14 December, 2009

High Court refuses special leave in the first case to consider the validity of innovation patents

High Court refuses special leave in the first case to consider the validity of innovation patents

A. Refusal for Special Leave

An application for special leave to appeal to the High Court from the Full Federal Court’s decision in the Delnorth case (reported in an earlier news alert) was refused in the High Court last Friday, 11 December 2009. Accordingly the test for innovative step is that set out by former Justice Gyles in 2008 in his first instance decision to be found here, which was confirmed by the Full Federal Court in June 2009.

B. The Innovation Patent

An innovation patent is a relatively new form of Australian patent introduced in 2001, and is intended to provide protection for “lower level inventions”. Whilst innovation patents provide the same exclusive rights as standard patents, albeit for a shorter term of 8 years, there is no requirement for an inventive step (i.e., a lack of obviousness). Instead, the requirement for an inventive step has been replaced with a requirement for an innovative step, which is intended to have a lower inventive threshold than an inventive step.

C. The Test for Innovative Step

To recap, the two-step test for innovative step involves:

  1. Comparing the invention as claimed, on a claim-by-claim basis, with each prior art disclosure separately, to determine any difference(s) between the claimed invention and the prior art disclosure.
  2. Looking at the difference(s) through the eyes of a person skilled in the relevant art and assessing whether the invention as claimed in the relevant claim only varies from the prior art disclosure in ways that make no substantial contribution to the working of the invention.

The term the “working of the invention” is the working of the device or process that is the subject of the relevant claim and that the assessment is a factual inquiry from the perspective of a person skilled in the art possessing the relevant common general knowledge.

It does not matter whether features that distinguish the invention from the prior art are features that were well known, or obvious to a person skilled in the art. 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 “real” or “of substance”, to the manner in which the device or process, the subject of the claim, works.

D. The Result

The special leave application having been refused, the decisions of the trial judge and the Full Court stand and confirm how valuable an innovation patent can be, not only in circumstances where a standard patent might be open to attack on the basis of lack of inventive step (i.e., obviousness), but also where potential infringement is identified and a standard patent application is delayed in routine prosecution or opposition. In this case, an innovation patent may be divided out, with infringement proceedings able to be commenced in a matter of months.

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