Australia: Changes to inventive step in Australia - a view from the devil's advocate

Last Updated: 12 July 2013
Article by Charles Tansey and Gareth Dixon

On 15 April 2013, many of the provisions of Australia's Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came into effect. We have reported previously (see, on what "raising the bar" actually means – and how Australian patent applicants could have effectively "ducked under".

In order to "duck under", one would have needed to ensure that their Australian patent application was examined under – and subject to the "old law" by filing a request for its examination before 15 April 2013; any case for which examination was not requested by this date then became subject to the "new law".

In respect of inventive step, the new law is characterised by two principal changes to the restrictions upon the information and background knowledge that may taken into account:

  • The assessment of the common general knowledge ("CGK") of an ordinary skilled worker in the art is no longer restricted to Australia – but is now assessed "internationally".
  • Previously, prior art used for the purposes of assessing inventive step must have been shown to have been "ascertained, understood and regarded as relevant" by a person skilled in the art. Under the new law, it is only necessary that the skilled person would understand and regard the prior art as relevant; the requirement that a document be ascertained (i.e., located) has been removed.

As Australian patent attorneys, our principal obligation (besides working within the law) is to act in the best interests of our clients. As such, standard practice throughout our local industry seems to have been that applicants were encouraged to request examination of any pending Australian applications prior to the deadline. This is easily justified; the new laws purportedly make it more difficult to obtain an Australian patent – and it was therefore in an applicant's best interests to have their case/s proceed under the "old" (softer) laws.

No argument from us. Anything that increases our clients' chances of obtaining relatively broad, valid patent protection has to be a good thing.

Moreover, it seems as though Australian patent applicants took heed of the advice they were given; IP Australia was deluged with some 30,000 examination requests leading up to 15 April. In this respect, the Australian Government appears to have cast something of a rod for its own back. Prior to 15 April (although somewhat variable across the different technologies), the average wait for a first examination report was around 12-14 months – and average pendency of an application (from filing in Australia to grant) was between three and four years. Now, throw an additional 30,000 examination requests into the equation – and even accounting for increased staffing, both these timeframes are likely to blow out considerably.

What's done is done – at least insofar as a decision to request, or not to request early examination. That said, we thought it worthwhile considering – at least from an academic perspective, whether the "new law" in respect of inventive step is likely to have any "real" effect on the breadth of a granted Australian patent. It is worth noting at this point – perhaps even as a disclaimer, that the "new law" goes considerably beyond inventive step; it also relates to utility/usefulness, sufficiency, descriptive support (formerly, "fair basis"), prior use, and the allowability of certain amendments. Accordingly, inventive step was but one of the many factors an applicant needed to consider when deciding whether or not to request early examination of their Australian patent application/s.

  1. Is the "common general knowledge" likely to be any different post-Raising the Bar?

Under Australian practice, an objection on the grounds of an alleged lack of an inventive step occurs where one of the essential features of a claim has not been previously disclosed, but would nonetheless suggest itself naturally (i.e., be obvious) to the notional skilled addressee. The examiner assumes the mantle of the skilled addressee, apprised of the CGK in the art – and attempting to solve a particular problem. For an objection to arise, it must be established that the prior art would, as a matter of course, be relied upon by the skilled person seeking a solution to the problem – and that any combination of the CGK with that prior art information would naturally suggest itself to the skilled person.

From an international perspective, this approach is fairly commonplace. However, as mentioned above, the first of the law changes removes the geographic limitation upon the CGK. The question therefore becomes "is the CGK in Australia any different to what it is globally"?

Under the "old law" (i.e., that applicable to any cases for which a request for examination was filed before 15 April 2013), where a foreign publication is relied upon as being indicative of the CGK, examiners must also demonstrate that the publication was well known in the relevant art in Australia.

Semantics? Not exactly, for there have been occasions in Australia in which the geographical limitation on the CGK has been invoked. For instance, what is admitted as CGK in a specification prepared overseas is not necessarily taken to be CGK in Australia. The seminal case here is that of BHP Steel v Nippon [1999] APO 69, in which it was held that in a Japanese-originating Australian application, an admission that a Japanese patent document was well known did not suffice to establish that the document was in fact CGK in Australia.

On the other hand, many arts are considered to be somewhat "international" by nature – and it follows therefore that the CGK in Australia will be essentially the same as it is in other countries. For example, it has been recognised that genetic engineering (see, Genentech Inc's Patent [1989] RPC 613) and organic chemistry (see, Biochem Pharma v Emory [1999] APO 50) are truly "international" arts. Other arts could reasonably be expected to follow suit given that these days, the global dissemination of information within any given industry is largely a function of the information/internet age.

Bottom line: those working in small, localised, niche industries may notice a change – as may those working in industries protected, to some degree, by language barriers (see, BHP v Nippon, above). However, to the vast majority outside of such industries, it seems reasonable to expect that "CGK now" may be at least substantially similar to "CGK then".

Chances are, it won't be long before this notion is challenged in a court...

  1. Is removing the requirement that a document be "ascertained" likely to make a tangible difference?

The second change foreshadowed above is an apparent loosening of the former situation in which not all prior art is strictly "citable" for the purposes of inventive step. Previously, prior art used for assessing inventive step must have been shown to have been "ascertained, understood and regarded as relevant" by the notional person skilled in the art. Under the new law, it is only necessary that the skilled person would understand and regard the prior art as relevant; the requirement that a document be ascertained (i.e., located) has been removed.

Semantics? Again, not exactly.

In the past, prior art documents have been excluded from consideration on grounds including too-recent publication (Wrigley v Cadbury [2005] FCA 1035); not being in English (Euroceltique v Sandoz [2009] APO 21); not being directed to solving the same problem as the claimed invention (Lockwood v Doric [2004] HCA 58); held in an obscure location (Mecanique Ltee v Madness Gaming [2001] APO 70); in a technology not generally associated with the patent literature (Commissioner v Emperor Sports [2006] FCAFC 26); or even an obscure-yet-relevant statement in an otherwise irrelevant document.

These cases highlight some of the bases upon which prior art documents have, in the past, been excluded from consideration in respect of inventive step. In partial justification, it was stated in Rohm and Haas v Nippon and Sankyo [1997] APO 40:

"A document would be ascertained if it was published in such a manner or form that it could reasonably have been expected to be found by a person skilled in the art. A patent document dealing with the same technical issues would prima facie have been ascertained by a person skilled in the art. The requirements of understood and regarded as relevant are not likely to be an issue where a document relates to the same art as the problem".

In Dyno Nobel v Orica 47 IPR 257 the word "ascertained" was interpreted by the Federal Court as meaning "discovered" or "found". Moreover, the court applied a "diligent searcher" test in determining whether a document was likely to have been ascertained. The following quote actually comes from the UK decision in Technograph v Mills and Rockley [1972] RPC 346:

"[T]here may be documents which, although available, would never be looked at by anyone making such a search as our hypothetical addressee is supposed to have made.. [the prior art includes] matter which in fact no-one.. ..ever knew or was likely to know, such as the contents of some foreign specifications which no-one had ever looked at and which the most diligent searcher would probably miss. I think that.. ..the words should have the more natural meaning of what was or ought to have been known to a diligent searcher".

When applying the "old law", examiners will generally proceed on the basis that it could be reasonably expected that the person skilled in the art would conduct a search of the patent literature and that aside from the examples listed above, any patent document located such a search could reasonably be expected to have been ascertained by the person skilled in the art. It follows that the more technical the field of endeavour, the more likely a patent search would have been conducted by the skilled person. For instance, if your field is genetic engineering, failing to conduct a patent search would be tantamount to negligence; the law, quite simply, reflects this notion.

Bottom line: Again, you'd be somewhat unlucky if your inventive step assessment under the "new" law was markedly different to that conducted under the "old" law. As with the CGK changes discussed above, what we're really talking about here are the minutiae – the "one case in a million" that turns on one of these quirks.

Whereas it was clearly advisable to establish your Australian patent application as an "old Act" case (by requesting examination prior to 15 April 2013), we would obviously want to temper any impression that if you didn't, it was necessarily "game over". As shown above, when it comes to inventive step, you would be fairly unlucky to fail under the new Act for an application that would've been successful under the old.

...and if you do happen to have that "one case in a million", there's always the Australian "innovation patent" system.

In summary, we believe that the changes – whether they actually "raise the bar" on inventive step or not, are a good thing. They serve to make Australian practice slightly less idiosyncratic (and thereby more consistent from an international perspective). From our standpoint, fewer idiosyncrasies equals more certainties; more certain equals more attractive to patent applicants. As readers will appreciate, determining and arguing inventive step under Australian practice has been, on occasion, somewhat challenging. These changes to our local practice are thereby welcomed in the hope that they may lead to a consistent and reliable inventive step standard.

Irrespective of whether removing "ascertained" actually raises the bar, it is expected that practitioners will welcome this change; it removes one of the more "clunky" features of our patent law. Previously, during examination or opposition matters, the requirement to argue as to whether a document would or wouldn't have been ascertained (when the outcome, as related above, was largely predetermined) was an undue burden upon applicants, examiners and opponents alike.

Finally, the above discussion reflects the "letter of the law". How this is interpreted by Australian patent examiners is probably a better indicator as to whether standards will truly be raised on inventive step under the amended legislation. In other words, in order to truly "raise the bar" on inventive step, all it takes is for Australian patent examiners to adopt a hard line – to more strenuously maintain inventive step objections. Given that there are still more than 30,000 applications still to be examined under the "old Act", we are possibly two to three years from seeing how this all plays out. Watch this space...

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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Charles Tansey
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