Draft Australian IP Amendment Bill released including farewell to the Innovation patent

Following the Productivity Commission’s (PC) 2016 inquiry and report into Australia’s intellectual property arrangements and recommendations to improve its operation, the Government’s response includes a number of proposed changes to legislation.

One vehicle for some of the potential changes is an amendment Bill - the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2018. An Exposure Draft of the Bill, released for consultation by IPAustralia can be found here.

We provide a brief summary of some of the key issues the Bill covers below:

Inventive step

A notable change is to amend the inventive step requirement which corresponds to recommendation 7.2 of the Productivity Commission’s original report.

Part 1 of Schedule 1 of the draft Bill proposes amending the inventive step requirement to:

“For the purposes of this Act, an invention is taken to involve an inventive step when compared with the prior art base if the invention is not obvious to a person skilled in the relevant art.”

This new definition is based on Article 56 of the European Patent Convention (EPC) and is intended to make the threshold and approach to inventive step similar to that taken by the European Patent Office, amongst other jurisdictions. This is likely to import the problem-and-solution approach as the prima facie test for inventive step, but its construction by the Courts will be awaited.

Part 1 of the Bill also updates the definition of the ‘prior art base’ with new section 7B. The change is substantively minor, effectively codifying the status quo while placing the definition into the body of the Act rather than in Schedule 1.

Innovation patent

Another headline change included in the Bill is the proposed abolition of the innovation patent system. The Productivity Commission’s view that the innovation patent was not providing value to Australian business has been acted on by the Government by proposing to progressively abolish the system.

The effective change is the proposed introduction of sub-section 52(3):

“It is a requirement of the formalities check that the date of the patent (if granted) would be a date before the day this subsection commences.”

Thus, this will prevent an application for an innovation patent being granted if the complete specification has been filed after the commencement date of the amended Act.

Abolition of the innovation patent system will not affect existing innovation patents but will prevent new innovation patents being filed after the amended Act takes effect.

Commencement of the provisions regarding inventive step and innovation patents are proposed to be delayed until 12 months after the Bill receives Royal Assent in order to provide rights holders sufficient time to determine how to proceed with applications claiming priority.

Changes to Crown use and compulsory licensing provisions

The Bill also introduces changes to the rarely used provisions regarding Crown use of patents and designs, and compulsory licensing of patents.

The main motivation for the amendments to the Crown use provisions is to improve transparency of this process, and also to require negotiation with the patent owner on reasonable terms before Crown use can be demanded.

The amendments to the Designs Act regarding Crown use are proposed in order to mirror the amendment to the Patents Act.

The amendment to the provisions regarding compulsory licensing clarifies that it is the public interest which is the key consideration. Specifically, the amendment will replace the ‘reasonable requirements of the public’ test with a ‘public interest’ test when the Federal Court considers an application for a compulsory licence. The proposed amendment also introduces amendments that require the court to consider the public interest when specifying the terms of the licence, including remuneration to the proprietor.

The Bill also amends the Patents Act to clarify the operation of the compulsory licensing provisions for dependent patents. These amendments provide that only the patentee of a dependent patent, and not a third party can seek a compulsory licence over the use of the original patent.

Other minor amendments

There are a number of other minor amendments which are proposed relating to seals, clarifying the limitation on ‘omnibus claims’, and protection of sensitive information.

Further detail regarding the proposed amendments is provided in the exposure draft itself and its explanatory memorandum which can be found here.

Submissions on the exposure draft of the Bill are open until 31 August 2018. Please let us know if you would like further information regarding the exposure draft or submission process.

New Zealand ‘Advancement Patent’

On a related note, and following our earlier article here, the Bill proposing a second tier patent in New Zealand called an “advancement patent”, which would have been similar in nature to the Australian innovation patent, has been defeated at its first reading in Parliament. Because the Bill proposing the advancement patent was a private member’s bill from a member of the opposition, it was not supported by the Government, therefore it lacked the necessary votes to progress to the next legislative stage.


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