The Australian innovation patent: the "perfect storm" loses a little wind?

The Australian innovation patent has a number of real advantages when considering a holistic view of protection for an invention. Several of these advantages were discussed previously in “The Australian innovation patent: a "perfect storm" for rights enforcement?”.

To recap briefly, an innovation patent’s advantages include that:

• It may be filed as a divisional of a pending Australian standard patent application or an international application designating Australia.
• It may be granted, examined and certified within a matter of months.
• There are no opposition proceedings.
• It has a lower threshold of inventive step, known as an "innovative step".
• There is no bar against holding a granted innovation patent while a corresponding standard patent application remains pending, or against relinquishing the innovation patent to enable the later application to proceed to grant.

In practice, this has led to innovation patents:

• Being extremely difficult to invalidate.
• Co-existing with their pending parent application.
• Being filed and certified specifically to challenge a potential infringer.

However, Seafood Innovations Pty Ltd v Richard Bass Pty Ltd ([2010] FCA 723 (12th July 2010)) serves as a reminder that there are limitations as to how robust an innovation patent can be considered to be.

Seafood Innovations filed an Australian provisional patent application in December 2002 directed to a fish stunning apparatus, which not only looked good, but also stunned the fish as they passed through the machine. A standard Australian patent application was filed, claiming priority from the Australian provisional. In 2006 an innovation patent was filed as a divisional of the pending Australian patent application and granted and in January 2007 that innovation patent was certified.

On 3rd December 2007 Seafood Innovations sent a letter of demand to Richard Bass to stop selling fish stunning machines which were said to infringe the innovation patent. After receiving a response that the innovation patent was not infringed, Seafood Innovations commenced proceedings against Richard Bass on 20th December 2007. On 28th February 2008 a second divisional innovation patent of the pending Australian standard patent application was granted, and on 7th August 2008 that innovation patent was certified.

The proceedings against Richard Bass were then amended to include the second innovation patent.

The second innovation patent was directed to exactly the apparatus that Richard Bass was selling, and therefore it was accepted by Richard Bass that if that patent was valid, which it argued against, there was infringement. Conversely, Richard Bass accepted that the first innovation patent was valid, but argued that it was not infringed.

In respect of the first innovation patent, Richard Bass admitted the presence of the first four integers, but the presence of integer five was contested. Integer five was:

“wherein the fish guide includes a floor being pivotally movable between a first position and a second position, the floor moving from the first position to the second position to allow a fish to pass unidirectionally from the entrance to the exit.”

In Richard Bass’s allegedly infringing machines, the “floor” moved, but three other components also had to move to allow the fish to “pass unidirectionally from the entrance to the exit”.

The court found that in the allegedly infringing machines, “lowering of the chin plate (floor), as a matter of language, does not allow or permit the fish to pass from the front to the exit of the device” (emphasis added). Therefore, the mechanism of the allegedly infringing machines was a different device and the first innovation patent was not infringed.

Innovation patents have a reputation for being robust against validity attacks. An innovative step has been found to be a low bar to surmount. However, this decision indicates that an innovation patent may be considered narrow in scope.

Unsurprisingly, the second innovation patent was “precisely the same” as the first innovation patent, except for the claims. The court mentioned that the timing of the application was “consistent with a view that the applicant sought by the application to cover possible weaknesses in its original infringement claim against the respondents”, and that this “bears on the question of validity of the patent”.

The second innovation patent was found to have an innovative step, but was found to be held invalid on the basis that the claims do not define the invention (Section 40(2) of the Patents Act 1990). In particular, in amending the claims to ensure that Richard Bass's machinery was clearly encompassed, integer five was changed to “wherein a fish moves unidirectionally from the front entrance through the guide to the rear exit and the height of the striker is adjustable with respect to the fish guide” .

The court decided that this claim omitted features which must be necessary elements of the invention, including how the fish is held while being stunned and how it is made to exit the device. Accordingly, the second innovation patent was held invalid.

While the case appears to take some of the wind out of the “perfect storm”, it seems that the court was influenced in its decision by the timing of the second innovation patent. In addition, although Seafood Innovations were ultimately unsuccessful, the versatility of the innovation patent allowed it to take action long before that would have been possible with its still pending standard patent application. Clearly, an innovation patent is extremely useful in offering the option of early enforcement, but perhaps it is more of a strong gale than a perfect storm.