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.

Parallel imports: consent under Australian law

In Australia, the Full Federal Court has confirmed the trend of recent decisions by reading restrictively the defence of "consent" available to the importers of grey or parallel goods (Paul's Retail Pty Ltd v Lonsdale Australia Limited [2012] FCAFC 130). There is a note of the case here courtesy of Clayton Utz.

Section 123 of the Australian Trade Marks Act is a statutory embodiment of the well established principle in the United Kingdom case, Champagne Heidsieck [1930] 1 Ch 330, which stated that trade marks were badges of origin, designating a genuine source, not badges of control. Just as in modern EU parallel import cases, the important question is whether the goods have been put into circulation by or with the consent of the trade mark owner.

In this case, Lonsdale Australia was a mere licensee, and the principle of implied consent when dealing with related companies had not been definitively accepted into Australian law for the purposes of parallel importation. The Australian licensee was not on the evidence linked to the goods and there was no evidence to suggest that it played any role in the application of the trade marks to any of the imported goods. The Full Court held that it was not necessary to decide the issues considered by the trial judge, because even if Paul's Retail could establish that Lonsdale Australia was bound by its related company's consent, the evidence showed that there was in fact no consent by that related company. But it's interesting to know that those abstruse arguments in which our courts have been obliged to involve themselves are just as important on the other side of the world.

Unjustified threats in Australian copyright law

Are they actionable? It seems so, according to this report via Mallesons' always-interesting Whiteboard IPblog. Does this mean that Australian law gives a remedy unknown in our copyright statute? Not entirely clear - but what does come through in this report is that an injustice was perpetrated by someone laying claim to rights in a work that rightly belonged to someone else. That seems to have been what the court decided, in which case it is just the sort of unpleasant bullying that the intellectual property system encourages. As the rights become more valuable, and the costs of enforcement become greater, the abuse of IP rights develops into a bigger and bigger problem.

Soon, far from encouraging creativity and inventiveness, IP litigation will take up all the time that people would otherwise devote to such useful activities.

Men at Work case won't go to appeal

That interesting Australian copyright case involving the song Down Under by Men at Work, which was held to infringe copyright in the well-known, or "iconic" as it was called in the litigation, Kookaburra, has come to a halt with the High Court rejecting EMI's application to appeal. Mallesons have the story on the IP Whiteboard blog, which is always full of good stuff.

I'm not only old enough to recall the song, I am old enough to consider it new, in the sense that it is post-New Wave. And I couldn't remember anything in it that sounded like Kookaburra. Seems I was right, because the court needed expert assistance to find the bits that had been copied: there was no "ready aural perception" of the copied bars but they were there. But that does seem difficult to square with the notion of a musical work, which is intended to be enjoyed by being listened to (a literary work, by contrast, being enjoyed by being read). If you can't hear the similarity, is music copyright really engaged?

An Australian Feist

Copyright in compilations remains a thorny issue, and if I needed reminding of it the other week explaining it to Russian law students certainly worked. Databases that aren't compilations, and vice versa - we are into the realm of metaphysics here.

Feist, SCOTUS's last word (as far as I know) on the subject of copyright in compilations (in suit, an alphabetical telephone directory for part of rural Kansas where I imagine telephones are few and far between, people likewise), was the death-knell for the "sweat of the brow" test, one of those graphic expressions that American lawyers use to the delight of legal dictionary-writers. In Telstra Corporation Limited & Anor v Phone Directories Company Pty Ltd & Ors [2011] HCATrans 248 (2 September 2011) the High Court of Australia has taken what seems to be a similar step, and given the close connection between Australian and English law this might be more important for us than Feist was.

The case raises interesting points about the need to identify the author or authors, and about the effect of using a computer. It has always struck me that making an alphabetical list using a computer is extremely unlikely to result in any sweat on one's brow. Read the interesting review of the points on Mallesons' IP Whiteboard blawg.

Australia considers a statutory right to privacy

Since we can't get away from the subject of privacy, which threatens to take over the law on breach of confidence (which perhaps will eventually be sub-divided into privacy and trade secrets law so we can focus on the interesting part and leave the spoilt "celebrities" to their own devices), I was interested to learn that a statutory right to privacy was under consideration in Australia. Thanks to Ashley Tsacalos of Norton Rose, which after its pioneering work creating a national law firm - I somehow thought that the M5 group wasn't such ancient history as it actually is - is now a global one.