High Court Backs Aristocrat on Software Patentability – It’s Time for IP Australia to Follow Suit

The High Court of Australia has denied an application by the Commissioner of Patents for special leave to appeal a decision of the Full Federal Court in which claims to a computer-implemented invention (CII), in the form of an electronic gaming machine (EGM), were found to be patent-eligible in Australia.  This brings to an end the long-running dispute over patentability of Aristocrat’s claims, and marks the first time since 1991 (IBM v Commissioner of Patents [1991] FCA 625) that any such dispute with the Commissioner over claims to a CII has concluded with a victory to the applicant/patentee. 

The significance of this outcome cannot be overstated.  In recent years we have seen many cases conclude with claims being found ineligible – i.e. not for a ‘manner of manufacture’ under Australian law – namely Grant v Commissioner of Patents [2006] FCAFC 120, Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150, Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, Watson v Commissioner of Patents [2019] FCA 1015 (leave to appeal refused in Watson v Commissioner of Patents [2020] FCAFC 86), Repipe v Commissioner of Patents [2019] FCA 1956, and Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86.  That is a lot of cases telling us what is not patent-eligible, with absolutely no guidance from the courts on where the boundary might lie on the positive side of patent-eligibility.  Finally, we have a decision of the Full Federal Court that sets out a reasonably clear and concise test which is then applied to eligible claims.  The High Court, in denying the Commissioner’s application for special leave to appeal, stated that the ‘Full Court applied established principles concerning the assessment of manner of manufacture and reached a unanimous and clear conclusion as to characterisation’: Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2026] HCADisp 15, at [2].

Following a rather convoluted passage through the Federal Court, the Full Federal Court and the High Court, back to the primary judge and then to the (differently constituted) Full Court, the final word on patent-eligibility of Aristocrat’s claims is Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131.  In this decision, the Full Court effectively overruled the reasons (though not the orders) of the earlier Full Court, and adopted the affirmative reasons of three High Court judges in the split decision Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 (see High Court’s Failure Exposes the Festering Eligibility Sore in Australia’s Patent Laws for more).  Somewhat unusually, this also involved, in a sense, ‘overruling’ the negative reasons of the other High Court judges, in a rare instance of three judges of an inferior court asserting precedence over three judges of a superior court (albeit with the support of three further judges of that superior court).  But that’s just a function of how weird this case became!

In what follows, I will briefly summarise how we got here, where the law stands in view of the Full Court’s 2025 decision, and the High Court’s reasons for refusing special leave to appeal.  Finally, I will review the current examination practice of the Australian Patent Office, and the prospects of change in the wake of the High Court’s decision.

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Tags: Appeal, Australia, Computer programs, Examination, High Court, Patent Office, Patentable subject matter

Former Patent Examiner Takes IP Australia to Federal Court Over Alleged ‘Abusive Management Practices’

A former IP Australia patent examiner who alleges ‘unlawful, unreasonable, unfair, inefficient, and abusive management practices’ at the government agency is seeking Federal Court review of Fair Work Commission (FWC) decisions that rejected his unfair dismissal claim.

Hendrik Johannes Liebenberg, who worked as a Patent Examiner from October 2012 until May 2024, has applied to the Federal Court of Australia for writs of certiorari and mandamus following unsuccessful FWC proceedings.  His case centres on allegations that routine quality assurance procedures at IP Australia constituted improper interference with his decision-making authority.  He has, additionally, escalated these claims into broader accusations about institutional practices.

For readers unfamiliar with the legal terminology, a writ of certiorari commands an inferior court or tribunal to set aside a decision, and is typically used when the decision-maker has exceeded their jurisdiction or made a jurisdictional error.  A writ of mandamus compels a public official or body to perform a duty they are legally required to perform, or to exercise their jurisdiction according to law.  Both are supervisory remedies allowing superior courts to oversee the exercise of power by decision-makers.

While it is more usual for the Federal Court to review administrative decision under the Administrative Decisions (Judicial Review) Act 1977, the difficulty for Mr Liebenberg is this case is that paragraph (a) of Schedule 1 to the ADJR Act excludes decisions made under employment-related legislation – including the Fair Work Act – from review.  This exclusion reflects Parliament's intention that Fair Work matters should be resolved within the specialist tribunal system rather than through general administrative law review.  To succeed, therefore, Mr Liebenberg will need to show that the FWC fundamentally misunderstood its jurisdiction, not just that it made errors within its jurisdiction.

The case provides a window into workplace dynamics at Australia’s primary intellectual property agency, though the FWC found no merit in the constructive dismissal claim after examining the circumstances of Mr Liebenberg's resignation.

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Tags: Examination, IP Australia, News, Patent Office

Zombie Patents! Can Expired Innovation Patents Still Be Examined and Certified?

The Australian Patent Office recently issued two decisions on the examination and certification of innovation patents owned by UK company Diogenes Limited: Diogenes Limited [2023] APO 5 concerning innovation patent no. 2020104437 (‘Diogenes 1’); and Diogenes Limited [2023] APO 8 concerning innovation patent no. 2021103809 (‘Diogenes 2’).  Both patents claim inventions relating to electronic pool wagering systems and – unsurprisingly, given this subject matter – both were found to be unpatentable under Australia’s ‘manner of manufacture’ approach to patent-eligibility.  However, it is not the substantive reasons for refusing to certify the patents that is of most interest.  What is unusual about both patents is that they had each expired before an initial examination report had even been issued.  Despite this, IP Australia proceeded with examination, issuing three reports on patent no. 2020104437, and two reports on patent no. 2021103809, before in both cases accepting requests to be heard and issuing the decisions noted above.  Just to repeat for emphasis, all of this activity occurred after the patents had expired.

The rationale for proceeding with examination is given in Diogenes 1 at paragraph [10], where the Hearing Officer observed:

It is not usual for the Commissioner to undertake actions on an expired patent. However, I note that, in order for the patentee to enforce their rights in relation to an innovation patent, it is necessary for that patent to be examined and certified. In such circumstances, and noting that the patentee could potentially bring infringement proceedings up to 6 years after expiry (assuming infringement proceedings occurred just prior to the expiry date – see subsection 120(4) of the Act), undertaking examination (and this decision) after the expiry date is appropriate.

I find this statement confusing, and suspect that the Hearing Officer may have meant to suggest that the infringement itself – rather than the ‘infringement proceedings’ – may have occurred prior to the expiry date of the patent.  In any event, we will get to the circumstances in which an expired innovation patent, that was not examined and certified within its lifetime, may nonetheless be enforceable.

Diogenes 2 was decided by a different Hearing Officer, who (at paragraph [4]) adopted the reasoning of Diogenes 1 for proceeding with examination of an expired innovation patent.

In the Diogenes cases, examination of the innovation patents was requested while they were both still alive – albeit, as we shall see, just barely!  But these decisions raise the question of whether a (former) patentee could request examination of an expired innovation patent and, in such a case, whether the expired patent could be retrospectively certified and enforced up to six years after expiry.  If so, then this might apply not only to patents that expired at the end of their maximum eight year term, but also to patents that ceased earlier than this due to non-payment of an annual renewal fee.

The upshot is that zombie innovation patents are able to rise from the dead and reach back in time to capture historical infringements!

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Tags: Australia, Examination, Innovation patent

Patent Examination Delays are Rising at IP Australia

In my previous article I presented some data on Australian standard patent application prosecution events between 2017 and 2021.  While the total number of events (examination requests, examination reports, responses and acceptances) has remained fairly consistent in recent years, the data shows that the number of examination requests filed each year has increased since 2019, but that the number of first examination reports issued remained steady in 2019 and 2020, and fell in 2021.  All else being equal, this would suggest that the number of cases awaiting examination would have grown over this period, and therefore that the response time – i.e. the delay between an examination request being filed and a first examination report being issued – would be increasing.  So I decided to check this by analysing the delays for all initial examination reports issued since 2010.

Sure enough, what I have found is that the median delay has grown from just under seven months in 2019, to just over 11 months for examination reports issued so far in 2022 (although, being early in the year, this most recent data point is preliminary and may not be reliable).  At the same time, however, the 85^th percentile has remained fairly stable, rising from just under 11.5 months in 2019 to slightly over 12 months so far in 2022.  The 85^th percentile is significant, because IP Australia has a service level commitment to issue first reports on applications for standard patents within 12 months of receiving the request for examination, and to meet this commitment 85% of the time.  (At least, it used to have this target, although I have been unable to find a Customer Service Charter Report any more recent than the April-June 2020 quarter that still reports against this particular target.)  It appears, therefore, that despite an overall increase in examination response time for a ‘typical’ case, IP Australia is (just about) maintaining its targeted performance overall.

Even so, with what presently appears to be a growing backlog of applications awaiting examination, and a bumper year of new filings in 2021, it could become increasingly challenging for IP Australia to keep response times under control without increasing its patent examination capacity.  Furthermore, IP Australia’s own reporting indicates that some fields of technology – particularly chemistry, pharmaceuticals, and biotechnology – are experiencing greater delays than others, and falling well short of its targets.  IP Australia is not currently hiring new examiners, and the Australian budget papers released this week show no projected increase in average staffing numbers in the 2022-23 fiscal year.  But it will at least need to replace any staff who might leave.  And the March 2022 edition of its What’s New at IP Australia email bulletin (to which you can subscribe here) invited interested readers to register their interest in examination positions, to be notified when new vacancies are advertised.  Now might be a good time to register, particularly for prospective candidates with a background in chemistry, pharmaceuticals, or biotechnology.

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Tags: Australia, Examination, Patent Office

Raising the Bar Has Not Reduced the Patent Acceptance Rate in Australia

Data on patent acceptances into 2021 confirms that the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (‘RtB Act’), which came into effect on 15 April 2013, has had a minimal impact on the rate of patent application acceptance in Australia – and to the extent that an effect is present, it does not run in the direction that might be expected!  Here, I define ‘rate of acceptance’ as the proportion of examined applications that go on to be accepted for grant.  Between 2009 and 2013, the rate at which applications subject to the former (i.e. pre-RtB) provisions were accepted rose from 69% to 72%.  In comparison, the acceptance rate of post-RtB applications has stabilised at around 75% in each year between 2017 and 2021.

Some people may have anticipated that, in raising the standard of inventive step and introducing stricter requirements for enablement and support of claims, the RtB reforms would result in fewer applications being accepted.  I was not one of those people, and I expect that neither were most other patent attorneys.  Those of us who work on behalf of patent applicants are well-aware that, firstly, most of those applicants are seeking patent protection in other jurisdictions that have high standards of patentability, and are not wasting time and money on equivalent Australian applications for inventions that do not meet those standards.  And, secondly, encountering a higher bar to acceptance does not necessarily mean abandoning the application altogether; often it may simply mean settling for a more limited scope of protection.

Perhaps more surprisingly, however, raising standards of patentability has not resulted in applicants making more rounds of amendment to their applications in order to achieve acceptance.  In fact, if anything applications examined under the post-RtB provisions have been, on average, subject to fewer amendments in examination than pre-RtB applications.

Interestingly, in the transition between the two legal regimes, the earliest applications to be examined under the provisions of the RtB Act had acceptance rates in excess of 90%, while acceptance rates of the last applications to be examined under the former provisions fell to below 50%.  These effects are most likely attributable to the respective applicants’ strategies in pursuing early examination of post-RtB applications, and in persisting to the bitter end with some pre-RtB applications.

Another interesting observation is that expedited examination has become increasingly popular in the years since the RtB reforms commenced, rising from just under 6% of all cases in 2014/15 to over 8% in 2020/21.  In particular, expedited examination under the Global Patent Prosecution Highway (GPPH) program rose from just 2.7% of cases in 2013/14 to 5.1% in 2019/20.  In fact, GPPH requests were the majority of all expedited examination requests in every post-RtB year except for the first (2013/14).

Finally, the most recent data confirms (once again) that the duration of patent prosecution (i.e. from examination request through to acceptance, in successful cases) has reduced significantly – from a median of over 600 days, to a little more than 400 days – since commencement of the RtB reforms.  This has been due, in almost exactly equal parts, to the tighter time constraints imposed on applicants, and to reductions in Patent Office delays in commencing examination after a request has been filed.

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Tags: Australia, Examination, Law reform, Patent analytics, Patent law, Raising the Bar

How Effective is Australia’s 12 Month Acceptance Deadline in Limiting Examination Delays?

One of the objectives of the Raising the Bar IP law reforms – most of which commenced on 15 April 2013 – was to reduce delays in the resolution of patent (and trade mark) applications.  The perceived problem with such delays was not that applicants were unhappy with the speed of processing of their applications (in fact, most choose to defer examination and acceptance of their patent applications), but rather that delays create uncertainty about whether a patent will be granted, and what scope the granted claims might have.  As noted in the Explanatory Memorandum to the Raising the Bar Bill, ‘[d]elay may suit the party, but it is not in the interests of the public, or the party’s competitors.’

There were four main features of the reforms that were expected to reduce delays and uncertainty:

1. reduction, from six months to two months, of the period within which an applicant is required to request examination, once directed to do so by the patent office;
2. reduction of the maximum period available for an applicant to obtain acceptance of a patent application, following issue of an initial examination report, from 21 months down to 12 months;
3. ‘tightening’ of the rules around when divisional applications can be validly filed, to reduce opportunities for what the Explanatory Memorandum describes as ‘abusive uses’; and
4. refinement of opposition proceedings, mostly in the form of more stringent criteria for obtaining extensions of time.

The reforms to opposition proceedings had an almost immediate impact, since they applied to all new oppositions filed on or after 15 April 2013, as well as (to a more limited degree) oppositions that were already in progress.  However, since over 99.5% of all accepted applications are not opposed, the reduction in opposition duration is irrelevant to the overwhelming majority of cases. 

It has taken longer to reach the point at which there is sufficient data to evaluate the effect of the change to the examination period, since this only applied to applications for which a request for examination was filed on or after 15 April 2013.  Many of these applications remained in the system for years.  Indeed, the last patent to be granted under the pre-Raising the Bar regime – without being additionally delayed by opposition proceedings – was no. 2010311063, which was derived from a PCT application that entered the national phase in Australia on 17 May 2012.  Examination was requested on 9 April 2013, and a first report issued on 7 August 2018 (after the application inadvertently lapsed and was restored).  The application was eventually accepted on 17 February 2020, and the patent granted on 18 June 2020.

I have now analysed nearly two decades worth of Australian patent examination data, spanning the period before and after commencement of the Raising the Bar reforms.  Further details and charts are below, but in summary I have found that:

1. reduction of the maximum examination period by nine months (from 21 to 12 months) has resulted in a drop of only a little over three months in the median period between initial examination and acceptance of successful applications;
2. the reforms have not, however, resulted in any lasting improvement in the pendency of the most ‘stubborn’ applications, which are only accepted following one or more divisional applications being filed for the purposes of continuing examination (for want of any better term, I call these ‘continuation divisionals’);
3. as a result, the ‘top’ 2% of cases are still pending for 900 days or more between an initial examination report being issued and an application finally being accepted;
4. perversely, following an initial temporary drop in the number of continuation divisionals, the reforms actually seem to have resulted in an increase in the proportion of divisional applications that are filed for the primary purpose of continuing examination;
5. on the other hand, however, the major use (i.e. over 60%) of divisional applications remains their primary purpose of pursuing alternative claims following acceptance of claims in a parent application.

Overall, reducing the examination period has had a relatively minimal effect on total pendency of patent applications – a reduction in the time prior to examination, i.e. between filing and a first examination report being issued, has been much more significant.  However, it appears to have had the unintended consequence of increasing the use of divisional applications to continue examination.

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Tags: Australia, Examination, Statistics

Computerised Decision-Making – Coming Soon to an IP Office Near You?

The Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (the ‘PC Part 1 Act’) received Royal Assent, and thus passed into law, on 24 August 2018.  Following an initial consultation, which confirmed (in case any confirmation was required) that the proposal to abolish the innovation patent system remained controversial, it had an easy passage through the two houses of the Australian Parliament after the corresponding provisions were dropped from the Bill at the eleventh hour.  (These same provisions have since been incorporated into the draft of the Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2018.) 

The PC Part 1 Act implements a number of less-contentious recommendations made by the Productivity Commission in its 2016 Report into its inquiry into Australia’s intellectual property arrangements, including clarifications on the legality of parallel imports, reducing the initial period before a registered trade mark may be challenged on grounds of ‘non-use’, and reducing reporting obligations relating to pharmaceutical patents with an extended term.  The Act also implements a number of measures that have been on IP Australia’s policy agenda for a while, most of which are intended to streamline and align the administration of the Australian IP system and make ‘technical amendments’ to correct or clarify IP legislation.

Included among the ‘streamlining’ measures are provisions to enable the Commissioner of Patents, and the Registrars of Trade Marks, Designs, and Plant Breeder’s Rights ‘to arrange for a computer program under their control to make decisions, exercise powers, and comply with obligations under the legislation’, i.e. to permit computerised decision-making.  When this idea was originally proposed in a public consultation process conducted in June-July of 2015, it was described as the ‘expanded use of automated systems’, and would have required the Regulations to prescribe specific decisions that may be automated.  The small number (three) of submissions received on this proposal were generally positive, but all noted the important role of the Regulations in controlling, and/or keeping the public informed, of the types of decisions that might be computerised.

However, three years is an eternity when it comes to progress of digital technologies, and with advances in machine learning and other techniques, the range of decisions that might presently, or in the near future, be wholly or partly automated has expanded greatly since the initial consultation in 2015.  The provisions that have actually been enacted (and which came into effect immediately upon receiving Royal Assent, i.e. on 24 August 2018) include no requirement for Regulations to be made permitting the automation of particular decisions.  Going forward, therefore, any decision, or related action, under the Patents, Trade Marks, Designs, or Plant Breeder’s Rights Acts may be automated using a computer program, if/when the relevant Commissioner or Registrar considers it appropriate.  The legislation has been drafted such that this may include both procedural actions (e.g. allowing an extension of time when no objections have been raised) and substantive actions (e.g. preparing an issuing examination reports).

While it might seem unlikely that computers will be examining patent applications any time soon, a submission made by IP Australia to the World Intellectual Property Organization (WIPO) prior to a meeting of international IP Offices held in May 2018 indicates that fully or partially automated trade mark examination – at least at the stage of an initial report – may be much closer to reality.

In any event, the necessary legislative permission is now in-place to enable any part of IP Australia’s decision-making processes to be automated, and an increase in the removal of human beings from the day-to-day execution of routine tasks that perhaps do not require high levels of adaptability and/or creativity is most likely now inevitable.  Fortunately, the legislation includes provisions that will make it easy for a computerised decision to be ‘overruled’ by a human decision-maker.  Furthermore, both computer and human decisions may be appealed to the Administrative Appeals Tribunal.

To find out more about how this will all work – and what IP Australia is up to in automating trade mark examination – please read on.

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Tags: Australia, Examination, Law reform, Machine learning, Patent Office, Trademarks

Data on Patent Office Decisions Highlights Impact of Law Reforms, and Continuing Problems with Law on Patent-Eligibility

Since commencement of the Patents Act 1990 in 1991, up until the end of August 2018, the Australian Patent Office has issued 1,851 published decisions (including, in earlier years, decisions relating to applications filed under the 1952 Act but issued under the transitional provisions of the 1990 Act).  Of these, decisions on substantive oppositions to the grant of standard patents have been by far the most common (666 in total).  Indeed, the vast majority of Patent Office decisions relate in one way or another to opposition proceedings, with the next most-frequent being procedural matters associated with oppositions (including decisions on costs, and final decisions following applicant amendments), and decisions on extensions of time to serve/file evidence.

Analysis of decisions issued by the Patent Office over time also highlights the impact of changes in law and practice, including the effect of amendments to the rules governing the grant of extensions of time in patent oppositions which came into effect with the Raising the Bar reforms in 2013.  The rate at which substantive opposition decisions, and decisions on extensions of time to file evidence, have issued since this time are consistent with other data indicating that the reforms have been effective in improving the efficiency of patent opposition proceedings.

Even more remarkable, however, is what the data reveals about the effect of recent changes in practice and case law relating to patent-eligibility of ‘contentious’ subject matter, and in particular of computer-implemented inventions.  Since 21 July 2010, when the Patent Office issued its decision in Invention Pathways Pty Ltd [2010] APO 10, there has been a total of 53 published decisions relating to examination objections asserting that the claimed inventions were not for patent-eligible subject matter (i.e. a ‘manner of manufacture’ under Australian law).  As I have noted on a number of occasions (most recently in Continuing Hostility to Computer Implemented Inventions Lands the Commissioner of Patents in Court. Again. Twice. and Computer-Implemented Inventions and the ‘Ball Point Pen Principle’ – Why the Australian Law on Patent-Eligibility is a Mess), the vast majority of these decisions have upheld the examiners’ objections, resulting in the applications being refused. 

What is even more remarkable about this, however, is that the number of such decisions over just the past eight years is more than double the grand total of just 21 decisions issued over the entirety of the preceding 19 years in relation to all available grounds of examination objection.  Furthermore, 38 of those 53 decisions have been handed down just within the past three calendar years.

As I have said before (e.g. in …Why the Australian Law on Patent-Eligibility is a Mess, linked above), this recent high incidence of applicants taking examination objections to hearings is a bad sign for the state of Australian patent law in relation to subject-matter eligibility.  The large number of decisions is bringing less, rather than more, clarity to the law, reflecting a high level of uncertainty, and a widespread lack of agreement among patent applicants, attorneys, examiners, hearing officers, and judges as to exactly what the law is – or should be – in this area.  And this uncertainty is not good for innovation and investment in digital technologies, because where there is uncertainty around the availability of IP protection, investors can have no confidence in either the ability to defend their own IP position, or of having freedom-to-operate in the relevant technical space.  Uncertainty thus discourages investment, and in this sense works directly against the incentive that the patent system is intended to provide.

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Tags: Australia, Examination, Opposition, Patent analytics, Patent Office, Patentable subject matter, Raising the Bar

Evidence Shows that 2013 Australian Patent Law Reforms Have Had No Long-Term Effect on Application Acceptance Rates

On 15 April 2013, the majority of provisions in the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came into effect.  Among other things, these reforms were designed to lift the inventive step standard, and to impose more-stringent requirements on the disclosure in a patent specification.  As a consequence of this, you would think that some inventions that would have been patentable prior to commencement of the reforms would be unpatentable under the new standard, and that some patent specifications that would have passed muster previously could fail to meet the higher standards for disclosure.  And, if so, then it might logically follow that the proportion of applications that successfully pass examination (i.e. are accepted for grant) would be lower under the new law than under the old.

Yet, as logical as that reasoning may seem, just recently I published an analysis indicating that acceptance rates across almost all examination technology sections at the Australian Patent Office were, in fact, consistently increasing on an annual basis between 2014 and 2016.  That result is surely worthy of a closer look!

A more-detailed analysis of Australian patent examination data covering a period of over three years either side of the Raising the Bar reforms, from 2010 up until the end of 2017, indeed confirms that a naïve assumption that lifting standards should reduce acceptance rates is incorrect.  In fact, acceptance rates had been rising for a number of years prior to commencement of the reforms, and initially this trend continued under the supposedly higher standards.  And although there was subsequently a brief decline in acceptance rates, this has been followed by a period during which acceptances have once again been on the rise.  Indeed, right now it appears as though the proportion of applications that are accepted for grant following examination is around 80%, which is almost exactly where it stood immediately prior to commencement of Raising the Bar.

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Tags: Australia, Examination, IPGOD, Law reform, Patent analytics, Patent law

Examination Allocations, Delays and Acceptance Rates at the Australian Patent Office, 2014-2017

It is perfectly reasonable for anybody who has applied for a patent to want to understand how the application process works, how long it is likely to take, and what are their prospects of actually receiving a granted patent in the end.  Unfortunately, it is not easy to find this information, in part because there are many factors that influence the patent examination process.  These factors include the different laws and regulations that apply in each country, variations that depend upon the field of technology of the invention, and the effect of workloads and application backlogs in the relevant patent offices.

In this article, I will review the application process at the Australian Patent Office, and look at some recent data drawn from the latest 2018 release of the Intellectual Property Government Open Data (IPGOD) to illustrate how delays in examination, and prospects of success, can be dependent upon technology and the way in which examination work is allocated within the Patent Office.  I was initially prompted to conduct this analysis by anecdotal accounts of a patent application ‘death squad’ within a particular team of Australian examiners.  However, since the plural of ‘anecdote’ is not ‘data’, I wanted to see whether there is any evidence to support these accounts within the most recent IPGOD data.  I did find the answer, along with a number of other insights.

The first thing to understand about the Australian patent examination system, for those not already familiar, is that it requires each patent applicant to file a request for examination that is generally distinct from other filing formalities.  This is in contrast to the US system, for example, in which examination fees must be paid at filing of a new application, which is then examined in its turn without further action by the applicant.  In Australia, it is possible to request examination (and pay the corresponding fees) at the time of filing, however most applicants elect to defer this step.  After filing, examination may be requested at any time, but a request must be filed within five years of filing, or within two months of the applicant being directed to request examination by the Commissioner of Patents, whichever is earlier.  This is almost invariably the Commissioner’s direction, since directions are typically issued within three-to-four years of the initial filing date, i.e. well within the five year limit.

As we shall see, what happens next depends strongly upon the field of technology of the invention – or, more precisely, upon how the examination task is allocated within the Patent Office, which is, in turn, largely technology-dependent.

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Tags: Australia, Examination, IPGOD, Patent Office

Technology Specialisations of Australia’s Patent Prosecution ‘Powerhouse’ Firms

In 2016, 24,331 patent applications were accepted for grant by IP Australia.  Based on the examination sections to which these applications were allocated, the top technology areas were mechanical engineering (11%), process engineering (10.6%), and construction and mining (9.8%).  And 80% of all these patent applications were handled by just ten firms.  The top three firms – Spruson & Ferguson, Davies Collison Cave, and Griffith Hack – account for over a third of all applications accepted in Australia.

The process of guiding an application through the examination process is commonly known as prosecution.  While local clients generally require a wider range of value-added services, such as advice on patentability and drafting of patent specification, over 90% of all Australian patent applications originate with overseas applicants that primarily require prosecution services.  And since Chapter 20 of the Australian Patents Act 1990 effectively gives registered patent attorneys an exclusive role in providing paid services to complete key tasks required for successful prosecution of a patent application, these services are the ‘bread and butter’ of many of the larger patent attorney firms in Australia.

In this article I will look at the ten firms that power four fifths of all Australian patent prosecution, and the areas of technology in which they operate.  It is important to appreciate, however, that this is not intended as a recommendation of the services these firms provide in relation to any particular technology.  Each firm in the top ten is large enough to employ attorneys with a range of technical backgrounds, and handles applications across all of the technology areas examined by IP Australia.  Self-evidently, far greater specialisation is found in smaller firms, which have fewer attorneys.  Small firms also tend to provide a greater proportion of their services to local Australian clients, and to engage in less of the high-volume incoming prosecution work on behalf of foreign applicants.  A number of smaller firms therefore appeared in my earlier analysis using filing data broken down to distinguish Australian small and large business applicants.  A firm’s experience, and success, in patent prosecution is therefore just one consideration among many in the selection of an Australian IP service provider.

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Tags: Australia, Examination, IPGOD, Patent attorney profession, Patent Office

How ‘Rational’ Are Australian Patent Applicants?

Last Tuesday night, I watched episode 2 of season 3 of the Australian version of the reality TV program for entrepreneurs seeking investors, Shark Tank.  The episode featured a husband and wife team, Margaret and Peter Powell, who were after funding for their ‘Catch’n’Release’ anchor retrieval system.  Their ingenious mechanism – that immediately impressed all of the ‘sharks’, along with many viewers including me – enables an anchor that has become caught under coral to be dislodged and retrieved without damaging the reef.  Everything was going along swimmingly, until the question of patent protection was raised, and the Powells revealed that a patent application was filed in 1999, and now has less than three years to run.  Four of the five ‘sharks’ very quickly declared themselves ‘out’.

This got me thinking about what motivates Australian innovators to file patent applications.  Obviously Peter Powell never intended that it would take him so long to develop and prototype his invention, or that it would be over 17 years and require the mentorship of a celebrity entrepreneur before he could finally secure a manufacturing deal and bring a product to market.  With the benefit of 20/20 hindsight, it is clear that the Powells would have been better served by waiting to apply for their patent until they were further along the development path.  No doubt, however, they would have had the usual concerns that the invention might be intentionally or inadvertently publicised, appropriated by someone, or independently developed elsewhere, if they did not move to secure their rights at the earliest opportunity.  In other words, they might have been motivated more by fear, uncertainty, and doubt, than by a rational business strategy.

When economists refer to ‘rational choice’, or ‘rational actors’, they are talking about a theoretical construct that is assumed to take account of available information, such as probabilities of events, and potential costs and benefits in determining preferences, and to act consistently in arriving at a self-determined best choice of action.  This is not, of course, how real people generally behave.  Real people often fail to obtain and take into account all of the available information, make little or no effort to determine probabilities, costs, and benefits, and allow their decisions to be swayed by emotional considerations.  Often, the more important the decision, the less likely it is that an individual will make a rational choice (in the economic sense). 

Large corporations, on the other hand, tend to perform somewhat better in the ‘rational choice’ stakes.  For example, a wealthy multinational corporation such as Google, IBM, Microsoft, or Apple, has little to fear over a decision about whether or not to file a patent application for a particular invention – the fate of its entire business hardly depends upon a single patent.  A corporation is better-served by developing a strategy or formula for determining when it will, or will not, file for patent protection, based upon extensive information, experience, and sophisticated advice to which it has ready access.

It therefore seems to me that if we want to know what ‘rational’ behaviour looks like when it comes to Australian patent filing, we should look at how foreign applicants (which accounted for 91% of all standard patent application filings in Australia in 2016, according to IP Australia’s Australian Intellectual Property Report 2017) act.  By comparing the behaviour of Australian applicants against this standard, we might be able to get a sense of just how rational, or otherwise, is their decision-making.

When I did this, I found that the behaviour of large Australian firms (defined as those having 200+ employees) very closely follows that of foreign applicants.  Small-to-medium enterprises (SMEs) appear to be slightly less rational, while private individual applicants (the category into which the Powells fall) exhibit significantly different, and clearly sub-optimal, behaviour.

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Tags: Australia, Examination, Innovation policy, IPGOD, Patent analytics, Strategy

Patent Offices in Crisis? Application Pendency Alone Does Not Tell the Full Story

An article posted on 24 October2016 on the IP Watchdog blog caught my attention.  It is by Mark Schultz and Kevin Madigan who have recently authored a report for the Center for the Protection of Intellectual Property (CPIP), The Long Wait for Innovation: The Global Patent Pendency Problem [PDF, 1MB].  Their thesis – and it is a sound one – is that the growth in numbers of patent applications throughout the world over the past decade or so is stressing the resources of many patent offices, and is resulting in a growing backlog which is resulting, in turn, in excessive pendency (i.e. the delay between filing an application and a patent actually being granted).  This, say Schultz and Madigan, is a problem, because in some countries patents are taking so long to issue that, by the time they do, they may be of little value to their owners.

The Long Wait looks, in particular, at the pendency of patents granted by a representative sample of 11 offices, between 2008 and 2015.  The results place South Korea, China, Australia, USA and Japan in a ‘low pendency’ group (application to grant in under four years).  Egypt, the European Patent Office (EPO), Argentina and India fall into a ‘medium pendency’ group (between four and eight years).  Bringing up the rear, in a ‘high pendency group’ (eight to 12 years) are Brazil and Thailand.

Schultz and Madigan’s conclusion that patent offices with longer pendency are struggling, while those with the lowest pendency are doing fine, is broadly valid.  However, there are a couple of limitations to their approach, as a result of which they miss some subtle – and not-so-subtle – points regarding the performance of a number of the patent offices in their study.

First, using pendency as a measure of performance is inherently backward-looking. For the offices in the ‘high pendency’ group, in particular, the applications in question were filed, on average, a decade prior to the year in which they were granted.  But what does this mean for applications filed since 2005?  Can they expect a similar, shorter, or longer pendency?

Second, the assumption underlying the methodology – that pendency is primarily a result of patent office delays resulting from an existing backlog of applications – is not entirely valid in relation to a number of the patent offices considered.  Applicant behaviour and specific legal and regulatory provisions are also significant factors in some jurisdictions.  Indeed, in Australia and Japan in particular the impact of changes in laws and/or regulations are clearly visible in the results, and dominate over patent office examination delays.

By looking at filing and grant behaviour in the 11 offices selected by Schultz and Madigan, in conjunction with their pendency data, it is possible to obtain further insights.  For example:

1. the Brazilian and Thai patent offices are in very serious crisis (the term ‘basket case’ would not be inappropriate) – in the absence of major intervention the pendency of applications in these offices will continue to grow (and the apparent reduction in pendency in Thailand between 2012 and 2014 appears to be an anomaly);
2. although the EPO falls into the ‘medium pendency’ group, it appears to have its workload under control, and is at low risk (along with Australia, the USA, Korea and Japan) of developing a growing backlog;
3. within the ‘medium pendency’ group, the Indian Patent Office appears to be at greatest risk of joining Brazil and Thailand in the ‘high pendency’ group, with every indication that the growth in pendency observed in Schultz and Madigan’s study will not just continue but, without action, accelerate; and
4. China, despite falling in the ‘low pendency’ group is, on other measures, on par with Argentina, and may be starting to develop a growing backlog of applications.

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Tags: Backlog, Examination, Patent analytics, Patent Office

Be a USPTO Patent ‘Examiner Ninja’

If you have any involvement or interest in the prosecution of US patent applications – particularly in the contested fields of computer-implemented inventions or biotechnology – you will probably be aware that disturbing things are afoot at the US Patent and Trademark Office (USPTO).  Specifically, in the wake of the US Supreme Court’s decisions in the Alice, Mayo and Myriad cases, patent allowance rates have plummeted in examination sections devoted to subject matter that could be regarded as relating to computer-implemented ‘business’ processes, diagnostic methods, and genetic technologies.

In this hostile environment, applicants and their advisers need every tool they can get their hands on to understand what they are up against, and to create the best possible strategies for staying out of – or, if necessary, getting out of – trouble.  And, as in many other fields of endeavour, so-called ‘big data’ is being touted as a possible solution. 

In particular, the contents of the USPTO’s Patent Application Information Retrieval (PAIR) database, which records all information about every patent application making its way through the office procedures, are increasingly accessible to anyone wants to use that data, whether for commercial or non-commercial purposes.  PAIR Bulk Data is now available directly from the USPTO, and includes the information included in the bibliographic (‘application data’), published document and patent term extension data tabs in Public PAIR dating back to 1981.  Additional examination information for many recent applications is available in the USPTO’s Patent Examination Research Dataset (PatEx).  Up until 2015, Google maintained bulk-downloadable USPTO PAIR data sets.

All of this information can be used to obtain and analyse a variety of statistics.  For example, if you are dealing with a ‘difficult’ examiner it is possible to find out whether it is just your case that is problematic, or if the examiner has a history of rejecting a majority of applications he or she has reviewed.  The data might also tell you whether the examiner is more likely to allow an application following an interview and/or whether filing a Notice of Appeal may lead to a more favourable outcome.

Of course, all of the sources I have listed above supply ‘raw’ data, in such exciting formats as CSV, XML and JSON, which is of limited use unless you have the time, and the technical skills, to convert it into a form that is more suitable for analysis.  Fortunately, there are people out there who are already doing this for us all.  Commercial offerings include LexisNexis PatentAdvisor and Juristat, while free services are provided by Examiner Watchdog and Examiner Ninja.  So I am going to provide a quick review of these services, and what they can do for you.

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Tags: Examination, Patent analytics, Patent Office, US

A Single Trans-Tasman Patent Application and Examination Process? NZ Committee Says ‘No’!

A joint Australia-New Zealand proposal for a unified patent application and examination process – once hailed by both governments as a boon for local innovators and a ‘world first’ in patent cooperation – appears likely to be dead-in-the-water, following a scathing report issued last week by the New Zealand Parliament’s Commerce Committee.

The idea behind the proposed single application process (SAP), and single examination process (SEP), was simple – to allow applicants wanting to obtain patents in both Australia and New Zealand to file one common application which would be subject to search and examination by an examiner either at IP Australia or at the Intellectual Property Office of New Zealand (IPONZ).  It was not proposed that the patent laws in the two countries would be merged, but rather that examiners would be trained to apply the laws of both countries, resulting in two separate patents being granted.

Despite various hold-ups (see below for more details), it had appeared that the New Zealand government remained keen on the SAP/SEP proposals, with implementing legislation being included in the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill, which was introduced into parliament on 3 November 2015.  However, this aspect of the legislation has been roundly rejected by the Commerce Committee, which is comprised of members from both sides of politics. 

The majority of the Committee (including members from the governing National Party) concluded that the purported benefits of the SAP and SEP mechanisms either do not exist, or are outweighed by the costs.  The opposition Labour Party Committee members have gone further still, in a separate ‘minority view’, calling the legislation ‘badly drafted’, and a waste of taxpayers’ money, while describing themselves as ‘bemused at the dexterity required by the Government to justify a complete reversal of its original position.’

The New Zealand Parliament is not bound to accept the Commerce Committee’s recommendation that the SAP and SEP provisions be deleted from the legislation when it comes up for further debate.  However, it looks very much as if any remaining supporters of the initiative will find themselves in the minority when the time arrives for a vote to be taken.

At the same time, however, the Commerce Committee has not recommended any substantive changes to provisions intended to introduce a joint Australia-New Zealand regulatory regime for patent attorneys, which will make New Zealand attorneys subject to essentially the same regulations and disciplinary proceedings as already apply to Australian attorneys.

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Tags: Australia, Examination, New Zealand, News, Politics

How to Patent Your Invention in Australia and the US

For many of the Australian clients I work with, the most important markets are Australia (i.e. the ‘home’ market) and the US (because of its size and relative accessibility).  This means that when it comes to protecting their innovative technologies, obtaining patents in these two countries is at the top of these clients’ lists of priorities.  I am therefore often asked how best to achieve this objective, how much it will cost, and how long it will take.

The typical ‘lawyer’ answer is, of course, ‘it depends’!  Do you want patents only in Australia and the US, or are there other countries of interest?  When and why do you require these patents?  Do you want to obtain patents as quickly as possible, or are there strategic advantages in drawing out the pendency (and finalisation of the scope of rights) for as long as possible?  What is your budget for the patenting program, both in the short term and over the coming years?

Assuming that you are able to answer these questions, it should be possible to develop a strategy that meets all of your requirements.  In this article I will go into further detail of one fairly typical and effective approach, along with some of the relevant considerations and potential variations.

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Tags: Australia, Examination, Paris Convention, Patent filing, PCT, PPH, Strategy, US

Overcoming Examination Objections – Advocacy vs Evidence

At a high level, the patent application process in Australia is not unduly complex.  First, an application is prepared and filed.  Then – either at filing, or at some later point in time – examination of the application is requested.  A patent examiner subsequently reviews the application, searches the prior art, and either approves the application for acceptance, or issues an examination report setting out any legal deficiencies or obstacles preventing this.  Once the application has been accepted, it is open for opposition by third parties for a period of three months.  The vast majority of accepted applications are not opposed, and so acceptance mostly leads directly to the grant of a patent.

Dealing with examination objections is therefore a critical part of the application process in many cases.  The primary decision to be made is whether to continue with the application, or to give up.  In my experience, some applicants are reluctant to take the second option, even when it would be wise to do so.  When the examiner’s objections have merit, and overcoming them would be unduly costly and/or could not be achieved without limiting the scope of the patent to something of little or no commercial value, the best thing to do might be to let the application die a natural death, and get on with doing something more productive with your time and money.  But this article is not going to be about how to abandon an application.

This article is about dealing with objections, in the many cases in which it is worthwhile to proceed with an application.  Sometimes – horrifying as it may seem – an examiner is simply wrong, in which case a reply to the examination report may consist of written submissions, such as reasoned explanation or argument, seeking to persuade the examiner of his or her error, such that the objections will be withdrawn.  Not uncommonly, there is some merit to the examiner’s objections, but the issues can be addressed by some form of permissible amendment to the application, usually accompanied by supporting written submissions.

What I intend to look at, in particular, is the nature of the written submissions made in response to an examination report.  How much weight do these have, what can be done to limit the examiner’s ability to ‘argue back’, and are there risks in testing the boundaries of ‘fair’ argument?

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Tags: Australia, Evidence, Examination, False suggestion, Patent Office

A ‘Heads-Up’ for Selected Patent Applicants: IP Australia Trialling Pre-Exam Notifications

From 25 January 2016 IP Australia has commenced a trial of a pre-examination notification process.  Under this process, which will initially be applied to 900 pending patent applications, a ‘Pre-Examination Processing Notice’ is sent out approximately two months before the application is referred to an examiner.  This provides the applicant with an opportunity to make any last-minute amendments to the application prior to the commencement of examination.

I think that this is a positive initiative by IP Australia that coud be of great benefit to (some) applicants and examiners alike.  The Australian system of examination differs from many others – such as the US, Europe, Japan and China – where a new response deadline (of typically between three and six months) is set each time an examination report is issued.  In Australia, an acceptance deadline is set, providing a single fixed period within which all objections to the grant of a patent must be overcome, regardless of how many rounds of review and response are require to reach this point.

The Raising the Bar law reforms, which commenced on 15 April 2013, reduced the time available for securing acceptance of an application to just 12 months (down from 21 months) from the date on which a first examination report is issued.  In some cases this is ample time.  In others it is less so.  Providing applicants with an opportunity to ‘hit the ground running’ by making any required amendments shortly prior to examination has the potential to reduce the number of rounds of substantive examination during the 12-month period, leading to earlier finalisation of applications.  This will also hopefully take some pressure off applicants, examiners and attorneys, none of whom enjoy finding themselves up against a final acceptance deadline!

Pre-exam notifications will not be beneficial for all applicants, however.  There will be cases in which they may slightly increase the cost of obtaining a patent in Australia without providing the applicant with any corresponding benefit.  Whether there is, nonetheless, a net benefit to applicants and the administration of the Australian patent system is something that IP Australia will hopefully be able to evaluate through the current trial.

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Tags: Australia, Examination, Patent Office

Can What You Say In Patent Examination Be Held Against You in Court?

Imagine that you have applied for a patent on an improved iron ore wagon.  During examination, you wanted to distinguish your invention from pre-existing ore wagons.  You therefore explained that your wagon has ‘an internal ridge’ that reinforces the side wall, and is ‘integrally formed within the side wall’, and you amended your claim to include this ‘integrally formed’ language.

Flash forward to a few years later, and you are in court arguing that one of your competitor’s iron ore wagons infringes your patent.  However, the competitor’s product has an internal ridge that is initially made separately from the side wall, and subsequently attached, e.g. by welding or riveting.  The court therefore has to decide whether this structure falls within the scope of the terminology ‘integrally formed within the side wall’.

This is, in a nutshell, the question that recently came before Justice Nicholas in the Federal Court of Australia (Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2015] FCA 1100).  Interestingly, it raises four separate issues:

1. whether the term ‘integrally formed’, in and of itself, excludes the two-step constructions;
2. whether the amendment of the claims to include the ‘integrally formed’ language during examination informs interpretation of the term;
3. whether the applicant’s accompanying explanation of the advantages of the claimed structure should be taken into account when interpreting ‘integrally formed’; and
4. whether the patentee is now barred (or, in legal parlance ‘estopped’) from making a different argument in court to the one it made during examination.

To put it another way: to what extent can what the applicant did and said during examination of the application be held against it in a court of law?

The short answer is ‘somewhat’, but to nowhere near the extent it would be in some other jurisdictions, and in particular the United States.  And – spoiler alert – no, ‘integrally formed’ does not include something made in two parts and then joined together!

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Tags: Claim construction, Estoppel, Examination

Rainbow Loom Patent Claims Rejected … For Now

I recently noted a potential patent battle brewing in Australia over the popular loom band products originally developed by Malaysian-born and US-based inventor, Cheong Choon Ng, and sold under the RAINBOW LOOM brand. 

Specifically, Ng has recently filed a series of five innovation patents, while local RAINBOW LOOM distributor Funtastic Limited sent letters placing Headstart International Pty Ltd and Moose Enterprise Pty Ltd, distributors of the competing CRA-Z-LOOM and FUNLOOM products in Australia, on notice of the prospective patent rights.  Headstart and Moose fired back by filing notices at the Australian Patent Office, along with numerous prior art documents and other information, contending that Ng’s innovation patent claims are invalid.

First examination reports have now issued in relation to all five innovation patents.  In four cases, all of the claims have been found to lack novelty (and innovative step) in view of various prior art documents, most of which were raised in the submissions made by Headstart and Moose.  All four of these patents include claims directed to the loom device itself, and the difficulty faced by Ng is that there is little structural difference between a loom suitable for use in weaving together rubber bands, and many older looms that have been used for weaving yarn.

For example, one of the documents cited against all of the innovation patents is US patent application publication no. 2008/0156043, entitled ‘Knitting Loom and Method of Use’.

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Tags: Australia, Examination, Innovation patent, News