05 November 2019

Australian Senate Condemns the Innovation Patent, but Grants an Extra Six Months on Death Row

Sad GravestoneOn 16 October 2019 the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 was passed by the Australian Senate. Among other purposes, this bill includes long-anticipated provisions to phase out Australia’s second-tier patent right, the innovation patent – despite concerted last-ditch efforts by opponents of the move to persuade non-government senators, in particular, to vote against the legislation. This lobbying did not fall entirely upon deaf ears, with Centre Alliance Senator Rex Patrick speaking passionately on behalf of Australian companies that wanted to see the innovation patent retained and unsuccessfully moving an amendment removing the phase-out provisions from the bill.

In the end, however, the Labor opposition voted with the government, thus ensuring passage of the bill, albeit on condition that the legislation be amended to provide for a statutory review to be undertaken to assess the impact on Australian small to medium enterprises of abolishing the innovation patent system, and make recommendations to facilitate access to standard patent protection for small business in Australia. The review is required to commence within three months of the legislation coming into effect, and must be completed within 12 months.

To allow time for the review, the period before the phase-out begins is to be extended from 12 to 18 months. During this period, it will remain possible to file new innovation patent applications. Once the phase-out commences, however, new innovation patents will only be available where they are based on existing applications filed prior to the phase-out date, e.g. as divisional applications or via conversion of pending standard patent applications.

To become law, the bill must still pass through the House of Representatives. However, its passage there is certain, since the government has a majority. The House will sit for the final time in 2019 between 25 November and 5 December, and I anticipate that the bill will pass during this period, and then be sent on to the Governor General for ‘Royal Assent’ (i.e. to be signed into law) before the end of the year. On this timetable, the statutory review will have to commence no later than March 2020, and be completed no later than March 2021. The phase-out will then begin by June 2021.

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