Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 introduced into the Senate
On 22 June 2011 the much anticipated “Raising the Bar Bill” was introduced into the Senate. The stated aim of the Bill is to introduce a number of reforms to Australia’s IP system to support innovation by encouraging investment in research and technology in Australia. One of the primary methods by which the Bill seeks to do this is by raising the standards against which IP rights are assessed. The Bill also includes provisions to put into effect recommendations contained in various reports prepared for the government by the Advisory Council on Intellectual Property (ACIP), the Australian Law Reform Commission (ALRC) and the 2008 review of the National innovation system (Venturous Australia).
The amendments have been divided into six schedules. Schedule 1 is the most significant in that it substantially raises Australian patentability standards and the requirements for patent specifications. Schedule 2 introduces two patent infringement exemptions, one relating to experimental use and the other relating to regulatory activity. Schedule 3 restricts some of the flexibility currently allowed within the Patents Act by restricting the filing of divisional applications and amendments filed by applicants following an opposition decision. This schedule also introduces amendments to the trade mark opposition system. Schedule 4 provides for the incorporation of patent attorney firms and attorney/client privilege to the clients of foreign patent and trade mark attorneys. Schedule 5 relates to trade mark and copyright enforcement, while Schedule 6 introduces assorted changes to deal with some anomalies present in Australia’s current IP laws.
About the author
Michael Caine is a fellow and council member of the Institute of Patent and Trade Mark Attorneys of Australia (IPTA), where he is convenor of the Patents Legislation Committee, and member of the Patent Consultation Group operated by IP Australia. Michael is involved in overseeing the preparation of submissions to IP Australia and other Government bodies in relation to Australian patent law and practice. He also consults to IP Australia in his role as member of the Patents Consultation Group. His IPTA activities included the preparation and filing of submissions in respect of IP Australia’s patent law reform proposals which lead to the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011.
While the Raising the Bar Bill includes amendments to the Patents Act 1990, Trade Marks Act 1995, Copyright Act 1968, Designs Act 2003 and Plant Breeders’ Rights Act 1994, the vast majority of the amendments relate to the Patents Act 1990. The final form of the Raising the Bar Bill does not differ markedly from the exposure draft of the Bill circulated for public comment earlier in the year. However, of particular significance are the amendments to the transitional provisions and the commencement date of the legislation.
According to the exposure draft the new patentability standards and specification standards were to be applied to all patent applications for which an examination report had not issued by the date of commencement. The date of commencement of the legislation was to be six months from the date the Act receives Royal assent, or an earlier date to be fixed by proclamation. The net result was that applicants who had filed patent applications prior to commencement of the new legislation would not be able to take any action to ensure that their applications were examined under the current more lenient standards. These provisions have been amended in the Raising the Bar Bill and the new provisions relating to patentability and specification requirements will now only apply to applications for which examination has not been requested by commencement of the legislation. The commencement period has also been extended from 6 months to a fixed 12 month period from the date upon which the Act receives Royal assent. This will mean that patent applicants will have an extended period within which to request examination of their applications to ensure that they are examined according to the current standards.
While this is a very welcome change, after commencement of the new legislation it is likely to become necessary to check IP Australia’s database to ascertain the date of the examination request in order to determine the applicable law. This problem could be partially alleviated if IP Australia takes steps to include the date of the examination request on published abridgements of accepted applications.
The Raising the Bar Bill has been scheduled for debate in the Senate for the week of 16 August 2011. Accordingly, the earliest that the Bill could be passed is September 2011, and, in view of the 12 month commencement period, the earliest commencement date for the new provisions is September 2012. This will provide patent applicants with a considerable period of time within which to request examination of their Australian applications to ensure that they are considered under the current more lenient provisions. Consideration could also be given to early national phase entry in Australia so that an examination request can be filed before commencement.
The new provisions will be subject to regulations which are yet to be published. It is anticipated that the regulations will be available for review late this year or early 2012.
A summary of the changes as they apply to patents is provided below:
Schedule 1 – Raising the quality of granted patents
- Under the current law inventive step is assessed against the background of the common general knowledge in the art as it exists in Australia. Section 7(2) has been amended to remove the territorial limitation such that inventive step will be assessed against the common general knowledge in the art in general. This amendment should assist opponents and third parties seeking to revoke granted patents since it will no longer be necessary to support a lack of inventive step argument with evidence from an Australian expert. Unfortunately the explanatory memorandum does not contain any guidance as to how the court, or other decision maker, should weigh up the evidence of experts when there is conflicting evidence from experts located in the same or different jurisdictions.
- The prior art base against which inventive step is assessed has been expanded by the removal from Section 7(3) of the requirement for a prior art reference for inventive step purposes to be “information that a skilled person…could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant…”. At first sight it would appear that this amendment could open the door for inventive step objections to be taken on the basis of prior art references that would never have been found by a person skilled in the art, for example a reference in a completely different technical field or a reference located in an obscure library. However, the explanatory memorandum explains that although the words “understood and regarded as relevant” have been deleted from this section, a normal assessment of inventive step would include consideration as to whether the reference would be understood and regarded as relevant by a person skilled in the art. The explanatory memorandum is silent in relation to whether it would still be appropriate in considering inventive step to ask whether or not the reference is one that would have been found by a person skilled in the art, for example by a diligent searcher. The explanatory memorandum does indicate a desire to change the law as expounded in Commissioner of Patents v Emperor Sports Pty Ltd 2006 [FCAFC 26] (10 March 2006), where a published US patent specification describing removable tags for playing American football could not be used to support an inventive step objection against similar tags used for playing rugby league or Australian rules football. In that decision it was held that a rugby league or Australian rules coach could not be reasonably expected to ascertain a US patent document. The explanatory memorandum does include a warning against the impermissible use of hindsight, and accordingly it is hoped that an inventive step objection will not be sustainable in circumstances where the published reference could only be found with knowledge of the invention.
- A new utility requirement is to be introduced which is based largely on utility guidelines developed by the United States Patent & Trademark Office (USPTO). The Bill seeks to introduce a new provision which will require a complete specification to disclose a “specific, substantial and credible use” for the invention. The use must be disclosed in such a manner that it is appreciated by a person skilled in the relevant art. This requirement for a specification to disclose a use for the invention is additional to the requirement of Section 18 for the invention itself to be useful, in the sense of meeting the promise of the invention as described in the specification.
- The level of disclosure required for a provisional application is to be increased to the extent that it almost requires the same level of disclosure required for a complete specification. The only difference is that a provisional application need not disclose the best method of performance of the invention.
- The disclosure requirement for complete applications will be amended to conform substantially to the corresponding United Kingdom provision, and the explanatory memorandum makes it clear the new provision is intended to be interpreted in a similar manner to the corresponding United Kingdom provision. The provision states that the complete specification must “disclose the invention in a manner which is clear enough and complete enough for an invention to be performed by a person skilled in the relevant art”. Although the provision does not specifically state that the full scope of the claim must be enabled, the explanatory memorandum indicates that the subject matter of a claim should be enabled across its “whole width”. It remains to be seen how the new provision will be interpreted by Australian courts. The requirement to disclose the best method of performance of the invention has been retained.
- The current requirement for a claim to be fairly based on matter disclosed in the specification is to be replaced with a support requirement. According to the explanatory memorandum, the support requirement is intended to encompass two requirements, one being that there must be basis in the description for each claim and the other being that the scope of the claims must not be broader than is justified by the extent of the description, drawings and contribution to the art. This second aspect of the support requirement appears to be intended to provide a means for rejecting unduly speculative claims.
- The new support requirement will also apply in relation to the assessment of priority entitlement. In this regard for a claim to be entitled to a priority dated based on a provisional application or other basic application the subject matter of the claim must be supported by that application. This amendment substantially raises the level of disclosure required to support a priority claim in Australia.
- A new system providing a search and opinion in cases where no other search reports are available will be introduced. It appears that the new search and opinion will be instigated at the discretion of the Commissioner; however it is unclear as to who will be responsible for paying for the search and opinion. This is expected to be clarified when the regulations are published.
- The examination process is to be extended to allow Examiners to consider and report on usefulness and prior use. In relation to the examination of usefulness, examiners will consider the new utility disclosure requirement as well as whether the claimed subject matter meets the promise of the invention.
- The “balance of probabilities” standard will be extended to all grounds examined, and will also apply to re-examination and opposition. These amendments are likely to increase the use of the re-examination and opposition systems as the likelihood of success should be substantially increased, especially in relation to lack of inventive step.
- The amendment provisions will be modified to prevent applicants from adding subject matter to their applications, except when the amendment is to correct an obvious mistake or clerical error. This will bring Australia’s amendment provisions into closer conformity with those of other major industrialised countries. The assessment as to whether subject matter has been added is made with reference to the complete specification as filed as well as “other prescribed documents (if any)”. It is unclear at this stage which other documents might be prescribed, although it is expected that this will include Abstracts and parts of the specification that were missing at filing but added under provisions which allow the addition of missing parts, such as those provisions which exist in the Patent Co-operation Treaty (PCT).
Schedule 2 – Free access to patented inventions for regulatory approvals and research
- A new provision is introduced which will allow a party to use a patented invention for purposes connected with obtaining an approval required by the law of the Commonwealth, or the State or Territory, or for purposes connected with obtaining a similar approval overseas. The provision specifically excludes pharmaceutical patents because the Patents Act 1990 already includes an exemption for acts solely related to obtain regulatory approval for pharmaceutical products. Unfortunately the new provision appears to suffer from the same problem which applies to the current pharmaceutical regulatory exemption. In this regard both provisions do not appear to restrict the exemption to patented inventions the use of which could not be reasonably avoided in carrying out the activity required for regulatory approval. Accordingly, both provisions appear to provide blanket exemptions for activities associated with obtaining the necessary regulatory approvals.
Experimental use exemption:
- An experimental use exemption is to be introduced which will apply to acts done for experimental purposes relating to the subject matter of the invention. The provision indicates that acts done for experimental purposes include, but are not limited to:
- determining the properties of the invention;
- determining the scope of a claim relating to the invention;
- improving or modifying the invention;
- determining the validity of a patent or of a claim relating to the invention;
- determining whether the patent for the invention would be, or has been, infringed by the doing of an act.
This amendment is expected to be well received by the Australian research community.
Schedule 3 – Reducing delays in resolution of patent and trade mark applications
Deadline for filing divisional applications
- Under the current provisions it is possible to file a divisional application up until the date of grant of the patent, unless the divisional is in respect of subject matter falling outside the scope of the accepted claims of the parent. In that case the divisional application must be filed within three months of the date on which acceptance of the parent application is advertised in the Official Journal. It is also possible under the current law to convert any application into a divisional of an earlier filed application if that application could have been validly filed as a divisional application on its filing date. Under the Bill the deadline for filing divisional applications or for converting applications to divisional status will be prescribed in the regulations to be three months from the date of advertisement of acceptance of the parent. Accordingly it will no longer be possible to file divisional applications from applications which are under opposition, and there will be less opportunity to overcome novelty objections based on earlier filed applications by the same applicant by converting the later application to a divisional application of the earlier. Another consequence of this amendment is that it will no longer be possible to file a divisional innovation patent in respect of an opposed standard patent application in circumstances where it becomes clear during the opposition that the claimed invention does not possess an inventive step, but would posses an innovative step which would have qualified for innovation patent protection. Similar restrictions will be placed on filing divisionals of innovation patents.
Amendments directed by the Court
- The Federal Court will be given the authority to direct amendment of a patent application, and the ability for an applicant to progress an amendment of a patent application before the Patent Office after an opposition decision has issued will be removed if there has been an appeal of that opposition decision. Under the proposed transitional provisions the Patent Office will not be able to progress amendments of opposed applications under appeal where those amendments were filed prior to commencement of the legislation but not yet dealt with. While these provisions remove some of the uncertainty which currently surrounds the processing of amendments filed before the Patent Office following issuance of an opposition decision, the new provisions are likely to cause difficulties and extra expense for both applicants and opponents as amendments filed following an opposition decision will, in many cases, need to be dealt with in the Federal Court rather than before the Patent Office.
Withdrawal of an opposed application
- The new Bill will place restrictions on an applicant’s ability to withdraw an opposed application. In this regard it will only be possible to withdraw an opposed application with the consent of the Commissioner. Where there is a divisional application relating to the opposed application it is expected that the Commissioner’s consent will only be given if the applicant agrees to also withdraw the divisional application. It is unclear whether anything positive will be achieved by this amendment. An applicant of an opposed application with a divisional application pending is now unlikely to request withdrawal of the opposed application, even if their main interest is in the divisional application. Accordingly the applicant will be forced to continue to defend the opposition on the parent application or to allow it to lapse through non-payment of continuation fees. It is unclear why there was a need to introduce this provision, since the Bill removes the ability for an applicant to file a divisional application from an opposed application. The restriction will apply to all withdrawal requests filed after commencement of the legislation.
- Criminal sanctions will be removed for non-compliance with a summons or a notice to produce a document or article, and will be replaced with non-criminal sanctions. Under the new provisions the Commissioner must be satisfied, on the balance of probabilities, that the witness or person required to produce the document or article has a substantial interest in the proceedings, and that the evidence, document or article is likely to be of substantial relevance to the matter before the Commissioner.
Schedule 4 – Assisting the operations of the IP profession
Incorporation of patent attorneys
- Under the new provisions it will be possible for a company to register as an “incorporated patent attorney” in circumstances where it has at least one patent attorney director and has met a number of other requirements. This provision will allow Australian patent attorney firms to incorporate. A number of offences have been introduced to deal with companies holding themselves out as, or carrying on the business of, patent attorneys who are not incorporated patent attorneys or an incorporated legal practice.
- Both the Patents Act and the Trade Marks Act will be amended to extend the privilege afforded to clients of patent attorneys and trade marks attorneys. These amendments address shortcomings of the current privilege provisions which came to light following Justice Heery’s decision in Eli Lilly and Co & Another v Pfizer Ireland Pharmaceuticals & Another (No 2) (2004) 137 FCR 573. Under the new provisions privilege will extend to the clients of foreign patent and trade mark attorneys, as well as to communications with third parties in circumstances where privilege would have applied if the patent or trade mark attorney were a lawyer. This amendment is particularly welcomed by the Australian patent attorney profession which has been lobbying for change since the Eli Lilly v Pfizer decision.
Schedule 5 – Improving mechanisms for trade mark and copyright enforcement
- This Schedule does not include any amendments relating to the patent system.
Schedule 6 – Simplifying the IP system
- Although the Patents Act 1990 includes a grace period for earlier disclosures by or on behalf of the applicant or patentee, or predecessor in title, it does not provide protection in respect of any prior secret (commercial) use of the invention, or in respect of earlier disclosures which fall outside the scope of the claim but, nonetheless, impact on inventive step. The Bill introduces a new 12 month grace period into Section 9 to deal with secret use which would otherwise invalidate a claim. The existing grace period has also been clarified so that it now clearly applies to earlier disclosures that fall outside the scope of a claim under consideration, but which would otherwise render the claim obvious. The provisions have also been amended to clarify that a complete application (as opposed to a provisional application) is required to invoke the 12 month grace period. The new provisions will only apply in respect of prior disclosures or prior secret use occurring after the date of commencement of the legislation.
- New Section 22A is to be introduced to ensure that a patent will not be considered invalid merely because it was granted to the wrong person. The transitional provisions clarify that this new provision applies retrospectively to existing patents. See also our comments below under the heading “Rectification of the Register”.
- The Patents Act 1990 is to be restructured so that PCT applications which enter national phase in Australia are treated as complete applications under the Act. This has allowed a whole chapter dealing with the special treatment of such national phase applications to be repealed, along with a complex set of regulations dealing with the treatment of national phase applications.
- Article 4C(4) of the Paris Convention allows an applicant to reset the 12 month priority period by filing a replacement application. The 12 month period is only reset if all of the requirements of Article 4C(4) are met. Under Australian law as it currently exists, however, it was necessary for an applicant to specifically request disregardal of any withdrawn or abandoned applications filed prior to the claimed priority date. In most if not all other countries the provisions of Article 4C(4) operate automatically, such that it is not necessary for an applicant to specifically request disregardal of earlier applications. The Bill amends Section 96 to remove the requirement for an applicant to request disregardal of earlier applications. It also removes the “same country” limitation which appears in Article 4C(4) so that an earlier withdrawn application can be automatically disregarded in circumstances where the subsequent application is filed in a different country. The new provisions correspond substantially in effect with those of Canada. In this regard, it is only applications filed more than 12 months before the Australian filing date which can be disregarded. According to the transitional provisions the new provisions will apply retrospectively to existing patents.
Disputes between applicants
- Section 32 is a provision which allows the Commissioner to make determinations for an application to proceed in circumstances where a dispute arises between any two or more interested parties in relation to the patent application. This provision has been amended so that it will only operate where the dispute arises between joint applicants. The provision will allow the Commissioner to make a determination as to how the application is to proceed, even if the application has lapsed.
- Under current Australian law it is possible to include omnibus claims directed towards embodiments of the invention as described with reference to the examples or drawings. Under the new provisions claims cannot rely on references to the description or drawings “unless absolutely necessary to define the invention”. Accordingly it will no longer be possible to include omnibus claims after the commencement of the new legislation. Under the transitional provisions it will be possible to include omnibus claims in all applications for which an examination request is filed before commencement.
- Although the regulations were amended several years ago to effectively remove the requirement for an applicant to provide search results to the Patent Office, the provisions which introduced the requirement and which provided the sanction for non-compliance were retained in the Act. These provisions have now been repealed. Accordingly, if a patent applicant had failed to meet the search result requirements when they were in force, there will now be no sanction for non-compliance.
- Modified examination based on a corresponding patent granted in a recognised country will no longer be available under the new provisions. Modified examination can proceed if already requested by commencement.
Postponement of acceptance
- Under the current provisions it is common for applicants requesting examination of their applications to also request postponement of acceptance. This ensures that the applicant has an opportunity to make any amendments to the application prior to acceptance. Under the new provisions the Commissioner will have the discretion to refuse to allow an applicant to postpone acceptance. It is not clear from the provisions or the explanatory memorandum under what circumstances the Commissioner would not allow an applicant to postpone acceptance. It is also not clear how or when an applicant would be notified as to whether such a request has been allowed or refused. Depending on how the Commissioner decides to apply his discretion, applicants may have difficulty ensuring that they have an opportunity to amend the application prior to acceptance.
Revocation of acceptance
- The Commissioner will be given a broad power to revoke acceptance of applications, or to revoke certification of innovation patents. While this provision may be advantageous when an application is accepted in error without consideration of a previously filed amendment, there are many circumstances where applicants would not want acceptance of their applications revoked. According to the explanatory memorandum the discretionary power is intended to provide an inexpensive and straightforward process for the rectification of administrative errors in accepted applications. However, the provision does not appear to be limited to the rectification of “administrative” errors.
Sealing of patents
- The Patents Act 1990 will be amended to remove all reference to the sealing of a patent. Instead of sealing a patent, particulars of the patent will be entered into the Register. This amendment will bring the process for granting a patent into closer alignment with the process for registering a trade mark. It is understood that IP Australia will notify the grant of a patent by providing an extract of the Register or a paper (unsealed) certificate of grant. It will also be possible to obtain certified copies of extracts of the Register if evidence of grant is required.
- The current provisions relating to non-infringement declarations will be amended to clarify that (i) a person seeking the declaration does not need to be a patentee, and (ii) that the declaration must be in respect of a granted patent. The provisions will also be amended to clarify that the declaration can relate to past, present or proposed conduct. Under the current provisions the person seeking the non-infringement declaration must pay the legal costs of all parties “unless the court otherwise orders”. Under the new provisions the Court will be given the discretion to award costs in the usual manner. It is expected that the winning party will be entitled to their costs, unless the Court thinks fit to order otherwise. An earlier proposal to allow validity to be questioned during re-examination proceedings is not being pursued.
Rectification of the Register
- In line with the introduction of Section 22A to ensure that a patent is not invalid merely because it was granted to the wrong person, a new provision is to be introduced to allow the Commissioner to rectify the Register to correct an error or omission in the Register, or to correct ownership of the patent. The Commissioner is not able to make these corrections if Court action is pending in relation to the patent. This provision will allow patentees to correct the ownership of their patents in circumstances where, at the time of grant, the named patentee who was not entitled to the patent. Under current law correction of this type of error generally involves surrender of the granted patent and application for a new patent in the correct name.
- The Bill removes from the Patents Act 1990 the requirement for sub-offices of the Patent Office to be maintained in each State. This will allow IP Australia to close existing sub-offices when they believe appropriate e-business channels are in place.
- The Patent Act currently includes a provision to exclude from copyright protection the reproduction in two dimensions of the whole or part of a provisional or complete specification that is open to public inspection. This section is amended by the Bill to extend the infringement exemption to the communication of the document to the public and translation of the document. The exemption has also been extended to a “prescribed document” although it is not clear what will constitute a prescribed document. According to the explanatory memorandum a prescribed document would include “the documents normally associated with the case file of a patent application”. Other published materials, such as journal references, books or other technical material are to remain excluded by the exemption.
- The texts of the Budapest Treaty and the Patent Corporation Treaty are currently included in the regulations. These will be removed and the Patents Act will be amended to refer to online versions of these treaties.
Whole of contents
- Novelty objections can be based on disclosure appearing in an Australian application having a priority date earlier than the claim under consideration, but published later. For this information to be relevant to novelty it must have been present in the specification at the time the application was filed and at the time it was published. This provision will be amended to remove the requirement that the information be present at the time the application is published. Unfortunately there is no guarantee that the version of a specification laid open to public inspection by IP Australia is the specification as filed. In this regard, it is possible to delete subject matter from an application after filing but before publication. This could mean that an earlier application could contain relevant information which is not apparent from the published version of the specification. It is hoped that following commencement of the new legislation IP Australia will ensure that specifications are laid open to public inspection in the form in which they were filed.