Patent legislation – proposals for improving the IP system

IP Australia is continuing to consider various ways in which the Australian patent system can be improved. Two further papers have been released following the publication of: 

• "Getting the Balance Right" (29th March 2009) 
• "Exemptions to Patent Infringement" (29th March 2009) 
• "Resolving Divisional Applications Faster" (15th June 2009) 
• "Resolving Patent Opposition Proceedings Faster" (15th June 2009)

The two further papers (released August 2009) are titled “Streamlining the Patent Process” and “Flexible Search and Examination”. All papers are intended to encourage discussion and debate around the proposed changes, the intention being to create a more robust system which encourages and supports innovation in Australia. The outcome of these discussions will be presented to the Australian government as recommendations.

Streamlining the Patent Process
In light of the increasing importance of intellectual property rights to businesses, IP Australia recognises that the IP system must be cost effective, efficient and accessible to its users. The paper recently issued by IP Australia on this topic addresses a variety of procedural hurdles and inconsistencies that unnecessarily complicate the Australian patent system. In particular, there is a desire to: 

• remove unnecessary differences in law between Australia and other jurisdictions; 
• simplify and modernise the systems used for processing patent applications; and 
• remedy other procedural problems within the system.

First, it proposes a modification in the way novelty is considered in Australia. It suggests that prior art citations are to be construed at the priority date of the claims in question, not at the date of publication of the citation as currently occurs. This would bring consideration of novelty more in line with the systems of other jurisdictions.

Second, it suggests that the way product-by-process claims are treated in Australia be changed to accord with their treatment in other jurisdictions. Currently, a claim taking the form “product X obtained by process Y”, where process Y is novel but product X is known, would be construed as relating to a novel preparation of X regardless of whether the new X was indistinguishable from the regular, well-known X. As this construction is inconsistent with UK and European law (at least), it is proposed that a claimed product will no longer be patentable merely because it is produced by a patentable process or method. Australian legislation protects patentable processes through its infringement provisions, under which a patented process is infringed by the exploitation of a product produced by that process.

IP Australia also proposes that claims shall not, except where necessary, rely on reference to the description or drawings. This is intended to eliminate the use of “omnibus” claims which are understood in Europe, the United Kingdom and the United States to be unclear and indeterminate in scope.

It also intends to: 

• streamline amendment procedures in relation to the particulars of a patent application or patent; 
• modify the legislation to ensure clarity and consistency in relation to the implementation of the Patent Cooperation Treaty (PCT) in Australia; 
• allow the commissioner of patents to rescind acceptance if the circumstances warrant it; and 
• amend the Patents Act to ensure that a patent is not declared invalid solely because it is granted to a person who does not, or persons who do not, have a right to the patent.

Flexible Search and Examination
Patent examination in Australia currently occurs after a request is filed by the applicant. There are currently two types of examination available – modified and normal. Modified examination occurs where the applicant identifies an equivalent patent granted in another English-speaking jurisdiction. Once the Australian specification is amended to accord with the equivalent granted patent, it undergoes a limited examination process. The alternative normal examination is used for all other applications, regardless of origin, the number of equivalent applications and the existence of previous search and/or examination reports.

In order to make examinations more cost effective and tailored, it is proposed that three types of examination be made available: 

• A Level 1 examination would apply if the applicant identified a granted patent from a recognised jurisdiction which is substantially the same as the Australian application. The application would be accepted based on the text of the overseas patent; 
• A Level 2 examination would apply if the application is a PCT application with an international search and opinion or if the applicant identifies a search and/or examination report from a recognised IP office at the time of requesting examination. IP Australia would base its search and examination on these results and any others that it located; and 
• A Level 3 examination would apply in all other circumstances and would be the default form of examination.

Different cost levels would apply for each type of examination, allowing cost savings where search and/or examination reports are available from other jurisdictions.

It is also suggested that third parties can request examination in order to reduce uncertainty. In this situation, the third party would be required to pay part of the examination fee.

Finally, it is also proposed to reduce the time delay between requesting examination and the deadline for gaining acceptance. Currently, once IP Australia issues a direction to request examination, the applicant has six months to request examination and then has 21 months to obtain acceptance of the application following issuance of a first official report. These timelines can lead to significant delays in finalising the scope of the protection which, whilst attractive to patentees, can be unhelpful for third parties. It is therefore intended to reduce the timeline for requesting examination to two months after issuance of the direction, and the timeline for obtaining acceptance will be reduced from 21 months to 12 months.

It is expected that the legislative changes that will follow the consideration of these discussion papers will: 

• reduce barriers in the innovation landscape for researchers and inventors; 
• improve certainty about the validity of granted patents; and 
• allow patent claims to be resolved faster.

All papers are available on the IP Australia website at: www.ipaustralia.gov.au/resources/news_new.shtml#41.