Innovation patents on the ropes, but not the canvas.

The Australian innovation patent system has been in the news recently as a result of the Australian Government’s intention to abolish the system. This decision followed the general inquiry made by the Productivity Commission into Australia’s intellectual property (IP) system. The expectation within the IP industry was that abolition of the innovation patent system would occur sometime in 2018.

But just when it was thought that the innovation patent system was to be abolished, there is now a slight possibility that it might be retained. As we previously reported on 28 March 2018, IP Australia indicated that “the Government has decided to undertake further consultation targeted at better understanding the needs of innovative SMEs before the phase out of the innovation patent occurs”. This statement followed submissions that were made in relation to the public consultation that was undertaken by IP Australia to the Draft Intellectual Property Laws Amendment Bill 2017.

Various public submissions were made in relation to the Amendment Bill, which argued that the innovation patent system remained an important form of protection for local Australian innovators. They also stated that the reasons given by the Productivity Commission were not sufficiently persuasive for the system itself to be completely abolished.

It is generally accepted that the current provisions relating to the grant of innovation patents should be revised. There is almost universal agreement that the rights provided to patentees by innovation patents are too great, and that many of the negative issues relating to the innovation patent system arise because of this. Thus, those that argue in favour of retaining an innovation patent system generally agree that the system should be revised to provide a better balance between the rights of the patentee and the rights of competitors, and that this can be at least partly achieved by raising the threshold upon which a valid innovation patent can be granted.

Currently, an innovation patent can be validly granted to an invention that is obvious, but amendments to the relevant legislation could increase the ‘innovative step’ threshold so that this could no longer occur. Further revisions could include that examination of an innovation patent would become compulsory at some stage during the life of the patent, so that clearly ineligible innovation patents would be removed from the patent register.

While it is not clear why the Government has decided to review its position in relation to abolition of the innovation patent system, there is a possibility that the abolition will now be delayed, or in fact not occur at all. Likewise, it is not clear at this stage when the Government will release any further findings regarding the further industry consultation it is to undertake. We will have to wait and see.


Andrew is the current Board Chair and a member of the Engineering Team of Phillips Ormonde Fitzpatrick.