IP reform update – demise of innovation patents, and government powers in a crisis

By David Kark
Intellectual Property Patents & Trade Marks

In brief 3 min read

The latest package of Australian IP law reform became law on 26 February 2020, when the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 – part of the Federal Government's response to the Productivity Commission's 2016 report on IP arrangements –  received royal assent. We analyse the key changes.

Key takeaways

  • The Act:
    • amends the Crown use provisions for patents and designs, including, topically, powers in an emergency;
    • phases out the innovation patent system; and
    • amends the compulsory licence provisions for patents.

Crown use

Under the Crown use principle, governments may exploit patented inventions and registered designs, without authorisation from the rights owner. The Act amends the Crown use provisions for patents and designs, to clarify that Crown use can be invoked for the provision of a service primarily provided or funded by the Federal Government and/or any state or territory government.

The Act also changes the previous position that governments could invoke Crown use without notifying the rights owner beforehand – governments are now required to seek a negotiated outcome with the rights owner before invoking it. Prior negotiations are not required in an emergency.

In an emergency, or if negotiations fail, ministerial authorisation must be sought before invoking Crown use. The rights owner must also be provided with reasons for invoking Crown use before the patented invention or registered design is exploited; or, in an emergency, as soon as practicable.

Innovation patent system

Australia has a two-tier patent system that includes the standard patent system and the 'innovation patent' system. Innovation patents offer shorter-term patent protection for inventions that do not meet the higher threshold of the standard patent system.

The Act will phase out the innovation patent system from 25 August 2021, after which it will no longer be possible to file any new innovation patent applications. However, standard patent applications filed before 25 August 2021 can still be converted to an innovation patent application after that date. Further, divisional innovation patent applications can be filed after 25 August 2021 from parent applications filed on or before that date.

Compulsory licences

Australian patent law allows a third party to apply to a court for a compulsory licence for a patented invention if:

  • there is a demand for the patented invention that is not being met by the patentee;
  • the third party has unsuccessfully attempted for a reasonable time to obtain a licence from the patentee on reasonable terms and conditions; and
  • the patentee does not have a satisfactory reason why they have not exploited the invention.

Previously, courts had to be satisfied that the 'reasonable requirements of the public' were not being met before ordering a compulsory licence. This has been removed, and instead the court must be satisfied it is in the public interest to grant the licence, taking into account the following factors:

  • the benefits to the public from meeting the unmet demand;
  • the commercial costs and benefits to the patentee and the third party from ordering the compulsory licence; and
  • any other matter the court considers relevant, including those relating to greater competition and any impact on innovation.

What's next?

If you have questions about the Act, please contact any of the people below.