ALB asked FB Rice & Co managing partner Paul Whenman to comment on the intellectual property (IP) recommendations recently made by the Australian government's Innovation Review. He said if there are fewer patents with narrower scope then it would reduce litigation.
Recommendation 7.2: Patent law should be reviewed to ensure that the inventive steps required to qualify for patents are considerable, and that the resulting patents are well defined, so as to minimise litigation and maximise the scope for subsequent innovators.
My take on this recommendation is that they want to raise the inventive step bar. Presumably this would result in fewer patents with generally narrower scope. In this scenario, there would be greater freedom to use technology because such a user could more easily avoid patent infringement.
However, it would not have any effect on maximising the scope for subsequent innovators when they try to gain their own patents. This is because it is the breadth of the disclosure in a referenced patent application that needs to be considered when determining whether a subsequent innovation is patentable or not. By contrast, infringement is determined by reference to the patent claim scope.
If fewer patents with narrower scope is the result, then an outcome might be reduced litigation, because a third party may be less likely to infringe a narrower patent. Similarly, it would seem that such patents having a higher presumptive validity, would be challenged less in revocation proceedings. Again, this would have a tendency to reduce litigation.
However, generally speaking litigated patents are those with commercial value - the point here is that a standard patent for an invention that is commercially successful will be challenged in litigation, in terms of validity and scope irrespective of any change in the inventive step bar.
Practically, it is only likely that a reduction in litigation would occur as a result of the elimination of innovation patents. That is, all Australian inventions, whether they are subject of standard patents or innovation patents, will be required to have an inventive step. The effect here would be that a person wishing to innovate would only need to take account of standard patents claiming inventions with an inventive step, rather then the present situation where such an innovation would likely fall foul of an innovation patent.
A point of overriding importance is how “inventive step” is defined and how it is to be reviewed by Australian Patent Office examiners. For example, if the inventive step standard were to be harmonised, say with the European Patent Office, the burden of examination could be shared with the presumption that it would be more thorough.
The major difficulty here is that such a harmonisation of laws would of necessity bind Australian courts. This is to be contrasted with the present situation where there is significant divergence in definition of inventive step between Australia, the European Patent Office and US law (obviousness).
Recommendation 7.3: Professional practitioners and beneficiaries of the IP system should be closely involved in IP policy making. However IP policy is economic policy. It should make the same transition as competition policy did in the 1980s and 90s to being managed as such.
This seems sensible.
Recommendation 7.4: Firms asserting or defending intellectual property should have a right to opt out of ‘appellate double jeopardy’
This is unlikely to have much effect on litigation. I think relatively few cases are appealed, while those that are appealed are usually considered of high commercial importance. Relatively large amounts of money will have been spent to achieve a first instance decision.
It is hard to imagine that too many litigants would not proceed with regard to the relatively small amount spent on an appeal, compared with a first instance case.
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