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01

DEC

2020

Pipers Bulletin 2020-11

  1. Patents

New Zealand

Small Differences from Prior Art Can Be Inventive

In Lonza NZ Limited v Koppers Performance Chemicals New Zealand 2020 NZIPOPAT 4 the Assistant Commissioner confirmed that close prior art is not sufficient for a finding of obviousness.

The decision concerns a divisional patent application of Lonza’s that was filed in February 2015 but which has an antedated complete specification filing date of 22nd June 2011, being the international filing date of the PCT application from which it derives, and so qualifies as a patent application under the Patents Act 1953.

The patent application relates to a fungicidal composition and methods for its use for glue-line treatment of wood products, where the composition contains the known fungicides triadimefon and cyproconazole as the active ingredients in a respective weight ratio limited to be within the range from 6:1 to 20:1. While the active ingredients are known fungicides novelty was asserted in respect of the synergistic effect of combining the active ingredients within the claimed ratios. The composition is formulated to be added to the glue shortly before it is used to glue wood products at the glue line in amounts that are not detrimental to the properties of the glue but continue to be fungicidally effective against a broad spectrum of fungi, and the synergistic effect assists in satisfying those constraints.

The PCT application from which it derives had a wider ratio of triadimefon to cyproconazole: namely a weight ratio limited to be within the range from 1:1 to 20:1. However, the application in question was limited to the 6:1 to 20:1 range on account of a prior patent (now in Lonza’s name) disclosing compositions where triadimefon is combined with cyproconazole in a molar ratio within the range from 5:1 to 1:3. Koppers alleged that Lonza’s patent application lacks novelty and is obvious in light of the earlier patent and the US application from which it derives.

The Assistant Commissioner noted that the difference between the weight ratios and molar ratios was negligible on account of triadimefon and cyproconazole having very similar molecular weights and that the prior art did not specifically teach application rates for the triadimefon cyproconazole combination. Koppers first argued that the difference between the prior art 5:1 ratio and the 6:1 ratio is mathematically trivial. However the Assistant Commissioner found that the existence of a mathematically trivial difference is irrelevant as the key question in applying the General Tire [1972] RPC 457 test for anticipation is whether the skilled person following the prior art would inevitably produce a composition within the claimed weight ratios. The Assistant Commissioner held that the skilled person would not diverge from the range stated in the prior art as they would want to obtain a composition with known fungicidal properties.

Koppers next argued that the only difference between the prior art and Lonza’s application is the ratio and that the closeness of the ratio ranges means that the application claims subject matter that is obvious. However, the Assistant Commissioner criticized this argument for not taking into account the differences between the tests for novelty and obviousness, stating that being nearly not novel in the sense that it is very close to the 5:1 ratio disclosed in the prior art does not imply that the claims are obvious because they are only not novel by a small degree. In contrast to the findings of the Delegate in the related Australian proceedings the Assistant Commissioner found that the application rates for the triadimefon cyproconazole combination is part of claimed monopoly and so constitutes another difference from the prior art.

However, even without that other difference, the Assistant Commissioner still found that obviousness was not established. Koppers had argued that there was no material difference between the 5:1 ratio and the 6:1 ratio as the PCT application disclosed no difference in synergy for those ratios. The Assistant Commissioner held that it didn’t follow from this that it would be obvious for the skilled person to investigate nearby ratios such as 6:1, especially as there was nothing presented regarding why the skilled person would be motivated to do so. Even if Koppers had established the obviousness of 6:1 Lonza could have amended without affecting its monopoly in its commercial product which has a ratio of 10:1.

Koppers further attempted to establish obviousness from the prior art in combination with their assertion that it was common knowledge for the person skilled in the art to test azole pair combinations for fungicidal effectiveness across a range of ratios from 20:1 to 1:20. Lonza sought to counter this with expert evidence to the effect that the increased synergistic effect as the ratios increased from 6:1 to 20:1 were unexpected. Koppers’ experts cast doubt on the statistical basis of that claim, but the Assistant Commissioner gave Lonza the benefit of the doubt (given that the 1953 Act applies). Nonetheless, irrespective of the asserted increased synergy, the Assistant Commissioner rejected Koppers’ common knowledge claim. Firstly, the Assistant Commissioner cast doubt on whether the experience of one of Koppers’ experts in testing a range of ratios was common practice or more akin to privileged and confidentially held company information. Secondly the expert had not been aware of the use of triadimefon as a wood preservative until close to the priority date and only gave an example of an azole-azole combination in a 1:1 ratio. Thirdly, the expert’s experience related to the fungicidal treatment of whole wood products rather than glue-line treatment and it was known that effectiveness in treating the former did not necessarily imply effectiveness in treating the latter. Instead the Assistant Commissioner accepted the evidence of other experts who stated that it was common knowledge for the person skilled in the art to test azole pair combinations for fungicidal effectiveness across a range of ratios from 3:1 to 1:3. The Assistant Commissioner also noted that it was known that cyproconazole is far more effective as a fungicide than triadimefon and so it would be counter-intuitive for the skilled person to think that further diluting cyproconazole with triadimefon would give improved results. Given these doubts the Assistant Commissioner held that obviousness had not been established.

PCT

Forthcoming PCT Fee Changes for Australia and New Zealand

Effective from 1st January 2021 the International Filing fees will change for Australia and New Zealand. The table below gives the changes in the equivalent amounts in AUD and NZD: (PCT Newsletter; 2020/11)

PCT Intl Filing Fees

Intl Filing Fee

Fee per sheet over 30

PCT-EASY Reduction

(Varies according to electronic format)

Current Fee (AUD)

2,043

23

307 – 461

Fee from 01/01/2021

2,023

23

304 – 456

Current Fee (NZD)

2,162

24

325 – 488

Fee from 01/01/2021

2,188

25

329 – 493

Effective from 1st January 2021 the NZD equivalent amount for an International Search carried out by IP Australia, the EPO, KIPO and the USPTO will change as indicated below. (PCT Newsletter; 2020/11)

ISA (Currency = NZD)

Intl Search Fee (Current)

Intl Search Fee (01/01/2021)

IP Australia

2,357

2,379

EPO

3,099

3,150

KIPO

1,594

1,561

USPTO (Large Entity)

3,220

3,283

USPTO (Small Entity)

1,610

1,642

USPTO (Micro Entity)

805

821

Effective from 1st January 2021 the Handling fee for an International Examination carried out by IP Australia, the EPO, KIPO and the USPTO will change as indicated below. (PCT Newsletter; 2020/11)

IPEA (Currency)

IPEA Handling Fee (Current)

IPEA Handling Fee (1/01/2021)

IP Australia (AUD)

307

304

EPO (EUR)

183

185

KIPO (KRW)

255,000

253,000

USPTO (USD)

217

218

  1. Designs

Europe

Public Review of EU Design Legislation Launched

Following a recent fit for purpose evaluation of EU legislation on design protection the European Commission is now seeking feedback on its proposed areas for change.

The evaluation considered the adequacy of both the Designs Directive – which harmonised some aspects of national Designs legislation within the EU – and the Community Designs Regulations – which provide for unitary design rights in respect of both registered and unregistered designs across the EU – and the interface between the two. Feedback is sought on the following matters by 22nd December 2020.

Protectable Subject Matter

  • further clarifying the ability of digital graphical user interfaces or icons as well as sets of articles and interior design to be protected as designs;.
  • whether dynamic movement designs should be protectable and whether the regime for filing multiple designs needs an overhaul.

Scope of Rights

  • further clarifying when design protection extends to articles manufactured by 3D printing;
  • whether the seizure of counterfeit goods should be extended to include goods in transit through the EU;
  • whether permissible uses of designs need extending to balance the rights of designers and design users;
  • whether the boundaries between copyright and design protection need clarifying.

Fees

  • whether fees at the various stages of a registered design need rebalancing;
  • whether to remove the fee for recording the transfer of a design application.

Further Harmonisation

  • whether further harmonisation of various procedural rules would be beneficial;
  • whether to further harmonise national laws on spare parts by including a repair clause in the Designs Directive so as to further liberalise the aftermarket.

  1. Trade Marks

New Zealand

Minimal Historical Evidence of Use Results in Shredded Specification

The recent Assistant Commissioner’s decision Nitro AG v Nitro Circus IP Holdings LP 2020 NZIPOTM 23 is the first non-use decision to take into account the Supreme Court’s recent decision in International Consolidated Business Pty Ltd v SC Johnson & Sons Ltd 2020 NZSC 110.

Nitro AG has three registrations for NITRO with broad specifications covering clothing including sports-clothing; footwear and headgear (class 25); skis and skiing equipment, snowboards; gymnastic and sporting articles not included in other classes excluding golf balls and other golf equipment (class 28). In consolidated revocation proceedings Nitro Circus sought to restrict Nitro AG to snowboard boots in class 25 and snowboards and snowboard bindings in class 28.

Nitro AG contested Nitro Circus’s status as an aggrieved person on the basis that Nitro AG’s marks are not the only NITRO marks blocking Nitro Circus’s applications for NITRO CIRCUS in classes 9, 12, 14, 16, 25, 28, 32, 38. However, the Assistant Commissioner readily dismissed that contention finding that it is sufficient for aggrieved person status that Nitro AG’s marks were cited against the NITRO CIRCUS applications and that it was not necessary for Nitro Circus to concurrently contest all the marks cited against its applications.

The pleadings and hearing for the case were made after the Court of Appeal decision and before the Supreme Court decision (summarised here) in the ZIPLOC ownership and non-use litigation between International Consolidated and SC Johnson. While the Court of Appeal had held that the date of entry onto the register is the only relevant date for determining ownership, given that the interpretation of section 68(2) was before the Supreme Court Nitro Circus also maintained its alternative revocation actions, which sought revocation to be back-dated to dates preceding their own applications. Consequently, Nitro AG had two sets of non-use periods to defend. The first set involved three-year periods one-month before Nitro Circus filed its revocation actions and the second set involved three-year periods ending the day before Nitro Circus filed its applications for NITRO CIRCUS. However, given that Nitro AG had not pled any special circumstances for its non-use, the subsequent Supreme Court decision made the first set of non-use periods irrelevant. The Supreme Court held that applications for registration can only precede applications for revocation of blocking marks either where a section 26 exception applies or where the revocation applications are back-dated to or before the date of application for registration.

Pleading the back-dated revocation dates further assisted Nitro Circus’s cause as Nitro AG had difficulty establishing use to the satisfaction of the Assistant Commissioner in respect of a wider range of snowboarding related goods in classes 25 and 28 for that earlier period. The back-dated three-year non-use period ended on 31st March 2015 for the class 25 registrations and on 8th April 2015 for the class 28 registration. Nitro AG was founded in 1989 and began supplying the New Zealand market via a distributor in mid-2014. Nitro AG did not supply a copy of the distribution agreement, but relied upon its brand featuring in New Zealand Snow Sports Industries Federation Inc. (NZSIF) publications and various NZSIF Snow Sports Trade Fairs. Given the back-dated revocation dates only the catalogue for the 2014 NZSIF Trade Fair qualified as evidence. This listed the NITRO brand in relation to the following products: Snowboards, Snowboard Boots, Snowboard Bindings, Clothing, Luggage / Travel Gear, and Accessories. Nitro AG also sought to rely upon its products featuring on the website of a New Zealand retailer, but was unable to satisfy the Assistant Commissioner that its products were on the website during the relevant period.

In relation to Nitro AG’s registration in relation to clothing, including sports clothing, the Assistant Commissioner held on the basis of the evidence that the specification should be limited to jackets and pants for snow sports.

In relation to Nitro AG’s class 28 registration in addition to its accepted use in relation to snowboards and snowboard bindings Nitro AG also sought protection for gear bags and gloves. The 2014 NZSIF Trade Fair catalogue listed luggage as a product for the NITRO brand and the product index lists NITRO as a brand under headings for Bags and Travel Gear. However, the Assistant Commissioner found those classifications to be too broad as they could have referred to bags in general which belong in class 18 and not to bags for snowboards which belong in class 28. In the absence of further evidence from the relevant period the request to include gear bags in the revised specification was refused. Similarly, Nitro AG’s assertion that the inclusion of the NITRO brand in the 2014 catalogue’s listing for accessories likely referred to gloves was not accepted by the Assistant Commissioner, who also noted that the distributor’s invoices from the relevant period did not specify any such accessories. Perhaps it would have been better to argue that gloves fell within the class 25 specification which included sports clothing. Gloves are an essential item of clothing for skiing or snowboarding rather than an ‘accessory’. In the explanatory note for class 28 in the 4th edition of the Nice Classification it states that sports clothing is in class 25. It was only from the 10th edition (2011) of the Nice Classification that ski gloves were specifically listed and classified under class 25. Nitro AG’s other class 25 registration in relation to footwear and headgear was limited to boots for snowboarding as again Nitro AG was found to have fallen short of discharging its onus of establishing, on the balance of probabilities, that there was genuine use on other goods.

This represents yet another non-use revocation decision in which the Assistant Commissioner rigidly applies the evidential standards showing that registered owners should be proactive in recording and retaining records of their (or their licensee’s) use of their marks. Had this decision issued before the Supreme Court’s decision it seems likely that Nitro AG would have been able to demonstrate use on a wider range of goods.

United Kingdom

Wholesalers Ability to Qualify as Average Consumers Confirmed

In Foundation for the Protection of the Traditional Cheese of Cyprus Named Halloumi v Babel Sajt Kft 2020 EWHC 2858 a UK Judge held that the Hearings Officer was wrong to hold that members of the trade do not qualify as average consumers for the purposes of evaluating the likelihood of confusion.

In 2000 the Foundation obtained an EU registration for HALLOUMI as a collective mark in respect of cheese and has sought to use that registration to prevent cheese producers who are not part of the Foundation from using or registering marks containing HALLOUMI in respect of cheese or cheese products. Use of the collective mark is governed by the Foundation’s regulations, which set out requirements as to composition and that production must take place in Cyprus.

In November 2018 Hungarian based Babel applied to register its Hajdu HALLOUMI device mark in the UK for identical and substantially similar goods and this was opposed by the Foundation. The Hearings Officer rejected the opposition finding that only members of the public and not members of the trade would qualify as average consumers and that such people would only recognise HALLOUMI as referring to a type of cheese. While acknowledging that a registered mark must be assumed to have some distinctiveness, the Hearings Officer found the distinctiveness of the Foundation’s mark to be inherently weak. On the evidence, the distinctiveness of the mark was also found not to have been enhanced through use as articles by the Foundation explaining that the cheese’s production is governed by rules occurred in trade publications rather than in publications aimed at the general public. In making a global assessment the Hearings Officer concluded that Babel’s mark did not create a likelihood of confusion given the finding that average consumers would only recognise HALLOUMI as referring to a type of cheese.

The Judge noted that like standard trade marks collective marks are also assessed for distinctiveness. However, the Judge also found that extra distinctiveness considerations arise for collective marks and that the Hearings Officer had not adequately taken that into account. Whereas a standard trade mark is used to differentiate an undertaking’s products or services from those of others in the same sectors of the market, a collective mark has both a differentiating function (members of the association from others) and can function as a secondary distinctive element within a mark of one of the members of the association. By failing to take account of that latter function the Hearings Officer failed to consider the possibility that the incorporation of the Foundation’s mark within Babel’s mark could deceive members of the public into believing that the mark is used by a member of the association.

The Judge also found error in the Hearings Officer’s finding that the average consumer would only recognise HALLOUMI as referring to a type of cheese. This was inconsistent with the acknowledgement that the mark must be assumed to have some distinctiveness on account of being registered, and effectively raises an absolute ground objection – which the presumption of distinctiveness precludes from opposition proceedings. Instead, the Judge considered that the Hearings Officer should have found that the average consumer would recognise HALLOUMI as referring to a type of cheese and that it is a product produced by a member of the Foundation.

Further, the Judge found error in the Hearing Officer’s finding that members of the trade do not qualify as an average consumer. The Hearings Officer justified the exclusion of members of the trade on the basis that the goods are of a type that would be purchased regularly and without the need for assistance from an intermediary. However, the Judge agreed with the Foundation’s contention that the Hearings Officer failed to give due regard to the voluminous and unchallenged evidence of the Foundation’s marketing and promotion material directed at the UK trade which highlighted that HALLOUMI is registered as an EU collective mark. The Judge found that this material should have led the Hearings Officer to conclude that trade consumers are a significant part of the relevant public and that they could be deceived into thinking that Babel’s mark is used as a member of the association, and so refused registration.

While the Foundation has been successful in this opposition, it is noteworthy that the HALLOUMI registration is currently the subject of a cancellation action by a non-Cypriot third party, presumably on the basis that it lacks distinctiveness or has become generic. In the event that the cancellation action prevails members of the association may instead have to rely upon the Cyprus Ministry of Energy, Commerce and Industry’s attempts to obtain certification trade marks. Notably, they have achieved certification trade mark registrations for HALLOUMI CERTIFICATION MARK in the United Kingdom and for HALLOUMI in the USA and are making a second attempt for HALLOUMI in Australia, but have not made an application in New Zealand. There are currently three registrations in New Zealand that contain the word HALLOUMI, all in the name of one New Zealand based proprietor. Somewhat surprisingly, one of those registrations is for a process chart for making halloumi.

United States of America

Effective from 2nd January 2021 the USPTO will increase fees across the majority of its operations as well as introducing new fees. The full notification of the changes can be found here. Some notable changes are:

USPTO Fees (USD)

Current

From 02/01/2021

Standard Electronic Application Using TEAS

$275 per class

$350 per class

Electronic Application Under TEAS-Plus

$225 per class

$250 per class

Additional Fee if TEAS-Plus Criteria Not Met

$125 per class

$100 per class

Filing Declaration of Use

$125 per class

$225 per class

Deleting Goods, Services or Classes before acceptance of filed Declaration of Use

$0

$250 per class

Petition to the Director Using TEAS

$100

$250

Petition to Revive Abandoned Application Using TEAS

$100

$150

Letter of Protest

$0

$50

Petition to Cancel or Notice of Opposition Using ESTTA

$400 per class

$600 per class

Request for Oral Hearing

$0

$500

About the Firm

Pipers IP
Address 1st Floor, Imagetext House, 3 Owens Road, Epsom, Auckland 1023, New Zealand
Tel 64-9-919 9450
Fax 64-9-919 9454
Email patents@piperpat.com
Link www.piperpat.com

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