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Focus: Australian 'Raising the Bar on IP Rights' Bill passed

26 March 2012

In brief: Major changes to intellectual property protection in Australia are likely to become law in only a few weeks. Partners Tim Golder (view CV) and Chris Bird (view CV) and Lawyer Tracy Lu examine the key substantive features of the new provisions and provide some recommendations for clients to factor into their protection strategies.

How does it affect you?

  • It is important to be aware of the major changes proposed by this reform, and to adapt your strategies and procedures to meet their impact.
  • Some of the changes will take immediate effect, while the majority will come into effect after 12 months.

Introduction

In our Focus: Major IP reforms under consideration, we examined the draft  Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (the Bill), and discussed in detail the proposed changes in the areas of patents, copyright, trade marks and designs. The Bill has had relatively plain sailing through Parliament, and will soon be enacted – it passed its third reading in the House of Representatives on 20 March 2012 and is now awaiting Royal Assent. We will be focusing here on some of the key features of the new provisions.

Patents

As discussed in our previous Focus, the Federal Government's 2008 review, Powering Ideas: the innovation agenda for the 21st century, raised concerns that thresholds set for the grant of a patent in Australia were too low, suppressing competition and discouraging follow-on innovation. Particular concerns have been raised that patents are granted for inventions that are not sufficiently inventive, and that the details of inventions are not sufficiently disclosed to the public.

The Bill proposes numerous amendments to the Patents Act 1990 (Cth) (the PA), many of which seek to increase the threshold for patentability and tighten up the examination process.

  • Infringement exemptions – acts for experimental purposes and obtaining regulatory approval: An 'experimental use' exemption will be introduced, to give more certainty to researchers. An act done for experimental purposes relating to the subject matter of the invention will not be considered as an infringement of a patent. Examples of such acts include determining the properties of the invention, determining the scope of a claim relating to the invention, improving or modifying the invention, determining the validity of the patent, and determining whether the patent for the invention has been infringed. Assuming the act is not carried out primarily for commercial purposes, experimental use will not be considered an infringement. Further, infringement exemptions will be extended to non-pharmaceuticals, so that acts in obtaining regulatory approval for such subject matter in Australia or under the law of another territory will not be considered to constitute patent infringement. Importantly, these provisions will come into effect immediately.
  • Expansion of common general knowledge, expanding prior art base, requirement for full enablement and full support: As previously discussed, the changes to the considerations around inventive step will raise the bar on patentability, to a level that is more consistent with that applying in other jurisdictions, particularly in Europe. The present requirement that the claims of a specification be 'fairly based' on the matter described in the specification will disappear, to be replaced by a support requirement that the claims be 'supported by matter disclosed in the specification'. The intention of this change is to ensure that the scope of granted claims is no broader than justified by the extent of disclosure and by the contribution to the art. As a consequence of these changes, the scope of patent rights available may be narrower than has previously been the case. Importantly, under transitional provisions, the new requirements for an application to meet the sufficiency, support, utility and inventive step standards will apply to all applications where a request for examination has not yet been filed. We therefore recommend that you give consideration to requesting examination before the new legislation comes into force (which can be done at the same time a complete application is filed), in order to benefit from the less stringent tests currently applicable.
  • Provisional patent applications: The new law will require a provisional patent specification to be 'clear enough and complete enough' for a skilled person to perform the invention, which is a higher test than the previous requirement that the application describe the invention in general. This will align the disclosure requirement for a provisional specification with a complete specification, and both will need to provide an enabling disclosure of the invention. This means that applicants will need to consider carefully when is the right time to file a provisional application, as further development work may be required before the required disclosure level can be met. Again, applicants may wish to consider bringing forward filing examination requests on complete applications, to benefit from the more generous provisions currently in place.
  • Usefulness of an invention: The new provisions will require that the specification discloses a 'specific, substantial and credible use for the invention'. This change, which follows the current approach in the United States, aims to prevent the grant of patents for speculative inventions that require further research to reasonably confirm a 'real world use'. We do not envisage that these provisions will have a significant practical impact for the majority of users of the Australian patent system.
  • Modified and deferred examination: The option of modified examination, based on a corresponding patent granted in a foreign country, will be removed. Differences between patentability standards and requirements mean that modified examination is not extensively used, and it is seen only to add to the complexity of patent legislation. Consequentially, the option of deferring examination (while the applicant awaits grant of a corresponding application overseas) is to be removed. Despite the limited use of modified examination, it has proved attractive for some companies for whom consistency of patent rights in different jurisdictions is important. Any applicants who would like to take advantage of modified examination for pending applications will need to act before these provisions come into force.
  • Omnibus claims: Unless absolutely necessary to define the invention, claims will no longer be able to rely on references to the description or drawings. This will do away with the use of omnibus claims, consistent with our major trading partners.

Copyright

As reported in our last Focus, the Bill will introduce a number of changes to the notice of objection scheme under the Copyright Act 1968 (Cth), with the aim of helping copyright owners to better conduct copyright enforcement through the Customs seizure process. All these changes come into effect 12 months after the Bill receives Royal Assent (which should be in the next few weeks).

In addition to the provision of importer details to the objector, as is the case under the current regime, the Bill provides for the Customs CEO to also give the objector information about the exporter. This would obviate the need to apply for a court order to obtain that same information, and would also help copyright owners identify repeat offenders and persons higher up in the chain of infringing conduct.

In order to remedy difficulties encountered by objectors in commencing legal proceedings where the importer deliberately takes no action or provides false contact details, the Bill provides that an importer may only claim for release and return of the seized goods if the importer provides certain 'prescribed information', which is necessary for the objector to identify and contact the importer. An example of such information is given in the Explanatory Memorandum as 'an address where the objector can serve legal documents on the importer'. The Customs CEO is then required to notify the objector of the 'prescribed information'.

Where no claim for release has been made, the seized goods will be forfeited to the Commonwealth.

The copyright owner will be permitted to inspect or remove multiple copies of the seized goods instead of a single sample, as under the current regime, so that infringing goods can be identified within a seized consignment that contained both infringing and non-infringing goods.

Goods released but not collected within 90 days will also be forfeited to the Commonwealth.

As is the case under the current regime, if an importer does make a claim for the return of the seized goods, the copyright owner must institute infringement proceedings within a specified time, or the goods will be returned to the importer. However, the changes do put some onus on importers to identify themselves, so that, at least, copyright owners would be able to ascertain the persons against whom they may bring proceedings, and where they may serve court documents without resorting to (for example) applying for substituted service or deemed service.

Trade marks

The Bill also makes a number of important amendments to the Trade Marks Act 1995 (Cth). Again, these will come into effect 12 months after the Bill receives Royal Assent.

  • Customs seizures: In this respect, the changes to be introduced to the Trade Marks Act largely mirror the ones referred to above in relation to the Copyright Act. Objectors will also have the right to inspect or remove (which they do not currently have) samples of the seized goods for the purposes of determining whether has been an infringement.
  • Trade mark oppositions:
    • The Bill provides that a notice of opposition must be filed 'in the manner and form prescribed by the Regulations'. So, the detail will not be available until the Regulations are drafted. However, the Explanatory Memorandum foreshadows that the Regulations will require that notices of opposition contain more detail than is currently the case, so as to give the trade mark applicant a better indication of the arguments it will need to address in the opposition. It also indicates that the timetable for steps in the opposition will be significantly tightened (although, again, we await details in the Regulations).
    • If a notice of opposition is filed, an applicant will be required to file a notice of intention to defend the application in the prescribed manner and within the prescribed period. Failure to file the notice would result in the lapsing of the application. This is intended to avoid the current situation where a notice of opposition is filed, and the opponent then files its evidence, only to find that the trade mark applicant does not wish to proceed. Under the Bill, the trade mark applicant must file a notice of intention to defend, before the opponent is obliged to file its evidence.
    • The Bill allows for Regulations to prescribe circumstances in which the Registrar may dismiss the opposition. Again, we await detail from the Regulations. However, the Explanatory Memorandum provides an example where the opposition may be dismissed if the opponent does not comply with its obligation to file a more detailed notice of opposition and statement of grounds and particulars.
    • Note that all these amendments will only apply to oppositions filed on or after the date when the relevant provisions come into effect.
  • Trade marks attorneys:
    • The Bill provides for the registration of companies as incorporated trade marks attorneys.
    • Communications with a foreign trade mark attorney will be afforded the same privilege as those with an Australian attorney, which is very helpful for multi-jurisdictional trade marks management.
  • Summary offences: The Bill creates corresponding summary offences for each currently indictable offence under the Trade Marks Act. Summary offences have a lower 'fault' element (requiring only 'negligence') and lower penalties. This will help with the expeditious and cost-effective resolution of less complex matters.
  • Maximum penalty for indictable offences: The Bill increases the maximum penalty for trade mark offences, to bring them in line with penalties for similar offences under the Copyright Act.
  • Additional damages: The Bill introduces the availability of additional damages for trade mark offences, which are punitive in nature, to be in line with similar provisions under the Copyright Act, the Designs Act 2003 (Cth) and the PA.
  • Presumption of registrability: The current onus on the trade mark applicant to demonstrate registrability will be reversed and a 'presumption of registrability' will be introduced: ie a trade mark should be registered unless there is a specific objection to its registration. This should make it easier to achieve acceptance of various trade marks.

Conclusion

These reforms represent a major change to the Australian IP system, and particularly with regard to patentability requirements and patent infringement exemptions. If you have any questions, or would like to discuss the impacts of these changes in detail, please contact us.

For further information, please contact:

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