Australia ponders patent refresh to restrain trolls

Australia’s patent system will be overhauled to make life harder for cynical abusers of the patent process.

The review will focus on 'innovation patents', a type of patent introduced in 2001 to encourage IP protection for SMEs and function to protect “simple inventions and improvements to existing technologies”. Such patents last just eight years, compared to the 20 years for conventional patents in Australia. Winning an innovation patents requires only the demonstration of an “innovative step” rather than the standard patent’s “inventive step”.

The Advisory Council on Intellectual Property (ACIP) has issued a call for public comment on changes to the innovation patent system in light of changes to the market and an unusually high growth of patents applications for certain technologies within IT, electronics and pharmaceutical sectors.

ACIP is also currently holding a comprehensive review on the innovation patent system in Australia.

The Australian technology and biotechnology sectors, in particular, have been rife with evidence that bigger companies are gaming the system by using the innovation patent system to extend the life of their patents and deliberately targeting competitors.

The proposed amendments would require innovation patent applications to demonstrate the same level of inventive step as a standard patent.

The consultation paper states that the changes have been sought due to government concern over “evergreening”- a strategy in which companies could use innovation patents to effectively extend the life of their patents.

The comparatively simple process of gaining an innovation patent also saw companies to create “patent thickets”, or a wall of patents which hinders competitors' ability to innovate around a given invention.

“There is a real and pressing risk that more applicants could choose to use these strategies in the future. Such strategic behaviour would likely bring Australia’s IP system into disrepute both in Australia and overseas, because it would highlight the poor balance between protection and innovative disclosure within Australia’s Innovation Patent system,” the paper states.

King & Wood Mallesons lawyer Charles Davies comments that the government’s overhaul of the system will help circumvent the practice of innovation patents being used tactical tools for litigation to suppress competition, or potentially “evergreen” standard patents. He adds that the inclusion of the “inventive step” would help prevent the grant of innovation patents over unworthy developments and help to combat the current problems highlighted above.

Submissions have been called for by 25 October 2012. ®