The August 13 decision in which the validity of three innovation patents was upheld “will open up patents to a lot of people,” according to Justin Blows, an associate for Griffith Hack in Sydney.
The Australian government introduced innovation patents in 2001 to encourage small and medium-sized businesses to protect their innovations. Innovation patents provide the same level of protection as standard patents but have a lower level of inventiveness. They last for up to eight years and allow a maximum of five claims. Innovation patents are not examined initially, but if a patent holder wants to enforce their rights they have to request an examination, which usually takes around six weeks. According to IP Australia’s statistics, 1,117 innovation patents were filed in 2006.
The three innovation patents in this case were for a roadside marking post that springs back, developed by Delnorth. Delnorth filed the first patent in February 2006 and began infringement proceedings against Dura-Post, a Tasmania-based company that supplies marker posts, in the same month. Delnorth then filed two more innovation patents in April and August 2006. Dura-Post counterclaimed for invalidity, which made this the first time the validity of an innovation patent has been tested in court.
Article 7(4) of the Patents Amendment (Innovation Patents) Act 2000 states that an invention has an innovative step when compared with the prior art base, unless it only varies from the information set out “in ways that make no substantial contribution to the working of the invention”.
In his decision Judge Gyles stated that the phrase “of no substantial contribution to the working of an invention” is a different test from the inventive step test used for standard patent applications.
In an important phrase, the Judge stated “if there is a substantial contribution to the working of an invention, then there is an innovative step”. The Court found claims one and two of the second and third patents to be invalid, but established infringement had taken place.
The decision shows how effective innovation patents can be. Delnorth originally filed a standard patent application in June 2004, but when they realized that someone was infringing “they used innovation patents as weapons” Blows told Managing IP.
Orders on the case were made on August 21. A spokesperson for Dura-Post has confirmed that the company is appealing the decision and it will now be heard by a three-judge panel of the Full Federal Court.
Spruson & Ferguson Lawyers advised Delnorth, while Norman Waterhouse Lawyers acted for Dura-Post.
