first-instance judgment in the Australian part of the global Lipitor patent dispute was handed down earlier today (20
December 2006). Click here to go to the judgment.

In essence,
as in many other countries, Ranbaxy challenged only the construction (and
therefore infringement) of the Basic patent, and lost.

though, having dropped the novelty and inventive step arguments at trial,
Ranbaxy still managed to invalidate the Enantiomer
patent based on two grounds which are rarely successful: False Suggestion and
lack of Utility.

Ranbaxy did
not convince the Court that the patent was invalid on another unusual ground
(which is peculiar to Australia)
— lack of Manner of Manufacture for failure to meet the threshold
requirement of disclosing an invention.
However, Young J took up the opportunity to provide further guidance
on this complicated lacuna of Australian patent law.

This case
highlights the importance of really digging into the specification and the
surrounding factual matrix when seeking to challenge a patent. As quoted (from Jim Hurst) in my recent article, Global Litigation Strategy and the art of war,
“the best ideas often come late at night and only after tearing apart
the patent and the prior art on literally a line-by line basis”.

developments have also recently occurred in the UK
and Canada
– click here for
the latest version of the Scorecard™ for the global Lipitor
patent dispute.


The Basic patent
(AU 601981)

As in other
jurisdictions, the Court held that the Basic patent is not confined to racemic mixtures, but instead include the R-trans enantiomer and the S-trans enantiomer. In essence, this was because the skilled
addressee would have read the depiction of the Atorvastatin (Lipitor) molecule as including
either the Racemate or any one of the enantiomers. Young
J referred to several portions of the specification to support this

The Enantiomer patent (AU 628198)

False Suggestion or Misrepresentation

argued that Pfizer had made false representations in the patent specification
and in correspondence with the Australian Patent Office which materially
contributed to the Commissioner’s decision to grant the patent. In essence, the representations were that
the level of activity of the R-trans enantiomer was
ten times greater than the racemate. Whereas, the actual level was only two
times greater. The Court agreed that
the claims were invalid based on False Suggestion or Misrepresentation.

Lack of Utility

argued that the representations in the patent about a tenfold increase in
activity of the R enantiomer were a promise which
was not met by compounds falling within the claims (which only generate a
twofold increase). In finding the
claims invalid on this ground, the Court also took the opportunity to correct
a line of argument by Pfizer which misconstrued the test for Utility. (They had argued in parallel that the R enantiomer of Atorvastatin is
commercially useful. However, the test
is whether the invention meets the promise of the specification.)

Manner of manufacture

line of argument cantered through the transitional provisions of the 1990 Act
(the ‘198 patent was filed under the earlier, 1952 Act), and several
famous and famously confusing appellate decisions (Philips, Ramset, Microcell, NRDC and Merck & Co). Pfizer had argued that Ranbaxy’s line
of attack was foreclosed by the decision in Ramset Fasteners. The
Court disagreed, citing another High Court case, Philips v Mirabella as being directly on point and drew support
from the other cases.

this minor victory, Ranbaxy failed to convince the Court that the Enantiomer patent was in fact invalid on this ground.


the length of the judgment (134 pages), Young J managed to hand down his
judgment in less than 8 weeks after the end of the trial.

As noted in
my previous article (Value for money in global patent litigation), judgments
in Australian patent cases have historically been handed down 33 months after
trial, on average.

one’s succinct but very important for those interested in the interplay
between IP strategy and government regulatory control or pharmaceuticals in
the USA.

The broad
take-home is — if government regulatory control is relevant to your
industry, then think long and hard about how it enhances or detracts from
access to the market by you and your competitors. Then think again, strategically.

The US
pharmaceutical strategy take-home is – a ‘first filer’ generic
pharmaceutical company will not lose its 180 day marketing exclusivity merely
because the relevant Orange Book patents have since been delisted. The Appeals Court ruled that
notwithstanding that the patents had subsequently been delisted, the
‘first filer’ generic company would still be entitled to its
exclusivity provided that one of the two trigger situations were met
(litigation success or commercial launch).


If someone
tells you that you can’t launch a product because they have a patent
(or use a brand because they have a trade mark) — do you apologise and
quietly walk away? (If you do, then
probably best not to bother reading anything else I write.)

No, you
check the patent or trade mark, the scope of the monopoly, its validity, etc
etc (see the 6T’s framework here).

The same
line of thinking applies to control imposed by regulatory authorities. To really enhance your IP Strategy, think
about how you can make the most of these controls. Then, as Ranbaxy and Teva did in this case,
think again about whether the regulatory authority is acting within the power
delegated to it.


In my
earlier article, Pharmaceutical
IP Strategy in the US – Merck’s latest tactic for Zocor
, I explained how
in 2003, Merck had requested that the Orange Book patents listed in relation
Zocor be delisted. Due to the FDA
policy in dealing with this situation, Merck’s controversial tactic
effectively removed the chance of generic exclusivity. I also wrote briefly about the background
in Zocor
Generic Exclusivity dispute continues on appeal in the US

For those
outside the pharmaceutical industry, the upshot of this case is that the FDA
received a slap on the wrist (and two losses in Court) for applying a policy
inconsistent with the governing legislation, and innovator companies can no
longer use this tactic in the ongoing chess-game being played against generic


Article and further links (including a copy of the
judgment) at Aaron Barkoff’s Orange Book blog.

In my earlier article ‘Analysing IP — put simply’, I introduced the ‘6T’™ framework for analysing IP issues. This article uses the same framework to show you how to simply structure an IP due diligence.

Just to remind you, here are the 6 T’s that form the framework:

  1. Type of IP
  2. Time (until expiry)
  3. Territories (in which IP is held/registered)
  4. Terminated (ie the status of the IP)
  5. Technical Scope of the monopoly
  6. True monopoly? (validity)


IP Due diligence may be done for a wide variety of reasons. For the sake of this article, let’s assume that it is part of an analysis of a potential M&A acquisition or in-licensing deal.

As I said in my earlier article, this is a simple tool and there are many, jurisdiction-specific complexities. It is meant to trigger a useful line of questions and is not the ‘last word’ in any jurisdiction on the applicable law.

Preliminary point

Once you understand the value-drivers for the deal, you can then go about assessing the extent to which the IP position supports or detracts from them and refine your deal strategy.

Type of IP

Firstly, understand which types of IP might underpin the various value drivers in the proposed deal so that you can focus on them.

I was recently asked to work through an IP strategy discussion with a reasonably well-known publicly listed company. A senior executive mentioned in passing that recent acquisition targets were asking for a premium for their ‘brand’ in proposed deals. On further discussion, it became apparent that trade mark protection was scant or non-existent in these targets. While this company went on to take up some of those opportunities, they paid only for the common law rights to the brands, and at a serious discount to the figure that would have been paid if trade marks were offered as part of the deal.

Time until expiry

This is pretty simple. IP rights are all about monopolies and some IP rights have a set term — ie Patents, Designs and Copyight. So, clearly the older one of these rights is, the less valuable it is to you.

Trade marks live forever (provided that you keep paying renewals — more on this later). Confidential information is a tough one — it theoretically doesn’t expire, but most confidentiality clauses have time limits (often imposed by local case law). So you should pay careful attention to all non-disclosure agreements and their clauses if confidential information is a substantial value-driver in your deal. (Unfortunately, of course, it is what you’re not told that is most damaging here.)


If the target doesn’t have the relevant IP rights in one of your countries of interest, then there’s no need to pay for them. This is a simple thing to check, which will save e a lot of money or change the course of the negotiation. You may find that there’s no need for a deal at all.

Termination (status of the IP)

If relevant IP rights supporting the value proposition exist in the right countries and with sufficient remaining term, then check that all renewals are paid and up to date. If the IP rights have irretrievably lapsed, then, to be blunt, they are worthless.

As I mentioned in my earlier article, status information needs to be dealt with carefully, and in most countries, may take a while before lapse becomes irretrievable.

Technical Scope

So, your target is telling you that they have 15 patent applications, 4 granted patents and a couple of trade marks relating to the product of interest. But, it will all be useless if the technical scope is insufficiently broad (or worse, misdirected).

By ‘misdirected’, I mean the situation where the claims of the relevant patent don’t cover the product you’re acquiring / licensing. Notwithstanding the premium you paid for the patents rights, your competitors will be free to produce exact copies.

By ‘insufficiently broad’, I mean that while the claims cover the product of interest, they are easy to avoid with simple work-arounds so that your competitors can readily compete using a non-infringing product. The same applies to trade marks if for example you have to rely on goods or services being related because the specification of goods and services were drafted too narrowly, or your mark includes an unnecessary limiting aspect (such as a visual device) which narrows its scope.

True monopoly (validity of the IP Right)

To be sure, a broader technical scope is a double-edged sword as along with the increased monopoly comes a greater risk of invalidation. Again, you might find that an IP right performs perfectly on the first 5 T’s, but it will again be worthless if it is in fact invalid.

I realise that most due diligence exercises won’t (and shouldn’t) allow for a full validity assessment, but there are a number of simple things that you can do to at least form a preliminary view about this.

Please use the link to the oxford site to view this article

The ultimate goal in a global IP dispute is
rarely to fight and win every case in every
country in the world. This is usually a waste
of time and money. Instead, the goal is to
use the situation to obtain the best
commercial result � better than before the
dispute arose. As Sun Tzu said in The Art of
War: “For, to win one hundred victories in
one hundred battles is not the acme of skill.
To subdue the enemy without fighting is the
supreme excellence.”

All manner of opportunities arise in the
context of a potential IP dispute. The following
five step approach is designed to put you in
the best possible position to identify and
seize these opportunities and, if necessary,
to go out there and win the litigation as well.

In a global IP dispute, two critical factors
will play a large part in determining your
fate: choosing and coordinating the
jurisdiction(s) in which you litigate and the
outside counsel you use in each country.

Assuming that your strategy dictates
litigation in a particular country, and you
have chosen your advocate, then the next
three steps to checkmate are: relentlessly
seeking and analysing the facts; devising
and implementing a consistent strategy; and
making sure the team runs smoothly.

To make this article more interesting for
you, I asked IP litigators from nine
jurisdictions the following question: “In your
experience, what is the single most important
thing for your clients to focus on to maximise
their chances of winning a major IP case?”
The answers reinforce the suggested
approach and provide some interesting
additional insights.

Where and when to litigate

If you have the choice, then clearly you
should litigate where you will obtain the
greatest strategic advantage. Where is that?
Well, it depends on your situation. The takehome
message here is that the better you
understand the options available in various
jurisdictions, then the better you can make
the most of them.

Here are some examples of factors to
consider in designing your strategy � as you
can see, they must be combined into a
single, coherent strategy based on your
particular circumstances.

Local procedural rules may act in your
favour. For example, for years IP owners had
been commencing proceedings in the courts
of the Netherlands because of the courts’
willingness to grant cross-border injunctions
across Europe (this practice is now in serious
doubt, although it has not been specifically
ruled invalid under the present Brussels
regime by the European Court of Justice).

Similarly, if you are seeking to enforce a
patent, you may wish to take advantage of
the split systems in China or Germany which
(usually) require separate courts to hear
cases relating to infringement and validity.
Such a system removes invalidity of the IP
right as a defence in the infringement
proceedings. So you can usually obtain a
fast result on infringement, and subsequent
remedies, such as injunctions. Of course,
the defendant is still able to challenge
validity and, if successful, have a finding of
infringement become useless at a later date.
This does not detract from many of the
strategic advantages of having a fast
infringement result, however.

You may want to make the biggest
impact where the greatest commercial effect
will be evident (either to seek an injunction
against an infringer or to get the attention of
the IP right owner). Clearly, this is dictated by
standard commercial factors such as the
market size in various countries.

If you are a relatively small player, you
may first wish to seek the most cost effective
litigation result. Consequently, you may elect
to follow the administrative tribunal route in
China, which will also return an enforceable
decision in three to six months.

On the subject of cost, the concept of
litigation efficiency (LE) helps in the
comparison of relative costs of litigation
between jurisdictions. LE is the market size
divided by the average cost of running a full IP
case in that jurisdiction. A larger LE means
that you buy more market dollars for every
dollar you spend on litigation. Note that the LE
in a particular jurisdiction will be different for
different types of IP litigation and should be
compared on this basis. Due to its relatively
large size and relatively low cost, France has
an attractively high LE. Consequently, it may
be most cost effective to commence
proceedings here for a relatively inexpensive
litigation in a relatively large market. Japan
(because of the enormous size of its market)
and Germany (due to relatively low cost) also
have high LEs.

If your strategy dictates that speed is of
the essence, you may elect fast-track
litigation in the Netherlands (10 months) or
the United Kingdom (10 to 15 months).
Alternatively, if your case is quite technical,
you may choose to go with one of the
specialist IP courts which are now available
in an increasing number of jurisdictions. For
example, Germany, the Netherlands, the
United Kingdom, China and Japan (the United
States Court of Appeals for the Federal
Circuit is also specialised in IP matters).

Selecting outside counsel

Selecting outside counsel is really a topic for
another day. But here are a couple of
important points to consider. Make sure that
the outside legal team will work well with you
and your internal people (more on this later).
If there are any doubts about this, then fix it
immediately. Otherwise, you will dramatically
compromise your case.

The person who will lead the
presentation of the case in court (the
advocate) must have a proven track record.
Ask for that proof. A list of cases argued,
both won and lost, is a good start. In some
countries, there are advocates who are
separate from law firms and do nothing else
(eg, barristers in the United Kingdom and
Australia). Barristers are instructed by
external legal counsel � make sure you have
a direct line of sight to them and that you
are confident in them.

Get the facts right, right?

Relentlessly pursue the facts, understand
them better than anyone and be prepared to
explain them simply in a consistent theme to
the judge or jury. This includes unremittingly
seeking evidence first from your own
organisation and, later, from your opponent;
and identifying and retaining the finest
experts, and working closely with them to
prepare the best evidence. As Jim Hurst
from the Chicago office of Winston & Strawn
says, winning requires “exhaustive
investigation, analysis, and preparation”.

The paper trail

Gathering documents and evidence is a
critical part of the forensic exercise. This is
particularly important in jurisdictions which
do not have court-ordered discovery (or
disclosure). Marina Couste and Florent
Guilbot from the Paris office of Howrey LLP
explain that conserving and gathering
documents prior to litigation is the most
critical thing to focus on in France. Stan
Abrams from the Beijing office of Lehman,
Lee & Xu said the same thing about Chinese
IP litigation. While it is now possible to
obtain court-ordered preservation and
collection of evidence in China, it is still
relatively difficult compared to other
jurisdictions, and in Stan’s words, proper
documentation will “make or break” an IP
case in China.

A solid foundation

As the facts come together, you need to
confirm that you are on solid footing. So, the
exhaustive analysis must include a thorough
investigation of infringement and validity
issues as early as possible. The analysis
should be continually reworked as more facts
come to light. Paul Steinhauser and Otto
Swens from Steinhauser Hoogenraad in the
Netherlands recommend a thorough validity
analysis before taking any (legal) action
against the adversary and in all situations,
regardless of whether the client is the owner
of the IP right or the alleged infringer. They
suggest that validity searching should not
only cover the industry in which the client is
active, but also related industries.

Expert testimony will make or break
your case

In some jurisdictions, the parties are
permitted to submit evidence from suitable
experts in support of their case. Such
experts are usually extensively crossexamined
so the choice of expert is critical.
Most readers will have seen cases won or
lost by expert testimony and clearly their
importance should not be underestimated.
Simon Cohen and Nigel Stoate from the
London office of Taylor Wessing commented
that careful selection of an expert will
undoubtedly change the course and outcome
of the litigation. This sentiment is echoed by
Paula Bremner from Hitchman Sprigings in
Canada who also strongly recommends
retaining experts as early as possible so that
they can assist in developing the strategy.
However, in some jurisdictions, such as
Australia, there can be severe strategic
disadvantages to opening communications
with experts, so be wary about direct
involvement by experts in strategy.

A consistent strategy

Once you have a good handle on the facts
(actually, you probably will not fully
understand them until after the trial), then it
is time to rework your strategy into a single,
consistent theme. As Koichi Tsujii from
Nakamura & Partners in Tokyo says: “One
must set up a consistent and convincing
strategy, and file briefs and exhibits in line
[with it] from the beginning to the end.” Jim
Hurst’s comments add further colour to this:
“The best ideas often come late at night and
only after tearing apart the patent and the
prior art on literally a line-by-line basis. The
best litigators then build that case-breaking
idea into a simple and understandable theme
for the entire case …”

Knowing the facts is one thing, being able
to cogently explain them is entirely another.
As Scott Blackman from the Washington DC
office of Winston & Strawn suggests, you
must know the fact issues so well that you
can comprehensively explain them to the
judge (and/or jury) in terms that make sense
to them and educate them as necessary.

As mentioned above, a critical
component of this is your choice of
advocate. The best advocates readily
synthesize many complex facts and legal
issues and weave them into a simple story.
If you are lining up for a major IP case, then
why not put your top two or three choice
advocates to the test? Give them a
complicated document � be it a technical
document for a patent case, or a marketing
or other document for a brand, trademark or
copyright case � and 24 hours to digest it.
Watch them explain it to someone from your
organisation who does not have the relevant
subject matter background. How well did
they get the information across?

It’s a team effort

As we all know, IP litigation is expensive, not
only in legal fees, but also in terms of drain
on resources. Consequently, handsome
rewards await those who ensure that the
team of people from within and outside the
organisation is operating effectively.

Christoph de Coster from the Munich
office of Taylor Wessing says that building an
effective team is crucial for success in
Germany. Christoph gives the example of
patent litigation, which in Germany is
handled by a team of lawyers specialised in
patent litigation, who take care of procedural
matters, and patent attorneys (from a
separate firm) who prepare the technical
aspects of argument for the court. Ideally,
the lawyer(s) and patent attorney(s) will have
an excellent working relationship and be
used to working together on the overall
strategy for the case.

Robert Cooper from the Melbourne office
of Mallesons Stephen Jaques agrees that
creating and maintaining an effective team is
critical. Robert emphasises the importance
of excellent communication between client
and litigators to deal effectively with critical
strategic decisions as they arise.

Intellectual Property Laws Amendment Bill (2006) was passed by the Upper
House of the Australian Federal Parliament on 14 September 2006.

The major
amendments are:

Exemplary damages for patent
infringement based on the behaviour of the infringer (or any other related

Broader non-infringement rights to
prior secret users of an invention;

A Bolar-type provision —
allowing ‘any patent’ springboarding;

Grant of a compulsory license to a
patent as a remedy for anti-competitive behaviour; and

Wider powers for the Registrar to
revoke Trade Marks after acceptance or after registration.


The newly
passed Bill is 45 pages long and makes many amendments to the intellectual
property legislation relating to Patents, Trade Marks, Registered Designs and
Plant Breeders Rights in Australia. Links to copies of the Bill and
Explanatory Memorandum can be found in my earlier article ‘Spring-boarding
to catch up with the rest of the world’.

following table provides a summary of the most important changes. (The changes to the Designs and Plant
Breeders Rights deal only with formalities and are not included.)


New Section


s 122(1A)

for exemplary damages for patent infringement in relation to:

flagrant infringement;

(b) the
need to deter similar infringements;

(c) the
conduct of the infringing party after infringement or after being informed
of the allegation of infringement;

(d) the
benefit accrued to the infringing party; and

(e) any
other relevant matter.

damages may be sought in relation to any infringement which occurs after
this section comes into force. So,
it will not apply to currently pending court proceedings unless further
acts of infringement occur.

s 119

of the exemption to patent infringement for prior secret use of an
invention by a third party. (Prior
public use does not require the exemption as it would destroy validity.)

other things, the section extends the prior user right to all acts of
exploitation, (not just those which had been undertaken prior to the
priority date of the patent). It
also allows transfer of the prior user right to another.

exemption will only apply to patents granted after the section comes into

s 119A

A Bolar-type

section which is long-awaited by generic drug manufacturers, provides an
exemption from infringement of a ‘pharmaceutical patent’ if the
acts done are solely for obtaining regulatory approval in Australia or elsewhere. (A ‘pharmaceutical patent’ is
defined as one which claims a pharmaceutical substance or a method, use or
product relating to one).

While the
exemption applies to export for Australian regulatory purposes, it does not
apply to export of goods from Australia, unless the term of the patent has
been extended and the goods contain a pharmaceutical substance per se (or produced by a process
that involves the use of a recombinant DNA technology).

springboarding was only allowed in relation to patents which had been

s 133

s 134

s 136A

of Australian competition law in connection with the patent as a ground for
grant of a compulsory license.
Specifically relates to contraventions of Part IV of the Trade Practices Act (restrictive trade practices).

applies to any conduct which occurs after commencement of these sections.


that the claims of Innovation Patents must define the invention. (The same requirement applies to Standard

s 79C

timing for making a divisional application for an innovation patent.

Trade Marks

New Section


s 38(1)

Registrar of Trade Marks now has the power to revoke acceptance of a Trade
Mark prior to registration.

s 84A-D

After giving
the trade mark owner and other interested parties sufficient notice, the
Registrar of Trade Marks may revoke a Trade Mark after registration. Grounds for revocation under this section
are quite broad, and include merely that it is reasonable to do so, taking
account of all the circumstances.

s 173(2)

s 175(2)

process for certification trade marks (CTM — a trade mark used to
distinguish goods or services which have met specified certification

s 217A

s 226A

a regime for availability and confidentiality of documents filed at the
Trade Marks Office.

On 4 September 2006, the Full Court of the Australian Federal Court handed down judgment in Woolworths Limited v BP plc [2006] FCAFC 132.

In essence, to establish that a colour has in fact become distinctive of your goods and services, it is necessary to use that colour alone, as the trade mark. BP had consistently used green with yellow and so failed to establish factual distinctiveness of its green colour mark.


Colour monopolies in Australia

Monopolies in colour have not faired so well in Australia to date. See also Cadbury’s failure in relation to the colour purple in Cadbury does not own the colour purple (in Australia, at least).

Acquiring distinctiveness in Australia

Under Australian law, to decide whether a trademark is distinctive (capable of distinguishing the applicant’s goods or services from those of others: 41(2)), the Registrar must consider whether the mark is inherently adapted to distinguish the applicant’s goods or services: s 41(3).

If it is not, the Registrar must then decide whether the mark is to "some extent inherently adapted to distinguish" those goods and services, and, if it is, whether its "use or intended use" will distinguish the applicant’s goods or services: s 41(5).

If neither s 41(3) nor (5) is satisfied, the Registrar must apply s 41(6), which in essence requires the applicant to establish: (1) that there has been use of the trade mark that is the subject of the application before the filing date; and, (2) that because of the extent of that use before the filing date the trade mark does distinguish the designated goods or services as those of the applicant.

In the present case, the Full Court was at pains to emphasize that it is the use of the trade mark, as a trade mark, before the application date that determines what can be registered. It is only where the extent of that prior use has had the consequence that the trade mark does distinguish the applicant’s designated goods or services from those of other persons that the trade mark is "taken to be capable" of so distinguishing the applicant’s goods or services: s 41(6)(a).

Distinctiveness of BP’s green

The Full Court found that notwithstanding a change in policy to make green the predominant colour, at all times it was used with yellow as the subsidiary, but ever present companion. Consequently, the Full Court concluded that the colours used to distinguish BP’s goods and services from those of its competitors were its existing brand colours, green and yellow, with a marked and clear predominance of green. Green, alone, was not used as a trade mark in the parts of the service stations referred to in the endorsements. In the words of the Full Court:

“Taking all of the evidence into account, including the absence of evidence as to the frequency of specific print or television advertising, we are unable to conclude that any trade mark use of colour by BP at the relevant times has been other than green as the dominant colour in conjunction with yellow as the subsidiary colour.”


The litigation and the appeal

BP had made two applications for registration of the colour green in association with service stations. The appellant Woolworths Ltd opposed registration. A delegate of the Registrar of Trade Marks refused the applications on the ground that the marks were not capable of distinguishing BP’s goods and services: Trade Marks Act 1995 (Cth), s 41(2), (5) and (6). The primary judge allowed an appeal and directed that the applications proceed to registration: BP plc v Woolworths Ltd (2004) 212 ALR 79.

Woolworths did not challenge the primary judge’s conclusion that the colour green as such is not inherently adapted to distinguish BP’s goods and services but is capable of acquiring distinctiveness through usage as a trade mark.

The appeal concerned three main issues: (1) whether the trial judge erred in finding that the amendments to the endorsements of each of the applications were not made contrary to s 65 of the Act; (2) whether each of the marks does distinguish BP’s goods or services by reason of its prior use and whether the trial judge erred in finding that BP’s trade mark applications should be registered pursuant to s 41(6) of the Act; and (3) the Full Court’s power to grant relief.

The trade mark applications

After amendment application 559837 was in respect of:

"The trade mark consists of the colour GREEN as shown in the representation on the application applied as the predominant colour to the fascias of buildings, petrol pumps, signage boards — including poster boards, pole signs and price boards — and spreaders, all used in service station complexes for sale of the goods and supply of the services covered by the registration."

After amendment, application 676547 was in respect of:

"The trade mark consists of the colour GREEN applied as the predominant colour to the fascias of buildings, petrol pumps, signage boards — including poster boards, pole signs and price boards — and spreaders, all used in service station complexes for the supply of the services covered by the registration, as exemplified in the representation attached to the application form."

Findings on evidence of use

The court made the following findings in relation to evidence of use:

In the context of the oil industry in which a small number of companies had for many years used colours to distinguish their goods and services from the goods and services of competitors, before 1989 BP used green and yellow to distinguish its service stations, goods and services from those of its competitors.

By 1989, BP made a deliberate decision to change what might be called the colour branding of BP. Green was to be, and was, used more extensively than yellow in the livery of service stations and in advertising.
It continued, however, to be used with yellow.

On the fascias of buildings, petrol pumps, signage boards, and spreaders in service stations, green was used as the predominant colour, but only with yellow. This use of green as the predominant colour, with the use of yellow, can be understood as trade mark use, replacing the use of green and yellow given approximately equal weight and prominence as the company’s brand colours before 1989.

The question arises whether, after 1989, the advertising reveals not only the use of predominantly green with yellow as the company’s colours and as a trade mark, but also the use, as a trade mark, of green alone. This question cannot be answered simply by attempting to find an advertisement without yellow present, although there is no such advertisement in evidence. For the conclusion to be drawn that green alone was being used by BP as a trade mark prior to 1991 or 1995, one must understand the material as stating to the ordinary person that green alone was being used as a badge of origin to distinguish BP’s goods and services from those of its competitors.

The following four simple steps
can dramatically improve your ability to create and capture intellectual
property (whether it relates to inventions, brands, works of art, know-how or

  1. create an
    IP-Conscious Culture;
  2. set up an easy-to-use knowledge base system;
  3. have regular IP-generation & capture meetings; and
  4. put it all through a robust evaluation process.


Intellectual property strategy is
invaluable in leveraging business strategy.
A few simple steps can dramatically improve your ability to create and
capture intellectual property.

Just to be clear, this applies
to all forms of intellectual property, not just invention disclosure.

Here are just a few things to
think about to increase the IP value generated and captured by your

1 – An
IP-Conscious Culture

Creating a culture that
enshrines the value of IP and energizes people to create and capture it is
critical. To do this, the
organization needs to have at least a basic understanding of intellectual
property – for a simplified model, see my article Analysing IP Put Simply

However, the rationale for
creating and capturing IP must to be understood and continuously communicated
from the very top of the organization.

If you really want to make this
work, then reward people for creating and capturing intellectual
property. (I’m not saying that
this always has to be financial — people are motivated by many
different things.)

Ideally, a single person on the
senior executive team should have overall responsibility for intellectual
property management, including IP capture.

2 – An
easy-to-use knowledge database

A central knowledge database
can greatly enhance generation and capture of ideas and associated
intellectual property. Ideally the
system will be electronic, easy to use and accessible by all people in the
organization. It should be a
repository for all ideas for improvements, new brands, products, customers,

The system should track who
generates the ideas, further ideas or improvements to them, and if possible,
manage the process of evaluating ideas for follow up. This can all be done relatively easily on
the organization’s intranet.

To be clear, such a system
should cater for the traditional ‘invention disclosure process’,
but much more as well.

3 – Get
together regularly

Ideas are best generated in
groups of people (see for example Edward de Bono’s work). So, holding regular meetings to discuss
ideas is very useful. Meetings should be attended by people from a variety of
backgrounds within the organization (eg. Marketing, Sales, Business
Development, Finance, Legal, Product Development, Manufacturing, etc.).

An IP specialist should attend
these meetings and contribute to the discussion. This person could equally be an employee or
external counsel.

4 – A
transparent evaluation process

Captured ideas must be
evaluated for usefulness. To minimize
wasted time, use a staged evaluation process to screen for success factors
such as (a) feasibility, (b) alignment with business strategy, (c) technical
merit, (d) potential commercial value to other entities.

The process should be clearly
understood and visible to everyone in the organization (and so should the
reward system described above).

The evaluation process will
help you decide whether to pursue the idea, and if so how. For example:

  • is it worthy of formal IP protection? (patent, trade mark, design registration, etc)
  • should it be utilized internally?
  • should it be captured and then out-licensed?
  • which aspect of our business strategy does this align with?
  • which of our current customers would benefit from this?
  • which markets would this be particularly beneficial in?
  • etc

The US Court of Appeals for the
Federal Circuit has now confirmed that a patent claim can be invalidated on
what was previously considered to be a minor technical defect. (Basically, a dependant claim is invalid if
it is not a subset of the claim from which it purports to depend.)

While Ranbaxy
won this point, its generic Lipitor was still held to have infringed
Pfizer’s enantiomer patent which expires on
24 March 2010 (with pediatric exclusivity).

Pfizer Inc.
v Ranbaxy Laboratories CAFC 06-1179 (2006)

‘995 patent was due to expire on 28 June 2011. So, a typographical error in claim drafting
may have cost Pfizer 15 months of market exclusivity in the USA. This is probably in the order of
US $ 1.25 billion (assuming that generic players obtain 50% of
the market during that period).

has foreshadowed that apart from appealing the Federal Circuit decision, it
may seek to correct the defect before the USPTO. Three mechanisms which Pfizer are
presumably exploring are: (1) a certificate of correction (35
U.S.C. § 255), (2) Reissue (35 U.S.C. §
251) and (3) Re-examination (35 U.S.C. §
302 — though this requires prior art).


Until earlier this year, there
was no Federal Circuit authority to support the notion that a claim could be
invalidated on what seemed to be a narrow, technical point. However, on 15 February, the CAFC handed
down its decision in Curtiss-Wright Flow Control Group
438 F.3d 1374 (Fed. Cir. 2006)
which confirmed that poor claim dependancy could lead to invalidity pursuant to 35 U.S.C.
§112 ¶ 4, which states:

“a claim in dependent form shall contain a reference to a
claim previously set forth and then specify a further limitation of the
subject matter claimed. A claim in dependent form shall be construed to incorporate
by reference all the limitations of the claim to which it refers.”

The CAFC cited Curtiss-Wright in support of its finding of

Part of the rationale for
allowing such a defect to invalidate the claim is that invalidation under
§112 is an express defence to infringement in 35
USC 282(3).

The CAFC also appeared to
caution lower courts against the temptation to rewrite claims in the form
that was clearly meant. (In the
present case, the invalidated claim (claim 6), should have depended from
claim 1.)

The claims
in this case

In essence,
claim 6 is dependant on claim 2 but does not narrow the scope of claim
2. Instead, the two claims deal with
non-overlapping subject matter. The
relevant claims are:

Claim 1. [R-(R *,R*)]-2-(4-fluorophenyl)-.beta.,.delta.-dihydroxy-5-(1-methylethyl)-3-phen
acid or (2R-trans)-5-(4-fluorophenyl)-2-(1-methylethyl)-N,4-diphenyl-1-[2-(tetrahy dro-4-hydroxy-6-oxo-2H-pyran-2-yl)ethyl]-1H-pyrrole-3-carboxamide;
or pharmaceutically acceptable salts thereof.

2. A compound of claim 1 which is

6. The hemicalcium
salt of the compound of claim 2.

Claim 6
claims a hemicalcium salt and references claim
2. However, Claim 2 does not include hemicalcium salts.
Claim 1 includes all pharmaceutically acceptable salts and so claim 6
should have been dependant on claim 1.

District Court agreed that there was a defect in claim 6 but declined to
invalidate it since there was no Federal Circuit precedent applying §112 ¶
4 to invalidate a patent claim.


See the global IP scorecard


appealed a 4 January 2006 judgment of the District Court of Delaware in Pfizer
Inc. v Ranbaxy Labs. 405 F Supp 2d 495 (D. Del
2005) which held that:

(1) claim 1 of US 4681893
the ‘893 (enantiomer) patent was infringed,

(2) the ‘893 term
extension was valid,

(3) claim 6 of US 5273995
(base) patent was infringed,

(4) that claim 6 of the
‘995 patent was not invalid under §112, or novelty or obvious or double
patenting, and

(5) that
the ‘995 patent was not unenforceable due to inequitable conduct.

The District Court’s
claim construction was affirmed and consequently so was the finding of
infringement.As in other
jurisdictions, the enantiomer patent was not
restricted to the racemic mixture.

Building a successful brand requires an exceptional track record
in at least the following areas (B.R.A.N.D.I.N.G.): Be in touch
(senior executives to articulate the brand); Recognition (by the right
people), Adaptability, Needs (appeal to customer emotions), Delivery
(consistent quality), Indicators (measure and manage), Newness
(brand should be unique), and Great surveillance (for potential

The top 5 global brands (Coca-Cola, Microsoft, IBM, GE and
Intel) have been in the top 5 or 6 positions since Interbrand started its survey in
2001. Three of the top 5 have decreased
in value over that time.

Building a global brand is not always the best strategy,
even for a global company. (It may, in
fact be a bad idea.) Critical success
factors for global brands include adapting the strategy to country-specific
situations and effectively communicating the brand across the world (both
within and outside the organization).


Building a successful brand

Intangible assets today comprise at least 80 % of the
market value of publicly traded companies.
Clearly brands make up a significant proportion of this.

A brand is a promise of consistent delivery of something
that the customer needs or wants. This
is also a good touchstone for setting brand strategy.

I came up with the mnemonic ‘B.R.A.N.D.I.N.G.’
to assist executive teams to remember the following key points:

Be in touch
– the senior executive team must clearly understand, and in fact continually
articulate the brand message both inside and outside the organization. As Interbrand states in their report
— in so doing, the senior management is giving the business strategy a
recognizable face.

— obviously, a strong awareness of your brand is critical.
Actually, strong awareness of your brand by
the right people
is the key.
This obviously consumes resources, which must be carefully
deployed. Consequently, choosing the
correct marketing approach and channels is critical.

– to local needs and situations will determine success in those areas. A brand which creates the wrong impression
or a negative connotation in a local area will not succeed and may damage the
organization’s reputation.

— top brands appeal at some level to human emotions. Understanding customer needs and wants and
making the right promises (that you will reliably meet) is a key part of the

Delivery of
excellent products or services
— your customers or clients must come to
rely on the delivery of the characteristics they are looking for in your
product or service.

of performance
— actively setting, measuring and managing performance
parameters and adjusting the strategy accordingly. Continually looking for new opportunities
to build brand value.

New (unique)
— at its best, a brand is an unmatched expression of an idea, which
customers or clients wish to be part of.

Great Surveillance — closely monitoring and acting on potential infringement of

The challenges of global brand strategy

The Interbrand survey focuses on brands that are
‘global’ — in their words, global brands are
‘available in many countries and, though they may differ from country
to country, the localized versions have a common goal and a similar

Although it can be extremely successful, this is not always
the best strategy to adopt. A global
brand brings with it an extra set of challenges and costs associated with
achieving the consistency and scale of a global brand along with the intimacy
of a local brand. Choosing the right
communication strategy for each country (and culture) is a critical but
complex task.

Companies competing well in several markets may be seduced
into a global branding strategy which does not match the business strategy
for the organization. If this happens,
the company will find itself doing neither the local nor the global aspects
very well. Conversely, if it makes sense
for the business strategy to be global, then, of course, global branding is
also going to be critical.

The Interbrand report

For brands to be considered by the Interbrand report, they

Originate from a publicly traded company
(presumably to allow access to the relevant financial data)

have at least one third of revenue generated outside the country of

be a market-facing brand

have a positive Economic Value Added (EVA)

not have a purely b2b single audience with no wider public profile or

As Interbrand admits, this excludes well known high-value
brands such as Mars which is privately held and Wal-mart which is not
sufficiently global.

The numbers

Here are some statistics from the report (most of which are
mentioned in the report itself):

The top five global brands:

are: Coca-Cola (US $ 67B), Microsoft ($57B), IBM ($56B), GE ($49B),
Intel ($32B);

were ranked (and valued) as follows
in 2001):

Coca Cola (1), ($69 B); Microsoft
(2), ($65.1B), IBM (3) ($53B), GE (4) ($42B), Intel (6) ($35B)

In other
words, 3 of the top 5 global brands have lost value since 2001.

3 of the top 5 are in the IT business — no doubt because of the
‘readily global’ nature of that business.

The top 100 global brands:

are collectively worth US $ 1.1 trillion dollars.

originate from 13 countries

mostly from the USA
(51), Germany (9), Japan (8) and France (8)

In the 12 months since the 2005 survey:

the biggest losses were by: Gap (down 22% to US $ 6.4M), Ford (down 16%
to US $ 11 M), and Kodak, (down 12% to US $ 4.4M).

the biggest gains were by Google (up 46% to US $12.4M), Starbucks (up
20% to US $ 3.1M), and eBay, Motorola, and Hyundai, each up
approximately 18% to US $6.8M, US $4.6M, and US $4.1M respectively.

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