The Australian Government Advisory Council on Intellectual Property (“ACIP”) has recently recommended several changes to the innovation patent system in Australia. The key recommendations include raising the threshold for “innovative step”; excluding processes from patentability as innovation patents; examination and certification being a precondition to using the term “patent”; and requiring examination to be requested within three years.

ACIP was asked by the Minister for Innovation, Industry, Science and Research, in 2011, to review the innovation patent system and assess whether it is achieving its purpose of stimulating innovation in Australian small and medium enterprises (“SMEs”).

Abolition of innovation patents

ACIP concluded that it did not have sufficient evidence to properly decide whether the innovation patent system is achieving its purpose. Thus, it could not make a recommendation on the question of whether or not to abolish innovation patents in Australia. It did, however, believe that it had sufficient evidence to recommend a range of changes to the system to enhance its effectiveness and reduce some of its unintended consequences.

Key recommendations

ACIP recommends raising the level of innovation above the current “innovative step” threshold, noting that the current test for “innovative step” is seen as being too low and adding little to the requirement of novelty. It recommends the test be amended to be the same as for “inventive step”, in that the innovation must be “non-obvious”, but that the comparison should be with the common general knowledge (“CGK”), not the CGK and any piece of prior art information (the test for standard patents). This would raise the threshold while still keeping it below the threshold for standard patents. The ACIP believes this would also provide some much needed certainty by using the well-established “non-obvious” test.

ACIP also recommends excluding methods and processes from being patentable inventions for the purposes of an innovation patent. Its aim in making this recommendation is to better align the innovation patent system with intellectual property laws in most other countries including the majority of Australia’s major trading partners. It notes that this would also address some concern that innovation patents are being used to patent what are, in effect, business methods.

The final key recommendations of ACIP are to make examination and certification preconditions to using the term “patent” and to require examination to be requested before the third anniversary of lodgement of the innovation patent. ACIP states that there is a general perception in the community that a “patent” is some form of legally-enforceable right. Innovation patents, however, are not legally enforceable until they have been examined and certified. ACIP recommends that an innovation patent be called an “innovation application” until it is examined and certified by IP Australia. This would also prevent absurd patents such as a patent for the wheel being referred to in a manner which suggests they are enforceable (see this New Scientist article). ACIP’s recommendation to require examination to be requested within three years is intended to provide more certainty over exactly what is and is not patented, as currently innovation patents do not need to be examined until requested either by the patentee, a third party or the Commissioner. ACIP believes three years would provide sufficient opportunity for the applicant to assess the commercial potential of an innovation before being required to pay the examination fee (currently $500).

It remains to be seen whether the Government will adopt these recommendations.

The ACIP final report on the review of the innovation patent system is available here.