Monitoring compliance with patent rights

Monitoring by Australian patent holders

9.54 A patent holder’s ability to enforce its rights depends on its ability to obtain information about third parties’ activities that may infringe the claims of a patent. Such information may be obtained from a variety of sources, including in-house procedures established by a patent holder, patent offices, or private information services that monitor patent compliance. The mechanisms by which Australian patent holders may monitor and investigate potentially infringing activities are considered below.

9.55 Information and resources within a patent holder’s organisation are two means by which potential patent infringers may be detected. Employees of a patent holder may be in the best position to identify potential infringement by third parties because of their familiarity with the relevant area of technology, the identity of competitors, and competitors’ business activities.

9.56 ‘Patent watch’ services, which are generally provided by law firms or patent attorneys, may also be used. Patent watch services review notices in the Official Journals published by patent offices, as well as other computer databases covering patent and technical data, for information about inventions or patent filings that may infringe a patent holder’s rights. Searches may be restricted by subject matter (for example, to a particular genetic sequence or technology), or by organisation name (for example, a key competitor or a researcher who is known to be active in the field). The available material is, however, limited because these sources of information do not reveal patent applications that have not yet been published.^[98]

9.57 It is somewhat easier for patent holders to monitor the activities of third parties who have been authorised by them to use a patented genetic invention pursuant to a licence agreement. Mechanisms for monitoring a licensee’s compliance with the terms of a licence are typically stipulated in the agreement (see Chapter 22). A patent licence may include a requirement that a licensee submit periodic reports detailing product sales or—if research and development is still required in connection with licensed gene patents—describing progress during the reporting period. A patent holder may have the right to audit a licensee’s records relevant to activities covered by an agreement—for example, financial accounts and laboratory workbooks. These mechanisms allow a patent holder to assess whether a licensee is using the patent rights in accordance with the licence, or for other purposes that may amount to an infringement.

Monitoring by users of Australian gene patents

9.58 Individuals, research organisations and biotechnology companies may conduct prior art searches before embarking on a particular line of research, or commercialising any genetic material or technology, to ensure that their activities will not infringe existing patent rights.

9.59 Respondents to the Nicol–Nielsen Study indicated that conducting prior art searches is an onerous and expensive exercise, and is becoming increasingly more difficult as the gene patent landscape becomes more complex.^[99] The study found that prior art searches are commonly conducted by Australian biotechnology companies to ensure that research does not infringe third party patent rights. However, the research institutions and diagnostic facilities surveyed in the Nicol–Nielsen Study demonstrated less inclination to perform such searches.^[100] Prior art searches by such entities might occur only when a commercial application for the relevant research becomes apparent.^[101] Nicol and Nielsen concluded that ‘there is some desirability for finding ways of reducing the onerous demands of patent searching and tracking infringement’.^[102]

Patent information available from IP Australia

9.60 IP Australia makes information about granted patents and published patent applications available in the Official Journal of Patents (Official Journal); by way of searchable online databases on IP Australia’s website; and by subscription to CD–ROMs containing copies of patent applications and specifications.

9.61 Section 222 of the Patents Act provides for publication of the Official Journal by the Commissioner on a periodic basis. The Official Journal contains notices and other matters prescribed in the Patents Act and the Patent Regulations. The Official Journal reports all significant events and actions that occur in relation to each Australian patent, as well as general information and notices about amendments to Australian patent law or the Patent Cooperation Treaty (PCT), or to IP Australia’s practices. The Official Journal is available from IP Australia’s offices and is distributed on CD–ROM to libraries and other reference organisations throughout Australia. A supplement to the Official Journal—containing only information about patents included in the New Patent Solution System—is made available by IP Australia on its website. IP Australia intends to make the entire Official Journal available electronically in the future.

9.62 IP Australia also provides online access to a number of databases that contain information about Australian patents and patent applications.

• Patents mainframe bibliographic databases—Patent Administration System (PatAdmin) and Patent Indexing System (PatIndex)—provide bibliographic information about patent applications that have been filed up to 4 July 2002, including patent or application number, inventor and applicant, as well as current status of the patent or application.
• AU Published Patent Data Searching (APPS) contains Australian patent abstracts; that is, the first page of a patent application at the time of its publication.
• Patent Specifications Database contains complete copies of published Australian patent applications (other than Australian patent applications filed under the PCT).^[103]
• New Patent Solution System (now known as Patsearch)provides bibliographic information about patent applications filed from 5 July 2002, similar to the information available for patent applications filed before this date in the PatAdmin and PatIndex databases.

9.63 Currently, the databases on IP Australia’s website contain overlapping information and each database is limited in the information it contains. To conduct a patent search on IP Australia’s website, at least two databases (and frequently more) must be used, and the search results must be cross-referenced in order to cover all necessary information. The nature of a user’s needs will determine which of IP Australia’s databases must be accessed to obtain the relevant information. For example, if a user requires bibliographic information about a patent application, a search of both PatAdmin and Patsearch would be required to complete a search. However, if a user requires information on an invention claimed in a patent application, a search of APPS and certain of IP Australia’s CD–ROM products would be appropriate.^[104] This is time-consuming and may potentially produce misleading results, particularly for inexperienced users, or those with a limited understanding of the Australian patent system.

9.64 Online databases provided by patent offices in some other jurisdictions, such as the USPTO and EPO, are more user-friendly. Search functionality is concentrated in one area of their website, and searches may be conducted using a wide range of fields.^[105] Search results include both bibliographic information about the patent and a copy of the complete patent specification, or a patent application (if published).

9.65 IP Australia informed the ALRC that it is in the process of upgrading its online databases and facilitating links between its various databases. Patsearch is a new patent database developed by IP Australia, and operates in parallel to the PatAdmin system. IP Australia intends to ‘migrate relevant data from the PatAdmin into [Patsearch]’ and provide a single search portal for these databases. IP Australia is also continuing to improve the search functions of Patsearch to provide access to additional information that users may wish to obtain.^[106]

9.66 In addition, IP Australia is investigating ways to facilitate links between searches of bibliographic information about a patent or patent application with the relevant patent abstract or complete specification.^[107] For example, IP Australia is considering linking the results of searches in Patsearch with relevant abstracts stored in the APPS. It is also investigating the cost-effectiveness of providing full-text searching capability for Australian patent specifications.

9.67 In 2003, the ACIP Business Systems Report commented on the benefits of users being able to conduct keyword searches of patent abstracts and specifications contained in IP Australia’s online databases.^[108] ACIP recommended that IP Australia make the abstracts of all Australian patent applications and grants searchable by text and International Patent Classification number^[109] on the IP Australia website as soon as possible. ACIP also recommended that this should extend to full text searching of complete specifications at a later stage.^[110]

Information about patent proceedings

9.68 Currently, there is no centralised public source of information about litigation involving challenges to, or the enforcement of, Australian patent rights.^[111] Limited information about opposition proceedings is published in the Official Journal and is included in Patsearch for patent applications filed from 5 July 2002. Information about court proceedings involving a particular patent can be obtained only at the registry of the federal, state or territory court in which the proceedings were filed,^[112] or by searching judicial decisions on patent matters. This can be complex, time-consuming and costly. In addition, such a search will not always reveal pending patent proceedings, or those that have settled prior to a judgment being given.

9.69 Information about patent proceedings may be relevant to potential licensees of a patent, or entities that are alleged to have infringed a patent. These entities may wish to know if the relevant patent is the subject of legal proceedings, or its validity has previously been considered. This information may inform decisions by potential licensees and alleged infringers about the strength of the patent, and in the case of a potential licensee, assist in assessing the value of the licence.

9.70 Other jurisdictions have mechanisms to make information about patent proceedings more easily accessible. In the United States, courts are required to notify the Director of Patents when legal proceedings relating to a patent are filed and upon a decision or judgment being issued in any such proceedings.^[113] The notice must include the names and addresses of the parties, the name of the inventor and the number of the patents at issue in the proceedings. The information contained in the notices is included in the file of each patent held by the USPTO.

Submissions and consultations

Comprehensive database of patent information

9.71 DP 68 proposed that IP Australia develop and regularly update a searchable online database comprising patents and published patent applications. The ALRC contemplated that this database would provide user-friendly access and search capabilities on a wide variety of bases and that, if a fee is charged for use of the database, it would be kept at a level that does not unreasonably limit access.^[114]

9.72 The difficulty of obtaining information about gene patents and pending gene patent applications was identified as a problem during the course of the Inquiry.^[115] A large number of submissions supported the ALRC’s proposal to facilitate access to this information, including those from the healthcare, research, government and industry sectors.^[116]

9.73 A number of submissions and consultations stated that access to the proposed database should be free.^[117] The Centre for Law and Genetics commented that ‘any requirement to pay a fee would undermine the public disclosure component of the patent system’.^[118] Free access to online patent information would also be consistent with the practice of other major patent offices, such as the USPTO and the EPO.

9.74 Submissions supported the proposed database for a variety of reasons. The Caroline Chisholm Centre for Health Ethics commented that availability of patent information would ‘bolster confidence in the patent system’.^[119] Other submissions suggested that easy access to patent information would decrease the likelihood of third parties infringing patent rights and duplication of research effort in areas of genetic technology already protected by patent rights.^[120] Another submission commented that facilitating access to information about existing patent rights would assist processes for challenging patents.^[121]

9.75 However, some submissions indicated that, even if the proposed database facilitated access to information about Australian patents, appropriate professional advice should be obtained before filing for patent protection or seeking to enforce patent rights.^[122] In particular, IP Australia commented:

It is also important not to underestimate the complexity of searching and analysing IP data. No amount of user-friendliness of the database search tool can substitute for the significant skill that must be possessed by the searcher, especially in relation to infringement searches. Also, as Australian patents make up a very small proportion of patents worldwide, searches conducted to check the novelty of an invention must consider foreign databases as the primary source.^[123]

Information about patent proceedings

9.76 The Intellectual Property Research Institute of Australia (IPRIA) suggested that the Patents Act be amended to impose an obligation on Australian courts to report patent proceedings to IP Australia, based on the model provided by United States patent law. IPRIA considered that this information should include, at a minimum, the patent number and court file number for relevant proceedings. IPRIA noted that details of the parties to proceedings and how such proceedings are terminated (whether settled, withdrawn or the subject of a judgment) would also be useful. IPRIA submitted that IP Australia should include information contained in such notices in the comprehensive online database proposed by the ALRC.^[124] No other submissions addressed this issue.

ALRC’s views

9.77 The ALRC considers that IP Australia should develop a comprehensive database that incorporates, and centralises in a user-friendly format, the patents information already made available by IP Australia on its website.

9.78 Submissions and consultations indicated that information about Australian gene patents is not readily accessible and that this impedes the licensing and enforcement of gene patents. The ALRC considers that a comprehensive database of patent information, developed by IP Australia, could assist inventors, biotechnology companies and research organisations in conducting preliminary searches of existing Australian patents and published patent applications, which are an important part of any prior art search. Such a database could assist in identifying whether a particular activity or area of research involves intellectual property problems, or in refining the scope of a comprehensive prior art search.

9.79 Currently, patent information is provided by IP Australia in a number of overlapping databases. Developing a comprehensive database relating to all Australian patents and published patent applications would allow searches for patents and published patent applications claiming genetic materials and technologies, as well as all other types of inventions.

9.80 Some of the other difficulties that a user currently encounters in searching for patent information using IP Australia’s on-line databases may be addressed when improvements to Patsearch are completed. However, in its current form, Patsearch does not provide all of the information that a user might require when conducting a patent search. For example, access to full copies of patent specifications (for the purpose of obtaining information about claimed inventions) is available only from a separate database with limited search capability. Further, Patsearch only contains information about patents filed after 5 July 2002.

9.81 Much of the information that should be contained in any new patent database is already available to IP Australia, but would need to be compiled and centralised. In identifying the criteria by which such a database may be searched, the databases offered on the USPTO and EPO websites are worthwhile models. In the ALRC’s view, the ability to conduct searches of the patents database based on any of the following information would be useful: patent number and application serial number; inventor name; applicant name and assignee name; patent title; issue date; application date; specification details; patent classification; and registered encumbrances (for example, security interests and exclusive licenses). Many of these search criteria are available in Patsearch, which provides a valuable starting point.

9.82 The ALRC also believes that full-text searching of Australian patents and patent applications should be made available by IP Australia^[125] and encourages IP Australia to continue its investigations into how this facility may best be offered on its website.

9.83 Developing a comprehensive online database with full text search capability is likely to require considerable resources on the part of IP Australia. As noted above, submissions expressed concern about the potential effect of charging a fee for use of the database. The ALRC is of the opinion that accessibility of the information is a primary consideration and that, if IP Australia were to charge a fee to some or all users, the fee should be nominal.

9.84 The ALRC is also of the view that the proposed database should contain information about court proceedings concerning Australian patents. The Patents Act should be amended to require courts exercising jurisdiction under the Act to notify the Commissioner of Patents when legal proceedings to challenge or enforce a patent are commenced, and when a decision is given in any such proceeding. This information should be made readily available to the public, for example in the Official Journal and in the patents database on IP Australia’s website. Amendments should also be made to the Rules of Court of courts exercising jurisdiction under the Patents Act, where necessary, to give effect to this recommendation.^[126]

9.85 The ALRC recognises that the role of IP Australia is not, and should not be, to provide advice to prospective patent applicants about their ability to obtain patent protection, or to users of patent rights about freedom to operate in a particular field. It is important, therefore, that individuals and corporations obtain legal advice in appropriate cases about filing for patent protection, enforcing patent rights, or defending against allegations of infringement. Patent watch services and commercial databases containing patent and other prior art information are also available to assist patent holders and others in monitoring compliance with patent rights.