Changes to Australia’s Patents Act on the cards: What should foreign patent filers know?

IP Australia has released an exposure draft of the Intellectual Property Laws Amendment Bill to implement further changes to the Patents Act 1990 (Cth). We discuss some of the key changes that foreign patent filers and their attorneys should be aware of.

Inventive Step

The Bill seeks to raise the threshold for inventive step in response. The most recent amendments to “inventive step” had been brought into effect five years ago in 2013 (The Intellectual Property Laws Amendment Act 2012-Raising the Bar) and some of the earlier amendments from 2013 are yet to be considered by the courts in Australia. Therefore, it is somewhat ironic that another round of changes to Australia’s inventive step requirement is on the cards.

Currently, s 7(2) of the Act provides that ‘…an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art…’. In contrast, amended subsection 7(2) would state: …an invention is taken to involve an inventive step when compared with the prior art base if the invention is not obvious to a person skilled in the relevant art.

According to the draft Explanatory Memorandum, the revised inventive step provisions are intended to align Australia’s inventive step requirements with Article 56 of the European Patent Convention (EPC) and should be given a similar meaning. Therefore, we expect that IP Australia will adopt the problem-and-solution approach used by the European Patent Office (EPO) in assessing inventive step. That is:

1. Determine the ‘closest prior art’.

2. Establish the ‘objective technical problem’ to be solved in view of the closest prior art.

3. Consider whether the claimed invention, starting from the closest prior art and the objective technical problem, would have been obvious to the skilled person.

The current approach of IP Australia and Australian courts to assessing inventive step involves starting from the common general knowledge, as opposed to the ‘closest prior art’. There is a possibility that the well-established Australian approach of starting from common general knowledge would be discarded in favour of the European approach.

It has been a long-held view of the Productivity Commission (the government body responsible for recommending the latest changes) that that the High Court’s approach to assessing inventive step has been lenient and provides a lower standard for inventiveness or non-obviousness than some of Australia’s key trading partners such as Europe and the United States.

Amendments to the definition of the prior art base as it appears in current subsection 7(3) and Schedule 1 of the Act have also been proposed, and are likely to appear in new section 7B. The prior art base under the Australian Act will continue to include combinations of documents that a skilled person could ‘be reasonably expected to have combined’, in line with the EPC.

An objects clause

The Bill also proposes the insertion of an objects clause, as the new section 2A of the Act is as follows: “The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In so doing, the patent system balances over time the interests of producers, owners and users of technology and the public.”

The proposal for insertion of the objects clause is bizarre and no clear explanation has been provided as to why the requirement of “economic wellbeing” must be met for the grant of a patent.

A detailed reading of the draft Explanatory Memorandum confirms that ‘ethical and social considerations’ should not be taken into account to determine if the “economic wellbeing” requirement has been met. The draft confirms that such matters fall under the realm of patentable subject matter considerations.

The draft Explanatory Memorandum states that ‘[t]he term “technological innovation” … is not intended to narrow or change the subject matter eligibility threshold for grant of a patent’ and ‘is intended to be interpreted broadly to mean the applications of scientific knowledge for practical purposes’. Nonetheless, in an accompanying list of specific consultation questions, IP Australia is seeking further feedback on this point and submissions were due on 31 August 2018.

Crown Use and Compulsory Licensing

Amendments have also been proposed to clarify the current Crown use and compulsory licencing provisions under the Act.

For example, the amendments propose to introduce new section 160A to clarify that Crown use can be invoked for the provision of a service that any Commonwealth, state or territory government has the primary responsibility for providing or funding.

The proposed changes to Australia’s compulsory licensing provisions include replacing the current ‘reasonable requirements of the public’ test with a ‘public interest’ test. It has been proposed that in considering whether to grant a compulsory license, the Federal Court will be required to consider the public interest when specifying the terms of the licence, including the appropriate amount of remuneration (if any).

The proposed changes are also expected to address problems with existing provisions relating to compulsory licensing of ‘dependent patents’, i.e. those for which access to an earlier ‘original patent’ is also required, particularly where the owners of the original and dependent patents may be different.

Do you have any concerns?

We will keep you informed of developments in relation to the draft legislation and deadlines for any actions. You are welcome to contact us if you have any questions. Further information can be found here.

The draft amendments will not be implemented until the Bill has been considered and passed by both Houses of Parliament and attained Royal Assent. We expect that it will take at least another 12 months from the date of Royal Assent before the amendments come into effect. There is still plenty of time for applicants to review their Australian IP strategy and take appropriate action.

Andy Mukherji

Andy Mukherji, Principal



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