Australian grace period provisions – not so graceful
Mack Innovations (Australia) Pty Limited v Rotorco Pty Limited  QSC 138
The grace period provisions should be thought of as a patent filing “safety net” rather than a strategic filing option. In the opinion of the author, the existing provisions are verbose and in certain parts antiquated. The present case highlights a two step process for navigating these complex provisions.
The Australian grace period provisions are outlined in section 24(1) of the Patents Act 1990. For the purposes of determining whether an invention is novel or involves an inventive step (or innovation step in relation to Australian innovation patents), the provisions allow one to disregard:
(a) any information made publicly available, through any publication or use of the invention in the prescribed circumstances, by or with the consent of the nominated person or patentee, or the predecessor in title of the nominated person or patentee; and
(b) any information made publicly available without the consent of the nominated person or patentee, through any publication or use of the invention by another person who derived the information from the nominated person or patentee or from the predecessor in title of the nominated person or patentee (unauthorised disclosure provisions).
The ability to disregard the information referred to under this section only applies if a “patent application” for the invention is made within the prescribed period.
Regulation 2.2(1A) of the Patents regulations states that in relation to paragraph 24(1)(a) the circumstance that there was a publication or use of the invention within 12 months before the filing date of the complete application is a prescribed circumstance. regulation 2.3(1A) states that for information referred to in section 24(1)(a), if the applicant relies on the circumstance in regulation 2.2(1A), the prescribed period is the period of 12 months after the information was first made publicly available. regulations 2.2(1A) and 2.3(1A) were introduced in 2002 and became effective as of 1 April 2002.
Prior to 2002 the other prescribed circumstances were (and still are – at least in a slightly amended form) outlined in regulation 2.2(2) and include:
(a) the showing or use of the invention at a recognised exhibition;
(b) the publication of the invention during a recognised exhibition at which the invention was shown or used;
(c) the publication of the invention in a paper written by the inventor and:
(i) read before a learned society; or
(ii) published with the inventor’s consent by or on behalf of a learned society; or
(d) the working in public of the invention within the period of 12 months before the priority date of a claim for the invention:
(i) for the purposes of reasonable trial; and
(ii) if, because of the nature of the invention, it is reasonably necessary for the working to be in public.
Regulations 2.2(3) and 2.2(4) further qualify the conditions which must be met before the actions defined above in regulations 2.2(2)(a) and (b) can be considered prescribed circumstances.
The prescribed periods are set out in regulation 2.3(1) and these periods differ depending on the circumstances relied upon.
Facts of the case
Mack Innovations (Mack), the registered patentee of a cable pulling apparatus for a helicopter, initiated infringement proceedings against Rotorco Pty Limited. Rotorco responded with a counter claim that the invention was not novel in light of the fact that prior to filing for a patent the invention was tested in public. It was commonly agreed that this disclosure occurred between early march to July 2005, and prior to the filing of a provisional application (12 August 2005). A subsequent complete application was filed some 12 months later in August 2006. What was also not in dispute was that the disclosure fell within the ambit of regulation 2.2(2) (d) and therefore represented working in public of the invention for the purposes of reasonable trial.
Regulation 2.3(1)(c) relevantly provides that the prescribed period, in the present circumstance is “12 months from the start of the first public working of the invention”. In the present case this period had not expired when the provisional application was made but had expired by the time the complete application was lodged. Accordingly in dispute was the definition of “a patent application” as recited in section 24(1). Rotorco argued that under these circumstances section 24(1) requires the filing of a complete patent application within 12 months of the disclosure in order to rely on the grace period afforded by regulation 2.2(2)(d).
The Court found that in relation to circumstances outlined in regulation 2.2(2), limitation to complete applications was not to be found, in contrast to the specific reference to “complete application” in regulation 2.2(1A). In its enquiry the Court looked at the definition of “patent application” as defined in Schedule 1 of the schedule of the Patents Act which states “an application for a standard patent and/or application for an innovation patent”. This definition was found not to be enlightening. Section 29 however provides an explicit qualification that an application for a patent may be a provisional application or a complete application. Accordingly as a provisional application is an application for a patent under the Patents Act, the Court found that the term “patent application” as used in section 24(1) should be broadly construed to include both provisional and complete applications. The Court noted that a similar conclusion was reached by the Federal Court in NSI Dental Pty Ltd v University of Melbourne  FCA 1216.
Rotorco also argued that as a provisional application does not require claims, and regulation 2.2(2)(d) prescribes the circumstance of “the working in public of the invention within 12 months before the priority date of a claim for the invention”, then this pointed to the requirement of the filing of a complete application (which requires claims). The Court dismissed this argument by reasoning that the operation of section 24(1) and regulation 2.2(2)(d) could be identified once the complete application has been filed.
What this decision highlights is that the Australian grace period provisions are complex and not particularly easy to navigate. Before relying on the provisions one must first, clearly identify the circumstances surrounding the disclosure, and second, develop a filing strategy in line with the prescribed periods as set out in the regulations. When in any doubt as to the circumstances surrounding the disclosure, it would appear that filing an Australian complete application within 12 months of the initial disclosure would be the safest option. In the present case, while Mack maintained the validity of their patent, the case may have had a different outcome had Rotorco successfully argued that the public disclosure did not represent a reasonable trial such that by the nature of the invention it was reasonably necessary for the working to be conducted in public.