Update on draft Intellectual Property Laws Amendment (Productivity Commission response part 2 and other matters) Bill 2018

The Australian House of Representatives at the Australian ParliamentPhoto by Aditya Joshi on Unsplash

We have previously reported to you that on 23 July 2018 IP Australia released draft legislation for public comment which, if enacted, would result in significant changes to the Australian Patents Act. The draft legislation is intended to implement the Government’s response to the Productivity Commission’s inquiry into Australia’s Intellectual Property laws.

Submissions were received by IP Australia in relation to the draft legislation and on 4 January 2019, IP Australia published its responses which you can see here

Proposed Reforms to Inventive Step (Obviousness) Test

To recap, the Bill proposes changes to the inventive step test that would result in expanding the knowledge base against which inventive step is assessed and by adopting legislation worded in similar terms to Article 56 of the European Patent Convention.  In particular, the proposed new legislation would explicitly state that the test for inventive step would involve “comparing” the invention with the prior art base and only if the invention would not be obvious to a person skilled in the relevant art does the invention involve an inventive step.

Submissions were received by IPAustralia to the effect that:

  • The inventive step provisions were revised very recently under the Raising the Bar legislation of 2013 and not enough time has passed to assess their effectiveness;
  • The inventive step provisions have been revised too frequently and this places an undue burden on patent applicants;
  • Adopting the European approach to inventive step relies on “hindsight reasoning” and this tends to lead to greater combining of prior art documents;
  • Australian law is currently more closely aligned with the US, and adopting a European approach will move Australia away from the US which is not desirable.

In response, IPAustralia noted that the above issues were considered by the Commonwealth Government and it remains committed to adopting the highest threshold test for inventive step applied by Australia’s major trading partners, which is the European test. IP Australia doesn’t propose to recommend any further changes to the proposed inventive step test.

Abolition of the Innovation Patent

A number of submissions opposed the proposed abolition of the innovation patent and some called for revisions to the proposed grandfathering provisions. IP Australia responded by noting that a decision to abolish the innovation patent system has been taken by the Government and that the consultation was intended to hear suggestions regarding the implementation of that decision not on whether the decision should be revisited.  The proposed phasing out of the innovation patent by prohibiting the filing of new applications after commencement of the legislation will remain unchanged.

IPAustralia noted that the above issues were considered by the Commonwealth Government and it remains committed to adopting the highest threshold test for inventive step applied by Australia’s major trading partners
Objects Clause

In relation to the proposal to include an objects clause in the Patents Act, IP Australia noted a number of concerns were raised about the inclusion of the term “technological innovation” in the objects clause.  Some suggested a risk that the reference to “technological innovation” as opposed to “innovation” could narrow or alter the subject matter that can be granted a patent.  Others suggested that the introduction of an objects clause would introduce additional uncertainty and complexity and raise the costs of litigation while others argued an objects clause is unnecessary.

IPAustralia responded that it is unlikely that the courts would interpret the term “technological innovation” as being intended to narrow or change the subject matter eligibility threshold for grant of a patent, in the absence of some explicit provision to do so. The test for patentable subject matter in Australia under section 18(1)(a) of the Patents Act remains unchanged. As such, software patents and the like would continue to be assessed according to this test.  IP Australia doesn’t intend to revisit the form of the proposed objects clause.

One might suggest that IP Australia is seeking to have it both ways with its earlier acknowledgement that the objects clause “supports a clear statement of legislative intent for the guidance of the courts in the interpretation of the Act”.  If the inclusion of “technological innovation” is not intended to influence judicial interpretation of provisions such as section 18(1)(a) then what is the point of its introduction?

The submissions and IP Australia’s responses will be passed on to the Government for consideration in shaping the final form of the bill to be presented to Parliament.  There is no firm guidance yet as to when the Government will complete this process.  We will keep you informed of the further developments.

If you would like more information about proposed reforms to the Australian Patents Act then please contact Daniel McKinley

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