IP Australia (the Australian Patent Office) is proposing to introduce new high fees to process future Australian patent applications, with the new fees aimed directly at Australian small and medium sized enterprises (SMEs).

As part of IP Australia’s ‘Raising the Bar’ Act (set to come into effect on 15 April 2013), the draft Regulations propose a new fee of $2,200 to conduct a preliminary search and opinion (PSO) on a complete patent application. A slightly lower fee of $1,710 will be payable for conducting a search as part of the normal examination of an application. Payment of either of these fees is expected to be in addition to an existing examination fee of $490.

Failure to pay the fees when requested by the Patent Office will result in the patent application lapsing, with the applicant’s rights being lost forever.

The draft Regulations do not explain which applications will be the subject to PSO’s or when the Patent Office will decide to conduct a PSO or search. An Explanatory Memorandum [PDF] accompanying the Regulations states that a PSO will be conducted on each application when a search by another Patent Office is unlikely to be conducted before examination of the application commences. The Memorandum goes on to state that PSO’s will be conducted by the Commissioner, on her own volition, soon after filing (of the application).

The Memorandum makes it clear that applicants will be faced with the new fee around the time of filing the application and it will impact applicants who file Australian only patent applications, often Australian individuals and SMEs. These substantial new fees will impact on the Australian applicant simply seeking patent protection in their home country, whilst foreign applicants with sufficient resources to file international patent applications, will escape the new fees.

The Patent Office defends the new fee regime on the basis that the PSO will provide competitors and the general public with an early indication of the likely success of the application. Despite this, the PSO will not be a final or binding determination of the validity of the application and no competitor or member of the public will be able to rely on it for deciding the scope of any future patent monopoly. As a result, applicants will face substantially higher costs for obtaining their patent with little, if any, benefit to them.

A potential outcome of the introduction of the new fees is that the higher costs will lead to a decline in the number of patent applications filed in Australia, particularly by local SMEs. These companies will simply be unable to afford the escalating costs of patenting, with their inventions left unprotected. At a time when Australian innovators already struggle for funding and support, the introduction of higher costs will create a further barrier to obtaining patent protection from which they might leverage their inventions.

The new Regulations are expected to come into effect on 15 April 2013.