Is Australia’s Innovation Patent System on Borrowed Time?

On 5 August 2015, the Australian Patent Office (IP Australia) released a consultation paper seeking feedback from interested stakeholders on the Advisory Council on Intellectual Property’s (ACIP) recommendation that the Australian Government should abolish the innovation patent system.

Introduced in 2001 under the Howard Government, the innovation patent system is Australia’s second tier patent right having a shorter term,eight  years, and a lower threshold of invention (i.e. an ‘innovative step’ as opposed to an ‘inventive step’ required for a standard patent).

The rationale behind the introduction of the innovation patent system was that it would stimulate growth and innovation in small to medium enterprises (SMEs), which often direct their innovative efforts towards adaptions and improvements of existing technology. However, an economic research paper authored by IP Australia concluded that, in its present form, the innovation patent system offered no economic benefit.  According to the research paper:

“The great majority of Australian SMEs and private inventors appear to gain little benefit from the system… Only 23 SMEs have become moderate users of the innovation patent system … The average SME or private inventor files once and never again (74%), does not receive any enforceable right (83%) and lets their patent expire early because they see its value at less than the AUD110-AUD220 cost of renewal (78%).”

Whilst the innovation patent system is not without its flaws, there are options available to address these flaws without entirely abolishing the system.. Indeed ACIP offered recommendations for addressing perceived shortcomings with the innovation patent system in a report issued in May 2014. These recommendations included raising the level of innovation required above the current innovative step level, and mandating that innovation patents be examined before the third anniversary of the filing date.

The deadline for submissions concerning ACIP’s recommendation and any potential alternatives to encouraging innovation among SMEs is 28 September 2015.