For some years patentees, particularly small-to-medium enterprises (SMEs) and individuals, have been expressing concerns about the costs and difficulties associated with enforcing patents in Australia.
In 2006, in response to these concerns, the Australian Government requested that the Australian Council on Intellectual Property (ACIP) conduct an inquiry into, and report on, issues relating to post grant patent enforcement strategies.
After an extensive review period and consultation with relevant stakeholders, ACIP issued its final report to the Australian Government in January 2010.1 The government is currently considering its response to the report.
The report contains nine recommendations for measures intended to assist patent owners (particularly SMEs) to enforce their patent rights in Australia in a cost-effective and commercially viable way. Some of the recommendations are also aimed at assisting Australian owners of overseas patents to enforce their rights in foreign jurisdictions.
Recommendations 1 to 5: IP Dispute Resolution Centre
The focus of the ACIP report and recommendations is the establishment of a proposed new body, termed the ‘Intellectual Property Dispute Resolution Centre’ (IPDRC). The IPDRC is envisaged as having a central role in providing patentees with information and new avenues of enforcement, as an alternative to the traditional path through court proceedings.
The ACIP report acknowledges that the IPDRC would not resolve all the difficulties or complexities involved in enforcing patent rights. However it expects that the IPDRC’s resources would assist many patentees who are looking for ways to enforce their rights effectively.
Recommendation 1: IP Australia set up and support an IPDRC
Broadly, the IPDRC would offer a variety of services for patentees considering enforcing their patent rights, including by providing general information about patent enforcement strategies, including the court processes and alternative dispute resolution (ADR) mechanisms available to patentees.
ACIP’s recommendation reflects:
- the potential suitability of ADR mechanisms (both binding (such as arbitration) and non-binding (such as mediation)) for resolving some types of patent disputes, and
- the low level of general awareness among many patentees about ADR mechanisms.
ACIP’s report observes that ADR mechanisms are increasingly being utilised in many types of legal dispute, including in the IP area (citing WIPO’s Arbitration and Mediation Centre as an example). ACIP acknowledges that not all patentees will want or need to use the IPDRC but expects SMEs and individuals in particular to benefit from having access to centralised and relatively low-cost resources of this sort.
Recommendation 2: Register of ADR Experts
ACIP suggests that, as part its encouragement and facilitation of the use of ADR mechanisms, the IPDRC maintain a register of experts to whom patentees can be referred.
The experts would be drawn from both legal and technical specialisations, and could assist with the various types of ADR processes, including:
- advisory processes (such as expert assessments and non-binding opinions)
- facilitative (such as negotiations and mediations), and
- determinative (such as expert determinations or adjudications).
ACIP recognises in its report that guidelines for determining and selecting appropriate experts would need to be established. The quality of the experts would be crucial to the success of the IPDRC proposal.
Recommendation 3: Patent Tribunal
ACIP’s third recommendation is that the IPDRC include a ‘Patent Tribunal’, which would offer a specialised ADR mechanism for patentees.
It is envisaged that the Patent Tribunal could provide both:
- non-binding determinations (such as mediation and expert assessment), and
- if all parties to the dispute agreed, binding determinations also (such as arbitration).
ACIP has also provided some specific suggestions aimed at maximising the appeal and effectiveness of the Patent Tribunal, such as:
- having simplified rules of evidence and streamlined procedures, in order to contain costs, and
- imposing measures to encourage parties to abide by non-binding determinations, such as damages or costs consequences if the matter was subsequently litigated in court and the same outcome obtained.
As with the IPDRC concept in general, the Patent Tribunal concept would probably not be appropriate for some patentees. However if implemented well, it could offer significant advantages for others, particularly SMEs and individuals. The implementation could prove to be challenging, but is worth attempting.
Recommendation 4 and 5: patent enforcement resources
ACIP recommends that IP Australia institute some new resources to assist patentees to understand their patent enforcement options and increase awareness about these issues more generally. In particular ACIP recommends that:
- IP Australia establish a resource, such as on their website, which provides information about patent enforcement options, and
- parties to litigation be required to provide the Commissioner of Patents with information on the outcome of patent proceedings, with the public being able to access to this information.
Collecting and making available this information in a central place is a sensible suggestion.
Various issues with recommendations
ACIP acknowledges that careful consideration would need to be given on a way of minimising any ‘conflict of interest’ perception by having the IPDRC within IP Australia (for example, the rights granting body would also be seen to be determining infringement).
Funding is another issue for careful consideration. ACIP’s position is that the cost of the services provided by IPDRC should be borne by its users. However, if implemented, the government would need to ensure that the services really do provide a cheaper and more efficient alternative to the current court processes whilst still providing a quality service.
Recommendations 6 and 7: Continue to support the improvement of patent enforcement systems in foreign countries in the region
It is common knowledge that enforcing patent rights overseas can be difficult, particularly for SMEs and individuals, and particularly in some jurisdictions (including some countries in Asia).
As ACIP acknowledges, Australian authorities have no capacity to directly control or influence developments in overseas jurisdictions. However, ACIP recommends that IP Australia continue to:
- encourage and assist countries in the region to improve their patent enforcement systems, and
- expand its advocacy program beyond China and Japan to countries in the region in which Australian companies do business.
Recommendation 8: Customs Notices for patents
ACIP recommends that Australian Customs officials be empowered to seize goods at the border where the rights holder has forewarned them of a shipment of infringing product. A similar mechanism is already in place to protect trade mark owners.
ACIP observes that Australian Customs has already raised concerns about this recommendation, including that Customs does not have the legal and technical expertise and knowledge to identity and enforce patent rights.
Notwithstanding these concerns, ACIP considers that this mechanism will benefit rights holders, especially in circumstances where the product is likely to be immediately circulated in the market.
Recommendation 9: Monitoring Australia’s patent opposition process
ACIP raised, but did not reach a decisive conclusion about, the question of whether it would be beneficial to change the current pre-grant opposition process for patents to a post-grant process.
Reasons for such a change could include minimising the delays and costs inherent in the current opposition process.
ACIP’s view is that the alternative (post grant opposition) would not necessarily offer a better outcome.
Accordingly, ACIP recommended merely that IP Australia should continue to monitor and review the opposition processes over the coming years to identify whether there is any convincing reason for a change.