On 28 February, the Minister directed ACIP to report on the innovation patent system.

On 17 August, ACIP published an issues paper (pdf) and now seeks your comments by 14 October 2011.

According to the announcement of the issue paper’s release:

In recent years a variety of concerns have been raised about the innovation patent system and whether it is meeting its original objectives. A key concern is that an innovation patent is overly difficult to invalidate and the remedies for infringement are overly generous. Another concern is that innovation patents are being used to obtain a form of quick protection for higher level inventions while a standard patent is being pursued. Also, the innovation patent system has never been reviewed to assess whether it remains effective and appropriate for Australia now and in the future.

Innovation patents (which are not for business schemes) are difficult to invalidate after Dura-Post? The Full Court confirmed that the test of ‘innovative step’ does not involve a sort of obviousness penumbra over common general knowledge. Rather, the patent is innovative unless it can be shown that the difference between the patent and the prior art do not make a substantial contribution to the working of the ‘invention’. This was apparently derived from Griffin v Isaacs. As the trial judge explained with the apparent approval of Kenny and Stone JJ at [70] and [79]:

Be that as it may, the feature of what Dixon J said was the disjunctive nature of the concepts – one was ‘make no substantial contribution to the working of the thing’; the other was ‘involve no ingenuity or inventive step’. The first alternative has been taken by Parliament virtually verbatim from the judgment. The focus is upon working of the invention (as claimed) not to the degree or kind of variation from the kinds of information set out in s 7(5). In other words, the variation from the kinds of information might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step. … In my view the provenance of the phrase ‘make no substantial contribution to the working of the invention’ indicates that ‘substantial’ in this context means ‘real’ or ‘of substance’ as contrasted with distinctions without a real difference.

Rather than a modified inventive step test, it is a modified novelty test.

The Issues Paper runs to some 28 pages.

Interestingly, just over 11,000 innovation patents have been granted and 1,790 certified.Over 80% are to Australian inventors and around half are to Australian individuals as opposed to corporations (the proportion of certifications falls to 41%). The proportion of Australian grantees vs foreign appears to be falling over time.

1,011 of the grants are divisionals from applications for standard patents. For the first few years, that was about 5% of all divisional applications, but it has been at least 10% since 2006 with a couple of years getting closer to 14%. This leads to concerns that innovation patents are being used to get ‘quick’ rights.

There are also concerns that the pharmaceutical industry is using the system to ‘evergreen’ its patent portfolios.

The questions (although ACIP would like to take this opportunity to provoke discussion generally):

  1. Effectiveness in stimulating innovation
  2. Does Australia need a utility model?
  3. Does it cost too much?
  4. Is the cost of certification dissuading people from seeking certification?
  5. How do (people in) other jurisdictions jurisdictions perceive the innovation patent?
  6. Are there concerns about the uncertainty arising from the delays in getting certification?
  7. Are the current remedies appropriate?
  8. If the available remedies are reduced (e.g. you couldn’t get an injunction) would costs of (getting) an innovation patent be justified?
  9. How do you think the use of divisionals is working (and why did you do it)?

ACIP announcement

Issues paper (pdf)