1 Legal framework
1.1 What are the sources of patent law in your jurisdiction?
Australian patent law is governed by the Commonwealth Patents Act (1990) and the attendant Patents Regulations (1991). As federal legislation, the act and regulations apply to all Australian territory. There is no co-existing state legislation.
Australia is also a common law jurisdiction, so the decisions of courts and relevant tribunals also form part of the legal framework. Decisions of the High Court carry the most weight, ahead of the Federal Court (where practically all contentious patent matters are heard). Decisions of the Australian Patent Office (which is considered a tribunal) also contribute significant case law in relation to patent matters. Case law from the Administrative Appeals Tribunal also forms proper precedent for procedural matters.
The Australian Patent Office Manual of Practice and Procedure, while having no legal force, sets out the Australian Patent Office's current guidance to examiners as to how the law should be applied, as well as explaining current procedures and providing approved forms.
1.2 Who can register a patent?
A patent can be granted to:
- the actual inventor (or inventors);
- a person which is entitled to have the invention assigned to it;
- a person which derives title from the actual inventor or which is entitled to have the invention assigned to it; or
- the legal representative of a deceased person in one of the above categories.
Apart from the actual inventor, the person registering a patent need not be a natural person and can be any suitable legal entity, such as a body corporate (eg, a public or private company) or body politic (a country). Trusts, partnerships and similar structures are not legal persons and as such cannot register a patent.
A person which is entitled to have an invention assigned to it is typically the employer of an inventor of an invention conceived in the normal course of employment.
While limitations exist on who may register a patent, no such limitations apply to who may apply for a patent.
There is no requirement that a person be an Australian citizen or otherwise resident in Australia in order to register a patent.
2.1 What rights are obtained when a patent is registered?
Upon registration, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise others to exploit the invention.
The patent area is Australia, the Australian continental shelf and waters above the Australian continental shelf and the airspace over those regions.
‘Exploit' is defined as including:
- making, hiring, selling or otherwise disposing of a product (or offering to do so);
- using a product;
- keeping a product; and
- using a method or process or dealing with a product arising from the method.
When a patent is registered, the owner has the right to commence legal action with a view to obtaining an injunction, damages or account of profits, as well as a portion of the legal expenses in enforcing the patent. Although a patentee cannot commence infringement proceedings until the patent is registered, any damages or account of profits can be backdated to the date of publication.
There are a small number of statutory defences to infringement, which include the following:
- The alleged infringement occurred on an aircraft or vessel temporarily in the jurisdiction;
- The alleged infringement amounted to experimental use;
- The alleged infringement amounted solely to the registration of a product for therapeutic use;
- The alleged infringer had prior use of the invention; or
- The alleged infringement took place when the patent was in a state of temporary lapse.
2.2 How can a patent owner enforce its rights?
A patent owner can enforce its rights by commencing action for infringement in court - typically, the Federal Court. A patent owner can seek preliminary discovery if it has a reasonable belief that infringement is taking place, but does not have sufficient evidence to definitively conclude that infringement is occurring.
In most cases a patent owner wishing to enforce its rights will commence by writing to the potential infringer, placing it on notice as to the existence of the patent and, depending on the circumstances, seeking an explanation for the conduct complained of or asking the infringer to cease the infringing conduct.
The Australian Patents Act has penalties for unjustified threats of infringement, so a patent owner must have a high level of confidence that infringement is occurring before making such an assertion and practitioners should be cautious in drafting such correspondence. An action for unjustifiable threats is possible in any case in which an infringement action is ultimately unsuccessful; however, damages are unlikely to be awarded unless the threats were of such a nature as to cause demonstrable harm to the defendant (Mizzi Family Holdings Pty Ltd v Morellini (No 3)  FCA 870).
2.3 For how long are patents enforceable?
Patents are enforceable for a term of 20 years from the filing date. For applications proceeding in Australia as national stage entries via the Patent Cooperation Treaty, the filing date is the international filing date.
The term of any subsequent divisional patent is calculated from the filing date of the earliest parent application.
The term of patents for certain pharmaceutical substances can be extended by up to five years. This is discussed in more detail in question 3.6.
A patent becomes enforceable only upon registration (grant), although remedies for infringement date back to the publication date of the relevant application.
Australia also has a second-tier patent system - the ‘innovation patent' - for inventions of notionally lower inventive step ("innovative step") than a standard patent. Innovation patents have a term of eight years from filing. Innovation patents are enforceable only if they have been certified (examined) after having granted.
Both standard patents and innovation patents can be enforced after their expiry in relation to infringing acts that took place prior to expiration.
3 Obtaining a patent
3.1 Which governing body controls the registration procedure?
IP Australia is the governing body that controls registration of all IP rights (patents, trademarks, designs and plant breeders' rights) in Australia. IP Australia falls within the Department of Industry, Innovation and Science, but acts largely autonomously.
Within IP Australia, Australian patent registration and related matters are controlled by the Australian Patent Office.
3.2 What is the cost of registration?
The official fees from filing to registration are typically in the order of US$900, which comprises the filing fee (US$300), the examination fee (US$400) and the acceptance fee (US$200). Additional official fees (US$80) are payable for each claim in excess of 20 at the time of acceptance.
Annuities are payable each year, starting from the fourth anniversary of the filing date
3.3 What are the grounds to reject a patent application?
An application may be rejected on any one of the following grounds:
- The claims are not novel;
- The claims lack inventive step;
- The claims are not clear;
- The claims are not supported across their whole scope by the description;
- The invention as claimed is not disclosed in the description;
- The claims do not define patentable subject matter;
- The invention as claimed has no specific, substantial and credible use;
- The nominated person is not entitled to grant of the patent; or
- The application is for more than one invention.
3.4 What programmes or initiatives are available to accelerate or fast track examination of patent applications?
An applicant may request that the Australian Patent Office expedite the examination of an application. Examination may be expedited if the commissioner of patents is reasonably satisfied that it is in the public interest to do so, or that there are special circumstances that make this desirable. Special circumstances include, for example, that the applicant has become aware that infringement is taking place or is likely to take place, or that there is a significant commercial imperative for the applicant in doing so. If necessary, material in support of the request to expedite examination can be provided to the Australian Patent Office. The Australian Patent Office is generally agreeable to such requests. If a request to expedite examination is allowed, a report can usually be expected within about eight weeks.
Further, Australia is part of the Global Patent Prosecution Highway (GPPH) programme. Any requests for examination to proceed under the GPPH are automatically dealt with in an expedited manner.
3.5 Are there any types of claims or claiming formats that are not permissible in your jurisdiction (eg, medical method claims)?
Most claim formats are allowable in Australia, provided that they meet the requirements of clarity and support.
Specifically, in relation to medical method claims, the Australian Patent Office accepts both direct method of treatment claims and ‘Swiss-style' claims. These are considered non-identical in scope as they are directed towards different infringers. EPC2000 format treatment style claims, while allowable, are not considered under Australian law to be materially different from the corresponding composition claims per se.
‘Reach through' claims, directed towards compounds that are characterised only in terms of their action with a specific receptor, for instance, are generally not allowable, as they are deemed to be speculative and encompass compounds not disclosed in the specification.
‘Omnibus claims', directed towards the embodiments of the invention as disclosed, are not generally allowable, on the basis that they do not clearly define the monopoly sought, unless the claimed invention is such that it cannot be otherwise reasonably claimed.
Claims directed towards a product prepared by a specific process are allowable; however, claims directed to products ‘obtainable' by a specified process are generally not allowable, unless the claimed invention is such that it cannot be otherwise reasonably claimed.
3.6 Are any procedural or legal mechanisms available to extend patent term (eg, adjustments for patent office delays, pharmaceutical patent term extension or supplementary protection certificates)?
Patent term can be extended only under very specific circumstances. Where the subject of the patent is a pharmaceutical substance per se or a pharmaceutical substance produced by recombinant DNA technology, and the substance requires regulatory approval prior to being introduced on the market, an extension of patent term may be possible if there has been a delay on obtaining regulatory approval. The length of any patent term extension depends upon the length of the regulatory delay and is determined by calculating the amount of time elapsed between the filing date of the patent and the date of first regulatory approval. The patent term extension is effectively the regulatory delay minus five years. If the regulatory delay is less than five years, no extension of term is possible. The extension of term is capped at five years, which means that if the regulatory delay has been 10 years or more, the maximum possible five-year extension (to 25 years) may be available.
3.7 What subject matter is patent eligible?
The Patents Act specifically excludes as subject matter "human beings, and the biological processes for their generation". This means that the following are not considered to be patentable subject matter:
- fertilised human ova, zygotes, blastocysts, embryos and foetuses, and processes for growing or culturing them;
- totipotent human cells, including those that are the products of nuclear transfer procedures;
- methods of in vitro fertilisation or methods for introducing transgenes and donor genetic or donor cytoplasmic material into fertilised ova, zygotes, embryos or similar; and
- certain cloning processes.
In addition, the High Court has held in D'Arcy v Myriad Genetics Inc (2014) 224 FCR 479 that isolated nucleic acid sequences are not patentable, on the basis that the information stored in the nucleic acid sequences is the same as that contained in the DNA of the organism from which the nucleic acid is isolated. Such information is considered to be not ‘made' by human action and consequently the isolated nucleic acid sequences do not meet the manner of manufacture requirements.
Schemes and plans are not patentable subject matter, so business methods per se are not patentable. Merely implementing a scheme or a plan on a computer is likewise unlikely to be considered patentable subject matter. However, software-related inventions are patentable, provided that the invention has industrial applicability and involves a technical contribution – merely using a computer as a tool to carry out calculations or to arrange or present information is not patentable. The law in relation to the patentability of software aspect is currently evolving.
3.8 If the patent office does not grant a patent, is an appeal available and to whom?
Under Australian law, the issuance of a first examination report sets in place a 12-month deadline for placing the case in order for acceptance (and ultimately grant). Within that timeframe, any number of responses and subsequent reports may be exchanged. Third and subsequent reports are reviewed by a supervising examiner. There is no ‘final' office action under Australian law; but if the responses fail to make progress, a hearing may be set down. This is usually at the request of the applicant; however, it is possible for the Australian Patent Office to set down a hearing to resolve matters even if the applicant has not requested it.
A hearing is not strictly an appeal. The matter is heard by a hearing officer unconnected with the case. The original examiner may attend the hearing, but has no official part to play and the matter is ex parte, with the applicant making the case to the hearing officer. The hearing officer may agree to allow the case, refuse the case or make a partial decision on the issues in dispute and return the case to the originating examiner for completion.
Hearings of such a nature must be requested within the timeframe for acceptance. The hearing may be conducted in person or on the written record. The acceptance deadline may be extended until a period ending three months from the date on which the hearing officer's decision is made.
The applicant may appeal any decision of the Australian Patent Office to the Federal Court. This includes refusal by the examiner to accept the application, with or without a hearing.
In the case of an appeal relating to certain specified procedural matters, an appeal to the Administrative Appeal Tribunal is also available.
4 Validity/post-grant review and/or opposition procedures
4.1 Where can the validity of an issued patent be challenged?
The validity of an issued patent can be challenged in court by commencing revocation proceedings. The challenge usually takes place in the Federal Court. Federal Court registries are located in each state and territory in Australia. The originating party can determine jurisdiction.
The validity of an issued patent can also be challenged in the Australian Patent Office by instituting re-examination proceedings.
In the case of a certified innovation patent, validity can also be challenged by commencing opposition proceedings at IP Australia.
4.2 How can the validity of an issued patent be challenged?
In the case of court proceedings, papers are filed - typically, with the Federal Court - seeking an order that the patent is partially or entirely invalid.
At a fairly early stage, a case management hearing may be scheduled to determine a timetable for the filing of grounds and particulars, defence and evidence. If the matter does not settle beforehand, it will go to trial before a single judge at first instance. Judges hearing patent matters are drawn from a specialist panel. Decisions of the Federal Court are appealable to an expanded bench (at least three judges) and ultimately, if important matters of law are at issue, the matter can be appealed to the High Court.
Validity can also be challenged at the Australian Patent Office. In this case, a request for re-examination is filed by the party seeking revocation. The invalidating art and any other evidence or submissions must be provided along with the request to re-examine the patent. The Australian Patent Office must consider such a request and must re-examine the patent. However, once the re-examination process has commenced, the requestor has no ongoing role and the process becomes ex parte between the patentee and the Australian Patent Office. The Australian Patent Office will issue a report which, if necessary, can be addressed by argument or amendment.
In the case of a certified innovation patent, validity can be challenged by commencing opposition proceedings at IP Australia, which operates along similar lines to the pre-grant opposition proceedings conducted in relation to a standard patent. A successful opposition to an innovation patent will result in the innovation patent being revoked.
4.3 What are the grounds to invalidate an issued patent?
Under Australian law, the validity of one claim doses not necessarily affect the validity of any other claim. Thus, unless there has been some fraudulent behaviour by the patentee, a patent per se is not generally invalidated; rather, one or more (or all) of the claims may be held invalid.
A patent claim may be held invalid for any one or more of the following reasons:
- The claimed invention is not a ‘manner of manufacture' (ie, not proper subject matter for a patent, such as a natural phenomenon);
- The claimed invention is not novel;
- The claimed invention does not exhibit an inventive step;
- The claimed invention is not useful;
- The claimed invention was secretly used in the patent area before the priority date by or with the authority of the patentee or its predecessor in title;
- The specification does not describe the invention in a sufficiently clear and complete manner;
- The specification does not disclose the best method known to the applicant of performing the invention;
- The claims are not clear;
- The claims are not supported by the matter disclosed in the specification;
- The applicant is not entitled to grant of the invention (ie, the inventorship or ownership is incorrect; or
- The patent was granted by fraud or false suggestion.
4.4 What is the evidentiary standard to invalidate an issued patent?
There is an onus on the party bringing the action to demonstrate that the patent is invalid.
The standard used by the courts and by the Australian Patent Office is the ‘balance of probability' test. This requires the person making the decision - whether an examiner of first instance or a judge at the appeal stage - to weigh up the allowable evidence and decide, in the case of conflicting evidence, what the most probable finding of fact should be.
The rules of evidence are not strictly applied in proceedings before the Australian Patent Office, which is considered to be a tribunal and not a court. In patent hearings, the person making the decision will generally weigh up all the evidence presented. There is broad discretion as to how much weight the decision maker will give to any part of the evidence. For example, hearsay evidence is permissible in Australian Patent Office proceedings, although the decision maker will consider how reliable and probative it is and will give it appropriate weight. Hearing officers in the Australian Patent Office are usually highly technically skilled, but have only limited legal training, so the emphasis is to arrive at a correct outcome where both parties are given natural justice.
Previously, the Australian Patent Office used an evidentiary standard where the patent applicant received the benefit of the doubt. A patent application would proceed to grant unless it was practically certain that the subsequently granted patent would be invalid.
The rules of evidence are applied more strictly in court proceedings. Formal challenges to the admissibility of evidence may be made.
In the case of alleged infringement of a patented process for preparing a product, the onus reverses to the alleged infringer if the product is identical to the product obtained by the patented process. In that case, in the absence of proof to the contrary, the defendant's product will be taken to have been obtained by the patented process.
Expert evidence is generally put on in opposition and court proceedings, and may in some cases also be used in ex parte proceedings in the Australian Patent Office, such as re-examination. Expert evidence is generally confined to matters of technical fact and the state of the common general knowledge. Evidence from the parties may also need to be weighed in cases where inventorship is in dispute.
In proceedings before the Australian Patent Office, evidence is almost invariably presented in the form of a signed declaration. In patent opposition proceedings, the opponent presents its evidence in support, which is then responded to by the applicant's evidence in answer. The evidence in these rounds is broad ranging and the parties are free to address any issue they see fit. There is a further round of evidence in reply from the opponent. Evidence not strictly in reply may be given reduced weight. In general, the Australian Patent Office is unsympathetic to requests to file additional rounds of evidence or to allow additional time, even in cases where the parties might be in agreement.
In court proceedings, the plaintiff first provides its evidence in chief, which is then responded to by the defendant. The courts generally adopt a more flexible approach and will in most cases consent to an evidentiary schedule agreed by the parties. This is often necessary as the court will usually be dealing with invalidity as part of a counterclaim to infringement.
Witness statements are almost never tested by cross-examination in Patent Office proceedings, but they are in court proceedings. Expert witnesses for the parties are often required by the court to consult and prepare a joint report in which they set out points of agreement and points of difference. The witnesses may then be required to provide conjoint evidence, where they are examined and cross-examined together on the relevant issues.
4.5 What post-grant review or opposition procedures are available for third parties to challenge the validity of a patent?
As indicated above, once a patent grants, the only options for a third-party challenge are revocation through the courts or re-examination through the Australian Patent Office. However, Australia has a post-acceptance/pre-grant opposition system which provides an effective procedure for challenging the grant of a patent. Being pre-grant, it gives third parties the chance to challenge the grant of a patent before the patentee can bring an action for infringement.
The opposition process is inter parte, which tends to add to the overall cost of proceedings; however, patent oppositions are still significantly cheaper than court proceedings. The hearing officer will usually have a solid technical background, so pursuing an opposition can be advantageous where the subject matter is technically complex.
4.6 Who can oppose a granted patent?
Anyone can oppose a granted patent. It is not necessary to identify the real party in interest. An opposition can be pressed using a strawman as the actual opponent.
The use of a strawman can present some practical difficulties. For example, if circumstances arise with the true opponent that would otherwise justify an extension of time for filing evidence, the strawman will be unable to rely upon those circumstances. It is generally advisable also to have an agreement in place between the strawman and the true opponent to ensure, for example, that the true opponent retains the right of appeal.
4.7 What are the timing requirements for filing an opposition or post-grant review petition?
An opposition must be commenced within three months of acceptance of the application being advertised in the Australian Official Journal of Patents. All that is required at this stage is the filing of a notice of opposition, nominating the opponent of record and commencing the proceedings. This deadline is not extensible under normal circumstances and will be available only in case of error or omission, or circumstances beyond the parties' control. In the absence of an opposition by the deadline, the patent issues as soon as practicable, which is typically less than a month. If a request for an extension of time to file an opposition is made after grant, opposition is impossible.
A request for re-examination may be made at any time after acceptance of the application. If the request is made pre-grant, the commissioner of patents can re-examine the case, but is not compelled to do so, and indeed is unlikely to take such a step. However, if the request for re-examination is made after grant, the commissioner must re-examine the patent.
A certified innovation patent can be opposed at any time.
4.8 What are the grounds to file an opposition?
The grounds of opposition are only slightly less broad than those available to the courts. During opposition, the following grounds may be pressed:
- The claimed invention is not a ‘manner of manufacture' (ie, not proper subject matter for a patent, such as a natural phenomenon);
- The claimed invention is not novel;
- The claimed invention does not exhibit an inventive step;
- The claimed invention is not useful;
- The specification does not describe the invention in a sufficiently clear and complete manner;
- The specification does not disclose the best method known to the applicant of performing the invention;
- The claims are not clear;
- The claims are not supported by the matter disclosed in the specification; or
- The applicant is not entitled to grant of the invention
The Australian Patent Office will not consider invalidating prior secret use by the applicant during opposition proceedings. Because opposition proceedings are pre-grant, the Australian Patent Office is unable to determine whether a patent has been granted as a result of fraud or false suggestion.
4.9 What are the possible outcomes when an opposition is filed?
One possible outcome is that the opposition is fully dismissed, with no grounds made out. The patent will then proceed to grant, unless the opponent appeals the decision to the courts.
If some or all grounds of opposition are found to be made out, the hearing officer will allow the applicant a two-month window to propose amendments to overcome the deficiencies identified in the decision.
The allowability of the amendments will be considered, and these may themselves be opposed based on a lack of support or lack of clarity, or if they broaden the claims as accepted. Once the allowability of the amendments is settled, the parties make submissions as to the effectiveness of those amendments in overcoming the deficiencies identified in the original decision. A further hearing may take place if the issues are complex. The hearing officer will subsequently make a final determination as to whether the application can proceed to grant.
Once a final determination is made, that decision may be appealed to the court.
4.10 What legal standards will the tribunal apply to resolve the opposition or challenge, and which party bears the burden of proof?
The onus is on the party bringing the opposition to demonstrate that the patent, if granted, would be invalid.
The hearing officer applies the same standard as the court, which is a ‘balance of probability' test. That requires the hearing officer to weigh up the available evidence and decide, in the case of conflicting evidence, what the most probable outcome should be. As mentioned above, the strict laws of evidence do not apply in Australian Patent Office proceedings.
4.11 Can a post-grant review decision be appealed and what are the grounds to appeal?
Appeal is available on any of the grounds pressed during the opposition. New evidence may be presented by either party in the appeal.
In addition to an appeal from an opposition decision, if the patent ultimately proceeds to grant, then revocation proceedings may be commenced by any party, including the original opponent.
It is generally advantageous to proceed with the appeal of an opposition if possible, as this will delay the granting of the patent, because the patent applicant cannot commence an action for infringement or secure an injunction until and unless such an appeal is concluded in its favour.
5 Patent enforceability
5.1 What makes a patent unenforceable?
Patents are unenforceable if they lack any of the necessary requirements for validity.
A patent may be unenforceable if it has been obtained by fraud or false suggestion. A false suggestion, which would normally be expected to be made to the Australian Patent Office during prosecution, need not be wilfully false. If the representation was false and was material to the application securing acceptance, then the patent may be held invalid.
In some cases, if a patentee has a claim that is knowingly invalid and there is an undue delay in making a corrective amendment, then the court has the discretion to refuse that amendment. This, in effect, can tie a patentee to an invalid claim that cannot be corrected and is thus unenforceable.
Innovation patents proceed to grant without substantive examination. They remain unenforceable until such time as they have undergone substantive examination and have been certified.
5.2 What are the inequitable conduct standards?
As mentioned, in Australia, a patent may be held to be invalid if it is shown that the patent was obtained by fraud, false suggestion or misrepresentation.
For false suggestion or misrepresentation, it is not necessary that the person making the statement knew that it was false or deliberately sought to mislead. All that is required is that the statement was material in getting the patent granted and was not factually correct. Statements of advantage in the specification made in good faith are unlikely to be problematic (Uniline Australia Ltd v SBriggs Pty Ltd  FCA 222 (16 March 2009)). However, statements made in the specification implying factual experimental support where none such existed (Morellini v Mizzi Family Holdings Pty Ltd  FCAFC 13) have been sufficient to get a patent revoked.
Statements made during prosecution can also lead to a patent being considered to have been obtained by a false suggestion or misrepresentation. (Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (2008) 77 IPR 449). The representation must have materially contributed to the patent getting granted, although it need not have been the only factor in getting the patent granted.
The courts have quite broad powers and it can be shown that a party engaged in patent litigation acted with ‘unclean hands', which can be reflected in the decision and the remedy.
5.3 What duty of candour is required of the patent office?
There is no duty of candour comparable with that in the United States and no ongoing duty to keep the Australian Patent Office apprised of search results. However, as mentioned above, if an applicant presses or maintains a claim that it knows to be invalid, then ultimately the court may deny it the opportunity to make corrective amendments.
There is also no formal doctrine of file wrapper estoppel. However, if a patentee later makes assertions in relation to a patent that are inconsistent with those made during prosecution, then the question of misrepresentation and the materiality of that to the decision to grant may apply.
6 Patent infringement
6.1 What Constitutes Patent Infringement?
Patent infringement takes place when others exploit the invention as claimed. The term ‘exploit' is defined in the Patents Act, in respect of a product, as follows: "[to] make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things." Where the invention is a method or process, it is an infringement to "use the method or process or do any act mentioned above in respect of a product arising from such use".
In Apotex Pty Ltd v Warner-Lambert Company LLC (No 3)  FCA 94, the court confirmed that offers made during the patent term to supply after the expiry of the patent expiry constituted infringement.
In addition to direct infringement, it is possible for infringement to be indirect, or contributory, where no single party is responsible for infringement, but rather multiple parties act in concert to perform an infringing act. For instance, selling a known product with instructions to use in an infringing manner will constitute contributory infringement. Contributory infringement need not be explicitly directed. Selling a product with no reasonable non-infringing purpose, or even selling a product with the reasonable expectation that it would be used in an infringing manner, may be sufficient to constitute infringement. The approach of the courts with respect to contributory infringement has not always been consistent.
6.2 Does your jurisdiction apply the doctrine of equivalents?
No. Claims are given a purposive construction, rather than a strict literal construction, but features in the claims are not broadened beyond the wording used. The claims are read by a person of "practical knowledge and experience" in the art, informed by the specification, and will be construed to have that breadth. In Meat & Livestock Australia Limited v Cargill, Inc  FCA 51 at 217, it was stated that: "To apply a purposive construction does not justify extending the patentee's monopoly to the ideas disclosed in the specification."
For this reason, US claims should not automatically be used verbatim in Australia, as the consequences can be overly limiting. Where a specific feature can be claimed in functional terms, that should be preferred.
During prosecution and when a challenge to validity arises, the question of whether a claim or feature of a claim is a mere technical equivalent of features found in the prior art will be considered. If the feature is found to be a technical equivalent and provides the same functionality within the context of the problems solved, an issue of lack of inventive step may arise.
6.3 Can a party be liable if the patent infringement takes place outside the jurisdiction?
In some cases a party can be liable if the actual steps leading to infringement take place outside Australia. In Warner-Lambert Company LLC v Apotex Pty Limited (No 2)  FCAFC 26 it was held that importation and sale in Australia of a product made outside the jurisdiction by a method claimed in an Australian patent amounted to patent infringement. In effect, simply working the patented method outside Australia and importing the resultant product into Australia will constitute infringement.
This is particularly important in the pharmaceutical area, where many generic drugs may be imported. Even if the primary substance patent has expired, goods made overseas by a specific claimed process may still be infringing.
6.4 What are the standards for wilful infringement?
There is no distinct category of ‘wilful patent infringement' under Australian law. However, the nature of the conduct engaged in by an infringer, such as whether such conduct is flagrant and/or intentional, can be relevant to issues of patent infringement in several respects.
First, where infringement is determined to have occurred, wilfulness may be relevant to liability for damages or an account of profits. A court may refuse to grant such relief in the case of ‘innocent infringement' if satisfied that, as at the date of infringement, the defendant was unaware, and had no reason to believe, that a patent for the invention existed. If products marked to indicate that they are patented are sold to a substantial extent before the date of infringement, the defendant is taken to have been aware of the existence of the patent unless the contrary is established. In the case of divisional patents (in particular, divisional innovation patents), it was suggested in Coretell Pty Ltd v Australian Mud Company Pty Ltd  FCAFC 54 at  that "a defendant cannot be aware of a patent, let alone the invention as claimed in the claims of a patent, before it is brought into existence". Innocent infringement does not affect the court's ability to order an injunction.
Second, the wilfulness of infringement may be relevant to an award of additional damages, as discussed in more detail in question 9.6.
6.5 Which parties can bring an infringement action?
An action for patent infringement can be brought by either the patent owner or the exclusive licensee of a patent (S120(1) Patents Act 1990 (Cth)). An ‘exclusive licensee' is defined in the Patents Act 1990 (Cth) as "a licensee with the right to exploit the patented invention throughout the patent area to the exclusion of the patentee and all other persons". Courts have recently given attention to the question of when a party is an ‘exclusive licensee' for the purposes of the Patents Act and therefore whether the party is entitled to bring proceedings for patent infringement.
In Bristol-Myers Squibb Co v Apotex Pty Ltd  FCAFC 2 at , it was affirmed that "the right to exploit" is a single indivisible right. Additionally, an exclusive right to exploit a patent within a particular region in Australia is unlikely to be considered an exclusive licence. Care should be taken in drafting exclusive licences of Australian patent rights to ensure that the terms of the licence confer exclusive licensee status on the licensee, if that is the intention.
If infringement proceedings are initiated by an exclusive licensee, the patentee must be joined to the proceedings as a defendant if it has not been joined as a plaintiff (Section120(2) of the Patents Act 1990 (Cth)). If joined in accordance with this requirement, the patentee is not liable for costs unless the patentee enters an appearance and takes part in the proceedings (Section120(3) of the Patents Act 1990 (Cth)).
6.6 How soon after learning of infringing activity must an infringement action be brought?
An action for infringement must be brought by the later of either three years from the date that a patent is granted or six years from the date on which an act of infringement took place (S120(4) Patents Act 1990 (Cth)).
Generally speaking, an action can be brought any time within this period, subject to the possible application of doctrines such as acquiescence and laches which are applicable in particular circumstances.
Delay is an important factor when an application for an interlocutory injunction is made - that is, a temporary injunction prohibiting infringing activity which is made pending final determination of a proceeding. In this case it is important that the claimant act as quickly as possible after learning of the infringing activity, as failure to do so will be relevant to consideration of the balance of convenience. For example, in Interpharma Pty Ltd v Aventis Pharma SA  FCA 32 the approximately 10-month delay of the applicant in requesting an interlocutory injunction was a material factor weighing against the grant of an interlocutory injunction. However much shorter delays than this could also be relevant to the granting of an interlocutory injunction. Action in this situation should thus be taken as a matter of urgency.
6.7 What are the pleading standards to initiate a suit?
When initiating a suit, the applicant must and serve file two pleadings with the court. The first is an originating application that sets out the orders and relief that the applicant will seek in the proceeding. The second is a statement of claim which sets out all the material facts which are relied upon to establish infringement of the relevant patent. The statement of claim is intended to inform the respondent of the nature of the claims made against it and must contain the necessary particulars of each claim. Specifically, each claim of the patent that is alleged to have been infringed must be identified and at least one instance of each type of infringement alleged must be particularised. The applicant must also file a ‘genuine steps statement' which sets out the steps which have been taken to try to resolve the issues in dispute with the respondent.
A respondent can request further and better particulars from an applicant where the statement of claim is not sufficiently clear or does not contain adequate detail. A respondent must file a defence responding to each allegation made in the statement of claim and identifying any positive defences that it intends to rely upon.
6.8 In which venues may a patent infringement action be brought?
The usual forum for an action for patent infringement is the Federal Court of Australia. The Federal Court sits in the capital cities of each state and most territories in Australia, and has a number of registries throughout Australia. There are no jurisdictional rules with respect to the registry in which a proceeding is started. Proceedings are generally commenced in the most convenient registry to the applicant – usually, that closest to the applicant's lawyers. A request can be made for a matter to be moved to a different registry in certain circumstances.
At first instance, patent infringement matters in the Federal Court are heard by a single judge.
An action for patent infringement can also be brought in the Supreme Court of each state or territory. However, in practice, it is rare for patent actions to be commenced in the Supreme Court.
6.9 What are the jurisdictional requirements for each venue?
The Federal Court is a national court and applicants can file to commence proceedings in any of its registries located throughout Australia. Most patent infringement actions are filed in the New South Wales (Sydney) and Victoria (Melbourne) registries. There is no jurisdictional cap or minimum threshold on the level of monetary compensation which can be sought in actions commenced in the Federal Court.
As such, the issue of jurisdictional ‘forum shopping' does not arise in Australia.
6.10 Who is the fact finder in an infringement action?
In Australia, all aspects of a patent infringement action are heard and decided by a judge, who is responsible for making all findings of law and fact. Patent infringement cases in Australia are not heard by juries.
6.11 Does the fact finder change based on venue?
No, patent infringement cases are always heard by a judge without a jury.
6.12 What are the steps leading up to a trial?
Each patent infringement case will differ somewhat, depending on the particular circumstances, and the order in which various steps occur may vary. However, in most cases (in the Federal Court), at least the following primary steps will occur:
- Each party will file the necessary pleadings. Typically, the respondent(s) will also file a cross-claim for revocation of the patent, which will be heard together with the infringement action.
- Further particulars of the proceedings may be sought by either or both parties.
- Either shortly before or after the defence is filed, the parties appear at a first directions hearing, at which the court will set a timetable for next steps in the proceedings.
- Further directions hearings will take place throughout the proceedings, allowing the judge to case manage the proceedings. Interlocutory applications may be filed in relation to various procedural matters.
- The parties may seek discovery of relevant documents. Often, discovery will be given before evidence is filed, but in some cases the court will require the evidence to be filed first. Subpoenas may be issued to third parties to obtain documents from them.
- Each party will file its evidence on both infringement and validity. Usually, the applicant will file evidence in chief on infringement at the same time as the respondent files evidence in chief on validity, and then each party will file evidence in answer. This evidence will usually comprise both expert and factual evidence.
- In the months before trial there will often be a joint expert witness process, whereby the expert witnesses engaged by each party will confer and generate a joint expert report which identifies points of agreement and disagreement.
- Various pre-trial processes, including the identification of objections to evidence and preparation of court books, will take place in the run-up to the trial.
- The parties will each serve an outline of opening submissions setting out the law and facts on which each party relies.
- The trial takes place, at which witnesses give evidence and are cross-examined, and each party makes submissions on the facts and law.
6.13 What remedies are available for patent infringement?
The primary remedies that are available upon final judgment include the following:
- damages or an account of profits. If infringement is established, the applicant will usually be entitled to damages (compensation for the damage suffered) or an account of profits (an accounting of the profits made by the respondent). The applicant must elect which of these remedies it wishes to pursue. The basis for assessing damages will depend on the circumstances of the case. This may include damages based on lost sales and/or lost licence fees. Usually, the question of quantum will be separated from the question of liability. That is, issues of the appropriate quantum of monetary relief will not be considered at the first hearing; only if liability is established will a second hearing take place to determine quantum. In practice, issues of quantum are very often settled by the parties;
- permanent injunction restraining the respondent from infringing conduct;
- delivery up or disposal of infringing goods; and
- declaration that the relevant conduct has infringed the applicant's patent rights.
6.14 Is an appeal available and what are the grounds to appeal?
Yes, decisions of the Federal Court in relation to patent infringement can be appealed to the Full Federal Court which consists of a bench of three or five judges of the Federal Court. In the case of interlocutory judgments, usually leave to appeal must first be obtained from the court (Section 24(1A) of the Federal Court of Australia Act 1976).
In the Federal Court, the grounds for appeal are that the presiding judge made an error of law or fact, or both, in the original judgment. Appeals are heard ‘on the papers' filed in the original Federal Court proceedings. New evidence will not generally be admitted, other than in specific circumstances. The Full Federal Court will also consider the transcript of the oral evidence given in the first instance proceeding. The hearing before the Full Federal Court therefore consists of legal submissions made by each party.
A further appeal from the Full Federal Court to the High Court is available; however, special leave must be granted by the High Court. The High Court will usually hear an appeal only where an important question of legal principle is in contention.
7.1 Is discovery available during litigation?
Any party can apply for a court order to require discovery from another party to patent litigation proceedings or, in some circumstances, from a third party which is not party to the proceedings. A discovery application should not be made unless it will facilitate the just resolution of the proceedings as quickly, inexpensively and efficiently as possible. In practice, discovery is often sought in patent infringement proceedings. Usually, a party will request discovery in correspondence before filing a court application and often the parties may agree terms of discovery without a formal court application.
Where discovery is required, the party giving discovery must make reasonable searches and inquiries for all documents falling within the discovery required to be given. A list of the relevant documents is prepared and an affidavit must be sworn by an appropriate employee of the party giving discovery attesting to the searches that have been conducted and confirming that all discoverable documents located are listed. Documents over which privilege is claimed will be listed separately and although they must be identified in the list, privileged documents are not available for inspection by the other party.
Where a discovery order is made, there is an ongoing obligation throughout the proceedings to give discovery of any further discoverable documents which are identified.
7.2 What kinds of discovery are available?
While ‘general' discovery of all documents directly relevant to the issues raised in pleadings is possible, the court will usually require the party seeking discovery to justify why the particular documents should be discovered and will order discovery only of clearly defined and specified categories of documents, often limited by parameters such as date and subject matter. The relevance of the categories of discovery sought will need to be justified by reference to the issues arising out of the pleadings. Often it may be necessary to file an affidavit in support of a discovery application to deal with such matters.
Where discovery is ordered, reasonable searches must be conducted by the party giving discovery in order to comply with the discovery order. The search must be made in good faith, uninfluenced by any negative impact on the party, and should be comprehensive but proportionate. What constitutes a reasonable search will depend on matters such as:
- the nature and complexity of the proceedings;
- the number of documents involved;
- the ease and cost of retrieving a document;
- the significance of any document likely to be found; and
- any other relevant matter.
Confidentiality is not in itself a ground upon which to withhold discovery. Usually, arrangements will be agreed between the parties with respect to confidentiality - for example, whereby access to designated confidential documents is limited to outside counsel or certain named persons within the receiving party.
7.3 Are there any limitations to the amount of discovery allowed?
A key limitation is that discovery must not be sought by a party "unless it will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible" (Rule 20.11 of the Federal Court Rules 2011).
Litigants are expected to abide by guidelines issued by the court that state:
- "Where discovery is necessary, the Court expects the parties and their representatives to take all steps to minimise its burden" (Central Practice Note: National Court Framework and Case Management [10.3]); and
- "A Request [for discovery] must be proportionate to the nature, size and complexity of the case – ie. the Request should not amount to an unreasonable economic or administrative burden on the Discovery Respondent" (Central Practice Note: National Court Framework and Case Management [10.7]).
As mentioned in question 7.2, discovery is generally ordered by reference to specific categories of documents. The precise wording of such categories is often the subject of considerable contention between the parties, and the party seeking discovery has the burden of showing that the discovery is relevant to the issues in the case and proportionate.
Discovery can also be opposed and the court has discretion to refuse a request for discovery on the basis that it is oppressive to a party. This usually requires the party resisting discovery to file an affidavit setting out the time and work involved in searching for and collating documents within the categories sought.
While privileged documents must be included in the discovery list, they cannot be inspected by the other party.
8 Claim construction
8.1 When during a patent infringement action are claim terms defined by the tribunal?
Typically, all issues raised in patent infringement proceedings, including claim construction, are dealt with together at the final hearing. In that sense, ‘Markman' type hearings are not usually conducted in Australia.
However, the Federal Court does have the ability to hear a preliminary issue in a proceeding and there is some precedent for the use of this power to conduct a claim construction hearing. This occurred, for example, in Konami Gaming Inc v Aristocrat Technologies Australia Pty Ltd  FCA 92, where the parties jointly requested the court to consider and determine the construction of certain terms in the claims in advance of the hearing on infringement and revocation of the relevant patent.
8.2 What is the legal standard used to define claim terms?
The key principles of claim construction applicable in Australia were well summarised by the Full Federal Court in Jupiters Ltd v Neurizon Pty Ltd ( FCAFC 90; (2005) 65 IPR 86 at , omitting citations):
- The proper construction of a specification is a matter of law for the court.
- A patent specification should be given a purposive, not a purely literal, construction; and is not to be read in the abstract, but is to be construed in the light of the common general knowledge and the art before the priority date.
- The words used in a specification are to be given the meaning which the normal person skilled in the art would attach to them, having regard to his or her own general knowledge and to what is disclosed in the body of the specification.
- While the claims are to be construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification, although terms in the claim which are unclear may be defined by reference to the body of the specification.
- Experts can give evidence on the meaning which those skilled in the art would give to technical or scientific terms and phrases, and on unusual or special meanings to be given by skilled addressees to words which might otherwise bear their ordinary meaning.
8.3 What evidence does the tribunal consider in defining claim terms?
Claim construction is ultimately a matter for the court. In Britax Childcare Pty Ltd v Infa-Secure Pty Ltd  FCA 467 at  Justice Middleton stated: "A court may be in the position to construe a patent without the aid of any expert evidence, if it is clear that the patent is to be read according to its ordinary meaning and no special meaning is to be given to any word or phrase, and the court does not need assistance in understanding the context of the patent in suit."
However, terms of art often feature in patent claims and consequently courts will often rely on expert evidence when determining the meaning and scope of claims. This evidence will be provided in the form of expert witness affidavits and/or joint reports of experts, and oral evidence from experts at trial.
9.1 Are injunctions available?
Yes, both interlocutory and permanent injunctions are available in Australian patent infringement cases.
9.2 What is the standard to obtain an injunction?
Interlocutory injunctions: An interlocutory injunction is sought at the outset of a case to preserve the position pending final determination of the case. For an interlocutory injunction to be granted, the court must be of the view that:
- there is a serious question to be tried;
- damages will be an inadequate remedy; and
- the balance of convenience and justice favour grant of the injunction.
Whether there is a serious question to be tried will depend on the strength of the applicant's case as established in affidavits filed in support of the interlocutory injunction application. The applicant need not show that it will succeed at trial, but rather that it has a reasonably arguable case. Where the other factors relevant to the grant of an interlocutory injunction are relatively evenly balanced, the strength of the applicant's case may gain more significance (Samsung Electronics Co Limited v Apple Inc  FCAFC 156).
The sufficiency of damages is assessed by the court by considering whether, in the absence of an injunction being granted, damages would constitute an adequate remedy if it is ultimately shown that the respondent is infringing the applicant's rights. Damages may not be an adequate remedy for a number of reasons, such as difficulty in quantifying damages on the facts or the potential insolvency of the respondent if infringement is successfully argued.
In determining the balance of convenience and justice, the court will consider and weigh up the harm that could be suffered by the applicant, the respondent and, where relevant, third parties if an interlocutory injunction were granted. The status quo may also be relevant to assessment of the balance of convenience.
An applicant for an interlocutory injunction must provide an undertaking as to damages, which requires it to compensate the party against which the injunction is sought if the applicant is ultimately unsuccessful at final trial. Such damages can often be substantial and are an important consideration in determining whether to seek an interlocutory injunction.
Permanent injunctions: Permanent injunctions which prohibit a respondent from engaging in specific activities in relation to a patent for the duration of its remaining term are usually imposed by the court where patent infringement is established by an applicant.
9.3 Are damages available?
Yes. Generally speaking, a successful party in a patent infringement action will be entitled to elect between damages (other than in cases of innocent infringement, as referred to in section 6.4) and an account of the infringer's profits received as a result of the infringing activity.
Quantification of damages is usually separated from determination of liability for infringement. This ensures that the court and parties do not expend resources on determining the quantum of damages if no liability for infringement is found. The question of quantum is often resolved between the parties without hearing to avoid the expense of further litigation.
9.4 What types of damages are available?
Damages available for patent infringement cases can broadly be divided into compensatory damages and additional damages. The nature of additional damages is outlined in question 9.6. As an alternative, the applicant can elect an account of profits. The court may grant a request for discovery to aid the patent owner with this election.
Damages are most frequently calculated by reference to lost sales as a result of the infringing conduct and/or lost licencing fees where the applicant is not selling products or services itself. A patentee seeking damages based on lost sales must identify and justify classes of sales which it would have been able to make had the infringement not occurred. Difficult issues may arise as to how many of the sales made by the infringer would have been made by the patentee but for the infringement. Similarly, where the patentee would otherwise have licensed the infringer, damages may be calculated on the basis of a lost licence fee.
In some cases the Australian courts have also applied the ‘user principle' when determining damages for intellectual property infringement, granting damages on the basis that even if the above heads of damage cannot be made out, the infringer should pay something for its use of the relevant intellectual property. The jurisprudence in this area is still developing.
9.5 What is the standard to obtain certain types of injunctions?
See question 9.2.
9.6 Is it possible to increase or multiply damages due to a party's actions?
The court has the discretion to award additional damages which go beyond merely compensating the patentee for actual damage suffered. The amount of additional damages that a court can reward is not limited by statute. Case law suggests that additional damages are not available if the patentee chooses to obtain an account of profits from the infringer.
In exercising its discretion in determining whether additional damages should be awarded, the court must consider:
- the flagrancy of the infringement;
- the need to deter similar infringement;
- the conduct of the infringer after infringement or after being informed of the alleged infringement;
- the benefits that resulted from infringement; and
- all other relevant matters.
Additional damages can significantly increase the overall award of damages in circumstances where actual loss of the patentee is relatively limited, but the respondent's behaviour is determined by the court to justify additional damages.
9.7 Are sanctions available?
Liability for patent infringement is confined to civil liability in Australia.
9.8 What kinds of sanctions are available?
Criminal sanctions, including fines and imprisonment, may be imposed for failure to comply with court orders. However, these sanctions are not specific to patent infringement cases and there is no criminal liability for patent infringement per se.
9.9 Can a party obtain attorneys' fees?
Yes, the usual rule is that the successful party will be awarded its costs. Costs may be apportioned as appropriate, based on factors such as whether the party is only partially successful and whether its conduct during litigation warrants specific costs being awarded against it.
9.10 What is the standard to obtain attorneys' fees?
The successful party is usually entitled to its costs on what is known as a party/party basis. The final sum of costs can be determined by a process known as ‘taxation'. In most circumstances, the party/party costs that are ultimately awarded represent approximately 50% to 75% of the actual legal costs of the successful party.
In exceptional circumstances, the court may award costs on an indemnity basis, which entitles that party to the full amount of its legal costs.
10.1 What patent rights can a party obtain through a licence?
A patentee may choose to license some or all of its exclusive rights to exploit its patent to one or more parties. Rights can also be licensed on an exclusive or non-exclusive basis. If a party is an exclusive licensee, under statute, it acquires special rights that a non-exclusive licensee does not have, such as the right to sue. See question 6.5 above for a discussion of when a licensee is considered to be an exclusive licensee.
10.2 What limits can a patent owner impose on a licence?
Generally, a patentee is free to contract in relation to its patent rights as it sees fit. There are several statutory exceptions to this rule which render certain classes of licence conditions void (Section 144 of the Patents Act 1990 (Cth)). These include where a contract contains a condition that:
- the licensee cannot use the product or process of a third party;
- the licensee must obtain a non-patented product from the patentee; or
- the licensee is limited or prohibited from seeking examination for an innovation patent, which is a prerequisite for enforcement.
Conditions falling under the first or second bullet above are not void if the licensor:
- can prove that the licensee had the option of entering into the licence agreement without the condition; and
- provides for a mechanism whereby the licensee can give three months' notice and, by paying compensation, be relieved of the obligation.
Additionally, there is a mandatory statutory release from any licence that purports to operate after a patent has expired. Any such licence can be terminated after expiry by the licensee or licensor upon giving three months' notice, despite any contrary provisions in the licence or any other contract.
11.1 Are there any limits on patent protection due to antitrust laws?
The intersection between patent law and competition law in Australia is not well defined and there is little case law dealing with the respects in which patent rights might be limited by competition law. In general, limits are not imposed on patent protection by competition law. Historically, an exemption has also existed in the Competition and Consumer Act 2010 in relation to intellectual property, protecting IP rights holders from liability for anti-competitive conduct arising out of restrictions imposed on licensing and other agreements. However, legislation is proposed to remove this exemption, which will expose IP licences to general competition law requirements.
In addition, certain anti-competitive behaviours relating to the use of patent rights may in certain circumstances have consequences.
One aspect of this principle is reflected in Section 144 of the Patents Act 1990 (Cth), discussed in question 10.2, which deems certain licence terms void in certain circumstances.
Compulsory licensing provisions in the Patents Act also require the patentee to grant a licence to a third party in certain circumstances. One of the grounds for seeking such a licence is if the patentee has contravened Australian competition law, which deals broadly with anti-competitive practices such as price fixing; restriction of outputs in the production and supply chain; allocation of customers, suppliers or territories; and bid rigging (Section 45aa of the Competition and Consumer Act 2010). A compulsory licence can only be sought three years after the patent has been granted (Regulation 12.1(1) of the Patent Regulations 1991), and cannot be sought for an innovation patent unless it has been certified (Section 133(1A) of the Patents Act 1990). These provisions are currently under review as a result of recent reports of the Productivity Commission.
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.