SMEs, Universities and Research Organisations Most Disadvantaged by Lack of a Patent Filing Grace Period, says EPO Study

Over the past two decades or so, the number of major jurisdictions offering some form of general ‘grace period’ for filing of patent applications has grown significantly.  This has largely been driven by bilateral agreements (e.g. free trade agreements involving the United States), and regional agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), including provisions requiring the parties to provide a 12-month grace period.  With former hold-outs such as New Zealand, Japan and South Korea now having implemented grace periods in their national patent laws, Europe and China are currently the only two major jurisdictions in the world without a full-fledged grace period.  To my mind, it is an anomaly in this day and age of instantaneous global communication and publication that there are still countries that impose a strict novelty requirement, with the result that any public disclosure of an invention – accidental or deliberate – prior to filing remains fatal to the prospects of securing patent protection.

A new study recently published by the European Patent Office (EPO), The European patent system and the grace period: an impact analysis, is therefore a welcome contribution to ongoing debate as to whether, and how, the European patent system should harmonise with other major jurisdictions by introducing a general grace period.  Through surveys of users of the system between 2018 and 2020, the study seeks to:

1. evaluate the impact that the lack of a general grace period in Europe has on applicants in various categories, including European companies, universities and research organisations, and foreign applicants from the US, Japan and South Korea;
2. estimate the extent to which applicants would take advantage of any European grace period, and how this would depend upon the design of a grace period system; and
3. compare the perceived level of legal uncertainty that would be generated by the introduction of a grace period under different design options.

The survey sample is not unbiased.  For example, it does not include, by definition, entities that did not file applications during the selected three year period due to prior disclosures that precluded obtaining European patent rights in the absence of a grace period.  Even so, it appears that many participants have experience with grace periods across different jurisdictions, and have been affected in various ways by the lack of a grace period in Europe.  The results are therefore interesting, and appear likely to be indicative of wider experience, although they may underestimate the demand for the introduction of a European grace period.

The study found that the absence of a grace period has forced many applicants to postpone disclosures, with the most heavily affected being European small and medium enterprises (SMEs) at 10.4% and European universities at 12.1%.  For these entities, around two-thirds of these postponements had adverse consequences.  Universities reported a negative impact mostly on reputation or other aspects of their operations (such as delayed research publications).  For SMEs, the negative impact was roughly equally split across development/commercialisation and reputational factors.

Nonetheless, European businesses (small and large) are generally successful in avoiding pre-filing disclosures, reporting less than 1% of cases in which an application was prevented by a disclosure.  European universities, on the other hand, reported 7.8% of European applications being prevented due to a pre-filing disclosure, presumably reflecting the difficulty of enforcing disclosure restraints in an academic environment.  US companies also reported being heavily hit by the lack of a European grace period, with 7.2% of applications prevented by a pre-filing disclosure.

The study further found that the extent to which applicants would take advantage of a grace period, should one be introduced in Europe would be substantially affected by its design.  An unrestricted (i.e. ‘US-style’) design – with no declaration requirements, or preservation of prior user rights – was estimated to result in just over 25% of all European patent applications relying on the grace period (which seems like a very high proportion to me).  On the other hand, an ‘Australian-style’ system – which preserves rights for third parties that commence use of an invention following a disclosure, but before filing of a patent application – was estimated to result in under 10% of applications relying on the grace period.

While grace periods obviously benefit applicants, they create additional uncertainty in that the maximum delay between disclosure of an invention and publication of any patent application revealing the extent to which the invention may receive legal protection is extended from 18 months to as much as 30 months.  The study found that the perception of legal uncertainty among surveyed users of the European patent system was relatively high, driven primarily by European companies which harbour the greatest concerns by a significant margin.  ‘Perception’ is a nebulous concept, however, and there are good reasons to suspect that fear of the unknown is a major driver of survey responses here.

Overall, I would suggest that this EPO study bolsters the case for the introduction of a general grace period in Europe.  The leading argument in favour remains that of international harmonisation, with most other major jurisdictions now providing some form of grace period.  Adding to this, the study indicates that the lack of any similar provision in Europe has an adverse impact on a small, but not insignificant, number of applicants and prospective applicants.  The major counter-argument is that grace periods create legal uncertainty.  However, it is mainly European businesses that – when asked – perceive this as a significant consideration.  European universities and research organisations, along with applicants of all kinds from other jurisdictions which already provide grace periods (the US, Japan and South Korea), have far fewer concerns.

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Tags: Europe, Grace period, Innovation policy

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

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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Tags: Australia, Extensions of time, Grace period, Patent Office

Australian Patent Office Finds Grace Period Applies to Applicant’s Own ‘Secret Prior Art’

One of the cardinal rules of the patent system is that you should not disclose your invention before you have filed an appropriate patent application.  An invention must be novel and involve an inventive step at the date of first filing.  These requirements are tested against the ‘prior art’, which is generally all information made available to the public, by anyone, at any earlier time.  This includes any disclosures made by inventors and/or applicants themselves.

In some countries, however, there are ‘grace period’ provisions that permit a patent application to be validly-filed during some limited period – typically 12 months – following a disclosure.  Australia is such a country.  Under the relevant Australian law and regulations, any information made publicly available, through any publication or use of the invention by an inventor or subsequent assignee of the invention, must be disregarded as prior art, so long as a patent application is filed within 12 months of the disclosure.  It turns out, however, that this is an overly-simplistic way to describe the way in which the grace period rules work.

A complication arises in the case of what we in Australia usually call a ‘whole of contents’ citation, and which our American counterparts tend to call ‘secret prior art’.  Patent applications are not usually published until 18 months after their earliest claimed filing date (i.e. priority date), which means that it is possible for a prior application (i.e. one for which the inventor claims an earlier priority date) to be published after a later application.  Under Australian law, such unpublished (i.e. ‘secret’) applications can be cited only in relation to novelty, but not for inventive step purposes.  This means that a later applicant is barred from obtaining a patent for something that an earlier applicant had demonstrably already invented, and is entitled to claim as their own.

But what happens when the applicants of the ‘secret’ prior application and the later application are one and the same?  On the face of it, this is not a situation that the grace period was designed to address.  Grace periods are about prior public disclosures, not prior unpublished applications.  Nonetheless, in a recent decision an Australian Patent Office hearing officer has managed to interpret the grace period rules in a manner that encompasses ‘self-whole-of-contents’ applications: Rozenberg & Co Pty Ltd. v Velin-Pharma A/S [2017] APO 61. 

How this outcome was achieved is quite interesting.  Whether it is correct or not is another matter – in my view there are arguments either way, although I am inclined to think that the grace period does not apply to ‘whole of contents’ citations, and that the law provides more appropriate mechanisms to deal with this situation.

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Tags: Australia, Grace period, Prior art, Whole of contents

Secret Use – Australia’s ‘On-Sale’ Bar

As readers will be aware, the publication or public use of an invention prior to the filing of a suitable patent application to establish a priority date, constitutes prior art which may invalidate the subsequent patent claims, unless excused by some form of grace period (see ‘Grace Periods’ – Consequences of Disclosure Before Filing).

But what about use of an invention which is not public?  For example, a new manufacturing process may be patentable, and it may be possible to make use of such a process within a secure facility such that it is not disclosed to the public.  As another example, it may sometimes be possible to manufacture a new patentable product, such as in the form of a prototype, which might even be demonstrated to prospective customers under conditions of confidentiality before any patent application is filed.

The question that then arises is whether, and in what circumstances, such use may invalidate a subsequently-filed patent application?

It is timely to look at this question now, because the Raising the Bar reforms in Australia, and the America Invents reforms in the US, will both result in changes to the treatment of non-public prior use in the early part of 2013.

Under the current US law, 35 USC 102(b) provides that if an invention is ‘in public use or on sale in this country [i.e. the US], more than one year prior to the date of the application for patent in the United States’ then the inventor will lose the right to obtain a patent.  This is generally known as the ‘on-sale bar’, since it bars a person from obtaining a valid patent if they have been making commercial use of the invention any earlier than one year before the filing of a US patent application.

As we shall see, the Australian law relating to ‘secret use’ focuses similarly on commercial benefit (although this is to be found in the case law, rather than in the words of the Patents Act 1990), however there is currently no grace period available in relation to such use.  But, as we shall also explain, there will be key changes next year to the working of the grace period in relation to prior commercial use in both Australia and the US.

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Tags: Australia, Grace period, Law reform, Patent law, Secret use, US

‘Grace Periods’ – Consequences of Disclosure Before Filing

As most readers will be aware, one of the cardinal rules of the patent system is that you should not tell anybody about your invention before you have an appropriate patent application filed.  An invention must be novel and involve an inventive step at the date of first filing.  These requirements are tested against the ‘prior art’, which is generally all information made available to the public, by anyone, at any earlier time.  There is no general, internationally-recognised, exception to this rule just because a prior disclosure has been made by an inventor or applicant.

However, there are a number of countries in which the patent law provides for a ‘grace period’.  For the purposes of this discussion, we define this term as follows:

grace period:- a period of time, prior to the filing of a patent application, during which any disclosures, intentional or unintentional, deriving from the inventor or a subsequent owner of the invention, are unconditionally excused from consideration as prior art against the application.

Our requirement that such disclosures be excused without condition (other than as to timing) is important.  We sometimes see discussions of ‘grace periods’ which include references to provisions relating to unauthorised disclosures, or disclosures at recognised ‘international exhibitions’ or before ‘learned societies’.  The laws of many countries – including many notoriously grace-period-free European nations – contain such provisions.  We do not consider that there is much ‘grace’ in provisions that apply only in narrowly restricted circumstances.

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Tags: Australia, Canada, Europe, Grace period, US

A Note on the Limitations of the Australian "Grace Period"

We read a comment on another blog today that reminded us of common misconceptions about the Australian "grace period", held particularly by people more familiar with the US system.

This seemed like a good prompt for a quick review of the issues to watch out for.

As most readers will be aware, the "grace period" is a one-year period prior to the filing of a patent application, during which any public disclosure or use of an invention by the inventor(s) or applicant(s) will not be regarded as prior art citable against the application.

To put it the other way around, if you disclose your invention, you have a maximum of 12 months within which to file a patent application, otherwise your own disclosure will invalidate the application.

Most countries do not have a general period of grace, with the US, Canada and Australia being notable amongst the exceptions.  However, the Australian grace period should not be routinely relied upon, due to a number of limitations compared to the US system.

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Tags: Australia, Grace period