24.2 Trade marks, designs and patents

Trade Marks

General

The purpose of trade mark law is slightly different to that of the other intellectual property protection regimes, such as copyright, patents and designs. Trade mark law is not intended primarily as an incentive to creativity or inventiveness, but instead to protect the interests of traders, as well as being intended to provide consumers with a level of information and protection when they buy a product. Thus trade marks can signify the origin of goods or services and may say something about their quality, as well as serving to advertise the product.

Trade marks are particularly valuable in a market where there are alternative, possibly identical, goods. The registration of a mark protects it by preventing others who produce goods or provide services of a similar type from using the mark as an easy way to market success for their own product.

Note that the common law action or tort of passing off serves much the same function as trade mark law; however, a registered mark is protected, as from the date of application for registration, without the necessity of proving reputation in the mark. It is thus easier to prove infringement if a mark is registered. Nevertheless, a company may have a legal remedy even if its trade name or mark is unregistered or unregistrable: see generally Re Waterford Glass Group Ltd (1987) 9 IPR 339.

Australia's international obligations on trade mark protection

The fundamental principle of trade mark protection provided by the World Trade Organisation's TRIPS Agreement is that any sign, or any combination of signs, capable of distinguishing the goods and services of one undertaking from those of other undertakings, must be eligible for registration as a trade mark, provided that it is visually perceptible. Such signs may take the form of particular words, including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination thereof. Where signs are not inherently capable of distinguishing the relevant goods or services, members are allowed to require, as an additional condition for eligibility for registration as a trade mark, that distinctiveness be acquired through use. Members are free to determine whether to allow the registration of signs that are not visually perceptible, such as sounds or smells.

The owner of a registered trade mark must be granted the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trade mark is registered, where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion must be presumed.

TRIPS requires WTO member states to prohibit the registration or use of a mark which is confusingly similar to a well-known mark that is either already registered or in use for identical or similar goods or services. It extends this prohibition to marks for goods and services which are not similar to goods and services for which a well-known trade mark is used or registered if their use would indicate a connection between those goods or services and those of the owner of the well known mark, to the detriment of the owner's interests.

The current trade mark law in Australia is the Trade Marks Act 1995 (TMA), which commenced operation on 1 January 1996. It incorporates Australia's obligations under the WTO TRIPS Agreement. The TMA replaced the earlier trade mark law of 1955, although some of the provisions of that earlier law continue to apply to certain matters that were being dealt under it immediately before its repeal. The TMA has been further amended on a number of occasions, recently to take account of provisions relating to trade marks arising from the US-Australia Free Trade Agreement of 2004.

What is a trade mark/trade sign?

The TMA defines a trade mark as:

a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

Section 6 of the TMA states:

'Sign' may include the following or any combination of the following - namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.

This definition enables a company to register as a trade mark a shape or colour, sound or scent (which the earlier laws did not allow). It also allows the registration of an 'aspect of packaging'. Thus it can allow a company to register as a trade mark something that is purely functional in nature, such as a bottle, allowing a company to generate a quasi-monopoly over a functional item in certain areas of trade activity. Hence Coca-Cola has been able to register the shape of its bottle as a trade mark in Australia under the TMA (which it could not do in the UK under the UK trade mark law). See Coca-Cola Trade Marks [1986] RPC 421. See also Coca-Cola v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107; 47 IPR 481 (Full Federal Court), in which Coca-Cola protected the shapes of its trade mark bottle against a confectioner producing sweets in the shape of the Coke bottle. See also Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2001] FCA 1047; (2001) 52 IPR 137.

However, the extensions under the TMA are still subject to the limitations established by the case law as to registrability (see below); in particular that the mark or sign must be used to distinguish goods or services rather than being the goods or services themselves.

'Used or intended to be used'

Under section17 of the TMA, the sign must be 'used or intended to be used' in the trade. Registering a mark in order to provide de facto protection for an unregistrable one, known as 'ghost marking', is not permissible since there is no intention to use the registered mark as required by the Act. Similarly, it is not permissible under the Act to use trade marks in order to preempt competitors entering a particular market, or to 'stockpile' them in order to sell them off to manufacturers. See Holly Hobbie Trade Mark (1984) 1 IPR 486. However, the old rule against 'trafficking' no longer exists in the TMA.

Cases under the old legislation also indicated that the use must be bona fide commercial use: see Imperial Group Ltd v Phillip Morris and Co Ltd (1980) FSR 146.

'To distinguish goods or services'

A mark must be used 'in relation to goods or services'. This means that 'marks have no life of their own', and are registrable only in respect of the goods or services they are meant to distinguish. While the shape of an item can be a trade mark because of distinctive association, registration of a colour as a mark can be much more difficult to achieve. See Smith Kline and French Laboratories (Aust) Ltd v Registrar of Trade Marks [1967] HCA 42; (1967) 116 CLR 628; see also Woolworths Ltd v BP plc (No 2) [2006] FCAFC 132; (2006) 154 FCR 97; Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 4) (2006) 229 ALR 136.

By the same token it is not possible to monopolise through trade mark registration a name in the abstract. See Re Application by New York Yacht Club (1987) 9 IPR 102.

Who can register a trade mark?

A person may apply for the registration of a trade mark in respect of goods and/or services if the person claims to be the owner of the trade mark, and one of the following applies:

Section 27(1) of the TMA says:

(i) the person is using or intends to use the trade mark in relation to the goods and/or services;

(ii) the person has authorised or intends to authorise another person to use the trade mark in relation to the goods and/or services;

(iii) the person intends to assign the trade mark to a body corporate that is about to be constituted with a view to the use by the body corporate of the trade mark in relation to the goods and/or services.

Note that only the person who 'claims to be the owner' can apply for registration (under the old law, it was not necessary for the applicant to show that they had actually 'invented' the mark, merely that they first adopted that mark as a trade mark). Where a person cannot establish that they own the mark by virtue of having created it, the person would need to establish that they have used the mark in the course of trade and acquired reputation in it. However, an objection to registration based on first creation is not of itself a ground for opposition; although a mark of such a nature may be protected by copyright.

The courts view this question in strictly territorial terms. Hence, even if a mark is copied from one in use overseas, a first applicant or user in Australia may become the owner of the mark for the purpose of first registration in this country. Although only very limited local use by a foreign trade mark owner in Australia may suffice to prevent registration of that mark in Australia by another party, the absence of such use by the foreign company will remove any remedy against local infringement. See First Tiffany Holdings Pty Ltd v Tiffany & Co (1989) 13 IPR 589.

TMA provides a claim for priority for a trade mark owner from a foreign country (if a Paris Convention country providing national treatment rights for Australian trade mark owners), where they apply to register the mark in Australia within six months of having registered it overseas. Section 60 of the TMA introduces ground for opposing the registration of a foreign mark in Australia if it has 'acquired a reputation in Australia'. In Durkan v Twentieth Century Fox Film Corp (2000) 47 IPR 651, Fox argued that the success of the film Braveheart conferred proprietary rights on them, enabling them to prevent registration by Durkan of Braveheart the Musical.

Under section 27(3) of the TMA, an application must specify the 'goods and/or services in respect of which it is sought to register the mark'. The regulations to the TMA provides for the classes into which goods and services are to be divided for the purposes of the Act. Schedule 1 to the regulations sets out 34 classes of goods and eight classes of services in respect of which trade marks may be registered.

Requirements for registration

A mark must be 'distinctive' within the terms of section 41 of the TMA, that is, it must be capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered from the goods or services of other persons. In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar of Trade Marks must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

Section 41(4) and (5) of the TMA then sets out some tests for the Registrar of Trade Marks to use in determining whether the mark is 'inherently adapted to distinguish' the goods or services. Section 41(6) of the TMA provides allowance for circumstances in which the mark may not be inherently adapted, by the application of the following test:

(a) if the applicant establishes that, because of the extent to which the applicant has used the mark before the filing date in respect of the application, it does distinguish the goods or services as being those of the applicant - the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b) in any other case - the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

(b) the time of production of goods or the rendering of services.

Marks which cannot be registered or are difficult to register

The TMA provides a number of grounds on which registration of a mark may be refused [TMA Pt 4, Div 2, ss.39-44] or challenged [TMA Pt 4, Div 2, ss.57-62]. These grounds include:

• the mark cannot be represented graphically
• the mark is incapable of distinguishing the applicant's goods or services
• the mark is likely to deceive or cause confusion
• the mark is prescribed by the TMA regulations
• the mark is scandalous or contrary to law
• the mark is substantially identical or deceptively similar to another trade mark already registered in relation to the same or related goods and services.

Grounds for opposition to an application to register a mark also include:

• the applicant is not the owner of the mark
• the applicant does not intend to use the mark as a trade mark (ie, in the course of business)
• the mark is similar to a trade mark that has already acquired a reputation in Australia
• the mark contains a false geographical indication.

Marks unable to be graphically represented

Examples of these types of marks would include marks which are reliant upon sounds or smells without any accompanying graphical or visual representation or cues. Registration of these types of marks is not impossible, but creates particular challenges.

To be successful, an application for registration of a mark consisting of a sound would need to be accompanied by a comprehensive, unequivocal, written description of the sound; a tune, for example, would need to be accompanied by the musical score.

Marks likely to deceive or cause confusion

Section 43 of the TMA requires that an application for the registration of a trade mark in respect of particular goods or services be rejected if the use of the trade mark in relation to those goods or services is likely to deceive or cause confusion, because of some connotation it may have. This is similar to a provision under the old Act. However, the TMA separates the 'likely to deceive' provision [TMA s.43] and the 'deceptively similar' provision. See Southern Cross Refrigerating Co v Toowoomba FoundryP /L (1954) 91 CLR 592. Note, however, that in Estate of Diana, Princess of Wales v Masterson (2001) 52 IPR 264 (Federal Court), Princess Diana's estate filed an objection to registration of the mark 'Diana's Legacy in Roses' in relation to roses under section 43 of the TMA. The objection on this ground failed because there was no evidence that buyers would be deceived into believing that the Princess's estate had authorised or endorsed this form of commercialisation of her name.

In Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45 (High Court) the US sporting goods company sought to expunge the registration of 'Nike' in respect of cosmetics and toiletries by a Spanish company on the grounds that it could become deceptive or likely to confuse, even if at the time of initial registration it was not deceptive. The court held there was no reasonable probability of confusion.

Substantially identical or deceptively similar to another trade mark

Under section 44 of the TMA, an application must be rejected if the trade mark is substantially identical with, or deceptively similar to, a trade mark registered by somebody else in respect of similar or closely related goods or services. 'Similar' in this context is taken to mean 'of the same description', the question to be decided on the facts taking account of the nature of the goods or services and their customary trade context, rather than by TMA classification categories. Similarly, 'closely related' would be judged on functionality. See Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; McCormick and Co Inc v McCormick [2000] FCA 1335; (2000) 51 IPR 102.

A trade mark is deemed to be 'deceptively similar' to another trade mark if it is likely to deceive or cause confusion. See Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, in which Kitto J set out the wonderment test (at 595):

while a mere possibility of confusion is not enough - for there must be a real tangible danger of its occurring - it is sufficient if the result of the use of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source.

See also Re Applications by McDonalds Corp (1986) 9 IPR 509.

Incapable of distinguishment

Incapacity to distinguish constitutes grounds for both rejection of, and opposition to, an application to register a mark. A three-step test is used by the Registrar of Trade Marks to determine whether an applicant mark is capable of distinguishment, namely:

• if the mark has been inherently adapted to distinguish
• if not inherently adapted, the use intended use of the mark
• if still not inherently adapted, whether prior use before application has created distinguishment.

Short combinations of numbers and letters which might be commonly used as serial numbers, or combinations of two letters commonly used as initials, would both face significant difficulty in achieving registration. Similarly, common acronyms (such as CD-ROM or LED) or abbreviations (such as AUTO BILLPAY) would be deemed directly descriptive and therefore refused registration: eg PDMX for Programmable Digital Multiplexers in Re Application by STC plc (1989) 15 IPR 419.

Trade marks which are geographical names, or which are primarily identified by the public as place names, are also not registrable, particularly if the applicant is seeking to use the name of the place from which similar products also come. However, an application will not be refused merely because that place name exists somewhere, if the public would not commonly identify the place with the mark. See Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511.

Words which in their ordinary meaning are common family names or surnames are also unregistrable. This includes both the original sound of the name and the English variation if different. However, if the name is uncommon in Australia or not primarily identifiable as such it may be permitted registration.

Descriptive marks

One significant ground for seeking removal of protection from a registered mark (that is, removing it from the register) is that the mark has lost its distinctiveness and has become generic or generally accepted as a sign which describes an article, substance or service. A trade mark owner ceases to have any exclusive rights with respect to the trade mark where the registered mark 'consists of, or contains, a sign that, after the date of registration of the trade mark, becomes generally accepted within the relevant trade as the sign that describes or is the name of an article or substance' [TMA s.24]. See Re Sony Kabushiki Kaisha [1987] AIPC 90-412; Re Galaxy International Pty Ltd (1988) 13 IPR 433.

Descriptive words or devices which become so common and their primary meaning so plain that it is inconceivable that they could or should be associated solely with one trader may be removed from the register. Thus, if other traders are likely in the ordinary course of business and without any improper motive to desire to use the same or a similar mark, the mark would not be inherently distinctive. Some words that would extremely difficult to register (because they are something that other traders would need to use to describe their goods or services) include:

• STRAWBERRY for drinks
• WARM for heaters
• TOMATO for sauce
• GLOBAL for freight shipping services.

Examples under the old law of marks being refused registration because they were considered directly descriptive include:

• DAYSAFE (electro-mechanical security drawers and deposit boxes)
• CHEMICAL ABSTRACTS (database of summaries of chemistry articles)
• JUNIOR (microwave ovens)
• BREAK-UP (cleaning detergents)
• AUTOBOOTH (spray booths for painting and drying motor vehicle bodies)
• LITTLE PEOPLE (toy figurines)
• ALL THE COLOURS IN THE WORLD (knitwear and clothing)
• NATURAL 8 PLY (knitting yarn)
• HAIRFUSION (a method of fusing artificial hair to the human head)
• PIVOT (razors and razor blades)
• NEW WAVE (hair care products)
• KNOCKOUT (jeans and clothing)
• JETSYSTEM (washing machines).

A picture may be just as descriptive as a word: hence a kangaroo device is not distinctive of any Australian product, and a stethoscope wound around a lamp was refused registration for a doctor's after-hours service: see Re Application by Slaney (1985) 6 IPR 307.

Scandalous or contrary to law

Under section 42 of the TMA:

An application for the registration of a trade mark must be rejected if:

(a) the trade mark contains or consists of scandalous matter; or

(b) its use would be contrary to law.

'Scandalous' marks are likely to be fairly rare, but would include marks which would offend cultural or religious sensibilities, are racist, or promote the sale of an illegal substance.

Proscribed marks

Regulations made under section 18 of the TMA may specify that certain signs are not to be used as trade marks. TMA Schedule Two provides a small list of signs that may not be registered as trade marks: these include 'Austrade, C.E.S, Olympic Champion, Repatriation, Returned Airman, Returned Sailor, and Returned Soldier'. See Trade Marks Manual of Practice and Procedure, Pt 30; see also Advance Australia Logo Protection Act 1984 (Cth), and the Defence Act 1903 (Cth).

Under the old Act, the Registrar of Trade Marks could refuse to accept any application which consists of a representation of any member of the Royal Family, the Royal Arms, crests or insignia, the Australian flag, or emblems of any city or town in Australia: also prohibited were the words 'Royal, Patent, Copyright, Registered Design' and the like. There are also particular statutes prohibiting words like 'Bi-Centennial', 'Medicare', 'Instant Lottery'.

Rights given by registration

Under section 20 of the TMA:

If a trade mark is registered, the registered owner of the trade mark has, subject to this Part, the exclusive rights:

(a) to use the trade mark; and

(b) to authorise other persons to use the trade mark

in relation to the goods and services in respect of which the trade mark is registered.

There is also a right to obtain relief for infringement under TMA s. 20(2).

Duration of protection

Under section 72(3) of the TMA:

Unless it is earlier cancelled, or the trade mark is earlier removed from the Register, the registration of the trade mark expires 10 years after the filing date in respect of the application for its registration.

However, there is provision for ongoing renewal of registration [TMA s.75(1)]. Thus, unlike designs or patent registration and so long as the requests are received and the fees paid, trade mark registration may continue indefinitely.

Well-known marks - certification, defensive and collective marks

Apart from the general procedure for registration of a trade mark, there are also special provisions in the TMA governing particular types of marks - namely those with special uses, known as certification trade marks [TMA Pt 16, ss.168-183], and well-known marks registered as defensive marks [TMA Pt 17, ss.184-189].

Certification marks are marks adapted to distinguish goods or services in relation to quality, accuracy, or some other characteristic including origin, material or mode of manufacture, from other goods not so certified. An application for registration of a certification mark must be accompanied by a set of rules which will govern the particular use of that mark. Examples of certification marks include Woolmark, the Standards Association of Australia mark, and those marks indicating that garments fulfill the description of Harris Tweed, Irish Linen and Scottish Cashmere.

Defensive registration under Part 17 of the TMA is available for a small number of very well-known marks. Part 17 permits registration of marks where 'because of the extent to which a registered trade mark has been used in relation to all or any of the goods or services in respect of which it is registered, it is likely that its use in relation to other goods or services will be taken to indicate that there is a connection between those other goods or services and the registered owner of the trade mark' [TMA s.185]. The major advantage of a Part 17 defensive registration is that the goods and services so covered do not have to be used or intended to be used, and a defensive trade mark cannot be challenged on non-use alone. Part 17 requires that the trade mark in question already be registered; however, it extends that registration to other specified goods and services to prevent others using that mark or to prevent others creating any connection between the mark and those other goods and services. A defensive registration cannot be used to create a universal monopoly over a mark. Examples of marks registered under Part 17 in Australia include 'Holden, Levis, Chanel, Gillette, Kleenex, Shell, Nugget, Kelloggs, Coca-Cola (including the bottle), Rolls-Royce, Dorothy the Dinosaur, The Wiggles and Big Mac'.

Collective marks are used or intended to be used by a member of an association in relation to goods and services dealt with or provided by members of that association to distinguish them from goods and services provided by non-members.

Trade mark infringements and offences

Infringements

Section 120(1) of the TMA provides a simple definition of an infringement, namely:

a person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

Note that the section requires that an infringer use the mark as a trade mark, and not for some other purpose. Accordingly, depiction in the course of comparative advertising by a competitor does not constitute an infringement under the TMA. See Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407; see also Fender Australia Pty Ltd v Bevk (t/a Guitar Crazy) [1989] FCA 276; (1989) 25 FCR 161; 15 IPR 267. See Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491, and Berlei Hestia Industries Ltd v Bali Co Inc [1973] HCA 43; (1973) 129 CLR 353.

However, in occasional cases even the use of the exact words of a trade mark will not be an infringement if there is added to the trade mark words extra words which make it clear that there is no suggestion of substantial identity or deceptive similarity. See Angoves Pty Ltd v Johnson (1982) 66 FLR 216; 43 ALR 349 at 362.

Parallel importation

Importing goods that bear an infringing trade mark amounts to 'using' that trade mark in an infringing way. However, the situation is still somewhat unclear in respect of the parallel importation of goods bearing a foreign registered trade mark. In particular, uncertainty still exists as to whether goods imported by, or with the consent of, a trade mark proprietor outside Australia, in competition with the authorised Australian importer or distributor constitutes an infringement of the TMA. This question is similar to that arising in relation to copyright: if the strict legal position is taken that such importing is always infringement, this can amount to permitting a monopoly and, broadly speaking, restraint of trade.

Section 123 of the TMA would appear to adopt the doctrine of international exhaustion, whereby the placement of goods into a local market exhausts the owner's right to control subsequent dealings with those goods or services. Hence such parallel importation does not infringe the trade mark. However, Part 13 (section 131) of the TMA states that 'the object of this Part is to protect registered trade marks by making provision allowing the Customs CEO to seize and deal with goods that are imported into Australia if the importation infringes, or appears to infringe, a registered trade mark'. Such goods may be seized but the objector must bring an action for infringement within ten working days under section 137, and must prove 'infringement'. See Montana Tyres Rims & Tubes Pty Ltd v Transport Tyre Sales Pty Ltd (1998) 155 ALR 489; 41 IPR 301 and Transport Tyre Sales Pty Ltd v Montana Tyres Rims & Tubes Pty Ltd [1999] FCA 329; (1999) 93 FCR 421; 162 ALR 175.

Defences

Defences to allegations of trade mark infringement could include:

• using one's own name or place of business is not an infringement of someone else's trade mark [TMA s.122]
• using a trade mark which has been applied by or with the consent of the registered owner [TMA s.123]
• the mark was first used prior to the registration by the owner of the mark [TMA s.124].

Remedies

Under section 126 of the TMA, the remedies include an injunction, and damages or an account of profits.

Offences

A person is guilty of an offence if the person:

• falsifies or unlawfully removes a trade mark that has been applied to or in relation to any goods or services being dealt with or provided in the course of trade
• falsifies a registered trade mark by defacing, altering, adding to or obliterating it without the permission of the registered owner, or an authorised user [TMA s.145]
• falsely applies a registered trade mark, or a sign substantially similar to it, to goods or services [TMA s.146]
• makes a die, machine or instrument knowing that it is likely to be used for, or in the course of, committing an offence against ss.145 or 146; or reckless of whether or not it is likely to be used
• draws, or programs a computer etc. to draw a registered trade mark or part thereof, knowing that the mark produced is likely to be used for committing an offence
• possesses or disposes of a die, equipment etc, computer, or other device, programmed to draw a registered trade mark or part thereof, knowing that it is likely to be used for committing an offence [TMA s.147]
• intentionally sells, possesses, exposes for sale, or imports goods for trade or manufacture, knowing that a falsified registered trade mark is applied or registered trade mark removed [TMA s.148].

Penalties for an offence under sections 145, 146, 147 or 148 of the TMA include a fine not exceeding 500 penalty units, or imprisonment for a period not exceeding two years, or both fine and imprisonment.

There are an additional number of indirect offences, including:

• aiding and abetting offences [TMA s. 150]
• false representations about a mark being a registered trade mark [TMA s.151)
• false entries in Register or a document in the Trade Marks Office
• disobeying a summons etc
• refusing to give evidence etc
• claiming or permitting to be described as a trade marks attorney or trade marks agent unless so registered
• falsely claiming or implying some connection with the Trade Marks Office.

Trade marks and geographical indications (GIs)

TRIPS obligations

In accordance with the requirements of the TRIPS Agreement, WTO members are required to provide legal means to prevent use of any designation or presentation which may mislead the public as to the geographical origin of a good, and use which constitutes an act of unfair competition within the meaning of Article 10bis of the Paris Convention. Members are also required to refuse or invalidate the registration of a trade mark which uses a geographical indication (GI) for goods not originating in the territory indicated, if the indication is used in such a manner that it may mislead the public as to the true place of origin of the goods.

Article 23 of TRIPS requires members to provide an additional level of protection to wines and spirits, and in particular to provide the legal means for preventing use of a GI identifying wines or spirits not originating in the place indicated by that geographical indication, even where the true indication of origin is indicated, where the indication is given in a translated form, or where it is qualified. Accordingly, unlike the status in respect of other geographical indications, those for wines and spirits are to be protected even where use by a third party would not mislead the public and unfair competition would not exist.

In France, a government agency validates Appellation d'Origine Contrôlée (registered designations of origin), so that producers of wines, cheeses, and other foodstuffs, whose goods are renowned for their distinctive qualities and geographic origins are protected. For example, wines from the Champagne region of France are protected this way; local producers acting collectively have prevented the use of the word 'Champagne' on any sparkling wine that does not originate from the Champagne region of France.

The TMA and GI protection

Australia goes some way to meeting its obligations under TRIPS by incorporating in the TMA a certain degree of protection against the inappropriate usage of geographical indications (GIs) as trade marks. Section 6 of the TMA defines a GI as a sign recognised in the country of origin of certain goods which indicates that the goods:

(a) originated in that country or region; and

(b) have a quality, reputation, or other characteristic attributable to their geographical origin.

The general requirements of 'distinctiveness' make a GI difficult to register, although there is no express prohibition of their registration. Section 61 of the TMA provides that a registration of a trade mark may be opposed on the grounds that it constitutes a false indication of the geographical origins of the goods or services to which it applies. See Clark Equipment Co v Registrar of Trade marks [1964] HCA 55; (1964) 111 CLR 511 (High Court).

Furthermore, any false GI in relation to grape products may also render the mark unregistrable under section 42 of the TMA (where its use would be 'contrary to law'). See Comite Interprofessionnel des Vins Cotes de Provence v Stuart Alexander Bryce [1996] 742 FCA 1.

Industrial Designs/Designs

Introduction

Industrial design involves the design of three-dimensional products which may range from consumer goods to technologically more sophisticated equipment, and includes the engineering design of products such as machine tools. Designs may be those with an aesthetic input where appearance strongly influences customer choice such as furniture, textiles, clothes, china, cutlery and household appliances; or they may be more functional designs of equipment which is purchased to do a job or where appearance does not primarily influence choice, except to the extent that it suggests that the article will perform better. Generally, designs law protects representations of commercial and industrial products, rather than artistic endeavour. Its scope is far narrower than copyright law.

Australian designs protection

In Australia, designs are protected by Commonwealth legislation. The current law, the Designs Act 2003 (Cth) (DA) came into force on 17 June 2004, and replaced the 1906 Act - considered to be very much out of date. The DA is intended to give effect to the government's response to the ALRC's Report No. 74 of 1995, which identified two major problems with the 1906 law - the ease of registration, which did not require great novelty; and the inadequacy of protection against infringement. The DA also addresses Australia's obligations under the WTO's TRIPS Agreement, to which Australia has acceded. The Designs (Consequential Amendments) Act 2003 (Cth), which also came into force on 17 June 2004, amends the Copyright Act 1968 (Cth) ss.74-77 relating to the overlap between copyright and designs law.

The DA aims to preserve 'to the owner of the design the commercial value resulting from customers preferring the appearance of articles which have that design to that of those which do not have it' (see AMP Inc v Utilux Pty Ltd (1972) RPC 103 at 108).

The DA also provides a more streamlined registration system, under which applications undergo only a formalities check prior to being registered and published (see DA ss.21-61). A design is examined only to check compliance with formal requirements, not whether the design is in fact 'new and distinctive.' However, a design registration cannot be relied upon in litigation until it has been subject to examination and certification.

Because of transitional provisions, some elements of the 1906 Act may still apply, particularly in respect of some types of infringements against designs registered under the old Act. See Axe Australasia Pty Ltd v Australume Pty Ltd [2006] FCA 668; (2006) 69 IPR 45.

What is a design?

Section 5 of the DA defines a design as follows:

in relation to a product, means the overall appearance of the product resulting from one or more visual features of the product.

A 'product'

A 'product' is defined as 'a thing that is manufactured or hand-made is a product' [DA s.6(1)]. However, it should be noted that the design is quite distinct from the article to which it is applied.

Designs for a product of indefinite dimension or length are only registrable under the DA if the product's cross-section is fixed or varies only according to a regular pattern, has a repeating pattern, or all its dimensions remain in proportion [DA s.6(2)]. This enables designs of aluminium extrusions or repeatable wallpaper patterns to be registered (under the old Act, this was not permissible). See Brisbane Aluminium Fabricators and Supplies Pty Ltd v Techni Interiors Pty Ltd [1991] FCA 619; (1991) 23 IPR 107. See also Bondor Pty Ltd v National Panels Pty Ltd (1991) 23 IPR 289.

A component part of a complex product is recognised as a product for the purposes of the DA if the component is made separately from the complex product [DA s.6(1)], while a kit is taken to be a product when it is assembled.

A 'visual feature'

A 'visual feature' includes 'the shape, configuration, pattern and ornamentation of the product'. A visual feature may, but need not, serve a functional purpose. However, the feel of the product, the materials used, and any indefinite dimension of the product are not visual features [DA s.7(1)-(3)].

It should be noted that a design registration merely protects the way a product looks. A design for the purposes of the DA does not include a method or principle of construction, even if that method of construction involved gives the product its shape. While the shape of a product can be protected, the method of applying the shape to the product cannot.

Similarly, 'design' does not encompass any aspect of how the product works or functions. Even if the design features contribute to the product's function, or have a solely functional purpose, a design registration will only protect the appearance of the product. However, the functionality of the product may be protectable under patent legislation.

Requirements for registrability

A design has to meet a number of key requirements before it can be registered and legally protected in the market place, namely:

• the design has to embody features of shape, configuration, pattern or ornamentation, which can be two or three dimensional
• the design features must be visible, but do not need to have artistic merit
• the design must be new. 'New' in this context means the design (or one very similar) has not been in the public domain either within or outside Australia, including the internet. Hence, the design cannot be registered if it has been used or sold within or outside Australia or used or shown in public before the first application for registration
• the design must also be distinctive. 'Distinctive' means substantially different in overall appearance to other designs in the public domain. In assessing distinctiveness, more weight will be given to similarities in the overall impression to other designs rather than the differences.

'New and distinctive'

Under section 15(1) of the DA, a design is registrable 'if the design is new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design'. A design is 'new' and 'distinctive' unless it is identical or substantially to a design that forms part of the prior art base for the design [DA s.16]. The 'prior art base' consists of designs publicly used in Australia, and designs published in a document within or outside Australia, and certain other designs under section 15(2) of the DA. The current test is stricter than that required under the old law, since both novelty and distinctiveness are required. (The old Act required only one or the other.) However, even a new use of old features that have been used in prior designs may still be new or original.

'Prior art base'

In respect of the quantum of difference in order to qualify as new and original, the NSW Supreme Court said in British Franco Electric Pty Ltd v Dowling Plastics Pty Ltd [1981] 1 NSWLR 448, that 'it was not sufficient to point to any difference between the design and previously published designs to establish novelty or originality. There must be a substantial difference, having regard to the nature of the article to which it is to be applied'. The differences must be 'more than mere trade variations which any skilled workman might make'. See also Conrol Pty Ltd v Meco McCallum Pty Ltd (1996) 34 IPR 517:

in deciding whether a design is new or original, and in the course of doing so whether differences between the design and earlier designs are substantial, the eye is the judge.

Where the fundamental form of an article is common, the courts may not require startling differences from prior designs in order to allow registration. See D Sebel and Co Ltd v National Art Metal Co Pty Ltd (1965) 10 FLR 224 at 226:

the element of novelty or originality will of necessity be likely to be within a small compass. I do not mean thereby that any difference of shape, outline proportion or placement of components will thereby constitute novelty of design, but provided I can see a substantial difference from the fundamental form ... then I do not think that is sufficient to point to a number of elements of similarity to past design in order to show that the design is not new or original.

Prior registration, publication or use

Prior publication, even where that publication is of the design for which registration is sought, can defeat an application for registration. There is authority for the proposition that publication can occur even where the design is not made available to the public at large (see Safe Sport Australia Pty Ltd v Puma Australia Pty Ltd (1985) 4 IPR 120). The meaning of 'publication' is narrower than that used in copyright law. See the comments of Gummow J in J Rapee and Co Pty Ltd v Kas Cushions Pty Ltd (1989) 90 ALR 288; 15 IPR 577. The evidence of prior publication may be used to establish that the applicant's design was not new or original

However, certain publication or use may still be permitted without compromising novelty and originality. These include secret use [DA s.17(1A)]; publication or use after the application priority date; publication or use in breach of the design owner's confidence, provided registration is applied for with reasonable diligence when the publication or use becomes known; and display at an 'official or officially recognised international exhibition' within six months before application for registration.

Designs excluded from registration

Under the old Act, certain designs of a primarily literary or artistic character were excluded from registration under the Act's regulations. Regulation 11 excludes designs for 'articles on which there is printing', such as book jackets, calendars, certificates, forms, dressmaking patterns, greeting cards, labels, leaflets, maps, postcards, stamps etc. These regulations were discussed in Re Australian Postal Corporation [1992] AIPC 90-857.

Under the DA, these regulations are no longer necessary, since provision for exclusion can exist under the Copyright Act 1968 (Cth) as amended.

What exclusive rights does a registered design owner have?

The design owner has a number of exclusive rights in applying the design to any product for which it is registered. These rights are treated in the same way as rights in personal property. They include:

• the sole right to use and exploit that design by applying it to the product for which it is registered
• the sole right to license others to use and exploit that design, including charging fees for its use or allowing it to be used for a limited period under agreed conditions
• the right to assign, or assign in part, the design ownership to some other person or company
• the right to bring infringement proceedings against another person who applies the design (or fraudulently or obviously imitates the design) without the design owner's licence or permission
• the right to sue anyone who imports into Australia, for sale or business purposes, any unauthorised product to which the design (or any fraudulent or obvious imitation) has been applied
• the right to sue anyone selling any product infringing the exclusive design rights (or any fraudulent or obvious imitation) whether that product was made in Australia or imported.

These exclusive rights protect against any design imitation, whether or not that imitation was actually copied from, or based on, the original. If two people created products with the same design by chance, the person who is the first to file their application will have the protection registration affords. Hence someone infringing the other person's exclusive rights, even if they had never seen the earlier design, will be in breach of the registered design.

The design owner's rights also go beyond protecting only against exact copies. They also protect against both obvious imitations (where some slight differences can be seen between the designs) and fraudulent imitations (where there are some more apparent differences that have been made to disguise the copying). See Malleys Ltd v J W Tomlin Pty Ltd [1961] HCA 77; (1961) 180 CLR 120. The court stated that there must be 'sufficient individuality of appearance' to qualify as a design. But 'the existence of that sort of individuality is to be determined by the eye and not by measuring dimensions'. Thus a registered design must 'show a shape with enough individuality of appearance to distinguish it and to enable it to be determined by visual comparison whether the shape of an article is either the same as, or nothing more than an imitation of, that disclosed by the registered design'.

Duration of protection

Registered designs are initially protected for a period of five years from the date of filing the application for registration. The registration, and therefore the protection, may be renewed for a further five years. There is no provision for protection after the renewal [DA s. 46].

Registration is Australia wide, encompassing both products manufactured and sold in Australia and products manufactured overseas and imported into Australia. However, it does not extend protection to registered designs that have been exported overseas.

Like all forms of personal property, the design can be licensed or transferred to another party. Protection will be maintained provided that the transfer of ownership or licence is also registered.

Infringements and offences

The DA provides that a primary infringement occurs if a person, without authority, makes or offers to make a product that is identical to, or substantially similar in overall impression to, the registered design [DA s.71(1)(a)]. Infringement, being a secondary infringement, also occurs if a person imports into Australia such a product for sale or for trade or business, or otherwise sells, hires, uses or keeps such a product for trade or business [DA s.71(1)(b)-(e)]. Under section 19(4) of the DA, the court must apply the standard of the 'informed user', being a person familiar with the product to which the design relates. This is intended to produce a more objective test for infringement, than that which applied under the old Act, and is also intended to focus more on similarities, rather than differences.

The previous test of 'fraudulent or obvious imitation' [old Act s.30(1)] was interpreted narrowly, so that if there were differences (eg of dimension) between the original and the alleged infringing design, infringement would not be found to exist. See Dart Industries Inc v Decor Corporation Pty Ltd [1989] FCA 49; (1989) 15 IPR 403 concerning 'obvious imitation', in which the court said that there was no 'fraudulent' imitation, because 'the evidence does not (therefore) support a finding that the respondent knowingly, consciously or deliberately based its design upon the registered design'.

In Wanem Pty Ltd v Tekiela [1990] FCA 527; (1990) 19 IPR 435 at 440, the Federal Court accepted six propositions in respect of what might constitute an infringement:

(i) first impressions are important in determining whether there is an infringement of a design;

(ii) an obvious imitation is one which is not the same as the registered design but is a copy apparent to the eye notwithstanding slight differences;

(iii) the question must be looked at as one of substance and by examining the essential features of the design;

(iv) a closer correspondence between the registered design and the alleged infringing design is necessary to satisfy the test of obvious imitation than that of fraudulent imitation;

(v) precise mathematical comparisons or matters of measurements or ratios ... are not to be applied as the test of infringement; appearance to the eye is the critical issue;

(vi) questions of infringement must not be determined by a narrow or overly technical approach in comparison between the design and the alleged infringement, lest the registration be sapped of its worth to the registered owner.

See also Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd [2000] FCA 876; (2000) 100 FCR 90; 48 IPR 257 and Elconnex Pty Ltd v Gerard Industries Pty Ltd [1991] FCA 567; (1992) 32 FCR 491; 22 IPR 551.

Relief available includes an injunction subject to such terms as the court may think fit, and - at the option of the plaintiff - damages or an account of profits [DA s.75(1)]. It may also award such additional damages as it considers appropriate depending on the flagrancy of the infringement [DA s. 75(3)].

A court may also grant relief against unjustified threats of infringement.

The DA includes a 'right of repair' defence in section 72 of the new legislation for spare parts. This provides a defence against infringement of a design where a component part embodying a registered design is to be used for genuine repair purposes, or as a spare part. The onus is placed on the design owner to show that the alleged infringer knew the part sold was not for the purpose of genuine repair. The right of repair defence was due to be reviewed in 2005.

Offences include the following acts:

• causing false entries to be made in the Designs Register [DA s.131]
• false representation that a design is registered [DA s.132]
• false representation concerning any association between a business and the Designs Office [DA s.133]
• failure to comply with a requirement of the Registrar of Designs, including appearing as a witness or producing documentation.

Penalties may include up to 12 months imprisonment or up to 60 penalty points.

Dual protection: the copyright/designs overlap

The question of dual protection arises particularly in relation to 'artistic works' under the Copyright Act 1968 (Cth) (CA), especially drawings, engravings, sculptures, and works of artistic craftsmanship. Such works may also be registrable as designs. The designs/copyright overlap provisions are intended to ensure that, as far as possible, all such works receive the category of intellectual property protection considered appropriate to their nature. In particular, copyright protection should not be extended to commercial and industrial products which originate as drawings.

The position prior to the DA

Prior to the clarification provided by the DA and amendments to the CA (by the Designs (Consequential Amendments) Act 2003 (Cth)), the designs/copyright overlap provisions were as follows:

• two-dimensional designs receive protection as artistic works under the CA in so far as design features applied as surface designs constitute reproductions of artistic works. Cumulative protection is also available under the DA if the design is registered;
• three-dimensional articles retain copyright protection if they are works of artistic craftsmanship or buildings or models of buildings. Design registration results in effective loss of copyright for these works
• in other cases, copyright protection for artistic works applied as three-dimensional designs is effectively forfeited if the corresponding design is applied industrially.

The CA defines a 'corresponding design' as any design which, when applied to an article, results in a reproduction of the artistic work, except where the design consists solely of features of two-dimensional pattern or ornamentation applicable to the surface of an article [CA s.74]. Where the design is registered, any copyright in the work is not infringed by its reproduction on an article: hence, the owner will have to rely on design registration for protection [CA s.75]. But copyright protection will be retained where the work falls outside the design monopoly, particularly if it is a two-dimensional use of the work and unregistrable under the DA.

Where a corresponding design has not been registered, section 77 of the CA provides that copyright protection will still be lost if the design is applied industrially by or with the licence of the copyright owner. See Hutchence v South Seas Bubble Co Pty Ltd (1986) 64 ALR 330; 6 IPR 473, in which the scope of the loss of copyright protection under section 77 of the CA was construed narrowly:

a copyright owner only loses his or her rights under that section in respect of infringements made by another person in regard to articles of the same type as those previously sold, hired or offered for sale or hire by, or with the licence of, the copyright owner.

See also Interlego AG v Croner Trading Pty Ltd [1992] FCA 624; (1992) 39 FCR 348; 25 IPR 65.

A design is deemed to be 'applied industrially' if it is applied to more than 50 articles. Where it is applied to less than 50 articles, it is left to the courts to decide whether it is 'applied industrially': see Press-Form Pty Ltd v Henderson's Ltd (1993) 40 FCR 274; 26 IPR 113.

Under the current DA and CA

The DA and the CA work to limit copyright protection for utilitarian three-dimensional products, whether or not they are in fact registrable as designs. Consequently, the new definition of 'corresponding design' in section 74(1) of the CA states that:

'corresponding design', in relation to an artistic work, means visual features of shape or configuration which, when embodied in a product, result in a reproduction of that work, whether or not the visual features constitute a design that is capable of being registered under the Designs Act 2003.

The DA and CA together attempt to define the difference between two-dimensional designs (which continue to receive copyright protection) and three-dimensional designs (which do not). Under section 74(2) of the CA a design is 'embodied in a product' when it is 'woven into, impressed on or worked into the product'. Thus, flat wallpaper, book covers, calendars, greeting cards, CD covers and the like may retain copyright protection. Products such as tapestry, knitted items or carpets would be regarded as 'corresponding designs'.

A new section 77(1A) of the CA is intended to extend the notion of 'applied industrially' for the purpose of section 77 of the CA. It provides that products illustrated in published patent specifications, or drawings submitted in a design application, will be regarded as having been 'industrially applied' and therefore lose copyright protection under section 77 of the CA.

Patents

Introduction

Patents, like other intellectual property rights, are a product of the 'balance' between competing interests. From the time a market economy began to develop in Europe, the conferring of monopolies in certain areas has been regarded as necessary to balance the need of society for new inventions with the need of the inventor for some scope for reward. The core of patent activity in the last 50 years or so has shifted from Europe to the United States and Japan.

The origin of patent protection through the granting of letters patent, and the establishment of a patent specification as a technical document which described the invention and claimed an area over which the patentee would have exclusive rights, rests with the Statute of Monopolies 1624 (UK). The Statute declared void all monopolies for the sole buying, selling, making or using of anything in the realm, with the one exception for inventions. Patents for the 'sole working or making of any manner of new manufacture' could be granted for between 14 and 21 years to 'the first and true inventor'. The Crown was seen as having the right to grant monopolies, but this monopoly was a derogation from freedom of trade, and hence required 'consideration moving to the public'. This consideration was the expression of the patented invention with sufficient specificity to enable other people to exploit it when the patent period was over. The Statue of Monopolies is still referred to in Australia's current patent law.

In Australia, patents protection is provided by the Patents Act 1990 (Cth) (PA). It replaces an earlier act of 1952, which was based on the Patents Act 1949 (UK).

Why do we have patent protection?

As with the other main areas of intellectual property, Australia's patent protection framework essentially encompasses its international obligations under the WTO's TRIPS Agreement. Article 27 of TRIPS requires member states to make patents available for any invention, whether for a product or process, in all fields of technology, provided that the invention is new, involves an inventive step, and is capable of industrial application. It also requires that patent rights be enjoyable without discrimination as to the place of invention, or whether products are imported or locally produced. Three exceptions are permitted to this basic rule on patentability, namely:

• inventions contrary to ordre public or morality, including inventions dangerous to human, animal or plant life or health or seriously prejudicial to the environment
• diagnostic, therapeutic and surgical methods for the treatment of humans or animals
• plants and animals other than micro-organisms and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, any member excluding plant varieties from protection under patent provisions must provide an effective sui generis system of protection.

The exclusive rights that must be conferred by a product patent are those of making, using, offering for sale, selling, and importing for these purposes, while process patent protection must extend rights not only over use of the process but also over products obtained directly by the process. Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts. The term of protection available shall extend for a period of 20 years from the filing date.

Under the recent US-Australia Free Trade Agreement, Australia has also undertaken to extend its patent protection obligations beyond those required by TRIPS, particularly in respect of limiting the range of inventions for which protection could not be providing, and enhancing the degree of protection and exclusivity in respect of pharmaceutical and agro-chemical products and processes.

What is a patent?

A patent is a legal document that gives an inventor exclusive right to exploit their invention for a specified period of time, and to authorise other parties to do so or exclude them from doing so [PA s.13]. Section 18(1) of the PA defines a patentable invention as:

(a) a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and

(b) when compared with the prior art base as it existed before the priority date of that claim:

(i) is novel; and

(ii) involves an inventive step; and

(c) is useful; and

(d) was not secretly used in the patent area before the priority date of the claim by, or on behalf of, or with the authority of, the patentee or nominated person ..."

'Manner of manufacture'

The meaning of 'manner of new manufacture' is thus defined by reference to the Statute of Monopolies, and has been interpreted to require either:

• a product - which can be produced by following the instructions in the patent specification
• a specific use
• a process - which would be protected when used with any product; however, it would not protect a product that could be manufactured by that process but is not
• a product-by-a-process - which would cover only those products made by the process described in the patent specification. Therefore, it would cover the drug, but only when made by a specified process.

A patent application may include claims of two or more of these categories. But whether the patent covers a product, a process, a use or all of these, the invention normally must have a physical embodiment or its application must be capable of leading to one.

The first major Australian case on this issue was National Research Development Corporation v Commissioner of Patents [1959] HCA 67; (1959) 102 CLR 252 (NRDC case). The High Court held (at 276) that 'a "product" in relation to a process is only something in which a new and useful effect may be observed ... the "something" need not be a 'thing' in the sense of an article; it may be any physical phenomenon in which the effect, be it creation or alteration, may be observed.'. In respect of the distinction between a discovery and an invention, it was argued that a discovery in itself is not patentable, but the translation of that discovery into something new and useful supplies the relevant patentability factor. In the NRDC case, the invention was patentable because 'the relevant property of the herbicide was not previously known and the discovery led to a new application resulting in a manner of new manufacture'.

In contrast, see Commissioner for Patents v Microcell Ltd [1959] HCA 71; (1959) 102 CLR 232, in which a patent application for a self-propelled rocket projector comprising a tube of reinforced plastic was refused on the grounds that the invention was merely for a new use, since the tube shape and the properties of the plastic were already known.

'Prior art base'

The 'prior arts base' generally means the common general knowledge of those skilled in the relevant or associated fields or trades.

See Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Pty Ltd [1980] HCA 9; (1980) 144 CLR 253. According to Aickin J:

The notion of common general knowledge itself involves the use of that which is known or used by those in the relevant trade. It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge ... the question is, is the invention itself obvious, not whether a diligent searcher might find pieces from which there might have been selected the elements which make up the patent.

See also Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] HCA 59; (2002) 212 CLR 411; 194 ALR 485:

In assessing 'common general knowledge', the first step is to identify the field of knowledge; the second to identify who is skilled in the relevant art; and the third to consider what common general knowledge persons in the field would be expected to have.

The Patent Office Practice Note of 1991 provides the following examples of what might constitute evidence as to the state of the common general knowledge - standard texts and handbooks, dictionaries of standard English, selected technical dictionaries, concession in the patent application under examination, various other publications, patent specifications, where those in the field are in the habit of consulting these. There is also a definition of 'prior art base' in the PA, Schedule 1 Dictionary - in summary, information contained in a document or specification.

The prior art base for inventiveness includes documents anywhere in the world, but the ultimate test is still whether a skilled person in the relevant field in Australia would have known about them.

'Novel'

'Novel' generally means the invention should be recent and original, but most importantly it should not already be in the public domain.

The invention must be disclosed in the application in such a detailed way that would enable a skilled technician to make and use it. The novelty of an invention is to be judged against the background of the 'prior art base' relating to the area of technology [PA s.7(1)]. The test for novelty is the 'the reverse infringement test', that is 'the same as that for infringement, and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement ... Thus, for example, the fact that the invention as claimed contains variations from an earlier publication will not preclude anticipation being found unless those variations show ingenuity and inventiveness' (Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19; (1977) 137 CLR 228 at 235).

But also see Williams v Nye (1930) 47 RPC 289 at 321, where it was held that an invention may draw on existing elements but still be regarded as novel:

the essential aspect conferring validity for a combination patent is that the components interact to achieve a better result... A collection of elements which continue to perform their own function but do not combine to produce a new result is known as a mere collocation.

See the discussion in Advanced Building Systems v Ramset Fasteners (Aust) Pty Ltd [1998] HCA 19; (1993) 26 IPR 171; (1998) 194 CLR 171. Note the 'threshold' test for patentability proposed in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1994) 183 CLR 655, where it is apparent from the face of the application itself that there is no element of inventiveness in the subject matter applied for, the application fails the threshold test and should be refused without further examination.

A description in a publication, even in an obscure journal or report, will be sufficient to destroy novelty providing it is one that is 'publicly available'. See Sunbeam Corp v Morphy-Richards (Aust) Pty Ltd [1961] HCA 39; (1961) 35 ALJR 212 at 218:

A description in an obscure journal would suffice to destroy novelty provided that... the document, whether or not it was read generally by the public, had been available to the public.

Even when similar patent applications are filed in quick succession, so that one secures an earlier priority date, but has not yet been published when the second application is lodged , the PA will still invalidate the second on the ground of lack of novelty (see definition of 'prior art base' in PA Sch 1).

However, certain kinds of prior use are to be disregarded for the purposes of deciding whether there is a lack of novelty or inventiveness [PA s.24]. These include showing the invention at a 'recognised exhibition', publication in a paper read before a 'learned society', and the working of the invention in public within 12 months before the priority date where this was for the purpose of trial of the invention. Disclosure by a third party in breach of a confidential relationship with the applicant will not destroy novelty, provided the information concerning the invention was derived directly from the applicant and the patent application is made within 12 months [PA s.24(1)(b)].

Accordingly, the patent applicant must exercise care on how the invention might be used before the lodgment of the patent application. See Longworth v Emerton [1951] HCA 45; (1951) 83 CLR 539. Prior use can arise as a result of use by totally unrelated parties in circumstances of which the applicant is unaware: see Windsurfing International Inc v Petit [1984] 2 NSWLR 196.

'Inventive step'

While the testing of novelty is essentially a quantitative matter (has sufficient information been previously disclosed so as to anticipate the applicant's invention?), the inventive step requirement demands a more qualitative judgment'; that is, whether the invention, although new, is sufficiently different from what has gone before to embody an inventive step. There is a presumption of inventiveness under section 7(2) and (3) of the PA:

an invention is to be taken to involve an inventive step when compared to the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim [PA s.7(2)].

See Elconnex Pty Ltd v Gerard Industries Pty Ltd [1992] FCA 556; (1993) 25 IPR 173.

It is not necessary for the specification to say everything about the invention if what is not said can be supplied by the skilled worker for himself: see the statement in Rescare Ltd v Anaesthetic Supplies (1992) 25 IPR 119 at 143. The requirement of utility therefore overlaps with the requirement of sufficiency of description.

In the case of an invented product, the non-obvious/inventive step requirement does not require it to be made by a novel method. In the case of an invented process, the patent can cover a non-obvious way of making something already known (that is, previously invented or discovered).

'Useful'

'Useful' generally means some form of industrial application. This does not mean that the invention be commercially useful, but that it produces the result which the inventor has claimed in the application. See RehmPty Ltd v Websters Security Systems (International) Pty Ltd (1988) 11 IPR 289.

Thus mental processes or ideas, theories, scientific formulas or information itself are not sufficiently useful or industrially applicable to be patentable. Similarly, discoveries cannot be patented. See Philips v Mirabela (1994) 183 CLR 655; see also Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1996) 66 FCR 151.

'Secret use'

The requirement of 'secret use' means that a patent application is invalid where the invention has been 'secretly used' by the applicant or by others with authority before the priority date [PA s.18(1)(d)]. An inventor who wishes to exploit their invention secretly will therefore need to rely on breach of confidence rather than patent protection. There are, however, a number of exceptions or permitted secret uses set out in section 9 of the PA, of which the most important is a use other than for the purpose of trade or commerce. See Azuko Pty Ltd v Old Digger Pty Ltd [2001] FCA 1079; (2001) 52 IPR 75 at 117; [2001] FCA 1079. The manufacturing of goods alone is not secret use, but selling or accepting an order for the goods would invalidate the patent.

Difficult areas for patentability

Schemes, methods and systems

A mere improved method of doing something will not, by itself, be a 'manner of manufacture'. In Rolls-Royce Ltd's Application (1963) RPC 251 (UK Patents Appeal Tribunal), the court read the patent specification in suit as a disclosure of a general flight plan directing the initial operational movements of an aircraft between take-off and the commencement of free flying conditions. However, more recently the courts have allowed patents for improved business methods such as a process of operating smart cards in connection with traders' loyalty schemes: see Welcome Real-Time SA v Catuity Inc [2001] FCA 445; (2001) 51 IPR 327.

Methods of packaging and presentation of goods

In Wellcome Foundation Ltd v Commissioner of Patents [1980] HCA 21; (1980) 145 CLR 520, the High Court held that for there to be novelty in a package claim there must be an interaction between the container with its contents and the writing so that the instructions or directions are novel by virtue of their link with the process. The claim succeeded because the instructions indicated that the pills were to be taken in a certain sequence, the sequence being part of the inventive improvement.

Computer software

Computer software is generally protected under copyright law as literary or artistic works, and does not normally fit the prescription for patent protection. However, in IBM Corporation v Commissioner for Patents [1991] FCA 625; (1991) 22 IPR 417 it was held that the application of the selected mathematical methods to computers, and in particular, to the production of the desired curve by computer constituted a patentable process. This approach was affirmed by the Full Federal Court in CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 396; (1994) 51 FCR 260; 28 IPR 481. The Patent Office Manual of Practice and Procedure - National of March 2002 accepts that a computer software-related invention is patentable if the invention allows for 'an artificially created state of affairs of utility in the field of economic endeavour'.

Biotechnology

The question of whether biotechnology, or a use for natural or engineered living organisms, is patentable poses some difficult legal and ethical questions. In a UK case, American Cyanamid v Berk Pharmaceuticals (1976) RPC 231, the claim was for a biochemical process which utilised strains of a micro-organism for the production of the antibiotic tetracycline in almost pure form. This was seen as more than a mere 'discovery', since the micro-organisms had to be 'transferred to some appropriate medium, selected, mutated, re-selected and so on, before they produce any, still less any appreciable, quantity of antibiotic'.

See the United States case of Diamond v Chakrabarty [1980] USSC 119; (1980) 447 US 303, as the benchmark case for the grant of patents for living organisms and their products. The case established a distinction between an unpatentable product of nature and a patentable product derived from nature.

See also the Patent Office Practice Note, 'Patent Applications concerned with Living Organisms', which states that:

The criteria to be met before an application concerned with living organisms will be accepted are precisely the same as those for any other application, that is, no distinction is to be made solely on the basis that a claimed product or process is, or contains or uses, a living organism. Higher life forms will not be treated any differently from lower forms such as micro-organisms.

The 'therapeutic treatment' exception

There is a traditional reluctance in patent law to allow patents for methods of treatment of disease in humans. See Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205 at 234, on appeal at [1994] FCA 1065; (1994) 50 FCR 1; 28 IPR 383, 122 ALR 141. On appeal, the majority of the Full Federal Court held that there was nothing in the PA specifically excluding the grant of a patent for a method of medical treatment, but that Parliament should make any decision as to whether this type of treatment from patentability should be excluded from patentability. See also Joos v Commissioner of Patents [1972] HCA 38; (1972) 126 CLR 611.

The issue of patents for methods of medical treatment was discussed at length in Bristol-Myers Squibb Co v F H Faulding and Co Ltd (1998) 41 IPR 467, and on appeal to the Full Federal Court at [2000] FCA 316; (2000) 170 ALR 439. Finkelstein J said that:

I do not believe that in a controversial issue such as is raised by the present argument, I would be abandoning my responsibility as a judge to ... hold that if public policy demands that a medical or surgical process should be excluded from patentability, then that is a matter that should be resolved by the Parliament.

Inventions which are not patentable

The 'human being' exception

Human beings, and the biological processes for their generation, are not patentable inventions [PA s.18(2)]. It remains questionable whether this applies to embryos and embryonic cells and tissue. The Australian Patent Office Manual of Practice and Procedure, Vol 2 - National, para 8.5.1, expresses the view that patenting of human genes, tissues and cell lines is not prohibited [PA s.18(2)].

A greater degree of exclusion from patentability is stipulated in respect of innovation patents (see The different types of applications and patents, below) - namely plants and animals, and the biological processes for the generation of plants and animals [PA s.18(3)]. However, this exclusion does not apply if the invention is a microbiological process or a product of such process.

Section 50(1) of the PA also allows (but does not require) the Commissioner of Patents to refuse to grant a patent for a substance that is capable of being used as a food or medicine for human beings or animals and is a mere mixture of known ingredients.

'Generally inconvenient' and 'contrary to law'

Traditionally, these two grounds have been considered sufficient to reject a patent under the 1624 Statute of Monopolies. See Re Rolls Royce's Application [1963] RPC 251, where the application was rejected on the ground that to allow a patent for an efficient method of flying a plane would represent a dangerous restriction on a pilot's ability to fly a plane safely.

The 'contrary to law' exception is also found in section 50(1)(a) of the PA, which gives the Commissioner discretion to refuse to accept a patent request or to grant a patent for an invention where its use would be 'contrary to law'.

The different types of applications and patents

Provisional application

The first step in filing a patent application in Australia is often the lodgment of an application, accompanied by a provisional specification, at the Patent Office. The provisional specification describes the invention and (in most cases) its date of lodgment determines the 'priority date', on which date the invention must be new.

Complete application (leading to standard patent)

Within 12 months of lodging the provisional application, a complete application should be lodged at the Patent Office. Where an invention is in development when a provisional specification is lodged, further provisional specifications can be lodged in the 12-month period to include additional material. All such provisional specifications can be combined in a single complete specification, which concludes with a series of claims. The claims define the monopoly sought - both the particular embodiment of the invention as described in detail in the specification, and variations.

Divisional applications

It is possible to file a patent application that claims the same priority date as one previously filed, and claims matter disclosed in an earlier application. These divisional applications have a maximum term of 20 years, common with the parent application, but must be filed prior to sealing of the parent complete application.

Innovation patent

The innovation patent was introduced by the Patents Amendment (Innovation Patents) Act 2000 (Cth), to replace the former petty patent or utility patent (as it is sometimes known elsewhere) system. An innovation patent is granted quickly in comparison to a standard patent, only needing to pass a 'formalities' check; the standard patent examination is either deferred or replaced by a registration system.

An innovation patent still needs to show that the invention claimed is a method of manufacture, is novel, is useful and has not been secretly used beforehand. The inventive step requirement of the standard patent is replaced by an 'innovative step' test, which has a much lower standard, although an innovation patent must still vary from the prior art base in a way that makes a substantial contribution to the working of the claimed invention [PA s.7(4)].

An innovation patent is limited to a maximum of five claims, and can still be opposed after grant. It can only be enforced if it is examined in substance and certified [PA s.120(1A)]. It has a much shorter term of protection of only eight years [PA s.68].

Plants, animals and the biological processes for their generation are not patentable as innovation patents [PA s.18(3)].

The main advantage of the innovation patent is the significant cost saving over a standard patent.

Patents of addition

An application for a patent of addition may be made for a single improvement in, or modification of, the main invention in an earlier patent. The applicant must be the same person who lodged the earlier patent application, or a person authorised by the original applicant.

The application process

It can take two years to obtain a patent from the day that an application is filed at the national patent office (the priority date), and sometimes much longer. The Patent Office carries out a search to ensure that the invention really is new and non-obvious. When it is satisfied that this is so, the application is published and an in-depth examination follows. In the case of an invention derived from a natural product, the examination might include the obligation to deposit a specimen.

Once the application has been 'accepted' by the Patent Office, but before the patent has been granted, an opportunity must be given to others to oppose the grant on grounds set out in the PA. The validity of the patent may also be challenged, and throughout the 20-year period, renewal fees must be paid annually to keep the patent in force. Note that generally the process will be carried out by patent attorneys, who are not necessarily lawyers, and that lawyers will only become involved where there is some question as to infringement or validity. Patent attorneys are not required to be legal practitioners or to possess law degrees: rather the primary emphasis is on the possession of suitable tertiary qualifications, more often than not in a branch of engineering or science.

A provisional or complete patent application can be made by any person including a body corporate [PA s.29]. A 'patent request' is filed first [PA s.29(1)]. A provisional specification must describe the invention [PA s.40], and the specification must comply with requirements of sufficiency of description, lack of ambiguity and fair basis. Note that a 'complete application' must be made within 12 months after filing a provisional application, otherwise the provisional application lapses. The priority date is the date of filing of the provisional application provided the complete application is fairly based on the claims made in the earlier application.

If accepted, the applicant should be advised and notice of the decision is to be published in the Official Journal. The complete specification is open to public examination [PA s.49]. Third parties may intervene or object once the complete specification is filed.

Patent protection is territorial - a global or universal patent automatically encompassing a number of countries is not available, so patents must be obtained on a country-by-country basis. It may be necessary to file a different application in each country in which protection is sought. However, a number of international agreements, such as the WIPO-administered Patent Cooperation Treaty (PCT), simplify this process by enabling a single application to be prepared which may used to seek protection in countries which are a signatory to the treaty (Australia is a signatory). In the case of the PCT, this application is initially submitted to a receiving office from where it is distributed to national patent offices designated by the applicant. The PCT, however, only applies for a short time during the application stage and national patents still ultimately result.

Objections and rejections

'Formal' or 'internal' objections may relate to insufficiency of description. There is no need to relate every detail of the invention if the details could be supplied by a skilled worker: see No-Fume Ltd v Pitchford (1935) 52 RPC 231. On the other hand, see Samuel Taylor Pty Ltd v SA Brush Co Ltd [1950] HCA 44; (1950) 83 CLR 617.

Second, an application may be held invalid for ambiguity: see the above-mentioned Elconnex case:

the function of the claims is to define clearly and with precision the monopoly claimed ... (but) it is equally clear that it is the duty of the court to endeavour to ascertain from the language used the true meaning of any claim or claims. It is not the function of the court lightly to discard the claims in a specification on the ground that the language used is vague and uncertain.

Third, claims must be fairly based on the material provided in the specification to ensure that a wider monopoly than that justified by the specification is not being asked for.

Note the other grounds of invalidity of a patent set out in section 138 of the PA. They include that the patent was obtained by fraud, false suggestion or misrepresentation. This can cover any material deception which results in a patent being granted. This ground could overlap with that of in-utility or insufficiency of description: that is, a patent which does not fulfill its purpose or is insufficiently described may also have been obtained by fraud.

Exploitation of patents

Exclusive rights conferred by section 13(1) of the PA gives a patent holder 'the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention'. Exploitation includes producing, using, selling, or importing the invention. Patents are personal property and can be sold, hired, licensed, other wise assigned or inherited [PA ss.13(2), 120].

The term of protection is 20 years from the date of filing of the complete specification in the case of standard patents, and eight years for an innovation patent [PA ss. 68-70]. However, the annual renewal fees for patent registrations must be paid or the patent and its protection will lapse [PA s.143].

The PA does not contain any provisions dealing with ownership of patents for inventions made by employees. Thus, in the absence of contractual provisions, the same tests as for copyright will apply. In England, statutory modifications to the common law position state that an invention made by an employee shall be taken to belong to the employer if it was made in the course of normal duties but section 41 of the UK Act specifies that an award for compensation shall be made to an employee who arrives at a patentable invention, such as to secure for the employee a fair share of the benefit which the employer will derive. The courts in Australia have found an implied right in an employer to assignment of intellectual property rights created by an employee in the course of employment.

Infringement

The PA does not provide any definition of direct infringement, although three forms are suggested:

• exploiting the invention without the authorisation of the patentee
• authorising another person to do this [PA s. 13]
• supplying a product to another person where its use would be an infringement [PA s. 117]

Infringement 'will only occur when the invention as claimed has been the subject of the defendant's activities'. The first step is thus to decide what the invention consists of and the second to compare the infringing article or process. This requires that the relevant complete or petty patent specification be carefully construed in order to establish the extent of the territory that the patentee has marked out. The question of how narrowly or generously claims in patent specifications should be interpreted thus becomes a crucial one and in this regard the courts have been far from unanimous as to the most appropriate way to proceed.

On a 'literal' reading the scope of the patent monopoly is narrowly construed so that only an exact or nearly exact copy would infringe. On the other hand, a 'pith and marrow' approach would focus on whether the 'pith and marrow' - or certain key or substantive elements - of the invention had been taken. A purposive approach seems now to be favoured in Australia. In taking a broader approach, 'the claim must be read through the eyes of the notional addressee, the man who is going to carry out the invention described ... In considering the claim the court must ascertain what are the essential integers of the claim: this remains a question of construction and no general principle can be laid down': Rodi & Wienenberger v Showell (1969) RPC 367.

Prior to the PA, it was not an infringement of a patent to deal in a part of the patented product, unless all the parts were sold together. However, section 117(1) of the PA provides:

If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.

Importation for sale

See Re Eli Lilley and Co (1982) AIPC 90-003:

it was early established that the patentee of a process could restrain the obtaining from abroad and selling in the country of an article manufactured abroad by the patented process ... use of the patented process in the last stage of the manufacture of the imported article, to the situation where the patented process was used, not in the last stage, but in an earlier stage of the manufacture of the imported article.

It was held here 'that the importation of monensin sodium into Australia would have involved the use abroad of both a substance and a process claimed in the Australian patent'.

Reversal of burden of proof

Section 121A of the PA provides for the reversal of the burden of proof in civil cases involving process patents, whereby the defendant may be required to prove that the process used to obtain an identical product is different from the patented process.

Section 122 provides that the relief which 'a court may grant for an infringement of a patent includes an injunction ( ... [on] such terms as the court thinks) and, at the option of the plaintiff, either damages or an account of profits.' (Writer's emphasis added.)

Useful organisations

IP Australia

IP Australia is the Australian Government agency responsible for the administration of patents, trade marks, designs and plant breeders' rights system in Australia. Its main site includes links to general information material in respect of patents, trade marks and designs, as well as other areas of intellectual property. It also has links to search engines and databases fir these main areas of IP.

The website is www.ipaustralia.gov.au.

Department of Foreign Affairs and Trade (DFAT)

The Department of Foreign Affairs and Trade is responsible the development and administration of Australia's international trade policy. Its website includes links to comprehensive sites on the intellectual property provisions of Australia's free trade agreements, including in particular that with the United States.

The website is www.dfat.gov.au.

Advisory Council on Intellectual Property (ACIP)

The Advisory Council on Intellectual Property (ACIP) is an independent body appointed by the government, and advises the Federal Minister for Industry, Tourism and Resources on intellectual property matters and the strategic administration of IP Australia. The Council was established in 1994.

The website is www.acip.gov.au.

The Australian Domain Name Administration (auDA)

auDA was established by the Commonwealth Government in December 2000. auDA is the policy authority and industry self-regulatory body for the au. Domain space, and performs the following functions:

• develops and implements domain name policy
• licences second level domain registry operators
• accredits and licences registrars
• implements consumer safeguards
• facilitates the au. Dispute Resolution Policy.

The website is www.auda.org.au.