11 December 2016

Proposed IP Laws Amendments 2017: IP Australia Exposes Its Drafts

Exposed FilmIP Australia has published ‘exposure drafts’ of proposed new legislation and regulations, identified as the Intellectual Property Laws Amendment Bill 2017 and the Intellectual Property Laws Amendment Regulation 2017.  Written submissions with final comments on the exposure drafts are invited by 22 January 2017.  Late submissions will not be accepted!

Amendments are being proposed to the legislation covering all of the registered IP rights, i.e. the Patents Act 1990, the Trade Marks Act 1995, the Designs Act 2003, and the Plant Breeder’s Rights Act 1994 (a.k.a. the PBR Act), as well as associated regulations and related IP legislation in the Olympic Insignia Protection Act 1987 and the Copyright Act 1968. The main objectives of the amendments are to align procedures and terminology, as far as possible, among the different laws, and to streamline certain cumbersome, inefficient and/or outdated processes.  Draft Explanatory Memoranda (EM) have also been published, explaining the proposed amendments in detail.

Although many people (myself included) will doubtless have forgotten by now, IP Australia conducted a consultation on a number of proposals now reflected in this draft legislation back in early 2015.  Only 15 non-confidential submissions were received (it is not clear whether any confidential submissions were made, although the nature of the proposals was such that confidentiality is unlikely to have been a major issue for most people).

While the proposed changes are largely technical or administrative in nature, and it is therefore unsurprising that interest levels were low, there are nonetheless some fairly significant amendments in the draft legislation.  These include a major revamp of the general extension of time provisions in the Patents Act, changes to re-examination and third party examination processes, the replacement of a licensing regime with a new infringement defence to cover ‘intervening rights’ arising when a patent or application is restored, the introduction of enhanced damages for flagrant examples of unjustified threats of patent infringement action, and provision for computerised decision-making.

More excitingly, it may soon be possible to submit colour drawings with patent applications!

If you have read this far without switching off, then this is stuff you probably need to know about, and maybe even make a submission.  In all, the draft amendment bill includes 596 items, while the draft amendment regulation includes 481 items.  Obviously I am not going to try to cover all of these in detail (that is the purpose of the EMs, after all).  My aim is to provide a reasonably concise summary of the major proposals as they specifically relate to patents, in the hope that this may be of assistance to readers with interests in this specific area.

‘Aligning and Streamlining the IP System’

As already noted, the overarching purpose of the proposed legislation is to create greater alignment between the management of different IP rights, and to reduce inefficiencies within the system.  IP Australia is concerned, in particular, about unnecessary differences in the administrative procedures and rules that apply to different IP rights (i.e. patents, trade marks, registered designs and PBRs), and about delays that may occur in completing certain processes. 

A typical example of differences in procedures is renewal, or maintenance, of rights.  All registered IP rights in Australia require the periodic payment of maintenance fees (for patents this occurs annually, commencing at the fourth anniversary of filing, for trade marks it is every ten years, for registered designs it is at the fifth anniversary, and for PBRs it is annually measured from the date of grant).  While the different maintenance periods reflect the nature of the rights, and will therefore not be aligned, the various Acts use different terminology to describe the administrative procedures and status of rights, which is confusing.  Furthermore, while patent, trade mark and registered design owners may pay maintenance fees up to six months after the due date (with payment of late fees), no such ‘grace period’ exists for PBRs.

As the draft EM quite rightly states, ensuring that similar processes are used for the different IP rights will make the IP system simpler and assist businesses dealing with more than one right.  Speaking from experience, even expert IP practitioners have difficulty remembering which procedures, forms, fees and terminology apply to which rights!

Delays can arise as a result of rights holders failing to act promptly (e.g. in applying for extensions of time, after a need to do so has been recognised), or as a result of complex, burdensome and/or unnecessary administrative procedures (e.g. opposition proceedings).  A number of proposed amendments therefore address these types of delays.

Other proposed amendments would extend protections against unjustified threats of infringement action to cover PBRs, and provide for the award of additional damages in flagrant cases of unjustified infringement threats.

Additionally, there are many proposed amendments to enable greater use of electronic communications and online systems, simplify procedures, and to correct various minor errors and inconsistencies in Australia’s IP legislation.

Renewals and Terminology

Part 1 of the proposed amendments deals with renewals.  (I will generally use the alternative terminology ‘maintenance’ because, despite IP Australia’s efforts to align terminology, there remains a distinction in the Patents Act between ‘continuation’ fees paid prior to grant, and ‘renewal’ fees paid after grant of a patent.)

In relation to patents, the principal effect of the provisions in Part 1 will be to provide clarity that when a maintenance fee is paid during the six month ‘grace period’ the application/patent does not lapse/cease on the anniversary (and is subsequently restored), but rather remains continuously in-force.

Examination, Re-examination and Reconsideration

Part 2 of the proposed amendments primarily addresses re-examination.  As the draft EM notes, all of the Australian systems of registered rights provide for official review of accepted applications, or formally approved rights.  However, the various review mechanisms are inconsistent and potentially problematic with respect to the procedural steps, transparency, and fees.  The draft EM states that ‘unsuitable processes and unnecessary differences between the IP rights create inefficiencies for users of these mechanisms and increase administration costs for IP Australia.’

In relation to patents, the amendments would provide for re-examination procedures that are more consistent with initial examination processes, and with any associated court proceedings.  Most notably, re-examination of both standard and innovation patents would be limited to a six-month period commencing on the date of issue of a first re-examination report.  For innovation patents, the amendments would also resolve a potential conflict between re-examination and opposition proceedings, such that an opposition would take precedence, and re-examination could not commence or continue while an opposition is pending.

Additionally, Part 11 of the proposed amendments restructures section 44 of the Patents Act (which deals with requests for examination of standard patent applications), and in particular would permit third parties to request examination of an application.  Under the current legislation, a third party may ask the Commissioner to direct the applicant to request examination, which is a somewhat indirect route to initiate examination.

As is currently the case for innovation patents, the third-party examination request practice would require the requester to pay half of the examination fee, while the applicant would then need to pay the other half of the fee, otherwise the application would lapse.

Extensions of Time

In Part 3, major changes are proposed to the general extension of time provisions in section 223 of the Patents Act, and to related sections and regulations.

Firstly, the existing section 223 – which covers all grounds on which extensions may be granted and a number of associated provisions, and which currently comprises 14 subsections – would be broken up into eight sections, numbered 223 and 223A to 223H.  ‘New’ section 223 would retain the provisions of existing subsection 223(1), dealing with the grant of extensions of time required as a result of official errors and omissions, e.g. in the Australian Patent Office or in the International Bureau of the World Intellectual Property Organization (WIPO).

New sections 223A, 223B and 223C would address extensions required due to unintentional errors or omissions by applicants and/or their agents or attorneys, or circumstances beyond the control of the applicant, and would generally correspond with the existing subsection 223(2).  Section 223A would deal with the requirements for a valid application for an extension, while sections 223B and 223C, respectively, would address the processing of applications for periods of up to three months (inclusive), and greater than three months, respectively.

Currently, there are no explicit time limits on applying for an extension of time under s 223(2), however the Commissioner has a discretion as to whether or not to grant an extension, and promptness and diligence of the applicant in taking action have been established as relevant factors in the exercise of that discretion.  In contrast, the proposed provisions would effectively eliminate any discretion to refuse an extension where the Commissioner is satisfied, on the balance of probabilities, that the extension is indeed required as a result of an error or omission by the applicant or their agent, or circumstances beyond the control of the applicant, as the case may be (see proposed new sections 223B and 223C, subsections (8) and (9)).  Instead, an explicit deadline would apply, being either two months from the discovery of the error or omission, or two months from the circumstances beyond the applicant’s control cease to exist (proposed subregulation 22.11(1)).

The principal difference in the procedures for extensions of up to three months (‘short extensions’), and more than three months (‘longer extensions’), is in the manner in which any objections from third parties are treated.  Presently, short extensions are not advertised in the Official Journal, and cannot be opposed.  According to the proposed provisions:
  1. an application for a short extensions will be subject to an automated formalities check, and (assuming it passes) automatically published without human review;
  2. an objection to the short extension could be filed within one month of publication; and
  3. any objection would be dealt with via a streamlined process of written submissions and possible hearing. 
An objection to an extension of more than three months would continue to be handled via human evaluation and the more formal opposition proceedings (as is currently the case).

Notably, the automated check on short extensions, in combination with proposed provisions for computerised decision-making, would enable an application for a short extension to be made via an online form, immediately published, and automatically granted in the absence of any objections.

New sections 223D, 223F and 223G would substantially implement the provisions of existing subsections 223(3) (extensions may be granted either before or after the relevant deadline expires), 223(7) (application/patent treated as restored and 223(8) (provisional application treated as not having lapsed).  Additionally, subsections 223F(2) and 223G(2), along with proposed section 223E, provide for notification and/or publication of decisions.

The amendments would repeal subsection 223(2A), which currently provides for an extension of time where a deadline is missed despite the applicant having taken ‘due care’.  This provision was originally introduced to ensure that the Australian law complies with Article 12 of the Patent Law Treaty and Regulation 49.6 of the Patent Cooperation Treaty.  IP Australia considers that removal of the Commissioner’s discretion to refuse an extension, when all of the conditions specified in the proposed legislation are satisfied, meets Australia’s treaty obligations, and that the separate ‘despite due care’ extension would therefore no longer be required.

Notably, the consultation paper favoured a further option to limit extensions of time to a maximum of 12 months.  This proposal was not well received by the public submissions that addressed it, and is not reflected in the proposed legislation.

‘Intervening Rights’ Provisions

Grant of an extension of time frequently results in the restoration of a right (e.g. a patent) that had previously expired.  During this intervening period, third parties may have relied upon the official record showing that the right had expired, and commenced activities that constitute infringement once the right is restored.

Currently, under subsection 223(9) and subregulation 22.21(2), a person who took definite steps to exploit an invention in the period between a patent application lapsing or patent ceasing and its later restoration must seek a license from the Commissioner.  The applicant/patentee may oppose the granting of the licence.  Furthermore, subsection 223(10) provides that an applicant or patentee cannot bring court proceedings for infringements that occur during a period in which the rights have officially expired.

Proposed section 223H would effectively replace the requirement to seek a license with automatic protection that amounts to a personal defence to infringement.  Unlike the existing provisions, the protection would be triggered in any case where the relevant conduct commences during the period between expiry and restoration of the right, regardless of whether or not the expiry was a causal factor in the decision to exploit the invention.  There would no longer be any basis for opposition, and the question of whether or not the protection provided by section 223H applies would presumably be resolved between the parties or, if necessary, in the course of infringement proceedings.

It would be possible to transfer (‘dispose of’) the protection in its entirety to another person, such as a successor in business.

Unjustified Threats of Infringement

Part 15 of the proposed amendments deals with ‘unjustified threats’ provisions.  In particular, its aim is to align the protections provided across the various IP rights legislation for businesses facing an unjustified or groundless threat of infringement proceedings from another party.

In particular, this would involve adding protections to the PBR legislation, which does not currently include ‘unjustified threats’ provisions, and providing for the award of additional damages in cases of particularly flagrant threats across all of the relevant legislation, including the Patents Act.

Further Streamlining and Simplification

The proposed amendments also address a range of other outdated, inconsistent and/or inefficient aspects of the existing Patents Act.

For example, various amendments are proposed in Part 4 to allow IP Australia greater flexibility in the manner in which decisions and other matters are communicated.  These are generally intended to permit greater use of electronic notifications, where existing requirements may require that communications be ‘in writing’.

Other amendments in Part 5 would allow the Commissioner to determine the manner in which documents, including evidence, may be filed, how fees may be paid, and to permit lower fees to be charged if ‘preferred means’ are used to file documents and pay fees.  In the short term, this would facilitate greater use of online filing and payment mechanisms.  In the longer term, it would enable preferred means of filing and payment to be updated without the need for further legislative amendment.

The Patents Act currently requires signatures in more circumstances than the other IP rights, including those in which there is very low risk of unauthorised transactions taking place.  It is therefore proposed in Part 8 to remove certain signature requirements that are now considered unnecessary.

As noted above, in the discussion of short extensions of time, there are further proposed amendments in Part 9 to permit ‘computerised decision-making’ for matters in which little or no human judgment is required.  Under the proposals, the range of decisions subject to automation would be listed in a formal legislative instrument.  IP Australia anticipates that further public consultation would be conducted prior to making of the legislative instrument, so stakeholders would have an opportunity to comment on the suitability of proposed decisions for computerised processing.  The amendments to the Patents Act would also provide for IP Australia to ‘remake’ a decision in the event that the computerised decision were incorrect.

Proposed amendments in Part 12 would remove the various formalities requirements for patent applications from the Regulations, and consolidate them in a separate instrument made by the Commissioner of Patents.  This instrument would be easier to update in the case of changing requirements and capabilities.  In particular, it is envisaged that one early change would be to allow the submission of colour drawings in patent applications.

Parts 19 and 20 are concerned with the regulation of patent and trade marks attorneys, and would provide for the disclosure and publication of certain personal information of registered attorneys, and timeframes for the prosecution of offences committed by incorporated attorneys, respectively.

Conclusion – Don’t Forget the Deadline!

As I stated at the outset, there is a hard deadline of 22 January 2017 for any submissions on the proposed legislation.  My guess is that IP Australia’s agenda will be to push this on to Parliament as early as possible in the new year, considering that some of the amendments relate to the new trans-Tasman patent attorney regime, which is expected to commence on 24 February 2017.

Written submissions should be sent to consultation@ipaustralia.gov.au, and are requested in Microsoft Word or RTF format (an additional PDF version may also be attached).  The IP Australia contact officer is Lisa Bailey, who may be contacted on (02) 6222 3695 or by email at lisa.bailey@ipaustralia.gov.au


Post a Comment

Copyright © 2014
Creative Commons License
The Patentology Blog by Dr Mark A Summerfield is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Australia License.