Grace Period Introduced for Australian Design Rights

/ Phillip Boehm / News

The introduction of a 12-month grace period for designs in Australia will make it easier to coordinate the filing of Australian design applications into a broader international filing strategy, where there has been a pre-filing disclosure.

Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (the Bill) was passed by Parliament on 30 August 2021, which among other things, introduces the 12-month grace period for filing a design application in Australia. This grace period will have effect in Australia, but not other jurisdictions, and so cannot remedy pre-filing disclosure for an applicant in another jurisdiction without similar provisions.

A design application in Australia will need to be filed within 12 months of disclosure to receive the benefit of the grace period, and the disclosure will need to have been made by:

  • The designer(s);
  • The owner(s) of the design where this is someone other than the designer;
  • A party authorised by the designer or design owner; or
  • A party who obtained the design from the designer or design owner without their permission.

Publication of a design by any official designs office is not eligible for the grace period.

The Australian design grace period will come into effect 10 March 2022.

In order to balance the rights of design owners and third parties in light of the introduction of this grace period, the Bill also introduces an infringement exemption that protects third parties against infringing a registered design where they were using it before its priority date.

This applies to both independent creation, and in the case that the third party uses the design based on the disclosure made by the design owner before the priority date.

Accordingly, it remains preferable to file a design application in Australia before making any disclosure, or which claims priority under the Paris Convention, but the grace period will be available if required.

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Managing partner announcement

/ Madderns / News

We are pleased to announce the appointment of Jeff Holman to Managing Partner, from 1 July 2021.

Jeff has a strong reputation within the profession, the firm and among his clients as a registered Australian and New Zealand patent attorney. He specialises in chemistry, pharmaceuticals, biotechnology, polymers, materials, nanotechnology, and medical device patents.

Jeff takes over from Tom Melville, who was appointed Managing Partner in 2014. Under Tom’s leadership, Madderns has grown, maintained an enviable culture, attracted outstanding new talent and continued to assist a wonderful and diverse portfolio of clients to take their great ideas to the world.

Tom will now have more time to immerse himself in client-focussed work at Madderns, including leading the firm’s engineering practice and contributing to the board.

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IP Australia developing criteria to accelerate examination for selected applications

/ David Bey / News

The Australian government agency responsible for administering IP rights in Australia has recently announced that from May 2021 to June 2022, it will be conducting a trial of an innovative machine learning model to improve the process where patent applicants are directed to request examination.

While patent examination can be requested at any time, examination must be requested within two months of receiving a direction from IP Australia to do so, or within five years of filing (whichever is sooner). Failure to request examination in time will result in lapsing of the application.

IP Australia will typically direct an applicant to request examination around 4 years after filing. Once Examination has been requested, it joins a queue, where it waits to examined, with IP Australia aiming to issue a first report within 12 months.

For applicants looking to accelerate the process, there is the existing option of requesting expedited examination, where IP Australia will aim to issue the first report within 8 weeks of the request.

S44(2) of the Patents Act 1990 stipulates that the Commissioner may, on one or more prescribed grounds, direct the applicant to request examination. The prescribed grounds are found in Reg 3.16 of the Patents Regulations 1991:

  • That the Commissioner reasonably considers it expedient to give the direction having regard to the progress made in the examination of applications filed before the filing date of the application concerned;
  • That the Commissioner reasonably considers it to be in the public interest to give the direction;
  • That the Commissioner reasonably considers it expedient to give the direction, having regard to the examination of another application for a standard patent or the examination of an innovation patent.

The Regulations also require that the direction must be given in writing and state the grounds on which it is given.

The intent of the new model is to issue a direction to applicants when an applicant’s IP strategy is more developed, with the aim of helping applicants navigate the patent examination process more efficiently. This will apply to applications made using patent attorney firms and self-filers. The model may change the previous first come, first served order of directions by focusing on applications that are considered more likely to be ready for examination, but the model will not change the directions process as mandated by the Patents Act.

However, it will be interesting to see whether the reason provided is updated to indicate that the decision has been made because of this new process, or whether it will remain the current default reason:

“You have received this direction because either progress has been made in the examination of applications filed before the filing date of your application or I consider it to be in the public interest”

The announcement of this trial comes around the same time that the Australian Government’s commissioned review in to the accessibility of the Australian patent system to small and medium enterprises (SMEs) was tabled in parliament. Provide a link.

The final report of the Patents Accessibility Review made 16 recommendations intended to improve both the accessibility of the patent system and the support provided to Australian SMEs applying for protection in Australia and overseas.

The report was based on findings from oral consultations with SME representatives and other specialists, including commercialisation advisors, organisations representing patent attorneys such as IPTA and FICPI and patent attorneys. The research team also considered submissions and undertook their own research.

While the complete report makes interesting reading for all stakeholders, it does provide commentary on processing times for patent applications, with the executive summary stating:

“On processing times there is no significant issue, given that IP Australia can arrange for expedited review of a patent application at no extra cost, this taking three months. Some participants were quite happy for the delay of a year or so (this being the standard patent examination time under normal circumstances) – but there is no doubt that the availability of an expedited review service will deal with any problem here.”

The Report identified that for many, the delay in examination of a patent application was useful, as costs were postponed, including the following, non-attributed quote:

“Australia is amongst the fastest jurisdictions in the world.

This is a red herring. SMEs applications shouldn’t be dealt with quickly. …It’s important to defer prosecution costs.”

The decision to move to this new process raises many questions:

  • What metrics does IP Australia intend using to determine how developed an applicant’s IP strategy is?
  • What does IP Australia consider to be efficient navigation of the patent examination process?
  • Will this model be influenced by the progress of corresponding overseas patent applications?
  • What does it mean to be more likely to be ready for examination?
  • What can an applicant do to prevent early directions issuing?

While the findings of the accessibility report are not contradictory to IP Australia’s efforts to improve the customer experience, it is hoped that the agency is careful when it comes to anticipating the diverse needs of its customer base.

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New patent box scheme for Australia

/ Jeff Holman / News

In a welcome boost for Australian innovators in biotech and medical technologies, the Australian government has announced the introduction of a new patent box scheme which will come into effect on 1 July 2022.

Patent box schemes of different forms are currently available to innovators in over twenty countries including many European countries. The general concept of a patent box scheme is to encourage innovation by applying a lower rate of corporate tax to any profits made from patented inventions.

The Australian government is introducing a patent box to encourage businesses to undertake R&D and keep patents in Australia. The patent box will tax income derived from Australian medical and biotech patents at a 17 per cent effective concessional corporate tax rate. Normally corporate income is taxed at 30 per cent or 25 per cent for SMEs.

Only granted Australian patents with a filing date after 11 May 2021 will be eligible for the patent box.  It seems likely that the patent box will also only apply to granted Australian standard patents and not innovation patents.

The government has said it will consult closely with industry on the design of the patent box before implementation on 1 July 2022.

In addition to the new patent box scheme which incentivises businesses at the ‘back end’ of the commercialisation pathway, Australia also has an R&D tax incentive, which provides incentives to carry out earlier stage research and development in Australia.

At this stage, the patent box scheme will only apply to biotech and medical technologies, although the government has also suggested it could be extended to the clean technology sector. In an effort to incentivise innovation in a wide range of sectors in Australia it would be good to see the patent box scheme eventually extended to other technology areas as well.

Madderns will monitor the implementation of the patent box scheme closely and update our clients and associates when we have further information.

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Preparing for the End of the Australian Innovation Patent System

/ Madderns / News

As many will be aware, Australia has a 2-tier patent system, providing for the more common Standard Patents (which provide protection for up to 20 years for inventions that are novel and inventive), and Innovation Patents (providing protection for up to 8 years for inventions that are novel and “innovative”).

The most significant difference between the two patent types is that the threshold for an invention being “innovative” is much lower than that for an invention being “inventive” and in practice, Innovation Patents can provide protection for inventions that are essentially only novel over the prior art, even if they may be obvious.

As well as being used to protect more incremental inventions (which may nevertheless be very commercially valuable), Innovation Patents have been used as a tool in patent enforcement because, since they cannot be invalidated for lack of inventiveness, they are very robust patents and can be difficult to invalidate. Indeed, they have been described as the “strongest patent in the world”.

After a review conducted by the Australian Government1, the decision was made to abolish the Innovation Patent system. This takes effect on 26 August 2021, from which date no new Innovation Patent applications can be filed. There is however, a quite generous transition phase, which still allows new Innovation Patent applications to be filed as divisional applications of a pending patent application, or converted from a pending patent application, provided that that pending patent application was filed before 26 August 2021. This means that the significant benefits of the Innovation Patent system can still be accessed for the next 8 years, until 26 August 2029, at which time all Innovation Patents will have expired.

This means that, should you wish to keep your options open to use the Innovation Patent System for the next 8 years, you must take certain steps to ensure that a Standard or Innovation Patent Application is filed before 26 August 2021. A number of different scenarios include:

a) pending Provisional Patent application in Australia: if you have a pending Australian Provisional Patent application whose 12-month period expires on or after 26 August 2021, you should consider filing an Australian Standard Patent application or Innovation Patent application before this date. The Provisional Patent application may still be used after that date as a priority basis for filing overseas patent applications before the expiry of the 12-month period as usual.

b) pending overseas patent application: If you have a first patent application filing for an invention in another country, and the 12-month period for claiming priority expires after 26 August 2021, you can consider filing an Australian Standard Patent application or an Innovation Patent application before this date.

c) invention in development: while filing a patent application too early is generally discouraged, and it may not be practical or in the best interests of your long-term protection strategy for an invention under development, consideration should be given to the potential value of keeping the option of obtaining an Innovation patent for your invention, or at least a part of your invention, by filing a Standard Patent application or Innovation Patent application before 26 August 2021.

So while the Innovation Patent system is soon coming to an end, early and appropriate planning can maximise your opportunities to still benefit from its many advantages for up to 8 years. If you would like to consider the options available to you, speak with your Patent Attorney soon.

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