Applications will no longer be accepted for Australian innovation patents from 26 August 2021, with limited exceptions. Any existing innovation patents will continue in force until their expiry.
From 26 August, applicants may only apply for an innovation patent through a divisional application from a parent application having a filing date of 25 August 2021 or earlier, or by converting a pre-existing standard patent application to an innovation patent application.
To continue taking advantage of this second-tier patent system, applications should therefore be filed by 25 August 2021.
Actions required by 25 August 2021
To preserve the ability to obtain an innovation patent in Australia, applicants should consider filing upcoming patent applications by 25 August 2021 or earlier, where possible. This may take the form of:
- an Australian complete (non-provisional) application for an innovation patent or a standard patent, or
- an Australian Convention application for an innovation patent or a standard patent, or
- a Patent Cooperation Treaty (PCT) application designating Australia.
Applicants who have already filed an Australian provisional or foreign priority application should consider an early filing of one of the above by 25 August 2021.
The last remaining innovation patents will reach the end of their term on 25 August 2029.
Background to the innovation patent system
Generally equivalent to the “utility models” or “petty patents” available in a number of countries worldwide, an innovation patent has a maximum term of eight years and is limited to only five claims. By contrast, a standard patent application has a term of up to 20 years (with an extension of up to five years available for certain pharmaceutical substances), and no limit on the number of claims.
The innovation patent system was intended to stimulate innovation among Australian small-to-medium enterprises (SMEs) by providing relatively inexpensive short-term exclusive rights to low-level inventions.
Advantages of an innovation patent
There are several features of the system which also suit larger applicants and more sophisticated inventions.
Firstly, the threshold for patentability and validity of an innovation patent is lower than that for a standard patent. A patentable innovation need only possess an “innovative step” over the prior art, as opposed to an “inventive step” for a standard patent application.1 In assessing whether there is an innovative step:2
...where the point of differentiation... contribute[s] to the working of the invention, then it is entitled to protection, whether or not (even if), it is obvious... The focus is upon the working of the invention (as claimed) not to the degree or kind of variation from [the prior art]. In other words, the variation from [the prior art] might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step... In my view... “substantial” in this context means “real” or “of substance” as contrasted with distinctions without a real difference.
Moreover, a combination of two or more prior art documents may only be relied upon to show a lack of innovative step “if the relationship between the documents or acts is such that a person skilled in the relevant art would treat them as a single source of that information.”3
For these reasons, applicants can frequently obtain broader rights in an innovation patent which can be extremely challenging for a competitor or alleged infringer to invalidate.
Secondly, innovation patent applications can be filed as a divisional application from a pending standard patent application. One or more innovation patents can therefore be obtained relatively quickly and inexpensively for broader short-term protection while the standard patent application awaits or undergoes examination.
Thirdly, unlike a standard patent application, there is no opportunity for third parties to oppose an innovation patent before it is granted.
The above features in particular gave rise to what the Advisory Council on Intellectual Property (ACIP) described as “some applicants using the innovation patent system to protect higher-level inventions for strategic or tactical purposes,” by:4
- extending the effective term of the monopoly of a successful invention
- building a ‘patent thicket’ to increase the time and expense for competitors to clear the path to market, and
- targeting an alleged infringer of a granted standard patent.
Legislation was passed in early 2020 to commence phasing out the innovation patent system from 26 August 2021.5 Any existing innovation patent rights at that date will continue in force until their expiry, but new innovation patent applications will not be accepted.
Importantly, however, applicants can continue to file divisional innovation patent applications (in a similar manner to a US Continuation application) or convert a standard patent application into an innovation patent application, provided the application has an effective filing date of 25 August 2021 or earlier.
For further advice, contact the experts at Chapman Tripp Patents.
1 Patents Act 1990, s 18(1A)(b)(ii).
2 Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd  FCA 1225 at ,  and , upheld on appeal in Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd  FCAFC 81.
3 Patents Act 1990, s 7(5)(b).
4 Jim Butler Review of the Innovation Patent System, Final Report (Advisory Council on Intellectual Property, May 2015), at 7 and 36.
5 Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020, Schedule 1, Part 2, cl 4.