Innovation Patent facing its last rights

It seems that the death of the innovation patent is imminent, with the publication of draft legislation which would abolish the innovation patent.

An exposure draft of the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2017 has just been released which implements the Australian government’s response to several of the recommendations from the Productivity Commission. A copy of the Exposure Draft and explanatory memorandum can be found here. Notably this is only part of the response to the Productivity Commission report, with other proposals are being considered by way of discussion document, as outlined in our earlier article.

As well as abolishing the innovation patent, the Bill also proposes to:

  • amend trade mark and copyright laws to better allow parallel importation of goo;s into Australia:
  • expand declaration of an essentially derived variety to derived varieties which are not the subject of a plant breeder’s right;
  • reduce the grace period for non-use of a trade mark to three years;
  • abolish the requirement on patentees to provide certain data relating to pharmaceutical patents with an extended term

Abolishing Innovation Patents

As is now well reported, the Productivity Commission considered that the innovation patent system has failed in its goal of stimulating innovation in SME’s and recommended it be abolished, a recommendation with which the government agreed.

The Bill intends to achieve this by only allowing innovation patents where the patent date and the priority date both fall before the commencement date of the section. In this manner existing innovation patent rights, including the rights to file innovation patents as divisional applications from both innovation and standard patent applications will be preserved.

Allowing parallel importing

Whilst Australia already has parallel importing laws, it was felt that the scope was too narrow, allowing for certain corporate and contractual structures which would allow for the intent of the laws to be subverted. The Bill purports to close this gap by clarifying the circumstances where parallel importing is allowed.

Declarations for essentially derived varieties

Australia currently allows for a declaration of an essentially derived variety when a variety is applied for which has only minor changes from an initial variety. However, there was no provision for making such a declaration if no plant breeders right is applied for. The Bill intends to close this loophole by allowing for a declaration of an essentially derived variety for any variety (whether applied for or not).

Reduction in the grace period for non-use

Australian trade mark law currently allows for a grace period of five years post filing during which the trade mark cannot be invalidated for non-use. This is out of step with most trading partners, as well as with the non-use requirement itself which is only three years. Accordingly, the Bill intends to reduce this period to three years.

Removal of the requirement to provide data

Where a patent is subject to a term extension, it is currently a requirement that the patentee provide the Department of Health with specified information about the costs of research and development (R&D), including information on Commonwealth funding. As this information is now available from other sources, this requirement will be repealed by the Bill.

The Bill also makes a number of proposals as to procedural requirements across all of the Patents, Designs, Trade Marks and Plant Breeder’s Rights Acts which are unrelated to the Productivity Commission recommendations.

IP Australia has asked for submissions on the exposure draft by 4 December 2017. If you require any further information or require assistance with your submissions, please do not hesitate to contact us. We will keep you updated with the progress of this legislation.

David Nowak - 27 October 2017

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