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.

Grace Period Provisions

The general 12-month grace period is established by paragraph 24(1)(a) of the Australian Patents Act 1990, which provides that:

(1)  For the purpose of deciding whether an invention is novel or involves an inventive step or an innovative step, the person making the decision must disregard:
        (a)  any information made publicly available in the prescribed circumstances, by or with the consent of the nominated person or patentee, or the predecessor in title of the nominated person or patentee …
but only if a complete application for the invention is made within the prescribed period.

Regulation 2.2C of the Patents Regulations 1991 defines the relevant ‘prescribed circumstances’ (essentially, any circumstance not otherwise provided for specifically), and the ‘prescribed period’, which is ‘12 months from the day the information was made publicly available.’

Extension of Time Provisions

Section 223 provides that, in a variety of specified circumstances, the time for doing a ‘relevant act’ may be extended.  The meaning of ‘relevant act’ is defined in subsection 223(11), as follows:

relevant act means an action (other than a prescribed action) in relation to a patent, a patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications.

The ‘prescribed actions’, that cannot be extended under section 223 are defined in subregulation 22.11(4).  These do not include filing an application in time to obtain the benefit of the grace period, however this does not mean that this is a time limit that can be extended.  The purpose of the ‘prescribed actions’ is to exclude specifically certain acts that would (or, at least, might) have been ‘relevant acts’, but for their prescription.  The question still remains as to whether filing an application within the grace period is a relevant act at all.  I harbour significant doubts on this point.

I consider it arguable that the term ‘relevant act’ encompasses only those actions for which a time limit is affirmatively established by operation of the Patents Act and Regulations, and that the grace period provisions do not establish such a time limit.

Why Might Section 223 Not Apply?

It is well-established that if an applicant misses a deadline to file a standard patent application claiming priority from an earlier provisional application, or claiming Convention priority from an earlier foreign patent application, then section 223 applies.  Indeed, the definition of ‘relevant act’ explicitly refers to ‘a Convention application’.

The 12-month time limits for filing such applications are established by section 38 of the Act, in conjunction with regulations 3.10 and 3.11.  In particular, subsection 38(1) states that ‘[i]f an applicant makes a provisional application, the applicant may make one or more complete applications associated with the provisional application at any time within [12 months of the provisional filing date]’, while subsection 38(1A) states that ‘[a] Convention application must be made within [12 months of the filing date of the basic application]’ (emphasis added).  The language in both cases clearly makes an affirmative, prospective, link between the filing date of the original application, and the subsequent time limit for filing a complete application.

The provisions for PCT applications that enter the national phase in Australia are somewhat more involved (since the priority and filing dates are initially established under the international system, not in Australia), and are set out in regulation 3.13A.  Notably, however, this regulation expressly refers to the power of the Commissioner to grant an extension of time under section 223 which has the effect of restoring a right of priority, so there is no doubt here.

The scheme of subsection 24(1) is, however, somewhat different.  The focus of this provision is not on the filing date per se, but rather upon the subsequent actions of a decision-maker, who is instructed that they ‘must disregard’ certain disclosures that would otherwise be considered prior art, ‘but only if’ the application is made within the prescribed period, i.e. 12 months from the day of the disclosure.

The language ‘but only if’, in the context of the decision-making process, appears to direct attention to the state of the application at the time when the decision is made, rather than to a time limit for filing the application in the first place.  I therefore consider it plainly arguable that subsection 24(1) does not establish a time limit for doing a ‘relevant act’.  On this view, what it establishes is, after the fact of filing an application on a particular date, a time period during which a decision-maker must disregard certain disclosures.  Section 24 provides directions to a decision-maker, but the decision-maker does not perform any ‘relevant act’ to which section 223 may apply.

IP Australia Considers the Grace Period to be Extendible

It is all very well for me to make these suggestions, however the Patent Office does not agree, and considers that section 223 is applicable to extend the grace period.  It appears to base this position on a single Office decision issued in 2002, Ashmont Holdings Limited v American Home Products and Nature Vet Pty Limited [2002] APO 24.  That decision did not relate to the current general grace period provision (which did not yet exist), but rather to the provision equivalent to current paragraph 24(1)(b), which deals with unauthorised disclosures.  However, the decision turned on exactly the same ‘but only if’ language that remains in the current section 24, with the Hearing Officer disagreeing with counsel for American Home Products and Nature Vet that this prevented a ‘relevant act’ from being established (at [22]):

However, I do not believe that the word "only" alters the fact that there is a clear reference to a prescribed period in section 24(1)(b) of the Act and it is this which Ashmont is seeking to extend. I believe that the filing of a patent application within twelve months from unauthorised disclosure of the information is a relevant act required to be done within a certain time, as required by section 223. I can see no clear indication in the legislation to exclude section 24 from the provisions of section 223. Without a specific exclusion, as is the case for the time for filing a notice of opposition or a statement of grounds and particulars, I believe that section 223 applies. As a result, I find that section 223(2) is applicable to extend the time period prescribed by section 24(1)(b) and regulation 2.3(2).

On this basis, IP Australia remains willing to consider applications to extend the grace period under section 223, despite the problems that this creates, as outlined in the introduction to this article.

IP Australia Knows There is a Problem

It is worth noting that IP Australia is aware that granting extensions to the grace period is problematic.  I have written previously about IP Australia’s online Policy Register, which is a list of issues that IP Australia is considering or working on for policy action or legislative amendment.  Item no. 77 on the Register is entitled ‘Date of patent when there has been an extension under s223’, and currently has a priority of ‘medium’ and a status of ‘on hold’.  The issue is summarised as follows:

Under section 24 of the Patents Act, a document is disregarded for the assessment of novelty and inventive step (and innovative step) if a complete application is made within the prescribed period. The time period can be extended under s 223.

Under section 65, the date of the patent is the date of filing unless a different date is determined under the regulations.

There is no provision to alter the date of the patent to the last day that the application should have been filed, as there is for extensions in similar situations (such as to claim priority from a basic document).

This anomaly would be addressed by amendment of reg 6.3 to allow the date of the patent to be altered to 12 months after the date of public availability of the relevant information.

Clearly, IP Australia is comfortable with granting extensions of the grace period, but considers that it should be possible to ante-date the patent in such circumstances to reflect the date on which the application ‘should’ have been filed, i.e. 12 months after the date of public disclosure.

Conclusion – The Law is Unclear and Should Be Fixed

In my view, the drafting of section 24 is unfortunate.  While it initially focusses on the actions of a decision-maker responsible for determining whether a claimed invention is novel or involves an inventive step (i.e. something which necessarily takes place after filing of an application), it subsequently references making the application in the present tense (i.e. ‘…a complete application for the invention is made within the prescribed period’).  If the wording was, instead, ‘was made’ or ‘has been made’ then it would be clear that this is not about establishing the time limit for doing a relevant act, but rather is looking back to what actually happened.

On the other hand, if the intention was that the grace period should be subject to extension, then section 24 could have been drafted so as to unambiguously set a time limit for filing an application following a public disclosure.  Furthermore, one might think that if there had been an intention that section 223 apply to the grace period, then the need to allow for ante-dating of patents in such cases would have been accommodated in regulation 6.3, as the summary on the Policy Register suggests it should be.  There is, however, no evidence that this was ever contemplated.

To my mind, the law is unclear.  This is not good news for the owners of patents and applications for which IP Australia has extended the grace period because, until and unless the law is clarified, their validity uncertain.

Purely from a policy perspective, it seems preferable to me that the grace period should not be extendible.  This would be consistent with the law in the US and other countries that provide a grace period, and would provide greater certainty to the public, who would not need to be concerned about the possibility of a patent application being validly filed more than a year following the public disclosure of an invention.  However, if the grace period is indeed extendible, then I would agree with the proposal on the Policy Register than the Regulations should be amended to enable the patent date to be amended in cases where an extension is granted.  The present situation provides a patentee with an unwarranted benefit in such circumstances, and makes it difficult for the public to identify when an extended grace period applies.

Either way, section 24 should be amended to ensure that it is clear whether or not making an application within a period of 12 months following a public disclosure of the invention is a ‘relevant act’ for the purposes of section 223.

Overall, I think that this is an issue that deserves to be higher than ‘medium’ priority on IP Australia’s policy agenda, and should not be ‘on hold’!


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