However, differences exist between various jurisdictions and recent regulations and changes can have a significant impact on foreign applicants and their filing strategies. The following chapters describe the recent changes and implications for the application strategies in Europe, the United States, Australia and New Zealand. Chinese IP rights owners that have registered patents, designs and trademarks overseas must pay attention to all of these changes in order to increase the chances of success of their foreign applications.

I. Recent changes in Europe

The Europe of politics and the Europe of patents are not the same. On the one hand, there is the European Union (EU), a political and economic Union of currently twenty-seven member states. On the other hand, the European Patent Organization (EPO) grants patents under the European Patent Convention (EPC). The EPO currently has 38 member states but is an independent institution and not part of the EU. Presently, a patent granted under the EPC must be validated in each of the desired member states. To simplify this process there have long been efforts to create a unified entity and uniform procedure with the authority to grant and validate a patent with common legal rights throughout the entire EU. Quite recently, there has been a breakthrough in this regard.

Already in 2011, the Council of the EU authorised an enhanced cooperation in the area of the creation of unitary patent protection. The enhanced cooperation led to two regulations to create a Unitary Patent Protection (UPP) (Regulation (EU) No 1257/2012 of 17 December 2012 and Council Regulation (EU) No 1260/2012 of 17 December 2012) which entered into force on January 20th, 2013. Both regulations will apply from January 1st, 2014 or the date of entry into force of a further agreement, the so-called Agreement on a Unified Patent Court (UPC Agreement), whichever is the later. Actually, the UPC Agreement (Council of the EU, Document 16351/12 (PI 148, COUR 77) was signed in Brussels on February 19th, 2013 by 25 EU members (except Poland and Spain). It could possibly enter into force on January 1st, 2014, but the date will most likely be later, because 13 members including France, Germany and Great Britain must ratify the agreement first. Entry into force will require further amendments to the EU regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Regulation (EU) No 1215/2012).

Consequences for application drafting

The Unified Patent Court will be competent for both infringement and revocation actions. However, all such actions will be based on patents which are examined and granted by the EPO, i.e. patents which comply with the patentability requirements of the EPC. For the draftsman who intends to draft a patent application in compliance with the EPC, no additional challenges should occur. Of course some aspects remain similar to the current situation, such as the number of claims, second medical use claim format, original disclosure of feature combinations etc. remain highly important and should be taken into due account.

More changes triggered by the establishment of the UPC will probably be seen with respect to filing and application strategies. For example, where only a limited number of European states are of interest for patent protection, the unitary patent protection might not be necessary and actually too costly. In such a scenario, a Chinese applicant who originally filed an international (PCT) application may consider entering the relevant national phases only, instead of the European phase. However, where a patent grant under the EPC is sought, another question will be raised after the grant: whether the patent should become a unitary patent or whether it should be validated as a national part of the European patent in selected EPC member states. Additionally, for a transitional period of at least seven years (with possibility of an extension to a total of 14 years), a patent proprietor may opt-out from the exclusive competence of the UPC. There will thus be various strategic questions in the future, and also various answers.

II. Recent changes in the US

Each area of US intellectual property Laws ---- patents, trademarks, copyrights and even the federal courts ---- has, within the last decade, seen changes to the laws that govern their practice and enforcement. Most changes are the result of the rise of e-commerce and the Internet, which has fundamentally changed the course of business in the US and worldwide, and harmonization with the laws of sister IP systems.

The US Patent and Trademark Office (USPTO) is a unified patent and trademark office covering the 50 states of the US as well as the territorial holdings of the US (Puerto Rico, Guam, the Solomon Islands, etc.). The laws for the patent and trademark system are exclusively the purview of the Federal Government.

US trademarks have become almost exclusively an online fluid system of registration and renewal as a result of changes in e-commerce. The onset of the Internet era changed many aspects of trademark law, making the use and protection of brands of more vital importance. A US trademark registration has benefits that exceed anything that can be secured with a state or territorial registration:

• Public notice of the claim of ownership of the mark;
• A legal presumption of the ownership of the mark and the exclusive right to use the mark nationwide or in connection with the goods/services listed in the registration;
• Ability to bring an action concerning the mark in federal court;
• The use of the US registration as a basis to obtain registration in foreign countries;
• Ability to record the US registration with the US Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods;
• Right to use the federal registration symbol®; and
• Listing in USPTO’s online databases.

Also the US patent system has seen major changes recently. US patents are divided into three major categories: utility, design and plant patents. Utility patents cover the functional aspects of inventions and, even though somewhat limited by court decisions in recent years, the scope and variety of matters still covered by US patent protection is among the widest in the world. If the invention uses a machine or transforms matter, it may be patentable. Design patents have a broad scope covering the ornamental aspects of an object, whilst plant patents cover plants created by asexual reproduction.

Copyrights cover any act of authorship, including writings, music, visual arts, architectural works, sculpture, etc. The copyright system in the US is a registration system that has slowly changed to the realities of the digital era. Registration of copyrights is not necessary in the US to preserve the rights in a copyright, but gives extraordinary protection and increased damages, for which in the case of statutory damages, actual valuation of the harm is not necessary.

All patent, trademark and copyright matters are litigated almost exclusively in the Federal court system. The federal courts, as in any aspect of US federal law, interpret the meaning of the laws such that even though US law is codified, the meaning of the law is fluid and can be interpreted in different ways depending on the facts and present situation. Trials for patent matters are typically held in the District courts of the US and appeals are brought to the US Court of Appeals for the Federal Circuit, with final appeals being heard in the US Supreme Court. The trial system has been criticized for the expense of a lawsuit due mostly to discovery; this area has recently seen changes as a result of electronic discovery in light of e-mails, texts and other communications means.

As noted above, the most recent changes in IP practice are directed to the patent system which has dramatically changed as a result of the passage and now full implementation of the America Invents Act.

Overview of changes to US patent law

The Leahy-Smith America Invents Act (AIA), also known as the America Invents Act (P.L. 112-29), was ratified on September 16th, 2011 and has now become fully implemented into law in the United States. Key points and provisions of the AIA include:

• Transitioning the US to a first-to-file system. The US now gives preference to the first inventor to file; but will still allow challenges to determine if the first filer was an inventor.
• Providing an enhanced grace period for inventors to safeguard patent rights against disclosures made by inventors one year or less before the effective filing date, which allows inventors to engage in crucial negotiations with potential buyers or investors without fear of losing their right to a patent. The US will maintain the one year grace period for inventors to file after disclosure; changes in what is and what is not prior art will also aid inventors who disclose.
• Consistent with international norms, the definition of prior art now includes non-printed disclosures, including oral disclosures, made available to the public anywhere in the world. This brings the US more in line with the reality of what prior art is, but also makes patents more vulnerable to challenge via non-published and non-written disclosure.
• Providing prior art effect to US patent applications as of their foreign priority dates. In the past the law indicated that the application had prior art effect upon publication in the US.
• Eliminating the requirement for inventors to set forth the best mode to carry out the invention as a defense in infringement actions or in post-grant review. It is advisable to provide a best mode as it is believed that the courts will still look to what protection is provided if the best mode is not disclosed.
• Providing a 75% discount for patent fees to all applicants that qualify as micro entities. Qualifying for this standard may be difficult to prove and will require documentation.

The above is based on the USPTO interpretation of the scope of changes to the US patent laws. As noted, the federal court system will at some point interpret the laws in light of the factual system presented and that will give practitioners a clearer meaning of the scope of the changes and the strength of US patents thereafter.

III. Recent changes in Australia and New Zealand

Developments in the Australia/New Zealand region focus on recent changes that came into effect in Australia on April 15th 2013 through the Intellectual Property Laws Amendment (Raising the
Bar) Act 2012, and changes likely to soon come into effect in New Zealand through the Patents Bill 2008.

Changes to Australian Patent Law

There are many amendments that have been introduced by the “Raising the Bar” Bill, but the following may be of particular interest to foreign applicants. There has been a removal of the territorial limitation for common general knowledge (currently Australia only), thereby “raising the bar” with respect to the inventive step. In terms of “usefulness,” the specification is now required to disclose a “specific, substantial and credible” use for the invention - more of a US-style requirement. Also, under a new sufficiency requirement (based on EP/UK provisions), the specification must disclose the invention in a way that is “clear enough and complete enough for the invention to be performed by a person skilled in the art.” Further, the “fair basis” requirement has been replaced with a new “support for the specification” requirement.

In addition to patentability standards, other procedural changes now require that a request for examination be filed within 2 months (previously 6 months) of receiving a direction to request examination. Also, acceptance is to be obtained within 12 months (previously 21 months) from the date of the first examination report. A further significant change now requires a notice of entitlement to be lodged at the time of requesting examination - previously any time before acceptance.

Changes to Australian trademark law

A major change relates to an amended section 41 regarding the presumption of registrability during examination. In short, where the Registrar is uncertain whether a trademark is capable of being distinguished, the presumption of registrability should apply.

Other significant changes centre on trademark opposition procedures and enforcement. While the changes relating to opposition are intended to make the process quicker, the enforcement changes are intended to strengthen the enforcement of rights. The opposition period has been reduced from 3 to 2 months from the date of advertisement. In addition, extensions of time for all actions under this new opposition procedure have been tightened. In summary, extensions of time will be more difficult to obtain as the threshold requirements are now stricter. Most importantly, the period of the extension granted will now be at the Registrar’s discretion and be based on what the Registrar considers appropriate.

Proposed Changes in New Zealand Patent and Trademark Law

The 2008 New Zealand Patents Bill, following its second reading in Parliament, is now likely to come into effect in 2013. Among the major changes will be the move to the absolute novelty standard (rather than the local novelty standard which is currently used), and examination to cover grounds for inventive step and utility in addition to novelty.

One of the earlier stumbling blocks to this Bill was the treatment of software patents. It is now likely that New Zealand will implement a system substantially based on UK (and European) law regarding the computer program exclusion. It is intended to contain a computer software exclusion provision referring to “computer software as such.” This provides a narrower exclusion than previously proposed, and will enable a significant degree of patent protection for the application of software in devices.

In the context of computer programs and business methods, and reverting back to Australia, a recent decision in Research Affiliates LLC v. Commissioner of Patents [2013] FCA 71, upheld a refusal by the Australian Patent Office to grant a patent on a computer implemented invention.

The Court held for a computer implemented invention to be patented, a “physical effect” is required. Further, it concluded that such physical effect must involve something more than just using a computer to generate such information. The applicant has filed an application for leave to appeal this decision to the Full Federal Court. Progress of this decision through the appeal process is eagerly awaited to establish clear principles in Australia on business method patents.

A key “trademark” event was New Zealand acceding to the Madrid Protocol in December 2012. As Australia is also a member, this now enables foreign applicants to consider Australia and New Zealand more of a “single market” when developing trademark filing strategies.

Conclusions

With the likely establishment of a Unified Patent Court in Europe and the possibility to obtain patents granted under the EPC with unitary effect in several EU member states, applicants will have further opportunities to tailor their protective rights according to their needs. At the same time, it will become vital to develop a sound drafting and filing strategy. Access to legal expertise covering the centralized as well as the decentralized European patent application and litigation procedures is a critical aspect.

As concerns the United States, while much of the IP regulations have undergone significant changes in the past few years, it is fundamentally the same and protection in the United States for varied types of intellectual property, will still remain a good investment. The US is one of the largest markets in the world for goods and services and the protection of IP rights remains an important goal.

Whilst Australia and New Zealand are, in most respects, very similar, they currently have relatively independent patent laws and practices. Under an agreement, both countries are working towards a “Single Application Process” which is intended to enable single online filing of patent applications for the same invention in both countries. However, this will still result in two separate applications, not a single “cross-country” application. Another aim is for a single examiner to examine the two applications concurrently to reduce duplication, but before such an examination system is introduced, the Patents Bill which updates New Zealand patent law and practice will need to be passed.

It is therefore expected that law firms like Dennemeyer & Associates, which employ patent attorneys from various jurisdictions in Europe, United States, Asia and Australia/New Zealand and have over 10 offices worldwide, will be the first choice for foreign patent filers and patent proprietors when it comes to international filings and other issues pertaining to intellectual asset management. We at Dennemeyer & Associates are ready to provide comprehensive legal advice and support in this field. Our attorneys are well practiced and continue to update skills to remain abreast with the changes in international IP laws, particularly in key jurisdictions.