Australia’s innovation patent, extinction imminent


The Intellectual Property Amendment (Productivity Commission Response part 2 and other Measures) Bill 2019 was passed by the Senate on 16 October 2019. This will result in the abolition of Australia’s second-tier patent system, the innovation patent.

Many small- and medium-sized Australian businesses and relevant industry groups, including the Australian Chamber of Commerce and Industry, which represents around 300,000 Australian businesses, expressed strong and well-reasoned support for retaining the innovation patent. These views were seemingly ignored by both the Government and Opposition, whose reasons for phasing out the innovation patent have never been credibly articulated.

Notably, the Opposition proposed amendments to the bill, to which the Government agreed. This included extending the period for phasing out the innovation patent from 12 to 18 months after the Bill becomes enacted and the implementation of a review considering the accessibility of the patent system for small and medium businesses as detailed below.

(1)     The Minister must cause a review of the accessibility of patents for small and medium sized enterprises within three months of the commencement of this section.

(2)   Without limiting the matters the review should consider, the persons conducting the review must examine:

 (a)       the cost of applications for patents; and

 (b)       processing times of patents; and

 (c)       advice provided by the Australian Government with respect to the patent application process; and

 (d)       awareness of the patent application process.

(3)     The persons conducting the review must provide the Minister with a written report of the review within 12 months of the commencement of the review.

(4)     The Minister must cause copies of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.

Relevantly, the terms of the review above do not specifically detail consideration of the value or benefit of offering some form of patent protection for inventions that do not meet the inventive step threshold required for standard patents. This appears to be particularly relevant, as raising the threshold of inventive step remains on the Government’s agenda. The consequence is that protecting commercially valuable inventions will become significantly more difficult in Australia which, according to business owners will stifle innovation.

Passage of the amended Bill through the House of Representatives will be a formality, as it has bipartisan support and is expected to occur during the week starting November 25. Once passed, the provisions preventing the filing of innovation patents will come into force after June 2021. Spruson & Ferguson will, of course, keep you updated once the Bill has been passed by the House of Representatives.

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