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Intellectual Property | 2010 3rd March: Intellectual property is used to describe a collection of rights. There are three main categories:

1. Patents. Gives protection to technological ideas, industrial application, new plant varieties.

2. Copyright. Protects a particular form in which ideas are expressed: literary, artistic, musical, dramatic works, films, sound recordings.

3. Protection of traders business reputation. Unfair competition in the marketplace. Trademarks Act, tort of "passing off" protects goodwill in an unregistered trademark, Fair Trading Act s9. Each right confers a sort of monopoly: the exclusive right to perform some defined form of activities. Underlying Policy Issues: Intellectual property rights confer a limited monopoly in certain defined ways for a certain period of time. It has to be justified. It can be justified by reference to two different rationales.

1. Notions of justice or fairness based on the rights of the initial creator. Possesses moral rights to reap the reward from intellectual effort. Civil law jurisdictions tend to regard this as the primary justification.

2. Utilitarian arguments. This justification is based upon maximisation of social resources. The wide dissemination of ideas. Limited monopoly is allowed in so far as the ideas are used for people to invest or undertake socially useful operations. In legal systems of common law, this utilitarian, overtly economic justification has always been the dominant one. Recognition of property rights has the disadvantages associated with monopoly power. Prices fixed at well in excess of production costs, to the detriment of the consumer. Limits imposed on these intellectual property rights promote a balance between consumer availability, market competition and ownership rights. Ultimate utilitarian good is to tailor these rights in such a way that the benefits outweigh the disadvantages of IP rights. International Dimension NZ inventor will normally want to retain the right to manufacture and maintain that product in a number of countries. NZ is a party to a number of international conventions, which specify certain minimum levels of protection, e.g. World Intellectual Property Organisation, Paris Convention (provides for reciprocal enforcements of patents), Bern Convention (reciprocal enforcement of copyright). There are problems associated with normalising content and scope of IP rights, because there are different underlying policy reasons behind IP rights. Civil law countries tend to favour broader IP rights than anglo-American rights. There is some conflict between technologically advanced countries and underdeveloped countries who want the benefits but can't pay monopoly prices. NZ is a net importer, so we did not sign the most recent versions of the international conventions which raised the minimum protection levels. Until recently there was no enforcement mechanism

Intellectual Property | 2010 anyway. Things changed quite radically in the 1990s, when IP rights became the subject of international negotiation. Resulted in the TRIPS agreement. Not only proscribes minimum standards, but also provides effective machinery for enforcing compliance. Timetable for this varied depending on the levels of development of the country. Concessions were made for developing countries.
- Developed countries agreed to reduce tarifs and allow cultural imports from developing countries
- Gave developing countries more time to bring their domestic provisions into compliance - Developed, 5 years, developing, 10 years. In 2001, the least developed countries rebelled and got an extra five years - up to 2010. They should all have complied by now. The revolutionary feature of the TRIPS agreement was the enforcement agreement. Failure to comply may result in the WTO imposing trade sanctions. Over the last 10 years in NZ there have been ongoing reviews of these laws - discussion papers, opportunity for submissions. Culminated in new Trademarks Act 2002, a new Act for advising patents, 2008 is still before a select committee. Amendment to Copyright act designed to resolve uncertainty about digital copyrights. S92A - sanctions against illegal firewall sharers. 5th March: Patent Law Historical Background: Statute of Monopolies.
- Removed power from king to grant monopolies.
- Declare monopolies void and promote competition
- Parliament recognised that England was relatively bakwards and needed new technologies, so allowed one exception for the statute to promote manufacturers s6 Patents Act - "Manner of manufacture." Patents Act in NZ, 1860, Current Act, 1953, substantially followed the 1947 bill. UK abandoned the Statute of Monopolies for its patent law in 1977 - signed up to patent convention, had to bring domestic law into line. UK law and NZ law are significantly different, so be careful when comparing. Two underlying ideas:

1. Provide economic incentives to invest their time and effort into providing new technological inventions

2. Public disclosure - avoids unnecessary duplication of effort, and encourages others to improve on previous inventions. Snowballing effect. Patents give the inventor an exclusive right to exploit the invention for 20 years, in turn for making the invention public knowledge. After 20 years it passes into the public domain. Patent Application Process:
- Made to the IP office of NZ - IPONZ, in Wellington
- Operates under the jurisdiction of the Ministry of Economic Development
- Application of the patent is accompanied by a specification

Intellectual Property | 2010
- "Complete specification", s10(3). Describe the invention Disclose best method of performance Claim/claims defining scope of invention (fenceposts to mark the boundaries of the patent monopoly).
- "Provisional specification", s9 Can foreshadow a complete specification. Can just give a broad outline of the invention. A complete specification must be filed within 12 months. Priority date will be the date on which the provisional specification is filed.
- Once complete specification is filed, 3 basic threshold requirements. Examiner must be satisfied that it meets the definition of "invention" - s2 Adequately described Invention is new or novel "Priority date" is the date on which the application is assessed for novelty or inventiveness, and will be the date the complete specification is filed, or the date the provisional specification is filed, if the complete specification is completed within 12 months. If the three requirements above are met, the patent is allowed. Application is open to opposition for a 3 month period. S21 are grounds of opposition - same as grounds for revocation in s41. International Patent Rights: Paris Convention for the Protection of Intellectual Property. Applies to Trademark and Registered Designs as well as patents.

1. The grant of patent rights is controlled by national law. Does not oblige any other countries to give a patent to that invention. There are certain minimum standards enforced by TRIPS. No automatic rights of patent-granting are in other countries.

2. Principle of reciprocity. Must treat applications by citizens from other countries the same as their own nationals.

3. Provides for a special right of priority. When someone applies for a patent in one country, can then apply in other countries within 12 months, and the priority date will be the date of the first application for assessing novelty. Patent Cooperation Treaty. Allows for the filing of a single international patent application. Does not affect the substantive law of member states. Does save time and money in designating formal requirements and making one single search for novelty. What use is made of the Patent System?
5000 patents granted every year in NZ. Only a small proportion (less than 10%) to NZ residents. The bulk are convention applications from foreign nationals. Few NZ manufacturers use the patent system to any significant effect - high costs in acquiring patent rights and the enforcing of them. Can obtain similar rights under copyright protection - attaches automatically, and gives a broad protection. In many manufacturing industries it is not the process or the product that is valuable, it's the 'knowhow'. This can be protected by confidentiality agreements, not patents. Patents offer the most to:
- Small backyard inventors. Important because they can acquire a property right they can sell.
- Pharmaceutical and agricultural chemical industries. Easy for someone to find out the composition of a particular product, easily copied. Patent protects this.

Intellectual Property | 2010 More recently, two rapidly increasing areas of technology have generated many patent applications.

1. Computer software

2. Biotechnology Most applications are parallelled by opposition grounds. S41 (1) (a) Invention is the same as another already patented (b) Person not eligible - i.e. not the inventor (c) Patent obtained in contravention of rights - e.g. Patent holder obtained knowledge of invention through misuse of confidential information (d) Not an invention (e) Not new (f) Obvious - i.e. involved no inventive step (g) Not useful (h) Specification has a poor description (i) Patent obtained on false suggestion of representation (l) Secretly used already (m) Patent granted contrary to law (d) - not an invention. S2(1) "Invention" "Any manner of new manufacture". Produced by a process of manufacture. Originally was "new marketable products" = vendible products. Courts have progressively extended the scope of the concept well beyond the original. Recognised that a new method or process that results in an improved product is a "manner of new manufacture". Two broad kinds of patents:

1. Product patent. New substance, object or thing.

2. Process/method patents. Subject matter of a product patent is a physical thing. Process patent relates to a physical activity. What sorts of Innovations fall outside the scope of a "manner of manufacture"?
Invention vs discovery. What is a mere discovery?
- Discovery of an existing naturally occuring substance or phenomenon.
- If a naturally occuring organism is taken out of its natural environment, purified and applied to some sort of technological process, then it can be an invention.
- Scientific theories, principles, raw data in themselves are not patentable inventions. If a new theory or principle can be applied to a technological result with economic value, then the patent can apply to the use of that theory or the products of it. Re Application by Milton Edgar Anderson:
- Claimed a patent monopoly over the 'nutrino' atom, antimatter and new laws of electric conduction
- Rejected on the ground that it did not relate to patentable subject matter
- There are limits - must also be a "manner of manufacture" - certain fields have always been excluded. Discoveries of the laws of science/maths do not exhibit this requirement.

Intellectual Property | 2010 10th March: Method/Process Patents: Until recently, the availability was narrow. A new discovery would not be suitable for a patent. It had to be a saleable thing, or act upon a vendible product (improve or preserve). Maeder:
- Made a wave in hair
- Process acted upon human hair, not a vendible product.
- No patent Automatically excluded all applications on the human body. Methods having application in agriculture/horticulture:
- Automatically not allowed
- Policy reasons
- Claim of this sort unlikely to be new National Research Development v Commisioner of Patents HC Australia. Discussed in Swift.
- Sought patent for method of controlling weeds, using a known chemical
- Growth of crops advanced Commisioner denied application on three grounds: that a new use for an established product is a discovery, not an invention. Also, the chemical was not applying to a vendible product - it was acting on the weeds, not on the crops. It was also applying to agriculture/horticulture. HC rejected each of these grounds. Rejected the idea that new use of an old thing can never support a method claim limited to the new use. Rejected the blanket ban on agriculture/horticulture - said too rigid, outdated, no longer reflected desirable public policy. Looked at vendible product requirement. Said two requirements necessary:

1. New method or process must produce "discernible artificially created state of affairs"

2. New 'state of affairs' must have economic value. So, re 1. it must produce a specific new end result. Application of chemical created new state of affairs - result in higher crop yields and therefore greater economic value. Qualifies it as a manner of manufacture and therefore a patentable invention. Plaintiff met both requirements. Swift--

Plaintiff had new method of tenderising meat Injecting enzymes into the animal before death Enzymes distributed around the body of the animal and tenderised the meat Was initially equated with an agricultural process

Chief Justice in NZ looked at NRDC case, and held that the fact that it relates to agricultural/horticultural/physiological doesn't automatically exclude anymore. Looked at vendible product, thought that the test was satisfied in this case. Did act upon a vendible product. Judge went on to apply wider idea from NRDC, the idea of the 'artificially created state of affairs'/effect. Made it clear that "manner of manufacture" is a flexible concept. Adaptable. But this was only obiter - judges technically had to apply traditional approach.

Intellectual Property | 2010 Wellcome: Judges could apply the NRDC test.
- Pharmaceutical drug already in use for malaria
- Could also be used for leukaemia
- Application refused. Patent office relied on three grounds for their refusal:

1. Already in use substance, mere discovery not invention.

2. Claim in respect of a process that was not a vendible product.

3. Regardless of rationale there was a long standing practice of refusing patents for human illness. CA got rid of first two. Approved the wider approach in NRDC and Swift, and disapproved of Maeder. Said that the application for the claimed method of treatment did result in a new, artificially created state of affairs with economic value. Thus = "method of manufacture". Nevertheless, they upheld the third ground for rejection. They had two objections to patenting new methods of medical treatment:

1. Ethical objection: Doctors should not be restricted in their attempts to safe human life, prevent illness/suffering. They should be free to use all known methods at their disposal, including the administration of drugs. Patients should not be denied a form of treatment simply because their doctor is not able to get permission to use a particular patented method. But would a new use of drug restrict availability? No. Would increase the cost during the period of the patent, but wouldn't prevent use.

2. Economic concerns. Patenting new use would mean the drug would cost more during the patent period. Lies at the heart of the system. patents for 2nd and subsequent therapeutic uses would allow drug companies to extend to terms of the patents by finding new uses for them and therefore charging monopoly prices for longer periods. Already have enough economic incentive from the patents applying to entirely new chemical compositions. CA not satisfied the established patents for new methods of medical treatment ran contrary to overall public interest in NZ. CA said additional incentive by allowing new patents would not outweigh the costs of an increase in drug cost. If the change is to be made it is better made by Parliament than the courts. Legal justification for refusing to give patents for new methods of medical treatment in humans public policy proviso on s6 Statute Monopolies (1623) incorporated into NZ. Proviso = grant of a patent should not harm the state in price raising/generally inconvenient = contrary to public policy. Effect of Wellcome decision - CA approved NRDC approach. This meant "manner of manufacture" can include these products. 12th March: Wellcome decision not accepted by the big drug companies. 1994 Anaesthetic Supplies found no good reason to restrict new uses of old drugs. NZ developments proceeded more slowly. way. Cases classed things as "non theraputic" treatments, but still applied to the human body. This led to a gradual erosion of Wellcome ban. 1998 list of non theraputic purposes for which now patents would be allowed. Reclassifying conditions as non medical. TRIPS - designed to permit granting patent in Wellcome type case - newly discovered use for existing drug.

Intellectual Property | 2010 Swiss drug companies devised a new method of claim to get around the law - permitting the granting of a patent for a newly discovered use of a drug.
- Claimed that the use of the compound in known medicine was for the purpose of new use Swiss companies claimed the use of the known active compound. CM 20, Claims made in Pfizer case. 18 claims total. Claims 1-4 used for newly developed product - product claims. Claims 5-9 method of treatment claims, like the claim rejected in Wellcome. Claims 10-14 Swiss type claims. Two objections to Swiss Claims:

1. Merely disguised claim to methods of medical treatment. Should look behind this to the true substance of the claim.

2. Swiss claims on their face lack novelty, so should be denied a patent on that ground. Compound and medicine are both already known - nothing new. The only novelty lies in the newly discovered use for the medicine, but the claim doesn't claim a patent monopoly over the newly discovered use, because of Wellcome ban. Swiss type claim carefully avoids claiming a new use to avoid the Wellcome ban. Swiss type claim runs contrary to long standing principle of patent law. Novelty must be found in the features of the invention for which the claim is sought. But the novel feature of the new use clearly can't be claimed because of Wellcome. On the other hand Swiss claim, in original form does offer advatage (due to its very limited scope). Who could infringe a Swiss claim? Only other manufacturers, not medical practitioners, using the drug. Swiss claim offered a means of providing drug companies with economic incentives to undertake research necessary to discover new therapeutic uses for already known drugs. Doesn't constrain health professionals at all. Europeans overcame objection based on lack of novelty by adopting a strained interpretation of a provision in the European Patent Convention. Problem: NZ Patents Act contains no equivalent provision. Initially when patents came before courts in Switss claim, Comissioner rejected on the grounds of lacking novelty. Commissioner changed their mind. Now though we follow the overseas practice and allow swiss claims. Pharmac became concerned - government funding agency responsible for government expenditure on drugs. Swiss claims extended the protection for existing drugs, delaying entry into the market for generic manufacturers, which increased the cost for Pharmac. Pharmac challenged the commissioner's practice in the courts - Pharmaceutical Management Agency Ltd v Commissioner of Patents [2000]. Although NZ Act contains no equivalent to European, overall NZ practice is much the same as European practice - Swiss claims are valid. Didn't stop here. Pharmac court went on to uphold the ban on medical treatment patents. Disagreed though with the reasoning in Wellcome court.
- Said Statute of Monopolies had been impliedly repealed/superseded by s17(1) in the 1993 Act. "Contrary to morality". S17(1) the only ground on which a patent could be denied.
- Wellcome ban could be justified under s17(1) but not under s6 Statute of Monopolies.

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