What are some of the big IP-related developments in Australia in the past year?
You can split the developments into legal developments and policy developments.
In terms of legal developments and case law, it's really been the year of patents being the dominant subject matter in IP litigation. There hasn't been as much this year in terms of trade mark or copyright.
The big decision in the past year is from the High Court on the patentability of medical treatment methods [Apotex v Sanofi-Aventis]. A lot has already been said about the case, but I think one part that is interesting is that a clear majority, three out of five members of the High Court, drew a distinction between methods of medical treatment (i) by pharmaceutical, and (ii) by medical procedure by a doctor. Only the former has been found by this decision to be inherently patentable; the inherent patentability of the latter has been left open by the majority of the court. The majority in fact said that the latter was "unlikely" to be patentable.
We are also waiting for the Full Federal Court to come to some sort of consensus on the issue of computer-implemented inventions. In the meantime, how courts in the United States rule on these issues is of great interest here in Australia, so there are eyes on how the Supreme Court will rule in Alice v CLS.
Finally, we are waiting, and I emphasise the word waiting, for the Full Federal Court decision on the patentability of gene sequences. In the first instance [in Cancer Voices Australia v Myriad Genetics] the Federal Court held that DNA sequences were inherently patentable. We thought that there would be a decision by the end of last year, but it still hasn't come yet.
So for this year, patents have been the big topic in IP in Australia. What's more, these cases go toward the very foundational and fundamental issue of what is or isn't patentable.
Has the new government brought about any changes in IP policy?
There has been a complete absence of policy statements by the new government on innovation or intellectual property. Personally, I think this is hugely problematic, and it looks like the government doesn't care about innovation and intellectual property's contributions to economic development.
When I talk to other people in this space they share a similar concern.
What actions there have been have not been encouraging. For example, we had a National Commission of Audit to determine basically what can be cut or reduced in the budget. One item that came up was the Advisory Council on IP (ACIP), and the Commission's recommendation was to have a review on whether the ACIP was needed. While this is not a clear recommendation to abolish the body, this call is in my perspective totally wrong, to potentially remove at this moment this source of outside advice about intellectual property. But it does seem to be consistent with this deafening silence on IP and innovation.
What does the ACIP do?
The ACIP advises the government on IP matters. Members are representatives from IP-related industries, professionals like IP lawyers and academics. The body has been key to help bring about important changes to IP laws. For example, one recent change is the introduction of an exception to patent infringement for experimental use.
Has the government taken any positions on more specific IP-related issues?
Australia had a major review of the copyright laws in the digital age. The review, from the Australia Law Reform Commission (ALRC), recommended several changes, such as a fair use exception to copyright infringement [Australia has several specific fair dealing exceptions, rather than the more flexible fair use test like the one used in the US]. The government seems to have dismissed this report with a, 'no thanks', which is kind of extraordinary.
Given that the report was commissioned by the previous government under a different political party, is this dismissal unexpected?
No, in that sense it's not surprising. However, the government seems to be taking a very conservative view on these issues, and that view seems to be that everything is just fine. But the fact that we had commissioned such a major report to look into this topic seems to indicate that things aren't just fine.
Are there any other policy statements on copyright issues from the government?
About the only policy statement that has come out is that the government wants to renew its efforts to get the internet service providers (ISPs) and the copyright holders to come to an agreement about online infringement, like some sort of three-strikes policy. There had been discussions between the two camps, but since the High Court [in Village Roadshow v iiNet] found that the ISPs were not liable, there hasn't been much movement because the copyright users have no leverage.
The government wants to renew this process, and it may rely on the threat of legislation to move things along. The legislation could be something such as imposing liability on the ISPs, or perhaps introducing a safe harbour provision of some sort or a three-strikes policy for online infringement.
Are there any other issues that you think will be dominating the discussion?
The executive arm of the government accepted an ethical exception to patentability which would exclude inventions where commercial exploitation would be "wholly offensive". This began under the old government and it doesn't appear that the new government has changed its mind. We're still awaiting the legislation for that.
I think the issue of gene patents will be an interminable debate that's going to resurface. What the Full Federal Court holds in the Myriad decision won't end it because there is a lot more to it than just the issue of specific gene sequences.
Last year, you released a study about the patents surrounding blockbuster drugs in Australia and the issue of evergreening. Are you working on any follow-up research?
In that earlier study, we looked at some of the costliest drugs in Australia and found that many of those drugs were attached to many patents not held by the patent holder of the active pharmaceutical ingredient (API). Instead, they were either held by generic manufacturers or by a manufacturer that held patents to APIs in other drugs but not this particular one.
As a follow-up to that study, we are looking at how long these secondary patents were held and for any patterns there. If you renew a patent, an economist would say that it is a proxy of its value, because a patent that isn't very valuable would not be renewed. We looked at that renewal data to see if there are any statistically significant patterns in renewal rates depending on the type of the invention and the type of owner.
From our research thus far, we have found that those secondary patents that were applied for by the originator of the active compound are held for a statistically longer time than those applied for by another major research pharmaceutical agency or a generic. The differences appear to be meaningful.
"Contrary to common preconceptions, the USPTO actually grants its claims more narrowly than Australia or the EPO"
We also found that one type of secondary patents that surround the API is held for longer than others, that category being a delivery mechanism or formulation for the API.
We also looked at whether the renewal rates for the secondary patents were related to how successful the primary compound was. We looked at data from the Pharmaceutical Benefits Scheme (PBS), which subsidises the cost of drugs in Australia. With this data, we look at how much each drug costs the government as a measure of how valuable and successful they are.
To be clear, all the drugs involved can be considered blockbusters, so the idea of low success is relative here. We are distinguishing the really big blockbusters from the smaller blockbusters.
We found that the success of the original drug does not cause a significant difference in the renewal rates of the secondary patents. The value of the API does not appear to be driving the magnitude of the renewal of the secondary patents.
Are you working on anything else?
I'm also doing research on the way three patent offices, the Australian patent office, the USPTO and the EPO examined the same claims. For this research we found patents that were granted in all three offices and looked at how each one treated the claims. The thrust is to compare the patent offices' treatment of identical claims and see if there are significant differences in outcome.
We found that contrary to common preconceptions, the USPTO actually grants its claims more narrowly than the other two offices, and the EPO generally grants the same claims more narrowly than the Australian patent office. If you use narrowness as a proxy for how stringent a patent office is, then the USPTO is actually the most stringent, in contrast to the common belief that the EPO is the strictest.
As part of this research, we checked out the prosecution history for each claim, and we found that the US is generally producing more prior art than is found by an EPO search or an Australian search. Given that it has more of this prior art, the US tended to narrow the scope of claims more than the other two offices. The differences we found thus far are significant.