Further proposed amendments to Intellectual Property legislation in Australia

In addition to the Intellectual Property Laws Amendments (Productivity Commission Response Part 1 and Other Measures) Bill 2018 (Cth), IP Australia has released draft legislation for public comment which proposes further changes in line with the Productivity Commission’s inquiry into Australian intellectual property legislation. Please note that at this stage the Bill has not been introduced to Parliament.

The Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2018 (Bill) proposes changes to the Patents Act 1990 (Patents Act), the Designs Act 2003 (Cth) (Designs Act) and the Trade Marks Act 1995 (Cth) (TM Act).

Inventive step requirement

In Australia, a standard patent must posses an ‘inventive step’ to be protected. Whether this inventive step exists is determined by examining whether the claimed invention is obvious to a skilled person in the relevant field, in view of information commonly known or used, or information made publicly available by publication or use (referred to as a prior art base).

The Bill proposes to raise the threshold of this test so that it is consistent with the international standard, in order to effectively filter out ‘low-value patents’. Accordingly, the proposed amendment would expand the scope of what is considered the prior art base to include:

• Information in a document that is publicly available, whether in or out of the patent area;
• Information made publicly available through doing an act, whether in or out of the patent area;
• A combination of 2 or more pieces of information referred to above which could have been reasonably expected to have been combined; and
• Information that is common general knowledge.

Objects clause

In its review of the Patents Act, the Productivity Commission (PC) suggested that given the scope for administrative and judicial interpretation to ‘diverge over time from the intent of policy’, the implementation of an objects clause is essential in making clear parliamentary intent.

It is stated that the introduction of this clause will improve the likelihood that decisions will align with policy objectives, and ensure the Australian design and patent systems remain effective and adaptive as economies and business models evolve.

The proposed object clause emphasises:

• Economic development;
• The transfer and dissemination of technology; and
• Balancing the interests of producers, owners and users of technology.

Innovation patents system

In Australia, it is possible to apply for an innovation patent, which may be registered where an applicant’s invention is different from previous inventions, and involves an innovative, rather than inventive, step. Innovation patents have a short duration, and are not examined until requested by the patentee or a third party. Accordingly, innovation patents are not legally enforceable until examination has occurred.

The PC and the former Advisory Council on Intellectual Property (ACIP) have previously advocated for a review of innovation patents, claiming that they provide relatively minimal benefits, and impose significant costs on third parties.

Going forward, the Bill proposes to abolish innovation patents entirely. These amendments are not intended to affect existing rights, and accordingly innovation patents with a priority date preceding commencement of the Bill will remain protected.

Crown use provisions

Crown use provisions permit the government to exploit certain patented inventions or designs without authorisation from the owner. Under current legislation, Crown use can be invoked where exploitation is necessary for the proper provision of services of the Commonwealth or State.

Proposed amendments under the Bill are aimed at reducing uncertainty surrounding under what circumstances Crown use provisions can be invoked, and improving accountability and transparency for patentees affected by Crown exploitation of patent and design rights.

Accordingly, the proposed Bill:

• Allows Crown use to be invoked for the provision of any service that any Commonwealth, State or Territory Government has the primary responsibility for providing or funding; and
• Improves transparency by requiring that governments first engage in negotiations for permitted use with the owner.

Where negotiations are unsuccessful, or Crown use is required in an emergency, Ministerial authorisation must be sought and approved prior to exploitation. Once approval is given, the design or patent owner must be notified of the reasons for Ministerial grant as soon as is practicable.

Compulsory licensing provisions

Compulsory licensing is a legislative safeguard which may be invoked by the Federal Court in exceptional circumstances, allowing another party to exploit an invention without authorisation of the inventor.

Currently, a compulsory order may be sought where the reasonable requirements of the public with respect to a patent have not been satisfied. Throughout the course of its review, the PC raised that this term was unduly confusing, and conflated the reasonable requirements of the public with the interests of individual trades or industry.

The proposed Bill replaces references to reasonable requirements of the public with ‘public interest’, and requires generally that a licence many only be granted where:

• There is unmet demand for an original patented invention, which can be resolved by granting authorisation to exploit;
• The applicant has made reasonable attempts to obtain authorisation from the patentee;
• The patentee has not provided a satisfactory reason for not exploiting the patent; and
• It is in the public interest to grant a compulsory licence.

When deciding if a grant is in the public interest, the courts should have regard to the benefits to the public from meeting the unmet demand, the commercial costs and benefits of a licence to the patentee and the applicant, and any other matters which may arise.

Further amendments to the Patents Act ensure that the form of an order and the revocation of a licence are similarly consistent with the public interest.

We will continue to inform our readers of developments relating to the progress of the Bill through the Senate.

This article was written by Luke Dale, Partner, Ashley Holland, Partner and Jonothan Cottingham-Place, Law Clerk.