More on IP Australia’s proposed changes to our IP systems

More on IP Australia’s proposed changes to our IP systems

More on IP Australia’s proposed changes to our IP systems

IP Australia is proposing changes to Australia’s intellectual property laws and practices. A first round of public consultation in respect of these proposed changes was conducted in early and middle 2009. A second round of consultation papers was released in late 2009, which included IP Australia’s responses to the first round of consultation, together with details of how it intends to implement the proposed changes. We provide the following summary of IP Australia’s proposals and some of their possible effects.

Events so far

IP Australia is the Australian Government agency responsible for administration of intellectual property (IP) legislation relating to patents, design registrations, trade mark registrations and plant breeder’s rights.

As reported in the Davies Collison Cave IP Update, July ’09 Issue, IP Australia released a first round of five consultation papers in March and June 2009 which proposed wideranging reforms to substantive IP law and practice in Australia. Detailed responses to these proposals were submitted by the Institute of Patent and Trade Mark Attorneys of Australia (IPTA), the Law Council of Australia, and the Australian Federation of Intellectual Property Attorneys (FICPI Australia1), among others.

IP Australia issued a second round of consultation papers in November and December 2009 with revised proposals, based on the responses to the first round of papers, together with provisional drafting instructions that describe the proposed legislative and practice amendments in detail. These revised proposals have been the subject of responses by IPTA and FICPI, among others. The deadline for responding was 12 February 2010.

The substance of IP Australia’s second round of proposed changes

The proposed changes to IP law and practice are wide-ranging and are motivated by a broad variety of aims. Some proposals are attempts to “harmonise” the Australian patent system with other patent systems, e.g., in Europe, the US, Japan and the UK. Some proposals attempt to clarify Australian law or counteract unwanted (by IP Australia) results from court decisions, e.g., by increasing the level of disclosure required for sufficiency and changing the test for relevance of prior art in assessing inventive step. Other proposals aim to simplify or restrict our IP systems, e.g., by abolishing product-by-process and omnibus claims. Other proposals aim to reduce the time between filing a patent or trade mark application and its eventual grant or refusal, e.g., by substantially reducing the time to respond to patent examination reports, and reducing opportunities to file divisional patent applications.

Sufficiency and fair basis

Sufficiency

In the first round of consultations, IP Australia proposed increasing the requirements for sufficiency of description in patent specifications.

Presently a specification must “describe the invention fully, including the best method known […] of performing the invention”. This has been interpreted as requiring disclosure of “something within each claim”.2

In the second round of consultation papers, IP Australia proposes that a specification be required to “describe the invention fully in a manner which enables the invention to be performed across the whole scope of the claim[s] by a person skilled in the relevant art without undue experimentation”. IP Australia comments that “this new descriptive requirement will vary depending on the area of technology and the particular invention”, e.g., for a “broad class of chemical compounds, it may be necessary to provide a number of examples extending across the broad class”. For example, IP Australia’s view is that a genus claim should fail even if only one thing within the claim is not enabled.

This proposal seems to be aimed at inventions in less-predictable technical fields, known in the US as the “unpredictable arts”, e.g., involving chemical and biological rather than mechanical or electrical elements. The word “enables” is used in US law, and the US Patent Office manual states: “In cases involving unpredictable factors, such as most chemical reactions and physiological activity, more [disclosure] may be required.”

It is not clear how this requirement would be interpreted in Australian courts. Enablement across the whole scope of a claim could be interpreted to mean that every possible embodiment needs to be described.

Date for Sufficiency

IP Australia proposes that the sufficiency requirements (i.e., full description and best mode) must be fulfilled at the filing date of the complete application, as opposed to the current requirements that allow fulfilment of this requirement at any time before grant.3

Amendment Limitations

IP Australia also proposes to require that any amendments do not “go beyond the disclosure contained in the specification at its filing date”. This would be more limiting than the current requirements that allow the addition of new subject matter; although if the new subject matter is claimed, the priority date of such claims is likely to be the date of the amendment.

Fair Basis, and Priority Applications

IP Australia proposes to replace the current “fair basis” requirement (that claims be “fairly based on the matter described in the specification”) with a requirement that “the claims be supported by the matter described in the specification”, and furthermore that the claims be supported by the matter described in priority application (e.g., a provisional application).

It is not clear how this would be interpreted in Australian courts. The meaning of “fair basis” is well established in Australia, including by the High Court4, whereas a clear interpretation of “support”, particularly as it is proposed to replace fair basis, may take decades to resolve.

Implications

These requirements could be extremely onerous for patent applicants and would place Australian law at odds with the laws of its major trading partners. Support may require a very large number of example embodiments, described at the date of the priority application, and a single embodiment within the scope of a claim not enabled may result in invalidity. If this is the case, a third party improvement of a patented invention, where the improvement is not enabled by the patent specification, may not infringe a valid claim of the patent, and the very existence of the improvement could also render claims covering the original commercial embodiment invalid. A provisional application may require the same high level of description as a complete application. It is possible that amendments may only be allowed if there is “photographic” support for them, e.g., amendments may be strictly limited to the words in the specification as filed.

Should this be the case, it may no longer be possible to file a provisional application that is “provisional” in nature (e.g., an outline of the invention with a few examples), and prepare a more “complete” specification at the end of the priority period. Furthermore, it may severely limit our ability to clarify the claims during prosecution, e.g., as new prior art comes to light.

Inventive step

As in the first round of consultations, IP Australia proposes to extend common general knowledge (CGK), currently limited to that existing in Australia, to include knowledge anywhere in the world, i.e., providing universal CGK for inventive step analyses. This proposal aims to make it easier to lead evidence from foreign experts, but the manner in which IP Australia intends to implement the change could result in a need to establish that the knowledge is common across a range of jurisdictions.

In the first round of consultations, IP Australia proposed to remove the requirement that it be reasonably expected that a piece of prior art would have been “ascertained”, i.e., found, by a hypothetical skilled person, for it to be considered in an inventive step analysis.5 IP Australia seems to wish to avoid a repeat of the Emperor Sports situation, in which a relevant piece of prior art was rejected for not being ascertainable because “a football coach would not normally search the patent literature”.6 This proposal, particularly together with the proposed universal CGK, may make all prior art on the planet relevant for inventive step analyses, even when it would never have been consulted by a person skilled in the art.

In the second round of consultations, IP Australia also proposes to remove the requirements that a piece of prior art would have been “understood” and “regarded as relevant” by the skilled person. IP Australia seems to believe that these requirements are redundant because they are inherent in the tests for inventive step, and therefore would still be considered by a court even if they were deleted from the legislation.

In the second round of consultations, IP Australia is not maintaining their earlier proposal to revise the test for inventive step to additionally require that an invention not be “obvious to try […] with a reasonable expectation of success”. Instead they propose to apply the existing tests “more rigorously” during examination.

Utility

IP Australia proposes that the requirement for utility, or “usefulness”, be fulfilled by having a “specific, substantial and credible use” of the invention in the specification.

This language is used in the US patent office manual, but not in US legislation. The wording is used when the dividing line between a discovery and an invention is unclear, e.g., in biotechnology. In Australia, inventions are normally differentiated from discoveries using the well-established tests for a “manner of manufacture”. Changing the meaning of “utility” may introduce unnecessary uncertainties, and may create an onerous new requirement for applicants to fulfil with their patent specifications.

Examination, re-examination and opposition

IP Australia proposes the following changes: that Examiners consider prior art acts as well as documents during examination and re-examination; that utility be a ground of examination; that all grounds for examination be available on reexamination; and that the “balance of probabilities” standard of proof be applied in examination, re-examination and opposition (rather than giving the applicant or patentee the benefit of the doubt).

Exemptions to patent infringement

IP Australia proposes to introduce an exemption to infringement for “acts done predominantly for experimental purposes on a patented invention”. This is intended to clarify Australian law. There is some concern about the wording of this proposal. In 2005, the Australian Government’s Advisory Council on Intellectual Property (ACIP) proposed an exemption for “acts done for experimental purposes relating to the subject matter of the invention that do not unreasonably conflict with the normal exploitation of a patent”. The words “on the patent invention” are believed to be narrower than “relating to the subject matter of the invention”, making IP Australia’s exemption narrower than that proposed by ACIP. The phrase “do not unreasonably conflict with the normal exploitation of a patent” was proposed by ACIP to ensure the exemption satisfies our international treaty obligations. In contrast to ACIP, IP Australia’s proposal requires assessment of the predominant purpose of the experiment, rather than its impact on the exploitation of the patent.

IP Australia proposes extending the exemptions to infringement for seeking regulatory approval (known as “springboarding” provisions), currently only available for pharmaceutical products, to include non-pharmaceutical inventions. Little justification for this proposal has been provided beyond the existence of regulatory delays impacting on those wishing to exploit inventions following patent expiry, and no consideration has been given to the provision of patent term extensions outside the pharmaceutical field to compensate patent owners for similar or more lengthy regulatory delays experienced by them in getting the original products on the market.

Patent oppositions and trade mark oppositions

IP Australia proposes forcing acceleration of opposition proceedings, albeit with some relaxations, e.g., that a notice of opposition to procedural matters be filed after two months rather than one month.

IP Australia proposes that extensions of time in oppositions not be available “solely because of delays caused by an agent or a legal representative failing to act promptly or diligently”. This seems to be unnecessary in light of the broader proposed requirement that “the party [applying for the extension of time] has acted promptly and diligently at all times since the opposition proceedings began”.

Divisionals and opposed applications

IP Australia seeks to limit applicants filing one or more “strategic” divisional applications during patent opposition proceedings, then abandoning the opposed applications and pursing similar claims across a potentially large number of divisional applications. First, IP Australia proposes that no divisional applications can be filed (or converted) after three months following acceptance, which is last date for filing a notice of opposition. Secondly, IP Australia proposes to introduce a provision to prevent withdrawal of opposed applications without leave from the Commissioner.

Novelty

IP Australia proposes that a “whole of contents” novelty objection can now be based on information in a filed specification even if that information was removed prior to 18 month publication. Under the current system, the information must be in the specification as filed and as published. For this to be a sensible requirement, IP Australia will need to introduce a system for publishing filed versions of applications.

In the second round of consultation papers, IP Australia no longer proposes to require that novelty citations be construed as at the priority date of the claims. Instead, IP Australia will continue to construe prior art references for novelty as at their publication dates.

Product-by-process claims and omnibus claims

IP Australia proposes effectively ending usage of product-by-process and omnibus claims. The intention is to bring our law and practice into conformity with Europe and the US, and to simplify Australian claim interpretation. These changes seem unnecessary because interpretation of these claims is well established in Australia.

Unity

IP Australia proposes importing the PCT’s unity wording into Australian legislation: i.e., that “the claims are taken to relate to one invention if they relate to a group of inventions so linked as to form a single inventive concept”. This test is already applied by the Patent Office during examination.

Disregarding earlier applications under the Paris Convention

IP Australia proposes automatically disregarding first-filed Convention applications if priority is claimed from a disregarded second-filed application. This would remove the requirement that disregardal be on request to the Commissioner, but would curtail priority claims from abandoned or withdrawn applications when there has been a refiling after withdrawal or abandonment.

IP Australia also proposes that the earlier application will be disregarded even if the later application is made in a different country.

Grant process and amendment of particulars

IP Australia proposes changes that will allow electronic registration of a patent grant, and recordal of patent particulars, thereby permitting use of electronic data management systems for grant and amendment of particulars.

Reference to pct applications

IP Australia proposes re-drafting the provisions referring to PCT applications into the same chapters in the Patents Act 1990 that relate to complete applications. Presently, PCT requirements are in a separate chapter in the Act, and primarily in the Regulations.

Access to information

IP Australia proposes that information will not be open to public inspection (OPI) if the Commissioner “has reasonable grounds for believing that the document or part of the document should not become OPI”. The aim is to protect sensitive personal information filed with the patent office.

Rescinding acceptance

IP Australia proposes giving the Commissioner the power to undo acceptance where a patent application should not have been accepted, e.g., as a result of an error or omission by IP Australia, such as when a broadening amendment is filed before acceptance, but not processed before acceptance.

State sub-offices

IP Australia proposes removing the requirements that sub-offices be maintained in each State, thus allowing the sub-offices to be closed. IP Australia intends to make more use of “e-business channels”. It is hoped that this proposal is delayed as the e-business channels with IP Australia are currently extremely limited.

Entitlement

IP Australia proposes that a patent will not be invalid solely because it was not granted to a party or parties who were correctly entitled, and that the Commissioner be given similar powers to rectify the Register as the courts now have. This proposal will address a significant problem with Australia patent law.

Non-infringement declarations

IP Australia proposes that any person will be able to seek a non-infringement declaration for an activity. This proposal aims to address a decision in the Occupational and Medical Innovations case7, which held that noninfringement declarations were only available to persons who have applied for, or been granted, a patent for that activity.

In the second round of consultation papers, IP Australia introduces the proposal that the validity of a claim can be questioned in proceedings for a non-infringement declaration. This may introduce unexpected difficulties, e.g., if a patent is found to be invalid but not removed from the Register (which requires revocation proceedings). It is hoped that this proposal is reconsidered. In the second round of consultation papers, IP Australia is no longer proposing that the Commissioner also be given the power to conduct proceedings for noninfringement declarations.

Early search and examination

IP Australia proposes that non-PCT applications (which apparently comprise about 16% of all applications) be treated to a preliminary search and examination, shortly after filing. This would be similar to the International Search Report (ISR), and/or the International Preliminary Report on Patentability (IPRP), that is provided under the PCT. For applications with corresponding cases in certain other “recognised” jurisdictions, an applicant would be able to rely on a search and examination (perhaps a Supplementary European Search Report) from that jurisdiction instead of IP Australia’s preliminary search and examination.

It is not clear how this will operate in practice, nor how the fees will be charged.

Examination options

In the second round of consultation papers, IP Australia has withdrawn its proposal for a multi-level examination process, e.g., performing no examination on certain foreign applications, and allowing an applicant to request the level of examination. Now a single examination process is proposed, with a sliding fee scale depending on the amount of original work that the Examiners have to do. It is not clear how the fees will be determined and there is still a danger that the fee system will introduce unnecessary complexity into the system.

The existing option of modified examination is proposed to be removed.

Third party requests for examination

In the second round of consultation papers, IP Australia is not maintaining its proposal that third parties be able to request examination.

Requesting examination and gaining acceptance

IP Australia proposes to accelerate examination and acceptance on patent applications. It is proposed that the deadline for requesting examination following issuance of a direction to request examination be reduced from 6 months to 2 months, and that the deadline for acceptance be reduced from 21 months to 12 months after the first examiner’s report.

It seems that these substantially reduced timelines would be much more onerous for applicants, particularly those trying to develop their inventions (e.g., start-up companies developing products and raising capital), or those coordinating prosecution across multiple jurisdictions.

Further Information

The second round of IP Australia’s proposal papers, and their attendant draft drafting instructions, are available on IP Australia’s website, in their “News” archive, dated 22 December 2009, at the following URL: http://www.ipaustralia.gov.au/resources/new s_new_archived_2009.shtml#77.

If you have any questions in relation to these proposals please contact Sam Mickan or Michael Caine.

Endnotes

  1. “FICPI Australia” is a self-governing national association of the Fédération Internationale des Conseils en Propriété Industrielle (FICPI).
  2. Kimberly Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; 207 CLR 1; 177 ALR 460; 75 ALJR 518 (15 February 2001); Pfizer Overseas Pharmaceuticals v Eli Lilly and Company [2005] FCAFC 224 (31 October 2005) (“Pfizer 2005”)
  3. Pfizer 2005, supra
  4. Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58
  5. Section 7(3) of the Patents Act 1990
  6. Commissioner of Patents v. Emperor Sports Pty Ltd [2006] FCAFC 26 (10 March 2006)
  7. Occupational and Medical Innovations v Retractable Technologies Inc. [2008] FCA 1102; 77 IPR 570