Scintilla – a flash, a spark, an iota. Shorthand for creativity and an indicator of inventiveness under Australian law.






Tuesday, August 19, 2014

The ACIP Innovation Patent Review: Where are the roadside posts leading us?

By Lester Miller, Senior Associate

Australia's innovation patent system has done an excellent job of protecting incremental inventions, but it can be confusing. A person receives a granted patent before an examiner has determined patentability, but the innovation patent can't be enforced until after optional examination and certification. After certification the patent can be enforced, even though the concept may be obvious.

The Advisory Council on Intellectual Property was tasked in February 2011 by the former Minister for Innovation, Industry, Science and Research to review whether the innovation system was working to stimulate innovation in SMEs. ACIP consulted widely, and recently released its final report, which includes six recommendations to the Federal Government.
 

Innovation patents today

 
About 5 per cent of patent applications filed in Australia are for innovation patents. They are characterised by an eight-year term, a five-claim limit, an optional examination for certification (without which there can be no enforcement) and a six-month prosecution limit. Claims to plants and animals and biological processes for their generation are excluded, but microbiological processes and products are allowed. After only a simple formalities assessment, an innovation patent application proceeds to grant and can legitimately be referred to as a patent.
 

The hole in the post

 
The first judicial consideration of the relevant statute was during a contest between two roadside post manufacturers, Delnorth and Dura-Post, in 2008. The patentability threshold for an innovation patent (novel and involving an innovative step) was intentionally set lower than a standard patent, but found lower by the court than many expected. The test: differences between innovation patent claims and one existing design should be considered, followed by an assessment of whether those differences make a substantial contribution to the working of the claimed innovation. If there is real contribution to the working, the claim is valid.
Delnorth's drivable flexible post with a marker hole was found to be patentable over a post which needed a small pit to be dug for its base, and a hardening resin poured into the pit. Delnorth's marker hole was found to increase the performance of the post since it indicated the depth to which it should be driven for good springback. Even though Delnorth's post may have been thought at the time to have been obvious, that was found to be irrelevant to the validity of the innovation patent.
 

Getting off the roadside

 
ACIP did not find enough evidence to recommend keeping or disposing of the innovation patent system. If it is kept, however, ACIP recommends:
  • Only using the word 'patent' for fully examined and certified innovation patents that meet (a new) threshold;
  • Increase the innovative step threshold by using worldwide common general knowledge in the art, rather than one document, as a basis for an assessment of contribution of a claim feature;
  • Compulsory examination after three years;
  • Methods, systems or processes should be excluded; and
  • Remedies for infringement be unchanged, if the above changes are made.

Comment

 
If the recommendations are adopted by the Government, what is really a patent application, only examined for formalities, will no longer be called a patent, which will resolve a decade-long anomaly.
 
It is possible that the proposed rule change to include common general knowledge would lead to an increase in uncertainty, evidentiary burden and costs for patent applicants, since the first step in any discussion of validity would not be not a straightforward check of whether a document is published, but an argument, potentially backed by technical experts, about whether a document can be included as part of the everyday global stock-in-trade technical information of a skilled person (CGK). To make the examination process more efficient, examiners may well need to be given powers to assume the level of CGK in particular technology fields, which may be unrealistic.
 
Without further guidance, there may be technical fields where the proposed rule may cause the innovative step threshold to be even be lower than it is at present. That is, documents having similar features as the invention claimed may not be able to be shown to be within the body of CGK of a skilled worker in a particular field (for example, the document may be well-known in one technical field, but not well-known outside it) and therefore unable to be used for an innovative step consideration.
 
One of the benefits of the present innovation patent system for SMEs is it has very few compulsory steps and consequent low cost in most cases. Introducing a compulsory examination step may be a good balance between certainty for third parties who may want to use a particular innovation, but it will increase costs for applicants. Given long lead times for commercialising inventions, three years may be too soon.
 
It cannot be easy to get the balance right, particularly when aiming to stimulate innovation for SMEs, running a two-tier patent system. It will certainly be interesting to see which recommendations, if any, are adopted by the Federal Government.
 

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