Public input sought on patent reform

IP Australia seeks comment on reforms to prevent patent abuse

Intellectual property watchdog IP Australia is seeking public comment on reform to Australia's patent system. The federal government is proposing changes to the Patents Act 1990 to raise the threshold for so-called 'innovation patents'.

Under Australian IP law, standard patents, which have a lifespan of 20 years, require an inventive step. Innovation patents currently require only an 'innovative step'. "It may seem like a trifling distinction, but weaker patents can create problems," said parliamentary secretary for industry and innovation, Mark Dreyfus.

Although innovation patents, which were first introduced in 2001, were designed to encourage innovation among small and medium businesses, increasingly they have been used by larger companies, particularly for IT and pharmaceuticals. Organisations have also used innovation patents as a mechanism to extend the life of standard patents, Dreyfus said.

"The potential for evergreening is of particular concern," states IP Australia's consultation paper, Innovation Patents – Raising The Step.

"Evergreening is a strategy in which companies could use Innovation Patents to effectively extend the life of their patents. In addition, the comparative ease of gaining an Innovation Patent could also help companies to create ‘patent thickets’, a wall of patents which hinders rivals' ability to invent around a given invention.

"There is a real and pressing risk that more applicants could choose to use these strategies in the future. Such strategic behaviour would likely bring Australia’s IP system into disrepute both in Australia and overseas, because it would highlight the poor balance between protection and innovative disclosure within Australia’s Innovation Patent system."

The paper notes that the proportion of innovation patents granted to Australians has fallen from 85 per cent when the system was introduced to 65 per cent in 2011.

The Intellectual Property Laws Amendment (Raising the Bar) Act 2012, which became law in April, raised the threshold for obtaining standard patents, but left innovation patents untouched.

The consultation paper proposes replacing the 'innovative step' for innovation patents with the same inventive step test required for standard patents.

"This would align the Innovation Patent requirements with the well-known and legally-settled test for inventiveness that applies to Standard Patents. Raising the inventiveness requirement for Innovation Patents will address community concerns that the Innovation Patent system is being abused, particularly in the information technology industry."

Since the innovation patent was introduced, IT-related innovation patent applications have increased by 390 per cent, compared to a rise in applications of 150 per cent for all areas.

According to IP Australia, Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008], which concerned flexible roadside posts, proved that innovation patents can be granted for obvious enhancements.

IP Australia has set a deadline of 25 October for public comment.

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