Imagine that you are about to launch a new product and a routine freedom-to-operate search reveals a patent that stands in your way. If you proceed with the launch, you could find yourself in court, facing an injunction and being left with stock which you may need to destroy. If you abandon the product, you could forego huge potential profits. What should you do?
Scope of monopoly rights
In Australia, there are a number of options available depending on what stage of the examination/grant process the patent has reached. If the patent is not yet granted and is still pending in the Patent Office, the scope of the claims (which define the extent of the monopoly rights) has not yet been settled. In that case, the primary aim is to reduce the level of risk by obtaining some certainty regarding the ultimate scope of monopoly rights that are likely to be granted.
Various mechanisms under the Patents Act allow any person to influence – and hopefully restrict – the scope of the monopoly rights granted by the Patent Office. For example, if the patent application has not yet been accepted by a patent examiner, any person may lodge at the Patent Office a ‘notice of matters affecting the validity’ of the patent, together with copies of relevant prior art documents showing that the claimed invention is not novel (ie, not new) or inventive. The patent examiner must then consider the documents as part of the examination process.
After the application has been accepted, it is also possible to formally oppose the application before it proceeds to grant. In addition to asserting that the claimed invention is not novel or inventive, there is a range of other available grounds on which the patent can be challenged, including:
- the applicant is not entitled to the grant of the patent;
- the invention was in public use before the filing date of the patent application; and
- the invention is not a patentable invention because it is not useful or it had previously been used in secret by the applicant.An advantage of the opposition procedure is that the opponent has the opportunity to present evidence regarding what is commonly known and present argument as to why the patent should not be granted. The opponent can also reply to any evidence lodged by the patent applicant. This opportunity is not available in the earlier notice of matters affecting the validity of the patent.
If the patent is already granted, the scope of the claims, and hence of the monopoly rights, appears to have been settled. However, the validity of any patent is never completely certain. For example, the validity can be challenged before the Patent Office by lodging a request for re-examination of the patent, together with documents which show that the claimed invention is not novel or inventive. Like the abovementioned notice of matters affecting the validity of the patent, the re-examination procedure is restricted to a consideration of prior art documents (ie, not prior use) and to the grounds of novelty and inventive step.
Once the documents are lodged at the Patent Office, the person requesting re-examination has no further involvement in the process and the patentee deals only with a patent examiner. Amendments may be made to the patent in order to avoid complete invalidity; these may also be sufficient to avoid infringement.
It is also possible to seek revocation of a granted patent in the courts. The grounds available to challenge a patent are similar to those available in the pre-grant opposition procedure. However, a further ground is available – namely, that the patent (or an amendment) was obtained by fraud, false suggestion or misrepresentation.
In many cases, the most contentious ground of opposition or revocation is that of lack of inventive step. Assessing novelty is generally straightforward, since it requires (as in many jurisdictions) clear and unambiguous disclosure of the claimed invention in a single prior art document or prior use. Inventive step, on the other hand, is more difficult to assess, but is frequently the ground upon which substantial cases are won or lost.
The law of inventive step in Australia is widely considered to be more favourable to the applicant/patentee. In this regard, the High Court of Australia has recently reconfirmed that “a scintilla of inventiveness” is sufficient to sustain a patent, and the law presents a number of hurdles to any party seeking to invalidate a claim for lack of inventive step. In particular, it is necessary to ascertain
- the identity of the relevantly skilled person to establish (by evidence);
- the common general knowledge that might be ascribed to this person; and
- the relevance of any prior art documents or information relied upon in the analysis of inventiveness from the perspective of the skilled person.
These hurdles seem to have become more onerous in recent times, particularly in pre-grant opposition proceedings. This has prompted some commentators to suggest that it may be preferable to skip the opposition procedure altogether, wait until the patent is granted and seek revocation in the courts. While the Patent Office is not bound to follow the rules of evidence, opposition procedures are becoming considerably more rigorous and much more like court proceedings. Costs have increased accordingly and the gap between opposition and revocation is reducing.
A final option is to do nothing to challenge the validity of the patent/application proactively. Instead, you may proceed with the product launch and wait for a letter of demand to arrive on your desk. If infringement proceedings are commenced, you can apply to the court, by way of counterclaim, for the revocation of the patent. If this option is adopted, however, it is recommended that you start collecting prior art evidence immediately.