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The proposed reforms of the Australian government are overdue, and deserve serious consideration by patent users.

It seems an oxymoron that patents both encourage and discourage innovation. Patents encourage innovation by providing a monopoly to reward the efforts of inventors who develop and publish new inventions. Simultaneously patents can discourage innovation by competitors, yet competition is an excellent driver of innovation. Patent law is a balancing act between these two drivers, and the limited terms of patents (a maximum of 20 years) is just one means of seeking a balance.

There are a number of other mechanisms used to achieve the necessary balance. One of these mechanisms is to ensure that the monopoly granted is limited to what has been invented. Currently in Australia an inventor only has to show one example of an type of invention to be able to claim all examples of the type of invention claimed. Under the proposed reforms, protection would be limited to the inventions disclosed in the patent specification, or variations of the claimed invention that do not require ‘undue experimentation’. In simple terms, if you did not think of it, you can’t claim it.

A second important balance is that inventions have to be new and inventive. This immediately raises the question – new and inventive compared to what? Under current Australian patent law a patentable invention has be a) new compared to any earlier patent, public document or commercial usage (publication) anywhere in the world, and b) inventive compared to any prior art publication where a skilled person would have reasonably expected to have ascertained, understood, and regarded as relevant.

This raises the next question – how do you decide what this hypothetical skilled person would have ascertained, understood, and regarded as relevant? How do you see inside this hypothetical person’s mind?

These questions have occupied the minds of many of our best IP lawyers and judges. In 2007 the High Court of Australia ruled that the design of storeroom locks did not count as a prior art publication when considering whether domestic locks were inventive, because it was not proven that the designer of the domestic lock would consider the design of storeroom locks as relevant. While one cannot argue with the way the High Court has applied the law, this outcome can be argued to be absurd – which is a reflection on the underlying law.

In contrast, under the proposed reforms, there would no requirement to prove that a prior art publication was ‘relevant’ for the viewpoint of inventive step. Among other things, this would make an immediate impact on patent examination. Currently, patent examiners are reluctant to raise objections on the grounds of inventive step as it is difficult for them to prove that a prior art publication is relevant. But without this need, we can expect patent examiners to assert that more patents are not inventive during examination.

In practice, the combination of these two reforms (and some other proposed changes) would make patents harder to get and narrower in coverage. My Griffith Hack colleagues are right to suggest that this may increase the burden and likely costs for patent applicants. However most patent applicants are also technology users – and as technology users should benefit from the lower risk of infringing the undeserving patents of others. Genuine innovations, whether in the Cleantech or other areas, are still going to lead to granted patents, and rightly so.

An added benefit of the changes is that they will help to align Australian patent law with patent law in other countries. In the long run there is no inherent reason why patent laws vary around the world, and these variations impose additional costs on inventors and companies who file patents in many countries. Aligning patent laws requires individual countries to give up some of their uniqueness – and Australia’s current patent law in the above areas is unique compared to patent law in major trading partners such as the US, China, UK, Europe and Japan.

There is one further proposed reform worth noting. The Federal Government is also proposing introducing the right to experiment on a patented invention without infringing the patents. In the Cleantech area this might, for example, help a solar cell company develop and test a competitive solar cell in advance of the expiry of a blocking patent. As with the above reforms, this reform will tip the balance towards technology users and away from patent owners. However this particular reform is not necessarily about alignment of Australian patent laws with international norms, as there are few international norms in this area.
Do you think these reforms will affect your business? The first public consultation period for these reforms has just ended, but law reform is a long process. The Federal Government will no doubt welcome your contributions, and Griffith Hack would be pleased to work with you to help to better understand and manage the impacts of any changes once legislated.

Mike Lloyd

There is no doubt that filing patents is a prime form of protection for new products and processes, and one that should be top of mind for innovators. However, there are other forms of protection that can also assist to protect new innovations. These include:

Keeping your processes secret for as long as possible. Carefully drafted confidentiality agreements can assist with this. However your competitors may be able to reverse engineer your ’secret’ process.

Ensuring that you have clear ownership rights for the innovations. This may not be as automatic as you think, even if you have paid for new developments. For example, the rights to the innovation may still reside with the technologist(s) who did the work. Or other innovators may have prior claims to the invention.

Developing and trade marking distinctive brands for your innovations. Customers may remember strong brands long after any underlying patents have expired.

Protecting objects that have a distinctive appearance with a design registration.

Defensive publications, which help ensure that no following party can claim the innovation that you have published. Just be aware that defensive publications will also mean that all of your competitors will be free to benefit from your ideas. Patent applications which are filed and then abandoned after publication will have the same effect, and provide the additional benefit that they are easily discovered in patent searches.

If in doubt, please seek professional advice about your protection options. Innovators can sometimes be too close to their invention, and fail to see how it can be protected because it is ‘obvious’ to them. A patent attorney may give a more objective opinion. IP laws can be very complex.

Regarding your second question, the patents in this area were quite sparse and there did not appear to be a lot of obvious overlap, except in the area of carbon capture where a few parties appeared to be claiming similar inventions. However these types of questions should ideally be answered from the viewpoint of specific technologies. Also the study did not consider patent applications prior to 2003 or very recent PCT patent applications, which should also be considered when comparing patent portfolios.

Mike Lloyd

With the National Innovation Policy still under wraps, and only a small amount of discussion about direct funding from the Energy and Climate Change departments it will be a very topical area.

What do you recommend as the appropriate defensive/aggressive stance for organisations wanting to protect or participate in this field (ie other than filings)?

Has your research uncovered how much of an overlap there is in this field, and how interconnected the portfolios are?

Keep up the great work.