05 April 2014

Expected Increase in Applications Entering Examination

Right DirectionIP Australia has announced that, from this month, it expects to increase the number of patent applications being sent to examination. 

This means that if you have an application pending at the Australian Patent Office – and particularly if it was filed more than four years ago (including national phase applications based on PCT applications originally filed that long ago) – the likelihood that you will be directed to request examination, assuming you have not already done so, is on the rise.

For those who are unfamiliar with the Australian patent examination process, we have a ‘voluntary’ examination request system.  Filing of an application, and requesting examination, are separate steps, each of which requires the payment of a specified fee.  Currently the fee for filing a standard patent application is A$370, while the normal fee to request examination is A$470 (reduced to A$300 if IP Australia has previously conducted an international search on an originating PCT application).

The system is not entirely voluntary, however, and one circumstance in which an applicant can be compelled to request examination is if the Patent Office sends a notice (known as a ‘direction’) requiring an examination request to be filed.  Following a period during which fewer of these directions have been sent, IP Australia is expecting to issue significantly more of them from now on.

Time Limits for Requesting Examination In Australia

An applicant may elect to request examination at any time, including at filing.  However, there are two mechanisms which ensure that unexamined applications do not remain pending indefinitely:
  1. the Commissioner of Patents can issue a direction for the applicant to request examination of an application, which sets a two month time limit within which examination must be requested; and
  2. in any case, examination must be requested no later than five years after filing of the application.
If either of the above time limits are not complied with, the application lapses.  Responding promptly to an examination direction is particularly important.  Two months is not a long time, particularly for overseas applicants who may receive notification, and forward instructions, via an Australian agent and their own external patent counsel.  Up until commencement of the Raising the Bar patent reforms in April 2013, the period for requesting examination in response to a direction was six months.

Use of the Examination Direction System

Applicants rarely come up against the five year deadline, because the Patent Office generally issues a direction well before that time arrives.  The directions system allows the Office to maintain a steady queue of applications awaiting examination, and thus to control the workload of its examiners.  If there is a natural reduction in the length of this queue, more examination directions are issued.  On the other hand, if the queue becomes longer, then fewer directions may be issued for a period of time.

In the lead up to commencement of the Raising the Bar reforms, there were significant spikes in the number of new applications filed (with examination requests), as well as of voluntary requests for examination of existing applications.  As a result, IP Australia has not needed to issue directions to request examination in order to maintain a healthy queue of examination work.  It has continued to do so only in the case of applications nearing the five year deadline – although applicants are warned that it is ultimately their responsibility to monitor the relevant dates, and that they should not rely on receiving a direction before requesting examination.

However, with few examination directions being issued, more applications are now nearing the five year time limit.  Additionally, it seems that Australian patent examiners have been making good progress on the backlog of work resulting from the spike in applications and examination requests last year.  As a result, there will be an initial jump in directions being issued this month, followed by an ongoing increase as examiners continue to catch up on the queue of pending examinations.

Conclusion – How Long Should Examination Be Delayed?

Ultimately we should expect to start seeing earlier directions, to keep up the rate of applications entering the examination queue.  IP Australia has an ongoing objective of reducing the pendency of Australian patent applications, because large numbers of pending applications create uncertainty about the scope of future patent rights that may be granted. I can attest to the fact that this is a genuine concern – one of the hardest tasks as a patent attorney is to advise on the risk of infringement in relation to a pending patent application which could still be amended prior to grant. 

On the other hand, applicants have a legitimate interest in not being forced to finalise their patent claims so early in the process that the true commercial value of an invention, and the key features providing that value, have not been identified and tested in the marketplace (or, in the case of pharmaceutical inventions for example, through formal trials).

A reasonable compromise should therefore be struck between these competing interests.  It is my opinion that an ‘ideal’ period for issuing a direction to request examination is between three and three-and-a-half years from filing, which is consistent with fixed examination request deadlines set in other jurisdictions such as Europe and China.

In the longer term, I think that it may be appropriate to look at reducing the existing five year deadline back to a fixed period based upon these types of policy considerations, and eliminating the examination directions practice altogether.

In the meantime, if you have applications pending in Australia, keep an eye out for your examination directions!

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