hatch, a key Senator on a relevant congressional committee:

'Altering the standard for determining whether injunctive relief should be granted in a patent infringement case has emerged as perhaps the most contentious issue in the patent reform debate. Large high-tech companies, many of which have products covered by thousands of patents, believe that some change in current law is necessary to prevent what they consider as something akin to legalized extortion by plaintiffs who use the threat of an injunction to obtain settlements that are allegedly disproportionate to the value of the patent that is infringed.

Because the profitable life of many high-tech products is relatively short, an injunction that keeps these products off the market for a year or two can threaten the profitability or even the viability of a small or mid-sized tech company, which arguably forces these companies to settle cases for much more than the claims are actually worth.

To add to the difficulty, some believe there appear to be quite a few over-broad patents in these areas, resulting in a situation where an infringement suit might be successful even though it would have failed if the patent claims were written properly. The tech industry has dealt with this problem in part through cross-licensing to avoid the mutually assured destruction that would accompany aggressive enforcement of all relevant patent rights.

Cross-licensing only works as a solution if the other potential litigants face a comparable threat from the available remedies. Many tech companies argue that the main threat is not from other legitimate companies, it is from overly-aggressive patent holders and their attorneys who use the disproportionate threat of an injunction to extort large settlements based on nearly worthless patents. It is alleged that these types of patent holders, commonly referred to as patent trolls or licensing shops have no interest in cross-licensing because – in the most extreme examples – they don’t make or sell anything and therefore have no business risk from an injunction. They allegedly exist predominantly for the purpose of threatening litigation to obtain settlements. '

And you can see this fight coming out in the briefs, from Patently-O's summaries. Large company Yahoo! argues that 'the availability of injunctions should turn largely on whether the patentee engages in research and development and should discourage entities whose sole business is patent litigation'. On the other side, a bunch of law professors led by Thomas Field argue that the right to an injunction should be strong, and not variable according to the patentee's use of the patent - arguing that:

'The trial court accepted arguments analogous, given the apparent economic disparity between the parties, to ones Goliath might have made in asking that David be disarmed' (nice line! wish I'd thought of that)

RIM argue that the patent enforcement system 'must promote the useful arts'. Why are they interested?

Well, of course, RIM are the people who make BlackBerry, and they are deeply enmeshed in patent litigation with a company, NTP, which does not currently do research, and which does not make products. In their case, the district court judge issued an order barring the sale of the must-have executive device in the US. This did cause some rather general panic and caused some US legislators to get involved:

'RIM and its defenders in Congress played their trump card - invoking the spectre of another major terrorist attack in Washington. Several lawmakers, impressed that their own BlackBerrys had not failed on Sept 11, 2001 while cellphones everywhere went dead, warned in hearings that shutting off the devices threatened natioanl security. Even House Speaker Dennis Hastert - the top Republican in Congress and an avid BlackBerry user - intervened on RIM's behalf.(from the Globe and Mail story)

As my colleague Ben has pointed out, an injunction in this case is strange, to be honest:

'the patentee has no ongoing business that will be harmed if the injunction isn’t issued. And, more to the point, it is the alleged infringer’s business which may be destroyed if the injunction is granted. Since NTP is claiming only money, if it eventuates that RIM infringed, then RIM can simply pay extra. But if RIM ends up winning, it would be in a hard position to recover from being forced to shut down its entire US business for x months in the interim. That’s the kind of injury that is classically ‘irreparable’. Unless I’m missing something, the balance of equities is so clearly in favour of RIM that it’s hard to see how any interlocutory injunction could issue.'

The MercExchange case has been described by Patently-O as one which 'could easily be the most important patent case in the past five years'. Looking at all this background, you can see why.

My view? Well, injunctions cannot be, and should never be, 'automatic'. Remember the roots of the order in equity - as an equitable remedy, it is and should be discretionary, and the court can and should take into account the balance of equities. And an 'automatic' right to an injunction could lead to some very undesirable incentives and results:

'[A]n absolute entitlement to injunctive relief can and does permit unscrupulous patent owners to “hold up” defendants by threatening to enjoin products that are predominantly noninfringing and in which the defendant has already made significant irreversible investments. . . .

A microprocessor may include 5,000 different inventions, some made by the manufacturer and some licensed from outside. If a microprocessor maker unknowingly infringes a patent on one of those inventions, the patent owner can threaten to stop the sale of the entire microprocessor until the defendant can retool its entire plant to avoid infringement. Small wonder, then, that patentees regularly settle with companies in the information technology industries for far more money than their inventions are actually worth. (quoting an amicus brief, signed on behalf of thirty-five of the top patent law professors in the country, in support of eBay's petition for certiorari, see Patently-O here)

But that does not mean some kind of general rule against injunctions for those who are not themselves exploiting the patent. Such a rule could well hit some Australian patent holders quite hard, if you think about it. With their limited capital, in many cases an Australian research-based company will be much better off licensing - partnering with someone with the resources, the network and the ability to fully commercialise the invention. Patents in this context are a bargaining tool, and to be effective in that role there must be a credible threat of enforcement and the possibility of an injunction. Yes, the court should take into account, as part of the balance of equities, whether the patent holder is using the patent. But an inquiry into the balance should be able to take care of that. We need to take care, in how we frame injunctions, to avoid cutting out the genuine little research guy, - target the troll if you have to, but don't remove the possibility of the injunction even for a company not actively making products itself.

 
Superhotties and Divas?

Legal blogs get a mention in today's Australian Financial Review Legal Affairs section (sorry, registration/subscription required) in the intriguingly titled 'Superhotties and divas: the blogs rule'.

Oh, and no, I am neither a 'superhottie' nor a 'diva'. The 'superhotties' and 'divas' mentioned are not the bloggers who post on the Australian sites mentioned (Quantum Meruit, Inchoate, and my alter ego blog, LawFont), but rather, Justice Kirby ('superhottie of the first order') and Justice Crennan ('diva') (quoting judgments from the famous, or infamous law blog in the US, 'Underneath their Robes').

It's a shame, though, that the article seems to focus largely on the 'gossip blawgs' - legal blogs that are that little bit gossipy or outrageous (like Underneath Their Robes). But that's only a small proportion of blawgs, and not the ones that I read most of the time, which are the ones focusing on legal commentary, update, and analysis. There's less of them in Australia (though LawFont is one, and Weatherall's Law is another). But if you look at my 'regular read' list, what you'll find is a whole lot of blogs that talk, in an informed way, about cases and other legal developments. Think IPKat, Michael Geist, Patently-O, the Trademark Blog. I read these because they provide up to date information about current developments, and in particular, they provide analysis that is lacking from mainstream news. They're also a good indicator of the kinds of things people are thinking about.

There's a lot more to blogging, or blawging, in other words, than the AFR article would suggest. Still, it is Friday. I guess we're allowed to be frivolous.

 
Links and pointers this morning [updated Fri arvo with more on the Google Story]

It is far too hot and sticky this morning in Melbourne to spend vast amounts of time blogging. (hmmm, theory, how does weather affect blogging? More blogging if colder and stuck inside..?).

Four interesting stories today though:

• First, in a fabulous display of pre-poll stress and poor judgment, Sam Bulte, the Canadian MP who has been getting heat for taking money and fundraisers from copyright industries while intimately involved in copyright policy, has threatened to sue law prof Michael Geist after the election, apparently for defamation. Wow, if that were to go ahead, it might make Canada a bit like Singapore - where suing for political discussion is a little more common. Perhaps a little heat of the moment statement? Canadian election is on Monday. Watch that space!
  
• There are reports that the German Wikipedia site has been taken down by court order. It turns out that the dispute is centered around a wikipedia entry about a hacker called "Tron." The main page with the notice (in German) is here: http://www.wikipedia.de. The German language version of the U.S. Wikipedia is still online with the same information here: http://de.wikipedia.org/. The article in question can be read in German here: http://de.wikipedia.org/wiki/Tron_(Hacker), and in English here: http://en.wikipedia.org/wiki/Tron_(hacker). As Techdirt notes, the German court order also says that the hacker's full name can't be mentioned on wikipedia.org sites, again raising the question of just where local jurisdiction stops on the internet.
  
• The front page of the NYT website has a story that Bush administration, seeking to revive an online pornography law struck down by the U.S. Supreme Court, has subpoenaed Google Inc. for details on what its users have been looking for. Google has reportedly refused to comply with the subpoena, issued last year, for a broad range of material from its databases, including a request for 1 million random Web addresses and records of all Google searches from any one-week period, lawyers for the U.S. Justice Department said in papers filed Wednesday in federal court in San Jose. According to the NYT, the government contends it needs the data to determine how often pornography shows up in online searches as part of an effort to revive an Internet child protection law that was struck down two years ago by the U.S. Supreme Court on free-speech grounds. Imagine having to trawl through the results of that subpoena .... eeeerrrrr-gggly. I would be quite prepared to bet money that any Australian-based search engine would not resist such a subpoena, by the way. Since, from the sound of things, the info could be provided without being identified to particular individuals, privacy laws wouldn't really apply. Even in the past, when a bunch of Australian universities did resist a subpoena, their resistance was on the question of how much would be provided (to a private party in litigation), not whether it would. [update: more recent coverage notes that Yahoo!, MSN and AOL all received similar requests - and complied.]
  
• Bag and Baggage is a blog I don't often visit, but always rewards a read. Currently it has a rather interesting post about an ABA Panel on "who owns the news: Attempts by sports organizations and entertainers to control coverage". In particular, the post discusses the use of contracts and media credentially conditioning to impose the protections that IP law ordinaire would not provide (this is something that was discussed at a CMCL presentation last year, I seem to recall). Worth a read if you're interested in those celebrity type issues. I always think that once you realise just how much is done with contract, the whole concept of needing property rights in celebrity personality looks a little, well, irrelevant. Contract, the new key!

 
At last, good news for iPod owners in Australia

No, it's not that copying your CDs to your iPod has become legal. Not yet. Sony has come to the iTunes party, announcing that it will make its catalogue available through Apple's Australian iTunes music store. Good news indeed.

And in other iPod news:

'UK-based Selfridges has opened an iPod school an upmarket part of London, even though the manufacturer does it for free in its shop just round the corner.Clueless music lovers who have embraced the trendy new technology but not the know-how can pay 65 pounds ($150) for a 40-minute lesson at Selfridges, on the popular Oxford Street shopping haunt.'

That bit's rather amusing, but what interested me was this snippet in the news story:

'Selfridges set up a so-called SpeedPod service in December last year, in which CDs are loaded on to the music players for a fee

Of course, since you're at Weatherall's Law, you know the question, right? Is this legal? (Of course, it wouldn't be here (yet)).

 

Well that's a relief. Ugg Boots is generic... (UPDATED 20 Jan 2006)

The Trade Marks Office (IP Australia) has apparently ruled that 'Ugg Boot' is a generic term. As such, it can be removed from the Register, putting an end to the exclusive rights of the trade mark owner. Given that no decision appears in AustLII, I'm guessing that this is an initial decision, which could be the subject of review or later, appeal to the courts. The story may not be entirely over. [Update: The decision is in fact available here; it is a decision by the delegate under s 101 relating to an application for removal under s 92. As such, it could be appealed to the Federal Court (s 104). The decision is worth reading, if only for the comedy value in seeing how 'UGG', 'UGH', etc have been used. After the decision, the trade mark owner's lawyers issued a statement, noting that Deckers had the right to appeal the decision and was "considering its position":

"The worldwide popularity the Ugg brand enjoys today is a direct result of Deckers' heavy investment over many years in building the brand," the statement said. [oh really? And here's me thinking that the main reason for the well known-ness of UGG is (a) its kitschness and (b) the efforts of certain Ugg-friendly celebrities]
"Deckers will continue to take any and all necessary actions to protect its Ugg brand around the world."]

Of course, this has generated plenty of news coverage (headline story on News Radio this morning). All this simply confirms that:

1. we use 'Ugg Boot' a lot,
2. Ugg boots are important, and widespread enough around Australia for their name to become generic,
3. the makers of Ugg Boots should have been promoting an alternative generic term (Sheepskin boots? Sheepies?)
4. a trivial story will ALWAYS get more attention (confirmed last year when the issue of Ugg Boots was debated in Parliament). For coverage last time this was an issue (Feb 2004), see here.

Put Ugg boots in Google, and watch any doubts you might have dissapate...

 
Food for thought.

'‘The entire corpus of published printed material produced in a year, including books, newspapers, and periodicals occupies between 50TB – 200TB, depending on the compression technology. This amount could now easily fit in a refrigerator-size disk array.

So now it is becoming technologically feasible for all recordable information to be accessible by everyone on the planet. The barriers to accessibility are not technical in nature, they are social, legal, and economic.’

Hal Varian, 'Universal Access to Information', Communications of the ACM, October 2005, Vol 48(10) at 65.

 
Canada, Copyright Reform, Campaigns and Cash

I've not been reporting on the debate in Canada over the conduct of Sam Bulte, and her copyright industry-funded fundraiser. The place to go for background and comments is Michael Geist's website. It's a truly fascinating (and disturbing) story, but for the moment, it doesn't impact on, or have implications for, the Australian situation. So I direct you elsewhere for that story.

But Geist has linked to what I think is a fascinating post, by Matthew Good, Canadian musician. It's a comment on whether the interests of the 'Canadian Music Industry' and the interests of Canadian Musicians coincide. A taste:

'The most important realization that any Canadian can make about this country’s music industry is that it is almost entirely beholden to foreign parent companies. Now, many of you might be labouring under the false assumption that the primary concern of Canada’s foremost corporate music giants is the promotion and support of domestic artists, but nothing could be further from the truth. Canadian companies exhaust the majority of their energies promoting large international acts, basically acting as little more than regional sales offices. Below those concerns is found whatever investment remains in Canadian music, an investment that over the last decade has rapidly declined. That’s not to say that all interest is gone, or that there aren’t a few good people left out there with their heads screwed on straight, just that their options are limited by those above them.'

The issues that Good talks about are issues that face music industries and musicians in small economies. Australia, too, has a small or branch economy. I wonder whether there are many Australian artists who would mirror Good's comments? An issue worth exploring.

 
WHO Report on IP and Developing Country Diseases delayed

Via IPWatch:

World Health Organisation commission on intellectual property rights has failed to meet its deadline for a report that was to be presented to the WHO Executive Board later this month because of disagreement among its members.

The WHO Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) was set up in February 2004 based on a 2003 World Health Assembly resolution (WHA56.27). Its mission is to collect data from different actors involved in intellectual property rights, innovation and public health and to analyse how incentives and funding mechanisms may be created for research into, and the development of, medicines for diseases that “disproportionately affect developing countries,” the CIPIH says.

The January 2006 deadline was already a postponement, as the 2003 WHA resolution requested the commission to present a final report “with concrete proposals” to the executive board at its 115th session, in January 2005. At the 116th session, which took place 26-28 May 2005, it was agreed the report should be ready in time for the 117th session of the WHO Executive Board set to meet on 23-28 January, 2006.

According to IPWatch, members of the Commission are in disagreement; there will be further discussion in mid Jan. For more detail, including members of the Commission and the history of the report, go to IPWatch.

 
Attorney-General's Department has published fair use review submissions

See the full list here!

It's been a long time coming, of course (I started publishing links to the submissions back in August, 2005, and the Copyright Council also did so). But all credit to the Department for putting them up. It is undoubtedly a good thing that they have done so - there are many I haven't seen before. Having the submissions online contributes to the transparency of the lawmaking process. In this case, transparency is a good thing. Given that opacity of the law-making process was one factor in the High Court's reasoning in the Stevens v Sony decision, putting the submissions online will also assist in the future. Thanks, AGs! (Thanks also to Matt Black (EFA) for alerting me to this).

 
Want to know what they're talking about in trade mark in the States?

You might want to head over to 43(b)log: in particular the posts summarising proceedings from the AALS Section on IP - Parts one, two, three, and four.

In other trade mark news, IPKat reports an ECJ decision (scroll down to C-361/04 P (2006-01-12) Ruiz-Picasso and Others v OHIM) on whether the mark PICARO for vehicles would be likely to be confused with an earlier mark, PICASSO (registered, inter alia, for vehicles).

The ECJ has apparently held that the CFI had not erred in finding that, where one of the compared signs has a clear meaning (ie, PICASSO's known reference to a very famous artist), any conceptual differences can displace any visual and aural similarities. So, even if PICARO and PICASSO are close, the fame and known meaning of PICASSO prevents confusion. In any event, OHIM had found the degree of phonetic similarity between the two marks to be relatively low.

The IPKat comments that:

this decision has serious ramifications for those who own trade marks corresponding to the names of well-known people. It is clear that the person’s name will benefit from a more limited scope of protection than other marks because its well-known status will often displace any likelihood of confusion caused by visual and phonetic similarity between the name and later marks

My gut reaction, though, is that the reasoning of the ECJ as described makes sense - if the issue is consumer confusion, then protection extends as broadly, or as narrowly, as preventing confusion requires.

It's worth noting that this issue of confusion in the face of fame is one that has occasionally dogged Australian courts, with varying reasoning adopted in the Woolworths Metro case, the Coca-Cola v All Fect case and the Hill of Grace/Hill of Gold decision (see the latter for discussion of the differences in reasoning in the earlier two cases).

 
Breaking news: Yahoo! jurisdiction case en banc decision handed down (US)

News to hand today: the US 9th Circuit Court of Appeals has handed down its en banc judgment in the Yahoo! case regarding enforcement of the judgment of the French Court in La Ligue Contre Le Racisme et L'Antisemitisme v. Yahoo!, Inc. It would appear that:

• 3 judges decided to dismiss for lack of ripeness
• 3 decided to dismiss for lack of personal jurisdiction; thus the case was dismissed, despite the
• 5 judges who thought that there was both jurisdiction and ripeness.

Huh? I hear you ask? Isn't the Yahoo! case, like, ancient history in internet terms? Yes indeed, but remember, that we are working on law time here, not internet time. Let me give you the brief precis:

• In 2000, aFrench court ordered Yahoo! and Yahoo! France to take all measures at their availability, to dissuade and render impossible all visitation on Yahoo.com to participate in the auction service of nazi objects, as well as to render impossible any other site or service which makes apologies of Nazism or that contests Nazi crimes, to warn surfers about the content, and pay fines. The French court ordered that Yahoo! had three months to comply with the Order or it would be subject to a penalty of 100,000 francs per day. The French order is: La Ligue Contre Le Racisme et L'Antisemitisme v. Yahoo!, Inc., T.G.I. Paris 14 ( Nov. 20, 2000 ). The order is available in translation on several sites, including Juriscom and EFF.
• In response to this Order, Yahoo! sought and received in U.S. District Court for the Northern District of California a declaratory judgment stating that French authorities cannot impose and collect fines on Yahoo!. The District Court gave summary judgment for Yahoo!, the stating that the enforcement of foreign judgments is based on the "comity of nations.": Yahoo!, Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme, 169 F. Supp. 2d 1181 (N.D. Cal. 2001). The district court issued the declaratory judgment because the content is protected by the First Amendment, and the court "may not enforce a foreign order that violates the protections of the United States Constitution by chilling protected speech that occurs simultaneously within our borders."
• The 9th Circuit overturned the decision of the District Court, finding that there was no basis for jurisdiction because LICRA and UEJF had insufficient contacts with the forum state: Yahoo!, Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme, 379 F.3d 1120 (9th Cir. 2004)
• In February 2005, Yahoo! was granted a rehearing en banc: meaning that the three-judge panel opinion could no longer be cited as precedent by or to the 9th Circuit Court, or any district court of the Ninth Circuit, except to the extent adopted by the en banc court: Yahoo!, Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme 399 F.3d 1010 (9th Cir. 2005). The case was re-heard in late March 2005

On one level, from a non-US perspective, a decision of this kind (disclaimer: I've not yet read it. It's 100 pages long!!!) might be good news - it is a decision that the overseas respondent to the action could not be hauled into the US court. But note the split: 5 judges thought there was jurisdiction, 3 thought there wasn't. No guarantee that overseas respondents won't be hauled into US courts in the future...There was a majority who thought the District Court had personal jurisdiction.

News coverage here. More commentary and coverage as it comes to hand.

 
Patent litigation in the States - explosion or decline?

A few of the patent blogs over the last week or so have been reporting a decline in patent litigation in the US, sourced from analysis done by LegalMetrics. According to LegalMetrics,

'The number of new patent infringement cases in the U.S. dropped in 2005 by over 10 percent. According to a study by LegalMetric, a litigation analysis firm, this is an extremely rare event. Each year from 1994 to 2004 showed an increase in the number of patent cases over the previous year, according to LegalMetric'

On the other hand, another commentator, Peter Detkin, Managing Director of Intellectual Ventures also analyzed litigation trends and published a presentation entitled Patent Reform: Winners, Losers and Prospects...And Myths. He found that patent lawsuits per issued patent have been on the decline since 1997.

All of this sounded a little weird to me, because I've been reading some work by Bessen and Meurer lately, and according to their paper on SSRN, there has been a patent litigation explosion in the US (or at least was, in the US). According to them,

'[There was a] rapid increase in patent litigation hazards over the 90s [which] cannot be explained by firm patenting rates, R&D spending, firm value or industry composition. Looking at a variety of explanations, we conclude that legal changes may be the dominant factor driving this increase. This implies that the increase in patent litigation represents a growing disincentive to R&D that is not likely offset by growth in the number or value of innovations.

Furthermore, we find evidence that ... the more R&D a firm performs, the more likely it is to be sued. In most industries, this pattern of litigation is inconsistent with the view that most defendants in patent lawsuits are simple pirates or imitators. Instead, patent defendants are, to a large degree, innovators themselves, spending as much on R&D as the plaintiffs. Moreover, about a quarter of patent lawsuits occur between firms that are in different industries and are also “technologically distant,” suggesting that innovating firms may be unable to completely “clear” their technology for possible infringement in advance. ...although the rate of litigation per patent among public firms as plaintiffs did not increase much from 1987 to 1999, the rate of litigation per R&D dollar among public firms as defendants increased 70%.'

Now, Bessen & Meurer studied the 1990s (up to 2000), so the LegalMetric analysis isn't necessarily inconsistent. But it begs the question of how an increase is measured. In raw numbers? Against the number of patents granted? patents in force? R&D spending? All of these would be valid things to measure an increase against. None are clearly identified as being part of LegalMetric's mix. All this means is that:

1. Taking discussions or conclusions regarding litigation rates at face value is naive. Lots of other things impact on patent litigation rates, including (a) the number of patents in force, (b) developments in the market etc.
2. Far more interesting is whether there are any implications for patent policy from any shifts in litigation. Something that Bessen and Meurer consider in another paper...

Oh, and if you are wondering about trends in Australian patent litigation, I talked about this at two presentations last year; the slides from those presentations are available at IPRIA's website. There's also a detailed academic paper in the Federal Law Review, August 2005.

 
2006 Predictions

The other day I blogged about what was coming up in Australian IP. Not really predictions - these were more statements about the stuff I knew should be coming.

For a bunch of predictions - focused on the US but of course with more general relevance - see Freedom to Tinker's list of 23.

 
Interesting development: IBM makes announcement on patent quality, software patents and open source [UPDATED 12 Jan]

An interesting press release from IBM yesterday, reported in today's Australian here. and in the New York Times here (there's a story in WSJ, too, but it's subscriber only). In essence, IBM has announced 3 ways it is working with the USPTO, Open Source Development Labs (OSDL), members of the open source software community and academia to improve patent quality.

[update: in addition to the above sources, it's worth dropping by Groklaw for more on these initiatives]

Those three ways are (to quote the IBM press release):

1. Open Patent Review - In conjunction with the USPTO, this program will encourage various communities to review pending patent applications and provide feedback to the patent office on existing “prior art” that may not have been discovered by the applicant or examiner
2. Open Source Software as Prior Art - This project will establish open source software - with its billions of lines of publicly available computer source code contributed by thousands of programmers - as potential prior art against patent applications; and
3. Patent Quality Index - This will create a unified, numeric index to assess the quality of patents and patent applications.

These are interesting developments indeed.

Open Patent Review

The idea of making patents more available, and accessible, during the examination process has been around a while. The problem that it seeks to solve is the fact that for a patent to be granted, the invention should be both novel (not already revealed, published or done), and inventive (not obvious). There are lots of people out there in the world who can say whether something is obvious, or whether something is already being done - but they are not the people examining it. The question? How do you get that information from the world, to the patent office - in a way that doesn't just:

• overwhelm the patent office with useless information, increasing the workload to limited benefit; or
• waste the time of people in the community.

This is not at all straightforward - you have to gather the information, you have to rank/filter it, and of course, there is the problem the other way - how do those with the information work out that their information is relevant? How does a programmer read a patent and work out that it describes what they are already doing?

There has long been a right for third parties to submit information in the course of examination under the law - eg under our Patents Act, information can be submitted under s 27. But it's not been that much used, and most people wouldn't know (a) that they can submit information, or (b) that there was a patent they should be worried about.

The Internet, of course, and developing software and social networking software (think wikis, reputation systems, etc) open up new possibilities for gathering, filtering, and ranking information. Various projects have already been instituted that capitalise on existing community information. The EFF 'patent busting' project, for example, used calls to the broader community to identify the 'worst offending patents' that were both invalid, and harming innovation - with a view to having those patents challenged/re-examined.

The Community Patent Project goes a step earlier, to examination. The project is discussed, in a lot more detail, in a paper here by Beth Noveck of the New York Law School. Workshops in February I think are being designed to refine and discuss the proposal: see here, and also here.

The Open Source as Prior Art Initiative

Another project is the Open Source as Prior Art Initiative. It's main home is this website. The aim of this project includes:

• Establishing electronic publication practices that any software author can use to ensure their source code can be used as prior art.
• Creating search mechanisms and interfaces that allow patent examiners and others to more easily locate relevant electronically published source code and its related documentation.
• Developing a "taxonomy" or "tagging" system that can be used by software developers, patent examiners and others to describe and help locate relevant source code and documentation

A public meeting will be held at the USPTO on February 16th.

Open source software is, of course, already prior art - but it's not that easy to find for examiners. I guess you can see this project as creating another resource for examiners conducting their searches - another database, but presumably one that does a bit of 'translating' or mediating between language and code.

The Patent Quality Index

The third project has its home at this website. The aim is:

'[to] create a unified, numeric index to assess the quality of patents and patent applications[which] will be an open, public resource for the patent system. The index will be constructed with extensive community input, backed by statistical research and will become a dynamic, evolving tool with broad applicability for inventors, participants in the marketplace and the USPTO'.

Comments

These are really interesting, ambitious initiatives. Open access and development, and peer creation has been one of those buzzwords that has really taken off in the last couple of years - think open source software, but also the translation of open source ideas to things other than computer software - Wikipedia, for example. These developments are a bit like Wikipedia - they seek to use community information, and knowledge, and gather it together for a new and useful process. But it's even more ambitious in one sense - because the process will involve not just gathering information, as Wikipedia does, but also a significant process of melding disciplines and translations. Parts of these projects need to:

• translate patents - which combine legalese with technical language - into something that community members can understand and interact with;
• translate statutory standards - novelty, obviousness - into things that can be measured, indexed, etc.

Wow! Watch those spaces...

 
Lawyers, law blogging, legal scholarship

To blog or not to blog? If that is your question, and you are in law, the one stop shop summarising the debate can be found at the Legal Theory Blog. Interesting timing, since I've been receiving a few media/lawyer/student inquiries just lately about the whys and wherefores of blogging.

I have little to add to Larry Solum's extensive, and thoughtful comments. As a junior(ish) academic, I read his comments as largely quite negative - ie I should probably not be blogging. To distracting; too much danger of garnering negative comments and negative perceptions without knowing about it.

But I wonder whether the issues are slightly different for an academic in a relatively small, and isolated part of the legal academic world (Australia). Blogging does occasionally make me part of a more global conversation - . That's more of a positive, I think, for a person in an out of the way country than it is for, say, a junior academic physically located in the heart of the United States or Europe.

The other issue might be area of law/what is going on in your area of law. For the last couple of years, a key way to be in on the debate has been to blog - because IP, in Australia, has been moving very fast. I don't think I'd be blogging if my area were, say, succession law...

Overall, then, I would say the issue for me is balance. So the New Year's resolution is...

 
Upcoming Attractions in Australian IP...

2005 was one of those years where the IP developments just kept coming. Kazaa, Fair Dealing/Fair Use, a TPM law inquiry, Stevens v Sony, the occasional patent judgment, another government inquiry. And that's just the Australian stuff. We also of course had stuff like the Grokster judgment, developments in the Blackberry litigation ... more treaty-making. It was hard keeping up. Matt Rimmer has done a run down over here.

Instead of doing my own round up, I thought it might be fun to list up the things that are still to come in Australian IP. Just so I can feel exhausted before we even really start the year.

Here's what I've thought of so far. Feel free to email me (or comment below) if you can think of more. There are bound to be some things I've missed.

Copyright

What can we expect in Copyright law developments this year? Well, here's what I can tote up off the top of my head.

First, we can expect some outcomes from the Fair Dealing/Fair Use Inquiry (fondly known as the iPod inquiry). The Attorney-General, at last year's Copyright Symposium, promised us some outcomes, particularly on the legitimacy of personal copying. So we might see:

• 'new exceptions to recognise some everyday forms of private copying that do not harm copyright owners such as "time-shifting" (eg. taping a TV show to watch at a later time) and "format shifting" (eg. putting a CD you have bought onto your IPod)'. Back in November, it sounded like their might be some doubt about whether such defences would actually eventuate - the AG noted in his speech that 'before taking these options to Government, I have asked my Department to undertake a further targeted round of consultations with key stakeholders' - a fact pointed out by Warwick Rothnie at the time, when he noted that '[on] what, if anything, is actually going to happen on the fair use/private copying front, we shall have to wait and see'. However, the Australian media have clearly decided that we will get such a defence. In December, there was a little outbreak of stories (here, and here - noted in the blogosphere here (Geist) and here (Lessig)). And according to this weekend's Age, one of the 'areas of action' to watch out for in 2006 (up there with Hugh Jackman, Greek food, and pigs with personality) is fair use. to quote the story:

'A nation of criminals will return to the right side of the law this year when the Government finally includes a "fair use" exemption in Australia's tough copyright laws.

It will finally be legal to tape a television show or copy a CD to your MP3 player.

Attorney-General Philip Ruddock confirmed last week that these "common sense" exemptions would soon be made law - although it's not yet certain how many copies we could legally burn of our favourite playlists.

One? 500? It's so easy for anyone to copy, quote and sample the work of other people, there are other, thornier issues to resolve.'

• a new extended dealings exception that can apply to a wider range of permitted uses' - perhaps something that will cover parody? Or a 'catch all' type additional exception?

It's not clear whether we will see anything dealing with the other significant issue raised in many submissions to that inquiry - the orphan works issue. It wasn't mentioned by the AG in his speech.

Second, we can expect the outcomes of the Digital Agenda Review: huh, I hear you ask? Isn't that outdated? Well, we could still expect some outcomes on the matters not rendered entirely obsolete by the Australia-US FTA. In particular, there might be some changes to the Library/Educational provisions of the Digital Agenda Review, piggy-backing off both the original Digital Agenda Review, and the Fair Dealing Inquiry where these matters came up again. Possibly too, we might see some changes in relation to provision of access for the visually disabled - even CAL, in its recent submissions, has noted the inadequacy of these exceptions.

We can also expect some movement in relation to anti-circumvention laws: sometime this year, laws implementing Article 17.4.7 of the AUSFTA must be passed to take effect from 1 January 2007 (Article 17.12). So, presumably, the LACA will report on appropriate exceptions (their report is due by the end of February 2006), then we will (presumably) see some draft legislation. Expect action here soon. Personally, I'll be watching for a few things:

• whether the Sony debacle in October-November 2005 (where Sony DRM opened up major security holes in individual users' computers - see Felten for backstory) makes any impact on what the Australian government says about DRM and anti-circumvention laws. As I've noted in a previous post, it's not self-evident to me that our current laws regarding consumer protection and computer security would protect Australian users in a similar situation - you could make an argument, but it would be a difficult, expensive piece of litigation to run because the application of laws to the situation is neither clear, nor easy. Michael Geist, in Canada, has argued that the settlement of a class action against Sony offers a model for legislative action controlling how DRM is used. A good idea? Worth thinking about, at any rate.
• What the government ends up saying about the process for getting exceptions to DRM-protection laws. One of the most notable features of the process so far has been the confusion evident regarding how exceptions are to be created, why the LACA was tasked with creating exceptions to a ban not yet framed, etc. Watch what happens next - open consultations on a draft? I hope so.

And, of course, there's the Kazaa case (you know, the Australian equivalent of Grokster, where the liability of P2P software providers for copyright infringement is being considered). At the moment, in that case (and as far as I know):

• The appeal from the judgment of Justice Wilcox, who held Kazaa liable for authorising infringement by providing P2P software, is listed for hearing from 20 February 2006 - 24 February 2006, in Sydney (before Branson, Lindgren and Finkelstein JJ - they've pulled out the big (IP) guns!). That means we can expect (assuming the case goes ahead) a judgment sometime in 2006 in that appeal.
• a motion to hold Sharman liable for contempt is listed for hearing on 30 January 2006. This motion results from Sharman's alleged failure to comply with the order of Justice Wilcox to make changes to its technology to limits/prevent further authorisation of copyright infringement. Sharman argue they have complied by preventing downloads of the Kazaa software to Australian computers. It's interesting too that the notice of motion for contempt is not the only notice of motion listed that day. Back in December the Music Companies were given leave to file 'any other Notice of Motion dealing with issues of relief in this case' by December 19, and a motion certainly was filed that day. Since the notice is not online, it's not clear to the outsider what's involved there.

Another issue we may see some movement on is more general issues of enforcement. In November 2005, the Attorney-General foreshadowed amendments introducing 'new enforcement measures'. According to the AG, his guiding philosophy is that while we should 'ease the law for Australian consumers', we should also take:

'tougher measures to deal with copyright pirates who make a profit or cause significant damage by ripping off other people's material'

It's not clear what this would mean. Does this mean higher penalties? More use of criminal enforcement against the pirates? Or is the government planning to comply with a long-held US desire - to introduce into Australia statutory damages for infringement? Maybe a combination of all these. One thing that does look like being considered in 2006 is the use of criminal penalties. A general review of criminal penalties in Commonwealth legislation by the Attorney-General's Department was due to commence in late 2005 - this is supposed to include the use of criminal penalties in IP (as Warren Entsch noted in his response to the ACIP Report on Trade Mark Enforcement).

What else in copyright? Well, in case all that wasn't enough, here's a few more, just for good measure:

• we might expect an outcome from the AG Department's inquiry into whether to extend the ISP safe harbours to people other than carriage service providers - Universities, for example, may get some more protection, although it wouldn't change much in practice, I would think - Universities already respond to notices to remove copyright-infringing material; and we may lose the utterly ridiculous use of the Telecommunications Act to define the scope of the safe harbour - ridiculous-ness well set out in David Lindsay's excellent presentation at the Biennial Copyright Symposium last year (powerpoints available here);
• There's a dispute between CAL and the Australian Schools listed for hearing in the Copyright Tribunal in February, about how much schools should pay for school-based digital copying of authors' and artists' work, and what kind of copying should be paid for. CAL press release here.
• Speaking of the Copyright Tribunal, we might get a decision from it on how much Pay TV operators should pay for the re-transmission of free-to-air television. This decision will have an impact on whether the newly-created Director's Copyright is worth anything at all (their only new right, under the legislation, is to a share of this remuneration). The hearing on this issue happened last year, meaning a decision must be pending.
• An appeal from a judgment about copyright in 'television formats' (eg, 'The Block', 'Big Brother') - Nine Films & Television Pty Ltd v Ninox Television Limited [2005] FCA 1404 - is listed for hearing in the Full Federal Court appeals in February. Rothnie has discussed the judgment at first instance here.
• finally, we might see some action on the long-standing issue of communal moral rights for indigenous people. Of course, this is one of the slowest-moving issues known to the copyright world - the Attorney-General mentioned it as an area of government concern in February 2004, and February 2005. In fact, in Feb 2005 the Attorney-General named this as an 'area where the Government is determined to push ahead with copyright reforms' - noting an aim of finalising the legislation by the end of 2005. In November 2005, the AG indicated legislation would be introduced in 2006.

I should note, too, that all the above developments are the specific legal ones. More generally, it's going to be particularly interesting, this year, I think to see where open access and the so-called 'open content licensing' movement goes (Creative Commons and the like). Creative Commons is moving along in some pretty significant ways - they've just raised some pretyt major funds in the US (see the Lessig Blog for details), and more and more people are using the licenses. In Australia, it will be worth keeping an eye on the an ARC-funded Linkage project being run out the Baker & McKenzie Cyberspace Law and Policy Centre looking at the issue of 'Unlocking IP'. Open access to research and research publications is moving ahead in leaps and bounds, with governments around the world interested in ensuring access to the results of publicly funded research (to keep up with these developments, I recommend Peter Suber's very important site).

Patent

What about developments in patent? Here I'm less certain what we're going to see happening in 2006. But there are a couple of issues to watch for, I think.

The first is the issue of the research exemption in patent law. Here in Australia we have now two different law reform bodies - the ALRC, and ACIP, both recommending a research exception to allow people to experiment on patented materials for the purposes of research. I've consisdered these two proposals (and their differences) in more detail here. Chances are we will get a change in the legislation, but when is an open question - legislative drafting resources are presently scarce, and this may not be seen, by the government, to be high on the list of priorities.

The second is the continuing debate over business method patents. The scope of what is patentable in this context is a matter of live debate here in Australia at the moment; a debate only likely to be enlivened when the issue hits the Full Federal Court this February. The case of Grant v Commissioner of Patents is listed for hearing before Heerey, Kiefel and Bennett JJ on 28 February 2006. Readers might recall I've discussed this case before in some detail - see here and here. Warwick Rothnie also has a discussion here. Some practitioners have criticised IP Australia's, and the Court's approach as being 'short-sighted' - see for example the passage from Clark quoted in this post.

It's worth noting, too, that the issue of patentability here is rather live over in the United States. As Patently-O notes, the USPTO currently has proposed Interim Guidelines for Patent Subject Matter Eligibility open for comment, and issues of patentable subject matter are also before the US Supreme Court in the case of Labcorp. While the case is about a method of medical treatment, a key argument in the case is that the claim being challenged 'violates this Court’s longstanding rule barring patents on “laws of nature, natural phenomena, and abstract ideas.' One of the arguments against business method patents is that they are concerned with 'abstract ideas' rather than inventions. See Patently-O's summary of the case and briefs here.

Another patent case listed for hearing in the Full Court sittings in February is Emperor Sports Pty Ltd v Commissioner of Patents [2005] FCA 996. This case, discussed at length by Warwick Rothnie here, concerns the Australian procedure for re-examination of patents. As Lindgren J noted in his judgment, the result of the case is potentially that re-examination became less useful as a process. For another perspective on the case, see this note (pdf) by lawyers at Davies Collison Cave.

Finally, of course, there is that matter I mentioned the other day - the patent ever-greening. It's possible that we'll see some action - at least review action, if not reform - regarding the Labor Amendments put in when the FTA was approved. See my discussion from last week.

Trade mark

And what about trade mark?

Well, in Australia, the issue of the day may well be the colour mark. An appeal judgment is pending in one of the more significant colour mark cases - BP plc v Woolworths [2004] FCA 1362. Given that the case was heard (by Black CJ, Sundberg and Bennett JJ) in May 2005, judgment would be expected pretty soon. Trade mark groupies will recall that this is the case where Justice Finkelstein held that BP had established that "the colour green" had become distinctive of BP's goods and services - and hence, that BP was entitled to registration of the colour as a trade mark. The relevant trade mark number is 676547, and the mark is described as follows:

The trade mark consists of the colour GREEN applied as the predominant colour to the fascias of buildings, petrol pumps, signage boards - including poster boards, pole signs and price boards - and spreaders, all used in service station complexes for the supply of the services covered by the registration, as exemplified in the representation attached to the application form'

There's a couple of interesting issues in the case - the registration of colour generally, and the issue of the 'limping trade mark' - as Finkelstein put it:

'BP’s get-up consists of more than one feature. It comprises the shield, the letters BP, the use that is made of the colour yellow, as well as the colour green. It is true that as a result of its green program, green was regarded as BP’s dominant corporate colour. Yet green is only one aspect of its total image. The question that arises in these circumstances is whether it is possible to dissect that total image and obtain trade mark registration of only one component of the whole image'

Finkelstein held that in this case the colour alone had become distinctive, but it's a tricky issue in some cases.

Judgment in BP won't answer all the currently outstanding issues about trade marks in colour in Australia. In particular, it won't necessarily tell us when, if ever, colours can be 'inherently distinctive' (and so registrable without the long period of use that BP were able to prove). This is a live question at the moment, Mansfield suggesting it is in Philmac, but with Finkelstein doubting it's possible (paras 17-18). Going by what happens elsewhere in the world, it would seem Finkelstein has the better end of the stick (see eg David Llewellyn's paper on Europe, on the IPRIA website here).

It will also be interesting to see whether the Full Court approve IP Australia practice in allowing trade mark registrations that do not rely on any established colour system (like the Pantone system) - another area where IP Australia practice differs from overseas practice (again, see Llewellyn).

In another, colour-related issue, it might be worth noting that the long-standing dispute between Cadbury and Darrell Lea over the use of the colour purple by the latter is currently set down for hearing (on liability, not damages) in March 2006. Cadbury are alleging:

"contravention of ss 52, 53(c) and 53(d) of the Trade Practices Act 1974 (Cth) and passing off based on the use by Darrell Lea of the colour purple in relation to chocolate confectionary products. The statement of claim contains in par 44 et seq allegations that "Darrell Lea has obtained and continued to enjoy the economic benefit of Cadbury's reputation and goodwill in the colour Cadbury purple" and that Darrell Lea has "no just basis for appropriating and converting Cadbury’s reputation and goodwill in the colour Cadbury purple".”

The case is not, as far as I can tell, about trade mark infringement, but judgment on the TPA issues might well have some interesting applications to any future case about trade mark infringement in relation to colour. Of course, the case could settle...

The other live issues in trade mark will be the outcomes of IP Australia's review of the trade marks legislation. IP Australia has done extensive consultation on the bits and pieces that are not working in the Trade Marks Act 1995 (see IP Australia's 3 papers, available here), and we might see some results of that inquiry in 2006. Amongst the areas where reform can be expected is how oppositions are run (according to Entsch's response to the ACIP report on TM Enforcement).

IP and Trade

Can there still be more, even above and beyond all this? Well, yes, of course. The final point to note is that FTA negotiations are still going on with a number of countries. The issue of what, if any, IP provisions will be included in such agreements continues to be a live one: do we do what we did with Singapore? Or what we did with the US? Do we try to include obligations on IP enforcement in such agreements? Is there any point to including IP enforcement provisions in an FTA with China? Watch this space. According to the last update, the next negotiating meeting on the China FTA is due in Feb-March 2006.

Trade Minister Vaile has also foreshadowed some kind of review of the US-Australia FTA, set for Feb-March 2006. My guess? Nothing useful - 12 months is simply not enough time to generate any sensible conclusions about the agreement's effects.

Concluding comments

2006 is not shaping up as a boring year in IP. No doubt there will be enough to keep us all busy - depending, in particular, on whether all the reviews I've mentioned above do generate some legislative action this year. Watch this space! And since I've no doubt missed some things, do email me if you can think of anything. I'm happy to update! Or comment, of course.

 
How to win fans and influence people (?)

Coldplay's new CD comes with detailed rules of the road, at least in the US. Not just rules, but failings: customers are warned that the CD may not play on:

• any Mac computer
• some CD players with CD-R capacity
• some car stereos with satellite guidance systems
• some portable CD players
• some DVD players
• soem CD/LD convertible players
• some game players
• some PCs

Oh, and at the end of all that, a simple statement: 'except for manufacturing problems, we do not except product exchange, return or refund'. Ouch.
(see also madisonian.net; sivacracy). And it's not the only CD with rules.

 
For those who care...

...about which electronic version of Commonwealth legislation is the 'authorised' version, you might be interested in the AG's proposal for legislative amendments to provide for authorised electronic versions of Commonwealth Acts and compilations of Acts.

It is proposed that new legislative provisions be introduced to allow the Department to designate a database of Acts and compilations of Acts, made available to the public, as authoritative. In practice, this would consist of the PDF documents from which printed legislation is produced, which are already available on ComLaw.

Submissions on this nailbiting issue by Feb 6, 2006 (be still my beating heart!)

update: apparently some people can't access the link to the proposal above. If you can't, just pop 'authorised electronic version acts australia' into Google.

 
Big surprise - US the bigger winner in US-Australia trade in the first year of the FTA.

Reports from the SMH:

'The Federal Government has blamed a stronger currency and increased competition from Asia for a disappointing first year in the new trade pact with the United States.

Figures from the Department of Foreign Affairs and Trade revealed Australia sold less to the US but bought more from the economic giant in the year after the bilateral trade agreement came into effect.

While Australia's merchandise exports to the US fell by 4.7 per cent in the 12 months to October, imports from the US rose 5.7 per cent, the data showed.'

Of course, it's rather difficult to gain when so many of the Australian market entry benefits are delayed (remember those provisions removing beef quota restrictions? phased in over 18 years?).

But caution shoudl be applied here - 12 months is, as the government notes, too short a time-frame to make a judgment on whether the Agreement has had beneficial effects. It is also, I would note, too short a time frame accurately to gauge adverse effects. One can't help but wonder why the government is now touting, therefore, a twelve month review. Wouldn't it be more sensible to wait?

 
The ACCC on that tricky warranty language...

I'm more an IP person than a contract person, but in teaching IT law, you do often come up against that question - just how far can warranties go in excluding corporate liability?

The SMH reports that the ACCC has taken legal action in the Federal Court against LG Electronics for telling customers who bought its mobile phones that it offered only a limited and voluntary one-year warranty. The commission alleges that LG has breached the Trade Practices Act by making false warranty statements in its online mobile phone manuals.

Apparently, the manual tells consumers that the limited warranty "is in lieu of all other warranties, expressed or implied in terms of marketability or fitness for a particular use", contrary to the statutory warranties in the Trade Practices Act. Under s 71 of the Act, goods supplied have to be of 'merchantable quality', and under s 68, Any term of a contract (including a term that is not set out in the contract but is incorporated in the contract by another term of the contract) that purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying s 71 (or its sister provisions) is void. So, by saying that the warranty is more limited than that, LG would be engaging in misleading and deceptive conduct. If they've done that.

LG are apparently doing an internal investigation.

The ACCC press release is here.

 
'Tis (?'twas) the season to be frivolous

I missed this at the time, but someone has actually studied humour in the US Supreme Court (for Green Bag, admittedly, but still...). Apparently Scalia J is 19 times as funny as Ginsburg J, measured in number of laughs in the term...

update: Starkoff points out to me that the Green Bag article is available online here.

 
Back in business - and it's about the FTA (and patent evergreening) again...

You know it's time to start blogging again when you realise you are talking back at the television (although at least I refrained from yelling at the tv...). Sometimes I wonder whether I'm doomed to keep blogging for so long as US-Australia FTA IP issues keep periodically hitting the headlines.

Why was I displaying this mild form of insanity? Last night, the FTA, and pharmaceutical prices issues hit the 7:30 Report (transcript now available here), building on a story that hit the newspaper sites yesterday. According to the SMH:

'Acting Prime Minister Mark Vaile says the "evergreening" amendment to the FTA - demanded by Labor as a condition of its support for the pact ahead of the 2004 election - could be tossed but after intense lobbying by the US pharmaceutical industry.

Mr Vaile said the amendment was unnecessary to begin with, and removing it would not force up medicine prices.'

It's always a nightmare when patents, pharmaceuticals and evergreening hit the news. It's a nightmare because (a) the term 'evergreening' is vague, uncertain of scope and appears to be used by different people to mean different things, and (b) that's really hard to explain in a 30 second soundbite.

Sometimes, 'evergreening' is used to refer to the attempt to extend the patent monopoly on a substance beyond the period provided for under law: 20 years basic term, extendable by up to 5 years under Ch 6 Pt 3 of the Patents Act for pharmaceutical substances to recognise that patent owners may not get the benefit of the full 20 years because of delays entailed through the regulatory processes for approval. One way to extend the monopoly is to come up with new inventions relating to the same substance. So for example, you might have a first patent on the active ingredient in a drug. Then later, you file for a patent on a different use for the ingredient, or for a method for delivering the drug. Being applied for later, these patents will go for longer, of course. Thus extending the monopoly.

This can be called 'evergreening', because it 're-greens' a monopoly that might otherwise expire early. The problem with calling this 'evergreening' is that the description covers things that are allowed and perfectly legitimate, and things that are abusive of the system. Consider 2 examples:

1. Perhaps you discover an active ingredient, but it takes you years (and some highly inventive research) to work out how to apply it for human treatment. In this case, why shouldn't we reward the inventive research, by granting a patent on the method for delivery?
2. On the other hand, perhaps you file a method of delivery patent, but it's not really inventive - it was obvious once you knew the ingredient.

In theory, in case (1) the second patent ought to be granted (and would be) and in case (2) the second patent would not be granted (and ought not to be). In reality both patents might be granted, because our examination system is not (and cannot be) perfect. And if (2) does happen, challenging and removing the patent is going to be a difficult and expensive process.

When people talk about evergreening, however, they generally use it in a pejorative way - to refer to abuses of the system. Does it happen? Maybe, but we don't know how often (2) arises, because we don't really know how often patents are granted that shouldn't be.

But when people use 'evergreening' in the pejorative way, they are often thinking, not just of applying for patents that shouldn't be granted. They are thinking of abuses of other rules as well. So, for example, consider the definition once offered by CRA International:

'Evergreening refers to the alleged misuse of drug patent rules by brand name pharmaceutical companies, a tactic used to delay the delivery of cheaper generic drugs into the marketplace'.

This definition actually sums up quite well how people use 'evergreening' - as a general one to refer to all the alleged abuses of patent and drug listing rules to extend the monopoly of innovator companies and prevent/delay market entry by generic companies - combining applying for invalid or over-broad patents, and then using those patents, and other rules in the system, to delay generic entry.

What other rules? Well, in Canada and the United States, it has been argued that certain rules about the interaction between patents and systems of listing drugs for approval for therapeutic use are abused by innovator companies. In particular, there has been a lot of concern about the so-called 'automatic injunction'. In the United States, there's a set of rules that are complicated, but basically provide that:

• when an originator drug company seeks approval for a new drug, it lists related patents in a book called the 'Orange Book';
• when a generic seeks approval for a bio-equivalent drug (eg, when the main patent on the drug expires), it must certify, in relation to all the Orange Book Listed Patents, that they have expired (or will before approval is granted), or that they are either invalid or not infringed.
• If the latter, the generic has to give detailed reasons as to why the patent is invalid or not infringed.
• If the originator company files a lawsuit for infringement within 45 days, it gets an automatic stay of 30 months before the FDA can approve the generic's entry.
• Also, the first generic to file saying a patent is invalid, or not infringed, gets 180 days of market exclusivity - ie, once FDA approval is given to the generic, no other generics get entry for 180 days (this is designed to give generics incentives to litigate invalid patents or design around patents).

There is evidence that these complicated US rules have been abused. When the FTC studied these rules and these issues in 2002, they found that:

'two of the provisions governing generic drug approval prior to patent expiration (the 180-day exclusivity and the 30-month stay provisions) are susceptible to strategies that, in some cases, may have prevented the availability of more generic drugs. These provisions continue to have the potential for abuse.'

The generic industry in Canada has argued a similar system there is also abused (see the Generics Industry Submission in the FTA consultations, attaching a Canadian report, here).

Do we get any such abuse in Australia? Well, importantly, we do not have an Orange Book system here, nor do we have 30 month stays on TGA approval. Under the amendments the Liberal Party introduced, the generic company applying for TGA approval has to certify either that:

• acting in good faith, it believes on reasonable grounds that it is not marketing, and does not propose to market, the therapeutic goods in a manner, or in circumstances, that would infringe a valid claim of a patent that has been granted in relation to the therapeutic goods; or
• that there is a patent, but either the generic does not intend to market until the patent expires, or that the applicant has given the patentee notice of the application for registration or listing of the therapeutic goods.

It's a minimal version of what the US has - without the listing, and without the automatic stays. So we cannot have that kind of US-style 'evergreening'.

Is there still potential for the patent system and TGA system to be abused? Of course there is always potential. Any system of very valuable monopolies (and drug monopolies are valuable) gives rise to strong incentives to use every part of the system to extend monopolies so far as is possible. For example, that unjustifiably broad or invalid patents will be applied for and granted, and that these will be used to delay generic entry. But as I noted above, that risk is inherent in the patent system, and we don't know how often unjustifiably broad, or invalid patents are granted. We just don't have the evidence on that.

How do the Labor amendments play into all this? The Labor amendments are designed to prevent abusive use of the rules that Australia does have: by providing that if a patentee intends to sue a generic applying for TGA approval for patent infringement, they must certify that the infringement proceedings:

(a) are to be commenced in good faith; and
(b) have reasonable prospects of success; and
(c) will be conducted without unreasonable delay.

If they make such a certification, and it is 'false or misleading in a material particular', then they can be subject to a $10 million fine. So, in essence, the provision is designed to prevent frivolous litigation, or bad faith litigation, or unduly vexatiously-managed litigation.

Are the amendments particularly useful? I'm not sure. But the question now is whether they should be removed.

Last night, on the 7:30 report, it was alleged that these amendments (a) cause uncertainty, and (b) single out the pharmaceutical industry for unfair treatment - no one else suffers these kind of fines for bringing litigation.

(b) is probably right - I'm not aware of such provisions elsewhere in the law. But then again, perhaps Labor took the view that such provisions were justified given the FTC findings from 2002 - that where litigation did ensue between pharmaceutical and generic companies in the approval process, that generics succeeded 73% of the time.

Regarding (a), I'm not sure how you would prove that there is increased uncertainty beyond that inherent in litigation. A court that found that litigation was vexatious, or conducted wiht unreasonable delays, has at its disposal such possibilities as rulings for indemnity costs or costs orders which, in patent litigation, could be quite high.

It will be very interesting to see what evidence any research done produces. I can't help but think it is just too soon to know whether the amendments have a positive or a negative effect. 12 months? What can you prove in 12 months? Come back in 3 years and we might have something more to talk about.

To me, the more interesting question is actually - what would be the political effects (or realpolitik) of removing the amendments. The FTA created more processes for review and appeal of PBS pricing and listing decisions, and a 'Working Group' with more possibilities for US and industry involvement and pressure in the way the PBS works. The protection of the PBS, depend on government being able to withstand the inevitable increased pressure from pharmaceutical companies to increase prices. To me, the most interesting thing would be - if the government now removes the amendments, on less than compelling proof of problems, does that not just indicate that it is willing to change according to industry (or US) pressure? Just a speculation.