In our previous edition of Inspire! we outlined the procedure and some of the benefits involved in securing innovation patent protection in Australia. This article noted several benefits to patentees, and encouraged clients to consider filling innovation patent applications not only for relatively minor innovations, but for major inventions as well.

The innovation patent system is now under review by the Australian Government. This review has followed a recent report issued by IP Australia in relation to the economic impact of the innovation patent system, which found that the innovation patent system “is not fulfilling its policy goal of providing an incentive for Australian SMEs to innovate.” Following release of the economic report, the Australian Government Advisory Council on Intellectual Property (ACIP) released a recommendation that the Australian Government should consider complete abolition of the innovation patent system. The position taken by ACIP is quite different to its previous position in its report in June 2014 in which it recommended raising the threshold level of innovation required for a valid innovation patent from the very low current level.

The ACIP report of June 2014 made further recommendations for changing the innovation patent system, including:

  1. Requiring compulsory substantive examination of an innovation patent
  2. Changing the name of an unexamined innovation patent, and
  3. Limiting the grant of innovation patents to exclude methods and processes.

The ACIP report of June 2014 did indicate that it was unable to recommend abolition of the innovation patent system without adequate empirical evidence on whether the system does or does not stimulate innovation in Australian SMEs. That inability has since been rectified by the economic report of IP Australia mentioned above and consequently, ACIP now recommends that the Australian Government consider abolishing the innovation patent system.

The innovation patent system has long been considered to provide too generous protection for innovation patent owners. Innovation patents provide the same legal remedies as standard patents, but an innovation patent can be valid based on only a very minor difference from the prior art. The difference can even be an obvious difference .

In the public consultation that proceeded the June 2014 ACIP report, the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) recommended raising the level of innovation required for grant of a valid innovation patent. While ACIP did not recommend the specific change that IPTA suggested, ACIP did recommend an alternative approach that IPTA was in support of.

The most recent ACIP recommendation to abolish the innovation patent system would be welcome news for some practitioners in the IP industry, although for many others (and we expect the majority), there is an intermediate position that would be preferred. That intermediate position is to adopt the recommendations made by ACIP in the June 2014 report. If those recommendations were adopted, then the innovation patent system could be tested at a more reasonable threshold  validity level which would be more in keeping with the monopoly ‘deal’ that the patent  system provides for genuine innovations and inventions. The intermediate position allows for an initial attempt to fix the system, rather than simply abolishing it straight away.

The Australian Government is now considering the economic report of IP Australia, along with the latest recommendation from ACIP in order to finalise its decision on whether the innovation patent system should continue, and if so, in what form.

The Government is calling for submissions  from interested parties and POF will be active  in those submissions. We are very interested  to hear from our clients in relation to their  views on whether the innovation patent system should be retained or abolished so that those views can be put to the Government.