06 May 2013

Australia’s Four Laws of Inventive Step

StepsAs I reported in a recent article, the Australian Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came full effect on Monday, 15 April 2013.  Among the many reforms introduced by the Raising the Bar Act was a change to the procedure for assessing inventive step, which raises standards to bring Australia’s laws more into line with major trading partners such as the US and Europe.

Of course, it would be unjust to make the changes retrospective – there could be many patents previously granted, and applications previously filed, which would have been rendered invalid overnight.  So the new laws apply only to those applications and patents in which a request for examination is filed on or after 15 April 2013. 

My previous article on this topic included some astonishing statistics on the number of new applications filed in the weeks leading up to commencement of the Raising the Bar reforms.  I have since heard that in the first two weeks of April, around 16,000 requests for examination were filed.  To put this in perspective, in 2012 IP Australia granted a total of 17,724 patents, so those two weeks’ of requests alone added the better part of a year’s worth of examination work to the pipeline.

If you have only a casual interest in Australian patent law, or you have not been following the subject for very long, you might think that there are now two different standards of inventive step to keep in mind when considering the validity of Australian patents and applications.  However, you would be wrong.  In fact, right now there are live Australian applications and patents variously subject to no fewer than four different standards of inventive step.

The 1952 Act Standard

The current Patents Act 1990 came into force on 30 April 1991, repealing the former Patents Act 1952.  At the time, patents had only a 16 year maximum term, however this was subsequently increased to 20 years.  In addition, the Intellectual Property Laws Amendment Act 1998 introduced the system for extension of term of patents relating to pharmaceutical substances by up to five years.

As a result, there remains a handful of patents filed prior to the commencement of the 1990 Act which are still in force.  Right now, in fact, there are 51 such patents.

Technically, since the 1952 Act was repealed, the 1990 Act applies to these archaic patents.  However, under the transitional provisions in sections 233 and 234 of the 1990 Act, no patent originally filed under the 1952 Act can be found invalid on any ground that would not have been available under the earlier Act.

The High Court settled the interpretation of these provisions in Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59.  Essentially, the law of inventive step established under the 1952 Act in Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9 continues to apply to patents granted under the old Act.

The standard for inventive step that was developed under the 1952 Act was very low.  The claimed invention can be compared only with the common general knowledge of the person skilled in the art in Australia, i.e. the everyday stock-in-trade of the relevant Australian worker in the field.  It is not permissible to compare a claimed invention against prior art, such as pre-existing published documents or products, unless it can be shown (by suitable evidence) that these are part of the common knowledge in Australia.  No matter how obvious a claimed invention might be when compared with a prior publication, the claim cannot be invalidated on this basis unless the publication is proven to be notoriously well-known.

The Original 1990 Act Standard

With the 1990 Act, the government of the day sought to raise the standard of inventiveness required for a valid patent above the low-water-mark set by the Minnesota Mining decision.

For patents filed in the early years of the 1990 Act – on or after 30 April 1991 – inventive step may be assessed not only against the common general knowledge in the art, but also against a single item of prior art information (typically a single document, or a single public act), so long as ‘the skilled person … could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded as relevant to work in the relevant art in the patent area’ (Patents Act 1990, original section 7).

The ‘patent area’ means ‘Australia’, and as originally enacted, the Patents Act 1990 still requires that the person skilled in the art, and the common general knowledge, be limited to Australia.  Also, while prior art documents could, in principle, be published anywhere in the world, prior acts (e.g. public use or sale) remained limited to Australia.

Furthermore, prior art information is only admissible if it can be shown that it would have been ‘ascertained, understood and regarded as relevant’ by the skilled worker.  This requirement has routinely proven to be a stumbling block, particularly in fields of endeavour in which it is not common for workers to conduct searches, or refer to the patent literature, when developing new ideas. 

The most extreme example of this is probably the Emperor Sports case (Commissioner of Patents v Emperor Sports Pty Ltd [2006] FCAFC 26, on appeal to a Full Bench of the Federal Court of Australia).  There, the alleged invention involved tear-off strips of material for use in touch Australian rules football and rugby games.  The court found that the relevant ‘person skilled in the art’ was a football coach, who could not be expected to have found a prior US patent document disclosing essentially the same invention, but intended for use in American football.  As a result, the claims were found to be inventive!

The Revised 1990 Act Standard

In the early 2000’s, the Howard government made a further attempt to raise the requirement of inventive step in Australia.  A draft of the bill which became the Patents Amendment Act 2001 originally sought to delete the requirement that prior art information be ‘ascertained, understood and regarded as relevant’.  However, a political compromise to secure the support of the (now defunct) Australian Democrats party in the Senate led to this language being retained.

Nonetheless, from 1 April 2002 it became permissible, when assessing inventive step, to combine the teachings two or more items of prior art information, so long as the skilled person could ‘be reasonably expected’ to have done so – after, of course, having already ‘ascertained, understood and regarded as relevant’ the multiple sources of information sought to be combined.

Additionally, the 2001 Amendment Act expanded prior use to include public disclosure by acts occurring anywhere in the world, and not just within Australia.

The ‘Raising the Bar’ Standard

As of 15 April 2013, Australia finally has a standard of inventive step which is comparable to other developed nations:
  1. all prior art information is available as the basis for assessment, whether in or outside Australia, and whether or not the inventor should or could have known about it and/or it would have been ‘ascertained, understood and regarded as relevant’;
  2. sources of prior art information may be freely combined – although this will presumably only be permissible where it would be obvious for the skilled person to do so; and
  3. the relevant common general knowledge assumed to be available to the skilled worker is based on a global standard, rather than being limited to Australia.
While it is likely to be some time before a court considers the effect of these reforms, the intention is that the standard of inventive step be aligned with that in comparable developed countries.  Notably, the Australian Patent Examiner’s Manual, in Section 2.5.2.5A, cites the UK case of Pfizer Ltd’s Patent [2001] FSR 16:

A real worker in the field may never look at a piece of prior art: for example he may never look at the contents of a particular public library or he may be put off because it is in a language he does not know. But the notional addressee is taken to have done so. This is a reflection of part of the policy underlying the law of obviousness. Anything which is obvious over what is available to the public cannot subsequently be the subject of valid patent protection even if, in practice, few would have bothered looking through the prior art or would have found the particular items relied on.

Summary

When assessing ‘obviousness’ of claims in an Australian application or patent, it is necessary to determine which version of the law applies.
  1. if the patent has a filing date earlier than 30 April 1991, then the 1952 Act’s ‘common general knowledge only’ standard applies.
  2. if the patent has a filing date on or after 30 April 1991, but prior to 1 April 2002, then the original 1990 Act standard or ‘common general knowledge plus one, ascertained/understood/relevant item’ standard applies;
  3. if the patent or application has a filing date on or after 1 April 2002, and a request for examination was filed prior to 15 April 2013, then the revised 1990 Act standard of ‘common general knowledge plus one or more, ascertained/ understood/relevant items’ standard applies; and
  4. if the patent or application was filed after 15 April 2013, or was filed before this date but examination was requested after 15 April 2013, then the ‘Raising the Bar’ standard applies, permitting more flexible selection and combination of prior art information.
All four different standards will continue to be relevant in Australia, until the last of the 1952 Act patents finally expires, sometime in early 2016.  The original 1990 Act standard could be with us until 2027 (with extensions of term), while the revised 1990 Act standard will remain relevant until perhaps 2038.  I hope to be retired before then!

Image Copyright (c) 123RF Stock Photos

5 comments:

Name said...

Hi Mark,

Has 'raising the bar' standard provided any concrete examples to clarify 'when' it would be obvious for the skilled person to produce the claimed invention by combining known elements?

Mark Summerfield said...

As yet we have very little guidance, although approaches taken in Europe and the US are likely to be relevant.

The Explanatory Memorandum to the Raising the Bar Bill had this to say on the subject:

Importantly, the changes are not intended to substantially change the operation of the existing tests for inventive step as applied to the prior art base or to permit hindsight analysis. While a skilled person is essentially deemed to be aware of and to have carefully read the publicly available information, the inventive step tests are otherwise applied in the context of what the skilled person would have known and done before the priority date of the claims in question. The tests will therefore continue to take account of factors such as whether the skilled person would have understood and appreciated the relevance of the prior art to the problem the invention was seeking to solve and whether it would be considered a worthy starting point for further investigation or development.

It also remains the case that individual pieces of prior art information can only be combined where the skilled person would have been reasonably expected to have combined them.

I would also suggest having a look at the relevant section of the European Guidelines for Examination, given that the Australian Examiner's Manual generally endorses the use of a similar 'problem-solution' approach (see section 2.5.2.3.1A).

In short, under the new regime all prior art is on the table, and the test should be whether it would have been obvious for the skilled person to select and combine the relevant pieces of information.

Shannon said...

Hi Mark,
In a few of your posts, you seem to suggest that the massive increase in the number of patent applications will put a huge lag on the examination process over the next few years. Do you think we will see a corresponding drop in patent applications over the next year, as many applications (which would have been put through over that period) were likely rushed through the door in the last few weeks to get in before the deadline?

Mark Summerfield said...

Hi Shannon,

The thing about patent filings is that you cannot file for what you have not yet invented! And since it is important to secure a priority date before any form of public disclosure or commercial use of an invention, patent applications are often filed at the earliest available opportunity.

Some applicants might have been in a position to bring new filings forward by a few months. Additionally, there would have been a proportion of Australian national phase filings from existing international applications that were brought forward, as well as early filings of divisional applications, and applications based on existing foreign applications and provisional applications filed during the preceding 12 months.



I would therefore expect that there will be some lull in new applications over the next 6-12 months, and it will be interesting to see whether it is significant.


However, the bulk of new examination work created for IP Australia is due to requests for examination filed on already pending applications.


It is important to understand that none of this will change the rate at which applications are examined, and patents granted, by IP Australia. By the end of last year, the Commissioner was issuing directions for applicants to request exam at around 3-4 years from filing, and once examination was requested a first examination report was typically issuing within 12 months. So in a normal case, the delay from filing until the first report was around 4-5 years.


IP Australia stopped issuing directions to request exam late last year, in anticipation of the rush on voluntary requests. Now, instead of a long delay between filing and requesting exam, there will be a long delay between requesting exam and receiving a first exam report. That is, of course, in an 'average' case. There will no doubt be some applications that had already been pending for four years or more on 15 April 2013. If the applicant in those cases waited until the very last minute to request exam under the old law, they could now be waiting a further three years or more for a first report.

ak said...

Hi Mark
I hope you never retire.. Your blog is always worth reading.
On the matter of common general knowledge (CGK) in Australia for cases prior to 15th April 2013, it may be quite difficult to exactly say whether a particular subject is CGK in Aust. or otherwise and does the onus lie on the attorney or examiner to prove this? I remember reading something in the Australian Patents Manual that matters considered as pertaining to international dimension such as chemistry is regarded as global and part of CGK in Australia?

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