12 October, 2019
What you need to know
- On 25 July 2019 the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 (Bill) was introduced to the Senate.
- From the day 12 months after the Bill receives Royal Assent, the innovation patent system will be phased out and no new innovation patents will be permitted. However, the system will continue to operate for innovation patents filed before the new provisions commence.
- The Bill also introduces an objects clause for the Patents Act, clarifies the provisions permitting Governments to use patented inventions, and implements a "public interest" test for compulsory licences for patents.
What you need to do
- To protect the rights you have in an innovative step, you should file an innovation patent application prior to, or within the first 12 months of, the Bill receiving Royal Assent.
Phasing out the innovation patent system
The innovation patent system protects inventions that involve an incremental advance in existing technology which do not meet the inventive threshold required for a standard patent. It can also be used to patent inventions where 8 years of protection is considered sufficient instead of the standard 20 years, at lower cost. The system was designed to be a quicker and more affordable process for Australian small to medium enterprises to protect their innovations as these patents do not generally require examination before a patent is granted. However, a 2016 Productivity Commission report found that the innovation patent system was not providing value and was placing unreasonable costs on third parties. The Productivity Commission recommended that the innovation patent system be abolished.
The Bill provides for the phasing out of the innovation patent system. To protect existing rights, the provisions of the Bill relating to the removal of the innovation patent system commence 12 months after the Bill receives Royal Assent (commencement date).
From the commencement date, no new innovation patents can be filed. However, the innovation patent system will continue to operate for innovation patents filed before the commencement date, including applications made in the 12 month period between Royal Assent and the commencement date.
The Bill does not affect the right to file divisional applications or to convert a standard patent application to an innovation patent application for any patent or application filed prior to the commencement date.
It is difficult to predict when, if at all, the Bill will receive Royal Assent. Due to this uncertainty, if you wish to obtain protection using the innovation patent system you should consider filing your innovation patent application as soon as practicable.
Other changes to the Patents Act
Government use of patented inventions
The Crown use provisions of the Patents Act operate to grant governments the right to exploit patented inventions for the purpose of providing services. The Bill clarifies that the Crown use provisions can be invoked for any services that a government has primary responsibility for providing or funding, whether they will be provided by a government authority or via an agent authorised by the relevant government authority.
Before relying on the Crown use provisions, a government will be required to negotiate with the patent owner for a reasonable period to attempt to agree terms for authorisation to exploit the invention, unless there is an emergency (such as a public health crisis, war, national security situation, natural disaster or other emergent situation). In an emergency, or where negotiations fail, the government must receive Ministerial authorisation before the Crown use provisions are invoked.
The Bill also provides that where terms for exploitation of the invention cannot be agreed, a Court must determine remuneration for the patent owner that is "just and reasonable, having regard to the economic value of the exploitation of the invention".
A new test for compulsory licences
The Bill introduces a stricter framework for granting a licence to exploit another patent owner’s invention. The Federal Court may only grant a compulsory licence if there is demand in Australia for the invention to be exploited; the applicant has attempted to gain authorisation from the patent owner to exploit the invention without success; the patent owner has failed to exploit the invention; and it is in the public interest to give the applicant authorisation to exploit the original invention.
The framework replaces the existing "reasonable requirements of the public" test with a "public interest" test. This responds to concern that the current test focuses on the interests of industry rather than the interests of the community generally. The public interest test requires consideration and balancing of the rights of the patent holder and the interests of the broader public, as well of any other matters the Court considers relevant.
Introduction of an objects clause
The Bill inserts an objects clause into the Patents Act to provide clarity and guidance about the purpose of the Act. The stated object of the Act is "to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public." The intention of this clause is to guide decision makers, although it remains to be seen if this will be taken into account by IP Australia and the Courts when making decisions concerning patents.
Authors: Phillipa Anstey, Lawyer; and Kellech Smith, Partner.
For further information, please contact:
Lisa Ritson, Partner, Ashurst
Lisa.ritson@ashurst.com
