Australia: Australia’s innovation patent
Life Sciences Spotlight (Asia Pacific)

THE STRONGEST PATENT IN THE WORLD THAT YOU HAVE PROBABLY NEVER HEARD OF

While many countries offer a single type of patent to protect inventions, Australia offers two – a standard patent and an innovation patent. As this article will show, the innovation patent is probably the strongest patent in the world and also the least known.

Australia's unique innovation patent system was introduced with the objectives of providing a "second-tier" system to protect lower level or incremental inventions and to encourage innovation amongst small to medium sized enterprises (SMEs) by providing a faster and more cost effective mechanism for obtaining patent protection for their lower level inventions. However, although introduced to achieve these objectives, the availability of innovation patents is not limited to incremental inventions or to SMEs. Rather, subject to the limited exclusions from patent eligibility referred to below, innovation patents are available for all forms of invention that satisfy the patentability requirements and to all size of enterprise (as well as individuals).

Although the number of patentees that have been applying for innovation patents to protect their inventions has been increasing in recent years, this jewel in Australia's intellectual property regime remains undiscovered by many patentees around the world.

What is an innovation patent?

The Australian innovation patent system was introduced in 2001 to replace the petty patent system (first introduced in 1979), and to respond to perceived deficiencies in the standard patent system and existing design law. In particular, a "gap" was found to exist in the protection of minor and incremental functional innovations and inventions that were not sufficiently inventive to be entitled to protection under the standard or petty patent system and which were not protectable under the designs system, which protects the appearance of articles, and not their functionality. There was also considered to be a lack of access to quick, less expensive and more easily obtainable patent protection for inventions with a short commercial life.

The innovation patent system provides a means for inventors to protect their rights via a relatively quick and inexpensive process. This type of protection also enables inventors to obtain protection for each stage of development of the invention, long before the broader research project is complete, thereby reducing some of the associated long term financial and commercial risks. Significantly, the fact that the innovation patent system provides the same exclusive rights and remedies as are available under the standard patent system, with the added bonus of having a lower threshold for patentability, is a key feature which is both unique to Australia and advantageous to patentees.

Whilst a number of other jurisdictions have systems in place for protecting low level inventions, such as "utility models", they do not offer the key advantage of the innovation patent, discussed below. Moreover, the US, UK, Singapore, India and New Zealand currently offer no utility model patent protection to patentees.

How are innovation patents different to standard patents?

Innovation patents can provide a fast and cost effective means of protecting intellectual property. Innovation patents are particularly useful tools in supporting first to market advantage and are strategically valuable assets in protecting and enforcing patent rights.

We highlight some of the key differences between standard patents and innovation patents in the table provided. However, in short, some of the key features and benefits of the innovation patent system can be summarised as follows:

• Fast grant – usually within one to three months.
• Broad scope and coverage – with limited exclusions.
• Cost-effective – preparation and application costs are lower than for a standard patent.
• Less stringent requirements – in relation to both filing and patentability.
• No pre-grant opposition – unlike standard patents.
• Examination and certification is optional – yet required for enforcement.
• Equal rights and remedies – once certified, the same remedies for infringement are available as exists for standard patents, i.e. injunctions, damages, account of profits.
• Strategically advantageous – innovation patent applications can be converted into standard patent applications and vice versa and they can also be filed as divisionals of standard patent applications, allowing them to be used for enforcement and litigation without compromising the standard patent application.

Lower threshold for "inventiveness"

Perhaps more important than any of the benefits mentioned above, while innovation patents are required to meet the same "novelty" test as standard patents, they only need to possess an "innovative step", which is a lower threshold than the 'inventive step' required for a standard patent.

To be regarded as having an innovative step, the invention must differ from the prior art base in a way that makes a "substantial contribution" to the working of the invention. There is no requirement that the invention be non-obvious, as is a requirement of standard patents.

The meaning of what constitutes a "substantial contribution" has been considered by the Full Federal Court of Australia in a number of decisions. That Court has held that it does not matter whether features that distinguish the invention from the prior art were well-known, or obvious to a person skilled in the art. Rather, all that is required is for at least one distinguishing feature of the claimed invention to make a substantial contribution, being a contribution that is both "real" or "of substance." Furthermore, it is the "substantial contribution" made to the "working of the invention" itself, and not the contribution that is made to the art, that is to be assessed. That is, provided that the contribution is a substantial one to the working of the invention, it does not matter that the invention is not an advance in the art.

These decisions have confirmed that it will be fairly easy for patentees to satisfy the innovative step requirement and in turn, it will be fairly difficult for opponents to successfully challenge the validity of an innovation patent on the basis of lack of innovative step. This places the owners of Australian innovation patents in a solid position when seeking to protect and enforce their patent rights in Australia and, combined with the numerous other strategic benefits offered, provides a strong incentive for patentees to seek innovation patent protection.

Comparison of Australia's standard and innovation patent systems

Review of innovation patent system

The innovation patent is currently undergoing a series of reviews. In 2012, IP Australia released an "Innovation Patent System Consultation Paper" to invite public comment on a proposal to amend the Patents Act 1990 (Cth) to raise the patentability threshold for innovation patents to the same level of inventiveness as required for standard patents. The Australian Council on Intellectual Property is also in the process of conducting a review of the innovation patent system, and an options report is expected to be published in late 2013.

What these reviews highlight is that there are clear commercial advantages to be gained for inventors in pursuing protection under the innovation patent system as it currently stands.

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.

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