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Intellectual Property Bulletin

13 July 2007

In this issue: Our intellectual property lawyers and patent and trade marks attorneys provide an update on the latest cases and legislative developments relating to patents, trade marks, copyright and designs.

Patents – A final round in the Lockwood v Doric saga

In brief: In its second and final decision on Lockwood's patent to a security deadlock, the Australian High Court has provided useful clarification on the weight that can be given to admissions made in a patent specification with regard to inventive step. The judgment will be seen as generally favourable by owners of Australian patents.

By Chris Bird, Partner, and Anthony Selleck, Patent & Trade Marks Attorney

Summary

The Australian High Court recently allowed the appeal of Lockwood Security Products Pty Ltd (Lockwood) against a decision of the Full Federal Court that the invention defined in a number of claims of Lockwood's patent was obvious under section 7(3) of the Patents Act 1990 (Cth). The matter has now been referred back to the Federal Court to consider the issues of amendments, costs and damages.

Background

We reported the grant of special leave to appeal to the High Court from the decision of the Full Federal Court in Intellectual Property Bulletin – September 2006. This is the second time this patent has been subject to a decision by the High Court, the first being on the issue of 'fair basis'. We have also reported on earlier rounds in this saga: Intellectual Property Bulletin – March 2004 and AAR Focus: Patents, Designs and Trade Marks – April 2005.

The Full Court held a number of claims of Lockwood's patent invalid on the ground that they were obvious, both in light of the common general knowledge and when that knowledge was supplemented with other relevant information. Key to the Full Court's decision was a finding that locks available before the filing date were found to be 'deficient', in that operation of the lock from the outside of a door did not deactivate another, separate lock located inside the door. This functional feature was a key aspect of the invention claimed in the patent. The finding was not drawn from the evidence of persons skilled in the art presented during trial, but instead from an 'implicit admission' found to be made by Lockwood in the patent specification.

Findings

The High Court reversed the Full Court on this point, and held that the Full Court had attributed undue weight to the implicit admission in the specification when considering the question of obviousness. Admissions made by patentees in specifications concerning matters such as prior art and common general knowledge are often included as part of standard drafting practice, in order to clearly articulate the advance over prior art made by the invention. While the High Court accepted that such admissions can be highly significant, they are not conclusive, and must be considered along with all of the other evidence relevant to the question of inventive step. The High Court also found that a number of secondary factors helped support the inventive step of the invention, including its commercial success, and the failure of others to arrive at an alternative solution.

Conclusions

Lockwood's patent included a number of claims of varying scope, and the High Court confirmed that the question of obviousness must be considered by reference to the scope of the particular claim in issue. It is permissible to treat differently broad and narrow claims when determining what information might be relevant under section 7(3). The claim of the Lockwood patent in issue before the High Court was relatively narrow (a broader functional claim had not been pursued by Lockwood in this appeal), and was found not to be obvious after the admissions made in the specification were properly weighed with all of the other evidence presented at trial.

Patents – When obviousness is not so obvious

In brief: A recent Federal Court case has made clear that parties must lead evidence, where inferences cannot be drawn, as to what prior art information the skilled addressee would reasonably be expected to 'ascertain'. This information is crucial to supplementing the skilled addressee's common general knowledge for the determination of whether an invention is obvious, and therefore invalid for lack of inventive step under the Patents Act 1990 (Cth).

By Chris Bird, Partner, and Oliver Evans, Articled Clerk

Background

KD Kanopy Australasia Pty Ltd was the exclusive licensee in Australia of a patent over a new collapsible canopy framework. Insta Image Pty Ltd imported and sold a caravan shelter that was alleged to infringe the patent. KD Kanopy brought infringement proceedings against Insta Image, which in turn cross-claimed for the revocation of the patent, one ground being its invalidity for lack of inventive step.

Findings

In KD Kanopy Australasia Pty Ltd v Insta Image Pty Ltd [2007] FCA 481, Justice Kiefel considered whether four key United States patents could reasonably have been ascertained by the skilled addressee in the relevant field of art (having already concluded that they were not part of the common general knowledge). The skilled addressee was found to be a designer/constructor in the awning, tent and shade structure business, although not necessarily qualified as an engineer.

Justice Kiefel relied upon Commissioner of Patents v Emperor Sports Pty Ltd (2006) 225 ALR 407, which made it clear that the skilled addressee is not capable of ascertaining all publicly available prior art documents anywhere in the world. In that case, it was held that, although in some circumstances it may be obvious to all what information the skilled person could ascertain, when the identification of the relevant prior art is in dispute it is necessary to provide evidence as to what could be ascertained.

Justice Kiefel then stated that the absence of journals in the awning and canopy industry, and the fact that this information would be unlikely to appear in engineering design journals, suggested that in this case the skilled addressee would not have ascertained the US patents. Justice Kiefel considered whether the US patents were available to be searched and whether they would have been searched online by a design engineer before the priority date, but concluded that no such search would have been undertaken. The defendant's case on obviousness therefore failed.

After referring to and approving Emperor Sports, His Honour stated at p28:

In many areas it may be assumed that the relevantly skilled person would be familiar with professional journals or other technical information. Unless an inference could be drawn, evidence would generally be required about what that person may reasonably be expected to have done.

 
Conclusions

The take-home point from this decision is that a defendant must provide evidence supporting a contention that the skilled addressee would have been reasonably expected to have ascertained relevant prior art information. A failure to do so may lead the courts to conclude – as they did in Emperor Sports and KD Kanopy – that the information, however pertinent it may be, should be precluded from consideration.

Interestingly, as illustrated in this case (caravan shelters) and Emperor Sports (pull tags for touch football), it appears that the less 'high-tech' the field of the invention is, the less likely would the skilled addressee be to have ascertained relevant prior art. One therefore must conclude that as the level of 'technicality' of the relevant field decreases, the more difficult it can be to defeat a patent on grounds of obviousness.

Patents – Interlocutory injunction refused in pharmaceutical patent case

In brief: In Intellectual Property Bulletin – December 2006, we reported that the Federal Court, in Merck and Co Inc v GenRx Pty Ltd [2006] FCA 1407, stated that courts are becoming less reserved in granting interlocutory injunctions in pharmaceutical patent cases. While that might be so, in a recent decision in which GenRx Pty Ltd was also the respondent, Roche Therapeutics Inc v GenRx Pty Ltd [2007] FCA 83 (9 February 2007), the Federal Court refused interlocutory injunctive relief on the basis that the undertakings offered by the respondent afforded sufficient protection to the applicant.

By Sarah Matheson, Partner, and Josh Budin, Lawyer

The proceeding

Roche Therapeutics Inc and F-Hoffman La Roche AG (collectively, Roche) are the joint proprietors of an Australian patent for a medicament and method using carvedilol for decreasing mortality resulting from congestive heart failure (the Patent). Carvedilol is used in a product by Roche marketed in Australia as DILATREND.

GenRx Pty Ltd (GenRx) was preparing to launch a generic product listed under the Pharmaceutical Benefits Scheme (PBS) containing carvedilol indicated for the treatment of congestive heart failure (GenRx products). Roche claimed that GenRx threatened to infringe the Patent and sought interlocutory relief restraining such infringement. GenRx contended that the Patent was invalid on several grounds and, in any event, GenRx's threatened actions would not infringe the Patent.

Validity of the Patent

GenRx claimed that the Patent was invalid on the grounds of lack of novelty, no manner of manufacture and inutility.

On novelty, the court found that the three prior publications relied on by GenRx did not anticipate the claims of the Patent. Although those publications anticipated the dosage specification in the Patent, they did not refer to a decrease in mortality, which was an integer of the claims of the Patent.

GenRx argued that the Patent merely describes a new use (to decrease mortality) of a known substance (carvedilol). While Justice Emmett considered this argument had cogency, he considered it raised questions of law inappropriate to resolve at an interlocutory proceeding.

GenRx argued that the Patent was inutile because there was no evidence that carvedilol has a beneficial effect on mortality. Justice Emmett considered that it was for GenRx to establish inutility, and there was no positive burden on Roche to show that the claimed invention works.

Although Justice Emmett was circumspect about reaching any conclusions on the validity of the Patent, he noted that GenRx had advanced strong arguments that the Patent was invalid. It is likely that this factor weighed in favour of the court refusing to grant the injunction.

Infringement

GenRx argued that there was no serious question to be tried concerning infringement of the Patent. The court found that it was at least arguable that, because the GenRx products were included in the PBS as being bioequivalents of DILATREND, decreasing mortality is a use for the GenRx products. Notwithstanding that GenRx undertook to remove the reference to 'decreasing mortality' in the product information, Justice Emmett found it was at least arguable that, in selling the product, GenRx would be doing so to decrease mortality in patients suffering from congestive heart failure.

Justice Emmet was not persuaded that there was not a serious question to be tried on infringement of the Patent. However, his Honour felt there was no need to reach a conclusion on this point, as the balance of convenience was resolved in favour of GenRx.

Balance of convenience

GenRx's undertakings weighed heavily in favour of the court refusing the injunction, as they were considered to ameliorate much of the possible prejudice that Roche might suffer if it was ultimately successful in establishing infringement at trial. In addition to undertaking not to advertise carvedilol for decreasing mortality resulting from congestive heart failure, GenRx also undertook to maintain accounts and records of carvedilol sales until judgment of the final hearing, and to report the sales to Roche every three months. The court noted that the fact that the GenRx products attracted a subsidy under the PBS was also a factor that weighed in favour of refusing the grant of an injunction, as patients had access to a subsidised bioequivalent to DILATREND pending outcome of the trial.

Conclusion

In the Merck case, GenRx offered similar undertakings to those it offered in Roche Therapeutics, but the court more readily determined that the loss suffered by Merck would be difficult to quantify and could not be compensated. It may be that the court in Merck was persuaded to grant an injunction on the basis of stronger arguments that, in that case, GenRx had infringed a valid patent. In Roche Therapeutics, there was a serious question as to whether the Patent was valid and it was unclear whether GenRx had infringed.

Even if the courts are less likely to be reserved about granting interlocutory injunctions in pharmaceutical patent cases, it seems they will still need a relative degree of comfort that a patent can withstand validity challenges and that the applicant can ultimately prove infringement.

Trade Marks – STARR PARTNERS v STAR REALTY deceptively similar trade marks

In brief: The Full Federal Court recently found in the decision of Starr Partners Pty Ltd v Dev Prem Pty Ltd [2007] FCAFC 42 that STARR PARTNERS and STAR REALTY were deceptively similar trade marks, and overruled the primary judge's decision.

By Andrew Butler, Partner, and Peter Ryan, Trade Marks Attorney

The facts in brief

Starr Partners (Starr), a Sydney real estate agency and owner of a trade mark registration for STARR PARTNERS and a star device in respect of real estate services, appealed to the Full Federal Court from a decision of a primary judge of the Federal Court.

The primary judge held that use of STAR REALTY and a star device in Queensland by Dev Prem Pty Ltd (Realty), also in relation to real estate services, did not infringe Starr's registration. The differences between the marks – such as the word 'partners' rather than 'realty', the different spellings of 'starr' and 'star', and the different star logos – were, in his Honour's view, too great for there to be a real danger of confusion.

On appeal, the Full Federal Court took a view contrary to the primary judge, and found that it is the essential features and the overall impression of a trade mark that determine the likelihood of confusion and whether the marks are deceptively similar. The Full Court concluded that 'starr' and 'star' were the uncommon words of the marks at issue, which would be more memorable and significant for the purposes of infringement than common words such as 'partners' or 'realty'.

Their Honours therefore upheld Starr's appeal, finding that Realty had infringed Starr's registration for STARR PARTNERS and star device, and that Realty be restrained from using the trade mark STAR REALTY and star device.

Implications

The appeal decision is important in that it confirms the prevailing view in relation to trade marks that it is the whole of the mark that must be considered. Where prominent and unusual features are incorporated into trade marks, it is generally those features that are likely to be remembered by consumers and may result in confusion in the marketplace.

Copyright – FOXTEL successful in signal piracy case

In brief: The recent decision of the Federal Court in FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 dealt with an action for signal piracy.

By David Yates, Partner, and Jeremy Collins, Articled Clerk

FOXTEL's subscription cable television service can only be operated where a coded card is inserted into a set-top box. The Mod Shop arranged for customers to obtain cloned cards allowing them to access FOXTEL for free. FOXTEL was successful under section 135AN of the Copyright Act 1968 (Cth), which allows a broadcaster to bring an action against a person who makes, sells, distributes or imports (among other things) a 'broadcast decoding device'. FOXTEL was unsuccessful under s135ANA, which prohibits making commercial use of the broadcast through the use of a broadcast decoding device. These provisions are now offences under the Copyright Act and are contained in expanded form in sections 135ASA-ASJ of the Act.

In this case, if a customer responded to an advertisement for 'free FOXTEL', The Mod Shop gave a mobile number to call to obtain a cloned card, usually through a meeting in a car park at night. These cards were openly advertised by The Mod Shop. When FOXTEL improved its technology to prevent this occurring, The Mod Shop created a server that sent the codes to unlock the FOXTEL service to a serial card sold by The Mod Shop. Authorised cards were thus 'shared' and many customers could access FOXTEL using one authorised (and paid) FOXTEL card.

The decision

Justice Siopis held that FOXTEL was a broadcaster that made an encoded broadcast, which triggered the application of s135AN and s135ANA.1

The Mod Shop companies did not contravene s135AN in relation to the pirated smartcards because, despite the third parties themselves engaging in the relevant conduct, there was no evidence that third-party suppliers were acting on behalf of The Mod Shop companies.2 Customers also did not contravene the section.3 Providing cloned cards was sufficient to establish liability,4 but because FOXTEL could not establish The Mod Shop companies had engaged in the conduct, they were not liable on this ground.

The Mod Shop companies contravened s135AN in respect of their card-sharing activities. This was because the 'client serial interface device' (the serial card connected to the Internet) provided to customers was a broadcast decoding device within the meaning of the Copyright Act, as it was designed or adapted to circumvent 'encryption which protects access to the broadcast.'5 Given that FOXTEL's transmissions were 'encoded broadcasts' and The Mod Shop companies knew its devices would be used to allow unauthorised access to FOXTEL broadcasts, the requirements of s135AN were satisfied.

Justice Siopis dismissed the proposition that there was any contravention of s135ANA, because the section was aimed at those using a broadcast decoding device for their own commercial use. Facilitating access for others for commercial gain was not a contravention of the section, nor was using a device to gain access for private use.6

Finally, it was held that advertisements by The Mod Shop companies containing representations that customers could obtain free FOXTEL constituted misleading and deceptive conduct under s52 of the Trade Practices Act 1974 (Cth), in that they failed to disclose that free access could only be obtained by unlawful means.7 A claim for inducing breaches of contract was also upheld because web advertisements constituted an offer to existing FOXTEL subscribers to obtain the same service for free.8

The person who controlled The Mod Shop companies did not attend trial or contest any evidence. He and the other owner of The Mod Shop companies were both found personally liable for the contravention of s135AN by The Mod Shop companies, and fined $953,000 and $313,000 respectively.9

Footnotes
  1. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [93].
  2. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [114].
  3. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [119].
  4. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [123].
  5. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [101].
  6. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [288-289].
  7. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [302].
  8. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [313].
  9. FOXTEL Management Pty Ltd v The Mod Shop Pty Ltd [2007] FCA 463 at [334 and 344].

Copyright – 'Fair dealing' for the purpose of reporting sports news over the Internet

In brief: In a recent decision on an application for interlocutory relief, the Federal Court has considered what constitutes 'fair dealing' for the purpose of reporting news about National Rugby League matches over the Internet and via mobile phone.

By Stuart Lawrance, Senior Associate

Telstra holds the exclusive rights to show footage of National Rugby League (NRL) matches over the Internet and via 3G mobile phones. Shortly after the start of the 2007 NRL season, Telstra commenced proceedings against Premier Media Group (the company that produces the Fox Sports channels) and the publisher of the Fox Sports website, www.foxsports.com.au. Telstra complained that video reports of NRL matches posted on the Fox Sports website, and supplied by Premier Media Group to Hutchinson and Vodafone for their 3G mobile services, infringed the copyright that had been exclusively licensed to Telstra.

The video reports in question were branded 'Fox Sports News' and featured a voiceover describing the events of each NRL match, accompanied by excerpts of match footage. Each video report reproduced up to two minutes of footage (from an 80-minute match). Telstra sought damages and an injunction. Pending final determination of its claim, Telstra sought an interlocutory injunction to limit the amount of footage that could be used in the video reports to no more than 45 seconds of footage per NRL match.

In Telstra Corporation Limited v Premier Media Group Pty Limited [2007] FCA 568, Telstra's application for an interlocutory injunction came before Justice Allsop. On the question of whether Telstra had made out a prima facie case for relief, the only issue between the parties was whether the Fox Sports News video reports shown over the Internet and mobile phones amounted to fair dealings with the match footage for the purpose of reporting news, within the meaning of section 103B of the Copyright Act 1968 (Cth). Telstra did not seek to argue that the NRL matches were not newsworthy. Instead, the case turned on the question of whether the video reports were fair dealings.

The evidence before the court established that sports news programs on free-to-air and pay television had, for a number of years, shown reports that were similar to the video reports the subject of Telstra's complaint. Moreover, those free-to-air and pay television reports regularly reproduced more than 45 seconds of another broadcaster's footage when reporting on an event. Justice Allsop found that match reports of one to two minutes would not necessarily be seen as beyond the bounds of fair dealing when broadcast on free-to-air or pay television. Consequently, in order to succeed in its application to restrict Fox Sports to 45 seconds per match for Internet and mobile reports, it was incumbent upon Telstra to prove that there was a clear difference between what constituted 'fair dealing' in the medium of television on the one hand, and Internet and mobile communications on the other. There was no such evidence. On the contrary, there was evidence before the court that suggested the opposite. An email produced by Telstra showed that Telstra, when negotiating for a licence of Internet rights from the Australian Football League, had taken the position that non-rights holders would be able to rely on the fair-dealing provisions in order to show Internet reports of up to two minutes per match. For those reasons, Justice Allsop found that Telstra had failed to make out a prima facie case. His Honour dismissed Telstra's application and ordered Telstra to pay the costs of the other parties.

Following Justice Allsop's decision, the case was settled between the parties. Given the nature of the interlocutory hearing, there is a limit to the conclusions that can be drawn from Justice Allsop's decision. One thing that does seem clear, however, is that a copyright owner or licensee who wishes to argue that fair dealing in the context of the Internet should be given a more restricted scope than in other, 'old' media should come to court prepared to prove how the Internet is different and why different considerations should apply.

Copyright – The case of the extradited Internet pirate

In brief: This month, a United States District Court in Virginia sentenced Hew Griffiths, an Australian national, to 51 months in prison for conspiracy to commit criminal copyright infringement. The spotlight of public attention has passed across Mr Griffiths' case as it is thought to be one of the first ever extraditions for an intellectual property offence. As a further point of novelty, Mr Griffiths had never set foot in any US territory, having at all relevant times resided in Australia.

By Jim Dwyer, Partner, and Matt Vitins, Law Graduate

According to the charge sheet, Mr Griffiths was involved in an Internet software piracy group known as Drink or Die, which was a highly structured criminal organisation devoted to the unauthorised reproduction and distribution of copyright software over the Internet. The group sought to achieve a reputation as the fastest provider of high-quality software (including Microsoft, Adobe, Autodesk, Symantec and Novell) to the underground Internet software-piracy community known as the Warez scene.

Drink or Die was highly systematised. New software would be uploaded to a 'drop site', from which other Drink or Die members ('crackers') would access the files and circumvent any embedded copyright protection. 'Testers' would then perform quality checks before 'packers' broke the software into smaller packages that could be more easily moved by 'couriers' onto the Internet. The group used encryption and other sophisticated security measures to avoid detection.

It seems the case against Mr Griffiths was clear. Once extradited, he pleaded guilty to offences under US law, and he also indicated that he would have pleaded guilty in an Australian court if charged under the Copyright Act 1968 (Cth). The point stressed by the episode is not so much the controversy of conviction, but that the Internet can operate as a vehicle for global infringement. Although Mr Griffiths acted from within Australia, all courts involved were happy to accept a crime had occurred in the US (or, more specifically, Virginia) and that extradition was appropriate.

Perhaps the final word should be left to the District Attorney for the Eastern District of Virginia, who has been quoted offering the following summary:

Whether committed with a gun or a keyboard – theft is theft...and, for those inclined to steal Intellectual Property here, or from half-way around the world, they are on notice that we can and will reach them.

 

Copyright/Designs – The balance between copyright and designs

In brief: A recent High Court decision has given some clarity to an aspect of the often difficult copyright design overlap.1

By Marina Lloyd Jones, Senior Associate

Mr Swarbrick, a naval architect who designed and was involved in the manufacture of a commercially successful racing boat, sued for infringement of copyright in the hull and deck mouldings and 'plug' used to manufacture that racing boat. One of the alleged infringers, Boldgold Investments Pty Ltd, manufactured boats using reproductions of the hull and deck mouldings. These mouldings had been given to two of its employees by Mr Swarbrick, who was their former employer.

The mouldings had been made by taking a 'plug', essentially a full-scale model of the hull and decks, and forming the mouldings around it to create an inverted reproduction, which was then used to manufacture the boats. The challenge facing Mr Swarbrick was that he had not registered the design of the plug or mouldings under the Designs Act 1906 (Cth) (since replaced by the Designs Act 2003 (Cth)) and therefore had to rely on copyright in the plug and mouldings as 'artistic works' in the nature of 'works of artistic craftsmanship'. Mr Swarbrick succeeded at first instance, but the defendants successfully appealed to the Full Federal Court. Mr Swarbrick then appealed to the High Court.

Certain objects may be eligible for 'dual protection' if they qualify both as 'artistic works' under the Copyright Act 1968 (Cth) (whether as two-dimensional drawings or three-dimensional 'works of artistic craftsmanship') and are registrable as designs under the Designs Act. Conversely, in certain circumstances, a designer may lose their ability to enforce copyright. Various legislative amendments have sought to find an appropriate balance between these two forms of protection, that is, the boundaries between each.

Following amendments made to the Copyright Act by the Designs (Consequential Amendments) Act 2003 (Cth) (which came into force on 17 June 2004, after the events considered in Burge v Swarbrick), the law as it currently stands is:

  • a copyright owner who registers a design corresponding to the relevant artistic work (where that design relates to the three-dimensional shape of a product) will be prevented from enforcing his or her copyright against infringers and must rely on design law;
  • a copyright owner who registers a design corresponding to the relevant artistic work (where that design relates to the two-dimensional pattern on a product, such as a wallpaper design) will retain his or her copyright protection in the artistic work and potentially achieve dual protection; and
  • a copyright owner who treats the relevant artistic work as an industrial property and mass produces objects using the corresponding design will be unable to enforce his or her copyright (unless the work is one of artistic craftsmanship, in which case copyright will still be enforceable).

Mr Swarbrick admitted that the design had been industrially applied. He submitted that the relevant works were 'works of artistic craftsmanship' in order to retain his ability to enforce his copyright. In rejecting this submission, the High Court:

  • stated that utility and beauty, or function and art, are not mutually exclusive. A work could be one of artistic craftsmanship, despite its form being partially dictated by functional considerations;
  • held that determining whether a work is one of artistic craftsmanship 'turns on assessing the extent to which the particular work's artistic expression, in its form, is unconstrained by functional considerations'.2 The greater the requirements in a design brief to satisfy utilitarian considerations, the less scope to encourage substantial artistic effort; and
  • disagreed with the trial judge's and Full Federal Court's view that the moulds and plugs were works of artistic craftsmanship. In designing the plug for the boat, Mr Swarbrick's key aim was to create speed on the water, and, in seeking to achieve it, he was acting in the role of an engineer rather than an artist-craftsman. In other circumstances, he may have fulfilled the latter role but that was not the case with this design brief.

The artistic craftsmanship exemption is significant for designers: if they can bring their work within its scope, they will be able to mass-produce objects corresponding to the design while still being entitled to enforce their copyright against infringers. It is important to remember that once a copyright owner has registered an artistic work as a design under the Designs Act, the artistic craftsmanship exemption will not apply. The exemption only applies to mass-produced but unregistered designs.

Footnotes
  1. Burge v Swarbrick (2007) 234 ALR 204.
  2. At 83 to 84.

Legislative developments – PBS reforms passed

In brief: Legislation to implement the Pharmaceutical Benefits Scheme (PBS) reforms has been passed by Federal Parliament.

By Ric Morgan, Senior Associate

The National Health Amendment (Pharmaceutical Benefits Scheme) Amendment Act 2007 (Cth) amends the National Health Act 1953 (Cth) and introduces three new elements to the PBS – statutory price cuts, price disclosure and supply guarantee – with the aim of driving down the cost of the PBS to government. The amendments will take effect from 1 August 2007.

Statutory price cuts

The statutory price cuts include 12.5 per cent on the entry of a new brand of a listed drug (providing a statutory basis for existing policy), annual 2 per cent reductions in August 2008, 2009 and 2010 for all brands where multiple brands already exist for a listed drug (but only where no 12.5 per cent price reduction is imposed in that year), and a 25 per cent reduction for drugs that have become genericised, which will apply where there are multiple brands of a drug in a therapeutic group. Further price cuts can be imposed on combination products where one of the drugs in the combination product is subject to a price cut.

Price disclosure

Price disclosure requirements will apply to suppliers of new brands that are bioequivalent to, and share the same manner of administration as, listed brands. Such suppliers must disclose information about the actual price to pharmacies (including any rebates and other incentive programs) in relation to the new brand and their existing bioequivalent brands that are administered in the same way as their new brand. Other suppliers of existing bioequivalent brands that are administered in the same way as the new brand can opt-in to the price disclosure regime; however, once in cannot opt-out. The information gained from price disclosure will drive further price cuts to bring the price paid by government down to the actual disclosed price at which suppliers sell to pharmacies.

Supply guarantee

Supply guarantee will be required where a supplier introduces a new brand of a drug or enters into a new pricing agreement for an existing brand where more than one brand of the drug is listed on the PBS. The supplier must guarantee the supply of that brand for two years.

A more detailed analysis of the PBS reforms will be provided in an upcoming AAR Focus article.

Our people

In brief: We are pleased to announce the appointment of two new partners, David Yates and Miriam Stiel, from 1 July 2007, as well as two new senior associates.

New Partners
Miriam Stiel

Miriam joined the firm as a summer clerk in 1994. She spent a year working in the Supreme Court of New South Wales before commencing as a solicitor at the firm in 1997. Miriam is a litigator, specialising in intellectual property disputes. She advises on all aspects of IP law and has worked with clients from a range of industries, including media and entertainment, luxury goods, sport and technology, to develop strategies for the protection and enforcement of their IP rights. She has also been involved in handling commercial disputes for major Australian and multi-national corporations and has extensive experience running and defending applications for urgent interlocutory relief. Miriam is a member of the Management Committee of the Copyright Society and a regular contributor of headnotes for the LexisNexis Intellectual Property Reports.

David Yates

David joined the firm as a summer clerk in 1995. David specialises in intellectual property litigation and dispute resolution, working with a range of multinational and local companies in trade mark, copyright, patent and design infringement and validity matters. David is a member of the firm's sport practice, and currently acts for the Australian Olympic Committee, among other sports clients. David works for clients in a broad range of industries, including food and beverages, general manufacturing, information technology, sport, music and entertainment. David also has a writing contract for LexisNexis' Patents, Trade Marks & Related Rights service and has been an author for LexisNexis in the intellectual property area for more than 10 years.

New Senior Associates

AAR is also pleased to announce the appointment of two new Senior Associates in the IP practice group: Marina Lloyd Jones in Sydney and Emma Mitchell in Melbourne. Their promotions reflect impressive experience, technical excellence and commitment, as well as a strong client focus.

Retiring Partner

We acknowledge and say thank you for the tremendous contribution that our retiring partner Michael Dowling (June 2007) has made to the success of the firm's intellectual property team. We are delighted that Michael will continue as a consultant to the firm.

Practice Group Leaders

From 1 July 2007, Philip Kerr took over from Michael Dowling as the IP Practice Group Leader. Philip and Michael have worked closely for a number of years as leaders of the group. Richard Hamer has taken up the position of Deputy Practice Group Leader.

For further information, please contact:

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