Given the perceived antipathy of IP Australia towards the innovation patent, patent attorneys were surprised when they announced that they were recommending it be phased out over eight years.
The innovation patent appears to have been granted a reprieve for the moment.
The Federal Government has decided to consult further to understand the needs of innovative small-to-medium enterprises before phasing it out.
IP Australia revealed the decision in a statement announcing that amendments to Australia’s IP laws based on recommendations by the Productivity Commission had been introduced to parliament for consideration.
“The Government has decided to undertake further consultation targeted at better understanding the needs of innovative SMEs before the phase out of the innovation patent occurs,” it said.
The notes accompanying the phase out indicated that they were keen to avoid a situation where applicants of current patent applications lost the right to obtain an innovation patent.
As a result, if you have a pending Australian patent application (or a Patent Cooperation Treaty application designating Australia) when the change happens (date to be confirmed), you will still be able to use it as the basis to get an innovation patent if the first filing in the family was less than eight years ago. (Innovation patents last eight years.)
This long phase out is quite different to the position that IP Australia adopted when it increased the requirements for getting a standard patent five years ago (the “Raising the Bar” changes). That change lead to a rush of last minute action to get applications considered under the old standard. So perhaps the slow burn in this case is also aimed at avoiding a similar rush.
Why the hate?
The innovation patent was introduced in 2001 to provide a second tier patent.
It was designed to be attractive to small and medium size enterprises and thus foster innovation in this sector of the economy.
Among the features that were intended to attract them was a lower threshold to get a patent.
After the first couple of pioneering cases, it was soon realised that this lower threshold made innovation patents very hard to invalidate, which made them attractive to another audience entirely: litigants.
The process for obtaining an innovation patent to use in litigation typically runs like this. The patent attorney works with the client to identify any pending patent applications less than eight years old that disclose features found in a litigation target’s product. Narrow claims are drafted based on that disclosure which are directed at the product. One or more divisional applications are filed for innovation patents with the targeted claims. Being narrow, the claims usually survive examination and the innovation patent is certified and can be used in litigation. The whole process typically takes around three months.
Given the speed at which they could be obtained and their effectiveness, innovation patents became a widespread part of litigation. Even multinationals got in on the act. For example, Apple asserted a number of innovation patents in the Australian arm of their global dispute with Samsung.
This type of use of the innovation patent came to be regarded by some policy makers as misuse and one of the reasons why they lobbied for its removal, arguing that the innovation patent was not fostering innovation as originally intended.
With the proposed eight year phase out of the innovation patent, there are still some circumstances where it is worth filing an innovation patent now instead of using a pending Australian application sometime during the eight year phase out
The most obvious one is if you don’t have patent protection in Australia and want to take advantage of the lower threshold of patentability to get some. If you don’t have an application filed before the change is made, you won’t be able to use it.
A less obvious situation is if you are already contemplating litigation. After the phase out starts, IP Australia is likely to be highly vigilant to ensure only existing rights are preserved and hence more likely to raise objections during examination that claims are not fully supported by the specification.
This could leave you tied up before IP Australia dealing with these objections when you want to be able to assert the patent. If you are contemplating litigation, we recommend filing an innovation patent and requesting examination as soon as possible.