07 February, 2019
Spruson

Australia: The Forgiving Country

Australia: The Forgiving Country

A common question regarding Australian practice is whether National Phase Entry is possible after a deadline has passed. In Australia, this is possible through the general extension of time provision, s 223 of the Patents Act 1990.

Under s 223(1), a Commissioner must extend the time for doing a relevant act under the condition that the relevant act (most commonly a failure to pay renewal fees) was not done within the time limit as a result of error or omission by:

  • the Commissioner or a Deputy Commissioner; or
  • an employee; or
  • a person providing, or proposing to provide, services for the benefit of the Patent Office; or
  • the receiving Office; or
  • the International Bureau of World Intellectual Property Organisation.

Under section 223(2), the Commissioner may extend the time for doing the relevant act because of:

  • an error or omission by the person concerned or by his or her agent or attorney; or
  • circumstances beyond the control of the person concerned.

While the extension of time provision can apply to the deadline to undertake a number of different acts (including filing an application, entering the Australian national phase, requesting examination and paying a renewal fee), the provision is not available for the extension of the final acceptance/allowance deadline following an adverse examination report (Office Action).

Under the Patents Act 1990, there is also provision for the protection or compensation of persons who availed themselves of or exploited, or took definite steps by contract or otherwise to avail themselves of or exploit, an invention within a period specified in which the patent was lapsed or ceased because of the failure to do the relevant act.[1]

Under regulation 22.21(2)(c) these persons may apply, in the approved form, to the Commissioner for the grant of licences to exploit the inventions.[2]

Sections 223(9) and 223(10) of the Patents Act 1990 state:

(9)  Where the Commissioner grants:

(a)  an extension of more than 3 months for doing a relevant act; or

(b)  an extension of time for doing a prescribed relevant act in prescribed circumstances;

the prescribed provisions have effect for the protection or compensation of persons who, before the day on which the application for extension of time is advertised under subsection (4), exploited (or took definite steps by way of contract or otherwise to exploit) the invention concerned because of the failure to do the relevant act within the time allowed, the lapsing of the patent application or the ceasing of the patent, as the case may be.

(10)  Infringement proceedings cannot be brought in respect of an infringement committed:

(a)  between the day on which the patent application lapses and the day on which it is restored; or

(b)  between the day on which the patent ceases and the day on which it is restored.

As a result of these provisions, would-be infringers can apply for licences to exploit inventions between the expiry of the patent and the application for an extension of time. A determining condition however is that any potential licensee must prove that they are aware that the patent has ceased or lapsed and that the application for the licence is consequential of this knowledge.

This condition was assessed in Law v Razer Industries Pty Limited [2010] FCA 1058. Mr Law was the owner of the patent and due to failure to pay renewal fees, the patent was in a ceased state. While in this ceased state, Razer manufactured and sold a product that fell within the scope of the claims of Mr Law’s invention. Razer was unaware of the patent at this time, and once they were aware of it, an application for a licence to exploit the invention was filed. However, Mr Law was granted an extension of time under section 223 and he commenced infringement proceedings against Razer as of the restoration date of the patent.

In reaching a decision, her honour stated that: “[t]here must be a link between the fact that the particular patent has ceased and reliance upon that fact by the person seeking to obtain the protection”. It was concluded that, as Razer was unaware of the existence of the patent, and therefore that the patent had ceased, the provisions of subsection 223(9) and regulation 22.21 did not apply and Razer was not eligible for grant of a licence.[3]

Currently, the requirements of section 223 are that a licence must be obtained to allow the continued exploitation of a patent once it is restored.

In the 2017 Exposure Draft of the Intellectual Property Laws Amendments Bill, proposed section 223H would remove this requirement.[4] The proposal is that an automatic “right to exploit” will be available where an extension of time of more than 3 months is granted resulting in the restoration of the patent and where the party exploited the patent after the lapsing/ceasing and before the application for the extension of time. This “right to exploit” would automatically allow the party to continue to exploit the invention after it is restored without the need to apply for a license.

Additionally, this proposal aims to remove the requirement for the exploitation of the lapsed/ceased patent to be a consequence of the knowledge of the expiration of the patent. It is argued that, “requiring a person to be aware of the patent can penalise those who conduct due diligence searches but fail to identify the patent in question due to the complexities of the patent system. New subsection 223H(2) addresses this by not requiring the person who started to exploit or took definite steps to exploit to know that the patent had lapsed.”

An additional proposal is that this “right to exploit” could be transferable, meaning that the right to exploit the invention could be sold to another party. Further developments in this regard have not yet been published.

In summary, the Australian system is quite forgiving when it comes to extending a period for the doing of an act where there was an intention to do the act but the implementation of the act was frustrated by an error or omission.  The Australian system is also quite forgiving of third parties who avail themselves of the invention whilst the patent is actually in a state of lapse, on the proviso that the third party can establish that they were aware that the patent had ceased or lapsed.

Please don’t hesitate to contact us if you have any questions on the above.


[1] Patent Manual of Practice & Procedure 3.2.6 Reg 22.21(4) – Opposition to Grant of Licence.

[2] Patent Regulations 1991 (Cth) reg 22.21(2)(c).

[3] Law v Razer Industries Pty Limited [2010] FCA 1058.

[4] Intellectual Property Laws Amendment Bill 2017.


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