The phase out of Australia’s innovation patent system caused a flurry of filing activity in 2021, so what are your options if you identify an innovation patent that affects your freedom to operate?

There was a spike in filing activity as part of the phase out of Australia’s innovation patent system, with over 2,700 innovation patents filed in August 2021 alone. With so many recently filed innovation patent cases, it is a good time to consider the available options if you identify an innovation patent that might affect your freedom to operate.

First, is there really a problem?

If you are worried about an innovation patent, it can be useful to get some early advice on the potential scope of the patent rights and, if necessary, the prospects for challenging validity. You may find that the patent claims do not cover your proposed commercial activities. Alternatively, you might get some clarity around a potential problem so that you can start developing a strategy to address it.

Tailor your strategy

If you identify a problematic innovation patent, it might be worthwhile to challenge that validity of it and we touch on some of the available options below. However, in some cases, you may prefer to negotiate with the patentee in order to reach a mutually beneficial commercial solution (e.g. licensing or assignment of the patent rights). Sometimes a validity challenge can be used strategically to encourage the patentee to come to the negotiating table, or to shift the balance in your favour during negotiations.

There is no single strategy that is appropriate in all circumstances. The best course of action for you will depend on your commercial goals and individual circumstances. The Griffith Hack team can assist you with developing a tailored strategy: feel free to contact us if you would like to discuss your options.

A granted (innovation) patent doesn’t always mean much

It is important to remember that innovation patent applications proceed to grant after only a formalities check. However, they do not become enforceable until they have completed substantive examination and been certified. If you are concerned that infringement proceedings might be commenced against you once an innovation patent has been certified, it may be beneficial to consider pre-certification options.

How likely is invalidity?

Requesting substantive examination of an innovation patent is voluntary. As a result, applicants sometimes take an “optimistic” approach to the subject matter being pursued. This may be done by some foreign applicants to take advantage of financial incentives in their country of origin. Alternatively, the underlying strategy may be for the granted (but uncertified) innovation patent to act as a deterrent to competitors, who might not go the additional step of seeking advice on whether the innovation patent is likely to stand up to scrutiny.

China’s utility model is a similar second-tier of patent protection to the innovation patent. Recent figures indicate that patent invalidation proceedings in China have been successful in a significant proportion of cases. Of the concluded invalidation proceedings for utility model patents in 2020, 39.2% of cases were invalidated entirely, 18.2% were invalidated partially, and only 42.6% of the challenged utility models were maintained.

Much is made of innovation patents being harder to invalidate due to the innovative step being a lower threshold than the inventive step requirement of standard patents. While it is true that the innovative step threshold is lower, it is not a free pass to validity. For example, it is important to bear in mind that innovation patents must meet the same validity requirements as standard patent cases for the level of disclosure in the patent specification. Recent case law indicates Australian patent specifications must now meet a higher standard, more aligned with UK and European requirements. With these recent developments in mind, it is wise not to take an innovation patent (especially an uncertified one!) on its face.

Pre-certification options

Third-Party Examination Requests

Sometimes the simplest way of dealing with a problematic case is to ask the Patent Office to look at it. Substantive examination of innovation patents is voluntary, but third parties can request that an innovation patent be examined. This can be done anonymously or by ‘strawman’. Both the third party and the patentee must pay an examination fee in relation to the third party’s examination request. If the patentee fails to pay this fee, the patent will cease. For patentees who filed an innovation patent with no real intention of having it certified, being asked to pay the examination fee may be enough to cause them to abandon the case.

Notice of Matters Affecting Validity

If you would like to enhance the likelihood of objections in examination, you can give the Patent Office a bit of help. It is possible to file a Notice of Matters Affecting Validity (NMAV). The NMAV can provide submissions (and supporting material) asserting that the claimed invention lacks novelty and/or an innovative step. The Patent Office is required to consider the NMAV when the innovation patent is examined (irrespective of who made the examination request).

You can file an NMAV at any time from when the complete specification for the patent becomes open to public inspection to immediately before the Commissioner decides to certify the patent. Again, this can be done anonymously or by ‘strawman’.

Post-certification options

After certification, a patentee can commence enforcement proceedings to assert their patent rights. Accordingly, it is important to consider the risk of the patentee commencing infringement proceedings when contemplating a post-certification challenge to the validity of an innovation. There are a number of different options available, and we recommend consulting with an IP professional to develop a strategy suited to your circumstances.

Re-examination

If the innovation patent has been examined and certified, that does not have to be the end of the matter. If you still have validity concerns, you can ask the Patent Office to re-examine the innovation patent. Again, this can be done anonymously or by ‘strawman’. Re-examination requests can address more grounds than an NMAV including written description requirements.

Re-examination can be considered a “passive” approach in that you provide information to the Patent Office and hope that they will use it wisely. If the Patent Office raises objections in the light of the re-examination request, the patentee will be given the opportunity to respond to the objections, but the party requesting re-examination does not have a formal opportunity to contest the patentee’s response. Re-examination can be a cost-effective option in circumstances where there are clear invalidity grounds.

Opposition

Alternatively, if it is strategically beneficial to take a more active approach to contesting the validity of an innovation patent, you can commence opposition proceedings before the Patent Office. In opposition proceedings, both the opponent and the patentee are given the opportunity to file evidence and make submissions in support of their respective cases. The opposition can proceed to a formal hearing, where each party can be heard and a hearing officer from the Patent Office will prepare a formal decision on the opposition. The grounds of opposition include the same grounds as re-examination.

Revocation

There is also the option of commencing revocation proceedings before the Federal Court. We do not suggest litigation lightly, but in some circumstances revocation proceedings can be the best approach. The grounds of revocation generally include the same grounds as for oppositions.

If you are dealing with nuanced technical issues or a complicated case, it may be beneficial to actively contest the validity of the innovation patent in opposition or revocation proceedings. As noted above, the best strategy will depend on the specific circumstances of any matter.

How we can help

Griffith Hack is a full-service specialist IP firm. We combine a highly experienced and technically diverse patents team with a legal team with a strong track record. At Griffith Hack, our attorneys and lawyers work together to provide you with commercially astute advice and execute a strategy tailored to your needs.

To discuss the available options, please contact a member of our team.

With Australia’s innovation patent system set to end later this month, pre-grant opposition proceedings will likely play a significant role in the strategies of challengers going forward – and owners will want to be prepared. Gavin AdkinsDr Toby Thompson and Amanda Stark discuss. 

Australia’s innovation patent system is ending soon. As a result, Australia’s pre‑grant opposition proceedings will likely play a more significant role in the strategies of patentees and challengers in the future.

Innovation patents are subject to a different ‘post-grant’ opposition procedure to standard patents that is stayed by the commencement of court proceedings. As a result, divisional innovation patents are sometimes used as a litigation tool in order to, among other things, short circuit the enforcement delay associated with the pre‑grant opposition procedure for standard patents. As the innovation patent system is phased out, this tactic will fall away.

Australia’s pre-grant patent opposition procedure is long-standing but has undergone some important changes in recent years that will become critical in the future.  These changes include higher requirements for several grounds of opposition, resulting in a less pro-patentee opposition regime than was previously the case.   

Lower burden of proof

Previously, in order to succeed in opposing grant of an Australian patent it was necessary for an opponent to establish that the patent, if granted, would be clearly invalid.

Now an opponent need only satisfy the Hearing Officer on the balance of probabilities that a ground of opposition to the grant of the standard patent is made out.

Stronger grounds for opposition

In respect of standard patent applications which are filed on or after 15 April 2013, or for which examination is requested after this date, there are four substantive changes that strengthen the grounds for challenging validity:

1. Broader prior art base for inventive step (obviousness)

Firstly, the background “common general knowledge” is no longer confined to that which existed in the art in Australia. In practice, this removes the need to use local Australian experts or otherwise prepare evidence in order to establish that the relevant art is ‘international’ in nature.

Secondly, in order for prior art to be eligible for assessing inventive step it is no longer necessary to establish that it must be “information that a skilled person […] could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant”. This removes another evidentiary obligation from an opponent and broadens the prior art base substantially.

2. US utility requirement

An express utility requirement was inserted to align with the US position such that “a specific, substantial and credible use for the invention (so far as claimed) is disclosed in the complete specification”. This is in addition to the pre-existing requirement for the invention itself to be useful.

3. UK/European enablement and support requirements

The disclosure requirement for complete applications has been amended to conform substantially to the corresponding UK provision, such that the complete specification must “disclose the invention in a manner which is clear enough and complete enough for an invention to be performed by a person skilled in the relevant art”.

Further, the ‘old test’ for fair basis has been replaced with a requirement based on UK/European law that that the claims are “supported by” the description. The ‘old test’ for fair basis was essentially limited to a textual comparison between the claims and the body of the specification or priority document that did not involve any inquiry into ‘technical contribution to the art’.

4. Tighter restrictions on amendments

While not a ground for invalidity, patent applicants are not allowed to add matter that goes beyond the disclosure contained in the specification at its filing date, except to correct a clerical error or obvious mistake.

Strict time-frames for evidence

In the past, patent opposition proceedings in Australia often became protracted due to generous provisions relating to extensions of time for lodging evidence. This is no longer the case.

Evidentiary time periods are still extendable, but the regulations relating to extensions of time for evidentiary periods are now reasonably onerous and strictly applied by IP Australia. Unless a party can show that they acted promptly and diligently and made all reasonable efforts to file the evidence in time, an extension will not be granted.

The procedure from filing the Notice of Opposition to the issuance of a written decision on validity can now be completed within about 18 months, although extensions of time (where allowed), amendments and procedural disputes can extend this time-frame.

Use all available options

It is currently still possible to file new applications for innovation patents in Australia, until 25 August 2021. Even after that date, it will still be possible to file applications for innovations which are divisionals of existing applications filed before that date.  As a result, if your invention is of significant commercial value and is likely to be commercialised in the short to medium term, an 8-year term innovation patent may still be a useful option.

How we can help

Facing a pre-grant opposition in Australian is often a new experience for many patent owners, and opponents also.  Opposition practice is a specialised area of Australian patent law, particularly with regard to areas such as preparation of expert evidence, hearing preparation, dealing with procedural aspects such as amendment requests and extensions, and extending into commercial aspects such as settlement negotiations and licensing.

Griffith Hack’s experts have extensive experience in handling Australian patent oppositions. Our combined patent attorney and legal team provides integrated scientific and legal expertise, together with strategic, commercially-relevant insight, and has a proven track record in delivering results.

To discuss patent oppositions further with a member of our team, click on their profiles below. 

Australia’s innovation patent system is ending soon. For patent applicants, there’s still time to take advantage of the system – you just need to act quickly. 

The sun is quickly setting on Australia’s innovation patent system, with the 25 August 2021 deadline to file applications fast approaching. 

In this article, we look at the key aspects of the innovation patent phase-out process, what options are still available to you, and provide a refresher on what an innovation patent is. 

What is an innovation patent?

Australia currently has a two-tier patent system: standard patents and innovation patents. Innovation patents were introduced in 2001 to encourage businesses to protect their innovations. We break down the differences between the two systems in this table:

Standard patent Innovation patent
20-year term 8-year term
Must involve inventive step Must involve innovative step
Application > Examination > Grant Application > Grant (streamlined)
Unlimited claims Maximum 5 claims
Enforcement after grant Enforcement after certification

The innovation patent system offers a number of advantages for applicants:

  • Lower threshold for patentability: While standard patents require an inventive step, innovation patents only require an innovative step.
  • Innovation patents can be filed for the same subject matter as standard patents.
  • An innovation patent provides the same rights as a standard patent.
  • Innovation patents and standard patents may coexist for the same invention (as long as there is a difference in respective claim scope).

Innovation patents provide very robust patent protection even for subject matter that would not support a standard patent, and can therefore be a critical part of a successful infringement action.  The innovation patent process (which is streamlined and does not include any pre-grant opposition) is also a very effective mechanism to secure rapid grant for enforcement.

How will the innovation patent phase out work?

The phasing out of Australia’s innovation patent system officially commences on 26 August 2021. For patent applicants, this means there are key dates you need to be aware of:

  • New innovation patent applications, or standard applications on which an innovation patent may be based, must be filed no later than 25 August 2021.
  • New innovation patent applications submitted on or after 26 August 2021 will not be accepted.
  • Existing innovation patents and innovation patent applications filed on or before 25 August 2021 will continue in force until they expire.
  • A standard patent application can be converted to an innovation patent application after 26 August 2021, as long as the standard patent application was filed on or before 25 August 2021.
  • It will also be possible to file a divisional innovation patent application from a standard patent application that was filed on or before 25 August 2021.
  • By 26 August 2029, all innovation patents will have expired.

What the end of innovation patents means for you

Whether you have an existing innovation patent, are considering filing for an innovation patent, or want to keep your options open for filing an innovation patent during the phase out period, there are key deadlines and facts that you need to be aware of. We break it down in this set of FAQs. 

Can I still file an innovation patent application?
Yes, you can file an original innovation patent application until the deadline of Thursday 25 August 2021 (AEST). 

Can I apply for an extension?
No, there are no avenues available to apply for an extension, or to file late applications. 

What if I already have an innovation patent or have previously filed an application?
All innovation patents and innovation patent applications filed on or before 25 August 2021 will continue in force until they expire.

Are there any other options available to me after 26 August 2021?
Yes, there are two alternate options available for you to take advantage of the innovation patent system after 26 August 2021 – but you still need to act before 25 August 2021:

  1. Standard patent application conversion: A standard patent application can be converted to an innovation patent application from 26 August 2021, as long as the standard patent application was filed on or before 25 August 2021.
  2. Divisional innovation patent application: It will also be possible to file a divisional innovation patent application from a standard patent application, so long as that was application was filed on or before 25 August 2021.

Should I file an innovation patent application now? If so, what do I need to do?
You do not need to file the innovation patent before 25 August 2021 provided that you have filed a standard (non provisional) patent application in Australia by that date. By doing so, you will keep your option open to file the innovation patent after 26 August. The standard patent application may be a direct filing in Australia or may be an International (PCT) patent application designating Australia.

The innovation patent filing may be subsequently based on the standard patent application (as a divisional application or by conversion). One of the key strategic advantages of the innovation patent system is to provide rapid grant and robust protection in enforcement proceedings and this advantage will remain whilst the standard patent application remains pending.

If the invention has a short life cycle or is incremental (such that it would not be eligible under a standard patent), then you should consider filing of the innovation patent directly before 25 August 2021. This will simplify the patenting process and be more cost effective.

Can I still maximise my patent term if I accelerate my complete patent filing to meet the deadline?
Yes, by adopting a “dual track” strategy where you file a first standard patent application by 25 August 2021 to form the basis of an innovation patent filing during the phase out period whilst that standard patent application remans pending.

A second standard patent application can be filed subsequently closer to the 12 month priority deadline to ensure the maximum term of the patent is retained. Steps would need to be taken to avoid a “double patenting” objection but these can be managed by keeping the first patent application pending.

Key takeaways

  • If you want to take advantage of Australia’s innovation patent system, you need to act soon.
  • New applications must be submitted by 25 August 2021 (AEST).
  • Existing innovation patents and applications submitted on or before 25 August 2021 will continue in force, expiring at the end of their 8-year term.
  • You should consider accelerating your complete (non-provisional) patent application filing in Australia before 25 August 2021.
  • Griffith Hack is here to help. If you have further questions or are unsure what the best steps to take are, please contact the Griffith Hack team who can take you through your options to ensure that you extract maximum value from the innovation patent system while it lasts.