Article updated 14/02/2020
The Innovation Patent system was originally introduced in 2001 to provide a cheaper, more efficient way for small to medium-sized businesses to protect their intellectual property through the ‘innovative step’ test. Innovation Patents protect those inventions that do not meet the inventive step threshold required for standard patents. However, the recent Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 (the Bill) will see the eventual phasing out of the Innovation Patent system in Australia.
The Bill was introduced into the Senate in July 2019, for the primary purpose of reviewing the Innovation Patent system. An inquiry into the Bill found that only 17% of submissions supported removal of the Innovation Patent.[1] The majority of the opposition came from many small and medium-sized businesses and relevant industry groups, including the Australian Chamber of Commerce and Industry which represents around 300,000 Australian businesses. Notwithstanding this however, a Senate Committee has recommended that the Bill be passed into law.
Why change the innovation patent system?
The Senate Committee proposed a number of reasons for removing the Innovation Patent system. Firstly, there has been a perception that the current innovative step test, which requires “a substantial contribution to the working of the invention”,[2] was too low and therefore gave rise to an influx of Innovation Patents that were enforceable at law. In addition, there was a perception that small and medium-sized businesses were not making use of the innovation patent system, and those who had were not acquiring benefits from it. This appears to be the primary justification for phasing out the system.
The introduction of an object clause
The Bill will see the introduction of an object clause into the Patents Act 1990 (Cth) (the Act), stating that its main object “is to provide a patent system in Australia that promotes economic wellbeing through technological innovation”.[3]
The Senate Committee recommended an objects clause with the aim of providing more targeted assistance to stimulate innovation in Australia. In making its decision about the objects clause, the committee was of the view that an object clause would “provide a valuable statement of the overarching framework for the patent system to guide decision makers and the community”.[4] Arguments that were raised against the introduction of an objects clause were that terms such as “technological innovation” and “economic wellbeing” would limit what could be patented and create uncertainty and complexity.
What this means for patent applications
After the Bill receives royal assent, no new innovation patents may be filed. In the interim however, there are transitional provisions to maintain the rights of those existing Innovative Patents. There are concerns the legislation will result in a narrowed patent eligible subject matter, particularly for innovations in the ICT and biotechnology fields. This, combined with the introduction of an object clause, may introduce uncertainty and restrict patent eligible subject matter and make it harder for small to medium-sized businesses and other individuals to protect their intellectual property.
However, it is important to note that innovation patents may still be filed up until the date the legislation is passed. The exact date is yet to be determined but is likely to be around mid-2021. Even after the legislation takes effect, existing innovation patents will remain valid until their expiry 8 years after filing. In addition, any pre-existing standard patents may still be converted into innovation patents or have a divisional innovation patent filed from it.
Takeaways
The phasing out of the Innovation Patent system will eventually restrict patent eligible subject matter and thus make it harder for small and medium-sized businesses to protect their intellectual property. However, nothing will change until the legislation takes effect, so for the time being new innovation patents may still be filed.
Links and further references
Legislation
Further information about protecting your invention
If you need assistance in protecting your invention, please telephone me for an obligation free and confidential discussion.
Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au
Disclaimer
This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.
[1] Senate Economics Legislation Committee report on the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019.
[2] Dura-Post (Australia) Pty Ltd v Delnorth Pty Ltd [2009] FCAFC 81.
[3] Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 sch 1.
[4] Senate Economics Legislation Committee report on the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019.
Related insights about protecting your invention
-
Patent revocation due to lack of novelty
One of the often cited requirements for a patent to be granted, is that the invention as claimed must be ‘novel’ in light of the information of the day (referred to as the prior art and the common general knowledge) (section 18(1)(b)(i) of the Patents Act 1990 (Cth) (Patents Act)). Put simply, if its been…
-
Patents and the threshold for registration
Learn about the different types of patents available in Australia, their requirements for patentability, and how to protect your invention with this article. Discover what can and cannot be patented, and the legal implications of obtaining a patent. Get the facts you need to know about patents in Australia.
-
Understanding patent revocation
Engaging in transfers of intellectual property? Beware of transferring goodwill too. The case of Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue [2020] NSWSC 120 highlights the concept of goodwill and its three (3) aspects, as well as how it affects the ability to generate earnings from identifiable assets.
-
Interlocutory injunctions in patent dispute cases
Australian Intelligence Community (AIC) Commissioner Falk determined in Uber investigation how the Office of the Australian Information Commissioner (OAIC) will assess if entities have an Australian Link to be legally bound by the Privacy Act 1988 (Cth).
-
Contesting patent ownership between joint inventors
This article provides an overview of the conditions for patent grant, joint inventorship tests, and standard of proof for disputes in relation to contested patent ownership in Australia.
-
Is exporting a product a trade mark infringement?
The Trade Marks Act 1995 (Cth) provides protection to Australian trade mark owners, but what happens when their mark is used overseas? Learn more about the protection the Trade Marks Act provides, and the remedies for infringement, by clicking through to the full article.
-
Is using a trade mark in AdWords considered infringement?
A Court concluded that a company had infringed a trade mark using Google AdWords in Veda Advantage Limited v Malouf Group Enterprises Pty Limited [2016] FCA 255. Click through to learn more about the dispute, and the learning points and takeaways.
-
Be cautious when alleging patent infringement
The Court weighed in on the issue of unjust threats of patent infringement and the damages that may be payable. Learn more about the importance of proving direct causation between the threat and the loss, and the implications for patent holders and infringers alike.
-
What are end user licence agreements?
Understand the legal risks of end-user license agreements (EULAs): learn about the common clauses, conditions, and warranties that can protect both the licensee and the licensor. Find out how to ensure your EULA is legally sound.
