The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 (Cth) is set to abolish Australia’s innovation patent system. After an extensive consultation process — including a 2015–16 Productivity Commission inquiry, the bill passed the Senate with bipartisan support in October 2019. It passed the House of Representatives on 6 February and now awaits royal assent before becoming legislation.
Under the bill, those who have already obtained or applied for innovation patents will continue to be able to enforce them. It will also be possible to apply for innovation patents for 18 months after the bill comes into force.
Companies cannot afford to overlook the importance of obtaining appropriate IP protection. Failure to do so can jeopardise its commercial position and runs the risk that competitors will enjoy the benefits of significant investments made in research and development. Ensuring that key IP is appropriately protected can also be fundamental to a company’s ability to attract investment.
The standard and innovation patent systems enable businesses to protect new and innovative products and processes. It is important to apply for patent protection before any invention is disclosed to the public including, for example, by promoting or launching a product embodying the invention or publishing a paper disclosing the invention in an academic forum. It may be possible to protect developments that will not otherwise enter the public domain as trade secrets.
Australia’s innovation patent system
The innovation patent system was introduced in 2001 to protect incremental technological developments by Australian small- and medium-sized enterprises and as a replacement for the petty patent system which had been in operation since 1979. For 40 years, these systems have guaranteed protection for innovations in Australia.
IP owners have used the innovation patent system across a range of fields, with particular use in engineering (both civil and electrical) and information technology. For example, child safety seat manufacturer Britax obtained an innovation patent for a lightweight children’s booster seat that can withstand significant forces, while the Australian Mud Company obtained innovation patents for a process of conducting a geological survey for drilling operations. Many Australian businesses utilise the innovation patent system, including Apple, power tools manufacturer Black & Decker, home appliances maker Dyson and BlueScope Steel. While Australian residents accounted for nine per cent of standard patent applications in 2018, they accounted for 51 per cent of innovation patent applications.
Companies should review their R&D projects and IP portfolios, and consider the merits of applying for innovation patents.
The benefits of innovation patents
Innovation patents enable businesses to protect new and innovative products and processes. The ease with which they can be obtained, coupled with the difficulty of challenging their validity, has made them an effective litigation tool. Innovation patents present a number of key benefits as they:
- Require a low level of inventiveness to be valid (an “innovative step”) making them notoriously difficult to revoke
- Can be granted very quickly (within one month).
- Are granted without substantive examination (but are examined by IP Australia, the agency responsible for administering the patent system, before they can be “certified” and then enforced).
- Do not have a pre-grant opposition procedure, which (for standard patents) allows third parties to delay the grant of patent rights.
- Have a maximum term of eight years (compared to 20 years for a standard patent).
- Provide the same infringement remedies as a standard patent (including the ability to obtain an injunction to prevent the sale of an infringing product by a competitor).
Companies should review their research and development projects and IP portfolios, and consider, together with their IP advisers, the merits of applying for innovation patents.
This is especially important for companies:
- Contemplating or considering launching new products.
- Which have identified potentially infringing conduct by a competitor.
- With a standard patent application pending and which may benefit from immediate protection under the innovation patent system.
While the days of this powerful enforcement tool may be numbered, they are not yet done, and companies should act now to make sure they are in the best possible position to protect their IP in the years to come.
David Fixler is an IP litigator and partner at Corr Chambers Westgarth.