Modified Examination – What It Is and Why (not) to Use It

The Australian Patents Act 1990 provides for an ‘alternative’ mode of examination of a standard patent application, known as ‘modified examination’.  This procedure is rarely used – and for good reason, as we shall explain – however the Kimberly-Clark decision, on which we reported earlier this week, reminded us that there are circumstances in which an applicant might consider requesting modified examination.

In particular, in appropriate cases the modified examination procedure may be used to obtain an Australian patent with claims that do not satisfy the usual requirement of being directed to one invention only, thus avoiding the need to file one or more divisional applications.

To understand modified examination, it is useful first to take a look at the process of normal examination.

NORMAL EXAMINATION

The criteria to be applied by the examiner during normal examination are set out in section 45 of the Patents Act 1990.  During normal examination, the application is assessed for compliance with:

1. paragraph 18(1)(a), i.e. whether the claims comprise patentable subject matter;
2. the requirements for novelty and inventive step;
3. the requirements of section 40 of the Act; and
4. various other prescribed matters, of a mostly technical nature, as set out in regulation 3.18(2).

Section 40 sets out the various requirements of the patent specification, including the ‘prohibition’ on claiming multiple inventions, which was at issue in the Kimberly-Clark case.  In relation to a standard patent application, section 40 requires that:

1. the specification must provide a full description of the invention, including the best method of performing the invention that is known to the inventor(s) (encompassing ‘best mode’ and ‘sufficiency’ requirements);
2. the specification must include at least one claim defining the invention;
3. the claims must be clear, succinct and fairly based on the description; and
4. the claims must relate to one invention only (the ‘unity’ requirement).

If the examiner considers that any of these requirements is not satisfied, an objection will be raised, to which the applicant may respond with reasoned argument and/or allowable amendments.

Once a patent is granted, failure to comply with one of the section 40 requirements (with the exception of the unity criterion, as shown by the Kimberly-Clark decision) is a potential ground of revocation under section 138 of the Act.  So, while examiners, applicants – and even patent attorneys – are not infallible, it is certainly beneficial for an application to be subjected to examination of the section 40 requirements, and to amend, if necessary, to ensure compliance.

MODIFIED EXAMINATION

An applicant can elect modified examination based upon a corresponding granted patent in any of the following countries (section 47 of the Patents Act, and regulation 3.21):

1. a member state of the European Patent Convention;
2. Canada;
3. New Zealand; or
4. the United States of America.

The specification of the Australian application must be brought into exact conformity with the granted foreign patent (aside from minor permissible differences).  Examination then proceeds under section 48, which requires compliance with all of the criteria of normal examination except for the section 40 requirements.

Disadvantages of modified examination

The primary disadvantage of electing modified examination is that there is no opportunity to amend the specification to address any deficiency in respect of the section 40 requirements, or indeed any other unique aspects of Australian patent law and practice.  Since laws relating to best mode, written description, sufficiency, fair basis, enablement, claim interpretation, and so forth, vary amongst the relevant national laws, a specification that is appropriate to issue as a US patent, for example, may not be in the best possible condition for grant in Australia.

Contrary to what you might expect from an examination process ‘based on’ a granted foreign patent, there is generally no cost saving in requesting modified examination.  In many cases, the requirement to amend the Australian specification to bring it into conformity with the granted foreign specification will actually result in increased costs, once attorney fees are taken into account.

Advantages of modified examination

The principal circumstance in which modified examination may be beneficial is when the granted foreign patent includes claims that would not satisfy the unity of invention requirement in Australia.  Most commonly, this will be a US patent, because the test for unity employed by the USPTO is different from that used in Australia.  It is not uncommon for a US patent to be granted having a number of independent claims directed to solving the same technical problem, but that do not share a common set of novel and inventive features, as would typically be required for unity in Australia.

In such cases, requesting modified examination in Australia avoids the need to file divisional applications directed to the different claim groups, and thus saves time, cost, and the added complexity of monitoring managing a larger portfolio of related patents.

USING THE MODIFIED EXAMINATION PROCEDURE

Modified examination is best employed as part of a planned strategy, and not in an ad hoc manner just because it is there.

It is presently possible to delay requesting examination in Australian for as long as five years from the filing date, which should provide sufficient time to secure the grant of a corresponding US patent.  With appropriate care – and preferably collaboration between Australian and US attorneys – it is generally possible to prepare a patent specification that reasonably satisfies the requirements of both jurisdictions.

In cases where an applicant wishes to protect multiple embodiments of an invention, via separate independent claims in a single application, such claims may satisfy the US unity requirements, but not the corresponding test in Australia.  By obtaining a granted US patent first, and taking steps to ensure that the US specification is also suitable for grant in Australia, the applicant can use modified examination to avoid the need to file divisional applications in Australia to protect all of the additional embodiments.