Should innovations be more inventive? A call for public comment.

The Federal Government has proposed changes to the innovation patent system, and is seeking public comment. The proposed amendments would require innovation patent applications to demonstrate the same level of inventive step as a standard patent.

In 2001, the Patents Act 1990 was amended to create a new lesser class of patents to replace petty patents called “innovation patents”, intended to protect smaller inventions and to foster and protect innovation among small-to-medium Australian entities. Innovation patents give the same exclusive monopoly rights as a standard patent, but they differ from standard patents in many respects, mainly that:

  • they have a shorter eight-year lifespan (compared to the twenty of standard patents);
  • they have a streamlined application process which skips in-depth examination by IP Australia; and
  • they require only an “innovative step” rather than the standard patent’s “inventive step” requirement.

However, the innovation patent system has apparently gone somewhat awry, with the number of innovation patent applications dramatically increasing since their introduction. A large proportion of these have been in the pharmaceutical, IT and electronics industries. The Government now believes that this is creating two major problems. First, there is evidence that innovation patents are not being used to protect actual R&D investment, but are being employed as tactical tools for litigation to suppress competition, and potentially to “evergreen” standard patents (an issue of significance elsewhere in the world, as we’ve discussed previously). Second, the sheer number of innovation patents being sought suggests that many applications are being granted over obvious or minor improvements that don’t deserve patent protection, especially because the remedies available for infringement of the much-easier-to-obtain innovation patents are identical to the remedies for infringement of standard patents.

Hot on the heels of the Raising the Bar amendments receiving Royal Assent in April of this year, the Australian Government is now calling for public comment for its proposal to amend the Patents Act 1990 by requiring that innovation patent applications demonstrate the same “inventive step” as a standard patent. It is thought that this will prevent the grant of innovation patents over unworthy developments and help to combat the problems highlighted above. Submissions must be made by 25 October 2012. Information on how to make a submission is available on the IP Australia website.

Meanwhile, the Advisory Council on Intellectual Property (ACIP) continues its comprehensive review on the innovation patent system in Australia.

For those who are interested, we have prepared a more detailed note on the proposed reforms. For a copy of the note, or for more information, please contact James Lawrence (E: [email protected], T: +61 2 9296 2126 or Kim O’Connell (E: [email protected], T: +61 2 9296 2188).