It may come as a surprise to many that a new full Federal Court ruling about plastic posts has confirmed that invention is not necessary for an innovation patent and as a result Australia’s unique innovation patent system may be creating enforceable rights over minor variations of existing products and processes.

Innovation patents are unique to Australia and, in contrast to standard patents, have a lower threshold for patentability and a relatively short term of eight rather than twenty years. The innovation patent system was introduced in 2001, and was designed to ‘stimulate innovation in Australian SMEs by providing Australian businesses with industrial property rights for their lower level inventions’.

Australia’s reputation as pro-patent will be enhanced as innovation patents are being relied on even more heavily by local as well as overseas patent holders for protecting and enforcing their rights, both for lower and higher level inventions.

Even though all of the features claimed in an innovation patent may be obvious to combine together, this alone will not invalidate the patent. To establish innovative step, all that really needs to be shown is that the new features must make a substantial contribution to the working of the claimed invention. This places the owner of an innovation patent in a powerful position when seeking to assert its patent rights.

It will now be difficult to successfully challenge the validity of an innovation patent on the basis of a lack of innovative step.

Last week’s Dura-Post v Delnorth decision will also make it more difficult to predict the scope of protection that might arise from a pending patent application because various minor points of distinction disclosed in the application may well qualify for innovation patent protection. Therefore there is now greater uncertainty as to whether a new product or method will infringe on competitors’ patent rights.

In this latest case the full Federal Court of Appeal considered several innovation patents for a roadside marker post made of sheet spring steel. The post included a number of features: a tapered end to allow the post to be driven into the ground, a barb to enable the post to be anchored into the ground and a marker hole to indicate how deep to embed the marker post in the ground.

All of these features were known from existing plastic posts, but not from an existing spring steel post. According to the Federal Court, this new but arguably obvious combination was enough to make these patents valid, as they contributed substantially to the working of the roadside post as claimed. The result gives the patentee an eight year monopoly on the invention of placing a marker hole in a known sheet metal roadside post, and separately providing the marker post with a barb and a pointed end.

The decision confirms that innovation patents are a powerful and increasingly popular tool for rapidly obtaining and enforcing exclusive rights to an invention. This is good news for patent holders, but bad news for potential infringers.

This article was published in the Australian Financial Review on 13 July 2009.