Innovation nation

Homegrown innovation is a focus for IP Australia, but balancing the needs of local and foreign inventors has proven more difficult

Australian patent law has, in the last three years, undergone a significant change. The Raising the Bar Act of 2013 updated many of Australia’s legislative instruments, most of which had not been reformed since before the turn of the last century.

The aim was to push for more homegrown innovation in Australia, but in the three years since the bar was raised, more than 90 percent of patent applications are still filed by foreign applicants.

Mark Roberts, partner at Davies Collison Cave, says: “It would appear that the biggest users of the patent system in Australia are in the ICT sector, with the next largest sector being life sciences and chemistry.”

“But it should be borne in mind that around 90 percent of patent applications in Australia are filed by foreign applicants, so the technology areas in which there are high numbers of patent filings doesn’t necessarily reflect the areas in which significant innovation activity is taking place in Australia.”

The Raising the Bar Act aimed to change this by reducing prosecution delays, raising the quality of granted patents and simplifying the IP system. These reforms were intended to both increase the attractiveness for local innovators, as well as “make the IP system easier to use in a global setting”, according to IP Australia.

Despite this attempt, Roberts says that recent case law in software and business methods have made patent protection in these areas “more challenging”.

“It may be that the industries affected will make the case for legislative change in these areas given that these are areas of significant economic growth that could be hindered by patent laws that are not supportive of the industries in question.”

Securing innovation

Robynne Sanders, partner at DLA Piper, says that patent filings in the ICT sector might drop following the decision in RPL Central v the Commissioner of Patents.

She says: “The decision is presently affecting the rate of acceptance of computer-implemented method patents.”

“However, given Australia’s strength in ICT innovation and start ups, it will be important for those companies to be able to secure protection for their technology.”

“And, for the first time in three years, there has been an increase in filings of innovation patents.”

Sanders adds: “IP Australia has been increasingly willing to engage orally with inventors to work through issues. This process should be encouraged as it can lead to a more streamlined progress of the patent application.”

“The process (be it an interview at examination or a hearing on patentability or opposition) needs clearer process for recording the conduct of the interview or hearing.”

“There needs to be greater powers given to IP Australia to control how these proceedings are to proceed.”

“While it is presently almost impossible to obtain extensions to file evidence during oppositions, IP Australia cannot effectively control other aspects of the process, such as pressing irrelevant prior art, which leads to time wasting and the inventor incurring substantial unnecessary cost.”

Martin Pannall, partner at Madderns, argues that IP Australia is “actually very good at implementing measures to make the patenting process more inventor-friendly”.

“It has a very active education programme to educate users and potential users about the IP system, its website has many information resources, it provides a patent case-monitoring service to advise applicants of changes to the status of a particular case and it provides a ‘Patent Analytics Hub’ service which is available for users to request tailored analysis for their own needs.”

“It is also currently in the process of establishing an IP counselor in Beijing, China, to assist Australian companies with IP issues in China.”

“There is nothing more in particular that I think that IP Australia could do to assist its users.”

But Pannall says that IP Australia’s user-focused patent system may almost be “too easy for the unrepresented user”, and that this is often to its own detriment.

Patent applicants generally engage patent attorneys to prepare and file their applications, but certain inventors who are not represented by an employer may find it fairly easy to file and prosecute their own patents, absent of a patent attorney.

Pannall says that this can result in the “irrevocable loss of rights for the inventor and patent.” He adds: “There are many areas of the patent drafting and filing process where mistakes can prove fatal to their IP rights.”

“The innovation patent system, which was originally intended to be for use by the smaller user, has resulted in many self-filers drafting and filing their own patent application as an innovation patent, obtaining a grant after a formalities check, and providing a false sense of belief to the applicant that it has an enforceable, valid right, when in fact, the patent specification filed may be completely invalid.”

“It is only after a formal substantive examination that the patent application has been test for substantive validity.”

“It should be noted, however, that IP Australia does recommend to self filers that they seek professional advice.”

A highway for change

Despite the attitudes of intellectual property legislators shifting towards the upkeep of local innovators, they are chiefly aware that the majority of patents are still being filed by foreign companies—the top three being the US, Japan and Germany.

As a result, IP Australia continues to invest in cross patenting highways and bilateral agreements, such as the Global Patent Prosecution Highway.

Roberts, however, doesn’t think that the GPPH is having a major or direct impact in Australia based on the fact that “an alternative mechanism for securing expedited examination of patent applications was already in place in Australia before the GPPH program came into being”.

Sanders says that while the GPPH is hoped to make Australia more attractive so investors, the scheme is still at “an early stage in Australia so it is unclear exactly what effect they will have”.

Pannall says that schemes such as the GPPH, while being useful tools, do not significantly contribute to the attractiveness of filing in Australia.

Agreeing with Roberts, he says that it is mainly due to “the examination practice in Australia already largely using information on the prosecution of corresponding patent applications in other countries, specifically in the US and Europe”.

“While proceeding under the GPPH for an Australian application is a ground for expediting the examination process, there are other grounds for expediting examination if desired.”

But Pannall says there is one exception that might make the GPPH scheme more attractive. The scheme could allow Australian applications as a basis for expediting examination in other countries.

He says: “Often, it is quicker to obtain grant in Australia than other countries, and the foreign patent application can be examined more expeditiously and efficiently if the Australian case has been examined and issued more quickly.”

“In some instances in fact, we have used the innovation patent system to obtain certification to facilitate the prosecution of the corresponding patent in other countries.”

“One of the features of the innovation patent system is that it is automatically granted after a formalities examination (usually within two to three weeks of filing), and then formal examination can be requested to obtain certification, which is the equivalent of being granted or issued a standard patent, albeit for a lower inventiveness threshold.”

It is clear that patenting in Australia has undergone a considerable change since the reforms of the Raising the Bar Act, but there are still a lot of questions to be asked.

Australia’s intellectual property momentum stems from foreign inventors, but the country wants to place itself on the centre stage of innovation and to do so would require an push to open a dialogue with inventors and make quality patenting more attractive.

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