Patent Reform Exposed Part VII – ‘Search to Sealing, and Beyond…’

In previous articles of this series, we have looked in detail at a number of the main proposals in the Draft Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 which would change the substantive requirements for validity of a patent.  In this article, we look at some of the proposals that would change practices, and some of the standards applied, within the Patent Office. 

While some such proposals may affect whether or not a patent is granted, none have any impact on the validity of a granted patent.  The objective is essentially to raise the standards of examination in order to reduce the number of patents actually granted with invalid claims.  As many readers will no doubt be aware, there is no ‘presumption of validity’ of a granted patent in Australia.  On the contrary, section 20 of the Patents Act 1990  expressly disavows any such presumption, and makes clear that the work of the Patent Office is conducted on an ‘all care, but no responsibility’ basis.

The proposed changes discussed below are:

1. provision for preliminary search and opinion;
2. examination of utility;
3. permitting examiners to consider evidence of ‘prior use’;
4. lowering the barrier to refusal of an application; and
5. changes to amendment provisions.

PRELIMINARY SEARCH AND OPINION

Proposed new section 43A, subsection (1) provides that:

If a complete application for a standard patent has been made, the Commissioner may conduct a preliminary search and opinion in relation to the patent request and specification relating to the application.

Notably, this is a permissive provision, i.e. the Commissioner may, but is not obliged to, conduct a search and opinion.

There are no details in the draft Bill as to how this would work – subsection (2) provides that the search and opinion will ‘be conducted in accordance with the Regulations’.  However, according to the Draft Explanatory Memorandum the intention is that a preliminary search and opinion might be provided in cases in which it appears likely that the applicant would not have the benefit of any other early indication of patentability.  Generally, this would be Australian-originating applications for which no corresponding foreign applications or international application under the Patent Cooperation Treaty (PCT) has been filed. 

It is intended that the Australian preliminary search and opinion would be similar to an international search and preliminary examination conducted under the PCT.  The search would be conducted before the application is published (i.e. within 18 months of the priority date), and the search report and opinion would be published along with the specification.

We hope that this goes ahead.  We are looking forward to assisting our clients to obtain, for free, a service for which the Australian Patent Office presently charges A$1900.00 (the current International Search fee payable upon filing a PCT application in Australia)!  Of course, if the preliminary search is not free – or at least very much cheaper than A$1900.00 – then it will not be used.  By way of comparison, the current fee payable when requesting examination of an Australian patent application is A$450.00.

EXAMINATION OF UTILITY

Section 45, subsection (1), of the Patents Act 1990 currently requires the Commissioner to examine the claims of a patent application to determine whether they define patentable subject matter (i.e. ‘manner of manufacture’), are novel, and involve an inventive step, over the prior art.  However, the claims are not examined to ensure that they define something ‘useful’.

Under the proposed reforms, lack of utility would become a ground for refusal of a patent application.

Clearly, it may be difficult for an examiner to form an opinion as to whether or not a claimed invention is useful.  It is certainly possible for a patent specification to describe something that appears plausible on its face, but which could simply not be made to work in practice.  In such cases, examiners are unlikely to be in a position to refuse an application for lack of utility.

It is also questionable whether applications should be refused for violating ‘laws of nature’, e.g. ‘inventions’ purporting to be perpetual motion machines or faster-than-light communications systems.  If an inventor claims to have proven Einstein wrong, and finds a practical application of a new theory, the improbability of this claim should not be an automatic bar to the grant of a patent.

In many cases, the granting of patents for non-functional inventions is harmless, anyway.  If something cannot be made to work, then it cannot infringe the patent, and certainly cannot result in any commercial damage to the inventor or profit to the infringer!  However, as discussed in Part II of this series of articles, there are circumstances in which a meaningful objection may be based upon the absence of a ‘specific, substantial and credible use’ for the invention on the face of the specification.  In particular, including compliance with the expanded ‘usefulness’ definition as a requirement for acceptance of an application will, for example, empower examiners to reject overly-broad claims directed to genetic materials on this basis.

PRIOR PUBLIC USE

The ‘prior art base’ for assessing novelty and obviousness includes all publications and acts, anywhere in the world, which result in relevant information being made available to the public.  However, the current subsection 45(1A) limits the material available for consideration during examination to prior publications only.

As the Draft Explanatory Memorandum states:

Historically, this approach made sense because information about prior use was not easily accessible by examiners.  However, with the advent of the internet, information of prior use is now more readily available.

Additionally, section 27 provides for third parties to provide information to the Commissioner that is relevant to the validity of a standard patent application.  Presently, however, any such information cannot be applied during examination insofar as it relates to prior use, no matter how persuasive it may be.

It is therefore proposed to repeal subsection 45(1A).  This will not require examiners to conduct specific searches or other investigations into possible prior use, but it will make it possible for such information to be considered in cases where an examiner is aware of relevant prior use, by whatever means. 

‘STANDARD OF PROOF’ FOR ACCEPTANCE OF PATENT APPLICATIONS

Once upon a time, patent applicants were afforded the ‘benefit of the doubt’ across all available grounds for refusal of a patent application.  For the Commissioner to refuse to grant a patent, it had to be ‘practically certain’ or ‘clear’ that the patent would be invalid.  The ‘mopping up’ of invalid patents was then to be left to the courts, typically when the patentee attempted to enforce the patent rights.

No wonder, then, that Australian patents do not enjoy a presumption of validity!

This is no longer the case.  Paragraph 1(a) of section 49 of the Act requires the Commissioner to be ‘satisfied’ that the claims define novel and inventive subject matter before accepting an application.  In practice, this equates to the civil standard of ‘balance of probabilities’.  However, a distinction is drawn, in paragraph 49(1)(b), in relation to other grounds of refusal, to which the ‘benefit of the doubt’ standard still applies.

IP Australia is proposing that section 49 be amended so that the ‘balance of probabilities’ standard will apply to all grounds of refusal.  For some reason, the term ‘satisfied’ currently used in subsection 49(1)(a) is to be replaced with ‘reasonably satisfied’.  IP Australia seems to think that this will not alter the meaning – but then, why change the wording?

Associated amendments are proposed to section 60, section 100A, section 101, section 101E, section 101J and section 101N, so as to apply the same standards to examination of innovation patents, to patent oppositions and to re-examination proceedings.

AMENDMENTS

Currently, section 102 of the Act prohibits any amendment being made to a patent specification that would result in subject matter being claimed which was not disclosed in the specification as filed.  It is therefore permissible, for example, to add new material to the description of a patent specification at any time – including after grant – so long as this new matter is not claimed.

However, the boundary between merely ‘adding’ and effectively ‘claiming’ new matter may not be clear.  For example, the addition of further exemplary embodiments of an invention may provide support for claims that were overly broad based on the original disclosure.  Yet, if no amendment is made to the claims, the current requirements of section 102 will normally be satisfied.

Furthermore, in Pfizer Overseas Pharmaceuticals v Eli Lilly [2005] FCAFC 224, the Full Bench of the Federal Court of Australia found that an invention need only be fully described at the date of grant, making it possible for an applicant to file an inadequate description initially, and then subsequently amend in order to meet the full description requirements prior to grant.

This is clearly silly, and IP Australia is therefore proposing that section 102 be amended to prohibit the addition of any new matter to a patent specification after filing. 

There are, additionally, currently some differences between the amendments that may be considered by the Commissioner and those that may be considered by a court, and the rules regarding allowable and non-allowable amendments are confusingly divided between the Act and the Patents Regulations 1991.  IP Australia is therefore proposing to clean up these inconsistencies.

THE VERDICT

Readers of some of our previous articles in this series may be surprised to discover that we are supportive of all of these proposals, and have no substantial issued with the proposed manner of their implementation.  This suite of changes will bring greater clarity, certainty and consistency to the processes of examination, opposition, grant and amendment of applications and patents.

The one further change that we would like to see is the introduction of some additional benefit to the patentee after being subject to this more stringent process.  While it is perhaps unreasonable to suggest that a patent should be presumed valid in view of prior art that was not considered during examination or opposition, it seems equally unreasonable that a patent should be subject to repeated attacks on the basis of the same grounds and prior art in multiple forums, if the standard of proof is identical in each case. 

It might therefore be worth considering whether a higher burden of proof should apply when a third party seeks to invalidate a patent – through opposition, re-examination or revocation proceedings – on the basis of grounds identical with those already considered and overcome during earlier proceedings.

Tags: Amendments, Australia, Examination, Law reform, Opposition, Patent law, Raising the Bar