The federal government released a 102-page Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 and a 118-page explanatory memorandum clarifying the proposed changes on March 2.
Some significant changes to patents include expanding what can constitute prior art, clarifying specifications and protecting experimental research.
Lawyers welcome the amendments and see them as raising the bar for the country's patents system.
"I'm quite excited about the proposals," said Michael Caine, a partner at Davies Collison Cave. Caine has been monitoring the draft's progress since a consultation began in 2009.
"It gives a message to the international community that we take our patent system seriously. That would give companies confidence to bring their businesses here because the net result will be the patents that are granted will be better quality patents, provided IP Australia does its job."
Lawyers highlighted several of the document's biggest proposed amendments to the Patents Act 1990.
The first is the territorial expansion of common general knowledge for inventive step from Australia only to anywhere in the world. The amendment extends to innovation patents as well.
This will make it easier to obtain expert evidence to support or attack inventive step, said Caine. "But the trouble is there is no clarification about what to do when you've got different levels of common general knowledge in different jurisdictions. The courts will clarify this on a case-by-case basis."
Assessing obviousness with common general knowledge worldwide will further keep Australia's patent system in line with larger jurisdictions so that litigating the same patent should produce the same results.
"Especially in high-tech areas, which are often where patent litigations take place, what is common general knowledge in Australia is not the same as everywhere else," said Robert Cooper, a partner at Mallesons Stephen Jaques. "It's not seen as a great outcome if Australia is assessing common general knowledge on this island and not looking at what is happening outside."
The bill also aims to amend subsection 7(3) by broadening the range of documents that can be used to assess inventive step.
At present, prior art is restricted to information that is "ascertained, understood and regarded as relevant" by a skilled person. The bill removes those words so that prior art can include any public available information.
Some worry that this will create an influx of experts giving evidence on the same inventions across multiple jurisdictions, but Cooper said courts will remain wary of hindsight bias.
"If your expert has seen the patent prior to giving their evidence on whether the patent is obvious or not, the court will carefully assess the weight to be given to that evidence," said Cooper. "You can't just import the expert you used in the UK, for example, because there's still the risk that the expert's evidence will be attacked. The ability of one party to attack the other party's expert on the basis of hindsight bias will not be changed because of these amendments."
In an effort to stimulate innovative research, a change to section 119C protects experimental activities from patent infringement. Some activities considered to be experimental include contractual work as well as research partially funded by a commercial entity.
The exemption from infringement will not apply to research with the intention of commercialising an invention.
"Experimental use is very welcome particularly with gene patents," said Caine, who added that gene patents, which are discussed in a separate bill, will be subject to the tightened patentability requirements.
Mirroring US law, the bill requires specifications to disclose a "specific, substantial and credible use" for an invention - a step that some consider over the top.
"It's just unnecessary and unclear," said Caine. "We already have a utility requirement that an invention be useful. On top of that, they're going to introduce a new requirement that you must describe substantial utility and if you don't, your invention is not considered useful."
A further change aims to make patent specifications clearer by replacing the "fair basis" rule for claims with a support test to ensure that an applicant claims what is described, and that the contribution made to the art and the scope of the claim correspond.
The bill is likely to pass in the winter session of Parliament, but Caine suggests applicants filing for patents now bear the amendments in mind.
"We don't know when this will become law, but patent applications should be drafted with these new requirements in mind just in case transitional requirements apply to cases filed today," said Caine.
The changes will apply to applications that have not been examined and reported on by the time the bill commences.
The draft is open to comments until March 21 for parties who have had private access to the bill since January, and until April 4 for first-time viewers.
A number of separate IP reforms in Australia are underway. The Advisory Council on Intellectual Property (ACIP) recently released a report to change the definition of patentable subject matter.
