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Australasian Biotechnology, Vol. 12 No. 2, 2002, pp. 37-39 Biotechnology Legislation
THE IMPLICATIONS OF THE CHANGES EFFECTED BY THE PATENTS AMENDMENT ACT 2001 FOR SUCCESSFUL PATENTING OF INVENTIONS AND INNOVATIONS Ian Pascarl Partner, Blake Dawson Waldron, Level 36, 101 Collins Street, Melbourne Vic 3000. Email: ian.pascarl@bdw.com.au Code Number: au02015 Abstract The Australian Patents Amendment Act 2001 (Amending Act) came into operation on 1 April 2002. The effect of the Amending Act is to raise substantially the threshold requirements for patentability in Australia. The standard for both novelty and inventive step, and the standard of proof that must be satisfied by applicants, is higher, and those who fail to disclose relevant information to the Commissioner risk losing their rights altogether. On the other hand, applicants for patents are likely to receive some benefit from the proposed introduction of a grace period. The main changes effected by the Amending Act and other proposed changes are summarised below. Background Prior 1 April 2002, Australian patent law had been exceptional when compared with that in Europe and in the United States of America (USA). In those jurisdictions, novelty and inventiveness have for many years been assessed from an international standpoint. In those jurisdictions, the prior art base against which novelty is measured is unlimited in its geographical scope, and inventiveness is assessed in the light of what would have been obvious to a notional skilled worker anywhere in the world. This has not been the case in Australia. Furthermore, Australian law placed no direct obligation upon applicants to disclose the results of their searches or corresponding overseas applications. Also in examination and opposition, Australian law gave the patent applicant the benefit of the doubt in relation to assessments of novelty and inventiveness. The net effect was that it was easier to obtain a patent in Australia than in Europe or USA, and that, directly or indirectly, Australian consumers often paid royalties that Europeans and Americans did not in respect of the same products and processes. Reform The Australian Government described the purpose of its reforms as being to ensure that patents were not granted in Australia that would not be granted elsewhere, and to increase the likelihood that if a patent were granted in Australia, then corresponding applications would be more likely to be successful overseas. The impact of the reforms is considerable. The new law takes the shape of a series of radical amendments to the Australian Patents Act 1990 (the 'Act'). A number of these amendments may be described as 'technical'. The main changes, however, are fundamental and sweeping in their effect. Novelty (anticipation) One of the key requirements of patentability is that the invention be novel. Prior to 1 April 2002, novelty in Australia was assessed against information in documents published anywhere in the world, but only against acts (uses) occurring in Australia. After 1 April 2002, novelty will also be assessed against acts (uses) occurring anywhere in the world. Furthermore, after 1 April 2002, novelty can be assessed against two or more publicly available related documents or acts (uses) if the relationship between them is such that a skilled addressee anywhere in the world would treat them as a single source of information. Prior to 1 April 2002, the skilled addressee was limited to a person so skilled in Australia. Inventive and innovative step (obviousness) Another key requirements of patentability is that the invention involve an inventive or innovative step (obviousness). Inventive step is the standard of inventiveness required for a standard Australian patent. Innovative step is the standard of innovation required for the grant of Australia's new 'second tier' patent, the innovation patent, which came into existence on 24 May 2001. In each case, the degree of obviousness to be overcome is assessed through the notional skilled person, in the light of common general knowledge as it existed before the priority date. The impact of the provisions of the Amending Act on obviousness is not entirely clear because of a last minute change forced on the Bill by the Australian Democrats before it passed into law. However, we can say with certainty that inventive and innovative steps will, after 1 April 2002, be assessed against common general knowledge in Australia and either:-
Although it is unclear whether, for the purposes of standard patents, as opposed to innovation patents (where the skilled addressee may now come from anywhere in the world), the skilled addressee can come from anywhere in the world, there is no doubt that obviousness is now to be tested against a higher standard. This has been achieved by adding acts (uses) occurring anywhere in the world to documents published anywhere in the world and making it clear that for assessment of the relevant types of information that can be considered in addition to common general knowledge, those additional documents and acts no longer have to be relevant to the art in Australia. Standard of proof Prior to 1 April 2002 applicants for patents in Australia were given the benefit of any doubt arising during the process leading up to acceptance, and in oppositions, before the Australian Patents Office. That is, if there was any doubt concerning the material suggesting invalidity, then the applicant was given the benefit of that doubt, thus allowing the application to proceed to acceptance or the opposition to be rejected. It is now commonly accepted that the effect of the Amending Act is that after 1 April 2002 (see section on application dates of amendments) patentability before the Australian Patents Office will be judged by the higher standard of 'the balance of probabilities'. Application of this higher standard will mean that the Commissioner will be more inclined to scrutinise applications very carefully against lawful grounds of objection and that, as a consequence, fewer applications may proceed to acceptance. Similarly, in relation to re-examination of accepted specifications, and requests for standard patents, the Commissioner will not, after 1 April 2002, be limited to re-examining the complete specification only when the patent is opposed. She may, after 1 April 2002, do so of her own volition. If the Commissioner makes an adverse report on such a re-examination she may refuse to grant a patent, having provided the applicant with a reasonable opportunity to amend the relevant specification and, if necessary, after providing an opportunity to the applicant to make submissions. Duty of disclosure After 1 April 2002, applicants will be under a positive duty to inform the Commissioner of any searches made in relation to patentability, whether in relation to the Australian application or corresponding applications in other jurisdictions. This obligation of active disclosure, which also applies to innovation patents, will be supported by a powerful sanctioning provision by which amendments will not be allowed, even if they remove a lawful ground of objection to patentability, if that objection arises from information which the patentee, or his predecessor in title, failed to disclose to the Commissioner. Applicants who conceal information which subsequently comes to light therefore risk losing their rights altogether. Other changes Apart from a number of 'technical' amendments, the most significant is a provision designed to give better protection to the interests of third parties who used the invention before the patent application was filed (although this amendment stops short of permitting the third party to license or assign such rights, as is the case in the United Kingdom). Further likely reform It is also worth noting that the Australian government is at present considering further reforms concerning a 'grace period', and in relation to tying contracts. Grace period One hurdle to the grant of a patent is currently set higher in Australia than in many other countries. Apart from the limited protection provided by section 24 of the Act, in Australia, as in most European countries, a public disclosure made in advance of patent applications, for example in conference speeches or public demonstrations, is sufficient to invalidate those applications. However, in Canada, the USA, Japan and thirty-five other jurisdictions, applicants are permitted 'grace periods' of various durations in which such disclosures may be made with impunity. In September 2000, the (Australian) Intellectual Property and Competition Review Committee delivered its Final Report (the 'IPCRC Report') to the Australian government. Having considered the matter, the Committee concluded that there was merit in introducing a grace period, suggesting that this be coordinated with any similar introduction under the European Patent Convention. However, if Europe failed to introduce grace periods before October 2005, then Australia should "seriously consider" proceeding before its European counterparts. By this time, the Australian government had already announced its intention of introducing 12-month grace periods by subordinate legislation. In January 2001, Prime Minister John Howard, confirmed this by launching his government's 'Innovation Action Plan'. This envisaged the fast-track introduction of a 12-month grace period prior to the filing of the complete application. A 12-month grace period prior to the priority date would then be coordinated with its introduction in other countries. In August of last year, however, the Senate Economics Legislation Committee, in its review of the Patents Amendment Bill, expressed some disquiet. It could find no basis for such swift implementation and felt that the benefits to Australia had been exaggerated while the disadvantages in jurisdictions that had a grace period had been understated. Indeed, although it might be permissible to make prior disclosures at home, these same disclosures would serve to invalidate applications in most European states and potentially in all the signatory states of the European Patent Convention. The Committee therefore recommended that in preparing the regulations for introduction of any grace period, "IP Australia and interest groups should work together to identify in more detail the risks that stem from the uneven international adoption of grace periods and, where necessary, formulate strategies to address them". That said, it would appear the Australian Government is determined to introduce for a 12-month grace period, by way of an amendment to the Patent Regulations 1991 to come into operation at the same time as the Amending Act. I understand that the grace period will be twelve months prior to the date of filing the complete application and that it will only apply to disclosures made afrer the 1 April 2002. I also understand that the essential circumstance that the drafters of the regulations wish to protect against, is the disclosure by the patentee of any improvements to the invention in the twelve-month period prior to the complete application being filed. The drafters expect that Australian inventors will proceed in the conventional way by first filing a provisional application and then a complete twelve months later. If a provisional is not filed, then the inventor will still have protection against own disclosures, but not against disclosures by others. Tying Contracts Tying contracts are arrangements under which those legitimately exploiting a patent, for example as licensees, are obliged to acquire products not protected under the same patent or to not acquire those of third parties. A good example would be an obligation upon a licensee of a patented DNA sequence to acquire all of its TAQ polymerase to sequence or amplify the gene in the PCR from the licensor. Such arrangements are obviously tempting, in that they apparently effectively broaden the monopoly granted by the patent. However, they are unfair for the same reason. Section 144 of the Act addresses this practice by rendering such contracts void. As a consequence, the licensor would, for example, be unable to enforce a debt for royalties. Worse still, section 144(4) provides that such void contracts provide a clear defence to infringement proceedings. Put simply, if you use tying provisions, you might as well not have a patent because others can use it with impunity. The IPCR Committee recommended the repeal of these provisions on the basis that the "conduct they address is better dealt with through the provisions of section 51(3) of the Trade Practices Act" (TPA). However, the Committee found that this section was also flawed, in that the intellectual property exemptions were unclear and potentially too broad. It recommended that section 51(3) be redrafred so as to make tying provisions acceptable "so long as those conditions do not result, or are not likely to result, in a substantial lessening of competition. The term 'substantial lessening of competition' is to be interpreted in a manner consistent with the case law under the TPA more generally". These recommendations, which are consistent with changes to equivalent provisions under UK law, have been largely accepted by the government. We expect implementation of the new section 5 1(3) of the TPA to be coordinated with repeal of the s144 tying provisions in the Act. For the present, care should be taken to avoid any such tying contracts, whether or not they would lead to any "substantial lessening of competition". Application date of the amendments The amendments concerning novelty and obviousness apply to complete specifications made on or after 1 April 2002, the amendments concerning disclosures of searches apply to all applications unaccepted on 1 April 2002, and the new standard of proof applies to acceptance of complete specifications occurring on or after 1 April 2002. Copyright 2002 - AusBiotech |
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