IP Australia is Seeking Feedback on Proposed Fee Changes

IP Australia has published a draft of its four-yearly Cost Recovery Implementation Statement (CRIS), which outlines proposed fee changes that would take effect from October 2024.  It is also taking the opportunity to review the hearing costs that may be awarded for Patents, Trade Marks and Designs.  Feedback on the proposals may be provided via submissions to IP Australia’s public consultation page.  Consultation is open until Sunday, 21 January 2024. 

In this article I will be looking in greater detail at some of the changes relating to patents in particular.  Stakeholders with an interest in any of the rights administered by IP Australia (patents, trade marks, registered designs and plant breeder’s rights) should take the opportunity to review the draft CRIS and submit any comments or concerns during the consultation period.  Briefly, on non-patent matters, I note that there are significant changes proposed to the fee structure associated with trade mark opposition hearings, with fees that increase with the number of grounds, beyond the first three, raised in a Statement of Grounds and Particulars (SGP), and with the number of prior trade marks, beyond the first ten, cited under section 44.  For designs, it is proposed to reduce application fees, while the fees for requesting examination will be slightly increased.  For Plant Breeder’s Rights, modest increases to application fees are proposed, however there will be more substantial increases in examination fees, and a doubling of renewal fees.

Registered trans-Tasman attorneys will want to take note that IP Australia is also proposing to increase registration renewal fees by A$50 across the board, which it says is required ‘to assist in covering the cost of administering the Trans-Tasman IP Attorney system.’

In the patents area, the headline changes, discussed in greater detail below, are: modest increases to most filing, examination and renewal fees; a doubling of opposition and hearing fees; a change in the timing (but not amount) of excess claim fees, from being charged at acceptance to (also) being charged at the time of requesting examination; a surprising (and perhaps unintentional) removal of innovation patent filing fees; and significant increases to the level of costs that can be awarded in contested proceedings, including patent oppositions.

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Tags: Australia, Costs, Fees, Patent Office, Public consultation

Intellectual Property is Integral to AI Regulation, and Getting it Wrong Will Hand More Power to Big Tech

Governments around the world are considering how they can – and should – regulate the development and deployment of increasingly powerful and disruptive artificial intelligence (AI) technologies.  Australia is no exception.  On 1 June 2023, the Australian government announced the release of two papers intended to help ‘ensure the growth of artificial intelligence technologies (AI) in Australia is safe and responsible’.  The first of these is the Rapid Response Report: Generative AI, which was commissioned by Australia’s National Science and Technology Council at the request of the Minister for Industry and Science, Ed Husic, back in February.  The Rapid Response Report assesses potential risks and opportunities in relation to AI, and is intended to provide a scientific basis for discussions about the way forward.  The second paper is the Safe and Responsible AI in Australia Discussion Paper which, according to the Minister’s media release, ‘canvasses existing regulatory and governance responses in Australia and overseas, identifies potential gaps and proposes several options to strengthen the framework governing the safe and responsible use of AI.’

The discussion paper seeks feedback on how Australia can address the potential risks of AI.  It provides an overview of existing domestic and international AI governance and regulation, and identifies potential gaps and additional mechanisms – including regulations, standards, tools, frameworks, principles and business practices – to support the development and adoption of AI.  It focuses on ensuring AI is used safely and responsibly, but does not consider all issues related to AI, such as the implications of AI on the labour market and skills, national security, or military specific AI uses.

Another key area that is expressly excluded from this consultation is intellectual property.  That is, in my view, a serious shortcoming.  It appears to presume that IP is somehow separable from the other issues covered by the discussion paper.  This is a flawed presumption, particularly in relation to business practices.  In the contemporary world, IP is at the heart of many business practices, and the laws and regulations that we make around IP can be the difference between a business practice that is viable, and one that is untenable.  And not every business practice that might be enabled by IP laws is necessarily desirable or of net benefit to society.  If we fail to consider the interplay between IP laws, business practices, and other forms of regulation, then we risk making mistakes that might prove very difficult to undo in the future.

This article is prompted by, but is not primarily about, the Australian consultation process (although I will return to that at the end).  It is about how IP rights, and other forms of regulation, could operate to concentrate increasing levels of power in the hands of the few big tech companies – such as Microsoft (through its partnership with OpenAI), Google and Amazon – that have risen in recent years as the dominant players in AI and its enabling technologies.  Based on recent developments, I believe that the stage is already being set for implementation of exactly the kinds of laws and regulations that would most benefit these companies, under the guise of protecting innovators, content creators, and the general public against the various threats said to be presented by AI.

A perfect storm is brewing.  Onerous regulation around the development, training and deployment of AI systems could combine with IP-based restraints on the use of training data, and on AI outputs, to bake-in an advantage for the world’s richest and best-resourced companies.  The storm is being fuelled by hype and fearmongering which, even though much of it may be well-intentioned, plays to the interests of big tech. 

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Tags: Artificial intelligence, Australia, Copyright, Innovation policy, Machine learning, Patent law, Public consultation, Public policy

IP Australia Proposes Minor Fee Changes, Major Changes to Opposition and Other Hearing Costs Awards

Just prior to Christmas, IP Australia announced that it is seeking feedback on its draft Cost Recovery Implementation Statement (CRIS), which outlines proposed fee changes that would take effect from October 2020.  It is also taking the opportunity to review the hearing costs that may be awarded for Patents, Trade Marks and Designs.  The public consultation process closes this Sunday, 16 February 2020.  In this article I will look briefly at proposed fee changes in relation to patents, none of which strike me as unreasonable or contentious.  I am, however, more concerned about proposed increases in the costs that may be awarded in relation to contested hearings, and most particularly patent oppositions.

IP Australia conducts its regulatory role in administering Australia’s system of registered rights (patents, trade marks, designs, and plant breeder’s rights) on a cost recovery basis, i.e. it seeks to cover the costs of these aspects of its activities from the fees charged to users of the system (which these days, for better or worse, it calls ‘customers’).  To do this, it uses various financial and economic systems and models to forecast expected demand and cost of service delivery, and reviews and adjusts fees on this basis every few years.  IP Australia last undertook a fee review in the 2015-16 financial year.

Cost recovery does not require each individual fee to reflect the cost of the nominally associated service.  The fee for requesting examination of a standard patent, for example, is (and will remain, under the proposed fee structure) A$490, which doubtless falls far short of the actual cost of examining an application.  Patent maintenance fees, on the other hand, correspond with minimal and highly automated administrative tasks, and currently rise as high as A$2550 annually, for pharmaceutical patents extended beyond the standard 20 year term.  This reflects the fact that fee setting can serve broader policy purposes, such as providing an incentive for patentees not to maintain patents that no longer hold corresponding commercial value, thus freeing up the patented technology for public use.

Costs in contested hearings, on the other hand, have nothing to do with the operations of IP Australia.  They are amounts, set by regulation, that can be awarded by designated officers of IP Australia against unsuccessful parties in administrative proceedings such as patent oppositions.  They are paid directly by the ‘loser’ to the ‘winner’, and are intended to offset the actual costs of the proceedings incurred by the successful party.  IP Australia is proposing to increase the costs that may be awarded significantly (by more than four times in some cases), on the basis that this will ‘better reflect the actual costs incurred’, and that the proposed costs ‘are based on the practice of the Federal Court’.  Both of these justifications may be true, though that does not automatically make them relevant!

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Tags: Australia, Costs, Fees, Maintenance fees, Opposition, Patent Office, Public consultation

Changes to Australia’s Law on Inventive Step Put On-Hold Following Consultation on Draft Legislation

Back in July, I reported the commencement of a process of consultation on an Exposure Draft of legislation – the proposed Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2018 – intended to introduce a number of further reforms to Australia’s intellectual property laws, including abolition of the innovation patent, introducing an ‘objects clause’ into the Patents Act 1990, and (again) raising the standard of inventive step.  The consultation period concluded on 31 August 2018, and IP Australia received 18 non-confidential submissions (including one from me [PDF, 155kB]).  It has now published a response to those submissions [PDF 188kB].  Additionally (assuming that my own experience is representative) individual responses have been prepared and sent to each party that made a submission, which has become a commendable feature of recent consultations by IP Australia.  Full details of the draft legislation, and consultation process, can be found on IP Australia’s web site.

As many readers will be aware, the majority of the provisions in the draft legislation are intended to implement recommendations arising from the Productivity Commission’s (PC) enquiry into Australia’s Intellectual Property Arrangements, that have been accepted by the government. 

Following consultation, IP Australia intends to proceed with the following reforms, substantially as proposed in the draft legislation:

1. abolition of the innovation patent system;
2. introduction of an ‘objects clause’ into the Australian Patents Act (for anyone who does not already know, an objects clause is a provision that outlines the underlying purposes of the legislation, which can be used to resolve uncertainty and ambiguity); and
3. amendments to Crown use and compulsory licensing provisions (subject to a number of technical amendments identified in submissions).

None of this comes as a great surprise.  Given that the government accepted the PC’s recommendations in each of these areas, IP Australia has an obligation to progress the implementing legislation.  Any action to block these reforms must now take place at the parliamentary level.  The changes to Crown use and compulsory licensing in fact received broad support from stakeholders.  On the other hand, many submissions continued to oppose the abolition of the innovation patent system, and the inclusion of an ‘objects clause’, notwithstanding that challenging the decisions already made by the government was beyond the scope of the consultation process.  As would be expected, therefore, such submissions fell on deaf ears.  Indeed, one can almost detect a note of irritation in IP Australia’s reply that it ‘notes that the decision to abolish the innovation patent system was taken by the Government, and that this consultation was directed towards the implementation of that decision.’

In a less predictable twist, however, IP Australia has found a range of concerns expressed in submissions relating to the draft amendments to inventive step provisions to be ‘persuasive’.  In particular, it has been persuaded ‘that the proposed changes to the legislation and the accompanying EM [Explanatory Memorandum] will not achieve the intended outcome of sufficiently raising the threshold for inventive step, as the wording is not sufficiently different and that the courts may not have sufficient regard to the EM when considering the proposed inventive step changes.’

As a result, the inventive step reforms have been placed on-hold pending further consideration:

IP Australia has advised the Government of the outcome of this consultation process. The Government has decided to postpone changes to inventive step to ensure there is sufficient time to formulate and consult further on options to ensure legislative changes have the intended effect.

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Tags: Australia, Law reform, Obviousness, Patent law, Public consultation

Reprieve for the Innovation Patent Short-Lived, as New IP Laws Amendment Bill Exposed for Comment

My speculation that the last-minute removal from the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 of provisions to phase out the innovation patent system had more to do with political expediency than any change-of-heart over abolishing the system appears to have been well-founded.  Despite an announcement at the time that ‘the Government has decided to undertake further industry consultation targeted at better understanding the needs of innovative SMEs before the phase out of the innovation patent occurs’, and the fact that a consultation to learn more about the needs of innovative SMEs remains open until 3 August 2018, amendments to substantially prevent the grant of new innovation patents have re-emerged in an exposure draft of the Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2018.  The provisions are unchanged from the earlier draft, and would simply ensure that no innovation patent application having an effective filing date on or after commencement could pass the formalities examination and be validly granted, and that no innovation patent claim having a priority date on or after the date of commencement could be validly certified.

The new draft legislation, published on IP Australia’s web site on 23 July 2018, also includes provisions intended to:

1. amend the inventive step requirements for Australian patents;
2. introduce an objects clause into the Patents Act 1990;
3. amend Crown use provisions of the patents and designs legislation;
4. amend compulsory licensing provisions in the Patents Act; and
5. implement measures to streamline processes within the Patents and Trade Marks Acts and make technical improvements to the legislation.

Further details of the main patent-related provisions are discussed below.

In addition to the earlier consultation on the provisions for phasing out the innovation patent, IP Australia has also previously consulted on options for implementation of the inventive step changes, objects clause, Crown use and compulsory licensing provisions. However, this draft legislation is the first time that specific legislative provisions have been published for comment.

The exposure draft is open for public comment until 31 August 2018.  Instructions for making submissions can be found on the consultation web page.

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Tags: Australia, Law reform, Patent law, Public consultation

Australian Government Consultation on Changes to the R&D Tax Incentive Program

On 8 May 2018, the Australian Government announced its plans to reform the Research and Development Tax Incentive (R&DTI) program to better target the program and improve its integrity and fiscal affordability in response to the recommendations of the 2016 Review of the R&D Tax Incentive (‘the Review’).  Changes to the program will apply for income years starting on or after 1 July 2018, i.e. the current financial year just beginning.  On 29 June 2018, the government released exposure draft legislation and associated explanatory materials setting out its proposed implementation of the reforms.  It is currently seeking stakeholder feedback on these materials, and has published an accompanying consultation paper outlining areas in which specific feedback on the implementation of the reforms is being requested.

The R&DTI is the Australian Government’s largest, and most costly, innovation incentive program.  In its current form, it provides a tax offset (of 43.5% or 38.5%, depending on annual aggregated turnover) for some of a company's cost of eligible R&D activities.  To be eligible, an applicant must be an incorporated company, and be conducting eligible core R&D activities incurring an expenditure of at least A$20,000.  The legislation defines eligible activities as being experiments that are guided by hypotheses and conducted for the purpose of generating new knowledge.

The Review found that the R&DTI was failing to fully achieve its objectives of generating additional R&D activities and was not well targeted, in the sense that it provides benefits for R&D activities that would have been undertaken anyway.  It also found the cost of the Incentive had exceeded its initial estimates of A$1.8 billion per annum when it was introduced in 2011-12.  In 2016-17, it actually cost around A$3 billion.  The Review made a number of recommendations to improve the integrity and effectiveness of the program and to promote its objectives.  The proposed legislation would implement a number of these recommendations, adopted in the 2018-19 national budget.

If passed, the proposed changes to the R&DTI program will apply a A$4 million cap to the refund available to small companies (although, notably, clinical trials will be exempt from the cap).  They will also reduce the incentive available to large companies, and make the corresponding tax offset dependent upon R&D intensity (i.e. cost of R&D relative to total expenditure).  Additionally, they will close some ‘loopholes’ and make a number of adjustments to the administration of the program, including enhancing transparency by requiring information about companies’ R&D tax claims to be published.

A consultation process in currently underway, with submissions due by 26 July 2018.

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Tags: Legislation, Public consultation, Tax incentives

The Australian Government is Asking SMEs How They Manage and Exploit Their Intellectual Capital (Mostly, They Don’t)

The Australian Government’s Department of Industry, Innovation and Science (DIIS) has launched a consultation ‘to better understand the needs of innovative Small and Medium Enterprises (SMEs) in managing and exploiting their intellectual capital’.  If my experience is anything to go by, the first challenge will be finding Australian SMEs with an understanding of what intellectual capital is, let alone how to manage and exploit it in any systematic way.  Fortunately, DIIS has provided its own definition of the term: ‘by intellectual capital we mean things like ideas, know-how, branding, data, trade secrets and copyright and also registered intellectual property (IP) rights such as patents, trade marks, designs and plant breeder’s rights.’

While potentially patentable inventions may form only a small part of a company’s intellectual capital – and there are, of course, many businesses that are not at all involved in the generation of new technology – patent filings are nonetheless widely seen as one indication of innovative activity within the national economy.  Additionally, applying for IP protection is a clear signal that a business has some awareness of its intellectual capital, even if only informally.  In the case of a patent filing, someone has at least identified the existence of an invention, and made a conscious decision that it is of sufficient value to warrant protection.  I recently wrote about Australia’s poor performance in patent filings, which I attribute to a generally negative mind-set, arising from a combination of ignorance, aversion, and lack of appreciation of the value of patents (and other forms of IP).  Relatively low rates of patent filing might therefore be a reflection of an absence of awareness, processes, and strategies for actively managing and exploiting intellectual capital within the vast majority of Australian businesses.

According to a 2016 report published by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), there were over 2.1 million businesses operating in Australia in 2015.  Just 0.2% of these (around 3,700) were classified as large businesses, employing over 200 people.  A further 2.4% (just under 51,000) were medium-sized enterprises, employing between 20 and 199 people.  The majority of businesses smaller than this – 60.6%, or just over two million – are non-employing sole traders (like me).  As I demonstrate in this article, however, even on the most generous interpretation of the available data, less than 0.3% of SMEs and sole traders filed any kind of Australian patent application in 2015.  On average, SMEs filed around 1.5 applications each (if they filed at all), while the typical individual applicant filed only a single application.  By comparison, just over 5% of large firms filed patent applications in Australia, and on average these firms filed over five applications each.

I fear, therefore, that DIIS will not receive too many responses to its consultation, and those businesses that do respond are unlikely to represent a broad cross-section of Australian SMEs.  Businesses for which intellectual capital is barely on the radar are unlikely to become aware of the consultation, or take the time to respond to questions set out in the Submission Guide, such as: ‘What does “intellectual capital” mean to you?’; ‘What role does it play in your business strategy?’; ‘How does your business exploit its intellectual capital?’; ‘Can you tell us about any successes or failures?’; ‘Do you seek advice on how to manage and exploit your intellectual capital?’; and ‘If not, why not?’.

For those SMEs, and other stakeholders, with an interest in the fate of Australia’s innovation patent system, this consultation provides a further opportunity to make their views known.  When provisions to abolish the innovation patent were recently dropped from legislation introduced to Parliament, IP Australia announced that the Government had ‘decided to undertake further industry consultation targeted at better understanding the needs of innovative SMEs before the phase out of the innovation patent occurs’.  The Submission Guide does not expressly mention the innovation patent, however the consultation is explicitly linked to the Productivity Commission’s inquiry into Australia’s IP arrangements, noting that the Government is ‘committed to continue to further explore the overall needs of Australian SMEs in relation to exploiting their intellectual capital, and securing, utilising and enforcing their IP rights.’  Filing numbers presented in this article show that, for whatever reasons, SMEs have made increasing use of the innovation patent system over time.

While the consultation is primarily directed to SMEs, the Submission Guide also appears to envisage that submissions may be received from ‘professional organisations providing service or advice to SMEs.’

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Tags: Australia, Intellectual capital, IPGOD, Public consultation

Is Australia Headed for a ‘Technology’ Test for Patent-Eligibility?

Last week I reported on IP Australia’s response to submissions made in its consultation on the Exposure Draft Intellectual Property Laws Amendment Bill 2017 and Regulations.  Now, hot on the heels of that development, IP Australia has also published the submissions it received in its other ongoing consultation process, commenced in September 2017, along with its corresponding further response.  This consultation also relates largely to implementing recommendations made by the Productivity Commission, and accepted by the Australian Government, including: amending inventive step requirements; introducing an objects clause into the Patents Act 1990; amending the provisions for Crown use of patents (and designs); and amending the provisions for compulsory licensing of patents.  In this case, however, proposed legislation has yet to be drafted, and the initial consultation has been directed to obtaining feedback from stakeholders on a number of potential implementation options for each recommendation.

A total of 18 non-confidential submissions were received in response to IP Australia’s consultation papers.  Once again, a number of these submissions argued against changes in the law, notwithstanding that the Government has already decided to implement the various Productivity Commission recommendations, and doing nothing is therefore not an option that is open to IP Australia.  Fifteen non-confidential submissions provided comments on the options for amending the inventive step requirements, of which 14 did not support making any changes.  Fourteen non-confidential submissions were received in relation to introducing an objects clause, of which just six submissions were in favour, and eight did not support the change.

There was less stakeholder interest in Crown use and compulsory licensing, however among those that did make submissions on these issues there was somewhat greater support for change.  Of seven non-confidential submissions relating to Crown use, five supported amending the law.  In relation to compulsory licensing provisions, three out of eight non-confidential submissions supported change.

Crown use and compulsory licensing provisions have rarely been invoked in Australia (and no compulsory licence has ever been granted).  Furthermore, the proposed amendments are unlikely to result in any increase in the use of these provisions.  The relative lack of interest in these areas is therefore not very surprising.

However, the proposed changes to the inventive step requirements, and the preferred wording of the objects clause, could have the more profound effect of introducing a ‘technology’ requirement into Australian patent law, creating tension with previous statements of the Full Bench of the Federal Court of Australia rejecting the proposition that patentable inventions be required to fall within an ‘area of science and technology’.

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Tags: Australia, Law reform, Public consultation

Continuing Opposition to Abolition of the Innovation Patent Falls On Deaf Ears at IP Australia

IP Australia has published its response to submissions made in its consultation on the Exposure Draft Intellectual Property Laws Amendment Bill 2017 and Regulations.  The period for comment on the proposed legislation closed on 4 December 2017.  The draft legislation contains measures to implement aspects of the Government’s response to the Productivity Commission’s inquiry into Australia’s intellectual property arrangements, along with amendments to strengthen plant breeder’s rights (PBR) enforcement, streamline official processes, and make technical improvements to the legislation.

While the majority of Productivity Commission recommendations addressed by the draft legislation relate to PBRs and trade marks, the most significant patent-related provisions are those implementing the abolition of the innovation patent system.  The proposed approach would see a fairly gentle transition, with applicants given a year’s notice within which innovation patents would still be granted under the current system, followed by eight years during which all existing innovation patents would gradually cease or expire, and restrictions would be imposed on new applications and the certification of innovation patent claims.

When the draft legislation was published, I argued that the proposed transition could be viewed as too gentle, considering the Productivity Commission’s relatively strong objections to the strategic use of divisional innovation patents, and the uncertainty caused by uncertified claims.  This was, however, very much a contingent view – i.e. given that the innovation patent system is to be abolished based upon the Productivity Commission’s recommendation, the abolition should be implemented in a way that most-effectively addresses the Commission’s reasons for making that recommendation. 

In fact, I would prefer to see the innovation patent system given a second chance, in an improved form.  However, since the Government has accepted the Productivity Commission’s recommendation, and the consultation was directed to its implementation, rather than being a further opportunity to canvas objections to this decision, I did not make a submission.  This did not, however, prevent a number of others from taking the opportunity to once again express their opposition to abolishing the innovation patent system.

Unsurprisingly, these repeated objections fell on deaf ears, with IP Australia focussing in its response on the few submissions that actually addressed the merits of the proposed legislation.  On this basis, it appears at this stage that – absent a last-minute reprieve at the parliamentary level – the process of abolishing the innovation patent system is likely to proceed in substantially the manner set out in the draft legislation.

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Tags: Australia, Innovation patent, Law reform, Public consultation

Compelling Applicants to Identify ‘Technical Features’ of Inventions Claimed in Australian Patent Applications

As I have reported previously, a consultation process in currently underway in relation to a number of recommendations accepted by the Australian Government following the Productivity Commission’s Report on its Inquiry into Australia’s Intellectual Property Arrangements (‘PC Report’).  IP Australia has issued a number of consultation papers, and written submissions from interested stakeholders are due by this Friday, 17 November 2017.

The primary concern of the economists making up the PC committee that conducted the IP inquiry, with regard to patents in particular, is that rights are granted too readily in Australia, resulting in an excessive number of ‘low-value’ patents being granted.  When the PC economists refer to ‘low-value’, what they mean is that the innovations protected by the patents have low social or additional value.  The Report explains these characteristics in the following terms (see pages 200-1 of the Report):

1. innovations are of greater social value where they result in new goods, services, or production methods that improve the allocation of society’s limited resources, particularly where those innovations advance human knowledge and create knowledge spillovers into other areas of the economy;
2. innovations are additional where they would not have been developed or commercialised (or development would have been delayed) absent patent protection – noting that (at least according to some economic theories of the patent system) patents for innovations that are not ‘additional’ impose net costs on the community even if the innovation is socially valuable.

As a result of these concerns, the PC wants Australian patents to be harder to obtain (or, in the case of innovation patents, impossible to obtain).  The primary mechanism proposed by the PC for achieving this objective is to raise the standard of inventive step, possibly by imposing conditions that are unique among the world’s patent systems, such that the requirements in Australia are at least as high as, and preferably higher than, those existing in other jurisdictions.

To this end, the PC has recommended that applicants for patents in Australia should have to identify the technical features of the invention in the patent claims.  It has conceived of this as a new obligation, over and above existing legal requirements for patent claims in Australia, having a goal of improving the information available to examiners for identifying relevant prior art and assessing inventive step.  Furthermore, the PC believes – and IP Australia appears to have accepted – that this is an existing additional requirement under European patent law, and that it will impose a minimal burden upon most applicants.

In my view, however, the PC’s proposal is fundamentally misconceived.  In saying this, I mean no disrespect to the Commissioners.  They were handed an impossible task by the Government – given just 12 months to understand, review, and recommend reforms to Australia’s IP arrangements across the whole gamut of relevant rights, including patents, copyright, trade marks, registered designs, plant breeder’s rights, and circuit layout rights.  Consider, however, that after focussing primarily on patent law and practice continuously for over 15 years of my working life, I still find inventive step to be a difficult and constantly shifting topic.  When looked at from this perspective, the PC did a remarkable job.  But it would be wrong to think that all of its pronouncements are authoritative and beyond reproach.

IP Australia has offered three alternative proposals for implementing the PC’s recommendation, one of which requires change to substantive legal requirements for patent validity, while the other two would primarily involve changes in examination practice.  Unfortunately, because the recommendation itself is flawed, I do not consider any of these proposals to be acceptable.  Legislative change would create uncertainty and have possible unintended consequences, whereas changes in practice without the backing of legislation would be liable to challenge as being inconsistent with existing law.

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Tags: Australia, Innovation policy, Law reform, Obviousness, Patent law, Patentable subject matter, Public consultation, Public policy

New Online Register Exposes IP Australia’s Policy Concerns

A few weeks ago, following the release of the Government’s response to the Productivity Commission inquiry into Australia’s intellectual property arrangements, IP Australia published a beta version of its ‘policy issues register’ online.  Publication of the register is an initiative by IP Australia under the Open Government National Action Plan, and is intended to enhance public participation in government decision-making.

While many interested stakeholders in the Australian IP system would be aware of active enquiries, consultations, and legislative reform – such as the ongoing consultations into various matters, including raising the standard of inventive step under the Australian patent law, and on the proposed draft Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill and Regulations 2017 – up until now there has been little insight available into other issues and concerns that may have been occupying the policy wonks at IP Australia.

This is changed by the new online register, which is a list of issues that IP Australia is considering or working on for policy action or legislative amendment.  The issues may relate to any of the IP rights administered by IP Australia, i.e. patents, trade marks, designs and plant breeder’s rights (but, notably, not copyright, which falls within the responsibilities of the Department of Communications and the Arts). 

Issues listed in the register may come to the attention of IP Australia as a result of:

1. government priorities;
2. recommendations from IP related reviews;
3. stakeholder suggestions;
4. international developments; or
5. internal proposals.

The current beta release of the online policy issues register will run until 16 March 2018, after which IP Australia plans to conduct a review in response to any input from the public.  In the meantime, it is possible to provide feedback on each individual issue via an accompanying form, to submit new policy issues for consideration, and to submit comments on the beta policy issues register itself.

Below, I highlight just a few of the patent-related areas in which IP Australia’s ongoing policy concerns are revealed by the online register.

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Tags: Australia, Law reform, Patent Office, Public consultation, Public policy

The Impending Extinction of the Australian Innovation Patent

The photograph accompanying this article is of ‘Benjamin’, the last known thylacine (commonly known as the Tasmanian tiger), which died in captivity in the Hobart zoo, most likely as a result of neglect, on 7 September 1936.  Benjamin had been captured in 1933, three years after the last thylacine known to have been shot in the wild was killed by a farmer.  Indeed, a major contributor to the thylacine’s extinction was its inconvenience to farmers.  As the largest carnivorous marsupial of modern times, the thylacine was blamed for the slaughter of livestock, and between 1888 and 1909 the Tasmanian government paid £1 per head for dead adult animals and ten shillings for pups – which was a lot of money at the time.

The innovation patent is another unique Australian creature that is about to become extinct at the hand of government policy.  Unfortunately for the innovation patent, it has become a great inconvenience to economists, within IP Australia and at the Productivity Commission, who believe that the system, and in particular the low threshold for the innovative step, contributes to low value patents, which they blame for the imposition of unacceptable costs on the community.  IP Australia has now published draft legislation and rules (the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill and Regulations 2017) including measures to implement aspects of the Government’s response to the Productivity Commission’s inquiry into Australia’s Intellectual Property arrangements.  These measures include the abolition of the innovation patent which will, if the draft legislation becomes law in its current form, go out like the thylacine, not with a bang but a whimper, dwindling slowly away over eight years after the last shot has been fired against it. 

Of course I am aware that the extinction of an entire species is a tragedy of criminal proportions, and that comparison with the mere repeal of a second-tier patent system is hyperbole of the highest order.  But I am using this rhetorical device to highlight the analogous manner in which government policy is driven in each case by a single perspective on the problem at hand.  Both the thylacine bounty and the abolition of the innovation patent are the result of governments acting on input provided by particular interest groups, i.e. farmers and economists respectively.  Just as the 19th century was a different time, when there would have been little public interest in, or opposition to, the culling of a unique native animal to protect farmers’ livelihoods (and the food supply), there is today very little interest from the broader community in challenging economists’ views on what is best for Australia’s innovation and intellectual property systems.

Economic modelling has become one of the primary drivers of so-called evidence-based policy-making, despite the fact that very few people (including most, if not all, politicians) could claim to understand the economists’ models, assumptions, or the statistical methods used to produce their ‘evidence’.  In fact, economic models rarely make reliable predictions, even when they fit past data well.  Just this past week, the deputy governor of the Reserve Bank of Australia has conceded that the Bank can only ever predict even the most basic economic indicators within a wide margin of error and that, ‘not surprisingly, forecast misses are more common than not’.  If the country’s top central bankers cannot predict headline figures like economic output and inflation with any precision, what prospects do economists have of predicting the long-term impact of different options within the Australian patent system on national innovation and productivity?

Sadly, we will never know if there was a solution better than ‘termination with extreme prejudice’ to the problems posed by either the thylacine or the innovation patent.  But, once we accept that the innovation patent must and will die, IP Australia’s current proposal seems like a soft option.  I say that if we are going to abolish the innovation patent, it should be done as swiftly and decisively as possible!

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Tags: Australia, Innovation patent, Innovation policy, Law reform, Patent law, Public consultation, Public policy

Australian Government Commences Consultation on Proposed Patent Law Reforms

The Australian Government recently issued its response to the Productivity Commission’s final report on its Inquiry into Australia’s Intellectual Property Arrangements, indicating support for a number of the Commission’s recommendations.  IP Australia has now published a set of consultation papers discussing proposed implementation of the Government’s response to a number of recommendations in the report, as well as a 2013 report by the Commission on Compulsory Licensing of Patents.  Four of the five consultation papers that have been released relate to patents, and address: amending inventive step requirements; introducing an objects clause into the Patents Act 1990; amending the provisions for Crown use of patents (and designs); and amending the provisions for compulsory licensing of patents.  (Additionally, a fifth paper addresses introducing divisional applications for international trade marks.)

Written submissions in response to questions presented in the consultation papers are due by Friday 17 November 2017, and should be sent via email in Word, RTF, or PDF format to consultation@ipaustralia.gov.au.

It is presently intended that legislative amendments relating to the issues discussed in the consultation papers be included in a Bill for introduction to Parliament in 2018.  Prior to this, it is expected that there will be further consultation on an Exposure Draft of the proposed amendments.

IP Australia will conduct further consultation on other measures covered by the Government’s response to the Productivity Commission’s report – including  phasing out of the innovation patent system – later in 2017, with a view to introducing corresponding further amendments in a Bill as soon as possible.

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Tags: Australia, Innovation policy, Law reform, Patent law, Public consultation, Public policy