Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act and Regulations 2018

Overview

The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 (the Act) received Royal Assent on 26 February 2020.

The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Regulations 2020 (2020 Regulations) were registered on the Federal Register of Legislation on 3 April 2020.  

The Act was the second piece of legislation implementing the Government’s response to the Productivity Commission inquiry report into Australia’s intellectual property arrangements. It began the process of phasing out the innovation patent system and consequently, from 26 August 2021 filing of new innovation patent applications is not permitted.

The phase-out of the innovation patent was part of the Government’s commitment to ensuring our IP system meets the needs of Australian small and medium enterprises (SMEs). IP Australia has a range of resources to help SMEs navigate the IP system. Australian SMEs can receive further dedicated support, with an SME case management service and SME fast track service, which was launched as the innovation patent was phased out.

Consultation on the Act

Most amendments included in the Act were developed over several years.

In 2017, IP Australia consulted on the measures in schedules 1-4 of the Bill in the form of options papers and received 18 non-confidential submissions:

• Introducing an Objects clause into the Patents Act 1990
• Crown use of Patents and Designs
• Compulsory licensing of Patents

From 23 October to 4 December 2017, IP Australia consulted on the phasing out of the innovation patent system in its consultation of the Exposure Draft and Draft Explanatory Memorandum of the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018.

Following consultation, IP Australia developed Exposure Drafts of the Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2019.

From 23 July to 31 August 2018, the exposure drafts were published for consultation and 18 non-confidential submissions were received. You can read IP Australia’s response to this consultation which details the outcomes.

The Government was persuaded by submissions that stated the proposed changes to the legislation on inventive step and the accompanying Explanatory Memorandum would not achieve the intended outcome of sufficiently raising the threshold for inventive step. The Government decided to postpone changes to inventive step to ensure there is sufficient time to formulate and consult further on options to ensure legislative changes have the intended effect (see Policy ID: 11)

Consultation on the Regulations

From 16 November to 21 December 2018 IP Australia sought public comment on the exposure draft regulations.

Thank you to all who contributed and provided submissions to our consultation.

Six non-confidential submissions were received. You can read IP Australia’s response to this consultation which details the outcomes and our reasoning.

Parts 1-3 of Schedule 1 to the exposure draft regulations are associated with the Act.

Draft legislation and explanatory materials

Exposure Draft of the Intellectual Property Laws Amendment Bill 2017

Exposure Draft of the Intellectual Property Laws Amendment Regulations 2017

Draft Explanatory Memorandum to the Exposure draft of the Intellectual Property Laws Amendment Bill 2017

Draft Explanatory Statement to the Exposure draft of the Intellectual Property Laws Amendment Regulations 2017

Exposure Draft of the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Regulations 2018

Draft Explanatory Statement to the regulations

Overview of the Legislation

The Act is divided into four categories, corresponding to the following eight schedules:

• Schedule 1 – Responses to the Productivity Commission
• Schedules 2 and 3 – Crown use of patents and designs
• Schedule 4 – Compulsory licensing of patents
• Schedules 5 - 8 – Other measures

The Act also requires a review of the accessibility of the patent system. You can read more about the independent review, its findings and recommendations.

Schedule 1 – Responses to the Productivity Commission

The PC was asked to consider whether Australia’s current IP arrangements provided an appropriate balance between access to ideas and products, and encouraging innovation, investment and the production of creative works. On 25 August 2017, the Government published its response to the PC Inquiry. On 24 August 2018, the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 received Royal Assent. That Act implements Part 1 of the Government’s response to the PC Inquiry.

Schedule 1 to this Act gave effect to Part 2 of the Government’s response to the PC Inquiry. These are:

• Introducing an objects clause into the Patents Act.
• Commencing the phasing out of the innovation patent system.

Introducing an objects clause into the Patents Act

The Act introduced an objects clause into the Patents Act, which clarified the underlying purpose of the patent system and over time will reduce uncertainty in the operation of the Patents Act. The clause provided broad guiding principles that helped ensure that the patent system remained adaptable and fit-for-purpose in the future.

The clause highlighted that the benefits of the patents system to society are primarily economic in nature, and these benefits are achieved through incentivising innovation and the dissemination of technology, that, among other things, will lead to improved economic wellbeing. The clause was intended to clarify and clearly articulate the goals of the patent system, and to assist courts in interpreting the Patents Act in cases where the text of the legislation is uncertain or ambiguous. However, the objects clause did not alter the ordinary meaning of the legislation or overturn existing case law and established precedent.

Commencing the phasing out of the innovation patent system

This Act commenced phasing out the innovation patent system, as follows:

• No new innovation patents can be filed from 26 August 2021 (AEST).
• Existing innovation patents that were filed on or before 25 August 2021 (AEST) will continue in force until their expiry. This ensured current rights holders were not disadvantaged.
• You will still be able to file a divisional innovation patent application after 25 August 2021 (AEST), provided that the parent application for the divisional was filed on or before 25 August 2021.
• You will still be able to convert a standard patent application to an innovation patent application provided the standard patent application was filed on or before 25 August 2021 (AEST). 
• No extensions of time are available for late filings of innovation patents.

Whilst phasing out the innovation patent, the government remains committed to dedicated support services to help SMEs navigate the IP system. Small businesses will receive dedicated support and services to help ensure they are not disadvantaged.

Schedules 2 and 3 – Crown use of patents and designs

Crown use is a rarely used safeguard. It allows the government to step in when action is necessary to deal with an emergency, or other public interest issues and access patented inventions and designs.

This Act introduced measures to improve transparency and accountability of Crown use. The amendments modifed the Acts to clarify the circumstances in which Crown use can be invoked, introduced a process of Ministerial oversight, and provided better guidance to the courts on the remuneration standard that should be used in determining the level of compensation to be paid to the rights holder.  These amendments improved the balance between the rights holder and the ability of the Government to ensure that the community’s access to technology is not restricted.

Schedule 4 – Compulsory licensing of patents

Schedule 4 implemented recommendations made in the 2013 PC Report regarding compulsory licensing. The Act changed the test applied by the courts when determining whether a compulsory license should be granted. The amendments removed the ‘reasonable requirement of the public’ test and replace it with a ‘public interest’ test.

These amendments improved the balance between the rights of the patent owner and the interests of the broader public.

Schedules 5, 6, 7 and 8 — Other measures

Collectively, schedules 5-8 of the Act made a number of minor amendments to the Patents and Trade Marks Acts to improve, streamline and modernise the administration of the Australian IP system and made a number of minor technical fixes. These changes reduced delays for businesses and ensured that the IP rights system continued to operate effectively. Specifically:

Schedule 5 – Seals

Schedule 5 amended the Patents Act and Trade Marks Act to allow for the official seals of the Patent Office and the Trade Mark Office to be kept and used in electronic form when supplying electronic certified copies of documents to customers. This included a certified copy of a patent specification to establish a priority date for overseas filings, certificates for trade marks, or as evidence for legal or other proceedings. The new legislation alleviated the need to supply customers with paper copies of certified documents.

Schedule 6 - Specifications

Schedule 6 amended the Patents Act to make a technical correction around ‘omnibus claims’. These are claims in patent specifications that make reference to features of the invention disclosed in the description, drawings or examples. The Raising the Bar Act prevented omnibus claims from being filed that are not absolutely necessary to define the invention.

Due to a drafting oversight, the Raising the Bar Act only allowed this requirement to be considered and reported on during examination of standard and innovation patent applications. This amendment now allows IP Australia to consider and report on this requirement in various other stages including amendments after acceptance of an application, amendments after the grant of a patent, re-examination, opposition or revocation proceedings.

Schedule 7 - Protection of information

Schedule 7 amended the Patents Act to improve the handling of sensitive information by the Commissioner of Patents, by granting the Commissioner power to redact sensitive information from patent documents, including the power to partially or wholly redact a document, and publish a redacted version.

Schedule 8 - International applications

The Intellectual Property Laws Amendment (PCT Translation and Other Measures) Regulations 2019 removed the requirement to file a certificate of verification for most patent documents.

Schedule 8 is an enabling provision that allows the Patents Regulations to be amended so as to no longer prescribe certificates of verification for one additional transaction – filing a request under section 10 of the Patents Act for the Commissioner to restore a priority date to an international application.

A certificate of verification is no longer required for this request if the international application was not filed in English. An English translation of the international application will still be required.

Commencement

The Act received Royal Assent on 26 February 2020. The following table provides commencement details of the provisions in the Act.

Overview of the Regulations

The 2020 Regulations amend the Patents Regulations in line with changes that Schedules 1, 2, 4 and 8 to the Act make to the Patents Act 1990.

Parts 1-3 of Schedule 1 to the Regulations makes:

• Amendments to support phasing out of the innovation patent system
• Amendments that are consequential to the changes made in Crown Use in the proposed Bill
• Amendments that are consequential to the proposed changes made to compulsory licensing in the proposed Bill.

Parts 4-7 of Schedule 1 to the Regulations improve how translations of patent documents are filed with IP Australia and make other technical improvements to the patent and designs regulations.