Australian government takes drastic action to curb Australian innovation patents

Australia’s unique innovation patent system provides inventors with a useful tool for protecting lower level innovations, thereby plugging the gap between the protection available under the registered design system and that afforded by the standard patents regime. This is consistent with the original objectives of the legislation, which sought to achieve this outcome when replacing the previous “petty patent” regime.  That regime required the same inventiveness threshold as a standard patent, and therefore conferred no benefit in the context of lower level innovations.

 

The present innovation patent system is not without its faults. In particular, it is generally recognised that there is currently an imbalance between the scope of the rights afforded and the relative ease with which they are obtained.  It was understood that a current review being undertaken by the independent body ACIP (The Advisory Council on Intellectual Property) would investigate this thoroughly and, with consultation, make recommendations for further consideration.

However, IP Australia has pre-empted the ACIP review, and issued what it refers to as a consultation paper, entitled Innovation Patents – Raising The Step. This paper is more of a “statement of intent” to urgently amend the legislation, so as to align the inventiveness threshold for innovation patents with that applicable to standard patents, as per the new higher threshold due to come into practical effect on 15 April 2013. For summary details on these changes and recommended actions prior to this deadline.

There has been extensive use of the innovation patent system by some high profile multinational entities such as AppleTM.  However, data provided in IP Australia’s own consultation paper acknowledges a significant increase in the use of the system by Australian SMEs and individuals, which is consistent with the original aims of the legislation. Furthermore, there does not appear to have been any analysis of the scope of patents that have been granted and certified to date, supporting the contention on which the proposed action is founded, that the current system has resulted in the widespread patenting of “obvious” inventions.

It may be assumed that by issuing a consultation paper, IP Australia is open to consideration of alternative approaches, if indeed there is a problem with the current system.  Such alternatives might include a restriction of the available remedies in the event of infringement commensurate with a lower threshold test for inventiveness, a further reduction in patent term, or even abolition of the system in its entirety. However, when presented in this manner, and pre-empting any recommendations from the ACIP review, the outcome may well be fait accompli and if the proposed amendment is successful, the chances of back-tracking to anything more moderate may be very low.

If the changes go ahead, it may well be disappointing to those applicants hoping to protect their valuable but incremental inventions.  In certain circumstances, the regime would still provide a useful tool for rapid enforcement, or a reduction or postponement of patenting costs by avoidance or deferral of examination.  However, there are clear commercial advantages to be gained by pursuing protection under the system as it presently stands. Accordingly, we recommend that you carefully review your current portfolio and patent strategies with a view to taking action before these advantages cease to be available in their current form.