The Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Act) was passed by the House of Representatives on 20 March 2012 and received Royal Assent on 15 April 2012. According to the Explanatory Memorandum, the purpose of the Act, which amends the Patents Act 1990 (Patents Act), is to “support innovation by encouraging investment in research and technology in Australia and by helping Australian businesses benefit from their good ideas.”1 In this article, we examine the key changes to patent law as a result of this enactment.

Increasing the standards for patentability

The Act raises the standard for inventive step by widening the common general knowledge of a person skilled in the art to include common general knowledge whether in Australia or overseas. Previously, only common general knowledge in Australia was taken into account.

In addition, the Act enhances the requirement of “utility” by ensuring that the invention works in precisely the way it is described, such that the patent specification documents the “specific, substantial and credible2 use. This enhanced requirement seeks to prevent the grant of patents over speculative inventions.

The standards for the disclosure of an invention are also raised to ensure that it is “clear enough and complete enough for the invention to be performed by a person skilled in the relevant art.”3 This is to encourage follow-on innovation that can be exploited once the patent expires, and to ensure that patents are no broader than the invention disclosed.

What the Commissioner can consider during examination

The Act expands the elements which the Commissioner may consider when deciding whether to grant or revoke a patent. This will bring the Commissioner’s examination process into line with the elements that a Court can consider, which are much wider. The additional considerations which can be examined by the Commissioner include those concerning utility, prior art information to a higher standard of proof.

Previously, the assessment of the usefulness of an invention was reserved to opposition and revocation proceedings. However, the Act now requires the Commissioner to examine whether an invention is indeed useful. This means that the public will have more certainty about whether patented inventions documented in the specification are actually viable.

Similarly, prior use, which is only considered during opposition or revocation proceedings, will also be considered at the examination stage. The effect of this will be that the Commissioner can consider all prior art information that the Commissioner is aware of in the ordinary course of examination, or if a notice is provided to the Commissioner4 after a filed specification becomes open to public inspection and it becomes apparent that the invention is not novel.5

Importantly, the Act requires that a higher standard of proof be applied by the Commissioner when deciding whether to accept an application for a standard patent. Previously, a patent application was subjected to a lower standard of proof than a Court. The Act implements the Australian Law Reform Commission’s proposal that the balance of probabilities should apply to all statutory requirements for patentability at the examination stage. These amendments are intended to minimise situations where the Commissioner grants a patent that would be invalidated in Court, thereby fostering a more robust patent system.

Replacement of Fair Basis Requirement

The Act replaces the “fair basis” requirement with a “support requirement.” Subsection 40(3) of the Patents Act requires the claims of a complete specification to be, among other things, fairly based on the matter described in the specification. The notion of “fair basis” in Australian patent law is intended to ensure that the monopoly claimed is consistent with the description of the invention.

Overseas jurisdictions that use the “support requirement”, such as the UK, require that the claims be supported by the description in addition to any document from which priority is being claimed. Therefore, the scope of the claims must not be broader than the extent of the description, drawings and contribution to the art.

The “fair basis” requirement and the “support requirement”, though conceptually similar, have developed differences in substantive law. This is a case of unnecessary complexity, uncertainty and cost for global innovators seeking protection in Australia and other jurisdictions. The Act, therefore, aligns Australian patent law with that of overseas jurisdictions, such that overseas case law and administrative decisions which deal with the “support requirement”’ will be applicable to Australian courts and administrative decision-makers.

Exemptions from infringement

The Research Exemption expressly clarifies that research and experimental activities that infringe a patent, but are conducted for an “experimental purpose”,6 are exempt from infringement.

The Act also introduces a new section 119B into the Patents Act which provides an exemption from infringement for activities undertaken solely for the purposes of gaining regulatory approval to market or manufacture a patented invention. The new provision expands the current exemption in section 119A of the Patents Act, which applies in favour of pharmaceutical inventions, to all technologies, including medical devices and industrial chemicals, for which there is a regulatory approval regime.

Conclusion

The changes introduced by the Act significantly tighten the threshold criteria for patentability and generally increase the standards for patentability. In addition, the exemptions from infringement for research and regulatory approval activities will no doubt encourage further research and investment in Australia. The passage of the Act through the Senate has been slow, which is surprising given the obvious benefits the amendments represent to researchers and innovative researchbased companies. However, the Act will now improve Australia’s intellectual property regime and bring Australia into line with its major trading partners.