11 March 2011

Patent Reform Exposed, Part I – Raising the Inventive Step

This is the first in a series of articles discussing the various reforms proposed in IP Australia’s Draft Intellectual Property Laws Amendment (Raising the Bar) Bill 2011.  We previously reported (here) on the public release of the Exposure Draft.  IP Australia has invited the submission of comments, which are due by 4 April 2011.

In this article, we look at the proposed changes to the requirements for establishing the presence or absence of an inventive step (otherwise known as ‘obviousness’).

WHAT IS THE EXISTING PROBLEM?

The standard for assessing inventive step in Australia is widely regarded as being lower than the corresponding standard under the patent laws of many of the country’s major trading partners.

There are two main reasons for this, both of which may be regarded as aspects of a peculiar ‘parochialism’ in the Australian law.  Generally speaking, an invention will involve an inventive step so long as a person skilled in the relevant art would not, at the priority date, have considered it obvious in light of the common general knowledge in the field, together with pertinent publicly-available information.  So far, so similar to the law in most jurisdictions.

The twofold problem with the existing Australian law, as set out in Section 7(2) and (3), is that:
  1. the relevant common general knowledge is limited to that which exists in Australia; and
  2. publicly-available information is only available for consideration with regard to inventive step if the skilled person could be reasonably expected to have ascertained, understood, and regarded as it as relevant .
The first of these restrictions is, frankly, absurd in the age of the Internet and jet travel.  People, products, services and knowledge are highly mobile, and globally accessible, and there is really no such thing as ‘common general knowledge’ that is peculiar to any one nation.  No doubt there exist fields of endeavour in which there is little or no expertise in Australia, such that there is virtually no relevant ‘common general knowledge’ under the current law.  This makes Australia a fertile patenting ground for foreign applicants operating in such fields, since almost any trivial advance will be considered ‘inventive’.

As a further practical matter, the current requirement to establish the state of common general knowledge in Australia often complicates opposition proceedings and litigation, because the evidence of foreign experts, no matter how eminent in their field, is likely to be discounted in the absence of a showing that their expertise is equally representative of the Australian situation.

The silliness of the second restriction becomes most apparent when we look at some of the case law, the most egregious example of which is Commissioner of Patents v Emperor Sports Pty Ltd [2006] FCAFC 26.  In that case, an ‘invention’ comprising removable tags for playing ‘touch’ Rugby League or Australian Rules football was considered.  An almost identical system was the subject of several US patents, differing only in that it was employed in American football.  The court found that the skilled person in relation to the claimed invention was a Rugby League or Australian Rules coach, referee, umpire or administrator, and further that such a person could not reasonably be expected to ‘ascertain’ a US patent document.

As a result, the US patent documents were disregarded, and a trivial variation on an existing published system was held to be patentable in Australia!  While we are inclined to agree that, as a matter of fact, Australian Rules football referees probably do not conduct routine searches of the US patent databases, this is no reason to grant patents for things that are, for all practical purposes, already known, used and published on the Internet.

THE PROPOSED REFORM

IP Australia’s proposed ‘fix’ to the inventive step problem is straightforward: delete references to common general knowledge being limited to the ‘patent area’ (i.e. Australia), and remove the requirement for prior art to be ‘ascertained, understood and regarded as relevant’ before it can be considered in the inventive step analysis.

It is proposed to amend section 7(2) and (3) as follows:

7 (2) For the purposes of this Act, 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 the light of the common general knowledge as it existed in the patent area (whether in or out of the patent area) before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3).
7 (3)  The information for the purposes of subsection (2) is:
            (a)  any single piece of prior art information; or 
            (b)  a combination of any 2 or more pieces of prior art information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have combined.
being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant and, in the case of information mentioned in paragraph (b), combined as mentioned in that paragraph.

THE VERDICT

This is a good, and long overdue, reform.  But, if anything, it does not go far enough!

The requirement for an item of prior art information to have been ‘ascertained’ was always ridiculous, as the Emperor Sports case shows.  A minor variation on an existing known product or process should not become patentable simply because a person such as the inventor would not have been expected to conduct a patent search!

The requirement for the information to be ‘understood and regarded as relevant’ is unnecessary.  Other jurisdictions get by perfectly well without this – the degree of apparent applicability of the prior art simply forms part of the assessment of whether it would have been obvious for the skilled person to apply it in devising the invention.

We imagine, based on current practice, that the requirement that the skilled person could ‘be reasonably expected to have combined’ multiple sources of prior art information will substantially correspond with requiring a ‘teaching, suggestion or motivation’ to combine the information to be present in the prior art.  This remaining prescribed test is therefore likely to be less flexible than, for example, the law of obviousness in the US as articulated by the Supreme Court in KSR Int'l Co. v. Teleflex, Inc. (2007) 550 U.S. 398.

Additionally, it remains the case under Australian authorities that a ‘scintilla of inventiveness’ is sufficient to support the grant of a patent.  While the proposed reform will expand the volume of prior art against which inventive step might be assessed, it will not necessarily raise the bar any higher against the prior art.  Nonetheless, raising the baseline is a good start.

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