18 March 2011

Patent Reform Exposed Part III – Provisional Specifications

In this article on IP Australia’s proposed reforms to the Patents Act 1990 we look at a change to subsection 40(1) of the Act, which relates to the level of disclosure required in a specification associated with a provisional patent application.

We presume that most readers ‘know’ that the purpose of a provisional application is to secure a priority date without having to meet the full burden of disclosure and formalities associated with a complete (nonprovisional) application.

Or is it?  It is legitimate to ask – what is the value of a provisional specification that provides less that a full and detailed disclosure of the invention, including at least one working embodiment?


The short answer to the above question is: not much value at all.  Even if it is the case that the Australian law is somewhat permissive regarding the level of disclosure required to establish priority from a provisional application, no other jurisdiction is remotely interested in according any special status to Australian provisional specifications.  Thus, for example, when an Australian filing is used as the basis for a priority claim in the US, or Europe, or Japan, or any other country (directly, or via an International Application under the Patent Cooperation Treaty), the level of disclosure required to sustain the priority date is no different whether the Australian application was provisional or complete.

It is for this reason, at least in large part, that IP Australia wishes to repeal the existing subsection 40(1) of the Act, which states simply that:

A provisional specification must describe the invention.

The proposed replacement requirement is that:

A provisional specification must disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art.

This is IP Australia’s way of stating that the specification must provide an ‘enabling disclosure’ (a topic on which we will have more to say in our next article in this series).  The reasoning is that an Australian patent application (provisional or otherwise) that meets this standard should provide a sound basis  for a priority claim in a subsequent application filed anywhere in the world.

The second reason for this proposed reform put forward in the draft Explanatory Memorandum is that ‘the lower standard [of disclosure required under subsection 40(1)] allows an applicant to use a provisional application to deter competitors before the applicant has fully realised their invention’ or ‘[p]ut simply, an applicant may be able to ward off other innovators based on a rough or imprecise disclosure. The risk is that the anti-competitive effects of patent monopolies are not sufficiently justified where there is a low level of disclosure.’  This reasoning is drawn from the 2000 report of the Intellectual Property and Competition Review Committee (IPCRC), Review of intellectual property legislation under the Competition Principles Agreement.


With all due respect to the architects of this proposed amendment, we would suggest that it largely misses its mark.

There are at least three problems with the proposal.  Firstly, subsection 40(1) performs no actual meaningful function, either in its present form, or as proposed to be amended.  Secondly, section 40 is irrelevant to the question of the level of disclosure required to support a priority claim.  Finally, to the extent that the concerns of the Competition Review Committee are justified, the proposed amendment will do nothing to address this issue.
Subsection 40(1) Performs No Meaningful Function
Section 40 of the Patents Act 1990 is, generally, about the ‘internal’ requirements for validity of a patent specification.  It includes provisions relating to the level and content of disclosure required, the clarity and conciseness of the claims, the need for the claims to be based upon the invention that is disclosed by the description, and the requirement for ‘unity of invention’, i.e. that one patent should correspond with one invention only.

All of these requirements are considered by a Patent Office examiner during examination of a patent application.  All except for the ‘unity’ requirement can form a basis for revocation of a patent before a court.

Subsection 40(1), however, is never applied – provisional applications are not examined, and they expire after 12 months (if not withdrawn earlier) having never been granted or published.  They are not subject to revocation by a court.

If an applicant wishes to file a ‘provisional application’ consisting of a completed copy of last Saturday’s Times cryptic crossword puzzle (an achievement far greater than most inventions), there is nothing stopping them from doing so.  So long as the form is filled in correctly, and the fee is paid, the application will be received, allocated a number, and placed on file. Nobody will issue an examination report, or any other document, advising the applicant that the provisional application is invalid due to a failure to comply with subsection 40(1).

The subsection does nothing.  We would simply repeal it once and for all.  The only practical effect it has ever had is to lead applicants to believe – falsely – that the level of disclosure required of a provisional application is lower than is actually the case.
Section 40 is Irrelevant to the Priority Date Issue
As pointed out above, section 40 is about ‘internal’ issues.  The question of the entitlement of a claim of a complete application to the benefit of an earlier priority date is determined by subsection 43(2) of the Act, in concert with Regulation 3.12.

In particular, subregulation 3.12(1)(b) provides that:

if the claim is fairly based on matter disclosed in 1 or more priority documents, the date of filing the priority document in which the matter was first disclosed;

Subregulation 3.12(2)(a) then relevantly provides that:

if the application that relates to the specification containing the claim is a complete application – a provisional application that is associated with that complete application … is a priority document

So the requirement for priority is that the claim of the complete specification must be ‘fairly based’ on the matter disclosed in the provisional specification.  This is so regardless of anything that might (or might not) be required of a provisional specification under section 40.

The draft Explanatory Memorandum states that:

Currently a provisional application need only ‘describe’ the invention generally in its rough state, and does not need to ‘enter into all the minute details as to the manner in which the invention is to be carried out’.

The quoted test is from the Full Federal Court appeal decision in Anaesthetic Supplies Pty Limited v Rescare Limited [1994] FCA 1065 (at [83], and it should not be forgotten that this was case in which the court found that the claims of the complete application were not supported in the provisional, at [96]).  Any lesser requirement upon a provisional specification, however, appears to have been developed by the courts by way of giving effect to the purpose of a provisional application, i.e. to enable an applicant to secure an early priority date while they test or assess the commercial viability of their invention and decide whether or not to pursue patent protection in Australia and/or overseas.

Regulation 3.12 draws no distinction regarding the meaning of the term ‘fairly based’ between Australian provisional specifications and other forms of ‘priority document’.  It therefore seems to us that any amendment to subsection 40(1) will not address the issue of lower standards for provisional specifications, so long as the courts remain free to apply a ‘purposive construction’ of the Act in relation to provisional applications.
Effect of Provisional Applications on Competition
It is no doubt true that applicants may sometimes file provisional applications as a form of ‘bluff’, with the intention of creating uncertainty for competitors as to the scope of any potentially-pending patent rights.

However, there is little that can be done about this, and certainly not by amendment of subsection 40(1) alone.  Provisional applications are not published. 

In Australia, the title, filing date, applicant name, and inventor(s) names (if provided) are publicly available shortly after filing the application, but nothing more.  No matter what the content of subsection 40(1), there is no way that a competitor can determine whether the specification filed comprises a full and detailed description of an invention corresponding with the title, or a copy of last Saturday’s Times cryptic crossword puzzle.  The right of the applicant to maintain confidentiality of the contents of the application until 18 months from the priority date is enshrined in international conventions.

Unless IP Australia proposes to subject all provisional applications to a substantive technical review of the contents of the specification before allocating an application number and filing date, we cannot see there being any change in potentially ‘anticompetitive’ behaviours corresponding with the concerns expressed by the IPCRC.
The verdict from us on this proposed reform is a big thumbs down.  The proposed amendment does not actually address either of the issues identified by IP Australia.  The onus will remain with the applicant to ensure that a provisional specification includes all of the detail necessary to support a priority claim in foreign jurisdictions.  The amendment will do nothing to curtail any abuse of the provisional application system that may be occurring (although we are unaware of any credible evidence to suggest that this is a real problem).


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