“Innovative” Australian style

by FB Rice & Co (Australia)

Australia has a two-tiered patent system including standard patents and innovation patents. Innovation patents must pass the test for “innovative step” as distinct from the “inventive step” test for standard patents.

The Federal Court of Australia has recently given guidelines on the meaning of “innovative step” and the threshold level of difference over prior art is very much lower for an innovation patent compared with a standard patent.

Background

A standard patent in Australia has a maximum term of 20 years with further extension of term possible for pharmaceuticals. An unlimited number of claims may be included. The invention subject of a standard patent must be novel and have inventive step.

In contrast, an innovation patent has a maximum term of 8 years and a maximum number of 5 claims. The invention the subject of an innovation patent must be novel and have “innovative step”.

The innovation patent was introduced in 2001 to replace the “Petty patent” system. The innovation patent system is designed to suit small to medium sized enterprises and individuals. It is intended to provide an industrial property right that is quick and easy to obtain and suited to inventions with a short commercial life. An innovation patent is granted immediately but must be examined and certified in order to be enforced. Opposition to a certified innovation patent can be made at any time. The innovation patent is similar to Utility Models available in some other jurisdictions.

Innovative Step

The Federal Court of Australia recently issued a decision on the meaning of “innovative step” in the case of Delnorth Pty Limited v Dura-Post (Australia) Pty Limited ([2008] FCA 1225). This is the first time an Australian Court has considered the matter.

The case related to three innovation patents owned by Delnorth for roadside marker posts. These marker posts were flexible, allowing them to withstand an impact and return to their original upright position. Delnorth alleged that Dura-Post had infringed these innovation patents. In response, Dura-Post made a cross-claim of invalidity of the innovation patents, putting at issue what constituted an innovative step.

The Patents Act 1990 s7(4) provides that

“an invention is to be taken to involve an innovative step when compared with the prior art base unless the invention would to a person skilled in the relevant art &hellips; only vary from the kinds of [prior art] information in ways that make no substantial contribution to the working of the invention”.

The Court held that traditional thinking about obviousness is not relevant to determining innovative step. The threshold for innovative step requires a difference over the prior art that makes a “real” contribution or a contribution “of substance” to the working of the invention. Such a difference may be innovative irrespective of -

  • the degree to which it varies from the prior art,
  • whether it is better than the prior art or
  • whether it was obvious to move from the prior art to the invention.

The judge stated that:

“The phrase “no substantial contribution to the working of the invention” involves quite a different kind of judgment from that involved in determining whether there is an inventive step. Obviousness does not come into the issue. The idea behind it seems to be that a claim which avoids a finding of no novelty because of an integer which makes no substantial contribution to the working of the claimed invention should not receive protection but that, where the point of differentiation does contribute to the working of the invention, then it is entitled to protection, whether or not (even if), it is obvious.”

It was held for example that sheet spring steel makes a substantial contribution to the working of the roadside post and therefore, the claimed steel post has an innovative step over prior art plastic roadside markers. The judge stated that ” the materials are quite different, although, no doubt, they each have the same objective. As I have endeavoured to explain, the question is not whether flexible sheet steel is better than flexible PVC – it is certainly different. It cannot be seriously argued that the material sheet spring steel does not make a substantial contribution to the working of the roadside post claimed in each claim.”

It was also held that marker holes in the base of the posts made a “real contribution which is of substance to the working of the invention as the embedding of the post in the ground is a significant aspect of the operation of a roadside post and the marker hole undoubtedly assists in that regard”.

In other words the variations from the prior art might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step.

Australian Government Policy

The Australian Government has commissioned an expert panel to review the National Innovation System and a report of that panel was released on 9 September 2008. A Government response is expected around the end of this year.

Included in this report are suggestions that patents are gained too easily in Australia and there is mounting evidence that this is impeding rather than stimulating innovations. The criticism is primarily concerned with software and business method patents but the recommendations are couched in broad terms. There is a recommendation to increase the level of inventive step of standard patents so as to “minimise litigation and maximise the scope for subsequent innovators”.

This report makes no mention of innovation patents but is at odds with the current innovation patent system, particularly in light of the recent Federal Court interpretation of “innovative step”.

Strategy

Innovation patents should be kept in mind when tailoring a patent filing strategy. An innovation patent can co-exist with a standard patent for different aspects of an invention as long as the claims are not identical in scope so as to amount to “double patenting”. Innovation patents are granted quickly. A patentee may therefore obtain early protection for a specific aspect of an invention (even if not inventive) while pursuing broader protection in a standard patent.

There is flexibility in the Australian patent system as a standard patent application can be converted to an innovation patent application, up until acceptance. Conversely, an innovation patent application can be converted into a standard patent application prior to grant (but this is generally within one month of filing so does not give much time!) An innovation patent application can be “divided” from a pending standard patent application and the two applications pursued simultaneously. If a “double patenting” objection arises, the innovation patent may be withdrawn to allow the standard patent to be granted.

Summary

It remains to be seen whether the innovation patent comes under direct scrutiny by the Australian Government. In the meantime, an innovation patent is a valuable tool for IP stakeholders in Australia. An innovation patent or the potential to file an innovation patent may discourage imitators and provide an effective weapon against imitations, either in the form of an injunction or damages for infringement.

This overview is intended merely to highlight areas where Australian Law may be different to that of other jurisdictions. For further or more specific information on Innovation Patents in Australia, please contact Gwen Bentley (gbentley@fbrice.com.au), Chris Owens (cowens@fbrice.com.au) or any of the other practitioners of FB Rice & Co via our website at www.fbrice.com.au

For further information please contact Chris Owens (cowens@fbrice.com.au) or any of the other practitioners of FB Rice & Co via our website at www.fbrice.com.au

The information contained in this alert is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.

 

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