Australian innovation patents: dangerously strong but for how long?

The Australian Advisory Council on Intellectual Property (ACIP) has been asked by the Minister for Innovation, Industry, Science and Research to investigate the effectiveness of the innovation patent system in stimulating innovation by Australian small to medium business enterprises (SMEs). As part of that review, ACIP has now released an Issues Paper to encourage discussion on this topic and assist in conducting wide-ranging public consultations. The purpose of the paper is to suggest points that may be taken into consideration during the review process. However, there is a strong inference throughout the document that the system as it stands, particularly in light of recent judicial interpretation, offers opportunities and rewards to the patentee that are potentially excessive when compared to the ease with which they are obtained.

The Issues Paper itself makes very interesting reading. The introductory section provides an excellent summary regarding: how the innovation patent system differs from the standard patent system; how the system is proposed to be amended under the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011; as well as filing trends since commencement broken down by applicant category (individuals or companies) and by local or foreign origin. There is also a summary comparison of the Australian innovation patent system with its top 20 trading partners for FY09/10.

However, the section of most interest relates to concerns that the system as implemented may have generated unintentional and undesirable consequences, many of which are potentially at odds with the original aims of the legislation. The consequences to which these concerns relate include:

  • Quick protection for high level inventions as well as low level
  • Increased use by large corporations
  • Same infringement relief as with standard patents, while seemingly low threshold inventiveness requirements (as currently interpreted by the Courts) makes them potentially difficult to challenge and revoke
  • Increased use as strategic divisional applications
  • Use in “evergreening” strategies to extend patent coverage period by patenting trivial changes
  • Uncertainty when certification of granted innovation patents is delayed
  • Broad subject matter coverage – concerns regarding computing and pharmaceutical innovation patents

Given the number and extent of the identified concerns, it seems likely that some degree of change will be proposed as a result of the review. Whether this change will result in Australia abandoning the system in its entirety, or enacting some restrictions to: narrow eligible subject matter; limit divisional applications; and/or reduce the level of remedies for infringement, is impossible to predict at this early stage. However, it seems reasonable to assume that at least some of the opportunities and consequential threats resulting from the present system may be limited within the next few years.