In a recent decision (Delnorth Pty Ltd v Dura-Post (Aust) Pty
Ltd,  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
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
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.
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
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
The Federal Court then considered what constitutes a
"substantial contribution". The Court said the
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
whether the invention is better than the prior art
the degree to which the invention varies from the prior
whether it was obvious to move from the prior art to the
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
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
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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