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Mont has an innovation patent for a travel pack.

It sued Phoenix for infringing the innovation patent; Phoenix  counter-claimed for invalidity on the grounds of Mont’s own use commencing in October 2004.

Patents Act 1990 s 24 (read with Reg. 2.2(1A)) provides a patentee with a grace period: protecting the patentee against attacks on grounds of lack of novelty or inventive step/innovative step by reason of the patentee’s own authorised use or disclosure within the 12 months prior to “the filing date of the complete specification”.

The background was as follows:

In October 2004, it had started offering travel packs made according to the invention for sale.

In May 2005, it filed a complete application (with a complete specification) for a standard patent.

In November 2006, however, it filed a complete application (and of course a complete specification) for an innovation patent as a divisional application from the earlier standard application and this application matured into the innovation patent.

The trial judge had found that the “grace period” had to be calculated from the date of filing the complete specification for the divisional application, not the parent.

The Full Court has now allowed an appeal ruling that “the complete specification” referred to in reg. 2.2(1A) in the case of a divisional application is the complete specification for the parent.

Jagot J (with whom Emmett J agreed) explained the rationale:

76 By the provisions relating to divisional applications, the Act and Regulations establish a scheme in which an applicant may ensure that a claim for an invention that the applicant has previously disclosed in a complete specification as filed and which is within the scope of the claims of the complete specification as accepted takes a priority date as if the claim had been included in that earlier complete specification. The scheme thus ensures that the requirements of novelty and inventive step or innovative step for the claims within the divisional application (which are essential determinants of the validity of the patent application) are assessed by reference to a priority date established by the date of the earlier (or parent or original), rather than the later (or divisional) specification.

77 All features of this statutory scheme for divisional applications are consistent. Hence, the claims in any patent granted on a divisional application take the priority date of the claims in the earlier (or parent or original) application. Publications or uses of the claimed invention, after that priority date, cannot affect the validity of any patent granted. The term of any patent granted on a divisional application is also taken to have started on the same date as the date of the earlier (or parent or original) application.

Similarly Bennett J said [49]:

49 The scheme of the Act provides that, where the invention of the divisional was disclosed in the parent, the publication or use of the invention within 12 months before the filing date of the parent must be disregarded for the purposes of assessing the novelty and inventive/innovative step of each of the parent and the divisional, provided that a patent application for the invention is filed within the prescribed period. This applies where the divisional is of a parent standard patent or a parent innovation patent. Where the invention of the divisional was disclosed in the parent, the words “the complete application” in reg 2.2(1A) refer to the parent application and not to the divisional application.

Jagot J also provided a detailed rebuttal of Phoenix’ contentions.

Mont Adventure Equipment Pty Ltd v Phoenix Leisure Group Pty Ltd [2009] FCAFC 84

ps: IPTA was granted leave to intervene (and while advocating the view that the Full Court adopted, was ordered to pay any additional costs incurred by the parties as a result of the intervention).

pps:a patentee who needs to rely on a grace period to preserve the validity of the patent in Australia may well still lose the patent outside Australia where the grace period does not apply

The Patents Act was amended (in relatively controversial circumstances) to include a 12 month grace period (somewhat a la the USA) so that use or publication of the invention in the 12 months before the complete specification was filed could not be relied on to destroy validity: see s 24(1)(a) and reg.s 2.2(1A) and 2.3.

Assume that a complete application for a standard patent was filed on 13 May 2005.  Then a complete application for an innovation patent, as a divisional from the standard, was filed on 22 November 2006.

Assume further that the first publication of the invention the subject of both applications was in October 2004.

Which complete application does time run (backwards) from?

If the standard application, the innovation patent will be valid; if not, it will be invalid.  If time runs from the date of the complete application for the innovation patent, however, the divisional status of the innovation application will not have all the usually expected effects.

Stone J has found that the relevant application, on the basis of the specific wording of the legislative provisions, is the complete application for the innovation patent:

10 There does not appear to have been any previous judicial consideration of the present question. Both parties submit that, having regard to the context in which they appear, the ordinary and natural meaning of the provisions supports the construction for which they respectively contend. For reasons given below I have concluded that the construction for which the respondent contends is correct, namely, that where the specification filed in respect of a parent application discloses the invention claimed in a divisional application based on the parent, the “complete application” to which cl 2.2(1A) refers is the divisional application. Consequently I would answer the question for determination as follows:

For the purpose of determining the validity of the Australian Innovation Patent No 2006100978 (Innovation Patent), and on the facts stated in the orders made by Bennett J on 11 December 2007, “the filing date of the complete application” within the meaning of reg 2.2(1A) of the Patents Regulations 1991 (Cth) is the filing date of the complete application for the Innovation Patent on 22 November 2006.

28 I reject the applicant’s argument that the respondent’s construction creates an anomaly by providing the innovation patent with the benefits of divisional status whilst depriving it of the grace period benefits otherwise accruing to that status. As the respondent correctly submits, the consequence of its view is that the grace period simply runs from a later date, which may or may not extend past the priority date based on the filing of the parent application. This is said to reflect:

… a decision not to allow divisional applications to benefit more than they already do from the earlier priority date in circumstances where the divisional application is filed more than a year after the parent application.

Be very, very very careful if you have to rely on the grace period!

Mont Adventure Equipment Pty Limited v Phoenix Leisure Group Pty Limited [2008] FCA 1476.