Australia: Australia´s New Innovation Patent

On May 24, the Australian Innovation Patent system came into force, to replace the Petty Patent system.

Petty Patents were introduced only in 1979, with the intention of providing a second, lower tier of protection for ‘short term’ inventions. In fact, the petty patent was subject to the same novelty and inventive step requirements as standard patents except that the prior art was limited only to documents or uses occurring in Australia. It had a reduced term of six years.

The innovation patent is a response to at least two recent governmental advisory committee reports that concluded that the petty patent system was failing Australian Industry. It is worth quoting the rationale:

"The purpose of the proposed innovation patent is to stimulate innovation in Australian SMEs. It would do this by providing Australian businesses with industrial property rights for their lower level inventions. Industrial property rights are not available for these inventions at present… This lowers the incentive to innovate." [Explanatory Memorandum]

An innovation patent is awarded for an "invention" in the same way as a standard patent. The right of exclusivity has the same potency as a standard patent in the sense that infringement, and the associated remedies, are determined in an identical manner. Compared to standard patents, however, patentable subject matter is somewhat narrower: plants, animals and biological processes for their generation cannot be the subject of valid claims of an innovation patent. Also, innovation patents have a reduced term – a maximum of 8 years.

The Australian Government’s intention is that it should be easier to obtain a valid innovation patent than a standard patent. The test for novelty of the two is the same, but for an innovation patent an "innovative step" must be demonstrated, whereas for a standard patent the requirement is for an "inventive step". An innovative step is determined with reference to the prior art, and by considering whether the difference of a claimed innovation from the prior art is such as to make a ‘substantial contribution to the working of the invention’. Prior art that can be considered for assessing whether there is an innovative step is potentially broader than prior art that can be considered for assessing whether there is an inventive step.

Only time will tell how the "innovative step" requirement will be interpreted. It will probably require the validity of an innovation patent to be tested in court before we have a clearer understanding of how the test is to be applied. However, the recently published Patent Office guidelines for Examiners clearly show that the Patent Office will treat the test as involving a lower standard of inventiveness than for a standard patent. The Patent Office does concede, however, that the word "substantial" poses difficulties for examination, and requires each application "to be assessed on its merits".

The Innovation Patent is not subject to substantive examination prior to grant, but it can undergo examination after grant at the request of the patentee or anyone else. The outcome of the examination is that the patent is either revoked or "certified". An innovation patent must be certified before it can be enforced. Third party oppositions and applications to a court for revocation are also possible once certification has taken place.

In many other respects, an innovation patent is similar to a standard patent. For example, Convention priority can be claimed. However, only five claims are allowed in an innovation patent (all can be independent/base claims if desired). Divisional applications from an innovation patent are also possible, but they must be for another innovation patent, and not for a standard patent. Conversion from a standard patent application to an innovation patent application, and vice versa, are possible in most circumstances. Renewal fees are payable for an innovation patent from the second anniversary of the filing date.

It is suggested that inventors should approach using the innovation patent system with caution. Where patent protection is required in countries other than Australia, an application for an innovation patent in Australia may not be appropriate. Further, the cost of obtaining and "certifying" an innovation patent may not be significantly less than the cost of obtaining a standard patent.

Two suggested uses for an innovation patent, however, are:

1. The innovation patent could serve as a defensive publication, given that it is published in an official capacity soon after filing; and
2. Depending upon judicial interpretation of the ‘innovative step’ test, it also may offer patent applicants a fall-back position in the face of an insurmountable inventive step objection.

The innovation patent system will be reviewed in 5 years to determine whether it is meeting its objectives.