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Focus: Major IP reforms under consideration

5 April 2011

In brief: IP Australia is currently considering draft legislation that proposes some major changes to, and developments in, IP protection in Australia. This will include consideration of submissions made by all interested stakeholders over recent weeks. In this article, Partner Trevor Davies (view CV) and PTA Technical Assistant Sean Blasdall highlight some of the key features covering patents, and Partner Tim Golder (view CV) and Senior Associate Anna Thorburn highlight some of the key features covering copyright, trade marks and designs.

How does it affect you?

  • It is important to be aware of the changes proposed by the draft legislation, and to consider how these changes may affect your business if and when they are passed into law.

Introduction

In 2009, IP Australia commenced consultation on a series of IP reforms. In the latest stage of the consultation process, stakeholders were invited to make submissions on a draft Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (the Bill), which will now be considered as the Bill goes forward. The Bill has been released in conjunction with an Explanatory Memorandum (the EM).

The reforms are being proposed to better meet the objectives of Australia's intellectual property rights system, being 'to support innovation by encouraging investment in research and technology in Australia and by helping Australian businesses benefit from their good idea'.1

Patents

The Federal Government's review in 2008, Powering Ideas: the innovation agenda for the 21st century, raised concerns that thresholds set for the grant of a patent in Australia are 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. Some of the key proposals are outlined below.

  • Expansion of common general knowledge: The Bill proposes to expand common general knowledge to anywhere in the world when considering inventive step of an invention. At present, common general knowledge is limited to Australia, which is considered to be too restrictive.
  • Inventive step: The Bill proposes to remove the requirement that prior art for the purposes of assessing inventive step is restricted to information that would be 'ascertained, understood and regarded as relevant' by a skilled person in the art. Instead, the prior art base for inventive step will be expanded to all publicly available information. When combining two or more prior art documents, a person skilled in the art only needs to be reasonably expected to have combined those documents before the priority date. The proposal aims to raise the standard set for inventive step in Australia to a level that is more consistent with standards set in Australia's major trading partners.
  • Fair basis: The Bill proposes to change the present requirement that the claims of a complete specification be 'fairly based' on the matter described in the specification, to a support requirement such that the claims must be 'supported by matter disclosed in the specification '. The intention of this change is to ensure that the scope of granted claims is fully enabled by the disclosure of the invention. A consequence of this proposal is that patents may be granted with a more narrow scope than would be available under the current PA. The proposal aims to ensure that granted patents are no broader than the invention that has been disclosed by the applicant.
  • Provisional patent applications: The Bill proposes that a provisional patent specification must be 'clear enough and complete enough' for a skilled person to perform the invention. The aim of the amendment is that a provisional specification should provide an enabling disclosure of the invention. At present, a provisional specification only needs to disclose the invention; that is a lower threshold compared with many other jurisdictions. A consequence of this proposal is that Australian applicants would no longer be able to file speculative and/or early provisional patent applications. Further work may be required to develop an invention more fully before filing a provisional application, to ensure the invention is entitled to the priority date of a provisional filing.
  • Prior use: The Bill proposes to include prior use of the invention as a ground at examination. Currently, prior use is only considered during opposition and court revocation proceedings.
  • Usefulness of an invention: The Bill proposes to add a usefulness requirement, so that the specification discloses a 'specific, substantial and credible use for the invention'. It is proposed that usefulness of the invention will also be considered at examination. The proposal aims to prevent the grant of patents for speculative inventions that require too much further work before the invention can be put into practice.
  • Amendments: A complete specification will be required to provide a 'best method known' for performing the invention at the time of filing the application. The Bill proposes to remove the opportunity that currently exists for an applicant to amend a specification after filing to include a best method or introduce further support for an invention.
  • Examination: The Bill proposes to remove the option of modified examination based on a corresponding patent granted in a foreign country or the option of deferring examination.
  • Re-examination: The Bill proposes to expand re-examination to the full range of substantive grounds on which a patent can be revoked, regardless of when the application for the patent was filed, or the patent granted. At present, re-examination is only available for granted patents based on novelty and inventive step.
  • Claims: The Bill proposes to preclude the general use of omnibus claims.
  • Infringement exemptions – acts for experimental purposes: The Bill proposes a much-awaited 'experimental use' exemption. 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, or determining whether the patent for the invention has been infringed. Assuming the act is not carried out for commercial purposes, experimental use would not be considered an infringement.
  • Infringement exemptions – acts for obtaining regulatory approval (non-pharmaceuticals): The Bill proposes to expand infringement exemptions to non-pharmaceuticals where acts in obtaining regulatory approval in Australia or under the law of another country or region will not be considered as an infringement of a patent.

Copyright

The Bill proposes key amendments to the notice of objection scheme set out in the Copyright Act 1968 (Cth) (the CA). The amendments are designed to strengthen copyright protection, by adding more onerous obligations on importers to secure the release of their goods.

Under the current scheme, a copyright owner can lodge a notice of objection with Australian Customs in respect of imported goods that may infringe its copyright. If goods are seized by Customs, the copyright owner is notified and then has a limited time within which to bring infringement proceedings against the importer. If proceedings are not commenced, the goods are returned to the importer.

Under the Bill, protection measures for copyright owners are boosted in a number of respects.

  • After receipt of a seizure notice, the importer must make a claim for the release of the goods. The claim must include the information prescribed by the regulations. The EM foreshadows that prescribed information will include 'an address where the objector can serve legal documents on the importer' .2 The requirement to make a claim for the release of the goods places a new burden on the importer.
  • Seized goods are forfeited to the Commonwealth if a claim for the release of the goods is not made within a specified period. This is in stark contrast to the default position under the current regime, which provides for release of goods to the importer.
  • Customs is permitted to give the copyright owner details of the exporter (in addition to the current right to provide details of the importer). This amendment is designed to improve the 'ability of copyright owners to address infringement at its source and identify repeat offenders'.3
  • Customs may permit the copyright owner to inspect multiple samples of the seized goods (as opposed to the current regime, which limits inspection to a single sample). This amendment will help copyright owners to determine whether consignments contain infringing and non-infringing goods.

If the importer makes a claim for release of the goods, the onus remains on the copyright owner to institute infringement proceedings. If proceedings are not commenced within a specified time, the goods will be returned to the importer. While this part of the process is similar to the current scheme, the additional safeguards outlined above should make it easier for rights holders to determine whether to commence proceedings and to successfully serve court documents on importers.

Trade marks

The Bill proposes numerous amendments to the Trade Marks Act 1995 (Cth) (the TMA).

  • Trade mark oppositions – notice of intention to defend: The Bill introduces the concept of a 'notice of intention to defend the application for registration of a trade mark'. If a notice of opposition to a trade mark application is filed, the applicant for registration is required to file a notice of intention to defend its application. Failure to file a notice of intention to defend will result in the application lapsing. This is good news for opponents, who currently have to file their evidence before knowing if the applicant is defending the application.
  • Trade mark oppositions – particularisation of opposition grounds: Under the Bill, a notice of opposition must be filed in the manner and form prescribed in the regulations. The EM foreshadows that regulations will be made to require opponents to provide particulars of their grounds of opposition. According to the EM, this will 'help focus oppositions earlier, reducing costs and unnecessary effort for the applicant'.4
  • Extension of attorney client professional privilege: The Bill proposes that the scope of attorney client professional privilege be extended to client communications with overseas attorneys. This is a major development, in light of the international nature of intellectual property registration and management.
  • Customs seizures: The Bill allows inspection of goods seized by Customs by the trade mark owner. The TMA does not currently have a provision relating to inspection. The Bill also includes amendments to the notice of objection scheme under the TMA similar to those outlined above regarding copyright.
  • Maximum penalty for indictable offences increased: The Bill raises the maximum penalties for indictable offences to align them with the penalties for similar indictable offences under the CA.5
  • Introduction of summary offences: The Bill introduces summary offences that correspond with the indictable offences in the TMA. These summary offences have lower fault requirements (from 'recklessness' to 'negligence') and attract lower penalties. 'This will permit a quicker resolution of more simple trade mark offences and assist with the efficient administration of justice.'6
  • Introduction of additional damages: The Bill introduces a discretion for courts to award additional damages. These damages, sometimes referred to as punitive or exemplary damages, are currently available under the PA, the Designs Act 2003 (Cth) (the DA) and the CA for flagrant breaches. This is a positive development for trade mark owners, as it gives courts greater power to provide deterrents for would-be infringers.
  • Clarification about the presumption of registrability: The Bill repeals and replaces section 41 of the TMA, to clarify that the presumption of registrability applies to all of that section, reversing the onus that the courts have imposed on the applicant under sub-sections 41(5) and 41(6). Section 41 deals with the capacity of a trade mark to distinguish goods and services.

Designs

The Bill provides that the Federal Magistrates Court will have jurisdiction to deal with matters under the DA. This proposed amendment implements the Advisory Council on Intellectual Property (ACIP) recommendation to provide parties greater access to justice. The EM indicates that small business may benefit from being able to prosecute their designs matters in a speedy, cost-effective and less formal tribunal.

Footnotes
  1. EM, p.7.
  2. EM, p.76.
  3. EM, p.75.
  4. EM, p.54.
  5. EM, p.82.
  6. EM, p.82.

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