28 February 2012

Major Australian Patent Reform Passes in Senate

Image credit: Opensource.com on FlikrDuring the evening of Monday, 28 February 2012 the Australian Senate debated, and passed without amendment, the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011.

The passage of this Bill represents the most significant single set of reforms to Australian IP legislation since the passage of new Patents, Trade Marks, and Plant Breeder's Rights acts during the first half of the 1990's.

The Bill was introduced into the Senate in June 2011 (see Australian Patent Reform – Wrap-Up).

REFORMS

The amending Bill includes six 'Schedules', each of which addresses a different aspect of IP law reform.

Schedule 1 relates to the quality of granted patents and addresses concerns that the threshold in Australia for granting patents has been too low.  Many of these have been discussed in detail in our earlier articles, referenced above.  Very briefly, the changes include:
  1. a higher standard for establishing inventiveness;
  2. a new 'utility' requirement for 'a specific, substantial and credible use' for a claimed invention; and
  3. more stringent requirements for the scope and detail of disclosure required to support patent claims;
Schedule 2 provides greater certainty around the availability of infringement exemptions for activities such as research and obtaining regulatory approvals.

Schedule 3 is directed to improving efficiency in procedures relating to approving and challenging patent and trade mark application, so as to reduce delays in the system.

Importantly for the IP professions, and their clients, Schedule 4 introduces regulatory reforms, such as allowing for patent attorney firms to incorporate, and extending to patent and trade marks attorneys the same client-attorney professional privileges as currently exist for communications between a lawyer and their client.

Improvements to the mechanisms for trademark and copyright enforcement are addressed in Schedule 5.

Finally, Schedule 6 amends the Patents, Trade Marks, Designs and Plant Breeder's Rights acts, to remove some procedural hurdles, streamline processes and make improvements to ensure the system is fit for purpose in the increasingly electronic and globalised business environment.

BIPARTISAN SUPPORT – MOSTLY

During the Senate debate, the Raising the Bar Bill received broad support across both sides of politics.

Opposition Senators Richard Colbeck (Lib., TAS) Suzanne Boyce (Lib., QLD) and Gary Humphries (Lib., ACT) spoke generally in favour of the Bill.  They acknowledged the high degree of community and industry support for many of the reforms, noting that many of the people the opposition has consulted have indicated that they want to see the legislation passed.  However, they also made it clear that the opposition does not consider the Bill to address all areas of concern, and sees it more as a 'good start', rather than the final word on Australian IP law reform.

Unsurprisingly, Senators Bill Heffernan (Lib., NSW) and Nick Xenophon (Ind., SA) spoke at length on their concerns around the patenting of 'discoveries', such as isolated genetic materials, as well as the economic costs to Australia from the extension of pharmaceutical monopolies by various means.  As we have reported previously, both of these Senators joined in a 50-page dissent to the recommendation by the Senate Legal and Constitutional Affairs Committee inquiring into the Patent Amendment (Human Genes and Biological Materials) Bill 2010 that the Bill not be passed (see Divided Senate Committee Urges Rejection of Gene Patents Bill).

Senator Heffernan remains vocally opposed to the patent system, even as amended.  In the kind of rhetoric we have come to expect (under parliamentary privilege), he described his fellow politicians 'gutless', patent lawyers as self-interested 'nest-featherers' and patentees in biotech fields 'cartels', called everybody with a different view in the debate 'phoneys', and stated that while 'there is probably no harm in the bill, there is no use in the bill.'

Senator Xenophon was a little more conciliatory, acknowledging that raising standards would be of some assistance, but continuing to speak of various alleged 'unnecessary abuses' of the patent system, with consequences ranging from higher prices to loss of life.

Parts of the speeched by Senators Heffernan and Xenophon certainly make for lively reading in the Senate Hansard of 27 February 2012.

MORE REFORMS TO COME?

Clearly the issues ventilated by Senators Heffernan and Xenophon are not going to go away (and certainly not so long as they have anything to do with the matter).

As we reported in Government Response to Patent Reviews: ‘Not Much Left to Do’, the Government's recent response to nearly ten years' worth of reviews of the Australian patent system suggested that there are at least three areas of potential further reform which could go some way towards addressing the outstanding concerns:
  1. a proposed inclusion of a statement of objectives in the Australian Patents Act, to ‘provide a clear statement of legislative intent’;
  2. replacing the venerable 'manner of manufacture' test for patentable subject matter with an alternative statement of the requirements using clear and contemporary language; and
  3. removing the existing specific exclusions to patentability the Patents Act, and introducing instead a ‘morality test’.

WHERE TO FROM HERE?

The Bill will now proceed to the House of Representatives, where it is expected to pass unimpeded.  It is therefore likely to receive the Royal Assent of the Governor General within the next few weeks.

With most of the provisions of the Bill having a 12-month commencement period, the full effect of the reforms will not be felt until March 2013.  The transitional provisions are fairly complex, and to a limited extent have the potential to affect even those applications filed prior to commencement.  Prospective applicants with priority applications (e.g. Australian provisional applications, or first foreign filings) made after the Bill receives the Royal Assent may have a choice as to whether the current or amended provisions apply to a subsequent Australian application.

Applicants for Australian patents therefore need to start thinking, and obtaining appropriate advice, in the very near future about the best strategies for protecting new inventions during this transitional period.

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