The recent Full Federal Court judgement Coretell v Australian Mud Company ([2017] FCAFC 54) has clarified the date from which an innovation patent can be infringed. An innovation patent may only be infringed after it is granted and published, and not from any earlier date, such as the filing date or the date from which its 8 year term is calculated. This decision is particularly of relevance to the value of innovation patents filed as divisional applications.

Innovation Patent Basics

Innovation patents have a maximum term of 8 years from filing or, in the case of a divisional innovation patent, 8 years from the filing date of a parent or grandparent application. The date of filing of the parent or grandparent is known as the Effective Date of the patent. Innovation patents have a limited term of protection compared to standard patents in return for a lower threshold of inventiveness.

An innovation patent, following a formalities check, will proceed to grant very quickly after filing, usually within a couple of months. In order to be enforced, the innovation patent must then be examined and certified. It is possible to file an innovation patent application, request examination and have an enforceable certified innovation patent within a matter of months.

Due to its reduced requirement for inventiveness, and the speed with which it can be certified, the innovation patent is often used strategically in litigation. Particularly, owners of standard patent applications who locate potential infringers may file and request examination on a divisional innovation patent application with claims focused on the infringing article. This approach can quickly result in a certified innovation patent, which is then used to enforce the owner’s rights against the potential infringer.

Coretell v Australian Mud Company

This strategy underlies the decision in Coretell v Australian Mud Company (AMC). AMC were the owners of two innovation patents (2010101356 and 2011104041) that were enforced against Coretell. Each AMC innovation patent was a divisional of standard application 2010200162, which was a divisional of standard application 2005256104, giving an Effective Date of each innovation patent of 5 September 2005. The innovation patents were granted on 16 December 2010 and 15 September 2011, respectively.

One point of contention between the parties in the matter was the date from which Coretell was said to have infringed the innovation patents. Particularly, AMC argued that, following the earlier decision Britax Childcare v Infa-Secure ([2012] FCA 1019), the infringement claims against Coretell should be backdated to a date earlier than the grant date of each innovation patent, potentially to as early as the Effective Date of the innovation patents, 5 September 2005. This being the case, then AMC would have been entitled to relief from that date.

Coretell argued that the date from which relief for infringement could arise was the date of grant of the innovation patent, at the earliest.

In a unanimous decision, the bench decided in favour of Coretell. The judgement of Burley J. provides sound reasoning for this decision, rejecting the earlier decision in Britax at [95]:

‘…the interpretation adopted in Britax reflects a dramatic shift in the policy underlying the grant of substantive rights pursuant to the Act. It leads to the unattractive result that the owner of a divisional innovation patent may file a divisional application upon a much older standard patent and then sue for acts of infringement that took place well before the invention was defined in any claims. I would expect such a policy shift to have been clearly forecast in the language of the Act and in the secondary materials. No such shift is signalled in either.’

Burley J. references the ‘dates of grant’ of each innovation patent (16 December 2010 and 15 September 2011) as being the earliest date the specifications were published and therefore the date at which potential rivals were put on notice of the risk of infringement. In practice, innovation patents are only open to public inspection on the date that grant is advertised in the Official Journal, which is, in fact, a couple of weeks after the grant date. It is likely that Burley J. intends to reference the dates upon which the grant of each innovation patent was officially advertised.

Will the litigation strategy of filing divisional innovation patents continue?

The practice of filing divisional innovation patent applications to trap potential infringers may be affected as a result of this decision in situations where the patentee seeks to financially penalise the infringer. Notwithstanding this, the economics of litigation allowing, it will nevertheless still be a useful approach if the patentee’s aim is to stop an infringer from further market activity which is not already the subject of a granted patent.

Handy tip to recognise innovation patent numbers

Ever wondered how to tell whether an Australian patent number relates to a standard patent/application, an innovation patent or a provisional application, without having to search the number in the AusPat database?

The answer lies in the fifth digit, which tells the type of patent/application being referenced. The first four digits relate to the year of filing of the application. The following, fifth digit refers to the type of application filed as follows:

1 – Innovation patent 2 or 3 – Standard patent/application 9 – provisional application

For example, 2010101356 is an innovation patent, 2010200162 is a standard patent and 2004905021 is a provisional application number.