Australia: "Innovative Step" In Innovation Patents Clarified

Last Updated: 28 January 2009
Article by Anthony B. Watson

Originally Published 24th December 2008

In a recent decision (Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd, [2008] FCA 1225), the Federal Court for the first time considered the meaning of "innovative step".

The Australian innovation patent system was introduced in 2001 to provide an IP right that is quick and relatively easy to obtain. The system is intended to protect inventions having a short commercial life span.

In comparison to a standard patent, which requires an invention to be novel and to have an "inventive step" (ie it is not obvious), an innovation patent requires novelty and a lower level of difference over the "prior art", defined as an "innovative step".


Delnorth Pty Ltd (DelNorth) alleged that Dura-Post (Aust) Pty Ltd (DuraPost) had infringed 3 innovation patents for Ezy-Drive Posts (Ezy-Drive), a roadside post made of sheet spring steel that supposedly bent back into shape if hit by motor vehicles. DuraPost counter-claimed, alleging that the innovation patents for Ezy-Drive were invalid.

DuraPost's cross-claim was based on the grounds that the claims in the Ezy-Drive patents did not relate to a manner of manufacture, or lacked fair basis, novelty, utility or clarity. These claims were ultimately unsuccessful.

DuraPost also claimed that the Ezy-Drive patents lacked the innovative steps required by section 7(4) of the Patents Act 1990 (Cth). The issue of "innovative step" lies at the heart of the Federal Court judgment.


"Innovative step"

In considering whether the claims for the Ezy-Drive patents involved an "innovative step", the Federal Court formulated the following 2 step process:

Step 1: Compare the invention as claimed in each claim with the prior art base and determine the difference or differences.

Step 2: Look at the difference(s) identified in Step 1 through the eyes of a person skilled in the relevant art in light the common general knowledge as it existed in Australia before the priority date of the relevant claim, and ask whether the invention as claimed only varies from the prior art base in ways that make no substantial contribution to the working of the invention.

The Federal Court then considered what constitutes a "substantial contribution". The Court said the following:

  • the phrase "no substantial contribution to the working of the invention" involves quite a different kind of judgment from that involved in determining whether there is an inventive step (used for standard patents)
  • "substantial" means "real" or "of substance" as opposed to differences between the invention and the prior art that are of no real or substantial significance.

The Federal Court also said that in determining whether a difference is innovative, the following factors are not relevant:

  • whether the invention is better than the prior art
  • the degree to which the invention varies from the prior art
  • whether it was obvious to move from the prior art to the invention.

End result

The Federal Court applied the above to specific claims made by DuraPost in the Ezy-Drive patents. The Court found that some claims did have the required "innovative step". For example:

  • the use of flexible sheet spring steel instead of the prior art of flexible PVC material makes a substantial contribution to the working of the post. In this regard, the Court said that it is inappropriate to question whether sheet spring steel is better than PVC
  • marker holes on the base of Ezy-Drive. Though this involved only a small difference from the prior art, the marker holes made a real and substantial difference to the working of the post. The reason for this is because the embedding of the post in the ground was a significant aspect of the operation of the roadside post and the marker hole was considered an essential ingredient in performing this function.

The Federal Court also found some of the claims in the Ezy-Drive patents did not have the requisite "innovative step". This included, for example, the surface coating of Ezy-Drive, which the Court found did not involve a substantial enough contribution.

Practical implications

This is the first case to provide guidance on determining what constitutes an "innovative step" in relation to innovation patents. The case confirms that an "innovative step" is less than an inventive step. It also highlights that an innovation patent can protect an invention even if there is only a small point of difference.

This case will make it harder to successfully revoke an innovation patent on the ground of lack of "innovative step" and so should be viewed favourably by the holder of innovation patents. On the other hand, this decision will mean that innovation patents could more easily exclude competing products or processes that are already the subject of innovation patents.

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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