Australia: The IP bar is rising - incoming changes to Australian intellectual property law

Last Updated: 24 March 2012
Article by Jane Owen

Last year, we sent you an alert regarding the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011. On 20 March 2012, that bill passed through both houses of Parliament. The changes effected by the bill will come into operation over the 12 months after it receives royal assent, which is expected to be given in the coming weeks.

The reforms effected by the legislation amend the Patents Act 1990, Trade Marks Act 1995, Designs Act 2003 and Plant Breeders Rights Act 1994. They are designed to create consistency between Australian IP law and laws in other major patent jurisdictions, and provide a more robust and reliable IP enforcement system.

Some changes will take effect immediately upon royal assent. These include exemptions to patent infringement for:

  • experimental use, including to determine the properties and scope of an invention or for the purpose of improving or modifying it. The aim of this amendment is to foster innovation by giving researchers some certainty that they will not infringe a patent by experimenting to improve upon a patented invention
  • obtaining regulatory approval. This is aimed at avoiding granting a de-facto monopoly to the patentee beyond the patent period due to the lag that would occur where a new entrant to the market would need to wait until the patent had expired before starting to seek regulatory approval.

We set out below a brief summary of some of the other key changes:

Patents changes

  • New obviousness material: the common general knowledge available for assessing whether an invention is sufficiently inventive or innovative will now include information known outside Australia.
  • New test for relevance of prior art for obviousness: the test for inventive step will no longer include a requirement that prior art information to be considered be reasonably expected to have been "ascertained, understood and regarded as relevant" by a person skilled in the relevant art - the new test is that two or more bits of information could have reasonably be expected to be combined.
  • New fair basis test: the requirement that patent claims be "fairly based on the matter described in the specification" will be replaced by a requirement that they be "supported by" that matter.
  • "Secret use" now within grace period: the "secret use" exclusions have been extended to the effect that any use of an invention within Australia, within 12 months of filing a complete patent application, is not secret use that would invalidate the patent.
  • New definition of usefulness requirement: a patent specification will be required to disclose a "specific, substantial and credible use for the invention". The disclosure in the complete specification must be sufficient for that specific, substantial and credible use to be appreciated by a person skilled in the relevant art.
  • Higher disclosure standards: any provisional or complete application must disclose the invention in a manner "which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art".
  • Priority dates: the priority date of a claim will be aligned with the new "supported by" test and the requirement for an enabling disclosure of the matter in the claim in accordance with the higher disclosure standards.
  • New matters considered in examination:
    • prior use will now be considered during examination in relation to novelty and inventive step
    • usefulness must be investigated during examination of both standard and innovation patents.
  • Higher standards of proof: the "balance of probabilities" standard is to apply to decisions made by the Commissioner of Patents (Commissioner) including at the acceptance stage (so the Commissioner must accept a patent application if satisfied on the balance of probabilities that it is valid). The standard is to similarly apply to re-examination of, or opposition to patents, or certification of innovation patents so, for example, the Commissioner may refuse an opposed patent where it is satisfied on the balance of probabilities that the granted patent would be invalid.
  • Higher standards for amendments: amendments that would result in the specification claiming or disclosing matter that extends beyond that disclosed in the specification as filed will be prohibited.

Trade Mark changes

  • Additional damages: trade mark owners will now have the possibility of obtaining additional damages, such as for flagrant infringement, or where the conduct of the infringer following notification of infringement warrants it.
  • Stronger Customs regime: the Customs seizure regime will force importers of seized goods to provide their contact details to Customs – which Customs will then provide to the trade mark owner – failing which the seized goods will be forfeited. This is aimed at stopping infringing importers from avoiding infringement proceedings through hiding their details from the trade mark owner. A similar revision will apply in respect of the Copyright Act 1968 seizure scheme.
  • Increased penalties: the maximum penalties for indictable trade mark offences have been increased – to five years imprisonment or 550 penalty units (A$60,500), or both.
  • Summary offences: a new class of summary offences for trade mark infringement will be introduced.
  • Opposition reform: the trade mark opposition system will be reformed by, among other things:
    • removing the requirement to serve a notice of opposition on an applicant
    • requiring the opponent to file a statement of particulars of opposition grounds (to prevent opponents from claiming all grounds in every opposition unless warranted)
    • requiring an applicant to file a notice of intention to defend an opposition failing which its application will lapse, without the need for the opposition to run the course or provision of evidence and hearing.
  • Presumption of registrability for marks: amendments will be made with the object of shifting the benefit of the doubt in favour of the applicant in respect of borderline section 41 (i.e. "descriptiveness") issues on examination. It is difficult to gauge at this stage what practical effect the new section 41 will have, since it still requires the Registrar of Trade Marks to decide whether a mark is inherently adapted to distinguish the applicant's goods and services and then consider any evidence supplied by the applicant in the event that it is not.

Other notable amendments

Other notable amendments include:

  • providing the Federal Magistrates Court with jurisdiction to hear trade mark and design cases
  • clarifying that the grace period for patents applies in respect of complete, and not provisional, applications
  • preventing patents from being found void where granted to the wrong person
  • limiting the availability of omnibus patent claims (ie claims that rely on references to descriptions or drawings) unless absolutely necessary to define the invention
  • extending the privilege that attaches to communications between registered patent and trade mark attorneys and others for the dominant purpose of providing intellectual property advice, to receive the same privilege as similar communications (in providing legal advice) from a lawyer
  • provision for the Commissioner to conduct a preliminary search and opinion in relation to filing of a standard complete patent application.

What can you do in the short-term?

The reforms to the obviousness test are not retrospective and will be applied in respect of patent applications filed after commencement or where examination is requested after commencement (which is 12 months after royal assent). Whilst they will apply to patent applications filed before commencement, if those applications are subject to an examination request within 12 months of royal assent, the old standards will be applied. If you have a pending patent application, or intend to file one in the coming months, you should consider whether it is more advantageous to request examination under the current (lower) standards before the extended commencement date above.

The exemptions to patent infringement for regulatory approval and experimental use commence the day after royal assent is given, so processes in that regard may require review in order to remove unnecessary legal clearance steps once those exemptions come into effect.

If you are a trade mark or copyright owner and have not yet availed yourself of the Customs seizure regime, you should consider doing so. Once the strengthened regime commences (in 12 months) it will provide a much greater deterrent to counterfeiters, and also give you better chance of identifying those counterfeiters in order to take action against them. If you would like to know more about Middletons' Customs program, or any of the other reforms discussed above please contact our IP team.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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