29 November 2015

Patents and the Trans-Pacific Partnership Agreement, Part 1

Pacific OceanNegotiations in relation to the controversial multi-national free trade agreement known as the Trans-Pacific Partnership (TPP) were concluded on 6 October 2015.  The full text of the Agreement has since been published by the participating countries, including on the web site of the Australian Department of Foreign Affairs and Trade (DFAT).

The parties to the TPP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the United States and Vietnam.  DFAT describes the TPP as ‘a regional free trade agreement of unprecedented scope and ambition’ (which, I suspect, nobody would dispute) which has ‘great potential to drive job-creating growth across the Australian economy’ (which would seem to be a more politically-motivated and contentious claim, though time will tell).

The full text of the TPP comprises some 6000 pages (or so I have read – not that I have made any attempt to count them all myself).  Its 30 chapters cover a huge range of trade-related matters, including market access and tariffs, customs administration, sanitary measures, competition policy, labour and the environment, as well as a number of specific areas of technology and commerce, such as telecommunications, electronic commerce and financial services.

It seems fair to say, however, that the provisions of the TPP that have received the most attention – little of it positive – are those relating to so-called investor-state dispute settlement (in Chapter 9 on ‘Investment’), and on Intellectual Property in Chapter 18.  Indeed, draft texts of IP chapter were repeatedly leaked and published by Wikileaks during the years of negotiation of the TPP, with the copyright provisions generally receiving the most attention and criticism.

In this two-part article, however, I am going to focus on what the TPP says about patents, and what this may mean for participating countries, including Australia.  In Part 1, I will cover most of the provisions relating to the scope of available patent rights, and general procedures, while Part 2 will look at provisions relating specifically to pharmaceuticals and biologics, and at extensions and adjustments of patent term.

Related Treaties and Conventions

There are a number of IP-related treaties and conventions of which TPP participants are required to be members.  As regards patents and related rights, these include the Paris Convention for the Protection of Industrial Property and the Patent Cooperation Treaty (PCT) – of which all parties are already members – as well as the 1991 version UPOV Convention for the Protection of New Varieties of Plants (UPOV 91) and the  Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure.

Interestingly, New Zealand is one of the countries that does not currently provide specific protection for new plant varieties (equivalent to Australia’s Plant Breeders Rights Act 1994) under UPOV 91, with its existing Plants Variety Rights Act 1987 being based on the earlier 1978 version of the Convention.  It will be required to introduce updated protection within three years of the TPP coming into effect.

A further point to note is that while TPP members are required to participate in the Madrid system for international registration of trade marks (Australia and New Zealand a both already members), there is no similar requirement to sign up to the Hague Agreement Concerning the International Registration of Industrial Designs, which is something that has been discussed in Australia, but thus far resisted, at least in part because it would require an extension of the maximum term of protection of a registered design from the current 10 years to at least 15 years.

Patentable Subject Matter

Obligations regarding the subject matter for which patents may be obtained are similar to those in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), i.e.
  1. patents must be available for any invention, whether a product or process, in all fields of technology, provided that the invention is new, involves an inventive step and is capable of industrial application;
  2. patents must also be available for inventions claimed as at least one of the following: new uses of a known product, new methods of using a known product, or new processes of using a known product (this is an extension of the obligations under TRIPS);
  3. parties are permitted, should they so desire, to exclude from patentability inventions that may offend ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to nature or the environment;
  4. parties are also permitted to exclude diagnostic, therapeutic and surgical methods for the treatment of humans or animals, as well as animals other than microorganisms, and essentially biological processes for the production of plants or animals, other than nonbiological and microbiological processes, and plants (although new varieties of plants must, in any event, be protectable under a system consistent with the UPOV Convention).
I do not believe that any changes to the law will be required for Australia to meet these obligations – although there is an additional provision in relation to the protection of biologics (to be discussed further in the second part of this article) that may be problematic in light of the High Court’s recent Myriad gene patent decision.

Grace Period

A big change for many members of the TPP will be the requirement to implement a 12-month grace period, providing applicants with a general immunity from the consequences of self-disclosure of an invention prior to filing a patent application.

To my knowledge, Australia, the US, Canada, Mexico and Malaysia already have such grace periods in their national patent laws.  New Zealand declined the opportunity to follow suit in its recent implementation of the Patents Act 2013, but will now be obliged to do so.

The introduction of a 12-month grace period in Japan will be a significant and welcome change.  Japanese patent law is notoriously unforgiving of errors, omissions, or missed deadlines by applicants, and any new ‘saving’ provisions will make everybody’s lives a little easier and less stressful!

Patent Revocation

The TPP requires that ‘each Party shall provide that a patent may be cancelled, revoked or nullified only on grounds that would have justified a refusal to grant the patent’ (emphasis added).

This may not seem significant or controversial, however it may have an impact on some participating countries.  Historically, it has not been uncommon for examination of applications to exclude certain grounds of invalidity, such as lack of utility, that may be difficult for examiners to assess without additional independent evidence.  For example, applications that appear to be directed to ‘perpetual motion’ or ‘free energy’ devices and methods may be written in a convincing manner, such that it is not readily apparent that they do not, or cannot, work.

Australia faced exactly this issue when the Australia-United States FTA – which includes a similar provision – was concluded in 2004.  At that time, an Australian patent application could not be refused on the ground that the invention was not ‘useful’, which would have meant that a patent could not be revoked on this ground, either, if Australia was to comply with its obligations under the AUSFTA.  The solution at that time was to make lack of utility a ground of pre-grant opposition so that, subject to an opponent raising the objection, it would be a ground upon which the grant of a patent could be refused.  Since then, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 has made lack of utility a ground of refusal during examination as well.

Additionally, TPP participants may provide that fraud, misrepresentation or inequitable conduct may be the basis for cancelling, revoking or nullifying a patent or holding a patent unenforceable.  Such provisions exist in section 138(3), paragraphs (d) and (e), of the Australian Patents Act 1990.

Exceptions to Exclusive Rights of a Patentee

The TPP allows that ‘a Party may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.’

This makes room for such mechanisms as Australia’s Crown Use and Compulsory Licensing provisions, which permit the government to exploit a patented invention, or a court to order a patentee to grant a licence to a third party in appropriate circumstances, subject to the patentee receiving adequate compensation.

First Inventor to File

The principle that a patent may be granted to the first (inventor) to file a patent application for an invention – as opposed, for example, to the first-to-invent – is enshrined in the TPP:

Each Party shall provide that if an invention is made independently by more than one inventor, and separate applications claiming that invention are filed with, or for, the relevant authority of the Party, that Party shall grant the patent on the application that is patentable and that has the earliest filing date or, if applicable, priority date

I do not believe that this will require any changes in the law by any TPP participant.  The US seemed to think it had come up with some new formulation when it replaced the first-to-invent regime with first-inventor-to-file, under the America Invents Act – as though other countries might be granting patents to anyone who applies without regard to whether they had actually invented the claimed subject matter.  This is not true, of course.  The Australian law, for example, has always provided that a patent may only be validly granted to an inventor, or to a party with a legitimate claim of ownership leading back to an inventor.

Publication of Patent Applications and Office Files

Publication of patent applications at 18 months following the date of filing or, if priority is claimed, the earliest priority date, is enshrined in the TPP.

On the face of it, this provision would appear to end the era of non-publication of certain US patent applications.  While publication at 18 months has been the ‘default’ in the US for some time now, applicants still have the option of requesting non-publication of applications that have been filed in the US only, and do not claim any foreign priority in a country that requires publication after 18 months.

The text of the TPP does not appear to leave room for this distinction to continue.

The TPP also requires participating countries, following publication of an application, to make available information relating to the examination of the application, including at least:
  1. search and examination results, including details of, or information related to, relevant prior art searches;
  2. non-confidential communications from applicants; and
  3. patent and non-patent related literature citations submitted by applicants and relevant third parties.
This provision does not, unfortunately, go so far as to require an online file inspection facility such as the USPTO’s Public PAIR system, or IP Australia’s eDossier.  However, as a practical matter most national patent offices are moving towards electronic record-keeping and access in any case.  In the meantime, there will doubtless be some countries that continue to require requests for copies of documents to be made in the old-fashioned way!


To summarise the provisions of the TPP discussed in this part of the article, the most notable points are that the Agreement will result in:
  1. uniform implementation across participating countries of a number of IP-related treaties and conventions, including the UPOV Convention for the Protection of New Varieties of Plants which will require new legislation in New Zealand;
  2. the provision of a 12-month grace period across all of the participating countries; and
  3. uniform publication of patent applications, and associated documents held by the national patent offices of participating countries, at 18 months following an initial filing date.
Most of these provisions are uncontentious.  However, matters that are more closely bound to important public policy issues, such as health care – e.g. the grant of patent term extensions for pharmaceutical products, or data exclusivity for biologics – tend to generate more concern.  These will be the subject of Part 2 of this article.

Note: An earlier version of this article indicated that New Zealand does not currently provide protection for new plant varieties, whereas the correct position is that it does, but not in accordance with UPOC 91 as required under the TPP.  My thanks to Humphrey Foote for bringing this error to my attention in the comments below.


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