The fate of Australia’s innovation patent has now been confirmed.  Last month, the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 received Royal Assent and finally set the timeline for the phasing out of the innovation patent in Australia.

What you need to know:

Before 26 August 2021:  No change to current system.  Innovation patents may be filed directly, or as divisional applications from pending Australian standard or innovation patent applications.

On or after 26 August 2021:  Innovation patent applications may only be filed as divisional applications from pending Australian standard applications or pending innovation patent applications for which the filing date of the parent is before 26 August 2021.

25 August 2029:  With the latest possible filing date for an innovation patent being 25 August 2021, the last day that any remaining innovation patents will expire is 25 August 2029.

A missed opportunity

The phasing out of the innovation patent marks the end for one of the strongest assets for offensive IP strategy.  The assessment of patentability against novelty and “innovative step” (a lower test than inventive step) made the innovation patent more straightforward to grant and very difficult to invalidate.  The ability for applicants to file innovation patents as divisional applications from a pending standard patent application made them perfect for directing at competitor products by including targeted claims.  Having all the same remedies available as a standard patent, the innovation patent was the weapon of choice for many patentees.

Surprisingly, the uptake on innovation patents has never been significant; something I have never quite understood, given the strength of these rights.  In 2018, the total number of innovation patent filings was only 7% of the total number of standard patents filed.  They were favored by Australian applicants: in 2018, AU residents filed around 51% of all innovation patents.  This compares with only 9% of standard patents being filed by applicants that are resident in Australia.   This huge differential suggest that international applicants do not appreciate the value of the innovation patent.  This is possibly a reflection of the more strategic conversations Australian attorneys have with their local clients.  In any case, it seems a missed opportunity for many international companies with IP interests in Australia.

So, what next?

The innovation patent was introduced in 2001 to provide an IP right for incremental inventions.  It was created to benefit SMEs by offering protection for a lower threshold of innovation, at a lower cost and greater speed to grant.  Recent reviews determined that it was not achieving its original policy objectives of encouraging innovation among Australian SMEs by offering protection for lesser inventions.

However, Government seems intent on helping small businesses gain access to the IP system.  One of the requirements of the Bill is that a statutory review be conducted of the accessibility of patents to SMEs, with a particular focus on the cost of applications and the processing times.

But is the answer to provide IP rights directed to assist one type of business or another?  I don’t think so.  The incremental invention was never only the realm of the SME, in fact many of the most impressive inventions we see come from our SME clients.  SMEs need to approach the IP conversation in the same way as larger more established businesses, benefiting from clear IP strategy which identifies their IP, understands how it produces value into the business and defines a plan for protecting and exploiting that value.  When patents are relevant they need access to the best protection available.

The demise of the innovation patent comes at a time when changes are being made to raise the bar for patentability of standard patents in Australia. Recently, support requirements were brought into line with European requirements and the Federal Government is considering recommendations to align inventive step requirements with Europe.  These changes are designed to improve the quality of patents granted in Australia.

It will now be more important for SMEs to find attorneys that have a considerable experience of the European patent system and a willingness to dive deep into understanding their business in order to support their IP requirements.

It will be interesting to see the results of the statutory review, but Government might better support SMEs by providing more accessible grant or incentive programmes to help them access the IP system, rather than by creating new rights.

Practice Note

So it is business as usual for the innovation patent for the next 18 months.  In the meantime, we recommend that applicants consider the innovation patent carefully as part of their IP strategy and the opportunities it presents.

If you have any questions about the innovation patent or if you would like to discuss any of your IP needs, please get in touch with our team.

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