Australian Innovation Patents Retrospectively made Non-Retrospective

by Ben Mott on May 2, 2017

We have previously commented on the remarkable properties of the Australian innovation (8 year) patent here and here. Not the least of those properties is the ability of innovation patents to be infringed before they are filed. Recent authority deprives innovation patents of this ability. Nonetheless, innovation patents remain a prominent feature of the Australian patent landscape and should be considered as part of any Australian patent filing strategy.

On 3 April 2017, Justices Jagot, Nicholas and Burley handed down their unanimous judgment in Coretell Pty Ltd v Australian Mud Company Pty Ltd [2017] FCAFC 54 by which they stripped innovation patents of their ability to be infringed before they were filed.

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Prior to this decision, such ‘retrospective infringement’ could occur in the context of an innovation patent granted on a divisional patent application. By way of example, an international patent application could be filed, subsequently enter the national phase in Australia and then, perhaps years later, provide basis for a divisional patent application on which an innovation patent might be granted. Earlier authority held that damages could be payable in respect of acts infringing the innovation patent occurring as far back as the international filing date, i.e. potentially years before the innovation patent was filed.

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This ability for retrospective infringement in conjunction with the other remarkable properties of innovation patents made them very powerful litigation tools. By preserving a pending Australian patent position, innovation patents can be filed after a competitor enters the Australian market and with claims crafted to target the competitor’s activities (and of course in terms adequately linked to the disclosure of the pending applications pre-dating the competitor’s activities).

In view of these recent developments, this remains a powerful and often appropriate strategy, albeit now that, as the law currently stands, damages for early infringing acts will not be recoverable.

Under the new regime, infringing acts are first recoverable on the day that the innovation patent is ‘granted’. We show ‘granted’ in quotations because in the context of innovation patents the term is a misnomer; whilst it is the term used in the Australian legislation, it is very misleading. Australian innovation patents are granted after a basic formalities check but without substantive examination. As such, the grant of an Australian innovation patent is akin to the acceptance of a US utility patent application.

Beyond being ‘granted’, innovation patents must pass the additional, and usually optional, step of substantive examination before the patent can be enforced or threats of enforcement can be made. Substantive examination can often be completed within three or four months of filing for the innovation patent. This relatively short timeframe is one of the factors that makes filing a targeted ‘post-infringement’ innovation patent application an attractive option.

Another feature making this an attractive option is that there is no effective mechanism for inter-partes interference at the Patent Office level. Inter-partes opposition proceedings cannot be initiated until substantive examination has been passed. At the same time, the patentee has the option of initiating infringement proceedings in the Australian Federal Court. Upon the commencement of such proceedings, any inter-partes opposition before the Australian Patent Office must cease.

So whilst innovation patents have been stripped of their ability to be infringed before they are filed, they should continue to be considered as part of any Australian patent filing and/or patent litigation strategy. Indeed, if anything, this latest decision is motivation to file innovation patents sooner rather than later.

These strategic considerations are, of course, something to discuss with your Australian patent attorney, particularly in relation to any commercially important inventions that warrant the additional protection afforded by having an innovation (8 year) patent running alongside a standard (20 year) patent application.

Ben Mott: Principal; Mechanical Engineer & Patent Attorney at Wadeson.

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