No innovation patents, restricted patent eligible subject matter and fewer patent attorneys – welcome to the future of IP in Australia!


The Senate Committee inquiring into the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 has recommended in their report that the Bill be passed by the Senate.

As we previously reported, the Bill includes provisions to abolish Australia’s second-tier patent system, the innovation patent, and introduce an objects clause into the Patents Act.

Significantly, 51 written submissions were made to the Senate Committee, the clear majority of which (42) opposed the abolition of the innovation patent, while only 3 submissions, including one from IP Australia, supported abolition. Those who made submissions in support of the innovation patent were predominantly small/medium-sized Australian businesses, but submissions were also received from several industry groups such as the Australian Chamber of Commerce and Industry, the Australian Industry Group, Medicines Australia, AusBiotech as well as the Law Council of Australia and several Universities, all of who supported retaining the innovation patent.

A brief public hearing was held on August 19, at which only representatives from IP Australia, John Gibbs, an intellectual property law lecturer and Peter Strong, CEO of Small Business Australia appeared. Notably, both Mr Gibbs and Mr Strong were allocated only 5 minutes at the hearing with up to 25 minutes of questions, while IP Australia was allowed 45 minutes to present their case against the innovation patent. Significantly, requests to appear at the hearing from business owners and the Institute of Patent and Trade Mark Attorneys of Australia were refused.

Relevantly, the Committee’s Report included “dissenting comments” by Senator Rex Patrick from the Centre Alliance Party and the Committee’s Labor Party Senators. Senator Patrick’s comments, entitled “Creative thinking not evident in plans to abolish the IPS” cites “comprehensive and disturbing” evidence submitted by Mr John Gibbs, an IP law lecturer, indicating that abolishing the innovation patent is a “step in the wrong direction” as it is clearly useful and valued by SMEs and, as acknowledged by IP Australia, will not result in any cost saving. Senator Patrick also powerfully rebuked those supporting abolition of the innovation patent by stating “there’s a certain arrogance of officials, or indeed many politicians for that matter, who have little if any experience of research, development or business and who enjoy regular pay in their bank accounts courtesy of the taxpayer, dictating to entrepreneurs and businesses what’s best for them”.

Labor Senators, Alex Gallacher and Jenny McAllister also expressed significant concerns that “the evidence provided from a number of parties suggests a significant gap could emerge if the innovation patent is removed without alternative mechanisms being put in place to specifically assist small- and medium-sized enterprises (SMEs) to access the patent system and innovate”. Thus, at this stage, it is not clear if the Opposition will support the Bill without a clear alternative to the innovation patent being proposed by the Government.

Seemingly in the shadow of the innovation patent provisions, is the introduction of an objects clause into the Patents Act, which several submissions opposed because it has the potential to introduce uncertainty and restrict patent eligible subject matter in Australia. Concerns about the use of the proposed object’s clause to narrow patent eligible subject matter in Australia were particularly detailed in IPTA’s submission. IPTA’s concerns appear to have been confirmed by economist Dr Hazel Moir, who responded to IPTA’s submission by stating that if Judges do use the object’s clause to restrict patent eligible subject matter, a by-product will be fewer patent attorneys.

Both houses of Parliament resume sitting on September 9 and it is expected that the IP Amendment Bill part 2, will be debated. Spruson & Ferguson will, of course, provide updates.

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