24 June 2019

Australian SMEs Show a Growing Preference for Smaller Patent Attorney Firms

Choose wisely... Back in February, I published data which indicated that Australian patent attorney firms within listed groups, and perhaps larger firms in general, appear to have been losing share in the market for Australian patent applications filings to smaller, privately-held firms.  In this article I will take a closer look at this trend, by focusing specifically on filings by Australian-resident applicants, breaking firm size and corporate structure down into more precise groups, and looking at the behaviour of small and medium sized enterprises (SMEs) in particular. 

When it comes to preparing and filing original patent applications for new inventions, Australian SMEs collectively are patent attorneys’ most significant clients, by far.  In 2017, SMEs filed as many original patent applications with the assistance of patent attorneys as all other categories of Australian applicants combined.  They are also the only category of Australian applicants that actually generated an increase in the number of original patent applications filed over the decade spanning 2008 to 2017.

In recent years, however, this important category of patent applicants has been exhibiting some clear trends in choice of patent attorney service providers.  In particular, as I will show in this article, Australian SMEs are increasingly choosing smaller service providers over larger ones and, since local attorney firms began to be owned by publicly-listed companies, privately-held firms over those within the listed groups.

09 June 2019

The Patent Office is Granting Time Extensions to Australia’s Grace Period for Filing After Self-Disclosure

Deadline The Australian patent law and regulations provide applicants with a 12-month ‘grace period’, enabling an application to be validly filed following an inadvertent, or intentional, act of self-disclosure of an invention.  As most readers will doubtless be aware, this is significant because in the absence of such provisions, any disclosure – such as publication or public use – of an invention before securing a priority date becomes prior art that can be used to invalidate patent claims on the basis of lack of novelty or lack of inventive step.  While there are a number of countries that provide a general period of grace of this kind, notably including the USA and Canada, the majority of countries do not.

Furthermore, most countries (Australia included) have provisions in their patent laws to permit time limits to be extended in appropriate circumstances, such as when an inadvertent error or omission has occurred, or when circumstances beyond someone’s control have prevented them from meeting a deadline.  Typically, however, grace periods cannot be extended beyond the legislated period (i.e. 12 months, in Australia’s case).  There are a number of ways to rationalise this restriction.  One approach is to observe that an inventor (or successor in title, such as an employer) is under no obligation to file a patent application at all and, until an application of some sort is filed, does not make themselves subject to any provisions of the patent system.  Thus, once a disclosure has occurred, the onus is entirely upon the prospective applicant to ensure that an application is filed before the expiry of any applicable grace period, given that there is no public record within the system of any relevant filing ‘deadline’ that could be extended.

Another approach is to consider that a grace period operates retrospectively, rather than prospectively.  That is, when applying the patent laws to an application, the effect of the grace period is to permit certain disclosures to be disregarded, so long as they occurred no more than 12 months prior to the actual filing date of the application.  This is in contrast, for example, to the filing of an initial priority application, which formally establishes a specific date 12 months in the future by which any further applications must be filed in order to obtain the benefit of the priority date.  Extending a grace period thus has the effect of increasing the period further back in time, as opposed to granting the applicant additional time to complete an act for which a specific time limit has already been established within the system.

Permitting extensions to grace periods is problematic for a number of reasons.  Firstly, it may leave no obvious trace of the fact that a patentee has been permitted to obtain a patent despite having made a public disclosure of the invention more than 12 months prior to filing an application.  A member of the public would need to dig into the details of the Patent Office files to discover exactly what additional period of grace has been allowed, and in what circumstances.  Secondly, due to the retrospective effect of a grace period extension, the applicant is effectively permitted to file an application later than should have been allowed, which is advantageous because a patent that is filed later also expires later than would otherwise be the case.  In priciple, however, the grant of an extension of time should do no more than place the applicant in the same position that they would have been in had they not missed the deadline in the first place, and no better.

Notwithstanding these issues, it has recently been brought to my attention that IP Australia is, in fact, granting extensions to the grace period.  I must confess that I had not believed such extensions to be possible (although, as I shall explain, there is a single published Patent Office decision from 2002 that suggests otherwise).  Indeed, as will become clear, I remain sceptical about the validity of extending the grace period, in the absence of any judicial consideration of the matter.

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