Australia to commence phase out of Second Tier ‘Innovation Patent’ system

In Australia, second tier patent protection in the form of the ‘innovation patent’ system has been available since 2001. Innovation patents can include up to five claims, have a maximum term of eight years, and are granted subject to only a formalities review but must undergo substantive examination in order to be enforced. 

Australian innovation patents also require a lower threshold of ‘innovative step’ over the prior art, as compared to the inventive step requirement of standard Australian patents. The Full Federal Court (Australia’s second highest court) has established that the innovative step threshold is very low, requiring little more than novelty.

Over the last decade, there have been serious concerns regarding the effectiveness of the innovation patent, with various government reports recommending either changes to the innovative step threshold or complete abolition of the system. Ultimately, the Intellectual Property Laws Amendment Bill was brought before Australian parliament, including provisions to commence phasing out of the innovation patent system. Recently, the Intellectual Property Laws Amendment Act 2020 (‘the Act’) has entered into law, confirming that the innovation patent system is indeed to be phased out, and providing details in this respect.

Importantly, the Act sets a final deadline of 25 August 2021, after which new innovation patent applications cannot be filed. However, it will remain possible after 25 August 2021 to convert a standard patent application to an innovation patent application, and to file a divisional innovation patent application from a standard patent application, so long as the effective filing date of the standard patent application is 25 August 2021or earlier. Nevertheless, with a maximum term of eight years from the effective filing date, under the provisions of the Act all Australian innovation patents will have expired by 26 August 2029.

Conclusions

Despite being seen by many innovators and IP professionals as an undesirable outcome, Australia’s second tier patent system is to be phased out. Fortunately, however, relatively accommodating phase-out provisions are being adopted. Independent innovation patent applications can be newly filed on or before 25 August 2021. Additionally, innovation patent applications may be filed as divisional application or conversions from standard patent application after this deadline, providing the standard patent application has an effective filing date of 25 August 2021 or earlier. In the lead up to the 25 August 2021 deadline, innovators are encouraged to review the possible value of Australian innovation patent protection, particularly in relation to new IP in development. If innovation patent protection is considered desirable, obtaining an Australian filing date by the deadline should be given serious consideration.

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