A consultation paper titled Innovation Patents - Raising The Step, released by the federal government, is proposing changes to the Patents Act 1990 "to discourage misuse of the IP system".

The Australian Innovation Patent system was introduced in 2001 to protect functional or incremental innovations, that were not sufficiently inventive, to be granted a standard patent. Innovation patents have a lower patentability threshold than a standard patent, requiring an innovative step rather than an inventive step.

The consultation paper states that the innovation patent system replaced a patent system that was not well utilised, notes a significant rise in innovation patent applications within certain technologies, and then appears to propose a change to the innovation patent system to make it more like the underutilised patent system.

At the moment under the current IP law, an innovation patent must be both novel and involve an innovative step when compared to the prior art base - section 18(1A). An invention involves an innovative step if the invention varies from the prior art in a way or ways that make a substantial contribution to the working of the invention - section 7(4).

Following Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225 and Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd [2009] FCAFC 81 there is a perception in official circles that the test for innovative step is not tough enough. It permits the grant of innovation patents for enhancements that are obvious. This in turn is seen to create a risk of evergreening or the creation of patent thickets.

IP Australia proposes a preemptive amendment that innovation patents must involve an inventive step rather than an innovative step. This would make sure that obvious innovations are excluded from the innovation patent system.

The closing date for submissions is Thursday 25 October 2012.