Thursday 19 August 2021

End of the Line for Australian Innovation Patents

 Australia has phased out its innovation patent system, following legislative changes to the Patents Act 1990 (Cth). 

The final day for filing a new Australian innovation patent is 25 August 2021.

The relevant amending provisions of the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 (Cth) commence from 26 August 2021 - 18 months after the Act received royal assent.

What is (or was) an Innovation Patent?

The innovation patent was conceived as a simpler, faster, and more economical, form of protection for inventions compared to a standard patent or provisional patent.

Unlike a standard patent, an innovation patent does not require the applicant to demonstrate an "inventive step". 

However, the prospective patentee must still demonstrate the subject matter has:

  • novelty - namely, the absence of public disclosure of the invention before the priority date; and 
  • an innovative step - namely, that the invention is different from known prior art, and makes a 'substantial contribution to the working of the invention'.

The duration of an innovation patent (once granted) is up to 8 years after its filing date, subject to payment of annual renewal fees. The specification is limited to 5 patent claims and formal examination of the application is optional.

Once filed, the application may be granted in as little as 1 month, and examination (if requested) can be completed within 6 months.

The overall cost of the application (excluding professional attorney fees) is estimated at approximately A$1,500 - substantially less than the cost of a full standard patent.

The Phase-Out

In 2015, the Australian Productivity Commission was tasked with a review of Australia's intellectual property laws, including to "ensure that the intellectual property system provides appropriate incentives for innovation, investment and the production of creative works while ensuring it does not unreasonably impede further innovation, competition, investment and access to goods and services".

The Productivity Commission's Final Report was released in 2016, and included a recommendation to abolish the innovation patent system.

That recommendation was formally supported by the Australian Government in 2017, stating in its response: "The [Australian] Government considers that more targeted assistance would better achieve this objective [to stimulate innovation in Australian SMEs], while avoiding the broader costs imposed by the innovation patent system."

Legislation was then implemented in two parts:

  • The 'Part 1' Act (passed in 2018) included amendments to copyright, designs and trade mark legislation, among other measures; and
  • The 'Part 2' Act (passed in 2020) addressed the recommendation to abolish the innovation patent system.

According to IP Australia's official announcement, the phase-out stems from several reasons, which are reflected in the 2016 Productivity Commission Final Report:

  1. The innovation patent's low barriers to entry made it easy to file a patent application, but resulted in a clogging of the system. Further, it was argued that strategic filers could exploit the system as a means of stifling competition.
  2. The low innovation threshold and lack of compulsory examination created difficulties and uncertainty for other innovators in gaining a clear understanding of freedom to operate.
  3. Innovation patents were not recognised internationally. This is said to have jeopardised international expansion prospects and exposed patent holders to potential copycat activity in international markets.

IP Australia's conclusion was that the innovation patent system had failed to achieve to its objectives, whilst imposing an A$11m annual administrative burden on the agency.

Where to from here?

Existing innovation patents filed before 25 August 2021 will continue to remain in force until their expiry, and divisional applications based on an existing innovation patent application will still be permitted provided the effective priority date is on or prior to 25 August 2021.

To support SME innovators, IP Australia has deployed a range of other measures including:

  • an online portal;
  • a dedicated "SME Fast-Track" patent process to shorten the examination timeframes for SMEs; and 
  • piloting access to subject matter experts and case managers targeted at assisting self-filers.

It will remain to be seen what impact the removal of innovation patents has on the broader Australian patent landscape.


Ben Thorn is an Australian intellectual property lawyer based in Brisbane, Queensland. He is the founder and director of Xuveo Legal, and is the current chair of the Queensland Law Society Technology and Intellectual Property Committee. Ben has been listed as a recommended intellectual property lawyer in Doyle's Guide 2020 and 2021.

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