On 23 July 2018 IPAustralia released an exposure draft of the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2018 for consultation.  A copy of the draft legislation can be found here.  This follows the Productivity Commission’s 2016 review of the Australian IP system and the release of the exposure draft of Part 1 in March 2018 and subsequent enactment in June 2018.

Innovation Patents to be Abolished

The proposed legislation would provide that any innovation patent application having an effective filing date that is after the commencement date of the legislation could not be validly granted.  Moreover, an innovation patent claim having a priority date on or after the commencement date of the legislation could not be validly certified.

If the proposed legislation is enacted in its present form then innovation patents filed before the commencement date would remain valid and enforceable but future innovation patent applications would not be permitted.

Inventive Step to be Tightened

Notwithstanding the recent reforms to the inventive step test resulting from the Raising the Bar legislation of 2013, the Government has expressed support for recommendations that the inventiveness threshold pursuant to ss. 7(2) and 7(3) of the Patents Act 1990 (Cth) should be raised even further.

The knowledge base against which inventive step is assessed was expanded in 2013 by the Raising the Bar Act. In particular, the Raising the Bar Act removed the restriction that the common general knowledge against which obviousness is assessed be limited to what was known or used in Australia. It also removed the requirement that the prior art information be limited to only those documents that would have been ‘ascertained, understood and regarded as relevant’ by the skilled person.

The proposal now is for a further tightening of the inventive step requirement by adopting legislation worded in similar terms to Article 56 of the European Patent Convention.  In particular, the proposed new legislation explicitly states that the test for inventive step involves “comparing” the invention with the prior art base and only if the invention would not be obvious to a person skilled in the relevant art is there an inventive step.

The draft Explanatory Memorandum that accompanies the proposed legislation provides that the proposed legislative wording has been adopted specifically to follow the European legislation so that the Australian Patent Office and Courts will adopt the European approach to assessing inventive step.  In particular, it is envisaged that Australia would adopt the “problem solution” approach as it is applied in Europe.  This would be a significant departure from the practice that has existed in Australia until now.

The new approach would involve addressing the question in three stages beginning with determining the closest prior art, then establishing the objective technical problem to be solved by the invention and finally, starting from the closest prior art and the objective technical problem, considering whether the invention would have been obvious to the person skilled in the relevant art.  In other words, the test can be distilled down to asking if it would have been obvious to modify or adapt the disclosure of the closest prior art to provide the technical effects that the invention provides over the closest prior art.

Furthermore, the new inventive step provisions slightly broaden the prior art base.  The existing test for inventive step requires that the “common general knowledge” of the skilled addressee be taken into account when assessing obviousness.  Other prior art information such as published documents or acts, alone or in combination, may also be taken into account. The proposed new test would permit consideration of published documents or acts independently of the common general knowledge.

Somewhat worryingly, the Explanatory Memorandum includes a discussion of “manner of manufacture” (i.e. eligible subject matter) in the section which discusses obviousness considerations.  On numerous occasions Australian courts have cautioned against blurring the lines between inventive step and subject matter eligibility. Perhaps it is envisaged that Australian courts and the Patent Office would adopt the European approach, at least in relation to computer implemented inventions, of determining by stealth subject matter eligibility under the rubric of inventive step?

When will these changes come into effect?

the Government encounters major resistance to the proposed legislative changes it would seem that these new provisions could be enacted and come into force in early 2019.  The deadline for written submissions on the Exposure Drafts is 31 August 2018.

If you have any questions about the proposed legislative changes then please contact Daniel McKinley.‍