The Advisory Council on Intellectual Property (ACIP) has published its final report on its review of the Innovation Patent System.  The following are the key points highlighted by ACIP in their review:

  • ACIP has been unable to obtain adequate empirical evidence as to whether the system does or does not stimulate innovation in Australian SMEs and therefore is unable to make a recommendation on whether to retain or abolish the innovation patent system subject changes ACIP recommends to enhance the effectiveness of the system and to reduce some of its unintended consequences.
  • ACIP recommends amending the Patents Act 1990 (Cth) to raise the level of innovation to a level above the current innovative step level but below the inventive step level that applies to standard patents.  ACIP suggests that suitable level of innovative step should be the test for inventiveness described by the High Court of Australia in Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9: (1980) 144 CLR 253; (1980) 29 ALR 29 but modified as to what is relevant common general knowledge (CGK).  In order to be innovative, an invention would need to be non-obvious by reference to the CGK anywhere in the world but without reference to prior art information that is found not to be part of the CGK at the priority date of the relevant claims of the innovation patent.  This sets a lower threshold than is currently applicable to standard patents where the invention must be non-obvious by reference to the CGK and any piece of prior art.
  • ACIP recommends amending the Patents Act 1990 (Cth) so that substantive examination must be requested before the third anniversary of the lodgement of an innovation patent.  This will allow sufficient time for a patentee to evaluate the commercial potential of their innovation patent before they are called on to commit a reasonable investment in protecting their IPR.
  • ACIP recommends amending the Patents Act 1990 (Cth) so that the term ‘patent’ is only applicable to innovation patents that have been examined and certified.  There is a general perception within the broader community that a ‘patent’ has some form of legally-enforceable right.  ACIP suggests calling an uncertified innovation patent an ‘innovation application’ up until the time that certification of the innovation patent has occurred.
  • ACIP recommends amending the Patents Act 1990 (Cth) to exclude all methods, all processes and all systems from being patentable inventions for the purposes of an innovation patent.  This would better align the innovation patent system with the legal systems of most countries including the large majority of Australia’s major trading partners. It would also address concerns about the effect of innovation patents for methods, processes and systems for implementing what are, in effect, business methods.  ACIP have included “systems” as an exclusion to prevent methods or processes being re-cast as a claim to a “system”.  Innovation patents would therefore have to have claims to an apparatus, a product, an article, or some other material thing.
  • ACIP recommends that, subject to the preceding recommendations being accepted, the remedies for infringement of an innovation patent remain unchanged.  ACIP considers that the existing remedies are suitable for a future innovation patent given the raised level of innovation and additional excluded subject matters. ACIP also endorses the current practice whereby courts consider exploitation by the patent holder as a key consideration in any application for an injunction.

It should be noted that these are ACIP’s recommendations and the Australian Government is still to consider its response to the report.