How to hurdle Australia’s tough new patent laws

Australian entrepreneurs are set to find it increasingly challenging to obtain a valid patent following the Intellectual Property Laws Amendment (Raising the Bar) Act, introduced by the Federal Government earlier this year.

The new law increases the standards required to receive patent protection, bringing Australia in line with many overseas countries.

Effectively, the new law requires patent applicants to prove they’re making a significant advance on what is already in the market; it literally raises the bar on patent requirements in Australia.

The amendments come into effect from April, 2013. However, applications filed prior to this time could be required to meet the higher standards.

Ben Hamilton, technology & IP partner, Hall & Wilcox, says the rationale for raising the threshold patentability is to prevent the grant of patents over what might be described as merely speculative inventions.

“The concern here is that if patents are granted too readily, then that could stifle competition and follow-on innovation,” Hamilton says.

According to registered Australian patent attorney Mark Summerfield the reforms will make it more difficult to obtain a valid patent in Australia.

Patent standards were fairly low in Australia and many in the profession agree that the changes are long overdue, says Summerfield, the editor of patent law blog Patentology.

“It will be some time before we know exactly how far the bar has been raised, because it is likely to be a few years before any court decides a case involving a patent grated under the amended law.”

“However, there is no question that the reforms will make it more difficult to obtain a valid patent in Australia,” Summerfield summarised on his blog.

What is a patent?

The IP Australia website explains that a patent is worth considering if an invention is new, not publicly disclosed and has commercial potential.

You can apply for patent protection for a range of inventions. These include traditional inventions such as appliances, mechanical devices, computer-related inventions, business methods, biological inventions, micro-organisms and other biological materials.

Things that can’t be patented include human beings or the biological process for their generation, artistic creations, mathematical models, plans, schemes or other purely mental processes.

The benefits of a patent include the right to take legal action to stop others infringing on your territory without your permission, encouragement of Australians to continue their research to develop new and innovative products and gives trading partners the incentive to provide similar rights and therefore protect Australian exports in overseas markets, according to IP Australia.

And while some believe that the costs associated with filing, maintaining and enforcing patents can often outweigh the benefits, the advantages can be enormous, says Hamilton.

“For instance, these patents could be licensed out in various ways to a number of parties in different territories or different market segments.”

There could also be huge benefits for start-ups down the track, he adds.

“To some extent, a start-up with robust patent protection may be more attractive to external investors,” Hamilton says.

Hamilton says each start-up should seek tailored advice on how the new laws could affect them.

“It’s difficult to generalise across all business types, as different IP rights are more appropriate for some industries and less so for others,” he explains.

Where you can go wrong

Summerfield says one of the common mistakes he sees is when a business has attempted to navigate their own way through the patent protection process and failed.

“With a bit of guidance from the trademarks office it is possible for a business to go through the trademark process themselves quite successfully, but a patent document, on the other hand, is not a document for the faint-hearted,” Summerfield says.

Patent protection can hinge on the wording and understanding the difference between whether your invention is different from the actual product you’re bringing to market, he explains.

Given money is often tight when starting out in business, many opt not to protect themselves with a patent, which can bite them down the track, Summerfield says.

“Searching and finding out if you’re infringing a patent or if what your company is doing is actually patentable can cost a few thousand dollars and businesses often choose to spend that money somewhere else,” he says.

“Like insurance, patents are really an exercise in risk mitigation. But more Australian businesses need to be thinking like slightly bigger businesses and recognise that they do need to have legal protections in place from the start.”

Story continues on page 2. Please click below.