Australia Seeks Tougher Inventiveness Patent Requirements

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By Peter Leung

Inventors seeking new patents in Australia may have to meet more stringent inventiveness requirements that better match Europe’s under a government proposal aimed at improving the nation’s intellectual property system.

Prime Minister Malcolm Turnbull’s government’s recent response to recommendations from the Productivity Commission, a government research body, included support for raising the inventive step requirement— analogous to the U.S. requirement that an invention be not obvious. An invention is not obvious if it’s sufficiently different from the known technology at the time.

“As it currently stands, the inventive step bar isn’t as high in Australia as it is at the European Patent Office,” Simon Potter, principal and patent attorney with Spruson & Ferguson in Sydney, told Bloomberg BNA. “Even though the Australian government made some changes back in 2013 with the Raising the Bar Act, the Productivity Commission’s view is that the bar remains too low, and the government apparently agrees.”

The government also supports abolishing the innovation patent, a lesser patent right for smaller innovations.

The response, issued Aug. 25, doesn’t give a timeline but highlights the government’s IP-related legislative priorities. There will likely be further consultations with stakeholders, such as IP Australia, the country’s patent office, on how to implement the changes.

More Like Europe

The government said it supports amendments to the Patents Act to clearly establish that a “scintilla” of inventiveness is not enough to secure a patent. The law should also make clear that the “obvious to try” test used by the European Patent Office can be used to determine whether an invention has an inventive step, it said.

“The underlying tenor of the Productivity Commission’s recommendation seems to be that Australia is granting too many overly broad patents,” Brett Lunn, managing partner and patent attorney with FB Rice in Sydney, told Bloomberg BNA.

European practices play a prominent role in the proposed patent reform. According to Australia’s Department of Foreign Affairs and Trade, the EU is the country’s second largest trading partner.

Rachel Hooke, a partner and patent attorney with FB Rice in Sydney, told Bloomberg BNA adopting an inventive step requirement in line with the EPO’s in theory likely won’t be too controversial, but much will depend on the details and implementation.

The government also supported a related Productivity Commission recommendation requiring applicants to identify the technical features in its patent claims, a practice that the EPO employs. Whether an invention meets the inventive step requirement should turn on the claim’s technical features, so requiring the applicant to lay out those features should help patent examiners come to the right conclusion, the commission said.

The recommendation also pushes for a move away from assessing inventions as a whole in favor of focusing more on technical features, which might not be the right approach, Hooke said.

“The PC seems hung up on weeding out ‘obvious and/or trivial combinations of pre-existing objects’ when in fact such claimed inventions would be barred under the existing test for inventive step,” she said.

Furthermore, Australia has a “ manner of manufacture” test but the EPO doesn’t, which is why the technical features analysis is so important in Europe, Hooke said. Having both seems “unnecessary and confusing,” she said.

The matter of manufacture requirement goes to whether an invention is patentable subject matter. A patentable invention must belong to the useful arts, provide a material advantage, and provide value in a field of economic endeavor.

Abolishing Innovation Patent

The government also said it supports abolishing the innovation patent, a lesser patent right designed to protect smaller technological advances. Innovation patents have a lower inventive threshold and are granted much more quickly, since there’s no substantive examination. An innovation patent only has an eight-year protection term and cannot be enforced until it passes examination.

Several other countries also have similar “secondary patent” systems, including Germany, Japan, and China. China’s utility model patents are sometimes criticized for being low quality, since they are also granted without examination, a problem that the government sees with the Australian system.

Broad, unexamined innovation patents are potential legal threats and can create uncertainty if they belong to a competitor, Lunn said.

The system also may not be fulfilling its original goals. Petty patent systems are generally supposed to be a low-cost way for smaller domestic companies to secure patent protection. But in the last few years, large multinational companies have increasingly used the system to build up their patent war chests, Lunn said.

Data from IP Australia shows that in 2016, 54 percent of the 2,322 innovation patent filings came from international companies. In 2015, international companies filed 39 percent of all innovation patent applications and, in 2014, 34 percent.

The commission examined other possible approaches for revamping innovation patents, such as increasing the inventive step requirement. Ultimately, though, it recommended abolishing the system to eliminate the use of innovation patents for “strategic purposes,” such as drafting and filing patents specifically designed to cover a competitor’s already released product.

No Term Extension Changes

The government rejected a recommendation to change patent term extensions for pharmaceutical patents to compensate for time lost to regulatory approval.

The rejected proposal would have extended terms only if government regulators took more than one calendar year to approve a drug, and would not have accounted for delays related to other issues, such as clinical trials. Because the regulatory approval process usually takes less than a year, many patent holders likely wouldn’t have qualified for an extension, Potter said.

Instead, Australia will continue using its current system, which calculates term extensions based on the time period between a patent’s effective filing date and regulators’ granting market approval, less five years. That period includes time expended for clinical trials and other acts within an applicant’s control.

To contact the reporter on this story: Peter Leung in Washington at pleung@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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