Australian Patent system review: an ineffectual hand-waving exercise?

A missed opportunity to introduce an alternative second-tier patent system!

Pearce IP recently reported on recommendations made by an independent review into the Australian patent system to overhaul the way in which patent litigation proceeds in Australia. Overall, the Report prepared from the review makes 16 recommendations which aim to make the patent system more accessible to Australian small and medium sized entities (SMEs).  Conspicuously absent from the Report is any consideration as to what will fill the void left by the abolition of Australia’s second-tier patent system, the innovation patent – paradoxically the reason the review was initiated.  

Don’t mention the war, but if you do, put it in Appendix A

A number of stakeholders, including multiple SMEs and the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) urged the review to consider the introduction of an alternative second-tier patent system designed specifically for Australian SMEs.  However, the only mention of a second-tier patent system in the Report appears in Appendix A – “Issues outside the scope of this review”.  This is despite the issue of a new second-tier patent system squarely falling under the following terms of reference:

  • the cost of applications for patents;
  • the cost and times required to enforce standard patents; and
  • any other barriers or impediments that prevent Australian businesses filing and obtaining patents.

The Report states in Appendix A that none of the submissions made regarding the introduction of a new second-tier patent system, differed from those considered in previous reviews of the innovation patent.  This is wrong.  The submissions made, by for example IPTA, did not mention the innovation patent system but rather put forward compelling reasons why a new second-tier patent system tailored for SMEs should at least be considered.  Significant revisions, with respect to the existing innovation patent system, were proposed by IPTA including not permitting the filing of second-tier divisional applications from standard patent applications, the majority of which are overseas originating.  Such a second-tier patent system had not been put before any previous review.  It therefore appears the Appendix A of the review is an inaccurate hand-waving exercise that can only bring the credibility of the Report’s recommendations into question.

The Government’s left hand doesn’t know what its right hand is doing

In October 2020, the Australian Government announced a $1.5 billion investment in a Modern Manufacturing Strategy (MMS) to assist Australian manufacturers to become more competitive, resilient and build scale in the global market.  This was deemed necessary given the wide-ranging global challenges resulting from the COVID-19 pandemic.  Notably, it is accepted that innovation in the manufacturing space often occurs incrementally, where incremental innovation involves improvements to existing products resulting in commercially significant inventions.  These types of inventions are best suited to second-tier patent protection.  Thus, the failure of the Report to make a recommendation to introduce a new second-tier patent system, specifically with benefits to Australian SMEs, appears to be out-of-step with the Australian Government’s MMS.

Australia’s lack of innovative culture

Australia’s lack of innovative culture is brought into sharp focus by the Report which notes that:

  • only 5% of Australian patents are granted to Australian residents;
  • “few Australian SMEs use the patent system”; and
  • the number of SMEs owning patents is “stagnant”.

Based on these observations, it is difficult to see how taking away a critical innovation tool like the innovation patent and not proposing a replacement system will be anything other than detrimental to fostering a culture of innovation in Australia.  Contrast this with arguments put forward by IPTA in their submission, that a second-tier patent system “provides the obvious and most significant means for enhancing and stimulating SMEs’ access to the patent system as well as acting as a “feeder system” for SMEs to use the standard patent system”. 

The failure of the Report to include a recommendation to introduce a new second-tier patent system represents a substantial miscalculation and missed opportunity.

Deadline to file new innovation patents

Given that there is no immediate possibility that a new second-tier patent system will be introduced in the foreseeable future in Australia, innovators should take careful note of the approaching deadline of 25 August 2021, which is the last day for filing new innovation patents in Australia.

Grant Shoebridge PhD

Grant Shoebridge PhD

Special Counsel, Patent Attorney

Grant has over 15 years experience providing pharma, biopharma and biotech intellectual property services, and is renowned in his field. Grant is listed in IAM Patent 1000 as a world leading prosecution stand-out.

Grant specialises in providing strategic intellectual property services for pharma, biopharma, biotech and life sciences clients.

Jessica Chadbourne PhD

Jessica Chadbourne PhD

Associate, Patent Attorney

Jessica has established herself as an emerging leader in strategic patenting advice, being named as an IP Rising Star in 2019 by Managing Intellectual Property.

Jessica’s patent practice covers a broad range of complex technologies, including pharmaceutical and organic chemistry, industrial catalysis, polymer and coatings chemistry, nuclear chemistry, and materials chemistry.

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