Excesses of innovation patent damages pulled back
Published on 23 Apr, 2017
In a significant decision, the Full Federal Court has overturned an earlier single judge Federal Court decision regarding the date from which infringement of an innovation patent can occur. One of the unusual implications of the earlier decision was that a divisional innovation patent could be infringed before it was published, or even filed. The Full Court has now determined that infringement cannot occur until grant of the innovation patent.
- An innovation patent is a short-term patent available under Australian patent law. It has a lower patentability threshold, as there is no requirement for an inventive step. Rather the invention need only involve an “innovative step” – that it varies from the prior art in a way which makes a substantial contribution to the working of the invention. Other usual requirements for patentability such as novelty, support, clarity etc. still apply.
- An innovation patent is granted without substantive examination. However to assert it against an infringer it must be certified, which requires examination. An innovation patent runs for 8 years from the “date of the patent”. The date of the patent is the filing date, other than in the case of a divisional application where the date of the patent is the filing date of the parent, grandparent or earlier generation patent.
- Following the latest Coretell decision, an innovation patent cannot be infringed before its date of grant and so no damages are available for this period. This is in contrast to a standard patent, which can be infringed from the date of publication.
Innovation patents are commonly sought in Australia in conjunction with a standard patent application, often a national phase PCT filing. This is achieved by entering PCT national phase and filing a divisional innovation patent application within 3 months of the date of advertised acceptance of the standard patent. Innovation patents can generally be granted and certified within 6 months, providing a useful weapon against infringers in the short term while the standard application is still under examination and awaits the opposition period.
In Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (No 3)  FCA 1019 (Britax), the Federal Court considered alleged infringement of a number of divisional innovation patents filed in these circumstances. The question arose as to the date from which infringement of the innovation patents could occur. The alleged infringer argued that liability for infringement could not arise before certification of an innovation patent. However the judge concluded that infringement could run from the “date of the patent” (being the date of filing of the parent application).
This decision substantially increased the value of innovation patents, particularly when filed as a divisional application, as they could be infringed before the divisional application was even filed, let alone its claims published. In Britax, this resulted in potential infringement from June 2005, notwithstanding that the latest innovation patents had only been filed as recently as 2009.
Coretell Pty Ltd v Australian Mud Company Pty Ltd  FCAFC 54 (Coretell)
The issue has now been revisited by the Full Federal Court in Coretell which has overruled the decision in Britax. Giving the sole judgment, with which two other Federal Court judges agreed, Justice Burley outlined in detail his reasoning.
The key respect in which he differed from Britax was in finding that whilst the “date of the patent” (the filing date or in the case of a divisional application, the filing date of the parent/grandparent etc) determines the term of a patent, infringement is determined by reference to the date of grant. In reaching this conclusion, Justice Burley referred to the infringement provisions of the Patents Act 1990 (Cth), noting that they refer to infringement of “a patent”, inferring a granted patent. Further, section 57(1), which provides that an applicant for a standard patent has the same rights from the date of publication as if a patent had been granted, does not ‘move forward’ the date from which infringement would otherwise run from the filing date, but rather ‘moves backwards’ the relevant date from the date of grant. As section 57 does not apply to innovation patents (and nor is there any equivalent provision for innovation patents), infringement can only occur from grant. Justice Burley also noted the central significance of the claims in determining infringement. He confirmed that there is no infringement of an invention as such, there can only be infringement of the claims. In that context, publication of a specification forms a necessary part of allowing rivals to understand the scope of the monopoly, and it is out of keeping with this scheme to allow infringement before the claims are published.
In its recent Inquiry Report on Intellectual Property Arrangements, the Productivity Commission commented on the fact that divisional innovation patents could be infringed before they were made public, in context of its recommendation to abolish the innovation patent system entirely. The Coretell decision alleviates at least that concern with respect to the innovation patent system, providing a common sense interpretation in line with the framework of the Patents Act generally, and in particular, the provisions relevant to infringement. It also provides certainty to businesses, which can at least be assured that they will not liable for patent infringement damages in respect of a patent which has not yet been filed.