The Federal Government has released the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011, which proposes changes to each of the Patents Act 1990, Designs Act 2003, Trade Marks Act 1995, Plant Breeders Rights Act 1994 and Copyright Act 1968.
The proposed changes to the Patents Act 1990 include provisions to raise the bar of the inventive step requirement by removing restrictions on the information taken into account when assessing whether an application is sufficiently inventive.
The Bill was introduced and received its first reading in Parliament on June 22 2011 and it is expected that it will be passed shortly. The Bill proposes that the amendments on inventive step will come into effect 12 months after the day the Bill receives Royal Assent.
The Bill proposes changes that could be relevant to specifications being drafted. For standard patent applications where examination has not been requested before the commencement date of the amendments, the Bill proposes that the new inventive step provisions are to apply. For innovation patents, it is proposed that the new provisions relevant to those patents are to apply even if the patent is granted before the commencement date if no examination has been requested and the Commissioner has not decided to conduct examination by that time.
Raising the bar
Subsection 7(2) of the Patents Act provides that an invention is deemed to involve an inventive step unless the invention would have been obvious to a person skilled in the art in light of the common general knowledge as it existed in the patent area before the priority date. The patent area is defined in the Patents Act as being Australia.
Subsection 7(2) provides that the common general knowledge in the relevant field may be considered alone or together with additional prior art information. Under subsection 7(3), the additional prior art information can only be considered if it existed before the priority date and the person skilled in the art could be reasonably expected to have ascertained, understood, and regarded it as relevant.
Concerns have been raised that this threshold for assessing inventive step is too low given the restrictions placed on the prior art which can be considered. As mentioned on page 8 of the Explanatory Memorandum of the Bill, particular concerns have been raised that patents are being granted for inventions that are not sufficiently inventive, thereby suppressing competition and discouraging follow-on innovation.
The standard for assessing inventive step in Australia has also been regarded as being lower than that of many of Australia's major trading partners. Increasing attention has also been given overseas to the level at which inventive step thresholds are set. For example, the US Court decision of KSR International Co v Teleflex Inc et al (550 US 127 S Ct 1727 82 USPQ2d 1385 2007) reassessed the test for inventive step and stated that tests previously used had set the bar too low. Policy makers in the European Patent Office have also highlighted their interest in raising the bar for inventive step in the European Patent Convention.
The Bill has therefore proposed amendments that seek to ensure that standard patents are only granted for inventions that add significantly to what was previously known and available, and seeks to raise the standard set for inventive step in Australia to a level that is more consistent with standards in other countries.
Common general knowledge
The Bill proposes to change the test of what constitutes common general knowledge by no longer limiting it to knowledge in Australia. It proposes to omit the term "in the patent area" in subsection 7(2) and substitute it with "(whether in or out of the patent area)".
The proposed amendment is intended to better align the approach to assessing inventive step in Australia with the approaches taken in Australia's major trading partners and under the PCT, where when assessing inventive step, common general knowledge anywhere in the world can be taken into account. The restriction on common general knowledge in the Australian Patents Act means that a patent that would not be granted in other jurisdictions may be granted in Australia given the restricted pool of prior art information being taken into consideration.
The proposed amendment is also intended to address concerns that this geographical limitation does not take account of the global research, information and innovation environment that exists today (IP Australia, Getting the balance right: Towards a stronger and more efficient IP rights system, March 2009, p 10 ).
The proposed amendment does however raise questions as to how common general knowledge will be determined, and whether it will be necessary to establish that the knowledge in question is well known in more than one overseas jurisdiction and if so, in how many and which jurisdictions. The Bill's Explanatory Memorandum seeks to address this concern on page 41 by suggesting that the general approach to determining what is the common general knowledge is expected to be the same, in that the decision-maker would have to regard evidence of what background information and knowledge was generally available to the worker in the art, with the only difference being that the question is not to be posed in terms of the worker in any specific geographic location. On page 41 of the Explanatory Memorandum it is stated that:
In opposition or court proceedings, where the expert evidence differs between an Australian and a foreign expert, or between two foreign experts, the decision-maker would resolve the issue by weighing the evidence. This is not expected to be substantially different from the present situation, where conflicting evidence from different Australian experts has to be resolved.
The amendment is also intended to address situations involving fields of innovation in which there is little or no relevant common general knowledge in Australia, but relevant common general knowledge exists in the field in other jurisdictions. In such a case, trivial advances in such fields may be considered inventive in Australia. The amendment to remove the geographical restriction is intended to allow consideration of common general knowledge not limited to Australia. This would result in greater consistency with decisions made in other patent jurisdictions.
The amendment to remove the geographical restriction is also expected to remove constraints for parties involved in court and opposition proceedings in cases involving fields of innovation in which there is little or no expertise in Australia. The geographical restriction often means that Australian-based experts are preferred by the parties to give evidence on what the common general knowledge in Australia is. The amendment is expected to allow foreign experts to be more readily used and their evidence more readily relied upon by the Patent Office and the Courts.
The Bill also proposes that the same amendment be made to subsection 7(4) in respect of the assessment of common general knowledge for an innovative step.
Proposed changes to s 7(3)
The Bill also proposes changes to subsection 7(3) of the Patents Act to remove the requirement that the skilled person "be reasonably expected to have ascertained, understood and regarded as relevant" the information under consideration before that information can be combined with the common general knowledge.
The Explanatory Memorandum suggests that despite the removal of the threshold requirement from subsection 7(3), consideration would still need to be given to whether a document is relevant or would have been understood, as part of the inventive step assessment. Page 43 of the Explanatory Memorandum specifically states:
While a skilled person is essentially deemed to be aware of and to have carefully read the publically available information, the inventive step tests are otherwise applied in the context of what the skilled person would have known and done before the priority date of the claims in question. The tests will therefore continue to take account of factors such as whether the skilled person would have understood and appreciated the relevance of the prior art to the problem the invention was seeking to solve and whether it would be considered a worthy starting point for further investigation or development.
This means that although the amendments propose removal of the requirements of "understood" and "regarded as relevant" as a threshold limitation to allowing information to be combined with the common general knowledge, it appears that the requirements are still intended to be considered in the test for inventive step.
The situation appears to be different for the removal of the requirement that the skilled person be reasonably expected to have ascertained the information. The Explanatory Memorandum suggests that it is intended that the proposed amendment will overcome the problem that information that is clearly relevant may be excluded on the basis that the skilled person would not have ascertained the information. That problem was highlighted in the Full Federal Court decision in Commissioner of Patents v Emperor Sports Pty Ltd  FCAFC 26 which considered a patent for a device of removable tags for playing touch Rugby League or Australian Rules football. Despite a similar system being the subject of several US patents, the conclusion that the skilled person could not reasonably be expected to search for and consult a US patent document meant that those documents were disregarded. It appears that the proposed amendment to the legislation intends that such relevant information would be considered.
The amendment is also intended to bring Australia's law on inventive step in line with those of some its major trading partners. For example, under s 2 (2) of the UK's Patents Act 1977, Article 54 (2) of the European Patent Convention and Article 33, Rule 33.1 (a) of the PCT, inventive step is assessed against a prior art base including all information available to the public before the priority date.
The Explanatory Memorandum provides some guidance on interpreting the proposed amendments. The amendments are intended to broaden the scope of information that can be considered in order to make it less likely that a patent will be granted in Australia for an invention that would be considered obvious in other jurisdictions, while also seeking to ensure that standard patents are only granted for inventions that add significantly to what was previously known and available.
Magda joined Phillips Ormonde Fitzpatrick Lawyers in 2007 and has developed a wide range of experience in all aspects of IP including patent, design, trade mark, copyright and trade practices issues.
During a secondment with Phillips Ormonde Fitzpatrick’s Chemistry group, she developed experience drafting and prosecuting chemistry-related patent applications for local and international clients and completed the requirements to register as an Australian patent attorney.
Magda has been admitted as a legal practitioner before the Supreme Court of Victoria and the Federal and High Courts of Australia and is a registered patent and trade marks attorney. She has been involved in matters before the Federal Court of Australia as well as opposition proceedings before the Australian Patent and Trade Marks Offices.